Good morning, and thank you very much for having us back to conclude our remarks here today. As you know, my name is Mike Palecek. I'm a letter carrier from Vancouver and the national president of the Canadian Union of Postal Workers.
I have with me today our director of research, Geoff Bickerton. He has been with our union since 1977, and was intimately involved even in the formation of Canada Post as a crown corporation and in every single review afterwards. I would hope that between the two of us, we can come up with some answers for whatever you ask.
As you know from our letter to the committee chair, CUPW has done a critique of the task force's discussion paper, as promised. I believe last time we were here we said we would do that and submit it to you for consideration. This document outlines our concerns about financial matters and postal banking. I would like to highlight some of our concerns and also answer any questions you might have. Of course, I won't have time to be comprehensive in this.
First are the labour costs. In one place the discussion paper states that Canada Post's productive unit of labour costs are up to 41% more than those of comparable businesses in the private sector. In another place, it states the Canada Post productive labour rate is 45% more than its competitors'. Based on information that Canada Post provided to us, the difference is nowhere near 41% or 45%. You can see this on page 2 of our critique.
I'll move on to financial performance. The task force based much of its negative projections for the future on its analysis of the past five years, but they got it wrong by lumping the results together. In 2011, they didn't look at the impact of the one-time events, such as the pay equity payment estimated to cost $250 million, or the one-time increase of $63 million in pension benefit costs. Without these one-time costs, Canada Post would have made a profit from operations, in spite of the rotating strikes and full-scale lockout in 2011, which have been estimated to have cost between $50 million and $70 million.
For 2012, the task force reported a loss, which is not true. Canada Post reported a $94-million profit in 2012, but restated it in 2013 for comparative purposes only, when the corporation introduced new accounting standards. For 2013, the task force completely ignores the huge impact of the one-time accounting changes and instead cites the financial results as evidence of long-term unsustainability. The fact is that Canada Post would have reported a $321-million net profit, had it not been for those accounting changes in 2013.
For 2014, the task force acknowledges a profit but attributes it largely to March price increases that generated $214 million in revenue. They neglect to mention the impact of the increase in the benefit-cost discount rate, which reduced benefit costs by $181 million. For 2015, the task force doesn't say much except that it was a profitable year. Canada Post, on the other hand, tried to attribute the profits in 2015 to the CMB conversion program, even though the conversions happened at the end of the year and the impact in reducing costs was minimal.
The 2015 profits were the result of an increase in parcel volumes, productivity gains, and Canada Post's ability to reduce staffing in response to lost volumes. It was also achieved despite a decrease in the benefit discount rate from 5% to 4%, which increased the benefit cost by $189 million.
For 2016, the task force predicts a loss before taxes of $63 million. They predict a loss in spite of the fact that all evidence points to another profitable year for Canada Post. Canada Post reported $45 million in profits before tax in the first six months of 2016. This represents the highest profits for the same period, since 2010, when they started reporting profits quarterly. Plus, this was all achieved in spite of Canada Post instructing large-volume mailers not to mail during June of 2016, when they drove their business away threatening a labour dispute.
The corporation has a long track record of being wrong. I would ask that you review page 6 of our critique for this.
I have just a few more observations before we move to the questions.
The task force makes only one reference to our new collective agreement. They cite a clause in the urban contract requiring that there be 493 corporate retail outlets. They see this clause as negative. We do not.
They either fail to mention or were not told by Canada Post about two very positive developments. The task force does not mention the new rules that were negotiated that will allow Canada Post to significantly increase its market share in ad mail and the parcel market, particularly by delivering parcels on evenings and weekends. Similarly, there's no mention of a new activity values in the RSMC agreement that will increase productivity.
On postal banking, in addition to the financial issues, we have critiqued the task force's observations on postal banking. We hope you will read this section with interest.
I would like to highlight two major errors right now. The task force's report says, on page 82, that only 7% of Canadians who like the idea would actually use a postal bank. According to their own polling, it's not 7% of those who support the concept, but 7% of all Canadians. Furthermore, another 22% of Canadians say they would probably use a postal bank. In short, the task force's polls suggest postal banking has huge potential, and up to 29% of the country say they would probably use it.
The second error is found on page 86, where the discussion paper states “having a government entity competing in the financial sector would contravene Canada's trade agreements with other countries”. This statement is also incorrect. A postal bank would be subject to trade agreements and would have to operate within those rules, but there is currently nothing in any trade agreement that would prevent a postal bank from actually operating.
In conclusion, we believe that the task force's paper should be disregarded, as it is biased, and based on errors, omissions, misrepresentations, and unsupported speculation.
