President of the Treasury Board appearance at the Standing Committee on Government Operations and Estimates (OGGO) – Supplementary Estimates (B) 2023-24 – November 2023

Background

• The President of the Treasury Board tabled the Supplementary Estimates (B), 2023–24 in the House of Commons and in the Senate on Thursday, November 9, 2023.
• The Estimates are referred to various House of Commons standing committees, including to OGGO for TBS. In the Senate, they are all referred to the Standing Senate Committee on National Finance (NFFN).
• House committees may examine and amend the Estimates until three sitting days before the last allotted supply day (date not yet known). After that deadline, committees may conduct “subject matter” studies but can no longer amend the Estimates. There is no deadline for NFFN’s study, and NFFN cannot amend the Estimates.
• OGGO has invited the President and TBS officials to appear on November 30, 2023, as part of its study on the Supplementary Estimates (B), 2023–24.
• The OGGO appearance is expected to be fully in person, with the President and all supporting officials appearing in the room.
• NFFN has not yet invited the President and TBS officials to appear.

Day of: scenario (OGGO)

• The meeting is expected to begin at 3:30 pm. The President is scheduled to attend for one hour with TBS officials, and officials will remain for the remainder of the meeting to answer questions (4:30 pm to 5:30 pm).

Briefing binder

• A binder has been prepared in anticipation of the appearance, which the President’s office and supporting witnesses received on November 20, 2023. The binder provides an overview of the key government-wide items included in the Estimates, including refocusing government spending, settlements and compensation. The binder also includes material on key issues such as:
  • collective bargaining
  • the transition to Canada Life
  • growth of the public service
  • federal procurement and professional services

Supporting officials

• Annie Boudreau, Assistant Secretary, Expenditure Management Sector
• Karen Cahill, Assistant Secretary and Chief Financial Officer
• Samantha Tattersall, Assistant Comptroller General, Acquired Services and Assets Sector (Office of the Comptroller General)
• Stephen Burt, Chief Data Officer of Canada (Office of the Chief Information Officer)
• Marie-Chantal Girard, Senior Assistant Deputy Minister, Employee Relations and Total Compensation (Office of the Chief Human Resources Officer)
• Rod Greenough, Executive Director, Expenditure Strategies and Estimates Division, Expenditure Management Sector (second hour only)

Other relevant information

• OGGO adopted a motion to extend its ArriveCAN study (Canada Border Services Agency and TBS officials appeared on October 24). The Chief Technology Officer appeared on November 14.
• OGGO has extended its study on both diversity in procurement and on outsourcing of contracts. The outsourcing study heard from TBS and Public Services and Procurement Canada officials on October 3, 2022, and from public service unions on October 24, 2022. The unions were very critical of government outsourcing during their appearance. The diversity in procurement study began with a single meeting in October and is now in a holding pattern.
• OGGO has also adopted a motion:
  • to send for all contracts between a government department, agency or Crown corporation and GC Strategies, Dalian Enterprises Inc. or Coradix Technology Consulting, going back at least 12 years
  • that the unredacted documents be submitted to the clerk of the committee in both official languages in three weeks
  TBS has submitted the contracts by the deadline and will be submitting the associated Task Authorizations in the coming weeks.
• OGGO has also adopted a motion to undertake a study on the changeover of the Public Service Health Care Plan from Sun Life to the Canada Life insurance company.

Issue

Additional spending presented in Supplementary Estimates (B), 2023–24

Response

• Canadians and the parliamentarians who represent them have the right to know how public funds are being spent and to hold the government to account.
• These Supplementary Estimates present the first update on the Refocusing Government Spending Initiative.
• As committed to in Budget 2023, $500 million in travel and professional services funding has been refocused and removed from the 2023–24 budgets of 68 departments.
• Additional information about the Initiative’s refocusing will be presented in the 2024–25 Main Estimates and tabled in Parliament by March 1.
• Through these Supplementary Estimates, the government is also seeking parliamentary approval of $20.7 billion in new voted spending.
• These planned expenditures support a variety of government priorities, including:
  • support for Indigenous legal settlements and programs
  • compensation for federal organizations for collective bargaining agreements
  • military assistance to Ukraine
  • assistance to developing countries to address climate change
• Through these Supplementary Estimates, the government is also providing additional information on $3.9 billion in forecasted statutory expenditures.
• These forecasted expenditures support additional government priorities, such as:
  • the Canada Health Transfer
  • the climate action incentive payment
  • the Dental Benefit Act
  • the Dairy Direct Payment Program

Background

Supplementary Estimates present information on additional spending requirements that were either not sufficiently developed in time for inclusion in the Main Estimates or have subsequently been refined to account for developments in particular programs and services.

The Supplementary Estimates (B), 2023–24 present a total of $24.6 billion in incremental budgetary spending, which reflects $20.7 billion to be voted and a $3.9-billion increase in forecast statutory expenditures.

If approved by Parliament, voted budgetary spending would increase by $20.7 billion (9.5%) to a total of $239.3 billion. Much of the new voted spending is for:

• implementation of settlement agreements and related compensation (Crown-Indigenous Relations and Northern Affairs Canada):
  • $5.0 billion for the Restoule settlement
  • $1.6 billion to settle land-related claims and litigation
  • $651.2 million for the Federal Indian Day Schools settlement
  • $596.0 million for specific claims
  • $593.2 million to compensate Treaty 8 First Nations
• compensation and benefits for public servants:
  • Treasury Board of Canada Secretariat:
    • $2.1 billion to compensate departments and agencies for negotiated salary adjustments
    • $358.8 million for public service insurance plans and programs
  • National Defence:
    • $583.7 million for compensation and benefits for the Canadian Armed Forces
• military aid to Ukraine (National Defence: $500.0 million)
• coverage of non-insured health benefits for First Nations and Inuit (Indigenous Services Canada: $458.5 million)
• assistance for developing countries to address the impact of climate change (Global Affairs Canada: $430.0 million)

The Supplementary Estimates (B), 2023–24 also present $183.7 million in funding for Health Canada and Statistics Canada for the implementation of the Canadian Dental Care Plan. Health Canada is working with Sun Life to prepare for the plan’s launch.

These Estimates also show, for information purposes, changes in planned statutory expenditures. Statutory budgetary expenditures are forecast to rise $3.9 billion (1.7%) to a total of $240.1 billion.

The increase is primarily due to:

• $2.0 billion in payments for provinces and territories related to the Canada Health Transfer
• an increase of $425.0 million for the climate action incentive payment
• a forecast of $339.1 million for the interim dental benefit for children under 12 under the Dental Benefit Act
• $300.0 million for the Dairy Direct Payment Program to support dairy producers and offset impacts of market access commitments made under the Canada-United States-Mexico Agreement

The Supplementary Estimates (B), 2023–24 also provides information on the implementation of the $500.0-million reduction in spending on consulting, other professional services and travel, which was announced in Budget 2023. The full list of the implicated organizations and amounts is available online in the “Additional information” section.

Issue

How much is the Treasury Board of Canada Secretariat (TBS) seeking in the Supplementary Estimates (B), 2023–24 for program expenditures?

Response

• As a central agency, TBS is focused on managing government effectively.
• To support our broad government operations mandate, TBS is seeking parliamentary approval to increase Vote 1, Program Expenditures by $32.1 million.^{Footnote 1}
• These funds will support a broad range of people management responsibilities such as:
  • labour negotiations
  • human resources (HR) and pay systems improvements
  • Phoenix claims
  • litigation and class action settlements
• In addition, these funds will support our transition to cloud technologies and reprofile funds to implement Greening Government Fund initiatives.

Background

TBS will be seeking parliamentary approval to increase its Vote 1, Program Expenditures authorities in 2023–24 by $32.1 million. This figure includes an increase of $35.1 million of voted appropriations and a reduction of $3.0 million for various transfers.

Issue

In Supplementary Estimates (B), 2023–24, approximately $2.5 billion in requirements is presented for Treasury Board (TB) central votes.

Response

• Central votes support Treasury Board in its roles as the expenditure manager, employer and general manager for the Government of Canada.
• For example, these votes are used to reimburse organizations for costs associated with contingencies, government-wide initiatives, public service insurance, or compensation changes related to collective bargaining agreements.
• Government-wide initiatives in these Estimates include $17.6 million to fund a settlement reached for Phoenix-related litigation (Vote 10).
• Proposed funding of $2.1 billion is also included to compensate departments for collective agreements signed and other adjustments made between April 2023 and June 2023 (Vote 15).
• In addition, TB central votes in these Estimates include $359.3 million in proposed spending to help ensure the financial sustainability of public service group insurance plans in response to cost increases driven by price inflation and population growth (Vote 20).

Background

To support the Treasury Board in performing its statutory responsibilities for managing the government’s financial, human and materiel resources, a number of central votes (numbered 5 through 35) are required. Supplementary Estimates (B), 2023–24 includes additional funding for three central votes:

Issue

Budget 2023 delivers a refocusing of government spending to continue to serve Canadians most effectively, expanding on the Strategic Policy Review announced in Budget 2022.

Response

• The government is committed to responsibly managing Canadians’ tax dollars by ensuring that operations and programs are effective, efficient and directed toward key priorities for Canadians.
• Budget 2023 announced spending reductions of $15.4 billion over five years (2023–24 to 2027–28) and $4.5 billion annually thereafter, with savings being targeted toward the highest priorities for Canadians.
• Supplementary Estimates (B) includes information on the first block of these savings, reporting reductions of $500 million across professional services and travel for 2023–24.
• Planned reductions for additional years will be presented in the Main Estimates, to be tabled in Parliament by March 1.

Background

Budget 2023 proposes two measures to refocus government spending:

• reduce spending on professional services, travel and operations
• phase in a roughly 3-per-cent reduction of eligible spending by departments and agencies by 2026–27; comparable reductions will be applied to Crown corporations

In total, these proposals represent savings of $15.4 billion over the next five years and $4.5 billion ongoing.

• These measures are designed to target eligible discretionary spending and avoid making reductions where it is impossible (for example, legal settlements) or out of scope (for example, direct transfers to provinces).
• Since the release of the Budget, the Treasury Board of Canada Secretariat (TBS) has worked with organizations to determine the base of eligible discretionary spending for these reviews so that savings can be appropriately targeted.
• Proposals have been submitted to TBS and the work to assess them is underway. No decisions have been taken.

For 2023–24, there will be a $500.0-million reduction in spending on consulting, other professional services and travel. As these reductions are linked to professional services and travel, there will be no reductions in full-time equivalents or transfer payments. These reductions will be achieved by freezing the $500.0 million in the reference levels of 68 organizations for 2023–24. The full list of the implicated organizations and amounts is available online in the “Additional information” section of Supplementary Estimates (B), 2023–24.

