[Recorded by Electronic Apparatus]
Thursday, April 27, 1995
.1107 
[Translation]
The Vice-Chairman (Mr. Marchand): We are pleased today to welcome the president of Treasury Board, Mr. Eggleton, along with Mr. Giroux and Mr. Macdonald to the most interesting committee on Parliament Hill comprising the most intelligent and best looking members.
Some voices: Ah, ah!
The Vice-Chairman (Mr. Marchand): Then everything should go well.
One voice: And the youngest.
The Vice-Chairman (Mr. Marchand): And the youngest. You can see that right off. Mr. Eggleton, you have the floor.
The Honourable Arthur C. Eggleton (President of the Treasury Board and Minister responsible for Infrastructure): Thank you very much, Mr. Chairman,
[English]
members of the committee, for inviting me to discuss the 1995-96 main estimates of the Treasury Board Secretariat, the department for which I am minister.
[Translation]
The role of the secretariat is to support Treasury Board in a number of ways. One of its main functions is to help Treasury Board in its role as public service employer.
[English]
This means developing policies to reflect the values and principles of the public service and helping to establish and maintain government-wide management priorities and objectives.
Another major responsibility of the secretariat is to allocate resources among programs and departments to help the federal government work better within available means. The secretariat also advises and represents the Treasury Board in its relations with the unions. Finally, my ministry reviews submissions from government departments and agencies before they are presented to the Treasury Board or indeed before they are presented to the cabinet.
The Treasury Board and its secretariat get most of their legislative authority from three acts: the Financial Administration Act, the Public Service Staff Relations Act, and the Official Languages Act.
The secretariat also helps the board to make regulations under the major superannuation acts and backs us up when, from time to time, the Prime Minister assigns other responsibilities to the president or to the board. Those are the secretariat's main roles and responsibilities.
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As for current financial realities, my ministry helps the government to keep program spending - which is total spending minus charges for public debt - at a level that will enable us to make the most effective use of resources.
The Treasury Board Secretariat is responsible for helping the federal government to deliver quality, timely, and affordable programs and services, which means assisting departments to cut spending and streamline operations to meet fiscal targets.
This year, the main estimates for my ministry total $1.271 billion, an increase of $32 million, or 2.6%, over the 1994-95 figures, which results from estimated increases in contributions to employee insurance plans. This increase is less than last year's, partly because the 1995-96 estimates for the central administration of the public service program - one of the three programs for which my ministry is responsible - are $4.8 million lower than in 1994-95.
We have identified some $800,000 to administer the national infrastructure works program, a major initiative in partnership with the provinces, territories, and municipalities to support economic recovery by creating jobs, while renewing and strengthening our local infrastructure.
These funds support the office of infrastructure, which assists with the implementation of this $6 billion program. The office is also conducting a national evaluation of infrastructure works, a commitment that we made in the 1994 budget.
Infrastructure Works has moved ahead rapidly in its first year, creating jobs and enhancing the competitiveness of our cities and towns. We're well on our way to creating the 100,000 jobs the program is expected to produce - and that's a lot more that we thought when we first introduced the program.
The 1995 budget introduced changes to the infrastructure program in response to fiscal pressures. The total federal contribution will still be $2 billion, but the program will be extended to cover a five-year, instead of a three-year, timeframe.
In spite of these changes, we expect that 60% of all the funds will be spent in the first two years of the program - that is, by the end of this construction season - and that's a significant and rapid investment in the local economies of this country.
In the 1995-96 main estimates, $450 million has been set aside for contingencies. This represents about 0.9% of voted budgetary expenditures and is the same as last year's figure.
The contingency vote provides temporary financing for initiatives that could not be included in the main estimates but must be financed before the release of supply for supplementary estimates.
Right now the only increase in the government contingencies in the centrally financed programs are payments for reprography, which is essentially photocopying. The secretariat has allotted $1.4 million to finance the licensing agreements with the groups representing the authors and publishers of published material subject to copyright. The agreement ensures that the authors and publishers of published material are compensated when the government makes copies of their material.
[Translation]
My Department is also responsible for the employer contributions to insurance plans program ECIPP.
[English]
The Treasury Board indicates in its main estimates an increase of $35 million in contributions to employee insurance plans. This calculation is based on a formula that takes into account expected health costs and the projected size of the public service. When these estimates were made last fall, we could not take account of decisions in the 1995 budget. When these charges are taken into account, I fully expect that the increase will be less. Any increase would be due mainly to higher costs for the public service health care plan and higher provincial health or payroll taxes. However, I would like to point out that the cost of the dental care plan is expected to decrease by $12 million.
So you can see that a lot of these increases, or indeed the decrease, are relevant both to the programs that operate on behalf of the employees throughout the entire government system and to our estimates based on what we determine to be the actual cost and are not always controllable in terms of how they affect our budget.
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Now that I have described some of the highlights of the 1995-96 main estimates, I would like to tell you a bit about some of the secretariat's current initiatives.
One of the primary goals of the secretariat is to provide leadership in implementing the program review and its impact on the size of the public service.
We recently developed two programs, the early retirement incentive and the early departure incentive, to help manage the downsizing of the public service.
The early retirement incentive is now available to eligible public service employees. It allows employees who have been declared surplus and who meet age and service requirements to retire without the usual pension reductions.
The early departure incentive, which will apply in the departments most affected by the program review, will offer eligible employees a cash payment in return for resigning from the federal government.
Both of these programs were designed to be fair to employees and to the taxpayer. Over the next few years, my officials will monitor departments and agencies to ensure that they carry out downsizing to be in keeping with this objective.
One of the main goals is to ensure that the federal government provides quality services to Canadians. My ministry is responsible for coordinating government-wide efforts to develop and implement service standards. This quality-service initiative means that departments must know their clients better and focus on their needs.
Departments will develop service standards so their clients know what to expect. Public service employees need the freedom to make decisions and the tools, technology and training to improve the service.
[Translation]
The Secretariat has taken three main steps to improve government activities using information technology.
[English]
The first of these is the blueprint for renewing government services using information technology, which provides strategic direction for the use of information technology to achieve affordable, accessible and responsible federal services.
The second is locally shared support services, which encourages departments to work together to improve services and reduce the administrative costs of government. I have had an opportunity to talk with a number of employees who are involved in these kinds of endeavours. Our employees bring a lot of enthusiasm and expertise to achieving goals that will save the government and the taxpayer a lot of money.
The third is the secretariat's plan to reduce the reporting burden on business, which is the time and cost for small business to respond to federal government information requests. To do this, our target is 1998. We have an action task force, which includes people from both the department - the secretariat, in other words - and the business community, to help bring about the reduction in the paper burden and the overall reporting burden to the government.
Finally, my ministry is responsible for revamping the federal government's expenditure management system, which is the process by which government makes decisions on programs and spending. The system will help departments manage with available resources by focusing on the ongoing review of programs, spending, and the reallocation of existing resources.
It will also help to establish a more effective way of accounting for program results by requiring the government to deliver better and more timely information on program performance and the results from these programs and services. This will be provided to members of Parliament.
Mr. Chairman and members of the committee, those are the highlights of the l995-96 main estimates for the Treasury Board Secretariat. As for my officials, you have introduced two of them, but there are others here. They are ready to assist me in answering your questions. They'll bail me out, in other words.
The Vice-Chairman (Mr. Marchand): Thank you very much, Mr. Minister.
[Translation]
I give the floor over to my colleague, Mr. Laurin. You have eight minutes and not a second more.
Mr. Laurin (Joliette): I hope I will have the Minister's co-operation and that his answers will be as short as my questions, otherwise he will have all the time.
Recently, the International Labour Organization handed down a decision. This organization is generally fairly moderate and tries to reach objective decisions on labour matters with regard to various situations in different countries in the world. This time, the International Labour Organization seems to have come down very hard on Canada for the way public servants are treated.
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The decision says that action taken by the government in no way satisfies the test of equitable and reasonable accommodation in labour relations. The example given is that the Government of Canada, although it promised during the election's campaign to maintain harmonious relations with unions, did not fulfill this commitment. On the contrary, it has unilaterally imposed to its employees their terms of employment since 1991-1992.
