2020 to 2021 Main Estimates: Standing Committee on Government Operations and Estimates—November 16, 2020

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Public Services and Procurement Canada 2020 to 2021 Main Estimates overview

The 2020 to 2021 Main Estimates were tabled in Parliament on February 27, 2020.

The Parliament was prorogued on August 18, 2020 and recalled on September 23, 2020. As a result of this prorogation, 2020 to 2021 Main Estimates were re-tabled in Parliament on September 30, 2020.

Public Services and Procurement Canada’s (PSPC) opening net budget is $4.048 billion. Compared to the 2019 to 2020 opening net budget of $4.235 billion this is a net decrease of $187.2 million which is attributable to the combination of items outlined below.

Increases of funding totaling $504.1 million

Predictable capital funding

Increase of $216.8 million for predictable capital funding to improve the management of the PSPC’s portfolio of assets.

Purpose of funding

• As announced in Budget 2019, this funding will allow PSPC to establish a long-term predictable capital funding strategy to manage its portfolio of assets
• Enables PSPC to establish and implement investment strategies which transparently align investments with the use of its assets:
  • buildings
  • information technology (IT)
  • specialized assets such as bridges, dams and heating plants
• Enables a shift away from one-off approvals to portfolio-wide multi-asset investments planning and implementation:
  • this will provide parliamentarians and Canadians with a much clearer understanding of the overall capital requirements, timing and strategic planning
• Funding in fiscal year 2020 to 2021 will allow PSPC to undertake various projects:
  • more specifically, it will enable PSPC to carry out capital infrastructure projects related to the Alaska Highway, 875 Heron Road and the Lester B. Pearson buildings located in Ottawa, Ontario, and Esquimalt Graving Dock and other engineering asset projects to keep assets safe, operational and meet capacity requirements

Federal sciences and technology infrastructure initiatives

Increase of $101.1 million for renewing federal laboratories to provide federal scientists with facilities and tools that enable collaboration and support the important work they carry out for Canadians.

Purpose of funding

• Currently, half of federal laboratories are more than 40 years old and with advances in science and technology, federal science facilities need to be upgraded so Canada can produce the evidence needed to keep the air clean, food safe and water fresh
• PSPC is working with federal science departments and agencies to implement an ambitious 25-year plan that will revitalize the Canadian science sector and bring together science-based departments and agencies to share facilities, develop synergies between programs, facilitate collaborative research and support scientific excellence
• The Laboratories Canada (LC) program is part of the greater federal science and technology strategy supporting Canada’s science and innovation ecosystem. LC will support an enterprise approach to science infrastructure investments, sustainable, carbon-neutral, accessible multi-purpose and collaborative federal facilities that will strengthen Canadian science collaboration and excellence
• Budget 2018 provided $2.8 billion to launch the first phase of the strategy for building world-class, collaborative, accessible, and sustainable science facilities. Under the first phase of this initiative, PSPC is transferring funding to lead departments to support the role of the cluster management offices working as the interfacing agent between the LC office and the science based departments within the cluster—serving as a single window into the cluster. In this role they:
  • provide secretarial support to cluster governance committees, documenting and tracking risks, issues, decisions and other cluster management items in a central repository
  • coordinate cluster governance approvals for final deliverables to LC office
  • gather requirements and inputs from cluster partners to support activities such as equipment strategy, information management and information technology (IM/IT) strategy, and science information
• The funding will also address key deliverables, such as:
  • the launch of a horizontal approach to streamline the procurement of science equipment
  • the mitigation of administrative and policy barriers that impede collaboration
  • improvements to digital infrastructure capabilities
• Funding to be received in the Main Estimates will allow activities such as:
  • establish management and IM/IT strategies and processes
  • build collaborative and successful partnerships with clusters
  • repeatable laboratory design framework
  • sites selection for all projects with the LC phase 1
  • commencement of the design for the Mississauga project and the construction for the Hamilton project

Price and volume protection

Increase of $77.5 million for price and volume protection for accommodation costs to protect PSPC from non-discretionary price and volume fluctuations associated with crown-owned building and leased space.

Purpose of funding

• Every year, a funding adjustment is requested to account for price and volume fluctuation on expenses associated with the management of federal real property (for example: utilities, rent)
• The protection is to account for inflation and price variation in the space requirements for real property items for which PSPC has very little or no control (cost of rent, gas, electricity and the number of public servants to accommodate):
  • in return for this protection, any unspent funds is returned to the fiscal framework
  • the methodology was approved in 2015 and is subject to a review on a 5 year cycle

Les Terrasses de la Chaudière

Increase of $57.8 million for Les Terrasses de la Chaudière (LTDLC) Complex to modernize the exterior envelope and address the health and safety concerns associated with the deteriorating exterior brick cladding.

Purpose of funding

• The funds are being used to cover all costs related to the design and delivery of the replacement envelope of the LTDLC complex. This includes costs related to project management; the provision of architectural and engineering consulting services to design the new replacement envelope, as well as construction services
• The funding will enable PSPC to replace the current brick clad panels with a new building envelope to address the health and safety concerns associated with the failing building envelope brick cladding
• This work will be carried out on the 4 towers that comprise the LTDLC complex (1 Promenade du Portage, 10 Wellington Street, and 15 and 25 Eddy Street)
• LTDLC is currently at the project delivery stage, more specifically in the design phase
• Funding to be received in the Main Estimates will be used to develop more technical feasibility studies for the design plan of the project and prepare the acquiring construction services

West Memorial Building

Increase of $50.9 million for the rehabilitation of the West Memorial Building (WMB) (implementation phase) in order to provide interim accommodation during renovation of the Supreme Court of Canada Building (SCCB).