Thank you for listening.
Good morning everyone.
Mr. Palecek, you are the national president of the Canadian Union of Postal Workers, are you not?
It's a pleasure to meet you. We met a great many of your members on our trip, during the committee's 22 public hearings all over the country. Your members repeatedly told us—and I believe you expressed your opinion on the subject as well—that they had absolutely no confidence in the task force's report and that, in many cases, it relied on factually incorrect information. I'm glad we have the opportunity to meet, so you can confirm or deny the statements.
Your members pointed out more than once that the task force's report was based on accounting data from Ernst & Young, which, itself, relied on information from the Conference Board. On Monday, I asked an Ernst & Young representative who appeared before the committee whether his firm's figures were based on those of the Conference Board, and he told me that that was absolutely not the case. I can't understand why, then, your members continue to level that criticism when it hasn't turned out to be true.
What are your comments on that?
I thought a number of things mentioned by Mr. Chopra yesterday were surprising. I'm going from memory.
I remember his saying that they lost $300 million in revenue in 2009 and talking about what a bad situation Canada Post was in in 2009. He neglected to mention that in 2009, they actually reported their largest profit in corporate history. I thought that was a little funny.
I thought it was strange that he would talk about the role of management and CUPW in innovation, and frankly, he was heaping a lot of praise on us that we've never heard before outside of a room like this.
Again, he completely neglected to mention that we have our appendix “T” committee, and our urban collective agreement, which is the service expansion in innovation and change committee. This is actually a joint committee with two management representatives and two union representatives.
He also failed to mention that they spent the last year demanding that this be cut out of our collective agreement. It was actually one of the last issues left on the table before we were able to settle.
I think we met a very different Deepak Chopra yesterday than we are used to, to be honest.
Thank you very much for being here this morning, panel.
I'm interested in reflecting back to you some of the things we've heard on the road because we've heard management—in their case, yesterday—and from the unions, and Canadians, your customers across the country.
There are really two types of customers, are there not? There are the individual Canadians receiving delivery, who are concerned about how that happens and the services they get at the post office. And there are the commercial customers. That's where the business is growing, in parcel delivery. I'm intrigued by what we heard from small sellers, from the e-commerce people, from people working through eBay and Shopify, and so on. That's where it's happening.
We also heard there's a need for flexibility in delivery options, whatever they be, because the sellers need to be sure their customers are receiving the goods. There needs to be a flexibility in the services that are provided through the post office. With that, comes a need for flexibility in making sure that Canada Post is able to provide a competitive offer.
That's why I would first like to ask you some questions about the financial performance. When we talk about the difference in the labour costs, why do you think there is such a wide discrepancy between management's calculations and yours?
Thank you, Mr. Chair, and thank you to the witnesses for coming.
I had a Canada Post town hall in my riding, and it was basically dominated by postal workers. I would say that you are very passionate about Canada Post, which I admire. You guys provide a very good service. My cousin just got hired as a mail deliverer in Surrey, B.C. He's super excited. He enjoys his work. But that doesn't solve the current problem that Canada Post has. At a very macro level, I sum it up in these few points.
Transactional mail is on the decline, but you have more addresses to deliver to.
Your parcel business is increasing, right? But that doesn't offset the fact that there are more addresses to deliver to and there's less revenue coming in from transactional mail.
Then, there all these different proposals out there such as advertizing on your fleet, doing postal banking, reducing your workforce, ending community mailboxes, and doing alternate day deliver to get to a future of sustainability for the organization.
A lot of your recommendations today are based on Canada Post being profitable if you look at the numbers in a particular way versus the international accounting standards way, and we could debate that. We're not going to talk about the numbers per se, since I'm going to give a lot of deference to the fact that you do this job on a regular basis, and I don't. I'm looking at the numbers from an objective point of view, given my past skill set. I don't believe they're sustainable, but let me give you deference and say, “Okay, Canada Post is sustainable.” You're always looking to grow your revenue and reduce your costs, right?
What are the three things that you think Deepak Chopra should do to save Canada Post's future?
Sorry, let me rephrase the question.
Again, even in your ranks, at the postal worker level, they keep on talking about postal banking. It's not as simple as saying, “Oh, Canada Post should do postal banking”, right? There's a financial element to this, to say, “Okay, if Canada Post adopts postal banking, it will provide x dollars of revenue”, right? The assumption amongst your workforce, with all due respect, is that postal banking is the golden egg that's going to save Canada Post and provide hundreds of millions of dollars of revenue. The fact of the matter is that's not going to happen. The reason is that banking needs are already well served in Canada. Not all over the country, but, generally, where most of the population live, people's banking needs are served. That happens to be due to the strength of our banking sector. Wireless? Again, nobody's going to open up the CRTC to provide Canada Post with access, because Bell, Rogers, and Telus control that gambit. That's a discussion for another time.
