May 26,
2015
GOVERNMENT
SERVICES COMMITTEE
Pursuant
to Standing Order 68, Lorraine Michael, MHA for Signal Hill – Quidi Vidi,
substitutes for George Murphy, MHA for St. John's East.
The
Committee met at approximately 7:03 p.m. in the Assembly Chamber.
CHAIR (Forsey):
Good evening, everyone, if we are ready to go.
I want
to thank everybody for coming. First
of all, on my right, we will make the introductions of the Committee and the
staff, starting with Cathy.
MS C. BENNETT:
Cathy Bennett, MHA for the
District of Virginia Waters.
MS DYKE:
Laura Dyke, Researcher, Official Opposition Office.
MS MICHAEL:
Lorraine Michael, MHA, Signal
Hill – Quidi Vidi.
MR. MORGAN:
Ivan Morgan, Researcher, NDP Caucus.
MR. DINN:
John Dinn, MHA, Kilbride.
MR. K. PARSONS:
Kevin Parsons, MHA for the
beautiful District of Cape St. Francis.
MR. PEACH:
Calvin Peach, MHA for the
great District of Bellevue.
CHAIR:
Clayton Forsey, MHA for the
District of Exploits and Committee Chair.
First,
what we are going to do is Finance and Public Service Commission but we are
going to do the Public Service Commission first.
Before the minister introduces his staff, or if they introduce
themselves, first of all, I will call for the subhead of the Public Service
Commission.
CLERK (Ms Proudfoot):
Subhead 1.1.01.
CHAIR:
Subhead 1.1.01.
Before I
ask the minister, I need a motion for adoption of the Government Services
Committee minutes of May 25, Department of Service NL.
Could I have a motion for adoption?
Moved by
Calvin Peach. Do we need a seconder
for that? No, okay.
What we
normally do, we will give you a few minutes for introduction, Minister, and we
give each one back-and-forth questions at ten minutes each, but the first one
usually gets fifteen. I see Lorna
has it set up for fifteen; we will go with that.
Minister, you are on.
MR. WISEMAN:
Thank you, Mr. Chair.
Welcome
to members of the Committee. As the
Chair has indicated, we are going to deal with the Estimates of the Public
Service Commission first and then we will move into the Department of Finance
after we finish that one.
Before
we start, maybe I will ask my staff to introduce themselves, starting with my
left, Bruce Hollett, who is the Chair of the Public Service Commission.
Bruce, go ahead.
MR. HOLLETT:
Bruce Hollett, Chair and CEO
of the Public Service Commission.
MS CHAFE:
Ann Chafe, Commissioner,
Public Service Commission.
MS THOMAS:
Raelene Thomas, Director,
Public Service Commission.
MS TRICKETT:
Wanda Trickett, Departmental
Controller.
MS DRODGE:
Megan Drodge, Executive
Assistant to Minister Wiseman.
MS TULK:
Jennifer Tulk, Director of
Communications for Finance and Human Resource Secretariat.
MR. WISEMAN:
Okay, I thought we lost
somebody on the way. We will
introduce the rest when we get into Finance.
CHAIR:
Okay.
Also,
Minister, when you or your staff are responding to questions – most of you have
been through this before – identify yourselves for the Broadcast place so they
will know who is speaking and who is responding.
Thank
you.
MR. WISEMAN:
Thank you, Mr. Chair.
Again,
thank you to the Committee. First,
we are going to do the Public Service Commission.
Many of you have some experience with the Public Service Commission, but
the Public Service Commission is an arm's-length agency that supports
government's efforts to be accountable and transparent in its hiring processes
and decisions.
I will
not spend a whole lot of time talking about the Commission, per se, and
hopefully as we get into the discussion around the Estimates, there may be some
questions that arise with respect to its operation and its function and its role
so I do not want to eat into that kind of time.
Mr. Chair, we are open for questions.
CHAIR:
That is great.
Cathy, we will start with you.
MS C. BENNETT:
In the first section 1.1.01,
Services to Government and Agencies, I had some questions around the – I will
start at Transportation and Communications.
A budget for the last fiscal year was $97,000, revised was going to be
$50,000, and the budget is back at $97,800.
I am
just wondering what initiatives were undertaken last year to move from the
target down to the actual of $50,000, because you guys did some great work
there.
MR. WISEMAN:
Just to that Transportation
and that whole block of operating accounts here, there is some flexibility
within some of those accounts as the savings may be accrued in one because of
some spending pressures in some of the others, and that is what happened here.
The Commission has made a conscious decision to defer some of the travel
because of some of the pressures that they had on their EAP and trying to
balance and live within the overall global budget, they had to make some
management decisions as to how they spent their money.
MS C. BENNETT:
What kind of things did you
defer – not choose to spend money on, sorry.
MR. WISEMAN:
These would have been travel
deferments. Some of the work that
the Commission does provides services to people throughout the Province.
The base of operation may be here in St. John's, but we have employees
around the Province. So some of that
travel would have been deferred and handle the issues that arose in a different
fashion.
MS C. BENNETT:
Is that line to cover travel
for staff of the Public Service Commission who does hiring throughout the
Province?
MR. WISEMAN:
Maybe I should backtrack a
little bit because you posed a question about assisting with hiring.
The Public Service Commission is not involved in the hiring, recruitment
process. It is involved with
ensuring that there is compliance in the fairness principle.
So there is not travel associated with hiring.
The
Public Service Commission might be involved in travelling to – we have EAPs, for
example. There are programs that
they are involved with respect to professional development opportunities for
staff who work within the Commission.
Those sorts of things would have been included in this expenditure head.
So, they deferred some of those things to be able to respond to some of
the pressures they had in other areas.
MS C. BENNETT:
Right.
Congratulations, great job.
I am
just wondering what actual travel was deferred.
If there was a budget of $97,800 the year before and we are back up,
obviously there is travel that needs to happen; I am just wondering what travel
was actually not incurred.
MR. WISEMAN:
It is kind of difficult to
tell you that on this particular day they deferred the travel to some particular
part of the Province, or they deferred a decision to attend some kind of
conference; but, throughout the year on any given month, day, or any period of
time, Bruce and his staff would be responsible for making day-to-day management
decisions as to what they are going to participate in with respect to
professional development, for example, and some of the work that they do with
respect to classification and appeal processes, which is one of their other
mandates.
They may
defer some of the travel to deal with some of those issues and deal with it in a
different fashion. The cumulative
impact of those day-to-day decisions that they made resulted in this kind of
profile that you see here at the end of a twelve-month cycle.
MS C. BENNETT:
In the Purchased Services
there was an under expenditure from what was originally budgeted which is great
news. I am just curious to know,
what were the things that were not purchased?
MR. WISEMAN:
If you look at Purchased
Services, that covers an array of things which could include meeting room
rentals associated with some of the – just tie those two things together, for
example. If you are deferring some
travel that you may be attending, you are also deferring some of the expenses
associated with that.
Whether
you are renting meeting rooms or if you are purchasing services like courier
services and printing services, those sorts of things are all captured under
this Purchased Services area. So as
a result of the prudent fiscal management, they made some decisions as the year
progressed to not spend some monies in certain areas.
MS C. BENNETT:
The EAP that was referred to
earlier; just for my own clarity the actual costs of the EAP are not the
responsibility of the Public Service Commission.
Administration or connections with the EAP are, is that correct?
MR. WISEMAN:
The cost of the service –
there is a referral to an EAP, for example.
Frequently, that may be referred out to some outside counselling service
to provide that kind of support.
That gets paid for through this fund here.
MS C. BENNETT:
Would that be paid through
this particular line item?
MR. WISEMAN:
Professional Services, yes.
MS C. BENNETT:
Okay.
MR. WISEMAN:
There are two things that are
driving that cost: number one is increased utilization; and number two, the
increased cost of providing it or getting access to the services.
People who are being contracted have – there are changes, like a fee, to
cover their fee schedules.
MS C. BENNETT:
Is there a preferred supplier
or a supplier that is in place on an annual basis for the EAP services,
understanding that the services are very broad and they can be very unique in
what the needs might be, and that we may not always be able to have a particular
provider for a service. I am just
wondering is there a contract in place?
Or has there been a process to identify the support services through some
type of competitive bid?
MR. WISEMAN:
There is a fair number,
actually, of service providers.
Obviously they reflect the geography of the Province and the distribution of
employees in the Province. We have
people who provide these services in many parts of the Province.
There
are a number of individuals and organizations who provide this service, not just
our own Public Service Commission, but do it for a number of employers.
There are a number of service providers both here in the Northeast
Avalon, Eastern, Western, and throughout Labrador.
There is a profile, a list of those service providers in various regions.
MS C. BENNETT:
When employees make requests
for the EAP, is it an independent individual who funnels those calls out to the
service providers, or is that handled through the Public Service Commission?
MR. WISEMAN:
It is handled through the
Public Service Commission. There is
group of – Bruce, I think it is four.
OFFICIAL:
Six.
MR. WISEMAN:
There are six employees who
work with the Public Service Commission and that is their sole focus.
They coordinate and handle all of the employee assistance inquires.
They make the connection to the services that are needed if required.
MS C. BENNETT:
Okay.
Mr.
Chair, just out of curiosity, I know there is six-and a half minutes or almost
seven minutes left on the clock, if I am finished questions on 1.1.01, do you
want me to defer to or – ?
CHAIR:
We are doing the Public
Service Commission. We will vote on
the Public Service Commission. It is
only one page.
MS C. BENNETT:
Yes.
CHAIR:
If you are finished with
that, we can pass it over to Lorraine.
Sure, by
all means.
MS MICHAEL:
I do not have any other
questions. The ones I had have been
answered.
CHAIR:
Okay.
MS MICHAEL:
Could I ask one thing,
though, of you? Well, it is actually
of the minister. So far in Estimates
the briefing notes for the ministers have been passed on to us.
It really helps. It is just
the basic information that you have in your briefing notes.
Are you going to be doing that as well, Minister?
MR. WISEMAN:
Sure, we can do that too.
MS MICHAEL:
Okay great.
That
means there are things that we do not have to ask sometimes.
MR. WISEMAN:
Sure.
MS MICHAEL:
Great.
That is
all.
CHAIR:
You are finished?
MS MICHAEL:
I am finished, yes.
CHAIR:
All right.
I will call for the subheads of the Public Service Commission.
CLERK:
Subhead 1.1.01.
CHAIR:
Subhead 1.1.01.
Shall
the total carry?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
On
motion, Public Service Commission, total head, carried.
CHAIR:
Shall I report the Estimates
of the Public Service Commission carried without amendment?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
On
motion, Estimates of the Public Service Commission carried without amendment.
CHAIR:
Good.
Thank you.
Your
Public Service Commission is free to go.
MR. WISEMAN:
Thank you folks.
CHAIR:
Okay, so we have some more
introductions, Minister?
MR. WISEMAN:
Yes, we do.
We have
just changed out the troops. Now we
will have some further introductions.
I will start to my left.
MS HANRAHAN:
Denise Hanrahan, Assistant Deputy Minister, Department of Finance.
MS TRICKETT:
Wanda Trickett, Departmental Controller.
MR. MARTIN:
Craig Martin, Assistant Deputy Minister, Department of Finance.
MR. GRIFFIN:
Jay Griffin, Director of Tax Policy.
MS MILLER:
Ann Marie Miller, Comptroller General of Finance.
MR. HOLLETT:
Alton Hollett, Assistant Deputy Minister of Economics and Statistics.
MS TULK:
Jennifer Tulk, Director of Communications, Finance and Human Resource
Secretariat.
MS DRODGE:
Megan Drodge, Executive Assistant to Minister Wiseman.
MS BOLAND:
Gail Boland, Director of Policy, Planning, Accountability and Information
Management.
CHAIR:
Okay.
Thank you.
We will
start with Finance. What we normally
do here, Cathy – I know Lorraine is familiar with it.
We will do the subheads of the different sections.
Right now, we are going to call for the subhead of the Executive and
Support Services so we will call for the subhead.
CLERK:
Subhead 1.1.01 to 1.3.01.
CHAIR:
Subhead 1.1.01 to 1.3.01.
We will
start with you, Cathy.
MS C. BENNETT:
Sure.
As I
mentioned to the Chair earlier, if I ask a question that is inappropriately
timed, based on the section that we are going through, I am sure he will correct
me and let me know I am offside.
I wanted
to ask some questions with regard to some of the salary Estimates, if we could
start there. Based on the
information that I went through, in the information we had from last year and
this year, I see the number of permanent positions in fiscal 2014-2015 at 272
and in 2015-2016 at 271. I am
wondering if you can give me some clarity on the number of contractual,
temporary, and seasonal positions.
MR. WISEMAN:
Right now the department has
355 employees. There are 271
permanent, fifty-seven temporary, eleven contractual, and there are sixteen
seasonal.
MS C. BENNETT:
The fifty-seven temporary, is
that number consistent with the same number as the last four years?
MR. WISEMAN:
I do not have the Salary
Details from the previous year here.
I am not sure, Denise, if you have some knowledge of that.
I will have to find that out for you.
I can
verify the number for you, to answer your question, but there have not been huge
swings in the staffing levels in the department for a number of years.
If there are some variations, they are small numbers, but I can verify
the number for you.
MS C. BENNETT:
That would be great, thanks.
Budget
2015-2016 expected expenditures are $1.16 million in other salary costs; the
year before it was $64,000. Can you
give us a breakdown of this?
MR. WISEMAN:
Are you looking at the
Minister's Office?
