May 17, 2004 GOVERNMENT SERVICES COMMITTEE

Pursuant to Standing Order 68, Anna Thistle, MHA for Grand

Falls-Buchans, replaces George Sweeney, MHA for Carbonear-Harbour Grace.

The Committee met at 9:00 a.m. in the Assembly Chamber.

CHAIR (Mr. Manning): Order, please!

(Inaudible) a motion now to elect the Vice-Chair.

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

CHAIR: Contra-minded?

Carried.

On motion, Mr. Sweeney was elected Vice-Chairman.

CHAIR: I would like to welcome everybody here. I welcome the Committee.

This is our first meeting of the Government Services Committee. I would

certainly like to welcome everybody here and also take the opportunity to

welcome the minister and his staff. This is our first opportunity to sit down

with the minister. I congratulate you on your appointment to your portfolio and

wish you all the best. I am sure that over the morning we will have the

opportunity to critique your estimates, and we look forward to that.

Before we do that, downstairs everything is being recorded for someone to

read in the history books, I guess, if anybody is interested. We ask you not to

speak until the red light comes on in front of you - if you are asked a question

or you are asking a question - and to identify yourself each time so that the

people down below can keep track of what is going on because, as you know, we

are not in our regular seating arrangements here. Especially for the minister's

staff, to make sure you say who you are before you answer.

We have people here from the Public Service Commission also with the

Department of Finance, so we are going to take that Estimate first. When we

finish up with that those people can go on back to their duties, if that is okay

with everybody. We will go to the Public Service Commission first.

OFFICIAL: Can I ask, can we get an introduction (inaudible)?

CHAIR: Yes, we are going to do that now in a second. I just wanted

everybody to be aware, to give them time to get their paperwork ready. We are

going to do the Public Service Commission first, then we are going to followup

with the Department of Finance afterwards.

We are going to get everybody to introduce themselves first before we begin,

so everybody is familiar on both sides. We will start here with Mr. O'Brien.

MR. O'BRIEN: Kevin O'Brien, MHA for the District of Gander.

MR. ORAM: Paul Oram, MHA for the District of Terra Nova.

MR. SKINNER: Sean Skinner, MHA for the District of St. John's Centre.

MR. COLLINS: Randy Collins, MHA for the District of Labrador West.

MS THISTLE: Anna Thistle, MHA for the District of Grand Falls-Buchans.

MR. LANGDON: Oliver Langdon, MHA for the District of Fortune Bay-Cape la

Hune.

MR. ANDERSEN: Wally Andersen, MHA for the District of Torngat Mountains.

MR. LEWIS: Andy Lewis, Opposition Research.

MR. SWEENEY: George Sweeney, MHA for the District of Carbonear-Harbour

Grace.

MR. SULLIVAN: Loyola Sullivan, Minister, Department of Finance.

MR. PADDON: Terry Paddon, Deputy Minister of Finance.

MR MARSHALL: Harold Marshall, Vice-Chairman of the Public Service

Commission.

MS DEVINE: Sheila Devine, Commissioner with the Public Service

Commission.

MR. SAUNDERS: Earl Saunders, Director of Debt Management, Department of

Finance.

MR. BENNETT: John Bennett, ADM. for Finance.

CHAIR: Fabian Manning, Chair and MHA for the District of Placentia &

St. Mary's.

As usual, with our ten minute rotation, we will go around to make sure

everybody has the opportunity to ask a question. We are going to start with Ms

Thistle and we are going to go with a ten minute duration.

MR. SULLIVAN: Mr. Chair, if I could just give a brief introduction on the

Public Service Commission.

CHAIR: Yes, I am just going to give the rules (inaudible) first. We will

just pass back and forth and go around to each for ten minutes. If somebody does

not want to speak, we will just move on. We will give everybody an opportunity

to speak when the time comes.

We will call head 1.1.01 of the Public Service Commission. With that, I will

ask the minister to say some introductory comments.

MR. SULLIVAN: Thank you.

The Public Service Commission, its primary focus and its core mandate is the

prediction and application of merit in the delivery of staff policy and

compliance with that policy by departments and agencies of the core public

service. Basically, in terms of that, we are looking at giving increased force

to the Public Service Commission in terms of its ability to be able to preserve

that merit principle within the system. I know in 1997 there was a delegation to

the departments of a lot of responsibilities that were with the Commission, even

though the Commission has done an audit of that. To give merit to it, recently,

too, we have looked at filling some senior executive positions through the

Public Service Commission, and that is happening, I guess, as we speak also. We

want to see an increased focus in the merit principle within the public service

because we think it enhances the public service and makes it a capable, more

efficient, more qualified public service.

Within the Public Service Commission, there are three basic divisions. We

have a Staffing and Compliance Division that looks after staffing policy,

consultation support, and it also deals with human resource management auditing

and the Public Service Internship Program, which was the Graduate Recruitment

Program, basically, the predecessor of that. There is a division, too -

actually, within the last two years - an Appeal and Investigation Division. That

has been one to deal with various harassments and so on in the workplace. There

is a complaints and a commissions hearing, there is Management Grievances under

that topic, conflict of interest, Classification Appeal Board and

investigations. So, that comes under the Appeal and Investigation Division.

There is an employee and departmental services - like the EAP, Employment

Assistance Program, Workplace Wellness program, Respectful Workplace Program. Of

course, the pre-retirement services will come under that specific area, too. So,

the Public Service Commission does, I guess, and carries out a lot of functions

within government dealing with the human resource element in particular.

That is just a general overview of what it does. Of course, the two people

introduced there, the Vice-Chair and the Commissioner, certainly any details or

specifics that you might want to ask, too, they can assist in that process.

Thank you, Mr. Chair.

CHAIR: Thank you, Minister.

We will open the floor to Ms Thistle.

MS THISTLE: First, I would like to ask you about the financial aspect and

then I will have some questions.

I want to begin by looking at

section 1.1.01. I am curious about a salary

increase, a difference from what was revised in the 2003 Budget, $239,000. Do

you have some explanation for that area?

MR. SULLIVAN: Basically, it was because the Public Service Internship

Program is going to be increased. There is additional funding of $900,000 under

the Graduate Recruitment Program because the funding budgeted last year, there

wasn't much of a utilization of that funding there. That, I guess, primarily

came with delays in recruiting replacements there. When government changed too,

we did have a hiring freeze but the program has a go ahead and there is $900,000

allocated there. We anticipate getting full utilization in that program. While

it is almost $200,000 below historic levels there - overall, the salaries will

be down - it still will be up. The primary reason there would be because of the

Graduate Recruitment, or we call it the Internship Program. Small amounts were

due to annualization too, because with the increases in the Public Service you

will not get full annualization that would occur this year. So that would drive

it up higher too,

whereas part of the raise kicked in last year and you would

not get the full annualization.

MS THISTLE: Initially, when that program was introduced, it was fifteen

students per year solicited for work within the Public Service. Last year I know

there was an indication that thirty would be hired. How many were actually

hired? From the initial start of that program - which I think is probably five

years ago now - how many students are still in the employ of this government?

MR. SULLIVAN: Maybe you can give specifics. I think there are roughly

fifteen still employed, from my understanding.

MS THISTLE: Fifteen over five years?

MR. SULLIVAN: Fourteen still employed.

MS THISTLE: From, initially, five years ago?

MR. SULLIVAN: Yes, and there are fourteen still employed I understand.

There are nine who have left of their own volition. Sheila, for the specifics I

am sure you can give the details.

MS DEVINE: Since the program started, I think it was in 1999, thirty-four

people have been employed. Of that number, there are still fourteen who are

being funded through the program but approximately twenty are still within the

Provincial Public Service, either temporary or permanently employed.

Last year, regrettably - I guess due to budget restraints and so on - I think

we actually only hired one person under the Internship Program.

MS THISTLE: Only one person?

MS DEVINE: Yes.

MS THISTLE: So you are saying, out of the seventy-five we could have had

since the program began, because there was an initial commitment of fifteen per

year, we only have - how many employed by government now? Twenty, is it?

MS DEVINE: About twenty.

MS THISTLE: About twenty.

MS DEVINE: About twenty who have found their own jobs within the

provincial public service. What we have though are a number of other grads,

about fourteen, who have not yet secured employment. So what the program is

doing, basically, is continuing to subsidize or continuing to pay those people

who were hired originally under the grad recruit program, and as they attempt to

secure permanent employment - again, it has been difficult given the

circumstances of government at this point, but the intent is that these fourteen

who are being subsidized through the program will gain full, hopefully,

permanent or at least temporary employment within the provincial public service.

MS THISTLE: What you are saying, you have twenty who are somewhere within

the system and they are being moved around to get different experiences, but

they do not have secure employment yet?

MS DEVINE: There are fourteen who would be in that category. The rest

would be in permanent positions or long-term temporary positions.

Again, I guess, the program has changed based on the human resource planning

that has happened in departments and the intent of the new program, as you are

probably aware, is to look more strategically at hard-to-fill positions and of

recruitment in the future just for positions where we know there will be a very

long-term need for these people within the public service.

MS THISTLE: That is surprising because these are cream of the crop

students. You know, there used to be up to 500 apply for those positions, the

very best of graduates, and the intent was to hire them for management, deputy

ministers in the future and so on, and provide a wide array of experiences. So,

I am surprised to see that the take up has not been - what is the student

feedback? Are they are saying they are not able to get the jobs in government?

Is that why they are not staying? What is the problem?

MS DEVINE: I would totally agree, that what we have is the cream of the

crop in terms of how these people have been recruited and certainly they have

had tremendous opportunity to be moved around departments. It is certainly

commendable that these people have continued to wish to work for the provincial

public service, and all of their deputies and directors speak very highly of

them. They continue to apply for positions but, again, it is very difficult

within the public service at this point - it is challenging for all public

servants to either get promotions or, in some cases, to secure permanent

employment, but it is certainly not due to their lack of competence and it is

certainly not due to their own interest in staying and continuing to work within

this public service.

MS THISTLE: How many are you looking at recruiting this year?

MR. SULLIVAN: This year, on that, if I might add, Mr. Chair - last year's

budget, for example, had $900,000 put into it, of which in all of last year,

from April on, there was only one person employed. We have restated in the

Budget this year the full amount of $900,000 toward that program. That is the

historic level. I cannot speak for backfire, but it is certainly - the Budget in

the prior governments, last year was the same amount of money even though there

was only one employed. We put $900,000 back in again in this year's Estimates

to be able to, hopefully, utilize that in the program. I think that has been the

standard amount each year, to my knowledge, that has been there. So we have

historic funding levels there and there are allocations made in this budget for

that.

MS THISTLE: Alright, considering that -

MR. SULLIVAN: Vice-Chair, if you could maybe accommodate that?

MR. MARSHALL: The original program was introduced to hire five

individuals per year for the first three years and it was to be maintained at a

total of fifteen thereafter. Now, subsequent to that, there was a demand by

deputies that said we need more of these people because they are very good, and

what occurred was the deputies then found that they were unable to place them in

their departments. If there has been a difficulty with the program, it has been

the ability of deputies to find funding and find positions where they could

place them. The program this year is awaiting instruction, essentially, in terms

of the number of hires. So we are not certain, at this point in time, how that

will develop.

MS THISTLE: I was just wondering - because seeing those are so highly

qualified, you know, their resumes are impeccable - if a reconsideration can be

to how we should be looking at trying to encourage them to stay here? Supposing

you have to look at rejigging the program, because we do not want them to seek

employment elsewhere. There are a lot of people who are going to be leaving that

we have to fill the gaps for. Has there been any followup on that program since

it was instituted?

MS DEVINE: What there has been is, certainly, a long-term commitment to

the employment of these people while they look throughout the system for

suitable vacancies. Of course, these people are in competition with the rest of

the public service. While these people are specially hired to this program,

there are a number, obviously, of highly qualified, competent people throughout

the rest of the public service. So we are also, many times, looking for

promotions and, in some cases, permanent positions.