I would like to know what the minister thinks of this finding of the ILO.
[English]
Mr. Eggleton: First of all, the International Labour Organization was giving its opinion based on actions by the previous government, the Conservative government. Although I do expect there may be another consideration by that board of the extension of the wage freeze, because this is all relevant to the wage freeze, I am sure they would say much the same about this government in terms of that specific issue.
What they are saying is that they disagree with the application of a wage freeze, while the wage freeze was put in place and was extended by this government out of necessity to meet our fiscal targets. We simply had been in a fiscal crisis with the debt mounting. This year, as you know, we will spend $49.5 billion of the taxpayers' money just to service the debt in this country.
We have to get our fiscal house in order. When this government came to office, we came to office with a promise to the people of Canada that we would get that deficit down to 3% of GDP within three years. It was necessary to take a number of steps to do that and in fact to share the contribution to bringing that down across all parts of society and all regions of this country.
One was the necessity to extend the wage freeze that was started under the previous government and that the International Labour Organization report covers, because we simply do not have the money to pay additional wages. Of course, at this time this applies as well to the increments. Even during the first few years of the wage freeze, there were increments being given to some employees. This meant the payroll was still rising, by as much as 3% in fact, but it was only going to some employees. That has been added to the legislation passed by Parliament with respect to this current freeze.
It is certainly my hope that we can come out of this period of time just as quickly as possible and get into full negotiations with our unions. That is what the government stands for. The government wants to be in full negotiation on issues that are part of the collective agreements.
We can, however, negotiate on a number of items at this point in time. I was very pleased that we were able with one of our unions, the Professional Institute, to bring about an agreement with respect to pay equity. There are certainly a number of other items that we can negotiate with them, if they are cost neutral. We just don't have additional money, and that has resulted in this International Labour Organization decision. But the government has to get the fiscal house in order, and hopefully the wage freeze will soon result in an end, in our getting back to full collective bargaining.
[Translation]
Mr. Laurin: Mr. Minister, the decision of ILO is dated April 6, 1995 and does not only deal with the previous government's actions. The ILO requested the Liberal government to get back to the bargaining table with unions. It expresses the fervent wish that the government will allow a full resumption of collective bargaining in the Public Service and blames the government for continually abrogating rights to collective bargaining for its own employees.
It is true that the previous government abrogated collective bargaining but your own government did just the same.
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I would add that the union itself has suggested cost reduction measures amounting to several billion dollars in order to allow the government and the Public Service to reach their objectives.
Why didn't you take up these suggestions of the unions and why don't you return right away to the bargaining table in order to resume harmonious labour relations which are so essential for both the employer and the employee?
It seems to me that it should be discussed at the table and not be imposed unilaterally by the government. Why does the government refuse to resume bargaining when the other parties have valuable suggestions that would reduce costs?
[English]
Mr. Eggleton: As to the first part of the question, I think I indicated in my previous answer that while this consideration by the International Labour Organization of the measures of the Government of Canada started with the previous government, obviously they had been extended by this government. I have recognized that and I have given the reasons as to why that is the case.
As to suggestions from the unions or from the public or anywhere else with respect to efficiencies in the public service, efficiencies in government operations, we are always receptive to looking at those possibilities. Whenever we have received those kinds of suggestions, we look into those matters and will continue to do so. We have just gone through a major exercise called program review. In fact, we are going through some 22 reviews.
Everything in the government, everything from top to bottom, is being reviewed. Part of that review not only results in some reduction in programs, some removal of services or programs or transfer to other levels of government or to other agencies - as is the result of program review - but obviously we're concerned with greater efficiencies. We are concerned, as I indicated in my remarks, with greater effectiveness of our services, with having affordable quality services for Canadians. We are doing the best with the resources we have.
I can tell you, that is fully under way. Every opportunity to bring about greater efficiencies is certainly being examined and being carried out as a result of all of these reviews the government has undertaken. As soon as we can get back to collective bargaining in terms of salaries, wages and benefits, we will do that.
We have to get our fiscal house in order. We are on a plan and we have quite clearly indicated to Parliament and to the Canadian public what our goals are. Meanwhile, there is nothing to stop us from talking with the unions. We do have dialogue. We had dialogue with the unions when it came to the early departure and early retirement incentive. In fact, we almost had an agreement on that. We came very close on that, all except for one union.
We are certainly willing to continue to dialogue about a whole host of issues with the unions. To have collective bargaining now, we can't, obviously, have those things that are going to add to the costs that are part of the wage restraint bill until we come out of that wage restraint.
Mr. Williams (St. Albert): Mr. Minister, I see again that your department's budget is up by $32 million.
Mr. Eggleton: You have to learn how to read these budgets.
Mr. Williams: I am reading your own opening statement, Mr. Minister, where the main estimates for your ministry total $1.271 billion, an increase of $32 million. We have heard so much from the Minister of Finance and other ministers about how we are going to reduce spending of this government, and yet the budget is up again. When will it go down?
Mr. Eggleton: In terms of the operations of the secretariat, the operations of the department, it is down, it is going down, it is going down in staff -
Mr. Williams: Up $32 million.
Mr. Eggleton: As I indicated in my remarks, they relate to uncontrollable costs that are relevant to the government as a total, not to the operation of the Treasury Board Secretariat itself. They are relevant to things like the health care plan.
Now, if the provinces are putting up the costs of the health care plan, if there are other costs in terms of employee benefits, then those reflect.... Indeed, I mentioned one other thing, the reprography agreement. That covers the entire government, not just the Treasury Board Secretariat.
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We have certain costs that we absorb for the entire government operations on a centralized basis. That is why those figures overall result in an increase in the budget.
I want to make sure you understand this. When it comes to the actual operation of the department, I can tell you that just like every other department, there is a reduction in the costs of operating the department. Indeed, there will be a reduction in the number of employees.
Mr. Williams: Infrastructure program: you say you are well on your way to creating 100,000 jobs. How many of these will still be in existence after the infrastructure program is gone?
Mr. Eggleton: It was never intended that the 100,000 jobs would all be long-term jobs. In fact, they were intended to be largely short-term jobs, getting the economy moving again, getting the infrastructure of our communities strengthened. That in turn could attract additional private sector investment dollars.
One of the things that has come out of this program and wasn't part of the original design from the municipal level - and I remember that because I was there when it was designed - is, in fact, long-term programs. I will tell you why that has resulted.
Originally, we were only looking at traditional core infrastructure - roads, sewers and sidewalks - but we have expanded that at the request of the municipalities, at the request of local government and educational institutions, so there is a wider range of infrastructure projects. For example, if you put up a library, you get additional librarians. If you put up a convention centre, you have additional employees there, not to mention the additional hotel space that is occupied, the additional restaurants. So at this point in time we are up to almost 100,000 jobs, and 8,000 of them are permanent, long-term jobs. That is a bonus.
I wouldn't be surprised if at the end of the day that 100,000 turns out to be 200,000, simply because you attract additional investment dollars. That is what public infrastructure is all about. You get those additional private sector investment dollars flowing.
Mr. Williams: During the election you said you were going to spend $6 billion, and only $2 billion from the federal government, by the way, in three years, and now you are stretching it over five years. Is this another broken election promise from the red book?
Mr. Eggleton: No. We said we'd spend $2 billion and we will spend $2 billion. You say spending only $2 billion out of $6 billion. Well, you have to say the government is pretty good when it can put $2 billion on the line and get $6 billion flowing out of it.
Mr. Williams: We won't go through that discussion again. That's called squeezing the taxpayer three ways.
Mr. Eggleton: You have to remember that all your municipal leaders are in favour of this. They want extensions of the program.
So let me say this: no, there are no broken promises. The $2 billion is there. We have stretched it out over five years. One of the reasons we stretched it out was because we were getting requests from the municipalities that needed a little bit more time to finish some projects. We had to stretch it yet another year because of our fiscal circumstances, which we have talked about and we are all aware of.
So I think it is quite manageable within that five-year timeframe. I think a lot of the smaller communities and some of the smaller projects will have no problem proceeding and I think we are going to be able to identify projects that by necessity would have to go into a fourth or fifth year. The rest of them will just proceed apace and create the jobs and bring about the infrastructure that communities want.