MS C. BENNETT:
It is page 3.6.
I am probably ahead of myself, am I?
CHAIR:
Yes, you are.
You are in Financial Administration.
MS C. BENNETT:
I am in 2.1.
CHAIR:
We are doing Executive
Support now.
MS C. BENNETT:
Sorry, my apologies.
CHAIR:
That is okay.
MR. WISEMAN:
That is all right.
MS C. BENNETT:
Of the 271 positions, how
many of those positions are expected to be a part of the attrition plan over the
next five years?
MR. WISEMAN:
Departmental targets, in
Budget 2015 there is a target of three.
That will repeat itself over the course of the next five years, so there
will be fifteen.
MS C. BENNETT:
Based on the blend, I guess,
of the positions that are inside that make up the 271, have you forecast out the
individuals or the positons that will be eliminated?
MR. WISEMAN:
Not at this point, no.
We have profiled those who would be eligible to retire, so obviously we
have a profile of our employees in terms of their eligibility for retirement and
when those dates would occur; but, in terms of setting long-term forecasts about
which one of those we may not replace, these are decisions that we have not yet
made.
MS C. BENNETT:
Has there been any
identification of the three positions consecutively over the next five years
that will be eliminated through retirements?
Has there been any identification of skills gaps inside the departments
that will be created with those positions being made redundant?
MR. WISEMAN:
That becomes a big
consideration in that forecast. All
departments have the same responsibility in doing their attrition planning as to
recognize that here is your mandate, here is the range of programs and services
you provide. In our case, obviously,
it is tied back to our role as the Department of Finance.
So we need to have the talent and the skill to be able to manage the
financial affairs of the Province.
When we make those considerations that will become a factor.
MS C. BENNETT:
Are those decisions that
departmental staff are expected to create a strategy to identify or is there –
MR. WISEMAN:
The Executive will have that
responsibility to make those decisions.
MS C. BENNETT:
The Executive in the
department?
MR. WISEMAN:
Yes.
MS C. BENNETT:
Each department will be
responsible for that.
MR. WISEMAN:
At a departmental level the
Deputy Minister of Finance, together with the Executive team, would make that
determination in the Department of Finance.
The deputies in other departments, together with their Executive, would
make that decision as well for their respective departments.
These individual decisions are made by individual departments.
MS C. BENNETT:
Okay.
This may
not be a question that the Chair will allow me to ask.
Finance would have a target of three over the next five years.
I am assuming that other departments have a target as well.
MR. WISEMAN:
Exactly.
MS C. BENNETT:
Besides the attrition
program, will there be any other positions that will be cut in Finance in
2015-2016?
MR. WISEMAN:
No.
MS C. BENNETT:
How many people retired in
the department last year?
MR. WISEMAN:
Actually, I do not have that
here. I will have to get that for
you.
MS C. BENNETT:
Okay.
What is
the total number that is eligible for retirement over the next five years?
MR. WISEMAN:
I will have to get that for
you as well.
MS C. BENNETT:
With the total number of
retirements, has there been an identification of the skills gaps – at the total
number of retirements, not the ones for the attrition plan will create in the
department. What plans are in place
for that skills gap replacement?
MR. WISEMAN:
I guess that goes back to the
question you posed a moment ago, because it is the same question.
So I am going to try to give you the same answer, which is each
department – and in our case, I will speak specifically to the Finance.
The deputy minister, together with the rest of the Executive team, as a
part of their mandate, now have to put together an HR plan that maps that out,
giving consideration to the skills that are going to be necessary to provide the
services that we are mandated to do.
When we
look out this year and the out years over that five-year period, as we identify
those individuals who are eligible to retire, we need to make some determination
of what we need to do for succession planning, and what we need to do across a
department to ensure we have the breadth of skills that we need to do the
services and provide the services that we do.
Part of that new HR plan that the executive has a mandate to develop will
be reflected in that strategy.
MS C. BENNETT:
Just for clarity, the
information – there have been a couple of questions we asked that the minister
graciously offered to provide us the information.
Just for my own clarity, can you explain how that information or when
that information will come to us?
MR. WISEMAN:
We can put it together fairly
quickly. It is not something that
there will be, necessarily, any great delay in because it is only a matter of
assembling the information. The
issues of people who retired and a profile of eligibility is something we looked
at very recently, so that is something that is readily available.
MS C. BENNETT:
Would that information be
forwarded to the Official – sorry Lorraine, I am asking probably a stupid
question that you know. So a brown
envelope slips under my office door?
MR. WISEMAN:
What would happen –
MS MICHAEL:
John brings it.
MR. WISEMAN:
This is a committee of the
House and so you have asked that in a committee proceeding.
MS C. BENNETT:
Okay.
MR. WISEMAN:
What I will do is I will
provide it to the Chair. The Chair
then has the responsibility for distribution to those on the Committee.
MS C. BENNETT:
Okay.
MR. WISEMAN:
That is how the information
will flow to you and other members of the Committee, through the Chair.
We will provide that to him.
MS C. BENNETT:
Time frame typically?
MR. WISEMAN:
Soon, a matter of days.
MS C. BENNETT:
Days, okay.
I wanted to make sure that I understood.
I want to understand what the expectation is.
Mr.
Chair, that covers –
CHAIR:
Yes, I was going to say,
Cathy, that we actually started with fifteen minutes, but it is supposed to be
ten now. It was only in the
beginning that it was fifteen.
MS C. BENNETT:
Yes.
I am happy to turn it over to Lorraine.
CHAIR:
To sort of speed things up
back and forth, we try to go with ten and ten.
If you have no more questions on that section, that is okay, that is
fine.
MS C. BENNETT:
I am happy to turn it over.
CHAIR:
We will go to Lorraine.
She may use up ten probably.
MS MICHAEL:
Okay.
Thank you very much.
CHAIR:
Sure.
MS MICHAEL:
I am going to start right
away with line items. It is a minor
one, but still I will. Subhead
1.1.01, under Purchased Services, $4,000 was budgeted, but revised down to $600.
Very little was used in Purchased Services last year, if we could have an
explanation of that.
I think
it is normal practice to go back up to the base so that you allow yourself a
certain amount of money. You are
going back up to $4,000 in this year.
What was the $600, Minister?
MR. WISEMAN:
That covers items such as
some training costs associated in there, the photocopying, entertainment, and
printing services. Those sorts of
costs would be included in that number.
MS MICHAEL:
Okay.
Historically, does it ever go up to the $4,000?
Do you know?
MR. WISEMAN:
I am not sure what it has
historically been. I think we have a
profile here of what it was last year – the year before last, rather.
I thought we did. I will see
if I can find it here for you. I
thought I had it here, but I do not.
There
was $1,000 spent the year before that.
MS MICHAEL:
Okay.
MR. WISEMAN:
The base has always been
$4,000.
MS MICHAEL:
Right.
MR. WISEMAN:
The previous year it was
$1,000. This past year it was $600.
MS MICHAEL:
Okay.
Thank you.
Coming
down to 1.2.01, under Salaries the budget was $1,240,000 and it was revised up
to $1,299,000. Then for this year it
is back down partway, actually, between those two, to $1,277,800.
Could we just have an explanation of that whole line there, Minister,
please?
MR. WISEMAN:
I thought we were still on
the Minister's Office part.
MS MICHAEL:
No, I am sorry.
I thought I said I am just moving to 1.2.01.
MR. WISEMAN:
Okay, I am sorry.
The drop
in Salaries from last year came about as a result of two employees who retired
and there was a deferred replacement.
That is why we ended up with the savings from last year.
This year –
MS MICHAEL:
Last year it was overspent by
$59,000.
MR. WISEMAN:
Yes.
Associated with that we had severance; associated with their leaving, there was
severance.
MS MICHAEL:
Okay.
Thank you.
Then I would like to come down to Professional
Services. The budget was only $7,000
and the expenditure was $607,000.
Obviously, something big happened that you had not anticipated under
Professional Services.
MR.
WISEMAN:
That is associated with pension reform.
We had to use the services of actuarial consulting services to assist
with that exercise, and that is where we picked up the cost of those services
associated with pension reform.
MS
MICHAEL:
Okay.
Who was it who offered that service, that professional
service?
MR.
WISEMAN:
Eckler was one of the companies and Morneau Shepell was the other; there were
two companies that we used. These
are people, we use them – and many pension funds do; that is their area of
expertise.
MS
MICHAEL:
I
think we all are aware that is a pretty special expertise, the actuarial work,
especially around pensions too.
Thank you.
That is all the questions I have in that section.
Moving to 1.2.03, Transportation and Communications, the budget was
$289,100 and the revision was up to $450,000.
Let's look at that first.
What happened last year that made that go up by so much by $169,900 I think?
MR.
WISEMAN:
It
was primarily associated with increase in mail costs as a result of increases by
Canada Post to postage.
MS
MICHAEL:
I
see.
What would be the – I mean, that is a fair chunk.
MR.
WISEMAN:
Yes, it is. I am not sure, Denise,
if there is some additional detail around it, but it is associated with postal
increases.
MS
MICHAEL:
Just with postal increases –
MR.
WISEMAN:
The
amount of activity – I am not sure if there is any one event or something that
contributed to more mail outs going out last year, but –
MS
HANRAHAN:
It
would be vender payments and it would be payroll cheques.
MS
MICHAEL:
Right.
MS
HANRAHAN:
So
as we move towards EFT, the hope is that that will come down.
MS
MICHAEL:
Okay, thank you.
I guess it is because of that increase that the budget
for this year is higher than it was last year.
MR.
WISEMAN:
Exactly, yes.
MS
MICHAEL:
Okay, thank you.
Down to Revenue – Provincial, what is the source of
that revenue and why was it so much higher than budgeted last year?
MR.
WISEMAN:
That is increased revenue from the pooled pension fund, over and above what was
budgeted from last year.
MS
MICHAEL:
Okay, thank you.
Moving to 1.2.04, “Appropriations provide for the
purchase of tangible capital assets.” Purchased
Services –
MR.
WISEMAN:
We
did some changes last year to office space we had down on Mews Place.
We operate a facility on Mews Place, Topsail Road, here in the building,
and in Grand Falls-Windsor locations.
We have a small operation where you have an employee embedded in another
department's facility in Corner Brook but the facilities that are have a
responsibility for ourselves as a department, one on Topsail Road and the one on
Mews Place. These are some
improvements we made to the Mews Place facility.
MS
MICHAEL:
Okay.
You budgeted what you thought it might be, but it
turned out to be less.
MR.
WISEMAN:
Yes.
MS
MICHAEL:
Yes, that is good.
Then, under Property, Furnishing and Equipment you have
not budgeted anything, but you spent $158,000.
MR.
WISEMAN:
That was a couple of things. We had
six high-resolution scanners to manage our information systems, and then we had
a mobile filing system that was purchased as a part of the relocation to Mews
Place.
MS
MICHAEL:
Okay, thank you.
How far was the call?
Was it to –
CHAIR:
It
was 1.3.01.
MS
MICHAEL:
Okay, great. I will continue on to
that then, although I am not sure I have any questions there.
Under Operating Accounts: Employee Benefits, the budget
was $72.3 million and the expenditures $66.8 million.
Could we have an explanation of that, please?
MR.
WISEMAN:
This area here, 1.3.01, Government Personnel Costs, there is a couple of areas
in Finance like this where the Department of Finance absorbs the budget for and
then underwrites the cost of those expenditures across government.
These are the costs associated with the group insurance program, pension
plan contributions, and all of those costs.
Rather than have individual departments dealing with
that, all of the money is allocated in Finance, and Finance is kind of a
flow-through account held in the Finance budget. These are things that are
associated with the Employment Insurance program, the Canada Pension Plan
contributions, group medical and group life, and the post-secondary tax paid on
payroll. All of that is captured in
this category here.
This is a reflection of employee activity, or the amount of employee activity
that we have across government. It
gets absorbed in here. These changes
reflect fluctuations in those expenditures which are influenced by fluctuations
in staffing at various departments throughout government.
MS MICHAEL:
Right.
It would be difficult to do a right-on estimate of that.
MR. WISEMAN:
The estimating is based on
historical information, but it is an area where we have no control over how
costs – the Department of Finance does not, in and of itself, have an influence
over how the cost flows and the changes that are incurred.
(Inaudible) driven by operational departments that may make changes in
their staffing over any given year, we just absorb it here.
MS MICHAEL:
Right.
MR. WISEMAN:
We try to budget for it based
on what we historically have done and any information we have about forecasting
that has been done with respect to staffing in various departments throughout
government.
CHAIR:
Lorraine, it is okay.
If you only have a question or two left –
MS MICHAEL:
Just one more.
CHAIR:
– we can finish it.
The response is probably lengthy at times so it uses up some of your
time.
MS MICHAEL:
I cannot believe that the
minister has lengthy responses. I
cannot believe that.
MR. WISEMAN:
You are asking such important
questions that they deserve a good answer.
MS MICHAEL:
They do.
Thank you.
CHAIR:
You might as well take the
other question if you are going to finish up on that.
MS MICHAEL:
Again I always like to know –
because in some places it is the same, but in other departments it is different
– what the provincial revenue source is in this section.
MR. WISEMAN:
The revenue.
Maybe I will ask Denise, if she can speak to that, actually, because I am
not– some of it comes from group insurance recoveries, but I want to make sure I
give you the answer that reflects a little more detail.
MS HANRAHAN:
When employees go on
secondment to other agencies, this is us recovering this portion of their cost.
