The Committee met at 8:30 a.m. in the House of Assembly.

CHAIR (French): Good morning, folks.

I guess we are ready to start up. I assume that everybody downstairs have the names and so on. I guess we will start off – we already have an hour-and-a-half done on this department. I think we concluded Finance and we are now doing OCIO and then we will do the Public Service Commission, if that is okay with the Committee. Any problems with that?

Maybe everybody should say their name and then we will ask the minister and his group if they would introduce themselves. Just say your name before you respond to a question so that the people downstairs can follow.

We will start with the Committee, I guess, to introduce yourselves, starting with Mr. Buckingham.

MR. BUCKINGHAM: Ed Buckingham, St. John's East.

MR. FORSEY: Clayton Forsey, Exploits.

MS E. MARSHALL: Beth Marshall, Topsail.

MR. DINN: John Dinn, Kilbride.

MR. KELVIN PARSONS: Kelvin Parsons, Burgeo & LaPoile.

MS MICHAEL: Lorraine Michael, Signal Hill-Quidi Vidi, and I have one of our researchers with us, Ivan Morgan, this morning.

CHAIR: Okay, minister, if you want to –

MR. KENNEDY: Jerome Kennedy, Minister of Finance and President of Treasury Board.

MR. SHEA: Peter Shea, Chief Information Officer.

MS TILLEY: Jean Tilley, Office of the Chief Information Officer.

MS VAUGHAN: Linda Vaughan, Director of Financial and General Operations.

MR. BARRY: Keith Barry, Vice-Chair of the Public Service Commission.

MR. WALSH: Ed Walsh, Chair of the Public Service Commission.

MS CHAFE: Ann Chafe, Commissioner of the Public Service Commission.

CHAIR: Okay, thank you very much.

I guess we will ask the Clerk to call the first subhead in OCIO.

CLERK: What page is it on?

CHAIR: I have page twenty-seven, twenty-six, sorry.

CLERK: Okay.

4.1.01.

CHAIR: Shall 4.1.01 carry?

I guess we will start questions with Mr. Parsons and we can change every fifteen minutes if that is okay with everybody.

MR. KELVIN PARSONS: Sure. Thank you, Mr. Chairman.

I will not be long. I just have a few questions under each of these headings we did not get to the last day. First of all, on page 26 dealing with the Office of the Chief Information Officer, I am just wondering, exactly how many staff are involved right now with that sector.

MR. SHEA: Mr. Parsons, we have approximately -

MR. KENNEDY: People need to identify themselves for the record.

CHAIR: Yes, just say your name.

MR. SHEA: Mr. Parsons, we have approximately 290 permanent and temporary employees in the branch.

MR. KELVIN PARSONS: Are they all stationed in Confederation Building or in a complex?

MR. SHEA: No, sir. Probably 90 per cent to 95 per cent would be here in the St. John's region but we do have outside the east and west blocks, our main headquarters is at 40 Higgins Line just behind over here, behind the Confederation Complex. We do have a number of people who are stationed in other government buildings around the city, like Natural Resources Building, Petten Building, down at the courts, RNC, those areas, but we also have offices in Clarenville, Grand Falls-Windsor, Gander, Corner Brook and Goose Bay where we support applications and desktops and that for government offices located there and throughout the Province.

MR. KELVIN PARSONS: I would take it most of these individuals would be of a technical nature as opposed to administrative. What is the breakout on that?

MR. SHEA: Yes, sir.

We have - I do not have the numbers off the top of my head. I could certainly get them for you, but that is true, most of the people we would have would be programmers, systems analysts, senior analysts, project managers, desktop support, network specialists, and systems administrators. We run about 400 - we support the government network to 400 offices across the Province. We are responsible for all of the information technology, the application systems throughout government, about 600 of them.

We run the largest data centre east of Montreal in the Higgins Line building. There are about 600 large servers, about 1,000 virtualized computer servers, a large mainframe computer; again, the biggest east of Montreal. So in all the plant that goes along with it, that takes a lot of bits and bites and pieces like air conditioning and power distribution, conditioned power, those types of things. A lot of our people are involved in maintaining and feeding that, if you like.

MR. KELVIN PARSONS: Do privacy issues also come under your shop?

MR. SHEA: Yes, sir.

MR. KELVIN PARSONS: In the past year or so - I know when the minister was in Justice, for one, we had a couple of issues of privacy breaches. What is done on an ongoing basis to ensure that that does not happen? Because it seems like every time it pops up, the answer that is given is: Well, we were not aware of this, or we did not anticipate this, or such and such happened.

I believe there was also a case where someone took a computer home, a laptop or something that was accessed in that manner. How do you control those things, the privacy issues?

MR. SHEA: I should clarify for everybody's benefit, that we are responsible for sixteen main government departments, the RNC, the courts, a lot of agencies, boards and commissions, but the vast majority of – there are about 170, I believe, agencies, boards and commissions. The vast majority of those we would not be responsible for. The rationale is - the OCIO was put together about four years ago from eight separate IT divisions that were then in existence throughout the various departments, and over time some of those divisions had taken on responsibility for certain agencies and commissions, and other divisions had not.

We would be responsible for, like the RNC, or doing the work in the courts, but we would not be responsible for Workers Health, Safety and Compensation Commission. They have their own separate IT division. One of the breaches was there. So it is a separate issue from us. We have no mandate or authority over what goes on at the WHSCC, for example.

So it is not all, the same thing with the public health labs. The first breach that we had last year was actually with the public health labs, and that is something that we had – that is maintained through Eastern Health regional health authority. So we have no direct mandate, control, authority over them.

The one breach that we did have, and which we were responsible for was in the Student Aid program. I should say, too, the reference you made to the stolen laptop; I think that was at the Eastern School District. That is, again, another one that we had no control over. So I just want to be clear as to what we do have responsibility for and what we do not have.

The one we did have responsibility for was the Student Aid breach. Some authorized user of the system had gotten in and was able to manipulate the commands inside. He was a bona fide user who had a user ID and password, but when he got in he was able to do something which was inappropriate. He should not have been allowed to do it. It was a flaw in the program when it was written.

A lot of these programs we have inherited, there are over 600 separate applications. When I say application, it could be anything from civil service payroll, what was the social services long term-short term facility for HRLE, the financial management record system of government, pretty well every major application. So, privacy concerns and security concerns are a huge issue for us.

The bar has risen substantially over the thirty-five years that some of these systems have been in place. Like MCP, the medical care practitioners' system, was written over thirty-seven years ago. It was written in a time when privacy and security did not have the profile that it has today. Certainly the expectation, the bar is raised. We had to go back over the last couple of years and review all of the systems that we had, particularly the ones that are public facing, that are available on the Internet, to make sure that they were written or conformed to what is now the best practice for security.

MR. KELVIN PARSONS: The privacy – shall we say the law piece of it I guess, the legislation piece of it came out as part of the access to information and privacy. It took us four or five years to get in the position to actually implement and start using it. How does it fit - for example, municipalities? You mentioned Eastern Health, and there are school boards and there are municipalities. They are all bound by the same law, vis-à-vis privacy, and all funded by government, all these different agencies, yet you, as the Chief Information Officer, do not have responsibility for how that law and policy around policy is applied to them all equally. Why would there be a distinction?

If we are going to make the law say, you have to do this, and we are funding all of these agencies one way or another, other than municipalities raise their taxes of course, but a lot of the grants and monies they receive comes from government, Eastern Health, school boards, but yet you are saying you do not control the policy and how it is applied to them all. Why would there be a distinction here?

MR. SHEA: Why would there be a distinction with all of them? Again, I think part of it was historical. Like I said, the Department of Education might be when - their policy was to provide services to certain groups or divisions or agencies, commissions, that normally came under Education, maybe the Department of Finance when that was taken in. They may not have had responsibility, or Municipal Affairs may not have had responsibility for some of the commissions that were in there. So it was a bit of a ragtag group that we inherited. Some we had responsibility for, that were grandfathered in, and some we did not.