Mr. Williams: Staying on the numbers, Mr. Minister, I am looking at ``Figure 3: Activity Resource Summary'' on page 2-25 of Treasury Board of Canada Secretariat's 1995-96 estimates. You are talking about $16,963,000 in expenditures, 176 full-time equivalents. Now, 77% of that represents personnel costs. That works out to almost $75,000 per individual.
Mr. Eggleton: You are taking the $16,963,000 -
Mr. Williams: Times 77%, because you tell me 77% of that is personnel costs, and divided by 176 full-time equivalents I come up with almost $75,000. Aren't we a little generous with our salaries?
Mr. Robert J. Giroux (Secretary of the Treasury Board and Comptroller General of Canada, Treasury Board of Canada): What you are doing here is dealing with the estimates of the program strength, if I understand it correctly, the expenditure management summary.
Mr. Williams: I have taken all the numbers, Mr. Minister, and I find that you seemed to be more than generous with the salaries, it doesn't matter which one I took. Figure 3 on page 2-25 shows $16,963,000-worth of total expenditures, 77% for personnel costs. So 176 full-time equivalents works out to $74,213.
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Mr. Giroux: I cannot dispute your mathematics on this. All I want to say is that it doesn't necessarily follow that the 77% applies evenly to all of these areas. The Bureau of Real Property and Material, for example, does have a good part of its budget to pay for costs of data analyses and data collection and so on, so we would have to take a look at the actual distribution in this group.
Mr. Williams: Then let's move to another one, such as figure 4 on page 2-29. I find this one rather interesting: $17,822,000 for human resources management, with 220 full-time equivalents, works out to $61,500 per individual. However, official languages and employment equity, for some reason or other, seems to be rather an expensive program. The average cost there moves up to $70,000.
I was wondering why official languages and employment equity pays an average salary significantly higher than human resources management.
[Translation]
Mr. Giroux: It's rather difficult to answer this question in ten seconds, but I will try any way.
[English]
The salary numbers or these costs of human resources numbers do include employee benefits, so you have to take into account 25% to 30% that has to be added in. That accounts for the total cost. With respect to official languages and employment equity, it all depends on the mixture you have in that branch of senior officers versus staff and support staff, so it's a combination of all three.
[Translation]
The Vice-Chairman (Mr. Marchand): Thank you very much, Mr. Giroux.
[English]
You might be able to ask another question later on, Mr. Williams.
Mr. Williams: I have one final point, Mr. Chairman.
The Vice-Chairman (Mr. Marchand): Your time is up by about a minute already, but certainly you'll be able to come back in a third round.
[Translation]
Mr. Duhamel, you have the floor.
[English]
Mr. Duhamel (St. Boniface): I wanted to follow up on that, if I may. I have about four questions I'll ask rather quickly.
I would not want to give the impression, unless it were correct, that we have average salaries of that magnitude. What is the average salary of the civil service generally, the whole of the civil service? Even a ballpark figure would be useful.
Mr. Giroux: My sense is that it would be around $40,000, but certainly I would like to reserve the right to give you a much firmer number.
Mr. Duhamel: Thank you very much. I appreciate that.
I wanted to pick up on another point the president made with respect to the proposals with regard to early departure incentives. Was there a statement made that most of the unions or all of the unions but one had, in fact, accepted those proposals, or something to that effect, Mr. Minister?
Mr. Eggleton: Yes. However, I hasten to add that the one that didn't, out of 16, is the biggest by a long shot, the Public Service Alliance of Canada. So in all fairness, I must put it in that light. But we did attempt to bring about a negotiation, and I think it's an indication of what this government wants to do. We want to be able to sit down with the representatives of our employees, the unions, and work these things out. But at the end of the day, we have to go through this downsizing. We couldn't get the agreement, but in the legislation we have been careful to maintain what essentially it was that we negotiated with the unions.
Again, the changes to the workforce adjustment directive, which are the main parts of it, are limited in scope. They're only the most-affected departments - I think we're up to 11 departments - and also limited in timeframe to being at this approximately 45,000 reduction program in the three years.
Mr. Duhamel: That was my next question, thank you.
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We have made some brief reference to the infrastructure program, and in fact you did as well. You gave some indication of the reactions we've received to date. Could you elaborate on that briefly? How have people received that program, generally? I'm talking about municipalities and other key players.
Mr. Eggleton: Before I answer that, Mr. Chairman, I just want to draw your attention to page 2-50. The average salary for the various positions of the Treasury Board Secretariat as well as the salary ranges are listed there. You might find that instructive in terms of some of the questions Mr. Williams and others had on that.
The infrastructure program has been exceptionally well received by municipalities, first of all. Municipalities, through the Federation of Canadian Municipalities, were the creators of the concept we adopted in the election campaign of October 1993 and subsequently put into effect.
The provinces have all been onside. We very quickly were able to get agreements with all of the provinces and get the machinery in place. In fact, it was nothing short of a spectacular, record-breaking time for doing something like that. When you consider that we had to get agreement from all the provinces and get the literally thousands of municipalities, school boards and universities all rolling on this program, we were able to get it up and operating in a very short period of time.
By the end of this construction season, fully 60% of the $6 billion, to take the total figure, will have been spent. I think that's an amazing take-up. It's so well received. I keep getting letters from municipalities, the Federation of Canadian Municipalities and the provinces asking for extensions of the timeframe and the money in the program.
In fact, I attended a meeting of the Ministers of Municipal Affairs, at their invitation, a year ago in Vancouver, and the first thing they said to me was that they would like the program to continue, to be extended. They thought it was a great success in getting people back to work, strengthening the infrastructure of their communities, helping to attract additional investment dollars and helping to create a new spirit about the economy that things were beginning to move.
The program has been very well received by Canadians, and we'll continue to implement it.
Mr. Duhamel: I was wondering if you would elaborate on the secretariat's plan to reduce the reporting burden on business. This is in response to a business request. Perhaps you could also expand on the government's expenditure management initiative. What's the intent there?
Mr. Eggleton: It's more than a paper burden; it's an information burden. We're not looking to just transfer all the burden into electronic filing, though some of that may happen.
Small businesses have long griped about having to fill out so many government forms. I think the estimate is they spend about half a day a week filling out government forms when they could be doing something more to make money to ensure the success of their business. It's an extraordinary burden on small business.
One of the measures in Mr. Manley's paper on small business was a suggestion that we cut the information burden down. So we put in place a task force. There was already a group of small business people that came under Mr. Brien Grey, the vice-president of the Canadian Federation of Independent Business. He and Bernie Gorman of the Treasury Board Secretariat are co-chairing this committee to develop an action plan - not just another study, but an action plan - for actually reducing the paper burden.
We're getting good cooperation from all the departments. The revenue department is a big one. Stats Canada and all sorts of them are helping us to reduce the burden for small and medium-sized businesses in particular.
Let me get on quickly to the other part of your question, which was the expenditure management system. The reality this government has faced up to is if we have a new program or service, we can't add money on to the fiscal framework to do it; we have to do it by reallocation. That's one of the basics of the expenditure management system.
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Another one is to ensure accountability - to ensure that the money that is spent is reported, that we track it on a results-oriented basis and that we have measurable goals. We are developing a new system of business plans and outlook documents, which are going to be a good part of what the business plan document is.
The business plan document will replace the old multi-year operational fund, the old type of accounting systems for budgeting, and will be part of an ongoing process the Treasury Board will undertake.
The outlooks will go to parliamentary committees and again will have much of the information the business plan has in terms of forward-looking expenditures and programs and the measurable goals that departments are going to put in place.
Those are just some of the ways we're improving the expenditure management system.
Mrs. Chamberlain (Guelph - Wellington): Could I have some clarification on the comment about this task force that's reporting? When will we get the results of that task force? I think a lot of small business owners are looking for some real relief in this area, and I wonder if there are any time lines on that.
The Vice-Chairman (Mr. Marchand): You'll have a chance to ask the question in the next round.
Mrs. Chamberlain: I won't be here. I have to go at noon.
The Vice-Chairman (Mr. Marchand): Well, maybe someone else could ask the question.
