Colleagues, we are convened in public.
We welcome our witnesses here today.
Mr. Matthews, thank you for being here with your officials on relatively short notice. Of course, as you well know, the estimates have already been tabled, so this round of interventions will be slightly more informal. I understand you have a very short opening statement, and then we'll go to questions.
To my colleagues, rather than having a preordained, formal list of questions, if you do have questions for our witnesses, please indicate that by a show of hands, and we'll do it fairly informally. We'll try to get through this as quickly as we can.
We have Mr. Jowhari, Mr. McCauley, Mr. Blaikie and Madam Ratansi. We'll go in that order. Once we have completed all of the questions committee members may have, we'll be in a position, perhaps, to dismiss the panel.
Mr. Matthews, please proceed.
Also, committee colleagues, Mr. Matthews and Mr. Bombardier have generously agreed to dispense with their opening statements, which I have with us. I am suggesting that if we can get a consensus on this, we accept both of those statements as read and have them appended to the evidence. Do we have agreement, committee members?
Some hon. members: Agreed.
[See appendix—Remarks by Bill Matthews]
[See appendix—Remarks by Denis Bombardier]
The Chair: That's fine. In that case, we will proceed directly to questions.
Mr. Jowhari, we'll start with you for five minutes.
I think if we look back to the rollout of Phoenix, it's no secret that there were significant challenges, and that there are still challenges, with HR-to-pay stabilization. That said, over the course of the last three years, the government has made significant investments, both in capacity—meaning human resources—and in financial support to ensure that we are eliminating the backlog of transactions as quickly as possible and that we are investing in new ways of processing pay through additional stabilization efforts.
Back in the day, the workload management model, if you will, consisted of working transaction by transaction, which was not what the unions told us we needed to do. It was not what the staff on the floor told us we needed to do, and so we have listened to the input from staff, from bargaining agents, from public servants. They've asked us to work from a more holistic perspective, which has resulted in the pay pod model, which has been established in Miramichi. With it we are aligning dedicated resources to departments or a single department or a group of departments that have comparable collective agreements, to be able to align the HR and the finance groups within those departments with the pay pod people who are actually managing the compensation on the ground. Therefore, we are able to resolve issues much more quickly and we're able to process all transactions coming in now as they come in, so that new never becomes old. This allows us essentially to stop adding to the backlog and, at the same time, with capacity in the pods, to look at cases related to the new intake that's coming in, and also to focus on key priorities for departments. Departments have more of a say in what's being processed and when, on the assumption that new is not becoming old.
The transition to the pay pod model took a considerable amount of time and effort, as well as investment in training and development, to make sure that we had the right leadership in the pods—the coaches, the trainers, and the supports for the staff, who were able to, through on-the-job training and coaching, as well as classroom training, grow their skill sets. This has reached the point where we have seen a decrease in the global queue of about 33% since January of 2018 when it peaked.
We are continuing to see incremental declines, as we demonstrated in the dashboard that was posted last week. Our service standards continue to fluctuate, but have been improving over the course of the three years. There's still a long way to go until we get to where we need to be—dealing with 95% of all transactions within 20 working days—but we are making significant progress. All of this is happening at the same time we are processing a significant number of collective agreements that the Treasury Board Secretariat has negotiated. Essentially, we've issued $1.9 billion in retroactive pay, which has required our staff not only to work in Phoenix, but also to go back into the old processing system, extract data, run calculations on retroactive pay, and then work through any remaining residual manual work that the system was not able to process.
We've also continued to invest in the system. We've added functionality that wasn't there in 2016. We have continued to work on process improvements. We're now in a place where we have regular and predictable technological releases, and we are able to test, which we had not been able to do in the past.
This has been a longstanding question around the technology available basically to avoid travel when you can. Can you attend or participate in meetings virtually, versus hopping on a plane and travelling?
