Thank you, Mr. Chair. We're pleased to be here via video conference from Edmonton.
I believe you've been provided with a brief overview of our estimates process, which we provided to the committee clerk last week. My comments will be very brief to give you the gist of what we do out here.
Since the 1990s the estimates process in Alberta has undergone a number of transformations in terms of committee involvement, but there has been a consistent practice of presenting a budget address in February or March, at which time the main estimates are also tabled. Exceptions to this timeframe have occurred during election year, or when there's been a change in leadership.
The process begins with the Minister of Finance tabling the main estimates for the government departments. This occurs immediately prior to the minister's beginning the budget address. Depending on the year and the date of budget address, there may also be interim or supplementary estimates tabled at that time. There are also a number of other documents that are tabled and must be made public when the minister tables the main estimates, and those are the government's strategic plan; the ministry business plans, which are conducted on a three-year basis; a consolidated fiscal plan; and a consolidated capital plan. This is a statutory requirement in the Government Accountability Act.
Under our rules, once the main estimates are tabled they stand referred to committees of the assembly known as policy field committees. The assignment of a department to a particular committee is determined by the portfolio or mandate of each of these committees. Currently there are five policy field committees and 21 government departments. The only department that's not assigned to a policy field committee is the executive council, which is considered by the committee of supply. As you know, the committee of the whole is comprised of all 87 members of the assembly.
Our standing orders do allow for some variation of this procedure if the House leaders agree to a different format. For instance, this spring, of the 21 government departments, the estimates of 16 were considered by policy field committees, and the remaining five were considered in the committee of supply. During committee consideration, members have up to three hours to consider one department. Once all of the estimates have been considered for all departments, they are reported in the committee of supply and followed by a final vote.
One of the questions that has been identified by your committee clerk is whether all estimates are reviewed, or whether some are deemed to have been reported. I can advise you that they are all in fact considered by either a policy field committee or the committee of supply for three hours—again, for each department—or two hours in the case of the executive council. All of these departments are reported on before the final vote in the process.
There are some specific rules that apply to a committee consideration of main estimates, and they are as follows. Consideration begins with the minister's opening remarks. The official opposition is then entitled to the next hour for questions, and then there are two 20-minute blocks that belong to other opposition members. It's anticipated that this allocation may change, given the results of the last election. We now have an increase in the number of recognized opposition parties.
Unlike at other committee meetings, department officials are not permitted to address the committee, only the minister is. There's no voting that occurs during consideration of estimates. Amendments may be presented, but the votes defer to the date for the final vote on the estimates in the committee of supply.
In theory, once we get to the day for the final vote there may be a single vote on all of the government estimates, but this may be varied by any member who can request on one day's notice that the estimates of a particular department be voted separately. The other votes that could occur would be votes on amendments that had been presented during committee consideration.
Finally, the types of votes that are presented in the main estimates fall into three different categories. The first is expense or operating expense. The second is capital investment, and the third is non-budgetary disbursements. The practice of having these three categories of votes has been in place in Alberta since 1993. Prior to that time, voting was done on a program by program basis.
Just to close the loop in the cycle, once the vote on the main estimates occurs, the committee of supply rises and reports to the House, and the report from the committee of supply details each approved expenditure for all departments.
One of the matters that has been raised with us was whether parliamentarians can reallocate funds between votes. In Alberta that would not be an option that's available. That would be considered a transfer of funds, which would necessitate a supplementary supply estimate.
Finally to close the loop, following the committee of supply's report, the introduction of the appropriation bill takes place, typically the next sitting day. The bill then proceeds one stage per sitting day. So in a typical year the appropriation bill will receive royal assent approximately one week after the vote on the estimates.
That concludes my remarks, Mr. Chair, and we'd be pleased to answer any questions you or the committee have.
I would like to thank our witnesses.
I'm going to take more time to formulate my question and put it in layman's terms. We are used to hearing longer answers, but we will manage.
Earlier, you said something interesting about the budget. I know that you cannot give your opinion about certain issues. Moreover, I am not going to ask you to look back in time or even to talk about the current situation, but rather to look ahead.
When the budget is tabled, it is done so in a centralized manner supposedly to speed things up. However, you said that, in Alberta, in the past, the budget had been divided into three parts.
