Art Eggleton LiberalPresident of the Treasury Board and Minister responsible for Infrastructure

Mr. Speaker, one of the many groups of Canadians that are affected by Bill C-17 is the Public Service of Canada. When we came to power we found the public service under considerable stress. We have already started the rebuilding process and by the end of our mandate we expect the public service will have recovered its full ability to serve Canadians.

The wage and increment freeze which was announced in the budget is a difficult but necessary measure. The freeze which ensures that $1 billion can be booked in the fiscal framework to be reached in the year 1996-97 is something I recognize that public service employees will not welcome with open arms. But, frankly, we are freezing salaries to save jobs.

This government also announced in the budget an efficiency in program review aimed at reducing the cost of government. How that is connected is that if we find enough savings to meet the reduced departmental expenditure targets, we can apply the additional efficiency savings to reducing the length of the wage freeze.

Though the cool reception of many union leaders to the freeze of wages and increments announced in the budget is certainly understandable, I want to place our actions in perspective and show that we have been as fair as we could be to the public service in the present circumstances. I am confident that public service employees will accept this budget, especially when they understand the sacrifices that we are asking all Canadians, other groups of Canadians, to accept as well.

Most Canadians do not suspect how much they owe their quality of life to the employees of the Public Service of Canada. Let me give you three examples of the contribution of public servants to Canadians' welfare.

For more than 150 years members of the Geological Survey of Canada, using them as an example, have mapped the mineral resources of this country. This year and in future years commercial exploration will take place and new mines will open because of the work that is being done now by these public service employees.

Canada, as we well know and appreciate and as I have said many times, has just about the most respected police force in the world. Indeed, it is a national symbol. Everywhere Canadians are safer because of the work of policemen and policewomen of the Royal Canadian Mounted Police.

Every Canadian who flies in this country as we all do benefits from a network of services that the Government of Canada has developed and maintains. The maps used to fly the planes, the air traffic controllers that guide them through the air, the weather warning systems, all come from the public service.

The organizations and people working for government are too diverse for any less to do justice to them. In addition to the people I have just mentioned, the examples I have given, are

peacekeepers, scientists, postmen and postwomen, grain inspectors, trade negotiators and on and on.

The purpose of this list is not just to catalogue the jobs that government employees do but, more important, it illustrates the real and substantial value of these jobs. The people of Canada are getting a good deal from the people who serve them.

Public service employees have long accepted the notion that although they would never get rich working in the public service, they would at least feel more secure in terms of job security than perhaps in some other sectors.

The main source of employment security for our employees is this government's policy to preserve jobs for Canadians. The main instrument of this policy in the public service is the workforce adjustment directive. In essence this directive says that no employee will be laid off because of reductions in the workforce unless he or she has received another reasonable job offer, provided the employee is mobile and willing to be retrained where necessary.

The previous government made it clear that its intention was to legislate unilaterally an end to the employment security features of workforce adjustment. It was saying to affected employees that it was only a matter of time before they would be out the door. Remember that phrase pink slips and running shoes?

Mr. Speaker, I am sure that you can realize the effect that this would have on the morale of the public service and its capacity to deliver quality service to Canadians. That is why the government will make no changes to the employment security features affecting workforce adjustment without agreement of the public service unions. In other words, it is subject to negotiations. They may want changes, we may want changes. We are not going to act unilaterally as the previous government had suggested it would do.

This government has no dogma about downsizing the public service. Our priority is and will continue to be to provide quality service to Canadians in the most efficient way possible. Of course some departments will shrink, others may even grow.

Our objective will therefore be to help employees affected by the cuts in some departments to obtain another position in the public service or elsewhere. Specific measures are provided for this purpose.

First, we shall continue to limit external recruitment and improve the management of the priority staffing process for employees whose positions are being eliminated.

Second, we shall ensure that departments have access to the incremental funds that they need to train for new jobs those employees who are affected by the workforce adjustment. When departments have additional training requirements because of this program the Treasury Board will provide central funding to complement departmental budgets for that purpose.

