I appreciate the 10 minutes.
It is a pleasure to be here again to explain the process surrounding the supplementary estimates (C), and, to introduce the 2018-19 interim estimates.
We have a number of things to discuss today. First of all, I will talk about the changes made to the main estimates to better align with the federal budget. I will then turn to certain aspects of the last supplementary estimates, 2018-19. Third, we will briefly examine the first interim estimates, where you'll find the initial requirements for 2018-19. Finally, I will point out the organizations that are mentioned for the first time in these estimates.
On page 3 of the PowerPoint presentation, we simply set out some of the challenges that this committee would be very familiar with, with respect to their study of the estimates. You will recall that the President of the Treasury Board appeared before you last year on a number of occasions to begin the process of aligning the budget and the estimates and to reform the estimates process. This committee has been very active in that process, including the 2012 study of estimates and supply.
Page 4 is just a very brief summary, a reminder to the committee of the proposals made by the president to improve transparency and alignment. The most common complaint that we've heard about the estimates is the difficulty caused by having a main estimate showing much different planned spending than the federal budget, and there have been two causes for that. The first is that, under previous orders of the House of Commons, the main estimates were tabled on or before March 1, whereas there is no fixed timing for the budget. What has happened over the preceding years is that we were tabling the certainty of the main estimates in advance of the budget. Then we were using supplementary estimate exercises to catch up and to reflect the government's budget priorities for Parliament.
As a result of discussion at this committee and agreement of parties in the House, there has been a change to the Standing Orders so that, for the next two years, we will table the main estimates on or before April 16, and that is to say, after the budget. Timing has been a very important factor in the confusion between the documents.
Another challenge has been the differing scope and accounting methods of the two documents. The budget is comprehensive. It is inclusive of all expenditures of the Government of Canada, including tax expenditures, crown corporations, and consolidated special purpose accounts such as the employment insurance account. It presents parliamentarians with a full view of all federal expenses.
The estimates, in contrast, represent a subset of that federal spending. They represent the cash requirements of departments for a specific fiscal year to deliver the programs and services of government. We understand the challenge, and we have identified means of addressing this, most notably through a reconciliation table that has appeared in the last two exercises in the spring in our supplementary estimates (A), where we do a crosswalk between the expenses in the budget and the expenditures in the supplementary estimates, accounting for accrual differences, tax expenditures, crown corporations, etc.
The third idea advanced by the president was to better use our new focus on results to perhaps identify changes to the vote structure approved by Parliament. Currently, funds are approved by Parliament according to individual votes for departments, and these votes are organized according to function: operating expenses, capital expenses, and grants and contributions expenses.
Our focus on results is bringing some clarity in terms of what departments' core responsibilities are and the specific programs supporting those core responsibilities. We currently have a pilot with Transport Canada to look at their grants and contributions vote and to break that out by purpose. It was proposed by the president that we might expand on that and try additional pilots according to purpose.
The fourth pillar is better reporting. I believe we have improved the format of departmental plans and departmental results reports, and we have presented much more detail online on what we call GC InfoBase.
That is an overview of the proposals, and where we're at.
This year, as a result of the changes to the Standing Orders, we have tabled for the first time the document entitled “2018-19 Interim Estimates”. This allows departments to begin the fiscal year with authorities until full supply for main estimates is voted on in the House in June.
On April 16 we will be tabling the main estimates, which will include as many budget items as we can bring forward for approval. Coinciding with that will be the departmental plans that I mentioned.
Turning to the details of the two documents tabled earlier this week, the first is the supplementary estimates (C), which concludes fiscal year 2017-18. The supplementary estimates (C) provide information on $4 billion in voted budgetary appropriations for 48 organizations. This funding supports many initiatives announced in budget 2017, as well as spending set out in prior budgets, and updated by the in his fall statement.
The estimates also provide an update on forecasted statutory spending, and through these estimates we are forecasting a reduction in statutory spending of $336 million.
The front end of the supplementary estimates (C) provides an introduction and some detail, including highlighting the major items, the major areas of expenditure over $150 million. These include $622.9 million for the service income security insurance plan, $435 million for defence spending in support of the new defence policy, $277.6 million for military missions, and then a number of other programs and priorities of the government, including the G7 summit and increased spending for veterans.
If we group all the $4 billion according to certain themes, we see that wages and benefits comprise about 25%, or just over a billion dollars; defence totals $746 million, or almost 20%; then we have climate change and the environment at $438.9 million; and indigenous programming at $337.6 million.
