Thank you very much, Mr. Chairman.
I don't have a formal presentation. I just made a few notes. You have an hour, so I thought I would spare you the Magna Carta evolution of supply. However, if you want, though, I gave some of that testimony to the precursors of this committee in September 1995 and February 1997. I'm sure your very adept researchers can quickly find that evidence, which summarizes the evolution of the business of supply since Confederation.
For today, what I thought I would do is address a couple of the issues or trends that I've seen emerging from the testimony you've already adduced from expert witnesses, academics, and otherwise, and from the Parliamentary Budget Officer.
Maybe what I'm now calling a couple of myths need to be demystified, and I also have a proposal for you, a very practical proposal that is doable within the existing Standing Orders. It comes in two parts, one with no money and one with new money. I know that new money is a delicate thing these days, but I believe that it might even be a sound investment.
First of all,
the testimony provided by Professor Franks, Mr. Wehner and the Parliamentary Budget Officer basically seem to revolve around the perception that members have insufficient information, that the information they do have is irrelevant and that the members' ability to consider the information submitted to Parliament is limited.
The second point raised is the following. Budgetary estimates are tabled on March 1. Everything is deemed adopted by May 31, at the latest. However, Parliament is adjourned for three weeks during that period, leaving the committee very little time for an expenditure review. That said, analyses have been conducted on the flexibility the executive branch gave itself recently in terms of approving vote transfers.
First let me address the deemed reporting issue. I know that Mr. McCallum recently has written an article in the Canadian Parliamentary Review and recommends that the standing order be changed.
The deemed reporting concept in the Standing Orders is one of balance. To simply remove it would throw the whole supply process out of balance, because when it was adopted in 1968 as an interim standing order, and then in the early seventies as a permanent standing order, with it came 25 supply days as a trade-off to the opposition: 25 days where the opposition could set down a motion—some of them of confidence and some of them not—and set the agenda. That was the compensation for having lost those supply days in the committee of the whole.
In return, the government was guaranteed its supply by no later than June 30. That was the trade-off. To now remove that and not reconsider the other I think would throw the whole supply process out of balance.
The other what I'll call a myth—and I don't want to offend anybody at the table, Mr. Chairman—is that the documents you get are not complete or are not enough. Well, I think they are. I think it's plenty. I think the improvements that were made in the eighties, and the progressive tinkering at the margins with the concepts of plans and priorities reports, the departmental performance reports, combined with the tabling of the estimates, if you want, at a high level on March 1....
Those reports, read together—all three parts—are more than enough. I've been on the drafting side of plans and priorities reports and I've had to argue with Treasury Board about program architecture and all that kind of stuff. It is quite detailed, and maybe too detailed in some cases, but I think you have all the information that is required to do a proper study of the estimates.
The other myth is the fact that committees cannot make reports on estimates to the House with substantive recommendations. The PBO referred to a 1979 ruling that changed this. Actually, it wasn't 1979; it was June 18, 1973, and it was by Speaker Lamoureux, who said for the first time on estimates that committees have only inherited the old powers of the Committee of Supply to adopt, negative, or reduce, and therefore a substantive recommendation in a report was out of order, since the Committee of Supply didn't have that power.
However, that ruling is moot now, in my view, because you have Standing Order 108. If you look at Standing Order 108, you'll see that all the expenditure plans of the government, by department, are permanently before the committee, yours and the others. So as for saying that now you cannot make substantive recommendations to the government on matters of expense or supply, you might not be able to do it within a report on the estimates, but you have ample access to make all the recommendations you like. So anyone who is now hanging on to that Speaker's ruling of 1973 I think is dated, if I can put it that way.
Finally, there is the PBO. You will remember this, Mr. Chairman, because you were on that committee when Bill , the Federal Accountability Act, was before committee. I was invited as an expert witness. I wasn't very supportive of the PBO concept. I think I called it “congressional creep” when you have a tendency to want to borrow, out of other political cultures and other constitutional cultures, elements that we think may fit.
I caution you about Australia and New Zealand on that when you hear your witnesses next week, who are my two very good friends, Harry Evans and David McGee. Those are different political cultures. You have a senate that is elected by proportional representation in Australia, and you have a unicameral system in New Zealand, and a very transparent style of government in terms of access to information, cabinet confidences, and all that sort of thing.