In some cases, that would include group insurance, but it generally
includes their employee benefit portions.
MS MICHAEL:
Right.
Okay.
Could I ask a general question before going back to Cathy?
CHAIR:
Yes, sure.
I will make it up with Cathy.
That is not a problem.
MS MICHAEL:
Okay, thank you.
This is
more personal interest actually, but I think I am in the right spot to ask it.
If, for example, I owe money – to be honest, one time I was travelling
and did not know that my Blackberry was roaming.
I had a bill of over $2,000 which I paid.
I went down to Finance and paid it.
I do not get anything that shows I have paid it.
So if
somebody were to look at my expenditures they would say, well, Lorraine Michael
spent $2,500 when she was in – wherever she was.
There is nothing to show that I paid that money back.
Is that normal?
MR. WISEMAN:
There are two answers to your
question; one is the receipt itself you get.
So you yourself have had the acknowledgment of the payment.
MS MICHAEL:
Yes.
MR. WISEMAN:
You have been given a
receipt. The Comptroller General's
office would provide the receipting.
MS MICHAEL:
Yes.
MR. WISEMAN:
I think what you are more
referring to is the manner in which that gets reported in the House of
Assembly's report –
MS MICHAEL:
Publicly.
MR. WISEMAN:
– and the public information that is out there.
MS MICHAEL:
That is right.
MR. WISEMAN:
All MHAs and their
expenditures – there is no revenue stream associated on that line at all.
MS MICHAEL:
That is right.
Yes.
MR. WISEMAN:
So it is much more the way
the reports established by the House of Assembly – the construct of the reports.
The revenue is clearly put back in the public Treasury and you get a
receipt for that. Your concern and
your question obviously is much more about how the public looks at your
expenditures and sees that you spent all of this money on something, not knowing
that you ever paid it back.
MS MICHAEL:
That is right.
MR. WISEMAN:
It is a reflection of how the
House of Assembly itself has constructed your reports.
MS MICHAEL:
Right.
MR. WISEMAN:
It is something that the
Management Commission –
MS MICHAEL:
Should look at it.
MR. WISEMAN:
– should address so that there is a reconciliation should there be an
overpayment that is recovered. That
way it is fully accountable for and transparent in its reporting.
MS MICHAEL:
Right.
MR. WISEMAN:
Now it is paid out of the
public purse and that is how you got the money.
MS MICHAEL:
That is right.
MR. WISEMAN:
Therefore, when it is
recovered it goes back to the Exchequer Account and it is recorded in general
revenues.
MS MICHAEL:
Right.
MR. WISEMAN:
It is much more a reporting
issue established by the Management Commission.
MS MICHAEL:
Right.
Thank you.
I will
consider bringing that to the Management Commission.
CHAIR:
Okay.
Thank you, Lorraine.
Cathy,
did you have any more questions on this particular subhead?
MS C. BENNETT:
I did.
CHAIR:
Okay, not a problem.
MS C. BENNETT:
Under 1.1.01, Minister's
Office, the line item is referenced Transportation and Communications.
For a process question that may help me and help speed things up so I do
not ask the same question every time; in 2014-2015 we had a budget of $51,000.
Is that a built-up budget, or is that a budget that is built from
historical performance?
When I
say built up I mean is it built up from a plan, or it is based on the historical
results of that particular line item.
MR. WISEMAN:
It would be based on
historical changes. There is a thing
here that influences this. Depending
on where the minister's residence would be and their travel – so if you have a
minister, maybe two ministers ago, and their residence was here in St. John's,
as a minister then, there was very little travel in terms of that constituency
travel; whereas if you are a minister where your office space is here but your
constituency is somewhere, then this travel may change.
The figure that you see built in the base here is a reflection of
historical utilization by that department.
MS C. BENNETT:
Right.
MR. WISEMAN:
What was experienced last
year came about as a result of who happened to be the minister and their
circumstance, both where their residence would have been and where their
district would have been. So that
would have been a reflection of that change.
MS C. BENNETT:
Then, generally speaking,
when we look at the Transportation line, in subsequent areas, the same process
would apply that it is a historical budget based on the spending from the past.
I guess my question then is: Decisions about travel or about staff
training, things that would require travel, are they linked to a strategic plan
or are they made based on historical – we have always gone to this convention;
we have always done this training.
I guess
I am confused as to how a historical budget would link to a strategic plan of
activity. Maybe it is just because I
do not understand the process.
MR. WISEMAN:
Okay, so let's separate the
answer in two ways for you because we started off your question with respect to
the Minister's Office.
MS C. BENNETT:
Yes.
MR. WISEMAN:
My answer was with respect to
the Minister's Office.
MS C. BENNETT:
I understood, yes.
MR. WISEMAN:
You are broadening your
question to look at how we actually allocate funding in a variety of areas.
Let's take that one, travel, for example.
Any budgets that you see in here as we walk through, seeing there are
other departments here, they would be a reflection of decisions we would have
made through a budgetary process.
As a
team, we would have said: Let's look at Executive Support for next year, and
let's look at what would be our operational plan for next year, how we are going
to function next year as a department, what are some of the things we want to do
next year and how much money are we going to need to do that – always in the
context, though, of what our fiscal reality would have been.
As you
go through this document, and you have gone through some of the other Estimates,
you will see adjustments in the budget this year relative to what it was last
year. They would be a reflection of
operational decisions. I think you
used the word “historical context” versus “accumulative.”
In that context – these are not accumulative numbers, so it is not an
accumulation of what has happened in the past.
They
reflect, historically, what has been our practice, what are some of the things
we have done and participated in, and that is how we built the minister's
budget.
MS C. BENNETT:
Right.
MR. WISEMAN:
Other areas that we talk
about, as we move forward here, will reflect what we have chosen to do in the
next twelve-month period. We have
said to a number of others here is where we are fiscally today, here is the
nature of our operation, here are some things that we must do.
For
example – we will talk about it in a moment as we get to it, but let me use it
as an example now – the area of taxation.
We have tax auditors. As a
part of their program, they need to be travelling.
If we are going to have a tax audit function, they need to have resources
to do their job and a part of that is the ability to be able to travel.
So when we map out the travel budget, we need to consider what the audit
activities are for next year. Based
on these forecasted audit activities, we need to allocate this much money for
travel.
It is
based on an operational plan for the coming twelve months.
MS C. BENNETT:
Okay.
MR. WISEMAN:
We walk through each of those
areas of operation in that same fashion and we came to the number that you are
going to see as we walk through each of those headings.
You
started your question with respect to the Minister's Office, and that is why I
framed it the way I did.
MS C. BENNETT:
You are obviously right; my
question was asked in the context of trying to speed up every time I asked about
travel, so I appreciate you giving me both answers.
To this
one specifically then, we underspent happily by $49,000.
I am just curious as to what things did not get done, or was that a
reflection of what the minister mentioned earlier about the fact that it was a
different minister, a different travel costs associated.
I am curious to know what was not done.
MR. WISEMAN:
Again, the issue of what was
not done, I cannot tell you that the minister last year, or prior to my coming
last year, what that person may have chosen not to do and did not charge the
travel to that account. I can tell
you my own experience after becoming minister in the last fiscal year in that
most of my time last year, with the exception of one trip to Ottawa and I think
I had one other travel, was pretty much focused in the department around
preparation for this year's Budget.
As you
recall, last year in July we started to run into some challenges with our
revenue stream. So we really needed
to dig in, in the fall to start planning for this year's Budget.
Therefore, my time was anchored mostly to the office.
What I
did not do – it might be that there are a couple of things that I ordinarily
would have participated in last year in the fall that I did not, but that was
conscious decision about where I devoted my time.
MS C. BENNETT:
Okay.
That one I am good on, and that one I am good.
Thank you.
Heading
1.2.03, Administrative Support, I had a couple of quick questions there.
There was a salary of $112,000 which was allocated last year for students
within the Department of Finance. I
am wondering: Did you not hire whom you had planned as far as students go?
MR. WISEMAN:
There are two groups of
students that we have within the department.
We have co-op students who participate; most of them would be business
students. Most of them were from the
College of the North Atlantic or from Memorial University.
Then there are some students we provide summer employment to as well.
Last
year, we did not have as many requests for students as we budgeted for and would
have historically had. I think
throughout government you will find that most departments provide educational
opportunities, employment opportunities, as a result of supporting programs like
the co-op program, whether it is business, engineering, or other areas.
Then, in the summer, we provide student employment opportunities for
students as well.
Sometimes the demands are high and some more times they are not, depending on
other opportunities that may exist in the community.
MS C. BENNETT:
Would those positions have
been advertised to students to fill or –
MR. WISEMAN:
Many of them are done through
direct application to the departments.
Some of them are through the Human Resource Secretariat.
They are not positions that we have decided that we are going to create
ten positions and here are their position descriptions and we are going to
advertise these jobs this year.
What we
tend to do is we direct their applications to the Human Resource Secretariat,
direct applications to departments (inaudible) students, through high school
students, university students, college students.
Depending on the flexibility that departments may have in their budgets
for any one year, there may be an ability to accommodate half a dozen, there may
be an ability to only accommodate one or two, and some more times there is a
flexibility enough to accommodate more than that depending on the demand for
student employment.
MS C. BENNETT:
I am just curious if, this
year, the demand and applications for those positions was less, what is the
rationale around budgeting more than what was budgeted last year?
MR. WISEMAN:
Again, we believe that last
year might have been an anomaly in that the demand was not as high as we have
historically had it. My own personal
experience with students in areas where I have worked, there are fluctuations.
Through some years there are lots of other employment opportunities that
students may take advantage of and the demand through various government
departments may not be that high; in other years, it is.
MS C. BENNETT:
Can we get the numbers for
student hires for the last four years?
MR. WISEMAN:
We can do that.
MS C. BENNETT:
Perfect, thanks.
Okay,
that question was asked and I am finished that one.
Subhead 1.3 – the last question, a short one – there was an allocation of
$60,000 –
MR. WISEMAN:
In what –
MS C. BENNETT:
Sorry, 1.3.01, Government
Personnel Costs.
MR. WISEMAN:
Okay.
MS C. BENNETT:
Is that okay?
MR. WISEMAN:
Yes.
MS C. BENNETT:
I know that Ms Michael asked
a question earlier, but I am still sort of confused.
Last year there was an allocation of $60 million in Salaries.
The breakdown from last year's Estimate book showed about $23 million in
collective bargaining increases, $18,000 for a JES block to address – can we
have a little bit more detail on the Salaries in this section?
I did not understand, Minister, with due respect, the balancing that you
were talking about.
MR. WISEMAN:
Remember I said, as I
answered this question, there are a number of areas throughout government where
blocks of money are allocated because the Department of Finance becomes a
holding spot for that.
MS C. BENNETT:
Yes.
MR. WISEMAN:
This is one of those areas
where you have the implementation of the Job Evaluation System – the first block
was done in the middle of April. We
have another group being implemented as of the middle of July.
We we have put a block of money in here to be distributed to departments
of government to cover off the cost of that Job Evaluation System.
Plus, we
have some areas where we are trying to – we have had a block of money allocated
in here for some service contracts that government will have to fund.
There are negotiations taking place with ambulance operators, for
example. There are negotiations
taking place with the Newfoundland and Labrador Medical Association, to name a
couple. So we needed to create a
block of money here to make provision for those kinds of decisions that will be
made during the course of this fiscal year.
Rather
than allocate it to a particular department, we needed to create a block to
cover the outcome of those kinds of discussions that will occur.
MS C. BENNETT:
In essence, though, this is
operating money for operating departments that is captured here as a result of
salary band changes or salary changes.
MR. WISEMAN:
Yes.
MS C. BENNETT:
Would it not make more sense
to have those operation costs captured in the department so that –
MR. WISEMAN:
Just so we are clear, it will
be captured in terms of its costing.
It will costed to the department, but we need to have it here for its
distribution. In terms of when the
expenditures are reported next year in the accounts of government, it will be
charged to the respective department that has incurred the expense.
MS C. BENNETT:
I understand.
Okay.
CHAIR:
Okay.
You have
one more question, Lorraine?
MS MICHAEL:
Yes.
CHAIR:
Sure.
Okay.
MS MICHAEL:
Yes, just one question that I
missed under 1.2.03, the Salaries line.
It looks like it might be only one person, but budgeted $112,800 and then
the revision was down to $39,600.
MR. WISEMAN:
This allocation here is for
students. It is a block of money for
students.
MS MICHAEL:
Oh, that is for the students.
Okay.
MR. WISEMAN:
That is the student
conversation we just had a moment ago.
MS MICHAEL:
Good enough.
Okay.
I
thought it might have been that, but I missed it because it did not say that
specifically.
Thank
you very much. That is it.
CHAIR:
Okay.
No more
questions, Lorraine?
MS MICHAEL:
No.
CHAIR:
No problem.
We will call for the subheads of the Executive and Support Services.
CLERK:
Subheads 1.1.01 to 1.3.01.
CHAIR:
Subheads 1.1.01 to 1.3.01.
Shall
the total carry?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
On
motion, subheads 1.1.01 through 1.3.01 carried.
CHAIR:
Now we will call for the
subhead for Financial Planning.
CLERK:
Subhead 2.1.01 to 2.1.05.
CHAIR:
Subhead 2.1.01 to 2.1.05.
We will
start with you now, Lorraine.
MS MICHAEL:
Thank you very much.
Subhead
2.1.01; it seems always to be the beginner.
The Salaries line, please, Minister; budgeted at $754,600 and down to
$606,100, then this year up to $777,000.
