Thank you, Mr. Chair. I'm delighted to be here with you tonight, and with members of the committee.
We're going to be focusing tonight on supplementary estimates (C). I look forward to the discussion.
The mandate of this committee is to study the effectiveness and proper functioning of government operations, the estimates process, as well as the expenditure plans of central departments and agencies.
The Treasury Board is quite central to the work of this committee, so I'm looking forward to having a good working relationship with members of this committee. I'm delighted to be here tonight with Joyce Murray, our parliamentary secretary; Bill Matthews, the Comptroller General of Canada; Brian Pagan, the assistant secretary of the expenditure management sector at TBS; and, Renée Lafontaine, the assistant secretary, corporate services sector, and chief financial officer.
After my remarks, we'd be happy to take any questions you may have.
Let me first talk about the overall estimates process.
As you know, the government prepares estimates to request Parliament's authority to spend public funds. The slide on page 3 shows this process.
I believe each of your offices was provided with a deck that has that information.
The main estimates and the supplementary estimates (A), (B), and (C) provide information on the planned spending for each department and agency.
Main estimates must be tabled in the House of Commons no later than March 1.
The supplementary estimates present information to Parliament on spending that was either not sufficiently developed in time for inclusion in the main estimates, or that has since been refined to account for new developments in programs or services.
Later in my remarks I would like to get back broadly to the estimates process to highlight how we believe it could be improved.
I would like to turn now to government-wide supplementary estimates (C). I want to put these estimates into context by going back to the 2015-16 supplementary estimates (B), which are presented to the committee of the whole in December.
Giving the timing of the election in October of last year, the fall parliamentary session opened much later than usual, and most parliamentary committees had not yet been struck.
Out of respect for the newly formed Parliament, the fall supplementary estimates (B) only included the most urgent items that could not be temporarily cash-managed within existing authorities. As a result, there are more items in the supplementary estimates (C) tabled on February 19 than we would normally see.
The supplementary estimates (C) provide information to support the government's request for Parliament to approve $2.8 billion in voted appropriations for 58 organizations. These funds are needed to continue government programs and initiatives.
Page 4 of the deck highlights major items over $100 million, and they include $435 million to restore financial health to the service income security insurance plan, SISIP, which provides long-term disability benefits to Canadian Forces members.
There is also $216 million related to military support for Canada's assistance to Ukraine and to operations against the so-called Islamic State in Iraq and Syria.
There's $176 million for employment and social development to write off debts owed to the crown for unrecoverable Canada student loans.
There's $168 million for the green climate fund, $147 million for the resettlement of Syrian refugees, $121 million for Global Affairs Canada to cover foreign exchange adjustments and also some contributions to international organizations. There's $116 million for the construction of three offshore fisheries science vessels for the Canadian Coast Guard.
With respect to my own Treasury Board supplementary estimates, the department is seeking Parliament's authority for an additional $511.9 million. That includes the $435 million for disability benefits for Canadian Forces members, which I referenced earlier, SISIP. It also includes $34 million to establish a contingency to cover any increase in expenditures under the public service health care plan.
As well, there is $42.7 million in vote 1 for program expenditures, which mostly come from other government departments, to support Treasury Board-led government-wide back office transformation. This amount is offset by funding transferred from TBS to Shared Services Canada for IT infrastructure costs related to workplace renewal.
Finally, let me say a few words about transparency.
We are firmly committed to providing Parliamentarians with the information they need to monitor and review government spending. Right now the system does not enable us to reach this goal because of difficulties with the timeline. Given the timing issues, determined in part by House Standing Orders, the budget items for a given year are not reflected in the main estimates for the same year.
The current system is not transparent. The current system is, in my view, not functional or effective if the objective is that parliamentarians can hold government—I don't care which government, whether this government or a future government—to account. We aim to change that, and we look forward to working with you as part of this process.
The current system results in Parliament being asked to approve departmental spending plans without complete information on what the departments are actually planning to spend.
We understand that when it comes to the process of approving and reporting on government spending, this misalignment of the budget and estimates processes and the public accounts is an ongoing source of confusion for Parliament, the media, and Canadians. Some governments—we may hear more particulars later this evening—such as the Australian government have reformed their estimates and budget processes in a way that is more rational and effective if the objective is for Parliament to be given the information it needs to do its job.
These are problems that make it much more difficult for the Parliament of Canada, all members of Parliament regardless of party, to scrutinize government spending. Simply sequencing the main estimates so that they're presented to Parliament after the budget rather than before is, I believe, an important first step to better providing more complete and useful information to Parliament.