The PBO, I argued at the committee, should have an estimates mandate, and the committee agreed. Indeed, the act was amended, and it was given an estimates mandate. I don't think it has done much with it, and I don't think committees have done much in terms of exploiting it.
So there is a bit of a congressional influence there, without the money, without the size, and without the staff. Again, it is in the Library, and in the wrong place, as far as I'm concerned, as I said at the time.
Those are the myths I wanted to put on the table and hopefully give you some insight on my thinking, which is that I don't believe they are impediments to the study of estimates.
If I may, I'll make a proposal. It comes from something I haven't seen in your committee document. It's an article written by two former MPs, Ron Huntington and Claude-André Lachance, back in the early eighties, when this very study was going on and following some 10 to 12 years of experience with the estimates going to all committees. They came up with a couple of concepts about macro-estimates committees, which would be charged with just that. My proposal to you flows from there.
MPs are spenders; they're not savers. You all come here because you have an agenda. Very few of you got elected with the promise that you would reduce the estimates of the government.
It's a challenge for the average MP to get into the estimates, when going in, at the front end, you can't do anything much about them. You can reduce them or you can negative them. So over the last 40 years, MPs have given up. The opening line of the last report, in 2003, from the Alcock committee, was a quote from me, which basically said that I felt that the House had abandoned its constitutional responsibility to review supply. I didn't know they were going to use that as the opening line, but they did.
Here is what I'm proposing. This committee should get a new mandate, an expanded mandate. It should be called something else. It could keep government operations as part of its title, but I think it should be called the appropriations committee. The mandate should be in the Standing Orders, and in the Standing Orders, there should be an instruction to this committee to table in the House, within 60 days of its appointment, a five-year plan of study and review of government appropriations and estimates.
You have to look to the past to make sense of what is being proposed. You can't say that the estimates just evaporate once they're deemed reported. They don't. They're there. They exist, and you have access to them.
The composition of the committee should be made permanent. Now, let's be realistic. There are only 308 MPs. There are too many committees and not enough MPs. There are not enough committee rooms. There are all kinds of issues. There's the block system, whereby you can only meet twice a week and you can't meet out of your.... Those are all impediments that are not necessarily relevant today, but they contribute to it.
The whips are the major problem in committees and have been since the nineties, when the Liberals returned to power. Mr. Mulroney was much more generous with power for committees and their membership. Some of you may remember Don Blenkarn, who was chair of the finance committee for years and years. When they tried to take him out, there was a revolt in the House, and not just by the opposition.
The membership should be made permanent. By that I mean it should be for the duration of a session, and the whips should not be allowed to intervene. The chair should be elected for the duration of the Parliament, as the Deputy Speaker is. The Deputy Speaker is elected for the duration of the Parliament.
The chairs should come from the opposition, as it is, and the vice-chairs should come from the government. The vice-chairs should be appointed for the duration of Parliament as well. That way, over time, if the House switches sides, you have experience in vice-chairs on one side of the House and experience in chairs on the other side of the House, and there could be continuity in the role of that committee.
They should have the usual powers to send papers and persons to report to the House with recommendations, and they should have the power to appoint subcommittees. Each vice-chair could have a subcommittee of his or her own as part of the five-year review plan. That plan would be published and tabled in the House. The bureaucracy would know exactly what's coming down the pipe in terms of macro-studies.
Concurrently, the estimates every year would be referred to the committees for the usual round of the review of supply process.
The statutory instruments committee—some of you may not have discovered this yet—has access to the House for debate every Wednesday at one o'clock. It doesn't happen very often. They have the power to revoke a regulation. The minister shows up, committee of the whole style, and he must explain why he will not revoke that regulation. If he doesn't show up, it's automatically revoked.
So you have an hour that would not interfere with government time. It's there, from 1:00 to 2:00. It's committee time. It's never used. This committee should have access to that hour, and your reports with recommendations should be subject, mano-a-mano with the minister on the floor, committee of the whole style—not 40 bureaucrats, but maybe the deputy minister sitting in front of his minister advising him—as to why the government accepts or doesn't accept the recommendations of a particular study.
