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Results: 1 - 100 of 196
View Guy Caron Profile
NDP (QC)
Thank you very much, Mr. Chair.
Thank you for joining us and for your presentation, Mr. Fréchette.
I would like to turn to the report you wrote about the main estimates. You came back to a problem that seems to me to keep happening. I am talking about the lack of accountability and the significant differences between what are called the main estimates and the budget announced by the government.
You pointed out that the two processes are moving further and further apart and that we are now in a situation where only 85% of the budget is explained in the main estimates, a percentage that is constantly going down.
You also pointed out the different accounting methods used in the main estimates, where general accounting per se can be clearly seen, and in the budget announced by the government.
Could you tell me what purpose parliamentarians currently serve? Is it possible for us to properly analyze government expenses or is this an exercise that is becoming more and more futile?
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Mostafa Askari
View Mostafa Askari Profile
Mostafa Askari
2014-04-29 18:07
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You are absolutely right.
At the moment, the main estimates are not very useful in examining the government's financial situation because of the different accounting systems. Two years ago, we advised the parliamentary committee to change the system in the main estimates and we hope that that will eventually be done.
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Jean-Denis Fréchette
View Jean-Denis Fréchette Profile
Jean-Denis Fréchette
2014-04-29 18:09
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First, I would like to say that I agree with my predecessor's statement. I remember having said at this committee that I remember fondly the committees—and this goes back 10 or 15 years—that used to go over the main estimates perhaps for two months. Each of the responsible committees did an in-depth review of the estimates.
I have no recommendations to make. As I said, I agree with Mr. Page. Some people talk about reform, others talk about different approaches. The Standing Committee on Government Operations wrote a report that was full of recommendations. It is really a committee of the kind that must make recommendations along those lines. The committee recommended, for example, using an idea from Robert Marleau, a former clerk of the House of Commons, that the old system be a model that would give committees more time than one month to review the main estimates.
Mr. Marleau went further. when he appeared before that committee, he recommended that the three principal committees, the Standing Committee on Finance, the Standing Committee on Government Operations and Estimates and the Standing Committee on Public Accounts should have not only a kind of parliamentary budget officer, but also highly specialized research officers to help them in their work.
With that, I will let you take a look at the deliberations of that committee.
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View John McCallum Profile
Lib. (ON)
Thank you.
Information is nice, but I don't think that's the main thing. I think the main thing is greater parliamentary or democratic control over the expenditure of taxpayers' money. Under the current voting system, you can give all of the information you like, and we like it, but for example, you can still transfer money from border infrastructure to G-8 legacy fund without telling us, right?
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Bill Matthews
View Bill Matthews Profile
Bill Matthews
2013-05-28 12:13
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As I mentioned, the changes we've made to the estimates in the narrative where we actually talk about why the numbers are changing are key for Parliament to understand why the changes happened. I'm getting the sense that you and I would disagree about whether Parliament needs to control or needs information. I'm definitely there that they need information. I'm not sold on the control piece—
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View Denis Blanchette Profile
NDP (QC)
View Denis Blanchette Profile
2013-05-28 12:37
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Thank you very much, Mr. Chair.
Mr. Matthews, you talked about a downtime. However, I have the impression that you are treading water and that cosmetic changes have been made, that what already existed is being made better use of, but that, essentially, investments will eventually be made in the modernization of accounting systems and that will be the end of it. That is the impression I got from your message today.
I would like to go back to the continuum relating to estimates. The government spends money, but in the final analysis, we are trying to see what is being done. That is the information that was mentioned. You talked about monitoring, either by parliamentarians, yourself, or Treasury Board. However, at the end of the cycle there must also be accountability. In other words, do we really know what we voted on? Did we spend money in an efficient and effective way? We are talking about the information-efficiency-effectiveness continuum. If we set the technical vocabulary aside, we can say that the objective of all this is to be able to answer questions concerning those three aspects correctly. If we stop there, I really think that we will only have done half the work needed to give us a better overall understanding.
I agree with my colleague that we must not micromanage. That is quite correct. However, you were talking to me about strategic outcomes, but the departments already refer to them in the reports on plans and priorities. Is that not the case? You tell me that there are no more horizontal programs. However, at the local level, the departments already have horizontal programs related to departmental strategic outcomes.
My question is quite simple. You are asking for funds to modify and modernize the accounting systems. You tell us that strategic outcomes are the way of the future. With regard to what exists currently, what more do you need to attain your objectives? Does the Government of Canada, through the Treasury Board Secretariat, want to manage all the activities strictly on the basis of mega-strategic outcomes?
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Bill Matthews
View Bill Matthews Profile
Bill Matthews
2013-05-28 12:40
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The question of today is at what level should Parliament vote money. We have put strategic outcome out there as the proposed model.
It is true that departmental information in RPPs already includes information on strategic outcomes. The advantage to moving to a new model is that you can more easily tie the money you're voting on under strategic outcomes to RPPs. If there is a program that is of interest, you can then drill down and see what the performance objectives of a program were. Is the program performing? That's a question of efficiency and effectiveness. If you're really captivated, program evaluations are posted online, so you can actually review an evaluation of the program to see whether it is meeting its objectives.
All of that information exists right now. The question is whether Parliament is better served by tying the vote on strategic outcome or some other level to all of the information that already exists. The reason the answer could be yes is that parliamentarians think of departments more along the lines of strategic outcomes, programs, and those types of things than of capital, operating, and Gs and Cs. That's the question at play.
I spoke about modernizing the accounting system. There is already work ongoing that pushes departments to move to fewer financial systems. It's just a more efficient model to have one, two, or three financial systems in departments rather than have each one operating its own.
If we were to pursue such a change, the most opportune time would be when they're redoing the financial system. That's the reason there is a very strong link. If we are changing the financial systems of departments and we want to change the control structure, now is the time.
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Sally Thornton
View Sally Thornton Profile
Sally Thornton
2013-05-28 12:43
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On the systems side, with shared systems for financial management, the horizon really is three to seven years, with more substantive changes actually happening in five to seven years.
What we have before you, in terms of the work plan, is what we would be doing now with existing systems. It would take five years in changes to the 130 organizations. If there were a decision to go this way and we were to dovetail, that could have an impact on costs and consistency, but on a different timeframe.
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View Mathieu Ravignat Profile
NDP (QC)
View Mathieu Ravignat Profile
2012-10-30 9:03
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Would that change be favourable with regard to transparency, in your opinion?
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Douglas Nevison
View Douglas Nevison Profile
Douglas Nevison
2012-10-30 9:03
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It depends how you measure transparency, as you said.
At the moment, the budget decisions do come out through supplementary estimates (A), (B), and (C), so the transparency is there. It's just the question of that initial timing in terms of the gap between a budget in the winter-spring and a tabling date for mains of March 1. There is a timing issue there.
Coming back to your second question, as I said, I think the answer is in working on our processes within the system that we have to try to make them as efficient as possible, but then, as Bill mentioned in terms of some of the responses here, trying to link some of the supplementary estimates to particular funding decisions so as to build that crosswalk that would give you a sense of where the funds for a particular budget item or off-cycle funding decision are coming from.
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View Jean-François Larose Profile
(QC)
Thank you, Mr. Chair.
I would also like to thank our guests for being here for the study.
We have listened to your recommendations and we appreciate the fact that your position is to adopt most of the points that concern you. I think that the complexity of the situation justifies our motivation to clarify the whole document.
Measures are being taken now, but I have a bit of trouble understanding why your response to our proposal to have a fixed date is that it is too complicated, when you have agreed to sit down with us to help us fully understand every aspect.
Here is my first question. On the one hand, the government says that it wants to reduce the administrative burden, but it will actually introduce another type of complexity. In fact, two accounting systems will be needed, given the reforms of the pension plans of public service employees that the government is planning to carry out. On the other hand, the government is talking about increasing transparency, but is not able to make a commitment to align the key estimates documents to ensure this transparency because of the duplication of accounting systems.
How do you explain that paradox? It is all very well to advocate a position, but then you have to follow through on it.
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Bill Matthews
View Bill Matthews Profile
Bill Matthews
2012-10-30 9:23
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I think that the vast majority of the recommendations made by the committee, Mr. Chair, were accepted. There are two exceptions.
We haven't rejected recommendation 2 around the vote structure. We've said we wanted to put something before the committee to make sure everyone understands what we're talking about and that we understand the costs and timelines before we proceed. That's just a cautious approach, and I think it's the wise thing to do.
The balance of the recommendations were accepted, as I mentioned earlier. The one sticking point we've had is around this notion of fixed budget dates and maybe understanding the roles of the various departments.
The model we have in the current system is that before a spending proposal can appear in estimates, it needs to go through the Treasury Board approval process. That means departments have to have a very sound idea of what they're going to spend—how much is administration, how much is actually going out in grants and contributions, what the program objectives are, and what the performance indicators will be. It's only at that point that departments are authorized to spend money, so it's a significant amount of work after something is in the budget before departments can actually design their plans in detail and get spending.
I think one of the keys to helping this committee understand the linkages is the response to recommendation 7, because we have committed that for all new funding appearing in an estimates document for the first time, there will be a link back to the budget so that committee members and parliamentarians can see which budget the funding came from.
I'm not sure if you want to add anything on the fixed budget, or if we've covered it.
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View Jean-François Larose Profile
(QC)
View Jean-François Larose Profile
2012-10-30 10:10
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In this case, if we switch to a system based on strategic outcomes, will we not lose control of spending even more? It seems that it is easy to reduce capital expenditures in a fiscal restraint period and that a vote system based on outcomes or programs poses a risk in terms of losing some control of certain key expenditures that are less visible to the public, but still critical.
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Bill Matthews
View Bill Matthews Profile
Bill Matthews
2012-10-30 10:10
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I would say we have to separate what Parliament votes on and what information is available in support of what Parliament votes on. While you may vote funds at a high level, the database could actually contain information that supports more detailed information, building up to that voted amount. I would keep separate the notion of what Parliament actually votes on at a higher level, but it doesn't mean you can't have more details in support of the database.
That's the whole idea here, to give parliamentarians as much detail as we can in terms of what supports that vote. They can drill down if they want to, but the balance we're trying to strike is that if you vote at too detailed a level, the whole system becomes too administrative. You keep the vote at a reasonably high level, but you support it with additional information.
I think the idea here is recommendation 16: the best way to do that additional information is a database. I think we would have to go beyond what Parliament votes on and give supporting detail.
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View John McCallum Profile
Lib. (ON)
Thank you.
I'd like to now mention the G-8 legacy fund and the controversy over a border infrastructure fund being used for totally different purposes. I know it wasn't illegal, but I don't think it's in the spirit of parliamentary oversight. My question is whether there might be some way for such redirections of funds to be made public or to be announced to Parliament, to Canadians, as opposed to them just happening without us hearing about it.
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Bill Matthews
View Bill Matthews Profile
Bill Matthews
2012-05-14 16:50
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So that would depend on.... If the money involved is from two different programs, it absolutely would have implications if you move to a program vote, which, as I mentioned, has its challenges in terms of how many programs there are.
From my perspective, if you think about the G-8 and G-20, we have changed some processes internally to make sure we better describe in the estimates documents so that we don't bump into those again. And it was a one-off. It doesn't happen often, but it happened. So we have made some changes internally.
I'm not sure if Sally wanted to talk about—
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View Mike Wallace Profile
CPC (ON)
View Mike Wallace Profile
2012-05-07 15:52
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Thank you, Mr. Chair.
I thank the witnesses for joining us. There are a number of questions that have been generated here.
The first one about our struggle with the mains not matching what's in the budget because of timing. You're saying that yours do. Is there an issue with confidentiality, that the departments know what's going to be in the budget because they have to produce the mains prior to the budget being presented? That's part of the argument that is made here, that there are very few people who actually understand what's in the budget until the budget is presented to the House. That's why the mains can't reflect what's in the budget, or half the bureaucracy here in Ottawa wouldn't know what's in the budget. Is that an issue for you?
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Shannon Dean
View Shannon Dean Profile
Shannon Dean
2012-05-07 15:53
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I would say no, because the main estimates are tabled at exactly the same time as the budget speech is delivered, so there's not a timing issue.
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View John McCallum Profile
Lib. (ON)
Okay. One other issue that's sometimes a bit controversial here is when governments can shift funds from one block to another without telling parliamentarians.
Is that an issue in Alberta? What are the rules with regard to governments shifting funds from one allotment to another?
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Shannon Dean
View Shannon Dean Profile
Shannon Dean
2012-05-07 16:00
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We would consider that a transfer, and that would necessitate a supplementary estimate.
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Paul Thomas
View Paul Thomas Profile
Paul Thomas
2012-05-07 16:30
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Thank you very much.
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.
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View Linda Duncan Profile
NDP (AB)
Thank you, Mr. Chair.
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?
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Paul Thomas
View Paul Thomas Profile
Paul Thomas
2012-05-07 16:44
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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.
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View Kelly Block Profile
CPC (SK)
Thank you very much, Mr. Chair. I'm not sure that I'm going to use up my whole five minutes, but I know that I have colleagues who probably have some questions as well.
Welcome to our committee. This has certainly been a very interesting study and many of your observations have been made by others as well. So I think we're going to have a lot to talk about as we begin to look at the recommendations we're going to want to bring forward in regard to where we should go after this study is done.
You have observed, as other witnesses have, that we need to find a way to reduce the level of partisanship at a committee charged with this type of work. There may be some reluctance to include senators, whose participation you mentioned as one way of dialing down the partisanship. Barring that, though, what other ways would you suggest we could use to change the culture of partisanship on a committee like this?
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Paul Thomas
View Paul Thomas Profile
Paul Thomas
2012-05-07 16:49
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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.
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View Kelly Block Profile
CPC (SK)
I thank you very much for those comments.
I agree with much of what you've just said. I know that being a member on this committee has certainly shown me the importance of a committee that provides oversight of the estimates process.
I want to get back to what you said about providing incentives. How do we incentivize other parliamentarians? If we don't go to creating a committee, such as you are suggesting, how do we incentivize other parliamentarians, other committees, to see the study and the approval of the estimates process as something that's important?
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Paul Thomas
View Paul Thomas Profile
Paul Thomas
2012-05-07 16:52
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We've tried a number of things in the past. We used to do all of the estimates on the floor of the House of Commons, and that was just a game. It took up a lot of time. It wasn't very helpful in terms of giving meaningful advice to governments about how to improve their spending and the results of their spending.
We then went out to the standing committees, gave them investigations in view of legislation and the estimates. It seemed like a lot of work. There weren't enough committee meetings. There weren't enough committee members. There weren't enough time slots.
We tried saying you could change the estimates within a narrow range, maybe 5% above or below what's proposed, and make the government explain why it accepted or failed to accept that recommendation. As I mentioned in my opening comments, that was used rarely. It goes way back to the seventies, and it was rarely used by committees.
It really requires some discussion in each of the party caucuses behind closed doors to say to the leaders that you didn't come down here just to applaud when the great leader gets up to speak, and you didn't come here to thump your desk and yell across the chamber. You came here to contribute to better public policy, you want a chance to do that and you want to do it in a committee setting. You'll find your own ways to publicize to the folks back home in Saskatchewan that they're getting good value from their member of Parliament. Maybe through the local media you could talk about the work you did in changing agricultural policy, perhaps. It wouldn't happen overnight. It would take a number of years of reporting on the pattern of spending in the agricultural department, but eventually you'd get them to shift some money into an area you considered important to Saskatchewan.
That seems to me the most constructive role you could play.
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Paul Thomas
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Paul Thomas
2012-05-07 16:55
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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.
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Paul Thomas
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Paul Thomas
2012-05-07 17:03
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At some point you have to cut off debate. The government's entitled to have a vote on its money. It's not entitled to get its money, necessarily, but it's entitled to have a vote. I don't think you want the spectacle that you have in Washington where you're going month to month with extensions of temporary estimates, or something like that, and public servants are worried about whether their paycheques will arrive. That would not add to the reputation of Parliament if you got bogged down in that way.
