PACP Committee Report

Canadian Deputy Ministers as Accounting Officers

During its hearings on the Sponsorship Program, the Committee asked Mr. Quail what recourse was open to a deputy minister who found him or herself in disagreement with their minister. Mr. Quail replied that under those circumstances, a deputy could approach the Clerk of the Privy Council (7:1200) — a step he later indicated that he had not taken. (42:1650) [*] Asked if he had ever requested letters of direction from his minister if asked to do something he was not comfortable with, Mr. Quail answered in the negative. (7:1325) [*] When he spoke to the Committee, Arthur Kroeger also brought up the possibility that a deputy minister could sort out disagreements with a minister by going to the Clerk of the Privy Council who, in turn, could take the matter to the prime minister. (21:1600) [*]

While the Committee has been critical of the actions of the deputy minister concerning the Sponsorship Program, it recognizes that the available options are limited in the event of a disagreement between a deputy and a minister over operational and administrative decisions.

Deputy ministers work in a culture that places a high value on loyalty to their ministers and encourages them to be responsive to political direction. This is as it should be, but problems can arise if a minister were to instruct a deputy minister to take a course of action contrary to government administrative rules and procedures or were the minister to engage him/herself in areas of the deputy’s unique statutory responsibility. While a deputy can bring disagreements with their ministers over these kinds of matters to the attention of the Clerk of the Privy Council, this would appear to be at odds with the prevailing culture.

Furthermore, were a deputy minister to approach the Clerk, there is no certainty that disputes would be resolved in a satisfactory manner. In part, this lack of certainty arises from at least two roles performed by the Clerk: as the prime minister’s deputy minister and as the head of the public service — which create the potential for friction when the interests involved are dissimilar. And, as Dr. Franks observed, in the recent past the Clerk’s role of “representing the political to the bureaucratic has overwhelmed representing the bureaucratic to the political.” (43:1300) [*]

As indicated, the possibility of requesting written direction from a minister is also available to a deputy minister who has concerns about ministerial directives. But, this option too has a drawback. As Donald Savoie recently observed:

Nothing in the past has prevented deputy ministers from requesting their ministers to put in writing instructions when propriety is in question, but there has never been formal recognition of such a responsibility ^[21].

Mr. Savoie adds that: “Such recognition might well have strengthened the hand of the deputy minister of Public Works and Government Services,” ^[22] in the case of the Sponsorship Program.

The Committee asked Dr. Franks what might have happened had the accounting officer mechanism been operative at the time the Sponsorship Program was in effect. Dr. Franks replied that if Canada had had the accounting officer system,

The deputy minister would have objected to the way that the ministers proposed that the Sponsorship Program would be run. If the ministers insisted on running it that way, the deputy minister would have sent a letter, and that correspondence would immediately have gone to the Treasury Board and to the Auditor General. (13:1610)

Although this response is speculative, the Committee tends to agree with Dr. Franks. Had the deputy minister of Public Works and Government Services Canada been designated an accounting officer in the manner of his U.K. equivalents, he could have:

1. Discussed with his minister any objections he had to his minister’s proposed course of action concerning the Sponsorship Program.
2. Written a letter to the minister, in the event that the minister insisted on proceeding, setting forth his objections, explaining them, and informing the minister of his/her duty as accounting officer to inform the Clerk and the Auditor General if the minister chose to overrule his/her advice.
3. Received a letter from the minister directing him to proceed nevertheless.
4. Sent the relevant correspondence to the Auditor General ^[23].

If the deputy had had this procedure available to him and had not followed it in the case of the Sponsorship Program, then the responsibility for some of the more serious contraventions of the government’s rules and indeed for the disregard of key sections of the FAA would have been clearly his and he would have been held to account before the Public Accounts Committee. However, had he been able to follow the steps outlined above, the responsibility would have clearly been the minister’s — or it is quite conceivable that the minister would have refrained from proposing questionable courses of action altogether and many of the abuses now associated with the Sponsorship Program might never had occurred. In either event, the Public Accounts Committee would have been able to determine, with certainty, who was responsible for what went wrong with the Sponsorship Program, and to hold them to account.