There could be a vote. It doesn't have to be confidence, but there could be a vote. And it's deferrable anyway, so there's no surprise to the government. That way, I think, you would revitalize the process, bring MPs back into it in terms of an interest. Bring the minister in on it. Most ministers come to committee on estimates, make a perfunctory statement, and then they turn it over to the accounting officer, deputy minister, and you may never see the minister again.
The PBO should be the core staff of this committee. The PBO should be moved out of the library into the committees branch, and made a full-fledged officer of the House. Half of his budget—whatever it is today, I have no idea—should be spendable by this committee on studies, and the other half by other committees on estimates, as they apply for it. Take it out of the reach of the Liaison Committee, which has just become a tool for the whip to control where committees are going and how much they're spending, and not just in this government. The previous government did the same thing, going back to the Chrétien days.
The Board of Internal Economy just cut $3.8 million out of committee spending, and that's too bad. It's tragic, particularly that the Gagliano plan in the 1990s cut out $4 million. So it's not just one government here. There's an evolution. There's at least $12 million of missing money in committee spending over the last decade, which could be spent on things like the PBO and committee study of estimates.
This first part is all doable in the Standing Orders. You don't have to ask the government's permission to do this. All you have to do is change it. It takes leadership on the government leader's side, but it's all standing order changes. You don't have to go back and change the bureaucracy's performance, the budget timing.... All of that is doable in the Standing Orders.
If you want to put some new money in it, pay the chairman the same as the deputy speaker. If the chairperson is going to be there for the duration of the Parliament, there's only one way—
I can comment on both issues.
On the deemed reported issue, I think it should stay in the Standing Orders. Not for the reasons I said, but you're still under the gun to adopt, reduce, or negative within that period. After that, they're gone from the committee in terms of the capacity to reduce or in fact adopt them.
I think that's a necessary dynamic that is held over from the old committee of supply. As I said, on June 1, under Standing Order 108, you can pick up exactly where you left off on the 31st. The only thing you don't have before you is the capacity to reduce them again. They're gone.
The substantive part of the estimates is done before the committee. In terms of continuing to influence the process—that's why I call it a myth that somehow they evaporate on the 31st of May.
On the second component to your question, the budget cycle, if the committee is considering looking at changing the larger components of budget-making in Canada, chances are your report is going to go the same way that the other two went.
I'm not an advocate of the budget being tabled, and then the mains tabled to reflect the budget. The budget in Westminster models, particularly in Canada, in our culture, is really a policy statement by the government on what it intends to do in the next cycle. The mains that are tabled on the first of March are largely a reflection of the last budget. I've never done an analysis, but I would say that it would be 60% or 70% of the last budget.
The government has the capacity to come back to Parliament—in those three (A)s, (B)s, and (C)s—to alter what it tabled on the first of March against any new initiatives launched in the budget. So that comes before the House again. To me, it's workable.
It might be neat to have nice little rows on a piece of paper that show exactly how everything fits, but I think the reality of running a country is not the reality of running a corporation. Whether it's accrual or cash, those kinds of issues don't matter much to parliamentarians.
Government is there and it is accountable to the House. You're to hold it accountable. It has the spending initiative. To me, we have all of the tools to do it properly. I don't propose that having a budget that is clean to the estimates is desirable. I don't think it's possible either.
Mr. Chairman, I thank you for the invitation to appear before the Standing Committee on Government Operations and Estimates today to present on the estimates process by which Parliament reviews the estimates, or funds, requested by the government.
It is an honour for me to be here. This is the nation’s House, where the nation’s business is transacted, and it is a pleasure to be invited to appear before you.
In a democracy, the people have every right to expect that their taxes are used in a manner that is acceptable to the people. The House of Commons has the responsibility to represent the wishes and desires of the people and to ensure, by way of approval of the estimates, that government spending is prudent and in the best interests of the people. Since nothing happens without spending, it makes the approval of the business of supply the most important role of the House of Commons.