I'll be happy to address more questions on supplementary estimates (C).
Before concluding, Madam Chair, just a word on these interim estimates that we tabled. It introduces the interim authorities of 122 organizations, totalling $30.9 billion. Again, this will be complemented by the main estimates to be tabled on April 16. When we compare the interim authorities of $30.9 billion this year to last year, it's very close to what was sought last year as an interim authority of $30.1 billion.
This concludes my introductory comments.
In fact, close to 98% of this sum of more than $177 million will be allocated to the three following programs:
disability awards, earnings loss benefit, and other health and purchased services.
These programs already exist.
I am sure that you know that the government announced new programs in the 2017 budget. These programs were presented to Parliament in the supplementary estimates (B), so in November. This will be reflected in the main estimates, 2018-19.
This sum of more than $177 million is for programs that already exist. These increases are due to demographic factors. As the number of veterans increase, so do the costs for mental health services.
It's good to see you. It's been a long time, Mr. Pagan and Ms. Santiago.
A couple of days ago, when we were having the estimates briefing, we were talking about the departmental reports and the departmental results reports. Who is responsible for the editorial content of those and in the estimates? The reason I ask is that some of the items here.... We talked about pillar four being to provide higher-quality information on performance targets and results, and we talked about the difficulty in making our way through the estimates and understanding them. I want to read a couple of the items here.
We have $3.5 million to ensure the smooth functioning of courts and greater access to justice for all. We have money for grant payments for strengthening Canadian identity, amplifying the office of the Governor General, and helping build a stronger Canada. Who is writing this stuff?
It doesn't make it very transparent what the money is being used for. I want to get back to the departmental reports and why I'm asking who is responsible for them. The former PBO Kevin Page commented that they're merely communication vehicles for the government, and that no one uses them because there's no value to them. I point you to the Public Services departmental plan, where it doesn't even mention Phoenix, but it talks about one of their achievements being the Canada Post report, where we spent a long time travelling across the country and spent $500,000 of taxpayers' money.
The government didn't even respond to the report, but among her achievements she notes that she thanked the committee for the report and the hard work. We spend $500,000 travelling the country for Canada Post—whether they broke their promise or not is beside the point here—but in the departmental report there's no real comment about what they're actually doing or their achievements. Who is responsible for ensuring that you're actually fulfilling pillar number 4? If it should be the minister, let me know and we'll skip to other questions.
Thank you for your presentation.
I want to come back to the question of the delayed tabling of the main estimates and coordinating between the budget and the main estimates. I understand from the minister—both from his document and having heard him present at committee a number of times—that the ultimate goal for the President of the Treasury Board is to release the main estimates and the budget simultaneously. We're not there yet, but we're experimenting with delayed estimates in order to better integrate the process.
Of course, part of that process means having the Treasury Board Secretariat work more closely with the Department of Finance in the lead-up to the release of the budget, so that the budget isn't a surprise to the Treasury Board Secretariat. Even under our current process, the idea was to try to increase co-operation between those two departments, so that some of the information about the budget would be shared with the Treasury Board Secretariat in advance of the release of the budget in order to better coordinate the main estimates.
All that to say, has that started to happen? Is the Treasury Board Secretariat getting more information in advance of the release of the budget from the Department of Finance in order to facilitate a better coordination between the main estimates and the budget? Or are you having to wait until the release of the budget on February 27 to begin that work, and then you're left with the window between February 27 and April 16?
I have a quick question, and maybe somebody could get back to me in writing. I know there was a transfer from Citizenship and Immigration to the Department of Justice for legal aid money to help refugees. It was for the provinces of Ontario, British Columbia, and Manitoba. I'm wondering if someone could get back to me with the portion of funding that's allocated to Manitoba. It's not something we have to do right now, so if you could follow up in writing, I'd appreciate it.
I want to ask about the $250-million item for the Treasury Board Secretariat for paylist requirements, which seems to have a lot to do with accumulated severance pay benefits. I was doing a telephone town hall on Tuesday night with my riding, and there was a woman who called in. She is near the end of her career with the civil service, and a bunch of her colleagues and friends are as well. She was saying that there have been a lot of challenges with receiving their appropriate severance pay when they leave the civil service, and she attributed that to problems with Phoenix.
I'm wondering, first of all, is part of the problem that the government has not yet come to Parliament for the proper authorities in order to be able to dispense these severance monies, or is it really a problem with Phoenix or some combination thereof? Are we confident that this money that's going to be approved in supplementary estimates (C) is going to get disbursed to the people it ought to in a timely way?
