[Recorded by Electronic Apparatus]
Wednesday, May 15, 1996
The Chair: Colleagues, I think we can begin.
I'd like to welcome the mastermind of government program review, the man responsible for a plan that had unprecedented deficit reduction. He's here today to share some of his secrets.
I'd certainly like to welcome you, since you're our first minister to come and share your secrets on your outlook document.
The floor is yours.
Hon. Marcel Massé (President of the Treasury Board and Minister responsible for Infrastructure): Thank you, Madam Chair. I'll try to make your statements factual by the end.
An hon. member: That's a tall order.
The Chair: I thought our colleagues would allow me a little bit of self-indulgence today.
Mr. Massé: First I'd like to introduce the people at the table with me. Peter Harder is the secretary of the Treasury Board and Theresa McKeown is the adviser of ministerial and executive services. We have a team of people ready to answer the more detailed questions, since undoubtedly there will be a number of questions to which I may not know the detailed answers.
I am pleased to be here today to discuss the Treasury Board Secretariat Outlook Document for the 1996-97 fiscal year.
The Secretariat has a dual role: it supports the Treasury Board as a committee of ministers, and fulfils the statutory responsibilities of the central agency of the federal government responsible for corporate management.
When we assumed responsibility in 1993, the government was struggling with two major economic problems: a deficit and debt that were out of control, and unclear roles and responsibilities for the federal government.
The strategic and operational objectives for the Secretariat were broadly defined in this year's Speech from the Throne, Budget, Main Estimates, and Getting Government Right documents.
The mandate to implement the government's Program Review and public service reform priorities brings a shift in emphasis for the Secretariat. We will review the Secretariat's structures and activities to ensure that the department can meet its new obligations.
Let me outline briefly the secretariat's four key priorities for 1996-97 and then outline what we're doing to meet these priorities. Here are the four: sustaining the program review of the secretariat; enhancing the expenditure management system and the business planning process; transforming the federal public service; and modernizing the management, policy and legislative framework.
First, to sustain the program review of the secretariat, we are at present reviewing the secretariat's structures and activities. The goal is to become strategic and policy-oriented and to focus on helping departments to achieve the desired results rather than imposing centralized controls. This requires a shift from a control orientation to leadership facilitation. We will of course continue to have the controls needed to ensure that we spend Canadians' tax dollars wisely and account for them.
Our resources will be shifted to reflect these priorities, especially for program review and public service reform. Overall we will reduce the secretariat's operating budget and full-time equivalents by $14.1 million and 144 full-time equivalents over the next three years. Combined with the cuts made in the last fiscal year, this represents a reduction of 21.6% resulting from program reviews 1 and 2.
The second priority will be strengthening the Expenditure Management System to "get government right".
The fundamental Expenditure Management System principles of ``reallocation'' and ``no reserves'' remain sound. However, we need to improve the system of reporting on expenditure management to strengthen the focus on long-term results and to assist parliamentarians in assessing the spending plans and performance information of government.
This year we will be consulting with parliamentarians on their needs for expenditure management information, and putting forward ideas to make the information we prepare more timely, efficient and relevant.
For example, this year's Estimates contain six departmental Part IIIs designed to test new approaches to do this. We will be evaluating these pilots with a view to their expansion, and examining better ways to provide improved performance information via, for example, fall performance reports presented to Parliament.
Our third priority is implementing public service transformation. As the employer, Treasury Board has the responsibility to ensure that the public service remains modern and responsive and that its service delivery focus is enhanced. We will work with departments and other service delivery partners to identify and adopt new, flexible and efficient options to deliver services with closer links to clients.
During 1996-97, legislation will be proposed to create three new service agencies to deliver programs and services that offer the best value for taxpayer dollars. We will also consider other candidates for alternate service delivery options on a case-by-case basis.
We need to work with public service employees and their unions and involve them in the change process. In consultation with unions, departments and other key partners, we will seek to redesign the collective bargaining process to deal with all issues of cost to the government, of value to employees and of concern to Canadians. We will also streamline the classification system, which was created more than thirty years ago.
Our fourth priority is to modernize the public service legislative, regulatory and policy framework to ensure that it reflects our changing environment. This year we will review the four statutes that form the basis for the management of the public service - the Public Service Staff Relations Act, the Financial Administration Act, the Public Service Employment Act and the Public Service Superannuation Act - to identify the necessary changes.
At the same time we will be making these framework improvements, we will improve accountability for results within the framework.
The framework will be integrated with the initiatives we now have in place. I will report to Parliament on government review and we will use the business planning process to generate better results information.
This new vision is based on the federal government recognizing its true spending capacity and understanding its priorities clearly. These items broadly outline the major priorities facing the Treasury Board Secretariat for the 1996-97 fiscal year.
I will now be pleased, Madam Chair, to answer any questions you may have.
The Chair: We will now proceed to questions. We will start with Mr. Fillion of the Bloc Québécois.
