PACC Committee Report

THE GOVERNMENT OF CANADA’S RESPONSE TO THE FIRST REPORT OF THE STANDING COMMITTEE ON PUBLIC ACCOUNTS: “CHAPTER 13 – OTHER AUDIT OBSERVATIONS: PARLIAMENTARY OVERSIGHT WEAKENED IN POORLY TARGETED RELIEF FOR HEATING EXPENSES (RHE)”

---

 

 

 

RECOMMENDATION 1 – That the Department of Finance, in collaboration with other relevant departments and agencies develop a public assistance plan, in the event of excessive energy price volatility, incorporating policy instruments that allows the identification of segments of the population most vulnerable to sudden and large surges in energy prices; and that the Department of Finance prepare and table a document summarizing this plan to Parliament and the Public Accounts Committee no later than March 31, 2003.

 

RESPONSE:

 

The Government considers that developing and tabling a public assistance plan would reduce the Government’s flexibility to set appropriate policies that respond to evolving economic circumstances and take into account overall fiscal conditions.

 

Policies are developed in response to a wide range of economic and social factors, including energy prices, which affect Canadians.  The decision as to whether to implement a specific policy would vary over time because economic conditions as well as the Government’s priorities and fiscal situation are constantly evolving.  Indeed, a specific public assistance plan detailing how and when the Government could respond to excessive movements in energy prices would not capture all of the possible combinations of economic, social and fiscal circumstances that could exist at any future point in time.

 

The Government, through its departments and agencies, constantly monitors economic developments, including increases in energy prices, and their impact on Canadians.  In this constantly changing environment, the Government evaluates whether a specific situation or trend requires a policy response.  Where the Government sets out a policy intent, proposals are developed to achieve the intended objective on a cost-effective basis.  In this process, the Government must balance other competing priorities and fiscal considerations against the policy intent.  In developing its policy prescription, the Government also draws on previous experience with relevant, past policy initiatives.

 

In all of its deliberations, the Government attempts to identify and weigh carefully its available options, ensuring in the process that a decision to respond to special circumstances, such as an excessive movement in energy prices, is responsive to the views, concerns and priorities of Canadians within the context of overall economic and fiscal conditions.

 

RECOMMENDATION 2 – When the Government decides to implement special initiatives involving substantial sums of public monies, that it take all reasonable steps to ensure an initiative is referred to Parliament in order to obtain clear and explicit authority.

 

RESPONSE:

 

The Government agrees with the House of Commons Standing Committee on Public Accounts that it is important that Parliament authorize Government initiatives involving substantial sums of money.

 

The Government also recognizes, however, that there may be situations where it must respond quickly when faced with an urgent public need.  In all cases, the Government will act under appropriate legal authorities.

 

In the case of the RHE, a Notice of Ways and Means motion that included the proposed relief was concurred in by the House of Commons on October 19, 2000.  However, Parliament was dissolved on October 22, 2000, before authorizing heating relief payments.  The Government used existing legal mechanisms to authorize these payments.  On December 12, 2000, the Governor in Council approved an Order-in-Council authorizing the Minister of National Revenue to make ex gratia payments to eligible individuals for increased heating expenses.  On January 9, 2001 and January 23, 2001, the Governor in Council directed that special warrants be prepared to supply the funds for these ex gratia payments.  The special warrants were reported to Parliament on February 12, 2001, in accordance with requirements of the Financial Administration Act.  The use of these legal mechanisms allowed the Government to provide relief in a timely manner.