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37th PARLIAMENT, 2nd SESSION

Standing Committee on Government Operations and Estimates

EVIDENCE

CONTENTS

Monday, October 6, 2003

1110

The Chair (Mr. Reg Alcock (Winnipeg South, Lib.))

Mr. Mike Joyce (Assistant Secretary, Expenditure and Management Strategies Sector, Treasury Board of Canada Secretariat)

1115

Mr. Robert Mellon (Acting Executive Director, Expenditure Operations and Estimates Directorate, Comptrollership Branch, Treasury Board of Canada Secretariat)

1120

The Chair

Mr. Ken Epp (Elk Island, Canadian Alliance)

Mr. Mike Joyce

Mr. Ken Epp

Mr. Mike Joyce

Mr. Ken Epp

Mr. Mike Joyce

1125

Mr. Ken Epp

Mr. Mike Joyce

Mr. Ken Epp

Mr. Mike Joyce

Mr. Ken Epp

Mr. Mike Joyce

Mr. Ken Epp

The Chair

Mr. Ken Epp

The Chair

Mr. Robert Lanctôt (Châteauguay, BQ)

1130

Mr. Mike Joyce

Mr. Robert Lanctôt

The Chair

Mr. Robert Lanctôt

Mr. Robert Mellon

The Chair

Mr. Robert Lanctôt

The Chair

1135

Mr. Robert Lanctôt

The Chair

Mr. Mike Joyce

The Chair

Mr. Robert Lanctôt

The Chair

Mr. Robert Lanctôt

The Chair

Mr. Mike Joyce

Mr. Robert Lanctôt

1140

Mr. Mike Joyce

The Chair

Mr. Robert Lanctôt

The Chair

Mr. Joe Clark (Calgary Centre, PC)

Mr. Mike Joyce

Right Hon. Joe Clark

Mr. Mike Joyce

Right Hon. Joe Clark

1145

Mr. Mike Joyce

Right Hon. Joe Clark

Mr. Mike Joyce

Right Hon. Joe Clark

Mr. Mike Joyce

Right Hon. Joe Clark

The Chair

1150

Ms. Judy Sgro (York West, Lib.)

Mr. Mike Joyce

1155

Ms. Judy Sgro

Mr. Mike Joyce

Ms. Judy Sgro

Mr. Mike Joyce

Mr. Robert Mellon

Ms. Judy Sgro

Mr. Mike Joyce

1200

The Chair

Ms. Carolyn Bennett (St. Paul's, Lib.)

Mr. Mike Joyce

The Chair

1205

Right Hon. Joe Clark

The Chair

Right Hon. Joe Clark

The Chair

Mr. Dennis Kam (Executive Director, Finance and Administration, Corporate Services Branch, Treasury Board of Canada Secretariat)

The Chair

Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Canadian Alliance)

Mr. Dennis Kam

Mr. Paul Forseth

1210

Mr. Dennis Kam

The Chair

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Forseth

The Chair

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Forseth

Mr. Dennis Kam

1215

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Forseth

Mr. Dennis Kam

Mr. Paul Forseth

The Chair

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

1220

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

Mr. Dennis Kam

The Chair

Mr. Robert Lanctôt

Mr. Dennis Kam

1225

The Chair

Right Hon. Joe Clark

Mr. Dennis Kam

Right Hon. Joe Clark

Mr. Dennis Kam

Right Hon. Joe Clark

Mr. Dennis Kam

Right Hon. Joe Clark

Mr. Dennis Kam

1230

Right Hon. Joe Clark

Mr. Dennis Kam

Right Hon. Joe Clark

Mr. Dennis Kam

Right Hon. Joe Clark

Mr. Dennis Kam

Right Hon. Joe Clark

Mr. Dennis Kam

Right Hon. Joe Clark

Mr. Dennis Kam

Right Hon. Joe Clark

The Chair

Ms. Judy Sgro

Mr. Dennis Kam

1235

Ms. Judy Sgro

Mr. Dennis Kam

Ms. Judy Sgro

Mr. Dennis Kam

Ms. Judy Sgro

Mr. Dennis Kam

Ms. Judy Sgro

Mr. Dennis Kam

Ms. Judy Sgro

The Chair

Mr. Massimo Pacetti (Saint-Léonard—Saint-Michel, Lib.)

Mr. Dennis Kam

Mr. Massimo Pacetti

Mr. Dennis Kam

Mr. Massimo Pacetti

Mr. Dennis Kam

Mr. Massimo Pacetti

1240

Mr. Dennis Kam

Mr. Massimo Pacetti

Mr. Dennis Kam

Mr. Massimo Pacetti

Mr. Dennis Kam

Mr. Massimo Pacetti

Mr. Dennis Kam

Mr. Massimo Pacetti

The Chair

Mr. Dennis Kam

The Chair

Mr. Dennis Kam

The Chair

Mr. Dennis Kam

The Chair

1245

Mr. Dennis Kam

The Chair

Mr. Dennis Kam

The Chair

Mr. Ken Epp

Mr. Dennis Kam

Mr. Ken Epp

Mr. Dennis Kam

Mr. Ken Epp

Mr. Dennis Kam

The Chair

Mr. Dennis Kam

The Chair

Mr. Dennis Kam

The Chair

Mr. Dennis Kam

1250

The Chair

Mr. Dennis Kam

The Chair

Mr. Dennis Kam

The Chair

Mr. Robert Lanctôt

Mr. Dennis Kam

Mr. Robert Lanctôt

The Chair

Mr. Robert Lanctôt

The Chair

Mr. Dennis Kam

The Chair

1255

Ms. Lysanne Gauvin (Assistant Deputy Minister, Accounting, Banking and Compensation Branch, Department of Public Works and Government Services)

The Chair

Ms. Lysanne Gauvin

1300

The Chair

Mr. Guy Bédard (Assistant Executive Director, Public Services and Programs, Communication Canada)

1305

1310

The Chair

Mr. Ken Epp

The Chair

Mr. Ken Epp

Mr. Guy Bédard

Mr. Ken Epp

Mr. Guy Bédard

Ms. Chantale Cousineau-Mahoney (Director General, Corporate Services and Corporate Renewal, Communication Canada)

Mr. Ken Epp

Ms. Chantale Cousineau-Mahoney

Mr. Ken Epp

The Chair

Mr. Ken Epp

1315

Mr. Guy Bédard

Mr. Ken Epp

Mr. Guy Bédard

The Chair

Mr. Robert Lanctôt

1320

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

1325

Mr. Robert Lanctôt

Ms. Chantale Cousineau-Mahoney

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

Mr. Guy Bédard

The Chair

Mr. Robert Lanctôt

The Chair

Right Hon. Joe Clark

Ms. Lysanne Gauvin

Right Hon. Joe Clark

Ms. Lysanne Gauvin

Right Hon. Joe Clark

Mr. Guy Bédard

Right Hon. Joe Clark

Ms. Chantale Cousineau-Mahoney

Right Hon. Joe Clark

Mr. Guy Bédard

1330

Right Hon. Joe Clark

Mr. Guy Bédard

Right Hon. Joe Clark

Mr. Guy Bédard

Right Hon. Joe Clark

Mr. Guy Bédard

Right Hon. Joe Clark

Mr. Guy Bédard

Right Hon. Joe Clark

Mr. Guy Bédard

Right Hon. Joe Clark

The Chair

Right Hon. Joe Clark

Mr. Michael Turner (Assistant Deputy Minister, Telecommunications and Informatics Program Branch, Department of Public Works and Government Services)

The Chair

Mr. Michael Turner

The Chair

Mr. Michael Turner

The Chair

1335

Mr. Michael Turner

The Chair

Mr. Michael Turner

The Chair

Mr. Michael Turner

The Chair

Ms. Carolyn Bennett

Mr. Guy Bédard

Ms. Carolyn Bennett

1340

The Chair

Mr. Michael Turner

The Chair

Mr. Michael Turner

The Chair

Ms. Carolyn Bennett

The Chair

Ms. Judy Sgro

Mr. Guy Bédard

Mr. Benoit Trottier (Director General, Communications, Communication Canada)

1345

Ms. Judy Sgro

Mr. Benoit Trottier

Ms. Judy Sgro

The Chair

Mr. Massimo Pacetti

Ms. Lysanne Gauvin

Mr. Massimo Pacetti

Ms. Lysanne Gauvin

Mr. Massimo Pacetti

Ms. Lysanne Gauvin

Mr. Massimo Pacetti

Ms. Lysanne Gauvin

Mr. Massimo Pacetti

Ms. Lysanne Gauvin

Mr. Massimo Pacetti

The Chair

Mr. Ken Epp

The Chair

Mr. Ken Epp

Ms. Lysanne Gauvin

Mr. Ken Epp

Ms. Lysanne Gauvin

1350

Mr. Ken Epp

Ms. Lysanne Gauvin

Mr. Ken Epp

Ms. Lysanne Gauvin

Mr. Ken Epp

Ms. Lysanne Gauvin

Mr. Ken Epp

Ms. Lysanne Gauvin

Mr. Ken Epp

Ms. Lysanne Gauvin

Mr. Ken Epp

Ms. Lysanne Gauvin

Mr. Ken Epp

The Chair

Mr. Robert Lanctôt

Mr. Guy Bédard

Mr. Robert Lanctôt

1355

Mr. Benoit Trottier

Mr. Robert Lanctôt

Mr. Benoit Trottier

Mr. Robert Lanctôt

Mr. Benoit Trottier

Mr. Robert Lanctôt

The Chair

CANADA

Standing Committee on Government Operations and Estimates

NUMBER 061

2nd SESSION

37th PARLIAMENT

EVIDENCE

Monday, October 6, 2003

[Recorded by Electronic Apparatus]

Á (1110)

[English]

The Chair (Mr. Reg Alcock (Winnipeg South, Lib.)): Let's come to order.

Welcome to meeting 61 of the Standing Committee on Government Operations and Estimates.

Just so everybody understands what we are doing today, the supplementary estimates are before the House, and we have had referred to us four of the departments or agencies that normally report to us.

As we did with the supplementary estimates(B), and as we're working through the processes for dealing with these estimates, I thought what we might do is what we did last spring with the supplementary estimates(B) from last year. I've asked members of Treasury Board to come forward to basically answer members' questions about the structure of the supplementary estimates and the relationship of supplementary estimates to main estimates, to deal with those questions that help position the estimates. Then having done that, we will move through the various departments that have estimates before us.

We are meeting from now until 1 o'clock. We have a second meeting starting at 3:30 p.m. to deal with the other two groups that have been referred to us.

I would like to introduce Mr. Mike Joyce, assistant secretaryfor the expenditure and management strategies sector, and Robert Mellon, acting executive director,expenditure operations and estimates directorate, comptrollership branch. I see a third person here, Laura Danagher, who is not here. That's fine.

For members who were here for the supplementary estimates (B) exercise last spring, some of the information in the early part of this may be repetitive, but I thought it was important that we constantly go back to the purpose of these supplementary estimates and why we are taking the time to do what we're doing with them.

Perhaps I could ask Mr. Joyce and Mr. Mellon to begin with a brief overview. There is a deck that has been circulated here that gives some basic information.

Then we will go to questions as quickly as we can.

Mr. Joyce.

Mr. Mike Joyce (Assistant Secretary, Expenditure and Management Strategies Sector, Treasury Board of Canada Secretariat): Thank you, Mr. Chairman. Merci.

The deck, which we will move through fairly quickly to give you an opportunity to ask questions, attempts to do two things. One is it gives you an overview of the expenditure management system and how the fiscal framework is developed leading up to the budget, which of course provides the context for the main estimates and the supplementary estimates that follow, and then it provides a more specific overview of the supplementary estimates themselves. For those of you who have seen this before, I hope it will serve as a reminder and we won't be boring you too much.

If I could move quickly to slide 3, it shows you, within the expenditure management system, some of the key activities going on within the public service, particularly the three central agencies--the Treasury Board Secretariat, which I represent; the Department of Finance; and the Privy Council Office--that lead up to developing a budget.

I won't go through this in detail, but I would just point out that one of the things we do in the fall with the Department of Finance is develop what we call status quo spending numbers. These are the numbers for the operation of government on the assumption that there are no policy changes. These are the numbers, obviously, that underpin the fiscal framework, which then is able to let the government know the extent to which there is fiscal flexibility for them to pursue new spending initiatives in the budget.

The particular role my department, the Treasury Board Secretariat, plays is with respect to the status quo forecasts for what we call the direct program spending, which is all the planned spending with the exception of the major statutory. The lower line then shows you some of the priority-setting process. I won't go through that in detail because I think it's fairly self-explanatory. But the key thing is those three steps in terms of budget development from the point of view of developing the estimates, which are the status quo spending, the development of a fiscal framework, and the tabling of a budget, which are then followed by the estimates and the supplementary estimates.

The next two slides are just there for reference to show you the fiscal framework as it was struck in the most recent budget, February 2003. Page 4 just shows you the overall numbers that portray the balanced budget that was represented in the budget. The key elements there are the program spending and the debt charges, which are essentially the interest on the public debt.

The next slide shows you the fiscal framework in terms of that $143 billion that is program spending, which, as I earlier indicated, breaks down into the major transfers that are the statutory programs that are the responsibility of the Department of Finance, and the $69.5 billion in direct program spending, which is the focus of the Treasury Board and the Treasury Board Secretariat.

The Treasury Board Secretariat's role in the expenditure management system, just to provide you with context, is with respect to the direct program spending, that $69.5 billion. The Treasury Board and the Secretariat play an oversight role with respect to that component of planned spending. We are also, throughout the year, looking at what you might call spending pressures to make sure we understand these, and any appropriate adjustments are made.

Then last but not least, a specific responsibility of the Treasury Board, the president, and the Treasury Board Secretariat is in fact the production of the estimates, by which I mean both the main estimates as well as the two normal regular supplementary estimates, the first of which we are here to discuss today.

I will now turn it over to my colleague Mr. Mellon to take you briefly through the rest of the deck, which focuses on the supplementary estimates themselves.

Á (1115)

Mr. Robert Mellon (Acting Executive Director, Expenditure Operations and Estimates Directorate, Comptrollership Branch, Treasury Board of Canada Secretariat): Thank you, Mike.

On pages 7 and 8 there are a couple of slides that deal with the main estimates themselves, part I and part II. I'm not going to read through all of that material, but there are several points I would like to highlight for you. The part I that you see at the front of the blue book, which is about four or five pages long, is essentially the translation document that moves you from budget to estimates. When you want to see how you reconcile between the budget and the estimates, it's in part I of the main estimates. That may be something you should know.

The second thing is, on page 8 you'll note that the main estimates do not include funds set aside for contingency, new initiatives that require parliamentary approval, or things that require further planned spending and development. That is quite properly the role of supplementary estimates. That's the other distinction I'd like to make for you between main and supplementary estimates.