Purpose of funding

• The government takes the integrity and safety of its heritage buildings seriously and has committed to invest over $1 billion in the Supreme Court of Canada and the WMB’s rehabilitation
• The project will update the WMB building and fit-up accordingly to accommodate the daily operations of all occupants of the SCCB, who will occupy the WMB from 2023 to 2028
• This project will upgrade and conserve important symbolic spaces while supporting the uninterrupted operations of the Supreme Court and federal judiciary
• The project includes:
  • the major rehabilitation of heritage fabric, including exterior walls, windows and interior finishes
  • the major rehabilitation of mechanical, electrical and life safety systems
  • the modernization of information technology, multimedia and security systems
  • the seismic upgrading to current building code requirements
  • the interior fit-up for occupants of the SCCB
• The investment in this rehabilitation project will create jobs for the middle class by creating employment opportunities for Canadians in construction, manufacturing, and professional services
• The funding to be received in the main estimates will be used to continue the site preparation work and start the construction of the WMB rehabilitation project

Decreases of funding totaling $690.6 million

Government of Canada pay system

Decrease of $277.9 millions for the Government of Canada pay system: as a result of sunset funding from budget 2019.

Purpose of funding

• Budget 2019 provided additional funding to ensure adequate resources to address pay issues and continue stabilizing the pay system, this includes funding for additional full time equivalents’ (FTE) working directly on resolving pay issues
• Stabilizing the pay system and ending the undue stress and hardship faced by affected public servants and their families remains our top priority
• The government is “entirely committed to eliminating the backlog of outstanding pay issues for public servants as a result of the Phoenix pay system”
• Funding has helped with getting closer to steady state on pay administration by ensuring continuity in the services, capacity, system improvements and innovation:
  • system improvements include enhancements to collective agreement implementation, which has been rolled out for the processing 2018 collective agreements
  • funding has also allowed for continued collaboration with the private sector in supporting the running of the pay system and delivering solutions
• The desired expected results include:
  • the elimination of the backlog of outstanding pay cases
  • public servants (employees and retirees), and Canadians in general, have increased trust and confidence in the Government of Canada to pay its employees accurately and in a timely manner
• No funding in fiscal year 2020 to 2021

Real property repairs and maintenance

Decrease of $275.0 millions for real property repairs and maintenance as a result of the sunset of budget 2019 funding to maintain current office accommodation and related real property service levels to federal departments and agencies.

Purpose of funding

• The funding was a top-up to the real property program budget for 2019 to 2020
• The funding addressed PSPC’s Real Property Program integrity issues, which included growing health and safety risks, and a substantial need for urgent repairs stemming from years of under investments. This funding provided interim relief while PSPC develops a long-term strategy to address ongoing budget pressures
• The funding received allows PSPC to fund some types of expenditures in the areas of cleaning and maintenance, building investigations reports and repairs that were neglected in the past
• No funding in fiscal year 2020 to 2021

Long Term Vision and Plan

Decrease of $137.7 million for Long Term Vision and Plan (LTVP) as a result of the completion of 2 projects: West Block Visitor Centre phase 1 and the Senate of Canada building. Future approvals received in relation to the continued priority of restoring and modernizing Canada’s parliamentary precinct will be reflected accordingly.

Purpose of funding

• The LTVP for the parliamentary precinct is a multi-decade plan for the restoration and modernization for the buildings and grounds on and around parliament hill. As announced in budget 2016, PSPC received funding to continue implementing the LTVP program
• The parliamentary precinct LTVP is a multi-decade strategy designed to:
  • address the health and safety risks stemming from the deteriorated state of the 19th century Parliament buildings
  • address the long-standing shortfall of adequate parliamentary accommodations
  • modernize the buildings to meet the accommodation requirements of a 21st century Parliament, including addressing security, accessibility and sustainability considerations
• In 2016 and 2017, policy and funding approvals were obtained to rehabilitate the Centre Block, and to transform the precinct into an integrated parliamentary campus
• Significant progress has been made since 2016, including the completion of key projects on time on budget, which enabled the transition of parliamentary operations from the Centre Block in 2018 and complete transfer from parliament to PSPC in the fall 2019. Construction activities and historic restoration have begun
• In the year ahead (2020 to 2021), PSPC will continue to work in concert with Parliament to finalize functional and design decisions, and advance major construction activities. PSPC will also continue advancing the integrated campus strategy through its work on the block 2 redevelopment project, including an international design competition, and other efforts underway to update the LTVP to ensure that important connective infrastructure issues such as accessibility, sustainability, security, and the movement of people, goods and vehicles are considered

Main Estimates placemat

Parliamentary reporting and estimates supply cycle

April

• Beginning of fiscal year

April to June

• Tabling of Spring Supplementary Estimates (SE) for 2020 to 2021
• Approval of second interim supply for 2020 to 2021 Main Estimates
• Approval of Spring SE supply bill for 2020 to 2021

July to December

• Re-tabling of 2020 to 2021 Main Estimates ^{Footnote 1}
• Approval of 2020 to 2021 Main Estimates (full supply)
• Tabling of 2019 to 2020 Public Accounts
• Tabling of Fall SE for 2020 to 2021
• Tabling of 2019 to 2020 Departmental Results Report
• Economic and fiscal snapshot for 2020
• Approval of Fall SE supply bill for 2020 to 2021

January to March

• Tabling of last SE for 2020 to 2021
• Tabling of 2021 to 2022 Main Estimates
• Tabling of 2021 to 2022 Departmental Plan
• Budget 2021 presentation
• Approval of last SE supply bill for 2020 to 2021
• Approval of interim supply of 2021 to 2022 Main Estimates

Estimates process

The government prepares the estimates to obtain authority from Parliament to spend public funds. It provides an overview of the government’s spending plans to deliver on its priorities and mandate.

The estimates are tabled in the House of Commons each year by the President of the Treasury Board. The estimates are then referred to standing committees for their review and report back to the House with their recommendations.