Control of the public purse by Parliament has its origins in the Magna Carta signed by King John in 1215, when the king agreed to accept the “common counsel of our realm” when levying and assessing an aid or a scutage—scutage being what we call taxes today. Parliament has had control of the public purse down through the ages, and it's still very much at the core of our democratic government.
Today, Standing Order 80 clearly indicates that the House of Commons still retains that authority by stating: “All aids and supplies granted to the Sovereign by the Parliament of Canada are the sole gift of the House of Commons”.
That puts it in perspective, Mr. Chairman. The government has no money except that which is given by the House of Commons.
For the fiscal year ended March 31, 2011, according to the financial statements audited by the Auditor General, the government spent $270.5 billion dollars, granted by the House of Commons by way of approval of supply.
That volume of spending poses a quandary for the members of Parliament. Given that amount and the complexity of proposed spending by the government, how are members supposed to be able to scrutinize it properly? If you want to look at the detail, the mountain of paper would be so big that you would not know where to start. If you want a manageable amount of paper, the overview contains so little detail that there are no apparent questions to ask.
In addition to that, of course, the government considers the estimates to be a matter of confidence. What backbencher wants to carry the responsibility of triggering an election?
It doesn't stop there. Let us suppose that a parliamentary committee recommended a reduction in the estimates. First, it can only be debated and voted on a supply day. Should it pass and the estimates be reduced, the government could consider it a loss of confidence and trigger an election.
However, even without a supply day vote, a reduction recommended by a committee would cause the President of the Treasury Board to introduce a motion to restore or reinstate the original amount if the proposed reduction was not acceptable to the government. The vote on the motion to restore or reinstate the government’s request for funds is a vote on an opposed item, and the adoption of this motion overrides the committee’s recommended reduction, which means nothing will happen.
In June 1995, the Standing Committee on Procedure and House Affairs created a subcommittee on the business of supply, and I was privileged to sit on that committee. The report, of which I believe you all have copies, is I think the best and most comprehensive report on the business of supply in Canada in modern times.
I would like, Mr. Chairman, to acknowledge Mr. Brian O’Neal of the Library of Parliament, who was the principal researcher for the subcommittee and whose great work contributed immensely to the quality of the report.
In addition to placing the business of supply in an historical perspective, the recommendations of the report can be broken down into six areas: one, the creation of an estimates committee with overarching authority on the business of supply; two, the confidence convention and the business of supply; three, granting committees the capacity to reallocate up to 5% within the department under review; four, long-term cyclical reviews of statutory spending, which we call program spending; five, review of crown corporations that do not report through a minister; and six, a review of tax expenditures and loan guarantees.
The subcommittee, Mr. Chairman, reported back to the Standing Committee on Procedure and House Affairs with this report, which was adopted by the Standing Committee on Procedure and House Affairs in late 1996 or early 1997. The report was subsequently tabled in the House of Commons, but the House was dissolved for an election in April 1997 and the report died on the order paper. I was unable to have it resurrected by the Standing Committee on Procedure and House Affairs in the subsequent Parliament, therefore I tabled a private member’s motion to adopt the report.
The private member’s motion was adopted by the House, but since the subcommittee report had not been tabled in that Parliament, the motion was advisory rather than an order of the House, and no action was taken.
However, if you look at Standing Order 108(3)(c), you will see that the first recommendation of the subcommittee—that there be an estimates committee—has already taken place. That is why you are here today sitting as the government operations and estimates committee.
I believe it was in 2002 when I became aware there were to be changes to the committee mandates. I therefore lobbied for the creation of the estimates committee with a mandate according to the subcommittee report, and here you are.
If you study the mandate of the estimates committee in Standing Order 108(3)(c), you will see that it is virtually identical to recommendations of the subcommittee, so that part of the work has been done. As far as I am aware, however, the estimates committee has yet to make full use of the mandate in the Standing Orders to pick up on the business of supply or examine government spending that is outside the estimates. I believe that approximately 30% of total government spending is voted on through the estimates. The rest is statutory expenditures authorized as program spending in legislation by the House of Commons.