Mrs. Chamberlain: Okay.
[Translation]
Mr. Laurin: Mr. Minister, could you supply the Committee with details concerning the 45,000 jobs that will be cut from the Public Service? I would for example like to know the number of positions involved by department, the distribution of these cuts throughout the country, the planned timeframe, in other words when such and such a cut will take place, etc. At what stage of the operation are we now?
[English]
Mr. Eggleton: First of all, by way of background in answering this, the figure of 45,000 of course is firmly in our minds. We didn't set that out as a target for reduction of the public service.
We instead set out to review programs and services through the program review mechanism that was under the chairmanship of Mr. Massé. That was a detailed examination of our programs and services to determine what is appropriate for the federal government to continue to do, what we can afford to do, where we should be cutting programs out entirely, where we should be reducing others, etc.
A number of criteria were used in the examination. I think it's important to use that as a background. You'll find out why in just a minute, when I complete the answer. The result -
[Translation]
Mr. Laurin: Mr. Minister, forgive me for interrupting, but we don't have very much time. Given that the program study is now finished and that your decisions have been made, would it be possible for you to table with the Committee the numbers I was asking for?
[English]
Mr. Eggleton: When we have it available.
[Translation]
Mr. Laurin: I'm not asking to have them today.
[English]
Mr. Eggleton: I'm going to answer it the way I was starting to answer it, because I think it's an important part. I'm sorry you have to wait to hear the answer, but you're going to have to.
We didn't target 45,000 people. We talked about the programs and services we could continue to afford, and that resulted in a dollar reduction in each budget. Since a good deal of the budgets of the different departments and government operations are people's wages, salaries and benefits, it obviously has an impact on the number of people who will continue to be part of the public service.
Out of that came an estimate that it would be approximately 45,000 people, but that isn't firm at this point in time. The numbers are not firm. It's going to be approximately that, but each of the departments have to go through the exercise of determining where they're going to make the reductions in programs and services, flowing out of the program review in their individual departments.
As they do that, they will have a better handle on what the actual numbers are for their department and will also then be able to get a better handle on what the numbers are region by region. At this point in time we're only dealing with estimates.
Right now we don't have all of the package available for the downsizing exercise. The one thing that remains to be done is the early departure incentive program, because we require the legislation that is coming through the budget bill, Bill C-76. When that is available, then certainly the most-affected departments where most of the numbers are involved will be able to carry out this exercise.
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There still is a planning phase going on right now. Mechanisms are being established for the reporting of numbers as they become firmed up and as they are declared surplus. When that information is available we'll be happy to provide it to you, but it's not available at this point in time.
[Translation]
Mr. Laurin: Does all this mean the minister made these decisions without full knowledge of the details we're interested in? It seems to me it would be important to have this information in order to be able to plan. If you don't know the exact number, then how can you set the goal at 45,000 jobs? It could be 40,000 or 46,000, and I understand that. But how can you tell me today that you don't have that information, that your decisions have already been made and that you have begun to put them into effect?
[English]
Mr. Eggleton: But I told you 45,000 was not the objective. The objective was to downsize the government in terms of the programs and services we provide.
As a consequence of that, it is likely that we're looking at approximately 45,000 people. Until the departments actually complete their plans and determine what positions become surplus in terms of the programs and services they're no longer going to provide, we won't have that detailed information. The departments are working vigorously at that now, and as that information becomes available we'll certainly make it available.
Up to this point in time we've been operating on estimates.
[Translation]
Mr. Laurin: The conclusion that I am drawing from what the Minister has said thus far is that the Department isn't in a position to tell us how much money this operation is going to be saving us.
You offered the unions various measures in the areas of pre-retirement and early retirement, and they accepted them. It has for example been established that employees with 10 years experience and who are at least 50 years old will be able to take advantage of these measures. That's all fine and dandy for the Public Service, but what about equity and fairness towards the other workers of this country who aren't in the Public Service and who are only eligible for the POWA program, that requires them to have 15 years experience and be 55 years old or more? Why the double standard? It's 10 and 50 for the Public Service, which is wonderful for them, but it's 15 and 55 in the private sector, yet they're all in the same boat. What has happened to fairness? Will that mean that you'll be reviewing your POWA program so that all laid-off workers in the industrial sector will be eligible for the same benefits?
[English]
Mr. Eggleton: I'm not sure about the point you're trying to make.
Look, right now people can retire at age 55 if they have thirty years of service, according to the 1985 formula. They could retire at age 50, but they could be penalized at the rate of 5% per year. What we have said is that we will provide for an early retirement of those people. In other words, they will be able to forgo the penalty and thereby get an early retirement.
They don't have to accept it if they don't want to. It will only be for surplus positions. If they want to accept it they can. If they don't want to, then they could, if they're in a most affected department, receive the early departure incentive. Or if they're in a non-most affected department, their situation would operate under the current rules of the workforce adjustment directive.
We've gone through this in great detail, and I must tell you the unions weren't complaining about those parts of it. They just wanted to make it all voluntary across the whole system, which just doesn't work at all, as the Auditor General has quite clearly pointed out to us.
That kind of formula is a good one when you look at the private sector situation. It comes in right at about the middle range and is fair and equitable. It's fair and reasonable to our employees.
In addition to that, don't forget we're also offering training allowances, counselling and all sorts of other provisions to assist people to adjust to a private sector reality in departure from the public service.
You have to look at that as a total package and you have to look at the different options employees have.
[Translation]
The Vice-Chairman (Mr. Marchand): Mr. Laurin, the discussion is most interesting, but unfortunately your time is up.
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Mr. Laurin: I spoke, in French, about the PATA (POWA in English), and I see that the minister did not understand what I was referring to, which is why he was unable to answer my question. PATA stands, in French, for Programme d'adaptation des travailleurs âgés, which is, in English, the Program for Older Worker Adjustment. To be eligible for this program, one has to have 15 years of service and be 55 years of age or older, whereas in the public service, 10 years service and 50 years of age is sufficient. That is what I wanted an answer on. Are you going to be making changes to the Program for Older Worker Adjustment given what has been offered in the public service?
[English]
Mr. Eggleton: I didn't realize you were referring to that program in your previous comment. Bob is just going to make a comment about that.
[Translation]
Mr. Giroux: I would simply say that there is no link between the two. I understand your point of view, Mr. Laurin: In one case, the program is aimed at older workers outside. It is a program that I believe comes under Human Resources Development. It would be up to the minister in charge to examine the provisions of the program and to decide if changes are warranted.
As far as the public service is concerned, one must not forget that the special provision will only be in place for a period of three years, during which time we are going to be drasticallay reducing the federal work force. We're not talking here about the regular program, that is very different from the one you're interested in. The regular program says that to be eligible for a full pension upon retirement, one must be 55 years old and have completed 30 years service, otherwise there is a penalty.
[English]
The Vice-Chairman (Mr. Marchand): Ms Chamberlain has left. I didn't realize she was going to leave early.
It's your turn, Mr. Bryden.
Mr. Bryden (Hamilton - Wentworth): Thank you.
I'm delighted to have you here, Minister, because it gives me an opportunity to ask questions that particularly interest me. As you're aware, I have done some studies in the area of grants and contributions to non-governmental organizations. One of the things I was very surprised to discover is that with the mid-level civil servants often in charge of awarding those grants, there's no consistency of criteria by which they assess the organizations applying for the grants.
A classic case in point is someone in Human Resources Development who was responsible for administering over $10 million in grants to union organizations for labour education and did not require of those organizations a simple financial statement. Indeed, when one goes across the board, there is terrific inconsistency, and many organizations are receiving funding without having to provide minimum evidence of how they operate financially.
In your expenditure management system or your program review or anywhere in your review of how things are done, is there the idea of developing guidelines for assessing organizations requesting grants? Are we doing anything in that area?
Mr. Eggleton: We're very good at drafting guidelines. We do it all the time.
We went a little further in the exercise with respect to grants and contributions as they relate to special interest group funding for the last year. You may recall Mr. Martin mentioned it in his 1994 budget, and the Treasury Board Secretariat undertook to review the matter and develop some criteria. We then communicated with the departments and worked with them, as is our common practice.