A long time ago, in 1968, they did away with unlimited debate on supply on the floor of the House of Commons. Many people say that was the death knell of parliamentary democracy, but in fact it was used as a gimmick by the opposition parties in particular, singularly and collectively, to withhold approval for other actions that the government wanted to take, like integration of the armed forces, which was highly controversial. It was delayed for months simply by prolonging the supply debate.
No attention was being paid to the actual spending that was being approved; it was all about using it as leverage. You just lined up MPs to speak on the estimates, even though they were not making any contribution to more meaningful financial accountability.
I think there has to be a limit.
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Peter Dobell
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Peter Dobell
2012-05-02 15:32
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Good afternoon, to all of you.
You've invited the two of us to comment on two papers we have jointly written, a large part of them by Martin. I should let you know in advance that I got him started. The two of us have very different backgrounds as your chairman has just pointed out, but we worked together very cooperatively a number of years ago. Because we have different experiences we're going to speak in sequence, if that's satisfactory. We'll make a few remarks each.
Initially let me say that our writing, and my earlier writing before Martin joined me, was prompted by distress at Parliament's ineffective review of the estimates and its inability to detect and point to any misexpenditure of funds.
Before Martin Ulrich joined the centre I had already expressed concern that the estimates were being ignored. The fact that I was writing about this led John Williams, very soon after he was elected in 1993, to ask me to appear before a group of colleagues from the Reform Party—not a committee meeting—to talk about the situation. That's an example of how he got started and made it a kind of life work. It was only after Martin joined the centre that we were in a position, drawing on his experience—over 30 years in Treasury Board—to suggest ways that Parliament might propose of improving the situation.
I should say that the two of us have been much impressed by the quality of the speakers you've had, and their knowledge. I know many of them and I can affirm that you've made the right choice of people to come here. I'm not so sure about today, but anyway, it's not only the fact that you have had good speakers but the time you have devoted to looking at the problem.
You have managed to work in this Parliament fairly cooperatively, which is a bit unusual. I think it's going be a matter of how far you can draw on your experience to suggest satisfactory ways of improving the situation.
With Martin and I, a lot of the work we've done involved going to members of Parliament who were then in office to try to see how they were working. The conclusion we reached very quickly, and it's one of the things we wrote about, was the need for a substantial, what we called, financial service.
To be candid, we actually envisaged a much larger service than I'm sure you're going to be able to get. We were thinking about up to a dozen individuals with extensive experience in government financial services who could understand the complexity of government finances, which are really pretty difficult to penetrate.
The proposal we have proposed has been supported by a number of your witnesses, I'm happy to say. Indeed Kevin Page, along with his colleagues who came here, is an example of the kind of person we think should be in the financial services.
The only difference is that I think he should be reporting directly to Parliament, perhaps even to your committee, and I would like to see him reporting to you rather than reporting to the media.
Second, I'd like to see him taking some time to decide to take direction from you as to what subjects to work on, rather than deciding himself what's needed.
In our study, the one which we wrote for the IRPP, we advocated that committees on estimates should continue throughout the year. In effect, we share the opinion of those who say that it's a mistake to terminate the inquiries on May 31.
In our papers, we concluded that it would be more effective if, rather than looking at the annual estimates only in the spring, members were to concentrate right from the beginning on examining individual programs. This way you would get some sense of whether the performance on each program corresponded with what you perceived to be the public's needs and expectations.
We've been asked to report our conclusions in our study prepared for the Gomery Commission on the sponsorship scandal. It reminded me, when we received this request, that although we wrote that report with some hopes that someone would pay attention to it, as far as we are aware, this is the first parliamentary attention that's ever been given to that report.
I mention this because I hope that the report you will be preparing will have impact and will not be ignored the way ours was. In other words, come up with a report that has some chance of getting some parliamentary support and public support.
If your report has a positive and constructive tone, especially if it has the support of members from all parties, which is pretty hard to get but worth trying for, its chances of being seriously considered by government will be greater.
Bob Marleau was quite right in suggesting that conclusions with a positive tone that proposed ways to improve a program were more likely to be taken seriously by the ministry. It may take time. It's not something that's going to happen immediately, but it's worth considering whether that's something you could do.
Over the years that I have been observing—and they are substantial, as you mentioned—and working with parliamentary committees, I can advise you that I know of instances where a report that had the support of all parties had an extraordinary effect on the government. If opposition members on a committee, rather than looking for ways to attack the government, were to work with government members on ways to improve the effectiveness of government operations—to use words that you have already heard from Joe Jordan—you could jointly establish a base for demonstrating to the public that it was getting value for money for a program, something that the government might respond to if you agreed on ways to improve it.
Thank you.
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Martin Ulrich
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Martin Ulrich
2012-05-02 15:43
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Thank you, Mr. Chair.
Good afternoon, everyone.
I'm going to go into a bit more depth, particularly on the study for the Institute for Research on Public Policy. I think that is a bit dated now. It's almost 10 years old. It was one thing where we looked at, not the estimates in particular, but government oversight of financial management very generally. One of the reasons for that, as you all know, is that this was an issue internationally, not just in Canada. At the time, there was a lot of criticism of Parliament in the academic world, in the media, and so on.
We wanted to get into that subject in depth, so we took all the studies of all the committees during one calendar year. We identified those which had, in some way, shape, or form, an oversight of financial management. Both Peter and I met with members of all the parties at that time. I would say it wasn't a random sample by any means. We chose people who had been around a longer time and had more experience with the process to essentially get the best advice going.
Out of that process, it became very clear that financial oversight should be looked at on three different levels. One level is the broad, macroeconomic level. That's the overall budget, deficit, and debt—those kinds of things. Another level is the individual transactions—the individual contracts and all those things. Between the kind of control framework that the government had set up at the time, the Financial Administration Act, which provided all kinds of constraints as to how the government could use these funds that were either used through legislation or through votes, and the Auditor General's office doing its audit—there was this middle level, and that was the program or departmental level.
We reported in the paper the clear views of parliamentarians. We, after all those discussions, happened to share those views, but they were not essentially our views. They were the views of people like you, roughly 10 years ago. Their conclusion was that Canada, the Canadian Parliament, and the Canadian House of Commons does a pretty good job at that high, broad level—the aggregates. The budget is a big event in Parliament. There's a lot of preconsultation and so on. At the time, the finance committee was very active in pre-budget consultations. It worked pretty well.
They also had a lot of confidence, even though they didn't get into it a lot, at the individual transaction levels. But that middle level—the one where the estimates are—is the one that essentially did not work. That was not a surprising conclusion, I suppose, but it was nice to know that experienced members of Parliament felt this was the case.
A number of recommendations came out of those discussions, but one that I think is particularly interesting is—I'll use a bit of jargon here because I don't know what other words to use—the control framework. Since it is responsible for voting these funds, how does Parliament assure itself that Canadians have received what the government intended they receive, and that they were done effectively, efficiently, and all those good things?
Over the years, the vote structure and the kinds of things you technically vote on in Parliament have been evolving. As Peter referred to it, there were many cases where, over the years, the government gradually ended up making the votes larger votes. Therefore, when you had a number—when parliamentarians saw a number of x billion dollars for some great, noble purpose, they had absolutely no way of comparing that amount of money with that result.
They asked what they could do. In many ways, that's one of the reasons for the financial analysis service. One of the things we had recommended was that the financial analysis service, working under the direction of this committee, would take a look at that. How do you sort that stuff out to make it sensible? It's not that the government doesn't need flexibility. The government does need flexibility. At the same time, you represent all Canadians. Parliament needs to be able to ensure that it has taken a look at how the government, the big administration, has used that authority and money it has provided.
I think that control framework—largely the centre is the vote structure—is something that really needs to be looked at. Kevin Page certainly recommended that when he advocated that votes be on programs, and I think that is a huge step in the right direction.
A couple of other things came out of that study. One of them was the idea that committees should at least look at indicators. I believe—and as Bob Marleau made very clear—there's a lot of misunderstanding among parliamentarians as to what you have the power to do and what you can get done if you're willing to do so.
You have an enormous amount of power. There's an enormous number of things you can do if you get agreement in committee. We looked at committees, and the estimates were supposedly one of the reasons you should have committees. Well, in this study, we actually documented how much time committees spent on the estimates, and it was a minute amount compared to the other things they did.
Now, if the estimates are as important as certainly we believe and the people we talked to believe, then it might be a thing to think about how you would judge whether committees have performed well in their financial oversight duties. It might be something that this committee, with its overall responsibility for the estimates, might wish to consider.
So that was that study. The only thing I would mention about the sponsorship study we did was that we didn't actually investigate the sponsorship. The question we were asked to address was would it be possible, if Parliament did a better job of its financial oversight, to reduce the odds of something like the sponsorship scandal?
Needless to say, we concluded that certainly parliamentarians could not be said to be responsible for what happened, but certainly they could be said to have not done the kind of oversight that would discourage officials from doing what was evidently done in that case.
So I think the question that was posed in that study was quite a legitimate one. Could parliamentarians be seen as somehow, by not having done their jobs, encouraging bad financial administration? You might want to think about that.
I'll close with four observations that I think are supported by the two studies I'm talking about.
One, it is I think exceedingly important to think about the estimates as not just about money. It is money for a specific public purpose. You have to be able to relate that money to that purpose. If the kind of information you get does not link those two in a way that makes sense to you, then I think you can't really do the process.
In the times when I was in government, which is now more than ten years ago, I worked for the Treasury Board and we had a lot of dealings with Parliament at the time. It worked quite well. It was clear that the officials who worked in government, working with parliamentarians' staff, consulted quite a lot, or at least they were able, in that era, to do it. They were encouraging the parliamentary staff to figure out what parliamentarians actually need for information, and how it should be structured.
Two things came out of that. One was that there really was openness to doing that. The other was that you had to make sure it wasn't just a financial document—it was a financial document related to results that Canadians could understand. Mr. McGee from New Zealand, I believe, emphasized that point, and I would say everything we have done reinforces that.
I was also struck by the comments from Mr. Marleau and Mr. Williams about the authority in parliamentary procedures that you have available. As I read them, it was not that you shouldn't change them; it was that if you think that the solution is through another change in the Standing Orders, odds are it won't work. You have to look beyond that. You have to look at the way things are done, beyond the authorities and the powers and so on.
The vote structure I've already mentioned. What I call the control framework for programs, but whatever you call it, is certainly an area that deserves some attention.
Peter mentioned near the closing of his comments about getting consensus in committees and elsewhere. One of the things I've always been skeptical of is that Mr. Williams mentioned that report of more than a decade ago where there were some suggestions as to changing a certain amount of money that you can vote on. I think that's a delusion. I don't think that's going to help.
I think it's more important to see that it is the government that should control. It has a plan. It's worked it out. It's asked for it. If you don't have confidence in it, then you do what parliamentarians do, but I think to mess around in the detail is not a good thing to do. But all of these studies from 2001—there were 19 studies that had recommendations regarding either change in resources or change in results—were tabled in Parliament. They were sent to committee.
It doesn't change the votes for the specific year, but it does allow for downstream change, and usually, in the past, that has been acceptable to governments to consider.
If you try to change the votes in the year, you're just asking for difficulty. If you try to evolve the process, you might have some sort of success.
I think one of the reasons that estimates have not gotten much attention is that there's too much desire to change the numbers, and if you don't change the numbers, you feel you've failed. Well, if that's the way you feel, it won't work.
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Martin Ulrich
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Martin Ulrich
2012-05-02 16:03
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I'll leave number three for you.
Question number one concerns the key barriers. I might be dreaming in technicolour here, but it seems to me that there is a huge job to be done, and I think it rests with this committee to really look into the process of oversight at the program level. How can parliamentarians do it? It's not only your committee, it's all the others. You have the mandate on this committee, I believe, to deal with other committees and their work on the estimates, to kind of figure out what needs to be done.
I think the second thing that is closely related to this is that in an awful lot of committees the government members are protecting the government. The opposition members are protecting the opposition, and the question is, how can each party get something of value by overseeing, on behalf of all Canadian citizens, how the government is spending their money? There are answers to this. I have some of my own, but I don't live in your world, I've never lived in your world.
It is a very difficult question, but I think it you address it openly and say the people on the government side have a certain belief that they have the right kinds of programs.... They vote for it. We know they do. But what's wrong with the opposition members saying, “Well, you're going to have that, but let's at least understand what is happening. Why do you need that amount of money to achieve those specific results?” If opposition members see that as a waste of money, they can't change it but they certainly have a better idea how to communicate with the Canadian people as to why a change would be a good idea.
The government members, it seems to me, since they are in favour of the programs, would be in a better position to defend why it is exactly what their policy requires. It seems to me there is a zone here. I don't know exactly how to do it, but I sort of raise this as an issue of what parliamentarians should do. They should try to develop a way of testing it down to the party level at some stage.
On question number two, if I understood it correctly, talking about the sort of contribution process and deputy ministers, committees, and all that sort of thing, one of the things that's very big on the contribution agreement is.... Some of them are huge, but as Mr. Williams mentioned to you, the committee can certainly ask for an evaluation of that. In the past this was a perfectly normal thing for a parliamentary committee to do—ask the government for an evaluation of it, and in that evaluation they might even suggest that they consult with the members of the committee in doing it. This is a way, at least it was in the past, where you could get information over a period of time and come to some kind of understanding of what this huge thing is and why it needs to be the way it is, and what might be wrong with it.
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Peter Dobell
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Peter Dobell
2012-05-02 16:03
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The only thing I'd add is that Martin has pointed to the fact that opposition members take one position, government members take another position, but the important thing is that, privately, a number of the government members may think that isn't exactly the way they would like it to be for the future, so they will be able to raise in their caucus that change should be made. It's not going to come quickly, but it can come over time.
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Peter DeVries
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Peter DeVries
2012-05-02 17:08
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The information on accrual accounting should be in the department now. Departments are supposed to present or provide information on an accrual basis for all of their expenditures. They are supposed to be on an expense-based system at this point in time.
I hate to use the words “two sets of books”, but that's what we have. We have a set on cash and we have a set on accrual. There's no reason why the information can't be made available or can't be incorporated.
Hon. John McCallum: I just—
Mr. Peter DeVries: But I have just one other point if I may, Mr. Chair. I don't want to take away from the member's time.
But when you then compare those estimates to the budget for 2012-13, the budget is different from the estimates by $24.2 billion. The budget shows an increase in spending, whereas the estimates would show a decline in spending.
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Allen Schick
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Allen Schick
2012-04-25 15:32
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It's a pleasure to be a good neighbour and to discuss the Canadian practice, even though I'm not an expert on it.
I want to begin by indicating that good practice is not necessarily a precondition for good budget outcomes. My own country, the United States, is an example of this. We have perhaps the most widely respected legislative budget organization in the Congressional Budget Office. We also have the largest deficits in the world.
I don't want to correlate the two, but I do want to caution that often budget reform is a substitute for budget policy, and it should never be a substitute. Near the end of my remarks, I'll get back to the issue of parliamentary assistance or staff assistance for parliamentary budget work.
I do want to mention that anything that deals with a budget touches the constitutional framework of a country—the relationship between government and Parliament, between the parties and government, the electoral system. Therefore, one has to be guarded in importing from another country practices that may not be well suited in your own country. This is particularly the case because the Westminster system, of which Canada is a member, is at polar ends from the American congressional system. One has to be wary about exchanging techniques when they may ill fit a particular country.
Having said this, I do want to mention that from a distance, my own distance, there are a few matters of Canadian budgeting that I think deserve some attention. Perhaps the most obvious is the disconnect between the budget and the main estimates.
As a matter of fact, I'm kind of puzzled that what you call the main estimates are not what political leaders would regard as the main estimates. The main estimates should be a statement of policy, if they're truly the main ones, and yet here they deal more with the ongoing work of government, that which is being continued, rather than with revenue changes and with policy changes.
The timing issue is well known in Canada, and that is that the main estimates, I believe, precede the tabling of the budget, and consequently the additional estimates, or supplementary estimates, have to be tabled later in the year to incorporate the policy changes recommended by government.
It would be a reasonable step, not a difficult step, for government to change the timing to coordinate, indeed to consolidate, the estimates and the budget. At one time, in fact, the United Kingdom had a distinction between the estimates process, which they called the “spending process”, and the budget we talk of, particularly with revenues in the U.K. case. Now they have been brought together on the same page, as it were. I think that is something that your own country should well consider.