Would it be technically possible to divide the budget into several sections? Would we slow things down tremendously if we were to consider the budget item by item? Is that the case in Alberta, or would that be the case for everyone in general?
Indeed, we have a problem. When a budget is presented as one document, we have to give our opinion on the document in its entirety, without being able to examine the content, when in fact this content has a great deal of impact. We are seeing this trend more and more. It is like a Trojan horse. By the time we realize that the budget contains some bad surprises that could have been corrected at the outset, had there been an item-by-item consideration, we are already working on the next budget, the following year.
What are your thoughts on the matter?
It's a real privilege to be here. I welcome this opportunity to share some of my opinions that go back to the days of being a parliamentary intern in '72, which I should hasten to add was 1972, not 1872. So it's good to be here.
I've given the committee a short submission consisting of two parts: a diagnosis and a prescription. I've given your crack committee staff a longer, more academic paper on the Australian supply and estimates process, because I know that you've been listening to witnesses from other jurisdictions.
I intend to be very brief in these opening remarks and leave the maximum amount of time for questions and discussion with the committee members. I look forward to that very much.
I begin my submission with the observation that there has never been a golden era when Parliament was effective in examining the spending proposals of government in any systematic, comprehensive, and in-depth manner. The fact is that Canada's Parliament is not exceptional in that regard. Legislatures around the world find it difficult to cope with the complexities of modern public finance and using the estimates process to hold the political executive and the permanent bureaucracy accountable for spending to ensure they spend in ways that add value to Canadian society.
The exception to that general problem of legislatures coping with public finance matters is the U.S. Congress. In my submission I say to be careful what you wish for, because Congress has its own problems in ensuring that public finances are well managed.
The deficiencies in Canada's estimates process are caused by a number of factors. I'll briefly list them in a general way, and if you wish, I can go back and offer more detailed comments on each broad set of factors.
The first set is constitutional and legal factors, and this is familiar to committee members. All spending must originate with the crown making spending proposals based on the recommendations of responsible ministers. The passage of the estimates is seen to be a confidence convention. There are a number of other sort of conventions and rules that are constitutional and legal in nature.
The second source of limits for the parliamentary estimates process is procedural limits. For example, committees cannot change votes except to eliminate or reduce them. They can't add to spending. There were rules in the past, which I think no longer apply, that committees shouldn't make substantive recommendations, and should limit themselves to comments and actions or proposals related to the estimates themselves so there are procedural limits.
There is the factor of time. There is a short time period between the tabling of the estimates and May 30, when they have to be reported back to the House, so the committees have to rush through the estimates if they propose to examine them in any way. Most of the estimates are deemed to be reported upon when the deadline arrives.
A fourth factor is informational and formatting issues around the presentation of financial information. You can't really say that you lack for information, because a mountain of information is tabled in Parliament annually. There is a virtual alphabet soup of documents presented to you, whether we're talking about reports on plans and priorities, departmental performance reports, MAF reports, audit reports—the list goes on and on. You have not only multiple documents, but also multiple departments and agencies.
There are informational and format questions that give rise to problems, because most of these documents, frankly, go unread. Somebody needs to do a cost-effectiveness analysis on producing all of this information, at least for purposes of external accountability. One of the problems is that many of those documents are produced by bureaucrats for fellow bureaucrats inside the government.
I think the biggest source of problems is my fifth one, and that's the political, cultural, and attitudinal problems or factors. A fundamental fact of Parliament is that it's dominated by competitive, disciplined political parties, and reforms that ignore or seek to stifle partisanship are bound to have limited success in my view.
I say in my document that fixing the supply process is not mainly about finding the right rules for how estimates will be voted, the optimal number of committees, the appropriate staffing for such committees, and the best formats for presenting evidence to such committees. These things matter, but only at the margin. What is more important is a bargain that recognizes the divergent interests of the competitive parties represented in Parliament.
It seems to me that one of the things we have to look at more seriously is how to create the right set of incentives and disincentives to motivate more MPs to take their financial duties seriously. I talk about the way in which government and opposition MPs, the leadership of parties, and backbenchers in parties have different incentives to take this process seriously.
Most MPs see the work on estimates as an exercise in futility. They feel they can't change anything. Even in minority parliaments when your committee for example, the operations and estimates committee, has changed estimates, either for the Governor General or the Privy Council Office, it's usually been a symbolic victory and not one that is attempted very often. MPs also, it should be noted, tend to favour restraint in the abstract, and when it comes to their own constituencies, they are usually advocates for additional spending.