Mr. Fillion (Chicoutimi): I want to thank the minister for his presentation.
The minister spoke of four key priorities. I would like to focus on the third one, namely transforming the federal public service. We all recall the program put forward to cut 45,000 public service jobs, a program for which $2.3 billion has been allocated.
This week, we learned from a study conducted by two Carleton University professors that this program may not have been the best approach to take. In fact, you are reducing the size of the federal public service with taxpayer dollars by offering employees buyout packages under the early retirement or early departure programs.
Before deciding to go with this program, did you study the impact of attrition on public service employment levels? Did you conduct these kinds of studies before deciding to spend $2.3 billion?
Mr. Massé: Yes. I recall that at the outset, when we were looking at the size of government and examining the situation in each individual department, obviously we thought of proceeding solely through attrition because that would have been easier for us. We would not have had to spend this money and we could simply have waited until people left and not have replaced them. Then we could have made the required changes.
However, this solution creates two problems. Firstly, those who are leaving may occupy positions that we wish to maintain once we have redefined the roles and responsibilities of government. An engineer who reaches the age of 65 and retires cannot be replaced by a biologist from the Department of Fisheries simply because he is leaving and has to be replaced. Many essential services have been maintained, while many others have been substantially scaled back. Thus, the qualifications of those employees leaving through attrition as well as their particular sphere of activity may not necessarily correspond to the cuts that we wished to make.
Secondly, the attrition rate is a variable. If you look at the methodology used by the two professors, you will note that they used as a basic variable the average rate of attrition in the public service. As it happens, in recent years, the public service has been downsized considerably. Furthermore, during economic hard times, the rate of attrition declines considerable. Clearly that is what happened. We went through a cycle where the unemployment rate was high and where few jobs were available outside the public service. Consequently, fewer people were retiring because when jobs are scarce elsewhere, people tend to hold on to their public service jobs.
In order for us to make the cuts we wanted to make, the qualifications of the employees that we wanted to replace would have had to correspond to those of the employees who were willing to leave and this was not the case. For this reason, we concluded that we needed an equitable system which would enable those who had to leave to do so and which would allow us to keep those elements that we needed in the public service.
Mr. Fillion: Did you consider any other scenarios? For example, I'm thinking about worker mobility. Worker mobility could have been facilitated if some of the $2.3 billion had been used for training. I understand that people do not all have the same qualifications. However, on average 8,000 people leave their jobs through attrition every year. Couldn't we have used this money to train people in order to improve their mobility and qualifications instead of causing all of the upheavals that we are currently seeing?
Mr. Massé: That's an excellent idea and we did follow through on it. We increased the training budget. For example, Treasury Board set aside several million dollars to assist workers who were willing to be and capable of being retrained so as to minimize the number of layoffs.
This year, you will note that we have improved pension portability provisions to allow for worker mobility. Overall, 14.1% of positions will be abolished, while government will be downsized by approximately 22% during the program review phase. As you can see, we are reducing the size of government more than we are reducing staff levels, precisely because we have been able to redeploy people to other areas as a result of our training programs.
Mr. Fillion: Madam Chairman, the minister stated that he considered options other than the one retained. Could the committee possibly obtain copies of these studies along with the costs of each potential option?
Mr. Massé: During the program review, I saw lists corresponding to staff cutbacks for each department, but I don't know if we can access the information contained in these lists which are confidential, obviously to protect employees.
Mr. Fillion: I'm talking about more than just lists. I'm not asking you to give me lists of employees. You examined two, three or four scenarios before arriving at your decision. Could we know what these scenarios were along with their respective costs? I'm not asking you for employee lists.
You must have evaluated these scenarios before making a final decision. There must be documents in existence somewhere. For example, what about the scenario which would ensure worker mobility through training?
Mr. Massé: I won't describe for you the way a cabinet committee works, but essentially what we did was examine the program review. Of course, we consulted a stack of documents for each department under consideration.
My deputy minister informs me that these documents are confidential and that they are the property of Treasury Board because they were prepared by government employees for decision-making purposes. As such, they are not public documents.
Mr. Fillion: Could you describe another scenario for me? I don't see anything confidential in that.
Mr. Massé: Yes, but these are two issues...
An hon. member: Exactly what kind of information are you looking for?
Mr. Fillion: Nothing in particular. Before a decision is made, different options must necessarily be weighed.
Can you tell us how you arrived at the decision to spend $2.3 billion on retirement incentive packages in order to cut 45,000 jobs from the public service? I merely want to know why you took this action.
I think it's important to get some answers because several options were weighed and a choice was made. Could you tell us what these different options were?
Mr. Massé: I can describe the process for you, if you like, since I was in charge of the program review committee.
Mr. Fillion: I realize that.