In doing so, I would urge that the fact that you have a divided process, with estimates coming at one time and the budget at another time, allows you to restructure your entire budget process—not only that they are timed together; that indeed the two different sets of actions occur at different times. This is something that I would urge you to consider. Sweden is among the countries that have successfully introduced the procedure: that is, dividing parliamentary budgetary work into two discrete stages, a framework stage followed much later by an estimates stage.
The framework stage is a matter of policy, of strategy, of changes to revenues and to programs, of major changes to the estimates, and, most importantly, looking ahead to the macroeconomic environment, not only for the year for which estimates are being voted but also three to five years or more ahead.
If you combine strategy and estimates, the big picture and the detail, the likelihood is that one or both of them will be neglected. More often than not, it's the strategy, the policy, that is subordinated to the specifics of the budget.
So what a number of countries have introduced is a divided process in which at the first stage, which I label the framework stage, they do not delve into the details of the estimates. Instead, what they do is look at the economic environment, projections over the medium term, major policy changes by government, particularly with respect to the deficit, the debt, and other key fiscal variables.
While spending details are not tabled during this first framework stage, the government does provide, to use a famous or infamous Canadian term, the “spending envelope” that would be available during the estimates stage—in other words, what will be total expenditure, and that's divided by key sectors or policy arenas.
That's the first stage, and in some countries it's actually voted by parliament; in other countries it's merely discussed by parliament. It's presented by government, and depending on the role of the legislative branch, it either would be recognized by parliament or agreed by parliament. After this occurs, government ministries prepare their budgets consistent with the voted or tabled framework.
This leads to the second stage, which deals with the estimates and appropriation of authorized expenditure. The obvious rule in this case is that the estimates have to be consistent in two ways with the framework that was previously established. The first is with respect to the totals—the details cannot exceed the amount of money voted in a framework. Secondly, with respect to policy initiatives or changes taken by government, those should also be reflected in the estimates.
This would be a significant departure from the situation that currently prevails in Ottawa, but it would be consistent, however, with the fact that you have a divided system, and it would engage Parliament at two different times in the year on budgetary matters, one dealing with strategy and the big picture, the other with the specifics of expenditure.
Now, there's another aspect of Canadian practice that to my distant eye was once quite common around the world. It's still common in many developing countries, but it has virtually disappeared from advanced countries such as Canada. That is the distinction between operating and capital expenditure. At one time it was common around the world that there were actually two separate budgets. We often called them divided budgets: one dealing with the investments of government and the other with current or operating recurring expenditure.
The historical basis for this distinction is that the two sets of expenditure had different sources of funding. One was out of current revenue, and the other was often out of borrowed funds—a kind of golden rule that government can borrow only for finance investment. And to ensure compliance with this rule, they divided the budget and the expenditure into these two categories. For two main reasons, this practice has disappeared from developed countries.
The first reason is that to the extent that government is concerned about its fiscal position, the key aggregates—total revenue, total expenditure, total debt and deficit—you have to have a consolidated picture that does not separate between capital expenditure and operating expenditure.
The second reason is that capital and operating expenditures often are not distinct but are interchangeable with one another. In so many areas of government policy they're actually substitutes. One can proceed down a policy course of action through investment—for example, building clinics in rural areas. That would be in the capital budget. On the other hand, government can seek the same aim to improve health services in rural areas by subventing physicians to practise in rural areas. One is in the capital budget, one is in the operating budget.
The more you do one, for example, building clinics, the less you may need of the other, or vice versa. Consequently, if you want to have a robust analysis of the policy options of government and the connections among them, it makes a lot of sense to merge the two types of budgets, keeping in mind that you still must have sufficient data on the investment position of government.
This doesn't mean that you remove investment and capital information from the budget. It means, however, that they are within one umbrella of the budget. The question then becomes what should that umbrella be. What should be the classification or the framework within which you see both investment and operating expenditure?
There are two main possibilities. One is widely practised. The other is widely recommended. The widely practised one is by organizational units. To the extent that an organization bears both operating and capital costs, they should be combined in that entity's budget.
The alternative is what we call a program budget, or program structure. To the extent that operating and capital expenditure contribute to the same objective, they should be located within the same budgetary program, regardless of organizational location. In other words, a program budget, in some cases, will ignore organizational or ministerial boundaries. This is precisely why the program budget approach is highly recommended but is rarely practised, because to the extent that government, in addition to wanting to make robust policy, which would require that you see capital and operating expenditure contributing to the same objective...government has another purpose in managing its finances, and that is maintaining accountability.
Accountability in almost every case requires that the organization responsible for the expenditure and the activity financed by the expenditure should be in the dock, so to speak. It should be the accountable party. This is deeply embedded in Westminster tradition, and it's something that may be very difficult to surrender.
In fact, many countries call it a program budget, but the program is simply a veneer for organizational entities. To give an example that comes immediately to mind, you may have a bureau of water resources, which is an organizational unit, but instead you label it as a water quality program. The boundaries of the program and the boundaries of the bureau are identical, so in effect you've labelled it a program budget, but it really is an administrative, organizational budget.
Regardless of the way you go, I would think it is worth reconsidering the connection between the operating and the capital budget.
That leads to the third issue that I would like to discuss, which is what should parliament's role be, and more important, how should parliament be assisted to carry out that role responsibly and in an informed manner?
There is a mock trend around the world, not in every country, and certainly less so in Westminster countries than elsewhere, to enlarge the capacity of parliament to review and even to amend the government's budget. Keep in mind what I said at the outset, that the extent to which you want parliament to be able to amend the budget rises to a constitutional issue.
The practice in a growing number of non-Westminster countries is for a vast increase in the volume of amendments tabled in parliament and some subset of them being adopted, but most of the amendments are specific, detailed. They are within the government's fiscal envelope. This is very important.
To the extent that a country enlarges parliamentary discretion with respect to the budget, it is urgent that Parliament be subject to some fiscal constraint in terms of what it does. The combination of an open-ended parliamentary work on the budget without a constraint is something that can lead to fiscal damage to the country.
My own sense is that this is not where Canada is right now. Canada is not going to break away in a fundamental way from its Westminster legacy. Consequently, the issue becomes one of informing parliament rather than empowering parliament. Empowering parliament would mean that parliament can make significant changes to the government's budget. Informing parliament means that what parliament does is to hold government to account by having a robust debate on the options in the budget, the estimates tabled, the economic and programmatic assumptions that underlie those estimates, and the longer-term sustainability of the government's position. This clearly is consistent with the role that your committee has.
In fact, in your opening remarks, Mr. Chairman, when you indicated that you are a member of the opposition, it brought to mind the historical role of public accounts committees, in which that was the basic mechanism for well over a century, perhaps two centuries, for holding government to account: that opposition would chair the public accounts committee, the committee would operate on a non-partisan basis, take evidence from government, and thereby hold government to account.
Perhaps this system is sufficient. It's certainly survived a long time. But the fact that Canada a number of years ago established a Parliamentary Budget Officer tells me, hundreds of kilometres away from Ottawa, that at least there was unease in Ottawa about whether simply having a committee chaired by the opposition was sufficient to hold government to account and to allow for informed debate. After all, if it was sufficient, there would be no need to establish a Parliamentary Budget Officer.
Canada, in so doing, was following a trend that is quite widespread around the world, and that is staffing up parliament to be able to better perform its budget-related responsibilities. In most countries, however, I should note that the staffing occurs at the committee level, so that the additional staffing that is available to parliament to review the estimates, to offer options, to challenge the assumptions when it's appropriate—these are committee staffings, and therefore it has a low profile and is subordinate to the committee process in parliament.
In a small number of countries, including the United States, Mexico, and Korea, rather than relying on the committee structure as the main means for improving parliamentary budgetary work, a separate and independent office has been established. This has been done in Britain. In Britain it's not formally attached to Parliament, but it advises Parliament.
The role often is to review the estimates to see whether they are reliable. The key budget work today around the world is not simply whether the money should be spent, but are the assumptions underlying the estimates robust? Are they reliable?
Now keep in mind what assumptions are. If the table over here is the waterline, everything above the table is the budget and the estimates. They are open and transparent. They can be reviewed and published. Everything below the table line is assumptions. The assumptions are not transparent. They are not visible. But the numbers above the table are dependent on the assumptions below the table, and there's very little sunlight in government around those assumptions. This becomes the difficult task—and perhaps the most important modern task for Parliament—in dealing with a budget.
On the revenue side, clearly, the revenues are driven. They are a function of the economic performance of government. The future economic performance of government can never be known; it can only be assumed. That is the assumption; that is something parliament has to invest in.
What about the sustainability of the budget over a long term? That's critical to the future course and the future fiscal and economic health of your country. That rests on a bed of assumptions.
What about a government introducing a policy change? You want to know over the medium term what would be the budget implications of that policy change. After all, the first-year cost of a policy change usually is quite minimal, quite modest, but it cascades and enlarges in the future. Has the government been forthcoming? Is it using reliable estimates?
One of the reasons why assumptions lie below the waterline, below the table, is that they do not do well in sunlight. Very often, assumptions.... How do we describe them? The back of an envelope, right? Guesswork, okay? Sometimes they're politically massaged, but even when they're not politically massaged, the best thing you can do about assumptions is just to say this: let's assume a different set of assumptions, let's do a critical sensitivity analysis, and let's—to use a modern term—stress-test the assumptions to see whether they can stand the light of day.
I think this is something that parliament can benefit from. I think this is likely to be something that I would urge your committee to consider, whether in the context of the PBO, the Parliamentary Budget Officer, or in a larger framework—I don't know enough about the situation.
But I do think that you have an organization already, the PBO, which in international quarters is widely regarded, and building on it I think would be helpful. My understanding is that while it's a parliamentary budget office, it works closely with committees so that it's not a completely adrift entity. I would think that's something your committee might wish to consider.
These are some of the thoughts I have. I would invite questions or venturing into other areas where you think I might be of assistance.
Thank you.
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View Linda Duncan Profile
NDP (AB)
Thank you very much, Mr. Chair.
Thank you very much, Professor Schick. It's very interesting.
I am the new official opposition critic and new to the committee, but I've had an opportunity to go through the proceedings of previous witnesses. I have to say I'm reassured that all the esteemed experts who have testified seem to be on the same page. Dr. Joachim Wehner, you probably know, an assistant professor from LSE, recently gave very similar testimony about changing the timing of the estimates, the budgets, and so forth—and certainly on openness and transparency.
We have a Parliamentary Budget Officer, who actually presented one of his reports today. He expressed again his frustration with the lack of transparency and timely provision of information from the government to his office. He has pointed out that a good deal of that information is collected, readily available, and reported to the Treasury Board, but it is not passed on to Parliament in order to do the scrutiny of the budgets and estimates. It's not necessarily passed on to the PBO.
Dr. Wehner recommended that there should be stronger protections and an enhanced role of the Parliamentary Budget Officer to ensure access to relevant information, and that the Parliamentary Budget Officer be made a full officer of Parliament.
I wonder if you would like to comment on that. Do you have a similar kind of officer in the United States?
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Allen Schick
View Allen Schick Profile
Allen Schick
2012-04-25 15:58
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First of all, I'm a little wary, when two experts agree, that it isn't a conspiracy of sorts. I can't tell you whether the Parliamentary Budget Officer simply has what I'll call growing pains—the new kid on the block, and Treasury Board and other mandarins in Ottawa kind of circling the wagons and denying essential information—or it's something more deeply embedded.
I think it would be welcome for the committee to indicate in a report an expectation that the government be more forthcoming with the information. I know it is a weasel term, “government be more forthcoming”, but at this stage it would be premature to go beyond that and give the PBO some quasi-legal authority to pursue information.
At some time in the future that might be appropriate, but perhaps there should something to indicate that the standing of the PBO with respect to requested information should be roughly similar to that of the Auditor General. The same way the Auditor General is entitled to the information, the PBO would be entitled to it.
There is, of course, a big difference between the two. The Auditor General is looking at what happened in the past, and the PBO is looking at what's on the table today, which is why it's much more sensitive.
As for making the PBO a parliamentary officer, I have to admit I do not know enough about what that would entail in terms of the legal and constitutional structure of Canada. Perhaps speaking a little indiscreetly, I have sensed at international meetings that the PBO is sometimes a man without a country, if I can put it that way, without an organizational home. You have to build that home for the PBO. Whether it's as an officer of Parliament or as an independent group, the notion that the PBO is on a short string, so to speak, doesn't bode well for Parliament getting the advice it's entitled to.
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Jack Stilborn
View Jack Stilborn Profile
Jack Stilborn
2012-04-25 16:32
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Thank you very much for that introduction. It really leaves it for me only to say thank you to all of you for this invitation today. It's a great privilege to be here.
You have a text that I have distributed. I will attempt to speak from it, but I will shorten it down a bit as I go.
The synopsis that I offer there I want to reword slightly by suggesting that I think the basic thing I'm trying to do in this text is respond to the fact that a great deal of our thinking about Parliament is heavily dominated by unexamined assumptions, many of which are traditional. One of the challenges in thinking about anything like the estimates process is to attempt to see how Parliament actually works today, and particularly to take full account of the impact of disciplined political parties on Parliament, and then ask what Parliament really needs, rather than necessarily simply imposing what we think it ought to have or should be doing, based on assumptions with which it's no longer well aligned.
Dissatisfaction with Parliament's role in the scrutiny of government spending is longstanding, both among observers and among many MPs themselves. The central argument I will present today is that unrealistic expectations, and, as I've just said, possibly a misunderstanding of the way the Westminster model of Parliament now works, have been a major contributor to these dissatisfactions. A stronger focus on how Parliament actually works today could result in more realistic expectations, lower the frustration level, and also perhaps suggest some changes that might actually make a difference.
Concerns about Parliament’s effectiveness in scrutinizing government spending date back to the beginning of the modern era in Canada’s Parliament in the mid-sixties. The standing committee structure was originally created in 1965, and made permanent in 1968, partly because estimates debates on the floor of the House had become chaotic affairs, wildly partisan, and typically involved the concurrence in most of the government’s spending in panic sessions running late into the night in the last few days when Parliament was sitting. So it's interesting to realize that in the standing committee structure originally, estimates were one of the main jobs that it was seen as potentially being able to contribute to.
Successive episodes of reform in subsequent years have given committees greater powers, resources, and so on, in theory to strengthen their effectiveness in financial scrutiny. Paradoxically, however, 45 years of procedural reforms, both large and small, do not seem to have made a difference to the basic issues that originally provoked reform. Parliament is still widely seen as ineffective in its financial scrutiny role. MPs continue to express wide frustration with the estimates procedure and the supply process. Indeed, if anything, frustration appears to have increased roughly in tandem with the reforms that were intended to address it.
Why is this? A central explanation would seem to be that during the past 45 years the incentives that apply to committee members as they face the estimates each year have remained essentially unchanged. Government-side members who raise issues that could create ministerial discomfort soon learn that this does not contribute to successful political career development in Ottawa.
Some hon. members: Oh, oh!
Mr. Jack Stillborn: Opposition members may gain temporary glory by raising critical questions, but the inattention of the media and public to committee proceedings on estimates is so profound that these moments remain invisible in the ridings. It is implausible, to say the least, that electoral support in the ridings can be influenced by labour on spending estimates in Ottawa.
The fact that governments view the estimates as matters of confidence, given that they reflect the financial intentions of the government, underlies the incentive problem, along, I suppose, with the current level of party discipline. Under majority conditions, there is really nothing for committees to do with the estimates that might actually change spending plans, and under minority government scenarios, as we have recently seen, the theoretical possibility of changes is inevitably wound up with strategic calculations about bringing the government down rather than being about the substance of the estimates.
I have a section here called “Recent Reforms” that I'm going to treat in a more summary way. It basically makes the point that the major recent reform is the restructuring of reporting to Parliament and the creation of a theoretical future-year focus in the RPPs, which committees can study and make recommendations on outside the constraints of the estimates. That's the major development since that time. But committees have shown singularly little appetite for that kind of study, and I think it's because the basic incentives or disincentives I just reviewed have not changed. Also, this new future-oriented study concept—that just comes out of the Treasury Board Secretariat, actually—requires committees to engage in a level of delayed gratification about their work that is very optimistic about the kind of political timeframes that dominate members' behaviour, because these future-oriented studies won't even come into play until a year or more down the road. It's only then that the results will be visible.
