OGGO Committee Meeting

    Welcome, everyone.

    Welcome, Minister.

    We have with us today Minister Day, and we will be reviewing supplementary estimates (C). Everybody knows that supplementary estimates (C) will pass tomorrow and that our deadline has passed, but we had to do this as a formality. Therefore, there will be leeway on the questioning.

    We are also doing the main estimates. We had discussed, as a committee, that the main estimates will be discussed further when the RPP is out. So, Minister, we hope we can call you back then.

    With that, Minister, I understand you have a few minutes of opening remarks. I'll give you the floor.

    Thank you very much, Madam Chair.

    Friends and colleagues, it is an honour for me to be here today to discuss the expenditures of the Government of Canada.

    I will just make a few opening remarks. I'm looking forward to your questions and your insights, and I'm sure your positive criticisms and guidance, as we move ahead.

    One of the things that's interesting about responses to the budget, and I say this with some self-admission here, having also served in opposition, is that right after the budget comes out, many times--and I'm sure present audience excluded--the response from the opposition, and again I'm talking from painful experience, having been there, is that there is nothing in this budget. I just want to assure members...as you know, there is about $280 billion in this budget. Now there may be disagreement on how it gets spent and is dispensed, and I accept that, but I do think it's important to let Canadians know there is a lot of money in this budget. Some people may like that thought, some may not.

    When it gets drilled down on the critics' side, someone will say, for instance, that there is nothing in the budget for seniors. There is actually $36 billion in the budget for seniors. People say there is nothing for agriculture. Just for the Department of Agriculture alone there is $2.9 billion.

    So I think we can have agreement. Certainly there is a partisan nature to what we do, but I hope we all agree that there is a lot of taxpayers' hard-earned money that goes to running this government day to day, which is about $34 million a day just to keep the basic operations going.

    I'd like to reflect on the fact that we hear concerns about a deficit, and quite rightly. This budget, as we indicated before it came out, was going to have the initial steps of a road map to get us back to a balanced budget. Just over two years ago, recognizing that we were moving into what has been seen largely as the worst global downturn probably since 1929, we said, “We're going to take on some deficit; we're going to intentionally, temporarily, go into debt so that we can provide some stimulus to the economy in this down time and in this downturn.” I'm sure there will always be debates on whether there was enough or whether it was too much, but this was an intentional move. We knew we would be moving into a deficit situation. We also said that at the end of this year that deficit spending will stop.

    We now have a deficit, as you know from the figures, of about $53 billion. That means we're borrowing about $53 billion to complete all the spending to keep things moving day to day in government. And we have said we're going to get to a basically balanced position--almost all of that $53 billion taken care of--by the year 2014-15. People have said that's a gigantic and improbable--and some are saying impossible--task. It's a matter of how you break it down, and that's what this year's budget is about. First of all, we've sent the indicators, but you've seen many areas of increase in this particular budget. In the years following this budget, of course, the actual increase in spending itself is going to come to an end. We have debt charges that will continue to go up for a while.

    With this budget and the numbers that are before you, people are quite rightly asking, how do you get rid of that $53 billion? Actually, we're trying to break it down into three large bite-sized pieces. The stimulus spending, which includes infrastructure, is about $19 billion. That's over at the end of this year.

    If this glass of water represents let's say $50 billion plus.... Any time I round off a billion, please don't think I don't think a billion dollars isn't a lot of money. It's a pile of money. But for rounding purposes, if you look at this glass of water as representing about $50 billion plus worth of deficit, once we take out $19 billion, which will end this year, that part of the deficit right away in one year is going to shrink by about 40%. So for the purpose of illustration--and Paul is catching on--the deficit is going to go down about 40% just in one year along that pathway.

    We also said we're going to put a lid on departmental spending. Departments spend about $54 billion, all added together, to run their operations. We've said there's going to be a lid on that $54 billion. The 2010-11 lid you have in front of you will continue for the next two years. Just doing that stops the increase we've been seeing in our budgets, which we take full responsibility for. Just by doing that, by the time we get to 2014-15, that's about a 37% reduction, which takes us down to about there.

    The final portion of what we are going to be embarking on, and what we've been embarking on over the last three years, is strategic reviews of every department and agency. About a third of those come before the government each year. We say to the department heads that we want them to take responsibility for this, and we want them to find approximately 5% of their overall budget that they would classify as low priority, things that if they didn't get done...and we'd like to get it all done. We don't want people programs hurt, and we're not going to reduce the transfer payments to provinces. We're not going there, but we want them to help us find 5% in each department and agency. That, combined with what we think will be some upward movement on income revenues to the government, which basically means taxes without raising taxes, is the remaining approximately 23% or so. It will not be as easy as drinking a glass of water, but I wanted to show you the three main approaches we're taking to get there.

    I know there has been some speculation as to whether we are being overly optimistic on the revenue side. In other words, are we really going to see an increase in economic activity that can help make up that remaining 23% to get rid of the deficit? I believe we will, obviously. We're already hearing from around the world signals about how this government has been handling its economic matters. The manager of the largest bond portfolio fund in the world out of the United States, Pacific Investment Management, a trillion dollar fund—a trillion takes a long time for my brain to compute—said not long ago that he's directing major institutional investors to Canada. A week ago, in a financial report, Russia said they want to strengthen their currency reserves by buying Canadian dollars. So already we're getting signals that internationally we're becoming more and more attractive on the investment side. Of course, when people invest in businesses here in Canada, that means more jobs, more people working, and more taxes without raising taxes.

    The chair is giving me a signal. I will happily conclude my overview, and I'll look to you for your questions, direction, and insight.

    Thank you.

    Thank you, Minister.

    I will start with the first round of questioning.

    Ms. Coady, you have seven minutes.

    Thank you very much.

    I appreciate the minister coming here today. As the chair indicated earlier, this is the first step towards reviewing the main estimates as well as finalizing the supplementary estimates (C) review. We appreciate your taking the time to come here today.

    Listening to your analogy of the glass of water, I thought of the Parliamentary Budget Officer when you were saying that. He's still thirsty, thinking there's a structural deficit and that we're going to have some time to work our way through that. I also note that you talked about taxes without actually raising taxes. I find that an interesting turn of phrase, especially having been a business person. We do see some tax increases throughout this budget.

    I turn first to something this committee has actually studied, and this is concerning the departmental budget freeze. The main estimates show that this year the PCO will get just over $13 million over last year's budget, and that's for the Prime Minister and portfolio ministers' support and advice. I heard you in the House stating that this increase was for the upcoming G-8 and G-20 meetings. You used that as probably the foundation for having that increase. We do know that the G-8 and G-20 meetings will be over by this summer.

    My question is very simple. It's a simple and direct question, and I'd like a succinct and direct response, if you can, knowing that I have only a few minutes. Will the PCO departmental budget be frozen at the 2009-10 level or at the inflated 2010-11 amount?

    Thank you for your request for being succinct. I will try to be. I'm just jotting this down here.

    All budgets are going to be frozen at the 2010 levels. As I'm sure you're aware, that includes all spending. From year to year, PCO has any number of issues that they deal with. As I'm sure you're aware, it's not just the Prime Minister's Office; there are also four other departmental offices, or portions thereof, that get funded, and situations can cause that funding to increase. You already mentioned a couple of those: the G-8 and the G-20. One of the particular ministerial assists to the Prime Minister has significant travel implications related to his abilities, and that quite rightly requires some extra attention. There have been a number of issues that the PMO has had to engage Canadians on that required extra attention, extra dollars, extra resources.

    When we say we're looking at a departmental freeze, keep in mind that if there are extraordinary situations that come along, that could result in a request for an increase. Basically we're saying it's frozen, but there could be extraordinary situations that would require an increase.

    Thank you very much.

    Just going back to that point, you said frozen at 2010.... For clarity, is that 2009-10 or 2010-11?

    Thanks for asking that. It's 2010-11.

    So it'll be frozen at this budget cycle.

    That's correct.

    With the increase retained in it.