More information on the reduction affecting 2024–25 and future years will be available in the 2024–25 Main Estimates and Departmental Plans.

Budget 2023 also proposes to reduce previously announced funding that remains unallocated or is no longer required, or to delay it where the pace of implementation is slower than originally envisioned. This will result in savings of $6.4 billion over six years, starting in 2022–23.

Budget 2023 also announces the introduction of cross-government program effectiveness reviews, to be led by the President of the Treasury Board. These reviews are important if government programs are to deliver their intended results for Canadians. The first review will examine skills training and youth programming to determine, by Budget 2024, whether improvements can be made to help more Canadians develop the skills and receive the work experience they need to have successful careers.

The Government of Canada already requires major programs to be evaluated regularly – at least every five years – to verify that taxpayer dollars are being used effectively and that government programs are delivering intended results.

Issue

Changes made to Estimates and other financial reporting to increase transparency and respond to recommendations and addressing the Parliamentary Budget Officer’s request for a fixed budget date that falls before the tabling of the Main Estimates

Response

• The Government of Canada is committed to making it easier for parliamentarians and Canadians to hold the government to account for its spending plans and decisions.
• Ongoing changes have been made to address comments received from parliamentarians to increase transparency of financial information and to make Estimates documents easier to understand.
• The government continues to welcome feedback on its documents and processes.

If pressed on a set date for the budget or including all budget items in the Main Estimates:

• Setting a specific date for presenting the budget would restrict the government’s flexibility to respond to unplanned or evolving situations.
• In addition, it would not be feasible to include all budget items in the Main Estimates, as many require further development and refinement before they can be approved by the Treasury Board and listed in the Main Estimates for parliamentary approval.
• That said, we are open to further suggestions on how to enhance the Estimates process and look forward to recommendations that may come from the Standing Senate Committee on National Finance’s (NFFN’s) study, which is currently underway.

Background

In 2012 and in 2019, the Standing Committee on Government Operations and Estimates (OGGO) released reports on Estimates and supply processes.

In response, the Treasury Board of Canada Secretariat (TBS) made ongoing changes to products and processes, including:

• tagging items in Supplementary Estimates that stem from a federal budget
• development and ongoing expansion of GC InfoBase, an online searchable database
• expanding financial data in Departmental Plans and tabling them very soon after the Main Estimates
• providing a reconciliation of Estimates to the latest federal budget or fiscal update

On March 29, 2022, NFFN passed a motion so that the committee be authorized to:

• conduct a study of the federal Estimates process and other finance issues
• submit a final report no later than April 14, 2024

The committee began the study with an appearance by the Auditor General on October 4, 2022. The committee has also since heard from the Parliamentary Budget Officer and officials from TBS.

TBS also conducted pilot projects on aligning Main Estimates with the federal budget and on purpose-based votes.

On aligning Main Estimates and the federal budget:

• In 2017, provisional changes to House of Commons Standing Orders allowed for Main Estimates to be tabled in the House of Commons by April 16.
• This two-year change allowed for the tabling of an Interim Estimates and a delayed tabling of Main Estimates. Budget implementation votes were then used to include planned spending from the latest federal budget in the Main Estimates.
• This mechanism allowed for complete alignment and reconciliation of the accrual-based budget with the cash-based Estimates. In response to feedback, the second year of this pilot saw separate votes for each budget measure, and these amounts were included in departmental plans.
• The use of budget implementation votes also reduced the delay for departments to obtain parliamentary authority for new spending by securing the appropriation before the Treasury Board approved departmental submissions. Monthly online reporting ensured transparency on timing of Treasury Board approvals and the release of funds.
• Departments appreciated the flexibility in the timelines for obtaining Treasury Board approvals and having fewer new approvals to risk-manage through the fiscal year. However, there were mixed reviews of the budget implementation votes.
• Many parliamentarians perceived a reduced opportunity to influence or exert control over government spending, which greatly outweighed any process efficiencies the government achieved. One of the concerns with the budget implementation votes was that Parliament was being asked to approve amounts before the Treasury Board.
• The provisions were not reintroduced in the 43rd Parliament, so the system reverted to the current standing orders and process.
• It is not possible to have any budget items approved by the Treasury Board before the budget is tabled:
  • budget announcements can require external consultation before detailed implementation plans can be drawn up and Treasury Board submissions prepared
  • in addition, the budget can respond to recent developments, for which there is insufficient advance notice to prepare a full Treasury Board submission
  • lastly, there is the issue of budget secrecy, where decisions are closely held until the tabling of the budget

On the Transport Canada purpose-based vote pilot:

• Transport Canada also undertook a pilot project on purpose-based grants and contributions votes beginning in 2016–17, whereby it had three separate votes for grants and contributions. The votes were based on the departmental Program Alignment Architecture.
• That pilot ended in 2020–21. Transport Canada has returned to a single vote for all of its grants and contributions programs.
• Transport Canada experienced some challenges in managing its transfer payment programs over the three separate votes. Flexibility to reallocate grants and contributions funding to departmental priorities was limited.
• The pilot has demonstrated that there were risks and costs to the expansion of the pilot to other votes and other departments.
• Additionally, according to Transport Canada, the pilot vote structure has not necessarily strengthened forecasting scrutiny, and neither has it ensured greater expenditure transparency.

On fixing a date for the federal budget:

• OGGO reports in 2012 and 2019 recommended tabling the budget and the Main Estimates concurrently. The Parliamentary Budget Officer has also recommended this.
• In response to both OGGO reports, the government disagreed with the recommendation, as it would unnecessarily restrict the government’s flexibility in responding to global and domestic imperatives.
• In his April 13, 2023, report on Budget 2023, the Parliamentary Budget Officer reiterated his request for the Main Estimates to be tabled following the federal budget to include related investments.

On setting or amending dates for the tabling of Public Accounts and Departmental Results Reports:

• Recent reports by the Parliamentary Budget Officer have recommended requiring publication of the Public Accounts and the Departmental Results Reports (DRRs) no later than September 30 and tabling of the Departmental Plans at the same time as for the Main Estimates.
• The Standing Committee on Public Accounts (PACP) recommended in its report on the Public Accounts of Canada 2021 that the tabling date be changed to October 15.
• Parliament does receive information on actual expenditures prior to tabling of Public Accounts and the DRRs. The Fiscal Monitor for March 31 is released on the last Friday in May and provides preliminary financial results that include the majority of actual spending for the fiscal year.
• The government will consider the PACP report and the steps required to ensure the Public Accounts can be tabled by October 15, which may be feasible (the Public Accounts 2023 were tabled in the House by the President on October 24, 2023). Consultations will be held with the Receiver General for Canada, the Office of the Auditor General, and the chief financial officer community to assess how timelines can be amended to facilitate this target tabling date. Consideration will be required in relation to election years, as the current requirement is that Parliament must be in session to table to the Public Accounts.
• Recent federal elections (2019 and 2021) took place in the fall and resulted in the later tabling of Public Accounts and DRRs. The 2018–19 DRRs would normally have been tabled in fall 2019 but were ultimately tabled on February 26, 2020. The 2020–21 DRRs would normally have been tabled in fall 2021 but were ultimately tabled on February 1, 2022. In these cases, the time needed for new ministers to review and approve the reports for their portfolios is compressed and have a consequence on the timing for tabling.
• The 2022–23 DRRs were tabled on November 9, 2023, the same day as Supplementary Estimates (B), 2023–24.

On tabling of Departmental Plans and their alignment with Main Estimates:

• Departmental Plans fully reflect the funding requirements presented in the Main Estimates for those departments.
• The government continues to ensure that both the Departmental Plans and the Main Estimates are tabled in a timely manner to ensure parliamentarians have the information they need on the government’s plans for the upcoming fiscal year.
• The Departmental Plans for 2023–24 were tabled on March 9, and the Main Estimates for 2023–24 were tabled on February 15, 2023.

Issue

Numerous items in Supplementary Estimates (B), 2023–24relate to settlements with Indigenous Peoples and related compensation.

Response

• Funding in these Estimates for settlements and compensation is an important part of Canada’s accountability toward First Nations and our commitment to reconciliation.
• Proposed amounts in these Estimates include over $8 billion for Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) to support settlement agreements.
• These settlement agreements help address a number of priorities for Indigenous communities, including:
  • compensation for harms associated with the federal Indian day schools
  • land-related and specific claims and litigation
  • flooding due to the Ear Falls hydroelectric dam

Background

The federal government is committed to resolving legal challenges through respectful discussions and mediation. As such, it is in active discussions related to various legal challenges.

Issue

National Defence funding in Supplementary Estimates (B), 2023–24

Response

• In Supplementary Estimates (B), 2023–24, National Defence requests an increase in planned spending of $1.6 billion, of which $1.4 billion needs parliamentary approval.
• These planned expenditures support various priorities, including compensation and benefits for the Canadian Armed Forces, military assistance to Ukraine, support to members of the Canadian military who experience sexual misconduct, and more.
• In the Refocusing Government Spending exercise, National Defence identified reductions of $211.1 million in travel and professional services, which have been frozen and will return to the fiscal framework at the end of the fiscal year.
• Travel expenditures for military deployments were excluded from spending reductions.

Background

“Canada’s defence policy, Strong, Secure, Engaged, committed to ensuring the Department of National Defence (DND) has stable, predictable funding. The government has delivered on this commitment. As a result of Strong, Secure, Engaged and subsequent funding increases, including funding for NORAD [North American Aerospace Defense Command] modernization and continental defence announced in June 2022, DND’s annual budget is expected to more than double over ten years, from $18.6 billion in 2016–17 to $39.7 billion in 2026–27 on a cash basis” (excerpt from Budget 2023).

In Supplementary Estimates (B), 2023–24, National Defence puts forward an increase to planned spending of roughly $1.6 billion, of which $1.4 billion requires parliamentary approval.