What is to be done?
The dynamics of the Westminster model suggest that even in more attractive formats, with more interesting content, the overwhelming portion of information generated by Parliament about spending will continue to be greeted with seeming indifference by Parliament.
However, beneath the indifference, in committees and elsewhere, there is continuous attentiveness to the possibility of exceptional cases—sponsorships, F-35s, and so on—that have a high level of political resonance. When Parliament becomes seized with these issues, its appetite for relevant information becomes extremely intense and rapidly goes far beyond anything available in the formal estimates reports.
This brings me to my first recommendation. Attempts to improve Parliament’s effectiveness in scrutinizing government spending should focus on what Parliament actually does rather than on what we have traditionally thought it should do.
Parliament’s attention to government spending is issue-driven and highly episodic. The critical improvement challenge is thus the availability of information when needed by Parliament rather than the fine-tuning of formal reports or the attempt to redeem the formal estimates process by means of procedural tweaking.
In the committees, the estimates process will continue to be about looking for issues rather than about actually changing government spending. A flexible online resource that allows MPs and staff to drill down to individual activities and get a concrete picture of planned costs, or what is being accomplished and what the present costs are, should be the priority.
Such a resource might occasionally be useful for the consideration of estimates. More importantly, it could support attention to government spending outside the estimates process, where most parliamentary action actually happens now. It should be designed with that role in mind.
I want to just mention here that a lot of the basis for this already exists in the Treasury Board Secretariat in something called the program activity architecture, which you may have heard about from previous witnesses. It basically requires departments to organize their programming in a hierarchical form. They start at the top, with the outcomes to which they contribute, then move to the programs, then move to activities, sub-activities, and sub-sub-activities, where appropriate.
In theory, that drill-down environment is already there. It just needs to be made available to Parliament.
Second, although the idea has traditionally been anathema to governments, a capacity of this resource to break out activities and spending on a riding-by-riding basis is also needed. Yes, this will predictably produce a great deal of posturing about real or imagined inequities. But it would enable questions relevant to Canadians to be asked. Facts would be provided and explanations given. Ultimately, this is a healthy thing.
My second major point is that the existing structure of estimates needs to be replaced with something that reflects what Parliament actually does and, if the argument I have outlined is correct, will continue to do.
Why not integrate the estimates votes into a single vote on a government spending plan? After all, is this not in the bottom line what Parliament does? Parliament concurs in the estimates every year. Why do you need multiple and, in many cases, treacherously obscure votes to accomplish this?
The spending plan could include any limitations on making funding authorities transferred among what are now separately voted items that are appropriate to ensure that the government doesn't have just a free hand to shunt money back and forth at will. It could also include any principles or guidelines currently used by Treasury Board Secretariat in assessing departmental submissions for reallocating money during the fiscal year. This approach would reflect the modern reality that substantive spending control is actually done by governments, with parliamentary endorsement, rather than—as the phrase “the power of the purse” seems still to suggest to many—by Parliament itself. Furthermore, it could actually strengthen parliamentary and public knowledge about how spending control happens.
A modern supply process should take Parliament seriously, and this includes relieving it from ritual tasks that are too often incomprehensible to MPs. Political accountability is by its nature not a systematic process, but is highly selective based on the political importance of singular issues.
Parliament is uniquely the institution that can do this: selecting issues that are important to the public, holding governments accountable for what they are doing or failing to do, and providing through the contrast between government and opposition positions a very public counterweight to the tendency towards groupthink that is otherwise a pervasive feature of modern institutional life.
I think we should be more appreciative of the political accountability delivered by our Westminster model of Parliament and less troubled by the absence of a more systematic, non-partisan kind of accountability in the committees.
Thank you very much.
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View Alexandre Boulerice Profile
NDP (QC)
Thank you, Mr. Chair.
Mr. Stilborn, thank you for coming here to make your presentation. It was very interesting, but at times also troubling.
When you stress the indifference of Parliament to examining budget estimates, it calls to mind other presentations we have heard in which we have been told that scrutinizing expenses is the reason Parliament exists. If it is our role, but we are not fulfilling that role because we are not interested, we have a problem.
You say that members of Parliament are not provided with enough incentives to do this work conscientiously and to spend a lot of time on it. You also mention that it is not very glamorous politically. Yes, I have to confess that committee work is not the first thing my constituents want to talk to me about.
If there are insufficient incentives, what do you suggest to change that situation, that culture? You seem a little negative, a little pessimistic when you say: “In the committees, the estimates process will continue to be about looking for issues, rather than actually changing government spending.”
If there are not enough incentives, if government members cannot really criticize their own government and if opposition members are sitting here solely to sniff out scandals, what concrete changes are you suggesting?
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Jack Stilborn
View Jack Stilborn Profile
Jack Stilborn
2012-04-25 16:47
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I probably do need to talk a little bit about the impression that I may have given of general indifference to the estimates, because I certainly don't want to create that impression. I think that MPs, generally speaking, go through the considerable inconvenience and challenge of becoming involved in politics because they are very passionate about what government does and how public money is spent.
That passion surfaces from time to time in discussions of singular issues that catch parliamentary and public attention. I'm talking about not so much indifference as an almost act of revulsion to the appearance every year of the estimates documents in large piles and reports, which most MPs who I have talked with personally find to be very turgid and uninformative. They feel that these things are being inflicted upon them and they have to wade their way through them to do the formal estimates work, and then at the end of the formal estimates work there's nothing much to do with the estimates other than report them back.
It's not so much indifference as perhaps an element of hopelessness produced by the constraints of the formal estimates process.
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Jack Stilborn
View Jack Stilborn Profile
Jack Stilborn
2012-04-25 17:15
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First of all, I certainly wouldn't want to be undermining your motivation. I'm sure there are lots of other people available on the Hill who can do that.
Some hon. members: Oh, oh!
Mr. Jack Stillborn: What I would say is that I think there are some extremely valuable things that Parliament does that I, as a citizen, value and that no other institution does. I don't think there's any other institution that does it like Parliament, scanning across the whole horizon of government actively looking for issues that warrant public attention and debate for one reason or another. That's valuable.
Basically, an awful lot of what government does is pretty routine, and neither Parliament nor citizens really need to know about it. Citizens will probably never invest the time to do that.
What we need is an institution that is vigilant and sufficiently engaged in governance that it can find those things that need to get further attention. I think that's where Parliament does very valuable work, and we should be thinking about how we could help it do that better.
That's where I come back to the information availability—possibly a database-type proposal.
The second point in the question was whether the Westminster model is outdated. It's very hard to say, frankly.
I think we need to appreciate the merits of the Westminster model, and not dilute it by sliding in congressional elements here and there. I think the expectations around our standing committees bordered on that at an earlier point. Ideas about empowering committees to reallocate a certain portion of funding, for example, go in that same direction.
You have to ask yourself, does that not muddy what is now a relatively clear line of accountability between the government that does these things and Parliament that holds them accountable? Furthermore, if you had 20 standing committees reallocating 10% or 5% here or there in an uncoordinated way, would you actually have better government, and would it even be more democratic?
Personally, I'm skeptical about all of those things. I think that while it is imperfect, our Westminster model has some very important advantages that we need to preserve.
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View Denis Blanchette Profile
NDP (QC)
View Denis Blanchette Profile
2012-04-25 17:18
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Okay.
So let me ask you a question that is less broad this time.
Our practice is that if, by May 31, the standing committee has not reported to the House, it is deemed to have accepted any proposals as it. What do you think of that? Is that good enough? Should we perhaps be improving the focus of the committees' work in studying the budget, so that the job can be done in the time we are given?
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Jack Stilborn
View Jack Stilborn Profile
Jack Stilborn
2012-04-25 17:19
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Basically, the “deeming” rule was put into place I think right back at the beginning of the standing committee structure in 1968, but I'm not 100% sure about that. If you don't have some way of ensuring that the estimates get back out of the committees to the floor of the House, then you open the door to all sorts of tactical games within the committees to avoid having votes on them and to delaying and possibly kind of gumming up the larger parliamentary consideration of the estimates. Those activities wouldn't necessarily have to do with the substance of the estimates; they could have to do with almost anything.
So the deeming rule is basically a way of ensuring that the whole process isn't brought to a halt by what would amount to filibustering. I think that's valid. If Parliament decides to bring the estimates process to a stop, either in some small way or more broadly, that's its right to do, but it should be done on the substance of the estimates and not as a result of some kind of clever tactics in a committee.
The second point—and it goes back to this basic mantra about incentives—is that if committees are not motivated to look seriously at the estimates, then deeming or not deeming really doesn't make much of a difference. So you just do what allows the system to keep working, I think.
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David Good
View David Good Profile
David Good
2012-04-23 16:38
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Thank you very much, Mr. Chairman.
I greatly appreciate the opportunity to appear before the Standing Committee on Government Operations and Estimates, and I do applaud members of the committee for undertaking this study of the estimates and the supply process.
As a former public servant, I spent a good number of years dealing with budgets and the estimates in Ottawa, and I'm happy to report that I now have the time in a university to actually think and to write about these important matters of the management of public money.
I know you've heard much testimony from witnesses over the last number of weeks and months, and it's not surprising that everyone who has come before the committee has really made suggestions for improvement. I think it's a telling point, given our deep and important traditions of parliamentary government, that no one has recommended the status quo.
It's not my intention to quarrel or argue with what other witnesses have said, but I do want to set out what I think are some of the important issues that the committee is grappling with and suggest some improvements that I think might be made. In a way, it will be my small way of maybe helping you connect some of the dots.
A central principle of responsible parliamentary government is that the House of Commons holds the power of the purse. This means that the government has no money. It has no money except for that granted by Parliament, and the government can make no expenditures except those that are approved by Parliament. The House, of course, must be satisfied as a matter of confidence that all spending and taxation is consistent with legislation, with Parliament's intentions and the principles of parliamentary control.
The fundamental principles of parliamentary cabinet government limit the role of Parliament in the estimates process. It's the responsibility of the government to govern, in other words to establish the priorities, to put together a budget and the pending proposals, and then to present the estimates. Parliament approves the estimates and authorizes the government to spend the money. Government, not Parliament, spends the money.
In the estimates process, the role of Parliament is limited. It can only make one of three decisions on specific expenditure items. It can lower the amount proposed by government, it can reject the proposed expenditure in its entirety, or it can approve it unchanged. Reduction or elimination of an expenditure item is normally viewed as a want of confidence.
I'll spare the committee any history of the supply process, but I do want to make one important point, that the problems of supply and Parliament's frustrations with the estimates are not new. They are not new at all. In fact, they are very longstanding.
Shortly after the turn of the 19th century, in 1908, a royal commission observed that supplies were duly voted in the customary course in the small hours of the night by jaded members in a tired House. The resulting royal commission concluded dismally that parliamentary control over the government's expenditures was negligible. By mid-century it was no better. And in 1962, a leading student of Parliament, W.F. Dawson, observed that “...there is no part of the procedure in the House of Commons which is so universally acknowledged to be inadequate to modern needs as the control of the House over public expenditure.”
The substantial amendments to the supply procedures in 1968 did not really improve the process, and in fact by 1995 J.R. Mallory observed that from all sides, the view was the same: the review of the estimates was often meaningless.
By 2003, some parliamentarians were admitting that they were simply overwhelmed. The traditional notion of holding government to account was no longer feasible. There were just too many expenditures, too many reports, and too many programs to review.
If the criticisms have been many over a long and sustained period of time, the studies, the reviews and the suggestions for improvement have been very numerous. Since 1968, there has been three studies by committees and MPs: “The Business of Supply”, “Meaningful Scrutiny”, and “The Parliament We Want”. These have resulted in some 113 recommendations, but, unfortunately, there has been little change.
I find this most regrettable, but I think it's also telling. It suggests that there is really no silver bullet here; there is no magic wand. I don't think there's a universal solution that we can somehow import best practices from somewhere else in the world and bring them to Canada. As in all matters of public money, particularly in democratic government, there are many competing interests at stake and there's a need to balance and rebalance things. This does not mean that nothing can be done; however, it does suggest that if we're to do something more than studies and reports, then the feasibility of things will be almost as important as their desirability.
Let me touch briefly on some of the issues and then suggest some areas where I think improvements could be made. These are in no order of priority.
First, I would make the Parliamentary Budget Officer a full agent of Parliament to assist parliamentarians and committees. I think the role and mandate of the Parliamentary Budget Officer needs to be clarified and strengthened by making the office legislatively separate and independent of the Library of Parliament, thereby operating as a full agent of Parliament. A confused mandate, which I think we've had since its creation, only serves to increase partisanship and the scoring of political points rather than channelling substantive information to elevate the level of debate to assist parliamentarians in the scrutiny of the budget and the estimates. As a full agent of parliament, the Parliamentary Budget Officer would have authority to have greater access to documentation.
To date the Parliamentary Budget Officer has primarily focused on economic and fiscal forecasts and costing analysis of selective government expenditures. However, the office has an important mandate with respect to the estimates, and it's a mandate that I think has received too little attention to date. As a full agent of parliament the Parliamentary Budget Officer could and should provide significantly greater support to parliamentary committees in their review of the estimates and in dealing with the business of supply.
My second suggestion is to obligate the government to include budget items in the estimates. The estimates have increasingly become unaligned with the budget. This year is especially glaring and troublesome, with the result that the main estimates is almost meaningless as a document to actively reflect the government's spending plans. In addition, the decision not to include the budget initiatives in the departmental reports on plans and priorities, the RPPs, to be tabled next month, is most regrettable and adds to this misalignment. It clearly reduces significantly the incentive for committees to thoroughly review the estimates.
In my view there is an urgent need for closer alignment between the budget and the estimates. I'm not particularly worried about the budget's economic forecast being done on a full accrual basis and the estimates being done on a cash basis. This is and can be reconciled. The real problem, to my way of thinking, is the lack of inclusion of budget items in the main estimates. The key challenge here is to ensure, to the extent possible, that budget items are included in the main estimates.
While the budget and the estimates have never been fully aligned, my experience was that there was greater alignment in the past between the budget and the main estimates. I recognize that it's not always possible to include budget items in the main estimates, particularly when we have budgets that deal with major economic difficulties, such as the program review budget of 1995, and more recently the major economic stimulus budget of 2009. These, I suspect, will be treated as exceptions; but the expectation and the norm should be to include the budget items in the main estimates.
To make this happen I think that two things need to be done: one is that there needs to be very close cooperation between the Treasury Board Secretariat and the Department of Finance; and secondly, I think we need to look at either an earlier date for the budget or a later start to the fiscal year. Those are two options to provide sufficient time to ensure that the main estimates are aligned with the budget.
My third suggestion is that we make committee membership permanent. I don't need to remind anyone how complicated and difficult the estimates are to review and how limited your time as members of Parliament is. I would suggest making committee membership permanent for the duration of the parliamentary session and restricting the number of associate members. I think this might help to foster greater continuity within committees and encourage more specialization and expertise, in particular in policy, program, and expenditure areas.
My next suggestion is to review tax expenditures and include them in departmental reports. By tax expenditures, I mean tax exemptions—deductions, rebates, deferrals, and credits—used to advance a whole wide range of economic, social, and other public policy purposes. These are a significant amount of public money. They amount to over $100 billion annually. They've been variously described as backdoor spending, dark holes in the budget, and giving with both hands.
Despite the large amount of money and their increasing use, tax expenditures are not subject to a system of review and scrutiny as other expenditures. Tax expenditures are forgone revenues. In fact they are not budgeted the same way as direct expenditures—in fact are not budgeted at all.
Since the first tax expenditure account was published in 1979 in the John Crosbie budget, little has changed with respect to the scrutiny of tax expenditures. They are not included in budgets and the estimates of departments. They are not part of the public accounts of government. They are not reviewed by Parliament and its committees. They do not come to the attention of financial watchdogs. They are not regularly audited by the internal auditors or by the Office of the Auditor General nor evaluated by program evaluators.
