Notices of Meeting include information about the subject matter to be examined by the committee and date, time and place of the meeting, as well as a list of any witnesses scheduled to appear. The Evidence is the edited and revised transcript of what is said before a committee. The Minutes of Proceedings are the official record of the business conducted by the committee at a sitting.
I will call this meeting to order. This is meeting number 20 of the House of Commons Standing Committee on Government Operations and Estimates. The committee will meet again this Friday for a final time before Parliament is adjourned, and we will be meeting from 11:00 a.m. to 1:00 p.m. EST on Friday.
Colleagues, we have already heard from the PSPC officials. They will not be making an opening statement, and we do have the speaking notes from the Privy Council Office, which have been distributed in both official languages.
I would like to move, colleagues—similar to what I have done on a number of occasions before to allow us to get more time for questions—that the speaking notes presented by Matthew Shea of the Privy Council Office be taken as read and appended to the evidence of today's meeting.
Do I have consent for that motion?
Some hon. members: Agreed.
[See appendix—Remarks by Matthew Shea]
The Chair: Hearing no dissent, then, colleagues, we will go directly into questions. It will be a six-minute round, followed by five minutes, followed by two and a half minutes.
As for our normal routine, our first intervention will come from Mr. McCauley, for six minutes.
I will just quickly say welcome back to Mr. Blaikie.
Mr. Shea, welcome back as well. It's good to have you with us.
On the two main items you have in the supplementaries, I will start with the funding for communications and marketing, $48 million rounded up. What exactly is that for, please, and can you provide a breakdown of what it's being used for?
Absolutely. It's $49.5 million, as you know, and the first bit within that is $10 million for an extension of the $30-million Public Health Agency campaign that is currently out on COVID-19; $12 million will be used for an extension of the $10-million Finance Canada campaign that we're doing right now, and $2.9 million is towards the PCO COVID communications response team.
The remainder of the funds, approximately $25 million, will be held to keep flexibility on communications, for instance if we have upcoming campaigns on a vaccine that becomes available.
First of all, how did you get the other $25 million past Treasury Board, if it's just to be held in case something comes up? Can every department always slam a few million away just in case something comes up?
What exactly is the advertising being used for? We all know COVID is on the TV every second, every newspaper and every Facebook feed; everything is COVID all the time. Break down exactly those four items. What are we advertising, and where is the advertising going? Is it newspapers? Is it going to Facebook and U.S.-based companies? Is it staying in Canada to support Canadian journalism? Can you answer that?
I absolutely can. As you know, the virus is unprecedented, and our communication efforts need to remain flexible. You will have seen the ads for Dr. Tam, who has been on TV. You've seen ads encouraging physical distancing. You've seen Chris Hadfield and Hayley Wickenheiser out there encouraging us to stay home and save lives.
Let me ask you a question. Where is the direction coming from for this? The reason I ask is that it's a lot of money, and everyone knows about social distancing. Everyone knows that COVID is going on. Do you find it justifiable to spend $50 million on something that every single person knows about?
I think it's because it's on the news cycle 24 hours a day. I'm asking if you think this is a fair use of taxpayers' money, to advertise something that every single person in the entire world knows is going on right now.
I do think it's worth the money to advertise to Canadians on health and safety and on what we are asking them to do. Again, the virus has been unpredictable, so we are advertising. For instance, back when Dr. Tam came out and was advertising about social distancing, we did all that advertising to encourage folks to stay home once the lockdown hit. Now we advertise as well on the economic portion and the financial incentives for Canadians and, if I may just add, the recall rate on our ads has been 85%, so people are getting the message.
That item covers a number of different sub-items. One of them is the transfer of exempt staff who were previously under PSPC, who are now reporting to the Deputy Prime Minister. That's just a straight transfer. It's not new funding or an increase in cost to taxpayers. It's just a transfer between two departments.
The second piece is about support to the Deputy Prime Minister and her role and mandate letter commitments in terms of establishing more regional engagement, consultation and that type of thing.
I have a question regarding the employee satisfaction survey. I notice it's in your departmental results and your plan. It shows that 41% of public service employees surveyed stated that they viewed the workplace as psychologically unhealthy. I'm curious; why is there no money put aside in the supplementary estimates, or even the main estimates, to address this?
As stated a little earlier on the communications and advertising piece, the $49.5 million, the first portion of it we've allocated to the Public Health Agency of Canada to continue their successful public health campaign. Of that $49.5 million, $10 million will go to Public Health. We are also going to provide $12 million of that to extend the Finance Canada campaign, which is currently at $10 million, to promote the economic supports for businesses and individuals across the country.
My apologies for missing the first part of the question. I was switching over to a different microphone.
The NCC money is largely to do repair and maintenance, damage from floods and some deferred maintenance that exists. That's the big part of it, a number of properties and bridges, as well as a few parks. Grosso modo, that's the buckets of things you're looking at there.
Are we expecting completely different results from the 2013 study? Are they going to use the same weighted averages for certain...like put more emphasis on the environment or on certain locations? Are we expecting a completely different result?
I suppose you're going to say we'll wait until we see what the study says.
The weighting for the study will be the same as it was previously, but obviously things have changed in the years that have passed, so there may be different factors at play. The actual factors being used for the study are the same factors that were used the first time around; it's just a question of assessing what else has changed.
No. The money in supplementary estimates (A) is not for official residences. It is for flood damage, as I mentioned before, some bridges and parks, as well as some deferred maintenance on other properties.
Do we know the assessed damage on NCC property? I've seen some work going on, as I have the benefit of living around here. What were the damages assessed to, approximately? Do we have a number for that?
I think I probably have time for one more question.
With regard to official residence renovations, we know that it's never a big political seller. How does PSPC, and perhaps the NCC, plan to forecast similar situations going forward, whether it's for the official residences or for other properties we have around the national capital region?