Departments have to make their decisions. We don't micro-manage their operations. We expect them to do these things. But we'll certainly give them help and guidance, so that was done.
Because of the program review and the major cuts in expenditures on government programs, this was particularly an appropriate time to be doing this kind of review. So we've asked the departments, in the context of program review, to look at special interest group funding and grants and contributions for same. That is under way, and I trust that as part of the reductions it will have a....
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Each department has to determine its priorities. It may find that, in some of these grants, special interest group funding is important enough to them to make cuts in other places.
Mr. Bryden: Of course, I'm very supportive of the guidelines that come out, but I'm really directing my question toward the lack of consistency by bureaucrats in assessing organizations. Surely it should be a matter, under your peer review, of ensuring that every bureaucrat responsible for dispensing a grant should demand a financial statement from the organization that is receiving it or at least some evidence of responsibility.
This varied widely from ministry to ministry in ways that I don't think are acceptable or that meet the standards of the private sector.
Mr. Giroux: If I may, Mr. Chairman, the programs you are referring to - there are a number of grants and contributions programs, as you know - all flow from specific legislations that are applicable to the particular activity. Of course, the public servants who administer those programs will be guided by the requirements of the legislation. Often the legislation will require that regulations are to be passed for how to apply these.
Essentially, that's where it flows from. If the legislation or the regulations and the decisions of the minister managing that department with respect to the attribution of those grants are such that these are required or not required, then that's where it comes from.
Quite frankly, at the moment, I don't deny the fact that there are some in the category you are giving, but most grants and contributions programs - take, for example, the sports organizations or some of the others - do require rigorous financial analyses.
I would suspect you're probably quoting an exception. I don't know the nature of those grants particularly. With expenditures, particularly, organizations are often required to provide a plan and when they will be meeting certain criteria and objectives. A number of our grants and contributions do meet that requirement.
Mr. Bryden: I then suggest most respectfully, Mr. Minister, that it might be appropriate to set a standard of assessment across all ministries. Regardless of what legislation or regulations are setting up the grant or contribution regime, surely all organizations should be required to meet certain financial disclosure rules or standards. I would think this would be reasonable.
Mr. Epp (Elk Island): I have one question, Mr. Chairman. Then, with your permission, I would like to defer back to Mr. Williams who had a line of questioning going.
My questions for the minister are very simple.
You indicated - I think it was in passing - that the cost of benefits to employees was 25% to 30%. I'm sure you're wrong there, if I can just humbly suggest that. It has to be somewhere between 10% to 12% if it's typical of most employee situations. We're not talking about the MP pension plan here, which counts for 40%.
Mr. Giroux: In fact the number is closer to 30%. It includes health benefits plans and contributions to the pension plan as well.
Is that right, Don?
This is very technical, Mr. Chairman. Maybe Mr. Lusby could assist here, with your permission.
Mr. Don Lusby (Acting Assistant Deputy Minister, Corporate Services Branch, Treasury Board Secretariat, Treasury Board of Canada): For the purposes of the estimates calculation, a factor of 13% is used to escalate the salary figure. That doesn't include other benefits such as annual leave, sick leave, etc. If you factor all of those in, you're close to 30%.
Mr. Epp: I think it's time we fixed that up, because that is really out of line. It has to be.
I looked at your estimates on page 2-49. You have the profile of program resources under supplementary information. You have contributions to employee benefit plan as $6.679 million. Even if you use, as the base number, $58.102 million, which is the sum, it's only 11.5%. So I think there's something really wacky there.
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Mr. Eggleton: It's out of line with what? If you're comparing it with other organizations, such as in the public sector, then you have to compare apples and apples.
Mr. Epp: I think that's the key. I just wonder whether the government has become excessively generous with paying people not to work for them. That's just a comment.
Mr. Williams: Mr. Epp, I appreciate that you brought out that point. I was going to say that $738 million is included in the estimates, of course, to cover the employer contributions of insurance plans. I am looking at figure 2 on page 1-4. Presumably, even Treasury Board employees would have their employer contributions to the insurance plan lumped in there.
So in addition to the numbers we were looking at in the estimates, an additional salary cost was buried in with that lump program that covers all of the government.
Mr. Minister, you were saying to my colleague from the Bloc that you didn't decide to lay off 45,000 people. You said the government looked at how much money it had and how it would work with that. From there, since there was going to be a reduced amount of activity, you found that you could dispense with a large number of civil servants, perhaps in the range of 45,000.
But if you were working with how much money you can spend, how about figuring out what Canadians need? Why aren't we saying what Canadians need and then saying how we are going to deliver these programs, rather than saying this is how much money we want to spend on Canadians?
Mr. Eggleton: I did say that was part of the exercise. The program review had a number of criteria, and that certainly was first and foremost. We were doing a combination of trying to reduce the size of government to be able to live within our means, but we're also going through an exercise to get government right in terms of the programs and services that Canadians do need. We're trying to prioritize those programs and services that Canadians need.
Mr. Williams: In your opening statement you talked about the quality-service initiative. It means that departments must know their clients better and to focus on their needs. That's quoting from your opening statement.
I see that on page 2-15 of the estimates you talk about service standards. I recall from the Standing Committee on Public Accounts that the Canada Pension Plan had to be taken to task twice in the last number of years. The latest one was that they received 11 million calls in one year, but were only able to answer 4 million calls; 7 million calls went unanswered.
My question is: under quality-service initiative, what accountability are we ensuring for departments to have if they don't meet quality standards? Are there targets?
Mr. Eggleton: Page 1-4, which you started to refer to, is an excellent illustration of what I was saying earlier about our secretariat budget really being down. As you can see, the forecast of $91.419 million went down to $81.918 million.
So the operation of the department is down, and the contingency is virtually flat. But as you can see, the figure for employer contributions to insurance plan, over which we don't have direct control and that involves the entire public service, has caused the increase.
With respect to quality services, yes, indeed, that will become a goal of the government overall. It is a goal. In accordance with that, we will ask departments to set service standards.
Mr. Williams: Will there be accountability?
Mr. Eggleton: Yes, there will be accountability.
Mr. Williams: Will there be a penalty if they don't meet these standards?
Mr. Eggleton: We haven't worked out exactly the entire mechanism; we're in the process of doing that. But we will have service standards. We will monitor them. As with other figures and measurable goals, they'll be part of the review of the business plans.
Parliament and its committees will get a chance to look at those goals as well. In fact, there are already some departments that have service standards and are meeting them.
We want it to become something that is government-wide. We are now looking to implement it on that kind of basis.
We have to be sensitive to the current conditions of downsizing. But at the same time, there is a need to reinvigorate and re-motivate our public service as we come out of this downsizing. I think quality services and client focus will be the basis for that.
The Vice-Chairman (Mr. Marchand): Thank you, Mr. Minister.
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Before going to Mr. Murray, I would like to come back to Mrs. Chamberlain's question about the task force. I believe she did get information. Before I forget, is it possible to table that information so that everyone -
Mr. Eggleton: Yes. I actually had a table here, but because she was going, we gave it to her and she took it with her. We'll get it to you, Mr. Chairman.
The Vice-Chairman (Mr. Marchand): Okay.
Mr. Murray (Lanark - Carleton): Mr. Minister, as you know, we've been looking at contracting out in this committee over the last little while and one of the concerns that comes up repeatedly is public servants retiring and then going on contract immediately after retiring. I just wanted to mention that, because there's some concern. Apparently it was raised today in The Ottawa Citizen. I must admit I haven't seen the article - I'm hearing this third-hand - and you may not have either, but it's my understanding that it relates to people who are taking early departure incentives and not being allowed in future to derive any income from the federal government. An example apparently was used of a woman saying she would not be allowed to get a cleaning contract with the government afterwards, because she would derive income from the government.
I apologize if I'm not quoting that properly. As I say, that's third-hand information, but could you say something to clear up that confusion about the ability of public servants, if they do accept early departure incentives, to derive income from the federal government?
Mr. Eggleton: Well, if somebody leaves the public service as a result of the downsizing exercise, for example, and takes an early departure incentive and then somehow comes back on contract, given that departments have to meet numerical goal reductions in their budgets, I can't see how that is going to in any way help them. But if that did happen, that person would then have to pay back the EDI or that portion of the EDI relevant to the period of time they would not require it because they'd be back on the government payroll. That could also apply to a personal services contract.