At a minimum, as part of the estimates documents, departments should provide parliamentary committees with a report on the tax expenditures relating to their areas of responsibility.
My next suggestion is to better align the vote structure and the program activity structure.
As you know, the vote structure is the essential element for parliamentary control of the budget. Parliament grants money on the basis of votes. The estimates are broken down by votes, and the government cannot spend more than Parliament grants without coming back to Parliament. The government must then come back with supplementary estimates. The vote structure is a fundamental balance between adequate control by Parliament to hold government to account and sufficient flexibility for government to ensure efficiency in government expenditures. Over the last decades, the vote structure has been adjusted, and in some cases loosened, to increase the flexibility of the government to organize the financing of its activities.
Proposals for changing the vote structure have come from government, the Treasury Board, and not from Parliament. The government's program activity structure, on the other hand, is a structure that the government uses to report on programs against its objectives. It is a program structure that's used in the reports on plans and priorities, tabled in the spring, and the departmental performance reports, tabled in the fall.
I would simply encourage parliamentarians to examine the vote structure and to ensure that you're comfortable with it. I would also encourage you to examine the government's program activity structure and to ensure there's sufficient alignment between the vote structure and the program activity structure.
My next suggestion is to keep budgeting on a cash basis; I would not move to accrual budgeting.
As you know, in the private sector accrual budgeting is the norm, and in government budgeting is done on a cash basis. Also in government, the financial statements are done on an accrual basis. I don't think that because financial reporting in government is done on an accrual basis, budgeting should also be done on an accrual basis.
Cash budgeting is not only simple and straightforward, but it's also easier to understand than accrual budgeting. Accrual budgeting requires relating future expenditures to present expenditures through discount rates, social rates of return, and requires judgments and discretion. As a result, it is more open to interpretation and I would worry that accrual budgeting could be more prone to fudging of numbers, budgets, and allocations.
Forward-looking budgeting and after-the-fact accounting and reporting are not the same thing. Accounting, while important and essential, should not drive budgeting and the estimates. Financial reports can and are reconciled with budgets.
In considering the estimates, it seems to me that what's important for parliamentarians is to receive accurate and up-to-date information on how much the government has to spend and where it has to spend it. All things considered, I would stick with cash as a basis for budgeting.
Let me make one final suggestion before I conclude: I would suggest that committees need to develop a strategy for reviewing the estimates. From my experience as a public servant, the committees that have been most effective in reviewing the estimates have used a simple strategy. This strategy usually includes elements of the following. The members have been thoroughly briefed by government officials on the department, its programs, and expenditures; and the committee decides on a very simple and clear work plan for investigation, and its questioning of witnesses is disciplined and coordinated. The focus consists of one or two areas of expenditure where the committee feels the department is at risk, and the committee continues to seek additional information and analysis so that it can back up its focused investigation.
I know that some people, perhaps including academics, will not think this is very comprehensive, fulsome, thorough or complete. But from my own experience it can and does work for committees when they function as committees. I think that a clear and focused strategy would allow the committee to effectively draw upon the expert advice of the Parliamentary Budget Officer. It could also assist the committee in fulfilling its obligation to report on the estimates within the very limited timeframe it has available.
Mr. Chairman, that concludes my statement. I want to thank you very much for the opportunity to appear before the committee.
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View Pierre Dionne Labelle Profile
NDP (QC)
I get the sense that when the Auditor General eventually informs us that program X or program Y is failing, it is usually too late. Midway through, the committee dealing with the department in charge of the program in question is not able to detect or see that the program is falling short. We are talking about reconfirming Parliament's role in budgetary oversight. But there is a flaw here. We don't have the tools we need to prevent these failings. Regardless of the government in power, this information always comes to light too late.
That was not a question. I would like to hear your thoughts on that. I would say you are quite bold in suggesting a non-partisan approach as far as the Parliamentary Budget Officer's role goes. You also mentioned tax expenditures; that's quite a bold suggestion on your part given the current majority government.
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David Good
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David Good
2012-04-23 17:10
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On the question of the Auditor General, we have a system where Parliament is involved in three areas when it comes to public money. One is before the fact, and that's in the finance committee, in its pre-budget consultations and discussions. That has worked very interestingly. In my view, ministers of finance have listened to what has been reported out of that committee and what has been done before the budget. It has had some indirect and subtle impact.
At the back end of the process we have the Auditor General. The Auditor General is a long-standing tradition in our country, a key part of parliamentary democracy in holding governments to account. We have a public accounts committee. All of that handles things after the fact.
The question is, as we see those dilemmas what do we learn and how does it get incorporated back into the system?
Squeezed between those two beginnings, the front and back bookends, is the estimates process, which approves and reviews the estimates and the business of supply. Your sentiment of trying to increase the learnings both from the front end of the process and the back end of the process particularly—back into the appropriations process—I think would be a very good idea. I support what you've said.
Just how that is done, I think, requires expertise and skill. I think some of my recommendations would indirectly help in that, including permanent membership on the committees, support from the Parliamentary Budget Officer, making sure budget items are included in the estimates, aligning the vote structure in a better way with the activity structure, and also ensuring that we handle expenditure reviews in a focused manner.
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View Mathieu Ravignat Profile
NDP (QC)
View Mathieu Ravignat Profile
2012-04-04 16:12
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I have the feeling that it is a challenge for parliamentarians in New Zealand, just as it is for us here.
I also wanted to ask you a question about the officers of Parliament who verify the budget process, votes, and so on. I believe you mentioned three. Could you describe their role and their ability to inform parliamentarians?
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David McGee
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David McGee
2012-04-04 16:13
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Yes, I could.
One of the offices is very important to the parliamentary process of considering expenditure approvals.
There are three officers of Parliament in New Zealand. The oldest is the ombudsman, the office that I hold, which is traditional ombudsman work in terms of looking at allegations of maladministration throughout the public sector. And also in New Zealand, the ombudsman is the adjudicator on disputes over access to freedom of information. But there isn't a great deal of ongoing, day-to-day contact between the ombudsman and the way in which Parliament works.
A second officer of Parliament in our system is the Parliamentary Commissioner for the Environment, who is an independent official who will launch inquiries into policies or actions that have environmental consequences or implications. It's a voice outside government to which groups can turn when they think something is going to have an adverse consequence for the environment, which can then be investigated and reported to Parliament. The Parliamentary Commissioner for the Environment becomes involved with parliamentary committees if they're carrying out an inquiry with environmental implications, but it's a very occasional involvement with the work of Parliament.
The third official is the Auditor General. The Auditor General's Office does have an ongoing relationship with Parliament because the Auditor General's staff are available to be attached to parliamentary committees, especially when they're doing the post-budget review of the way in which governments and departments use their expenditure authority. The Auditor General's staff are also available during the estimates, but I don't think that committees find the Auditor General's staff as useful in their estimate approval process as they do in their post-budget analysis, because that's where the Auditor General's particular strengths are brought to bear.
Although we don't have a parliamentary budget office, there is support available from the Office of the Auditor General to parliamentarians in their budget approval and in their post-budget analysis phases.
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View Denis Blanchette Profile
NDP (QC)
View Denis Blanchette Profile
2012-04-04 16:36
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Let us talk about accountability. With estimates or a budget, we eventually want to see whether the objectives that were set are being met.
Does your country have the equivalent of what we have here? Is it always the same people who oversee the preparation of the budget estimates and the examination of the public accounts, the annual reports, or is it different groups? How is this examination designed so that new estimates can be properly scrutinized?
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Harry Evans
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Harry Evans
2012-04-04 16:36
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Apart from these committees and the staff who work on the estimates, the estimates and the explanatory notes of the departments are subjected to scrutiny by a large number of other people and bodies.
There is a public accounts committee, a joint committee on public accounts, which does the technical scrutiny of public accounts and reports regularly on them. They are assisted by the Auditor General, who audits the public accounts and does performance audits that look particularly at the performance of departments.
The Auditor General and the reports of his office are available to the estimates hearings and the senators in the estimates hearings. Audit reports provide one basis for questioning at estimates hearings.
There is a good deal of focus on the performance of departments and the effectiveness of programs.
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View Mike Wallace Profile
CPC (ON)
View Mike Wallace Profile
2012-04-04 16:49
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Thank you, Mr. Chair.
Thank you, Mr. Evans, for joining us today.
I have four or five questions, and I'm going to go fairly quickly.
Your estimates are presented on a program basis. Here they're on an aggregate basis. They are just straight numbers across the board. There's very little about each program.
If a program crosses departmental lines—for example, human resources helps pay for something, but other departments do too—is it indicated in the information provided to the committee who is actually responsible for that program and where all the parts are?
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Harry Evans
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Harry Evans
2012-04-04 16:50
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Yes, certainly. That's spelled out in the explanatory notes. And both departments can be called on to explain those particular programs. It's a good way of checking, of course, and cross-comparing on the program.
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View Alexandre Boulerice Profile
NDP (QC)
Thank you, Mr. Chair.
Mr. Marleau, thank you for your lively and meaningful, yet succinct, presentation. It is based on much experience and knowledge.
You used the term "accountability". I think that's the very foundation of the exercise in which we are currently engaged and of the work we as parliamentarians and legislators must do.
How would you rate the current federal government's transparency and accountability?
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Robert Marleau
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Robert Marleau
2012-04-02 15:49
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Not too long ago, I was the information commissioner. So I am going to refer to the reports I produced at the time, where I did not praise the government's transparency. Of course, being against transparency is like being against motherhood. One cannot disagree with it; there is never enough transparency. If we compare ourselves to other parliaments, globally, we are well behind.
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Robert Marleau
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Robert Marleau
2012-04-02 16:00
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When it comes to the estimates themselves, the supply, that's all you can do. What the Speaker ruled was that the committees, at the same time, had the power to report to the House. What they were doing was saying, we approve of these estimates, but we make the following recommendations. They were very neutral recommendations. They used language like, “Had the government considered the advisability of building a second port in St. John's?” It wasn't binding.
Back then, committee reports were debated in routine proceedings. They were also being used as a dilatory tactic. After question period, on Wednesday, it would be committee reports before government orders. We'd start debating a committee report and it would go to the hour of adjournment before it was transferred. The Speaker was concerned that all of a sudden there was a new dilatory tactic that was brought out. That doesn't exist anymore. The Standing Orders have evolved differently. It's very hard to use a committee report for a dilatory purpose.
Plus, if you take the existing hour, it's there, one to two. Nobody loses. The government doesn't lose any time. Only you, as involved parliamentarians, would invest in that time. Likely, it would be members of this committee and it would be short speeches of five minutes, on the floor, committee of the whole style, with questions and answers, and maybe, although not necessarily, a vote. That would be up to the committee report.
All of that stuff around the limits on committees on supply, in terms of what members want to do has evaporated, in my view. You have access that you didn't have before.
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Robert Marleau
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Robert Marleau
2012-04-02 16:07
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I don't want to attribute motives to it. At the time, when Parliament had Bill C-2 before it and I appeared as a witness, I said that it was at the wrong place and that part of the mandate was missing. If you want Parliament or the House of Commons to have elements that contribute to the government's obligation to be accountable, it is not in the formula that it is....
We can chase F-35s any time; that's glamourous. But having to respond to a committee report asking you to do a specific job and a specific analysis, say over a five-year plan, would be more effective.
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Robert Marleau
View Robert Marleau Profile
Robert Marleau
2012-04-02 16:09
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I think the mandate of the PBO should be largely in support of committees on supply. If you're studying whether the age of qualification for the OAS should be reduced or not, you have ample access to experts out there who can come in on contract and work with your witnesses. But there is nobody out there in the private sector—there's only one former clerk alive, and that's me—who understands the supply process and the supply details. So you need a staff that is on it, and that is continuity for you and for the next committee and the one thereafter, much as you have with the library and the researchers.
I'm not saying that the PBO should not have the mandate it has now. I'm saying it hasn't exercised part of its mandate. As far as I know there has not been a lot of work done by the PBO on estimates, and it's been before them and with them from day one. I would move it out of the library. It's kind of a barnacle on the side of the library, and you remember the tussles they had at the very beginning of the creation of the office, where the poor man didn't know who he reported to and what he was supposed to do. It's not a criticism; I'm just saying it's in the wrong place. Put it in the House, in the committee's branch, and make him an officer of the House, and then that office has to conduct itself....
Right now the perception, at least on the outside, is that it is largely an opposition function. Why can't you as government have access to some of this information and direct, through your majority control, certain studies that you want done from time to time? It's not sufficient for government parliamentarians to say you have all the bureaucracy. As parliamentarians sitting in government, you can have influence on your own government, and hold it accountable for some of the things it does. It doesn't have to be negative and it doesn't have to be a confidence issue, and you shouldn't get booted out of caucus because you have a point of view on a particular aspect of spending.
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John G. Williams
View John G. Williams Profile
John G. Williams
2012-04-02 16:36
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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.
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View Alexandre Boulerice Profile
NDP (QC)
Thank you, Mr. Chair.
Mr. Williams, thank you for your knowledgeable presentation. We are hearing from some outstanding witnesses today.
I also appreciated this overview of the signing of the Magna Carta, which led to the creation of parliamentarism. That's also a reminder that Parliament was created to do what we are no longer able to do today. I'm talking about the auditing of expenditures. My questions for you will be very similar to the ones I put to previous witnesses.
Since you represent an international organization, I will take advantage of your knowledge to ask you this. Can we find comfort in comparing ourselves to others, or is Canada cutting a sorry figure, on the international stage, when it comes to parliamentarians' capacity to audit and control the federal government's expenditures?
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John G. Williams
View John G. Williams Profile
John G. Williams
2012-04-02 16:50
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I have two things in response, Mr. Chair.
As you know, Canada is a beacon for the world, and long may it continue to be a beacon for the world as far as democracy is concerned. Also, in many ways, when you look closely, it's perhaps not as vibrant and robust a year as it should be.
Parliament has the authority. Have no doubt that Parliament is the supreme institution of the land, if you want it to be that way. Therefore, there is nothing outside your capacity if you, collectively, as a Parliament, decide to do this.
You have the power, collectively, if you use it.
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View Alexandre Boulerice Profile
NDP (QC)
It makes me think of somebody saying not to let anybody tell you that you can't do that—I like the spirit.
There is some skepticism—if not pessimism—when it comes to the outcome of the study we are currently conducting. It is an important study, but it is not the first of its kind. You are familiar with the 1998 study—the recommendations that came to nothing—and the 2003 study, which does not appear to have changed the system.
We are under the impression that, even if we came to a unanimous agreement—which happens sometimes, but not very often—if the executive branch is not willing to change things and wants to maintain control.... When something is shrouded in much mystery, parliamentarians have little power and, in the end, the government has practically all the weapons on its side. Even if we agreed and produced a nice unanimous report, if the Office of the Prime Minister blocked....
What do you think is needed to really bring about some positive changes?
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John G. Williams
View John G. Williams Profile
John G. Williams
2012-04-02 16:52
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I would like to see the estimates committee, first of all, collectively study the mandate you now have in the Standing Orders under 108(3)(c), which is wide-ranging and virtually limitless. You can look at everything the government spends. You do not really need a change in the Standing Orders.
Then don't get caught up in this confidence convention. Program spending is now within your mandate.
Mr. Marleau, the previous witness, said to set out a five-year plan. The business of supply report said not a five-year plan but decide if you're going to look at any specific program of spending the government does. Then you can ask through the House that an evaluation be done by the experts. The Parliamentary Budget Office has now appeared on the scene since this report was written.
There is a discipline called program evaluation that can give you a report of something of this magnitude on a particular program, asking four questions. One, what is the mission this program is designed to achieve within the country? Two, is it performing and fulfilling that mandate? Three, it is doing it efficiently and well? Four, is there a better way to do the same things? These are simple, fundamental questions that are long ranging in their application and do not invoke confidence. If you can get the professionals, the program evaluators, to give you a report of this magnitude on a program, you as a Parliament can now become engaged and make recommendations to the government that it would listen to going forward. Therefore, you can be very effective, in my opinion, if you act as a collegial committee moving forward in examining pieces of government spending in detail.