MR. SULLIVAN: Basically, Mr. Chair, I think what it comes down to, while

they could come in highly qualified, I think - as Sheila has indicated, too -

they still have to compete with other people who may be perceived by the

Commission, in actual fact, to have higher qualifications and then I guess they

lose out. Just because they are graduates and they come in highly qualified,

does not mean that other highly qualified people are not seeking positions, too.

So that is what makes it equally as difficult. I guess it speaks well for the

quality of public servants when they are highly qualified and do not get a

position. Somebody else must be highly qualified in the process, too.

CHAIR: Excuse me, Ms Thistle, your ten minutes are up.

MS THISTLE: Oh, okay.

CHAIR: We will get back to you in a minute, I am sure.

Any questions, Mr. Skinner? Mr. Langdon?

MR. LANGDON: I am not familiar with the program as such, are these people

management or would they be part of the union process as well, the young

graduates that you hired and you put them into the mix?

MR. SULLIVAN: I will refer that there. I would assume that it would be

open to their qualifications for the position because executive positions, of

course, have not gone through the Public Service Commission but management

positions have and the general service. So, if you want, I could certainly

comment on the experience of -

MR. MARSHALL: They are not restricted.

MR. SULLIVAN: The Vice-Chair said they are not restricted. They are open.

If there is a management position they apply for, and they have the

qualifications, they would have the same opportunity as other people who

qualify.

MR. LANGDON: I understand that, but are any of those fifteen people -

MR. SULLIVAN: Are they management?

MR. LANGDON: - part of a union negotiating team or are they all

management?

MR. SULLIVAN: Okay, I would have to ask the Commission: What is the

breakdown of the current ones there?

MS DEVINE: When the graduates or interns are hired they are hired by

contract at a rate of $30,000 a year, and then they are slotted into special

positions within departments. They are not normally part of a bargaining unit,

but if they are successful in securing employment in the department then

obviously they either move to a management position or to a bargaining unit

position.

MR. LANGDON: My point that I want to make is, the fact that if you do go

into the bargaining unit, that even though they would have skills which would

probably set them apart or higher than some of the people who are already part

of the bargaining unit, but because of seniority or whatever, they probably will

find themselves unemployed

whereas somebody else would move up the chain. Is

that correct?

MS DEVINE: Well, certainly they would not have the level of bargaining

unit seniority that would accumulate but we would hope that the experience they

gain through their placements in departments and so on would position them to

either apply, again, for bargaining unit positions or, in many cases, they are

applying for management positions.

MR. LANGDON: Okay.

In 1.1.01.09, Allowances and Assistance; I know this is a technical question

or a specific question. It was budgeted in 2003-2004 for $154,500 - none was

being spent this year - it is $157,900. Can you tell me why that is?

MR. SULLIVAN: There was an allocation made for the appointment of the

Channing Chair at MUN and that was not appointed, so it is back in for

reappointment and utilization this year. It just did not get done before the end

of the year.

CHAIR: Are you finished, Mr. Langdon?

MR. LANGDON: Yes.

CHAIR: Any questions Mr. Oram?

Mr. Andersen.

MR. ANDERSEN: Minister, I guess it is a bit ironic, going through the

whole Estimates of the book here and looking at all the salaries in every

department, that there is no change.

AN HON. MEMBER: (Inaudible) Public Service Commission.

MR. ANDERSEN: Okay, I will wait.

CHAIR: Ms Thistle.

MS THISTLE: Thank you.

I would like to ask - we do have a Chair right now of the Public Service

Commission, what are the plans to hire a Chair and when?

MR. SULLIVAN: There has been a certain financial allocation in the budget

but a decision has not been made at this point in time. It may be affected by -

and I cannot say specifically, but there is certainly a program renewal process

underway and that will be looking at the total structure. There could very well

be a Chair appointed in the near or distant future. I just cannot say at this

time because no decision has been made.

MS THISTLE: Are you looking at a total restructure?

MR. SULLIVAN: No, we do not anticipate - in fact, I am a strong believer

of the merit principle and there should be a stronger public service. In 1997

they delegated that to the departments. It is an area I have raised in

Opposition. I sat across there last year and said I did not agree with that.

Other positions - I think even temporary positions and various things that are

filled should be done on a merit principle and it should not necessarily come

outside the scope of the Commission. I am a believer and a promoter of a strong

Public Service Commission based on qualifications and their abilities. We have a

stronger Public Service as a result. That is our focus and certainly that is a

belief of mine.

As to a Chair, a decision has not been made. I guess when that decision gets

made it will be articulated at that time.

MS THISTLE: I notice that in 1.1.01.03, Transportation and

Communications, you have lowered that heading. What part of that would be

Communications for a dollar amount?

MR. SULLIVAN: Communications was budgeted last year at $22,000 and

$32,000 was spent. This year we are budgeting, again, $22,000 as the makeup of

that $89,500. We are budgeting the same amount as was budgeted last year but

there was an extra $10,000 spent over budget. That would be under that component

there.

MS THISTLE: Will any part of that be spent for the ads that were in the

paper a week ago about the hiring for the Department of Business, those

executive positions?

MR. SULLIVAN: I will have to defer that operation aspect to one of the

Commissioners on that. I guess you are referring to the Deputy Minister for

Business and a Chief Innovation Officer. Would they be the ones you are

referring to?

MS THISTLE: Yes, I am.

MR. SULLIVAN: Who paid for the ads for those positions?

MS THISTLE: Yes.

MR. SULLIVAN: Yes, I will defer that, but I will just say before I defer

for an answer, that these positions were decided to be put through the Public

Service Commission as opposed to being appointed by the Premier. We figured, let's

open it up and look for what qualified people we can find out there to apply. I

guess it would follow the normal course, I would assume, in advertisement of

public positions. Sheila, if you could elaborate on that and just tell us if

this, specifically, is the case and if it is similar to other advertisements for

positions in the public service.

MS THISTLE: I am just curious if the ads were actually written by the

Public Service Commission and are they paid for by the Public Service

Commission?

MR. MARSHALL: I think, perhaps, I can answer that. The Public Service

Commission engaged a private sector agency to assist in the development of the

file, and between the Public Service Commission and the consultant the

advertisements were drafted and published.

MS THISTLE: Are you saying that the Public Service Commission went to a

private ad agency to write that ad?

MR. MARSHALL: It is not an ad agency, it is a recruitment agency. The

reason the Commission engaged the consultant was because of the nature of the

two senior positions. There was a sense that there was a requirement for a

strong energy background for the Deputy of Natural Resources and for the Deputy

of Business, there was a sense there was a requirement for a very strong, broad,

focused knowledge and intelligence in the business field, and we felt that to

get that exposure, the exposure of the recruiting company, we would use the

resources more on a national basis.

MS THISTLE: Was that company a local company, and, if it was, do you

expect to use that company again in the future?

MR. MARSHALL: Yes, it is a strong local company and it has been here for

some time, I believe. Would we use it in the future? We would do the same thing

as we did this time. We asked for proposals, we received a number of proposals,

and made a selection.

MS THISTLE: Did you advertise publicly on that, or was it a request for

proposals?

MR. MARSHALL: It was a request for proposals.

MS THISTLE: Which company did you choose?

MR. MARSHALL: Now you are challenging my old brain. It was a local

company - do you remember the name? I cannot remember. I will get the name for

you. I am sorry!

MS THISTLE: You expect to use that company again. The advertising would

have been paid for by the Public Service Commission, and it was more elaborate

than the normal Public Service Commission ads that we would see in the papers

from time to time. You expect to use that particular firm for those type of ads

in the future?

MR. MARSHALL: No. This company has been engaged specifically for these

positions. My expectation would be that, if we are asked to do this again we

would go for requests for proposals again.

MS THISTLE: What have been the response to those ads?

MR. MARSHALL: At this point in time, there have been a number of calls

received by the director of staffing and, to the best of my knowledge, I do not

know of actual receipt of applications at this point in time.

MS THISTLE: Is there a closing date on those or is it open-ended?

MR. MARSHALL: It is a ten-day opening, I believe.

MS THISTLE: Do you have any idea what that will cost?

MR. MARSHALL: Sorry? The advertising?

MS THISTLE: How much was the contract for the firm?

MR. MARSHALL: It is not a contract. It is on the basis of $200 per hour

and their participation is based on the Public Service Commission's engagement

of them.

MS THISTLE: When you say $200 per hour, that would actually be the

preparation of the ad, the interviewing of the candidates, the selection and

recommendations, whatever is involved, is it?

MR. MARSHALL: Whatever we would choose to have them participate in.

MS THISTLE: I will move on to another question.

With the downsizing in the public service, there are going to be a lot of

layoffs. Is there a clearing house going to be set up through the Public Service

Commission to handle the bumping, the recalls, the severance, and heaven knows

what?

MR. SULLIVAN: I will answer that, Mr. Chair.

Yes, there will be. There were 217 layoffs announced in the public service.

Twenty-two of them proceeded last week and 195 were given notices last week,

overall, and a redeployment center in the Public Service Commission will handle

these. There are twenty-three people, who back some time ago lost their jobs or

were laid off, still within the Public Service Commission to be in that center

too. They will qualify, anybody who went out before, along with the current

ones. During that process now, there is a thirty-day bumping period in line with

the collective agreement, if you are a member of a bargaining group. If you are

not a member of a bargaining group, you will still go through the redeployment

center to be able to avail of any openings within that. Due to an attrition

process, there is going to be a job matching of qualified people to be able to

move these. The Public Service Commission will do the work on that to make sure

that these people, if an opening comes up, will meet the qualifications to get

into the Public Service, possibly without ever having a discontinuation of

service. A notice has been given and some people there may have up to sixty-two

weeks earned in the system and could still be paid until this process occurs.

Some could have twenty weeks and some could have none, basically, or very

little. While that process is occurring, there will be a matching of these

positions and it will be conducted through the Public Service Commission.

MS THISTLE: Has there been any money -

CHAIR: Excuse me, Ms Thistle, for a moment, please.

The ten minutes is up again. I just wanted to check and see if anybody else

wanted - Mr. Skinner? Mr. Langdon?

MR. LANGDON: I would like to ask a question.

I was talking to a person who got laid off last week, got a pink slip, and

they are being replaced by a person from management who was bumped out of a

place as well and laid off. You have management who are not part of the

bargaining unit taking jobs from the bargaining unit. You are saying that is a

normal course of activity, that you can do that stuff?

MR. SULLIVAN: That is not what I indicated. I indicated that anybody who

got their notice, a layoff, the 217, would go through a redeployment centre. It

is not only the bargaining people who would get a chance to be redeployed. I am

saying management people and non-bargaining people too, because there are some

non-bargaining non-management and there are some non-bargaining management and

so on. These people would also go through the redeployment centre.

I did not say that one could (inaudible) out of that. I will have to get the

specifics of these positions, what would happen there. I cannot see, until they

go through a thirty-day bumping period, that there would be any redeployment. I

would assume that process would have to run its course and at the end of thirty

days they would look at the redeployment for the positions that would become

available.

MR. LANGDON: In this case, specifically, the person was a member of the

union, got the notice, was laid off, and she was told that the person in

management was taking her position.

MR. SULLIVAN: Was it a permanent position or was it temporary?

MR. LANGDON: Temporary full-time.

MR. SULLIVAN: A temporary position.

MR. LANGDON: It just does not matter. The thing about it is, there are a

lot of problems out there.