I think, Mr. Chair, that the answer depends on the projects.
You would do an assessment, make a plan and then budget accordingly. Obviously, the money can't be spent until it has been properly approved, until the project has the blessing and the dollars have been put through this committee, etc.
I can't really give you a solid answer on that front.
To answer the question in terms of future planning for official residences, it's a better question for the National Capital Commission, in terms of what they would bring forward. Obviously, the grand headlines would be to do an assessment, plan a project, get the blessing for the funding, and then you would see them through the estimates.
However, there's nothing in these estimates for official residences.
In terms of PSPC and the $500 million that is being sought through these estimates, we are basically planning to spend that money on things like charters, some PPE, logistics support, both overseas as well as in Canada, and then some respiratory care units as well.
It's largely already in the works, through contracts.
Of the $500 million we are seeking, I cannot give an exact answer, because time will tell in terms of how it gets spent. The vast majority of PPE that was purchased initially was coming from overseas, obviously contracts for in-country logistics, as well as some support for some overseas logistics, but the majority would be international.
I was really talking about research, vaccines, therapy, clinical trials and biomanufacturing, not personal protective equipment. I am talking about the $406 million for the national medical research strategy.
Is any part of this category already committed to research and vaccines?
Mr. Chair, I'm afraid that question would be better asked of a different department. PSPC is only here on the $500 million for PPE. The questions that the member is asking are probably better suited for the Public Health Agency or Health Canada.
I agree with what my colleague Mr. Matthews just said about these questions being better addressed to other departments, but I can say that some of the money has been allocated to organizations like SSHRC—the Social Sciences and Humanities Research Council—and the Canadian Institutes of Health Research.
That money is being deployed to conduct a variety of research. I couldn't give full details on that, but vaccines are part of that roster of research. The money is being deployed toward efforts like that.
We have a long-term plan to stabilize the payroll system, including the salaries of public servants who have been hired to support our efforts. We have also set aside funds to stabilize the system itself and to work with departments to improve data capture.
All in all, that's 2,000 more people than expected.
Has the situation created by COVID-19 affected the processing of data or payroll transactions on Phoenix, or have things improved as a result of teleworking, among other things? All options are possible.
Thank you very much, Mr. Chair. It's a pleasure to be back with you.
With respect to the advertising money for the PCO, I'm curious to know how much of that money will be spent for developing advertising products in-house and how much of that the government envisions contracting out to private companies.
I don't have a breakdown for you. I can get that to the committee. I will say that $2.9 million of the funding goes toward the PCO COVID response team. As part of that team, we work with our behavioural science folks in PCO. We work with our own in-house team to be able to work with both the Public Health Agency of Canada and Finance Canada on the ad campaigns. In every ad campaign we do with the Government of Canada, we do use the agency of record to place the media buys. That is Cossette Media. We use them on a regular basis for all of the buys we do.
I could get back to you on what the in-house capacity is. The Public Health Agency of Canada and Finance have teams that work with us very closely on advertising.
Sure. I would appreciate a breakdown, particularly with respect to the money that's being requested here in the supplementary estimates.
I also want to ask about this. I know that it's the government's ad policy that ad campaigns over $250,000 are reviewed by a third party. There are exemptions in some cases for emergent public health advertising campaigns, but the request, even just in the supplementary estimates, is larger than the $250,000 threshold by a couple of orders of magnitude.
I'm wondering what the opinion of the government is with respect to these advertising dollars and the campaigns they'll fund, and whether or not those are campaigns that the government would submit to third party review.
Yes, you're correct. The $250,000 threshold is the threshold above which they have to go to the ASC, but many departments can use the ASC for ad campaigns that are below that threshold as well, and quite often we find that happening. I would submit that for the Public Health Agency of Canada advertising and the Finance advertising, we have gone to the ASC for both of those, and we will—
Mr. Daniel Blaikie: Okay, and—
Mr. Ken MacKillop: —[Inaudible—Editor] to do that for the campaigns.
I also want to ask about this with respect to the advertising campaigns. Largely, these have been PSAs about COVID. My understanding from your remarks today is that this new money is meant to continue those campaigns.
What techniques are you using to evaluate the success of those advertising dollars, to see if people are getting value for money with respect to those campaigns? You mentioned earlier that you've seen some success and you were taking credit for some of the awareness about social distancing measures and other things like that. How do you know that? What metrics do you use?
We are mandated to do evaluations of all the campaigns that we put out using what's called the ACET process. All departments use this. I did mention the metric earlier that the recall rate on the advertising was 85%. Just to give you an idea of what that means, it means that when we go out to research this after the fact, we can ask Canadians “Have you seen this ad?”, and the recall rate is 85%.
That compares to previous years at 34% for Government of Canada advertising—that's roughly 34% for the past two fiscal years—so we're seeing that advertising being recalled very well. Of course, if you encounter advertising that doesn't work quite as well, it gives you an opportunity to adjust your future campaigns.
With my remaining time, I want to ask some questions of PSPC about the money for Phoenix. In response to my colleague's questions earlier, you mentioned the difference between staffing levels at the beginning of the Phoenix pay system and staffing levels now, but I'm curious to know what specifically the new money being requested in these supplementary estimates will be used for. How many staff will be hired out of this money that's being requested? How much of this money, if any, will go to IBM?
We have been receiving funding on an annual basis since the beginning of the Phoenix issues, so the large proportion of the salary dollars that will be coming out of the supplementary estimates will be for retention of existing staff. We're not looking to grow the workforce exponentially, but rather to maintain the staff we have brought on, trained and engaged to become pay support staff.
There will be funding that goes to IBM. We do have a contractual obligation to them. The funding last year for IBM was about $80 million. We are now looking, through a request for interest, to solicit inputs or bids for alternative providers through a market solicitation.