MR. WISEMAN:
There were two vacancies that
occurred in that unit last year. We
deferred filling them. Then, the
other increase reflects the 3 per cent general salary increase.
MS MICHAEL:
Right.
MR. WISEMAN:
In all of those areas, just
as a general commentary, the original budgets for this year of 2015-2016 reflect
a 3 per cent increase in salaries.
MS MICHAEL:
Right.
MR. WISEMAN:
Some of the changes that you
might see in some of those categories reflect that 3 per cent increase.
MS MICHAEL:
Have those two vacancies been
filled, or at least you expect to fill them, one or the other?
MR. WISEMAN:
One of them is.
MS MICHAEL:
Okay and the other will be
filled?
Okay.
Thank you.
Under
Professional Services, $337,000 approximately was budgeted and $291,000
approximately spent.
MR. WISEMAN:
Part of that are the changes
that we had made. Last year, you
might recall in the fall we started making some conscious decisions about
discretionary spending.
MS MICHAEL:
Yes.
MR. WISEMAN:
This was one area where we
were able to make some changes from last year.
Some of the costs we were able to defer.
MS MICHAEL:
What would normally be the
Professional Services that you would be contracting there, or paying for,
whichever?
MR. WISEMAN:
Denise, do we have any
history there of what we paid out of this one here.
This is the Pensions Administration fund.
MS HANRAHAN:
Yes.
Historically, that would be paying actuaries, such as Morneau, for
evaluations of the pension plan as well as maintenance contracts for our pension
benefits system.
MS MICHAEL:
Maintenance contracts.
MS HANRAHAN:
Maintenance contracts for the
IT system.
MS MICHAEL:
Yes, right.
Okay.
Thank you.
MR. WISEMAN:
It is the software that
administers the plan.
MS MICHAEL:
Right.
Then
under Purchased Services, budgeted at $56,600, but only spent $29,000.
It looks like you have done a reassessment of what you need in that line
for this year which is only $36,600.
MR. WISEMAN:
Last year's dip in what our
forecast was, again, was as a result of that decision on discretionary spending.
MS MICHAEL:
Okay.
MR. WISEMAN:
We were able to realize some
savings.
MS MICHAEL:
Right.
We have asked this question of others: Where you have made cuts due to
discretionary spending, is it in any way affecting negatively what you are
doing? Or are you making sure that
you have what you need to do the work that needs to be done?
MR. WISEMAN:
It is an interesting question
actually, and the fact that you have asked it of everybody – it is a fair
question to pose. Obviously,
anywhere that we have made some changes in our spending patterns and our
forecast expenditures, we believe that we are able to do this by making some
modifications in how we deliver services.
We have
not had to discontinue doing anything in the department.
In some cases, we have looked at how we might do things slightly
different, but we have not had to discontinue providing any service or program
to live within our forecast.
MS MICHAEL:
Thank you.
Under
Property, Furnishings and Equipment you seem to have a baseline of $20,700 and
last year spent only $13,500. I do
not know if you have the historical information there.
Is that a usual revision in terms of the ratio?
MR. WISEMAN:
Denise, I do not know if we
have any historic data there of what we spent that on.
MS HANRAHAN:
(Inaudible).
MS MICHAEL:
Pardon?
MR. WISEMAN:
In the previous year to this,
the one just ending, we spent all of that allocation.
MS MICHAEL:
Okay, thank you.
Let's go
to 2.1.02, Budgeting. Again, let's
start with Salaries and taking into consideration what you said, I will be more
interested in the difference between the budget which was $1.1 million,
approximately, and the revision down to $1.2 million.
MR. WISEMAN:
Are you talking about the
Budgeting –
MS MICHAEL:
Yes, what was the revision
downwards; I think it is $81,400 is the difference between the budget and the
revision.
MR. WISEMAN:
Are we looking at the same
page, Budgeting –
MS MICHAEL:
Heading 2.1.01.
MR. WISEMAN:
The $1.145 million was last
year's budget and the actual was $1.2 million.
MS MICHAEL:
Yes, $1,145,300.
MR. WISEMAN:
Yes, so the increase over
last year –
MS MICHAEL:
The decrease.
MR. WISEMAN:
I am sorry, you are asking –
MS MICHAEL:
No, I am sorry.
You are right; it is an increase.
I apologize. It has been a
long few days.
MR. WISEMAN:
Okay.
I was starting to question myself there for a second.
There
was an initial severance we had to pay out as a result of employees leaving, and
that is what drove that cost up.
MS MICHAEL:
Okay, thank you.
Over to
2.1.03 and here – well, it is not much of a difference, but I will still ask –
the budget was $221,100 and this time it is revised down to $208,300.
MR. WISEMAN:
There was a position that
went partway through the year before it got filled.
There was a vacancy and it was not filled for the full fiscal year.
MS MICHAEL:
Right, thank you.
MR. WISEMAN:
This is one of those grants,
the small complement, we are back at complement.
If you add on the 3 per cent salary increase, then you get this figure
here. That is why it grew back up
again.
MS MICHAEL:
Right.
I am not
usually asking that because I can see that; it is only if it is going to be a
large number that I will question that.
Thank
you.
Down to
2.1.04, Financial Assistance: “Appropriations provide for promoting business
opportunities and financial support for departments and Crown agencies for
initiatives consistent with government's objectives with relevant funding
transferred to departments during the year as required.”
I know
it goes into a second page; that is why I am getting my pages ready here.
We see that you have $1.2 million, approximately, budgeted in 2014-2015.
That was not spent and now this year you are budgeting $2.2 million,
approximately. I would like some
explanation of this money, please.
MR. WISEMAN:
Again, this is one of those
areas where Finance holds the block but will not end up spending it as a
department. For example, the Muskrat
Falls oversight activity, there is $500,000 in here for that.
MS MICHAEL:
A half million.
MR. WISEMAN:
Yes.
Then there is another $300,000-and-some-odd allocated in here for some
additional pension reform initiatives.
We are in the process of finalizing the NLTA, and we have the Uniformed
Services one that we will work on next.
So we have allocated a block of money in here for some activity around
that.
Under
the revisions to the new legislation we have made some provision in here for the
implementation of ATIPP. The Privacy
Commissioner has indicated that it will be in June.
I think he might have, as a part of the Management Commission process,
indicated to the Management Commission that it would be June before he had a
chance to get a better feel for what resources he would need.
MS MICHAEL:
Yes.
MR. WISEMAN:
So we needed to make a
provision so we have a block of money in here for that.
There is some $700,000 in here for that activity because he has indicated
that he needed to have some time to figure that out.
Aligning with his activity, the Office of Public Engagement also needs to
make some adjustments in how they are going to support that new legislation.
We have
taken a block of money, some-$700,000, and put it in a block and placed it here
to facilitate that happening. This
block of money represents that kind of decision.
It is a pretty broad description you will see in the Estimates for it,
but the money that is allocated in this year, it is for those items that we have
just identified here. Plus, we have
an additional $300,000 for Professional Services embedded in here as a provision
for services akin to those sorts of activities.
MS MICHAEL:
Okay.
CHAIR:
That is a good way to finish
it – oh, you are still on the same question?
MS MICHAEL:
Yes, I am still on the same
question.
CHAIR:
Okay.
MS MICHAEL:
If I can finish it?
CHAIR:
Yes, you can finish.
MS MICHAEL:
Okay, thank you.
I have a
follow-up. Number one – this is just
a comment – you have all of that so when we get the notes, we will have that
detail.
MR. WISEMAN:
Yes.
MS MICHAEL:
I just want to question – if
I am reading my notes here correctly – last year we were told that the money
that was being estimated was for Deloitte & Touche for its strategic
procurement. Obviously that did not
happen because no expenditure happened.
MR. WISEMAN:
Are you talking about last
year's Estimates?
MS MICHAEL:
Yes, it was last year's
Estimates? Last year $1,223,000 was
being estimated and it was not spent.
Our notes tell us that we were told it was going to be for Deloitte &
Touche to do a strategic procurement.
MR. WISEMAN:
I just want to go back to the
question I answered a moment ago from Ms Bennett about the way this goes in the
previous account, how it gets expended.
I think your question earlier was around why won't you then transfer it
out to that department.
When it
gets expensed, it gets expensed out to that.
The expenditure for that money would be captured in the Cabinet
Secretariat expenditures, so the money would have been transferred out to them.
That piece of work that Deloitte was doing on that project, that work was
done last year I believe.
MS MICHAEL:
So it is showing up somewhere
else?
MR. WISEMAN:
Yes, as an expenditure.
MS MICHAEL:
Yes.
MR. WISEMAN:
It is this issue with the
placeholder in the budgetary process.
We need to make a provision for it somewhere, so we block it here.
Then when the expenditure occurs, the relevant department, we transfer
the money out to them and they incur the expense.
MS MICHAEL:
Okay.
MR. WISEMAN:
It is accounted for as an
expenditure item.
CHAIR:
Thank you, that is good.
Cathy.
MS C. BENNETT:
With the Chair's indulgence,
if it is okay, I am going to keep asking questions on 2.1.04 and go back to the
beginning –
CHAIR:
Yes, we are at 2.1.01 now to
2.1.05. So if you want to go back to
2.1.01, that is fine.
MS C. BENNETT:
Is it okay if I stay on
2.1.04 and finish the line of questioning?
CHAIR:
Sure.
MS C. BENNETT:
I am still confused.
Muskrat Falls oversight, as an example, $500,000 was budgeted last year
for it so when that expense took place, that expense was charged to the
Department of Natural Resources in a line item?
MR. WISEMAN:
Muskrat Falls oversight would
have been in Cabinet Secretariat.
MS C. BENNETT:
Last year if we knew we had
to make an allocation for it and we know there is going to be an expense this
year, why would that still be in this year's budget?
MR. WISEMAN:
We transfer that as they draw
down on it. If they only spend
$300,000 that is all they get. It is
earmarked specifically for that project.
MS C. BENNETT:
Okay.
So then
their department operational expenses, it is a special thing that does not
happen on an annual basis that is why you are keeping it there.
Okay, I got it now.
In
2013-2014 it was $4.5 million that was budgeted and zero was spent.
The reason I would assume that zero was spent is that the $4.5 million
was expensed out as it needed to be – got it; I understand now.
That
would include, as an example, what Ms Michael just referred to, some of the
expenses related to the procurement cost-savings initiative.
MR. WISEMAN:
To the Deloitte contract.
MS C. BENNETT:
Yes, got you.
These are one-time, never to be repeated, never to build into our annual
budget – I got it now. It just took
me a moment, thank you.
On the
procurement cost-savings initiative, I am wondering if the minister or even
staff would like to give some indication of what exactly some of the things were
that were identified in that.
MR. WISEMAN:
We can get that information
for you. Keep in mind, we were the
placeholder for the money; the expenditure was incurred by someone else.
We will get the answer for you, but it is not something we are
responsible for the administration of, and we would not have been involved
directly in the project.
MS C. BENNETT:
Right.
Who
would have owned accountability for the project?
MR. WISEMAN:
On that one it would have
been SNL under GPA – Government Services under GPA.
MS C. BENNETT:
Okay.
The
money that is allocated, the $2.2 million that is budgeted for this year, if I
have heard correctly, there is still the money for the Muskrat Falls oversight.
MR. WISEMAN:
Yes.
MS C. BENNETT:
There is still an amount for
the continuation of pension reform initiative.
MR. WISEMAN:
Yes.
MS C. BENNETT:
There is a new amount that
builds up to cover what the minister just referred to, I am guessing cost
associated with Bill 1.
MR. WISEMAN:
Seven hundred thousand,
exactly, yes.
MS C. BENNETT:
Okay.
With the
Chair's permission, I will go back to 2.1.01, Pension Administration, if that is
okay.
Under
the line item Professional Services I am wondering where the savings come from
to move from $337,000 as a budget to a revised estimate of $291,000.
MR. WISEMAN:
I guess when you go back to
this, if your savings – we just were able to, as I said earlier, in a lot of
these discretionary spending decisions, some of them were decisions that we were
able to defer an activity, and some of them were areas where we completed a
project maybe cheaper than we would have had thought we would have been in the
forecast. Some of these savings, the
difference between the $291,000 and the $337,000, would have been a result of
day-to-day management decisions that would have been made that accumulated to
give you that differential.
MS C. BENNETT:
The source of provincial
revenue – again, just to refresh my memory – can you provide the details on
that?
MR. WISEMAN:
Again, this is associated
with the recovery from the pooled pension fund.
That is a couple of times that question have come up.
It would be recovery from the pooled pension fund.
I will ask Denise to give you an explanation of how the revenue stream
works from the pooled pension fund.
MS HANRAHAN:
All of the costs that are
related to the administration of the pension fund are ultimately charged back
against the fund and they pay back to government to cover the costs of salaries
and operating. You will always find
that activity nets to zero.
MS C. BENNETT:
Okay.
I guess
my question then now is with the changes in some of the pension programs as we
go forward, and this being a transition year, how have we changed the budget
process to reflect that going forward; or is it timed to be with the end of the
fiscal year, March next year?
MR. WISEMAN:
It is an interesting question
you are posing because we are moving into some slightly different territory for
the administration of the pension fund now as a result of the changes we have
made. Historically, the pension plan
has been administered by this division in the Department of Finance.
Government was responsible for all of the liabilities of the fund and the
Minister of Finance was the trustee.
Now, as
a result of the joint trusteeship, we now have established a separate
corporation. Remember we dealt with
the legislation here in the House.