The Main Estimates:

• outlines the opening budget required for the department to deliver on its programs for the upcoming fiscal year (April 2020 to March 2021)
  • typically, items from the final Supplementary Estimates of one year do not show up in the Main Estimates for the following fiscal year
• most common area of interest from committee revolves around understanding why the Main Estimates are different than the previous year
  • the table below outlines the major items at play
• are divided into departmental “votes” which summarize the financial requirements for an expenditure category: operating, capital, or grants and contributions
• funding for the Main Estimates is provided through 2 different supply bills:
  • the interim supply^{Footnote 2} bill authorizes the funding of federal organizations for the first 3 months of the fiscal year (voted in March and made available to departments on April 1)
  • the full supply bill authorizes the balance of the funding presented in the Main Estimates (voted in June and made available to departments shortly after)

Main Estimates: Highlights

Public Services and Procurement Canada’s total funding sought in the Main Estimates for 2020 to 2021 is $4,048.3 million. This represents a $187.2 million decrease or 4% decrease over the previous year’s Main Estimates of $4,235.4 million. The major factors contributing to the change in funding levels include (but are not limited to) decreases and increases.

Main Estimates line item narratives

Government of Canada pay system

Project summary

The Government of Canada is committed to supporting employees and resolving public service pay issues as quickly as possible. This is a top priority, as employees deserve to be paid accurately and on time.

Budget 2019 provided additional funding to ensure adequate resources to address pay and system issues and continue stabilizing the pay system. Multi-year funding was provided for some pay stabilization initiatives (for example, IBM and PeopleSoft 9.2 contracts).

The December 2019 mandate letter of the Minister of Public Services and Procurement committed to “eliminate the backlog of outstanding pay issues for public servants as a result of the Phoenix Pay System to rebuild their confidence in the integrity of their pay and pensions.” The desired expected results from this commitment include that:

• at the end of the mandate, the backlog of outstanding pay cases would be eliminated
• public servants (employees and retirees), and Canadians in general, would have increased trust and confidence in the Government of Canada to pay its employees accurately and in a timely manner

Mains over mains variance

The following table includes 2019 to 2020 and 2020 to 2021 year over year variance.

A decrease in funding of $277.9 million is a result of sunset funding from budget 2019.

The Phoenix initiative was launched in spring 2016. As of 2019 to 2020, service delivery, systems capability, and change management initiatives are generally stable, although a backlog of pay cases persists. Budget 2019 funding (for 2019 to 2020) provided Public Services and Procurement Canada (PSPC) with the resources to continue actions to deliver biweekly pay for federal employees, reduce the backlog of outstanding transactions, enhance system stability and engage stakeholders in the move towards stabilizing human resources (HR)-to-pay. For example, the Pay Centre overall cases waiting to be processed has declined by 56% from January 2018 to October 2020, new compensation staff were hired to process pay issues, a new automated approach to facilitate collective agreement implementation for 2018 retroactive payments was developed, and thousands of other system fixes and enhancements were implemented.

For 2020 to 2021 and beyond, PSPC continues the implementation of the “HR-to-pay 3-Year Forward Plan for 2019 to 2020 to 2022 to 2023” to further meet commitments and eliminate the backlog. This plan focuses on 3 key areas:

• increasing productivity for processing cases
• supporting the reduced intake of new cases
• accelerating the delivery of systems enhancements and fixes

Key early milestones will include:

• focusing existing capacity on backlog elimination: this leverages existing plans to devote capacity to backlog elimination by focusing on addressing transfers, pay increments, reduction of backlog by departments, and acting appointments cases
• redesigning the retroactive payments process (target date: October 2020): this will improve automated processing for retroactive payments for individuals, reducing intake into the pay system by roughly 32,000 cases per year ongoing
• completing collective agreement implementation for 2014 (target date: fall 2020): finishing the review and validation of these cases will free resources that can then be devoted to eliminating the backlog

Background

Since the launch of Phoenix 4 years ago, PSPC has implemented a series of measures focused on stabilizing the pay system. These include increasing the compensation workforce, providing employees with greater support through our Client Contact Centre, introducing the pay pods model at the Pay Centre, implementing a backlog reduction strategy and implementing technical fixes that have improved payroll processing, such as increased automation of transactions.

As a result, since its peak in January 2018, the Pay Centre's backlog of transactions with financial implications beyond normal workload has been reduced by 71% (from 384,000 to 110,000) as of October 28, 2020.

Over the same period of time, the overall queue of transactions waiting to be processed at the Pay Centre has decreased by 56%, representing a reduction of 352,000 transactions, from 633,000 to 281,000.

In addition, almost $2.5 billion in collective agreement retroactive payments have been paid to employees, for the 2014 round.

PSPC has multiplied the compensation workforce fo4ur-fold since 2016, now with more than 2,300 employees across the Pay Centre, the Client Contact Centre, and the Client Service Bureau. PSPC continues to build capacity and provide training and support to compensation employees to further increase productivity. Additionally, the Client Contact Centre has been enhanced to provide better support to employees, including the ability to resolve pay issues in a faster and more effective way at the first point of contact.

Multiple technical changes to stabilize the system have been implemented, including over 2,500 systems fixes and enhancements. System improvements include enhancements to collective agreement implementation, which has been successfully rolled out for the processing of 2018 collective agreements.

We have completed the roll-out of the pay pod model to provide better services to employees served by the Pay Centre (approximately 200,000 employees). Now that pay pods are fully implemented, the Pay Centre is meeting service standards more often, while reducing the overall queue and backlog.

The Treasury Board of Canada Secretariat and PSPC are working with departments and agencies to improve the timeliness and accuracy of HR data submitted to Phoenix. HR transactions that are not entered in a timely or accurate manner can create inaccurate pay and increase the complexity of a transaction. The department is responsible for reporting to organizations on their timeliness of entering HR transactions. Organizations are then asked to match these reports with their own HR system data to develop an understanding of the business practices and challenges that affect employees’ pay files.