Mr. Massé: The initial studies conducted were macroeconomic studies. What we did was to look at the government's accounts receivables. Of course, we made some basic assumptions as to the rate of growth, the rate of inflation, the elasticity of tax points and so forth. I'm not telling you anything you don't already know. The process is quite complex. We based our forecast on a series of studies of each of these components.
In this particular case, we forecast revenues and expenditures over ten years, taking into account several scenarios, including one where growth would be rapid and one where growth would be slow. This is nothing new to you either. We began by examining the status quo and we realized that the situation was untenable for the government. We then looked at what would happen if we made certain cuts. Finally, after submitting our studies to Cabinet at least twice, we arrived at a decision as to the appropriate size of the government in the long term.
We then proceeded to allocate available resources among the departments. This process involved a number of adjustments on our part.
Initially, the Minister of Finance and I met with each minister to advise them as to the resources that would be allocated to their department over a four-year period.
In order to determine the resource allocation level, you have to look primarily at the priorities of central agencies. After initially determining the allocation level, the Program Review Committee proceeded through three stages.
In stage one, it determined for each department, based on the allocation level, which responsibilities that department would keep and which it would lose.
Both sides had their own list of priorities. After focussing on each individual department, a process which took several months, we weighed the fact that the responsibilities of certain departments ranked higher on the priority list than some of the responsibilities that we were planning to maintain or cut in other departments.
In stage two, we established the relative priority of the responsibilities of various departments and reallocated resources.
Once we had drawn up a blueprint, we submitted it to the Prime Minister's Office for a final decision on resource allocation.
Each of the three stages involves some consequences for employees. That is what interests you. If you decide to cut $3, $4 or $5 billion from a department's budget, the department's activity profile will change and the consequences will be felt by the employees who will be leaving.
You will then have some idea of the number of people who will leave through attrition. We are not talking here about the average rate of attrition, but rather about the rate of attrition for the period of time during which the program is in effect.
In the case of the most affected departments, it was clear that such significant staff reductions would be impossible unless special programs were in place. In certain other departments, no special programs were required to reduce the size of the workforce.
This was the approach taken, based on whether or not we were dealing with a most affected department.
Mr. Gilmour (Comox - Alberni): On a point of order, Madam Chairman, could we have shorter answers, or we're not going to all get our chance here.
The Chair: I've been watching the clock. I just felt that the minister should be permitted to finish his answer before.
Mr. Gilmour: Okay. Tonight?
The Chair: Thank you. I know that we want comprehensive answers here.
I understand, Mr. Gilmour, you're passing your time to Mr. Williams. Welcome.
Mr. Williams (St. Albert): Thank you, Madam Chairman. Maybe I can keep the questions short. Perhaps I could indulge the minister to keep the answers kind of brief as well.
Thank you, Mr. Minister, for appearing in front of the committee.
I noticed in The Ottawa Citizen in the last couple of days that there have been a couple of articles on the buyouts. They said, in fact, that perhaps the money could have been saved after all. There's a study coming from Carleton University saying that perhaps you didn't need to spend the money. And believe it or not, Mr. Daryl Bean, the president of the Public Service Alliance of Canada, is saying that perhaps you didn't have to spend the money. It was $2.3 billion. How do you tell the taxpayers of Canada that they got value for their money?
Mr. Massé: First, you should ask Mr. Bean why he made that statement. I'm sure that the people in his union who benefited from it may not agree with him.
Second, I can give you short answers, but you'll have less information.
There are two basic reasons why the rate of attrition was insufficient. The first one was the mismatch of jobs.
Mr. Williams: No, I'm talking about the cost of the buyout, which is $2.3 billion.
You have explained the attrition situation. But, for example, a civil servant with five years of experience gets a buyout equal to 20% of the total money they've earned over five years, which is the equivalent of 20% of all the earnings, which is very rich.
Mr. Massé: I'll give you two elements of an answer. The first one is to look at what happened in Ontario, where they were not generous. The costs of a strike are long-lasting and they affect social stability.
Second, the generousness of our programs - they were generous - corresponded to the types of programs given in major companies in the private sector.
Mr. Williams: What did you say - that they were generous? Would you table the analyses you made of the private sector to justify your buyout package?
Mr. Massé: No.
Mr. Williams: He isn't as generous as we might think, Madam Chair.
You've been laying off people and declaring them redundant because you don't need their skills any more. You're giving up to $7,000 as a training allowance to each person who leaves, but you also have $10 million in vote 15 for training. Why are we hiring people or providing additional training to people if we're laying off the people who have the skills we need?
Mr. Massé: No, no. In some cases the people we don't need any more - this is because we're getting out of a specific field, for instance - need money to be retrained to take a job in the private sector. Once they tell us which kind of job they're hoping for and what kind of training they need, then there is training for them to get out. However, there are people in the system - this is part of a question asked before - who, with some training, will be able to remain within the system.
Mr. Williams: That's the $10 million.
Mr. Massé: That's the $10 million.