I want to work closely with parliamentarians and other key stakeholders and experts to achieve greater transparency and would welcome an opportunity to engage this committee. In fact, a few weeks ago we had a session for parliamentarians of all parties. MPs and senators from all parties were there to discuss potential opportunities to reform the budget and estimates process. Over 70 parliamentarians participated in that.
My officials are currently preparing a discussion paper on the subject of estimates alignment, which we'll be able to share with this committee. I'd welcome the opportunity to return in the future to have a more fulsome discussion on that. I know committees set their own agendas, but we would really appreciate your input on this in terms of looking at models that work better than the one we have now and ways we can improve accountability.
We've already taken some concrete steps to improve transparency in these supplementary estimates by reporting on government lapses.
I draw your attention to page 6 of the presentation. For the first time, there is actually now an online annex. You can go to the Treasury Board website to the supplementary estimates. There's an online annex to the supplementary estimates, which provides Parliament with an early indication of the lapses expected for this fiscal year. We can discuss this further.
I know you want to talk about frozen allotments. I know that's exciting. Lapses and frozen allotments are something that get all of us really excited. It is an important issue and we can return to that.
I will tell you that it was a significant step to actually make public online this annex that lists the frozen allotments. This is a significant step forward that was recognized by the parliamentary budget officer, who said:
The publication of these frozen allotments a full ten months prior to the Public Accounts of Canada represents an important increase in fiscal transparency, ensuring that parliamentarians are on a less unequal footing with the Government.
To paraphrase, it puts you on more equal footing, to eliminate a double negative.
We appreciate the support of the parliamentary budget office on this. As we move forward, we intend on taking further steps to provide more details and more useful information in a more useful format to parliamentarians.
On that note, I'll conclude my remarks. I look forward to our discussion this evening, Mr. Chair and members of this committee.
Thank you, Minister Brison, for being here. I was looking at your mandate letter and you have a huge mandate to fulfill. You have 11 priorities. I know that your goal is to lead the management agenda of the government.
One of the things you talked about is transparency and accountability. I appreciate the fact that you're trying to align both the estimates and the budget process. I was looking at annex B, which talks about cash versus accrual accounting. It confuses the living daylights when your public accounts are in a cash basis and something else is in an accrual basis. While your department is looking at things around making the cycles similar, could we please look at accrual accounting because those are the international financial standards, and accountants read financial statements that way and it's easy to explain.
Treasury Board is requesting $43 million-plus for the back office transformation initiative. My question would be about your desire to make operations move toward information technology, so that data is available, open, etc.
What are some of the challenges that Treasury Board will face, or has faced, as it moves toward that back office transformation? How can we avoid the problems that Shared Services is facing, for example, where the RFP process is not very transparent sometimes or it's not very well done?
I know that within your mandate you have to work to establish new performance standards with ministries like Public Services and Procurement. The minister will be coming tomorrow.
Could you give me some idea of how you're moving toward it, what challenges we face, and how can we make the process more accountable going forward?
I welcome you, your officials, and your parliamentary secretary to this Committee meeting, Mr. Minister. It is a pleasure to have you here. It is also heartening to know that you want to work collaboratively. You can count on us to play a constructive role as the opposition.
In regard to the changes, I would say that it will be important to convince us of the need for those changes. If I look at, for example—and that brings me to my question, Mr. Minister—the Update of Fiscal and Economic Projections, 2015, which gathers government data, it is clear that there is a positive budget balance of $1.9 billion in the 2014-15 fiscal year.
You are just starting a new term in office, Mr. Minister. At this point, it is important to know that we are on the right track. In your election platform, you made it clear that in the short term you would post a modest deficit of less than $10 billion over the next two fiscal years, to make investments in infrastructure and Canada's middle class. You expected to return to a balanced budget in 2019.
I see headlines here.
I have an article from February. The headline says, “Federal Deficits Could Exceed $52B Over 2 Years, If Liberals Keep Their Promises”.
Also, the headline from a National Bank study says, “Liberal deficits could total $90B after 4 years”.
Mr. Minister, you are the guardian of the taxpayer. You're the one who says “no”, and you're also the one who signs the cheques.
We would not want you to develop tendinitis from signing cheques, since the sun will set on your sunny ways and the taxpayers will be the ones to pay the price.
I do have a question. At the dawn of your new term in office, you play an important role. Are you prepared to meet the commitment you made in your platform, and respect the opposition parties, which, as you know, want a balanced budget? I would like to hear your thoughts on that, Mr. Minister.
Mr. Minister, it is true that during the economic crisis, our government made investments, with the agreement of the opposition parties, including the Liberals.
However, how can you claim you inherited a deficit? Data from the finance department shows that there was a budget surplus of $1.9 billion. At the time you took office, the budget was balanced. You committed to run modest deficits. Can you commit this evening, as president of the Treasury Board, to safeguard the interests of taxpayers? The taxpayers in my riding, as well as business people, are worried, Mr. Brison.