Current status

PSPC is implementing the “HR-to-Pay Three-Year Forward Plan for 2019 to 2020 to 2022 to 2023”, enabling the department to further meet commitments and eliminate the backlog. This plan focuses on 3 key areas:

• increasing productivity for processing cases
• supporting the reduced intake of new cases
• accelerating the delivery of systems enhancements and fixes

In the short-term, PSPC is concentrating on:

• focusing existing capacity on backlog elimination
• redesigning the retroactive payments process
• completing collective agreement implementation for 2014

PSPC will also continue to build on its partnerships to deliver results:

• working closely with departments to ensure HR data is submitted to the pay system in a timely and accurate way
• ensuring that pay transactions can be processed quickly and accurately
• developing innovative tools and approaches and improving how we process pay
• continuing our collaboration with CRA and Revenu Québec to support employees experiencing tax issues
• implementing technical system fixes to improve how Phoenix functions

Real property repairs and maintenance

Project summary

A decrease in funding of $275.0 million is due to the sunset of budget 2019 funding provided to Public Services and Procurement Canada’s (PSPC) federal accommodation and infrastructure program to maintain current office accommodation and related real property service levels to federal departments and agencies.

Mains over mains variance

The following table includes 2019 to 2020 and 2020 to 2021 year over year variance.

The funding was a top-up to the Real Property Program budget for 2019 to 2020.

The funding addressed PSPC’s Real Property Program integrity issues, which included growing health and safety risks, and a substantial need for urgent repairs and maintenance stemming from years of under investments. This funding provided interim relief while PSPC develops a long-term strategy to address ongoing budget pressures.

[Redacted]

Current status

• $285 million of funding is being sought in the 2020 to 2021 Supplementary Estimates (B) [Redacted]
• In addition to providing the necessary funding for supporting operating and maintenance cost for the building, this funding will also help. The funding helps PSPC to provide personal protective equipment (PPE) for PSPC staff and pay increased cleaning and maintenance costs due to the COVID-19 pandemic
• PSPC is forecasting to spend within 98% of its gross building budget of $2.4 billion which includes the $285 millions top up

Funding profile

Background PSPC provides a work environment for approximately 260,000 full time equivalents, for 102 federal departments and agencies in 1,266 locations across Canada. By providing safe, secure and stable work environments to federal departments and agencies, we ensure they can focus on delivering their programs and services and support government priorities.

The vast majority of the activities in the Real Property operating budget cover expenses over which PSPC has no or very little control. Since PSPC is required to pay rent, electricity, contractual obligations (representing approximately 88% of the total program funding) and other non-discretionary expenditures, some types of expenditures were reduced temporarily in the past in the areas of cleaning and maintenance, building investigations reports and repairs. PSPC recognized that such reductions would cause additional costs in the future.

Due to program integrity pressures, PSPC managed its portfolio in the past at a sub-optimal level. In order to pay the non-discretionary operating costs, PSPC increasingly redirected funding away from needed repairs (for example, in the areas of cleaning, maintenance, repairs and the production of building condition reports).

PSPC has a strong performance record for managing its building budget. In previous years, PSPC was able to spend on average more than 98% of its budget of approximately $2 billion (which included program integrity additional funding of $248.3 millions in 2016 to 2017, $336.0 millions in 2017 to 2018 and $275.0 millions in 2018 to 2019 / respectively $13M, $47 millions and $30.0 millions of lapse).

As demonstrated in the table above, amounts received in fiscal year 2019 to 2020 are being spent based on the following priorities:

• all the contractual obligations (rent, utilities, payment in lieu of taxes (municipal taxes))
• direct building expenses (for example, regular building maintenance, security and grounds keeping (snow removal))
• any remaining funding is allocated for additional maintenance, repairs and studies that assess the state of these buildings (for example building condition report, environmental reports and Legionella)

Long Term Vision and Plan: Parliamentary Precinct

Program summary

Public Services and Procurement Canada (PSPC) is implementing the Long Term Vision and Plan (LTVP) for the Parliamentary Precinct—a multi-decade plan for the restoration and modernization of the buildings and grounds on and around Parliament Hill.

The Parliamentary Precinct is comprised of 35 Crown-owned buildings, of which 28 are designated federal heritage properties, including the parliamentary triad (West Block, Centre Block, and East Block), as well as several leased properties throughout the National Capital Area.

First approved in 2001, and subsequently updated in 2006, the LTVP is a flexible framework guiding the government’s efforts to restore and modernize the Parliamentary Precinct, and to make it more accessible, sustainable and secure. The Parliamentary Precinct LTVP is a multi-decade strategy designed to:

• address the health and safety risks stemming from the deteriorated state of the 19th century Parliament buildings
• address the long-standing shortfall of adequate parliamentary accommodations
• modernize the buildings to meet the accommodation requirements of a 21st century Parliament, including addressing security, accessibility and sustainability considerations

The LTVP functions through rolling programs of work with shorter-term implementation objectives in order to build upon lessons learned and mitigate risks within the longer-term vision. These shorter increments also enable the government to respond more easily to risk and evolving parliamentary requirements. Programs of work comprise several concurrent projects of varying sizes and durations, including large scale heritage restorations, new construction projects, smaller fit-up and information-technology related works, as well as planning initiatives.

In 2016 and 2017, policy and funding approvals were obtained to rehabilitate the Centre Block, and to transform the precinct into an integrated parliamentary campus. The approved program of work for the LTVP will continue into the 2030s.