The components of the $1.4 billion are:

• $583.7 million in compensation and benefits for the Canadian Armed Forces, including pay increases for general service officers up to the rank of Lieutenant Colonel, pilots, medical and dental officers, and non-commissioned members of the Canadian Forces; increases are aligned with those negotiated with the core public administration
• $500.0 million of military assistance to Ukraine; recent announcements of equipment and services include small arms, drone cameras, pilot training and tank maintenance
• $146.1 million for the Heyder and Beattie Final Settlements Agreement, which compensates members of the Canadian military who experienced sexual misconduct
• $118.5 million for expanded contributions to the North Atlantic Treaty Organization
• $49.9 million for Operation UNIFIER, the Canadian Armed Forces’ military training and capacity-building mission in support of the armed forces of Ukraine
• $5.3 million to implement the LGBT Purge Class Action Settlement Agreement

As shown in the annex on Refocusing Government Spending, National Defence’s share of the reduction in 2023–24 is $211.1 million. The $211.1 million has been frozen and will return to the fiscal framework at the end of the fiscal year. As these reductions are linked to professional services and travel, there will be no reductions in full-time equivalents or transfer payments.

Issue

The common hybrid work model for the federal public service was fully implemented on April 1, 2023.

Response

• The federal public service is a hybrid workforce, and we are proud to offer flexible work arrangements that allow most of our employees to work from home up to three days a week.
• Our number one priority continues to be delivering quality services to Canadians while balancing employees’ desires for greater flexibility with the employer’s need to have an on-site presence.

If asked about extensions or exceptions:

• In line with the Direction on Prescribed Presence in the Workplace, we have granted time-limited extensions to give certain departments the opportunity to assess and validate a full-time telework approach for specific functions within their organizations.
• Exceptions have also been granted for specific information technology (IT) functions that face recruitment and retention challenges.

If asked about the letters of agreement on telework:

• The employer and some bargaining agents signed letters of agreement on telework that sit outside of collective agreements. These letters have no impact on the direction for employees to work from the office two to three days a week, which continues to apply. Rather, they express a commitment to collaborate on telework more broadly.
• Specifically, the letters support the creation of joint union-management review panels within each organization to review grievances of employees who are not satisfied with a decision made related to their telework arrangement.
• Certain letters also provide for a joint consultation committee to review the Directive on Telework. The consultation process has begun and is expected to be completed in the coming year.

Background

The Prime Minister in his December 2021 mandate letter to the President of the Treasury Board requested that she “Work with the Clerk of the Privy Council, and in consultation with public sector unions, to strengthen and modernize the Public Service for the twenty-first century by: Bringing forward a coherent and coordinated plan for the future of work within the Public Service, including developing flexible and equitable working arrangements.”

The Treasury Board of Canada Secretariat (TBS) is addressing this mandate letter commitment in part by addressing employer-led policies to enable hybrid as a component of “flexible and equitable working arrangements.”

The COVID-19 crisis resulted in an abrupt shift to remote working arrangements for public servants in all jurisdictions as Canadians made every effort to stay home and practise physical distancing.

In November 2021, updated Health Canada’s Public Service Occupational Health Program guidance allowed departments and agencies to begin gradually increasing occupancy and planning for re-entry into their workplaces. Departments and agencies were quickly asked to pause any planned increases to building occupancy with the rise of the Omicron variant in December 2021.

On May 12, 2022, the occupational health and safety guidance was updated to advise that departments and agencies could return to full building occupancy.

In June 2022, the Clerk of the Privy Council outlined her expectations for a hybrid workforce and encouraged departments to experiment with models. Following this, departments and agencies tested different options to learn how a hybrid work model can best support our core purpose: serving Canadians.

As a follow-up to the Clerk’s message, in August 2022, the Chief Human Resources Officer requested information from organizations on their hybrid testing to date. The information collected showed that most public servants were operating under a wide variety of hybrid models and that there was a need for consistency in how hybrid work is applied.

As such, the federal public service announced on December 15, 2022, the Direction on Prescribed Presence in the Workplace requiring all core public administration employees to work on site at least two to three days each week, or 40% to 60% of their regular schedule. To allow departments and employees to smoothly transition to a common hybrid model, a phased introduction began on January 16, 2023, with full implementation by March 31, 2023.

The direction includes exceptions and extensions that have given departments, which grew larger and hired nationally during the pandemic, the ability to continue to deliver services during the transition to the hybrid work model

Based on deputy head requests, TBS granted 21 organizations with extensions where a relevant business case demonstrated a measurable increase in efficiency in service delivery and/or if an organization was unable to accommodate all or any employees on site due to real property or bandwidth challenges. The majority of extensions – those granted for reasons of business value – are set to expire on March 31, 2024. As set out in the direction, deputy heads are required to collect further data to demonstrate the effectiveness of this business model to Canadians.

Exceptions to the direction have also been granted by the Chief Information Officer for Canada for limited and specific IT functions. These exceptions will be reviewed twice annually to refine the approach.

As part of the recent negotiations, the employer and some bargaining agents signed letters of agreement on telework that sit outside of collective agreements. The Direction on Prescribed Presence in the Workplace and the current Directive on Telework continue to apply.

Under the terms of the letters, joint departmental review panels will be created within government organizations to help address individual grievances where an employee is not satisfied with a decision made related to telework and hybrid work and chooses to refer the grievance to the joint departmental review panel. Each department is responsible for creating the panels and developing terms of reference, with guidance from TBS.

Letters signed by the Public Service Alliance of Canada and the Canadian Association of Professional Employees include the provision of a joint consultation committee to support the review of the Directive on Telework. These committees started their work in fall 2023 and will endeavour to complete the consultation process within one year.

Issue

We are negotiating collective agreements across the public service that are fair to employees and reasonable for taxpayers.

Response

• We are committed to negotiating in good faith and to reaching agreements that are fair to employees and reasonable for Canadians.
• We’ve reached agreements with 14 bargaining units covering almost 179,000 employees, or approximately 76% of the core public administration population.
• For many of the remaining tables, we continue to bargain in good faith, and negotiations are moving toward positive results.

Background

Issue

Salary ranges and the terms and conditions of employment for executives and other senior leader positions in the public service have been revised. At the same time, there has been sustained scrutiny of performance payments and their link to departmental performance targets.

Response

• Salary and benefit improvements for senior leaders align with those provided to represented employees through recent collective bargaining negotiations.
• Maintaining competitive salaries and benefits is essential for recruiting and retaining talented, diverse and inclusive senior leaders so that they can effectively deliver high-quality services to Canadians.

If asked about performance pay and linkages to objectives in Departmental Plans:

• As in many organizations, performance pay in the public service is an important part of executives’ compensation that helps attract and retain talent and deliver results for Canadians.
• Departmental plans set out broad, high-level targets for departments, while performance targets for individual employees are set using specific criteria, which include management excellence and corporate objectives.
• Performance pay must be earned annually, and amounts vary based on specific achievements. In 2021–22, 10.1% of executives achieved the maximum allowable amount of performance pay.

Background

Issue

In early 2021, the Government of Canada announced its priorities to promote diversity and inclusion in the public service. Further commitments were highlighted in the December 2021 mandate letter to the President of the Treasury Board.

Response

• The Government of Canada continues efforts on many fronts to create a federal public service that sees our differences as our strength and fosters a deep sense of belonging among all public servants.
• We have launched several initiatives, developed with equity-seeking employee networks, to support departments in improving their diversity and inclusion.
  • For example, the Mentorship Plus program pairs members of under-represented groups who aspire to leadership and executive positions with executives who can help them access development opportunities and build their skills for executive roles. To date, 55 organizations are taking part in the program.
  • The Mosaic Leadership Development program aims to remove barriers for diverse communities by ensuring that high-potential employees from equity-seeking groups are considered for executive opportunities.
  • Of the 39 participants who graduated from the first cohort in March 2023, more than half are already appointed or acting in EX-01 or equivalent positions. The second cohort of the program was launched this past September.
• With regard to persons with disabilities, we introduced the Government of Canada Workplace Accessibility Passport, which streamlines accommodation processes and authenticates an agreement on the tools and support measures that federal employees with disabilities need to successfully contribute in their jobs. This year, the tool has been expanded to support employees with disabilities across over 55 departments and agencies.
• In addition to these efforts, the Treasury Board of Canada Secretariat (TBS) is creating a Mental Health Fund for Black public servants and establishing dedicated career development programs, including programs to prepare Black public service leaders for executive positions.
• Recently, I announced a panel of experts that will provide recommendations for the development and implementation of a restorative engagement program. The program will empower employees who have suffered harassment and discrimination and drive cultural change in the public service.

Background

In the 2020 Fall Economic Statement, the government announced funding for the Centre on Diversity and Inclusion (CDI) to support the evolving diversity and inclusion agenda in the public service.

After three years of operation, CDI has produced concrete results. Several enterprise-wide initiatives have been put in place, working actively with equity-seeking employee networks, to address specific barriers. Examples include:

• The Mentorship Plus program includes a sponsorship component that pairs members of under-represented groups with executives, enhancing traditional mentorship, thus providing more equitable access to career development opportunities for all public servants.
  • To date, there are 55 departments and agencies taking part in the Mentorship Plus program across the federal public service.
• The Mosaic Leadership Development program addresses key issues of under-representation in executive positions, which is one of the hardest barriers to overcome for historically under-represented groups. The first cohort included 39 diverse participants.
  • Of the 39 participants, Cohort 1 had 35 graduates, 22 of which have already been appointed or are acting in EX-01 or equivalent positions.
  • Cohort 2 of the Mosaic Leadership Development program was launched on September 13, 2023.
• Following modifications of the nomination criteria in 2020 to support cohort diversity, representation of all employment equity groups has increased in the Executive Leadership Development Program. Representation in cohorts launched in 2022–23 was:
  • executive cohort: 9% for Indigenous Peoples, 48% for visible minorities and 12% for persons with disabilities
  • assistant deputy minister (ADM) cohort: 12% for Indigenous Peoples, 40% for visible minorities and 8% for persons with disabilities
• Talent enablement strategies were co-developed with Black and Indigenous executive networks to increase representation in senior leadership roles. These strategies are being implemented through concrete actions, such as initiatives highlighting Black and Indigenous executive talent to deputy heads to assist departments in their executive and ADM succession planning needs.
• An assessment framework of the talent enablement strategies is in development. In addition, a needs assessment is currently underway to better understand and define barriers and related needs of executives with disabilities as they relate to talent management and professional advancement.
• A dedicated Federal Speakers’ Forum on Lived Experience serves as a platform for public servants to share lived experiences related to mental health, accessibility, diversity and inclusion.
• The Maturity Model on Diversity and Inclusion self-assessment tool supports organizations in understanding their maturity in five dimensions of diversity and inclusion.

In January 2021, the Clerk of the Privy Council launched a Call to Action on Anti-Racism, Equity, and Inclusion in the Federal Public Service to all deputy ministers, heads of separate agencies, and heads of federal agencies – calling on them to take deliberate actions to address systemic racism and make the public service more diverse and inclusive. On May 9, 2023, the Clerk of the Privy Council issued a Call to Action forward direction message to deputies that sets clear expectations and provides instructions to support effective and consistent implementation.