I would like to turn to the measures in this bill and explain their origins. The measures are a realistic combination of two elements. First, the budget recognizes that it is necessary for the attack on the deficit to book savings from the operating funds of departments through a wage freeze.

Second, it creates an opportunity for public service managers and employees to find more efficiency savings in an effort to shorten the duration of the wage freeze. Bill C-17 extends for a further two years the wage freeze for the Governor General, the lieutenant governors, federally appointed judges, members of Parliament and senators, members of the armed forces, RCMP as well as the employees of the public service. Why are we freezing salaries and suspending pay increments? Why are we taking these measures when the existing freeze still has another year to run? Public service employees deserve and need the answers to these questions.

The Minister of Finance gave the most evident and compelling reason for the freeze in his budget address. Simply put, there is no money for increases. The total salary costs of the government amount to $18.5 billion, thus making salaries a very important part of federal expenditures.

Though the government would rather proceed by negotiation than by legislation, I am convinced there really was not a reasonable alternative. In my consultations with our unions-and I did have prebudget consultations; other people engaged in them as well-they made it absolutely clear they had no interest in negotiating concessions. I understand that point of view.

If we had waited until the 1995 budget, a year from now, several bargaining units would have already been eligible to start negotiations and could have been off seeking third party arbitration by that point in time. Rather than let those processes begin under false premises we decided, albeit most reluctantly, to act this year in the budget and in this bill.

Bill C-17 also suspends normal pay increments. These increments, which are the pay increases automatically awarded to employees as they gain experience in new jobs, are common in both the public and private sector. We have chosen to suspend them because they were allowing a substantial number of public service employees to continue to get pay increases while their colleagues' salaries were frozen. The freeze on increments will put everybody in the same boat for the next two years. At the

same time this two-year measure on increments will reduce costs by some $400 million.

I might add that even in the years where there were zero increases in the existing legislation for wages the actual wage bill was going up at about 3 per cent because of the increments.

Though Bill C-17 does not allow the government to shorten or lift the freeze-it is not in the wording that we see before us-the government has made a very clear commitment to do so if efficiency savings in operating costs by December 31 of this year warrant it. Therefore we will make the decision on the freeze and our opportunity to lift the freeze, if it can be done, in the run-up to the 1995 budget.

The government is initiating a review of its operations, I think it is important to point out, to generate efficiency savings, reduce overlap and duplication, and eliminate low priority programs. The review for which my ministry will be responsible is intended to produce results by the end of December for use in the planning of the 1995 budget.

The Minister of Intergovernmental Affairs and Minister responsible for Public Service Renewal will lead with one component of the review that will focus on government programs, the roles and responsibilities. It will determine what services the government should provide and what services the taxpayer can in fact afford. It will also seek to eliminate overlap and duplication both within the federal government and among other levels of government and to reduce or eliminate programs that are no longer a priority. The efficiency component of the review will concentrate on increasing the efficiency of government operations. The emphasis will be on how to deliver existing services more cheaply.

We have invited public service unions to contribute to the review with a focus on efficiency at two levels: national unions working on issues with the Treasury Board secretariat on governmentwide savings, and local components of the unions working with departmental management on efficiency savings in each department in each locale in the country.

My parliamentary secretary, the hon. member for Ottawa West, is meeting with union representatives this week to explore the most productive ways for them to participate in the review. We hope the review will generate savings over and above the restraint measures that this and previous budgets have put in place.

The added savings from changing government programs will be available for such purposes as reducing the deficit, reallocating funds to other major programs or shortening the length of the wage freeze. The government's decision on what to do with these savings will be part of the 1995 budget.

The government believes that unions, managers and employees share a common desire to serve Canada well. We therefore want to put before the public service unions and the employees a broad range of issues for them to consider at various times and in various forums. The unions have proposed several of these issues for joint resolution. Management will suggest others.