It starts to get more remote when you get down to a position of somebody who would leave and then, perhaps, go out and be employed by somebody else and maybe have a contract that doesn't involve the work they did before or is not with the department they were with before. I don't think we're looking to penalize or to have money paid back for people in those kinds of circumstances.
We're in the process of developing clear guidelines of when that would apply and when it wouldn't apply. It'll be done on a common-sense basis. We want to help people who have to leave the public service because their positions are declared surplus, and one of the ways might be to set up businesses doing the kind of work they'd been able to do before. We would want to encourage people to be able to do that.
What we have to be careful of is the situation in which the person is laid off, does go out on the early departure incentive, and then comes back in another position, because it wouldn't be fair to the taxpayer to be paying him for departure and also paying him on the payroll again. We are in the throes of finalizing our guidelines - it won't be much longer now - that'll clearly delineate where those lines are drawn, and they'll be done in a fair and reasonable way.
Mr. Murray: I would just like to ask a question about morale in the public service. I understand you made some remarks to senior public servants earlier this month when you talked about one of the government's priorities being to re-motivate public servants.
Declining morale is not a recent problem. It's been going on for over a decade in some departments. It's not just related to the downsizing we're looking at now. I'm interested in knowing what initiatives Treasury Board may have under way to address this problem. Has it identified the concerns, other than potential job loss, that lead to poor morale? Is there something specific going on within Treasury Board to address this right now?
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Mr. Eggleton: There are a number of things, as I indicated in my opening remarks: certainly, quality services; more client focus services; giving frontline workers more responsibility to be able to deal with clients' needs; empowerment or decision-making possibilities; being more sensitive to the needs of people; and decisions being made at a local level as opposed to having to continually go back up the line for even the simplest of decision-making processes. We are looking at a number of ways that I think will not only better serve Canadians but will be more satisfying for our employees.
My goal here is to have employees who feel they're making a difference in their jobs, who feel good about public service, who are in fact making a difference for Canadians, and to have Canadians appreciate the kind of service they provide. This is going to require a number of things, not only empowerment of frontline workers and their ability to be able to deal more comprehensively with cases but also an exploration of training opportunities for them.
There are the information technology improvements that we've been talking about, and Andy Macdonald's blueprint that will help give them some tools in that area for quicker flow of information. I think we have some good examples to build on already. The Canada Business Services centres are a good example of quality service and integrated service. Here is another area that's important, integrated across government departments.
There are a number of things I think we can accomplish that will provide better services, and in doing so, also provide more satisfying employment for our people.
I think awards and recognition are going to be an important part of it. It's not always awards in the sense of cash, additional salary. We have some great innovators in the public service and they deserve to be recognized. They deserve to have attention brought to the things they have done above and beyond what is normally required in their jobs. That's certainly one of the things I would like to do right throughout the public service.
I would like to bring best practices, some of these good innovations, to the attention of all our public servants. It acts as an inspiration for others. It shares information that helps lead to improvements in other parts of the public service. We have some excellent people who work for the Government of Canada, and I think we need to encourage them. Recognition and awards certainly help do that, and in that way inspire and motivate other people to provide the best possible service we can to the people of Canada.
Mr. Epp: I have a few questions with respect to infrastructure. First, in the report you gave us here at the beginning, you said that you have identified some $800,000 to administer national infrastructure program. Is this on top of the $2 billion?
Mr. Eggleton: No, it's part of the $2 billion.
Mr. Epp: It's part of the $2 billion - job creation.
Mr. Eggleton: The overhead is out of the $2 billion, but it's a very small portion of it. For a program this size, we have absolutely the smallest department you could ever imagine. We have seven people running this $6-billion program. That's amazing.
Mr. Epp: Yes, well, the Liberals know how to spend money really efficiently.
Mr. Eggleton: Yes, you're absolutely right. Thank you.
Mr. Epp: I'm sorry, Mr. Duhamel.
Mr. Duhamel: You have so much potential to be a happy person. It distresses me to see you do that.
Some hon. members: Oh, oh.
Mr. Epp: I have a question on the national summary of these approved projects, on page 2-46. I'm sure those seven people can do arithmetic very well, but I look, for example, at Saskatchewan, and the federal share of the eligible cost is only 24.6%, which is substantially below the 33.3% we would expect here. How can you account for that difference?
To show that we're also interested in representing all of Canada, I might add that Quebec is also quite under-represented there at 27.2%.
An hon. member: What about Ontario?
Mr. Epp: What about Ontario?
Mr. Eggleton: Wait for the final figures and they'll all even out. I'll ask Mr. Moyer, who is one of the seven, to correct me or supplement what I say.
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My recollection is that in some of the provinces there is a mixture of the way the program is funded. In Ontario it's pretty straightforward, with a third, a third, and a third. In some of the provinces there's more municipal money, less federal money, or more provincial, federal, etc.; there's a combination of things. It could be that some of the programs under the formulas where there might be less federal money are proceeding, as it says, as of January 24, 1995, whereas some of the other ones that involve more federal money might be coming later.
What I'm getting at is at the end of the day, it all comes out as one-third contribution from the federal government.
The formula, of course, was established at the beginning of the program based on population and unemployment by province.
Mr. Norman Moyer (Assistant Deputy Minister Infrastructure Program, Treasury Board of Canada): The only element I would add to your response, Mr. Minister, is that from time to time there are also private sector partners in these projects. We expect, even once we get through the whole program, that the federal share will be less than 33%, because we have leverage at times. In the example I can think of, the expansion of the gas network either in Manitoba or Quebec where we are working on expanding the natural gas network, there are significant private sector funds that make up a proportion of the money. That, too, needs to be factored in.
Mr. Epp: Perhaps it would have been better to factor those contributions out of eligible costs for the bookkeeping purposes here. It makes it look as though there's much more money being expended by governments at all three levels than there really is, since the infrastructure program was intended to be this three-way plan.
Mr. Moyer: We certainly internally keep track of that money. We could look at different ways to present it.
Mr. Epp: I just think it's not an accurate accounting, as it appears here, if you're bringing in private money.
Mr. Eggleton: It's wonderful that we have private sector money coming in over and above it.
Mr. Epp: Indeed it is.
An hon. member: Maybe we could get that in health care, too.
Mr. Epp: Another question I have, while we're talking about infrastructure here, is with respect to the guidelines for the projects. It seems to me the government gave almost no guidelines at all as to what kinds of projects were eligible, with the result that we have a number of them across the country that are really very annoying to the taxpayers who pay all three taxes. That has been a bit of a downer on this.
I'm sorry, Mr. Duhamel, I'm sounding unhappy again. I'm not. I'm just trying to represent a concern that was expressed to me.
Mr. Eggleton: There were criteria, in the provincial agreements and well known to the municipalities, on all the information we have sent out. This is basic criteria with respect to our objectives in creating jobs and incremental projects. In other words, we weren't going to fund projects that were going ahead anyway, or portions of projects that were going ahead anyway. We wanted to have new jobs, additional jobs, even if it meant acceleration. If they had something in the capital program of a municipality that was scheduled for three, four, or five years down the road, if they accelerated it, that's legitimate too. We wanted to make sure it met environmental criteria, and various other pieces of criteria were part of that.
Essentially we wanted to leave it to the people we felt knew best about what was needed, in terms of economic development in their community, and the need for infrastructure to facilitate economic development. That is local government. Local government could also include school boards and universities, because education is a very key part of the need to create jobs for future.
We let them develop what their priorities were and submit their projects to us. We examined them against the criteria we had established, and the provincial governments did the same thing.
The Vice-Chairman (Mr. Marchand): That was the last question.
Mr. Lastewka (St. Catharines): I'd like to ask a few questions on the infrastructure program. I think I'll take the opposite side of Mr. Epp.
We've been able in the Niagara area to bring in a number of businesses and other organizations. In fact, of the $12 million in our own city, $5 million has been brought in by others. I thinks that's very important to tell people and remind people. There are additional jobs that have come about for the long term. In fact, I'm keeping count of exactly how many jobs on the first layer and second layer are ongoing.