When the Management Information Act passed, which I think was proclaimed January, 2007 perhaps, the responsibility in that is – the responsibility for protection of information that is in the hands of the department or agency was vested in the CEO or the deputy minister or the head of the agency. That is the way the legislation is written. I am not sure I could tell you the rationale or why not everything was –

MR. KELVIN PARSONS: It just seems to be a double standard because I have had it happen both ways. For example, I have talked to people who had so-called issues with the privacy piece and they would say: Well, just a minute now, we did not create this. Government told us that we had to live by these laws. Government told us this is what the policy was. So, do not blame us because we did not create the law. That is what their argument will be, for example, from a municipality or a school board, or a health board if you ask that one question. Yet, when you get a breach and you say whether it is breached in the health care or breached in RNC, it should be the same standards of security for everybody if you are going to make a law, I would think. Yet, you will say, as you just did: Well, that is not my bailiwick that happened down in Eastern Health.

We have a law that is supposed to be of equal application. I would think all the security around it would be of equal application and policies, but yet you keep getting this – yes, there was a breach, which was the bad piece, but nobody seems to be responsible for the security of it and making sure that it does not happen any more. That seems to be confusing to people.

MR. SHEA: Sure. Well, I think the responsibility for it is laid out in the management information act clearly as resting on the shoulders of the CEO, or the head of the agency, or commission as to how each individual leader or person in that group implements the requirements. The technology is so diverse, that has sort of accumulated over the years.

What is appropriate in terms of adequate firewalls and adequate protection in some areas may not be adequate or certainly not appropriate in other areas. Each individual agency, board or commission would have to go look down through all of the software application systems they have, but also the hardware systems they have, to decide for themselves which protective measures they have to put in place in order to make sure there are no privacy breaches. I do not believe it spells out, and I do not think it would be practical to spell out in the legislation that if you are using system X you must do it this way. I think the legislation is, I will not say nebulous, but it is certainly general to the point where it says you must take all necessary steps to make sure that the information that is in your care is being adequately protected without being prescriptive as to exactly how they do that.

In our case, I can tell you that the systems that we are responsible for, which is all government departments and a lot of RNC courts and a lot of agencies. We have had the one breach and immediately after that I directed that absolutely everyone of our Internet facing applications, public facing applications that are available on the Internet - as an example, a student who was able to breach the Student Aid system. I ordered a Risk Assessment and Mitigation program, we called it RAMP, and it has taken the last year or so to do.

We have gone through systemically using – we use a national company called Electronic Warfare Associates Inc. It sounds like Star Wars or something, but EWA. They are national experts in intrusion protection. They monitor our network, our system, twenty-four hours a day, seven days a week. We also use their expertise to probe what you might call ethical hackers, to come in and probe and see if they can break into the systems that we have, the over 600 that are in our care. Those are application systems like the HRLE client pay system or the FMS system, Financial Management System. When I am talking about systems I mean like that, but we also have 400 government offices that are connected by networks. There is the government network as well, the hardware if you like, and the Internet connecting to it. We use these folks to help our own internal security, pinpoint weaknesses and then we go about closing the door, if you like, to make sure that does not happen. There has been a lot of effort and time spent on that in our shop over the last year.

MR. KELVIN PARSONS: How does the policy come about around the privacy piece, any kind of policy? Is it government generated? Do you come across stuff yourself and you say: Look, we need a policy on this, and then you tell government and government makes it a policy? How does that whole piece work?

MR. SHEA: I think it is a bit of a chicken and egg. One of our branches inside the OCIO is Information Management Division. It is headed up by people who have – like a requirement, for example, for one of those analysts. A typical requirement would be a master's in library science, people who understand basically how to catalogue and classify information as to different relevance of its importance. They would have a lot of training and background and experience in those things.

We have somebody who is with us from the Privacy Office who is an IT person, but he has an awful lot of information and knowledge about the ATIPP legislation. The Executive Director of this branch, Shelley Smith, helped craft the ATIPP legislation. She is very converse and knowledgeable about what would be required - what are the requirements but also what we need to do to protect this.

We also sit on a number of national committees. There is actually a national in May, almost next month. At the end of next month there is a national committee, sub-committee of public sector CIO council. We have a number of people who sit on the security branch of that, or the security sub-committee. We are always trading information back and forth among ourselves about best practices. What are they doing in other provinces, and indeed, in Europe, to understand: What can we do to strengthen the walls or strengthen the firewall, if you like?

With 600 applications that have grown up over thirty-seven or more years, some of them are very new, some of them are five years, we have them spread across the board. They are very complex and they are all very different in terms of the technology they use. We put a lot of effort and time into trying to identify what the weaknesses are. Some you put more time into because they are more sensitive if the information got out, to individuals, and particularly the privacy aspect.

So when we go down through those lists of over 600, we would use our people who understand ATIPP to understand. This particular application, while it might serve a lot of people, it is not as sensitive as this other one which serves maybe a tenth of as many but the information in the data base, if it got out, would be more damaging, embarrassing, critical.

CHAIR: Go ahead, Ms Michael.

MS MICHAEL: Thank you very much, Mr. Chair.

I think I will come back to some of the budget lines and ask some specific questions on those. Still under 4.1.01, the budget for Salaries over last year's budget has gone up about $482,600, I think. Have you added new permanent positions? What accounts for the increase over the two budget years?

MR. SHEA: There is some annualization of new people in that particular group. There are about twenty-nine permanent positions budgeted. There is about - $77,000 of that is for a 4 per cent salary increase. Roughly, the same amount for an additional pay period which is budgeted for next year, and about $328,000 for annualization of new positions that is included in that.

If I could just say very quickly too, that our budget ask, budget request for this year is generally speaking the same as it was last year. We have no new funding requests in here but there are two different requests for carry over for equipment, hardware, changes to our building, upgrades to our building, but otherwise it is the same pocket if you like as we had last year. From one subhead to another, as you are going through this, we have a major reorganization coming. So you may see one goes up by x and later on you will see there is another one gone down by x. Just for your information.

MS MICHAEL: Thank you.

I can understand in your division the need for temporary employees but do you, on a regular basis, evaluate your temps to see if there positions that could become permanent, and has any of that happened this year?

MR. SHEA: Yes, we do. In fact, just last week we had some more discussions. One of the mandates of the office – I will roughly say 90-10. Ninety percent of our mandate really is to provide service, core service to our clients, which are really the main government departments and agencies if you like, but we also have a mandate to help grow the local IT industry to the extent that we can do that with the decisions we make on how we fill 90 per cent of our mandate. If we can do something in a way that helps grow the local IT industry, then we are mandated to do that.

For example, a lot of our professional services, we would get from the local IT industry. Trying to find a balance there where, if we were to hire all those people and create all temporary positions, well we would not be true to the 10 per cent that helps grow it, obviously. On the other hand, you want to get good value for government money. You do not want to be renting, quote-unquote, resources that we should own long term. There is a balance that we are trying to strike and there is also some expertise you should rent, you should continue to rent, because trying to keep - a lot of the skill sets that we have requirements for are very technical and those technical requirements are changing very frequently. It would be impractical for us to hire that particular skill set in because it would be very difficult to a, to retain them, because they are in tremendous demand, but also to keep them current, keep them knowledgeable. So we have a lot of training and travel. Even the training and travel that we get, it is very difficult to get it in Canada. So we have to send our folks off for detailed technical training, particularly in the security networks, privacy areas.

In the areas that we have, I will say garden-variety, commonly available requirements for skill sets that would be readily available in the Province, where we can those are the first ones we would evaluate. Even last week we went through and said: okay, if we were to try to convert some of these and make the request to convert them, which ones would make sense to convert? Those, clearly, would be the good ones; and those, by the way, are pretty good jobs. We are looking at $50,000 to $60,000 jobs. They are very good jobs, and the requirements can be met locally. On the other hand, there are requirements for very, very technical people. It would not make sense to hire those. You would be better off to continue to rent them, because you would not be able to retain and train them.

MS MICHAEL: You mentioned training. I had a question, so I think I will ask it here since you mentioned it.

In the last report by the Auditor General, the Auditor General did pick up on the fact that there was a need for a training plan to be developed with regard to Information Management, and in the response your division did say that money had been allotted. Has the training officer been hired? Has that been put in place yet?

MR. SHEA: I am going to defer to my colleague here. I do believe it is being – it is with the Public Service Commission, maybe. It has been advertised.

MS TILLEY: Yes, my understanding is it has been advertised. I do not think anybody has been offered the position yet, but I believe interviews have also been held, it is just not finalized.

MS MICHAEL: Okay, and has a plan been put in place or are you waiting for this person to be put in place in order to do the training plan?