In December 2021, the Minister of Housing and Diversity and Inclusion (Canadian Heritage) was mandated to, as part of a renewed Anti-Racism Strategy, lead work across government to develop a National Action Plan on Combatting Hate. Meanwhile, the President of the Treasury Board was mandated to continue taking action to ensure that public service workplaces are free from racism and all forms of hate. To that end, the Office of the Chief Human Resources Officer (OCHRO) is working closely with Canadian Heritage to lead efforts to prevent and combat hate in public service workplaces as part of the action plan.

OCHRO convenes a community of practice of Designated Senior Officials for Employment Equity, Diversity and Inclusion (DSOEEDI) to support implementation of initiatives and sharing promising practices across the public service. OCHRO also manages the Employment Equity Champions and Chairs Committees and Circle (EECCCs/C) Secretariat, which supports the three Employment Equity Deputy Minister Champions appointed by the Clerk of the Privy Council and their combined membership of approximately 350 departmental employment equity champions and chairs (Visible Minorities, Federal Employees with Disabilities, and Indigenous Federal Employees).

Significant progress has been made by releasing unprecedented and disaggregated enterprise data, offering insights into 21 employment equity subgroups, including Black, Métis, Inuit employees, and those with hearing or mobility challenges. This data meets stakeholder requests for more detailed analysis, enabling evidence-based decision-making. An online interactive data visualization tool, launched in April 2021, simplifies access and analysis of human resources demographic and employment equity data for the core public administration.

The Employment Equity Annual Report 2021 to 2022 shows that the representation of visible minorities, Indigenous Peoples and women exceed their workforce availability. The report shows the need to:

• continue working on increasing representation of persons with disabilities overall
• increase the representation of Indigenous Peoples at the executive level

TBS continues to encourage departments and agencies to meet or exceed their workforce availability as a means of continuously increasing representation of employment equity groups in the public service workforce over time.

As of March 2022, 168 executive employees self-identified as Black out of a total of 7,200, which represented 2.3% of the executive population. Black employees’ representation in the core public service population continues to grow.

OCHRO is working toward the modernization of the self-identification questionnaire by modernizing the language, ensuring everyone sees themselves, and is moving it online to a Treasury Board application, making it convenient, portable and safe. The modernized self-identification questionnaire for public servants will allow the core public administration to measure the representation of equity-seeking groups over and above current designated employment equity groups. The new questionnaire is anticipated to launch in 2024.

OCHRO has also worked closely with the department of Labour to support the Task Force on the Review of the Employment Equity Act and will comprehensively consider the report and recommendations therein when released in fall 2023.

The Government of Canada has amended the Public Service Employment Act to address systemic barriers for equity-seeking groups. Theseamendments received Royal Assent on June 29, 2021, and reaffirm the importance of a diverse and inclusive workforce and strengthen provisions to address potential bias and barriers in staffing processes.

In Budget 2021, the Office of Public Service Accessibility was renewed for three years to help the federal public service meet or exceed the requirements of the Accessible Canada Act. The Government of Canada continues to implement Nothing Without Us: An Accessibility Strategy for the Federal Public Service. The Act requires that all federally regulated entities identify, prevent and remove barriers to accessibility in seven different areas, with input from persons with disabilities at every step in the process.

The Government of Canada remains committed to hiring 5,000 net new employees with disabilities by 2025 to help improve the representation of employees with disabilities at all levels of the federal public service. As of March 2022, 1,085 net new persons with disabilities have been hired across the federal public service.

Budget 2023 provided $45.9 million over three years, starting in 2023–24, to TBS to create a Mental Health Fund for Black public servants and establish dedicated career development programs, including to prepare Black public service leaders for executive positions.

Budget 2023 also proposes to provide $6.9 million over two years, starting in 2023–24, to TBS to advance a restorative engagement program to empower employees who have suffered harassment and discrimination, and to drive cultural change in the public service. Of this amount, $1.7 million would be sourced from existing departmental resources. Funding will also support a review of the processes for addressing current and historical complaints of harassment, violence and discrimination.

Issue

The government filed a motion to dismiss a class action lawsuit that seeks damages on behalf of current and former Black public servants, as well as any Black individuals who have applied for positions in federal government departments and agencies, dating back to 1970. The government is taking continued steps to address issues related to harassment and systemic discrimination in its institutions.

Response

• The Government of Canada is working to create a diverse and inclusive public service, free from racism, harassment and discrimination.
• This includes passing legislation, creating support and development programs, and publishing disaggregated data.
• Notably, Budget 2023 provided $6.9 million over two years, starting in 2023–24, to the Treasury Board of Canada Secretariat (TBS) to advance a restorative engagement program to empower employees who have suffered harassment and discrimination, and to drive cultural change in the public service.
  • Funding is being used for a panel of experts announced in October 2023, to enable stakeholder consultations in fall 2023 and enable the development of recommendations for program design in winter 2024.
  • The panel comprises four recognized experts in clinical psychology, mediation, dispute resolution and restorative justice.
  • Funding will also support a review of the processes for addressing current and historical complaints of harassment, violence and discrimination.
• We know there is more to be done, but we believe that the courts are not the correct forum for addressing matters that can or could have been grieved under the Federal Public Sector Labour Relations Act. There are existing processes to deal with complaints or grievances related to harassment and discrimination in the public service.

Background

The Attorney General of Canada is engaged in several employment-related discrimination and harassment class actions on behalf of a number of departments and agencies.

The broadest, largest and most high-profile of these cases is Thompson et al. v. His Majesty the King. This proposed class action seeks damages on behalf of current and former Black public servants and any Black individuals who have applied for jobs in the federal public service dating back to 1970 but were not successful due to their race.

The plaintiff group in the proposed Thompson class action sent a letter to the United Nations’ Office of the High Commissioner for Human Rights that sets out various allegations with respect to ongoing systemic anti-Black harassment and discrimination in the federal public service. Canada has not been advised of any advancements in this area.

The certification hearing in Thompson is scheduled to be heard in Federal Court in October 2023.

Issue

In December 2021, the President’s mandate letter included a commitment to continue to take action to improve the government’s whistleblower protections and supports. On June 16, 2022, Private Member’s Bill C-290, An Act to amend the Public Servants Disclosure Protection Act, was introduced. The first hour of third-reading debate occurred on October 26, 2023. All parties supported the bill in its current form and emphasized that it is a first step to protect whistleblowers, while encouraging the government to continue work on the Public Servants Disclosure Protection Act. On November 29, 2022, the President announced the task force to review the Public Servants Disclosure Protection Act. As part of the review, the task force has commenced consultations with a wide range of stakeholders to ensure that diverse feedback and experiences are considered.

Response

• The government is dedicated to promoting a positive, respectful and safe public sector culture that is grounded in values and ethics, where public servants feel safe to disclose wrongdoing.
• In November 2022, a task force was appointed to:
  • explore revisions to the Act
  • consider opportunities to enhance the federal disclosure process
  • strengthen protections and supports for public servants who come forward to disclose wrongdoing
• The task force is composed of people who bring significant experience and diverse expertise in the field.
• The review began in January 2023, and I look forward to receiving the task force’s final report in spring 2024, with their recommendations for improvements to the Act.

On Bill C-290

• Bill C-290 introduces a number of amendments, such as expanding protection to cover more public servants involved in the disclosure of wrongdoings and extending the time period for making a complaint of reprisal from 60 days to one year.
• While the Government of Canada fully supports these amendments, there are some concerns with others because of their potential to have a significant negative operational impact.
• For example, Bill C-290 proposes to allow an individual to take a complaint of reprisal directly to the Public Servants Disclosure Protection Tribunal without a prior investigation by the Public Sector Integrity Commissioner. This could lead to a surge in cases that could overwhelm the capacity of the tribunal, leading to delays and costs for all involved.

Background

In June 2017, the Standing Committee on Government Operations and Estimates (OGG) tabled its report on its independent review of the Public Servants Disclosure Protection Act. The report contained 15 recommendations covering issues such as the definition of terms, training, protection of whistleblowers, research and assessments.

In October 2017, the government committed to implement improvements to:

• the administration and operation of the internal disclosure process
• protection from acts of reprisal but not legislative amendments

On February 17, 2021, OGGO adopted a motion to readopt the 2017 report and request a Government Response. Since Parliament was dissolved prior to a Government Response being tabled, there was no longer a requirement for a response.

In December 2021, the President’s mandate letter included a commitment to continue to take action to improve the government’s whistleblower protections and supports. This includes exploring possible amendments to the Public Servants Disclosure Protection Act.

The Office of the Chief Human Resources Officer is leading the implementation of activities in support of these commitments. A number of actions to foster an environment where public servants feel safe and protected to come forward with a disclosure have been taken, including:

• conducting outreach and education activities to inform public servants about the disclosure of wrongdoing process and protection against acts of reprisal
• taking steps to address harassment and violence in the workplace, including providing guidance to deputy heads, managers, departmental advisors and public servants on what constitutes harassment, as well as how to prevent and resolve harassment in the workplace
• completing implementation of the Policy Suite Reset for the Policy on People Management and the Policy on the Management of Executives, which set the foundation for the ongoing adaptation of policies to better support an ethical workplace culture in which public servants feel safe to come forward without fear of reprisal

In addition, we have kept a pulse on this issue by:

• monitoring departmental activities via the Management Accountability Framework as it relates to people management
• monitoring public servant sentiment via the annual Public Service Employee Survey

In June 2022, Private Member’s Bill C-290, An Act to Amend the Public Servants Disclosure Protection Act, was introduced in Parliament, to:

• expand the application of the Act to additional categories of individuals, allowing:
  • that a protected disclosure be made to any officer within the portion of the public sector in which the public servant is employed
  • the extension of the period during which a reprisal complaint may be filed
• add a duty to provide support to public servants

Bill C-290 passed second reading in the House of Commons, was referred to OGGO for clause-by-clause consideration, and was reported back to the House with 30 amendments on September 18.

On October 20, 2022, the annual report on the Public Servants Disclosure Protection Act was tabled showing that in 2021–22, public sector organizations received more enquiries and more allegations of wrongdoing than in any of the previous five years. In that year, 194 public servants made 178 internal disclosures containing 381 allegations of wrongdoing, a significantly higher number than the average 235 of the previous five years. This includes:

• serious breach of conduct: 50%
• gross mismanagement in the public sector: 19%
• misuse of public funds: 8%

The 2022–23 annual report on the Public Servants Disclosure Protection Act was tabled on October 30, 2023.