Key messages

• In partnership with parliament, PSPC is restoring the Parliamentary Precinct for future generations of Canadians, and making it modern, safer, greener and more accessible. PSPC is focused on restoring the Centre Block and transforming the precinct into an integrated parliamentary campus
• Throughout the COVID-19 crisis, construction has continued on the Centre Block and East Block with industry-leading health and safety protocols in place to ensure appropriate social distancing and compartmentalization of the construction site
• In the year ahead (2020 to 2021), PSPC will continue to engage with parliamentarians to confirm parliamentary requirements and the schematic design for the Centre Block rehabilitation project. PSPC will also continue advancing the integrated campus strategy through its work on the block 2 redevelopment project, including an international design competition that will allow PSPC to select the best design team with the demonstrated capacity to undertake this nationally-significant architectural project

Mains over mains variance

The variance is driven by an overall reduction in business volume caused by the completion of the West Block and the Senate of Canada Building. Other larger projects such as the Centre Block are completing enabling projects and delivering schematic design, construction planning and construction site preparation activities.

Funding profile for current 5-year program of work

Current status

Significant progress has been made on the LTVP, including the completion of the following key projects on time and budget: the Sir John A. Macdonald Building (2015), the Wellington Building (2016), the Senate of Canada Building in Ottawa’s former Union Station (2018), as well as the West Block and new Visitor Welcome Centre phase 1 (2018). The completion of these projects enabled the transition of parliamentary operations from the Centre Block in 2018.

With parliamentary operations now taking place in these new interim accommodations, current efforts are focused on the rehabilitation of Centre Block, as well as the rehabilitation of remaining assets still in need of intervention. Since then, enabling projects have been completed, a comprehensive assessment of the building’s condition was undertaken and construction activities began, including some interior demolition and abatement, and excavation of the front lawn in preparation of expanding the Parliament Welcome Centre that will eventually link the West, Centre and East blocks.

Throughout the COVID-19 crisis, construction has continued on the Centre Block and East Blocks with industry-leading health and safety protocols in place to ensure appropriate social distancing and compartmentalization of the construction site.

In the year ahead (2020 to 2021), PSPC will continue engaging with parliamentarians to confirm parliamentary requirements and schematic designs for the Centre Block rehabilitation project. PSPC is also advancing the redevelopment of the 3 city blocks across from Parliament Hill, along Sparks and Wellington streets. The transformation of the precinct into an integrated campus will begin with the redevelopment of the block bounded by Metcalfe, Sparks, O’Connor and Wellington streets (referred to as block 2). This includes the construction of a new building to support the immediate and long-term accommodations for parliament and the transformation of the former US embassy located at 100 Wellington Street and the adjacent 119 Sparks Street into a national space for Indigenous Peoples. The block 2 redevelopment project will include an international design competition that will allow PSPC to select the best design team with the demonstrated capacity to undertake this nationally-significant architectural project. Future phases of the redevelopment will transform the remaining 2 blocks, including the restoration and modernization of the Office of the Prime Minister and Privy Council.

Through these projects, PSPC, parliament, and stakeholders continue to work collaboratively to identify functional, flexible, integrated, and creative approaches to realize the full potential of the precinct campus and its important role in the nation's capital.

Predictable capital funding

Project summary

As announced in budget 2019, the funding received by Public Services and Procurement Canada (PSPC) enables the department’s long-term capital funding management strategy in support of a better planning and delivery of its infrastructure projects and assets portfolio plan.

It will provide the department secured funding over a 20 year period, to be used in the acquisition of, and betterments to capital assets such as building, bridges and federal labs. The transition to predictable capital funding will help ensure a more effective and efficient delivery of PSPC’s infrastructure programs, and produce a more timely and strategic fund allocation process needed to ensure a healthy asset portfolio.

In terms of current status, the funding received of $589 millions in 2020 to 2021 is a top-up to department’s capital authorities. The department is planning to spend $1.2 billion of its total appropriation of $1.6B.

Mains over mains variance

The following table includes the 2019 to 2020 and 2021 to 2021 year over year variances.

Part of the funding will go toward the following projects

Alaska Highway

This project includes the replacement of salt sheds, the rehabilitation and recoating of some of the bridges on the highway, asphalt overlay to extend its existing life, culvert replacement and rehabilitation in numerous locations, rip-rap production for erosion control, slope stabilization in a number of locations and numerous other projects to keep the highway safe and operational for the northern communities and businesses which rely on the highway as an essential transportation route. This project is in delivery stage.

British Columbia, Esquimalt Graving Dock

The program funding (multiple projects across the facility) for Esquimalt Graving Dock (EGD) will facilitate expansion of the facility with 2 parkades and warehouse space, as well as extending the graving dock basin by 36 metres, which will reduce costs to repair, maintain and retrofit vessels considerably for the Royal Canadian Navy and increase revenues for EGD. Program funding will also ensure operational continuity in the almost 100 year old facility by refurbishing legacy infrastructure such as sewer, water, fire alarms, dock wall and floor concrete, and capstans, as well as address other safety issues in the pump house and service tunnels. The program of work is in the planning phase, with 100% of the design completed for the dock extension project and other design (parking and warehouse) following later in 2020 and onward. Program funding will ensure delivery phase of the above-noted program of work can be completed by 2023.

Funding profile for current 5-year program of work

Background

Accrual budgeting

Since 2003, the Government of Canada’s annual financial statements (the Public Accounts) have been produced on an accrual accounting basis which uses the accrual costs of programs, not their cash profiles, to calculate the fiscal balance.

The federal budget is also prepared on an accrual basis.

PSPC will be the second department to implement accrual budgeting (after the Department of National Defence in 2005).

Management of capital budgets under the current cash based budget approach has historically limited PSPC’s financial flexibility. Uncertainties as to the amount of funds available each year have led to short term planning and delays of large capital projects required to maintain an acceptable level of performance across all assets.

Accrual budgeting will focus on enabling proactive, long-term and strategic planning for PSPC's capital assets portfolio through access to stable capital funds. It will increase the department’s financial flexibility and maximise the use of its resources for the maintenance and reinvestments in its assets.