Unfortunately, again, Mr. Linklater, for the second time, I apologize for interrupting, but if you could, please provide the rest of that answer in writing as soon as possible to our clerk, because we're now going to the next round of questioning at five minutes each, starting with Mrs. Block.
Thank you so much to our witnesses for joining us on such a beautiful, warm day.
Mr. Matthews, in these estimates, there is, as you noted in a response to one of my colleagues, $500 million in a request for funds to make payments to suppliers of PPE. Can you tell the committee the total value of all PPE contracts entered into by PSPC?
I cannot tell you at this stage. Frankly, it changes on a daily basis. The $500 million we are looking for here, Mr. Chair, is for contracts that PSPC would enter into for itself, as opposed to for clients or other departments. It's a bit of a different ask in that respect.
Last week at committee, you identified that roughly 40% of your department's contracts contained an advance payment component. Of the contracts that have this component, can you estimate for the committee what the average percentage of advance payment is?
It would be a really rough guess. What I could say, Mr. Chair, is that it varied depending upon the period in time during which we were transacting. There was a period in March and April during which if you were buying N95, you were looking at 100% in some cases. Early on, it was as low as 25%. Then it went to 50%, and then it peaked at 100%. I would say that more recently you're seeing cases in which, for certain commodities only, 50% seems to be the most common request, but there's a lot of back-and-forth. I would also say it's commodity-specific.
The majority of PPE right now is still coming from overseas, China in particular. We are still reliant on China as we look to stand up domestic capacity. We do have some coming from the U.S. as well. I could ballpark it, but I would say the vast majority of contracts early on were certainly coming from China.
Again, it depends on the commodity and the investment required. If you're looking at the gown industry in particular, you will see a lot of requirement to get your hands on material. There's great competition to get your hands on that kind of material, so some of our suppliers who struggled to make that initial outlay were seeking advance payments as well.
In the case of ventilators, for which there was large upfront investment, we saw some as well, so there are some for domestic suppliers as well.
You're right about the one. There are a few others that are struggling with delivery dates that are still in place. We expect there's one other that would have some issues of quality as well. It's too early to say what we're going to see on that one. To answer your question bluntly, there's still the active one we talked about. There are others that could pop up that we're monitoring closely.
I would highlight two issues. One is timeliness. For some, there have been some issues with timeliness. We're in constant communication with our suppliers to understand, when delivery dates slip, what the date will be. In a case where there are multiple delays, you have to start to question their ability to deliver. There's ongoing dialogue there.
On the quality front, we're always checking for quality with N95 or KN95. That comes up a lot. There are a couple that we're actively monitoring.
Good afternoon. Thank you to the witnesses from PCO and PSPC for joining our committee meeting today.
My first questions relate to PCO.
In your written statement, you mentioned that PCO has been leading intergovernmental efforts to coordinate federal, provincial and territorial responses to the pandemic and to ensure information sharing among governments. What format is this communication taking, and what proportion of the overall $49 million that's been budgeted is supporting the same?
I can talk a little bit about the format and how we're doing some of those intergovernmental relations.
We have a team at PCO that does have the responsibility to support the Deputy Prime Minister as well as the Prime Minister in federal-provincial-territorial relations. During the COVID response, we have had almost daily meetings with our counterparts in the provinces and the territories. We've also been supporting the Prime Minister and the Deputy Prime Minister at weekly meetings with all of the premiers to ensure that information is shared in a timely way.
Often the provinces and the territories, which have responsibility for health care, deliver some of the programs. We ensure that they have the information available to them on some of the new support programs coming out at the federal level and collaborate on some of the actions so that there is a level of collaboration between the different orders of government.
You mentioned in your earlier remarks that part of the advertising campaign was geared towards health advice, and other parts of the advertising campaign were geared towards financial measures and working with the Department of Finance. Do you have a measure of how well the campaign has informed Canadians specifically about the federal financial supports that are available?
I'm sorry. I don't have the breakdown of that 85% and what was specific to the public health campaign or the Finance campaign, but I can certainly get that to you and give you a little bit of the evaluation of the Finance campaign to date.
We do know that Finance has already committed approximately $7.5 million in advertising for this fiscal and they've already engaged in that. A large percentage of that was in Canadian media. On the evaluation so far, we do see that Canadians are responding well to the CERB, for instance, the Canada emergency response benefit. We'll do some more advertising this week on the emergency wage subsidy as well, to get a little more uptake on the emergency wage subsidy.
I can certainly get you some information on the evaluation of the Finance campaign to date.
I'd be remiss if I didn't ask about the biggest item in the supplementary estimates, which is the $585 million for the construction of the two Protecteur class ships. I know that these are very important, to permit naval vessels to remain at sea for much longer periods of time without having to return to port for fuel and other supplies. I'm particularly interested in this project, because I've had the opportunity to visit the Seaspan facilities in my neighbouring riding, where many of my constituents work.
This is a question more for PSPC. I was hoping you could tell me what the requested $585 million in support would go towards in the construction of these ships and what the total costs of those ships would be.
While PSPC is not getting any funding in these estimates for our work on the JSS, the joint support ships, obviously we have a role. The latest announcement or contract signing brings the total cost up to $4.1 billion. That's the current contract that's in place. So that's the update there.
If you're asking whether there's any new money in here for PSPC and for our role, no, there's no money in here for PSPC for joint support ship work.
I don't actually have the initial estimate of the PBO in front of me. I can tell you that the most recent update, before this latest one, was $3.4 billion. That has been signalled as being under review for a while. The latest update on cost brings us up to $4.1 billion.
I have a question about the Canadian Digital Service, for which there was about $9 million for 2019, about $12 million for 2020-21, and I think maybe a similar amount or bigger for 2021-22. Would you be able to explain to us what the Canadian Digital Service does?