    There will have to be allotments made to compensate for the fact that the G-8 and the G-20 had certain increases. If PCO is looking at an increase in their spending, they're going to have to put in a request to justify that, because just as there are certain increases related to the Olympics, we don't allow that simply to carry forward.

    That's why I sought clarity on that question, Mr. Minister. If you're going to freeze it to 2010-11, there actually is a $13 million plus increase in the PCO budget built in that year for those, as you've said, extraordinary circumstances. I note it in the supplementaries as well as in the main estimates. For example, in the main estimates there's an additional $78.5 million for activities related to the hosting of the 2010 G-8 summit in Muskoka, at Foreign Affairs. I noted that the 2009-10 supplementary estimates (C) included, I think it was, $179.4 million for funding, planning, and pre-event operations related to the policing and security of the 2010 G-8 and G-20 summits. I want some clarity around the fact that those are extraordinary circumstances, so you'll be going back to that pre-extraordinary event in order to ensure that you have no major increases in that area.

    Yes. When a department comes forward, they have to justify or request what exactly their spending is for. If they had a certain element of spending that took place the year before, whether we're talking about G-8 or G-20, or whether we're talking about the Olympics, and they're justifying some added expense for that, the next year, if that event is not taking place, then there's going to have to be justification for all the remaining expense.

    I just want to say I think you actually said “billion”.

    No, million.

    I think you recognize that it's millions that we're talking about here. When we talk about Privy Council for 2010-11, that's $143.9 million. I just want to clarify. I knew you meant million.

    I did say “million” actually.

    I do want to go back to these extraordinary circumstances, because this budget is quite strong in suggesting that the department budget freeze is just that. It is a freeze for the next number of years at the current level. What you're telling me, then, is the freeze for the PCO will include the money that was for extraordinary circumstances and that other departments, if there are extraordinary circumstances, could make petition to you for that very circumstance.

    They could. We've indicated that. It's going to have to be pretty extraordinary, but you are correct. The budgets going forward for Privy Council are going to be net of those extra expenditures for the G-8 and the G-20. We're making ourselves clear on that to departments, including the Privy Council, coming forward.

    Thank you for that. We'll probably come back to that whole notion for clarity.

    I'm still on this budget freeze and some of the changes that you're doing, but I noted when you announced the 245 board job cuts, you also talked about 17 departments or agencies that will be identified to find 5% of spending that could be trimmed. Which departments? Has there been an analysis done, and what is the impact?

    I'll get you the actual list.

    This isn't the first year we've done this. Last year there was about a third of departments and a number of agencies—I'll send you the list—and actual hard cash savings on that were $286 million to $287 million. That's money that's off the top, that's no longer being spent.

    Which, at the time, was going to be reinvested.

    I just want to give a specific incidence. Under the strategic savings, they were going to be reinvested in various programs. I'm thinking about science here. It was going to be reinvested. You were looking at the granting councils and you were doing a full analysis of those, and that money that was going to be saved was going to be reinvested in science. Are you saying that, for example, those types of strategic savings will now be cut?

    Once a saving has been achieved, it will be left at that level; it won't be reinvested.

    Our estimate for this year and for next year will be savings of about $1.3 billion. That's what we hope to see saved as we go through that strategic review.

    Madam Chair, we'll send the list of agencies and departments that will be going through that exercise this year.

    Thank you.

    We go now to Madame Bourgeois for huit minutes. I was thinking that it was seven, but it's eight minutes.

    Thank you, Madam Chair.

    Good afternoon, Mr. Minister. Thank you for making yourself available for nearly two hours.

    My first question is about the main estimates. Regarding salaries, departments and agencies need to be able to pay their employees. Of course, this also has to do with parental benefits, separation pay and other types of benefits.

    However, the 2010-2011 main estimates contain exactly the same amount for salaries, mainly $500 million, as did the main estimates of 2009-2010. I would therefore like to know how the Treasury Board Secretariat determines the amount at vote 30.

    For clarification, if you look at your notice of meeting, the minister is here for only one hour.

    Thank you for that clarification. I love the thought of spending two hours with you, but I was told it was one hour.

    Your officials are here, which is good.

    Thank you.

    Did you understand my question?

    Yes.

    We have indicated that we will freeze the budget for each department in the years following this one. There are reasons for this.

    Take the discussion on salaries, for instance. It is important to recognize that there is a legal process in place to frame the salary negotiations of public servants. Therefore, the government has no right to issue an order limiting pay increases to 2, 3 or 4%. That is not our job. Discussions are ongoing with the relevant agency.

    Each department has a budgetary envelope. If a department chooses to increase its employees' salaries, it will have to adjust expenditures elsewhere, because each department has a set budget.

    Mr. Minister, I asked you how the Treasury Board Secretariat determined the amount at vote 30, which covers parental benefits, separation pay and other types of benefits. If I understand correctly, that is what vote 30 is all about.

    Am I mistaken when I say that this amount does not necessarily include salaries, but rather benefits?

    Yes. Vote 1 will be frozen, and negotiation on benefits can continue. But it is not up to me to indicate today what will happen with benefits.

    However, the amount at vote 1 will be frozen.

    So they will be frozen. Why has the amount not changed over the years? That is what I do not understand.

    Yes.

    There must be people who leave government, people who are on parental leave, or who receive other types of leave. How do you know that you will need exactly the same amount again? That is what I do not understand.

    The benefits will not change. Salaries will have to respect the levels we have set for the departments. However, benefits will be maintained. Each department will decide how to manage its expenditures. There will not be a problem as long as the departments generally follow the rules.

    Fine.

    Salaries are included in the overall amount which will be set in the 2010-2011 budget.

    That is fine, Mr. Minister.

    I have another question. In supplementary estimates (C), we can see that there is a decrease in the amounts to be paid out by the guaranteed income supplement on the basis of the projected number of beneficiaries and the average monthly rate.

    This means that $228 million will not be paid in guaranteed income supplement benefits and will be returned to the Canadian treasury.

    However, on May 27, 2009, the opposition parties supported a statement made by the Bloc Québécois that said that the situation of tens of thousands of seniors left in the lurch due to defects in the guaranteed income supplement was entirely unacceptable. The parties said that the guaranteed income supplement program had to be changed, that it had to include a full retroactivity for the amounts due to the beneficiaries, that there should be a $110 increase in the GIS monthly benefits, and also that persons aged 65 and over who are entitled should be given supplementary benefits for more than six months.

    Given that there is a $228 million surplus, do you intend to implement this motion which was adopted in the House of Commons by all the parties except yours, of course, on May 27, 2009?

    We will always take the suggestions made by the opposition parities into consideration. However, we must note that although the population has declined, the rates will continue to go up.

    Mr. Minister, you have a $228-million surplus.

    Could we not envisage giving every senior an extra $110 a month in guaranteed income supplements, in view of the fact that your surplus will go back to the government treasury, and that it had been expected that the $228 million would be paid out?

    Today, I cannot make a statement about future rates. However, we will see the rates continuing to go up. It is not up to me to cite the exact amount here today.

    When you tell me that the rates will go up, does it mean that seniors will get the larger amount in their guaranteed income supplement? Is that really what you mean?

    As you know, every year—

    Ms. Bourgeois, your time is up.

    We consider normal price levels and inflation. There is much pressure and we must decide exactly what we are going to do.

    In past years, the rates went up. Of course, we could go on reviewing the amount and we will see if there is any increase in the rates.

    Thank you.

    Mr. Gourde, you have eight minutes, please.

    Thank you, Madam Chair.

    I'm just going to give Ms. Chow the first question.

    No, no, it's Mr. Gourde's turn.

    I thought we'd go here and then...okay, that's fine.

    No, no.

    I couldn't figure out what you were doing.

    Mr. Gourde.

    Thank you, Madam Chair.

    With your permission, I would just like to add a brief comment regarding this question.

    There will be—as we said—an increase of $10 a month. The total amount is $200 million. We will continue, each successive year, to verify if there is enough money left to continue doing this.

    Thank you, Madam Chair.

    Thank you, Minister Day, for being here today. I understand that as the president of Treasury Board, you are a very busy man. I thank you for your generosity.