Let's move to slide 10. This is something I'm sure you're all aware of now. We only have certain times during the year when we can bring estimates and supply bills forward for parliamentary consideration, and of course it's done on the last allotted day of the supply period in each of the three supply periods. We can't bring forward estimates and supply any time we like; we're limited as to our timelines. Slide 10 indicates what those timelines are.

Slide 11 shows the purpose of supplementary estimates. There are quite a number of purposes here. Some of them are relatively technical in nature, some of them quite broad. One of the primary purposes of supplementary estimates is to seek new spending authority within the fiscal framework—and I wish to highlight that—for items that were unforeseen or insufficiently developed when the main estimates were prepared. In addition, we use supplementary estimates to seek parliamentary approval for a whole host of additional authorities—everything from vote transfers to grants to operating budget carry forward. Supplementary estimates are a tool for seeking parliamentary authority for a whole range of issues.

Similarly, supplementary estimates also constitute an information document to Parliament to provide information on new items, transfer payments, major capital projects, and of course the famous Treasury Board vote 5 is also contained in supplementary estimates.

We also use supplementary estimates to update forecasts on statutory programs, particularly those that are provided by the Department of Finance and other departments such as HRDC.

On page 14 I've provided a slide that outlines the process in the House for how supply and supplementary estimates are handled. I won't go through it in detail, other than to reinforce my earlier point that the time strictures for when estimates and supply bills can be tabled is established by Parliament in Standing Orders. It's not our call; it's your call.

As you know, supplementary estimates votes, like main estimates votes, are now automatically referred to the appropriate standing committees for your review. For supplementary estimates, certainly, each committee reports or is deemed to have reported back to the House not later than three sitting days before the last allotted day in the particular supply period.

We use the guillotine process, which I believe everyone is familiar with. It means that supply bills are moved through the House in an expeditious manner; not a lot of time is spent on the debate.

The big difference in the Senate, of course, is that the Senate has no equivalent rules for an expedited passage. Supply bills and estimates are referred to the Senate national finance committee, who hold hearings and discussions. They report back to the Senate, which then takes a vote on the appropriate supply bills.

We have a general rule of thumb that we've followed for a number of years, which is that estimates documents—the “blue books”—are normally introduced into the House at least three weeks before the corresponding supply bill, to give members of committees an opportunity to review the material and call witnesses before they're actually faced with having to make the decision on supply.

Á (1120)

That, Mr. Chairman, is “supps” in a bottle.

The Chair: That was probably the quickest run-through of what is a huge and complicated procedure I've ever been a party to. I should say to members, before we came in here I had a pre-meeting with Mr. Joyce and Mr. Mellon. I had not been here for the meeting with them last year and had some questions of my own that I didn't want to force all of you to sit through, because you had this opportunity before. I suggested they move expeditiously through this to get to the questions. Mr. Joyce, you moved at a rate that was quite incredible, frankly. I thank you for it.

We'll go to questions.

Mr. Epp.

Mr. Ken Epp (Elk Island, Canadian Alliance): I'd like to say thanks for being here this morning.

My first question is, who is it who has the final say on the estimates? Is it the departments or is it the Treasury Board?

Mr. Mike Joyce: The final say on the estimates is Parliament's, because the estimates documents support an appropriation bill, and it is Parliament that approves the appropriation bill.

Mr. Ken Epp: I know that answer. But we all know when the estimates come to the House they are jammed through. That is just a fact. Any time we in the opposition have ever made a motion to amend, it has been defeated—even a simple motion that we made some time back when HRDC was going through all of its difficulties. We suggested some years prior to this that their estimates be reduced by $20,000, if I remember correctly. Parliament voted it down; they said, no, we don't want to show that Parliament has the final say on this.

Effectively, Parliament is just a rubber stamp. I therefore need to ask the question: if HRDC or somebody else puts into the estimates or the supplementary estimates a number, do you get to revise it over their protests, or is whatever they say final in your mind?

Mr. Mike Joyce: The answer to that question is that in the internal government process before it arrives at Parliament, the final approval step is the Treasury Board's—the cabinet committee's. There is no part of an estimate that is brought forward without the approval of the Treasury Board. We have a process whereby departments who are seeking to put items, for instance, in supplementary estimates have to come in and obtain Treasury Board approval to have that item included. There is a review done by both the Treasury Board Secretariat and the Treasury Board of the items that are in the supplementary estimates.

Mr. Ken Epp: One of the issues that is really a large issue in the minds of many people across the country these days is this EI thing. I noticed on slide 5 that your major transfers in the planned spending for this fiscal year include $15.7 billion for employment insurance. We know they take in, easily, $5 billion to $10 billion more than that in premiums submitted by employers and employees. Who is it who makes the decision?

We know there's an individual—the actuary general or somebody, or the chief actuary—who recommends what the premium rate should be. And yet the government continues to use this as a straight cash cow into general revenue year after year after year. Who makes that decision? Does the department do it? Does the chief actuary? Does the Treasury Board?

Mr. Mike Joyce: Thank you for that question. I perhaps should have made part of my previous answer more precise.

As I indicated in the opening presentation, the role of the Treasury Board Secretariat and the Treasury Board is focused on the part of planned spending we call direct program spending, not the major statutory programs of which the one you have identified is one. The central responsibility for its budget development and for developing the estimates is the Department of Finance's, and obviously it is the department that is responsible for administering the program.

I don't have details on how those numbers are developed. I'm aware of the situation you have identified. It is one that has been a longstanding issue. I've heard it mentioned in various places at various times. I don't have details of how those numbers are arrived at, because it is done by the Department of Finance, not by either the Treasury Board Secretariat or the Treasury Board itself.

Á (1125)

Mr. Ken Epp: It's my impression that there is actually a law being broken here, that there is legislation that mandates the magnitude of the surplus in the EI fund. Yet despite the fact that the accumulated surplus is now I think over $40 billion, there seems to be nobody who can say, hey, you guys have to obey the law. I would think Treasury Board would be the final arbiter, and if it is not ready to ensure that the law is kept, then who is?

Mr. Mike Joyce: I can only repeat as to the responsibility of Treasury Board that while we have what we might call a management oversight role with respect to how the program is managed, the specifics of the program, which I understand clearly are considered to be within the current legislation--because it is an issue that has been scrutinized, I'm aware of that--are something for which the Department of Finance has a lead role.

The statutory programs, because they are prescribed by legislation and operated within that legislation, are not something that comes through the Treasury Board for specific approval or adjustment, because as with any other statutory program, the expenditures that are reported in the estimates are forecasts based on certain economic assumptions of the amounts of money that will be spent pursuant to authority that Parliament has given in specific pieces of legislation--which, as you know, is why they're called statutory programs. So the numbers that we take an interest in are simply forecast pursuant to current legislation and the administration of the program.

Mr. Ken Epp: But, you see, that is my dilemma. You say it's a statutory program; it's governed by existing laws. That is true, but in my view, those existing laws are not being kept. They are blatantly, with impunity, being broken. So to whom do we go, the Supreme Court? Parliament can't do it; Parliament won't do it. Treasury Board, according to the answer you've given, can't touch it.

The Department of Finance just comes up with this. I guess HRDC is the one that initiates it, and then the finance department gets involved in making the budget, and there it is, year after year, a giant rip-off of Canadian employers and employees. Is there no way of stopping it?

Mr. Mike Joyce: I can only repeat that the way the program is administered is considered to be consistent with the law as it stands and the way it is applied. I am not aware that there is any concern in that respect.

Mr. Ken Epp: So you are not aware of the fact that employment insurance is not meant to be just a source of general revenue.

Mr. Mike Joyce: Because the employment insurance account is consolidated into the Consolidated Revenue Fund, I understand the situation is that it has that effect.

Mr. Ken Epp: That is troubling, Mr. Chairman. I think maybe this committee ought to look at that.

The Chair: Before we start building our agenda, Mr. Epp, perhaps we could have the minister in, to have that conversation about your disagreement.

Mr. Ken Epp: I think we should.

The Chair: Monsieur Lanctôt, do you have any questions?

[Translation]

Mr. Robert Lanctôt (Châteauguay, BQ): Thank you, Mr. Chairman.

I am going to refer specifically to the proposed schedule 1 to the appropriation bill. First, I would like to have an explanation of vote 1a.

The previous estimates provided $151,617,000. If I understand correctly, a new appropriation of $41,692,074 $ is being requested for June to December. The way I see it, that is an increase of almost one third. How do you come up with a new appropriation like that? We surely have to expect further appropriations will be requested for December to March. When you draw up a budget, does it cover just the first months of the year or the entire period right up to March 2004? If you look at vote 10a now, there is $31,746,000. I do not have the figures for last year with me, but they represented the total for the full year. When you do a forecast for the year, do you forecast for half the year or for the full year? Every year, there are new appropriations. I would like to have that explained.

Á (1130)

Mr. Mike Joyce: As my colleague said, the government's plans are set out in the finance minister's budget. The budget shows the total amount the government plans to spend for the full year.

[English]

We put into the main estimates as much as we can, based on the information we have at the time the main estimates are put together.

In the deck you have in front of you,

[Translation]

On page 11, there is an explanation of the items that we cannot include in the Main Estimates. That is why we have the Supplementary Estimates.

Mr. Robert Lanctôt: Excuse me, sir, but I do understand that. You do not need to explain to me what supplementary estimates are. I know that. In the case of vote 10a, planned spending for the full year was $20 million, and a new appropriation of $31 million is being requested. That is nearly twice what was initially planned. Yes, it is a general question. How do we wind up in such a bizarre situation? What do these amounts of $41 million and $31 million represent? One goes to the secretariat, and I understand that, but how does a budget of $151 million get increased by $41 million? Under vote 10a, for government-wide initiatives, $20 million was forecast, and now a new appropriation of nearly twice the initial amount, $31 million, is being sought. How can you do that?

[English]

The Chair: Excuse me, Monsieur Lanctôt, what document are you referencing there?

[Translation]

Mr. Robert Lanctôt: I am talking about votes 1a and 10a, which are part of the new appropriations being sought. It is on pages 17 and 44.

A voice: Which department?

Mr. Robert Lanctôt: Treasury Board Secretariat. If you tried to answer my first question without knowing where I was, I can understand why it was hard for you to give me an answer.

[English]

Mr. Robert Mellon: As I understood it, we were to have officials from the Treasury Board specifically to talk about Treasury Board votes later on. Perhaps you might wish to address it at that time rather than now.

The Chair: Your point is a fair one. The Treasury Board is going to come in on the specifics of their estimates, but is this not more of a structural question he is asking?

I'm trying to get situated myself.

[Translation]

Mr. Robert Lanctôt: My question is on the budget. What are we supposed to discuss today with these witnesses? Why have you come? To talk about Treasury Board's budget?

[English]

The Chair: That's right, but I had asked them specifically to come and talk about the whole document, the structure of the supplementaries, how they relate to the main estimates, and all of that, before we got into the detailed stuff with the specific department budgets.

Mr. Lanctôt, help me get to the number you are asking about. I'm on page 17.

Á (1135)

[Translation]

Mr. Robert Lanctôt: It is on page 17 and page 44.

[English]

The Chair: You are looking at the French version, too, right? Would the pagination be the same?

Okay. I now understand my confusion, but let me get situated on that page. In the English version, on page 17, I have Foreign Affairs and CIDA.

Mr. Mike Joyce: It's page 22.

The Chair: Mr. Lanctôt, just so I'm sure I am at the right place, you're asking the question under Treasury Board Secretariat, vote 1a, $41,692,074?

Okay, I'm with you now.

[Translation]

Mr. Robert Lanctôt: And under vote 10a, there is $31,746,000 for government-wide initiatives.

[English]

The Chair: Right.

Now may I ask you to repeat your question, just for my benefit?

[Translation]

Mr. Robert Lanctôt: There are two parts to my question, and one of them has to do with vote 1a. In my opinion, when you draw up a budget for the year, for example, for 2003-2004, it should not be for just a few months, it should be for the full year. Under vote 1a, there is an amount of $41 million, which is almost one third of the main appropriation. I find that a bit strange. I would like to know where that $41 million goes. But the most serious issue is that under vote 10a, for June to December, $31,746,000 is being sought, and that is almost twice the amount that was already provided for the full year. How can a budget be drawn up so poorly? What happened with government-wide initiatives?

[English]

The Chair: That is an excellent question, and it is exactly one I had this morning too, but, Mr. Joyce, if you go back to the relationship between the budget and the main estimates and that $7.9 billion figure, that may help to clarify it.

Mr. Mike Joyce: Thank you, yes.

I will try to answer your question in general terms and then give you some idea of the specifics in this instance, but my colleagues who will be coming after me will probably be able to give you more detail if you wish to pursue it.

Let me first of all talk about vote 1a, which is Treasury Board operating expenditures. You're absolutely correct, there is a significant increase proposed through the supplementary estimates. The reason these numbers were not included in the main estimates is that this is an example of funds that were set aside in the budget for which, at the time the main estimates were put together, we did not have sufficient detail about the exact amounts that would be spent on the initiatives concerned.

Let me itemize what the $41.7 billion is principally being sought for. It's for implementation of a project called the shared travel service initiative, which is intended to improve the effectiveness and efficiency of the way the government's travel service operates. That is a project that has been under development intensively during the first part of this fiscal year, so it is only now that we are aware of exactly how we want to proceed on that project, exactly how much money we need this fiscal year to initiate it, and exactly how the money is being spent.

If we had put the money in the main estimate—this is hypothetical—we could have put in a very rough estimate of the amount of money we thought we would spend on this project, but we would not have been able at that time to give you any details on how the project would proceed. Our judgment was that it would be better to leave that amount of money for the supplementary estimates, when we would be able to respond to a committee such as yourselves with the detail of how we intend to spend that money.

That is an example, if I can leave it at that.

[Translation]

Mr. Robert Lanctôt: I'd like to ask you a question before you go on answering my question on vote 10a and all that. I understand that you don't have the exact figures or details. You mentioned the travel service, but it seems to me that you should be able to evaluate that. If you are asking for $41 million now, you should have been able to plan on tens of millions of dollars for that. Why not include that from the beginning? It's as if it came as a surprise to you. You knew at the beginning of the year that you would need a certain amount for the travel service. Why didn't you ask for it then? Why did you wait and put it in the supplementary estimates because you didn't have the exact figures?

Á (1140)

[English]

Mr. Mike Joyce: That is the only reason I can give. It's a matter of judgment. We clearly could have put an allowance in—

The Chair: May I interrupt at this point, Monsieur Lanctôt?