My predecessor announced the establishment of the Public Servants Disclosure Protection Act task force in November 2022. It is composed of people who bring significant experience and diverse expertise within the field, including:

• academics
• individuals with expertise in other Canadian jurisdictions
• senior officers for internal disclosure
• bargaining agent representatives

The task force began its work in January 2023, with the review expected to take approximately 12 to 18 months to complete.

Budget 2022 provided $2.4 million over five years to launch a review of the Public Servants Disclosure Protection Act.

This review will build on the work that OGGO undertook five years ago and the recommendations from the 2017 report with research on the latest developments in whistleblowing in other jurisdictions and current input from stakeholders, including views expressed during parliamentary consideration of Bill C-290, An Act to amend the Public Servants Disclosure Protection Act, introduced by Bloc Québécois MP Jean-Denis Garon.

Issue

On July 1, 2023, the administration of the Public Service Health Care Plan (PSHCP) transitioned from Sun Life Financial to Canada Life Assurance Company (Canada Life). This has garnered attention from plan members, the media and politicians with respect to the vendor’s ability to provide services in a timely manner.

Furthermore, unrelated to the transition to Canada Life, the renewed PSHCP plan design also came into effect on July 1, 2023. Some of the changes to the plan have led to complaints from public servants.

Response

• This transition has been a big undertaking, and we share the concerns and frustrations of the many employees who continue to experience long wait times or for those unable to reach a Canada Life representative to resolve their situations.
• I continue to press Canada Life, as do Government of Canada executives, to reduce delays in wait times and improve plan members’ experience. This includes focusing on solutions to ensure that all retirees, public servants and their dependants receive support to access their benefits.
• Fortunately, we are beginning to see improvement, and we expect progress to continue.

Background

Per the Financial Administration Act, Treasury Board has authority for all aspects of the public service benefit plans. The President of the Treasury Board, as employer of the public service, is responsible for the overall administration of the public service benefit plans.

Public Services and Procurement Canada (PSPC) is the Contract Authority, responsible for awarding the contract. Questions relating to the procurement process, including contract performance and remedies available to be pursued, should be directed to PSPC.

The Treasury Board of Canada Secretariat (TBS) is the Project Authority responsible for all matters concerning the technical content of the work. This includes:

• assigning tasks to the contractor
• receiving and reviewing reports
• accepting the work
• requiring corrections or replacements at the contractor’s expense
• authorizing payments

Transition to Canada Life

On December 1, 2021, PSPC awarded a $515‑million contract to Canada Life to administer the Administrative Services Only contract of the PSHCP, with a “go-live” date for July 1, 2023. Prior to this, Sun Life Financial was the administrator of the PSHCP for 27 years.

The contract included an 18-month implementation phase whereby 18 subcommittees were responsible for over 3,000 deliverables. During this time, TBS met Canada Life several times weekly. Since July 1, 2023, executives of TBS, PSPC and Canada Life have been meeting daily to improve the member experience. This includes pressing Canada Life for timely solutions to alleviate member enquiries and complaints and respond to media and members of Parliament.

PSPC and TBS work jointly with Canada Life because PSPC is the Contact Authority and plays a central role with respect to contract adherence. TBS is the Project Authority, meaning it is responsible for all matters concerning the technical content of the work under the contract.

The following issues are examples of measures Canada Life has taken to alleviate pressures and complaints:

• The Canada Life contact centre has:
  • significantly increased the number of agents since July 1 and will continue to do so until December 31, 2023
  • retrained Canada Life agents to improve their technical knowledge on PSHCP benefits
  • updated online reference materials to answer members’ frequently asked questions
  • updated its integrated voice recording messaging for more effective call routing
  • increased communications with pharmacies to ensure they use the correct information to successfully transmit claims on behalf of members
• MSH International:
  • Canada Life is working with its subcontractor, MSH International, which is responsible for providing out-of-country coverage for members living, working or travelling abroad, to improve the member experience.
  • This includes seeking improvements to the website and the MSH contact centre.
• Systems outages:
  • Canada Life increased its server capacity in early September because it experienced over a dozen systems outages that occurred throughout the summer.
  • Since the September increase in server capacity, the system has been stable.
• Ability to process claims in a timely manner:
  • Canada Life is hiring and training more staff to handle claims submitted manually, as these are taking longer than expected.
  • Since July 1, 2023, Canada Life has processed over 5 million claims and digital claims submitted directly from service providers (pharmacies, massage therapists, physiotherapists, and so on). These claims are being processed within the expected service standards.

Public Service Dental Care Plan contract

In June 2023, PSPC awarded a contract to Canada Life for the administration of the public service Pensioners’ Dental Services Plan and the Public Service Dental Care Plan. This contract was the result of a procurement process that began in 2019. Canada Life will become the administrator of the dental plans in winter 2024.

TBS, PSPC and Canada Life are working together to apply lessons learned from the implementation of the PSHCP contract to the transition of the dental care plans contract. Plan members will receive regular updates on the progress of the move to the new dental contract.

PSPC can speak to the procurement process and contract award.

PSHCP plan design changes

Plan design changes to the PSHCP are negotiated between the Government of Canada, bargaining agents and retiree representatives at the PSHCP Partners Committee under the auspices of the National Joint Council, outside the core collective bargaining process. In September 2022, the Treasury Board approved the PSHCP design changes, effective July 1, 2023.

The modernized plan offers many enhanced and new benefits that are aligned with industry standards, which came at no additional cost to taxpayers and aligns with the Government of Canada’s current fiscal priorities. The PSHCP helps to support the government’s recruitment and retention requirements. The modernized plan also offers cutting-edge support to the 2SLGBTQI+^{Footnote 2} community and places the government as a market leader in this area and as an employer of choice.

To better align the plan with industry best practices, changes such as prior authorization and mandatory generic substitution of drugs were introduced. Savings achieved were reinvested into benefit enhancements that include enhanced coverage for mental health, vision care, hearing aids and an industry-leading gender affirmation benefit. Since the announcement of the plan renewal, many of the benefit improvements have been well received.

As part of the changes for prior authorization and mandatory generic substitution, plan members may be required to provide additional information to establish reimbursement eligibility for certain drugs and services. This is different from how the PSHCP reimbursement used to be adjudicated. For example, documentation is now required to support the ongoing use of brand-name drugs compared to their Health Canada–approved generic equivalents.

These changes require behavioural adjustments from plan members, and steps have been taken to allow plan members to gradually adjust to the new plan design changes and adjudication processes. For example, members who were on medication before July 1, 2023, and who would be subject to prior authorization as of July 1, 2023, are not subject to prior authorization for that medication.

There have been concerns expressed by some members in relation to the introduction of mandatory generic substitution, pharmacy dispensing fee changes, and changes to physiotherapy coverage that have been brought to our attention:

Issue

Bill C-13 received Royal Assent on June 20, 2023. The modernized Official Languages Act (the Act) introduces several changes that affect the Treasury Board, its President and its Secretariat.

Response

• The Treasury Board has longstanding responsibilities under the Act, including:
  • communications with and services to the public
  • language of work in federal institutions
  • participation of English-speaking and French-speaking Canadians in the federal public service
• As President of the Treasury Board, I am now responsible for coordinating the government-wide implementation of the Act, in consultation with other ministers, and ensuring its good governance.
• The modernized Act gives the Treasury Board more powers to monitor, audit and evaluate the compliance of federal institutions with their obligations to ensure that, for example, Canadians receive services in the official language of their choice.
• These new responsibilities are now in effect, and I look forward to working with my colleagues as we implement Canada’s renewed Official Languages Act.

If pressed on implementation of the Act:

Work is underway on two fronts:

• First, we are developing regulations for the implementation of Part VII of the Act. These regulations will:
  • support the vitality of official language minority communities
  • foster the full recognition and use of both English and French in Canadian society
  • require departments to include language clauses in federal-provincial-territorial agreements
  This work is proceeding on a priority basis, and we will ensure that important consultations with stakeholders, including minority linguistic communities, are part of our work.
• Second, we are developing an official languages accountability and reporting framework that sets out roles and responsibilities for federal institutions under the Act.

Background

The Act is a quasi-constitutional act that aims to:

• ensure respect for English and French, their equality of status, and equal rights and privileges as to their use in federal institutions
• support the development of English and French linguistic minority communities
• advance the equality of status and use of English and French

Issue

Implementation status of the Phoenix damages agreements reached with unions in 2019 and 2020

Response

• The government is committed to ensuring that federal public servants are paid properly for their important work, and we continue to take action on all fronts to resolve pay issues.
• The Government of Canada and a number of public service unions have reached agreements to compensate current and former employees who were impacted by the Phoenix pay system. The agreements cover general damages from April 1, 2016, to March 31, 2020.
• All employees covered by the damages agreements have now received their general damages compensation. In addition, a claims process is in place to allow eligible current and former employees to file claims for severe damages.

If pressed on the need for future Phoenix damages compensation:

• We are aware that unions have requested compensation for general Phoenix damages incurred after March 31, 2020. We are committed to a continued dialogue with unions on this issue.

Background

To date, approximately $685 million has been paid in damages relating to the Phoenix pay system, including some $125 million in 2022.

Phoenix damages entitlements for employees (current and former) are provided by the following damage agreements with the bargaining agents:

Issue

In response to new government programs and priorities, the population of the federal public service has grown significantly over the last few years.

Response

• The Government of Canada is committed to delivering quality services, programs and policies for Canadians and, as such, the size of the public service fluctuates due to government priorities and program requirements.
• We have set an ambitious agenda to address and advance important priorities, including climate change, reconciliation, inclusion and innovation.
• Deputy heads of federal organizations are responsible for building an appropriate workforce to fulfill their respective mandates and meet these important priorities. The size and composition of the public service fluctuates according to evolving priorities and needs.
• It is important to note that over the past decade, the percentage of government expenditures dedicated to personnel costs as a percentage of total government expenditures has generally remained the same.

Background

The size of the public service fluctuates in response to government priorities and program requirements, as well as increases in program funding in federal budgets.

The federal public service represented 0.90% of the Canadian population in 2023 and was 0.83% in 2010.

Managing hiring, talent and departures within organizations is the responsibility of deputy heads.

The mandates and activities of federal departments and agencies are as diverse as the people they serve. Deputy ministers each have the authority to determine their human resources needs at the departmental level.

Since 2011, the ratio of personnel expenditures as a percentage of total government expenditures by fiscal year has been relatively consistent, ranging from a low of 11.7% in 2021 to a high of 17.1% in 2013. For fiscal year 2022, the ratio was 15.6%.

