Thank you very much, Chair.
Chers collègues and members of the committee, thank you for the opportunity to be with you today.
Hopefully my voice will hold out. I have a little bit of a head cold and cough that's been going around, so if I have to take a glass of water or something, please excuse me for that.
I have with me today Yaprak Baltacioglu, Secretary of the Treasury Board of Canada, Bill Matthews, Assistant Secretary, Expenditure Management Sector, and Christine Walker, Assistant Secretary and Chief Financial Officer.
Today, in just a brief introduction, Mr. Chair, I'd like to talk about the estimates process, your committee's study, and how the improvements being made to the estimates process will lead to better parliamentary oversight of government expenses, if you don't mind.
I am also here, officially, to review alongside you the main estimates for 2013-2014, both government-wide and Treasury Board-specific. At the completion of my statement, we would be happy, of course, to answer any questions you may have.
Let me thank you for reacting to my initial suggestion of examining the estimates process by launching a comprehensive study that resulted in many substantive recommendations. I'm very pleased to report that significant progress has been made on many of the recommendations that were directed to the Treasury Board Secretariat.
Please allow me to explain. We found that recommendations 4 and 5 were related; that the reports of plans and priorities contained financial information by program for three previous fiscal years and for three future years, and that the reports on plans and priorities include an explanation of any changes in planned spending over time and of any variances between planned and actual results by fiscal year as available. That was the recommendation.
These recommendations are being addressed in the 2013-14 reports on plans and priorities by explicitly including information for three previous and three future years and including explanations of changes in planned spending over time.
In response to recommendation 7, cross-referencing new funding to budget sources, you will begin to see, in supplementary estimates 2013-2014, reference to the appropriate source of funds or budget for new programs that are appearing for the first time.
You will also find, in response to recommendation 12, hyperlinks to the Department of Finance's annual tax expenditures and evaluations report in the 2013-2014 reports on plans and priorities.
I'm happy to inform the committee that other changes in the main estimates 2013-14 that respond to additional comments from you and your colleagues are also being implemented. These include presenting departments and agencies alphabetically, bar charts and other graphics to provide a visual summary, and information on 2011-12 actual expenditures and 2012-13 estimates to date to provide context for the 2013-14 amounts. So there is certainly progress on all fronts.
Summarized spending by strategic outcome and program is also now included in part II of main estimates with details presented in an online table which is available in multiple formats including Excel. Information will be presented on changes to expenditures by program for spending authorities sought through supplementary estimates.
With regard to recommendation 2, that the Treasury Board of Canada Secretariat transition the estimates and related appropriations acts from the current model to a program activity model, our commitment was to provide you with a model, including costs and a timeline for implementation. The model, costing, and timeline have now been submitted to your committee for consideration.
I have also instructed my officials to do additional work on the costing of this potential change to determine if there are ways to further drive down the costs. My officials would be pleased to discuss the work plan and considerations with your committee as we move forward.
The last and most exciting portion of the changes being brought forward is that of the online expenditure data base that I had the pleasure of launching earlier this week. This is a new searchable online data base that for the first time ever will consolidate all information on government spending in one place.
We're talking about everything from spending on government programs to operational spending on things like personnel and equipment.
We all know how difficult and time-consuming it can be to go through numerous complex financial documents to try to get a whole-of-government picture on what is being spent and where.
So I'm pleased to say that the days when Canadians and parliamentarians had to sift through stacks of public accounts like Indiana Jones looking for the lost Ark of the Covenant are finally over—and no stakes are involved; I just want to make that clear.
We have gone from what is almost an archeological expedition—digging through numbers department by department—to the digital age. What this means for most Canadians is that they now all have a more complete picture of how taxpayer money is spent.
And you, as parliamentarians, will be better equipped to do your jobs. I would like to offer that my officials come and provide you with a demonstration, as was done during the launch on Monday.
I'll repeat, for those watching at home, that this initiative is about increasing transparency in government, a commitment our government has continued to deliver on since day one.
On the matter of the 2013-14 government-wide main estimates, you will no doubt note that they reflect the government's ongoing commitment to finding savings and returning to balanced budgets.