I talked to another person who was involved with Works, Services and

Transportation, a part of management, on the weekend. They had one set of

instructions earlier in the week, then they were told that they would not need

engineering qualifications along with management for the new jobs. Then on

Friday afternoon, it was changed back to the original position. There are people

out there whose lives are in turmoil. I do not know if you are going to have a

clearing house or whatever you are going to have, but these are human beings,

people who you put a face to day after day after day. There has to be something

that is going to help these people out. Whether they have been there for twenty

years, fourteen years, ten years or ten days, it does not make any difference. I

would say the quicker you can establish a situation where these people can be

looked at, looked after, and put in a situation where they can care for their

families, I think the quicker the better.

MR. SULLIVAN: According to the collective agreement, there is a

thirty-day bumping period, so anybody who is in a bargaining position would have

that option. First of all, the collective agreement calls for that period, and

that is being followed. We have to follow that bumping period procedure. Whether

someone from a management position is being put into a bargaining unit position,

I cannot speak on that. I do not know the specifics, but that to me is an

unusual occurrence. Unless that position is being eliminated and

responsibilities are being taken - I cannot speak on the specifics, unless it is

articulated. On that, I would not be familiar and I do not even know what

department it could be in.

I asked the same question myself last week, I think, that you are making

reference to, with regard to maintenance supervisors. There were forty-three

maintenance supervisors employed and all of them were served notice. In fact, I

was asked the question in the House. There were engineering technicians laid

off. I knew there were twenty laid off. I did not know if the department had

twenty-two, forty, fifty, or how many it had, and if they were all laid off. The

question came to the House, if they were all laid off. I knew there were twenty

laid off. If twenty were all were there, they were all laid off. Those details I

would not have available, but I did ask last week what is happening to those

positions, because there are thirty-two new positions being created. As late as

the end of last week I asked that question, and I was told that the job

descriptions or whatever is being developed, up until last week - I am not sure

what day it was I asked the question, probably Wednesday or Thursday - that the

job descriptions of the new positions were not completed, and they could not

give me an answer on that one. It is my understanding that these people would be

able to apply. I guess they would have to be matched on qualifications for these

positions through the redeployment centre, and anybody who is qualified would

get first crack from that redeployment pool before anybody else could get a shot

at it. That is my understanding.

MR. LANGDON: Again, I do not want to belabour the point and I will just

end it right here. The problem is, you have people who are maintenance foremen

who have been there for years. They get their pink slips, they are laid off. As

a part of that pink slip operation, they are saying that you could be hired back

but you would be hired back considering what engineering qualifications you

would have in addition to your maintenance work. These people were upset about

that. Then, later in the week - I am not sure if it was Thursday, but whatever

day it was - they were told, okay, it has now been changed, you will not need

engineering qualifications for the new job, you will be considered with your

maintenance. That kind of soothed some of their feelings and their concerns.

Then Friday they get another notice saying: No, the original one is correct, you

need the engineering along with the maintenance. It is bad enough to get a pink

slip but when you get conflicting information being given to a person in a

matter of a few days, it makes it very uncomfortable.

MR. SULLIVAN: Sure. I understand your position. In fact, the same thing

is one of the reasons that I asked the question. I was told up until last week -

I think it was probably Thursday - that these descriptions had not been done

yet. The needs of the department, I guess, could be appropriately addressed

under Transportation and Works; what position do you need in the department.

That would not be a responsibility of the Public Service Commission, you

understand. They will determine their employees, but once that is determined,

and what they need, it is a responsibility of the Public Service Commission. The

responsibility for redeployment has been given to them to make sure whatever the

description of the new job is or whatever it entails, that anybody who is

displaced in this situation, along with the twenty-three who are still there

from previous displacements, would have the first opportunity if they can meet

those qualifications. I think, as it currently exists, to get into that pool for

discussion, you must meet the minimum qualifications. That is as currently

structured.

What the job entails is a decision of Transportation and Works, and as the

Public Service Commission reports to me, it will certainly ensure that, that

process will be followed. I am not an interventionist in the Public Service

Commission. I want the Public Service Commission to operate at arm's-length

and make decisions on qualifications. I would ensure that when these are created

the Public Service Commission will have the autonomy to operate and to make

those decisions.

MR. LANGDON: Certainly, I will never interfere. I have been elected for

fifteen years and I have never ever made a call to the Public Service Commission

and do not intend to, if I am here for another twenty. That is an independent

agency, and I will leave it at that.

I will finish by saying, I was encouraged by hearing the minister say that he

has a strong commitment to the Public Service Commission, and I would hope that

the same strong concern and support will be there for the public service as

well.

CHAIR: Are you finished, Mr. Langdon?

MR. LANGDON: That is it.

CHAIR: Mr. Andersen.

MR. ANDERSEN: Just a question, I guess. I started earlier on looking

through the Estimates. I guess you gave some clarity to it, as to why there is

confusion within the public service, with those who are being bumped and being

told something one day and then a few days later learning of a different

scenario altogether.

One would think that the Public Service Commission spends a lot of time and a

lot of money on recruitment and staffing. With the projected minimum of 4,000

job losses over the next three to four years, one might think you would see a

decrease in the overall budget of the Public Service Commission rather than an

increase. The question I had in my mind this morning - I know the unions will

play a big role in the bumping process and so on, but at a time when we will see

4,000 less jobs as people go through attrition and other means, you always said,

Minister, that a lot of these jobs will not be filled. One would only question

as to why there would be an increase in this year's or last year's budget.

MR. SULLIVAN: I mentioned, basically, additional funding of $900,000 to

cover the Public Service Internship Program. I also said at the beginning, there

are three different aspects of the Public Service Commission. One aspect is the

staffing component. Appeals and Investigation is another. It deals with the

classification of appeals for any current employees. It deals with any conflict

of interest. Investigations, that is a new division that was up and running just

about - what? - a year-and-a-half ago roughly. It has complaints and commission

hearings. There is an aspect dealing with Employee Assistance Programs,

Respectful Workplace, a Workplace Wellness program, pre-retirement services and

other specific areas. There are a whole variety of services within the Public

Service Commission. Only one would deal with the staffing and with maintained

salary levels. There is an increasing usage of some of these programs, and

demands on the employer and on the Public Service Commission to provide those

services.

In addition, with a reduction - and we have indicated there will be a

reduction - there are an estimated sixty-some hundred people who would retire.

Roughly 4,000 is our hope to eliminate by attrition, primarily, in that process.

There would still be twenty-some hundred people. Five hundred people a year, if

you look at historic attrition levels, would be employed. I might add that with

salaries within the Commission too, there are significant amounts that are

devoted to these other areas.

If you look at the budget, there is almost $200,000 less than was budgeted

last year for salaries within the Commission. Certainly, part of that is under

our fiscal restraint program, and $900,000, basically, would be a commitment to

that internship program.

MR. ANDERSEN: The only other comment I would make on that would be, when

you talk of attrition, one would think that attrition means, as people have

completed their work term and have come to an age when they can retire, that

they go. Minister, there are a lot of people who call my office, and some in

Labrador, who are nowhere near ready for retirement, but have received layoff

notices.

MR. SULLIVAN: Yes, there are 217 actually in the public service in total,

twenty-two prior to the announcement and 195 since. Based on the number in the

public service, with thirty-some thousand when you exclude some other groups who

would be considered to be more independent and not within the direct public

service numbers in terms of the total amount, it is far less impacting than we

have seen in the past. We have seen as high as 2,000 at the one time. There was

an anticipated 331 people who would have gone out this past winter. Because of

the attrition process and others, 114 of them have been accommodated and that is

why 217 were issued notices. So, over the next while it is only fair to think

that there would be significant attrition, too, within the public service

because with an aging public service, that 195 of the last group, plus the

twenty-three back within the last two years who might have gone out, they still

have not been redeployed within the public service, the people who have gone out

last year. They will be in that pool too and available to have any matching

skills for any positions vacated through attrition. So, those opportunities will

be there.

CHAIR: Are you finished, Mr. Andersen?

MR. ANDERSEN: Yes, for the time being.

CHAIR: Thank you.

Mr. O'Brien. Ms Thistle.

MS THISTLE: Thank you.

I wanted to ask, regarding the downsizing of the public service, do you have

any funding set aside for retraining and also for assisting our workers to find

alternate employment?

MR. SULLIVAN: Well, there are Employee Assistance Programs there. I know

this deals with employee problems. It could be stress and other aspects, or some

counselling service there. Maybe, Sheila, on the specifics, if there is anything

within the EAP under that general area, if you would like to comment.

MS DEVINE: Certainly through the clearing centre, the effort is to try

and provide priority opportunities for people who are impacted by the budget

restraints. Through the clearing centre, again, people are given access to

resume planning, interview preparation and that kind of job preparation and

readiness, because as people have said, some of these people may not have done a

resume or participated in an interview for twenty years. So that is the focus of

that centre.

Through employee and departmental services, they would provide individual

counselling to any affected employee. That could include personal counselling,

it could also include financial counselling because, again, some people, whether

they are working their notice or whatever, many times there are huge financial

concerns that these people would have. So the emphasis is on the personal

support through one aspect of the program and through, I guess, trying to

facilitate people finding alternate employment within the public service set in

the focus of the clearing centre, and that is really where the services will be.

MR. SULLIVAN: Just further to that, in 2003-2004 there were 778 people

who availed of services in the past. We have seen, since 1997-1998, there are

some years where there has been significant increases in people seeking

assistance under programs. Some of them could be because of job losses, because

there are still numbers from previous job losses that will go through that

redeployment centre.

Just to give an example, in 1997-1998 there was a 28 per cent increase in

employee participation in that program from the previous year, then 16 per cent

more than next year; nine, thirteen, and nine-point-seven. So the number has

increased of participation in that particular program. That has been an ongoing

process because just about every week in government, for the last number of

years, there have been layoffs. Layoffs have gone ahead. So these people - just

because there are not 195 coming at one time as opposed to five, then another

five and so on, they still have the opportunities under those programs to avail

of that. Some have been availing of that too, while it would be more impacting

the higher the number, obviously, plus there will be a focus, and there has been

a focus in the past under - I think it was called the job re-employment priority

program, I think was the original program that existed.

MS THISTLE: I am getting calls from all over the Province saying that the

layoffs are greater than those being reported. What we are hearing is that

casual employees, seasonal types, are not being called back, particularly for

Works, Services and other departments. Is that the case?

MR. SULLIVAN: Overall, we anticipated that in this Budget there would be

700 layoffs; 400 bargaining units and 300 under management. We anticipated they

would be in the seventy, eighty range or more, what we were hearing through the

College of the North Atlantic. They did a news release saying only thirty-five.

Now, I cannot speak for outside agencies, school boards and health

consolidations. These numbers were in that 700.

Within government departments itself, initially we thought it would be 351,

352, revised back to 331, and that went back to 217 because attrition took care

of these. Within government departments, out of thirty-some thousand people

employed directly, there was an estimated 217.

What did happen in 2001, when the former Premier took over, for example,

there were areas out there - I will use, as an example, seasonal workers with

Transportation and Works - Works, Services and Transportation at the time - who

would normally get laid off in the spring. They were winter seasonal workers,

and people came in in the summer and would be laid off in the winter. There was

an order issued not to layoff anybody. The seasonal workers who have

traditionally worked seasonally for years, never got laid off in 2000, the last

two winters. The last two summers they did not get laid off when they normally

would. They are basically management decisions. These people never got laid off.

There were fifty-some of them, I think, in Transportation and Works. All the

seasonal workers were told no layoffs after 2001, kept on the seasonal people

year-round.

It also happened in areas - we were told no layoffs at Whitbourne. The

facility can be staffed up to sixty. There are only twenty-two out there now, or

twenty-four. Normally when the levels go down, if residents there go down to

thirty or forty, you layoff people and you bring them back again when you need

them. There was nobody allowed to get laid off in that area, and there are

several areas like that where traditionally people could not get laid off. Even

though they are seasonal workers, they were told no layoffs.