Parliamentary Budget Officer report

On April 4, 2023, the Parliamentary Budget Officer published an additional analysis on full-time equivalents (FTE) in the public service, based on information provided in 2023–24 Departmental Plans.

The PBO highlighted that from 2006–07 to 2021–22, the federal public service expanded from 335,000 full-time equivalents (FTEs) to 413,000, an increase of 78,000 FTEs.

Based on the 2023–24 Departmental Plans, the PBO states that the number of FTEs is expected to have reached 428,000 in 2022–23. This represents an increase of 23,000 FTEs compared to 2022–23 Departmental Plans. The Canada Revenue Agency; Employment and Social Development Canada; and Immigration, Refugees and Citizenship Canada account for two thirds of this increase.

Based on the PBO’s analysis of current plans, the number of FTEs are then projected to decline, falling to 400,000 FTEs in 2025–26, although this projected decline still leaves the number of FTEs well above pre-pandemic levels (382,000 in 2019–20).

The PBO also warns that current plans do not include additional FTEs that would result from new measures announced in Budget 2023.

Issue

What are the priorities and mandate commitments for the President of the Treasury Board and how are they being advanced?

Response

• As President of the Treasury Board, I am committed to providing ongoing leadership to help advance the government’s agenda and ensure that the government continues to meet the challenges of today and tomorrow.
• My priorities and mandate commitments span a wide range of government priorities, from fighting climate change, to enhancing digital services for Canadians, to strengthening the competitiveness of Canadian businesses.
• These key initiatives are grounded in the government’s goal to deliver results for Canadians.
• For instance, I launched the Refocusing Government Spending Initiative with a goal of finding savings from across government that can be redirected toward key priorities such as health care and the clean economy.
• Savings for travel and professional services have already been reduced for this year and were presented in Supplementary Estimates (B). Ongoing savings will be presented in Main Estimates, scheduled to be tabled in March.
• To support a reduction in professional services, we amended the Directive on the Management of Procurement to reinforce expectations around federal procurement activities and produced a guide for managers to support their decision-making when considering professional services.
  • Greening our operations is a key priority, and we have enhanced reporting on initiatives to reduce the government’s carbon footprint for greater transparency.
• I am also committed to addressing workplace harassment, discrimination and violence within the public service.
• Just this past October, I announced a panel of experts who will make recommendations on the structure and design of a new Restorative Engagement Program for public servants. The goal of the program is to address past harms and promote healing for employees who have reported experiencing harassment, discrimination and violence in the workplace.

Background

The Prime Minister’s letter of December 16, 2021, addressed to the previous President of the Treasury Board, contains over 30 commitments for which the President is responsible in whole or in part, spanning areas such as:

• equity, diversity, accessibility and inclusion in the federal public service
• digital government
• greening government
• government procurement
• strengthening and modernizing the public service for the 21st century
• regulatory modernization

The commitments include leading whole-of-government initiatives aimed at delivering improved services and results for Canadians, including:

• “Continuing leadership to update and replace outdated [information technology] systems and modernize the way government delivers benefits and services to Canadians;
• “Working towards a common and secure approach for a trusted digital identity platform to support seamless service delivery to Canadians across the country;
• “Bringing forward a coherent and coordinated plan for the future of work within the Public Service, including developing flexible and equitable working arrangements;
• “Continue leading our regulatory reform efforts in collaboration with your Cabinet colleagues to improve transparency, reduce administrative burden and lead our efforts to harmonize regulations that maintain high safety standards and improve the competitiveness of Canadian businesses;
• “Ensure government policy continues to be developed through an intersectional lens, is reflective of the needs and aspirations of Canadians and supports our path to net-zero through:
  • “Continuing to refine and strengthen the quality-of-life framework to ensure that we achieve long-term outcomes that benefit people, and that progress towards those aims is rigorously reported;
  • “Working with the Minister of Environment and Climate Change on the application of a climate lens to ensure climate adaptation and mitigation considerations are integrated throughout federal government decision-making; and
  • “Supporting the Minister for Women and Gender Equality and Youth in the evaluation process of GBA Plus [gender-based analysis plus] with the goal of enhancing the framing and parameters of this analytical tool and with particular attention to the intersectional analysis of race, indigeneity, rurality, disability and sexual identity, among other characteristics.”

Budget 2023 included support to advance commitments in key areas of Treasury Board responsibility, such as:

• $45.9 million over three years to create a Mental Health Fund for Black public servants and establish dedicated career development programs, including to prepare Black public service leaders for executive positions
• $6.9 million over two years to address workplace harassment, discrimination and violence
• $6 million over two years to guide departments on the transition to cloud technology

Budget 2023 also announced other priorities, including:

• the introduction of cross-government program effectiveness reviews, the first of which will examine skills training and youth programming to determine whether improvements can be made to help more Canadians develop the skills and receive the work experience they need to have successful careers
• reducing spending on consulting, other professional services and travel by roughly 15% of planned 2023–24 discretionary spending in these areas, resulting in savings of $7.1 billion over five years, starting in 2023–24, and $1.7 billion ongoing

Other recent policy actions related to the President of the Treasury Board’s mandate commitments include:

• Effective April 1, 2023, the Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets outlines that federal procurements over $25 million should incent suppliers to disclose their greenhouse gas emissions and set reduction targets.
• Effective April 1, 2023, the Directive on the Management of Procurement was amended to reinforce expectations that federal procurement activities are conducted with ethically, socially and environmentally responsible companies and require that all suppliers and their subcontractors adhere to the Code of Conduct for Procurement. In addition, departments will be required to implement measures for:
  • identifying, mitigating and disclosing risks of human trafficking, forced or child labour, and other unethical business practices in their supply chains
  • including these considerations in their procurements
• In July 2023, the government released its review and update of the Government of Canada’s Digital Ambition, which provides a clear, long-term strategic vision for the Government of Canada to advance digital service delivery, cyber security, talent recruitment and privacy.
• Effective July 11, 2023, the Directive on the Management of Materiel was amended to include new and modified requirements in support of the federal Greening Government Strategy and the commitment to electrify the entire federal fleet of light-duty vehicles by 2030.
• In September 2023, the government announced the second cohort of the Mosaic Leadership Development program. This program, which was co-developed with diverse employee networks, is aimed at developing equity-seeking public servants for senior leadership roles.

Issue

The Government of Canada’s approach to cyber threats that pose a risk to government infrastructure and services, and the Government of Canada’s response to notable cyber incidents this past year

Response

• The Government of Canada, like every other government and private sector organization in the world, faces ongoing and persistent cyber threats.
• The government has systems and tools in place to monitor, detect and investigate potential threats, and takes active measures to address and neutralize them.
• Together, the Treasury Board of Canada Secretariat (TBS), Shared Services Canada (SSC) and the Communications Security Establishment (CSE) work with departments to ensure that the government’s cyber security is strong and effective.
• The Government of Canada Cyber Security Event Management Plan is reviewed and updated regularly to reflect lessons learned from cyber events and cyber simulation exercises.

Background

The government works continuously to enhance cyber security in its services by:

• preventing attacks through implementation of protective security measures
• identifying cyber threats and vulnerabilities
• preparing for and responding to all kinds of cyber incidents to better protect Canada and Canadians

Budget 2022 provided $875.2 million over five years, beginning in 2022–23, and $238.2 million ongoing for additional measures to address the rapidly evolving cyber threat landscape. These measures include:

• $263.9 million over five years, starting in 2022–23, and $96.5 million ongoing to enhance the CSE’s abilities to launch cyber operations to prevent and defend against cyber attacks
• $180.3 million over five years, starting in 2022–23, and $40.6 million ongoing to enhance CSE’s abilities to prevent and respond to cyber attacks on critical infrastructure
• $178.7 million over five years, starting in 2022–23, and $39.5 million ongoing to expand cyber security protection for small departments, agencies and Crown corporations
• $252.3 million over five years, starting in 2022–23, and $61.7 million ongoing for CSE to make critical government systems more resilient to cyber incidents

As part of the Fall Economic Statement 2022, the government decided to provide $405.3 million over six years, starting in 2022–23, with $15.7 million in remaining amortization and $80.8 million ongoing to reinforce government cyber security, as follows:

• $205.1 million over five years, starting in 2023–24, with $15.7 million in remaining amortization and $40.9 million ongoing to support SSC’s security information and event management system
• $15.7 million over two years, starting in 2022–23, to support cloud security at SSC
• $167.8 million over six years, starting in 2022–23, with $37.1 million ongoing, including 102 incremental full-time equivalents, for cyber security modernization; these resources should be used in part to modernize the Government of Canada’s approach to cyber security
• $16.7 million over six years, starting in 2022–23, with $2.8 million ongoing to support TBS’s associated efforts to reinforce government cyber security

Budget 2023 provided $14 million in new funding for Public Services and Procurement Canada, National Defence, and the Standards Council of Canada to establish a cyber security certification program to protect Canada’s defence supply chain.

Departments and agencies have a responsibility to ensure that cyber security is managed within their organization. TBS, SSC and the CSE are the primary stakeholders with responsibility for ensuring that the government’s cyber security posture is effective and able to respond to evolving threats. CSE, in concert with Public Safety Canada, also provides support on cyber security from a national perspective. TBS provides strategic oversight of government cyber security event management to ensure effective coordination of major security events and support government-wide decision-making. The Chief Information Officer of Canada:

• sets information technology security policy
• defines cyber security requirements
• executes decisions on the management of cyber security risks on behalf of the Government of Canada

TBS, in collaboration with SSC and CSE, is in the process of developing a whole-of-government framework for the cyber security of operations. The purpose of the Government of Canada Enterprise Cyber Security Strategy is to:

• define the vision and strategic objectives for the government that will keep pace with the evolving cyber security risk landscape
• define a future state for the cyber security of government operations with supporting governance, oversight, and clear roles and responsibilities

TBS also maintains the Government of Canada Cyber Security Event Management Plan (GC CSEMP).

• The GC CSEMP is the whole-of-government incident response plan providing an operational framework that outlines the stakeholders and actions required to ensure that cyber security events are addressed in a consistent, coordinated and timely fashion across the government.
• The plan is applicable to all departments subject to the Policy on Government Security.
• The current GC CSEMP was published in November 2022, and an update is in progress to reflect lessons learned from cyber simulation exercises and recent cyber incidents that have impacted the government since the last update.
• To ensure that the GC CSEMP is up to date and effective, the plan is tested regularly and reviewed on an annual basis, and it is updated if changes are warranted. The most recent cyber simulation took place in February 2023.
• Details of the simulation were provided to the Standing Committee on Public Accounts (PACP) in a follow-up response to a question asked by the Conservative Party of Canada from the Chief Information Officer of Canada’s appearance on the Auditor General’s cyber security audit.