MR. SHEA: A bit of a chicken and egg thing. We have used some professional services, people who understand the information management best practice. So we have been using some people from, I believe Deloitte, to help craft that in advance of getting the person. Once the person comes on board, they will take it and run with it, and we will be able to discharge the Deloitte folks.

MS MICHAEL: Okay, thank you.

Under 4.1.01.05, Professional Services – and this may be something that you refer to in terms of chunks of money being moved somewhere else. There is a drop in Professional Services, a significant one from last year's budget, $268,300. Is that something that you have dropped entirely, and what is it, or has it moved somewhere else?

MR. SHEA: That is really due to the removal of one-time funding that we were given last year to do major upgrade to our building.

The building we call home is just over here on Higgins Line, 40 Higgins Line. The building was built in 1977. It did not have a major power upgrade since 1977. It was getting tapped out, if I could use that phrase, in terms of power. One of the things about running all these servers and mainframe computers, more than anything else, they need power for air conditioning. They have huge air conditioning demands. It generates a lot of heat. So, we had to upgrade the Heating, Ventilation, Air Conditioning system. Only part of that work was able to be completed last year. Obviously, this is being quarterbacked, if you like, by the Department of Transportation and Works on our behalf, although it is here in our budget.

The power distribution units were another sub-piece. So, if we had the HVAC – Heating, Ventilation, and Air Conditioning – the power distribution units inside that building over there, there is actually a separate substation from Newfoundland Power. The power that we would use to run our mainframe computers and our 600-reel 1,000 virtual servers would not be like the power going to your toaster, because it needs to be conditioned. It is fairly sensitive equipment, so we have conditioners built, a piece of equipment inside the building. We also have what is called an Uninterruptible Power Supply, an UPS, so that if we happen to lose power to the building we can run off batteries. There is a room there probably half as big as this room, with banks of batteries so that is we lose power we can continue to run all of this equipment on the batteries for thirty minutes. Then, beyond that, we have a huge big diesel generator - in fact, two different diesel generators – that, as long as we can feed diesel to them, they will keep it going. So, in terms of protection of information – protecting, keeping the systems going - all that equipment needs to be current and kept up to date.

The power distribution abilities that we had in the building were getting closer and closer to - in fact, I think we were tipping into the red literally 90 per cent of the day, towards the end, and we were being advised by engineers we were going to have a serious problem if we did not upgrade, and it had not been done since 1977, so a lot of the money was spent on that. The loading ramp was condemned by Occupational Health and Safety and needed to be replaced.

I think I have covered most of the - and the Halon gas system; there is a system over there for fire suppression that uses the gas Halon. According to the Environmental Protection Act, which is a federal regulation, that has to be taken out and replaced by December 31 this year. So, all of those monies were put in as one-time funding. Most of the work, or I should say a good deal of the work, was done last year but Transportation and Works were not able to get it all completed; so, in fact, that is one of the carry-overs that we have requested to complete that work for next year.

MS MICHAEL: Okay.

In subsection 07. Property, Furnishings and Equipment, you also have a drop in expenditure there. Is that related to the same piece of work?

MR. SHEA: It is, yes; that is exactly right.

MS MICHAEL: Okay.

Then, under Revenue 01, I notice last year - am I correct in saying you did not get the federal monies and you are hoping for them this year?

MR. SHEA: That is right. The federal monies that were there, I think, were tied to a program called Panorama, if I am not mistaken. There were revenues budgeted for, and the project either did not go ahead or did not go ahead to the point where they were able to do that. We have a number - this is sort out of the norm for us, but where there are eighty-twenty sort of funding arrangements with the federal government we make an allowance in that.

I defer again to my colleagues.

MS TILLEY: That revenue is projects that did not proceed as planned.

MS MICHAEL: It is project specific.

MS TILLEY: Yes.

MS MICHAEL: Okay, thank you.

Under section 4.1.02, Information Management, under .01 with an increase of $134,600, I am assuming there must be a new position coming there?

MR. SHEA: Yes, that is right. There is about $44,000 for annualization of a new position for this year. This is that group, the Information Management Branch specifically that I mentioned, which Shelly Smith looks after, providing advisory services across government, so there is one position. There is one additional pay period of about $45,000 and there is about $45,100 for a 4 per cent salary increase.

MS MICHAEL: Right, okay.

Under .05, could you talk to me about the professional services under this section? You are asking for $311,000 more this year over last year.

MR. SHEA: Most of that would be due to projects that are focused on information protection strategy and Information Management Advisory Services. The OCIO handles both the IT side of the business, if you like, but also the IM side, but the mandates are substantially different.

With respect to IT, Information Technology, computer stuff, we have the authority and the mandate to – when it was created, all of the hardware, software, all the servers, all the people, were moved into the OCIO, the IT side, but the IM side, Information Management, we only have the responsibility and authority mandate for advisory services so we actually do an awful lot of the advice, if you like, to departments who are out trying to set up efficient, modern Information Management practices. I think it would be fair to say over time we have not kept up – I will be generous and say we have not kept up - generally over time in various departments in their filing. We are talking more here about the paper-based records, electronic as well but mostly paper-based, so if you went around to the government departments you certainly would find areas for improvement, not only on the methods they use, the facilities themselves, process and procedures. They would not have the people. There has never been a real big emphasis on that, ever, so now again the emphasis is on better record keeping in order to meet the requirements of the ATIPP legislation, transparency and accountability. You have to be able to put your hands on this stuff, and it has been a problem for everybody because the records are not organized and kept in a way they should.

We provide those services to departments, so a lot of that professional services would be people we would be contracting to go and work for the department of X or Royal Newfoundland Constabulary, Supreme Court.

We have a project called IMCAT, Information Management Capacity Assessment Tool. They take about four months. We just finished one with Tourism. We did one last year with Finance. We did one for the Supreme and Provincial Courts. This person will go down and spend about four months getting to know exactly the Supreme Court, what they do, where they keep their records and make recommendations, at the end of four months, these are the weaknesses I found. A lot of these would be perhaps some privacy issues. They would say this is a problem if you let it go. They actually bring pictures back and say this is what I found and it is not very good, you really should fix it up, and these are new people we would recommend you hire.

Now, again, we do not do that; we just basically go in and give an assessment on the IM side.

MS MICHAEL: Right.

Is this an area that the new training officer would be involved in, then?

MR. SHEA: Yes, absolutely.

Trying to raise the bar out in the government departments, this would be somebody who would have deep expertise and knowledge in the best practices of Information Management who we would use as an advisor to help a department bring its capability up.

MS MICHAEL: Right. Thank you.

In the same section, subsection 06. Purchased Services, you had expectations of a much larger expenditure. You had budgeted $225,000 but only spent $73,600 and now this year it is down to $15,000. What exactly did you expect to do that did not happen? Was it a one-time expenditure?

MR. SHEA: It could be that it was transferred for next year, the monies, maybe. We may be deciding to budget it a different way. I know that the folks in that particular area were consumed - once we had the privacy breaches we turned our attention to going through the assessment and looking at all of the other systems we have to try to find out what other things they could be doing.

Maybe the $225,000 originally might very well have been just an overestimate, to think that we would require that amount of effort. I do know that we did an awful lot in terms of education and awareness, and I know some of it was done in house as well as using professional services for it, but certainly some of the work we had hoped to do we did not get to it because we were consumed by the privacy concerns and we had them working with their sleeves rolled up (inaudible).

MS MICHAEL: Yes, right.

I will stop for the moment. I do have other questions but I have been at it for fifteen minutes now.

CHAIR: Do you some more questions, Mr. Parsons?

MR. KELVIN PARSONS: Just clarification, Mr. Ring, again, educate me.

MR. SHEA: Sorry, it is Peter Shea.

MR. KELVIN PARSONS: Oh, excuse me.

So, where does Mr. Ring fit into this? He is different than you altogether, is he?

MR. SHEA: Yes, entirely different. He is in the OIPC, the Information and Privacy Commissioner Office. He is the Information and Privacy Commissioner.

MR. KELVIN PARSONS: But the information, the privacy piece that you deal with, all comes under the same piece of legislation?

MR. SHEA: I am not sure about the OIPC. I know from our perspective we have responsibilities for the Management of Information Act and we are actually responsible for providing advice, providing guidance, making sure that our electronic records and the papers – sorry, the electronic files that we have access to - are kept in a way that is safe and secure.