To realize the full benefits of accrual budgeting (such as stable capital funding, better planning, increased flexibility, etc.), changes are required relating to how the department plans, records, approves, and controls project financial information throughout the asset lifecycle (which begins by identifying the asset as capital investment and ends with its disposal). These changes will introduce new capabilities, policies and processes that depend on reliable access to accurate budget and cost data throughout this lifecycle.

Purpose and benefits

• Establishes long-term predictable capital funding, essential to support portfolio investment planning
• Enables PSPC to establish and implement investment strategies which transparently align investments with the use of its assets:
  • buildings
  • information technology
  • specialized assets such as bridges, dams and heating plants
• Enables a shift away from one-off approvals to portfolio-wide multi-asset investments planning and implementation, this will provide parliamentarians and Canadians with a much clearer understanding of the overall capital requirements, timing and strategic planning

Federal science strategy infrastructure initiatives

Program summary

Laboratories Canada is a 25-year strategy that is part of the Government of Canada’s plan to strengthen federal science nationwide. This strategy aims to provide federal scientists with leading-edge facilities, modernized information management and information technology (IM/IT) systems, greater access to common tools and reduced barriers to science and technology that facilitate collaboration.

The Government of Canada committed $2.8 billion over 5 years for the first phase of a Long Term Vision and Plan (LTVP) to build world-class, collaborative, accessible, and sustainable science facilities.

Many federal laboratories are outdated and some are unable to meet the operational needs of science programs and employees. The science and technology asset class encompasses approximately 3,500 buildings and a total floor area of 2.5 million m². The interim report for the fixed assets review indicates that the Government of Canada spent in the order of $350 millions (including operations and maintenance, capital, and payments in lieu of taxes) per year on average over the last 5 years on its assets and that the investment required for the entire portfolio would be $150 millions to $400 millions in incremental funding per year just to prevent deferred maintenance costs from increasing. Laboratories Canada phase 1 investments will replace ailing critical science infrastructure, and renew and build smaller to medium-sized collaborative facilities in Ontario, Quebec and Western Canada.

The first phase will support science program synergies such as:

• security and regulation
• health and safety
• resource management and a low-carbon economy
• transportation safety
• cultural heritage and preservation

Laboratories Canada is guided by a LTVP that details an integrated approach to building new federal laboratories and fostering the change necessary to amplify existing successful collaborative efforts. The vision is to create a “world-class national network of modern, multipurpose, federal S&T laboratories to support collaborative, multidisciplinary research and innovation, and evidence-based decision-making, including in regulatory responsibilities.”

Key messages

• The procurement processes for architectural and engineering services, as well as construction management services necessary to advance 3 projects (the cultural heritage science hub, transportation safety and technology ccience hub and Atlantic Science Enterprise Centre science hub) are expected to begin by winter 2021 and be completed with contracts awarded by fall 2021
• Phase 1 sites have been identified, evaluated and were recently approved. This decision will initiate a detailed series of site-specific planning and engagement activities with key stakeholders over the coming weeks and months
• Construction will begin in fall 2020 on pre-identified sites in Mississauga and Hamilton, Ontario. By the end of fall 2020, functional programming for many of the phase 1 projects will be completed
• Laboratories Canada and Shared Services Canada’s science program will define, develop, and deploy the information technology (IT) services required to deliver science outcomes. Work is underway to capture and validate detailed IM/IT requirements as well as identify and implement pilot projects across the science community
• Work is underway with federal partner departments and agencies to develop a new custodianship model and associated operating framework to fund and operate the facilities that support the long-term viability of these assets and avoid a repeat of the current costly rust-out. Laboratories Canada is also developing a federal science and technology portfolio strategy in partnership with Treasury Board Secretariat (TBS) that will seek to leverage the greatest value possible from these facilities. This strategy will inform future investment decisions under the Laboratories Canada Long Term Vision and Plan

Funding profile

Mains over mains variance

Current status

The funding to be received in the Main Estimates will allow PSPC to advance the first phase as follows.

Horizontal governance

Laboratories Canada is guided by a horizontal and vertical, internal and external governance structure to ensure the successful delivery of the various projects through sound decision-making and interdepartmental collaboration. The Laboratories Canada Office, part of the Science and Parliamentary Infrastructure Branch within PSPC, is leading the integrated effort across government to deliver this strategy. The Laboratories Canada Office is working to advance a series of science outcomes, bringing together 13 science based departments and agencies (SBDAs) grouped in 5 science hubs. Science hub partners have collaborated and prepared comprehensive science plans based on their science synergies.

Within each science hub, a governance structure has been established at the deputy minister, assistant deputy minister and director general levels to ensure appropriate oversight, direction and decision-making for their respective science programs and outcomes.

Design and project delivery

Laboratories Canada has received project and expenditure approval for 3 projects:

• cultural heritage science hub
• transportation safety and technology ccience hub
• Atlantic Science Enterprise Centre science hub

Over the course of 2020 and 2021, PSPC will tender and award regional-based architectural and engineering services and construction management contracts to design and build phase 1 facilities. The regional approach supports a streamlined and efficient approach to delivery. This approach also creates a scale of economy while creating more bidding opportunities for firms across Canada to participate in this work.

Construction will begin in fall 2020 on pre-identified sites in Mississauga and Hamilton, Ontario.

By end of fall 2020, functional programming for many phase 1 projects will be complete.

Site selection, engagement and change management

To identify the most suitable site locations for new facilities, a comprehensive methodology was developed in collaboration with science hubs. This evidence-based process served to identify sites, keeping science and scientists as primary drivers of any decision-making, while also considering real property and socio-economic factors.

Phase 1 sites have been identified, evaluated and were recently approved. This decision will initiate a detailed series of site-specific planning and engagement activities with key stakeholders over the coming weeks and months.