MS C. BENNETT:
Yes.
MR. WISEMAN:
We now have an entity that is
going to be responsible for that and we are in that transition phase now where
the entity is taking control of the administration of that plan.
At some
point in the future you might find that this may not be an item in our
Estimates, because the pension plan will be administered by a corporation and
they will pay their own expenses as a corporate entity; but, for now, in the
transition, we are continuing as business as usual to provide the administrative
support for the plan and charge it to the fund.
As time
progresses, depending on the decisions of that corporation, they may in fact
look to government say listen, you have been administering the plan for a while,
can we continue to pay you a fee and let you do it; or, they may choose to do it
in some other fashion. That is the
corporation's responsibility and the trustees would make those decisions as to
how they see the plan being run.
This
area in these Estimates will start to evolve over time, so this is very much a
transition year. I would suspect we
will not see any change in the fiscal year that we are moving into now, because
the corporation is just getting itself working and they will start to decide how
they manage the fund into the future.
I would not expect that will change much in the next eight or ten months.
As we
move forward in coming years, depending on the decisions they make, this may
change totally and this may disappear from our Estimates.
MS C. BENNETT:
In the past when government
had 100 per cent of the liability, it had 100 per cent accountability to do the
work. Going forward, it is a shared
liability. Obviously the
accountability will shift from government directly, in the Department of
Finance, it will shift to the corporation.
Yet, as a shareholder, government will still be responsible.
What is –
MR. WISEMAN:
Just so that we are clear, it
is a joint trusteeship so government will be responsible for –
MS C. BENNETT:
Yes, for its portion.
MR. WISEMAN: –
50 per cent of the
liabilities and will be, in theory, the benefactor of any growth that the plan
experiences. So it is a shared
responsibility now between the plan members and the government as an employer.
What we have done as an employer and what the employees themselves have
done is made a decision to appoint trustees.
So there have been appointments from both the employer and from the plan
members to this corporation and they have a fiduciary responsibility to the
plan.
MS C. BENNETT:
The skill matrix for the
trustees on the corporation has been defined by who?
MR. WISEMAN:
That was an interesting kind
of discussion actually because the plan members and the various unions that
represented the plan members in the Public Service Pension Plan in particular,
there was a fairly lengthy discussion around what constituted the credentials
that would be required to sit on that board.
Keep in mind that the employer gets to pick who they want to appoint as
trustees and the employee groups get to pick who they want to represent their
interests. So there was – I would
not use the word a negotiated understanding of what that would be, but
recognizing that the plan needed to have certain skill sets to be able to carry
out their fiduciary responsibility, it was agreed at the end of the day that the
employer would appoint people who were capable and competent broadly defined to
the board, and the employee groups would do that same thing.
There
was a belief that the management agreement for the plan should not be
prescriptive and dictate who the employees should put on that board.
The language in the agreement is broad in that it does not nail down
specifically the skills, but it acknowledges that there are competencies
required to be on that board.
MS C. BENNETT:
Right.
MR. WISEMAN:
That was an agreed upon
language that grew out of the negotiations between the employer and the various
unions that represented the employees in that plan.
CHAIR:
Okay, thank you.
Lorraine.
MS MICHAEL:
Does Cathy have a follow-up
question to finish off discussion?
CHAIR:
I am assuming she has more
than just one follow-up question in this section?
MS C. BENNETT:
I can wait.
MS MICHAEL:
Okay.
For the
last section in this part, 2.1.05, Financial Assistance: Loans, Advances and
Investments, I know what a large part of the $11.2 million was spent on last
year, but not all of it was spent.
Could we have an explanation, Minister, please?
The revision down, I think $1.2 million was not spent.
MR. WISEMAN:
That amount is basically the
Corner Brook Kruger deal.
MS MICHAEL:
The money that went to
Kruger, yes. That is what we were
told last year.
MR. WISEMAN:
That $9.7 million is what is anticipated to be the drawn down against that $110
million in this year coming.
MS MICHAEL:
In this year coming, okay.
MR. WISEMAN:
Last year $9.96 million was
drawn down.
MS MICHAEL:
Okay.
We were
told it was going to be $10.7 million.
MR. WISEMAN:
For this year?
MS MICHAEL:
No, for last year.
We were told it was going to be $10.7 million, but it was actually $9.96
million.
MR. WISEMAN:
It was $9.96 million, yes;
and then $9.759 million is what is forecasted for this year coming.
MS MICHAEL:
Okay.
That is
all still Kruger so we are talking –
MR. WISEMAN:
It is all still Kruger, yes.
MS MICHAEL:
Okay.
They got that last year and they are getting this this year?
MR. WISEMAN:
Based on the $110 million,
there is still $5.5 million in change left over to be drawn down in subsequent
year.
MS MICHAEL:
Okay.
When you
come down to the provincial revenue, what is that?
MR. WISEMAN:
That is the interest.
MS MICHAEL:
That is the interest, okay.
So they are paying the interest, great.
Of
course you probably did not know when you were setting it up, you could not
budget for knowing what exactly the interest rate was going to be, et cetera, I
suspect; that is why there is no budget for the revenue.
MR. WISEMAN:
I am not sure, Denise, if you
understand why we had a zero in the budget for last year but we had a revenue
stream. Did we not anticipate what
that would have been?
MS HANRAHAN:
There was no estimate made.
MS MICHAEL:
There was no estimate made.
MR. WISEMAN:
I think the rate would have
been understood, but I cannot explain why there would not have been a number in
there.
MS MICHAEL:
Right.
Maybe the contract was not finished, maybe there were things in the
contract that would have – although the rate would have been the thing, wouldn't
it?
MR. WISEMAN:
I think in the revenue
forecasting we recognize it as a revenue if we are able to (a) have confidence
that we will realize it, but we understand what it will be.
MS MICHAEL:
Right.
MR. WISEMAN:
That is when we enter it into
the budget as forecast revenue. I
would assume that at the time of the budget last year we were not in a position
to determine what they would be, nor where we in a position to say that we were
going to realize the interest payment in that year.
MS MICHAEL:
Right.
Minister, would that then be done directly between the Department of Finance and
Kruger, or Natural Resources and Kruger?
MR. WISEMAN:
I suspect it would be Finance
and Kruger. The payment would have
come to directly to Finance?
OFFICIAL:
(Inaudible).
MS MICHAEL:
It looks like the interest
rate did.
MR. WISEMAN:
We will verify it to be
certain, but I would not be surprised that it goes directly to Finance rather
than to Natural Resources.
MS MICHAEL:
Okay.
Now I am
sure the bottom line, whether it is you or Natural Resources, is that they are
honouring the loan –
MR. WISEMAN:
Yes.
MS MICHAEL:
Is anybody interested in what
is happening at Kruger in terms of are things going well, is business going
well, et cetera? I actually heard –
I forget; where were we today?
MR. MORGAN:
(Inaudible).
MS MICHAEL:
Yes, it sounded like – was
that this morning?
MR. MORGAN:
Yes.
MS MICHAEL:
Yes, that was this morning; I
have done so many Estimates this week.
We did hear this morning, I think, from Minister Granter that things are
going well there. Do you have a
sense of that also, or do you look at it from a business perspective like that?
MR. WISEMAN:
I understand – it is not a
file that Finance has a responsibility in terms of relationship directly with
Kruger, other than relative to this contract.
MS MICHAEL:
Right.
MR. WISEMAN:
I understood, the interest we
would have obviously as a Department of Finance only, not as government but just
purely as the Department of Finance, is whether or not we are living to the
financial obligation – and their ability to live up to their obligation
financially.
MS MICHAEL:
That is right.
MR. WISEMAN:
I understand they have been
able to make some changes that reduce their operational costs, the production
costs at the plant. They have been
very successful in reducing their costs compared to other industries, or other
mills within the industry. That has
bodes well for them but beyond that, Natural Resources would be in a much better
position to speak to, operationally, what they are doing.
MS MICHAEL:
Right, thank you.
That is
all the questions I have for this section.
CHAIR:
That is it for this section?
MS MICHAEL:
Yes.
CHAIR:
Okay.
Seeing
we are also halfway through our time, we only have one person in the Broadcast
so we are going to take five and give him a break.
MR. WISEMAN:
It is your call, Mr. Chair.
CHAIR:
We will take five and we will
come back to Cathy.
Recess
CHAIR:
Okay, if we are ready.
Mr.
Minister, okay.
Yes,
Lorraine, you had another question before we went to –
MS MICHAEL:
Yes.
CHAIR:
Sure.
MS MICHAEL:
Might as well get me out of
the way.
CHAIR:
Yes, not a problem.
MS MICHAEL:
I forgot that we had this.
This morning when we were in Estimates for the Forestry and Agrifoods
Agency we had a few questions regarding the royalty exemptions granted to Corner
Brook Pulp and Paper for things such as the construction of forest roads.
Another one was the degree of the slope on which pulpwood was harvested –
just a couple of examples.
I am
just wondering, Minister, can we get a clearer picture of these royalty
exemptions and how they work? How
much money is actually involved with these exemptions?
How much is it that we are not collecting?
MR. WISEMAN:
Craig, I do not know if you
are –
MR. MARTIN:
(Inaudible) directly by Forestry and Agrifoods.
MS MICHAEL:
They told us it was you.
MR. MARTIN:
They deferred to us?
MS MICHAEL:
Yes.
MR. WISEMAN:
That is why I deferred to
Craig. It has not come across my
desk on that.
MS MICHAEL:
Right.
MR. WISEMAN:
We will commit to get the
answer for you.
MS MICHAEL:
Okay.
MR. WISEMAN:
Regardless of who has it, we
will commit to get the answer for you.
MS MICHAEL:
Okay.
Thank
you very much.
CHAIR:
Okay.
Thank
you, Lorraine.
Cathy,
you are still on this subhead.
MS C. BENNETT:
Yes.
CHAIR:
Okay.
MS C. BENNETT:
Just so that we are all on
the same page, back to 2.1.01, Pensions Administration.
CHAIR:
Yes.
MS C. BENNETT:
This year is the transition
year for the new pension format. I
am just wondering what plans or strategies have been put in place, that are
reflected in these budget lines, that takes into account that transition?
We have several pension plans that are going into the corporation, some
left for government to do what it chooses to do in conjunction with the unions.
I am wondering what transition plan has been budgeted for in this with
regard to the staff.
I
understand that we are going to still manage.
I get that, but there will be new tasks; tasks that will be moving off
individual's job descriptions. As
that transition happens, has there been discussion about increases in work or
decreases in work depending on how the transition goes?
MR. WISEMAN:
A couple of parts to your
question; the first one, as I understood it, was what plans have we built into
this budget we are looking at here now.
I go back to an earlier answer I provided in that we are not envisaging a
change in this fiscal year that we are currently dealing with in this budget.
So we are envisaging a status quo in terms of that relationship that
government has in the administration of the plans for this fiscal year.
I
suspect that as we get closer to the end of this fiscal year and the new
corporation has established itself, then we will enter into discussions around
what transitional plans we may need to build in next year's forecast.
This budget here does not reflect any shifting of any roles and
responsibilities in this fiscal year.
It is
difficult to start forecasting. Keep
in mind now with the new corporate entity that we are one side of that
discussion and that corporate entity is the other side.
So in the absence of that entity being fully operational, it is difficult
for us to enter into a discussion with them to talk about what this might look
like.
What we
have assumed, a judgement call we have made is that based on what we believe to
be the task ahead of that new corporation for the next fiscal year, there will
be other things that they will want to focus their attention to.
The administration of the plan is not that they need to make a change to
in this twelve-month period.
We have
assumed the status quo in this period.
Now in theory, I suppose, sometime in the course of this fiscal year that
entity could come to us and say, listen, as of tomorrow we want to start doing
business differently. Here is how we
would like to do it. We do not want
you to do it anymore and we are gone.
We are going to take this and do it some other way.
That
could in theory happen. How
realistic is it? Well I guess it is
the $64 question. We are suggesting
that it may not happen like that in this fiscal year.
Therefore, this budget does not reflect any operational change in this
year.
MS C. BENNETT:
Have the trustees all been
appointed?
MR. WISEMAN:
They have.
MS C. BENNETT:
When will the names be
released?
MR. WISEMAN:
We could do it now.
I can get them for you. I do
not have them here with me, but I can get them for you.
MS C. BENNETT:
Okay.
The
pension overpayments that government is currently collecting from pensioners
now, is that activity going to be expensed in this line area?
The cost associated with the individual who has been asked to mediate and
discuss with the pensioners, is that in this section?
MR. WISEMAN:
I think that cost right now
is being borne by the Department of Finance.
Do you know what category we put that in? The cost right now is to the
Department of Finance and, not the Pensions Administration, not the pension
fund.
MS C. BENNETT:
Is there an estimate on the
costs associated? Is there a maximum
allowable that is going to be used for that?
MR. WISEMAN:
Yes.
What we base this on is we have taken a classification with a pay level
attached to it and said on an annual basis this piece of work should be paid at
this level. What we have done is
then equated it to an hourly rate because a person does not work every single
day. Therefore, we then equate it to
an hourly rate with a cap based on that annual salary.
I can
get that for you. I do not have it
with me.
MS C. BENNETT:
Is there a total dollar
amount that the department is expecting to spend to collect?
MR. WISEMAN:
No, we anticipate this to be,
maybe a three-month exercise. We do
not anticipate it going beyond that.
The group of people who might be impacted here – well, forget the full number
for a moment. As I have indicated
many times, some of the amounts are smaller amounts.