My understanding of Mr. Ring's role – I am perhaps not the best one to speak to it, but - he would be responsible if you had concerns about ATIPP legislation. If you made a request for information, for example, from us, and we did not provide it, for whatever reason, my understanding is that you would appeal to Mr. Ring's office for that.

I have to be careful here because I am in uncharted territory myself.

MR. KELVIN PARSONS: I have a tough time trying to keep all the different sectors separate, who is dealing with what. I know privacy comes under the ATIPP legislation. You have certain involvement with that, but obviously he has involvement with the ATIPP piece of it.

MR. SHEA: Yes, I think perhaps he is more on the compliance side. He is like the cops, I think.

MR. KELVIN PARSONS: I do not have any further questions for that sector. My only questions are related to the Public Service Commission.

CHAIR: Okay, Ms Michael.

MS MICHAEL: Mr. Shea, it is my understanding that - well, you said the piece of work around the privacy issue has been completed, and I think there was a contracted position that was working on that, and that position is now gone. Does that mean that you do not expect to deal with privacy issues again?

MR. SHEA: No. I guess the price of security is eternal vigilance. I know I am garbling that phrase, but I think one of my roles is to never be satisfied, never be complacent, and never be satisfied that we have the system that we have. We should always be probing and making sure that it is safe, that we have not forgotten something, so I will be frank and say that after thirty-seven years of creating systems in a way that the financial resources were not there, perhaps, to do them in the way that you would have liked to have done them, in a safe way – and that is no criticism of any of my predecessors. It was the reality of the day. The financial system was - they had to do the best they could with the money they had. Perhaps today you would spend more time putting in some of the safeguards. I am sure they would if they had their time back, A; and B, of course, the standards have changed. If you went into Wal-Mart ten years ago they might ask you to write your Social Insurance Number on the back of a cheque. Well, they would never do that now, so the standards and expectations have certainly changed.

We have this body of systems that we inherited four years ago, that do all the critical applications in government, so we are systematically working through that. It will likely take us a number of years to get to a point where we are much safer. We are trying to make sure that we take the ones that are at greatest risk and work through those. We have gone through the first level, all of the critical applications, and we feel very safe. I would like to be feeling a lot safer, but I think we have, using EWA, this intrusion detection group, using their advice, we have plugged as many of the holes as they think are really critical. Now we are going to the second level stuff, if you like, and going through it, but that will take us probably a number of years to get to a place where we need to be.

MS MICHAEL: Thank you.

Looking under section 4.1.03, in the salaries last year you underspent. The revision is down about $200,000, and you are going up a bit this year. What happened last year that you underspent?

MR. SHEA: That was due to delayed recruitment; we just did not have the positions. It was about $196,000 short of where we expected to be - positions that were approved in the budget – or it could be that we might have advertised and not found any suitable candidate for it so the salary was allocated for the full year.

MS MICHAEL: Has that been rectified, or it is going to be happening this year?

MR. SHEA: Yes.

The decrease that you are seeing this year, there is a decrease of just under $100,000, about $95,000.

MS MICHAEL: That is right.

MR. SHEA: There are a couple of reasons for that. First of all, there is an increased portion in that which is for a 4 per cent salary increase, an additional pay period. Annualization of new positions would have to go up but it would decrease by even more, which is reallocation of some of those activities to other areas, as I said. We have a bit of reorganization underway, so we add one pocket into another. You will see an offset somewhere else in here where some of that is actually going up. While this one is going down another branch would go up, because we have reallocated positions due to the reorganization.

MS MICHAEL: Thank you.

Under subsection 03., Transportation and Communications, there was an over expenditure of about $118,000. What happened there that you were not expecting?

MR. SHEA: A lot of that money was spent on additional travel costs. We do provide services outside the overpass, if you like. We have a number of regional offices but we also have training – a lot of the training we do, unfortunately, not only can you not get it in Newfoundland, some of it you cannot get in Canada. It is very specialized network training. We are required to go to the States normally to get it. So the travel expenditure was higher than we had hoped for.

MS MICHAEL: Right. You are down significantly, though. Your estimate for this year is only $77,400. Is it that a lot of training – because you mentioned training – has now happened, you do not expect to have those kinds of expenditures?

MR. SHEA: Right. The nature of the work that we do tends to be multi-year. A lot of the projects are multi-year and as you go through the various phases, some phases are more intense for travel and training and others would be intense for buying hardware, buying software. If you went out one week and looked at your house being built, you would say you are spending all of the time digging a hole in the ground but that is only because that is the phase you are at at that particular point. In a project development exercise there are parts which are intense for travel and training.

For example, we have about sixty projects that are in development right now at different stages. Now some of them have been around. The big projects may have been around for a couple of years, some we are just getting started, some we have not started yet but we will start this year. We typically have about sixty at various different phases.

One of the phases is during the requirements definition here. You are just about at the end where you have just about decided to purchase a particular system. It is very prudent to go, look and see what the experiences are of other jurisdictions that are already using it. There might be a lot of travel in there. Then, when you decide on the system, you have to go to get training in it. So, a lot of it is thick legal phase.

MS MICHAEL: Right. Under 04., did you anticipate a project that did not happen, because you budgeted $722,000?

MR. SHEA: There was one particular project in the Department of Business that did not go ahead, but about $453,000 – I am sorry, I am looking at the wrong piece, pardon me.

MS MICHAEL: Yes, 04.

MR. SHEA: Projects not proceeding as planned.

One of the challenges, I guess, we have is we are a central agency that serves the other departments and agencies in government. At the beginning of the year they basically, during our Budget process, our Client Services folks will go and talk to all of them regularly, get a list of what is your priorities. We will prioritize it, crunch it, slice it and dice it, and will plan the Budget for this particular amount. Then you might get down in September or October and the water is changed on the beans, if you like, for that department. They might say: well, we have a new set of priorities. We do not have time to do this.

So, we are really dependent in some ways on whether a department wants to go ahead and do it or not. In fact, this is what has happened in this particular case, anticipated software purchases. One particular project might be in a phase where there is going to be a major software purchase required to do this and they decided at the end of the day it is not our priority. We are going to put our time somewhere else, and of course we are left with the money allocated for it.

MS MICHAEL: Right, thank you.

Under 05., Professional Services; the Budget estimate for this year is significantly higher than last year's estimate, $3,540,000 approximately. What is the increase about? What is that for? Generally speaking, what are the professional services here? I guess it has to do with application development, obviously, but can you just be a little bit more specific?

MR. SHEA: About systems, certainly I will.

The change from the actual in the Revised number from $7.8 million up to $12.9 million, it reflects an increase of about $5 million remaining in operations and Professional Services to do projects that were in the requirement stage which were not considered Capital at the time. We are required by the OCG - they have certain requirements as to what we can put in Capital and what in Current. They were not considered Capital at the time. They would be projects like – the biggest project we have underway right now is the Human Capital Management System, which is essentially a human resource system for government. A new provincial schools administration system is in there. There is a new budgeting system that is in there, a financial consolidation hub for the Department of Finance. So some of the sixty systems that we currently have underway, there is money being transferred into Capital.

In terms of this coming year, there is a difference of about $3.5 million, which is due to increase in various development projects, like Adult Basic Education. Motor Registration System replacement, that has been around for about twenty-seven years. MCP, that is one I referred to earlier, pays all the doctors in the Province, collects all the records. That has been around for thirty-seven years. It is really getting very geriatric at this point. Student Support Services needs to be replaced. That is the one we had the privacy breach on student aid last year. We have quite a few projects underway.

I would also note, as I said earlier, that $3.5 million increase in this year's budget over last year's, there is an offsetting deduction. If you go to ops, which is over in Operations - I do not want to take you off your line here but –

MS MICHAEL: That's okay.

MR. SHEA: - in 4.1.05, you will see there is a reduction from this year of $8.8 million down to $5.0 million. I am sorry, I do not have the page number in front of me. My page is not numbered.

MS MICHAEL: Yes, it is subsection 05., Professional Services.

MR. SHEA: Yes, from $8.8 million down to $5.0 million. You will see there is a corresponding reduction that has to do with our reorganization. We are moving people, monies and so on around.