In Transportation and Works; people on the West Coast got laid off and

Central. By the time it came east, when the layoffs occurred there was a halt

put to it. These were the people who, traditionally, would normally be laid off,

and did not laid off for over two years. They are normal, management decisions

of seasonal workers there. Now, what is in that mix, I guess, some got included

in this total now, I would assume, but what they are - this department would

have to answer specifically on what their seasonal decisions are. But, that is

why there are people who got layoffs, because they were two years working

year-round when they were always seasonal workers. That is one of the main

reasons why you are hearing from people now who are put in that category.

MS THISTLE: So, your reference to laid off public sector workers is only

on permanent employees, is that correct?

MR. SULLIVAN: No, I did not say that.

MS THISTLE: No, I did not say you said it. I am just asking -

MR. SULLIVAN: No, there are temporary people, too. There are a lot of

temporary positions -

MS THISTLE: So, they would be included in that number of 700, the

temporaries?

MR. SULLIVAN: All layoffs, as a result of the Budget - other than

seasonal workers who come and go, they are independent - there are 700 people

total. That number is now revised down to 550, because we are told that

attrition picked up some of these. Some areas may not have - the College of the

North Atlantic, the release said only thirty-five would be laid off. We had

thought it might be double that. So, looking at a revision of our numbers in

government now, we had anticipated 352 and we announced 217. The difference

there is 135. So, take 135 off approximately 700 and you are down to 565.

The College of the North Atlantic were probably thirty less than we

anticipated. That would take it down to five-hundred and thirty-something. The

number of actual layoffs which might occur from consolidation of health and

education boards may be down close to 500. It could be under, but the number I

am using now to say that the 700 number now, to be on the safe side, is revised

down to roughly five-hundred and fifty when you look at the consolidation of all

the boards, you know, less directors and assistant directors and those types of

positions. That would be the number as a result of the Budget that was given

this year.

MS THISTLE: But I think what is important is that we do not have a number

on the people who are not recalled, called back for seasonal work. We also do

not have a number on the temporaries who are not going to be called back or -

MR. SULLIVAN: No, temporary employees and all of these, too, are in that

total. Everybody who got a layoff -

MS THISTLE: But the majority of this number are permanent people.

MR. SULLIVAN: Everybody who got a layoff were not permanent.

MS THISTLE: But, the majority are?

MR. SULLIVAN: I could get the number. There is a significant number of

temporaries also and a significant number of management. In total, there were

400 bargaining unit - as I indicated earlier - of which that number will be down

now to around, probably in the ballpark of 300. I have to look at those 135 to

see how many were management and how many were bargaining unit. But, based on

the ratio there, it would be safe to say that probably the number of bargaining

unit now would be less than 300. The number of management would be down in the

two hundred-and-some range out of the 550.

MS THISTLE: I guess it is a moving target. It is something that I will

check on.

MR. SULLIVAN: Sure. It will continue to move. In fact, as attrition

occurs that number will keep going down and down. There is attrition and as the

redeployment centre fills these - if there are a lot of people who leave through

attrition by next year, or by the time some of their notice periods are worked

out, there might be only half the number who will end up going. We can only

answer that based on, number one, how many people are going to leave over the

next while, and, number two, how these people who were given notices match the

qualifications for these people who go out. Number one, there will have to be an

attrition process, and, number two, there will have to be a matching of the

people who got notice to that position which was vacated through attrition. That

would determine how many we end up with and how many end up actually going out

of the 217.

MS THISTLE: I think what we are finding is that rural Newfoundland is

going to get the hardest blow because those people in rural Newfoundland who

only have enough weeks to qualify for EI, we are hearing that these people are

not being called in. They may not get into the overall numbers that you are

reporting as part of the Budget cuts. It is being felt around the Province and

this is what we are hearing. I have one -

MR. SULLIVAN: Over 200 on that one. Over 200 out of the

three-hundred-and-some are from the St. John's region in those layoffs.

MS THISTLE: Yes, but I would suggest that the people who are not going to

be called back are from rural Newfoundland and Labrador.

MR. SULLIVAN: Well, I cannot speak on - individual departments would have

to be asked that question based on their - I would not be intimately familiar

with Transportation and Works, or any of these departments, what their regional

operations are and what is in there. I think that would be more appropriately

asked in the Estimates of Transportation and Works.

MS THISTLE: Yes.

One final question I have for the Public Service Commission, and that would

be the new Business Department. In the job description that you will be

interviewing for, how many people will that deputy minister have to supervise?

Where will the location of that office be?

MR. SULLIVAN: That is not a decision. The Public Service Commission -

MS THISTLE: Well, I will ask the minister.

MR. SULLIVAN: - looks at qualified people in areas to do that. As for the

department, they do not get involved in the direction, operation, management and

aspects of the department. They are strictly an arm's-length selection process

to adhere to basic principles. So that certainly would not be appropriate. As

the Public Service Commission reports to me as the President of Treasury Board,

I would not want to get into asking questions on another department. I think

that could be addressed under that specific department, I am sure. I think they

had their meeting on Wednesday or Thursday night, or one night last week, and

that would be the appropriate place to ask that.

MS THISTLE: Well, I am quite certain if an ad was placed to attract an

executive, the executive would want to know what his or her duties were and what

supervision level it entailed and where they would be located. I think that

would be normal under a job description.

MR. SULLIVAN: Yes, and I also think that departmental operations should

come under department Estimates, but if one of the commissioners wanted to

indicate - if they have access to any of that information. I do not get involved

in the Public Service Commission at all. I never question, never ask. If there

is anything they know that they want to relate, feel free to relate that.

OFFICIAL: (Inaudible).

MR. SULLIVAN: No, they would not know anything about it. They would just

look at, I guess, filling a position. I think, it would be safe to say that you

look at filling a specific position there and anybody, I guess, would know that

if it is a deputy minister position, you are responsible for the whole

departmental operation. The same as any deputy minister in any department, you

have the responsibilities for the overall operation of that department and

reporting to that specific minister.

MS THISTLE: It seems to be a -

CHAIR: Excuse me, Ms Thistle, your time is up, your ten minutes. We gave

you leniency that time because you were into a question. We are just going to

check to see if anybody else wants to ask a question now, please?

Sean? Mr. Langdon? Mr. Oram? Mr. Andersen?

MR. ANDERSEN: Again, because everything here is recorded, Minister, can

you answer the question again, either yes or no? Temporaries, you mentioned that

there were going to be 700 this year who would have begun. You later gave a

number of five hundred and so many. Again, are temporary employees included in

this number?

MR. SULLIVAN: Yes, as a result of Budget layoffs, budget decisions, I

indicated at Budget time that there would be around 700 people laid off as a

result of Budget implications, the Budget that I announced. Since that, we have

realized that number now will be more like 550. We can never tell you exactly,

for the simple reason that attrition has taken up people as time goes on. If you

ask me next month, it will be less due to attrition. If you ask me the month

after, it could be less again, and we hope that in three months' time there

will be none - would be ideal, in attrition - as people go out.

I can say that we had anticipated within government departments, independent

of the College of the North Atlantic, independent of consolidation of education

and health boards, there would have been 352 people earmarked for a layoff

within the public service, of which that number went down to 331 revised since,

and then revised to 217 who were actually issued layoffs. Out of that 217, there

were twenty-two occurred before the last week, 195 announced last week, and out

of these there are permanents, there are permanent full times, there are either

part times or temporaries, there is contractual, basically, whatever, the whole

process. That is the number of people - some management, some bargaining units.

The total now is 217. There is a variety of mix in that 217.

MR. ANDERSEN: Also, that number could go higher as well.

MR. SULLIVAN: Not from our budget decisions.

MR. ANDERSEN: Okay.

MR. SULLIVAN: Any operational operations in areas with seasonal employees

- I think the questions was asked - they are happening every year, every month.

There is hardly a week goes by in government that there is not a layoff for some

other than budgetary purposes. That happened the week before we came in, the two

weeks before that, and it happened in lots of instances. There are traditional

things that occur on an ongoing basis for a variety of operational reasons, but

budgetary decisions, the number 700 is revised to approximately 550. It could

change, but for the public service I speak directly. I cannot speak - I think

the Minister of Education should be able to speak for Education, and the Health

Minister for the health board numbers, but all of these were 700, of which 352

are going to be in the department. That is now 217, and there is a variety in

that mix. I can speak for all departments that come under my responsibility to

report.

MR. ANDERSEN: I think, from your answer then, if I was to make an

estimation, I would say that it would probably go higher than what was

predicted.

Minister, one last question. You mentioned a short time ago, you said that

the College of the North Atlantic came back and gave a number of thirty-five.

MR. SULLIVAN: I read that in their news release, not that they came back

MR. ANDERSEN: I will go back, because everything here is recorded. You

said the College of the North Atlantic came back with thirty-five. Then you

said: We were expecting - I guess we would have to be government - that to be

much higher. Minister, who makes that decision?

MR. SULLIVAN: The Cabinet makes any decision on Budget, the same as any

budget. We figured there would be roughly about 352 people within government

departments, and probably another 350 out in other areas that would be laid off

as a result of our Budget decisions, with our consolidation, and with the

budgets that are provided to various institutions. We put in an estimate of that

number, and the 350 half or the 352 who were in government departments, we can

track that. We know that, and we know what they are. That is now 217. As for the

other 350, I had anticipated it would be higher. The College of the North

Atlantic did a news release - that is where I read it, in a news release - that

said they had laid off thirty-five.

There are others there. I guess the College, through the Minister of

Education, will have to answer for that. I am not in contact with the College of

the North Atlantic. The Department of Education is the one that would deal with

them. I cannot ask specifics. That could be appropriately asked in the

Department of Education. The Department of Education would be the appropriate

place to ask any specifics there.

MR. ANDERSEN: I guess the last thing, my comment, is: It would be really

interesting if government would have announced what they had anticipated to lose

through the College of the North Atlantic, what your expectations were.

Obviously, you would have to have a number somewhere along the way that you were

expecting to go. It would have been interesting to have known your numbers

because, as you said, it is too late. No one would say it now. You did say that

they recommended thirty-five and we, being the government, thought it was much

higher, so it would have been interesting to know how many you had anticipated

(inaudible).

MR. SULLIVAN: That is just based on - we looked at health education

generally. The College of the North Atlantic comes under Education. It is

approximately 350 with consolidation and with the budgets they are provided. How

they break that down, we do not know. They might have made cuts in other areas

as opposed to individuals. They might have cut back in supply in other areas to

meet a budgetary requirement. I think that is a decision the College would make

as to how they are going to meet their budgetary requirements, whether it is

going to be in the human resource element or in some other element. I cannot

speak for the College as to how they arrived at that. That is a question that

the College could - they are given a budget to operate under. They deal with the

budget, and if they deal with it with no layoffs, or thirty layoffs, or forty or

fifty or whatever, they deal with their budget within the line that is provided.

They are decisions that are made within that College.

CHAIR: Are you finished, Mr. Andersen?

MR. ANDERSEN: Yes.

CHAIR: Mr. Langdon.

MR. LANGDON: I would like to go back to the Vice-Chair of the Public

Service Commission again, for the record.

When you decided, or did you decide, for a call for proposals for the two

positions for the new Department of Business - a deputy minister and so on - was

it of your own volition that you went out and asked for outside help to help you

people with the new ads? Were you asked to do it, or did you do it on your own?

MR. MARSHALL: The way the request evolved was that the Clerk of the

Executive Council asked us to consider taking the lead role in the process. He

asked whether or not there was an opportunity to engage a consultant on the

basis that, as I described earlier, there was a need in each of those areas for

a very broad, well-qualified individual, because they were interested in

ensuring that energy was well covered off in the Department of Natural

Resources, that the Business portfolio was a new one and they anticipated that

it would be a promotional responsibility and it required an individual who had

brought contacts and significant depth in the business field. The Public Service

Commission considered that and it seemed appropriate, and we moved ahead with

it.