We have approximately eighty people where there is a material – and
obviously material is relative to the individual's circumstance, I appreciate
that.
We have
about eighty people where the dollar value is $1,000 or up.
The contacts that are being made would appear that – these would be the
people who would have the greatest interest in having a discussion about their
circumstance and wanting to look at a repayment arrangement that may need some
modification or special consideration.
That kind of number, we believe, can be completed in about a three-month
period.
MS C. BENNETT:
Of the original amount that
government had hoped to recover, has there been any amount that has been written
off so far to date, or considered uncollectable?
MR. WISEMAN:
There is a piece of work that
Mr. Bonnell is proceeding with. He
has not provided me yet with a – at least that summary has not come to me of the
work that he has done to date. The
intent would be that he will meet with individuals who have an interest in
meeting with him. It is not
mandatory that they meet with him.
If an
individual has been contacted and expressed an interest in meeting with him, he
has a process that he will go through.
When he has concluded, he will make a recommendation on each individual
case and provide that as a summary format for my consideration.
We have not actioned any of those individual cases that he has actually
met with to date.
MS C. BENNETT:
Some people have already
received communication that they will no longer be required to repay.
Has that number been quantified?
MR. WISEMAN:
I am not aware that people
have been advised that they will not have to repay.
MS C. BENNETT:
I am sorry.
I understood that there were individuals who had – it had been indicated
that due to length of life or personal health situations, that those individuals
had been.
MR. WISEMAN:
You are speculating on
something I am not aware of.
MS C. BENNETT:
Okay.
My apologies, I misunderstood.
Subhead
2.1.02, one of the questions I had here, and I am sure I am just missing
something, the two-year increase in the Salaries line is 7.6 per cent.
I am wondering if there is some explanation for –
MR. WISEMAN:
Subhead 2.1.02 you mean?
MS C. BENNETT:
Subhead 2.1.02, under
Budgeting, with the Salaries line, if you go back historically to the prior
year, the actual increase over a two-year period is 7.6 per cent increase.
MR. WISEMAN:
Right.
MS C. BENNETT:
That seems inconsistent with
the salary – it is a 3 per cent salary increase on an annual basis, isn't it?
MR. WISEMAN:
If you are going back to a
prior year, I am looking at the – the Estimate I have here looks at a 2014-2015
budget and a 2015-2016 budget.
MS C. BENNETT:
Right.
Yes, so back to the 2013-2014 going forward by two years.
MR. WISEMAN:
Okay.
MS C. BENNETT:
This is a 7.6 per cent
increase. I am just curious is that
because staff complement changed?
MR. WISEMAN:
The 7 per cent – there is a 3
per cent increase this year. What
was the last year? It was 2 per
cent. You had 2 per cent and 3 per
cent, and you had step progressions.
So 7 per
cent is probably in the order of magnitude with the same staffing levels.
I would have to reconcile the numbers for you, but just as a crude
measure, 2 per cent on one year compounded and now the 3 per cent, and a couple
of step progressions, that is about right.
MS C. BENNETT:
Okay.
Can we
get some more detail on that one?
MR. WISEMAN:
Yes, we can do that.
MS C. BENNETT:
Perfect.
MR. WISEMAN:
So your question is the
salary profile –
MS C. BENNETT:
An explanation of 7.6 per
cent.
MR. WISEMAN:
The salary profile in
2013-2014, 2014-2015, and 2015-2016, and the salary profiles for those two
fiscal years.
MS C. BENNETT:
Yes.
MR. WISEMAN:
Okay, or three fiscal years,
two actuals and one forecast.
MS C. BENNETT:
Thank you.
CHAIR:
Do you have another question,
Lorraine?
MS MICHAEL:
No, not in the section.
CHAIR:
Okay.
Do you
have another one, Cathy?
MS C. BENNETT:
We are going to 2.1.05,
right?
CHAIR:
Yes, we are.
MS C. BENNETT:
Yes, so just let me double
check here. No, I am good there.
CHAIR:
You are good there?
Okay, so
we just did the Financial Planning and I will call for the subhead.
CLERK:
Subhead 2.1.01 to 2.1.05.
CHAIR:
Subhead 2.1.01 to 2.1.05.
Shall
the total carry?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
Thank
you.
On
motion, subheads 2.1.01 through 2.1.05 carried.
CHAIR:
Okay, so now we will do
Taxation and Fiscal Policy.
CLERK:
Subhead 2.2.01 to 2.2.05.
CHAIR:
Subhead 2.2.01 to 2.2.05.
Lorraine.
MS MICHAEL:
Thank you.
In
2.2.01 looking specifically at Professional Services, there was nothing budgeted
in Professional Services last year, but $224,000 approximately was spent.
This year, the estimate is $1.3 million approximately.
If we could have an explanation, Minister, please.
MR. WISEMAN:
I will provide an
introduction to it and then I will ask one of the officials to provide a more
detailed commentary. It has to do
with an audit that we are doing about HST that we are entitled to receive.
The
$224,000 was as a result of some fees that we paid for a service to do an audit,
and it is based on a percentage of amounts collected.
The $1.3 million, as you will see in next year's forecast, is again a
fee, but that fee is based on an estimated recovery of $8.6 million.
So this
is a special audit on HST that we are doing to establish an entitlement to HST
funds and it is based on a percentage of what is collected.
That is how the fee structure is with the consultant that we are using.
I gave you that broad introduction and I will have – Craig, you can
provide a deeper explanation of where this exists.
MS MICHAEL:
In plain language.
MR. MARTIN:
What this is – this was an
activity undertaken last year with respect to the group health plans and group
insurance fund.
MS MICHAEL:
Okay.
MR. MARTIN:
What it is, it is an external
auditor on (inaudible) case in the first instance came in, was contracted to do
a review of the monies going through those funds from the purpose of looking at
whether or not all the HST paid through those funds was captured back and
claimed back from the federal government.
As a result of that review, it was determined that there was HST there
that could be recaptured. So this is
being done on a fee for service, a recovery basis.
MS MICHAEL:
Okay.
MR. MARTIN:
When you see for this year a
fee of $224,000 there, the actual recovery on that fee – you will see a related
revenue there in the current year of $260,700, there in the 2014-2015 year.
Also, for that particular $224,000, there was another $1.146 million
recovered. That was credited back to
the group insurance fund.
MS MICHAEL:
Okay, so it is paying off.
MR. MARTIN:
Yes.
Then the budget we see for the $1.3 million is for them to continue this
activity into the current fiscal year.
The anticipated estimated recovery on that is about $8.6 million.
MS MICHAEL:
That is the $8.6 million.
Okay, sounds good, smart move.
Thank you.
Coming
down to 10, Grants and Subsidies, $50,000 was budgeted and $89,500 was spent.
This year the estimate is down to $30,000.
It is a line item, so are the grants and subsidies that you give out
there consistently the same, or is it a one-off kind of thing?
MR. WISEMAN:
Last year we provided $80,000
to Memorial's Department of Economics for some research that they were doing.
It is a program – the acronym is CARE, which is the Collaborative Applied
Research in Economics program that the Department of Economics at Memorial has.
We provide them with a grant to do some of that economic research that
they were working on. That is why
the difference you are seeing.
MS MICHAEL:
Okay.
This
coming year you are not allowing very much money there.
MR. WISEMAN:
No.
MS MICHAEL:
Was that a policy decision?
MR. WISEMAN:
No, actually it was a one-off
process with them.
MS MICHAEL:
Okay.
MR. WISEMAN:
It is a piece of work that
they were doing. We assisted them
with the grant.
MS MICHAEL:
Okay.
Had you
a sense that was going to be happening when you budgeted?
It was more than what you budgeted?
You budgeted $50,000 last year.
MR. WISEMAN:
Yes.
I am not sure what the logic would have been.
I do not know if there is any detail the officials have that talk about
the $50,000 from last year.
MS MICHAEL:
Okay.
OFFICIAL:
(Inaudible).
MR. WISEMAN:
I am sorry; last year the
$50,000 was the – you remember the harness racing discussion that we had?
MS MICHAEL:
That is right, yes.
MR. WISEMAN:
The regulation around the
harness racing. Remember, last year
we went with the Atlantic Provinces to do the regulatory piece for us.
MS MICHAEL:
Yes, I do.
Actually I have it written in front of me here too.
MR. WISEMAN:
It was $50,000.
MS MICHAEL:
Yes.
MR. WISEMAN:
We had budgeted $50,000, but
it became $30,000.
MS MICHAEL:
Okay.
Then you had the money –
MR. WISEMAN:
We have the annual fee
associated with that.
MS MICHAEL:
Okay.
Thank you very much.
Okay,
let's go to 2.2.04. I will do line
items first and then I have a couple of questions related.
I might not get to them right at this moment.
Salaries: once again the budget was $3,475,000 but the revision was down
by $641,500. Could we have an
explanation?
MR. WISEMAN:
There were a number of
vacancies in that area last year and we delayed filling them.
As a result of that, then we had positions that were vacant and we had
salary savings, and we did not move quickly to fill them because of some of the
cost reduction initiatives that we wanted to undertake.
Now with those vacancies filled, together with the 3 per cent salary
increases, that is what we are seeing in the change here.
MS MICHAEL:
Right.
About
how many positions were vacant?
MR. WISEMAN:
There were three individuals
in total who left, resigned or retired, and then we had some changes that
occurred – delays in the refilling of those.
MS MICHAEL:
Right, thank you.
Down to
Professional Services, you budgeted $152,000, nothing was spent, and you are
still budgeting $152,000 this year.
MR. WISEMAN:
That is a result of a tax
audit that we are doing on a client.
We had thought we were going to spend the money last year, but we did not.
The audit is still ongoing and these are fees associated with that audit.
MS MICHAEL:
Okay, thank you.
I think
that is the audit on Vale. Last year
we were told that there was money allotted for an audit of Vale for possible
transfer pricing practices. I am
assuming that must be the money there; that is the client that we were told last
year.
I think
that is all that I had – it is still going ahead, the audit on Vale?
MR. WISEMAN:
That is proceeding, yes.
MS MICHAEL:
Okay.
Do you
have any expectation – do you think it will be completed this year?
MR. WISEMAN:
Audits are sometimes lengthy
in their process depending on the level of detail that needs to be evaluated, so
it is obviously proceeding to do the work – I would not want to try to pin down
when any audit might be finished. I
am not sure what kind of detail and what kind of information would need to be
reviewed.
MS MICHAEL:
Would there be an expectation
that the report from that audit would be made public? Could it be made public?
MR. WISEMAN:
One of the things you have to
keep in mind with audits is that under the Financial Administration Act there is
a very strict provision around the confidentiality of subjects that are –
MS MICHAEL:
Yes.
MR. WISEMAN:
Any individual, whether it is
you or I, are subject to tax audits.
Corporations are subject to tax audits.
MS MICHAEL:
Right.
MR. WISEMAN:
Information coming from those
audits is protected by the Financial Administration Act which is very specific
around the confidentiality of any information on any client who gets audited.
MS MICHAEL:
Okay.
That is not surprising I will let you know.
Subhead
2.2.05 – wait now, just let me make sure.
Just out
of curiosity; the Grants and Subsidies under 2.2.04 was $3,000, and $2,500 was
spent last year. What is that?
MR. WISEMAN:
It is associated with a fuel
tax project. I do not know, Craig,
if you are familiar enough with the project to comment on it.
It is the Fuel Tax Uniformity Project, but I am not sure of the detail of
the project.
MR. MARTIN:
I will have to confirm for
you, but I believe the Uniformity Project is a national project wherein they are
trying to set up a uniform tax return for basically all companies that are
remitting in multiple jurisdictions.
As a result, the costs associated with that program were slightly less than they
anticipated.
MS MICHAEL:
Okay.
That is
a continuing program?
MR. MARTIN:
That is a continuing program.
MS MICHAEL:
Okay.
Thank you very much.
I am
finished.
CHAIR:
You usually watch the clock.
That is why I left you alone.
MS MICHAEL:
Thank you.
CHAIR:
Cathy.
MS C. BENNETT:
I will go back to 2.2.01, Tax
Policy. On the HST recoverable on
the group insurance, how did we identify there was a possibility that there was
a recoverable?
MR. GRIFFIN:
It is a type of work that had
been done previously in earlier fiscal periods, so I guess we had experience of
some modest sort of recoveries.
Since the time of those original reviews, data mining techniques and
technologies have developed, and specialized consultants with specific expertise
in these areas have been honing their techniques and skills.
This
particular project was the result of some interest from certain consultants who
had made some proposals to us which we looked favourably upon.
OFFICIAL:
Nova Scotia (inaudible).
MR. GRIFFIN:
Yes, fair enough.
One of the consultants had also done some work for Nova Scotia which had
resulted in some very significant recoveries.
It was a situation where there was really nothing to lose by having a
look at this.
MS C. BENNETT:
Just so that I understand – I
am pretty sure I heard it right, but I do not know if I wrote it down right so I
want to make sure I have it – the $1.376 million under Professional Services
this year is expected, if history repeats itself, to yield an $8.6 million
recoverable.
MR. GRIFFIN:
This is a result of expanding
the scope of the work, as well as expanding the period under review.
MS C. BENNETT:
Yes.
MR. GRIFFIN:
The consultants looked at the
scope that they have covered and the period that they have covered already, and
basically extrapolated that out to a larger period.
They feel that this is a reasonable assumption of what they will be able
to recover.
MS C. BENNETT:
Okay.