Information management/Information technology

Laboratories Canada and Shared Service Canada’s science program will define, develop and deploy the IT services required to deliver science outcomes. Work is underway to capture and validate detailed IM/IT requirements (basket of goods) as well as identify and implement pilot projects across the science community (experimentation and innovation).

Optimizing investments

Work is underway with federal department and agency partners to develop a new custodianship model and associated operating framework to fund and operate the facilities that support the long-term viability of these assets and avoid repeating the current costly rust-out. Laboratories Canada is also developing a federal science and technology portfolio strategy in partnership with TBS that will seek to leverage the greatest value possible from these facilities. This strategy will inform future investment decisions under the Laboratories Canada Long Term Vision and Plan.

Price and volume protection

Project summary

The funding is for the protection from inflation and price variations relating to space requirements for real property items for which Public Services and Procurement Canada (PSPC) has very little or no control (cost of rent, gas, electricity and the number of public servants to accommodate).

Mains over mains variance

The increase of $77.5 millions is for accommodation costs in order to protect PSPC from inflation and variations in space requirements for public servants (non-discretionary expenses) as follows:

• $39.5 millions to cover planned price fluctuations (based on a forecasted consumer price index (CPI) of 1.98%)
• $39.9 millions to cover volume variations (1.9% of the $2.09 billion 2019 to 2020 gross budget)
• $2.8 millions to cover the reconciliation exercise (amounts received in 2018 to 2019 (based on forecast) compared with the actual expenditures and inventory)
• $0.9 millions for data centres decommissioning costs to be paid by PSPC for Shared Services Canada

Funding profile

Background

PSPC’s accommodation and real property services’ mandate is to meet the accommodation needs of federal organizations by providing and maintaining a cost effective Real Property portfolio of office facilities and common use assets.

Real Property’s portfolio is comprised of facilities either owned by the Crown or leased from the private sector, some with the option to purchase:

• 102 departments and agencies (approximately 50% of public servants located in the National Capital Area)
• 6.9 millions m2 office space or special purpose facilities
• 350 Crown-owned, 1,162 leased and 12 lease purchase facilities (as of September 30, 2019)
• federal holdings such as power plants, bridges, dams, roadways and other engineering assets
• Parliament Hill and Surroundings Program (providing office and special use accommodations space for the Senate, House of Commons, Library of Parliament and other parliamentary partners)

Price and volume methodology

The current methodology used was approved in 2015 and is subject to a review on a 5-year cycle. The review, to be undertaken by the Treasury Board of Canada Secretariat, the Department of Finance and PSPC would seek to determine among other things, whether the methodology has achieved its objectives and whether any adjustments should be made. A report will be submitted to the Treasury Board detailing the results of the review, after 5 annual funding requests have been approved and reconciled. The review is planned to start in December 2020, 5 years after the first funding request was approved in December 2015.

In return for this protection, any unspent funds are returned to the fiscal framework.

Formula considers

• consumer price index (inflation)
• actual spending
• variations to the inventory

Reconciliation exercise

Compares the funding provided previously based on forecast to actuals, ensuring PSPC is not over/under funded.

Current status

This funding is included in the Gross Building special purpose allotment budget of $2.4 billion where PSPC is forecasting to spend within 98% by year-end.

[Redacted]

Les Terrasses de la Chaudière

Project summary

As announced in budget 2016, the funding received by Public Services and Procurement Canada (PSPC) is to modernize Les Terrasses de la Chaudière (LTDLC) complex’s exterior envelope while addressing the health and safety concerns associated with the deteriorating exterior brick.

This work will be carried out on the four towers that comprise the LTDLC Complex (1 Promenade du Portage, 10 Wellington, and 15 and 25 Eddy). The funds are being used to cover all costs related to the project management; the provision of architectural and engineering consulting services to design the new replacement envelope, as well as construction services.

The envelope replacement project is currently in the planning phase and is expected to proceed to construction in fall 2021. The envelope replacement project is part of a larger program of work to modernize the LTDLC Complex over the next decade. The program of work encompasses the following projects:

• the rehabilitation of the parking garage structure, ventilation and heating systems, and electrical components
• the renovation of the office space to GCworkplace standards
• the renewal of the base building systems to accommodate growth and meet government sustainability targets
• the improvement of the LTDLC landscape, courtyard and ground floor commercial and common space

Of these projects, the parking garage project is currently in the final stages of construction with a planned completion date of December 2020. The remainder of the projects are in the planning and procurement stages.

Mains over mains variance

Current status

• Project is forecasting to spend $6.0 millions for 2020 to 2021. The significant variance with the funding profile below is due to significant delays incurred on the envelope replacement project as a result of a change in the design approach of the replacement envelope system due to significant implementation risks. As a result, the proposed cross laminated timber solution was replaced by a conventional standard curtain wall system. This major scope change required the project to terminate prime consultant contract for convenience
• Although some delay in the envelope replacement project may be attributable to COVID-19, the project schedule was more significantly impacted by the shift in the design approach. The project is scheduled to be completed by the end of 2026
• Main activities accomplished so far this year and left to be done:
  • termination of the prime consultant contract in January 2020
  • in June 2020 approval was received to increase project approval and expenditure authority, to seek advanced contracting approval to engage a new prime consultant, and to re-baseline the project schedule
  • procurement processes were initiated to engage a new prime consultant, an environmental consultant and a commissioning agent. Contracts are expected to be awarded by February 2021

Funding profile

Background

PSPC is committed to renewing the LTDLC Complex over the long term. This will include the modernization of the interior space and upgrades to mechanical, electrical, heating and cooling systems, as well as the renewal of the site.

The LTDLC Complex was built between 1976 and 1978. It is composed of 4 office towers located in downtown Gatineau and accommodates over 6,400 people, as well as retail, daycare and storage space.

The complex contributes to the overall portfolio strategy for accommodation within the National Capital Area (NCA) supporting the 75:25 ratio for office accommodation between Gatineau and Ottawa.