From an every-day perspective, where do you see inefficiencies in your organization that can be improved upon that will help the financial sustainability of this organization?
Good morning everyone.
It's our pleasure to be back to meet the parliamentary committee that has been working very hard, from what we've heard. We're quite pleased to hear that, because it means that you'll come up with good recommendations.
On my right is Marena McLaughlin, who you know already; and Mr. Mr. Jim Hopson, who you very well know and has travelled a long way from home. Unfortunately, Krystyna Hoeg could not be with us because she had previous commitments that she could not refuse.
Thank you again for having us.
We are here in front of you to remind you of what you may have forgotten, or what you already know very well. We thought it was important to revisit first, of course, our mandate.
Our mandate wasn't to make recommendations. Our job was to draw attention to considerations that were based not on our perceptions or impressions but, rather, on facts, and that was key. We were also bound by the limits of our mandate. We obviously had to disregard any form of subsidization, and we had to explore options for privatization, among other things. So those were our lines in the sand, if you will.
It was pretty clear and definite, and we've respected every term of our mandate.
You've met some of the people we worked with, Ernst & Young and Oliver Wyman. They are very rigorous and have done excellent work, and we're very pleased with the collaboration we got from them. But maybe you know more about that rigour than the one we've had for other dimensions of our work.
We were rigorous in making sure that what we were to consider and to assess was not strictly the opinion of a few people. We reached out, not to do consultations as you've been doing, but to meet with stakeholders to make sure that we were really understanding the different dimensions, the different aspects, of a very complex and long history of an important institution. It was not only for the people in government or the people working in Canada Post; all Canadians are concerned and are touched by the future of Canada Post.
Let me remind you about what we've done. We have met multiple stakeholders, and every time we met one it was not one person. The stakeholders were representing their members, whether I am thinking here about the Federation of Canadian Municipalities or the association of bankers. We met the Canadian Association of Retired Persons. We met, of course, with the different unions working in Canada Post. We met with postal experts, including, of course, Robert Campbell, who had done the first study some years ago.
We were very thorough in understanding the points of view of Canada Post's clients as well as its competitors. We met with UPS and we met with the Retail Council of Canada. We felt that it was important not to hear complaints—that was not the objective of our meetings. The objective was to hear what their view of the future was. Did they have ideas of what could constitute the future of Canada Post?
But our mandate was important, also. We were asked to understand Canadian views. In order to really understand Canadian views, we had a website on which we were posting a question every week. But there was also the necessity of understanding Canadians' views scientifically. We've done an extensive survey among Canadians in all provinces, all generations, and we kind of outnumbered the younger population, the older population, handicapped people, and even native people. Altogether we surveyed 2,400 people.
We also surveyed business people separately. There, again, it was an extensive number. There were 1,200 businesses consulted. They were small and large, and from all sectors of activities.
It's important to revisit that. In the discussions you may have had, we may not have stressed those aspects of our work as importantly.
It is with all of that knowledge and suggestions that we have done our work of analysis. First, there was the analysis of assessing the financial situation of Canada Post now and in the future by making some hypotheses and forecasting the future for the next 10 years. We had to bring you the views on this despite the fact that you are doing your own consultation. Of course, you don't have time to do the kinds of numbers we had with the surveys, to give you the opinions of Canadians, the uses they have for Canada Post, and how they project they will be using Canada Post in the future.
The third dimension was that if there was a discrepancy between the financial assessment and the forecast we have and Canadians' views, what could be the options that could ensure sustainability for Canada Post?
We worked with Oliver Wyman and Ernst & Young. These are consultants who have vast and international expertise, and who even have expertise in postal services. When we worked with Oliver Wyman, there was a first bundle, I might say, of options. There were more than 40 that were, at first glance, interesting, but when we dug into them, we retained only the ones that could fit our criteria. I say this because criteria were not what could be done in a very kind of hypothetical approach, but it was a matter of having the three criteria. Considering the market dynamics, is the option viable? Considering the fit with the competencies of CPC, is it viable? Finally, is there a real potential upside? Of course, if the financial situation does not really have a pinkish tint, you want something that will bring possibilities. That's how we have reduced our options through a rigorous process and analysis.
Our conclusion, you know by now, is that the situation at Canada Post already is one in which one size doesn't fit all. That's already the case when you see how the mail is delivered across the country.