There has been significant work, I think, to upgrade the facilities to allow virtual conferencing. That said, there is still travel required and there's some work being done to modernize the government's travel system itself, which is the tool we use to book our travel where necessary. That system needs some work. That will not result in greening; that will just be a better travel system for public servants to use when they travel.
One of the priority areas for us with the travel system is that, frankly, it is not very helpful for people who have accessibility issues. We need to do some work on that front, so there's a two-fold issue there.
Where we can, we encourage our employees to participate virtually rather than hopping on a plane.
The e-procurement system is a really important system for the department and for the whole of government. This is a contract that is under way with Infosys as a prime contractor. It's basically to put an off-the-shelf tool in the hands of public servants to allow them to do the basic end of procurement themselves. It will require less expertise for the more basic transactions once it's up and running.
That lets us save our resources—our procurement experts—for the more complicated procurements, like the one Mr. Fillion was just talking about. That's where the real value add for procurement experts is. That's the goal of that system.
It will also give the government much better data on its procurement. When this is all said and done, we'll have much better data on our procurement initiatives, which will help for better decision-making.
The final piece I'll add is that we do work with the Treasury Board Secretariat, as well as National Defence to a certain extent, because that is where the big procurement expertise is required—a strategy to bring people in, train them, get them certified to the extent they need to be and share resources where we have to.
The shipbuilding strategy is now at a stage where you have certainty on the east coast in terms of what is being built. You have AOPS 1 through 8 all being delivered and planned as we speak, and then they will transition into building the surface combatants. They have a nice long run of ships they can predictably deliver, and they can manage their workforce accordingly.
On the west coast, you have VSY, who will be building 16 vessels, as per an announcement a couple of weeks back. That's the new announcement. That, again, gives them some certainty, and also repetition—in terms of building the same ship in a repeated fashion—let's them learn more easily and drives some efficiencies. Again, they have a nice long run ahead of them.
The third piece of that is that, when you look at the age, in particular of the Coast Guard's fleet, there is additional capacity needed in terms of delivering ships for the Coast Guard beyond what those two yards can do, so the government made an announcement about adding a third yard to the program.
I have a couple of things to highlight. The Translation Bureau has gone through a rather massive transformation, and it's ongoing.
The two things in that industry that I would highlight are the more automated scheduling tools for how the work is assigned, but more importantly, the use of artificial intelligence and tools like that—automated translators—which are changing the nature of the work of translators.
Those who are working with written text have gone more from being word-for-word translators to being more editors, because, using tools, you're able to get a reasonably good quality of translation as a starting point. The nature of the work has changed, and that has helped to drive efficiencies. The workforce is very much onside with the discussion there.
If you were in the world of translating voice, obviously that world hasn't changed very much, so you're still very much dealing with traditional approaches and not a great change that is reforming that industry. There have been some health and safety concerns that I think you may be aware of around auditory issues for translators in that field, and we are working with our employees to deal with those issues.
Thank you, all, for being here.
My question has to do with translation and interpretation. I've been hearing, for a while now, about how difficult it is to recruit interpreters. That's not the case for translators. Interpreters, however, are in short supply, and it's likely related to health.
Do you have a plan to deal with the shortage of interpreters? Have you found any solutions?
Thank you for your question.
You're absolutely right. In the past, we had trouble finding people to fill positions. Recently, though, we've started working with universities to develop more programs so we can train more students.
We are working actively with universities to generate more resources in those areas.
The HR plan is obviously critical to the Translation Bureau's long-term success. Those discussions will continue. But there are lots of forums where we bring together our employees, contractors, universities and other experts to actually talk about these challenges, and they've really generated some benefits.
Thank you very much, Chair, and thank you to committee members. Good afternoon.
I'll be as brief as I can to allow for as much time for questions as possible.
Again, thank you for inviting us today to speak about the estimates. The main estimates present financial requirements for the 2019-20 fiscal year, including but not in addition to the amounts already shown in the interim estimates.