Everything you want to know is going to be on InfoBase.
In terms of the issue of departmental reporting, it builds on Mr. McCauley's question.
We've worked very hard over the last year. There's a new policy from TBS on results, so departments have come forward with new ideas about how they present their business and what their core responsibilities are. We challenge them on that, and once we agree on what their core responsibilities are, departments articulate what they're trying to achieve and what the result target is. We challenge them on that and then on what the indicators are that they're going to use to measure progress against that target.
That has been a discussion between ministers. There's an agreement between ministers that this is who we are, what we're trying to achieve, and how we're going to report. Once we have that frame in place, we provide the guidance in terms of how to develop a report and how to fill out the tables.
In terms of the editorial control, at the end of the day it is a report that is owned by ministers. They sign off on it. We do have a role in looking and challenging, as do two other important observers. There are departmental audit committees that are discrete—these are external third-party committees that provide guidance and, in some cases, direction to departments—and there is the Auditor General, as you mentioned. When we bring those three together, I think we have the makings of the governance to ensure that reports are credible and accurately reflect what departments are trying to achieve and what they have achieved.
In fact, InfoBase presents information not only about what you see here in this document, but also allows stakeholders to drill down and get a great deal more information, including FTEs or employees working on specific programs, where those employees are located, the NCR versus the regions. We have demographic data about those employees, so you can see an age band and distribution.
Most recently, to Mr. Drouin's point about always striving to do better, there have been incremental adjustments to InfoBase. In November of this past year when the departmental results reports were tabled that support the final accounting of actual expenditures in the public accounts, we added to InfoBase, for the first time, results information that show departmental progress against their commitments. These are both quantitative—we achieved a 95% response rate—or qualitative, depending on what the target had been.
I thank you for your interest. The president is very keen on popularizing InfoBase and making sure that it's out there and, as I say, we actually aspire to the point where it is so comprehensive that it makes my appearance here redundant.
We did present this to a Senate committee last year and we would be happy to come back and provide a demonstration of that tool, if the committee were interested.
As committee members are aware, I'm very sensitive so I will heed that.
I'm delighted to be here with you today. I've said this before but I think it bears repeating. I have a lot of respect for the work that committees do. Having been a member of Parliament for almost 21 years, I've spent most of my time in opposition, in fact. I enjoyed and valued my work on committees, and I understand full well the importance of the work of committees.
I'm delighted to be here with Brian Pagan, Renée LaFontaine, and Yaprak Baltacioglu, the secretary of the Treasury Board.
If you will indulge me for a moment, this will be Yaprak's last appearance before a parliamentary committee, I believe. Sadly for me, and for Canadians, Yaprak is retiring after 30 years of public service, having served a lot of governments. Her story is of somebody who came here at the age of 22 from Turkey, who was educated here, raised children here, and chose to serve a Canada that she loves. She has made an immense difference in the lives of Canadians over that period of time. She has been an exceptional public servant, and I want to thank Yaprak, on behalf of all of us, for her work.
Some hon. members: Hear, hear!
Over the last hour, I know that our officials have been with you discussing the highlights of supplementary estimates (C) and the interim estimates 2018-19.
Madam Chair, with these supplementary estimates, the government is asking Parliament to approve funding for issues that are important to Canadians. This is why we are trying to obtain, as you have heard, $4 billion in additional expenditures for 48 organizations.
These include $177 million to support veterans and their families, $435.4 million in support of Canada's defence policy, $202.5 million towards international assistance, and $277.6 million for Canada's military contributions to international missions. We're seeking Parliament's approval to create more opportunities for indigenous peoples, attract talents, strengthen university research, build strong indigenous communities, and innovate to solve Canada's big challenges.
We're happy to take your questions on both supplementary estimates (C) and also the interim estimates for 2018-19.
I would like to briefly discuss our broader agenda to reform the estimates process and to improve its alignment with the budget.
As Mr. Pagan said, the main estimates will be brought down on April 16 at the latest, for the duration of this Parliament. I know that Mr. Pagan and Ms. Lafontaine are as excited as I am with the idea that this year's main estimates will reflect the budget, thanks to this change of date.
One consequence of that change is that we have tabled interim estimates. This is the first time that the government has provided Parliament with a document showing the specific amounts that we proposed in an interim supply bill, for each vote of each department with an appropriation. The purpose of the interim estimates and the interim supply is to provide the government with sufficient cash and authority to start the fiscal year, until we request the full authority for the full supply of the main estimates.