Also, while we are there, down in that same page, subsection 07. you will see there is a decrease of $1.7 million, which goes from $3.9 million down to $2.2 million. Well, that same page back in - that you were referring to, 4.1.03 in the Property subsection, you will see that has gone up, but it is gone up in part due to that transfer from the other area. So it is a bit of out of one pocket into another.

MS MICHAEL: Okay. So I do not have to ask you about that. I did have that question (inaudible).

Thank you very much.

Just to keep moving on then, because I still have some others. I am assuming, and if the answer is yes you can just say yes. Under the same section, 4.1.03, that part of what you have been talking about is the reason for the Purchased Services going up by $138,000 as well?

MR. SHEA: Yes, I do believe that is the case, too.

MS MICHAEL: Okay. Thank you.

You have given me the answer on the Property, Furnishings and Equipment.

Under 4.1.04, it probably the same but I will ask. First of all, under Salaries, the Estimates for this year are up significantly from last year's estimate. Can you give me an idea of that breakdown? It is over $1 million, $1.3 million.

MR. SHEA: Yes, ma'am.

There are eighty-three, roughly, permanent positions. It changes everyday, of course, but eighty-three permanent positions in this group. These are the group of people, application services, who run those 600 applications. The previous group, the application development folks are the people who actually build new things, and they use a lot of professional services. The application services branch, once those other folks have them built, they turn them over to this group. These are the people who have to get up in the middle of the night and fix systems that do not work. If civil service payroll does not work, or something does not work, they are the people who are called out of bed to make sure it works. This is what the group does.

There is in that particular increase in budget, it was originally $5.2 million last year, it is now $6.4 million, and $1.3 million of that has to do with a $200,400 for a 4 per cent salary increase. The same amount for an additional pay period and $933,000 in reallocated movement from other branches as well. Positions have been moved actually, existing positions have been moved from other areas.

MS MICHAEL: Other areas inside of OCIO?

MR. SHEA: Yes.

MS MICHAEL: Okay, thank you very much.

Under subsection 05. of Application Services; once again, the revision was up by $446,000 and this year the estimate is $1.2 million approximately above last year's estimate. Could you talk to us about that?

MR. SHEA: Yes, two main reasons for that, we have an increase in the number of applications we have to support. Once you have them, it is sort of like having kids. Once you have them, you have to feed them and take care of them and that sort of stuff. So these will be new systems that will be added, but a large part of that would have to do with covering the cost related to information protection and increases in security, reducing the risk that we have. We have put probably no more attention on that than on anything.

This has just sort of really disrupted the normal flow of business, and for good reason. Once we discovered we were not as safe as we needed to be and we sort of started looking under rocks, if I could use that term, we found that there were a number of areas that we just could not leave and we have to really beef this up. This is stuff that will get us in trouble if we do not put the time and effort and money into fixing it.

So we have actually transferred a lot of money from other areas but, as I said, our overall budget ask this year for the OCIO total, there are no new monies in here. This would be transferred from other areas that we had hoped to do, maybe in some cases new systems development. It is a little bit like: Do you want something new or do you want me to make the stuff you have safe and secure? The sensible thing is to make it safe and secure.

MS MICHAEL: Thank you.

In the Revenue section here, that provincial revenue, what is the source of that? Is that just transferred from departments to you because of services or…?

MR. SHEA: It is for outside government agencies, a decrease in the new year, $3,900 due to the lower anticipated recoveries from outside agencies.

MS. TILLEY: That would be salaries for some positions that are paid for by departments, say pensions pays for a position to support the pension system, and legal aid also pays for one position.

MS MICHAEL: Okay. Thank you.

Just a couple of more questions, I think.

Down in section 4.1.05 – actually, you may have answered all my questions here because you brought us over.

Under Transportation and Communications, subsection 03., you did have an over expenditure last year for $285,700. The revision brought it up to $285,700, and then this year you are sort of keeping your figure at the same amount. Are you expecting more travel? What is it that caused it to go up by $285,000?

MR. SHEA: The main thing there is, data communications is by far the biggest thing. In there were have transportation, travel, relocation, communications, meaning communication on the airwaves, if you like, but data communications for IT, broadband networking and that sort of stuff. That is by far the biggest piece. In fact, this year out of the request for $2.499 million, $2.256 million of it is increased data communications costs. That is the requirement for it. That is an increase of about $335,000 because our costs for data communication has gone up, and that actually is the same reason why our actual for the year, $2.449 million, that was an increase of $285,000 which was due to higher than anticipated data communications costs.

MS MICHAEL: Okay. Thank you.

Under subsection 04. Supplies. Last year there was an over expenditure, at least the revision was about $160,000 and then less this year. Could you tell me the supplies in this case, what that refers to?

MR. SHEA: Yes, Ma'am.

Supplies in that case are software applications. It is software costs. It is not like staplers and that sort of stuff.

MS MICHAEL: No, I knew that. I figured it was software; I just wanted to get that –

MR. SHEA: Right. Also, besides software, this would be either purchase of software but very often software licenses and maintenance costs. Once you buy Oracle they sort of have you forever because we have to keep paying them regularly, and that is what those things are.

MS MICHAEL: Right. I am presuming that the revenue in this section is similar to the provincial revenue, and this section is similar to the provincial revenue in the last one.

MR. SHEA: The revised for this particular year: There is a $38,000 differential between the actual and budget, and that was salary that we had associated for computer support specialists. Why computer support specialists, I am not particularly sure. These are our desktop support people who go around and fix your machine if it breaks.

MS MICHAEL: Do they come in from other divisions? Why is it down as -

MS TILLEY: The Rooms pays for their own computer support specialist. The person actually works for us, but we invoice The Rooms for that position.

MS MICHAEL: Oh, okay.

MR. SHEA: The decrease next year from $312,000 to $137,000 is a decrease of $175,000 and that is due to removal of revenue for server hosting. Bell Aliant did have some servers in our area and they were paying us for it, but that has been removed now, so it was a one-time.

MS MICHAEL: Thank you. That was Bell Aliant. Okay.

Under section 4.1.06, again under Supplies, the budget is increasing significantly this year over the budget last year. You underspent last year, it seemed like you did not spend what you expected, so could you talk about that a bit?

MR. SHEA: Certainly. The savings from the actual compared to budget was about $1.9 million, and these were due to capital projects not proceeding as we had planned. Therefore, we had a reduction in the requirements for software. A lot of this again is in software. This is in the capital area.

The increase for next year, the request, is for an increase of $1.448 million due to application development planning to purchase software that meets the criteria for capital assets. That is software specially for the new human resource management system for the new budget system in Finance, a vessel management system in the Department of Transportation and Works, a new vital stats system in Government Services, and the provincial schools administration in the Department of Education. There would be others, but those would be the major ones. We would be at the phase in development where we would be buying the software this year.

MS MICHAEL: Okay, then. Is subsection 07 connected to that that as well, because a similar time happened, underspending and then asking for $266,000 more this year?

MR. SHEA: Yes, and in this case these would be complimentary because the one we just talked about would be the software side. This would be the hardware side. So, lower than anticipated hardware expenditures for those things and increased next year for the same reasons.

MS MICHAEL: Thank you.

I think in this section, 4.1.07 – I am just curious - under subsection 05 you had budgeted $750,000. Nothing was spent and nothing is budgeted. What has happened to that $750,000? Did it get put into other sections for ongoing work?

MR. SHEA: That was money we had earmarked for doing a disaster recovery project for Professional Services. Disaster recovery was taken as being really one facet of the information protection umbrella, which we have a number of different things in it. Disaster recovery certainly would be one thing. We used a lot of internal personnel on this rather than go into Professional Services for it. I would very much expect that next year or the year after, as we get into this, we may want to go back out again – Professional Services – but we actually have two disaster recovery special positions that we had filled and so we are using those two people, full-time government employees, to do an awful lot of this. These are people who have credentials, if you like, in disaster recovery. We did not use as many professional services as had thought.

MS MICHAEL: Thank you very much.

Under subsection 07, you did have an over expenditure. The revision was $727,000 above what you had budgeted and this year coming down closer to what you had budgeted last year. What was the over expenditure about last year?

MR. SHEA: The over expenditure was for the purchase of the disaster recovery hardware.

MS MICHAEL: Oh, so that was related.