This is a point, Mr. Joyce, that the committee has been struggling with, and I think there is an answer for it that has less to do with the specifics of the Treasury Board vote. Monsieur Lanctôt, if you would look in the main estimates book that tries to reconcile the budget amounts and the main estimates, in this particular year there is a figure of about $7.9 billion, which is the total value of all the new program initiatives that are contained within the budget. Is that right, Mr. Joyce? What the supplementary estimates are doing is detailing that.

I think all of us have been struggling with the issue of this extraordinarily large amount that floats out in the middle of nowhere. It actually does reconcile back to a number here. The reason for the supplementary estimates in that case is not so much adding unanticipated new money as providing detail on an initiative that was announced in the budget and simply not made public, even to the Treasury Board, because of budget secrecy until the budget is tabled. I had exactly the same concern as Mr. Lanctôt as I walked through this.

It is necessary to sort out what a program initiative is. When we get to Treasury Board we'll get the details of the questions you have.

Does that make sense?

[Translation]

Mr. Robert Lanctôt: Yes. It's the same thing.

[English]

The Chair: Can I move to Mr. Clark?

Mr. Joe Clark (Calgary Centre, PC): To follow on that point, it does not allow accountability if a parliamentary committee is faced with an entry in the supplementary estimates that says “Treasury Board Secretariat, $41.7 billion”, and we have no idea if it has to do with travel or anything else. Is it inconceivable that there could be an additional document that elaborates upon these matters before we come to committee so we have some sense as to what is at issue?

Mr. Mike Joyce: That's an excellent suggestion. Clearly, if between the time of main estimates and the time we are appearing before you now we were in the process of developing that project, it is conceivable we could actually have given advance information. It's not, as you know, part of our current approach, but it is certainly something we should consider.

The other issue I would have to check—and I apologize; I probably should know the answer to this question—is that one of the things we do at the time of the main estimates, as you know...about a month following the main estimates each department submits a report on plans and priorities. The spending reported on in that document is as consistent with the budget plan spending as is possible, so those documents actually do contain plans and priorities that relate to the budget plan spending, not strictly to the main estimates. There's an opportunity perhaps to make sure that if we did not put initiatives like this explicitly in the report on plans and priorities, we could certainly pay more attention and make sure that when we know we're doing something, it is explicitly flagged. There's an opportunity perhaps to consider using that document.

Right Hon. Joe Clark: I think that would be helpful.

I want to go back to the expenditure management system, which I take it is the system followed in normal times. I notice that the priority-setting exercise is normally finished in the fall, which is an indefinite date. My question is, what is in normal circumstances the time gap between the completion of the priority-setting exercise and the preparation of the budget? Is it six weeks? Eight weeks? Two months, normally?

Mr. Mike Joyce: As the budget itself is a document that's put together by the Department of Finance, I can't give you a precise answer to that question, but in the priority-setting process and the budget decision-making process, this is a document we just use internally, quite frankly, to give people an overview of the key steps.

It's not that there is, as perhaps suggested by this slide, a priority-setting process that discreetly ends sometime in the fall, is then picked up by a budget decision-making process, and then leads to the budget, so that the two tend to lead together. I think I would have to get an answer for you from the Department of Finance on that question, because they are the ones who would be in a better position to tell.

Right Hon. Joe Clark: We're dealing with a very unusual situation where priorities will not be established until—who knows?—maybe February, and it's certainly going to take more than a weekend between the establishment of priorities and the preparation of a budget. I don't want to ask you to comment on things out of your domain, but I would think it would be a fair observation that it is usually between four weeks and eight weeks at least, once the priority exercise has moved into the budget-writing exercise. Is Treasury Board making contingency plans to deal with unusual circumstances such as would allow a budget that performs the normal budgetary role prior to April?

Á (1145)

Mr. Mike Joyce: One of the issues we face is that the main estimates are required to be tabled in the House by a Standing Order deadline, which is the first sitting day in March, I believe. So one of the regular things we have to be able to do is be ready to table the main estimates by that date, based on whatever the current spending plans of the government are. if there is a budget before that date, then clearly that is what sets the framework within which we produce the main estimates—subject to the comment we made earlier that there are, because of budget secrecy and the proximity of the timing of the budget to the main estimates, always items we are just physically unable to include. There is a judgment made about whether we should include a number where we don't actually have enough money, but that is a matter of judgment.

If that represents a contingency plan, it is what we are prepared to do. Normally, however, the Department of Finance, as I'm sure you're aware, has a practice of putting a fiscal update down in the fall. That again provides a framework within which spending plans are articulated. But if—and I'm not sure whether this was your question—we arrived at the time when we would have to table main estimates and there was no budget.... Was that your question?

Right Hon. Joe Clark: No, my question is this. A budget has to reflect the priorities of the government in office at the time it is established. Those priorities take some time to set. We will either be dealing, therefore, with a budget that reflects the priorities in these unusual circumstances, of a government going out of office—the same party, but with a different ministerial direction—or we will get a budget that is considerably later than February, given the timeframes, or that does not reflect the considered priorities of a new government. We politicians will deal with that in our own way, but I wonder how Treasury Board is dealing with that. I wonder whether there has been any consultation between yourselves and the Department of Finance on this procedural question. How is one sure that whatever budget is tabled, whenever it is tabled, it reflects the priorities that can reliably be considered as the priorities of the Government of Canada over time?

Mr. Mike Joyce: Mr. Chairman, the only thing I can say in response to what you've said is this. From the perspective of the Treasury Board Secretariat, if there is a budget, then that represents the priorities of the government and we deal with the priorities and plans in that budget as best we can in the main estimates. From our point of view, whatever the most recent budget is, that budget is the framework within which we develop the main estimates. So if there is a budget, then that is what we base the main estimates on. If there is not a budget, then we base the main estimates on the current spending plans and priorities of the government.

Right Hon. Joe Clark: I see. This is a description of how, in effect, Treasury Board records the decisions taken elsewhere in government.

Mr. Mike Joyce: That is correct. There are some spending decisions within that framework that the Treasury Board does make. This does focus, as you correctly observe, on what you might call the incremental or new policy spending initiatives of the government.

The bulk of the main estimates, obviously, the current status quo spending plans of the government, are not affected, by and large, by a budget. The budget deals out the incremental margin of new policy spending initiatives of the government.

Right Hon. Joe Clark: Thank you, Mr. Chair.

The Chair: Thank you very much, Mr. Clark.

Madam Sgro.

Á (1150)

Ms. Judy Sgro (York West, Lib.): Thank you very much.

Could you briefly run me through this, from the start to the end? Take any department. Take Heritage or whatever one you want. As a department they formulate their program spending and they pull their budget together. Run me through what happens between the submitting of the budget by a department to the end process of actually writing the cheque for a service rendered, from your end.

Mr. Mike Joyce: It's not explicitly referenced on this diagram, but the starting point for the Treasury Board Secretariat and the Treasury Board is the fall, when we ask departments to make a submission, which we call the annual reference level update. The “reference level” is the term we use for what the Treasury Board approves as the spending limits for each department. And the main estimates are in fact based on those reference levels that are approved by the Treasury Board.

So we're dealing with a situation where, in the fall, we are looking at departmental spending on what we call a status quo basis, in the absence of any policy changes. We review from a Treasury Board Secretariat and Treasury Board perspective whether or not, in the absence of any policy changes, there is a need to change those spending levels. Sometimes there are technical adjustments that need to be made where, for instance, a specific program may be, to use a term we use inside the Treasury Board Secretariat, a sunset program, i.e., funding for a particular activity is being given for a time-limited period. A capital project may be a typical case in point. So we make those technical adjustments.

Perhaps I could digress a little to give you two examples of some rather large technical adjustments we make. By and large, for instance, we do not give inflationary increases to departments as a matter of course. It is almost a systematic built-in decrement to their budget, which has the effect of causing departments to have to find efficiency gains. Other countries actually do it more explicitly, and this is a practice we've adopted.

There are, however, some departments where they face large non-discretionary increases. I can give you two examples. One would be the Department of Public Works and Government Services, which basically purchases accommodation for the whole of government--for most of the government anyway. If the lease costs go up because of renegotiating leases and the market just happens to be an increasing cost market, then Public Works and Government Services Canada has no option but to pay that bill.

For a program like that that has a large non-discretionary element, at the time of the annual reference level update we will increase the department's funding levels, their reference levels, as an allowance for the cost increases they face.

Correctional Service Canada will be another example because their budget is largely determined by the inmate population. So we look at projections of how the inmate population is going to increase...the cost of housing, feeding...and correcting the inmates is something that is non-discretionary.

With the exception of those two examples, the fall process of setting the reference levels is very much one of looking at whether or not any adjustments need to be made for the budgets as they go forward. The Treasury Board then approves those reference levels. Those reference levels are communicated to departments, and they are then both free and responsible for implementing their programs within the funding limits the Treasury Board has set. They are responsible for respecting any other Treasury Board-specific decisions or the policies of the Treasury Board with respect, for instance, to capital projects, where they have to come back and seek the approval of the Treasury Board for specific capital projects.

What we have tried to do, particularly for Parliament and the public, is to make sure that departments identify the results they are going to achieve with the resources that Treasury Board has allocated. While the departments have a reasonably high degree of freedom in how they apply the funds that Treasury Board has approved within the vote structure set by Parliament, because that is the way Parliament approves, the focus is on trying to make sure the department has established result statements they can be accountable for. That is something the Treasury Board and the Secretariat look at, as well as Parliament.

So the departments then go through a process, having got their reference levels, of distributing their budgets, of respecting any specific Treasury Board decisions that have been made for reports back or for further specific approvals that may be required. They then basically put into operation their programs to achieve the results they have set out in the report on plans and priorities.

Á (1155)

Ms. Judy Sgro: I need to get to the end. I'm with you all the way through that, but at what point then, if the department has approval, based on the budget for expenditures of x amount of money and programs...? We've all been explicit about that, so they have an envelope.

In the Department of Heritage, for example, or any department, do they have a comptroller's division? What division sets up there, because that's where they write the cheques?

Mr. Mike Joyce: That is correct. Each department has--and there is a particular relationship with the Treasury Board Secretariat--something that is called a senior financial officer, which is usually the assistant deputy minister in the corporate services area. They also have senior full-time financial officers whose full-time jobs are financial management within the departments. These are the people who, within the department, ensure that the appropriate financial procedures and controls are in place.

Ms. Judy Sgro: And the relationship between them and the Treasury Board...?

Mr. Mike Joyce: The Secretary of the Treasury Board is also the ComptrollerGeneral of Canada. We have a specific assistant deputy minister position called the deputy comptroller general.

We have, as you may be aware, an initiative called Modern Comptrollership, where the Treasury Board Secretariat, particularly the Comptroller General's area, works with departments to ensure that modern comptrollership is in place, that the management procedures and systems are in place to assure effective financial control.

Mr. Robert Mellon: But there isn't a direct reporting relationship between those officials in the department and the Treasury Board Secretariat, so departmental officials do not report to the Comptroller General.

Ms. Judy Sgro: That's where I think we are having difficulty understanding Treasury Board's role and the whole issue of accountability that we are concerned about.

If the Department of Canadian Heritage has its financial comptroller there, and so on and so forth, who reviews and authorizes expenditures, then--not that everybody needs to be micromanaged--I always thought Treasury Board would again unfortunately have to oversee that, because in the end I thought you were ultimately responsible as the Treasury Board.

Mr. Mike Joyce: You used the word “oversight”. That is probably a very appropriate word to use. The responsibility of the Treasury Board and the Treasury Board Secretariat is to establish, in the case of the question you've asked, the financial management policies within which departments are then accountable for operating.

Our interest doesn't end there, though. Although we're not, if you like, full-time policemen out there monitoring every action of departments, because we don't have the resources....

This is maybe too much detail, Mr. Chairman. If I'm taking up too much time, do prompt me.

One of the things the deputy comptroller general's area has done is almost establish what we call a community of practice, where they work with the senior financial officers and the senior full-time financial officers to create a community of interest and to foster a dialogue between the people who are involved at the front line of having to implement Treasury Board policies within departments and to put good management practices in place.

One of the things that fostering a community of interest does is to encourage both an informal and a more formal exchange of good practices, but it also allows for a dialogue between the Comptroller General's staff and their counterparts in departments. So although there is not a direct reporting relationship, that informal dialogue and talking with the community does bring issues to bear.

It's not like we do a comprehensive audit, but it does give us a sense sometimes, an early warning, of where perhaps a department is getting into trouble or whether it needs help, where perhaps its systems are not as effective as they might be.

In fact, one of the initiatives that was put in place by the deputy comptroller general's office was a framework that tried to assess the adequacy of the modern comptrollership structure in departments. It was a self-assessment tool. It was developed in conjunction with some private sector consultants, and that tool, even though it's self-assessment, does give us an opportunity to identify where perhaps we need to work with departments to help them improve their management control practices.

Â (1200)

The Chair: Thank you, Mr. Joyce.

Just noting the interest around the table, it may be useful to set up a separate briefing, because there is a series of these kinds of questions that members would love to get into, but if we don't move along.... We have four departments sitting there now.

Madam Bennett, do you have a question?

Ms. Carolyn Bennett (St. Paul's, Lib.): Which person from Treasury Board should I ask my question to? Let me ask the question and you can tell me if there's somebody who can answer it.

When you mentioned results, there are certain results that happen across the whole of government. In terms of results-based management, some things aren't department by department, and obviously it has been of interest to lots of us in terms of quality of life or the various other indicators. How do you think Parliament could do a better job in our scrutiny role in terms of the things that have pockets of money all across government? How do we measure the results across government to know we're getting value for money in things that reside in many departments?

Mr. Mike Joyce: That's an excellent question. It is an issue that, to be frank, we have to deal with within the secretariat, because we try to do the same thing.

One of the things we have done—and I'm sure you're aware of this—is produce an annual document that comes out in the fall that tries to look from a whole-of-government perspective at what the key outcome indicators are for how the government as a whole is doing. Where we need to do further work to develop the use of that document, for both ourselves inside the Treasury Board Secretariat as well as for Parliament, is in making better links between that very high-level view of fairly high-level macro-outcome indicators and how they relate downward to the individual program activities within departments. It's an issue of extreme interest to us at the Treasury Board Secretariat right now, and it's a work in progress.

I don't have an answer I can give you, unfortunately, that says we have that. If we could only give you this information, it would give you the framework. It is something we are working on, and we will be able, I think, as the years progress, to close the gap between the detailed level of the program activities and that high level. I would have to be honest and say it is a work in progress, and we're still trying to make progress.

The Chair: The purpose of these meetings right now is to touch on each one of the areas we have a responsibility for and identify areas we may want to go further with. It may well be a good use of committee time to spend more time on these structural issues.

I'm not going to ask you to respond, but I want to identify a couple of other issues that I note in this. On pages 12 and 13, where you have the summary of changes to appropriations—and I'm picking up on Mr. Clark's comment—you have said, if you look at the transfer column against the National Research Council of Canada, that it is receiving a positive transfer of $7,029,000, and if you go down a little further, you will see that vote 85 is being reduced by the same amount. The trouble is, even when you go over to Industry to find out what vote 85 is, it is hard to know what it is, so you have no sense of what money is being moved from where and to whom.