    When you occupied this new position, you certainly established some priorities. What are these priorities?

    As we said, our priority is to eventually have a balanced budget. However, we will do this by respecting the programs available to citizens all over Canada. We will do it without reducing transfers to the provinces for health and education.

    It is very important to continue without reducing the programs meant for the people. Moreover, this must absolutely be done without increasing taxes. Also, it is important to send this message out not only here in Canada, but all over the world. Here, in Canada, we will reduce not only the deficit but the debt as well.

    Regarding our debts and our economy, the ratio is 31%. We can look at the situation in other countries. I believe in England, the ratio is 66%. In Japan, it is over 100%. I believe that it is 115%. When there are investments and when businessmen and women see an increase in the debt, they understand that it will be impossible to maintain a reasonable tax system.

    In the countries that have a higher debt level, they understand that this will create great difficulties for the economy. This is why many world organizations continue saying that Canada's economic situation is not as risky as that of other countries. This is very important for us, especially in order to see investments continue, domestically and from international sources.

    Thank you, Mr. Day.

    The 2010 budget contains a number of measures designed to curb spending growth over the next years. Will that be sufficient to eliminate the deficit?

    In our opinion, it will be sufficient if we continue to manage very prudently.

    We have indicated what our goals and intentions are, and we will continue to evaluate our progress each year. We will do so in order to make the adjustments required should an unexpected world event or economic crisis occur. However, in our opinion, we have implemented a conservative strategy, so to speak, and we will achieve our goals.

    Do I have any time left?

    You have three minutes.

    Thank you, Madam Chair.

    As concerns the budget, there have been a number of media reports stating that union leaders are very concerned about the measures affecting pensions in the budget .

    Have you met with the unions in order to hear their concerns?

    Yes, I have met with our union leaders. I have met with some of them individually, and I have also met with them all collectively.

    I was very clear. We do not intend to reduce current benefits because members have paid for these benefits. We will maintain them. I think you heard our Minister of Finance, who said that our goal is to review retirement benefits in general.

    As you know, our population continues to age. It is happening to me, to you, to everybody. In future, there will be pressure on pension plans. That's why we want to hold far-reaching discussions with union leaders and members in the public and private sectors to ensure that Canadian workers receive guarantees for the future and can continue to have confidence in their pension plans.

    We'll hear a very brief question, Mr. Gourde, if the minister can give a very brief answer.

    Thank you, Madam Chair.

    As concerns the public service, you have spoken in the past about attrition, which will play an important role in reducing future costs.

    Can you tell us more about this?

    We have determined that each year, some 13,000 people, men and women, leave the public service. Most of them do so to retire, but there are many others who leave to continue their careers in the private sector. There are others still who leave to enter politics.

    So the figure is close to 13,000. That's a lot of people. I think that this will allow for each department to find creative solutions. If there are people leaving, will all of them have to be replaced, or will we be able to continue to deliver our programs with the remaining staff? This will be a topic of in-depth debate and we will have that debate.

    Thank you, Minister. I have to cut you off.

    Madam Chow and Mr. Dewar will be sharing time. The two of you have eight minutes in total. Who is first?

    Ms. Chow.

    The G-20 summit is coming in June to the Metro Toronto Convention Centre, which is in the wonderful riding of Trinity—Spadina. The supplementary budget shows $179 million for policing and security costs.

    The City of Toronto is very worried and has requested that the federal government post a bond to cover expenses for potential property damage that could occur during the G-20 and for costs incurred by small businesses. The experiences of London and Pittsburgh showed that as a result of protests during the world economic summits those two cities hosted in 2009, there is a need to do so.

    So it's very straightforward. Are you going to leave the small businesses on Toronto's waterfront high and dry, or will you compensate them for their losses during the summit and post a bond so they are not worried about what is going to come up? Because economically it is tough out there, and they are worried about economic hardship.

    An hon. member: [Inaudible--Editor]

    Ms. Olivia Chow: Pardon me?

    We'll overlook that last.... I think that was a rhetorical question.

    I didn't even hear it.

    Madam Chair, security costs are always an issue at international events. They certainly were at the Olympics. Costs are very high when these events are hosted, either here or around the world. I understand projected costs for the summer Olympics in the U.K., for instance, are already somewhat north of €2 billion and probably going up. We believe the federal government has a responsibility in the sharing of those costs. We certainly took that responsibility seriously with the Olympics.

    The last time there was a meeting here in Ottawa, for instance, with President Bush, the President of Mexico, and the Prime Minister, there were considerable costs to the City of Ottawa, and the federal government shared the responsibility there. So on the specifics, I'd have to say to my colleague that I'll leave it to our public safety minister to decide what the best approach to that is, some kind of a bond issue or how it's done.

    The goal is going to be that there are no damages, and to have security in place so that would be the final result. That's always the goal. It's unfortunate in a society like Canada's, which is very open, where we encourage robust demonstration and robust public displays of either support or lack of support for any particular issue, that there always are people who abuse that and move to violent levels. That's always disappointing. I think whatever cause they're promoting, once they move into the area of violence, they lose sympathy they might have had. Members may have seen and noticed that on the first Saturday of the Olympics in Vancouver, there was a group who masked their faces and were particularly intimidating and violent. It was actually the crowd itself, many of whom were protesters, who pushed back against that.

    Minister, I just want to turn my time back to my colleague. Thank you.

    Thank you.

    Thank you, Minister.

    Chair, it's good to have the minister here.

    I just wanted to talk a bit about.... I was intrigued with his water analogy. I note he has a Kindle there, and I thought he might make use of higher technology than glasses.

    If I may, I'm seeing that this is the budget for the PMO and PCO, and I note that they're going to get this much more. My question is, are they going to remain with that much for the next number of years, or are they going to be getting less so that they'll be like the rest of us in the bureaucracy who are going to have cuts?

    The question is, will those increases to the PMO remain within this budget parameter you have set here? Yes or no.

    Expenditures moving forward for PCO will be net of the increases, for instance, that we saw for the G-8 and the G-20. So it will be as if that amount is reduced. It will be that reduced amount that they will have to go forward with. Now if there's something extraordinary that happens, like any other department or agency, they'll have to come forward for some special consideration--

    I'm hearing a maybe, Minister. I'm not hearing a definite.

    No, no, I'm definitely saying that moves ahead net of the G-8 and the G-20.

    So the extra $13 million that they're receiving, they'll get that reduced after next year?

    I'll have to ask them to come forward with all their spending estimates, but I'm just telling you that when there are situations that are bona fide extraordinary or special situations, like the G-8 or the G-20--I don't know when we'll be hosting that again.... They won't be able to come forward next year and say, “You know, those costs, that extra money we needed for the G-8 and the G-20, we're just going to have to hang on to that.” No they won't. It will be reduced.

    But you're saying.... You didn't say that in your comments. You were saying that the Prime Minister--you know, I'm kind of paraphrasing--has extraordinary responsibilities and he has to fly around, he has to do all these other things. That's fine, but let's not play around here. It's not just for the G-20 and the G-8. The extra increases that this office will be getting will be different from all the other offices, and if I'm someone who's a public servant and I'm sitting there watching the glasses overflowing for one office and I'm told to reduce mine right now.... You can see where there's a problem, particularly if I'm providing services to Canadians.

    Can you see that as a problem in terms of the perception of the government providing more for one office and telling everyone else to do more with less?

    To clarify, all ministries are being told that their spending is going to be frozen at 2010-11 levels. So we're not talking about reducing them. Now, if I can--

    Well, a lot of them are being reduced.

    If I can continue along that particular line, every department, certainly including PCO, has to justify its expenses--

    No question.

    --has to bring them forward, and if there is going to be--and I'm saying this because it would apply to any department--an increase that is necessary because of extraordinary circumstances beyond everybody's control, they can bring that request forward. I think that's only reasonable. I'm not saying that to invite a deluge of requests right off the bat. I'm saying--

    If I may--

    --I'm saying Canadians are serious about wanting to see the deficit going down and a balanced budget, and we are moving in that direction. Extraordinary situations will always be given some consideration.