In the last number of months, the government was affected by persistent distributed denial of service (DDoS) activity, including targeting of public-facing government websites such as the Prime Minister of Canada’s website, which invoked the GC CSEMP to ensure government-wide coordination, response and monitoring. Other cyber incidents impacting third-party suppliers for contracted services by the government have also warranted a coordinated response, including invocation of the GC CSEMP communications framework to ensure consistent and coordinated messaging from the government.

Issue

The Office of the Auditor General of Canada commissioned an audit on modernization of information technology (IT) systems in late 2022 with the objective to determine whether the Treasury Board of Canada Secretariat (TBS) and Shared Services Canada (SSC) have led and supported the efficient and effective modernization of IT systems across government. It was tabled in Parliament on October 19, 2023.

Response

• The Government of Canada is committed to better serving Canadians with digital services and programs that are accessible, easy to use and secure.
• We agree with the Auditor General’s recommendations and will continue to work alongside departments to address them swiftly and efficiently.
• Given the large size and critical nature of the government’s IT portfolio, this is a complex undertaking that will require diligent planning and close oversight.
• A government-wide IT modernization strategy is being developed to help ensure that required investments of time, expertise and funding are appropriately planned and prioritized.
• This work is being advanced as quickly as possible. In the meantime, we are closely monitoring the performance of existing systems to ensure that the services they support continue to be delivered to Canadians.

Background

There is currently a gap between the state of operations of technology components and what is optimal, creating significant risks in terms of security, performance, user experience and service delivery to Canadians. This gap is often referred to as technical debt.

• Since the Office of the Auditor General’s 2010 audit report Aging Information Technology Systems, the Government of Canada has identified about 7,500 business applications in production. According to TBS, only 38% of them are “healthy,” which means that 62% of government business applications require attention because of poor technical condition, low business value and/or insufficient funding.
• The audit was conducted between February and July 2023 and examined:
  • the governance, monitoring and oversight functions of lead agencies (TBS, SSC), including entity roles and responsibilities, in the effective modernization of government IT initiatives
  • the plans and processes in prioritizing and funding government initiatives in the context of IT modernization
  • the support provided to departments and agencies undergoing IT modernization efforts
• The key findings from the audit were:
  • two thirds of applications are in poor health, and the progress on modernization infrastructure is slow
  • TBS did not provide sufficient leadership for modernizing systems
• The audit concluded that:
  • TBS and SSC did not lead and provide sufficient support for the modernization of IT systems across the government in an effective and efficient manner
  • TBS and SSC need to act quickly to help support department and agencies with their IT modernization needs and help them address the costs of relying on outdated systems
  • departments and agencies need to promptly provide accurate and complete information about their applications to help TBS and SSC make better decisions about modernization

The key audit recommendations were:

• TBS to consult with departments and agencies to establish targets and/or timelines for modernizing unhealthy applications
• SSC, in coordination with TBS, to analyze financial impacts of old data centres and develop a plan for closing remaining centres
• TBS, with SSC and in consultation with departments and agencies, should finalize and implement a comprehensive strategy for IT modernization
• TBS should consult with departments and agencies to determine the tools and resources it needs for supporting government IT projects, including appropriate funding
• TBS to consult with relevant stakeholders to revise current funding mechanisms or develop new ones to help departments and agencies in modernizing their IT systems

Issue

On October 30, WeChat and Kaspersky applications were banned from government-issued mobile devices. This followed on an announcement on February 27, 2023, that the TikTok application would be blocked from use on all government-issued mobile devices for organizations subject to the Policy on Service and Digital.

Response

• The Government of Canada is committed to keeping government information secure. We regularly monitor our systems and take action to address risks.
• A review of the WeChat and Kaspersky suite of applications determined that they present an unacceptable risk to privacy and security.
• These actions are preventative in nature and no government-issued devices were compromised.
• The government’s use and choice of digital tools are reviewed on an ongoing basis to address the ever-changing environment to ensure government that networks and data remain secure and protected.

Background

On February 27, the Chief Information Officer of Canada announced the direction that the use of the TikTok application would be blocked from use on Government of Canada devices for organizations subject to the Policy on Service and Digital.

The Policy on Service and Digital governs the use of Government of Canada devices and ensures that networks and data remain secure and protected. The Chief Information Officer of Canada has authority under the Policy on Service and Digital to put restrictions on tools that present a risk to Government of Canada assets and information.

On a mobile device, TikTok’s data collection methods include the ability to collect user contact lists, access calendars, scan hard drives including external ones, and geolocate devices, making those who have downloaded the application more vulnerable to surveillance and cyber attacks.

Shared Services Canada, in collaboration with the Canadian Centre for Cyber Security, took the necessary measures to remove and block the application on government devices for all organizations supported by Shared Services Canada. On March 8, monitoring reports confirmed that all organizations subject to the Policy on Service and Digital took the necessary measures for the removal of the TikTok application.

Agencies and Crown corporations outside the Policy on Service and Digital’s and Shared Services Canada’s purview were also informed of TikTok’s removal and are strongly advised to consider implementing a common approach. Furthermore, provinces and territories were also informed of the removal.

The Government of Canada’s use and choice of digital tools are reviewed on an ongoing basis to address the ever-changing risk environment and to ensure government networks and data remain secure and protected.

• The Government of Canada policy regarding acceptable network and device use sets out expectations for conducting government business and for limited and reasonable personal use. Appendix A: Examples of Acceptable Network and Device Use (Non-Exhaustive List) of the Directive on Service and Digital outlines a non-exhaustive list of acceptable personal use, including to search for information online and keep up to date with news and current events.
• Where necessary, safeguards are also in place to manage security risks and address unacceptable use (Appendix B: Examples of Unacceptable Network and Device Use (Non-Exhaustive List) of the Directive on Service and Digital)

This action was taken as a prudent precaution. There is no information to suggest that government information has been compromised as a result of the blocked application.

The Standing Committee on Access to Information, Privacy and Ethics (ETHI):

• is currently conducting a study on the use of social media platforms for data harvesting and unethical or illicit sharing of personal information with foreign entities
• has held two meetings on the subject as of October 25

It is anticipated that the Chief Information Officer will be invited to appear as part of this study.

Issue

With the conclusion of the Access to Information review and the final report tabled in Parliament, key actions are being taken to improve how Canadians experience access to information (ATI) systems and processes.

Response

• Access to information is essential for our democracy and must reflect Canadians’ and Indigenous Peoples’ expectations for accessible, timely and trustworthy information.
• The first legislative review of the ATI process in 30 years was completed in December 2022 and resulted in a report that was informed by feedback from Canadians, Indigenous Peoples, experts and key stakeholders.
• We are now developing an action plan to create a stronger, more robust and more reliable ATI system for all Canadians and Indigenous Peoples.

This plan will focus on tangible performance improvements, building on existing efforts to increase capacity, enhance technology and provide ongoing guidance to government organizations.

Background

The review of the Access to Information Act (ATIA) was launched to offer an opportunity to have an open exchange on making ATI systems and processes more resilient. In December 2022, the President of the Treasury Board submitted a report to Parliament and published an Indigenous-specific “What We Heard” report on engagement undertaken as part of the review of access to information.

During the course of the first review, the Treasury Board of Canada Secretariat (TBS) identified a number of key actions on access to information to tackle operational issues and leverage digital service delivery to improve how Canadians experience the ATI process. The latest deliverables include:

• publication of Access to Information: Plain Language Guide to Exemptions and Exclusions under the ATIA (September 2023)
• updated the ATI Regulations to ensure consistency with the ATIA, following the 2019 legislative changes, and with the current practices and requirements on identification verification (August 2023)
• enhancing the Access to Information and Privacy (ATIP) Online Request service to improve functionality of the system for requesters (July 2023)
• launching the Access to Information and Privacy Communities Development Office to build greater capacity to improve ATI service delivery, which was done in fiscal year 2023–24
• releasing guidance to federal institutions to streamline the review process for ATI requests and for proactively publishing materials, which was completed in winter 2022

The Standing Committee on Access to Information, Privacy and Ethics (ETHI) adopted a motion on May 16, 2022, to study ATI and privacy systems.

• The committee has held nine meetings on the subject, hearing from the Information Commissioner twice and from officials from Global Affairs Canada, Public Safety Canada, the RCMP and the Privy Council Office.
• The committee also heard from the President and TBS officials on April 18, 2023.
• ETHI tabled a report on its review of the ATI system on June 20, 2023, which made 38 wide-ranging recommendations for fundamental reform of the ATI system. There is alignment between ETHI recommendations and the conclusions outlined in the ATI review report.
• A Government Response to ETHI’s report was tabled in the House on October 17, 2023.

The ATI review report to Parliament was organized around three key strategic outcomes:

1. improving service to Canadians
2. enhancing trust and transparency
3. advancing reconciliation with Indigenous Peoples

These strategic outcomes will inform further work to help the government create a stronger, more robust, and more reliable ATI system for all Canadians and Indigenous Peoples.

Given the importance of this review, the government consulted broadly with Canadians, Indigenous Peoples, experts and key stakeholders whose views and experiences will inform next steps. This public engagement process included a call for submissions, a user-experience survey, and thematic workshops. In a separate track of engagement, TBS has also been engaging with Indigenous groups and representatives to better accommodate their unique perspectives and specific needs relating to access to information.

The President of the Treasury Board invited national Indigenous organizations and 36 modern-treaty and self-government holders to participate in the review. At the conclusion of the review, TBS held bilateral discussions and received written submissions from several Indigenous groups and governments, as summarized in the Indigenous-specific “What We Heard” report. In the spirit of the Government of Canada’s commitments to reconciliation and the implementation of the United Nations Declaration on the Rights of Indigenous Peoples Act, our engagement with Indigenous Peoples remains ongoing.

As part of the review process and, as discussed in the report, TBS’s Internal Audit and Evaluation Bureau assessed the efficiency and effectiveness of proactive publication across the government, which includes disclosures related to information on contracts. The evaluation noted a need for institutions to monitor performance against their obligations and examine the use and usefulness of proactively published information. Leveraging the findings of the evaluation, the review did consider improvements to proactive publications as a whole and concluded that examining ways to engage with users to identify high-demand and high-value information, as well as developing improved accountability mechanisms, would allow the government to improve the quality of proactively published information.