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View Denis Blanchette Profile
NDP (QC)
View Denis Blanchette Profile
2012-04-02 17:01
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Thank you, Mr. Chair.
I also want to thank Mr. Williams. I am pleased to meet one of the spiritual fathers of this committee. It is a pleasure.
You may be able to shed some light on certain issues. Most of your recommendations have not been adopted. That includes the recommendations contained in the 2003 study. I am convinced that, if you have been faithfully following all our work, you are under the impression that we have been repeating ourselves, as if something was not understood.
What do you think we can do to avoid a repetition of what happened in 1998 and 2003, and to ensure that this work truly helps change or improve things?
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John G. Williams
View John G. Williams Profile
John G. Williams
2012-04-02 17:02
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I would start, Mr. Chairman, by having an in camera meeting of the members to look at your standing order mandate.
It is broad. It is wide-ranging. It covers all parts of government. You need to decide how you're going to examine government spending beyond just the estimates that are tabled at the beginning of March, which have to be voted on and confidence is attached.
You should move away from there. Don't leave it behind, but don't make it your primary focus. Consider how the estimates committee could look at government spending, loan guarantees, tax expenditures. By virtue of the fact that tax expenditures are deducted from people's income tax means there's no revenue, no expenditure, no program. There's nothing. There's nothing that comes before Parliament on tax expenditures that gives you information. Yet, they can be huge public policies—RRSP contributions being one of the major tax deductions and tax expenditures that doesn't show up anywhere.
These are the things you can look at, and then you can table a report in the House asking the government to provide evaluations of this magnitude that give you detailed managerial information on how this program is doing, and then go forward from there. This is where I think you can make the greatest impact and influence government spending down the road.
Now if you take a look at the 52 recommendations, program evaluation is a big one. Reallocation within a department of up to 5% gives you the potential tool to say, “not there, but there”, without invoking confidence that the government would agree.
That's provided you put forth reasonable rational reasons for your proposal. The government would then have to respond. It would have to accept or not accept, and provide its reasons for doing so. That allows a reasoned and intelligent debate in the House.
When you have that kind of attitude, it reduces the partisanship and makes it much more meaningful. You represent the wishes of your constituents rather than just throwing political barbs across the table, and therefore they have more confidence in the work you do.
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John G. Williams
View John G. Williams Profile
John G. Williams
2012-04-02 17:10
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Absolutely, for two reasons.
First, Parliament has an opinion. Of course, you're here because you have an opinion. You're here because you represent the opinions of the citizens who elected you. There is no guarantee that the government is all knowing, and has everything right.
You're entitled to express your opinion. If you say, instead of spending all the money over there, why don't you put some of it over here, if that is your opinion and it's reasoned and rational, the government might listen to you.
At the same time, also, by knowing that you have this authority to move money, or to recommend that money be moved—not be spent here but spent there—it gives you the incentive to look at the information knowing that your contribution can count.
If you know that your contribution can't count, if you're just going to get batted away, then, as I say, sometimes if people have no responsibility they act irresponsibly. That feeds the partisanship. But if you have this authority and this capacity, there is no doubt in my mind that you will accept it, and deal with it professionally, and make a contribution to the country.
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View John McCallum Profile
Lib. (ON)
Having spent some time in government and on the expenditure review committee, I don't remember this species of person called a neutral program evaluator. I'm not saying you're wrong, but I would have thought that even if you have that person, the committee will get what the government wants it to get.
Why not use the Parliamentary Budget Officer or some other independent body that works for the committee—not for the government—to spearhead this thing, possibly in conjunction with these people you've described? I don't think you want all the determination of the reports to be put into the hands of the people running the program or even of the government.
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John G. Williams
View John G. Williams Profile
John G. Williams
2012-04-02 17:15
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I agree, Mr. McCallum, and I'll say that when we wrote this report the PBO did not exist. I made my point that I think the Parliamentary Budget Officer should be an officer of Parliament serving this committee, very much like the Auditor General serves the public accounts committee.
Therefore, it would have the staff and the resources to do that program evaluation and also have the access to the documentation too. That would require legislation. The act for the Auditor General gives the Auditor General access to the documentation. The PBO would need that same kind of legislation.
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View John McCallum Profile
Lib. (ON)
I think we agree so far. I now come to some of the issues that my NDP colleagues have been raising. Why would the government want this committee to have that information in the first place?
The government would generally prefer to feed us stuff that it wants us to have, not give us a capacity to dig out stuff that they may not want us to have. They're doing expenditure reviews. If they want to get rid of a program or cut it, they can cut it without having some nagging little parliamentary committee telling it what to do and digging up dirty things that they might not want us to know about.
Why would the government want to cooperate with us on this?
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John G. Williams
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John G. Williams
2012-04-02 17:17
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I have two points. First, it's not a case of sharing. Government doesn't share with government; government reports to Parliament. Remember that Parliament is over the government and can demand anything from government that it wants.
Second, when people are held accountable on the small things, it prevents the big things from happening. Therefore, some minor managerial problems within an institution the size of the Government of Canada are not going to bring down the government, but are going to keep it focused in ensuring good service for Canadians.
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View Mathieu Ravignat Profile
NDP (QC)
View Mathieu Ravignat Profile
2012-04-02 17:24
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Since you are from the Global Organization of Parliamentarians Against Corruption, I'd like to ask you to talk a little about the relationship between corruption and this committee. Specifically, what major changes would be necessary to ensure that this committee can play a role in avoiding corruption?
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John G. Williams
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John G. Williams
2012-04-02 17:24
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I appreciate the question very much. On the concept of avoiding corruption, when you are held accountable you tend to do things right. Here we are in a democracy. We have the media reporting what goes on in committee. We have television, and so on. The public knows what is going on here. If they don't like what's going on here, they have the opportunity to change it at the next election. Or if they like what's going on, they can send you back again.
In dictatorships around the world there is no accountability, and when there is no accountability people steal the cash by the billions of dollars. When they steal the money their people are destitute. When you look around the world and see all the poor people on television who are starving and dying of this, that, and the next thing, it's because of bad governance, not a lack of aid. Why is it bad governance? It's because the people cannot hold their governments accountable.
Nobody has ever voted for poverty. Why is half the world poor, and a billion and a half people destitute? It is because they cannot exercise accountability over their governments, as we do here in Canada. What we're trying to instill around the world is accountable governance.
This committee is about accountability. You look at government spending and approve it or don't approve it. If you can get the House to agree with you not to approve it, then we have an election and fight it out. That's the way we do it in this country. It's called accountability. We let the people ultimately decide.
But in far too many countries around the world that opportunity doesn't exist, and people are left in absolute and total poverty with no capacity to demand services from their governments.
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View Alexandre Boulerice Profile
NDP (QC)
Thank you, Mr. Chair.
Mr. Ferguson, thank you for your presentation. I would also like to thank your colleagues for coming. I must say that I was delighted to hear your opening statement, of which a good part was in French. Bravo! That was great to hear.
Last week, when discussing an issue I know something about, the G8 spending scandal in the President of the Treasury Board's riding, Ned Franks told us that the spending complied with the existing rules because of the way the votes are structured. We also believe that departments should have some flexibility when it comes to the way in which they provide their programs. However, like most Canadians, we think ministers should not be able to distribute money in their ridings for projects undertaken mainly for election purposes. We in the NDP want to prevent ministers from being able to give gifts in their riding.
How can we, parliamentarians or the public, know if taxpayers' money is used for other purposes that are clearly different from those we examined and approved? How can we as parliamentarians restructure these appropriations in order to prevent this type of misuse of funds?
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Michael Ferguson
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Michael Ferguson
2012-03-28 15:37
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Thank you for your question.
In response to the honourable member's question, I think the critical thing is that the votes themselves need to be clear about what they are for and what they are intended to be for. I think that's the fundamental starting point in all of this: it's that what Parliament is approving needs to be clearly laid out in each of the appropriations. Then, once it's clearly laid out, it's I guess part of the process to make sure that the spending then complies with what's contained in those appropriations.
So I think it's purely a matter of making sure the appropriations are clear and then making sure that the overall management structure ensures that the spending is in agreement with what the votes were approved for.
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View Mathieu Ravignat Profile
NDP (QC)
View Mathieu Ravignat Profile
2012-03-28 15:46
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Thank you very much for being here. It's very important that you be here for this particular study.
One thing I've found frustrating as a parliamentarian is being unable to track, through the estimates process, spending that seems to be unjustified or seems to be unmeasured. I'm referring particularly to the overcharging of SNC-Lavalin, for example, for light fixtures and for desks, etc. How could this process be better structured so that we can track these types of out-of-control expenses?
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Michael Ferguson
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Michael Ferguson
2012-03-28 15:47
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Thank you for the question.
Part of what we do is that we audit the federal government's public accounts, but we audit that at the sort of macro level of the public accounts to make sure that the financial statements the government presents are presented fairly. We don't perform our audit in order to track the spending at the sort of individual vote level. We don't audit at that level of detail. It is really left up to the internal workings of government to make sure that the departments are spending according to the budgets they were given.
So again, it's not really something I can comment on, because it's just not the level of detail we get to. If in the course of our audit we were to find spending that we felt significantly didn't comply with an appropriation, we would probably raise that in our observations.
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View John McCallum Profile
Lib. (ON)
Thank you, Mr. Chair.
Welcome to Ottawa, Mr. Ferguson.
I would like to start with a question on the G8 Legacy Fund.
I'm sure you're aware of this issue over the G-8 legacy fund, which was supposed to be for border infrastructure but ended up being used in Muskoka. So I guess my question to you is whether there are.... I mean, we're not saying that transfers should never be made, but we are suggesting that parliamentarians should at least be informed when such transfers are made.
My question is whether there's a mechanism that would require the government to inform us of such changes and what that mechanism might be.
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Ned Franks
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Ned Franks
2012-03-26 15:33
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That's wonderful.
This question is of great interest to me. I cut my eye teeth—if that's the right expression—on parliamentary finance and government finance in working for the Budget Bureau of the Government of Saskatchewan. One of the things I worked on there was the form of the estimates and the accounting procedures to the legislature. That's where my interest in the accounting officer approach came from, and the estimates have always been of equal interest because I worked on them for many years there.
I'll just go through the comments. The standing committees were reformed in the 1960s. One of the jobs they were given in those reforms was the immediate, medium- and long-term expenditure plans of the departments and the effectiveness of their implementation. You would have thought that this gave the committees all the powers they needed to review departmental finances, financial planning, and the intentions as embodied in the estimates, but members often found dissatisfaction in the process.
In fact, early on, after those reforms of the 1960s, one committee made a substantive report on the estimates that had been referred to it—in other words, a report commenting on them—but the report was not accepted by the Speaker, who ruled that committees cannot make substantive reports on the estimates; they can only approve them as is, or propose a reduction, or propose eliminating them. But they can't do anything else.
This did not make the committees more eager to examine the estimates, and committee attention has dwindled for all the estimates of the government, in all committees, the Parliamentary Budget Officer has said, to about 60 hours in a year.
In the past, there were two parliamentary studies of the estimates and the estimates process by committees. In 1995 the House instructed the Standing Committee on Procedure and House Affairs to undertake a comprehensive review. Similarly, in 2003 the Standing Committee on Government Operations and Estimates also did that and produced Meaningful Scrutiny: Practical Improvements to the Estimates Process, which was 60 pages long, as opposed to 90 pages from the previous committee.
I would like to quote the 1995 committee report: “One of the witnesses, Dr. Franks”—that's me—“expressed doubts—
The Chair: I thought that might be your father.
Voices: Oh, oh!
Dr. Ned Franks: No, I'm guilty.
It stated:
One of the witnesses, Dr. Franks, expressed doubts that changes to the committee system or to the techniques used by committees to examine the Estimates would result in any improvement.
So I expressed my doubts, and the committee went on to say:
Although we understand this view, the Committee does not entirely share it. Yes, there are constraints that limit committee effectiveness, but these need not be completely debilitating. The Committee believes that there are ways in which committee study of the Estimates can be made more effective and are confident that the following suggestions will produce positive results.
They made...oh gosh, it was something like 90 recommendations, and nothing happened. There were a couple of tiny changes, but no significant ones. Then, in 2003, also as a witness, I was before a committee that went over the same area. It made fewer recommendations—23—but that did not lead to significant change.
So it might be my fault as adviser to the committees, but with a track record like that, I don't feel that I'm in a position to offer mammoth changes and to say, “Yes, sure, this will happen.” Because it doesn't.
Also, there are some problems in it that are constitutional, in the way the Constitution is interpreted in Canada. The fundamental principles of parliamentary cabinet government limit the role of Parliament in the estimates process. Ours is a system of government in and with Parliament, but not by Parliament, and nowhere is this more apparent than in the financial processes. The government is responsible for preparing the budget and estimates.
Parliament approves the estimates and authorizes the government to spend money, though only for purposes, in amounts, and through processes authorized by Parliament. The government, not Parliament, spends the money. Parliament again enters the financial processes in the third, accountability processes, after the money has been spent, with the audit by the Auditor General and the review of the Auditor General's reports by the public accounts committee.
Even in the estimates process, the role of Parliament is limited. It can only make one of three decisions on a particular expenditure item: it can lower the amount proposed by the government; it can reject the proposal in its entirety; or it can approve it unchanged. Parliament cannot increase an estimate, because this requires the recommendation of the crown. Reduction or elimination of an item of expenditure would normally be regarded as a want of confidence, and not surprisingly, this rarely happens.
I go into a discussion of the vote structure, which is the key to parliamentary control of the estimates.
The budget is divided into votes. The government cannot increase the money in a vote without coming back to Parliament, nor can it shift money from one vote to another. Within a vote, it can shift from one part of the vote, what's called an allotment in Canada, to another. In the U.K. system they are called sub-votes, and the process of moving them is called virement. We adopted our own terminology.
I want to offer my answers to six questions that have come before this and earlier committees.
First, should the budgets be on a cash or accrual basis?
As many of you will know, having been in the private sector, accrual is the normal basis for doing budgets in the private sector. Government is on cash, of course.
I'm conservative enough on this one to think that we should retain the cash system, partly because it's a very simple and straightforward system, whereas in accrual accounting, you get into problems of relating the future to the present. With all due respect, every time you're making a judgment like that, you're opening up more avenues for fudging the books. The experience of governments now is that budgeting, from the parliamentary perspective, is cash budgeting and cash accounting. The internal records are often kept on an accrual basis. I don't mind that difference. The interest of Parliament, which is to make sure they get very accurate figures and know what the government has been given to spend, what they have spent it on, and how much they have spent, is best assured on the year-to-year cash basis. That's my view, and I will not go on any further.
I consider the vote structure the essential element of control over the budget. Parliament grants money in votes, in lump sums. The budget estimates are divided into votes. The government cannot spend more than Parliament grants in that vote without coming back to Parliament. That's an absolute, hard rule. They come back with fairly healthy looking supplementary estimates at the end of it, and I like that idea.
A second question I look at is whether votes should be netted.
The answer, I think, is absolutely no. For the purposes of parliamentary control, the whole budget, the whole, one might say, intrusion of government into the economy, has to be looked at. Whole expenditures, as part of the total finances of the country, you can only get through a non-netted total budget.
There are other reasons too, but what I say here is that how government raises money and how government spends money are two quite separate and distinct matters. There's no logical reason that government programs should break even, let alone make a profit. Government is not a business. How it raises money poses one set of issues; how it spends money poses another and very different one. I believe in separating those as clearly as you can.
Should a distinction be made between capital and operating budgets? Once you make a distinction that way, I worry, because—again—a capital budget is going to relate present expenditures to future needs and expenditures, and vice versa, and again you get into far more complex accounting than I believe Parliament can keep control of.
Should the estimates be deemed to be passed by a given date? I do not like the process of deeming, which means that the votes are deemed to be passed whether they come out of committee or Parliament has approved them or not. But bearing in mind the capacity of parliamentary committees and Parliament itself to delay, procrastinate, and simply obstruct business, I think deeming is an essential part of the Canadian financial processes. It's unfortunate, but yes....