Mr. Williams: So you're keeping those who aren't fully trained and laying off those who need a skill to go work in the private sector.
Mr. Massé: No. We are letting people go if they have skills that are no longer needed and need some retraining to adapt to a private sector job but would not be able or willing to take the training to be readapted to an internal job. For instance, biologists who were in the Department of Fisheries may need some specific type of training to be able to get into a chemical company in the Toronto area.
Mr. Williams: Are you going to eliminate the bilingual bonus, as recommended by the Commissioner of Official Languages?
Mr. Massé: This is not a matter for me alone; this is a matter for the whole cabinet. You will note that in the past, notwithstanding the advice, successive cabinets have decided to retain the bilingual bonus. I feel that these reasons still operate, but I cannot prejudge what cabinet could decide in the future.
Mr. Williams: What's your recommendation to cabinet?
Mr. Massé: That's part of cabinet solidarity. I cannot tell you that.
Mr. Williams: You are lifting the wage freeze, but you've taken away arbitration. Therefore, you must have some kind of idea in your mind as to what you're prepared to give the unions. If you can't agree on that, you're going to legislate that. How much?
Mr. Massé: First, we may not legislate because we -
Mr. Williams: You may agree.
Mr. Massé: - have not decided what method we will use.
Second, yes, we have decided to suspend binding arbitration for three years. That's basically because our experience with binding arbitration has been that there is a tendency to look at what has happened in the private sector and give an average of the types of results that have been given over the past few years. There is also a tendency to make a compromise between the positions of the two parties. We believe that this is not proper in the next three years.
Mr. Williams: So you're not going to compromise. You're going to legislate if it comes down to that.
Mr. Massé: We hope to be able to negotiate rather than legislate.
Mr. Williams: Are you going to negotiate away job security?
Mr. Massé: Job security is now a relative notion. We will apply the principles that permit the government to implement its objectives. That's exactly what we've done during program review. Circumstances will undoubtedly change over the next few years. We will have to look at our position again.
Mr. Williams: Are you going to introduce the concept of merit into the negotiations so that people who perform above average are going to get compensated accordingly?
Mr. Massé: As you know, we've already introduced performance pay in the senior ranks. We intend to continue with that at least until we change our minds.
Mr. Williams: You have been meeting your targets on downsizing so far, primarily through laying off part-time staff and term employees and so on. Will you be reaching your targets in this quarter by claiming a reduction because of the 6,500 people who've been moved over to NAV CAN? Is that part of your reduction in this quarter?
Mr. Massé: We mentioned the 45,000 positions that would go in the public sector. We included NAV CAN, of course. So that's part of the 45,000.
Mr. Williams: I was talking to Mr. Bean at the finance committee last week, and I was concerned about the $200 million - again, value to the taxpayer - paid in severance pay to people moving over to NAV CAN. They didn't lose their jobs; they just got a new employer. He said that severance pay is a right. People get paid severance pay from the civil service even if they don't get severed; i.e., they get it as a retirement bonus if they never get severed along the way. He said that this is actually going to save you money, because you're going to pay it for the service up to the time when they transfer rather than for the length of service in the civil service and in NAV CAN.
Can you justify to the taxpayer why we're paying severance pay as a retirement package?
Mr. Massé: First, it's not severance pay as a retirement package. Severance pay is a right, and it's a right that's in the law, that's acquired, so many weeks per year -
Mr. Williams: Even if they don't get severed; i.e., they retire?
Mr. Massé: You had in this case an agreement that was negotiated with the unions, and severance pay was negotiated as part of that. However, you must note that this is not the rule that we are going to apply in other cases.
Basically, what you are getting is a deferred payment that is paid at the time when employment with the federal government is severed. So there was discussion; there was a negotiation. That was part of the deal for the NAV CAN people. But the normal deal is the one you would advocate, which is that severance pay that's accumulated is transferred into a trust fund if there is a transfer to a private company. It is then paid only when severance takes place, with the successor delivery system.
Mr. Williams: Therefore you have reservations about what was given to NAV CAN. Do you think the taxpayers got value for their money there?
Mr. Massé: It was negotiated, and therefore they got value for their money, because that's the process of negotiations. But I prefer the system whereby it's paid after the alternative service delivery agency makes the severance.
Mr. Williams: Again on NAV CAN, you talk about accountability, modernizing the services, and so on. NAV CAN has been set up as a new hybrid type of organization. It's neither a crown corporation nor in a private sector competitive environment. I don't know exactly what to call it, but you'd call it a not-for-profit agency. In my opinion, it is totally unaccountable to anybody, even with the reach of the Auditor General of Canada.
Are you concerned about it? Why were they allowed to move into a non-competitive environment with absolutely no accountability to the government, to Parliament, to anybody, and how do you explain that to the taxpayer?
Mr. Massé: First, it will be a regulated environment.