When you go down to Justice, you see a similar kind of thing, where there is money being taken away from the Federal Court of Canada and moved to the Courts Administration Service, and more money from the Tax Court moved to the Courts Administration Service, again with little detailing—although there is at least a line item, whereas with vote 85 there is just a blank.

Then, when you come over to the Canadian Firearms Centre.... I should say that this Justice department change is an offset: they transfer money here; take money away from there. At least it balances. But when you go over to the Solicitor General's department, you see a positive transfer of $84 million and of $16.5 million, which the detail will tell you is transferred from Justice, but you don't see any offsetting reduction in the Justice line to justify the transfer.

It is similar with the $3.8 million going to the RCMP. They are getting a transfer of $3.8 million, plus $21 million in new money, but you don't see where the transfer came from. It's called a transfer, but there is no indication of a transfer.

I would be interested in getting some quick explanation—not right now, because I'm going to end this right now so we can move; otherwise we're going to get hopelessly out of time here. I see Mr. Pacetti has joined us. Given his experience in accounting, maybe he can help me sort this out.

I want to thank you very much for your time. I suspect we will want to have a further chat with you just to sort out how these things work so we are better at reading them in the future.

I'm not going to recess or pause; I'm going to ask the next people from Treasury Board, Messrs. Dennis Kam and Carlo Beaudoin, to come to the table. We'll just keep going so that we don't lose any of this all-too-precious time.

Â (1205)

Right Hon. Joe Clark: Mr. Chair, can I make a point of order, for the record?

Vote 1a under the Governor General deals entirely with the Hnatyshyn Foundation for the Arts. I have been asked to serve in a role with respect to that foundation. I just want to put on the record that I will not be taking part in a discussion of those estimates, when we get to them, or voting on them.

The Chair: Thank you, Mr. Clark.

But, Mr. Clark, as it is a matter of one dollar, I suspect we can probably trust your ethics.

Mr. Joe Clark: It's the principle of the thing.

The Chair: This is Treasury Board. Just to go further, the first two witnesses were from Treasury Board to talk about the structure of the estimates and some of these issues. But Treasury Board itself has a supplementary request before us.

Mr. Kam is the executive director of finance and administration in corporate services branch, and Mr. Beaudoin is the director of finance and administration, corporate planning, and resource management.

Gentlemen, if you could, just give us a quick overview of the nature of the request we see here in the supplementary estimates; then we'll turn it over to members for questions.

Mr. Dennis Kam (Executive Director, Finance and Administration, Corporate Services Branch, Treasury Board of Canada Secretariat): I have a brief opening statement, Mr. Chairman.

Of the $267 million included in TBS's supplementary estimates, $225.3 million—which is 84%—represents flow-through funding from Treasury Board secretariat to departments and agencies as follows: $193.5 million for increased personnel costs resulting from new collective agreements; and $31.8 million for the government-wide government online initiative and for evaluation and internal audit policies.

Only $41.7 million of the total is for TBS operations. This amount is needed to pursue priorities such as the implementation of the shared travel system initiative, support for the expenditure management reviews, the establishment of the human resources modernization implementation secretariat, in-house government online projects, and some miscellaneous additional operating costs.

I will respond to your questions.

The Chair: Terrific. We are on page 94 in the English version.

Let me begin. Mr. Forseth, do you have any questions? Away you go.

Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Canadian Alliance): Thank you for coming today.

How many people are in the Treasury Board Secretariat as a whole? Give me a global figure as to how many people are in the whole secretariat.

Mr. Dennis Kam: It's about 1,400.

Mr. Paul Forseth: Fourteen hundred people—wow. Certainly we have a concern about the size of the Treasury Board Secretariat, but we previously were trying to get some answers to the question of its ability to exercise comptrollership down in the ministries or agencies.

Previously the Treasury Board has talked about delivering.... You write the budgets in response to the ministry presentations; the ministers sit on the board to finally decide government priorities; you talk about delivering program spending and then about your oversight role. Yet we're struck as parliamentarians with the failure of Treasury Board to monitor wrongdoing and the breaking of Treasury Board guidelines. That's a monumental national story.

The average taxpayer, if we're spending almost $32 million in comptrollership and oversight and so on, asks what the value is for money. We're paying for a lot of secretariat—but it fails to monitor—and for poor comptrollership, because it seems the Treasury Board rules and guidelines are consistently broken. So when you come to Parliament to ask for these appropriations, I have to ask you, where is the money being spent specifically on comptrollership and oversight to ensure that all these rules you write are being followed? And then, what is the specific relationship to the delegated comptrollership you have in the ministries that allows you to ensure that delegation is actually followed?

Â (1210)

Mr. Dennis Kam: That is a huge question and I'm not in a position to respond to it. I'm here to speak to the supplementary estimates items. There is a branch of the Treasury Board Secretariat that is responsible for comptrollership—the comptrollership branch—and that organization, which has in round numbers about a hundred people, is responsible for the financial accounting policies of the Government of Canada, for various financial management policies, and for the preparation of the public accounts.

The Chair: Mr. Forseth, it may be desirable or appropriate to bring the President of the Treasury Board before us to talk about these broader operational issues for the whole department. In fairness to Mr. Kam, he is here to speak specifically about what's in supplementary estimates (A).

Mr. Paul Forseth: Yes, and that is exactly what I asked him. This is taxpayers' money being spent to perform the duties that Treasury Board is for. One of the major duties is to ensure that as money is doled out there is modern comptrollership going on, and that its delegated authorities to the ministries and the chief financial officers in each ministry are followed. That's what we're paying for here, so I'm wanting some explanation in response to the classic failures. How are we going to get value for dollars to ensure that the Treasury Board role actually delivers what we're spending money for?

Mr. Dennis Kam: Again, given my organizational position, I'm not in a position to respond to that question specifically. You are probably aware that the secretariat, along with other departments, will be tabling in October the departmental performance report, which will address some of the questions you're raising. The secretariat had identified in its report on plans and priorities certain priorities and certain goals.

Mr. Paul Forseth: I understand that line. What is the taxpayer getting, then, for the $31.8 million? You talked about all of the flow-through money, so we understand what that is. What is the taxpayer going to get, then, for the $31 million?

The Chair: If I may, Mr. Forseth, the $41.7 million is for the TBS operations.

Perhaps you could just give us a sense of what--

Mr. Paul Forseth: That was what I was specifically looking at, setting aside the flow-through money, the direct Treasury Board operations. What is the taxpayer going to get for that?

Mr. Dennis Kam: The requirements are set out on page 94. There is $18.1 million set aside for the implementation of the shared travel services initiative. That involves putting in place a new travel credit card for the public service. It involves putting in place a new travel agent for the federal government departments as well. There was a competition, or an RFP--request for proposal--that was issued about a year and a half ago calling for interested parties to bid for a contract to provide credit card and travel agent services to the Government of Canada as well as to develop what's called an end-to-end travel expert system, which would have within the system all the rules the public service uses in its travel policy to evaluate a travel claim.

The intent is to develop a system that would be able to prepare a travel claim electronically, submit that claim through the department's financial system, and therefore generate a reimbursement with, obviously, the normal audits that would take place in the informatics systems.

Mr. Paul Forseth: We have a system now. What's going to be the difference?

Mr. Dennis Kam: There is no electronic system now. We have a travel agent. We have a credit card. Those will both be replaced under the new contract. We do not have an electronic system.

Â (1215)

Mr. Paul Forseth: So we're going to get a computer program, new credit cards, and a new travel agent for $18 million.

Mr. Dennis Kam: Yes, that's right.

Mr. Paul Forseth: That's very interesting.

Could you explain a little more about the next line, $8.9 million?

Mr. Dennis Kam: Yes, I can. In Budget 2003 the government announced its intent to undertake a series of reviews of departments and horizontal issues. Indeed, it was announced that there would be a five-year cycle for reviewing the expenditures of all departments, and in addition there'd be some regular reviews of horizontal issues. Eight teams have now been put in place to initiate those reviews. There have been press releases announcing the initial topics of those reviews, and I can give those to you.

Mr. Paul Forseth: Just name a few, and maybe you could also tell us what horizontal issues are.

Mr. Dennis Kam: Horizontal issues are defined as issues that cut across more than one department. An example of what is being looked at now is the whole issue of biotechnology, and as you can appreciate, that cuts across a number of departments, science departments in particular but also other departments. The industry department is involved in biotechnology. This study looks at what activities are involved in working in biotechnology across government, so there's an overview of how much is being spent on biotechnology-related items across government to ensure that there is coherence in that programming. That is taking place.

There's another one on common services, and those are services provided by Public Works. For example, accommodation services, engineering services, and translation are defined as common services.

Mr. Paul Forseth: So for $8.9 million we're going to find out why we're spending certain amounts of money in certain ways.

Mr. Dennis Kam: Yes, and hopefully we'll search for better ways of delivering those programs.

Mr. Paul Forseth: Thank you.

The Chair: I'd sure like to know how we spent $8.9 million, and in that previous one, we might have flagged problems and trouble earlier if we'd had a truly electronic system with the ability to search.

Mr. Lanctôt.

[Translation]

Mr. Robert Lanctôt: Thank you. Before continuing in the same vein, I'd like to make sure I've got this right. You are talking about $8.9 million. Can you give us a breakdown of the $41.7 million under vote 1a?

Mr. Dennis Kam: Yes. The list on page 94 contains all of the entries, but I also have another list that contains the same data. The travel service is the second item. All you have to do is add up all of the items under the heading "vote 1a".

Mr. Robert Lanctôt: Which page is that on in French?

[English]

Mr. Dennis Kam: Where?

Â (1220)

[Translation]

Mr. Robert Lanctôt: It's on page 44.

Why is the secretariat, and not Public Works, responsible for contracts with travel agencies and the new credit cards?

Mr. Dennis Kam: There is a group at Public Works that is in charge of the current system. A number of factors are integrated into the new contracts. This approach was chosen from a central agency perspective.

We expect that once the project has been implemented, responsibility will be transferred to Public Works.

Mr. Robert Lanctôt: In other words, initiatives and projects begin at the secretariat, and are transferred subsequently .

Mr. Dennis Kam: Not always, but in this case. The interface with financial systems is very complicated. Furthermore, Treasury Board had prior responsibility for the credit cards.

Mr. Robert Lanctôt: How many companies bid for these contracts in response to a call for tenders?

Mr. Dennis Kam: I believe there were five.

Mr. Robert Lanctôt: Do you know which parts of Canada they came from?

Mr. Dennis Kam: No.

Mr. Robert Lanctôt: Could you get me that information?

Mr. Dennis Kam: I think so. Treasury Board has made its choice, but there has been no announcement yet because negotiations with the suppliers are still in progress.

Mr. Robert Lanctôt: But has the supplier been chosen?

Mr. Dennis Kam: Yes, by Treasury Board, but the contract has not yet been signed.

Mr. Robert Lanctôt: The contract has not yet been signed?

Mr. Dennis Kam: No.

Mr. Robert Lanctôt: So, the call for tenders...

Mr. Dennis Kam: Some of the contract details have to be ironed out first.

Mr. Robert Lanctôt: Okay, but has the contract been awarded? Do you know which company got the contract?

Mr. Dennis Kam: Yes, but the government is waiting for that to be announced.

Mr. Robert Lanctôt: I'd like to know the name of the five companies that put in a bid and which one got the contract.

Mr. Dennis Kam: I don't have the list of those companies.

[English]

The Chair: If I may, Mr. Lanctôt, the purpose for today is to identify issues like this. If, after we're done, you would like to return to this topic, then we'll bring the people forward who can deal with this in more detail perhaps. That might be the easiest way to deal with it.

[Translation]

Mr. Robert Lanctôt: I have one question left, Mr. Chairman.

It's about the $31.8 million. I understand the need for this kind of budget: certain things weren't clear or certain details weren't known. That's the reason for this kind of budget.

As for vote 10a, having planned on $20 million for the full year, how do we wind up with a new appropriation of $31 million for the Government On-Line initiative? I know that once again, the details of this item weren't known. The chair and witnesses told us earlier that this was part of a global budget and that it was normal to have a variation of about one-third of the amount; but here we have nearly twice what was expected for the entire year.

I would also like to know whether responsibility for the Government On-Line initiative will be transferred to Public Works and Government Services too.

Mr. Dennis Kam: I'm not sure about the last question, but it's always a possibility.

There are three parts to the amount: $7 million for the units responsible for program evaluation; $7.5 million for internal auditors; and the rest, $17.2 million, for the Government On-Line program.

As Mr. Joyce said, the government planning system is an ongoing process, and this has to be taken into account in the estimates. All proposals have to be approved by Treasury Board before being included here. At all times, there is something under development. For example, in the budget, funding for the Government On-Line program was announced, but the decision...

Â (1225)

[English]

The Chair: I'm sorry, I do have to move on, Mr. Lanctôt, but please keep your notes.

I should say one thing, too, before I recognize Mr. Clark. We are going to be working right through until nearly 2 o'clock. I have asked the clerk to bring lunch in. There is lunch on the back table there, all well within Treasury Board guidelines, I want to assure Mr. Beaudoin. If anybody in the room wishes to eat, it is on the back table.

Mr. Clark.

Right Hon. Joe Clark: Thank you, Mr. Chair, and thank you to the officials at Treasury Board.

As we're learning again, examination of supplementary estimates is highly specific. We can ask questions and you can give answers only about the very detailed matters that come before us in supplementary estimates (A). I would like to repeat the matter that came up with your colleagues earlier, that it would be very useful I think as a general practice in the preparation of estimates, and of supplementary estimates, particularly perhaps in supplementary estimates, to have earlier than when officials appear an explanation of the detail of some of the spending. Most of us have not spent a lot of time thinking about the shared travel system initiative until we got here, and I think it is in everyone's interest to have us better prepared.

With regard to the expenditure and management reviews, I have two questions, one question that I will be specific about. Do these reviews apply to arm's-length foundations?

Mr. Dennis Kam: I don't think anything is off limits at this point. The reviews have started with a certain menu. The intent is to review all the departments, such as 22 or 26 departments--

Right Hon. Joe Clark: This committee is interested in the functioning of these particular.... You caught my interest when you said that one of the management reviews is of biotechnology. Is Genome Canada involved? Is the CIHR, whose chair took a decision before a committee of Parliament did and before Parliament was able to act? Are you empowered to review their activities?

Mr. Dennis Kam: The Treasury Board Secretariat would be empowered. I haven't seen the terms of reference of these particular studies so I don't know whether Genome Canada, for example, is included or not, but I think the secretariat can review wherever public funds are being spent.