While the first review is concluded, the government’s work to improve access to information continues. TBS officials have been continuously advancing initiatives targeting improvements to the ATI regime. These improvements target the three strategic outcomes outlined in the report to Parliament, notably:

• maintaining engagement with Indigenous organizations and governing bodies
• updating the TBS manual for ATIP practitioners to guide and standardize ATIP community practices
• onboarding institutions that fall under the ATIA onto the ATIP Online portal, where requests can now be submitted to 228 institutions and organizations
• reviewing the approach to the annual statistical reporting required under the ATIA to better identify systemic issues
• supporting the recruitment, retention, learning and networking of the ATIP community through the continued work of TBS’s ATIP Communities Development Office

Regular reviews will ensure that Canada’s ATI regime stays in step with future advances to continue to provide open, accessible and trustworthy information to Canadians in this digital age.

Issue

Departments have been exploring artificial intelligence (AI) technologies to improve services to Canadians. The Government of Canada is committed to ensuring the responsible development and use of AI in the federal public service. Media and public interest in AI has grown significantly over the past year, following the release of generative AI tools such as ChatGPT to the public.

Response

• The government is committed to ensuring the responsible use of AI, including the use of generative AI tools.
• AI has been used in workplaces, including in the public service, for decades in some form or another, including as a tool to support analysis, assist with prediction or support decisions.
• With the rise in use of AI tools, the Treasury Board of Canada Secretariat (TBS) has introduced policies, tools and guidance that enable departments to understand and manage the risks of AI to people and organizations.
• For instance, departments using systems that use AI must complete and publish an approved Algorithmic Impact Assessment (AIA) prior to the launch of the system.
• In addition, the government recently issued a preliminary guide to support institutions on the responsible use of generative AI tools by assessing possible associated risks.
• Through risk mitigation and sharing best practices, these tools will ensure that public servants use generative AI responsibly, securely and effectively.

Background

Issue

The Standing Committee on Government Operations and Estimates Committee (OGGO) commenced a study of supplier diversity in 2022.

Response

• The Government of Canada is committed to helping more businesses from under-represented groups participate in federal procurement to build a more inclusive economy.
• Treasury Board procurement policy includes several provisions to support supplier diversity and remove barriers for suppliers.
• Our policy also focuses on best value, which includes consideration for Indigenous reconciliation and socioeconomic and environmental objectives instead of only focusing on the best price.
• The Treasury Board of Canada Secretariat (TBS) continues to work closely with Public Services and Procurement Canada and Indigenous Services Canada to support the government’s commitment to award a minimum of 5% of the total value of federal contracts to businesses managed and led by Indigenous Peoples by 2025.

Background

Supplier diversity and social procurement leverages government purchasing power toward socio-economic objectives such as:

• enhancing market competition
• job creation
• economic and social benefits of procuring from small and medium-sized enterprises, local industry, social enterprises and not-for-profit organizations
• encouraging socially responsible business conduct
• advancing diversity and inclusion

On February 1, 2022, OGGO agreed to conduct a study of diversity in procurement. To date, the committee has held two meetings on this issue, hearing from officials from Public Services and Procurement Canada as well as representatives from:

• the Canadian Council for Aboriginal Business
• the Council for the Advancement of Native Development Officers
• the National Aboriginal Capital Corporations Association
• the National Indigenous Economic Development Board

There have been no subsequent meetings in relation to the study in recent months.

Under the Treasury Board Directive on the Management of Procurement, it is expected that procurements are managed in a manner that enables operational outcomes and demonstrates sound stewardship and best value. Best value considers not just the price but also non-financial outcomes such as social, economic, Indigenous and environmental returns.

The Directive on the Management of Procurement, which fully came into effect in spring 2022, also supports supplier diversity by setting expectations that departments:

• before launching a procurement, engage with industry early and conduct market analysis to gain deeper understanding of industry capacity, opportunities and barriers; by doing so:
  • industry is engaged
  • the government has a better understanding of who has the capacity to deliver
  • companies understand better what the government wants
• leverage procurement to provide socio-economic and environmental benefits
• unbundle requirements so that instead of a large contract with a single supplier, contracts can be broken down into smaller pieces, which allows for procurements to better align with the capacity of smaller and more diverse suppliers to respond
• make contracts simpler and easier to understand, as well as limit the number of mandatory technical criteria; small and medium-sized enterprises have identified the complexity of the procurement process and long complex technical requirements as barriers to participation, as they:
  • increase the risk of mistakes in bidding (resulting in disqualification)
  • often gear the procurement to the large firms that have the capability to meet the government’s requirements

In addition to the above, TBS supports increasing procurement with Indigenous businesses through specific initiatives:

• Minimum 5% target: To increase economic prosperity for Indigenous businesses, the Government of Canada has committed that a minimum of 5% of the total value of contracts is awarded to Indigenous businesses annually.
  • As of April 2022, the Treasury Board Directive on the Management of Procurement was updated to provide guidance on how to calculate and report on progress toward the minimum 5% target.
  • A phased approach has been developed for departments and agencies to meet the target by the end of fiscal year 2024–25.
  • According to the 2023–24 Departmental Plans published on March 9, 2023, the majority of the 32 phase-one departments forecasted to meet or exceed the target for 2022–23. However, four departments indicated they are not forecasted to meet the minimum 5% target and will require meaningful, consistent effort to achieve the target in the future. The 2022–23 Departmental Results Reports to be published this fall (2023) will confirm results to date.
• Nunavut Directive: In support of obligations under Article 24, “Government Contracts,” of the Nunavut Agreement, the Treasury Board established the Directive on Government Contracts, Including Real Property Leases, in the Nunavut Settlement Area in close consultation with Nunavut Tunngavik Incorporated, effective as of December 20, 2019. This directive and its implementing measures reflect the expected results of Article 24 with the aim to:
  • increase participation by Inuit firms in business opportunities to support the Nunavut Settlement Area economy
  • improve Inuit firm capacity to compete for government contracts and real property leases in the Nunavut Settlement Area
  • employ Inuit at a representative level in the Nunavut Settlement Area workforce

In support of these measures, TBS worked with the Canada School of Public Service to develop a mandatory online training course, “Indigenous Considerations in Procurement,” which provides a common understanding of procuring from Indigenous businesses within the Government of Canada.

• This course was made available in April 2022.
• All members of the procurement community were expected to complete this training by March 31, 2023.
• New employees are required to complete the course within three months of joining.

In addition, TBS worked closely with Public Services and Procurement Canada and the Canada School of Public Service to develop a Nunavut Directive–specific online procurement training course, which was also launched in April 2022. Federal employees who work with procurements in or into the Nunavut Settlement Area are encouraged to complete this course.

Issue

The Government of Canada’s use of professional services

Response

• Contracted services are a regular part of government operations and complement the work of our professional public service.
• We continue to review and enhance procurement rules and guidance to support the responsible use of these services.
• Notably, the Treasury Board of Canada Secretariat (TBS) recently published a manager’s guide about the use of professional services to help managers determine when to contract for professional services versus when to use internal resources.
• As well, this summer, TBS amended the Directive on the Management of Procurement to require departments to strengthen their internal controls for procurement.
• TBS also amended its guidance on the proactive publication of contracts to require greater transparency on the purpose of professional services contracts valued above $1 million.

Background

Government spending on external professional services – a broad category that includes everything from nursing to engineering to research to management consulting – have increased by $1,078 million (6%) in fiscal 2022–23 when compared to fiscal 2021–22. Although 64% of departments have increased their external professional services in fiscal 2022–23, the year-over-year variance (percentage), or growth rate of 6% for the Government of Canada, is the lowest it’s been in the past three years. This is mainly related to four major types of professional services:

1. informatics services: computer services, information technology and telecommunications consultants
2. health and welfare services: hospital services, welfare services purchased from social and related agencies, physicians and surgeons, paramedical personnel, and dental services
3. business services: accounting and audit services, banking services, collection agency fees and charges, real estate services and other business services
4. engineering and architectural services:
   • architectural design, control and plans
   • construction supervision of buildings
   • architecture of naval vessels
   • services related to assessment, remediation, care, maintenance and monitoring of contaminated sites and engineering consultants

Although absolute spending has increased, the proportion of spending on external professional services has remained relatively consistent when compared to overall expenditures. Specifically, total departmental external professional services in 2011 was 11.1% of gross external expenditures, excluding transfer payments and public debt charges, as compared to 11.7% in 2022. Through those years, the range was from 10.6% (2013 and 2021) to 11.8% (2016 and 2017).

Since 2011, the ratio of external professional services as a percentage of personnel expenditures by fiscal year has been relatively consistent, ranging from a low of 19% in 2013 to a high of 23% in 2017. For fiscal year 2022, the ratio was 22%.

While contracting is a normal and acceptable delivery strategy, the Office of the Chief Information Officer of Canada is developing a Government of Canada Digital Talent Strategy to ensure that the federal public service has the in-house digital talent and leadership it needs to build, deliver and maintain simple, secure and efficient digital services and programs.

The strategy is designed to support the digital community in the federal public service. This includes people who have skills, knowledge and experience in a variety of digital disciplines, including development, cybersecurity, data and many more. It also includes leaders who guide and sponsor digital initiatives. The strategy is currently under development and will be forthcoming later in 2023.

On October 5, 2023, the government published a Manager’s Guide: Key Considerations When Procuring Professional Services. The guide was designed to help managers at all levels:

• weigh relevant factors and make an informed decision about whether to procure professional services in a way that meets their operational needs and advances Government of Canada commitments and priorities
• when they decide to procure, meet their responsibilities under the Directive on the Management of Procurement when structuring and managing that contract

Along with Public Services and Procurement Canada, TBS published the results of its review of contracts with McKinsey & Company in June 2023. The independent audits conducted as part of the review found no evidence of political interference in the contracts awarded to McKinsey. The review also found that certain administrative requirements and procedures were not consistently followed. In addition to departments taking action, TBS outlined a number of measures it has since implemented to address these findings.

This includes amendments made in June 2023 to the Directive on the Management of Procurement and the Guide to the Proactive Publication of Contracts to: ​

• require a risk-based system of internal control that is maintained, monitored and reviewed to:
  • provide reasonable assurance that procurement transactions are carried out in accordance with the framework, and applicable laws, regulations and policies
  • ensure the accuracy, completeness and timely publication of contracting information for proactive disclosure
• strengthen documentation requirements, particularly regarding the justification for the use of sole source
• require greater transparency in large professional services contracts above a dollar threshold by requiring additional details in contract descriptions