Lastly, had the then deputy minister been designated an accounting officer, he would have been in a better position to manage the Department in a prudent and economical manner. In a broader sense, this would allow all deputy ministers to exercise their professional managerial skills to their fullest ability while at the same time continuing to serve their ministers. As Donald Savoie puts it, “[t]he accounting officer concept holds promise in that it can create an administrative space for career officials while respecting the doctrine of ministerial accountability ^[24]. Seen from the perspective of the public service as a whole, such an arrangement would enhance efforts to attract and retain the most able men and women to serve in government, and endow them with the flexibility they need to apply their skills to the fullest.

There are those who object to the adoption of the accounting officer concept in Canada, foremost among them, the Privy Council Office. But, as Dr. Franks testified, this objection is based on a misunderstanding of what the Lambert Commission, the McGrath Committee, and a host of others have proposed.

In response to the Lambert Commission’s recommendations, Privy Council Office concluded that:

[r]esponsibility shared tends to be responsibility shirked. Formal and direct accountability of officials to Parliament for administrative matters would divide the responsibility of ministers. … Experience indicates that such distinctions [between the policy responsibilities of ministers and the administrative responsibilities of deputy ministers] are artificial and that Parliament prefers not to recognize the informal division between the answerability of officials and of ministers ...

The attempt, .., to identify discrete areas of official accountability to Parliament would likely result in the further blurring of lines of accountability, weakening the ability of the House to hold the minister responsible when it chooses for matters falling under his or her authority ^[25].

Privy Council’s misunderstanding has had a lasting influence, as testimony given by Mr. Kroeger shows:

A deputy minister is accountable to the minister. But, if you say that officials should be accountable to a parliamentary committee, you have a conflict. Is the minister the boss, or is the parliamentary committee the boss? I don’t think many people seriously suggest that parliamentary committees could give direction to officials, but that has been suggested by the Lambert Commission and by some auditors general in the past ^[26]. (21:1545)

Under the accounting officer arrangement in the U.K., however, responsibility for administrative matters is not shared but belongs to deputy ministers unless a minister wishes to overrule his or her deputy, in which case the ultimate responsibility belongs to the minister.

Permanent secretaries are not, nor have advocates of the adoption of the accounting officer model in Canada ever proposed that deputy ministers be, directly and formally accountable to Parliament. As accounting officers, permanent secretaries are accountable/answerable before the Public Accounts Committee alone and the power to sanction that is implicit when one is accountable to someone is only present in the relationship that exists between permanent secretaries and their ministers. Lastly, no one has suggested that parliamentary committees give direction to officials, nor is this a characteristic of the relationship between U.K. accounting officers and the Public Accounts Committee. In the end, Mr. Kroeger’s objections appear to have been based principally on his interpretation of what he thought that the Lambert Commission had recommended and he indicated that he did not have any particular reservations about the British accounting officer model. (21:1620)

CONCLUSION AND RECOMMENDATIONS

In the submission that accompanied his testimony, Mr. Kroeger, wrote that:

The purpose of Ministerial responsibility is to preserve the authority of Ministers. The convention is a standing reminder to officials of who is in charge. It is a reminder that I would be wary of dispensing with ^[27].

The Committee is in full agreement with Mr. Kroeger and is firm in its conviction that ministerial responsibility and the doctrine of ministerial accountability must be retained. They are cornerstones of our parliamentary government and in most respects have served Canada extremely well. It is worth recalling that the struggle for democratic government in Canada was largely a struggle to achieve responsible government, and that responsible government (of which ministerial responsibility and accountability are an integral part) is what allows Parliament — and ultimately citizens — to hold government to account for its actions.

Nevertheless, the current interpretation of the doctrine of ministerial accountability dates from a time when government was small, and ministers knew (or ought to have known) their departments with some intimacy. These circumstances have changed, as both the Lambert Royal Commission and the authors of the McGrath Report recognized, and while the doctrine remains as valid as ever, its interpretation and practice no longer correspond with contemporary parliamentary or governmental realities.

Ambiguities in the doctrine, perhaps tolerable in the past, are now contributing to a situation in which those with responsibility are able to avoid accountability, as the Sponsorship Program has so clearly and so sadly demonstrated. What is needed, therefore, is not the wholesale abandonment of the doctrine of ministerial accountability. Instead, the doctrine needs to be reaffirmed and its interpretation and practice refined and clarified to assure its continuing relevance and utility to our system of government. The adoption of the U.K. accounting officer model would achieve these goals.