That's a summary of the diagnosis I offer.
The prescription is that I think you might be better off looking at a relatively large joint committee, a standing joint committee of the House of Commons and the Senate, and give it a title of something like “Government Finances and Public Administration” so that it's broader than the estimates in many ways. The committee could be perhaps 40 members. It might have a balance between a larger number of MPs and a smaller number of senators, recognizing that the House of Commons, at this stage at least, is the body that holds government responsible, in the sense that it can defeat governments if it so feels.
The mandate of this committee should be to examine government spending on a cyclical basis, perhaps over a five-year span, and in each year take a number of major departments and agencies and examine not only their spending but also performance reports and administrative issues that have surfaced from bodies like the Office of the Auditor General and so on. Rather than focus on the details of estimates, the committee would focus on the evidence of the success of policies and programs in delivering value to Canadian taxpayers.
The membership of this committee should be relatively permanent. There's too much mobility on the committees. MPs, particularly, need to settle into a committee. It would give them the opportunity to acquire the knowledge they need to understand government finances better. It would also allow the committee to plan its program of study and investigation over a number of years. Adding senators, I think, would be useful because senators [Inaudible--Editor]...at least until Mr. Harper gets his wish and has an elected Senate. The partisanship in Senate committees tends to be somewhat more muted than in House of Commons committees.
In the submission I recommend that staff support to the committee be provided by the Parliamentary Budget Office, which I note was launched on the basis of an unclear mandate. It was given an inappropriate organizational home in the Library of Parliament and, shortly after its creation, was drawn into the swirl of successive minority governments and nonstop campaigning within Parliament. All of this made the office and its leader, Kevin Page, the subject of controversy. He's a person with very strong opinions, obviously.
One thing that Mr. Page told a student of mine, who did a master's on the evolution of the Parliamentary Budget Office, is that his office had not done a very good job in assisting committees with examining the estimates. I think the office should create a designated division simply to serve the new joint committee that I'm recommending. This committee would then become the parliamentary home for the Parliamentary Budget Office. It's the committee to which the PBO would answer in explaining what it proposes to study and in submitting its own budgetary requirements on an annual basis.
I think the joint committee might divide itself, depending on how many members it has, into a number of smaller subcommittees and, over time, those subcommittees would develop specialized knowledge in the various domains of public policy.
You would really use your activities of studying to influence longer-range thinking of government. I say in my submission that there's nothing really all that magical about the lapse of 12 months in terms of government spending. Most government spending is done over multi-year horizons, and Parliament needs to become aligned with that sort of orientation.
To promote the cultural and attitudinal change I talked about would require endorsement by leaders of the parties represented in the House of Commons and Senate. You want to reduce the amount of partisan gamesmanship that goes on in this committee and allow MPs and senators on this joint committee to relate more to the evidence and to engage in a search for greater efficiency, effectiveness, and equity in public spending. My hope would be that this would be launched with the endorsement of all party leaders.
There's no guarantee that you'll bring about this cultural and attitudinal change. I supported the work done by the McGraw committee back in 1985 and the work done in 2003 when the late Ron Duhamel was involved in the reform of the supply process, and we had a debate about whether structural and procedural change produced attitudinal changes, or whether that relationship is reversed and attitudinal and cultural changes have to precede structural and procedural changes.
I think it's a bit of both, but unless the party leaders get on board and say they're prepared to allow their MPs to work with a minimum amount of partisanship, this won't work. Individual MPs and senators will have to recognize that this is a job for which there's not a lot of publicity and a lot of glamour. It's about contributing to sounder, better-quality government and getting value for tax money.
We know that the public respect for Parliament and its members is low. The esteem in which the institution is held is not as high as it used to be, and we have to get away from political gamesmanship and spend more time constructively inquiring about what works and what doesn't work.
Those are my opening comments, Mr. Chair. I'd be pleased to respond to questions and comments.
Thank you, Dr. Thomas.
I have to say, and I would probably be speaking for my party, that I don't think I'm very excited about your proposal to have the Senate there.
If you're talking about equal members and so forth, obviously there is going to be a disproportionate number of members from some parties and not from others. I find it odd that the Senate would be there, being a non-elected body, talking about this process of the passage of budgets and estimates in the House of Commons. I find that a little odd.