    One thing I can offer you as a suggestion, and we've tabled a motion to this effect today, Minister, and it may get support and you can talk to your colleagues about it, is in the estimates there's an amount of $129 million...you can take a look at the idea we've put forward to reduce that by about $4 million. The rationale is the promotion for the government's tax credit campaign, which was I think fairly roundly and soundly critiqued as being very promotional of the government. That could be a way to save some money.

    What we're proposing is that we remove about $4 million from that line item. I think your party's coffers are fairly robust and they could probably absorb that.

    Mr. Dewar, you'll have to end your question, quickly.

    Certainly.

    I'm just looking for your support, Minister, for this motion to remove $4 million from the Privy Council promoting the government's program, which has been soundly critiqued, pushing people to Conservative Party videos, etc. I would look to your support for that. I would think you'd be sending the right message to bureaucrats who are having to do more with less--

    Thank you, Mr. Dewar.

    --and maybe take some from the Conservative Party.

    Minister, your turn to answer.

    First of all, I'll open my remarks and I'll echo those by saying we sincerely consider all input. So I will take this back and have a good discussion with my colleagues. In question period today I did some comparisons, and I'm not justifying our spending; I wouldn't look to the previous Liberal government, and I'm sure you wouldn't, Paul--

    No.

    --and say, “There's a good comparison”. In the year 2002-03, in their government advertising program, it was about $111 million; ours last year was $89 million. You mentioned people have been criticizing. There will always be people who criticize what a government does. I think when we're talking about letting people know how to qualify for the home renovation tax credit and other--

    Okay, thank you, Minister.

    --tax issues, which can be very complicated, it's good to get that message out there; talking about how to apply to the armed forces--

    The Prime Minister singing “Let it be”. Come on.

    Thank you. I have to cut this conversation and go to the second round.

    Five minutes now, Madam Martha Hall Findlay.

    Thank you, Madam Chair, and thank you, Minister, for being here.

    I hate to do this to you, but I'm not going to let you off the hook. Two of my colleagues have tried this, and I'm going to continue down the same path, because with all respect, we are very concerned--I think you can tell--about the potential padding of certain budgets here before a freeze, so that there's benefit after the freeze.

    In the PCO, we have an increase of $13.4 million, to $74.5 million. I prefer to work with numbers. I understand you said the freeze would be net of any extraordinary expenses, but I really want to nail this down because that could include any amount of a certain amount of water in a glass. You have specifically referred to three items as being part of that increase. One is $6.4 million for what you have referred to as “chronic underfunding”. I'd love to know, given the increases in past budgets, what could have been chronically underfunded, but I'll save that for another time. That would leave $8.7 million for the G-8, the G-20...and as you have also referred to the winding down of offices for the Olympics, I think Canadians would love to know why it costs even more to wind something down, but, again, that's more detail than the time I have.

    So $8.7 million for two things that are very clearly extraordinary items. Can I get a commitment...? Even if the $6.4 million for the underfunding were kept, that would mean that the budget for the PCO in 2011-12 would be frozen, in fact, at $65.8 million. Can you confirm, then, that the budget for PCO--absent of potential future requests, as you've highlighted--for 2011-12 will then be frozen, and not at $74.5 million, but in fact at $65.8 million?

    The main estimates are clear and the major increases are broken out. The main estimates for the department for 2010-11 are $143.9 million, and that is an increase, as you've duly noted, over the previous year.

    But the question was very specific; it was about a relatively distinct portion of the increase for the PCO that we want to have confirmed is not going to be used as padding for future PCO budgets. So those are extraordinary items. If you can tell me that there are other items that aren't extraordinary.... But if that's what you have said and that's true, then the freezing of the 2011-12 budget for PCO would in fact be at $65.8 million.

    I can assure you there is going to be no padding anywhere. When it comes to anybody's budgets, all expenditures are going to have to be not just accounted for but they're going to have to be approved and agreed on beforehand. And I'm trying to be clear on this point. When there are year-to-year increases that are seen to be as a result of what we'll call “extraordinary” situations--“extraordinary” meaning those types of situations that don't normally come up in a budget year--we've been very clear--

    I understand there may be extraordinary efforts and a claim for that in future years. I am talking about extraordinary items in this year only that total about $8.7 million. If you've said already that the commitment will be a net of that, I want numbers. I want clarity, because we can all fudge.

    I want to know if the budget for 2011-12 is going to be frozen without that $8.7 million that is for extraordinary items--the G-8 and G-20 and the wind-down of the Olympics--this year?

    I don't know how much more clear I can be.

    Yes or no would work.

    These are the increases: $7.6 million to support the Privy Council additional operating requirements; $3.6 million to support implementation and coordination of the government-wide strategy on Canada's economic action plan; $3.4 million for collective agreements; and $1.8 million for the operation of the public service renewal task force.

    And I've been very clear that for any of these expenses, for instance, that had to do with the G-8 and the G-20, the Privy Council Office budget moves ahead net of those expenses. If a request is made for a certain expense based on an extraordinary circumstance and that extraordinary circumstance no longer exists, as the G-8 and G-20 will not post this year, then they're not going to get the dollars for that.

    I would argue that the economic action plan would be extraordinary as well because we gave approval for a two-year stimulus plan.

    Just as an overall question....

    Do I have time for an overall question?

    Yes, a very quick one.

    On a net $22.9 billion overall, only $12.3 billion is in fact, as we understand it, related to stimulus. Can you account for a relatively big increase of $10.6 billion in the overall budget at a time when you're saying you want to restrain? That's a very big increase for this year, only to then say that we'll freeze later on. Can you account for $10.6 billion?

    Are you talking about the overall budget?

    Yes.

    It's all broken out departmentally, and I am in a way pleased to hear that you're approaching this from both angles. One, I hear a concern about what's going to be reduced, and on the other hand I hear a concern because it's gone up $10 billion. So I appreciate that.

    When you look at--

    I'm concerned about padding before you review.

    I'm sorry, no more questions.

    You can finish it off.

    Let me talk about the broad brush increases that we have seen. And then on the minutiae, of course, if there are specific questions, Madam Chair, we can look at it on a department-by-department basis.

    But when you consider the increase in the size of the public service itself, it's very significant. You can look at it either over 10 years or year to year. In terms of the public service, there has been a 27% increase in individuals from 1999 to 2009, and a big portion of that was from the time we formed government in 2006. That's a pretty hefty increase. In terms of core public administration, the increase has been over 34%. And this year you have seen a significant increase in the number of public servants over last year.

    Two of the main drivers there...we did indicate that we would have the funding in place for an increase in the number of RCMP across the country, and part of that increase is reflected in this year's budget.

    We also said we would make sure our armed forces would have an increase in their regular members, up from 63,000 in 2005 to where I think we're at 68,000 plus a few right now.

    So in the broad area alone of more public servants, there has been an increase--

    Minister--

    But it was one that was planned and targeted--

    --I have to stop you because she asked you a PCO question and you've given her a whole spectrum of the government.

    No, but she asked about the broad picture.

    We have one last questioner before the minister leaves.

    Monsieur Nadeau, cinq minutes, s'il vous plaît.

    Thank you very much, Madam Chair.

    Good afternoon, Minister. I know that you are the president of the Treasury Board and that you are thus not responsible for all government workers. Government agencies and crown corporations come under other budget envelopes, but the fact remains that there are approximately 450,000 government workers in this country, and you are responsible for a very large proportion of them.

    Earlier, you referred to the 13,000 public servants who leave their jobs for all kinds of reasons. One of our fears is that, given the public service spending freeze announced in the budget, the federal government will, in one way or another, eliminate positions.

    Can you confirm to us today that no public service positions will be eliminated and that, given that it will be difficult to find people to replace them, the natural attrition of employees is not a solution either?

    You stated that Treasury Board and its president are responsible for expenditures, but I am not responsible, as you claimed, for the number of people who will continue to work in each department.