Mr. Chair, I'm wondering if that question is better suited for your next series of witnesses, because I believe—I'm going from memory here, and my friends from PCO may be able to help—that's more of a Treasury Board Secretariat question.
On the ones that the member is flagging, Mr. Chair, many of these were given to other departments to be used as surgical masks, because that's a lower grade. They've been put into service—not all of them, but a good majority of them—in other departments where the requirement for KN95 does not exist.
I think the highest standard of mask you would see, Mr. Chair, is the KN95. Below that, you would have the surgical mask. A defective—if I could say that—KN95 mask is still a high-grade surgical mask. I'm being very generic in my statement here, but it is suitable for other purposes.
Of the ones that have been received in Canada, the 9.8 million that the member is referencing, about half, give or take, if I recall correctly—I'll confirm—have been in use by other departments. Some are still being held by PHAC. PHAC actually has the inventory itself.
What are your conditions? Usually, rejected products will be credited back to the customer, returned back to the supplier or discarded. If you were to discard them, there's a compensation that has to go back to the customer, or if they're going to be stored in warehouses, that also costs money.
What are your options? What are you putting on the table there to negotiate what's going to happen to these masks?
Okay. Based on the terms of the purchase order, in which usually you take some conditions before you place an order, whether you have the upper hand or not—and I know that in this case we don't have the upper hand—what did you negotiate in terms of a defective product? Would you be able to tell us?
Normally in standard government contracts when you have a defective product, you have an obligation or an option to actually get a product in your hand that meets your requirements. If that fails, then you're on to other options. That's just a generic Government of Canada contract approach.
It would be nice, Mr. Matthews.... I did ask who the suppliers are, whether it's a Canadian supplier who is a distributor or whether you're dealing directly with China. Would you be able to advise us on whether you did it through a Canadian distributor or whether you are dealing directly with factories in—
I'll go back to the PCO with a couple of questions. My colleagues have done a really nice job of asking some really good questions here, but there are just a couple that I have left over.
In terms of the communications and marketing that were budgeted, how does the federal government communicate with Canadians who don't have access to the Internet and don't have access to digital marketing and whatnot? I'm just curious.
That's an excellent question because it raises the very good point that paid advertising is only one way we communicate with Canadians.
In using the paid advertising, we do use.... For instance, early on, the Public Health Agency of Canada had a mail-out that we sent to all Canadians. We also use what we call “loudaphones”, or billboards that you would see when driving down the highway. We still use bus billboards as well, believe it or not. It's a campaign, and we try to get as many Canadians as we can, including indigenous Canadians who may be up north and may not have access to the Internet like others do.
Obviously, how you target your specific campaign will depend on what you're trying to get across, but in this particular case, both the public health messaging on the safety and security of Canadians and the finance messaging were of interest to most, if not all, Canadians, so we used a variety of methods.
I have a question for PSPC regarding the budgeted amount for Phoenix. When I look at the numbers, I see a tremendous reduction in cases. They're down 64%, from 384,000 to 137,000 pay transactions. Why are these additional funds required if the workload is going down?
While we have made significant progress, there does remain a great deal of work to be done.
As I mentioned in response to an earlier question, we have been receiving funding on an annual basis. The funding in the estimates will allow us to maintain our staff and advance our efforts, while ensuring that we can speed up the technological enhancements and fixes that the system requires and continue to work with departments and agencies on the timeliness and accuracy of the HR information that's entered into the systems that then manifests in pay action.
We have made significant progress, but with the 50% reduction in the backlog, we still need to continue to pursue and double down on our efforts to continue that progress.
That's a very important question, but it's better asked of colleagues at Health Canada and the Public Health Agency who know the modelling and what might be coming. I can share with the chair that the goods in reserves are going up across the country, but can I say when we will be done? I cannot. I'm sorry.
Again, that's better asked of colleagues at Health Canada. We're just executing here. Health Canada and the Public Health Agency may have a better sense of comparators and whether they're meaningful. I'm afraid I can't offer anything useful on that question.
My first question is for Privy Council Office officials.
According to a March 26 article, the Trudeau government announced $30 million in advertising expenditures to counter COVID-19. On March 26, Canada was going through the most intense period of the pandemic.
Why is $48.7 million now being requested through supplementary estimates A 2020-2021? What is more important now than in March?
Does the budget need to be bigger now than it was back then?
Mr. Chair, as mentioned earlier, the unprecedented nature of COVID-19, with both the economic side and the public health imperative, has meant that we need to give information to Canadians as widely as we can.
To give you an example, in 2009-10, when we last saw the economic impact with the crisis and then H1N1, the government spent about $136 million in advertising that year. We're seeing that, this year, the government is likely to spend about $120 million in advertising by the end of 2020-21.
As we know, the crisis is not over. The Public Health $30 million that went out early on was forecasted to get the news to Canadians. I think at the time, March 26, we were getting into the “stay home, stay safe” time—
I have to interrupt you because I need time to ask you a second question. I'm not convinced by the explanations you've given me, but I'm going to move on to the next question.
The Government of Quebec announced that almost all of the amounts had been invested in local media. For its part, your government said something similar, namely that the bulk would be allocated to Canadian media.
When I open the local newspaper, every week I see two or three pages full of advertising from the Quebec government, but I can't find any advertising from the federal government.
Where did the money go? Did it all go to Google and Facebook? When are we going to find out how the money was allocated?
And with all of this, how do you make sure the information gets through?
Following up on that question—it was a great question from my friend from the Bloc—regarding a breakdown in how, hopefully, the performance indicators will be able to report to us where this money went, I'm wondering, does your department use the GBA+? If so, how do you track where the “plus” goes, in terms of these procurement investments in advertising?