However, in the options that have been considered, there is no silver bullet. The financial situation is not about a tragedy. Rather, it's about being conscious and aware that the past cannot be prolonged. Change has to occur. Realignment has to occur. Transformation has to occur.
What we have described the interesting options. For some, if you do one, you may not be able to the other. However, they are not about solving all the issues. It's about allowing a bridge between today, the future realignment, and the transformation that we say is needed in our conclusion.
It's clear to us that there is no single recommendation that can be done strictly by one of the parties or stakeholders involved. The transformation and then thinking along the transformation and the realignment, even the kind of short-term or mid-term options, all require collaboration of all stakeholders. That will definitely be a real challenge.
We have worked every day for four months, very seriously, including travelling—not through the whole country, but from our home to Ottawa to work together—to make sure there is a future for Canada Post. It is clear to everybody, from the surveys we've done and the meetings we've had, that the future of Canada Post is important.
It's not strictly about history and the past; it's about working together to make sure there is a future.
Ms. Bertrand, once again, welcome to the committee.
It's been a long road. I know this has been a lot of work for both you and all the committee members. For us, it has meant many long hours listening to stakeholders across the country and gathering valuable input. Retired people and those with mobility issues shared with the committee their fears and concerns about the disappearance of this public service. This is an issue we all care deeply about. Canada Post is a public service that is part of our everyday lives in our communities
As I have already told you, I was disappointed by the report. I was expecting more. I realize you were bound by a specific framework. I also realize that the committee could build on your suggestions to produce a more thorough and perhaps more in-depth report.
From everything I have heard and read, I can't seem to get the image of a pyramid out of my mind. You have Canada Post, the postal workers, and the public being served, a public that has a certain expectation of public service. Everyone has to do their part to make sure that Canada Post has a future. I'll come back to the service issue in a moment.
Given the information in your report and the input you gathered from the stakeholders you questioned, it is clear that the numbers don't match. What's more, they are based on data from 2011, when Canada Post went through a lockout and had to pay out huge sums for pay equity reasons. As far as the deficit goes, you came up with an average estimate and some forecasts, but, as we speak, the numbers we have show that Canada Post is profitable.
Earlier, you said that it wasn't possible to hypothesize too much on new solutions or ways of doing business, particularly as regards postal banking. Conversely, the report contains hypothetical figures for the future, specifically, for the next 10 years. The stakeholders we have met with have told us that those figures do not add up.
I'd like to hear your take on that. I appreciate that the firm did its job and that it was possible to make changes afterwards. I can't get into the nitty-gritty since I'm not an accountant like Ms. Ratansi, but why the difference in the data? Why are there different sets of numbers? Furthermore, and this question bears repeating, why were the financial results of 2011 taken into account despite the fact that it was an unusual year expenditure-wise?
Thank you for the question.
We worked very rigorously in a number of respects. First, basic figures come from Canada Post and its data. We also have figures that have been checked by an extremely responsible and recognized firm, KPMG. Ernst & Young, with whom we worked, analyzed those figures. It did not redo the audit, but it worked with the figures.
Forecasts are just that, but as we said in our report, we did decide to go with the most conservative hypotheses. It can be said that 2011 was an exceptional year because of costs related to pay equity, but 2014 was also exceptional. In fact, the price of the stamp went from 62¢ to $1. That generated an influx of about $200 million, and it inevitably helped Canada Post somewhat catch its breath.
Moreover, I want to remind you of the issue of the pension plan's solvency. Some may say that it's only a matter of $6 billion or $8 billion, depending on the assessment. According to the latest assessment, the amount was $8 billion. In addition, solvency payments have been suspended for the time being. When a $6-billion company makes a profit of $100 million, it's not huge. In the private sector, that kind of a profit would not be considered extraordinary, quite the contrary. Moreover, that profit will quickly be lost once solvency payments resume.
There is also the obligation to continue to invest in the company. It needs modernization and must move toward new niches and new technologies. That is what our forecasts are based on. It's rather conservative—and we won't argue over $50 million or $100 million—but when we establish the medium to long-term trend, we see that the situation is very delicate. We have to remember what is at the basis of all this. In other words, we are no longer receiving or sending the letters to which we are so attached. In addition, we are receiving and paying our bills online. Sixty-nine percent of Canadians feel that this trend will continue to grow.
Moreover, we will be less and less favourable to marketing initiatives and advertising distributed through the mail, as we are increasingly aware that, in many ways, that is a waste of paper and we could just as well use the Internet.
Finally, when it comes to package delivery, which is experiencing considerable growth, the prices cannot be raised at will, as there are constraints, not in terms of legislation, but in terms of market forces. That is why the only worthwhile possibility to consider would probably be for a regulatory organization to set a floor price that would be applied to our competitors. That would give Canada Post some breathing room.