My final comment here is that I'm in favour of a budget speech being held on supply, rather than on ways and means as it now is. The estimates present a more complete picture of the government's intentions on how the government will affect individuals, families, and the nation generally than do matters of ways and means. The government's intentions expressed in expenditure proposals hold more significance for both Parliament and the public than do ways and means issues, and I would like to see it changed.
Another reason, which I didn't put in my written remarks, is that ways and means has a pretty well fixed date for the introduction of the estimates into the House of Commons. So we would have a pretty well established budget speech date and budget presentation if we went to that. That's a change I would like to see.
Thank you.
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Joachim Wehner
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Joachim Wehner
2012-03-26 15:46
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First of all, thank you very much for allowing me to present some thoughts to the committee. I also would like to thank your administrative team for being so helpful in helping me to organize this.
First I'm going to give you some comparative observations. I bring less of the Canadian experience but a bit more of a contrast with other legislatures in the OECD countries in particular.
The first point I would make is that there's no standard model. There's no one best model for parliaments to scrutinize the estimates. You have a really wide diversity of models among the industrialized democracies that range all the way from the traditional Westminster model, which essentially keeps Parliament in a very passive role, all the way to Congress, which takes eight months to look at the President's budget proposals, formulates its own proposals, and sometimes doesn't even manage to pass it in time for the beginning of the fiscal year. You have the entire range in the OECD countries, from essentially just approving the government proposal as it is to writing the budget, and anything in between.
Where you position the parliament is a normative choice. It reflects your view of how public spending should be scrutinized and how much Parliament should affect public spending. So one cannot advocate one single best model. I just wanted to make that clear. However, if your aim is to strengthen parliamentary scrutiny of public finances, then I think there are a few factors you can consider, given comparative experience.
Let me just highlight six of these, which are also discussed in the paper, which I believe your research staff has had access to. Maybe some of you have had time to look at it.
In this paper I compare a number of industrialized countries' national legislatures. I look at six aspects in particular. These are institutional features of the legislative budget process.
The first one is the power of the parliament to amend the executive budget proposal. The second is what happens if the budget is not approved by the time the financial year starts. The third is the degree to which the executive can adjust the budget, as approved by Parliament, during the course of the financial year. The fourth one is how much time Parliament has in advance of the fiscal year to scrutinize the budget. In other words, when is the budget tabled in Parliament relative to the beginning of the fiscal year. The fifth element is the committee capacity within Parliament to scrutinize the budget and to monitor its implementation. And the final point is Parliament's access to independent budget analysis capacity.
I'd be very happy to expand this discussion on individual points if you have any questions, but I'm going to leave it fairly general for the sake of keeping my input short.
What I do in the paper, and you have copies of the results in front of you, is produce a ranking of national legislatures based on these variables. I give high scores to countries where the institutional arrangements favour a high degree of parliamentary control of the budget, and I give low scores to institutional arrangements that make it more difficult for Parliament to scrutinize the budget and to shape budget choices.
If you look at this ranking, which I hope is in the submission you received, you will see that the Westminster parliaments tend to cluster at the very bottom of the distribution among OECD countries. So the inherited system from Westminster is not one, from an institutional perspective, that favours strong parliamentary scrutiny and strong parliamentary input into the budget process.
Despite this, it is at the same time true that a number of legislatures, in particular over the past 10 years, and also in countries that have inherited the western system of parliamentary government, have started to make changes to the budget process, in particular changes that strengthen the role of Parliament in the budget process. With this experience in mind, I would like to proceed to a very short list of some reflections about the situation in Canada that relate to the variables that I just summarized for you.
Drawing on international experience, I think there are a number of possible changes. I'm not saying these are changes you should be making, but changes that could be considered if your aim is to strengthen Parliament.
The first one, in my view, is to protect and enhance the role of the Parliamentary Budget Officer. A number of countries are creating similar institutions, and the Parliament in Canada has really been at the cusp of this development. Internationally, the Parliamentary Budget Officer of Canada is very highly regarded, and it's certainly a major change, in my view, at least, in the degree the parliament in Canada has access to an independent, highly professional research capacity.
I believe that some adjustments are possible to the legal framework for the Parliamentary Budget Officer. In particular, this role could be strengthened, or the status be strengthened, if he were a full officer of Parliament. Moreover, steps could be taken so that the Parliamentary Budget Officer has total access to all relevant information. In the past I believe there have been incidents where departments have not been quite as forthcoming with providing information to the Parliamentary Budget Officer as perhaps they should have been. But overall, I see this as a very positive development, and I see some scope for strengthening it also on the basis of international experience.
The second point—and Professor Franks also talked about this—that is worth considering is the structure of the appropriations. In Canada, if I understand correctly, the appropriations are actually fairly highly aggregated, so the main level of appropriating money is at the vote level, and there are some categories of expenditures within a vote. Parliament certainly does not approve the appropriations on a program basis.
So if you wanted more control over the budget process and over budgets, one move could be to move from approval of votes to approval of programs. You already have a set of main estimates that includes strategic objectives and, within these objectives, programs, and it would be a fairly easy step to structure appropriations in a similar way. A number of western countries have made this exact move in recent years. New Zealand has adopted output-based appropriations, which are more detailed than appropriations at the vote level. A country like South Africa, for example, a few years ago, about 10 years ago, switched from approving budgets on a vote basis to approving budgets on a program basis. This gives you a lot more control over the budget and limits a bit more the still very broad flexibility the executive has in implementing the budget.
Quickly, I'll make three other points. It is possible, in my view, to adjust the timing of the budget process. If you look at the comparative evidence, the Canadian Parliament is one of the very few parliaments in the OECD community where the budget is approved after the beginning of the fiscal year. This is done routinely. The OECD best practices for budget transparency state categorically that the budget should be tabled no less than three months prior to the beginning of the fiscal year. The standard is also in the IMF code of fiscal transparency, so this is a very widely accepted recommendation.
The delay of approval of spending proposals and of spending is really something that is very outdated, and there are possibilities to either adjust the fiscal year or to bring the tabling of the budget forward, which will do away with this outdated and—in my view—inefficient practice, which undermines Parliament.
Very briefly, I have two other points. It might be possible to strengthen committee review in Canada. In many countries that have very in-depth scrutiny by Parliament of the budgets, they have a two-step process, where the finance committee or an appropriations committee is first tasked with looking at the aggregates—the spending totals in the budget and the allocation of the aggregates across individual policy areas—and then sectoral committees are tasked with scrutinizing individual votes.
Several parliaments, such as that of Sweden and the United States, in the past few decades, reformed their process to kind of strengthen the scrutiny of the overall allocations and not just have the sectoral committees scrutinize individual budget votes or departmental budgets.
My final point would be—and this is possibly a bit more controversial, but it is worth noting—that the Canadian Parliament has fairly limited powers to amend the budget proposal of the executive. When I say “budget proposal”, I'm referring to the spending proposals. I'm sorry for this inaccuracy in terms of your terminology, but it's one that I'm very used to.
A number of Westminster parliaments, amongst others, have reshaped their amendment powers over the past few years to allow for a slightly bigger possible role in prioritizing the budget. I just want to mention three examples. The New Zealand Parliament in the 1990s changed its standing orders to allow the parliament to make changes within the votes—so to alter the composition of the votes. This is different from the amendment powers that Professor Franks describes in the Canadian Parliament, where you can only reduce items.
In South Africa, the parliament recently gave itself very broad amendment powers, which are essentially unfettered. An interesting reference point may also be the experience in France where the Loi organique relative aux lois de finances was reformed in 2001. Through this reform, the parliament actually received the power to change allocations between programs within so-called “missions”, which are broader clusters of programs.
So there are several examples of parliaments that have recently extended their powers to allow for, amongst others, the possibility of shifting money between different programs in the budgets.
Thank you.
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View Mathieu Ravignat Profile
NDP (QC)
View Mathieu Ravignat Profile
2012-03-26 16:15
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Thank you, Mr. Chair.
I thank the witnesses for being here.
I am wondering about the state of democracy in Canada. As you know, Canadian democracy rests on the principle of responsible government. I am thinking of Confederation and the development of responsible government. I am not at all impugning the responsibility of the Conservative government; I am talking about the concept of responsible government.
The process is extremely complex and the information, in my opinion, lacks precision. I wonder if it has become an empty ritual and whether the very principle of responsible government hasn't been undermined for years. As a Canadian, this concerns me greatly and also concerns the citizens of my riding.
Have things reached such a pass that the concentration of power and the Canadian government's focus on economic decisions are causing a democratic crisis?
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Ned Franks
View Ned Franks Profile
Ned Franks
2012-03-26 16:19
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I think it's a crisis that has existed since 1867.
Voices: Oh, oh!
Dr. Ned Franks: We do have a problem.
You might look at this as a criticism of yourselves, and I don't really mean it, but a big part of the problem of the weakness of Parliament vis-à-vis the executive is the dominance of parties over almost every aspect of an MP's existence. That's not the private side in dealing with the constituents, but who participates in committees, in question period, who gets to talk during a debate, and so on. If you're a bad boy, you don't go on a foreign trip because the whips want to punish you.
If I were to suggest the one obstacle to a collective voice from Parliament in looking at things like the budget and making even minor changes, it's that dominance of party and the control that party exercises over the parliamentary activities of members. I don't know how to break that, and I'm sure you could tell me far better than I can how you might do that.
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View Kelly Block Profile
CPC (SK)
Thank you very much, Mr. Chair.
I want to thank you as well for being with us today.
We've been doing this study for a few weeks, and we've had many witnesses make similar observations to those you have made here today, recognizing that some of these processes have been in place for over a century, and studies have been undertaken and recommendations have been made, but not too many changes have resulted.
I want to go back to some of the comments that were made after my colleague asked questions about democracy. You noted that this has been an issue since 1867. I guess it's about partisanship. I'm going to ask you to comment a little on that.
A former Liberal member of Parliament, Mr. Joe Jordan, testified to this committee. I believe he was parliamentary secretary to the President of the Treasury Board for a time. Mr. Jordan made the following comment. I want to quote it and then perhaps get both of your thoughts on the issue of partisanship.
The estimates and supply process is a terrible, partisan mechanism for trying to embarrass the government, but it could be a very useful mechanism if MPs saw it as a way to improve the effectiveness and efficiency of government operations.
I'd like you to comment on that. Do you think there are ways we can make this process less partisan, more efficient, and more effective?
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Ned Franks
View Ned Franks Profile
Ned Franks
2012-03-26 16:24
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I think you need a rebellion in the caucus to do that, though I can offer some moderately serious things.
I don't think there should be the number of associate members of committees that there are. Now this is one of the best committees in Parliament, and most of you come to most of the meetings, but I believe I'm correct in saying that the NDP has something like three associate members on this committee, the Bloc has very few, the Liberals have very few, and the Conservatives have more than 120. Every member of the caucus who isn't a member of the committee or who isn't a cabinet minister, including the parliamentary secretaries, is an associate member of a committee.
I think the rules of the House of Commons should be looked at to the point that you can feel reasonably confident, if you're on a committee, that the whip isn't going to take you off if he doesn't like you or you don't do what you're told; that you're here for the full time, maybe even for a full Parliament; and that as associates you'd just have a limited number, not every member of the caucus. I have wanted to see that for a long time.
One of the real problems I find, in looking at committees and what they do—even if it's a committee that I go before, say, three times in a year—is that there are always new members. The thing you want to have in an effective committee is a corporate sense that you're not there for your party, but you're there for the people of Canada and the constituents and to work with your colleagues to produce the best thing you can for Canada, regardless of your party's views. Tell your party leaders to keep out of it.
That's an ideal. They've done it in England in their smaller committees, and they have an amazing history of it. But it's a totally different world. The average stay in Parliament for a member in Canada is a little over seven years, from seven to ten years. The average stay in Britain in almost triple that. I don't know about South Africa. But we do have that very real problem of the resources and the pressures on human resources and the pressures on MPs that tend to reduce the ability to produce a cohesive committee, except in very select circumstances.
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Joachim Wehner
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Joachim Wehner
2012-03-26 16:27
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Well, I think you've raised an important point, and it is that we can talk about institutional features, but at the end of the day what Parliament does is part of the political system and political dynamics, and these give rise to certain behaviour, which can be highly partisan or sometimes less partisan in some countries.
I have, however, seen parliaments in other countries that also have parliamentary systems, where you see occasionally at least much more of a cross-partisan approach in committees in particular. So if it is possible, it is possible in committees. This is the one big point I would make, and I also second Professor Franks on this.
I will just give you one nice example, which I really like, from the German budget committee in the German Parliament. They were having their budget hearings a few years ago and they heard that instead of attending the hearing in the budget committee, the finance minister was hanging out in the press gallery. When the committee heard this, they cut $500 million Deutschmark, at the time, from his budget—half a billion Deutschmark is not an insubstantial sum—which he wanted to use to renovate his customs offices.
That kind of approach...you're not doing it to score party political points, but you are really doing it to hold government to account. You can see a kind of cross-partisan spirit in that.
I think that is only possible in committees. One of the ways in which some committees foster this kind of approach is through rapporteur systems, where you give groups of MPs the task to scrutinize a particular part of the budget, and these MPs come from different political parties and they try to come up with a consensus view on this. Some committees in other OECD countries operate along these lines.
But as you said in your introduction, these broader political dynamics are very difficult to change, so they often are what they are, unfortunately, sometimes.
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Joachim Wehner
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Joachim Wehner
2012-03-26 17:00
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We have just completed, as part of an OECD study, a review of independent fiscal institutions in OECD countries. Amongst these institutions was the Parliamentary Budget Officer of Canada. I have also followed a little bit over the past few years the work of the Parliamentary Budget Officer, not in extensive detail, but I have kept a bit in touch with it.
From this work, I am aware that on occasion there have been requests for information from departments where the information has not been furnished, and then letters posted on the website of the Parliamentary Budget Officer that are essentially the responses from government departments to such requests for information.
I think that despite the provisions in the law, the Parliamentary Budget Officer should get information for free and should get the information he needs to undertake his work properly. I believe there have been some problems in this area.
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Ned Franks
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Ned Franks
2012-03-26 17:02
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Shall I begin on that? I could get something off my chest.
Before the current system existed, back in the dark old days of the 1960s, there was sometimes a risk in minority parliaments that the budget wouldn't ever get passed. It did, finally. Sometimes the estimates would be approved after the fiscal year was over. It was to avoid this that the deeming factor came in.
Now, maybe there should be a longer period between the time the estimates are introduced and the budgets are deemed passed. I would be comfortable with that. That I think is perfectly possible. But knowing what one might call the rampant partisanship in minority parliaments that we have seen in the past—not to suggest that modern MPs are like those of earlier generations, but it's perfectly possible—I think we need that deeming thing in there as a protection against just pure bloody-minded obstruction and the refusal to pass budgets in minority parliaments.
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Joachim Wehner
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Joachim Wehner
2012-03-26 17:04
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I think there are many parliaments where it is unthinkable that you would have anything happening on the floor of the House with regard to the budget without the responsible committee reporting on the budget. I'm not aware of any incidents in the German Bundestag, for example, or in many other western European parliaments, where the lack of a committee report would have delayed parliamentary practice.
So why not just require parliamentary committees to report on the estimates or on part of the estimates? Then they are under an obligation to do so. But you just say that if you don't do it, you're deemed to have reported. Effectively, this means that this part of the budget will not be properly examined. Let me put it more mildly: there is no potential, no possibility, for this part of the budget to be properly examined.
Examination at committee level is crucial. It's not going to happen on the floor of the House. If there is serious debate and analysis of the budget, it has to be at committee level. I would be a very strong proponent for making sure that committees live up to their duties and their responsibilities.
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Kevin Page
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Kevin Page
2012-02-29 15:35
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Thank you, Mr. Chair and committee members, for the opportunity to appear before you today.
I applaud all members of the House of Commons Standing Committee on Government Operations and Estimates for undertaking a study on the state of Canada's estimates and supply process.
Let me assure you that you'll have the full support of the Office of the Parliamentary Budget Officer in this important work. The time is right for substantive change. The context for change is both institutional and fiscal.