MR. SHEA: We have a new facility. In the interests of protection and security I should not tell you where it is, it is a hideout, but it is here in the complex, on site. It is a modification to a room and we have brand-new equipment in there. It is a new fibre-optic connection to our building and so on. It is off-site from the Higgins Line building. If we should have a catastrophic failure, a fire, flood, or something like that, we could go to this room. It contains hardware backup servers and that sort of thing, that we could rely on to continue to provide services in a shoestring mode.

MS MICHAEL: Thank you.

Those are all the questions I have with regard to the line items. I do not know what is happening here, Mr. Chair, with my partner, my partner in crime. Am I left on my own here?

CHAIR: The floor is yours.

MS MICHAEL: Okay, the floor is mine. This is quite unusual. Just give me one second please. I might have information here.

I had a message that Mr. Parsons had to leave. He does have a question he would like for me to ask the Public Service Commission, so I will put that aside until I get to that. I do not know what is up; I am not used to having the whole floor to myself so I might as well enjoy it.

I just want to check over my notes here. There were a few things under the Auditor General's report, but actually I think you have given me some of the information because you have talked about the disaster recovery plans. There were a couple of things, actually, in the Auditor General's report but one of them: He noted that there were over 132 charts of authority for application use that still were not done. How are you doing in the progress of that work?

MR. SHEA: I believe those have been, if not all completed, certainly substantially completed.

MS. TILLEY: I think there might be one or two (inaudible). That is my understanding.

MR. SHEA: A lot of those were in progress, of course, by the time we received the report but certainly as of the date of that writing he was accurate, but we put a lot of effort in. I think they are just about all there.

MS MICHAEL: Good.

What about with regard to progress around service level agreements in place between OCIO and client departments? Because he had looked at that as well and you hoped to have everything done by March 31 of this year.

MR. SHEA: Yes, substantially done.

MS. TILLEY: They are all completed, at least in draft form. I do not know the numbers off the top of my head, but there has been a significant increase in the number that have been signed off by departments.

MS MICHAEL: So you are pleased with the progress?

MS TILLEY: Yes, we are.

MS MICHAEL: He also pointed out the concern around the lack of a competitive bidding process for contracts between April 2007 and March 2010. I think it is something that you agreed with but you said everything is all fixed now with proper procedures and evaluations in place. Is that the case?

MR. SHEA: The contract that we are operating under now was issued through an RFP, request for proposal. It was done obviously through the public tendering agency. It met their requirements, if you like. It was a request for proposal. We had requests come in. It was a competitive process in that way. From those bids, we chose three consortias which were made up of seven separate companies. That contract went in, in April of 2007. I guess, in terms of meeting the requirements for competitive bidding, how we choose the three competitors, the three consortiums, I should say, was as I just laid out. Within those, I think he was finding some room for improvement.

MS MICHAEL: That is right.

MR. SHEA: Fair enough! Absolutely! Fair enough!

One of those consortiums was xwave and xwave has been the incumbent forever, up until 2007, when the old Computer Services Crown Corporation, which played a role, by the way, not dissimilar to what the OCIO is doing today, when that was outsourced in 1994, along with that was given the contract for all IT work in the government that we do today. All of the other IT companies that were out there were taking large exception to that, that they could not break in, if you like. They were like with their noses pressed up against the glass looking in, but they could not get at any of that. When the OCIO was created, we did the RFP.

If you have an entity that has been providing service for thirty-five years, so they are broad and deep, the comfortable pew for us, even though we had these three, of which one was xwave, is to always go back to xwave and give them the work, but that is hardly fair to the other consortiums led by Deloitte, and there is Plato in there, Allstream, and a number of other local companies.

We forced it, if you like, because otherwise xwave would have gotten it all. Even though they won it as a part of the competitive bid along with the others, if we had not forced it 80 per cent of it would have gone to them and the other folks would have gotten nothing. In the first year, we forced it and said to our own folks internally: You have to give some of the other people a chance here to build up. You cannot give everything to xwave because it is the comfortable pew. We did force it, but it was always the intention that there would have to come a time where everybody would have to stand on their own two feet.

Last year - it is probably six or eight months old - we put in this process, PASR, project approach, basically among the three consortiums. If we are doing a project we actually will ask the three consortiums to, themselves, bid. It is a tender within a tender if you like. We will actually give them the requirements and say: You tell us how you would like to address this project, how do you see it going, where do you see it, and what is it? Is it a custom built solution, how much money do you think it would cost, and those types of things?

That is a process that I think has substantially improved the tendering process, if you like, inside of the three consortiums.

MS MICHAEL: Have you actually put in place a written policy at this moment, or is it just practice?

MR. SHEA: It is our policy. We put it out there. For example, we will also go out for the Human Capital Management System. We are not obliged to go to one of the three consortiums to give that work to one of those three. If we have a particular system which we know there is expertise outside, we can go to tender for that. That is one example. We have others where we will not just go to the three inside consortiums who won the bid before and ask them. They can still bid on it, but we would actually issue a public tender for anybody else to bid as well as these three.

MS MICHAEL: Thank you.

Just one other point – I am not taking up everything that the AG spoke to in his last report, but this was one that I think you agreed with and that you were going to work at getting under control, and it had to do with recording and monitoring of IT hardware. The AG felt that things really were not adequate. He felt the OCIO was not complying with the government's financial management policy on IT asset inventory. He did not think that you had a system for monitoring software licensing and usage. I think he pointed out that unlicensed software throughout government could go undetected. You have indicated the complexity, I know, but you also said that you were working at getting things under control. How is that going?

MR. SHEA: It is going very well. We are making good progress, I believe. There is still a ways to go before we sleep, if you like, on that. We still have some more work to do.

This is on area which can be abused, if you like, because we have 7,000 desktops across government. Everybody has a desktop and software and the ability to download and copy, pirate, if you like, in an inappropriate way.

When the OCIO was created we were bits and pieces of IT divisions that had been out there and we realized, when we all got together and did an inventory, that we had a lot of software that was being used where perhaps licenses had expired, there were no adequate license for it, so we put a lot of effort in, in the first couple of years, in making sure that we were compliant and legal.

As part of that we have a product called LANDesk, which, when you bring in your laptop in the morning or you come in and turn on your desktop, all across government, these 7,000 desktops, laptops and so on, will basically, like ET, call home. When you turn on, it calls back to one of our servers that says, I am here and this is what I look like; this is the software I am running.

That is actually how we blocked some of the malicious software that is out there, like the breaches that were out there. Once we found out, for example, that the breaches were done through this product called LimeWire, at the public health labs and at the WHSCC – again, not in our side - once we realized that is what it was, we could put a rule in this LANDesk program that says if any of our 7,000 users dial in, in the morning, and have LimeWire, shut it down; do not let it run. So we control a lot of the software that runs on the systems using this particular product.

We have installed that product in the last year-and-a-half, and we brought it up to date, and that helps monitor what is out there. If we find that somebody is using an unauthorized piece of software, we will actually go to them and have it removed.

That also helps us monitor software that has been around forever. The person has had it there and did not really use it, did not have any need for it, and that costs us money. That gives us an opportunity to go and say: You have product X, it is costing us a lot of money and you are not using it, so how about we remove it and save ourselves a licence?

I agree with the Auditor General's comments on all of those things, without reservation. He is absolutely right, and I think we are doing a lot to help. There is one area where, with respect, I think we have a problem, and that is: in the past he has found fault with our predecessors and ourselves for not knowing where all government printers and assets like ‘mouses' or mice are.

MS MICHAEL: Nobody knows, do they, if it is mice or ‘mouses'?

MR. SHEA: Exactly, it is always a clumsy one.

There comes a point where you have to say: Yes, we could track every single mouse but you would need a fleet of 100 people to do it. It gets to the point where, do you hire 100 people to go and find out where a $15 device is? Or do you say: Do you know something? That is wastage.

I will leave it to you to decide whether you think it is worth doing that, but we have taken a position that, within reason, if is below a certain value, like $50, it is not worth hiring people to track it.

MS MICHAEL: In actual fact, that is a practice in Finance. None of us have to account for things below a certain amount of money.

MR. SHEA: Below a certain value, yes.

MS MICHAEL: That is right, so I think I agree with you on this one.

MR. SHEA: Thank you.

MS MICHAEL: I will not ask any more questions of the OCIO staff.

I really appreciate your answers.

MR. SHEA: Thank you.

MS MICHAEL: They have been very helpful in giving me a clear idea of the work that is going on. It is an extensive piece of work, but I think it is very, very important that we are very professional in our government with regard to our IT, so I feel good about what you are doing.