Second, they will have to satisfy the requirements of a large number of customers. If they don't, then they will be submitted to quite a number of market pressures.
Mr. Williams: It's cost-plus non-competitive.
Mr. Massé: It's not cost-plus non-competitive, because they will get into a position in which the clients they serve will be able to put a considerable amount of pressure on them.
Mr. Williams: Do you agree that, since they are a creation of government, the Auditor General should have had a say in being able to report back to Parliament on them?
Mr. Massé: Basically, the type of oversight that will apply to them will be done partly through a market mechanism and partly to our own judgment.
By the way, the clients in this game are people who are quite vocal on whether the types of service they are rendering and the prices they are charging are proper.
In this case we wanted to let the users have the greatest possible say. The situation is a bit similar to telephone companies, where you have private companies that operate within a regulated environment and where users themselves have a say on the type of service they get and on the prices charged to them.
The Chair: Thank you.
Mr. Bryden, you have ten minutes.
Mr. Bryden (Hamilton - Wentworth): Thank you, Madam Chairman.
I'm delighted to have you before me today, Mr. Minister. I have been pursuing a line of inquiry over several sessions of this committee, and I think you are the perfect person to give me some real insights. This pertains to our aboriginal set-aside policy. This is a policy program that seems to have been developed without a great deal of consultation that I'm aware of. Indeed, I only discovered it at this committee.
I'm interested in several things. First, how much is involved in the program? How much is being set aside? Second, I'd like to discuss a little bit of the philosophy of the program. Can you tell me first how much is being set aside for aboriginal businesses? What's the financial target of government contracts?
Mr. V. Peter Harder (Secretary of the Treasury Board): Mr. Bryden, you raised this when Mr. Little was here -
Mr. Bryden: Yes.
Mr. Harder: - and he committed at that time to put the response to some of your questions in writing. I have a draft of that response.
Mr. Bryden: It has not arrived.
Mr. Harder: It hasn't arrived, but perhaps I could ask Mr. Little to speak to it. I can assure you that it will be on its way as soon as possible.
Mr. Bryden: Fine. Go ahead, please, Mr. Little, if you would.
Mr. Bob Little (Deputy Secretary, Deputy Comptroller General, Financial and Information Management Branch, Treasury Board Secretariat): Sir, you asked how much the set-aside target was. The target we're looking at is 3% in terms of being able to move appropriately to contracting with aboriginal businesses on the basis of a competitive process, or, in other words, on fair value being assigned to the contract.
Mr. Bryden: Three percent of what? Can you put a dollar figure on that? Three percent doesn't mean much to me.
Mr. Little: The assignment is sort of dependent on 3% of... Let's say at some points, in certain departments, they already exceed 3%, so we're trying to move to areas where more can be provided in that particular direction. So how much it would be varies by department.
Mr. Bryden: Are we talking about hundreds of millions? What are we talking about? Is it tens of millions?
Mr. Little: In the final stages, we're probably talking about something in the order of $300 million.
Mr. Bryden: Now, Mr. Minister, coming back to you, if I may, what we can discuss is the philosophy behind this program. And I have a document here that is a Treasury Board document to departments and agencies telling about the program and its implementation. It is about new policy and reads:
Mr. Massé: The answer is that maximum value is not defined purely as a monetary value. You're looking at trade-offs. And the trade-offs - and now you know the rest of the argument - will include questions such as social stability, the effect of very high unemployment rates in certain groups of the population, and the need to give more support to groups that are more vulnerable in our society, at least for a while until they are able to fend with the rest of society.
What you try to do is first get the maximum value possible. We define value as including questions such as rate of return, but also social stability and other costs of government. If you get a very high percentage of the aboriginal population in jails in Manitoba, we as taxpayers pay in any case for the vulnerability of that group. The act of giving them jobs, even if they cost a bit more, may be a cheaper way of reaching our objectives.
Mr. Bryden: Thank you for an excellent response, which I have great sympathy for.
There is another philosophical question this program seems to collide with. How do you reconcile it with the spirit of non-discrimination that exists in the Canadian Human Rights Act with regard to the workplace, and for that matter the charter? Aren't we dancing on very delicate ground when we discriminate in favour of one group, which obviously implies discrimination against another group?
Mr. Massé: Yes, we are. Affirmative action is of that type, but affirmative action has been judged in a number of cases to be a proper application of government judgment, even though it does what you say.
Mr. Bryden: I have another question along this line. Is this program going to end somewhere? Is it a temporary thing, or do you see it as something that will go on indefinitely, or at least in the foreseeable indefinite future?
Mr. Massé: I would hope that it could end at the time when the vulnerability of that specific group has been reduced to something close to the average of the rest of Canadians.
Mr. Bryden: So there's no perceived end to this; you've not calculated a termination of the program.
I have one other question on this line. Again, you're on such delicate ground here. How do you determine the race of a business? How do you determine whether a business is one race or another race? It would seem to me that this is fundamental to how your program is going to work.