Right Hon. Joe Clark: The Auditor General can't in these cases, so it would be very interesting for this committee to know if Treasury Board does have that power.

You use a phrase in your statement, “This amount is needed to pursue priorities such as”, and then you specify some of them. Is there anything hiding in the “such as” that isn't itemized that we should be aware of? You specified three or four.

Mr. Dennis Kam: There are some very small things. For example, there is about $900,000 to allow the Treasury Board Secretariat to put in place a new expenditure management information system. Work has been ongoing for several years on that. The secretariat had the legacy system that became obsolete probably eight or nine years ago. They are working on that. There are some minor things.

Right Hon. Joe Clark: They are minor things.

Mr. Dennis Kam: They are minor, yes. There is nothing significant. You have all the large items.

Â (1230)

Right Hon. Joe Clark: Remind me, if you would, of the composition of the board with respect to ministers. The President of the Treasury Board is chair. Is that by statute?

Mr. Dennis Kam: Yes.

Right Hon. Joe Clark: Is the Minister of Finance vice-chair by statute?

Mr. Dennis Kam: Yes, by statute.

Right Hon. Joe Clark: As a normal practice, is the Minister of Finance present at most major decisions by the board?

Mr. Dennis Kam: I can't tell you that. I know the Minister of Finance does attend from time to time, but I don't participate in that.

Right Hon. Joe Clark: I have one last question, which is a follow-up.

With regard to the shared travel system initiative, we were told by one of your colleagues earlier that this was planned in time for the main estimates, but not enough detail was known at that time. Is there any general guideline that you follow in a case like that? The main estimates allow a more extensive analysis than the supplementary estimates do, and I wonder if there is any general guideline. What caused you to, I could say, put this in the supplementary estimates or, I could say, keep it out of the main estimates? Why was that decision taken with regard to the shared travel system initiative?

Mr. Dennis Kam: First of all, I'd point out that we try to put in the maximum amount possible in the main estimates. I think we share your view that the biggest picture we can show of the government's expenditure plans should be included in the main estimates, but the main estimates have legal roots as well because the main estimates are tabled to seek the spending authority from Parliament for items that the government has confirmed are necessary and has approved the detailed budgets for.

The rule of thumb that's always been used in putting together the main estimates is that only items approved by the Treasury Board will go into the main estimates. So there are a number of items that will be in the spending plan of the government that will be announced perhaps in the budget, but until they have gone through the formal process of being submitted to the Treasury Board for review, which means a Treasury Board submission with all the detailed costing, they won't find themselves in the main estimates. They are part of the government's expenditure plan at a high level, but the detail is not sufficient for Treasury Board approval, so then they move forward into the supplementary estimates.

Of course, the supplementary estimates, again, fill the legislative requirement of seeking spending authority from Parliament.

Right Hon. Joe Clark: Then these have been approved since the tabling of the main estimates.

Mr. Dennis Kam: Yes.

Right Hon. Joe Clark: Thanks.

The Chair: I've been trying to sort this out myself.

Madam Sgro.

Ms. Judy Sgro: Thanks very much to both of you. I hope you'll be patient here as we try to get a better handle on, a better understanding of, the role of Treasury Board. If you can't answer the questions, please just mention that.

As these go forward--the end of our fiscal year is March 31--is there currently in our different departments an automatic freeze come three months prior to the year end? I raise that question because often the issue is that we're coming to the end of the fiscal year so we should spend whatever we have in our budgets. I know I'm talking to Treasury Board, but I think it's something of a general question for departments.

Mr. Dennis Kam: There is no automatic freeze. Each department would have the authority to impose some discipline within the department, depending on the requirements at year end.

To give you an example, at the Treasury Board Secretariat, which I'm responsible for, we do a mid-year forecast. So we ask all components of the Treasury Board Secretariat to forecast their expenditures, looking at their actual results at the end of September, and then looking forward the next six months to the end of the fiscal year. We want to determine whether original plans are on track, whether there's some flexibility that can give rise to reallocation within the department to fund new items, new pressures, that have come along.

I know that in the past if there was some major priority a department was facing and there was no opportunity to seek incremental funds, departments could put a freeze in place to free up some funds for reallocation to fund a new priority. In fact, there was a study by the Auditor General many years ago now looking at year-end spending practices and concluding that although perhaps there was spending in advance of needs, making some purchases in advance of need, in general there was a good management process that was followed at year end.

A lot of the discretionary spending is held in abeyance until all your non-discretionary items are covered, and then in the last quarter, for example, if you have to replace your computers, which are becoming obsolete, you have the funds to do that. Otherwise you may have to wait another year. Computers have to be replaced every three or four years, so you'll wait until year end, and if you have the funds you'll replace them. Otherwise you wait another year. And you're holding back, as I said, to make sure all your non-discretionary items are cleared.

So there is more spending in the last quarter, yes, but it's because of that budgeting process that managers go through. They identify what they have to cover and then they determine what's left to cover some of the other, more discretionary items, because you have more influence over the timing, whether it's this year or next year, but ultimately you have to spend the money.

Â (1235)

Ms. Judy Sgro: But would Treasury Board, as a department--and I realize you're taking care of strictly Treasury Board's expenditures, so I'm not sure whether you can answer the question, and I'm not sure I'm fairly asking you the question--at the six months' review when you would look at a department--

Mr. Dennis Kam: No, we wouldn't look at other departments.

Ms. Judy Sgro: No, so looking at your own.

Mr. Dennis Kam: Each department would follow more or less the same process. Most departments do that.

Ms. Judy Sgro: And if a program isn't going to go forward, and at that six-month point you can see there is going to be x amount of dollars left, is there any suggestion that possibly they should freeze those funds? Do those questions ever come up? Do you ever end up with a surplus in Treasury Board Secretariat at the end of the year?

Mr. Dennis Kam: Yes, every year.

Ms. Judy Sgro: Every year.

Mr. Dennis Kam: Most departments do, because, as you can appreciate, Parliament approves a vote with a maximum spending limit, and under the Financial Administration Act and Treasury Board policies we can't exceed that limit. Indeed, if we did exceed the limit--and from time to time some department does it--that overspending becomes the first claim in the following year's budget. So we're careful to budget right up to the limit, and because of that, and because plans tend to be always optimistic, most departments end the year with a lapse, with a surplus. I think, for example, the Treasury Board Secretariat last year lapsed in the order--and the public accounts will be out soon--of $8 million that wasn't spent, because it's a large organization with a large number of units.

Ms. Judy Sgro: Thank you very much.

Thank you, Mr. Chairman.

The Chair: Thank you very much, Madam Sgro.

Mr. Pacetti.

Mr. Massimo Pacetti (Saint-Léonard—Saint-Michel, Lib.): Thank you, Mr. Chairman.

I have two questions. The first one is that for supplementary estimates I think there are six or seven items. Are these all new initiatives or are they additional initiatives? For instance, would the government online initiative be something new?

Mr. Dennis Kam: Government online has been an ongoing project now for about four years, and it's been funded--and in a sense it's a project; it's not ongoing, but it's a long-term project--through the budget. There has been a series of budget announcements allocating funds, usually in blocks of two or three years, for this project, and I think there have been two or three allocations in the budget.

Mr. Massimo Pacetti: So why would that one be considered in the supplementary estimates? I know you explained it for the--

Mr. Dennis Kam: It's in the spending plan of the Government of Canada, but the detailed programming of this spending was not available at the time of the main estimates.

Mr. Massimo Pacetti: If we have a long-term project, don't we already know what we're going to be spending it on?

Mr. Dennis Kam: In a sense, there are goals and objectives in terms of what the government online project wishes to achieve. Some of the means evolve over time. Again, I'm not an expert in that area. You would have to ask the experts.

For example, one major dimension, one major aspect, of this is called the secure channel, which is about finding a way of ensuring that.... For example, say we wish to do financial transactions through the Internet. We have a secure channel for doing that. That is running in the order of $50 million or $60 million alone just to do that. It is charting, in one sense, uncharted territory, so there are some bumps in the road on that.

You'll see that the money being set aside for transfer to departments through vote 10, which is $17 million, will fund local projects in each department or agency. Those departments will develop proposals that seek to respond to the overall objectives of the government online project. They will submit those to the Treasury Board Secretariat for some partial funding support. Normally, departments will contribute a part and the Treasury Board Secretariat, through this mechanism, will contribute a part.

Mr. Massimo Pacetti: So there would be no amount for government online initiatives in the previous estimates? For example, in 10a, where it says “Government-Wide Initiatives”, in the $20,783,000, there would be no money allocated for government online initiatives?

Â (1240)

Mr. Dennis Kam: I don't recall. I don't believe so, but we can check. We don't have the mains with us, unfortunately. I'm trying to remember what was in there. There was some money in there for modern comptrollership, the modern comptrollership project, the transfer of funds, the same sort of thing, to fund local projects and departments to encourage initiatives that support modern comptrollership. Some of that was in the first $20.8 million. There may have been a small part for government online. We'll have to get back to you on that.

Mr. Massimo Pacetti: My second question, if I may, is on the supplementary estimates on top, where it indicates “Explanation of Requirement”, $266 million, and then you break them down in terms of objectives. I see the majority of it goes towards personnel. Is that personnel in terms of salaries--

Mr. Dennis Kam: In “Object of Expenditures”, that's salaries and benefits.

Mr. Massimo Pacetti: Is it an internal allocation, or did you have to hire new personnel or new people?

Mr. Dennis Kam: The bulk of that is actually the compensation adjustment. If you look under vote 15a, $193 million will be allocated to the department to respond to new collective agreements. The bulk of that is actually the salary adjustments.

Mr. Massimo Pacetti: If I look at the next one in importance, where it says “Other Subsidies and Payments”, that would be the $31 million we were talking about, on top of the country-wide initiatives? That would be actual money spent?

Mr. Dennis Kam: Yes. That will be transferred to departments. As I said, departments will submit to the Treasury Board proposals for joint funding of projects. Once the secretariat has analysed these various proposals they will ration the money available across departments and Treasury Board will approve a submission. There will be a submission to Treasury Board seeking authority to allocate these funds, after they have been approved by Parliament, to departments. Some will get half a million, some will get a million, some will get very tiny amounts.

Mr. Massimo Pacetti: Thank you, Mr. Chair.

The Chair: Thank you very much.

Do I have other questions around the table? Perhaps I could add a couple before we move on.

I note in the supplementary estimates, on page 94, you come down to “Evaluation and Internal Audit Policies”, vote 1, $3.385 million. In vote 10, what's vote 10?

Mr. Dennis Kam: Vote 10 is “Government-Wide Initiatives”. Again, reflecting my discussion on GOL as well, vote 1 is the internal operation of Treasury Board Secretariat. These funds will be used to maintain a centre of expertise within the secretariat on internal audit. In addition, transfers will be made to departments, out of vote 10, to allow them to build a capacity for internal audit. There will be a supplemental pot of money that will be used for funding internal audit studies in the very small departments and agencies that are not of a sufficient size to have their own internal audit unit. Essentially, that will be distributed across, as I say, up to 80 or 90 departments and agencies.

The Chair: Vote 15a, $193,520,000 is right, is it not? Is that for compensation adjustments government-wide?

Mr. Dennis Kam: Yes, it is. I have a detailed list of the allocations by department, but it runs many pages.

The Chair: We can deal with that.

Treasury Board vote 5, which was referenced in the earlier presentation, is not dealt with in the supplementary estimates here, but in the main estimates it is a $750,000,000 contingency fund. Is this in addition to or different from the $3 billion contingency fund that Finance always puts in the budget?

Mr. Dennis Kam: That's different. The Treasury Board vote 5 provision normally lapses at year end, if you look at the public accounts. That money is there for interim financing, bridge financing between Treasury Board approval and approval by Parliament of the supplementary estimates--of the additional spending authority. When the additional spending authority is provided to the department from the supplementary estimates, they repay vote 5. The amount actually spent and charged against vote 5 at year end is very small, and the bulk of that passes. So in terms of the overall fiscal plan, vote 5 is basically calculated and built into the overall fiscal plan as a lapsing amount. When the Department of Finance puts together the fiscal plan of the government, it always assumes a certain portion of the authority granted will not be used and will lapse. That's part of it.

The Chair: So this is sort of a shock absorber, if you like, for those fluctuations in the operation, but it's not like the $3 billion Finance puts in that, if it's not spent, rolls over into payment on the debt. This simply lapses.

Â (1245)

Mr. Dennis Kam: Yes, this lapses.

The Chair: Yet it's part of the overall figure that comes to the bottom line as the final budget figure.

Mr. Dennis Kam: No, it's actually netted out. There will be a gross amount of $750 million, but in the Minister of Finance's fiscal plan overall there will be a forecast that $700 million of the $750 million will not be used. In putting together a plan, they develop a forecast of net expenditures, in effect, anticipated revenues and anticipated expenditures, and the anticipated expenditures will always have this at a discount because of anticipation that most of vote 5 will lapse.

The Chair: You should ask the question, Mr. Epp. Go ahead.

Mr. Ken Epp: That begs the question that if the money in vote 5 lapses, where does it go?

Mr. Dennis Kam: It doesn't go anywhere; it lapses. It's spending authority that's not utilized at year end, so it contributes to the overall--

Mr. Ken Epp: Then you'd have a larger surplus at the end of the year, and that would be applied to the debt.

Mr. Dennis Kam: That's only if their forecast is wrong. But say, for example, we have $750 million there and they forecast, in putting together the fiscal plan, that $750 million is going to lapse, and the $750 million truly does lapse, then the plan is bang on and there's no additional surplus. If they forecast a lapse of $700 million of the $750 million and the full $750 million lapses, then there's an extra $50 million to contribute to the surplus.

Mr. Ken Epp: It would simply then become a budgetary surplus in public accounts at the end of the year.

Mr. Dennis Kam: Yes, exactly.

The Chair: It's an odd figure.

Mr. Dennis Kam: Yes, it's very unusual to see.

The Chair: At the beginning of the year you say, “We're budgeting $750 million, but we know that by the end of the year you're only going to spend $50 million.” Of course, it does beg the question why you're budgeting.

Mr. Dennis Kam: It's not budgeting. It's budgeting in the sense that you're budgeting on a net basis there, so we're only really budgeting $50 million. But you have to have the authority there as interim financing, bridge financing. The only reason it's there is to provide bridge financing between the time Treasury Board approves something and the time it appears in estimates.

You've probably had discussions on the use of vote 5 already. There's a serious evaluation done of every request for Treasury Board vote 5 funding. If departments can wait—and indeed, we have items waiting that didn't go into these supplementary estimates that we know are going into the final supplementary estimates.

The Chair: Does that mean you would potentially approve a new program area expenditure prior to final approval by Treasury Board or Parliament?