We must also think of our children. Sustainable development means that we will not saddle them with a system that is not sustainable. It has come to the point where we will be borrowing to buy groceries. This is what you will do, and this is not sustainable development.
You are the one who can act as the government's control valve. You can say that you have to meet your commitments. Indeed, this was in your platform, which was why you were elected. Of course, only 41% of the population voted for you, which means that 59% of the population said they did not want a deficit.
A $10-billion deficit is bad enough, but according to the headlines, you are on a slippery slope, Mr. . Are you ready to take on your role as guardian of taxpayers' interests and guardian of the commitments made by the Liberal Party during the last election campaign?
I repeat, at the end of the year we had a $1.9-billion budget surplus. I can table the document; it is available online, on the Finance Canada website.
There are a couple of things on this, David. I was joking a little bit with Mr. Blaney, but I don't want us to get into.... I've sat on committees that get too partisan and it's not a lot of fun.
On this, if you take a look at the “Fiscal Monitor” it's a picture in time of one month, one quarter, what have you, and it's like saying you check your bank account one day and you have $10,000 in it but you haven't paid your mortgage, you haven't paid your car payment. Or you think, I must have money in my account, I still have cheques left, kind of thing. It's not exactly a broader picture. It doesn't necessarily reflect the overall.
In terms of the frozen allotments in that question, I just want to give you some examples. These are funds that are approved by Parliament but the Treasury Board will restrict access to the monies for various reasons. I'll give you just a couple of examples.
One is, for instance, when there's a commitment to transfer dollars to another department or agency in exchange for a service. Another is the reprofiling to future years.
For instance, freezing allotments sometimes occurs with defence procurement where we set aside a certain amount of money with the expectation that money will be expended in the future. Again you can go to the Treasury Board website and see $5.1 billion laid out in terms of specific examples.
There's $2.8 billion of the frozen amounts that are funds that have been approved for reprofiling to future years. This includes $630 million in capital and operating funds for major defence projects like I mentioned; $675 million for claims settlements and other transfers supporting indigenous peoples.
I'll give you one example here that falls under Treasury Board, and that's $507 million for maternity and parental benefits and severance. That falls under “Treasury Board Central”. It's an important one because Treasury Board, by doing this centrally, takes that financial cost out of departments and agencies, and Treasury Board manages it. We do that because we believe there is a public good to not having departments and agencies making hiring decisions with limited budgets based on whether there's a possibility that somebody may need parental benefits or severance. There are some very important and progressive reasons why Treasury Board will manage some of these centrally.
We are managing government contingencies. This year, part of this for Treasury Board is $750 million of government contingencies that won't be allocated. There are carry-forwards from other years for operating capital budgets of $560 million. The rendering of this public “earlier in the budget” process, as the parliamentary budget officer has said, is a significant step in terms of transparency. It's an important step. It's just the beginning in terms of transparency and providing better information to parliamentarians and Canadians.
From marijuana to shipbuilding, we run the gamut here.
Let me begin by discussing the marijuana legislation. For many years the Government of Canada's approach has failed to reduce marijuana use, particularly among young people. Our responsibility is to implement an evidence-based approach.
The evidence is quite clear. Nobody is condoning, supporting, or promoting the use of marijuana, Mr. Blaney. We want a legal framework in laws that are more effective. Some countries that have chosen to focus efforts on health promotion, prevention, mental health services, and addiction services have found that to be more effective in reducing the use of drugs, marijuana being one, than simply a criminal justice approach. We can differ on the approach, but I want to be very clear, Mr. Blaney, that nobody here is advocating or promoting the use of marijuana.
You've raised a question on shipbuilding, and I think you may be speaking specifically to the three offshore fisheries science vessels, the $116 million.
As you know, we are committed to a national shipbuilding program across Canada. For the funding of the three offshore fisheries science vessels, I've been working most recently with Minister Tootoo. It's part of replacing the aging fleet, which is important.
What's important is you're managing shipbuilding, which falls broadly between Fisheries and Defence, and also Public Works, which is now Public Services and Procurement, and Industry. As a government we seek to balance Public Services and Procurement, my old department. Their job is to have an open and transparent process that gets the best value for taxpayers. Industry seeks to maximize industrial regional benefits, IRBs, most recently called ITBs, or technology benefits, and then the departments, Defence or Fisheries, have their needs in that.
Treasury Board overall plays a leadership and coordinating role and works with all departments and agencies to have the most efficient procurement processes that address those three government objectives: jobs for Canadians, value for tax dollars, and the best possible equipment for our military and our Coast Guard, as examples.