Thank you.

MR. SHEA: Thank you.

CHAIR: Shall subheads 4.1.01. to 4.1.07. carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

On motion, subheads 4.1.01. through 4.1.07. carried.

CHAIR: Shall the total carry?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

On motion, total carried.

CHAIR: Shall I report the Estimates of the Office of the Chief Information Officer carried without amendment?

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

On motion, Estimates of the Office of the Chief Information Officer carried without amendment.

CHAIR: Thank you very much.

I want to thank Mr. Shea and Ms Tilley for taking the time to answer the questions today. Thank you very much.

MR. SHEA: Thank you, Mr. Chairman.

CHAIR: Moving right along, we will go to the Public Service Commission.

I will ask the Clerk to call the subhead.

CLERK: 1.1.01.

CHAIR: Shall 1.1.01. carry?

I will turn it back to Ms Michael.

MS MICHAEL: Thank you, Mr. Chair.

I will wait for the staff to get in place. I do have a few questions. It is not extensive. I will do the line items first. There are not many lines, so this should not take long.

Under Salaries there is an increase of $581,300 this year. Can you give us an idea of what the new positions are? I presume there are probably some new positions involved in that.

MR. WALSH: Yes, that is correct. The salary breakdown would be, of the $580,000, there was that extra pay period and the 8 per cent increase that had to be factored in.

MS MICHAEL: Yes.

MR. WALSH: We received, in addition to that, position funding for 1.5 additional new positions in our Employee Assistance Program. That makes up for a half person-year that was granted in last year's budget, and makes that into two full-time permanent Employee Assistance Program co-ordinators in accordance with the terms and conditions of the collective bargaining process.

MS MICHAEL: Okay.

MR. WALSH: That is for school boards, NAPE and school boards, CUPE employees. In addition to that, we received an additional position to co-ordinate the job advertisement exercises, particularly those job advertisements that are going into the public media. As well, we received an adjustment on our temporary salary dollars of $112,000 that compensates for the increases that came as a result of the salary increases that were bestowed on all employees.

MS MICHAEL: Okay, thank you.

With temporary employees - I do not have your figures in front of me, but - do you do a regular audit with regard to temporary employees to see, are there positions that have been there for a long time and actually could become permanent? Because there are some departments that have identified that to me.

MR. WALSH: Yes, that is correct, that is something that we review on a fairly regular basis to make the determination as to whether or not these positions are actually permanent or if the positions are actually temporary. If the jobs, we believe, should be confirmed as permanent then obviously we would make the necessary approach to government to see whether or not we would get that additional assurance.

MS MICHAEL: Did you have any changes this year of categories, from temporary to permanent, in your department, in your division?

MR. WALSH: No, we specifically did not ask for that kind of confirmation at this stage.

MS MICHAEL: Okay, thank you.

In 03.Transportation and Communication, last year you had a revision of $30,000 upward and this year the figure is about $33,500 over last year's budget. Could you just give us a short explanation of the increase?

MR. WALSH: In a nutshell, the additional cost associated with the additional Employee Assistance Program Co-ordinators. The travel that they would require, that money is incorporated into that component.

MS MICHAEL: Okay, thank you.

In 04.Supplies you overspent supplies by about $20,000; yet, you are back down to $38,000 this year. So was that, I take it, a one-time expenditure that had to be made?

MR WALSH: That would be correct.

MS MICHAEL: Do you have what it was, or - the $20,000, the extra money?

MR. WALSH: The only suggestion that we can come up with would be last year's budget, meaning the period ending 31 March, we ran a couple of additional Career Expos, those job fairs that we had, that we held throughout the Province. Given the circumstances, we decided that it would be appropriate to have an additional fair in Labrador and in Central Newfoundland.

MS MICHAEL: Okay, thank you.

MS VAUGHAN: Also, the PSC are located in two separate areas, so there are office supply requirements for the two different areas. That would have increased for that purpose.

MS MICHAEL: Thank you very much.

Under subsection 05. Professional Services you had budgeted quite a bit more, you have estimated quite a bit more, than you did this year. What were the expenditures about last year under Professional Services that made them so high in comparison to what you have estimated for this year?

MR. WALSH: In last year's budget the Commission had been allocated an additional one-time funding of $320,000. That money was specifically designed for the TV ads that we produced and issued that promoted careers in the Public Service, and the values and benefit of those.

MS MICHAEL: Okay.

MR. WALSH: That was a one-time deal.

MS MICHAEL: I remember seeing some of those ads.

Thank you.

Did you find that the ads and the career fairs, et cetera, were successful? In asking that, then, I have to say, how did you decide ahead of time to judge whether or not this expenditure was going to be successful? How did you evaluate, or have you done a full evaluation yet?

MR. WALSH: I will offer the opinion first and then I will speak to the evaluation portion.

Our general reaction perception is that the ads and the Career Expos have been successful. My personal opinion is that they are a valuable tool in that they achieve two results. One is obviously in a seller's market where there are often more opportunities than there are people who are qualified and able to fulfil those roles. The fact that we must be seen to be an employer of choice is critical. Both the ads and the Expos were intended to show individuals – citizens, if you will – that there are opportunities available, career opportunities available, within the Public Service that they may be interested in, and that we are interested in them.

The second part, and sometimes it is a little bit harder to measure and evaluate, is that sense of pride that government employees get when they see the values and the benefits of Public Service employment being advertised externally. Not just that we have a job to fill, but here are the values and benefits of working for government, working for the Public Service, that sense of contribution and commitment to the public good, as well as often recognizing some of those things that we take for granted, but when you see them on TV in an ad, and our co-workers are the ones who are out there making the pitch, that gets a lot of value and benefit.

MS MICHAEL: Right.

You did have a full strategic plan put in place with regard to the recruitment that this was all connected to.

MR. WALSH: Yes.

MS MICHAEL: I know that some of your strategies developed were to increase diversity within the workforce, equity and access to employment. I am interested in, what is your definition of diversity? What exactly does it cover? When I am saying definition, that is what I mean.

MR. WALSH: Diversity would mean, in large measure, that we should have a Public Service that reflects the society that we serve. That would include the range of diverse groups, interests, individuals, that we might find within our own society. So that is not just – and I do not mean just to imply minimize – it is not just gender, it is not just ethnicity; it is everything from sexual orientation, colour, race, creed, interests and values.

If we are truly reflective of the society we serve, then I would suggest you are in a better position to offer government that kind of a broader perspective, in reflection, in its policy development phase.

MS MICHAEL: Right.

Some of these are very complex, as we know; and, of course, you always have to be reassessing where our society is, in coming up with that.

MR. WALSH: Absolutely.

MS MICHAEL: Because of that, I would just like a little bit more. When you talk about sexual orientation, do you also include gender identity? Because they are two different things.

MR. WASLH: The answer is, yes, we do.

I will also be honest with you and say, however, that it is a very difficult and perhaps inappropriate thing for me to try and evaluate and measure. If we try and take the reverse effect on that and say if we start trying to fill positions on the basis of an individual's qualification and capacity, notwithstanding their orientation, notwithstanding their ethnicity, their colour, race, creed, that we hire the best people that we can possible get, our responsibility should be to make sure that those kinds of factors are not built into the assessment evaluation phase.

MS MICHAEL: Would you use one of the basic principles of employment equity?

MR. WALSH: Yes.

MS MICHAEL: Because this is part of employment equity, that, yes, the person has to be qualified but if you have say two people equally qualified but one would add to the diversity of the work group, you would chose the person who would add to the diversity if you had definitely equal qualifications, because that is the basic premise of employment equity.

MR. WALSH: It is a fundamental principle. However, we have to try and find that balance between what would be - if I interpret your question correctly - whether or not we should have an affirmative action program to increase representation or whether or not indeed we should build our evaluation assessment process on the basis of a meritorious assessment of the quality of the candidate and we would not allow extraneous factors to be the cause of that individual being denied.

MS MICHAEL: Well, I am not sure that I was referring to affirmative action because the principle of employment equity does not necessarily mean affirmative action.

MR. WALSH: Yes, that is correct.

MS MICHAEL: So, to say that if you have a goal of increasing the diversity then there has to be some intentionality around how you increase the diversity. One of the ways of that, this principle of employment equity, is that if you have two people who are equally qualified and hiring one person might also increase the diversity, then that is a decision that one makes. I mean that is what employment equity is all about.