Mr. Massé: I guess the main rule is what the race of the majority of the owners is or what persons have the majority shares in the business.
Mr. Bryden: How do you determine that as a government awarding contracts? What do you do? Do you ask them to take a DNA test? Do you ask them to submit to that? Do you ask them for their status cards? How do you determine the race of any company?
Mr. Massé: I do not know the details of that program, but basically you have a list of status Indians, and they have their card. Therefore whoever is in charge of the business would know that. You would base it on either an affidavit, if there is no other proof available, or whatever the best level of proof is.
Mr. Bryden: Doesn't it get in the way of the Charter of Rights when you start asking people to declare their race in order to qualify for some kind of government contract? Don't you get into trouble?
Mr. Massé: I presume the owner of the business would know a number of these people himself. You see, obviously the government has to tread on delicate ground there too. That's the nature of affirmative action.
Mr. Bryden: I'll just ask you one more question in this direction, because the philosophy is very important when we're looking at a program. It does have to meet some scrutiny.
I can very much sympathize with the principle of trying to encourage a group in society that may be having difficulty, say in the province of Manitoba, or may be having difficulty because it's located in remote areas of the country. I do have real difficulty when we're looking at a program that would seem to favour people in urban centres who do not have the same cultural connections or cultural links to the people living on the reserves in this country or in remote communities.
Does your program not give an advantage to people in urban centres who have very little cultural claim to being aboriginals? In other words, what are you going to do about that and do you want to do it?
Mr. Massé: I'll answer in terms of a general principle. I've been in the position of employer in a number of organizations that have had large groups of people. When a specific group is more vulnerable than another - and the statistics will show what the vulnerability is - I'm personally in favour of giving them more of a chance to get employment, simply because not only will the market allocate jobs in terms of objective criteria, such as ability to do it, past experience or the type of preparation you have in terms of level of education, but also people will naturally bring in their own sets of values and past experience. Discrimination is often the result of applying your own set of traditional values without knowing that if you do this, you will tend to hire people who have the same experiences, the same values, the same past, and in the end, the same educational background and the same culture as you have.
When you're looking at it from the point of view of a government that has to encourage a pluralistic society, you have to be careful to counterbalance that natural tendency and to give minority groups who are vulnerable the ability to get more jobs.
The Chair: Make this your last question, please.
Mr. Bryden: I'd like to make a point on this, Mr. Minister.
When we talk about Bill C-31 aboriginals, those who acquired status as a result of legislation that I think was passed in 1982, we're talking about a great many people who live in urban centres and have been there for several generations. They have very few identifiable cultural links to their racial origins, if you will, and indeed, sometimes they absolutely have the financial and economic advantages of the mainstream society of which they are very much a part.
Yet your program does not make a distinction. That is, it would favour these people as well as the aboriginals on reserve. I take it that is the case.
Mr. Massé: I think your comment is proper.
Mr. Bryden: Thank you very much, Mr. Minister.
Mr. Fillion: Mr. Minister, judging from your fairly lengthy response, I understand that considerable work was done within the public service to ensure that the level of cuts was different in each department.
In looking at the statistics on young people, I noted that when you were Clerk of the Privy Council, young people under the age of 29 made up 27% of the public service. Today, this figure has slipped to 10%.
Today's youth face many problems. The jobs available to them in the public service are part-time or term jobs. Your program targets first and foremost temporary jobs and contract workers. How do you react to the fact that young people make up only 10% of the public service? Don't you think one solution would have been to take a portion of the $2.3 billion and use it to help these young people find decent jobs?
Mr. Massé: The government has other programs for young people; just look in the Budget or in the Throne Speech. There are two sides to the story. When you consider the number of term employees affected and when you look at the latest Treasury Board report which covers the period up to the end of December 1995, you will note that a large proportion of the 18,200 or 18,300 people who were laid off were term employees.
This report covers a nine-month period. Basically, what you have are temporary employees hired to work during income tax time. They get more coverage because we are talking about a nine-month period.
This point needs to be further clarified.
You are correct in saying that the public service is aging. Statistics bear this out. Over the past15 years, in particular since 1984, budgets have tended to keep employment stagnant to say the least.
When a hiring freeze is in place for several years - in this case, it has been almost12 years - you necessarily restrict the number of new arrivals and you increase the average age of public servants. That is what has happened. The effects have been two-fold.
First of all, fewer positions are available in the public service for young people. Secondly, after a certain time, a high number of people retire and all of a sudden, you find yourself with a very youthful public service because you have a new pool of people. However, this situation doesn't last for very long.
You are correct in saying that the public service is aging, but this problem must be resolved through programs which directly encourage the hiring of young people, not through the use of the public service which is being reduced to a more manageable size.