On the
Grants and Subsidies, just to make sure I understood, the $50,000 for membership
in the Maritime Provinces Harness Racing Commission actually came in at $30,000.
I did not catch the amount on the care grant.
Was that the remaining difference between the – it is $50,000.
It was $89,000, I think, so the difference between the $30,000 and
$89,000?
MR. WISEMAN:
Yes.
MS C. BENNETT:
Okay.
Under
2.2.03, Project Analysis – and this may not be the appropriate section for the
question, so I apologize. I am not
sure exactly where to ask it so I will try it here.
Expenses related to internal auditors, is that under Project Analysis
here? Where do they actually get –
so the internal audit team –
MR. WISEMAN:
That is the Comptroller
General's department.
MS C. BENNETT:
Okay.
Cool.
We are
not there yet, right?
MR. WISEMAN:
Yes.
MS C. BENNETT:
Okay.
I was
not 100 per cent sure where it was going to be so I appreciate your patience.
In
Project Analysis I am good. Tax
Administration, 2.2.04, the Salaries; Minister, you mentioned that there were a
number of positions that were vacant in the last fiscal year.
From the notes that I have, there were positons that were also vacant in
the prior fiscal year –
MR. WISEMAN:
Yes.
MS C. BENNETT:
What I would like to ask is
if the positons were the same, or if you can provide me with what the actual
vacancies were for the last number of years so that we can also take a look at
what the vacancy forecast is that we talked about earlier tonight.
I am wondering if you could give me some clarity on that.
MR. WISEMAN:
We will get that information
for you.
MS C. BENNETT:
Particularly what I am
looking for is if they are the same positions for the two consecutive years.
MR. WISEMAN:
The issue of positions, just
so we are clear, to make a distinction here between classifications –
MS C. BENNETT:
You are right.
MR. WISEMAN:
We could have a group of
individuals in the same classification, so two were out yesterday and two of
them are out today. They are two
different individuals but they just happen to come from the same grouping
because they are tax auditors, so there are probably a larger number of them in
the same classification. Just not to
mistaken the fact that they may be the same individuals.
MS C. BENNETT:
I understand.
Sorry, I should say same positions, or the same classification of
positions.
MR. WISEMAN:
Yes.
MS C. BENNETT:
From the question I asked
earlier this evening, the information I am assuming that we will get around the
forecasted retirements, globally in Finance, will include a breakdown by
division, so how many retirements are actually in this particular area.
MR. WISEMAN:
Yes.
MS C. BENNETT:
Okay.
Subhead
2.2.05, Debt Management, there was a reimbursement of Salaries and other
operating costs from the Newfoundland Municipal Financing Corporation Sinking
Fund. Is that what the revenue line
is here under Debt Management? It is
the same thing that happened last year; there is a recovery under that?
MR. WISEMAN:
Yes.
MS C. BENNETT:
Okay.
With
regard to Salaries in 2013-2014 we under spent in this division by $150,000 and
the reason that was given at the time was that the manager for capital markets
and a debt analyst had been unfilled during a certain period.
We have under spent again. I
am just wondering if those two positions specifically have been filled and they
are new positions that are vacant now, or if it is a continuation of positions
that have been vacant?
MR. WISEMAN:
The manager of the capital
markets is still vacant. The other
one was filled, but there was another vacancy that occurred, other than the one
that you referred to earlier.
MS C. BENNETT:
Okay.
Mr.
Chair, I am sorry; I think I am at the end here.
CHAIR:
Are you?
MS C. BENNETT:
I think so.
I am not sure. Can you remind
me we are supposed to be ending?
CHAIR:
Yes, at 2.1.05.
MS C. BENNETT:
Yes, then I am.
CLERK:
Subhead 2.2.05.
CHAIR:
Subhead 2.2.05.
Yes, I am sorry; thanks, Lorna, for correcting me.
MS C. BENNETT:
With three minutes on the
clock, I will stop.
CHAIR:
Lorraine, did you still have
a couple of questions on that?
MS MICHAEL:
No, the questions I had on
that section Cathy has asked, so that is fine.
CHAIR:
Okay.
So no more questions on Taxation and Fiscal Policy?
Okay, if
that is the case, I will call for the subheads.
CLERK:
Subhead 2.2.01 to 2.2.05.
CHAIR:
Subhead 2.2.01 to 2.2.05.
Shall
the total carry?
All in
favour?
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
On
motion, subheads 2.2.01 through 2.2.05 carried.
CHAIR:
The next one we call is –
CLERK:
Economics and Statistics Branch.
CHAIR:
Subhead?
CLERK:
Subhead 2.3.01 to 2.3.02.
CHAIR:
Subhead 2.3.01 to 2.3.02.
Lorraine.
MS MICHAEL:
Okay, thank you.
The
Salaries line again, there is a variance from the budget to the revision of
$218,400. If we could have an
explanation, Minister, please.
MR. WISEMAN:
There were some vacancies
that we delayed recruiting.
MS MICHAEL:
Right.
Are they
back in place now, those positions?
MR. WISEMAN:
I have to verify that for
you. Actually, I am not sure which
ones are filled and which ones are vacant.
I will find out what vacancies are there for you.
MS MICHAEL:
Okay, please.
Thank you.
MR. WISEMAN:
Maybe I can find out for you
now.
MS MICHAEL:
Okay.
That is
why you have all of that crew there.
MR. WISEMAN:
That is why I have that crew
here, yes.
MR. HOLLETT:
There were a variety of reasons for the savings there.
There were some vacancies, but we had some issues in getting positions
filled because there was a backlog at the Public Service Commission.
As we got later into the year and we got into restraint, there were just
some positions that we would have liked to fill, we just held them.
So there are a variety of reasons there for that.
MS MICHAEL:
Okay.
MR. HOLLETT:
I think besides a couple of positions that we have actually identified as being
frozen, the rest of it is moving ahead as fast as it can.
MS MICHAEL:
Okay, thank you very much.
Under
Revenue – Provincial, what is that revenue and why was it more than you
anticipated last year?
MR. HOLLETT:
The revenue there came from ACOA and it is contributions that they made to some
work that we do, Community Accounts and that sort of thing.
MS MICHAEL:
Okay.
MR. HOLLETT:
The reason it was over is
because they actually paid us more than we expected them to.
MS MICHAEL:
Oh, very good.
You do not always get money from ACOA that you are not expecting.
MR. HOLLETT:
Yes, and it does not happen
often.
MS MICHAEL:
No, right.
Thank you very much.
Subhead
2.3.02 – it probably gets tedious answering this question about the staffing,
but I think we have a responsibility to ask.
This time the variance from the budget down to the revision is $357,200,
so once again –
MR. WISEMAN:
It is the same answer as the
previous one actually.
MS MICHAEL:
Okay.
The whole answer is the same?
Okay,
great. Thank you.
It looks
like you plan on bringing up the complement this year.
Under Professional Services the budget was $115,000, and the revision was
down by $85,000. Could we have an
explanation of that? Did you have
expectations around the Professional Services, something did not happen?
MR. WISEMAN:
We just made some decisions.
Those are discretionary spending decisions that we made to defer certain
things we were proposing to do.
MS MICHAEL:
Okay, great.
They
will be happening this year.
Under
Purchased Services, again, budgeted at $851,600 and was down somewhat to
$767,200 where it is remaining for this coming year.
What gets purchased there?
Why was it down from what you had budgeted?
MR. WISEMAN:
A big chunk of that $657,000
is a rental cost for space that we have outside of this building.
MS MICHAEL:
Right.
MR. WISEMAN:
Some of the other changes
came about as a result of some data purchases that we delayed doing last year.
That is part of that discretionary spending decision that we made.
MS MICHAEL:
Right.
Okay. Thank you.
Under
Revenue – Provincial – well I will ask for the federal too.
I am curious about getting $20,000 from the federal that you did not
expect. Under the provincial you are
almost $100,000 above what had been budgeted.
If you could just explain those two lines, please.
MR. WISEMAN:
I will get Alton to give you
a little more detail. This is one of
these areas where we have a particular expertise and a talent, and we are able
to produce work for sale. The
Newfoundland Statistics Agency is a tremendous source and a wealth of
information sought after by many, so we have an opportunity to generate some
revenue.
I will
ask Alton to give you some sense of who we get the revenue from.
MS MICHAEL:
Okay.
Thank you.
MR. HOLLETT:
It varies from year to year. There
are some that we do each year. We do
forecasts for Hydro, we do forecasts for the City of St. John's, and we did some
work for the university.
This
year most of the revenue came from the university, the City of St. John's, the
Housing Corporation, Hydro, East Coast Trail, and Goss Gilroy.
One reason why that is up a little bit this year too is that there were –
sometimes the timing of the billing does not match when the books close off.
MS MICHAEL:
Right.
MR. HOLLETT:
So we had almost $75,000 this
year carried forward. It is a
combination of the carry forwards plus the external work that we do for people.
MS MICHAEL:
Okay.
Thank you.
What was
the $20,000 from the federal government?
I am curious.
MR. HOLLETT:
The $20,000 from the federal government; actually that was from ACOA as well.
It was on the statistics side instead of the economics.
MS MICHAEL:
We made money from ACOA this
year. Okay.
Moving
on to 2.4 – that is the wrong sheet.
I thought you said 2.4. I am missing
a sheet, I think.
CHAIR:
We are not up to 2.4 yet.
MS MICHAEL:
No, I know.
That is why I think I am missing a sheet.
No, I am
not. Okay, that is it.
OFFICIAL:
(Inaudible) there are only
two.
MS MICHAEL:
Yes.
Those are all my questions then for that section.
CHAIR:
That is it?
MS MICHAEL:
Subhead 2.3.02, was that the
last heading?
CHAIR:
That is it, yes.
MS MICHAEL:
Okay, yes.
CHAIR:
Okay, great.
Thank
you, Lorraine.
Cathy.
MS C. BENNETT:
On 2.3.01, under Economics,
last year there were eighteen permanent positions in the division.
This year there are nineteen.
Is there anything else that accounts for the $240,000 increase in Salaries
besides that position?
MR. WISEMAN:
The 3 per cent increase and
step progressions.
MS C. BENNETT:
The 3 per cent?
MR. WISEMAN:
The 3 per cent increase.
MS C. BENNETT:
Okay.
I will
move on to 2.3.02. The entrepreneur
in me wants to say can we not make this a cost centre, if you can get revenue
coming in. I am not suggesting that
be a government policy, but it was exciting there that revenue is coming in for
services rendered. I just had a
little entrepreneur moment there. I
am sorry about that.
One of
the questions I had here was that we underspent Salaries by $357,000.
What positions exactly were not filled?
Were there any special projects here that did not materialize?
MR. WISEMAN:
We will get you the detail on
the positions that may have not been filled.
MS C. BENNETT:
Okay.
That was
it on those two sections for me.
CHAIR:
That is it for you?
MS C. BENNETT:
That is it.
CHAIR:
That is it for you, Lorraine?
MS MICHAEL:
Yes, it is.
CHAIR:
Okay.
That is it for Economics and Statistics Branch.
So I
will call for the subhead.
CLERK:
Subhead 2.3.01 to 2.3.02.
CHAIR:
Subhead 2.3.01 to 2.3.02.
Shall
the total carry?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
Thank you.
On
motion, subheads 2.3.01 to 2.3.02 carried.
CHAIR:
Next subhead.
CLERK:
Subhead 2.4.01.
CHAIR:
Subhead 2.4.01.
Who
finished off?
MS C. BENNETT:
I did.
CHAIR:
Yes, I thought.
Okay, Lorraine. I wanted to
make sure.
MS MICHAEL:
Okay, thank you.
The last
heading, once again the Salaries. It
seems like you did have, throughout different parts of the department, a number
of vacancies and that is what it seems we have again here.
So how many vacancies were there, minister?
MR. WISEMAN: Let
me get that for you, actually, because that is a similar question to ones you
have posed on a couple of other areas.
MS MICHAEL: Yes.
MR. WISEMAN: I
want to make sure we give you the right answer in terms of what positions we had
vacant and for how long.
MS MICHAEL:
(Inaudible).
MR. WISEMAN: I
am sorry. Were you waiting for me?
MS MICHAEL: I
was waiting for you. I thought you
said –
MR. WISEMAN: Oh
no, I am sorry. I said I would get
it for you. I did not mean right
away.
MS MICHAEL: Oh,
you did not mean right away. That
was funny.
MR. WISEMAN: I
thought you were reading your notes, I was leaving you alone.
MS MICHAEL: I
was waiting for you to find your information.
Okay, well, I look forward to getting that.
MR. WISEMAN:
Okay.
MS MICHAEL:
Okay.
Why I
was looking through my papers was, as I said, you seem to have had two and three
vacancies in various branches along the way, but, I guess, cumulatively it did
not affect the whole department because they were in different offices.
About
how many in total across – do you know?
Have you done the arithmetic on that?
If not, could you do it? How
many vacancies all together in the department?
MR. WISEMAN:
Vacancies are – depending on
when you ask the question because it is a snapshot in time.
So March 15 here is what it would look like and then September 15 here is
what it might look like.
Over the
course of a twelve month period, in any one of those divisions, there may have
been some changes in staff; people coming and going.
So we can give you an answer about the number of vacancies we had over
the course of a year but it may not necessarily reflect the snapshot in time.
MS MICHAEL:
Right.
MR. WISEMAN:
To speak to your point that
you raised with respect to impact, it goes back to a question I responded to
early in the evening, of the changes we have made and the decisions we have made
to either delay recruitment or defer recruitment in an effort to save some
money. We have been sensitive to our
mandate and our responsibility to provide services.