Here are some examples. For years the issue of contracted services has been a bone of contention among public service unions, managers and government. The unions see it as an attack on their members, while others consider it a cost effective way of doing business. We want to look at all aspects of the issue and make the best decisions for the people receiving our services and for taxpayers.

I have made a commitment to provide the Standing Committee on Government Operations with detailed information on contracting for services in the federal government. I have suggested to the committee that it undertake a broad review of the subject, here again opening to members of Parliament the opportunity to be involved in the decision making process.

In announcing the decision I wish to thank my parliamentary secretary, the hon. member for Ottawa West. Through the years of the previous government she and other members from the national capital region kept Parliament's interest in the public service alive. I know they are ready to make a strong contribution to the committee, as will members from across the country. After all, the public service is not just an Ottawa institution. I should point out that two-thirds of its members are located outside the national capital region in all parts of Canada.

The parliamentary committee may wish from time to time to examine other public service issues. The government remains committed to its employees and to their employment security. We intend to stabilize public service employment levels as much as we can. Nevertheless we must have the flexibility to make program adjustments as the needs of Canadians evolve.

Accordingly we will seek to make some modifications to the existing workforce adjustment directive, but we shall do so with the public service bargaining agents through the negotiation process that is now in place. They want changes as well.

Let me deal with pension management for a moment. There are compelling reasons for fundamental reform of major federal public service pension plans. The Public Service Superannuation Act, for example, is more than 40 years old and subject to criticism from several quarters. Plan members seek greater security of benefits. Taxpayers see the unlimited indexing of benefits as overly generous. The Auditor General has advocated changes to the plan's funding arrangements. Public service unions seek a greater voice in designing and managing the plan.

The government is determined to respond to these concerns with reforms that make the plan simpler, more affordable and easier to manage. We will develop the reforms in partnership with my advisory committee which comprises representatives of the plan's major stakeholders including the public service unions. We will renew the mandate of the advisory committee to develop a strategy for the complete overhaul of the program and to produce a framework for a replacement.

The Government of Canada and its employee unions have been unable to come to a full resolution on the issue of equal pay for work of equal value. Indeed the issue is now before a human rights tribunal where it could sit unresolved for another two years if no means are found to settle the matter through negotiation.

At the same time, to make it easier to resolve pay equity concerns in the long term we need fundamental changes in the job classification and remuneration structures of the public service. I am looking forward to trying to find a less confrontational way of ensuring that employees receive compensation that is in fact gender neutral. We are looking for ways to try to bring about a negotiated settlement of the matter.

The notions of what is a job and what is work are changing. We are moving away from the 9 to 5 routine, the old office and factory of the age of industry. For example, more work is being done at home under a policy that we have: Treasury Board's three-year Telework pilot project. Work schedules have to be adjusted to the needs of clients. We need to be more flexible. We need to change the structure of work. As the public service unions and managers have a big role to play in the evolution, this topic will be on the table for joint action.

I raise all of these matters, as I reach my conclusion, to illustrate that even though there is a wage freeze, which means we cannot go to the bargaining table on wages, we can go to the bargaining table to attempt to deal with a number of other issues. These are just examples. There are others that both we and the unions want to raise at the table. Through those means we will help to build the relationship between employer and employee over the years ahead.

I hope my remarks have made clear the main elements of the approach the government will take with the public service.

To begin with, we respect and are fully aware of the contribution to be made by employees of the Public Service of Canada.

We shall seek the broadest possible dialogue with public service unions and managers.

We will involve Parliament closely in all the major issues affecting the public service.

When necessary we shall act directly through legislation to ensure that the government's fiscal requirements are met. We shall respect the employment security of public service employees. I summarize these principles because they will guide all our actions. We expect to be held to them and I welcome that.

Let me conclude where I began. This is a responsible budget. A responsible bill flows from that budget. I look forward to working with the managers and the union leaders of the public service in implementing the budget measures that I have just discussed.