You're not the first to suggest that there should be continuity in this kind of committee—or super-committee, as Mr. Wallace suggested a while back. The problem is that it's out of our hands; at least, for four years it could be. But we can't guarantee that the members who are appointed will be around in the next election. Maybe you have to pick all young members. I don't know.
So it's a nice theory, but fortunately our processes continue to be democratic, and so long as they are, this is a bit of an anomaly.
I'd certainly have to agree with you, Dr. Thomas, that this is an area that takes a while to grasp. It would be helpful—and you would want—to pick people who really liked this kind of dialogue, going after the theory of better management of finances and so forth and not the niggly department-to-department matters.
I saw a bit of a contradiction in your comments about parliamentary budget officers, and I was encouraged by your comments today. In your article, which you kindly provided or our researchers found, “Parliamentary Scrutiny and Redress of Grievances”, which was very interesting, you seem to have a lot more cynicism about all of these advisory bodies established under the Accountability Act.
Could you elaborate a bit more? Do you see value in, for example, the office of the Parliamentary Budget Officer?
Let me just comment on the first two points.
The Senate does very useful work and I'm not one of those who say that the Senate is a completely useless institution. Most of its good work happens in committees, and in a book edited by Senator Joyal I make a case for the role that committees play in providing scrutiny of ongoing policies and programs. I think the Senate is a bit of an anachronism, being unelected, but the Senate is there. We pay for the Senate. We might as well get some value out of it. A body like the Senate national finance committee does good work. That's why I included them. It's hard, even in a House that's growing to 330 members, to find enough MPs interested in the dull, grinding work of understanding government finances to create a mega-super-committee with MPs alone.
As to the movement of MPs, you're right. We have to respect democracy, and we have a very high turnover, one of the highest of all western legislatures. About 45%, I think, are freshmen MPs after each election. So we lose a number of members who are building up experience, but the MPs add to that problem by moving around committees. At least, they used to do that a lot.
On the role of officers of Parliament, agents of Parliament, I think the document you're quoting from was actually a speech. I was entitled to be theatrical and be provocative, and that was my intention. But the PBO is there. I think if there is going to be a parliamentary budget officer, you have to find the right balance between giving him independence and giving him accountability, and you have to make him serve the committee rather than have the committee serve him. Sometimes rollovers will happen in the public accounts committee where the Auditor General, just by the force of his or her expertise and the depth of his or her capacity, can lead the committee down certain paths, and the committee doesn't do as much as it might to set its own agenda.
So I think the PBO needs to be put at the disposal of members of Parliament, and that's why I suggested it needs a place where it can come and answer for its budget on an annual basis. These people can develop into superheroes in their own minds. They get to point out the problems in government, and given a government the size of the Government of Canada, there will always be problems. So from the sidelines they can self-righteously criticize people in government for things that go wrong. But I think they have to answer for the judgments they make and do that in front of the elected representatives.
So I'm not entirely cynical. There was another committee on the past, present, and future of officers of Parliament where I set forth five structural conditions meant to ensure the right balance between independence and accountability.
It's very difficult. It's not like an organizational culture within an institution.
Parliament, as I say in my submission, doesn't really have a collective identity and a collective purpose. It's dominated by parties. Particularly in the last decade or two, we've almost been in a condition of a permanent election campaign. Therefore, opposition parties are looking for openings to challenge the governing party, and the government becomes defensive about its records and tries to spin the news about government activities to the best of its ability. There is no learning that goes on in those processes.
I've watched MPs sit on task forces and standing committees, special committees, and relate to the evidence, especially when we used to travel together more. They would come to a consensus in a broad, general way, and leave a lot of the narrow partisanship and more negative partisanship behind. Parties, seeing what Canadians are saying about the parliamentary process, how disappointed they are in the games that go on within Parliament, would actually reward members of Parliament who said, “I'm working on this committee alongside Liberals and New Democrats, the Conservative Party of Canada, and we're coming up with a consensus recommendation.”
Then there's a lot of pressure on ministers and on the public service to listen to that. Ministers can be held accountable by committees, and public servants who come to testify can be made to give fuller answers when the committee is working smoothly and effectively.
It has to come from the top, from the leadership of the parties. And it will take time. It's a slow process and won't happen overnight.