MR. LANGDON: I will just ask a supplementary, I guess, to that. It will

be my last one.

Do you feel, honestly, as the Vice-Chair of the Commission, that you could

have done it yourself without having proposals from outside?

MR. MARSHALL: I believe that in terms of the contact that I have had with

the organization, and the kinds of services that they will provide, that the

field will be substantially broadened, the nature of the expertise that is

brought forward by the organization will be helpful in ensuring that the best

that is available will be available for choice, yes.

MR. SULLIVAN: Sheila has a comment, too, on that one.

MS DEVINE: I just want to very briefly refer to our Professional Services

vote. Traditionally, the Commission has always been voted money to bring in

special technical or consulting services where there is a technical requirement

or for some reason the Commission decides it will take the lead but it needs to

have some other technical services. That is covered off in, certainly, our

Professional Services vote. It is just, you know, again, depending on the kind

of recruitment we are doing and so on. Sometimes we do not use that particular

vote, but in this case, obviously, we will be.

MR. SULLIVAN: The information on that one, too, under Professional

Services, there was $149,000 budgeted last year, $111,300 used, and this year

$129,300 was budgeted; because, for any specific aspects of counselling services

or even involving selecting Chairs, I guess, of Level III boards, for example,

or areas that would be required, certain selection boards or specialized

recruitment professionals for whom you need, I guess, some expertise or some

broader perspective in selecting, that is the nature of that specific line item

there.

MR. LANGDON: I will just say this: There are some questions within my own

mind that it is not all black and white. It seems like there are areas of grey

as to what happened, but I will leave that for me to contemplate in my own time.

MR. SULLIVAN: Okay, that is certainly something I am not familiar with,

and with the Public Service Commission I do not have day-to-day conversation

with them on any position going through the Public Service Commission. I get

numerous calls to my office and I just basically do not do it. The Public

Service Commission, I want it to be independent, arm's-length, and that is the

way I intend it to be. I am sure these two individuals there, who have worked

with me since November, have never had any encounter of that nature whatsoever.

MR. LANGDON: I will make this point: It is no reflection on the Public

Service Commission. My questions that I have, within my own mind, are from the

eighth floor.

MR. SULLIVAN: Yes, I think it is important - I guess the eighth floor you

refer to, the Premier, has the choice to go and select the deputies. That is

what is being done.

MR. LANGDON: Absolutely. I understand that.

MR. SULLIVAN: I think it is a very positive thing to want to see top

executive levels going out and having, whatever way the Commission would want to

do it, directly or to consult with other people, to get as broad and as good

candidates as possible there. I think it is important. I think that speaks well

for the role of trying to enhance the merit system in the public service and to

get qualified people. I think it is a very, very positive step, a merit in that,

and to be perceived in that manner there, I think, bodes well for it, and bodes

well for where we want to take the Commission.

MR. LANGDON: I will just say this in concluding. I read the poem one

time, The Opportunity , where the king's son and the coward were

involved in a battle. The coward saw the sword and there was just the hilt left

and he figured he could not win a battle with it. The prince came along and saw

it and won a great battle.

All I am saying to you is, it is a difference of opportunity, a difference of

interpretation, and if we stay here for four hours or five hours or ten hours,

it will not change.

MR. SULLIVAN: Just one general thing, I suppose, (inaudible) the

questions, too, I will certainly comment. I think we moved in the wrong

direction in 1997 when we removed the responsibility from the Public Service

Commission. Over 70 per cent of the people hired in government were not hired

directly through the Public Service Commission. We feel that every

Newfoundlander and Labradorian is entitled to get hired on their qualifications,

and it is an area that we like to see happening. We would like to see that

principle and, if you start at the top with the deputy minister, there is no

better way you can start than an area that the Public Service Commission has

exemption, it does not have the authority to deal with or relegate it to it. I

think it is a very positive step.

MR. LANGDON: (Inaudible) do the same thing for (inaudible), practice what

you preach. I will give you a lot more examples if you want them.

CHAIR: Are you finished, Mr. Langdon?

MR. LANGDON: I am finished.

CHAIR: Are there any more questions on the public service?

MS THISTLE: No more questions.

I would just like to thank the officials for being here this morning. They

did a good job of explaining the questions that were asked. No doubt in days to

come you will probably see some correspondence because it is clear we did not

get the answers we were looking for, but we will get them at a later date.

Thank you very much.

CHAIR: Mr. Andersen, do you have any follow-up questions?

MR. ANDERSEN: Just a point, but to us it is a very important point.

Again, I know that there were questions asked and, as my colleague said, it was

not directed at the Public Service Commission, but we thought the questions that

were raised were on a particular department, and we hoped that we would have the

minister who was responsible for that department come into the Estimates so that

we could question him.

AN HON. MEMBER: The same as we are doing this morning.

MR. ANDERSEN: The same as we were doing here this morning. I just want to

make that point for the record. (Inaudible) questions asked of any department,

and we were hoping that the minister responsible for that department would have

come and answered questions for us, the same as other ministers do.

MR. SULLIVAN: Mr. Chair, I have been in this House for probably twelve or

thirteen different Estimates and I have never yet, while I have been here, seen

a Premier stand and answer questions on his department, his responsibility.

There was an opportunity for this, it was dealt with in the House, the

Premier was out of the country, and even if he was in the country, even if he

were here, Premiers before have never answered. I have asked questions since

1992 on Estimates to the Premier, the Executive Council responsible for it, and

areas, and it has always been the Minister of Finance who has answered, or some

other minister who have answered questions on these. That is something that -

probably I can speak for twelve years at least - has not happened. If it was

good for twelve years; why wasn't it good for the thirteen years?

CHAIR: I think we will have to agree to disagree on that one, both sides.

MR. ANDERSEN: Can I make a comment to that? I would like to.

I have been here since 1996 and I can say to the minister that if he can go

back over from 1996 until this year, if he can show us where a minister

responsible for their department did not show, then I would like to see it. I

would say to you that the Premier has taken on a new approach, that he has a

line department and that is the reason why I raise the question again here and I

will continue to raise it at every opportunity I get, because he is now a

minister of a line department and we felt that he should have been here to

answer the questions. I will leave it at that.

CHAIR: My information is that the Premier, and therefore the minister, is

back today, so maybe you could ask the question when the time is appropriate in

the House to do so. I am sure he will welcome your questions.

There being no more questions on the Public Service Commission, we shall call

the subheads.

Shall subhead 1.1.01 carry?

SOME HON. MEMBERS: Carried.

CHAIR: Carried.

On motion, subhead 1.1.01 carried.

CHAIR: Shall the total carry?

SOME HON. MEMBERS: Carried.

CHAIR: Carried.

On motion, Department of the Public Service Commission, total heads, carried.

CHAIR: Thank you very much.

The Public Service Commission can leave us. Thank you very much for your

attendance. We are going to refer now to the Department of Finance.

Does everybody agree with a two minute break?

SOME HON. MEMBERS: Sure.

CHAIR: We may even go three minutes.

MR. ANDERSEN: Take five.

CHAIR: We will go for five minutes. It is 10:25 a.m. and we will report

back at 10:30 a.m.

MR. SULLIVAN: Thank you.

Recess

CHAIR: Before we call the heads of the Department of Finance, just a

quick commentary from the minister on a question that was raised in the Public

Service Commission, for which you were looking for an answer.

MR. SULLIVAN: I have that name for you, if you want it on the record.

MS THISTLE: Okay.

MR. SULLIVAN: The company that was there, the Public Service Commission

checked it, is Robertson Surrette.

AN HON. MEMBER: Is that a local company?

MR. SULLIVAN: The person is employed here. The people they have are

employed locally here. Robertson Surrette, they have a local office here.

MS THISTLE: You said Robertson?

MR. SULLIVAN: Robertson.

MS THISTLE: R o b e r t s o n.

MR. SULLIVAN: That is correct, Surrette, S u r r e t t e. They do have a

local office here, a local phone number, local office and so on. It is a local

company that operates here, the same as a lot of companies, I guess, have

offices here and operate here.

MS THISTLE: It is a name that I have not heard of, but that does not mean

anything. Thank you for providing that much information.

Are we ready, Mr. Chair?

CHAIR: Yes, we are. I just want a clarification. The Clerk will call the

first subhead and we are going to leave it open to ask questions anywhere within

the confines of the department, just in case there are different members,

instead of just taking one subhead at a time. We are going to open up the

subheads from start to finish, and then if anybody wants to float around with a

question they can. Is that okay with everybody?

MS THISTLE: Sure.

MR. ANDERSEN: You are too kind, Mr. Chair.

CHAIR: Thank you for your vote of confidence, I say to the Member for

Torngat Mountains.

CLERK: Subhead 1.1.01.

CHAIR: Subhead 1.1.01 has been called, and I will turn the questions over

to Ms Thistle.

MS THISTLE: Thank you, Mr. Chair.

Are you entertaining questions this morning from Executive Council?

MR. SULLIVAN: No, Executive Council has always been done in the House of

Assembly during regular House hours. That is a separate area that will be done

within the House. Along with the Consolidated Fund Services, that has been done

in the House. This is for the Estimates of the Finance Department on page 29,

starting in the Estimates book.

MS THISTLE: I realize that, but I wanted to ask that question.

MR. SULLIVAN: There is a provision for that within the House itself

during regular hours.

MS THISTLE: I realize that, too. You are not taking any questions on

Executive Council? You are leaving that entirely -

MR. SULLIVAN: No, there is an appropriate time for Executive Council.

There is a fair amount to time set aside for that. You will have hours and

hours, a lot more than in a regular Estimates meeting, if you have questions on

that.

MS THISTLE: Okay, now that that matter is cleared up, before I ask any

real questions, I would like to go through some of the headings, if I could. I

guess the first one would probably be Transportation and Communications in the

Minister's Office, subhead 1.1.01.03. The amount is $50,000. Do you expect to

be doing more travelling this year?

MR. SULLIVAN: No. Last year there was an expenditure - actually, last

year there was a budgeted amount of $71,000 and there was $44,500 spent. This

year we have budgeted for $50,000. One of the reasons why, I guess, is that we

are looking at - there was discretionary spending curtailed, for instance,

during last year. That is one of the reasons it came in at $44,500. When we came

in, we put a limit on any discretionary spending. It had to be approved, and it

had to come through the minister, within his department. We sort of scrapped

discretionary spending - only compulsory or necessary travel.

This year we have looked at budgeting $50,000. I do know for a fact that

there are going to be meetings over and above what were required, I know, just

last year. There was a Council of Federation established under the Premiers

across the country, and on that there is a committee set up on co-operation and

fiscal imbalance. I know we have a meeting near the end of this month in Toronto

on sustainability of health care, with Finance and Health Ministers, under the

umbrella of the Council of the Premiers. The Premiers are meeting somewhere.

We budgeted $21,000 less than last year, that was budgeted in this area. We

think it is a significant decrease in our budgeted level. As to actuals, you can

never speak directly on that, I guess, until next year comes, but there is a

significant restraint of twenty-one on seven. That is about a $30,000 reduction

in budget in this area.

MS THISTLE: For the record, I would like to say that discretionary travel

has been in effect for two years. It just did not happen last year.

MR. SULLIVAN: I am not disputing that; but, for instance, last year, up

to the time that I took over on the Transportation and Communications area,

there had been $29,000 spent from April to October in the department and, after

the election, October 21 onwards, up to the end of the fiscal year, there was

only $15,500 spent. So, there was just about half as much spent during my term

in office of five months versus the previous, well, five point some and six

point some, which is almost equal in time, the spending was about half of the

previous ministers. In other words, we did cut down on any discretionary

spending generally in government, not just within this office, so there was a

significant reduction in travel costs.