So there may have been a variety of vacancies that have occurred over a
twelve-month period, but at any given point in time one department may have been
short one or two and some other departments may have been flush.
MS MICHAEL:
Right.
MR. WISEMAN:
Six months later it may have
been changed slightly different.
So it
has meant that we have had – fortunately, we have a good, capable, competent,
dedicated group of people working for us who do some really good work and they
are able to respond to the changes that have occurred in their respective areas.
It allowed us to continue to provide the service that we have always
(inaudible).
Now we
have put together a – as a part of our way forward, we talked earlier about an
attrition plan and I said then that we would map out a staffing plan for the
next five years to help us manage through the changes that we are forecasting to
be made. We want to make sure that
we maintain the skillsets that we need to provide the depth and breadth of
services that we have and will continue to provide.
MS MICHAEL:
Thank you.
You did answer that quite fully at the very beginning, so thank you.
Under
Purchased Services, the budget was $794,300 and the revision was down to
$695,600. What are the services
purchased in the Comptroller General's office, and why was it down so much?
MR. WISEMAN:
The biggest chunk of that
money is a $456,000 lease – we have space on Topsail Road.
There is a lease on that of $456,000 annually, so that is the biggest
chunk of that.
MS MICHAEL:
Okay.
MR. WISEMAN:
Then some of the other
changes we have made come about as the result of some of those adjustments we
made in discretionary spending that we referred to earlier, and that we
deferred.
MS MICHAEL:
That is the biggest chunk, is
the lease. What else would be under
the Purchased Services, generally speaking?
MR. WISEMAN:
Maybe Ann Marie can tell us,
because I do not have profile –
MS MILLER:
Banking services would be another portion of that.
MS MICHAEL:
Pardon?
MS MILLER:
We are responsible for banking services for government –
MS MICHAEL:
Okay.
MS MILLER:
– so a portion of that would be our cheque costs and costs associated with
banking services.
MS MICHAEL:
Okay, which would be pretty
high for government, I would say.
MS MILLER:
Yes.
MS MICHAEL:
Okay, thank you.
Knowing
how high it is for an individual.
MS MILLER:
Yes.
MS MICHAEL:
Under Revenue – Provincial,
the $41,000 expected and $41,000 delivered.
What was that?
MR. WISEMAN:
Ann Marie, do you want to
comment on that, please?
MS MILLER:
Can you say that again?
MS MICHAEL:
Under Revenue – Provincial,
$41,400 was budgeted, and that amount was spent.
I am just curious what that was.
MS MILLER:
That was money that we would normally recover from the pension fund for costs
associated with the – because we produce the cheques for the pensions.
MS MICHAEL:
Right.
MS MILLER:
I guess we assumed that there would not be for the transition year, whether or
not that service would continue into this year.
MS MICHAEL:
All right, and so that is why
you have budgeted nothing –
MS MILLER:
Yes.
MS MICHAEL:
– but if you had to, I am
sure the money could be found.
MS MILLER:
Yes, it is revenue.
MS MICHAEL:
Yes – oh, it is revenue?
Right.
I have a
couple of general questions. They
are all related to the issues, but general.
One,
Minister, is about the royalty dispute between IOCC and the government, and we
have over the years gotten information on this.
Can you shed any light at where things are at the moment with regard to
this dispute? I am not looking for
details, but has arbitration begun?
MR. WISEMAN:
(Inaudible) provide a comment
on the status of that?
OFFICIAL:
I will follow up on that one and respond.
MS MICHAEL:
Okay, so you will let us
know. Thank you very much.
Also, in
the Consolidated Revenue Funds last year the revised income from Mining Tax and
Royalties was $107,642,000 and this year's estimate is up by $36.6 million, up
to $144,234,000. So I am wondering,
what are the indications to you that we can expect another almost $37 million in
mining tax and royalties?
MR. WISEMAN:
You are into the Consolidated
Fund now?
MS MICHAEL:
Yes.
We read all the books.
MR. WISEMAN:
So your question is why the
optimism about –
MS MICHAEL:
That is right.
MR. WISEMAN:
I did not anticipate dealing
with the Consolidated Revenue Fund tonight.
I thought we were going to deal with that in Committee of the Whole.
CHAIR:
Actually, if it is not in
this – she just had a couple of general questions –
MS MICHAEL:
Oh, that is right.
Yes.
MR. WISEMAN:
Okay.
CHAIR:
That is not part of these
Estimates tonight.
MR. WISEMAN:
When we deal with
Consolidated Fund, I will have the answer for you because I do not know the
answer – I cannot give it to you now; although if I did, I would give it to you.
MS MICHAEL:
You would give it to me,
okay.
MR. WISEMAN:
I did not anticipate this
discussion around the Consolidated Revenue Fund.
MS MICHAEL:
Okay, thank you.
I just
have one more general question – general in the sense that it is not a line
item. It has been a while since we
have asked about VLT and the VLT strategy.
Two years ago we were told the department was developing a full, broader
strategy on all forms of gambling. I
am wondering if there been any movement on that.
MR. WISEMAN:
No.
MS MICHAEL:
No.
Is it a discussion at all right now inside of the department?
MR. WISEMAN:
We are continuing with the
VLT strategy that was announced in 2005.
We are still focused on the objectives and we have met the targets that
are outlined in that initiative, but there is not any current activity with
respect to that issue today.
MS MICHAEL:
Okay, thank you.
CHAIR:
That is it?
MS MICHAEL:
I would like to think that
discussion will go on to look at it because people do have a lot of concerns
around gambling, so I think it is important that we stay on top of it.
CHAIR:
Okay.
Thank
you, Lorraine.
Cathy.
MS C. BENNETT:
Office of the Comptroller
General, 2.4.01. This is where the
internal audit is. If I had read the
heading I would have known that earlier, my apologies.
I know
we have asked a lot of questions about the vacant positions.
I think part of the reason those questions are so important – not only to
those of us on the Committee, but certainly to the public as a whole – is when
there are big chunks of positions that are not covered, there is obviously work
that does not get done. I was
wondering if I could get a little bit of clarity on – I will start with the
internal audit – where the direction comes from to the internal auditors as to
the work that they are supposed to be undertaking on an annual basis.
MR. WISEMAN:
Just let me correct something
in your assumption. The fact that
there are vacancies – you should never assume that there are big chunks of work
not getting done. Vacancies are
vacancies and work gets realigned.
Sometimes it may not get done in the same time frame it ordinarily would be
done, but it would not be fair to suggest that it does not get done at all.
There is
an internal audit committee of government chaired by the Clerk, and obviously
the Comptroller General's Office, headed by the Comptroller General who is
responsible for the internal audit process.
I will ask her to provide some commentary in terms of the mechanism that
we have in place to conduct those internal audits, and the structure that
facilitates that happening.
Ann
Marie?
MS MILLER:
Last year, we developed a
formal internal audit plan. What we
would do is we would meet with the deputy ministers of the departments and ask
them if they could identify any areas where they felt were high risk areas that
they would want us to look at for that coming year.
It would be a combination of that or some direction from the internal
audit committee, as well, as to specific reviews that they would like to have
undertaken for that fiscal year. We
get all the feedback back and then we allot out the hours and create the plan
for the year.
MS C. BENNETT:
How are the risk assessments
– I am going to back up for a second.
How are the profiles of risk assigned?
How do you determine which is high risk and which is low risk?
MS MILLER:
Yes, we apply a certain
methodology to that. We did do a
piece of work this past year in developing a formal risk assessment process.
We did have a consultant help us just with developing the methodology
because it was new to us. We did do
a risk assessment for a particular area of one department.
Now we will apply that methodology each year and do so many risk
assessments on a yearly basis with different departments on a go-forward.
MS C. BENNETT:
When we look at the Salaries
– so you said you worked with a consultant last year.
Is that consultation ongoing?
Has the methodology been identified, adopted, and communicated through all
departments? Obviously, internal
audit, through the Comptroller General, would not necessarily be driven
singularly by the Department of Finance.
It would be driven by the risks that would be identified in other
departments.
MS MILLER:
Sure. What they did is they helped
us with developing the methodology.
We also came up with templates to assess risk.
So now that we have that process in place, we will work with the
departments to go through the risk assessment process where we will go out and –
I mean, the one we did last year, we just went through the methodology that they
provided to us. There was a
knowledge transfer during that whole process.
Now an Internal Audit Division would have the expertise to go out and do
so many of these risk assessments on a yearly basis with departments.
MS C. BENNETT:
The audit plan has not been
drafted based on risk assessment though, it has been driven –
MS MILLER:
Well we did do an allocation of risk, but it was more our own experience versus
a formal methodology.
MS C. BENNETT:
Yes.
I am assuming the methodology will appear on the audit plans going
forward.
MS MILLER:
Yes.
MS C. BENNETT:
The reference to the
methodology will –
MS MILLER:
There will be a certain portion of the audit plan each year on doing these
formal risk assessments.
MS C. BENNETT:
The Comptroller General's
Office would manage – it directs the internal auditors, is that right?
I am not sure.
MS MILLER:
Yes.
MS C. BENNETT:
Is there any reporting
mechanism into Executive Council or Cabinet, or is it solely the responsibility
of the Department of Finance to direct through the Comptroller General's Office
the internal audit?
MS MILLER:
We do have this audit committee which is chaired by the Clerk of the Executive
Council. It has a number of deputy
ministers on it. We would also get
direction from them as well.
MS C. BENNETT:
Does that direction come from
the Clerk via the Premier's Office?
Who else would influence the audit committee?
Who else drives the priorities for the audit committee?
MR. WISEMAN:
The audit committee
(inaudible) autonomously. They will
not take direction from a minister or from the Premier.
Their role is to ensure there are internal controls and processes in
place to mitigate any risk associated with any financial exposure.
MS C. BENNETT:
Okay.
So in
the results from the Budget to the Estimates, I am just wondering where there
any special projects planned as part of the operations plan for the Office of
the Comptroller General that were not actually executed last year due to a
variety of reasons?
MS. MILLER:
No, we did fairly well.
The only audits that did not happen were only one or two and they were
because of departments really not – we met with the departments and they wanted
to switch out another project for the one that we had originally put on to our
audit plan, because, I guess, they identified during the year that this was
another area that they wanted to look at.
So we would have swapped out, but we would have done, for the department,
the number of reviews that we had planned to do.
MS C. BENNETT:
Okay.
Sorry, I
should have prefaced that I was moving to Purchased Services and was curious if
any special projects that were originally budgeted in the $794,000 did not get
executed to result in the Estimates of $695,000.
I should have been a little more clear, my apologies.
I am
happy to have that answer too, that you gave me, but –
MR. WISEMAN:
The answer to that is no as
well.
MS C. BENNETT:
Okay.
What
accounts for the increases in the staff salaries in 2015-2016?
MR. WISEMAN:
A couple of things, one is we
have a 3 per cent salary increase.
With the numbers of staff that we have there that is a sizable – so we are going
from a budget of $7,087,000 to $7,190,000.
So if you look at the 3 per cent salary increase, then we are pretty
close to that, together with step progressions that occur.
MS C. BENNETT:
I will ask the question again
in the same way I asked it earlier.
From 2013-2014 with a budget for Salaries of $5,157,000 to this fiscal year to a
budget of $7,190,000 – I cannot work out the math too quickly here now, I would
not want to say that I am offside, but that seems to be a little bit heavier
than 3 per cent.
MR. WISEMAN:
It would be because there was
2 per cent last year.
MS C. BENNETT:
Right.
MR. WISEMAN:
There was a 2 per cent salary
increase added to the 3 per cent. So
it is a compounding impact of that.
It gives you five point something and then –
MS C. BENNETT:
I think the increase is more
than 5 per cent.
MR. WISEMAN: –
you would have to throw in a few step progressions that are in there.
You are probably in the ballpark, but we can reconcile it for you.
MS C. BENNETT:
Okay, that would be great.
MR. WISEMAN:
The order of magnitude is in
the ballpark.
MS C. BENNETT:
Okay, that would be great.
Thanks.
The only
other question I had, which is a general question and, again, I was not sure
where to ask it. It may not be
appropriate to ask it here but I will throw it out.
I am sure the Chair will let me know.
With
regard to the PeopleSoft implementation, because it was a multi-department
project, where in the Department of Finance did the expenses related to the
PeopleSoft purchase, the capital asset purchase and then the associated training
cost?
MR. WISEMAN:
That would come under HRS.
We do the estimates for HRS.
The issues around PeopleSoft would be imbedded there.
MS C. BENNETT:
Okay.
CHAIR:
That is it for you, Cathy?
MS C. BENNETT:
Yes.
CHAIR:
Lorraine, do you have another
– you are done?
MS MICHAEL:
I am finished, thank you.
CHAIR:
Okay.
I will
call for the subhead of the Office of the Comptroller General.
CLERK:
Subhead 2.4.01.
CHAIR:
Subhead 2.4.01.
Shall
the total carry?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
On
motion, subhead 2.4.01 carried.
CHAIR:
Shall I report the Estimates
of the Department of Finance carried without amendment?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
On
motion, Estimates of the Department of Finance carried without amendment.
CHAIR:
I would like to thank
everybody for their participation; Minister, you and the staff.
I will
call for a motion for adjournment.
Moved by
Kevin Parsons that the meeting be adjourned.
Thank
you very much.
On
motion, the Committee adjourned sine die.