    In my opinion, it will be difficult to continue with the departure of 13,000 people each year, but that is up to each department to decide. I believe that people will continue to leave their jobs with the government, but there will be others who will start to work in government jobs. It is a normal process.

    You are referring to new hires.

    I don't know for sure which departments will see an increase or reduction in staff numbers. That is not my decision to make. However, I fully trust our public servants to take into account their obligations and identify their needs.

    As I said, we will see an increase in the number of public servants. We have not said that the number of positions must be reduced at all costs. That will be up to each department to decide.

    On page 162 of the English version of the budget, it is clearly stated that there may be a reduction in the size of the federal public service, so you can understand our concerns. I understand what you are saying, but the fact remains that the budget document says something different. I am not trying to set your statement against those of Mr. Flaherty, but the document is clear, and we need to understand it.

    Our committee made a thorough study of the issue of demographics in the federal public service. This is not specific to Canada; the same thing applies to all other public services, whether in the Quebec nation, the Canadian provinces or even municipalities. Many people retire because they are entitled to do so, having put in their years of service, and it is difficult to recruit people to staff the resulting vacant positions. Recruitment is difficult, among other reasons, because the same phenomenon can be observed in the private sector. Given this problem, trying to reduce the size of the public service could put us in a difficult situation.

    Mr. Nadeau, finish your question, please.

    Thank you.

    I am referring to the reduction in the size of the public service only with regard to an ideology.

    Could you please confirm to us that this is not the case?

    Sir, I appreciate your concern.

    You referred to the English version of the budget, and I believe that the key word is “may”. That shows that there is nothing sure or definite.

    It should result.

    Even the word “should”...

    What is clear here is that department officials will decide whether they can continue to serve Canadians as they have done for many years, or if they can deliver services differently. We don't know yet. You can read what is written in the budget. It is not definite, but we are seeking creative ideas. People may be replaced, but maybe they will not.

    As I said, I have a great deal of confidence in our public service: it is capable of finding creative solutions so as to continue serving Canadians from coast to coast to coast.

    Thank you, Minister.

    I know that as much as we'd like to keep you here for two hours, your time is precious. In your discourse, you indicated that there are 17 departments or agencies identified to find 5% spending cuts. Would you be able to supply those to us?

    On a point of order.

    Yes.

    We haven't had the final Conservative in this round of questioning, so if you're going to ask questions, would it not be fair--

    I'm not asking a question. I'm making a statement of what the minister stated. I'm just reminding him. So your point of order is a point of debate.

    That is what the minister asked. I am just reminding him that is what he asked and that he will supply that.

    Thank you.

    Yes, Madam Chair. I confirm that I will do that.

    Thank you very much.

    Thank you.

    Thank you for being here.

    The meeting is suspended for one minute while we wait for the next group.

    The Chair: Committee members, we now have the officials from Treasury Board Secretariat. We have Madam d'Auray, Secretary of the Treasury Board; Mr. Alister Smith; and Mr. David Bowie. When I looked at your name, I thought, okay, we're not going to have some guitar-playing person here.

    Welcome.

    You don't have any opening remarks, do you, Madam d'Auray?

    No.

    Shall we start with a round of questions?

    I don't have a formal opening statement. I thought I would give you the overview of the supplementary estimates and the main estimates for the Treasury Board Secretariat, if that is okay with you?

    Yes, that's fine. Thank you.

    The major changes in the Treasury Board Secretariat operating expenditures for the supplementary estimates are largely transfers from other departments to support the national employment equity councils and the national managers' community--that's $144,000--and $856,000 to support the financial interoperability and stewardship initiative for financial information systems.

    There is also an increase in vote 10 of $875,000 to support the workplace development innovation fund--that's in a central vote--to support deputy ministers to develop leaders in their organizations.

    In vote 15 there's a compensation adjustment of $196.4 million, which then gets redistributed to appropriations of departments and agencies. The list of the organizations to which those appropriations are distributed is included in the supplementary estimates. These appropriations are to cover compensation decisions made and agreements signed between August 1, 2009, and December 11, 2009.

    There is an increase in vote 30 for pay list requirements of $100 million to supplement other appropriations of departments and agencies for requirements related to parental and maternity allowances, cessation of service, or other employment adjustments. I believe those items were referred to by Madame Bourgeois when she was talking about vote 30 and the pay list.

    On the main estimates,

    the major changes deal with the secretariat's operating budget further to the change in its structure with the incorporation of the former Public Service Human Resources Management Agency of Canada. The operating budget was increased to officially account for the inclusion of this change, which was made in March 2009 and which can now be found in the main estimates for the Treasury Board Secretariat.

    Therefore, there are minor adjustments that take into account the staff increases at Treasury Board concerning salary payments based on collective bargaining.

    There are increases and reductions for some central votes. For most of them, you will see the same information as usual, that is, there is no change to vote 5 for government contingencies, vote 25 for operating budget carry-forward or to vote 30, which concerns funding for parental and other types of leave. All this stays the same.

    The main change we have made is the elimination of vote 35, which was linked directly to the implementation of economic action plan initiatives, because it is no longer needed. This vote does not appear in the 2010-2011 budgets, because the funding expired, according to the terms and conditions that were approved in 2009-2010.

    Those are the main changes that you will find in the main estimates and the supplementary estimates.

    Thank you.

    We go to the first round of questions with Madam Coady for at least eight minutes.

    Thank you very much.

    I appreciate your coming here this afternoon as officials of the department to talk about the main estimates overall and the supplementary estimates (C).

    I have some questions about the main estimates and the overall estimates. I'm having a little bit of a challenge finding some of the information I've been looking for in these main estimates, and I hope you'll be able to help me.

    In the main estimates I've been looking for some information on advertising--a page and a line in the main budget that speaks to the advertising costs and spending of government. When I consider institutional oversight and to ensure that we have effective oversight, we need to be able to have clear reporting to parliamentarians on the cost of a project or a program. In fact, under the Financial Administration Act, that is the case, and as officers, I'm sure you're well aware of that. So I'm asking two major questions that I'm having some difficulty with, and I'm sure you'll be able to help me.

    I'm looking for the cost of advertising--the particular page and line--that would go to this program as a whole and/or by department for both that and the items and information around management consultants.

    I'm hoping that under that kind of Financial Administration Act--and of course by extension the TBS officials, looking at the expenditure management group--you have the responsibility to ensure this particular institutional oversight. Can you help me along here?

    When we look at actual expenditures for either the management consulting and/or communications, if I can put it that way, we don't segment out advertising—and I'll come back to that in a minute. Those are actually published in the public accounts, in terms of the actual expenditures, and you will find the line items that are collected in the public accounts for those amounts.

    In terms of the main estimates—

    Which, for clarity, is after the fact.

    That's correct. They're actual expenditures.

    In terms of the main estimates—I'm getting there—information is drawn from communications costs. Those communications costs include advertising services, publishing services, and public relations and public affairs services.

    In terms of the main estimates for 2010-11...I have the main estimates for 2009-10 because we don't have the actual amounts for 2009-10 yet. I can give you the estimates for 2009-10, but I can't give you the actuals until the public accounts are published. The estimates for 2009-10 were $344 million, and the estimates for 2010-11 for communications costs are $336 million. That's for all government organizations.

    All government organizations for communications and--

    It's called communications costs, and that includes advertising services, publishing services, and public relations and public affairs services.

    Where did you find this in this document?

    We collected them.

    So you had to go through and collect it altogether—

    That's right, except in the public accounts, where they're actually integrated.

    Absolutely, but that's about six months after the end of the year that we're going to receive that information.

    That's right.

    So six months after year-end, say around mid-fall, we're going to get the information of how much the government spent on advertising.

    You're telling me that you've combed through the main estimates and summarized it to say under communications that it's $336 million. Is that correct?

    That's correct.

    In terms of advertising costs, we publish on the Treasury Board Secretariat website, on a quarterly basis, what the planned expenditures are for certain types of campaigns.

    Currently we have posted quarter one expenditures. There were no quarter two planned expenditures. Quarter three planned expenditures for strictly advertising should be coming up shortly.