MS THISTLE: What I would also like to say for the record is that you were

a new government as of October 21. No doubt it took a long while to get geared

up to run the government, so I would expect that is why you were not doing any

travelling.

MR. SULLIVAN: Actually, the week after I became minister, I went to a

meeting in the Atlantic Provinces in November. I got on an airplane within days

of becoming minister and went to a meeting of Finance Ministers in Atlantic

Canada. Myself and the deputy - who, I guess, was ADM at the time - went to a

meeting very, very quickly. We have had a fair number of meetings.

One of the reasons it is down is because our costs were down. For example, it

is not necessarily just in the number of meetings, it is in the cost associated.

Halifax, for instance, the cost of that trip - the total cost to go to that

conference was, I think, $680, if I remember. That is including everything for

me to get there and back at that meeting.

MS THISTLE: Well, I would say you should mark that one down because this

is going to be first cheap trip you will take in the next four years.

Anyway, I am going to move on to Executive Support. I see that Transportation

and Communications has increased on that one. What do you anticipate happening

there over and above last year?

MR. SULLIVAN: Last year there was a budget of $64,400. This year we are

budgeting $60,400. We are budgeting $4,000 less. You are looking at 1.2.01.03, I

assume?

MS THISTLE: Yes, I am.

MR. SULLIVAN: We budgeted $4,000 less than was budgeted last year because

we, under fiscal restraint, wanted to budget less. One of the reasons it was

down last year, also, is because we had a discretionary spending policy in which

we wanted to curtail expenditure in that area. For instance, it went down from

$64,000 to $45,000 in the actual year. So that is a combination, certainly, of

restraint measures and adherence to - discretionary spending is one of the

primary reasons for that.

MS THISTLE: But you have to look at the fact that you only spent $45,000

last year. So why would you up the budget again, seeing you are talking about

restraint?

MR. SULLIVAN: Well, we actually budgeted $4,000 less than last year. One

of the reasons it is down so low is because we had adherence to our policy at

the end of the year. We wanted to curtail expenditures of a discretionary nature

because we were in a significantly worse fiscal situation than we had

anticipated and we wanted to try to contain it.

MS THISTLE: Well, if that were the case you would go back to what you

actually spent last year, which was $45,000.

MR. SULLIVAN: Well, a certain amount of executive travel traditionally

has occurred in the past and we certainly went less than the previous government

budgeted, by $4,000. So, there is a certain amount of executive travel needed

there. Deputy ministers and other officials at the executive level need to

participate in - whether it is conferences or other information pertaining to

their jobs. We cannot eliminate that, and it is important to have that included.

MS THISTLE: I will leave that one for now but you are not practicing

fiscal restraint when you increase it by $15,000 over and above what you

actually spent last year, but I will move on to a new line.

MR. SULLIVAN: Well, I think it is appropriate to compare budget to budget

and actuals to actuals. I think next year you can look at the actuals and then

you can do comparisons. You cannot compare budgets to actuals. You must compare

actuals to actuals and budgets to budgets.

MS THISTLE: Under Administrative Support, 1.2.02, do you have anybody

working there? I do not see any salaries listed.

MR. SULLIVAN: Which one is that, 1.2.02?

MS THISTLE: 1.2.02.

MR. SULLIVAN: Is that Employee Benefits?

MS THISTLE: No, no. There is nothing there for Salaries for

Administrative Support.

MR. SULLIVAN: No, there is no salary basis here. That is just

administrative things, like Employee Benefits, Transportation and

Communications, Supplies, all these types of things which would be included

under that, Professional and Purchased Services, et cetera.

MS THISTLE: There must be employees there. You have Employee Benefits

for, I guess, conferences and different events that they are travelling.

MR. SULLIVAN: No, that is a payment to the Workers' Compensation

Commission; any CPR, first aid courses, professional, work related and

conference registration fees. It is not for direct employees. It is of a general

nature.

MS THISTLE: I notice that for Transportation and Communications you are

using the budgeted figure of 2003 again. When you know the actual was only

$135,000, why are you looking at increasing that to $41,000 in this time of

restraint?

MR. SULLIVAN: It is the same amount as budgeted last year.

MS THISTLE: You did not choose to use the actual figure instead of the

predicted one?

MR. SULLIVAN: No, that has been the historic use of it and we did not

want to - actually, if you go under it and you do not get savings in the

department you have to go to warrants. So, it is better to have allocations in a

budget than go looking for Special Warrants in cases. That is why any budgetary

item generally follows historic levels.

CHAIR: Excuse me, Ms Thistle, your ten minutes has expired. We will be

back to you in a few moments, I am sure.

Mr. Langdon.

MR. LANGDON: I want to take a little different twist on this here. Over

the last couple of weeks we have seen a tremendous increase in the price of gas

to the general public; something that was not anticipated, I am sure, to go as

much as it did. I filled up in my district on the weekend, it was a dollar and

six-point-five cents per litre. After considering that the public employees have

just had zero-and-zero for this year and next, the government, through its

service fees, expect to raise another $25 million more on everything from a

death certificate to a birth certificate and everything else in between. I am

wondering if the minister has any second thoughts? I heard him on the weekend

saying that it would not happen. I am wondering today, has he reconsidered or

thought about probably capping or giving a decrease to the public in terms of

provincial government taxes per litre of gas?

MR. SULLIVAN: Taxes are based on a litre and as the price goes up, in

some cases consumption could go down and government gets less revenue for the

gasoline tax. You would assume that if people have limited income they would

spend less, they would do less driving if it goes up. If we follow that basis,

or marginally less, we get less in gasoline tax. So our revenue goes down. To

give a refund when we have less revenue under gasoline tax would not make sense.

We have already budgeted on a certain amount. We lose money, too, on gasoline

tax when prices go up. The lower it is, the more we make on gasoline tax,

because if you consume more, we make more money. Ours is strictly on a

consumption per litre, not as a percent.

MR. LANGDON: Yes, I understand what you are saying but, I mean, there is

no guarantee that - I mean, there are people who have to go to work. There are

people over in the community where I am from, loggers, they drive from the

community up to the woods camp, which is about three to four hours, and you

know, gas that has gone from eighty cents a litre to $1.06 is a big difference.

Public service people who are on the lower end of the rung, I just thought that

the minister would see this as an opportune time to be able to do something for

the people who basically need it, but obviously he is not.

MR. SULLIVAN: No, but in response to that, traditionally, too, prices

have jumped and then they drop down, and previous governments have not adjusted

their taxes as the prices go up and down continuously. It is set in at an amount

per litre.

One thing governments did some time ago, I think they changed it from a

percent. I do not remember the exact year, but I think at one point it was a

percent. I would think around the early 1990s, if I am right in my guesstimate

of that, they decided to help cushion those costs for people when it jumps up. I

think you were probably a minister, or certainly a member of that government,

which decided that as it goes up let's put it on the litre, and then it does

not affect people as much when it goes up because it is a litre tax. I think

that is one way we have provided some stability in that particular aspect. So, I

think that is only fair. We would lose revenue on fuel tax as it goes up and

then to look at giving back money, we would lose more money. That is not a

position we are - with an $840 million deficit, we are not in the best position

to go rebating and losing more money on top of what we are losing now.

MR. LANGDON: So, you will not be putting a cap on the amount there?

MR. SULLIVAN: A decision like that would be a decision that Cabinet would

have to make, not just me, as minister, in setting those and they would have go

through that process. So, it is not an area that I feel we are in a fiscal

position to do. Had we had a balanced budget or surplus, it is an area that

could be looked at, but in light of our fiscal restraints and so on, it is only

going to further increase our deficit.

MR. LANGDON: Well, obviously, again I am not surprised but leave it as

is.

MR. SULLIVAN: I might add -

MR. LANGDON: Mr. Chair, I have to say that I am not physically well this

morning. I have a doctor's appointment and I will be excusing myself from the

Estimates. The other people here can carry on. It is not that I want to leave,

but I have to do that.

I want to say before I go, I want to thank the officials for coming. You are

good people, and I am sure that the people in the Province have support in their

public servants. I think that at the end of the day we do not need all the

external reports to tell us that you people know what you are doing, and I am

sure that Mr. Gourley found that out when he did his report, that the

information you gave him was correct. So I want to commend you on that.

CHAIR: Thank you, Mr. Langdon.

Mr. Andersen.

MR. ANDERSEN: Certainly, I have some questions. I guess, as the Minister

of Finance, you are responsible to all departments as to exactly how much each

department is going to have for their budget.

Mr. Chair, I believe that we have to be out of here by 1:00 p.m.

CHAIR: Pardon?

MR. ANDERSEN: What time do we have to leave here in order to -

CHAIR: Twelve o'clock.

MR. ANDERSEN: Twelve o'clock, okay. Well, we will not even come close

to getting through the Estimates here today, so I will ask a few questions while

I have the opportunity.

Minister, I want to ask you, obviously that junior consultation that - as you

and your government said, that you inherited a deficit. Although, certainly you

would think from the records in the House of Assembly it certainly seems that it

should come as no surprise to you as to questions that you raised last year in

what you were saying.

I want to ask, there were several projects that were approved last year by

the previous government, and I know I have asked the questions of the other

ministers, one is the $2.4 million that was allotted for an auditorium, not for

Lake Melville but for all of Labrador. Right now the children, in particular, do

not have the opportunity to attend music festivals, art festivals, you name it.

Performers who go around this Province and in Labrador West are performing at

Arts and Culture Centres but in Happy Valley-Goose Bay they are doing this in a

bar because that is the only suitable place they have.

Up until February, the Minister of Municipal Affairs was indicating to me and

to the Town Council in Happy Valley-Goose Bay that the money for such a project

was sitting in the department. A great amount of work was done by the people who

have gone out and solicited the federal government to come up with well over

$300,000. Their invoices have to be completed by the end of this fiscal year; if

not, the money will be lost.

As the Minister for Finance, I would have to ask the question as to why such

a vital piece of an educational tool that we need for the children from all over

Labrador was axed from this project?

MR. SULLIVAN: Did you say at the end of this 2004-2005 fiscal year a

decision has to be made?

MR. ANDERSEN: The over $300,000 that was allotted and fought for from the

federal government, the invoices have to be included by the end of this fiscal

year.

MR. SULLIVAN: The 2004-2005 fiscal year?

MR. ANDERSEN: Yes. If not, the money is withdrawn.

MR. SULLIVAN: Okay. So, we have until March 31 of 2005, I would assume,

committed to that, I understand.

MR. ANDERSEN: Well, if you do not have invoices done before - I mean, it

is one thing to commit to it but if you do not have your invoices done the money

is gone.

MR. SULLIVAN: Okay. The point I am making is that if it is the 2004-2005

fiscal year, this initiative can be brought to the table in next year's

budgeting process. If a decision is made and a commitment given on that specific

aspect, it is an initiative that can come to the table for next year's budget,

if it is the current fiscal year you are speaking about.

MR. ANDERSEN: I am talking about the allotment from the federal

government, not the provincial government.

MR. SULLIVAN: Yes, but I am sure it -

MR. ANDERSEN: It is okay to say that the provincial government has put

the $2.4 million project on hold. The other key part for them is the well over

$300,000 that has been allotted by the federal government, which they told the

people in Labrador, through their MP, that invoices have to be submitted before

March, 2005. If invoices are not made and done than the money will be lost.

MR. SULLIVAN: Well, all I can speak on is the budget decision this year

and what the details and commitments - I would not be privy to all the details

of what the federal commitments are, whether verbal or written. I would not be

aware. That would be something - it is not directly in my department, but

budgetary decisions were made this year on all projects. We delayed projects all

over the place and cancelled projects; schools in numerous areas, from Herdman

Collegiate in Corner Brook, from Mobile to L'Anse-au-Loup (inaudible). It is

all over the place, from the hospital in Grand Bank. They are budgetary

decisions we made around the table.