I would not call the diversity a person would add, I would not consider that extraneous. Now maybe you did not mean that, but that is how your answer came across to me. I would not consider that extraneous if you have a policy of increasing diversity. If that is part of your strategy than finding a way to add that into your decision making is not extraneous to the process. I put that to you to think about.

MR. WALSH: Thank you very much.

MS MICHAEL: Thank you.

Let's just come back, although I do have a few more questions. I think under that that is fine.

Just again, part of the recruitment - because I may as well finish these. They all came out of the answer to the question around the ads, et cetera, so I might as well finish these.

Have you put in place an intern program for recent graduates? Has that been something that you have thought about?

MR. WALSH: That is a program that we had in play several years ago. We ran into – maybe I will make an editorial comment and say obviously nothing is perfect. We ran into difficulties because at the time what we tried to recruit for were generalists who had capacity to grow. What we are trying to do in this current approach is to ensure that we try and recruit individuals with the specific job skills that the system may require on a go-forward basis.

For example, several years ago if we were looking for an intern, as long as the individual had what we perceived to be growth potential, that is the individual that we would select. This time around we are going to try and focus our efforts, particularly on the early stages, with students who are still in the schools to try and establish relationships, particularly in the areas of skills where we have a short-term or we anticipate long-term need. For example, we may be specifically focusing on engineering students rather than students from another, unrelated program.

MS MICHAEL: Right.

MR. WALSH: We use that as an example.

MS MICHAEL: Right.

CHAIR: Ms Michael, if I could just interrupt for a second if you do not mind.

MS MICHAEL: Yes, sure.

CHAIR: We are outside the three hours normally allotted for Estimates and I was just wondering how much longer you are going to be, if you do not mind me asking, because we have some people on the Committee who have some other commitments?

MS MICHAEL: Right.

CHAIR: I was just curious.

MS MICHAEL: I just have a couple of questions, actually, and I can speed up. I forgot about the fact that –

CHAIR: No, no, not a problem.

MS MICHAEL: Okay, good enough. Thank you.

Well, in that case let me ask – I will just check my line items and see if there are any more in there that I would like clarification on.

In 06., Purchased Services, you revised up to $325,000 and now this year you are up to $1,600,000. What is it that you have planned under this year's budget?

MR. WALSH: The estimate for 2009-2010 reflects an additional $1.1 million and that is the cost of advertising that each of the various departments had to place their job ads in the print media on the weekends. What we have done is we have taken that money from the departments, put it into our budget, and we are going to use that to coordinate what we perceive to be a more efficient administrative process for the distribution of those ads.

Instead of having fifteen departments each putting an ad in, we thought when it came to the Commission, we will be the liaison with GPA and the liaison with the media, and we feel that we can get some efficiencies that way.

MS MICHAEL: It makes a lot of sense. Thank you very much.

Again, I am always curious about provincial revenues. What is the provincial revenue that you expect there under 02., $24,000?

MR. WALSH: Some of those advertisements that we distribute, we actually get some funding back for those. For example, if we were putting in something for Occupational Health and Safety, there may be some kind of return revenue from Workplace, Health and Safety.

MS MICHAEL: Okay. Thank you.

Just a couple of more general questions then that I have.

Mr. Parsons did ask me to ask a question, so if I may, I will ask that. His question is: Is there a plan for the retirement of senior executives and if there is, what is that plan? I am presuming he must mean across the board.

MR. WALSH: To the best of my knowledge, there is no plan.

MS MICHAEL: Okay. Would you be responsible for that if there were to be a plan?

MR. WALSH: I do not know if I would be responsible, but I may be a party to any discussions or implementation.

MS MICHAEL: Okay. Thank you very much.

I just have two more questions really. One is with regard to the Classification Appeal Board. I am aware of the fact that there was a backlog last year, a backlog of 532 outstanding appeals from the health care boards was reported, and we were told there are possibly more appeals coming from reclassified utility workers as well. You said then that you would address the backlog in this coming year. How have you managed with that?

MR. WALSH: We have been quite successful. There is a process of continuous intake, obviously. Right now, our outstanding balance would be somewhere in the vicinity of about 200. If you look at last years numbers, at that time we were around 750. So we feel that we have gotten a solid handle on that now. Some of those are group activities, for example, with the utility workers. That was not a single individual; it was a package that came in. So we feel that we have made a significant improvement in that and we anticipate by the end or middle of this fiscal to be current.

MS MICHAEL: Very good. Do you have a sense of why there were so many appeals from the health care boards? Was that unusual? Did it have to do with the restructuring, or do you have an assessment of why there seem to be so many?

MR. WALSH: Primarily, the appeals that we were dealing with from health care boards were reflection on a program of total audit and review of all of the classifications that were done a couple of years ago. The decisions then were rendered, and therefore instead of individuals, they came in as a collective group.

MS MICHAEL: Right. Thank you very much.

My other couple of questions is with regard to the investigative services of the Commission.

MR. WALSH: Yes.

MS MICHAEL: You did say that you would refine the investigation policy and procedures manual and assess the need to expand the role played by the Investigations Consultation Advisory Group. Has that happened?

MR. WALSH: We ran into an unexpected, unanticipated delay insofar as the director of Appeal and Investigation last year moved on, which is Mr. Ed Ring, and then we re-advertised, filled the position, and we have a new incumbent in the job now. Now that she is in play, that is one of her priorities and she will be working on that between now and September.

MS MICHAEL: Okay. When did that person come into the position?

MR. WALSH: She actually arrived in August. In fairness, I think she arrived in May but because of the nature of her employment, prior to coming to us, we had to make arrangements to enable her to continue to participate in, in this case, the collective bargaining process, because that has been something that she had been dealing with and was deemed to be a priority. So she effectively came back to us on a full-time basis in September.

MS MICHAEL: Last year you reported that in 2007-2008 you had twenty-two complaints. Do you know what the number was for 2008-2009?

MR. WALSH: By complaints you mean general?

MS MICHAEL: Yes.

MR. WALSH: In terms of management grievances, we received seven management grievances and we received fifteen new investigation requests.

MS MICHAEL: Okay, thank you - about the same number.

MR. WASLH: About the same number. I think it is reasonable to assume that those numbers get kind of standard, barring anything unforeseen we would not expect that they would either increase or decrease rapidly.

MS MICHAEL: Right. As a Commission, do you have any role to play if complaints are made within a department but do not move outside the department, they get dealt with in the department? Are reports made to you on that?

MR. WALSH: We do not audit that function at this stage. What happens is a department receives a request, if they want us to come in as an external agent to do that review we will. If we, however, receive complaints from another individual or groups of individuals that imply that there are things happening within a particular agency or department that we think are significant, we will investigate those.

MS MICHAEL: Okay.

Do you have an opinion - and if you do not, that is fine - on whether or not the Commission should have a role to play with complaints that happen in departments, even if they do not come to you?

MR. WALSH: I do not feel it would be appropriate for me to offer an opinion on that.

MS MICHAEL: Okay, that is fine.

That is all, Mr. Chair, thank you very much.

CHAIR: Thank you very much.

MS MICHAEL: And I thank the staff. Your answers have been quite helpful.

MR. WALSH: Thank you.

CHAIR: Shall 1.1.01 carry, all inclusive?

SOME HON. MEMBERS: Aye.

On motion, subhead 1.1.01 carried.

CHAIR: Shall the total carry?

On motion, total carried.

CHAIR: Shall I report the Estimates of the Public Service Commission carried without amendment?

Motion, that the Committee report having passed the Estimates without amendment, carried.

CHAIR: Just before I call for a motion for adjournment, our next meeting is tomorrow evening at 6:00 p.m., Government Services.

Could I have a motion to adopt the minutes from the Department of Transportation and Works and Newfoundland and Labrador Housing Corporation?

MR. FORSEY: So moved.

CHAIR: Moved by Clayton Forsey, seconded by Mr. Dinn.

On motion, minutes adopted as circulated.

CHAIR: There is something else, too. I am sure there is. No.

Motion to adjourn. It is a fight over who is going to move that motion. Ms Marshall moved it, Mr. Buckingham seconded it.

Thank you very much. Thank you, minister.

Thank you, folks.

On motion, the Committee adjourned.