    Okay, but that's after the fact. I'm looking at the main estimates and you're telling me it's $336 million.

    Do you have the central financial management review system data?

    I'm sorry?

    The central financial management review system data. How did you get these items?

    We literally collected them from the main--

    Page by page.

    Yes, page by page.

    You went through each department and added them all up into a conglomerate?

    For the estimates, yes.

    And that's for communications?

    I want to be clear. It is for communications costs in terms of planned, as in main, estimates. When we look at expenditures, in terms of planned expenditures, if I can make that difference, in terms of advertising per se, those are published on a quarterly basis on the Treasury Board Secretariat website.

    Okay, so that would clarify communications. What about for consultants?

    The consultants are found in the operating budgets. There is a line item for that—and my colleague is pointing that out. For 2010-11, the planned—again, this is something we collected—is on page I-34 of the main estimates.

    And is this something that you went through line by line?

    No, it's actually on I--

    Okay, there is a one-line item.

    That's correct. And that one is estimated to be, according to the main estimates, $9.8 billion.

    That's $9.8 billion—

    Billion, yes.

    —for consultants?

    All the departments.

    All departments included.

    Professional--

    It's called professional services, so it could be management, it could be—

    Okay, so it's not broken out into—

    No, no. It could be information technology services, it could be database rental--it's all professional services that are retained.

    Combined. It's not management consultants, per se?

    No, no. It's professional services.

    There's a heck of a lot of IT in there.

    It could also be science. There is a long list of what we call standard objects.

    Okay. But under the Financial Administration Act, in order for all of us to do our effective fiduciary responsibility, we need to know the breakdown. Is there a way of getting that broken down?

    I think we find that the most effective way is to do so through the public accounts, because that is after the fact. We can give you what the planned are. It is then dependent on how each organization decides to do the coding.

    You can give me what the planned are. Can you provide that for me by department?

    I think that would take quite a bit of time to do.

    Alister.

    Departments log in these planned expenditures by what we call standard objects of expenditure. There's a breakdown, if you look at page I-34 , which is already fairly detailed. What we'd have to do is actually go back to the departments and break it down even further into the subgroups. This tends to be fairly micro, because these are planned by the departments.

    I was looking at last year's expenditures. If you looked at the public accounts for last year, for example, management consulting was $586 million. That's a substantive amount of money, and I want to know how it's being spent.

    Those expenditures come from what you referred to earlier: the central financial system, the CFMRS. They are aggregated at the end of the year by Public Works and are published in the public accounts. But it's very hard to do on a planned basis, what you're asking for.

    Thank you.

    We'll go to the next round of questioners.

    Madame Bourgeois, huit minutes, s'il vous plaît.

    Thank you, Madam Chair.

    I have two short questions to ask, and I will be sharing my time with my colleague Mr. Nadeau.

    I would like to come back to the questions I put to—

    Madam Chair, I would just like to understand the order of questioning. When the minister left, it was our party's turn. When we begin with new witnesses, do we begin with a new round of questioning?

    Yes.

    So we're beginning with the 11th question today.

    Yes.

    Because on our side, we have only been able to ask one question.

    Unfortunately, if the minister had stayed for two hours, you would have had the rounds. If the witnesses stay for one hour....

    An hon. member: No, we never did that before.

    The Chair: That is how the procedure has been. I'm not making it up as I'm going along. That's how it goes.

    Is that true, clerk?

    Yes, you're following the orders written by the committee.

    Madam Chair, if you'll reference our last committee meeting, prior to Christmas, you'll notice that when the officials remain, we've just continued with the next in order. I think if you reference our previous behaviour in this committee, that's how we've always done it.

    That is if they remain. But when we change witnesses, we come back to the same order again. That's normal. That has been our practice.

    Maybe we could allocate the timeframes, then, so that we don't start a round unless all parties have the ability to engage in that round.

    We could agree for the next time around that if the witnesses come again or if we have a break in the meeting, we continue on. If that's the will of the committee, we'll do that. We can reduce the number of minutes if you want, but at the moment, you're in the middle of questioning, and you will lose out otherwise.

    Madam Chair, these are points of order, so we know we won't lose out on this.

    That's fine.

    I would suggest for the next round that we just allocate the remaining time we expect, then just allocate a specific amount for each party so that the parties--the NDP and us--are not left out again.

    You will not be left out. I'll discuss that with the clerk.

    Thank you.

    Continue, Madame Bourgeois.

    I will be asking one or two questions and I will share the rest of my time with Mr. Nadeau.

    Please explain this to me. I put the question to the minister and I may not have expressed myself correctly. I have trouble understanding why, in the main estimates, $500 million is allocated for paylist requirements, which are the same amounts found in the 2009-2010 main estimates. However, in the supplementary estimates, the amount of $100 million is requested by the Treasury Board Secretariat. It states that this funding is for severance pay, vacation credits payable upon termination of employment, parental benefits and termination benefits for ministers' exempt staff. I would like you to explain what is meant by ministers' exempt staff.

    Second, in the definition of vote 30 under Treasury Board, there is no mention of paylist requirements for ministers' exempt staff.

    Are they usually included in vote 30? Those are my questions. Please help me understand.

    The salaries of exempt staff belonging to ministers' officers are paid out of the departments' operating budgets. The budget allocated to a minister's office is funded by the operating budget.

    You referred to compensation paid in the case of parental leave, among others. These people have the same entitlements as public servants, under the regulations and working conditions. When these payments are made, they come directly from the departments' operating budgets. The departments submit their request and we reimburse them under vote 30. This applies to all payments that come under vote 30.

    All right. If I have understood correctly, the amount provided for 2010-2011 in the main estimates should not be $500 million. There should be $100 million more.

    For now, we have allocated the same amount for 2010-2011 as is allocated each year, that is, $500 million. If we see that there are more job terminations or people taking leave, then adjustments will have to be made as part of supplementary budgets. This amount has remained stable according to forecasts. If in coming years, we think we will have to spend more, then we will have to take that into account and adjust the vote. For now, we are leaving the amount at $500 million because we think that we will be able to function with that budget. If not, then we will request an adjustment, as we are doing today.

    You are asking us for a supplementary amount.

    That's right. We will do so, if necessary, to fund statutory and parental leave as well as retirement. However, this depends on the requests made by the departments under the central vote.

    Thank you.

    Thank you, Madam Chair.

    Good afternoon to all of you.

    Earlier with the minister, we discussed the size of the federal public service. Now this question goes hand in hand with that of subcontracting. Subcontracting is not advantageous, in my opinion, because it costs more to pay subcontractors than to maintain a public service staff with permanent employees.

    You say that the same amounts will be maintained in each department, but I would like to know how it will be possible to avoid losing staff without being forced to turn to subcontractors. This solution costs more than if we had kept our staff. It is completely illogical, in my opinion. Regardless of the party in power, this phenomenon occurs time and time again.

    Thank you.

    Madam Chair, I would say that it depends on the type of activity. For example, for the implementation of the economic action plan, Service Canada, which reports to Human Resources and Skills Development Canada, had to increase its staff fairly quickly, for the very reason that it had to meet the growing demand on the part of people who were unfortunately laid off and who wanted access to employment insurance benefits or training, as well as requests from employers who wanted access to transitional measures.This department succeeded in increasing its staff fairly quickly, but that was so it could cope with a fairly major increase in workload. Now it will have to begin reducing staff. It is possible to deal with these situations by hiring people who are not necessarily subcontractors, but who work on a contractual basis for a definite period.

    In other circumstances, for example, when certain agencies were created, it was found to be more profitable to call on more contract workers than full-time employees. It allowed for greater flexibility in situations where the demand for and use of services fluctuated excessively. In some cases, we used the subcontractors because certain activity sectors were transferred. In such cases, service contracts were awarded and the costs were reduced as a result. Depending on the activity, the type of department, and fluctuations in use and requirements, we make adjustments according to specific situations.

    

    Thank you.

    Patrick Brown.

    Thank you, Madam Chair.

    I have just a comment first.