To better support this purpose, you will notice an important change in the way that voted authorities are presented in the proposed schedule to the appropriation bill. Now, we show both the amount of cash that the department requires for the first three months of the fiscal year and the total authority, which is the value of contracts, grants, and contribution agreements, for example, that they can commit against the vote for the year beginning on April 1.
If you had followed the progress of the last fall, you'd recall that we saw an amendment to the Financial Administration Act to enable this change. This simple change to vote wording provides greater clarity for departments, which then work, and must work, within the authorities approved by Parliament.
This is another example of our commitment towards improving the clarity and transparency of the process of determining budgetary forecasts and authorities.
With this change, we are improving the clarity and transparency of the estimates and the supply process. As important as these interim estimates are, they're really just the teaser for the main event and that's the next budget and the main estimates.
As the has announced, the next budget will be tabled on February 27, and by delaying the tabling of the main estimates, we will be able to include new spending measures, from the budget, in the main estimates, and to get those funds working for Canadians as soon as possible after they're announced in the budget. It really does make the estimates process more meaningful.
In the past, we would have the main estimates before the budget. We would debate the main estimates and then the budget would come along, rendering much of what we talked about in the main estimates irrelevant. I value your time as committee members, and I hope that this enables you to play an even greater role in terms of not just holding our government to account but future governments to account.
As Brian and Renée explained, we're continuing to work on the other pillars of estimates reform. There's the option of changing the nature of the vote to reflect the purpose, the why, rather than just the nature of the how, the expenditure. We're also committed to having the 2018-19 departmental plans tabled at the same time, or very soon after the main estimates.
That concludes my opening remarks. I'm looking forward to having a discussion. I always enjoy this committee.
Thank you, Madam Chair.
Thank you, Mr. President, and to the officials for being here. We appreciate this component of our committee. It's a role that we all take seriously, and I think we can all agree that the new alignment will perhaps allow us to fulfill that function of our committee work a little more effectively.
The alignment, of course, is just one feature of the new process. I wonder if you can elaborate on other steps that are being taken to ensure that the process continues to be more transparent, more clear, and aligns departmental priorities with the budgetary process.
What other steps, behind just the alignment, are being taken to make this process more open and transparent?
One of the things I'd like to come back to the committee to discuss are the departmental results frameworks, which is a very different reportage of departments to Parliament. It is much more results-focused than ever before. In the past, reports were focused on outputs. We are trying to focus reporting on outcomes. In the past, reports were focused on processes. We want to focus on objectives and what we actually get done on behalf of people.
The indicators you will see in the departmental results framework first of all relate to objectives that we believe Canadians would share and understand. The old reporting was not one that I think was understandable or pertinent to citizens.
That's something where I'd like to come back sometime and have a more in-depth discussion, and go through and compare the old program architecture reports and the new departmental results framework so that you can see. We can do it in a couple of departments to show the difference. What it is doing is creating an alignment between the government ministers and the public service. In terms of a transparent reportage process to citizens, that ensures we're keeping our eye on the ball in terms of what we're trying to achieve.
I would like to come back and spend more time on that, and program-based reportage—the work we're doing with Transport, as an example—which provides a lot more detail than you would have had in the past.
I mean the objective here... I think the changing of the sequencing of the budget and the main estimates is an important step forward. It will take time to achieve the full results of that. You're dealing with the machinery of government in terms of Finance, Treasury Board, and departments. It is a significant change. I looked at the gold standard in terms of budget estimates process. I like the Australia model, where budget and estimates come out basically simultaneously. From an efficiency perspective and an accountability perspective, I think it's really good. We're moving in that direction, and I think that's positive.
Minister, we spoke to Mr. Pagan earlier about this and butted up against who's writing the editorial content of both the departmental reports. I'm glad the departmental reports are going to be released at the same time as the estimates.
I will read out to you some of the comments in here. There's money for the “smooth functioning of the Courts and to promote greater access to justice for all”. Under the Department of Canadian Heritage, there's funding to “amplify the office of the Governor General, and help build a stronger Canada”. It seems that we're moving away from transparency by writing what looks like political content and not accounting content to be delivered to Canadians.
I will go back to the departmental reports I was mentioning earlier. I will use Public Services and Procurement as an example. In her report, she doesn't mention Phoenix at all, but she goes on about the Canada Post report where part of her achievement is thanking the committee for the work they did. It seems quite odd that a departmental report put together, meant for transparency in terms of where Canadians' money is being spent, is written about such frivolous stuff, but also misses such important stuff as Phoenix.