On the advertising, we know that with the Public Health Agency of Canada, more than 80% of that placement was in Canadian media. There was 16% in print media, including dailies, weeklies, ethnic and aboriginal newspapers, so—
I would love to have that breakdown, as it appears would my friend from the Bloc as it relates to the French language advertisements in the province of Quebec, and, of course, all the francophone communities across the country.
What is your mandate when you do the GBA+? What policies do you have in place to ensure that the equity, diversity and inclusion of your stated procurement policies are reflected in the contracts that you procure?
I think I would like to get back to you on specifically the Public Health Agency of Canada campaign and their lens with GBA+, as well as Finance's campaign, because I don't have that information with me today.
I will now excuse our witnesses from PCO and PSPC.
Thank you very much for your appearances here. You have been, as always, informative and helpful.
Colleagues, I will be suspending in just a few moments. Before I do, we will remain in public, because I have one item that I would like to go over with you. That is the draft budget, which all of you will have received from our clerk, for the additional costs we have incurred from conducting these Zoom meetings.
We're asking for an approval of $6,000. That will be a maximum amount. I don't think personally that we'll spend that much. The majority of that, approximately $4,500, is for the establishment of the phone lines that are required for our Zoom meetings, and $1,500 is for the headsets we have been distributing to our witnesses so that our audio levels are as good as they can be.
Colleagues, if you have any questions, please virtually raise your hand. Otherwise, I would prefer to go directly to the question and ask for your approval for this amount.
Colleagues, I will now suspend for just a few moments while our clerk and our technicians do sound checks for our second panel of witnesses.
As a reminder to all of you, we have not received speaking notes for the Department of Finance or the Treasury Board Secretariat, so both of those departments will be making short five-minute opening statements.
Thank you very much. I think I'm the only one who has an opening statement today.
Mr. Chair, I'm very happy to be here today to answer the committee's questions on the 2020-21 supplementary estimates (A).
As committee members know, each year the government tables two or three supplementary estimates that outline incremental spending plans to the main estimates. The current supplementary estimates (A), tabled by the president on June 2, 2020, seek approval of funding that is incremental to the 2020-21 main estimates, which were tabled this past February and which parliamentarians are currently studying.
These supplementary estimates present information on spending requirements across federal organizations that were either not sufficiently developed in time for inclusion in the main estimates or have since been updated to reflect new developments. In addition to summarizing the government's incremental financial requirements, these estimates also provide an overview of major funding requests and horizontal initiatives.
The information in the supplementary estimates ensures continued transparency and accountability on the use of public funds to deliver programs and services to Canadians. These documents give parliamentarians and this committee the opportunity to review and consider these spending amounts in advance of approving them.
They bring forward $6 billion in operating and capital expenditures, grants and contributions to be voted by Parliament for 42 federal organizations. Among these are public health and economic responses to the unprecedented impact of the COVID-19 pandemic, support to indigenous peoples across the country, the disability insurance plan for the public service and air travel security screening.
Karen Cahill, assistant secretary and chief financial officer for the Treasury Board Secretariat, and my colleague Marcia Santiago are happy to answer questions on any items should committee members have any.
In total in these supplementary estimates, voted spending measures represent about a 5% increase over those included in the 2020-21 main estimates tabled this winter. As you may recall, the 2020-21 main estimates requested the authority to spend $125 billion in voted budgetary expenditures and $87 billion in voted non-budgetary expenditures.
We also continue to publish information on statutory spending in these estimates. This ensures that all Canadians have the most complete information available on the planned spending of appropriation-dependent organizations.
For information purposes, these supplementary estimates include forecasts of statutory expenditures totalling $81 billion. These statutory expenditures forecasts provide information on emergency spending that was authorized by parts 3 and 8 of the COVID-19 Emergency Response Act, which were presented, debated and passed in Parliament in March and April. Parliament is not being asked to vote on them again in supplementary estimates (A).
Mr. Chair, it's important to be clear on the difference between voted and statutory expenditures. I mentioned this a couple of months ago when I was at the committee and walking through how we map out the supply calendar.
Voted expenditures require annual approval from Parliament through an appropriation bill. This means that parliamentarians consider and approve the government's proposed spending plans in the estimates documents before they are authorized in an appropriation bill. Statutory amounts, on the other hand, are presented in the estimates for information, because they've already been approved by Parliament through other legislation.
To support transparency and accountability in government spending, significant additional detail on these supplementary estimates is available online. The government's online information tools reflect the commitment to give Canadians a clear explanation of where public funds are going and how they're being spent. As my colleagues Alison McDermott and Soren Halverson from the Department of Finance can attest, the Minister of Finance is committed to report on a biweekly basis to the House of Commons Standing Committee on Finance on the key actions taken by the government to help Canadians.
Finally, as usual, the government will report on the actual spending through the public accounts after the conclusion of the fiscal year.
Again, I realize members are eager to get to the questions, so I will leave it there. I'm happy to receive them. Thank you.
Mr. Purves, it's good to see you back. I have a quick question. Earlier in committee we heard from PCO that half of their $50-million advertising ask was for future use, without an exact plan, in case something came up from COVID. They said it went through TBS approval. Why did that not go through a vote 5? There's a textbook definition for why it should be under vote 5 for TBS.
Yes, I mean the $25 million. They said it passed through TBS approval for advertising spending for which they actually didn't have a plan. It was just held in reserve, basically, in case something came up with COVID. Why would Treasury Board not put that into a vote 5?
Maybe I'll ask you take a look at that specific one and maybe you can get back to the committee as to why Treasury Board approved it when they didn't actually have a plan for the money.
I'm going to get to something else.