Thank you for reiterating what your mandate was. Yours was a discussion paper. You didn't draw any conclusion. You just helped us to go forward and ask questions. Sometimes it was very hard to say whether the remarks you made were valid or invalid. We heard a lot of contradictory information to what you heard. What I'd like to do is read something that some of the witnesses said, and it was not the union.
One said that the task force paper on the Canada Post Corporation review is fundamentally flawed and ill serves the residents of Canada because it misses opportunities to take advantage of Canada Post's unique strengths. This is where the confusion comes for us. We're looking at it and saying, were you looking at it from an insolvency perspective, because you mentioned it, or were you looking from an ongoing concern that can't capitalize on opportunities?
I'll make a few statements, and please makes notes, because you'll answer the questions.
One of the things they also said, and you quoted it just now, was that 60% of Canadians do banking online. The person who was looking at the source said that the source you cited was Yahoo Canada, but readers of Yahoo Finance are in no way representative of the population of Canada. You can answer that question, as well.
In your analysis, Mr. Hopson, you said you do not look at one anomaly, but that for 19 out of 20 years that Canada Post has been in business, it has been profitable. If it has been profitable, then you and I know that when we project into the future, then you can project two years for accuracy. Even Ernst & Young told us that their projections are not that accurate.
You can see the confusion people are facing with viability, non-viability, and sustainability. What are some of the creative solutions?
We had Oliver Wyman here as well. You said you looked at the U.K. and France. Those are two densely populated countries. Even when we asked the question of Oliver Wyman, they didn't even look at Australia. If you don't look at Australia, which is really parallel population-wise and size-wise, how do you come up with conclusions that postal banking is not viable? We've had so many presentations that state that in certain instances postal banking has been viable, that you have to look outside the box, and there was no integrated thinking by Canada Post.
The reason I'm telling you this is that you're going to respond, and I'll be quiet afterwards.
One of the other things they said that you didn't look at was Canada Post shooting itself in the foot because it was creating competition for itself by opening up franchise stores while it had corporate stores. We learned from businesses that your analysis is flawed that ad mail will decrease because of technology. So here I am asking, who is right, who is wrong, and what do I do?
The floor is yours.
Yes, it wasn't that site. I think it's very important that we understand that e-commerce is rising. It's not reached it's potential.
Regarding the solvency problem of the pension, it is not in our hands to present a solution. What we've presented are the options that you have to consider, but it is a big weight that you can for now forget. Of course, that's what the corporation has been able to do, given the holiday they were given, but it's there, and unless you change either the legislation, as they did in Quebec last year or in New Brunswick, you're caught with that. It has to be considered.
I'll let my friend talk about Australia.
Regarding the corporate stores versus franchises, we have considered the possibility that the moratorium that was once appropriate, because the areas were rural and had very little population, is not longer so because it is a different story today. Here we think of Brampton, Moncton, Halifax even. We thought, if we try to be imaginative, isn't there a possibility to use the corporate stores that remain in the rural and more remote regions as hubs? Canada Post could offer the possibility of partnering with banks, offering municipal, provincial and even federal services, and maybe even some private sector services, and to be the meeting place but also to provide
a single-desk system, as it is commonly referred to,
for all kinds of services. So we've tried to really balance the interests of Canadians with the possibilities.
Maybe you want to talk about Australia.
Mr. Chair, thank you for inviting me to return to your committee to discuss estimates reform.
I'm pleased to have with me today from my department, Yaprak Baltacioglu, the secretary of the Treasury Board; and Brian Pagan, the assistant secretary of the expenditure management sector of Treasury Board. Nick Leswick, the assistant deputy minister of economic and fiscal policy at the Department of Finance; and Siobhan Harty, assistant secretary to the cabinet for parliamentary affairs from the Privy Council Office, have joined us as well.
As I said last time I was here, I know estimates reform is a very important issue for this committee. I value your committee's input as we move forward on it.
I think this is either my 13th or 14th parliamentary committee appearance between the House and the Senate over the last year. I take working with committees very seriously as a parliamentarian. As I mentioned last time, June 2 will be my 20th anniversary, after some seven elections, of having the opportunity to represent the people of Kings–Hants. For sixteen and a half of those years I will have been an opposition member of Parliament, and for three and a half, a member of government.
As such, my views on these issues in terms of parliamentary engagement are shaped by having spent a lot of time as a member of Parliament who recognizes fully the importance of Parliament and the role that parliamentarians play—a fundamental role in terms of holding government to account. The ability to exercise oversight is the most important role that we as parliamentarians can play on behalf of those we represent.