The exterior brick-veneer has undergone advanced deterioration. Since the late 1990’s, brick fragments have fallen from the building. To maintain safety, PSPC has managed a brick inspection and repair program for over 10 years. In 2014, PSPC installed an overhead protection system and closed the courtyard of the complex to the public. These precautions will remain in place until the project is complete.

The replacement of the building envelope with a sustainable cladding solution will result in a higher performing building, thereby reducing building operation costs and greenhouse gas emissions which support the Federal Sustainable Development Strategy and the NCA Portfolio Strategy objectives. It is expected that the new envelope will contribute to the facility’s overall energy performance by 24%above the National Energy Code for buildings.

West Memorial Building

Project summary

As announced in budget 2016, the funding received by Public Services and Procurement Canada (PSPC) is to rehabilitate the West Memorial Building (WMB) in order to provide interim accommodation for the operations of the Supreme Court and federal courts and their employees during the rehabilitation of the Supreme Court of Canada Building (SCCB).

The project will update the WMB and fit-up to accommodate the daily operations of all tenant of the SCCB, who will occupy the WMB from 2023 to 2028.

This project includes upgrades to meet current building codes and conservation of important heritage characteristics while supporting the uninterrupted operations of the Supreme Court and federal judiciary.

The project includes:

• the major rehabilitation of heritage fabric, including exterior walls, windows and interior finishes
• the replacement of mechanical, electrical and life safety systems
• the modernization of information technology, multimedia and security systems
• seismic upgrades to meet current building code requirements
• the interior fit-up for occupants of the SCCB
• improved sustainability measures to achieve the Four Green Globes certification as per the green building initiative certification standards

Mains over mains variance

The funding to be received in the Main Estimates will be used to continue the site preparation work and start the construction of the WMB rehabilitation project.

Current status

• The project is forecasting to spend $38.1 millions in 2020 to 2021
• The project, considered essential for PSPC due to health and safety reasons, began its construction activities on April 15, 2020 following strict COVID-19 safety precautions. PSPC is monitoring the impact of COVID-19 on operations, procurement processes, construction activities, health and safety standards, and workplace standards
• Major discrepancies between original drawings and existing structure has required the increase of structural reinforcement works, resulting in an estimated 4 months slippage
• Mitigation solutions to reduce schedule slippage and potential cost increase are being actively investigated with the construction manager and prime consultant. Different moving options are also being examined in collaboration with SCC
• To date, 90% of the demolition activities have been completed. Structural upgrades have begun in the basement and ground floor
• It is expected that construction and spending pace will accelerate once COVID-19 measures are better ingrained

Funding profile for the phase 1

Background

The WMB is part of Canada’s primary Second World War memorial and was constructed between 1954 and 1958.

The WMB is an important “Classified” federal heritage building in the existing crown-owned inventory and was selected as the ideal interim facility for the SCCB due to its’ location, size and prominence.

The project will help conserve one of Canada’s primary heritage memorials to those who lost their lives in the Second World War and to honour veterans for years to come.

The building has been vacant since 2008 because of its current overall poor condition and related health and safety issues. It has never gone through a major rehabilitation. The building systems exceeded their expected life cycles and the building requires modernization and upgrades in order to meet building code requirements for occupancy.

[Redacted]

Second interim supply

2020 to 2021 Main Estimates: $2.1 billion for the Second interim supply

The following table includes the interim and full supplies for 2020 to 2021.

Summary

Public Services and Procurement Canada (PSPC) sought access to a second interim supply of $2.1 billion in 2020 to 2021. The second interim supply bill provided the department with sufficient cash to sustain operations and cover financial obligations until the tabling of the full supply expected in December 2020.

Background

The estimates process falls under the democratic principle that no money can be spent without the approval of parliament. This process, which includes the Main Estimates and the Supplementary Estimates, provides elected officials and Canadians with an overview of the government’s spending plans to deliver on its priorities and mandate.

The Main Estimates outline the proposed budget required for the department to deliver on its programs for the upcoming fiscal year. 2020 to 2021 Main Estimates were tabled on February 27th, 2020, and excluded budget 2020.

In the normal estimates process, the tabling of Main Estimates results in 2 supply periods (interim and full supply) that require approval through a vote. The interim supply bill is introduced in March to cover the financial requirements during the first 3 months of the new fiscal year (three twelfths) until the full supply (remaining nine twelfths) is approved in June.

2020 to 2021 is an exceptional fiscal year with unforeseen events that have impacted the normal estimates process.

Due to the impacts of the COVID-19 response on parliamentary business, the parliament introduced a second interim supply for the current fiscal year which was concurred in by the Committee of the Whole (COW) on June 17th, 2020. The second interim supply provided the department with sufficient cash to sustain operations until the tabling of the full supply expected in December 2020.

In addition, the parliament was prorogued on August 18, 2020 and recalled on September 23, 2020. As a result of this prorogation, 2020 to 2021 Main Estimates were re-tabled in parliament on September 30, 2020 and will be voted toward the end of November 2020.

2020 to 2021 first interim supply

The first interim supply for 2020 to 2021 was tabled on March 13th, 2020. PSPC received $1.3 billion in funding for the first few months of 2020 to 2021 as follows: $772.0 million in vote 1 (four twelfths for operating expenditures), $396.8 million in vote 5 (three twelfths for capital expenditures), and $145.1 million in statutory authorities (revolving funds and employment benefit plans).

2020 to 2021 second interim supply

The second interim supply for 2020 to 2021 was concurred in by the COW on June 17th, 2020. PSPC received $2.1 billion as follows:

• $1.4 billion in vote 1 (a total of eleven twelfths for operating expenditures)
• $793.6 million in vote 5 (a total of nine twelfths for capital expenditures)

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Date modified:

2023-05-10