Mr. Fillion: What you're telling me is that instead of trying to eliminate the jobs of people who were on the point of retiring, you tried instead to encourage people who were younger to leave. The figures back this up.
Mr. Massé: No, that's not it. Consider the two programs that were implemented. To date, the most popular one has been the early retirement incentive program. It has reduced the average age of public servants and this has been accomplished by leaving incumbents in place, not by hiring young people.
Mr. Fillion: I will ask you a series of questions and I would like you to tell me if you can provide me with some written answers.
Since the program's inception, how many positions have been eliminated through layoffs or through the elimination of vacant positions? Can you answer that question?
Mr. Massé: Yes.
Mr. Fillion: How many persons have opted for the EDI or ERP program? Could you also provide us with these statistics?
Mr. Massé: Yes.
Mr. Fillion: This information isn't confidential then?
The Chair: The member's request has been duly noted.
Mr. Gilmour: Thank you, Madam Chairman. I certainly appreciate the minister appearing in front of the committee.
Mr. Massé: It's a pleasure.
The Chair: Such a friendly committee.
Mr. Gilmour: Yes, and I wasn't showing any disrespect when I was encouraging you to shorten your answers. I just wanted the opportunity to put more questions in.
The Treasury Board provides advice to the government on policies, legislation, activities and resources of crown corporations. It also prepares an annual report to Parliament on these crown corporations. We've had a number in our committee.
We had CMHC appear last week. A private company is basically accountable to its shareholders. I asked who CMHC is accountable to, and the answer was ``the people of Canada'', which I had a hard time with. Perhaps you can give us your view on the relationship between the CEO, the board and the minister. Who is accountable and where do you see the buck stopping when it comes to a crown corporation?
Mr. Massé: Accountability is split in cases like that. Of course that's the case with all the crown corporations. And it will be the case with the other alternative service delivery agencies that could be created.
Basically, the accountability is determined in the law itself that creates the crown corporations. The minister remains responsible for the overall policies and for the approval of the corporate plan and the annual plans that are presented to Treasury Board. Therefore the general accountability, which will be defined in very precise terms in the act itself, belongs to the minister. But the accountability for the day-to-day spending of funds and the objects on which they are spent is basically with the board of the corporation.
Mr. Gilmour: That's fine. I just have some difficulty, when some of these corporations wander off the rails, as to who really is accountable and responsible, because it seems to be falling between the cracks.
Mr. Massé: It is an important question.
By the way, it's a question where very often there is a grey zone.
If you look at social housing, for instance, the policies that we reviewed in program review and that were then approved by cabinet are policies about what is the size of the program and what kinds of units or what kinds of programs the money would be spent on. So this type of policy is decided outside the corporation and becomes a given for them, but then the administration of specific amounts of money, clients, and so on... The minister doesn't touch that, and therefore is responsible only as a fiduciary. In other words, if he's chosen reasonably good board members, that's probably the end of his responsibility.
Mr. Gilmour: The Treasury Board also provides advice and support to the government with respect to privatization of crown assets. Treasury Board estimates indicate that the board provided advice to the privatization review committee for Canada Communication Group. This committee was established in July 1995 and was to be open and transparent, yet nothing has been heard from them since. Can you shed some light on what is happening today?
Mr. Massé: I'm not exactly an expert on that file, because it's the Minister of Public Works who would know that well. So I'll give you the story I know and perhaps let my officials give more detail.
In this case a committee was formed that did report on what kinds of options were open in terms of privatization, commercialization, and employee takeover. These were the options available for the Canada Communication Group. We then discussed in cabinet committee the pros and cons of these various options, and we agreed on a course that should become public in the next few weeks.
The Chair: That warrants a question that you might wish to pose to the Minister of Public Works.
Mr. Harvard (Winnipeg St. James): Mr. Minister, I have both a comment and a question. It has to do with the aboriginal set-aside policy.
It probably doesn't come as any great surprise to you that I'm a supporter of affirmative action, but even the best of policies can have their problems. It seems to me that if this particular affirmative action program was successful in contributing to the economic health of certain aboriginal enterprises, then it may not be too long before these enterprises, through sheer competitiveness, would be able to garner the $300 million in business that Mr. Little has said would be set aside. If that was the case, and if that $300 million was not moved or changed, it may soon come that you won't need that particular affirmative action program any more.
I've always believed that the best kind of affirmative action program is one that is indeed self-eliminating.
Human nature being what it is, there is always the possibility that some new rationale can be found to extend that beyond the $300-million figure: $300 million today, $600 million tomorrow, and God only knows what it will be the day after that.
That's my observation, Mr. Minister. And here's my question: should we consider - and I know this is not by statute, but by regulation, as it were - some kind of sunset clause so that at a time when there is really no more need for it, it is simply done with?
Mr. Massé: As you know, sunset clauses have been applied to a number of programs. I'm thinking of health and the AIDS program, for instance. I think our experience with sunset programs is mixed. At the end you always have to remake a judgment as to whether that program is still useful, still needed, and so on.