I would like to address some of the key items that were raised by committee members last time and in subsequent meetings, and sometimes in individual discussions and smaller groups.
First is their desire for the important requirement that ministers appear before committee to explain their estimates. On behalf of the government, I want to assure you on the record that our government is committed to ministers appearing before committee when invited to defend their estimates. We firmly believe that parliamentary oversight and accountability are absolutely crucial to our democratic system.
Having ministers before committee, when invited to discuss and defend their estimates, is a key part of holding government to account. You have my personal commitment, but also the commitment of our government, to make sure that is the case. That was laid out also in our mandate letters by the Prime Minister who said that he wanted “meaningful engagement with...Parliamentary Committees”.
We take that very seriously in our government.
Second, I heard the concern about changing the Standing Orders to allow the main estimates to be tabled no later than April 30. There was a concern that this would weaken parliamentary oversight, because it would shorten the number of days parliamentarians and their committees would have to study the main estimates.
To alleviate that concern, I propose April 30 for the first two budgetary and estimates cycles. This is important operationally because we are asking a lot of Treasury Board, Finance, and all departments and agencies who work together. This is a significant, substantial change, and it will take time to operationalize it. We are saying that for the first two budgetary and estimates cycles, the deadline would be April 30. Having an April 30 deadline for the main estimates for the first two years would allow our departments to make the necessary adjustments and give them time to ensure that substantial portions of the budget are reflected in the main estimates, strengthening the importance of the main estimates and their relevance.
This approach will ensure that the main estimates, starting this coming year, will be a more useful and relevant document, because they will reflect this year's budget priorities and prevent the situation we now have, in which the main estimates are effectively debated for several weeks and rendered basically irrelevant when the actual budget is tabled.
In year three, a permanent change would happen, allowing the tabling of main estimates on March 31. I've discussed this with the former parliamentary budget officer, Kevin Page, who believes this is a reasonable approach. He said the following, which he agreed I could share with you:
|| While I believe Parliament and Canadians should see main estimates before the start of the fiscal year, I support your recommendation that this adjustment may take two years to implement.
He is somebody who has worked as a parliamentary budget officer and also within the public service broadly. He understands that these types of significant changes do take time to put into operation to ensure that we're getting them right.
I understand the concerns I've heard about any potential reduction in the time available for parliamentary study. I assure you that reducing parliamentarians' ability to study the main estimates is something we want to avoid. It's not our intention; it's quite the opposite. We want parliamentarians to be able to study documents that will be substantially more meaningful than those they are provided with today. This is an approach that will provide the best balance between parliamentary study of the mains and making the mains a vastly more useful and pertinent document.
A third concern was raised about committee of the whole. Tabling the main estimates by April 30 would require some form of consequential amendment. Under the current rules, it's up to the opposition to identify the departments whose main estimates will be referred to the committee of the whole. The current Standing Orders give the leader of the opposition until May 1 to identify these departments. That deadline would obviously need to be moved until after that in order to give the opposition time to make an informed decision. We recognize the need to change that deadline to give the opposition time to make that determination. Moving this deadline would have the effect of limiting the government's flexibility in scheduling these appearances before the committee of the whole.
As a fourth concern, the last time I appeared here there were also some concerns that our proposal would somehow reduce the number of supply dates. I want to be crystal clear that is not the case. Adjusting the tabling of the main estimates would have no impact on the number of allotted opposition days or other aspects of the supply cycle, including planned supplementary estimates for the supply periods ending December 20 and March 26. Committees would be able to examine estimates documents and call on officials and ministers throughout the supply cycle.
A fifth concern was around the current Standing Orders requiring committees to report back on the mains by May 31. There was a concern that a month might not be enough time to fully scrutinize the mains. We are open to your ideas on how to address this. This could be a discussion with the House leaders to allow some reasonable extension of this. That's a discussion we ought to have between House leaders, but we recognize the need to address this and the potential to move that forward.
Finally, some members of the committee have expressed the view that the budget date should be fixed. Mr. Chair, as you know, there's currently no requirement to table a budget. It's not part of the Standing Orders, and the timing of the budget falls within the jurisdiction of the ministry or . The normal practice is to table budgets between mid-February and mid-March. Extreme situations do arise where governments need to avail themselves of more flexible approaches.
I want to say to the committee that we are open to hearing this committee's advice on the subject. We're open to suggestions from the committee, and we will take those suggestions seriously.
Mr. Chair, a lot of what we're doing now is based on the good work of this committee going back to 2012. This is important work in strengthening the accountability of government to Parliament and strengthening the role of Parliament.