Part I of the document, the Government Expenditure Plan, gives an overview of spending requirements for 2019-20 and comparisons to previous fiscal years.
Part II, the departmental Main Estimates, provides information on planned spending by each federal organization requesting authority through the appropriation bill.
Additional details are available online, including forecasts of statutory spending, allocations from Treasury Board central votes, and expenditures by program or purpose.
Finally, I would remind the committee that the Government of Canada Infobase is also available to provide you with more information on authorities and expenditures.
Mr. Chair, the main estimates for 2019-20 present a total of $299.6 billion in planned budgetary expenditures. Of this amount, $125.6 billion is for voted expenditures, while $174 billion is forecast to be spent under statutory authorities.
Of the $125.6 billion in voted spending, the largest departments are the Department of National Defence, at $20.5 billion; the Department of Indigenous Services Canada, at $12.2 billion; Treasury Board Secretariat, at $7 billion; the Department of Indian Affairs and Northern Development, at $6.9 billion; and the Department of Foreign Affairs, Trade and Development, at $6.4 billion.
Voted expenditures are approximately $12.7 billion higher than the previous main estimates, including $6 billion for budget 2019 initiatives.
The increase in voted expenditures also reflects funding decisions made prior to budget 2019, including additional funding to settle outstanding claims, advance reconciliation and improve services and infrastructure in indigenous communities; the ramping up of infrastructure spending under the investing in Canada plan and the new building Canada fund, as well as the Gordie Howe International Bridge; increased capital spending for Canadian Coast Guard ships and VIA Rail trains; and increased funding to reduce greenhouse gas emissions and protect species and habitat.
Of the $174 billion in statutory spending, the largest components are benefits for the elderly, at $56.2 billion; the Canada health transfer, at $40.4 billion; public debt charges, at $24.7 billion; fiscal equalization, at $19.8 billion; and the Canada social transfer, at $14.6 billion.
The estimates do not include payments from the employment insurance operating account or expenditures legislated through the Income Tax Act, such as the Canada child benefit.
In terms of individual departments, four have increases of over $3 billion in comparison to last year's main estimates.
For the Department of Finance, the $5 billion increase relates to a $2.1 billion increase in interest on unmatured debt due to the upward revision of forecasted interest rates by private sector economists, and increases in the Canada health transfer, fiscal equalization and the Canada social transfer.
The Office of Infrastructure of Canada sees a $4.6 billion increase, due mostly to an additional $2.2 billion through the gas tax fund to address short-term priorities in municipalities and first nation communities as announced in budget 2019, and an increase in $2.1 billion in contributions under the investing in Canada plan, the P3 Canada fund and the new building Canada plan.
The Department of Indian Affairs and Northern Development increase of $3.9 billion relates to settlements for federal day schools, the sixties scoop and specific claims.
The $3.8 billion year-over-year increase for the Department of Employment and Social Development relates primarily to a $2.8 billion increase in benefits to the elderly, due to changes in the average monthly rate and in the number of beneficiaries. The department also has a total of $333 million in budget 2019 funding for a wide range of initiatives.
There is one particularly significant decrease, $6.6 billion, for Treasury Board Secretariat, which relates to the one-year funding of budget 2018 initiatives across the government.
With that, Mr. Chair, I will hand it over to you for questions.
Thank you for being here.
I was looking at your departmental plans, and there is this question of financial risk that departments have to talk about. Could you first explain, with the various departments you have—your multiple departments—what your definition of “financial risk” is?
For example, with the seniors department, you're talking about the aging population and how we will have to match the payment of OAS. How does a department, which has to manage its budget and provide its departmental plans, determine...? It can't do 100%, but you want to move from the present 13% to 75%. What do you do? How does the department work its financial risks?