When we looked at our fiscal situation we were facing a billion dollar

deficit. We were facing a cache of $600 million and we decided decisions had to

be made. Capital money is the same as money you are paying on current account.

It is still money and an outlay of government. So, we made decisions at the

Cabinet table as to what projects we were fiscally able to proceed with this

year. Of course, as for the future, decisions will be made in a similar manner.

I am sure, as a minister, you are aware that Cabinet makes decisions on budgets

and on projects. That is the way it worked, and the Cabinet made the decision on

these.

MR. ANDERSEN: Minister, when we look at what has transpired in the last

while, being told of jobs gone, jobs lost, and the next day only to have a

minister of a department come back to say, well, we have changed our minds, we

are going to reinstate that employee or employees, and rightly so. A prime

example would be what was predicted for Labrador West, where they were going to

lose their driver examiner, and then, when questioned in the House and so on,

the minister did reconsider.

When you hear of all the people who are going to come out of the system this

year, and you go through just about every department, one would think there is

an amount of savings going to be made this year. Every department you go

through, when you look at Salaries, they basically remain the same. Some may

have gone down a bit, but others have gone up quite a bit. Obviously, the Budget

that was presented here, by yourself, in this House, Minister, don't you think

you are going to have to make a lot of amendments to it?

MR. SULLIVAN: No, none whatsoever. Salaries in a lot of cases, as you go

through them, have gone down. Where salaries might be maintained this year,

decisions made this year, some people may have had forty, fifty or sixty weeks

due by either pay redundancy or given notice. There is a period of time where

some of the people who received their notice now might receive a salary into

next June. They might be here until next May or until November. If notice is

given it may take a period of time. Allowances would be made for these within

the Salaries votes. Part of the Salaries increases in some areas has been

because of an increase in public services. The first year you are going to get a

complete annualization for the public service increase. Last year you only got

the partial impact of that, now you are getting the full impact, and there is a

reduction of numbers within the public service, a fair number of reductions,

basically. Salaries went up because of continuation of payment to people who

have been given notice or the annualization of salaries. There are less

positions than salary positions there. There are significant less positions

within political staff.

I will just use one example. For instance, in my office, the Salaries there,

two years ago it was $465,000, this year we are looking at the total budget of

about $202,000. The Salaries portion is $263,000. We are down significantly. I

have two political people in my office and my predecessor had four. That is

basically in all departments. We have reduced significant numbers not only in

the political staff but also in reductions in other specific areas across the

public service. That would not be accurate, that we have had increased. There

are less positions, both political and otherwise, and any increases are due to

having to pay people when you give them notice or there is annualization of

certain salaries that are now getting the full impact, that the full impacts

were not in previous budgets.

MR. ANDERSEN: Minister, I guess you could certainly sit down and listen

and take it all in stride, you know, what you are saying, but I would just like

to ask a question on subhead 2.3.01 on page 36, because, contrary to what you

say, we see here an increase of almost $500,000 in salaries, almost $500,000 in

just one subhead.

MR. SULLIVAN: If you look further down on that page you will Revenue -

Federal, $1.1 million. That is because we are participating in a census; we are

getting a recovery. Look at the recovery the year before, $272,000; we are

getting an extra $833,000 coming back because of a census project that is paid

federally. We are getting $120,000 budgeted there for the First Nations. We are

being paid and reimbursed 100 per cent to set up community accounts, to try to

get it started with the First Nations, and the federal census program - in fact,

our area here, our staff, have become basically experts in the field. We are

doing work here on such accounts for Atlantic Canada. We are getting reimbursed

from other provinces. There are seven universities across the country

contributing, and we are getting money back on each of these. If you took out -

I will just use the census one alone, not counting other areas. The census

alone, in salaries, in that figure there is $440,200 for census alone that we

are getting 100 per cent reimbursement; Transportation and Communications,

$66,600 reimbursement; $47,000 on Purchased Services; $25,700 on Property,

Furnishings and Equipment; we are getting $415,600 out of that Information

Technology; we are getting back $415,600, for a total of $985,000 that we are

getting back on the census alone, not counting other areas.

In other words, we have employees here with expertise who are working for our

Province, working in the public service here, who are being paid for by other

Atlantic Provinces, by the federal government, by the First Nations and others,

because we have the expertise here and it is being highly regarded. We have

people leaving here continuously to attend conferences and to participate in

areas here that are paid 100 per cent of all their costs related to it. So we

have sort of almost a centre of excellence in this area here, and that money is

channeled back.

Just look at the bottom line when we cancel out Revenue - Federal and take

$1.1 million off that total, we budgeted this year, when you net that out, you

can see, over $42,000 less in the public purse of the Province regarding that.

In other words, that is a decrease, basically, in those areas, and the only

reason it has increased is because it is 100 per cent recovery. That is a very

positive good news story.

CHAIR: Thank you, Mr. Andersen, your time has expired. You can come back

again in a moment.

Mr. O'Brien? Ms Thistle?

MS THISTLE: Thank you, Mr. Chair.

I would like to ask the minister if you could go back to Administrative

Support, 1.2.03.

MR. SULLIVAN: Subhead 1.2.03?

MS THISTLE: The heading on 1.2.03.07., Property, Furnishings and

Equipment, $90,000.

MR. SULLIVAN: One second now; subhead 1.2.03?

MS THISTLE: Page 30.

MR. SULLIVAN: Subhead1.2.03., yes.

MS THISTLE: The heading 07., $90,000, can you tell me what that is about?

MR. SULLIVAN: Yes, I would. This year we decided to actually put new

positions in place in government on the gas audits. We feel that the former

decisions to reduce gas auditors - there are a lot of people using gasoline,

marked fuels, that is costing us hundreds of thousands, if not millions, of

dollars, and we decided to go back and put people back in these positions now.

We think we are losing tremendous revenue. In order to do that - that is for the

potential purchase of three pickup vehicles that you need. You are having, of a

hazardous nature, certain chemicals that you would have to store in the back of

a pickup, and these people will be doing those actual audits there that could

increase our revenue by many fold as a result of that. So, that is one of the

areas there that we are looking at increased, actually, extra employees,

basically, in that area, and there are extra costs associated with setting up

that, and we are confident it will have a significant return, a positive return,

in extra revenues.

Already we have done some auditing of people who were illegally using it, and

our auditors will go back, and you may have to go back three years and pay extra

taxes because you were utilizing that. That is an area that will generate

revenue for this government, and it is a necessary expense to enable them to do

that.

MS THISTLE: Is this a departure from your previous policy? Because my

understanding is that you are renting a lot of your vehicles. I know, for

instance, the RNC are renting their vehicles instead of buying new ones. Are you

actually going to go out and buy new vehicles?

MR. SULLIVAN: Well, the decisions that get made will get made on what is

the best decision. Yes, if it is cheaper to do it, we are looking at that. This

is in line - this is really a reversal of a former government policy in terms of

these positions there. The union have been calling also, saying: Look, you have

been losing revenue; why don't you do this?

We have gone out and, if you have someone to do it, the tools to do it, it is

possible that if availability of one within a fleet can be determined - we are

reviewing the whole vehicle fleet within government now through Treasury Board.

We are looking at all vehicle use, leases, and we are looking at the whole scope

of things to see how we can most efficiently manage the fleet of vehicles here

within government.

The Premier had two vehicles. The former Premier had, I think, a Durango, a

fifty-some thousand dollar vehicle, and an LHS, about a $45,000 or $50,000

vehicle that has gone back in the fleet also. We are looking at a total

management of the fleet. Maybe some are dropped from the fleet and some might be

added, but we are looking at the whole management. If there is a specific on

these ones, certainly the deputy minister - because I think there is one. Is

there one we might be able to access? Still, there is a cost associated with it

from a departmental point of view.

MR. PADDON: The intention is to have three positions across the Island to

do gas tax inspections, so you would have a vehicle for each of those people

because of the hazardous nature. If we can use vehicles that are already

existing around government, we will use them. The thought was, we need to put an

allocation in here to give us flexibility to be able to, I guess, get this

program up and running. If we can use existing vehicles, we will; if not, we

will have to use the money from the allocation to get the vehicles.

MS THISTLE: Okay, so no decision has been made at this point.

MR. PADDON: Not at this point, no.

MS THISTLE: I see.

MR. SULLIVAN: If I could just add further on that, we are going to look

at the existing vehicle pool, of course, and if there is availability and

suitability, obviously, that would be the first choice; but, if there is not, we

could go on a wing and a prayer and not have people in position and probably

significant revenue at stake. There would have to be an allocation to cover

that. If we can reduce our vehicle cost in our fleet to do so and do that, that

is an avenue we are going to look at within the whole process of vehicle use.

MS THISTLE: When do you expect to be in a position to make that decision

with regard to purchase or lease of trucks?

MR. SULLIVAN: That is an operational thing; I will defer that to my

deputy.

MR. PADDON: We would hope to have this program up and running within a

couple of months, for sure. We want to get it operational as soon as possible to

get the revenue benefits as soon as we can.

MS THISTLE: Moving on to General Government, subhead 1.3.01.01, Salaries,

I notice that the actual amount spent was just over $1 million last year and you

are brining that up to $1.8 million again. What is your reason for that,

particularly in light of all the layoffs that have recently occurred?

MR. SULLIVAN: There was certain pay equity that had to be paid out and it

got carried over. There is some carry-over into this year and it had to be a pay

equity amount included in there.

MS THISTLE: Are these severance packages that you are paying out, or

what?

MR. SULLIVAN: No, these ones are pay equity and there is a carry-over

that should have gone into last year, that technically would have carried, but

it got carried over into this year, an expenditure that is this year's cost

now, because I guess it is something that was not incurred. It intended to be

incurred last year but did not get incurred until this year. Therefore, that

drives it up by that amount, and there is a pay equity amount in there also for

a settlement of pay equity request. We had to budget for it.

MS THISTLE: How much is that pay equity amount?

MR. SULLIVAN: Well, the pay equity amount, I do not have the exact

figure, but it is considerably - it was less last year than the pay equity

requirement this year, I know that. The pay equity costs are higher this year. I

am not sure if we have the specific breakdowns on all, but the costs for pay

equity are higher this year, 2004-2005, than last year.

MS THISTLE: Are they covering all departments?

MR. SULLIVAN: Yes.

MS THISTLE: It is not related to - of course, no, that court case is -

MR. SULLIVAN: No, the heading says Government Personnel Costs. They are

basically, all of these, in the salaries as pay equity. There are some

carry-over costs and salaries. They would cover all basic departments on this

issue, so much for each department. What the breakdowns are, and all of that,

well, I would not be able to give you that amount of detail here. It would be

impossible.

MS THISTLE: So, you are saying that the pay equity that was budgeted for

last year was not paid? Are you saying that?

MR. SULLIVAN: No, I am saying it was less last year than this year, and

there were also carry-over costs into this year - the reason it is higher than

revised - but keep in mind it is lower than budgeted last year.

MS THISTLE: But, it would be a difference of $800,000?

MR. SULLIVAN: Actually, we are down $28,000 over last year.

MS THISTLE: Well, if you could, I would appreciate finding out, if you

would let me know at a later date, what that discrepancy really is?

MR. SULLIVAN: Yes, the pay equity would be amounts on behalf of all the

departments, so I guess they would be amounts that we can make a note and see

what those amounts are.

MS THISTLE: Okay.

Pensions: during the Budget exercise, and particularly the report that was

done by Michael Gourley, there was mention made of $93 million required to

accrue for employee benefits. That was, at best, an estimate. Are you in any

position now to confirm what that actual figure should be?

MR. SULLIVAN: That is not the item you are asking on there, though,

Employee Benefits under Pensions?

MS THISTLE: No, I am not.

MR. SULLIVAN: Right. The question you are asking regarding the PWC report

- we are obligated to make allowances for post-retirement liabilities which

would include health and life insurance benefits. In other words, the costs we

are incurring today for health and life insurance have to be paid out in the

future, and those have to be accrued, we have to make an allowance for that.