When we had the PBO with us last week, we talked about leave code 699 in Treasury Board. We asked the PBO about it. I understand Treasury Board is following up with the PBO about it. I'm just wondering whether you are going to meet the PBO deadline for providing this information and whether you would be able to provide the aggregate information to this committee as well on the use of code 699.
Next, with regard to the disability insurance plan, the $395.8 million, I know generally what that is about. I'm just wondering if you can provide a breakdown. How much is due to added public service employees? How much is for added benefits they're receiving? Is there a change in actuarial numbers?
Karen, as part of the follow-up question, we asked PCO about the employee engagement survey, in which 40% of all public servants said they were working in a psychologically unhealthy environment. How much is this contributing to our added costs in the disability insurance plan?”
In effect, the $395.8 million we're asking for for the disability insurance plan is to cover two things. One is a lump-sum payment of $320 million that we have committed to the insurer, to reimburse the insurer. This is mainly to re-establish the health of the plan. As per the Office of the Superintendent of Financial Institutions, OSFI, we need to keep a 40% surplus to keep our plan in good health. This is to contribute to that.
Of this $395 million, how much is from an increase in the amount of FTEs in the public service and how much is an increase in the use of this disability fund, again looping back to the 40% of public servants saying they're working in a psychologically unhealthy work environment?
These estimates include $81 billion in statutory support that is not being voted on in Parliament. This is support that effectively we provide detail on for transparency purposes. In terms of the main estimates plan for the 122 organizations that are appropriation dependent, we always provide updates on any changes on the statutory supports for these 122 organizations.
As a consequence of that, of the $81 billion, it is almost entirely, except for about $100 million, directed toward COVID supports. That $81 billion is a subset of the items that are contained in the Minister of Finance's report that is tabled on a biweekly basis to FINA. We took that report and worked with our Finance colleagues to make sure that we were getting, as of May 29, the best and clearest picture possible about what elements of that support factor into specifically those 122 organizations and that we can report on in the supplementary estimates.
That's the statutory side. On the voted side, as I mentioned, the budgetary voted amount is $6 billion. Of that amount, $1.3 billion is directed toward COVID-19 supports. As you go through the document and all the items, you will see COVID-19 in brackets. It's not something we normally do. Effectively, we earmarked all the items that are for COVID-19 supports so that parliamentarians and Canadians can look at it when they go online.
Great. That's very helpful. Thank you very much for that rundown.
In the allocations, TBS allocated $0.3 million to the Canada Border Services Agency and $0.4 million to the Canada Revenue Agency under vote 10 “to assess their inventory of legacy applications and build technical capacity to support their migration into more secure modern data centres or cloud services”. Why did TBS use this type of vote for that allocation?
Vote 10 is used in circumstances where an item goes to Treasury Board, it's approved by Treasury Board, there's a clear line of sight as to what the initiatives are, and there's a clear line of sight on the amounts, but it's unclear precisely which departmental vote will be allocated certain funding. These are government-wide initiatives. For example, the application modernization initiative is a government-wide initiative. It applies to a whole host of different departments, but it's not until the departments themselves are actually able to identify how much they're going to identify and collect of the amount that they're able to get it. From that standpoint, it's very important to have an operating vote, a central vote like that, so that you can actually distribute to the system broadly. It effectively has that line of sight.
The other aspect of that is Phoenix damages, LGBTQ2 supports and a lot of supports where you don't know precisely which departments will receive what amounts. It's important to be able to have that central vote to be able to distribute accordingly.
I have a follow-up question. Has the COVID-19 pandemic motivated this assessment and migration to more secure and modern data centres and cloud services? Was that an ongoing project? Was it accelerated by the COVID pandemic? Could you shed some light on that?
I don't know whether it has shed some light on that issue. I think that issue would probably be best carried out by our colleagues at Shared Services. I don't know, Karen, if you have a position on that or a perspective to share from that standpoint.
I would suggest that we ask our colleagues at SSC as they are responsible for the whole infrastructure. As a department, we have done a lot of work towards moving to cloud services, but every department is a bit different and SSC's coordinating this initiative.
What is most beneficial to a country in economic, financial and efficiency terms, both in the short and long run? Is it better to wait until the last minute to replace naval, real estate or other infrastructure, or to implement a replacement plan? In the specific case of naval infrastructure, is it better to build it here and give people work, or wait until the last minute and be forced to buy it somewhere else?
Which of the two options is more profitable for a country in the medium or long term?
That question is outside my swim lane in looking through the supplementary estimates (A) in particular. It carries with it many questions about priorities. There's the economic side, the strategic side.... I don't know if it's one that is best suited for me to answer as opposed to potentially Defence or PSPC. Bill Matthews and company were just here.
Ultimately, in many cases, the authority for expenditures must come from Treasury Board. We are seeing increased spending in shipbuilding because of delays and some decisions that have to be made, unfortunately, which run counter to the National Shipbuilding Strategy.
What is the Privy Council Office's position on the ever-increasing spending?
Isn't there a brake to be put on, at some point, in order to respect the budget that was originally planned?
Well, certainly for items that go through Treasury Board, they get the rigour and the assessment on a case-by-case basis. In terms of the status of that project in particular and so forth, the Treasury Board's position on a particular issue often is subject to cabinet confidence.
In terms of the government and where the government is with respect to the next stage of investment on the joint ships initiative, there is the funding in the supplementary estimates directed towards that initiative. Again, for the most part, I think questions about timelines and questions about consideration of priorities and so forth would probably be best directed towards the Department of Defence or PSPC, those who are actively managing those initiatives.
Again, if we step back when we talk about the initiatives, when we're talking about specifically the broader project for the polar icebreaker initiative and so forth, the Department and Fisheries and Oceans would be best placed to answer those questions.
It's not strange bedfellows. It's colleagues looking for transparency.