So you don't sunset all of them, or even a majority of them, because you always have to make that decision about the need. It has the advantage of making the decision-makers aware that unless they remake the case, the money will disappear. But I think that role of making the decision-makers aware of their various programs and the need to revisit them all the time is being done at present through the program review.
As you know, every department has to come up to Treasury Board now with a business plan. In that business plan, it has to indicate what its core responsibilities are and it has to rejustify all of the money it spends on other activities. Because of that, I think in the next few years we may obtain results that are at least as good by forcing departments to downsize, to review their expenditures, and to justify their expenditures, because there's now a lot of competition between these programs.
Mr. Harvard: I have one more question that really has to do with the mandate review, the downsizing of government and, to use your term, getting government right.
I happen to believe that government is a noble institution. I consider it to be a vital and necessary force in our lives. However, I guess there isn't a day that goes by when it's not maligned in one way or the other, and it usually comes from friends like ours across the way. And I don't say that pejoratively, I just say that factually.
And I think the downsizing itself creates certain problems that are unintended, but... My guess is that there are a lot of Canadians who look at government today and look at the way it's being reshaped, and ask themselves if they really want to pursue a life in the public service. At least I would assume that.
So, Mr. Minister, when you're looking at the downsizing of government and considering its role in contemporary life, do you really draw a line and say you will not cross that line because that would impair the vitality of government and would really undermine government? Do you say you don't want to send out a message to Canadians that government does not have worth any more? Do you say that you want the best brains in the country - at least some of them - to work in the public service?
Mr. Massé: The answer is yes. And that happens to be an extremely important question, especially when governments change as quickly and as much as they do.
By the way, of all the western countries we're not the only country to make the types of deep reforms that we've had to in the last few years. New Zealand has had to abolish two-thirds of its public service, not 14% like we've been doing. And the answer is that the international competitiveness of countries nowadays depends very much on how efficient their public sectors are. The public sector must be seen nowadays as an engine of growth and also as an engine of social stability that has economic consequences.
I'll give you one example. There are a considerable number of American companies that are now locating in Canada because of the health system that we have. You know that. You've seen that. But they do it not because they love the health system, but because it so happens that the cost of health care in Canada for their employees, when covered by company plans, is lower in Canada than it is in the United States, and that gives them a competitive advantage.
The sum of all the programs that have to exist in a country is determined, of course, by the values of the people of that country - sharing through social programs and so on. It's also determined by the place that country wants to have in terms of the global community and its competitiveness.
There is no doubt that we now have to start rebuilding the internal reputation of our public service. It has been maligned for years. People have brought to the surface a lot of examples of waste, a good number of which were true, and as a result, the desire of people to move into the public service has indeed been reduced. We must fight that, because in the world that's coming, we will need a competent public service even more than in the past, and the incomes of average Canadians will be determined by the competency and the quality of their public service.
The Chair: Mr. Minister, I know you've been very generous with your time, but we have a request for one very short question from Mr. Bryden.
Mr. Bryden, you have to share your time with Mr. Fillion, so it has to be very quick, because the minister has to leave.
Mr. Bryden: That's all right. It will be very quick.
Again, this document says businesses seeking contracts as aboriginal businesses are required to certify that they are indeed what they say they are. In this document it says:
I thank you very much for your patience.
The Chair: Rhetorical questions save some time.
Mr. Fillion: I have a very brief question, Madam Chairman. Quebeckers make up 22% of the public service. Under the proposed program, this percentage will decline. At present, it stands at about 21.5%. Once the program wraps up, Quebeckers will make up 20.5% of the public service. Is that correct? This would represent a loss of 5,000 to 6,000 jobs.
Will you admit that Quebec has been hard hit by this program?
Mr. Massé: No. I have looked at the figures for the first nine months and they indicate where the 18,000 jobs have been eliminated; job losses in Quebec were slightly higher. I myself wondered why this was so.
One of the reasons for this was that reforms were carried out more quickly by the Department of Human Resources Development in Quebec than in the other provinces and this was responsible for the changes in employment levels.
I asked if ultimately, the impact of the program would be spread equitably among the various regions of the country, including Quebec. I was told that this would be the case. There is nothing in particular about the program which could result in a drop in the proportion of Quebeckers in the public service.
Obviously, I'm especially interested in this issue since almost 20,000 public servants live in my riding.
Mr. Fillion: We hope that today, the minister will...
The Chair: On behalf of our colleagues, I'd like to thank you for coming to reassure us that the treasury is well guarded.
I think we've had a first. I don't think we've ever seen Mr. Williams at this committee before, but he got in well over a dozen questions in ten minutes.
Thank you very much for coming. I hope you'll come back and visit us soon.
Mr. Massé: Thank you very much, and thank you to all the members.
The Chair: The meeting is adjourned.
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