We're committed to doing a better job of aligning the budget and estimates processes. I look forward to continuing our active engagement with this committee, but also across Parliament, on this and many other issues. I would be pleased now to answer any questions you or committee members may have. Also, our officials would be pleased to answer any questions.
To be honest, I actually think that members of Parliament, even members of the governing party, have the same responsibility to hold their government to account. It's not just opposition members who have a responsibility to do this. All members of Parliament, even members of the governing party, whoever the governing party may be at one time or another, have a responsibility to do this.
Committees, by nature, ought to be less partisan in the work they do. I believe that Parliament itself, many times—except for one hour a day where it's pretty hard to change that—broadly should be less partisan in the work we do. But committees, I think, should be held to a higher standard in terms of the work they do and in terms of not being partisan.
The responsibility of Parliament and of parliamentary committees to hold government to account for government spending is essential. The current system is not designed to be understood. In fact, if you were to try to design a system to be difficult to understand and to be opaque, you would not be able to do a much better job than what has happened over decades. As a member of Parliament, I can tell you that there are people who have been members of Parliament for years who don't understand the budget and estimates process, and these are smart people, engaged people, and good members of Parliament, who have difficulty understanding what is a ridiculously opaque and unnecessarily complex and illogical system.
The answer is that at some point we should in fact have a system that not just members of Parliament—and all parliamentarians, as I include senators in that—but the general public can understand. That should be the objective. I view this as an evergreening process. These are changes we want to make now, but as we move forward, I want this to be something that, on an ongoing basis, we work on to strengthen accountability of government for spending to Parliament.
Thanks for joining us again.
If it makes you feel better, Minister, I'll let you know that, unlike that of my young cohort over there, your time in Parliament doesn't even scratch half my life.
I think we all agree on the need to promote transparency of the budget process and the need for alignment between the estimates and the budget.
I have to say, though, that I am still a bit apprehensive about modifying the Standing Orders before we adjust the corresponding behaviour when it comes to creating the budget and presenting the main estimates. Your predecessor, , noted several times in the discussions of the 2012 budget that reforms didn't require a change in the rules necessarily, but rather a change in the coordination of the budgetary process. I think that's the path I'm going down.
Changing the Standing Orders is quite an exceptional issue, and I think you've now recommended changing a second one to allow time to study the documents. We're now changing two Standing Orders. These rules governing the House are, obviously, very important. They supersede the government of the day. Changing them is monumental and substantial. We just want to underscore the scale of the proposal. Changing the Standing Orders is not something that we should just throw out, that “Oh, we have one day to meet the committee of the whole. We'll just do another change of the Standing Orders.” I think that sets a very bad precedent.
Is it the most proper way to change the Standing Orders so that the budget and estimates can be aligned, when there's nothing that says we can't change the alignment right now?
I'll start by saying that we in the NDP do think that it's a good idea to try to better align the budget documents and the estimates documents. There's value in doing that.
Thank you for making it a priority to try to do that, but there are concerns around the amount of time that parliamentarians have to study that document, however better it may be in terms of information. There are concerns around actually ensuring that those documents remain coordinated to the extent that there isn't either a fixed budget date or a fixed budget period in which that budget would be brought in. You can't coordinate two things if you don't know where one of them is. To the extent that the Standing Orders remain silent on the budget, it's hard to feel that this limited change to the Standing Orders will actually ensure any kind of coordination.
Then of course access to government is also requisite for a good study of the estimates. I think those are represented in the six concerns that you identified.
We've had your assurances and the assurances of your colleagues—or you've assured us on behalf of them—that they're prepared to appear before committee. But we know that governments don't last forever, and as much as the latest infrastructure plan projects your government sticking around past 2023, Canadians may well change their minds. With a different government, those assurances may not amount to much.
Would you be prepared to consider changes to the Standing Orders that would require ministers to appear before committee to ensure that parliamentarians have the access they need in a restricted time frame to be able to get the answers they need with respect to the estimates?
Good afternoon, minister. Thank you for joining us this morning.
First, Her Majesty's official opposition wants to strongly reiterate that any change that may bring more transparency and align main estimates and supplementary estimates is in itself laudable.
Second, in theory, we are clearly talking about a reform of budgetary appropriations and of the process related to budgetary appropriations. However, it would also appear that, behind the facade, we are talking about a fundamental reform of Canada's parliamentary democracy, and I will tell you why. I believe that there are currently two opposing philosophies. There are two fundamental premises that you have indirectly addressed.
First is the premise where parliamentarians can better understand the budgetary processes—in other words, supplementary estimates and main estimates. That is the first premise. No one can be against it because it is good.