Mr. Dennis Kam: I'll give you a concrete case of an item that was in the budget, post main estimates. The item goes through a Treasury Board submission for a sort of detailed costing and scrutiny. Treasury Board agrees to the proposal and gives authority to the department to include an item in supplementary estimates. The department says, “We're only going to get supplementary estimates in six months; this requirement is immediate. We have to start spending this money now.” The Treasury Board people ask, “Do you have enough flexibility internally to bridge finance or cash manage this requirement until the supplementary estimates come?” If the department can demonstrate that they don't have sufficient flexibility to cash manage internally, then they may ask for an advance from Treasury Board vote 5. That becomes bridge financing until supplementary estimates are approved. Then they have to repay their vote 5 advance.

That's basically how the process works. As I say, it's quite true they're used to evaluate each proposal for a transfer from vote 5, and $750 million isn't sufficient to fund the amount of anticipated spending that will happen to supplementary estimates, so they have to ration the funds very diligently.

Â (1250)

The Chair: I'm just trying to reconcile a couple of the numbers here. Let me ask just one quick question and then we'll move on.

I'm looking at the main estimates. You're showing $151 million for operating expenditures, up from $118 million in 2002-03. Here you're asking for additional authority to the $151 million of $41,692,000, for a total jump to $193 million. Then there are the personnel costs, if you look at “Objects of Expenditure”, of $202 million. Either I can't add or I'm missing an understanding here of how you can have $202 million of personnel expenditures with only $193 million...?

Mr. Dennis Kam: It's not immediately apparent, but there are some salary components to each of the items, for example, the shared travel service initiative. There's a team of about 40 people working on that, so there are salary dollars there. The expenditure management review involves about 50 employees, so there's a payroll requirement there.

The Chair: But under personnel, object one, the object of expenditure is the department-wide number.

Mr. Dennis Kam: Yes. It covers all these votes.

The Chair: Mr. Lanctôt.

[Translation]

Mr. Robert Lanctôt: I'm going to ask another kind of question. This is about creating a secretariat for the implementation of human resources modernization. You want to create a new secretariat, but the responsibility for this human resources modernization is part of Treasury Board's mandate. Could you explain to us and tell Canadians and Quebeckers why the abuses we saw in the Radwanski file weren't detected? Is it because of a lack of financial resources?

Mr. Dennis Kam: I'm not in a position to answer. That is a question for the government.

Mr. Robert Lanctôt: I think my question is appropriate. I'm asking you if there's a lack of resources or not. I think you ought to know whether there's a lack of resources or not. Is there a lack of resources? Does the secretariat lack resources for this oversight? You do financial oversight, and you also have to examine all aspects of human resources. I'm taking a single file, the Radwanski affair. Is there a lack of resources? Why wasn't there proper oversight?

[English]

The Chair: Mr. Lanctôt, rather than allowing Mr. Kam to make a career-limiting response, perhaps we could put this one on the list to talk to the President of the Treasury Board Secretariat about. In fairness to Mr. Kam, he's here to talk about the financial details, and it may be beyond his pay grade to deal with that question.

Is that a fair comment, Mr. Kam?

[Translation]

Mr. Robert Lanctôt: Mr. Chairman, he is certainly in the know. What does he do? What's his title? He is the Executive Director of Finance and Administration. I'm asking him whether there are sufficient resources to allow for proper government oversight. I don't know who can answer this question. I think he is in a position to tell me whether there is a lack of resources or not. You are telling me that we are supposed to be looking at the financial issues. That is precisely what I am asking him. I'm not asking him why they didn't do it; I'm asking him if there are sufficient resources to do it.

[English]

The Chair: Mr. Lanctôt, I'm certainly not attempting to limit our getting an answer to that question. I too am interested in the answer. I just suspect Mr. Kam may not be the person to give us the answer.

However, Mr. Kam, having been given two options--to reply or to take the fifth--you are welcome to choose between them.

Mr. Dennis Kam: Mr. Chairman, thank you, but again, I am not in a position to answer that question. I can say that I have adequate resources to carry out my duties, but I'm not involved with the responsibilities being alluded to there.

The Chair: Okay, thank you very much. I appreciate your time here today. With this very brief opportunity, what we are really trying to do is identify those issues the members may want to spend a little more time on.

Thank you very much.

If I can, as was our practice the last time, I'll ask the representatives from PWGSC and Communication Canada to approach the table and slip silently into the seats about to be vacated, and then we'll keep going.

Mr. Turner, welcome. It's always a pleasure to see you.

We have here, from the Department of Public Works and Government Services, Mr. Michael Turner, assistant deputy minister,telecommunications and informatics program branch; and Ms. Lysanne Gauvin, assistant deputy minister, accounting, banking, and compensation branch.

From Communication Canada, we have Mr. Guy Bédard, assistant executive director,public services and programs; and Ms. Chantale Cousineau-Mahoney, director general,corporate services and corporate renewal.

I note also there is an additional item here, the Office of Indian Residential Schools Resolutionof Canada. Is anyone at the table able to speak to that?

Â (1255)

Ms. Lysanne Gauvin (Assistant Deputy Minister, Accounting, Banking and Compensation Branch, Department of Public Works and Government Services): I believe that vote is going to be handled through Indian Affairs and Northern Development.

The Chair: It is listed against you, but that's fine, we'll reconcile that later.

Just so you understand the process here, we are not looking for a great deal of detail at this point. This is a process we've instituted to ensure that for every estimate that gets referred to us, members have an opportunity to hear what is being requested and to ask some questions for clarification so we can make a decision as to whether we wish to delve deeper into a particular item.

I think you were asked just to come with very brief opening remarks if you so chose. Then we'll jump right into questions.

As there are two line items here, have you sorted out how you might deal with them?

Please, Madam Gauvin.

Ms. Lysanne Gauvin: Mr. Chair, members of the committee, good afternoon. My colleague Mr. Turner and I are pleased to be here today on behalf of Public Works and Government Services Canada, commonly referred to as PWGSC, as part of your review of the supplementary estimates that were tabled in the House of Commons on September 23, 2003.

Mr. Chair, let me first explain briefly the scope of our operations.

PWGSC provides common services to departments and agencies across the country. We accommodate more than 205,000 public servants and parliamentarians across Canada and we manage 6 million square metres of office space in some 2,500 locations. We are Canada's largest purchasing agent. We administer over 60,000 contractual transactions worth more than $11.4 billion.

We maintain Canada's accounts and carry out the federal government's banking and disbursing activities, which total almost $1.3 trillion each year. The department is a key agent in the delivery of the government's strategic information and technology infrastructure. We provide a range of services, including public service pay and pensions, telecommunications, management consulting and audit, and language services such as translation, interpretation, and terminology.

PWGSC works behind the scenes to ensure that the Government of Canada meets its commitments to Canadians. We welcome the fact that the committee is devoting time to the review of the supplementary estimates; after all, we are talking about a lot of money. For our department they represent $115.8 million. This amount has been approved by Treasury Board, and we are now seeking parliamentary approval.

Of the $115.8 million, a total of $37.1 million is for accommodation requirements and $78.7 million for government online projects.

· (1300)

[Translation]

Funding for accommodation is continually increased as the result of changing government requirements. Each time Treasury Board approves client program expansion with an impact on personnel, Treasury Board Secretariat ensures that 13% of salary for these new employees is set aside to offset PWGSC accommodation costs.

Accordingly, the money in this TBS central accommodation reserve fluctuates throughout the year as TB submissions are approved for all departments and agencies. PWGSC has no control over these approvals and receives a status report from TBS on a monthly basis. Although $11.9 million was included in the planned accommodation spending in the 2003-2004 Report on Plans and Priorities, the $37.1 million requested in the supplementary estimates (A) represents a combination of the $11.9 million previously identified plus new accommodation requirements related to client programs expansion approved since that time.

Mr. Chairman, our supplementary estimates (A) also seek $78.7 million for Government On-Line (GOL) initiatives including the following projects: the Secure Channel and the Secure Channel Network (GENet), the Government of Canada Market Place, the Government On-Line—Content Management Solution Project, and the Pay Web Development and Procurement Office. It is important to note that these projects were identified in our Report on Plans and Priorities and included in the planned spending for the department. I would also like to indicate that these funds are not cost overrun. They represent a drawdown from previously approved funds. In the case of the Secure Channel, a large multi-year project, this request is for one of a series of ongoing funding transfers from the Government On-Line fund to this department for successive stages of the development and operation of the main elements of the common infrastructure.

Mr. Chairman, I recognize that the supplementary estimates do not provide any detail with respect to our GOL projects. We have therefore distributed to the committee a fact sheet on each of the GOL projects. If members have questions with respect to any of these projects, my colleague and I would be pleased to respond.

[English]

This concludes my opening remarks. We're prepared to answer any questions with respect to our supplementary estimates.

Merci.

The Chair: Thank you.

Mr. Bédard, do you have a comment on that?

Mr. Guy Bédard (Assistant Executive Director, Public Services and Programs, Communication Canada): Thank you, Mr. Chair, members of the committee.

[Translation]

Good afternoon. My colleague, Chantale Cousineau-Mahoney and I welcome the opportunity to provide you with information on Communication Canada, its mandate and activities, and to describe the initiatives that are included in the supplementary estimates for the organization.

Communication Canada was established in September 2001, through the merger of the former Canada Information Office and the Communications Coordination Services Branch at Public Works and Government Services Canada.

The mandate of Communication Canada is to improve communications between the Government of Canada and Canadians. We seek to achieve that mandate through a variety of programs, services and initiatives, which together represent an integrated and comprehensive communications effort on behalf of the government as a whole, and are organized around the needs and interests of the public.

Communication Canada is fulfilling its mandate by listening to Canadians through public opinion research, by ensuring that Canadians have access to relevant and reliable information where they live, by informing Canadians about the programs, services and access channels available to them, and by providing Canadians with direct access to government information and services, whether by telephone, through the 1-800 O-Canada call centre, by Internet, through the Canada site, www.canada.gc.ca, or in person, through attendance at exhibitions.

We also provide corporate communications support across government through such services as Publiservice, and coordination of advertising and public opinion research activities.

· (1305)

[English]

This fiscal year Communication Canada has a budget of $99 million. This does not include funding to be received following the fall supplementary estimates (A).

Communication Canada's supplementary estimates (A) include $28.2 million for three information and communication programs: first, the citizen information initiative; second, the Government of Canada exhibitions program; and third, the regional coordination initiative. It also includes $1.3 million for a grant to the Canadian Unity Council. Finally, it reduces the department's transfer payments by $1.3 million as part of the $1 billion government relocation exercise.

These funds will help Communication Canada meet its mandate of improving communications between the Government of Canada and Canadians.

The three information and communications programs were launched in 2000-01 and received three years' funding of $30 million per year. That expired in March 2003. This year's supplementary estimates seek the same previous level of resources for this current fiscal year only.

Of the $28,2 million in funding for the communications and information program, $18.5 million is directed to the citizen information initiative, designed to inform Canadians about programs, services, and access channels and to support government priorities and horizontal issues.

Over the last years, numerous campaigns and services guides, Services for you, Services for Seniors, and Services for First Nations People, have been developed.

The new 2003 edition of Services for you, produced in 11 versions, one for each province and one for the north, is distributed to 12 million households in Canada.

Funding will allow Communication Canada to continue developing and delivering a wide range of creative citizen-oriented corporate information products in partnership with other Government of Canada departments and agencies.

Further, the $4.6 million directed to the exhibitions program will maintain the government's presence at exhibitions across the country. The Canada Pavilion, a key component of the program, offers the unique opportunity to obtain relevant information on Government of Canada programs and services while providing visitors with the unique opportunity to interact with government representatives.

Over the last three years, 3.9 million Canadians visited the Canada Pavilion.

Finally, the remaining $5.1 million is directed to the regional coordination initiative, which undertakes a wide range of initiatives by integrating regional communications into national communication activities, answering a national consistency in all our messaging.

As our minister said, and I quote:

The Government of Canada needs to understand all the nuances of Canada's regions and be able to communicate with Canadians regionally in order to build the bonds of unity and a strong sense of inclusion and fairness nationally.

[Translation]

The Regional Coordination Initiative will maintain its offices in all 10 provinces and will continue to ensure the continuity of Government of Canada communications at the regional level as well as coordination of regionally specific communications at the corporate level.

The continuation of these three communication initiatives will reinforce the success achieved to date. These programs will continue to foster a corporate, whole-of-government approach to communications, by providing access to Government of Canada information to citizens at a national, regional and local level.

Also in the supplementary estimates is a $1.32 million grant to the Canadian Unity Council. The CUC disseminates information on Canada to Canadians living abroad in order to stimulate exchanges on questions of national interest.

[English]

That concludes my remarks, Mr. Chairman. Thank you again for the opportunity to outline briefly Communication Canada programs and services and to provide additional information on the initiatives included in the department's supplementary estimates (A).

· (1310)

The Chair: Thank you, Mr. Bédard.

Mr. Epp.

Mr. Ken Epp: Thank you for your reports. I have a number of questions. I want to urge you not to become defensive if I ask some questions that may sound as if I'm attacking you, because I'm not. I just want to know the answers.

First of all, on Communication Canada, on page 20 of the estimates, I have a huge question there.

How is it that your contributions in support of activities and projects to increase the understanding and appreciation of Canadian identity and to develop social awareness are going up from $1.5 million per year, the way I read it, to $30.25 million per year from here on in? That is a tremendous leap, and I want an explanation of that.

The Chair: That's in the plans and priorities document, Ken. That's not in the supplementaries.

Mr. Ken Epp: I'm sorry. I hit the wrong document. A number like that just throws itself out.

Mr. Guy Bédard: Sorry, I don't have it in front of me. Which page again?

Mr. Ken Epp: It's in chapter 20. It's called 2003-2004 Estimates, Part II, in the main estimates.

Mr. Guy Bédard: That's the contribution dollars?

Ms. Chantale Cousineau-Mahoney (Director General, Corporate Services and Corporate Renewal, Communication Canada): In actual fact the budget is not increasing; it's just that we have transferred some money from the O and M part of our budget, vote 15a, to a new vote, vote 20a, to the grants and contributions vote. It's mainly for sponsorship, because the sponsorship program has changed from contractual arrangements with event organizers to contributions.

Mr. Ken Epp: Okay, so you're saying that the total amount isn't changing, that it's just reported in a different place?

Ms. Chantale Cousineau-Mahoney: That's right. It's because we're using a new means to provide contributions to event organizers across Canada.

Mr. Ken Epp: Okay.

Now, here's the part that I was warning you about. I have had a number of people who are really upset phone or e-mail my office, or visit personally in some cases. They are just upset about the fact that their hard-earned taxpayers' dollars are going to some of these activities.