No, I don't think that's it. A number of steps go into coming up with an estimate. I can give you an example that relates to our department. It relates to what you see in one of the votes. When we include an initiative in the estimates, we provide the best possible estimate we are capable of at the time. As you know, once the initiative is approved, the request goes to cabinet, to the Treasury Board. That is the time to spell out the costs and the number of people. The details of the program or initiative are then fleshed out.
The funding requests are submitted to the Treasury Board, and, in many cases, you also see them because the spending authorities are approved at the parliamentary level. We are then able to provide more accurate estimates. To begin with, only the broad strokes of the initiative are laid out, but as it is developed, the associated costs become clearer. That is altogether different from the issue related to vote 10.
As I told Ms. Ratansi, the challenge of costing falls to us, and the people responsible are highly competent. Nevertheless, when an initiative is still in its infancy, the costs are often less detailed. We provide more detailed costing as the initiative is developed, and that is prior to the submission to the Treasury Board.
I have a last couple of things for you. I'm looking at the departmental plan.
I have a quote here from the “Departmental Results”, on page 1:
Canadians deserve to know how the government spends their tax dollars, what results are expected from government programs, and what is being achieved.
When I look at page 11 of your departmental plan, the very first one, on the results, states: “Departments achieve measurable results”, with the indicators, and the “[p]ercentage of departmental results indicators for which targets are achieved”, and then, under “Target”, a non-specific target is put in. It's ironic. Why would we not put an exact target?
The very next one is Treasury Board proposals. The target is “at least”—not a firm number. Again, these are paper documents tabled in Parliament to hold the government and departments accountable, but the plan is between 75% and 85%, or “at least”. Why, in the Treasury Board, which is supposed to be the leader on the departmental plans, are we still seeing such problems, I guess?
Sure. Maybe I'll take you back to two budgets ago. There was $18 million set aside to stand up a team that was going to look at options and recommendations. At the time, the set-up was around pay and the replacement of Phoenix. What I would say is that as we got out there and started working with vendors, it became very clear to us there really isn't such a thing. You typically would buy an HR and pay system, and so the next generation HR and pay team came into being.
The team was led by Alex Benay, but was very much supported by OCHRO and Nancy Chahwan, the chief human resources officer. It started as a team, a very small team, that was going to use an agile procurement process, which I'll talk briefly about, to identify options moving forward.
The team did a few things. One was looking at lessons learned. We had the benefit of looking at other jurisdictions, Australia, California and Alberta, and also at Phoenix and at recommendations in OAG reports to look at lessons learned and what we could do differently.
The other thing we did was to engage civil servants; we engaged government departments and HR professionals to identify what some of those key things were as we move forward.
Then there was the agile procurement process. The way it typically works in procurement, as I think most of you would know, is that the government hunkers down and writes down a series of business requirements in a little cave, and then sends them out. It goes out to the vendors, and the vendors are trying to figure out what government means. There are long blackout periods. By the time the whole thing is done, nobody has actually spoken to each other, and it's years later, and of course what you've asked for is typically outdated.
What this process does is that it allowed us to kick off with an industry day back in the fall when we talked about a process wherein we would, in fact, do it through a series of gates. We weren't going to hunker down; we were going to sit down and identify through each gate...and down-select vendors.
Gate 1, which was last fall, leaned on digital standards. The digital standards include, of course, security, official languages and accessibility, but there is what I like to call the non-digital of the digital standards, which says that thou shalt consult the client, thou shall be iterative, thou shall be agile and thou shall be in the open. We had really embraced all of those standards. Gate 1 was about whether vendors could meet those standards.
Seven vendors applied through gate 1, and very quickly we down-selected five into gate 2. Gate 2 was all about the testing. We brought in subject matter experts from across government. Those were executives. We brought in user testing. We ran user testing in lobbies. We had public servants from coast to coast to coast testing it. From that, we were able to down-select three vendors from gate 2 to gate 3.