With the new mandate, the estimates committee can now look and examine spending right across government. You will find in the subcommittee report—recommendations 35 to 39—a proposal for the estimates committee to examine statutory spending on a cyclical basis using the concept of program evaluation. All government programs should be evaluated at least once every ten years to: one, articulate the public policy objectives of the statutory program; two, decide whether or not these objectives are being met; three, whether or not the program is being effectively managed; and four, whether there are alternative means of meeting the same policy objectives.
These points are virtually identical to a private member’s bill that I had on the order paper for a number of years, which never made it to the House for debate. The point is that the estimates committee now has the authority under Standing Order 108(3)(c)(x) to examine statutory expenditures. To do so, it can ask the House to request that the government conduct program evaluations as outlined above to assist the committee in its work.
The estimates committee can also look at loan guarantees and tax expenditures that do not show up anywhere in the financial statements, and crown corporations that do not report to any other committee. These can represent huge sums of money and important public policy; therefore, the House needs some way to scrutinize them. That is the role of the estimates committee. The Public Service Commission, which is independent of government and therefore cannot report to the House through a minister, now reports directly to the House and is referred to the estimates committee.
The big item is the consideration of the estimates by Parliament. The most important function of Parliament—control of the public purse—is not even given a perfunctory examination. Many members of Parliament don’t understand the process, and therefore stay with more politically rewarding agendas. The big problems are how do you understand this mountain of paper; and if you did understand the paperwork and wanted to make a change, the Standing Orders and the confidence convention prevent you from doing so. Based on the premise that there is no gain for the pain, the estimates are left untouched and a mystery to many. Supply days are for political football with never a mention of supply.
When I arrived here in 1993, the last supply day in June used to be a full-day debate on the estimates, but even that was changed so that the debate on the estimates does not start until 6:30 p.m. and finishes at 10 o'clock. That's $270.5 billion dollars fully considered in three and a half hours. Pretty soon the House will be examining the estimates at the rate of $100 billion per hour, which really is a sad reflection on the state of our democracy.
If you read the report carefully, you will find that the subcommittee suggests a methodology by which House of Commons committees can recommend a reallocation of up to 5% within a department, and even reductions in the estimates without triggering the confidence convention. The report sets out a clear timetable for consideration of the estimates by the committees, and if a House committee recommends a change or a reduction, they must give their reasons for doing so. In response, the President of the Treasury Board can either accept or reject the committee's proposals.
If the Treasury Board accepts the committee's proposals, a modified royal recommendation can be tabled. However, if the committee recommendation is rejected, reasons must be given. This should lead to a reasoned debate in the House when the estimates are debated. It would be nice, of course, Mr. Chairman, if the Standing Orders were changed to allow more than three and a half hours of debate in the House.
Regardless of the issue, if you change the motivators, you will change the results. Supply days have become political, because MPs cannot change the endgame. If you allowed a process whereby estimates could be reduced, then I would hope that MPs would take the estimates more seriously and would hold a number of serious meetings on the issue with senior department officials.
Now, Mr. Chair, if I can change the topic slightly, I will talk about the plans and priorities documents themselves.
I sat on a committee that revamped the old part III documents into the plans and priorities documents, which presented the proposed spending for the coming year within future projections going out three years. This was something new.
The committee also recommended the introduction of departmental performance reports, tabled by the government in the fall. These two documents, plans and priorities in the spring, which are forward-looking, and the departmental performance reports, the DPRs, in the fall, which report past experience, should present the information in a similar manner, the plans and priorities having three years going forward and the DPRs having three years of historical information.
Unfortunately, Mr. Chairman, I saw these DPRs being what I called self-serving fluff, without real substance. I therefore wanted two DPRs selected at random each year for audit by the Auditor General. This way, we would know if the DPRs were really telling the story within the departments.
The Auditor General tabled a report in Parliament in 2007, I believe, explaining the methodology by which DPRs could be audited. Since I have been gone for a few years, I am not sure if the Auditor General has, in fact, audited some of these DPRs.
Mr. Chairman, the government operations and estimates committee has a wide-ranging mandate, and I hope this committee will utilize that mandate fully to make the examination of the estimates by Parliament a meaningful exercise.
It is why Parliament came into being, and control of the public purse remains its most important function.
I thank you, Mr. Chair.