The second premise, which you also addressed, is the need for and importance of making the government responsible and accountable for its actions, including the budget, which is basically the government's main tool.
Those are the two opposing premises. When we look at our country's last 150 years, I think that our founding fathers and parliamentarians clearly chose the second premise. They chose the premise that tries to make the government responsible and accountable through the oversight of the use of public funds. Here is my question on that matter.
I want to bring you back to the mandate letter the publicly addressed to you. The fourth priority is to:
||Strengthen the oversight of taxpayer dollars and the clarity and consistency of financial reporting. Ensure consistency and maximum alignment between the estimates [...]
That sentence shows the clash between the two premises. Your reform proposes clarity and consistency of financial reporting, as well as consistency and alignment of the estimates. On the contrary, your reform does not seem to really ensure and strengthen the oversight of public funds. We even have the impression that it's doing the opposite.
You yourself said:
more meaningful—okay, but government accountability, and the responsibility is less.
So there are two opposing premises and we, on this side of the House, want to ensure that the second premise, which has been maintained by parliamentarians for 150 years, will not be changed lightly. In addition, you are talking about a second standing order. Will there soon be a third one?
What do you have to say about the clash between those two philosophical premises that are important for our country's parliamentary democracy?
Yasmin, you have the advantage of being an accountant. Not all of us are accountants. I was a finance guy, but we relied heavily on the accountants.
It is confusing as it is. In opposition we have limited resources. Individual members in their offices do not have a lot of legislative resources. I was very fortunate in opposition in having Tisha Ashton, who just loved the estimates process. There aren't many people like that. Over a long period of time, I got to understand them to a certain extent, although not as well as she did. All our parties have people in our offices and the leader's office who really love this process.
The idea is that we shouldn't need experts who understand and love this process. Every member of Parliament, and Canadians in general, should understand a process that is simple and is easier to understand. The process should be something that we can describe to any Canadian, both in terms of the sequencing and departmental reports.
There are thousands of people in departments across the Government of Canada who are writing reports that almost nobody reads. That's because they don't provide these reports. It's not their fault, by the way. The nature of the report now means that they spend a lot of time providing information that isn't that useful, that isn't of that high a quality, and that doesn't really reflect the basic departmental plans and departmental results. We want to change that part of it as well.
These are significant changes. I think smart members of Parliament from all parties struggle with this. It's not just opposition members who have the responsibility to hold government to account.
Thank you, Minister, for being here. I do have a question and a half for you, at least an observation and a question that hasn't been asked, but I think it's very germane to this conversation.
I'm assuming, Minister, if you're talking about changing the Standing Orders, then you would be talking about an adoption of a provisional Standing Order and not a permanent Standing Order, because you can put a time limit on a provisional Standing Order, as I'm sure you're aware.
It has been the convention of the House that when Standing Orders are changed, they would all receive unanimous consent among all parties. Obviously, it's within the purview of this government that through just a simple vote you can change the Standing Orders as you will. Is it your intention, Minister, to seek unanimous consent if you try to proceed with a change to the provisional Standing Orders, and what would your timeline be?
To that end, last February we did a briefing for members of Parliament. There were about 80 parliamentarians from the House and Senate. We have since met with this committee. We've done a technical briefing recently.
We have been very engaged with Parliament and parliamentarians in seeking direction and input. Today, as we said, there were six concerns raised over the last period, and we have addressed them. We're doing everything we can. I'm doing everything I can. Our officials are doing everything they can to demonstrate absolute good faith in what we're trying to achieve here.
We would expect, as parliamentarians, reciprocity on that, because we all agree on the objectives. As a minister representing the government, I also have to reflect the operational capacity of what we can do. I'm not going to commit us to doing something and fall short of it. I want us to get this right.
I want it to be absolutely clear that we're demonstrating good faith and that we want parliamentarians from all parties to do so as well. The committee process and the work your committee is doing, going right back to 2012, is important. This is an evergreening process. The changes we're proposing now will inform future changes and strengthen the budget and estimates process and, fundamentally, the accountability of governments to Parliament and to Canadians. This is important work.
Mr. Chair, you and I have been around awhile, and this is the kind of thing that as parliamentarians we can look back on and say that we participated in a fundamental change that strengthened parliamentary democracy in Canada. There aren't that many opportunities that we have as parliamentarians to be able to say that.
I hope this is something—a grand project, an important project—that we can all work on together across party lines, because that fundamental accountability of government to Parliament, and of Parliament and government to Canadians, is something that should be a grand project on which we can all agree and work to achieve.