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I do have a concern on the infrastructure program and the confusion that was brought forward by Mr. Ed Philip in Ontario. We're still getting many questions on it. Your office has been very good in resolving project by project as we call. Can you give us an update on where you are in making sure the confusion that resulted from the election, or rumoured election, is resolved?
Mr. Eggleton: Indeed, because I think we were going along quite well in terms of cooperation with Ontario until all of a sudden, Mr. Philip dropped his bombshell of a letter. It was just totally for political reasons.
Back when the decision was made, it was part of Mr. Martin's budget that we would phase some of the funding of this program into a fourth and fifth year, which I communicated immediately on the day of the budget with all the provincial counterparts, in terms of infrastructure ministers. I couldn't at that point communicate with all the municipalities that quickly, but I contacted the 60 largest municipalities in the country, the Federation of Canadian Municipalities, and other provincial associations of municipalities.
I never heard back anything from anybody other than some of them saying to me that they were happy to get some additional time because they did need additional time for their projects.
It wasn't until Mr. Philip sent his letter around that people started questioning things. I think that's because he was suggesting that, in fact, it could cost municipalities more, which is not true, or that it could result in a reduction of jobs, which also is not true. It obviously stirred things up. I think we've now corrected that situation in terms of the understanding of municipalities.
In terms of how we do carry out that deferral of funding, in Ontario the share is about $73 million. This is doing it on the same proportional basis we have in other provinces in the initial agreement.
There are a number of projects, and we're trying to identify projects at this point that will need additional time, in any event. If we can tie down those projects that are able to use the funding spread over the fourth and fifth year, then of course everything else can just proceed.
We're not asking anybody at this point in time to cut back in terms of proceeding with their programs. I fully expect that in Ontario, as in the rest of the country, they will just proceed with what is planned for this construction period. Certainly any municipality that has plans to do that, that has tenders out there, that's ready to go, should go.
Mr. Lastewka: I have a question on the 45,000 public service employees, and I understand the mythology used to get to 45,000. I understand the two programs that are available for the employees, and so forth.
My concern is that when you go through the complete structure and you get down to the regional level, when you're starting to talk positions and bodies and movement and so forth, what type of flexibility will the managers have? I'll give you exact situations that are happening.
It seems that sometimes one large department, such as the Department of Revenue, is not having to move people in that area because their programs are elsewhere, and in the meantime, HRD across the street has to move. We're seeing now movement of positions and people going from St. Catharines to Hamilton, for example, because that's what's happening in the HRD. In the meantime, over in the other area we could have moved people just from one side of the street to the other side of the street, that type of thing.
What kind of flexibility is there going to be at that regional level?
Mr. Eggleton: The ultimate responsibility for carrying out the downsizing is with each department and the minister and the deputy minister at the top, but we are asking them to be sensitive to the regional situations that exists.
I've been out meeting, as has Bob Giroux, with regional councils and people who are operating in different parts of this country. They, of course, want to do what you want to do, and that is see how this is going to work out overall within their regions. I think that's fair and I think we are moving to in fact encourage that kind of consideration. But the ultimate responsibility, of course, is going to rest with each department.
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Mr. Lastewka: I understand the concern for precedence with the agreement, but as this is such a massive program -
Mr. Eggleton: I agree.
Mr. Lastewka: - the flexibility factor is very important for regions because of the initial impact we're trying to make. I would hope that we would be thinking of the people who could have moved across the street rather than having to sell -
Mr. Eggleton: I think you make an excellent point. I'm just going to ask Bob to add a couple of comments.
Mr. Giroux: I would like to add two comments. One of them is that we're going to encourage, at the regional level, as much flexibility as possible in terms of the movement of employees. This is to allow those who would be affected to get the maximum opportunity to find other jobs.
Already a number of regional councils across Canada are made up of heads of federal departments in the regions in which we have set up committees. In fact, some of them even have union representatives on them to start working these out and make sure it's as fair as possible.
The other part, though, is a kind of a coordination of the impacts coming from a number of departments, which could really hit a smaller community or a particular area.
We're doing a full review of the points of service issue. Mr. Macdonald is on a committee chaired by a deputy minister to ensure that we get as much coordination as possible in terms of each department doing its own thing. But at the same time, this will show what the impact would be in a particular region and make sure that we can do it as smoothly as possible in order to reduce the impact.
If you wish, Mr. Macdonald could give you more details on the participation in that exercise.
The Vice-Chairman (Mr. Marchand): I haven't had the opportunity to ask any questions. I'd like to, if you don't mind, come back to the infrastructure program.
It seems this program was quite successful. I can't deny that. One of the priorities of the Liberal government was job creation. With those two elements combined, why was the $200 million cut? Why were new moneys not added to this infrastructure program?
Mr. Eggleton: It's cut only in the sense that it's outside the three-year timeframe of the fiscal framework, but it isn't cut in the sense that it's off the program. It's still there, and it will be part of an extended program. In other words, the $2 billion is still intact within the $6-billion program.
That was done for fiscal necessity. It was because of our need to meet our fiscal goals.
The Vice-Chairman (Mr. Marchand): I understand, Mr. Minister. I realize it's extended over five years instead of three, but why were there not new moneys added to such a successful program and a job creation program?
Mr. Eggleton: I'd be delighted if you would write my colleague, the Minister of Finance. Tell him we'd be happy to have more money to operate this program further, because it has been a successful program.
From what I'm hearing from municipalities, as I indicated earlier, there's been a lot of support. I forgot to mention that there's one other group of supporters. I shouldn't leave them out of that. I've had 16 letters from members of the Reform Party, of which 12 have been favour of infrastructure programs for projects. I just have to mention them as being part of the supporting group.
But we're presently going through an evaluation of the program. As we come through that, the government will certainly be able to consider where we should go from here.
The government's always been in some kind of an infrastructure program. This one has been quite successful. It's been locally based. I would hope we would be able to continue, but of course the government can't make that decision at this point in time. We have to go through the evaluation, and we also have to determine what resources might be available.
The Vice-Chairman (Mr. Marchand): So this $200-million cut was not eliminated but spread out. Instead of three years, it was five years. So it allows the government not to spend as much money per year.
Does this not have some effect on existing projects? Obviously, all municipalities have not reached the same point. Some have only begun; others are at mid-term; others are almost finishing; and so on. Have you given any consideration to the impact it will have on those municipalities that are at various stages? Some will have to delay their projects, and others will have to possibly postpone them or maybe even cancel them.
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Mr. Eggleton: No, I don't anticipate that to be a problem. I think we can cash-manage this.
Just to give you an example, we were talking earlier about Ontario and Mr. Philips's letter. In Ontario last year we allocated $250 million; they spent $100 million.
There will always be circumstances in which the flow of cash and the project don't proceed quite as fast as they would like them to proceed.
There are some major projects. I know the one in my community, the trade centre in metropolitan Toronto, was really struggling even to come within the three-year timeframe. So they're quite happy to have an additional....
I've had other letters from the offices of ministers that said they were happy to have, for some projects, additional time.
I think we can cash-manage this. Particularly for the small projects in the smaller communities, there's no reason for them to hold anything up at all. At the end of the day it might be very minimal in terms of its impact and anything being held up at all.
We're going through that detailed discussion right now with the provinces to see what the actual impact will be. I suspect we'll be able to fairly well cash-manage this, and the communities will be able to proceed with the projects they want to proceed with. This would be done by and large on the timetable on which they want to proceed.
The Vice-Chairman (Mr. Marchand): I presume that, since the moneys are limited, they have all been spent so that no new projects are being accepted.
Mr. Eggleton: It's not spent, but about 97% is the approval rate, at this point. At least, that's in Ontario is it? It's 86% across the country, it seems.
Mr. Moyer: Yes, we are about 86% committed. There are still new projects being presented and they are still being brought forward for approval in every part of the country.
The Vice-Chairman (Mr. Marchand): Is that in all the parts? There were four parts to that program.
Mr. Moyer: In Quebec, in particular, there were four elements to the program. There is still some money to be allocated in each of the quatre volets.