I should also say that the interesting part about this process is that, because of its openness, we sat with vendors and defined what those requirements were. That was very helpful to us because, as government, we don't know what the latest and greatest is out there. Vendors were sitting with us and saying, “You don't really mean that; what you mean is this”, so the gates would change, and the requirements would change within the gates. We had unions in the tent. The unions helped us define what those requirements were. They sat and did the bids with us as well.
The objective of gate 3 was to do two things. We achieved part one today, which is quite exciting. The first objective was to qualify up to three vendors we could draw on. We realized early on that government isn't homogenous. The possibility of our using one system across the Government of Canada is unlikely.
I just want to come back to some of these questions in the estimates.
What I'm hearing—and you can correct me if I'm wrong—is that in these votes, whether it's the central vote, the budget implementation vote from last year or a corollary in this year's estimates, the expanding government-wide initiative votes essentially are being constructed this way because government wants to be able to do its program design and then spend the money right away. It's a timing issue. You used that word earlier, that it's really about timing. The idea is that, as soon as program design is done, the money has already been approved, and off we go.
Is that a fair characterization of the reason these large votes are being presented to Parliament for approval prior to program design being complete, or even begun in some cases?
Yes, but I just don't see how we can be asked to approve funding when even the broad lines, in some cases, aren't already established. Don't you think it's an odd control? Parliament is supposed to be about spending control. We're supposed to challenge government on whether or not the way it's proceeding with a particular policy objective actually makes sense. Since this government came in and these estimates were formed, the tendency has been to ask Parliament to approve more funding with less information about how the money will actually be spent.
The only thing I've heard that approaches a justification for that is that we want to be able to spend the money as soon as we have the program design so that there's no time-lapse between when the program design is complete and the authority is granted by Parliament. I don't find it a compelling argument. You talked about the end of the supply cycle and that there are only so many supplementary estimates. In fact, the government's own estimates reform has caused there to be fewer ordinary supplementary estimates and therefore fewer opportunities to come for spending authorities after program design has been complete.
There's no restriction in the Standing Orders on how many supplementary estimates the government can bring forward or when it can bring them forward. In fact, the government can adopt supplementary estimates as an order of the day, as a government order in the House, and cause votes to happen outside the ordinary supply cycle. I mean, there is a supply cycle that's set up. That's helpful, obviously. It's routine. But it seems like the habit of government, of having only three supplementary estimate cycles and now two, has become canonized in a way that's not true of the....
I guess what I'm really driving at is that I have been objecting to the way government has reformed the estimates process in this Parliament. That's not a secret to anybody sitting at this table. I don't think it's a secret to almost anybody who's been paying attention to this. My principal objection has been that government is coming to Parliament with less information about how it actually plans to spend money. It has the blurb from the budget; that's nice. Mr. McCauley cited a document that I cited at the last meeting that actively encourages departments to respond to detailed spending questions with the high-level blurb from the budget. I mean, that doesn't help parliamentarians do their job.
What is the justification for moving to a system that makes it impossible in principle for parliamentarians to ask questions about how the money will actually be spent? Why are we doing this? It's undermining parliamentarians' ability to do their job. I want to know what the win is. I can speculate as to what it is. People familiar with politics would say that this creates opportunities for government to play fast and loose with other people's money. That's what happens. And that's true of not just government. In any organization where you don't have executives who are prepared to answer detailed questions about what they plan to do with money, you run into trouble.
Colleagues, since this is our last meeting of this Parliament, I wish all of you a very good and, hopefully, productive summer.
Since we're all partisans around this table, it would be completely disingenuous of me to say I hope to see all of you back here again.
Some hon. members: Oh, oh!
The Chair: However, in all honesty and all sincerity, I do wish all of you the best of luck in the upcoming campaigns. I hope you really do have a good summer.
Mr. Purves, to you and your officials, thank you once again for being here. I do hope to see you and your officials back here the next time we sit. Once again, I hope all of you have a very successful and productive summer.
Colleagues, we are adjourned.