    Earlier when we had questions there was a reference by my colleague, Mr. Dewar, about the price and expense of advertising. I should just mention, since this is your first time joining us today, that we actually talked a lot about this a year ago, and the question from the opposition a year ago was why we weren't advertising more. I heard references to how much the Obama administration spent on advertising to promote the stimulus program, and a website was pointed out. Actually, one of Ms. Hall Findlay's questions was why we didn't promote it more.

    Taking that suggestion from the opposition, Canada has done an excellent job at actually highlighting the stimulus investments we have seen. It is important to clarify that it was actually a suggestion from the opposition.

    In terms of the fiscal management we are seeing in Canada and how it compares to other countries, there has been some positive coverage about how Canada's debt-to-GDP ratios are very strong and how the spending during this stimulus period is scheduled appropriately to phase out. Is there anything you could share with the committee to highlight for us why Canada is in such a strong position and how we compare to other countries in terms of our debt ratios?

    I will ask my colleague, Mr. Smith, to answer that for you, Madam Chair, if that's okay.

    Thank you.

    If I could refer the honourable member to the budget, there is a good account of our fiscal position, which we expect to remain the strongest in the G-7. We start out with an advantage of having a much smaller total government net debt to GDP than other G-7 countries, and on page 63 of the budget there is indeed a table that shows this. We are in quite good shape in comparison to other countries. Even with the projected increase from 2007 to 2014, we remain far below the debt-to-GDP ratios of other countries.

    What choices do you believe have resulted in the accomplishment of having the lowest debt-to-GDP ratios in the G-7? Are there some specific approaches that Canada has taken that have put us in such a more fortunate position?

    I'd have to say, Madam Chair, one of the elements is that while the recession hit Canada, it did not do so in the same way or fashion as in other countries. In terms of the financial position and the regulatory position of our own financial institutions, if I can put it that way, we didn't have the same impact. We also didn't have the same issues as, for example, the United States had with housing and mortgages. In fact, we have a very strong housing sector and it keeps rebounding.

    While we did have quite an impact on the manufacturing sector, other parts of the Canadian economy were able to remain if not completely stable and strong, at least the dip was not as pervasive as in other countries.

    I would say overall it was our regulatory framework, our fiscal position in that we were running surpluses up until the recession, and therefore we were able to release some funds in order to stimulate the economy. Overall, if I look at the financial, fiscal, and regulatory positions--and just the overall economy--we were in a stronger position going into the recession than other countries.

    There have been numerous references to different savings the governments are looking at, everything ranging from cutting back the patronage positions—something I thought was just excellent—to attrition in the public service. Do we have any figures on some of these measures? For example, on attrition in the public service, do we have a figure of estimated savings that will be accounted to the government through that measure?

    If I may, Madam Chair, the biggest amount of savings will come from the freezing of operating budgets of departments. There is, as indicated in the budget documents, about $1.8 billion of foregone expenditure that is in fact going to contribute to the reduction of the deficit. That will in fact come from departments having to manage within their operating envelopes and making choices, improving efficiencies, reorganizing their activities, not filling all of the positions that come from attrition, changing and focusing the hiring, because there is no hiring freeze--in fact, hiring will continue in the federal government, targeting the competencies we need. I think there will be a range of measures and activities that departments will be putting in place in order to meet the containment in terms of cost, or the rate of growth, if I can put it that way.

    I would add one element, which is that the operating budgets in 2010-11 of departments are probably at the highest levels they've ever been. So with $54 billion, we're peaking in terms of operating budgets, in terms of planned expenditure. So going forward, we should be able to manage within those.

    Is that the reason for the $2.8 billion decrease from 2009-10 to 2010-11 in the main estimates?

    The major amount I think that's attributed to that is there's a reduction of $1.8 billion for the freezing of operating budgets, and then the additional reductions come from reductions, for example, I believe from National Defence in terms of close to a billion dollars. Then a certain amount comes from the international assistance envelope, which is also capped at an expenditure of $5 billion, but the automatic increases that had been planned will no longer be provided. Again, their savings come from what we call foregone expenditures, i.e., they were planned expenditures, but they will not be made.

    Thank you.

    Are you done?

    Yes.

    Thank you.

    Mr. Dewar for eight minutes, please.

    Thank you, Chair, and thank you to our guests for their help in going through the estimates and some costs around governance.

    I had a question with regard to the cost containment by departments, and we were trying to get from the minister how this would work. What I'm seeing is a picture where the departments are given a number and are basically told, go forth and find those--however you want to put it; some people call them efficiencies, other people would call them reductions, and other people would call them cuts.

    Was there any direction given in terms of where they should find them, how they should go about doing this in terms of managers being directed by, obviously, their ministers and I guess ultimately by the president? Or is it just, here's the number, go forward and find the savings and efficiencies?

    I would say most of the deputy heads are responsible and accountable for the management of their organizations in the current state today.

    Right. I understand that.

    Going forward, that would still continue to be the case. So they have set operating budgets; they have programs and mandates to deliver. The flexibilities they currently enjoy, they will continue to enjoy, if I can put it that way, in order to be able to manage within those operating budget envelopes. So it does give all the flexibilities necessary to consider whether or not you need to replace all of the positions necessarily, in a certain area of work. In other instances, it could be that services could be combined. There could be use of technology to do things differently.

    If I may, there's just been no direction from government--

    There's no direction, no--

    They've just said, here's the number, and that's it, that's all--

    That's correct.

    That's what I had from the minister.

    They will continue to manage within their existing flexibilities and responsibilities.

    Right, but the government, the cabinet, the President of the Treasury Board, didn't say, “Here are the criteria, here are the principles.” He just said, “Here's the number”, right, if I can take that from what you're saying.

    Well, the main estimates basically put the numbers on the table, so when Parliament votes on them, they will--

    But there is no other direction?

    There is no other direction, except, if I may, to say there are no restrictions on hiring--

    Yes, I know that.

    But that is important.

    Mr. Paul Dewar: No, I heard that.

    Ms. Michelle d'Auray: And the collective bargaining and the wages negotiated within that are to be paid according to what has been negotiated within the envelope.

    No, I understood that fully. I guess the question for many of us is in regard to the government saying, “Here's the number, so go do it.” Each department has different responsibilities. If each department is treated equally in terms of finding the savings, there are concerns about how that affects the public, because every public servant doesn't give the same measure of service to the public.

    I want to ask you a little bit about the question that was posed by my colleague, Monsieur Nadeau, regarding the hiring of temporary workers and those who come in to fill a need quickly. You mentioned the program the government had put out there that had to get people hired immediately to get going. I've been very concerned about this from the perspective of the growth in the temporary help agencies.

    Department numbers going back a number of years were given to me and show spending on this going from over $100 million to over $300 million. The concern I have is that Treasury Board guidelines aren't actually always being followed. So I guess this is my question: how do we monitor departments? This is a trend. It didn't start with this government and it hasn't been in just the last couple of years.

    The trend is that departments and managers go out and hire people, not just as in the example you gave in terms of the government's economic stimulus and not just when there was a passport bulge. They are hiring people who are what I would consider long-term employment candidates.

    I'm just questioning what probes Treasury Board does to make sure that managers are following the guidelines and that they're making sure the guidelines are followed, because I have instances where they're not. This will be a concern, of course, as we go ahead, because departments are being told, “Find savings and here's the amount.” Maybe they make quick decisions and then they find out that they need to continue to provide the services. So they've not filled positions, they go out and hire people temporarily, and the costs actually increase over the long run. Something's got to give.

    I'm questioning a bit about how we ensure that the guidelines are being followed by Treasury Board when it comes to temporary help.

    We have a couple of elements there. In terms of the number of term positions, if I can put it this way, for people who come in for a defined time period, we do have some very strict rules that we monitor and that departments monitor as well. If someone has been in a term position for three years or more, they become an indeterminate, except in certain circumstances. We still abide by that, obviously. The bargaining agents are very effective at monitoring that as well, and so do we.

    But on hiring, when a manager hires a person for a temporary job, they have to actually follow the guidelines, and I have cases where people aren't. I'm wondering what oversight there is for that.