In total, the government-wide main estimates provide information on $252.5 billion in planned budgetary expenditures for the 2013-2014 fiscal year. This includes about $87.1 billion in planned voted expenditures and about $165.5 billion in statutory expenditures.
As the main estimates show, we are starting this fiscal year on the right track, with a reduction in planned spending of $4.9 billion over fiscal year 2012-13. Last year the planned voted budgetary expenditures were $91.9 billion.
What's more, these planned voted budgetary expenditures show a decline over four years. This reflects the results of the government's cost containment measures during that period.
Moving to the statutory spending component of the main estimates, it has increased by a modest $5.5 billion. This increase is largely due to changes in the forecast of elderly benefits, the Canada health transfer, and employment insurance payments.
I will now turn briefly to the main estimates specific to the Treasury Board Secretariat.
This year the secretariat is asking for $5.66 billion in spending authorities. This includes $214 million for departmental activities and $5.421 billion for central votes, which support government-wide activities. Overall this represents a decrease in spending of $19.8 million over the previous year's main estimates.
The decrease and spending for the Treasury Board is mainly due to a $10-million decrease in vote 20, Public Service Insurance. This is related to savings identified in the 2008 strategic review, which were announced in budget 2009, at the sunset of the joint learning program; and a $9.8-million decrease in vote 1, Program Expenditures, which are directly related to the activities of the Treasury Board Secretariat as a department.
As we move forward, Canadians will see that we have treated and will continue to treat transparency and accountability as paramount.
Estimates reform, the online expenditure database and my appearance here today are all part of our continued commitment.
I'd be happy now with my officials to take questions on the 2013-14 government-wide and Treasury Board-specific main estimates.
Thank you. Certainly, I may defer to my officials after some initial comments, if you don't mind.
Absolutely, an important part of government accountability and efficiency in delivering services is to continue to modernize the structure of our human resources. Our people are critical to delivering services, obviously, so we continue to look for ways to do that. Part of it is reviewing back office operations.
What I’ve found in government is that there are a number of stovepipe activities where you have an agency, you have a department, they have their payroll department and they have their IT service department. There's a myriad of agencies and departments, each with their own back office. Quite frankly, not all of that is necessary now. So we are looking to consolidate back offices. It has no impact on the services that are going to be delivered to Canadians, but it's just common sense that you don't need three dozen payroll departments, as an example.
Yes, part of that modernization takes a look at that aspect of it, as well as ensuring that we have the right tools for managers to manage. We ensure that the expectations on the public servant are crystal clear so that he or she can meet and hopefully exceed performance.... That's our aspiration for those people as they develop their careers as well. It's a combination of things, in my mind.
Madam Baltacioglu, would you like to say a few words?
Let me give one example that springs to mind, just because the scars are almost healed, but not quite. It has to do with the traditional thing that happens around here. We have the estimates process, and those have to be tabled by March 1. Then typically—not always, but typically—the budget is after that date.
So in that period of time between the estimates and the budget, not everyone, but some people run around with their hair on fire because, oh my gosh, the estimates, they have a cut on this and it means the government is making massive changes to this program or to that program, and then that all dies down because when the budget happens, it actually has the funding that people expect for those particular programs. Because what we call sunsetters, those programs with specific time-limited funds, are not included in the estimates process until the funds are renewed.
So I really do believe that with the changes, with this online database where you can see year to year, program to program, it gives you a better context of how budgetary decisions are made. You can follow the thread of the funding of particular programs over a greater period of time. You can compare similar activities, department by department. I think that's going to be an important tool as well as you seek to make sure departments are being efficient on the common activities that they have.
All these things will provide clarity and maybe reduce anxiety in some cases, and maybe also create legitimate questions that the government will have to answer. I think that's all part of it too.
I'm not saying this is going to create world peace in our time, but I think it will be a substantive improvement from the status quo.
We'll reconvene our meeting then, committee members.
We welcome some of the same officials from the Treasury Board, as well as some other officials who will be joining us, including Sally Thornton.
Welcome, Sally. I know you are a regular visitor to our committee.
I don't have my glasses on, so I can't read everybody's name.
I'm going to let you introduce yourself, Bill, perhaps when you get going here.