From an institutional vantage point, I agree with Senator Murray who recently described the estimates and supply process as an “empty ritual”.
From a fiscal vantage point, as you know, it is anticipated that the government's 2012 budget plan will call for significant and sustained spending restraint. This is an important time to better engage the watchful eye of the legislature to ensure that spending restraint implementation is carried out by the government and public service in a way that effectively manages fiscal and service-related challenges.
One of the key principles underlying responsible parliamentary government is that the House of Commons holds the “power of the purse”. The House must be able to satisfy itself, as the confidence chamber, that all spending and taxation is consistent with legislation, Parliament's intentions, and the principles of parliamentary control. When this is accomplished, Parliament is serving Canadians.
In my view, this is rarely accomplished. Parliament is at best only giving perfunctory attention to spending. Are members comfortable to vote on some $104 billion in annual discretionary expenditures, examining $267 billion in total program spending, with about 90 hours of collective effort among parliamentarians and with some departments and agencies seeing no scrutiny whatsoever, as was the case in 2010-11?
Too often, almost as a matter of convention, Parliament is starved of the information necessary to perform its fiduciary responsibilities. How often does Parliament see real decision-supporting financial analysis prepared by public servants on new legislation or procurement? The answer is almost never. Is it possible to hold the government to account without access to decision-supporting financial analysis?
As the Parliamentary Budget Officer, I was very disappointed, as I am sure many of you were, to learn that departments and agencies have been instructed by the Treasury Board Secretariat not to provide Parliament with information on the government's spending and operating review in the upcoming departmental reports on plans and priorities. This is a 180-degree change in direction from last November. It is a significant development. It undermines Parliament. How can Parliament provide spending authority without details by departments and agencies? Should Parliament ever vote on supply without financial information and analysis?
The time has likely come to ask whether we've designed an estimates and supply process to serve the power-of-the-purse role of the House of Commons, or whether we have allowed it to be reworked over many years so that it primarily serves only the government. What have we done? Have we created a system so complex—with different accounting between budget and estimates, a mixture of information on program activities and outcomes, and a voting system based on inputs like operating and capital—that only a handful of people really know how the whole system hangs together?
Is it not time to say that so much of the information we put in our estimates books represents simulated transparency at best—transparency whose purpose is to obfuscate and confuse, not to support accountability? Have we created a system where the budget is so disconnected with the estimates that officials from the Treasury Board Secretariat, my old department, think it is normal to inform members of Parliament that they will not see the details of the 2012 budget in the 2012 reports on plans and priorities.
Do we want the House of Commons to have the “power of the purse”? If we did, and we thought it was truly important to be respectful to our Westminster roots, our Constitution, and the Financial Administration Act, we would build accountability and the estimates and supply process around this principle.
What happens when we repeat things like the power of the purse belongs to the House of Commons but we behave in a totally different way? Could it be that our respect for our institution is diminished?
Public servants like me are asked to be caretakers of these institutions—their underlying principles and values. We get paid by taxpayers to do this. We do not have the necessary tools to do it well.
William Ewart Gladstone, a former Chancellor of the Exchequer, a four-time Prime Minister of the United Kingdom, said in 1891:
If the House of Commons by any possibility loses the power of the control of the grants of public money, depend upon it, your very liberty will be worth very little in comparison.
When it comes to principles that underpin institutions, if it was important 100 years ago, it is just as important today. The stakes are high.
I think the system needs to be examined on three levels: process, structure, and support. On process and support, we need to ask ourselves why parliamentarians are not incentivized to scrutinize departmental spending before they give their consent. Why?
Are committees even required to review the estimates? The answer is no, thanks to a long-standing order famously known as the deemed rule. Could there be a more symbolic and symptomatic testament than the deemed rule to the state of dysfunction and disuse of the estimates and supply process?
Is it not a problem that there is no regular review process for the more than $100 billion of tax expenditure programs, which are very much like other spending programs, but also carried forward each year with scant attention?
Are committees tasked with reviewing estimates able to dissent? The answer again is no. They're unable to increase spending. Minority reports or reductions of estimates are rare.
Are committees encouraged to make substantive recommendations? According to a 1979 ruling by the Speaker of the House of Commons, the estimates and supply process was not the time. When is the time?
Do committees have specialized support to review the estimates? Yes, but the extent of the resources available to you and your colleagues would not likely fill most of the chairs around this table. Surely the time has come to design a process that incents scrutiny before consent and provides members of Parliament with the tools and capacity to recommend improvements in how we spend taxpayer money.
On structure, it makes little sense in a 21st century world for parliamentarians to be voting on inputs like operations and capital, and grants and contributions that cut across a department spending many billions of dollars for a diverse set of program activities. Given the recent experiences with border infrastructure funds and aboriginal housing and education, would it not make more sense to consider program activities (five, 10 or 15 per department) or their associated outputs as more relevant control gates? Why should ministers and their accountability officers be able to move monies from one activity to another without scrutiny or consent? Would voting on program activities not encourage more meaningful scrutiny on service level impacts as we move forward with spending restraint? Would this not help simplify our estimates system, which collects financial and non-financial performance data on program activities?
Clearly, any changes to our estimates and supply process need to be home-based and homegrown, but can we learn from other responsible parliamentary government systems? I think we can, and I encourage this committee to explore lessons learned in other countries. Sweden, for example, includes performance frameworks for proposed programs in its budget. Committees debate these performance frameworks. New Zealand has a proactive disclosure of decision-supported financial analysis in memorandums to cabinet and votes supply on a program activity basis, as does South Africa. There are academic scholars, such as Professor Joachim Wehner at the London School of Economics and Professor Allen Schick at the University of Maryland, who have travelled the world and studied different budget and appropriation systems and could be of great service to members of this committee, if there was interest.
Finally, I close with the repeat of yet another question. Do you want the power-of-the-purse role to rest with the House of Commons? If so, there is work to do. As George Bernard Shaw said, “Progress is impossible without change...”.
Thank you very much. I would be honoured to address your questions. Merci beaucoup.
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View Alexandre Boulerice Profile
NDP (QC)
Thank you, Mr. Chair.
Thank you for your report and for coming here today, Mr. Page. I would like to congratulate you on your good work, which requires a lot of patience.
You have provided us with a very interesting report, though a bit depressing in terms of the quality of the work that we are able to do as parliamentarians. As depressing as all that might be, it is not surprising, given what we have been seeing since we have been in Parliament. The estimates submitted to the legislator seem to be a fait accompli and we don't feel that we will be able to make any significant changes. As our witness Mr. Jordan told us, the parliamentary approval system for the estimates rarely works.
Let me go back in time a little. In December 1998, the Standing Committee on Procedure and House Affairs made a number of recommendations and suggestions. One recommendation was that, when they submit their planning documents every year, departments and organizations inform the committees of all possible directions and of the issues they will be working on, beyond the fiscal year in question. In your opinion, could something be done? Is there something worth implementing?
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Kevin Page
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Kevin Page
2012-02-29 15:47
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Yes.
I would like to start by thanking you for your support.
You must be referring to the expenditure planning reports of departments and agencies. You are asking me if it is possible to have a different report that looks at all the program activities and their performance. I think that's possible. The reality is that, when representatives of the executive, of the government and of the Treasury Board, review the activities of a department in light of cuts, they are reviewing a document that is very different from the spending report provided by the department or the agency. So it is quite possible because the information and the analyses are there.
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View Alexandre Boulerice Profile
NDP (QC)
Thank you.
The other question I wanted to ask you has to do with what Mr. Macdonald from the Canadian Centre for Policy Alternatives said when he came to see us. In his view, when reports on plans and priorities are submitted, the impact and effects of programs are reviewed, as well as government investments and spending. We try to see if it is efficient, if it works.
But in terms of tax breaks, tax credits and tax cuts for large corporations, there is no follow-up. We are in the dark. We have no idea if things are working. Some people wax lyrical about how wonderful everything is and how they are changing the world. We have our doubts. And there are no tools to help us check what the effects are in actual practice.
Do you think that, in addition to examining the possible effects of expenditures, we should also look at the effects of tax breaks and tax cuts?
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Kevin Page
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Kevin Page
2012-02-29 15:48
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Absolutely. As I said in my presentation, the government's tax expenditures amount to over $100 billion every year. Can we change our system of accountability so that each department submits a report with tax expenditures to the committee? That is absolutely feasible.
It is also possible to find information on tax expenditures on the website of the Department of Finance. But that information is in some alternative universe. The information is not included with the work of this committee or Parliament's Standing Committee on Finance.
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View Alexandre Boulerice Profile
NDP (QC)
Let me tell you about a file I worked on last fall. In the estimates, the amount listed for the border infrastructure fund was $83 million. We finally realized that some of that amount had been invested in the G8 legacy infrastructure fund.
As parliamentarians, what can we do when an amount is earmarked for something but, at the end of the day, the money goes to something else? How can we do our jobs properly?
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Kevin Page
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Kevin Page
2012-02-29 15:50
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In my view, it is important for a committee like this to start a discussion on what is the best control gate for parliamentarians. Is it operations, capital, or program activities? I feel it is time to change the control gate for parliamentarians. If your control gate is program activities, for example, Parliament will have more control.
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View Mike Wallace Profile
CPC (ON)
View Mike Wallace Profile
2012-02-29 15:50
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Thank you, Mr. Chair.
I want to thank our guests for coming today.
I was looking forward to the report from the budget officer. As you know, I've been active in the file on estimates since basically I got here.
I do know why they called you, in this magazine Power and Influence, a media star, because most of your previous comments were comments, and I was looking for suggestions in terms of what we could do better.
Now, I know that your office put together a system that's available to all members of Parliament in terms of looking at actual spending. Part of my issue here is that we have mains and budgets coming at the same time. A year goes by, and at the end of the fiscal year, six months later, you get the actuals to do the actual comparison.
So the approach that you've developed for members of Parliament to use is that we can look at actuals as they go, as they're reported. What I'm looking for today are what suggestions you have for improvements. Have you looked at anything specific? One item is the tool you've added for members of Parliament to better scrutinize the actual spending that will happen.
You talked about “deemed”. Do you recommend that we get rid of deemed, and how do you recommend doing it? Do you think each committee should do it? Should there be a special committee on estimates only, as we have here, just to look at everybody's estimates?
You allude to what's happening in other states—for example, Australia. You brought it to my attention that they have more of a programmed approach. Do you have actual solutions that you're recommending to this committee to look at? That's why we're having this study. We're having experts like you, who have looked at these issues, to give us suggestions to make improvements.
I do agree with you that it's important for Parliament to be able to scrutinize these things, the actual spending of the $259 billion, in a more appropriate way. I may not agree with some of the things you've said about what the role of the government is, or the opposition, but this is for us to have a better understanding, when we stand up and vote for it, of what we're voting for.
Based on that, do you have any suggestions for us?
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Kevin Page
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Kevin Page
2012-02-29 15:53
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Thank you, sir.
I think probably the most important suggestion I could make, that I think would both incentivize parliamentarians to scrutinize and make the work they do have more meaning, would be to change the control gate: move it away from voting on inputs, operating capital, and grants and contributions to a program activity basis.
I can't imagine what it would be like to be a new parliamentarian and get estimates books and public accounts books and budget books thrown in front of you and be asked to vote on an operation that cuts across a whole department when we have departments that spend billions of dollars. I know, having worked on seven different departments—three central agencies, four line departments—that when people talk about, say, the coast guard....
I worked at Fisheries and Oceans. They get the coast guard. They should vote on the coast guard. They should vote on search and rescue, on icebreaking. Those are real to people on both coasts.
I worked at Agriculture Canada. Farm financial programs—those are real to people. They should vote on farm financial programs.
I worked at HRSDC. They should have separate votes on the grants and contributions in that program, whether it's for training or the elderly or whatever.
So the number one recommendation, sir, is to change the control gate. Make it a program activity-based system, just the way it exists in Australia, New Zealand, South Africa, and other countries.
I think it would incentivize people. People would understand it. And then when people are looking at how to monitor whether or not they're doing restraint well, they could look at these activities—these are the control gates—and look at performance relative to those control gates. I think it would just reduce the complexity tremendously.
On process, the “deemed” rule to me is just a symptom of failure. It's like people have thrown up their hands and said, “We can't do this. It's useless. Why am I wasting my time?”
To that, in part I think we have to understand...and I don't even know; I need help to understand why people feel that way. We don't feel that way when we do research here; we released a paper yesterday to parliamentarians and Canadians on a costing of Bill C-10.
We need to look at the process and try to incent people more. I think if they could have an impact, if people sitting on a standing committee, when they bring in a deputy or a minister, could say, “You know, we've looked at this program activity, and this seems like a weak program activity. We know we can improve performance”—and I know you're the type of member who likes to ask those kinds of questions—“so I want to come back and see you next year; I want this improved.”
I think we should have reports coming out of every standing committee around those program activities to try to improve them. The deemed rule should just go. I don't think it's even part of the conversation. To me, it's just a symptom of failure.
On support, you have to ask yourself, do you have access to the people and the resources you need? But again, I don't think it means creating a parallel process around Parliament. The public service has to support everybody around Parliament in a different way.
For instance, yesterday we found ourselves providing a financial analysis, a 90-page paper, peer-reviewed by seven people, on one aspect of Bill C-10. Why can't the public service do that? We had two people working on it. Why can't the public service...? Before, when we used to do that work.... You should get access to that.
In terms of standing committees reviewing the reports, I think these reports on plans and priorities and departmental performances are weak. They're communication vehicles. Nobody uses them. I worked in all three central agencies. They don't go to cabinet.
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View Mike Wallace Profile
CPC (ON)
Kevin Page
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Kevin Page
2012-02-29 15:56
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Well, I know that members on the executive...and I've been in cabinet rooms. When they sit down and start talking about austerity, and they're looking at strategic operating reviews, they're looking at a very different framework, a program activity framework that's very real, not a communications tool.
Everybody needs to see that information. People would get charged up and incentivized to scrutinize spending. They would understand it. It's very understandable. I just think we've made the system so complicated.
I could go on and on, but certainly, let's change the gate. Let's make it program activity-based. Let's change the process. Let's incentivize people to actually do this. Take away the deemed rule. Let's look at support. Let's try to find a different way, without increasing resources, to support you in a better way.
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View Denis Blanchette Profile
NDP (QC)
View Denis Blanchette Profile
2012-02-29 15:57
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Thank you, Mr. Chair.
Thank you for your presentation, which was very informative. By listening to you, I got the feeling that, as parliamentarians, we might be slightly stuck in tradition. It no longer makes sense, it is getting bigger and we are no longer able to follow it properly. Our problem is that we are sort of lost in a sea of numbers and we are no longer able to make sense of those numbers. We have to take a different approach. The organizational culture has to change.
When you started working on a database project, you must have looked at best practices. You mentioned some countries that have best practices. Do you have some examples in mind that show how, in a situation as sticky as ours, the process changed in order to give parliamentarians and the public access to intelligible information?
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Kevin Page
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Kevin Page
2012-02-29 15:59
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Yes. I worked for the Department of Finance, the Privy Council Office and the Treasury Board Secretariat. So I have seen information like that. When a decision needed to be made, the government, the executive and the cabinet would look over the information. It is really a different type of information. That is what Mr. Khan, who used to work in the private sector, prepares as part of the decision-making process. You analyze the goal. It is like a performance evaluation. It is a financial analysis that makes it possible to examine the various options and calculations. It is also a risk analysis.
In my view, if you are trying to improve Parliament's accounting, that is the type of information you need. It is an analysis. When the government makes decisions, I am pretty sure that it looks at and uses that type of information. So why would the information not be shared?
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View Denis Blanchette Profile
NDP (QC)
View Denis Blanchette Profile
2012-02-29 16:00
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The information is there. It is perhaps poorly organized and it is surely not well presented or compiled.
In addition to the suggestion you have made in response to my colleague, could you tell me what would be some winning short-term strategies in order to start making progress and making the estimates more readable for everyone. We talked about changing the structure; we said that the organization and organizational practices are going to change, but that is a long process. Do we need to change the frames of reference and come up with a new way to do the follow-up? Will tracking activities be enough? Where should we actually start for quick results? I am referring to the so-called quick wins.
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