I had a lady who's a senior, and her husband has passed away. She's trying to make ends meet. She has a limited income, but she still has enough to be taxable. Now there's only one of them, so her deductions have gone down; yet the maintenance of the living space is exactly the same, the utilities have shot up, and she doesn't have enough money to pay all of her bills. The grandkids come home with these little balloon things that you can blow together and that say, “Government of Canada”. She says, “I'm reminded every month that there's a Government of Canada”.

That's been the common theme, that people look at their paycheque and here's the deduction. They don't need to be informed that they live in Canada, or that there is a Government of Canada. They're saying this is just an atrocious waste of their money.

So I want to hear from you, how do you justify all of this expenditure on promoting Canada when the Canadians out there who are footing the bill say, “We don't need it”?

And then while you're at it, there is that item I just talked about, “to increase the understanding and appreciation of Canadian identity”. That doesn't come by advertising, but by being here, by looking at your family history, and by looking at Canadian history. That's a function of our schools and our normal social institutions. We don't need to spend millions of dollars of taxpayers' money.

And with this thing called “develop social awareness”, what are we talking about there? I get people complaining that we have people who are raping women, who are brought into our community, which suddenly becomes our social awareness. This is an actual fact; in my riding, we had some guys released who were dangerous offenders and they weren't looked after. Yet that affects our social awareness.

Anyway, I've really given you a rant, but I don't want you to feel attacked. This is how I get it, and I just brought it to you. Now, how do you answer?

The Chair: If I may intervene, Ken, I don't want to be the referee in all of this, and although those are interesting and important questions, and I think the minister would love a chance to debate those at length with you, in fairness, Mr. Bédard and Madam Mahoney are here to talk about the operational facts and figures of the program. At this point I'm not certain it is appropriate to have them defending why sex offenders get released into your community.

Mr. Ken Epp: Oh, I know, That was a diversion.

· (1315)

Mr. Guy Bédard: I'd just like to add one comment, if I may.

Essentially, as you may know, Communication Canada is listening to Canadian research every quarter of the year. From the different research we do, Canadians want to know more about what the Government of Canada is doing for them. And before we asked the government to renew the three initiatives, we went through an in-depth evaluation of the results of those programs. For example, with the services guide distributed to 12 million households, 77% of households said it was useful information, and half of Canadians said they would follow up and would keep it and would refer to it.

So for each of the initiatives we're undertaking, we are making sure that we do exit surveys or evaluations in order to make sure we meet the expectations of Canadians.

That's the only thing I have to offer.

Mr. Ken Epp: Okay. That's a reasonable answer, which I accept. Thank you.

I would like to know, with respect to the sponsorship program.... It has now been brought so that it's run directly under Public Works and Government Services Canada. No longer do you have the agencies that are bidding on these projects.

How do you decide where to put these advertisements? I'll agree with you that your little booklet might be useful...well, it is useful; you said it is.

Some hon. members: Oh, oh!

Mr. Ken Epp: So it's useful to inform Canadians of programs. Without that information, perhaps some of them would forget to apply for their old age security, or whatever. Okay, let's accept that.

But when the camera scans a hockey game and we see a Government of Canada billboard in the rink, what use is that?

Mr. Guy Bédard: Essentially, you have to take sponsorships, which is what we are referring to, as part of our marketing mix. We do public opinion research; we do advertising; we do fair and exhibit contacts; and we do sponsorship. Essentially, we use all of the marketing tools available to us in order to be in a position to inform Canadians—and mainly to make sure they understand very well how to access Government of Canada programs and services.

For example, the use of the 1 800-OCanada line is important for us. If you don't know where to go to learn more about a program or service, if you call that number, a person will talk to you and you will get the information. If the call centre cannot provide the full information, they will refer you to the right organization or person. You have to see all of those things as part of our strategy to communicate how to access government programs and services.

The Chair: Thank you, Mr. Bédard.

Monsieur Lanctôt, s'il vous plaît.

[Translation]

Mr. Robert Lanctôt: Thank you, Mr. Chairman.

I'm going to start with the following question. The $30 million included in the summary of transfer payments was discussed. I'm not going to talk about that because I realize that it was put somewhere else. The Sponsorship Program was a program worth around $40 million, and now there is a total of $30 million in planned spending for 2003-2004. Can we deduce from this that the elimination of third parties alone saved $10 million? I'm going to start with this simple question, to which I would like to have a quick answer, and then I will continue.

· (1320)

Mr. Guy Bédard: No. There was $40 million for the Sponsorship Program last year. This year, it's still $40 million, but it has been reduced by $5 million to allow for a contribution, among other things, to the $1 billion reallocation exercise. Part of the remaining $35 million is in the form of contributions or transfer payments, as you said, and the other part is for program administration and what we call activation; that is to say, beyond sponsorship at an event, the Government of Canada may also be present through a kiosk distributing information on programs and services. All of that is now part of the $35 million sponsorship budget this year.

Mr. Robert Lanctôt: All right. What does the $5 million reduction you mentioned consist of?

Mr. Guy Bédard: The $5 million reduction is part of an effort that all departments were asked to contribute to in order to cut spending by $1 billion as announced in the budget. We contributed $3 million to this cut, and Mr. Goodale reallocated $2 million to other initiatives, including the Exhibitions Program.

Mr. Robert Lanctôt: All right. So we are no longer talking about $40 million, we are in fact talking about $35 million.

Mr. Guy Bédard: Yes, $35 million.

Mr. Robert Lanctôt: All right. How much money have you saved so far on account of the fact that there are no longer any third party middlemen in the Sponsorship Program? How much have you saved since the new program was implemented? Or have you given more sponsorship money to organizations that need it instead of advertising agencies that took advantage of it?

Mr. Guy Bédard: The ministerial decision in relation to the program was that our administrative costs should be limited to 15%, the amount that used to go to the in-between agencies doing the administrative management. So our administration budget comes within this envelope.

Mr. Robert Lanctôt: All right. How much money have you managed to save since you stopped dealing with third parties?

Mr. Guy Bédard: Given that the year is not over, I don't have any data on how much money may have been saved this way. We no longer pay the 12%.

Mr. Robert Lanctôt: It's October now, so almost half of the fiscal year is over. Do you have an idea of the numbers? Is it the same?

Mr. Guy Bédard: It appears that we will not exceed the 15% maximum for administrative costs.

Mr. Robert Lanctôt: Compared to before, what does that mean?

Mr. Guy Bédard: In the past, we had to pay agencies 15%, not counting salaries.

Mr. Robert Lanctôt: So it amounts to the same thing.

Mr. Guy Bédard: In addition to the salaries of people who were there before, officials were given an allowance.

Mr. Robert Lanctôt: If I understand correctly, there have been no savings.

Mr. Guy Bédard: There will be some savings, in my opinion, but I don't have any specific information. I can tell you that it will involve gains other than financial, such as a direct presence, direct management and direct monitoring of sponsorships.

· (1325)

Mr. Robert Lanctôt: That is fine. Let us look at page 85 of the English version of your document. There is reference to a request for $28.3 million for operations, part of which would be used for information. Is that new advertising? What will the $18.3 million be used for?

Ms. Chantale Cousineau-Mahoney: Most of the money will be used to pay for the advertising contract fees under the CII program. What is the name in French?

Mr. Guy Bédard: L'Initiative d'information des citoyens.

Mr. Robert Lanctôt: What kind of advertising is involved?

Mr. Guy Bédard: Here are a few examples: this year we published the second edition of the Services Guide for Canadians and we are planning other initiatives, such as a campaign on our access channels. We want our access channels, such as our 1-800 number for example, to be available everywhere in Canada from 8:00 a.m. to 8:00 p.m. in every province. Right now, they are available from 8:00 a.m. to 8:00 p.m., but only in central Canada time zones.

Mr. Robert Lanctôt: If I understand correctly, this $18 million will be used to publish the brochure and a subsequent one.

Mr. Guy Bédard: We are working with Human Resources Development Canada on the second stage of the campaign for children, and a new guide for children will be published this fall. It is information on the programs and services related to families. This campaign will be held in the fall.

Mr. Robert Lanctôt: If I may, Mr. Chairman, I would like to ask one last short specific question.

Let us talk about the advertising for children's services. Did you contact the provincial governments, including the Quebec government, before dealing with the school boards? Do you not think that by contacting the school boards directly instead of going through the provincial governments, including Quebec, that Communication Canada is infringing on areas of provincial jurisdiction?

Mr. Guy Bédard: This campaign is the responsibility of Human Resources Development Canada. I do not know what steps the Human Resources Development Department took in this regard.

Mr. Robert Lanctôt: Isn't Communication Canada the central authority now?

Mr. Guy Bédard: Communication Canada is a partner. Communication Canada is responsible for its own campaigns, such as its 1-800 number in Canada, etc. Communication Canada supports some campaigns for which Human Resources Development Canada is responsible, since some programs for children, for example, involve more than one department. So we act as a coordinator.

Mr. Robert Lanctôt: What would be your contribution to this campaign in percentage terms and what would be that of HRDC?

Mr. Guy Bédard: I do not have all of the...

The Chair: Mr. Lanctôt, you can come back to that on the second round.

Mr. Robert Lanctôt: Thank you.

[English]

The Chair: Thank you.

Mr. Clark.

Right Hon. Joe Clark: Thank you, Mr. Chair, and thank you to the witnesses.

Under Public Works there's a reference to additional accommodation requirements. I understand that has mainly to do with offices, but does it also have to do with the costs incurred, in exceptional cases, by persons appointed to positions in Ottawa where double accommodation is required?

Without asking you to go into a specific case, are there some general guidelines with respect to the application of that provision of double accommodation? Does it apply normally only to one year? Where are exceptions decided? Are they decided by the department or by the PCO, or elsewhere? Is there a document you could give us?

Ms. Lysanne Gauvin: Thank you for the question.

The amounts that are referred to in supplementary estimates (A) for federal accommodations, the $37 million, relate strictly to the federal government housing of public servants. It does not deal with additional accommodation requirements such as you're describing.

Right Hon. Joe Clark: Okay. Where would we find out about that? PCO?

Ms. Lysanne Gauvin: Treasury Board Secretariat.

Right Hon. Joe Clark: Okay.

With regard to the evaluation of Communication Canada programs, we all know that the evaluation of programs can be self-serving. I wonder if you would be prepared to publish the questions asked in your evaluation, the aggregate answers, the holding organizations in each case, and an indication as to how the polling organization was contracted.

Mr. Guy Bédard: The results of the evaluation are posted on our website. If you want to have access to additional information, and so on, we will be pleased to provide it.

Right Hon. Joe Clark: Okay, thank you very much.

Ms. Chantale Cousineau-Mahoney: The way the companies were picked was through an RFP, a full request for proposals, evaluated through Public Works.

Right Hon. Joe Clark: Okay. I'm interested in the regional coordination initiative. Is this a new agency or new money for this new agency?

Mr. Guy Bédard: The regional coordination initiative was established three years ago, in 2000, with the opening of our regional offices across Canada in the provincial capitals. We are asking to renew the same level of funding for this fiscal year for this initiative.

· (1330)

Right Hon. Joe Clark: You're asking for $5.1 million.

Mr. Guy Bédard: No, that was what we had last year.

Right Hon. Joe Clark: Why was it not included in the main estimates?

Mr. Guy Bédard: Essentially, after two years, we wanted to conduct an in-depth evaluation. We have undertaken to do that over the summertime and the fall, because many of the activities we are conducting in all those areas take place during the summertime. For example, exhibitions, as well as some of the campaigns, are in the spring and the fall.

We got the full information late in the fall, so we went back to the board in order to make sure that the ministers would make an informed decision, based on facts and figures.

Right Hon. Joe Clark: You have offices in all 10 provinces, you say. That means at least 10 offices. Are they staffed by public service competition?

Mr. Guy Bédard: Yes, they are.

Right Hon. Joe Clark: On the Canadian Unity Council--and I don't have to defend my belief in Canadian unity--why do they need an extra $1.32 million this year?

Mr. Guy Bédard: What we are supporting is the liaison program they have in Europe. They started first in Paris.

Right Hon. Joe Clark: In Europe.

Mr. Guy Bédard: Yes.

The objective essentially is to communicate with Canadians living abroad, and also to reach decision-makers in those countries in order to inform them of the priorities, programs, and services of the Government of Canada, through eminent Canadians who are essentially discussing foreign exchange on key policies of the government: sustainable development, trade, globalization, and so on.

Right Hon. Joe Clark: These are people, I presume, who can't get on the Governor General's trip. I would be very interested in why one needs to have that activity functioning internationally. I don't know what services or extra help is needed by foreign governments from the Canadian Unity Council. I don't want to detain you on that, but it seems to be a matter that should be examined.

Should I come back for a second round?

The Chair: You have one more minute on the first round, Mr. Clark. I'm enjoying this.

Right Hon. Joe Clark: Let me go back to Public Works then. You're spending $76-million-and-some on special services. Is that 100% on consultants, or how would it break down? What are professional and special services?

Mr. Michael Turner (Assistant Deputy Minister, Telecommunications and Informatics Program Branch, Department of Public Works and Government Services): I believe, sir, that falls largely in the area of the government online projects. It would be largely the use of outside contractors and consultants who are supporting the build of the technical infrastructure, the “secure channel,” as we call it, as well as in some of these service delivery projects where individuals have been brought in from outside with specialized expertise to assist in these projects.

The Chair: Thank you very much, Mr. Clark.

If I may, I'll just pick up on that point, Mr. Turner, before I go to Madam Bennett and Madam Sgro. If you look in Treasury Board--I don't expect you to deal with the Treasury Board supplementary estimates--there is also a very large amount in there for secure channel. Is there a government-wide number for what secure channel is going to cost us?

Mr. Michael Turner: You will see it in both places, because essentially the Treasury Board CIO branch is the bookkeeper and banker for the government online projects. They then, upon agreement with the participating departments, will assign the money. It then gets transferred through, for example, the supplementary estimates in this case to the implementing department or agency, and that's why you will see it in both places.

In our particular case, the money that's shown in our supps that are before you today is the next installment of the bill for secure channel infrastructure, and the board will still have money held for the next six months of the year, to the end of March, in that budget.

The Chair: But in the supplementary (A)s for this year you are indicating that part of your vote 1, a substantial portion of the $78 million, is for outside contractors to build “the infrastructure”. I'm assuming a lot of that is secure channel?

Mr. Michael Turner: Yes, that's correct.

The Chair: And Treasury Board is also asking for a new appropriation of $31,746,000, half the size of yours, so yours is not money they're transferring to you. Neither of these shows transfers between the two of you. If I add those two numbers together--obviously, there are other things included in that--am I beginning to get the whole number for secure channel? Or if I go through this exercise in all of the departments of government, am I going to keep adding up little bits until I get to a much larger number that is called secure channel?