Is everyone ready? We're going to ask Mr. Matthews to open with some remarks.
First of all I have to ask, committee, whether you would you like to carry on with the rounds of questioning as they were or you wish to begin a new round of questioning on the docket. Continuing on would be my instinct.
Some hon. members: Agreed.
The Chair: Okay, very good. It doesn't make much of a material difference, because the next round would go to the NDP anyway.
Mr. Matthews, would you like to open with a few remarks?
As you have already said, I am accompanied by several colleagues today. You already know Ms. Christine Walker and Ms. Sally Thornton. To help us with today's presentation, I am also accompanied by Ms. Marcia Santiago and Ms. Grace Chennette.
I have a couple of quick comments before we get back to questions.
I was just reflecting on the four or five things I would notice in these main estimates from a government-wide perspective. Some have already been touched on so I won't spend much time on them.
Voted numbers are down, and statutory numbers are up, as we know. We had a quick discussion as to why the statutory numbers are up, and that's largely related to two payments related to elder benefits, as well as to EI and the health transfers.
The second thing I would mention—which the chair already covered with his question—is the non-budgetary spending related to CMHC. That's something that stands out in these estimates and it was already picked up on.
In terms of trends, typically at this stage we're about 65% statutory and 35% voted. We're about normal again on that number, so there is nothing too significant there.
The split among transfer payments, operating and capital, and interest is largely unchanged from previous years in terms of percentage breakdown of the $250 billion.
There is additional information for members, which I would flag. If you're looking for a great summary of departments, I would take you to the first section of the estimates. It's on page I-10 in the English version—
It is on page 11 of the French version.
That's where you will find some of the new information that was flagged earlier in terms of a listing of all departments, what they actually spent in 2011-12; the estimates they had in the main estimates for 2012-13; and their estimates during 2012-13 at the point in time the estimates were prepared; as well as their estimates for 2013-14.
That's a new addition and I think that information should be quite helpful to members when looking for their questions.
Then I would quickly flag the largest increases and decreases by departments. The large increases, if you're interested, were for Public Works and Government Services Canada, Indian and Northern Affairs Canada, and RCMP.
On the decrease side are National Defence, Infrastructure, and Transport Canada.
If it's of interest to members, we're happy to talk about why those changes have occurred.
The only other thing I would flag for the committee members, Mr. Chair, is that we do have this book organized in alphabetical order, as was mentioned. That means the order of the departments is different in English and French, so do give us a moment to find for everyone the proper page reference in both languages if we get into detailed questions about the page numbers.
That's all I would leave you with.
Thank you for the questions, Mr. Chair.
If I could actually comment on the first suggestion, it is a helpful one. Then I will answer your question on FTEs.
I think the member has a very good point about program activity architecture. When we started with program activity architecture information, it was new. No matter what vote model we end up with, it's very clear that program information is more important now than it used to be. It's only fair that we give departments a chance to rethink their structures and get them adjusted, as they would need to be if we were to actually move to a voted structure by program, because programs clearly have taken on increasing importance over the years.
So we'll take that suggestion. Thank you.
The reason for the difference you have flagged in the FTE numbers.... I didn't see the methodology from the policy centre, but they looked at reductions over a broader period of time. Their period of time included strategic reviews, operating budget freeze, and some other measures to reduce spending. The 19,200 number that you hear from the government is directly related to Budget 2012: 19,200 is the number of positions that were to be eliminated as a result of the strategic and operating review of Budget 2012. The policy centre was looking at a bigger period of time.
I can tell you that in Budget 2013 the government provided an update on the 19,200. Initially they were forecasting that of the 19,200, roughly 12,000 would have to use workforce measures to be transitioned out, and they were hoping for 7,200 through attrition. The trend appears to be slipping. As of Budget 2013's December numbers, 16,220 of the positions have been eliminated—not quite the full 19,200, but certainly on track. Of those, 9,300 were through attrition and roughly 7,000 through workforce adjustment measures.
So the initial forecast is proving to have overestimated our reliance on workforce adjustment, and we have been able to make greater use of transition to achieve those reductions. But the 19,200 is directly related to SOR.