    If there is an instance that you have identified, perhaps through the committee you could let us know or inform us.

    So you do monitor that?

    We do monitor. The individual departments monitor and the bargaining agents do as well. If there are circumstances where the rules are not followed, we would appreciate, perhaps through the chair, being informed of that.

    The other element is in terms of other types of casual employment, if I can put it that way. The Public Service Commission also reports on an annual basis on the types of employment and the nature of employment.

    She reports to Parliament on that--

    I know. I've spoken to her.

    In fact, she has a fairly effective way of bringing those issues forward and of auditing, if I can put it that way, departments and very closely monitoring those issues.

    Yes, I know. I've spoken with her about that.

    Thank you.

    Thank you, Mr. Dewar.

    We will send you an e-mail to remind you to bring that.

    We'll go to the next--

    Excuse me, Madam Chair. It was actually if the member had--

    Yes. Thank you.

    If he was...? Okay. That's fine.

    Thank you.

    We'll now go to the next round.

    Oh, we can't even go to the next round. It's 5:15 and we have actually come to the end of our time. We are going to do committee business--

    Why aren't we going until 5:30?

    If you look at your agenda, you'll see we have committee business to discuss.

    Madam Chair, with your permission, on behalf of all my colleagues, I would like to thank the people who were with us this afternoon, even if there was a lot of noise during our meeting. I would like to thank them for having been kind enough to answer all our questions.

    Thank you.

    Thank you.

    Madame Bourgeois, I'll have to remind committee members not to come around. We will send the clerk over. If you come over here it does disturb the chair as well.

    Thank you very much.

    Thank you.

    We will suspend for one minute and then we'll go into committee business.

    The Chair: I thought we could do two things.

    First, when the witnesses were here, a point of order was raised. The point of order dealt with the rules of procedure that we had adopted. According to the rules of procedure that we had adopted, when we change witnesses, we start the round again. I'd like to ask the committee's indulgence that if the witnesses change and we're studying the same topic, wherever the last questioner left off, I can continue the round as if there had been no change. If the committee would agree to that, I would like to make that the normal process. Normally, if the whole thing changes and we have new witnesses coming in, they do their opening statement, and we always start from the first round. If we are in agreement with this--

    Can I ask a question?

    I'm new to this committee, so just forgive me. In my last committee, when a new witness came, there was a new round. Are you saying you're going to change that for this committee?

    No.

    Here is what I am suggesting. In this case it was the minister and the Treasury Board, so it was the same ministry or the same people.

    Oh, I see what you're saying.

    In that case, if we're dealing with the same group, I would like you to give me the leeway so that I can continue on the round. It's a break in procedure, but if you agree, then I'm willing.

    Mr. Warkentin.

    I think there would be agreement to just continue in the event--and only in the event--that it was the same issue. In this situation, it was the minister and his officials accompanying him. If there are two different topics and they're isolated.... But if you just forewarn us that we're going to continue with the same round, and we make it that you would ask the committee's indulgence beforehand if you intended to do that at a meeting, then we can accept that. This is a perfect example of where that would have been beneficial.

    It would be on a per meeting basis.

    It would be on a per meeting basis.

    Okay.

    Ms. Hall Findlay.

    I don't necessarily object to that in that circumstance. In this context, I'd like to ask two questions. First, the minister himself said--I thought--it was going to be two hours, and I was told it was only going to be one. That surprised me, because my understanding was that we ask for two, and the ministers generally say, no, they can only come for one. I don't know why on earth we would not have had the minister for two hours. If the minister was prepared to come for two hours, I certainly would have preferred to have the minister for two hours. That's one point. In that sense, this discussion would be moot.

    Second, I thought we had also had a discussion about dispensing with opening statements. I was also a little bit surprised to hear an opening statement. It's not that it wasn't enlightening. I want to get that clarified, because it is part and parcel of what we're trying to accomplish with this.

    The usual procedure allows them to make opening statements of between five and ten minutes.

    I had understood that we could make requests that there not be, and I thought we had that discussion.

    It's a normal process. You cannot tell them not to say a word and that we're just here to question them. They have the right.

    I understood that when the invitation was sent. Anyway, I'll clarify that.

    Can I actually get that confirmation about the ministerial appearances? When we have an opportunity to have a minister, I think our default should be to expect the minister to be here for two hours.

    The clerk is telling me that he's surprised, too; that the minister said he was going to be here for two hours. I don't remember him saying two hours. He didn't say? Okay. I have witnesses here saying he didn't say it. It was Madame Bourgeois who suggested he was here for two hours. He shook his head, and then I had to intervene and say, no, he said one hour.

    But he said he would be happy to be here for two hours and he was told to be here only for one hour. That's what he said.

    I'll check the blues on that one.

    Okay, thank you.

    If we can check, I would appreciate it, just for future reference.

    Sure.

    The default should be that we ask the minister to be here for two hours.

    Monsieur Nadeau.

    Madam Chair, Mr. Warkentin had a very good idea that he shared with us earlier. If we are dealing with the same subject, we should continue with the process already begun, even if new witnesses come to the table. However, if we are hearing from witnesses on an entirely different topic, we should start all over again.

    Mr. Dewar.

    I'm not a permanent member here, but it seems to me it's fairly simple. When you have a new group of people coming before the committee, then you start anew. So I would advocate for what you had been doing. If there's extra time, it should be dispensed with appropriately in the sequence that you desire as the chair.

    But you get a very different set of responses from a minister versus the officials--we all know that, and the government knows that, so with respect, it's not the same.

    In the foreign affairs committee, we can have a study on free trade with the United States and have a go-around with the minister and have officials as a separate go-around. I would think it would be unusual and bizarre to break with that, and I think what you were doing was following the practice set at all committees.

    It changes the sequence, and I was a victim of that because I was interceding when I thought it would be the NDP and it was actually the government. Each committee does that. But to change the sequence when you're looking at the estimates...the minister brings forward a set of capabilities and insights that is very different from those of his officials, and to start to loop them together is not appropriate. I think you should stick with what you have. Mr. Martin would want that. It makes it easier, it keeps it simple, and I think it's fair.

    Mr. Holder, and then Mr. Warkentin.

    Thank you, Madam Chair.

    I can understand why my colleague from the NDP would feel that way, based on the way the sequence of questions occurred. I'll come back to this circumstance here, where we Conservatives thought that, as the government, we would have the next question, and it didn't occur.

    But I suggest that the point that I felt really did express some wisdom was if they're the same or related. If the one issue is you ask ministers to attend for two hours and they can, terrific. Frankly, I think they would make their best efforts and it would be what it is.

    Having said that, that's a separate issue from the issue of the numeracy of speaking. Right now, every round, according to our formula—and we have a formula that I observe—would involve one hour and 32 minutes of questioning, with our getting our appropriate questions in whichever ranking, based on standings in the House. That's how this is all done, and I felt somewhat shortchanged.

    You know I have more opinions than my Cape Breton mother, and I never had a chance to express them today. That may not be a loss to this committee, but I would suggest to you that, from our standpoint, if it is related, then I think the sequential sense of what we have feels fair to me. If it's different, I'd defer to the chair on that.

    I think Mr. Warkentin's suggestion was that we play it by ear, and if the committee can operate or cooperate that way, that would serve us well.

    Mr. Warkentin.

    Yes, since this is an unusual case, we can take it up at the beginning of future meetings that look to be like this.

    I respect you, Madam Chair, having chaired the last meeting. These events often come unexpectedly, and certainly we'll now know that we should take a look and make an agreement before a future meeting similar to this one.

    Okay. Thank you.

    And I'd like to thank you for chairing the last meeting. You came up with a work plan suggestion on the study—

    Excuse me, Madam Chair, if we do plan to go into that, we may want to go in camera--if we're going to be modifying or talking about the work plan--because it hasn't yet been solidified and distributed.

    Sure.

    Is it the will of the committee to be in camera?

    I have to suspend again for 30 seconds and tell anybody who is not supposed to be here to go away.

    [Proceedings continue in camera]