In instances that are not covered by statute law or regulation, it is sometimes necessary and desirable to exercise discretionary authority. Ministers and prime ministers must be able to do this but only in circumstances in which neither law nor regulation guides nor restrains them. As Arthur Kroeger testified:

If there’s a normal way of doing things but a minister or a prime minister chooses, in the light of a situation, to do something different, they have the right to do it. Not all exercises of political discretion are bad. (21:1620)

Under an arrangement such as the one that exists in the United Kingdom, the ability of a minister to exercise political discretion has not been diminished. Indeed, the clear assignment of responsibilities affirms a minister’s legitimate right to do so.

The Committee is therefore convinced that the use of an accounting officer designation for Canadian deputy ministers would strengthen — not dilute — the doctrine of ministerial accountability and would not impair ministerial authority or the ability to act. “Introducing the concept [designation of deputy ministers as accounting officers]” according to Donald Savoie:

[p]oses no difficulty, provided that accounting officers operate within the broad framework of ministerial accountability to Parliament for the policies and actions of their departments ^[28].

Accordingly, the Committee affirms the centrality of the doctrine of ministerial accountability and calls for its clarification and strengthening by the adoption of arrangements similar to those in place in the United Kingdom for permanent secretaries (deputy ministers).

With these requirements in mind, the Committee recommends:

RECOMMENDATION 1

That deputy ministers be designated as accounting officers with responsibilities similar to those held by accounting officers in the United Kingdom. Features of this arrangement must include, but not limited to, the following:

The personal duty of signing the financial accounts described in his or her letter of appointment.

The personal responsibility for the overall organization, management and staffing of the department and for department-wide procedures in financial and other matters.

Ensuring that there is a high standard of financial management in the department as a whole.

Personal responsibility for all powers and authorities either delegated or directly held.

Ensuring that financial systems and procedures promote the efficient and economical conduct of business and safeguard financial propriety and regularity throughout the department.

Ensuring that the department complies with parliamentary requirements in the control of expenditure with particular attention ensuring that funds are spent only to the extent and purposes authorized by Parliament ^[29].

As accounting officers, the personal responsibility of deputy ministers for negligence and wrongdoing does not diminish over time.

RECOMMENDATION 2

That as accounting officers, deputy ministers be held to account for the performance of their duties and for their exercise of statutory authorities before the House of Commons Standing Committee on Public Accounts; and

RECOMMENDATION 3

That the following procedures be adhered to when deputy ministers (as accounting officers) are in disagreement with their ministers regarding administration and operation of their departments:

The deputy minister must inform the minister if he or she has objections to a course of action proposed by the minister.

If the minister still wishes to proceed, the deputy minister must set out his or her objections to the course of action in a letter to the minister stating the reasons for the objections and the deputy minister’s duty to notify both the Auditor General of Canada and the Comptroller General of Canada.

If the minister still wishes to proceed, he or she, must instruct the deputy minister in writing to do so.

If instructions to proceed are received in writing, the deputy minister must send copies of the relevant correspondence to both the Auditor General of Canada and Comptroller General of Canada ^[30].

The Committee also notes the tendency toward frequent turnovers in deputy ministerial positions, a factor that makes it difficult for incumbents to master the complexities of their departments thus complicating their capacity to be held accountable for their performance. The Committee accordingly recommends:

RECOMMENDATION 4

That the government endeavour to retain deputy ministers in their positions for periods of at least three years; however their responsibilities are in no way diminished should their tenure be less than the recommended three years.

Since at least the late 1970s, many have warned that the doctrine of ministerial accountability, as interpreted and practiced in Canada, had failed to keep abreast of changes to the scope and structure of modern government. As government became more complex, the ambiguities associated with the doctrine meant that it was no longer able to address new stresses placed on the system. Those warnings became fully realized and the inadequacies of the doctrine exposed by the events surrounding the Sponsorship Program.

The Standing Committee on Public Accounts was unable to establish, with certainty, exactly who bore ultimate responsibility for the mismanagement of the program — and thus who should have been held to account.

Adoption of the accounting officer model will avoid any such confusion in the future and will significantly reduce the likelihood that the kinds of behaviour associated with the Sponsorship Program will happen again. Canadians need this assurance and Parliament needs the tools that can provide it.