Otherwise, it all becomes due at that particular point in time. Under the Public

Sector Accounting Board, the CICA, it has to be recorded. You have to record

that once you are aware of it. Approval was given last May by the former

government to move forward in tabulating this item, and during the course of

last year the actuary was doing work on this. Up to the time we had the interim

report, they had determined it to be probably $50 million. I think that was the

figure they had at the time, but they said that is a ballpark.

With the final PWC report they said, if the report was delayed we are at the

process where we might get a more accurate number. When the report came out, the

actuary informed us that it is now at $93 million. That was the amount for that

year. They had told us in the report that the total amount accrued would be

$1.223 billion. That would be the total accrued amount. That was in the PWC

report, the question you are asking. That amount now, including the current

amount, I think is a little over $100 million allowance for that item, overall.

We have to factor those costs with what we are going to pay out later.

If we decided, for example, not to pay any post-retirement costs - some

jurisdictions said, we won't pay any health or life insurance for anybody

after they retire, that is not our responsibility - that would lop over $1

billion off our debt basically, our commitments we have to make. That is a

commitment, and it is costing us roughly $100 million a year to meet those

requirements.

MS THISTLE: You did say, at the time of the Gourley Report or PWC report,

that it was an estimate, the actuarial study was not complete. You were

estimating it to be in the vicinity of $93 million. Is that actuarial still

taking place and when will it be done?

MR. SULLIVAN: I will just give you, off the top of my head - the amount

that we had predicted in the final PWC report was $1.223 billion, if I recall

that figure. At the end of the fiscal year we had that figure revised to be,

more accurately, about $1.1 billion. I wouldn't know if John would have the

exact number, but roughly $1.1 billion. The total amount carried was very close

to what it was. I would assume there is always ongoing actuarial work to look

at, based on your number of employees, their ages, how long they live after they

retire, and the shifting demographics of people in the public service. That is

going to be a moving figure always. Whatever day you calculate it will be the

day that you will have to peg it at that amount, and a year later, obviously,

you will get some changes. It is fairly safe to say that it is roughly $100

million a year and about $1.1 billion in total. That would be the ballpark

figure.

MS THISTLE: And you are actually including that figure in the accrued

deficit?

MR. SULLIVAN: It is obligatory to include that. It must be included. When

a debt is realized, you cannot keep a shifting debt over a year-end into another

fiscal year. That is not permitted to do. That is contrary to the guidelines

established under PSAB and under the CICA. That is something we cannot do.

Had the previous government not initiated and done no work on that and had we

looked at initiating it later, then once you identify a liability as being

there, you have an obligation to record that liability. Now I am not a CA, but

the gentleman to my right is. He might answer more specific questions on that,

but once a recognition of that liability was there we had an obligation. Had an

MC back on May 3 of last year not initiated this process or nothing started on

it, that would not have started to be recorded until the fiscal year we are now

in. There was an obligation to do that. We could not intentionally move costs

over a year-end because the Auditor General has continuously rapped the fingers

of government for doing situations with moving figures across at year-end. We

made a commitment that we are going to record every single thing as it is, when

it is and follow a full accrual based accounting as was introduced in the

Budget, not only this year but they introduced an accrual basis of accounting in

last year's Budget, too.

MS THISTLE: Were you about to say something, Terry?

MR. PADDON: I will just make one comment.

This is really a question of timing. The Public Sector Accounting Board had

determined that this had to be - the accounting change was going to happen

anyway, starting in about 2005. So it was really just a question of when it was

done. The process was started back at probably this time last year. So, the

minister is right. Once it was identified as being a liability it is incumbent

upon the Province to record it in the Public Accounts, and to account for it in

the budgetary process.

MS THISTLE: Going back to -

CHAIR: Excuse me, Ms Thistle, your time has expired for now. We will get

back to you shortly.

Mr. Andersen, do you have any questions?

MR. ANDERSEN: I asked my questions this morning. (Inaudible).

CHAIR: Pardon? I cannot hear you.

MR. ANDERSEN: Do you need time to ask a few questions?

CHAIR: No. I asked them if they wanted to ask a few, but no, I will move

on.

MR. ANDERSEN: Okay. Under 2.1.03, Grants and Subsidies going from

$400,000 to $4.4 million.

MR. SULLIVAN: Which one is that?

MR. ANDERSEN: That is on page 33.

MR. SULLIVAN: Okay, yes. Are you finished?

MR. ANDERSEN: Yes.

MR. SULLIVAN: Traditionally, in that category there is financial

assistance of $400,000 that has traditionally gone to C.A. Pippy Park and this

year there is an extra $4 million in it toward any opportunities to promote

business opportunities within the Province.

I announced in the Budget, actually, that - one area that we have been

looking at as providing some opportunity, possibly. There are no final decisions

made on any of that $4 million but it is safe to say that there is an area of

consideration with the broadband service. There is $16 million on the table now

for different areas. The department, I know, is looking at identifying to get

out to rural Newfoundland and Labrador because it is more difficult to compete

in a business sector if you do not have access to the same quality of service

that you get in urban areas. We are looking at a possibility $1.2 million out of

that to be able to, I guess, level the playing field for rural Newfoundland and

Labrador to have access to these services. That $1.2 million would probably

leverage $15 million more in federal commitments.

For example, one project has almost the value of - Smart Labrador is one of

the projects, I think, that was ongoing to try to - up and running. There are

others. I know one in particular is close to four million of which - the

government commitment they were looking for was three-hundred and some thousand

on the $4 million. Overall, we are looking at probably seven cent dollars to

help get broadband into rural Newfoundland and Labrador. That has been

important. So, that is one of the areas that is sort of being looked at to

assist there, and that decision is not even made. The remainder would be to help

promote and particularly, our focus is to try to level the playing field in

rural Newfoundland and Labrador to allow businesses to be able to set up there.

That would be one of the focuses of our government, generally, in the business

sector.

MR. ANDERSEN: I am going to jump ahead to page 35, subhead 2.2.03. Again,

we see an increase in Salaries.

CHAIR: 2.2.03.

MR. ANDERSEN: 2.2.03, page 35.

MR. SULLIVAN: Yes, Project Analysis?

MR. ANDERSEN: Yes.

MR. SULLIVAN: Okay.

CHAIR: You had better repeat the question, Mr. Andersen, maybe.

MR. ANDERSEN: I have asked a question on Salaries, again, why the

increase?

MR. SULLIVAN: Well, because there were positions last year - the reason

it was down from Budgeted is because there were positions seconded to other

departments which were left unfilled, and that occurred last year. In that

department there are nine permanent positions. That allowance also is an

allowance if there are any temporary or assistance or overtime. The reason it

was down over Budgeted last year is because there were positions seconded

elsewhere. We are back to historic numbers there but our Budget overall is down,

as you can see, by about $44,000. Would that be, I would assume, probably a

position less?

MR. PADDON: No. What we have done is just reduced the amount that is

allocated for temporary assistance and overtime in that division.

MR. SULLIVAN: So there are still nine positions and there is very little

allocation, basically, for temporary assistance and overtime?

MR. PADDON: Yes.

MR. SULLIVAN: Okay.

MR. ANDERSEN: Go a little further down the line there to 2.2.03.05,

Professional Services, an increase of $10,000 over last year.

MR. SULLIVAN: That is consultancy for research. Sometimes in economic

analysis you might want some outside work done on that. Last year they budgeted

$20,000 for that but they did not end up in that specific year as having any

outside expertise to call on in that area. This year we decided to reduce that

by $10,000, by half, in case we need some economic analysis outside. The

department does provide a certain amount but there are times when you need to go

to an outside source. So at least there is an allocation to be able to do that.

MR. ANDERSEN: That would be, I guess, contracting out?

MR. SULLIVAN: Yes. I think, traditionally, it has probably been - I know

last year there was $20,000. So that may have been - if you look back to

previous Estimates you might have seen - it is probably, I would assume, in that

range. I cannot speak for - I know that previous budgets would show that figure,

if you wanted to research back further.

MR. PADDON: It has been $20,000 for -

MR. SULLIVAN: The deputy informs me that is has been $20,000 for some

time, budgeted, and we decided to cut it by half this year, more or less, as a

restraint measure.

MR. ANDERSEN: I am not sure if anyone touched on 2.1.01 on page 32. Under

Salaries, again, an increase.

MR. SULLIVAN: There was budgeted last year $1.586 million and $1,567,000.

The amount you can see this year is $35,000 more on a $1.6 million salary. That

is basically the annualization of salaries. This is going to be the first fiscal

year that we are going to get the full impact of the 15 per cent three-year wage

program, the full annualization we will meet this year. That is the primary

reason there.

MR. ANDERSEN: I guess the other question I would like to raise on this

subheading would be 2.1.01.12, Information Technology. I guess something that is

very near and dear to all of us, as to why there is such a large decrease of

$156,000?

MR. SULLIVAN: Why is it down significantly this year?

MR. ANDERSEN: Yes.

MR. SULLIVAN: The Windows based pensioners payroll system was completed

in 2003-2004 and that is not required now, so certain times in IT you may have

upgrading of a system in one certain year as opposed to another. That was done

in 2003-2004, so we have reduced our allocation there because of that. We would

have $156,000 less than was actually budgeted and spent last year.

MR. ANDERSEN: Okay.

Minister, I guess a question - and, again, I know it will be raised with

Works, Services and Transportation - in your Budget, on Budget day, you outlined

that there would be an increase of 10 per cent in ferry rates this year.

Obviously, a lot of people are calling their members, and certainly they are

calling me as the critic for that department. When you see an increase for

someone from Fogo Island to Farewell, that has gone from $5.50 to $6.50, that is

an increase of about 18 per cent. Again, the question arises on many occasions.

Really, the Budget that you presented, so many changes are occurring over and

over. An example again is a senior who travels on that same ferry, that they

have gone from $3.00 to $3.50, which is an increase of just below 17 per cent.

The question I ask again, with all of this, every day with a different

scenario that is presented of what is outlined in the Budget and what is

transpiring again, the question people are asking me - and I am sure asking all

of the members on our side - is: When is the Minister of Finance going to do

some amendments and adjustments to his Budget? Obviously, what we have heard in

the Budget - there are examples I gave you earlier this morning, and this one

again now. Really, when are you going to make some adjustments to your Budget?

MR. SULLIVAN: We are going to make no adjustments to it, because when I

said if rates are going to go up 10 per cent, for example, Transportation and

Works would look at taking a rate and they would look at, if there are anomalies

within certain ferries on rates over others, and whatever the case may be, that

is a general statement of what the rate increase is going to be and the amount

of revenue that is going to be obtained. How you cut that generality - if we

said there is going to be a certain increase or a decrease of a certain per

cent, that might be worked out separately within a department to get those

revenues.

For instance, I will use an example now - it is not necessarily a factual one

- if there is one ferry service that is probably paying higher than the norm

than they should, based on current rates, than another, and there is an increase

that goes in, there might be a reflection to do a balancing of what is more

appropriate taking everything into consideration. That is an operational

decision within the department that they would look at. That is a question that

would be more appropriately asked to Transportation and Works.

Our general statement of an increase was a budgetary Cabinet decision, the

same as we indicated that we are going to give - whether it is $2 million less

to the College of the North Atlantic or $1 million less somewhere else. We

announce them and they, within their structures, within their department, deal

with their budget.

The departments get a budget based on Cabinet approval and they have the

opportunity within their budgets - it happens on an annual basis - if there are

over expenditures in some areas and they need adjustments, and down in other

areas, obviously they put forth each of the items in a budget but they have that

discretion to do transfers under subheads later, the same as they would have an

opportunity to look at which rate structures would apply to which areas. Cabinet

would not sit down on every