Mr. Purves, I want to get back to you. I kind of cut you off earlier in the discussion on the $25 million. PCO received $50 million and went through the Treasury Board process.
Mr. Glenn Purves: Right.
Mr. Kelly McCauley: They stated that about $25 million or $22 million, around there, was for future use, with no real planned use. It was kind of a “just in case things change with COVID” use for advertising. I'm curious. Again, how did that get through Treasury Board approval and not get put into a vote 5 for contingency use when they didn't have an actual plan for it, apart from, “well, if things change with COVID, we've got this in our back pocket”?
I understand that, but PCO said they have $50 million of which they only have plans for $25 million. The other they're going to sit on until they have a use for it. What I can't wrap my head around, puny as my brain is, is how they got authorization for funding through the Treasury Board system where they don't have a plan for that apart from if something comes up.
I recognize that but they told us in this committee meeting that half of that's for future use. They don't have a plan in case things change with COVID. I'm wondering if that meets Treasury Board guidelines. It's about asking Parliament to approve money they don't have a plan for.
Obviously, there's always a plan for certain amounts that go through Treasury Board. That's what Treasury Board ministers do. They scrutinize these items and they move on. If the timing works, then they go into the next supplementary estimates. That's effectively what's happened in this instance. It's gone through the voted payment authority path for the full amount. I don't know. I didn't hear what they said.
Ms. Cahill, you were talking about the $395.8 million for the disability insurance plan. How much of an increase is that for public service employees accessing this plan? What's a year-over-year increase, and how much is the increase in the cost of premiums?
I would need to follow up on the exact number of the increase, but definitely we have seen an increase in employees accessing disability insurance.
There are also other factors with respect to the increase we're requesting. One of them is we have negotiated salary collective agreements. Increase in salary would bear an increase into the disability insurance plan as it's an insurance—
There's a vote 5 use of, rounded up, $11 million for CRTC that Treasury Board transferred to provide financial assistance to broadcasters facing declines in revenue. Where exactly is that $11 million going? Who is it going to? It's going to CRTC, but obviously they present it to Treasury Board where that money's getting used if they're accessing the contingency. Where is it going exactly?
Okay, I'll assist you. There must be some metrics to have come up with this figure. Do you have any idea how you based this figure?
We know that for CERB, there is between $35 billion to $41 billion for the first three months. We know that for other programs, the wage subsidy program, there was also somewhere around that, or more.
When it comes to that.... Let's say there is $3 billion over three months. How did you find a way to budget that much? So far, based on what we know, there are not many applicants. Businesses are finding a problem with the landlords in general. A lot of them are facing closure. Some of them have spent hundreds of thousands of dollars buying a franchise.
What was the metric? Please assist us, because politically we're not able to get any answers from the ministers. We're having to come back to you guys to get some feedback.
I can tell you that this program was designed in conjunction with the Canada Mortgage and Housing Corporation. It involved market research undertaken by the CMHC as part of the fact base that went into constructing and sizing the program.
Mr. Purves, I want to thank you for the explanation with regard to the planned statutory expenditures and the almost $81 billion. I do want to get back to you with regard to vote 5. I hope you can explain. I promise you that I will not interrupt you. I will give you at least two minutes to explain the reason we use vote 5.
I do want to ask the folks from Finance.... The emergency response acts were passed on March 25 and April 20 and there was a commitment from the Minister of Finance to report to the Standing Committee on Finance on the use of these expenditures. I haven't been to finance yet and I haven't had the chance to peruse those reports, so I'm wondering about the structure of those reports and the type of information that you're providing to the Standing Committee on Finance with regard to the planned expenditures that we've had through the emergency response acts.
With regard to these reports that we are putting out to FINA, I have an example of one here. We just deposited on Thursday the sixth report, which was put out on June 10. What they all do is review, essentially, the different components of the acts and the different measures that have been announced to date under each of these elements. The reason we're doing this is that the acts are somewhat open-ended, unlike some other pieces of legislation that specify how much money is being given, to whom and over what period of time. These acts are quite open-ended, and they say things like “authorize [these] payments” to be made out of the consolidated revenue fund “in relation to public health events of national concern”.
That's pretty broad and, I'd say, open-ended. That's why the minister committed to provide these reportings. For each item, there is a little description of how much we estimate the impact from a financial standpoint to be and a very brief description of what the item is. We describe which part of the act it is part of. Then generally there's some kind of a status update, or we've been providing status updates in cases where information is available, which is the case for most programs, describing what can be said about the implementation of those programs. Then we have a little table in the centre that kind of describes...an add-up table of all the measures.
We also have information on all the other elements of the COVID response plan that are not actually part of the act but are of interest to Canadians, so the minister is reporting on those as well.
For instance, we can assume that in terms of today's announcement with regard to the CERB, the Department of Finance will be providing an update to the Standing Committee on Finance at some point, in two weeks or whenever, on how much these measures will cost and how many Canadians have applied.
That's right. The CERB extension says that individuals who come up against the eligibility limits will have eligibility for another eight weeks. When the next report is tabled, we'll have some estimate of the fiscal impact of that decision to extend, and there are always updates provided on the current payouts to individuals under that program.
I just want to state for the record that I have the utmost respect, Mr. Chair, for my honourable colleague Mr. McCauley, and I hope he didn't feel that I singled him out. Of course I would not be talking about him because I have a lot of respect for this gentleman.
Mr. Purves, can you explain to this committee why Treasury Board uses vote 5 or why departments would be forced to use vote 5?
Payments arise. They're urgent payments and they have to be made before the next supply cycle. Vote 5 is there to facilitate circumstances when these unforeseen expenditures that are often urgent and for important initiatives need to be made. The use of vote 5 up to now, that's in the online report, has all been for COVID-19 measures.