Who is responsible? I guess it's the ministers, but who's overlooking to make sure they're delivering on your promise in pillar four about providing high-quality information and performance targets and results in departments?
In fact, that would be very much the reason that we would propose to approach this as a pilot, to make sure that we had a measured approach in proceeding and that we could, in a very limited way, test all of our assumptions in the application of this.
Just to make it very concrete, when we talk about purpose-based votes, just using TBS as an example right now, we have $919 million in supplementary (C)s that we're requesting. That is spread through existing votes, our operating vote, and some votes that we administer on behalf of the public service as the employer.
In a pilot of a purpose-based approach, we would take our new results framework, where we have defined roles as the employer, as the expenditure authority, and as the regulatory authority, and we would present the same items, but according to those roles. The vote would be according to our core responsibility as employer. The idea is that, as the president says, it would allow committees and stakeholders to maybe follow the money better in terms of the key responsibilities, the key activities of departments.
When we presented the ideas last year, as I think the committee recalls, there was lots of discussion around timing, and unfortunately, we really never got past a decision on timing, so we would welcome a report or recommendation as to whether this should be pursued. We do have some ideas about how we could do that, but we did not feel that there was any consensus to expand the pilot at this time.
Patience, you're right.
We are very concerned when we hear the minister talk about another example to have better transparency in the government, because we all remember that one of the first pieces of legislation the government tabled was Bill , which killed some transparency tools for workers. This is why we are very concerned, but we will see what the government tables, and we will pay careful attention to that.
Madam Chair, I am very happy that we can discuss with the President of the Treasury Board in such a direct manner.
In our point of view, the President of the Treasury Board is the chief custodian of Canadian tax dollars. Expenditures of $330 billion must be subjected to very serious scrutiny, and it is up to the President of the Treasury Board to ensure that each dollar is wisely spent.
My first question is quite clear. Does the minister agree with spending $8.2 million for a hockey rink in front of Parliament? Was it a wise spending of public money, yes or no?
Mr. Simms, did you not want the five minutes? Okay. We'll share.
Thank you so much, Mr. President of the Treasury Board, and thanks to your officials. That was quite a funny little end to the Canada 150 festivities. I won't go there.
I will go back to Phoenix, because as a member of the public accounts committee, I can say that it has been occupying and preoccupying us a great deal.
Going forward, I know that this item called “stabilization of the Government of Canada's pay system” is a chunk of the supplementary estimates (C). I know that one of the big items will be hiring or completing the hiring of the new pay experts that you need to get this done properly. There will be some IT expenses too.
How do we expect to get this resolved in the reasonable amount of time that our public service should expect it to be resolved in? By that, I mean less than a year, so that we don't drag this out for five, six, and seven years like Australia had to do in one much smaller instance. Do you think this amount will be sufficient to try to address this issue within that limited scope of time?
Thank you very much, Alexandra.
The IBM Phoenix pay system issue is one of the toughest ones, and I've served in cabinet in two governments. This is one of the toughest public.... Well, it's not just public policy. It is the execution issue that I have dealt with.
You mentioned the need to hire pay experts. Part of the challenge is that 700 pay advisers were let go prior to the system actually being operable and the new system implemented. One of the keys in this that you learn in terms of the future is that you don't gut the legacy system before the new system is operating. In fact, in terms of some of the people we are hiring, we're actually trying to bring back some of those legacy people, because they have invaluable experience and an understanding of the pay system on a department-by-department basis.
We have been working closely with the union leaders. In fact, we had a discussion with them again yesterday. One of the recommendations they've made, with which we agree, is that we need to put more people back in the departments, so we are working to that end. Yaprak can speak to some of where we are investing, but we're investing $142 million to recruit, hire, and train people across government.
Beyond that, it's important to remember that the IBM Phoenix pay system was conceived about a decade ago. The technology available then and the IT methodologies practised then are very different from those that exist today. While we work very hard to stabilize the existing system with departments across government, working with PSPC and OCHRO at Treasury Board, we also believe that looking at new approaches and taking a look at.... If this were a greenfield project today, if we were looking at this situation as it is today, unimpeded by the blinders that often occur in government around the tyranny of sunk costs—you're trying to make what you've spent money on work—if we were to look at this with fresh eyes, with a fresh team of people, using modern digital protocols and technology, we may find that there is a new way that can actually address this issue faster.
You need to take look at this in a two-track approach: continuing the work we're doing right now to stabilize the existing system, but also at the same time being open to completely new approaches that reflect modern digital today and that weren't even available 10 years ago when this system was conceived.