· (1335)

Mr. Michael Turner: I would not expect to find any substantial expenditures in other departments beyond our own and the CIO branch of the board. You would have to ask the board for a bit more detail on the funds you see in the CIO branch, but it may not all be secure channel per se; it may be other parts of GOL.

The Chair: But you understand the difficulty here?

Mr. Michael Turner: Yes, indeed, but I can tell you it's exactly what we've spent on the secure channel system to build and operate; $147 million is the figure to the end of the last fiscal year, and to the end of the last month it was roughly $216 million.

The Chair: Is that within PWGSC?

Mr. Michael Turner: PWGSC, yes.

The Chair: Well, thank you for having that figure at your fingertips. I'm rather impressed with that.

Carolyn.

Ms. Carolyn Bennett: This is on the Communication Canada mandate, where it says you coordinate corporate communications nationally and in the regions. I'm on page 13 of part 3: “Work with other departments to establish a proactive two-year planning cycle and to spread out media buying throughout the year.”

The media buying is interesting, and I want to know, how much do you do and how much does the department do? One of my greatest irritations as a physician watching the Olympics was the horrible Elvis Stojko ads that were against all research in terms of what works in preventing kids from smoking. It's a terrible ad. Is that a Health Canada problem, that they've wasted money on a terrible ad and the highest possible expense during the Olympics, or is that you helping them do that with the proactive two-year planning process?

Mr. Guy Bédard: As you may know, over the last year we've gone through a major review of the way the government has been conducting business in advertising. Minister Goodale and Madame Robillard led that exercise. Minister Goodale announced a certain number of changes back in April in Toronto regarding the way we should essentially do business, and that will make for a new competitive aspect and better coordination in the future in terms of the way it will be conducted.

The process right now is essentially one that brings the proposal to the cabinet committee on government communications, which is chaired by Minister Goodale, and ministers have an opportunity there to comment on the campaigns that are proposed and the explanation of the rationales.

We have to say that in this case we're there to communicate, provide the climate, and make sure we have the request for proposal, the procurement processes, and so on. We also provide what we call the advertising number, but the substance of the content of an ad campaign comes from the relevant department.

Ms. Carolyn Bennett: In the supplementary estimates for government online, Public Works, it says this is just a draw-down from previously approved funds in terms of some of this GOL stuff. Are we on target in terms of time for GOL, and if we're not, shouldn't you have asked for more money? Our chairman thinks we're going to save a whole bunch of money if we eventually get to government online in terms of being able to see what's happening across the whole of government.

· (1340)

The Chair: I've also said we won't meet the target.

Mr. Michael Turner: With respect to the target itself, I would have to say it is largely the Treasury Board's CIO branch that is involved in the monitoring of that. But I can tell you that as recently as this morning, Michelle D'Auray, the federal CIO, made reference to the target and felt we were approximately on target and were going to meet our objectives for the end of 2005 to have the 135 services up and running.

Now, whether there are adequate funds to allow for that and to allow for ongoing operation is another concern, and you will not be surprised to learn that there are discussions under way across departments right now on the question of what's called longer-term sustainability of the infrastructure. In other words, how do we pay for the ongoing operation of the new technologies and new services being provided online?

As your chairman is well aware, to do so from the point of view of saving money in other areas is the challenge, and there's work under way across a number of departments to explore how services can be transformed in the way they're offered now to make better use of the online capability to re-engineer those services so they can be provided more efficiently.

Our role at PWGSC is twofold. One is to build and manage the common infrastructure behind the wall, so to speak, to allow departments to concentrate their efforts on their specific programs and their specific applications and not worry about repeating and rebuilding infrastructure. Number two is, as a department ourselves, we have a number of government online projects, some of which you see in fact in the supps here, that will offer certain services online through PWGSC.

The marketplace, for example, is mentioned here, and that's one initiative that's managed within PWGSC itself. That is expected to be part of a larger re-engineering of the whole process of procurement within the department, in which my colleague Glen Bailey, the ADM for the acquisition program, is actively engaged. There has been a major effort to essentially rethink the whole acquisition process and to see how it can best be supported and facilitated by the new technologies moving more procurement into an online environment.

The Chair: Thank you, Madam Bennett.

I can't let the comment about GOL targets go by without at least one minor comment. I suggest if one were to draw out the original commitment and look at how it has evolved over time, it would be a little hard to be quite so sanguine about it.

Mr. Michael Turner: It is, some say, a moving target.

The Chair: I should out Mr. Turner, though. He's been one of the champions of this. He knows a lot about this, far more than I do.

Ms. Carolyn Bennett: I just want to know why he didn't want more money.

The Chair: Well, I'll tell you, you might want to wander around and look at some of those services like that 1-800-OCanada call centre. it's first class.

Judy.

Ms. Judy Sgro: Since you've raised it, I must add to that. I've gotten so that when people ask me questions, I just say call 1-800-OCanada. It's a wonderful service, and people have gotten back to my office and complimented us on what a great service it is, the service you are providing to Canadians when people don't know where to go. So hopefully, people will have by second nature that 1-800-OCanada embedded in their mind, and every time they have a question they'll no doubt call.

How are you doing from a Communication Canada perspective on partnering with other departments when it comes not only to purchasing media time or where you would place the ads, but in working in cooperation with those departments so we have a bit of a uniform look when we're out there advertising various departments and services? Aside from what you put out as Communication Canada with your seniors' booklet, your children's booklet, and, as you said, a families' booklet you're doing now, how are you doing with getting departments to change the way they have traditionally been doing their advertising and partnering with you?

Mr. Guy Bédard: Mr. Chairman, may I call one of our colleagues, Benoit Trottier? Benoit is the DG of communications and he can maybe answer better than I can those specific questions.

Mr. Benoit Trottier (Director General, Communications, Communication Canada): Basically, your question is how do we work with other departments on information and advertising projects. We work on big priorities for the government that go beyond the responsibility of one department.

If you take the example of children, we basically create working groups and we ask...in this particular case we asked all the departments that offer services to children or families to come and work with us to put together a comprehensive list of services for children and families and, also very important, where citizens can go to find more information about the services that are listed in this publication.

We coordinate the input and also the output. This allows us to have a consistent approach throughout this process.

· (1345)

Ms. Judy Sgro: Suppose the Department of National Defence has initiated some sort of information campaign, or whatever be their rationale. Are they calling you, as Communication Canada, and suggesting that you might be of assistance to them with the skills Communication Canada has, to assist them in whatever their initiative is that they want communicated to the public, or because it's within their own budget, do they do their own acquisition and so on?

Mr. Benoit Trottier: It's a combination of both. In the case of National Defence, where it is a big department with more resources than smaller departments and agencies have, they have their own specialists. But we also have mandatory processes where all departments, regardless of their size, have to input into the campaigns that they're planning to undertake over the next year. Also, when they want to buy media time or space, they have to come to us with their plan. We will then give them a number that will allow them to buy space and time in the media.

Basically, those departments that have all the resources they need come to us through the process. But the medium and smaller ones we assist on an as required basis.

Ms. Judy Sgro: Great work. Thank you.

The Chair: Mr. Pacetti.

Mr. Massimo Pacetti: Thank you, Mr. Chair. I have one question.

On the additional accommodation, in the brief it says it's the result of 13% of salary. So if I take $37.1 million and I divide it by 13%, shouldn't we have an additional $284 million of additional supplementary estimates? Did I understand that correctly?

Ms. Lysanne Gauvin: It's a formula that's been established for a number of years, and whenever departments go to the Treasury Board seeking approval for additional funding and there's a salary component, they get the salary and we receive the 13%.

Mr. Massimo Pacetti: So we would see the $284 million in other departments. Is that it?

Ms. Lysanne Gauvin: It would be split out throughout all departments.

Mr. Massimo Pacetti: Which one would be the majority? Would you have that?

Ms. Lysanne Gauvin: I can tell you which ones are the big ones for this round: Citizenship and Immigration Canada, Canada Customs and Revenue Agency, Agriculture Canada, CFIA, Health, and Justice.

Mr. Massimo Pacetti: So if we ran a total, it would be roughly $284 million.

Ms. Lysanne Gauvin: No, because there are a lot of small ones as well.

Mr. Massimo Pacetti: Okay, but if we had the list, it would be about $284 million, and if you take 13% of that, that's how we arrive at that $37.1 million.

Ms. Lysanne Gauvin: Roughly, that's right. You've understood correctly.

Mr. Massimo Pacetti: Okay.

The Chair: Mr. Epp, you wanted another round. We have about ten minutes left.

Mr. Ken Epp: I don't think I'll take that.

The Chair: I'll guarantee you won't.

Mr. Ken Epp: We'll see where things go.

To the people on my righthand side, I'm really intrigued with the fact that you'd crank through billions of dollars on behalf of the government. I understand you are the agency in charge of issuing all those HRDC cheques and all the EI cheques and everything. That all goes through your banking division. Is that right?

Ms. Lysanne Gauvin: For the most part, that's correct. We do not issue the EI cheques.

Mr. Ken Epp: They go directly from the department, do they?

Ms. Lysanne Gauvin: The cheques go directly from the department to the recipient. However, we do the direct deposits for EI.

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Mr. Ken Epp: I'll bet that's confusing.

Ms. Lysanne Gauvin: No. It's been in place for a number of years now, that split.

Mr. Ken Epp: Do all salary cheques to civil servants go through that?

The nature of my question has to do with savings. It must be 10 or 15 years ago that there was a big push to go through electronic transfer of funds, particularly for old age security and for government employees and so on. It was touted as being a fantastic saving in terms of costs. Could you give us a bit of a progress report in terms of what percentage, roughly, of success you have had in persuading people to take the route of electronic transfer instead of the printed cheque mailed out through Canada Post?

Ms. Lysanne Gauvin: Overall, for the payments that are issued by the Government of Canada, about 70% of the payments are issued electronically. There are variations by programs. In some programs it's up to 85% or 90%. For pensions and other programs it's quite a bit lower. But if you look overall, about 70% of payments are issued electronically for the Government of Canada.

Mr. Ken Epp: Another question on the same topic. We always have vigilance against fraud. But I understand we still have in Canada around five million social insurance numbers out there for which there are no people.

I wonder, when it comes to electronic transfers versus the old delivered-by-mail cheques, does that not make security checks more difficult? I think the reason is that if Canada Post has an address and the person is no longer there, it's a good likelihood that the cheque will be returned with somebody scribbling “no longer lives here”, or something like that, on the letter, whereas with electronic transfer, the gift could keep on giving for years and years. Can you comment?

Ms. Lysanne Gauvin: I don't have the numbers in terms of what the split is between fraud through electronic payments and paper payments, but it's something we could get back to you about. I simply don't have that information at my fingertips.

Mr. Ken Epp: Is it presumed to be a major problem?

Ms. Lysanne Gauvin: No.

Mr. Ken Epp: I don't know how you define “major”, but are there people receiving double payments and people receiving payments they shouldn't be getting at all, in any numbers at all? Do you have a specific crew with a mandate for looking for those things and making sure it doesn't happen?

Ms. Lysanne Gauvin: I've forgotten your first question. May I answer your second question first?

With respect to verifying for double payments, that's mainly the responsibility of the issuing department. If it's an EI payment, for example, it's up to HRDC to ensure they're not issuing double payments.

I'm sorry, I forgot your first question.

Mr. Ken Epp: Do you have a group of people who are out there specifically making sure that the payments made are legitimate?

Ms. Lysanne Gauvin: Oh, yes. We try to detect fraud as payments are going through, or as we're reconciling the payments. Yes, we do.

Mr. Ken Epp: Okay. Thank you, Mr. Chairman.

The Chair: Thank you, Mr. Epp.

There was a famous moment in the Manitoba legislature when a minister rising to answer a question said, “I didn't hear the question, but here's the answer”. So thank you for that.

Monsieur Lanctôt.

[Translation]

Mr. Robert Lanctôt: I will finish the question I asked earlier.

You are telling me you had a partnership with HRDC for the advertising campaign for children's services, but you were not the ones to make the decisions. You simply provided a percentage of the money required to implement the program and do the follow-up. How did that work?

Mr. Guy Bédard: Under that partnership, our main objective was to provide a guide that would include more than the services provided by the Human Resources Development Department, that would include all of the services available to children and families. The second objective was to give more regional presence to the information campaign on the various parts of the program. Those were our objectives under our partnership with Human Resources Development Canada.

Mr. Robert Lanctôt: But you know that the department's objective isn't that at all. The purpose of this advertising isn't just that. You transmitted the information through the school boards instead of sending it directly to the homes of Canadians and Quebeckers.

You knew full well you had no jurisdiction over this whatsoever. Why did you advertise through school boards? You are part of that.

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Mr. Benoit Trottier: As far as I know, the school board network in Quebec or elsewhere was not used during the advertising campaign for children's services. I can ask the Department of Human Resources Development, that brought everyone together in this case, to tell me whether that was the case. As far as I know, the school board network was not used for that. The advertising for the guide was done on television, on radio and in the newspapers. But it could be that copies of this guide ended up in the hands of third parties, who can distribute them as they see fit.

Mr. Robert Lanctôt: I would like you to check because it was done systematically in the school boards. Your agency wants to advertise and already knows that it uses other people's jurisdictions to do so. Check this, because it was done systematically.

Here's another question. With regard to the advertising contracts that are awarded, which must not be confused with the Sponsorship Program, apparently $400 million was spent in prior years. Will the amount be as high this year?

Mr. Benoit Trottier: For the fiscal year 2003-2004, it is estimated that government-wide, the total value of awarded contracts will be between $55 million and $60 million. This figure will have to be confirmed once all the contracts are completed. We will then be able to see how accurate the initial estimates were. Generally speaking, the amount is 5% to 10% less than the estimate once the media purchases have been made and paid for.

Mr. Robert Lanctôt: For the advertising program, did you use the services of the same intermediaries as for the Sponsorship Program?

Mr. Benoit Trottier: The government used a central coordinating agency to purchase the media spots. Only one agency is authorized by the federal government to purchase media air time and space. That agency has a contract with Public Works and Government Services Canada.

Mr. Robert Lanctôt: Thank you.

[English]

The Chair: We're at that time when we are going to close down. I just want to say a couple of things.

I think the first thing is just to recognize some very good work on the part of Communication Canada. You've come a long way in a short period of time, given what you started with.

And I want to thank you, Madame Gauvin and Mr. Turner, for being here.

Mr. Turner and I have had many conversations, and I've always found him to be very forthcoming on these issues. This issue of trying to determine the horizontal costs of these programs is something we are interested in. Now we will pursue it through Treasury Board, but we may call upon your services to help us sort out how we go about doing that.

Thank you very much. I appreciate your being here. And to those who are back there to support you, thank you also for being here. We'll see you again soon.

Members, the clerk informs me we're back in this room at 3:30 p.m. If you wish to leave books and papers here, they will secure the room.

We're adjourned.