Then there's the other problem that the only time the media show up to witness a committee at work is when there's a scandal. That adds to the emphasis on looking for details that are negative in some way.
There's not an easy answer. It may be a matter of a turnover of MPs, with new MPs coming in. They may want to play a more meaningful role, not just standing in the House of Commons and delivering hard-hitting speeches but getting to actual work on the details of governing.
All right, we'll start with the Constitution. One of the constitutional principles is that all spending must originate with the crown. In other words, on the recommendation of responsible ministers in the cabinet, the government puts forward its spending plans through the office of the Governor General. Along with that, governments have treated the approval or not of their spending plans as a matter of confidence. So you can't vote against the budget or even vote against individual estimate items without the government raising the threat of that amounting to a matter of non-confidence, requiring their MPs to vote with the government. So that limits the parameters within which the committees can be creative in criticizing and trying to change public spending.
There's also the question of whether you would want to go to a system like the American system where very powerful committees in the U.S. Congress, especially on the Senate side as opposed to the House of Representatives side, regularly defeat the President's budget, change it, or delay it, which leads to deadlock and instability. Institutional buck-passing is the way I describe it. No one knows who's to blame, whether the President or some part of Congress. If you transferred some real power to committees to recommend changes, would you worry, would Canadians worry, about relatively inexperienced members of Parliament—perhaps not fully informed of the budgetary choices that have been made inside government, how difficult they were, and all the considerations that went into them—having the right to change that estimates in that way? I'm not saying that there's anything pure or totally rational about the way governments decide budgets, but I'm just saying that they have the whole public service behind them.
In terms of Australia, I gave the committee staff a long paper on the supply process in Australia. I interviewed members of its House of Representatives and elected Senate. The main body in which the government is held accountable in the Australian political system is the Australian Senate, which is elected on a system of proportional representation, which has mainly meant that there's never been a government majority in the Senate. Then they have their calendar year for Parliament blocked out into two main periods, May and October, when Senate committees go to work to examine the estimates. The minister shows up first and spends a day, maybe, or half a day, in front of the committee. They go on from early in the morning, literally 8 o'clock in the morning, for the whole day. The Senate is not sitting at this time. They take this whole block of time over two weeks and they run through departments of government.
There are two main accountability documents in Australia. One is called the parliamentary budget statement, and the second one is called the annual report. The parliamentary budget statement, PBS, gets most of the attention. Public servants are grilled when they come before those committees. There's no government majority. The rules of engagement are better defined: What senators can ask public servants is better defined, as well as what public servants are allowed to answer. I think that it might be helpful in the Canadian context to have clearer rules around that. In Australia, public servants at the senior level, with the permission of their minister, can actually go to brief party caucuses, so there's more informed debate. It's not perfect and Australians are critical of it, but compared to what I've studied in Canada, they make a more meaningful effort and provide scrutiny of the spending plans of governments.
This is a subject near and dear to my heart. I'm really interested in how we produce useful information for members of legislatures.
What is relevant information is partly in the eye of the beholder. You have 308 members of Parliament working in different parties. Their perspectives are somewhat different. So what one person considers relevant at one point in time in one committee setting will be quite different from another.
There's even the question of what constitutes quality information. What you regard as a quality piece of analysis I might disagree with, because we come from different perspectives and so on. In Australia, the committees commission research, and the public service often delivers research.
Most of the reports we were talking about earlier are produced mainly for internal accountability purposes, including being filed with the Treasury Board Secretariat, which is the central budgetary agency of government. They aren't produced, in the first instance, for parliamentarians. So how do you serve different audiences and ensure that you get just the right information, in the right amount, in the right format into the right hands?
I mentioned the parliamentary budget statements. The second accountability document for parliament is called the annual report. The characteristic of the annual report that makes it most useful to parliamentarians is that it has a narrative quality to it. The public servants are required to tell the performance story of the department. What did they plan to spend the money on? Why did they under-spend or overspend? What targets did they have in terms of outputs, goods and services, and programs they promised to deliver? Do they have any outcomes data? Did they make a change within society?
All of that is contained within the annual reports. They've been producing annual reports for a long period of time, so they've gotten used to serving parliamentarians.
Our system is still in its relative infancy, and there's too much information. I think the phrase I used is that MPs are stuffed with information and starved for understanding. You have this mountain of information come at you, and you just don't know what to do with it.