[Translation]
The Vice-Chairman (Mr. Marchand): Even in the fourth one.
Mr. Moyer: Even in the fourth one, although there is not much left in it.
The Vice-Chairman (Mr. Marchand): My last question will concern the criteria.
[English]
What were the criteria the government used in terms of distributing these funds? Were there regional criteria?
Mr. Eggleton: We established the figures on a province-wide basis. Then we asked our partners, the provinces, to determine processes whereby there could be a fair regional distribution. But by and large we let them come to us with their suggestions.
In the case of Ontario, for example, they actually took all the municipalities and school boards and everything and then divided it by population and the size of capital expenditures. They had a very even flow right across the province.
Some other provinces have done that, but there have been different formulas. We asked the provinces to tell us that.
Mr. Williams: Mr. Minister, we know you are concerned about cutting the deficit and cutting it down with expenditures. Just recently there was an announcement that the Treasury Board has increased the automobile allowance up to about 37c. or 38c. and the per diem for MPs and civil servants for meals while travelling. This is while the business sector, as far as automobiles are concerned, are still restricted to 31c. for the first 5,000 kilometres and 25c. thereafter, which is significantly lower than what the Treasury Board is paying.
The Department of Finance said that it feels, as far as business is concerned, that this is quite adequate. Why does the Treasury Board continue to increase the amount of money we're paying on automobile allowance, when the Department of Finance is not making any changes for business?
Mr. Eggleton: A number of years ago, this became incorporated. A set formula is followed here. They do a review a couple of times a year as to the actual cost increases of the various component costs that go into automobile expenses. That's everything from the gasoline to maintenance, insurance, and all that sort of stuff. A very set formula is used.
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This was established as part of the collective agreements as adopted by the National Joint Council back about ten years ago. So this has sort of gone on automatically. It becomes a pretty automatic procedure because it's all set down in the collective agreement.
Mr. Williams: So when's it going to stop?
Mr. Eggleton: This is an increase that has come about as a result of that formula. I must tell you that sometimes, though, it's a decrease. Apparently they actually decreased it a couple of years ago. But at this point in time, on the basis of the formula, there's been an increase.
In terms of MPs, that's up to the Board of Internal Economy. The practice has been for MPs to follow whatever the public service has been doing.
Mr. Williams: What about the businessman?
Mr. Eggleton: Oh, okay.
Mr. Williams: He hasn't had a change in years -
Mr. Eggleton: I appreciate that.
Mr. Williams: - yet Finance is saying it's quite reasonable for business, and they're covered up.
Mr. Eggleton: I think it's fair to review that in view of the cap on the business community, so that's what I'm undertaking to do.
Mr. Williams: As well, businesses are restricted to receipts only for moneys spent on travel - for meals and accommodations and so on - yet the government continues to pay a per diem of about $46 to $48 a day for meals for civil servants on travel.
Don't you think there would be a significant saving of money if you moved over to a receipt-based accounting process, as business is required to do under the Income Tax Act?
Mr. Giroux: You're quite right; the government pays a per diem. But just for the sheer administration cost because of the amount of travel that's happening in the federal government, I'm not quite sure it would be more economical to check every receipt. It makes it much easier in terms of administration to have a per diem. Those per diems are based on a review of the cost of meals. They're also indexed per formula. The per diem is also part of the national joint council's travel directive.
It's our intention, as the president has said - and it's due for review in the fall - to take a fresh, global look at the travel directive. I'm not denying that receipts could be the approach; all I'm saying is we have to be careful, when we move into these areas, that we don't impose additional administrative costs that completely nullify or even make it worse than if we did it on a formula basis.
The Vice-Chairman (Mr. Marchand): Thank you very much, Mr. Giroux.
That was your last question, Mr. Williams. I'm sorry; we're running out of time.
Mr. Epp: I have a point of order, Mr. Chairman. Mr. Williams had only four minutes and it's only twenty to one.
The Vice-Chairman (Mr. Marchand): Mr. Williams and Mr. Epp have had some six or seven minutes in prior periods.
Mr. Epp: Oh, I see. So we're paying back the loan.
The Vice-Chairman (Mr. Marchand): Well, in a way, yes.
Mr. Epp: No interest?
The Vice-Chairman (Mr. Marchand): No interest charge at all.
Mr. Epp: Thank you.
The Vice-Chairman (Mr. Marchand): Mr. Lastewka.
Mr. Lastewka: As the departments do their reshuffling of programs and people, who is monitoring it to make sure we're not just going to become top-heavy, but are also going to have reductions at the top?
When I look at page 2-50, I'm not sure how to read how those reductions are happening in the executive and the high administrative areas. Is there some mechanism that's monitoring at the end of the day? Is there a report card saying, yes, we've had a good distribution?
I know in large corporations, when sixty or seventy people are taken out of a program, automatically so many executives are taken and so forth. Is that happening in government?
Mr. Eggleton: We're not actually getting down to quotas, but we are bringing to the attention of deputy ministers and their departments that we expect proportionate cuts. If we see a disproportionate situation, then we're going to act on it. We're going to have regular reporting on that to ensure it is... I would imagine, though, that each department that has to reduce a dollar figure as opposed to a number of employees would find the higher the salary the more savings there is.
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Quite aside from that, that's not the basis on which it should be done. It should be done on the basis of ensuring that there is a good organization there to run efficiently and effectively the programs and services they are going to continue to provide. In terms of the proportionate situation, we'll be looking at this on a regular basis, I can assure you.
Mr. Lastewka: While this program is going on, both the dollar reduction and the program reduction, my concern is that smaller communities - and I mean communities in the neighbourhood of 150,000 and less - are going to be hit a lot.
The Vice-Chairman (Mr. Marchand): Mr. Lastewka, that will be your last question.
Mr. Lastewka: Rural areas are going to be hit a lot. We're going to keep track in our 12 municipalities as to what's happening to each one of them. As far as the Treasury Board, are you looking at what's happening to urban and rural areas and communities, as all the departments start to make their announcements?
Mr. Eggleton: Of course we are. As I indicated earlier, dealing with individual employees and their needs. There's a training package of up to $7,000 to help them in terms of their adjustment into the community. There are going to be labour-management committees in different communities that are also going to assist those people to adjust.
We'll also be looking to the private sector to be involved in this exercise as well. We are providing funds for some communities. For example, we've provided in the National Capital Region a program to be operated under Human Resources Development that will focus on the community adjustment aspect of it, the impact on the community.
While we're dealing with the individual, primarily, here at the government end, there is the impact on the community that has to be considered as well. Those various instruments, I think, should all help, the community adjustment package, the training component as well as the labour-management committees at the local level.
The Vice-Chairman (Mr. Marchand): Thank you, Mr. Minister.
I want to clarify the time factor. I noticed it bothered you, Mr. Epp and Mr. Williams. In earlier rounds you did, in fact, get much more time. This is not a regular round. The third reason is that the minister has to leave; he's pressed for time.
Mr. Williams: Aren't we all?
The Vice-Chairman (Mr. Marchand): Yes, indeed. I didn't even make use of my time to ask questions. I had some further questions.
Mr. Lastewka: We thank you for that.
The Vice-Chairman (Mr. Marchand): I would like to thank you, Mr. Minister, for being here with your officials.
Mr. Williams: Mr. Minister, before the meeting breaks up, can I ask for a letter from the Treasury Board explaining the salary cuts and reconciliation with the estimate figures, because there seems to be some dispute as to whether they were averaging out to the $70,000 or $80,000? Therefore, I would like to have a letter to the committee from the Treasury Board.
The Vice-Chairman (Mr. Marchand): If this were baseball, that would be a foul ball.
Mr. Williams: But it's not. This is politics, Mr. Chairman. They did offer to give us the explanation, therefore I'm asking this committee to request that they please forward it to the committee.
Mr. Eggleton: Sure. No problem with that.
May I finally, Mr. Chairman, thank you and the members for this opportunity to be here. As well, thank you for the work you're doing in terms of the examination of the issue of contracting for services. It's a very big part of the budget. It's a very important part. We'll certainly continue to work with you. My officials will continue to work with you on that question.
The Vice-Chairman (Mr. Marchand): The meeting is adjourned.