Regional operations, not previously authorized, $10,000. Agreed?

Total

department, not previously authorized, negative $57,000. Agreed?

Page 8, Public Works and Services, operations expenditures, directorate, not previously authorized, $858,000. Ms. Bisaro.

I have a question here with regard to the Procurement Shared Services Centre. We have an explanation here where there is a transfer of money in from various departments to centralize our procurement services, but we are taking in $515,000 and yet we are spending whatever $515,000 plus $165,000 is. I don’t have that number here. We are spending $680,000. If we are doing the job in the various departments and it is costing us $515,000, why is it when we bring everything in together that we can’t provide the same services for the same amount of money? Thank you.

Thank you, Ms. Bisaro. Mr. Aumond.

I can accept that explanation, but I guess I’m still wondering. If I was doing procurement within a department previously, now I’m not doing procurement any more. We’ve now set up a procurement officer and a centralized desk, so why would there not be savings on me as an employee, because I’m not doing procurement anymore?

Can we not see savings in each department that equals the cost of providing this service in a centralized place? I’m having trouble trying to understand how we have employees who are not doing as much as they were doing before, but it is still going to cost us money to bring this service into a central location. Thank you.

Mr. Chair, thanks to Mr. Aumond for that. I have to ask the same question I asked with regard to the financial shared services. We are spending money here, nearly not as much money, but we are spending a bit of money here. Do we have expectations that we are going to have savings through the centralization? I think the Minister alluded to it a little bit, but are we going to basically… If we are spending $165,000, are we going to gain much more than that by having these services centralized? Thank you.

Thank you, Ms. Bisaro. Minister Miltenberger.

Thank you, Mr. Chairman. On the procurement side, one of the clear areas, of course, is anticipation through volume discounts when we have more coordinated and integrated procurement processes. Those

economies of scale will become more clearly evident across the board. In a number of ways we have different departments, different regions all doing their own purchasing. I believe I mentioned, in a previous sitting, using the bundled water plants as an example, where we recognized that as a government we did five water plants in a coordinated way, we had a common procurement policy, we had a common construction approach, we would save money not only in the construction and development side but in the maintenance and be able to move the common parts and those types of things. Again, we would be avoiding those costs that if we just keep doing business the way we are doing, we would be spending that extra money that we hope now we would realize through the integration of these processes. Thank you.

Thank you, Mr. Miltenberger. Mr. Dolynny.

Thank you, Mr. Chairman. I just want to continue on this path where we are trying to figure out if, really, at the end of the day of this request, are taxpayers ahead in terms of savings. Now, the deputy minister talked about a cost benefit of 23 percent versus I think he said 17.5 percent. If I could get some clarification, what does he mean by that? Are we seeing savings of a delta of possibly less than 5 percent going into a procurement shared system? Thank you.

Thank you, Mr. Dolynny. Minister Miltenberger.

Thank you, Mr. Chairman. What I understand these numbers to mean – and I will get the deputy minister to help me on this – the departments are funded for the benefits to employees at about 17.5 percent. The actual costs of those benefits are 23 percent. Normally what is expected and what we keep running into issues with costs and how people use vacancies to cover off the shortfall, that 6 percent gap is substantial. This process has closed that gap, so that deficit of 17.5 percent has been closed and they will be funded at 23 percent, so this area here won’t have that particular budgetary challenge.

I will ask the deputy minister to hopefully tell everybody that I was pretty close to the right track.

Mr. Aumond.

Thank you, Mr. Aumond. Mr. Dolynny.

Thank you, Mr. Chairman. Mr. Aumond is a wise man to agree with the Minister. I am still trying to wrap my head around this. Are we seeing savings in the benefits of the employees or are we seeing benefits in that we are more centralized in our procurement? At the end of the

day, we are seeing a monumental shift in the procurement shared services of the organization and we are seeing a whole shift in this financial shared services model kind of overlapping on the same framework. What is the savings predicted to be under this procurement shared services model? With us spending all this extra money on the supplementary appropriation, what are the savings to the taxpayers at the end of the day? Are we going to be seeing millions of dollars, tens of thousands of dollars? What can we expect to see in savings in doing a procurement shared model? Thank you.

Thank you, Mr. Dolynny. Minister Miltenberger.

Thank you, Mr. Chairman. What we are going to see is efficiencies in effectiveness and service delivery. We are going to see avoided costs, especially on the procurement model side. This is not a cost savings where we are going to realize, as the Member said, millions, hundreds of thousands of dollars of money. What we are looking at with the resources we have available, how do we better organize ourselves to be more responsive and effective and this is what you’re going to get, and you will have, over the long-term, the avoided costs, the realization of the coordinated approach we’re taking on buying large amounts of goods through our procurement processes and back to the example of the benefits that we realize through the bundled water plant approach. Thank you.

I’m not sure if I’m totally in agreement with that statement from the Minister. You don’t do something unless you see a cost benefit to the taxpayer. You just don’t do it because we think it’s going to save money and efficiencies where the economies of scale that tend to pop up from time to time.

I’ve got a hard time wrapping my head around what are the true targets. I know that there are bean counters out there – and I mean that in a positive way and in a positive light – that calculate by as doing this there’s savings, and I think if we’re going to be true to form and we’re going to be asking for money and say follow us, we know what we’re doing, I would hope to God that we have the ability to quantify what those net benefits are, what are the scope of savings. Why do this, then, if we don’t know that number? There’s got to be some preliminary numbers in which the department, the Minister and deputy minister should be able to share with this committee in terms of we’re doing this because we’re saving this much money, because we’re doing our procurement on a more shared and standardized basis. Why don’t we have that type of information? Why is it so secretive?