I think the Prime Minister and the Minister of Finance have both spoken on this matter. The government has not said they will not produce a budget. They are concerned about the timing: what we are able to say at a given point in time and how easily what is said is going to stand the test of time. I think they're worried about the uncertainties that are prevailing in the economy right now.
From a technical standpoint, lots of things can be done mechanically, but I think the real question is whether it is the right time to provide a budget that provides useful information about the government's economic and fiscal situation. The government is studying these issues.
Generally, a budget tends to be a larger exercise involving more expenditures and is for making decisions on a go-forward basis for an entire year. Typically, an economic update is provided at a different time of the year from when you traditionally put out budgets. Often it's seen as a starting point for the fiscal forecasting process that allows us to deliver a budget in subsequent months.
I don't think the decision can be made at this point, but we are studying these issues. We're looking at the economics and discussing the economic issues with private sector economists. There is a great deal of uncertainty with respect to the whole set of issues around the evolution of the virus, so—
Uncertainty exists not only for the federal government but for the provincial governments as well, yet the Government of Saskatchewan was able to work through the uncertainty and unveil a provincial budget. I believe other provincial governments are looking to do the same.
How long do you think it's going to take you to study your ability to put forward either a budget for Canadians or some sort of financial update so that they can understand exactly what state the nation's finances are in?
We've been asking a number of questions regarding vote 1a and the amount budgeted in the supplementary estimates for communications. Given that there has not been a budget, will there be savings in the Department of Finance in advertising? If so, could that simply then be diverted to advertising for COVID-19?
Obviously, I'm not from the communications team, but my sense is that the communications team is working overtime, if anything. The new money for advertising is being fully allocated, so it's not obvious that there would be savings.
I think Madam McDermott heard your question quite clearly—at least I assume she did—and I would ask that she provide a fulsome answer to your question in writing as quickly as possible through the clerk, because we're completely out of time.
We'll now go to Mr. MacKinnon for five minutes please.
In that same line of thinking, let me ask the witnesses from Finance this as well. In terms of public communications on government priorities, whether they be budget related or COVID related, of course that money would be available to broadly communicate government priorities, would it not?
I agree with the point that the existing Department of Finance budget could be used for all government priorities and all announcements, most of which in recent weeks and months have focused on COVID-related responses.
Mr. Purves, in terms of Treasury Board, you're applying your regular rigorous oversight to spending, whether it be regular spending or exceptional spending under COVID, such as those items contained in these supplementary estimates.
For the benefit of the members of the committee, can you outline the process of how departments would bring these proposals to you, and how they would construct their cases for spending the money that has been allocated to them, either by Parliament or by virtue of a law passed by Parliament?
Sure. It's been a little more unusual this time around, just because of the urgency of the COVID-19 response. Typically, you have statutory authorities that exist for a whole host of different initiatives. Transfers to people and transfers to other levels of government are typically done through statutory authorities. Then a lot of the direct program spending is done, as we say, through the main estimates and through supplementary estimates as additional funding is required.
In terms of dealing with the COVID-19 dislocation, there really was a combination of statutory authorities sought, as well as voted authorities. For the items you see in respect to these supplementary estimates, they've gone to Treasury Board in submissions, as they normally would, and they go through the rigour that they would normally go through. In terms of the statutory items, despite the fact that they may not be getting expenditure authority and then going for voted appropriations in Parliament, if there are programs, terms and conditions that require Treasury Board policy issues, that require Treasury Board oversight, Treasury Board has been doing the regular due diligence and rigour that they normally do on these instances.
I would say that Treasury Board as an institution has been operating very efficiently, has been very busy over the last few months and has been having a lot of rigour on many of these items that go through and that would normally go through Treasury Board, given program authority parameters and so forth.
I want to take this opportunity to extend to all of you and, through you, to all public servants, as a local MP and a member of Parliament for Gatineau, best wishes for a good National Public Service Week. It's been an incredibly extenuating and trying time for everyone, for public servants and, I know, many senior public servants like all of you.
Thank you very much for your perseverance and creativity.
Mr. Chair, my question is for the Health Canada officials who are with us today.
Of the requested supplementary budgets, $16.1 million will go to the Canadian Food Inspection Agency.
In recent months, I have often been approached by citizens who complain that indicating the exact source of processed foods sold at the grocery store is not mandatory. Why does the Canadian Food Inspection Agency not have a policy requiring that the source of products be displayed? People have the right to know what they are buying and where their food comes from.
I'm sorry, I was sure Health Canada officials were here.
I have a second question, and it's about advertising. Earlier, we were told that the initial $50 million was for COVID-19. We then asked why this amount had not been included in another line item, and we were told that it had been included in that way because the funds are not only allocated for COVID-19 and that the advertising could be used for other purposes.
Did I understand you correctly? What else would it be used for?
Again, really it's funding for a whole-of-government communication and marketing response, which I believe is probably consistent with what my PCO colleagues mentioned, in four key areas: public health information, financial support for individuals, financial support for businesses and the economy, and public safety and security information.
I don't know if my Finance colleague wants to jump in on that....
I was delighted to see that the Department of Crown-Indigenous Relations included in one of their major items the request for.... Well, I'm not delighted that the request had to be made, but here we are. The money is finally here. It includes compensation for persons who attended federally established, funded, controlled and operated Indian day schools.
It also includes monies that will be used for legal and administration fees. How much money in this supplementary did the government spend on this litigation?
In terms of the total amount, I'm seeing $1.3 billion to the McLean Day Schools Settlement Corporation for individual compensation of $10,000 per class member for harms associated with attendants' level one claims.
Colleagues, we are a little over time. We will be adjourning.
I will remind colleagues that we'll be back for our final virtual meeting before Parliament rises for the summer, this Friday at 11:00 a.m. Eastern Standard Time. I look forward to seeing all of you again then.