Committee
Consult the user guide
For assistance, please contact us
Consult the user guide
For assistance, please contact us
Add search criteria
Results: 1 - 6 of 6
Philip Jennings
View Philip Jennings Profile
Philip Jennings
2015-03-30 17:14
Expand
As I mentioned before, we put a report on the web. As highlighted by the Auditor General, there was no one place where all the information was together. A report was posted in December 2014, which essentially highlights all the funds that went into the restructuring, as well as all the funds that have been recovered to date.
The final recovery of some funds that make up the equity in General Motors is not yet known. The Government of Canada still owns equity in the company and the two principal factors that will determine the value of those recovered funds will be the share price for General Motors, as well as the exchange rate, so any depreciation in the exchange rate for Canada leads to more recovered funds.
The report highlights what the value of those funds was at the time the report was written, but that has been fluctuating since that point. I should also say that since the report was published, General Motors did call an option on its preferred shares. They bought back preferred shares from the Government of Canada, and Ontario exercised its rights to sell its remaining shares to General Motors, which took place in February of this year.
Collapse
View Lysane Blanchette-Lamothe Profile
NDP (QC)
Thank you, Mr. Chairman.
Thank you for being with us today.
My first question is for Ms. Cheng.
On page 2.37 of volume I, it says that the Office of the Auditor General has concerns regarding the way departments and organizations apply their capital expenditures to their operational vote. According to the Office of the Auditor General, this decreases Parliament's oversight with regard to public spending.
Can you explain this process to me and tell me how it affects Parliament's oversight with regard to public spending?
Collapse
Nancy Cheng
View Nancy Cheng Profile
Nancy Cheng
2011-12-05 16:14
Expand
The question relates to the use of the capital vote and the operating vote. In the first instance, some departments only have one vote, and it's called a program expenditure vote. In that case you won't actually have this scenario coming to service in the way we describe it.
What happens is that often departments have a capital vote as well as an operating vote. Then when an expenditure occurs, where would you charge that?
Collapse
Nancy Cheng
View Nancy Cheng Profile
Nancy Cheng
2011-12-05 16:15
Expand
Basically, Parliament gets to oversee and set a limit for each of these votes. So if you set a limit on the capital vote, then presumably that is a budget you want to oversee to make sure it isn't exceeded. If the practice is such that some expenditures can go either way, then it makes it difficult for you to oversee whether that particular limit is being observed.
The framework was set in place back in about 1992. It is about time to take a look at it.
In the first instance, this $5 million mark was set some time ago. Some departments we notice actually have major expenditures that are over $5 million, but because they don't have a capital vote they can't charge to a separate vote. That oversight mechanism isn't there when in fact they would have a lot of expenditures that might be over the $5 million mark.
The other thing is that this concept of minor capital, which allows departments to charge capital-type expenditures to an operating vote, is basically allowing each department to set their own limit. What we saw was that in one case, for example, the limit was pretty high, so expenditure of over $1 million is when it needs to be charged to the capital vote. But some expenditures under $1 million are still capital in nature, arguably, but they would not necessarily go in the direction of the capital vote.
In another department we noticed that there is no limit set whatsoever, so it's almost like a case-by-case basis. That means there is inconsistent application between departments and agencies. It was something we discussed last year with the Office of the Comptroller General, and the Comptroller General's office is in agreement with us that that inconsistency needs to be looked at as well.
Those are the kinds of issues we're trying to underscore to make the vote structure and Parliament's vote authority oversight work better.
Collapse
View Malcolm Allen Profile
NDP (ON)
View Malcolm Allen Profile
2011-12-05 16:54
Expand
Thank you, Chair.
Thank you, everyone.
Perhaps I will start with Madam Cheng on this issue about voting and how we look at what exactly we're voting for, whether it be a capital expenditure or an operation expenditure. You pointed out that there are weaknesses in the system in the sense that quite often capital expenditure is actually in a vote that's not a capital expenditure; it's locked into it.
As parliamentarians, one of the things we do is not only collect folks' money, but we actually spend it, and the only way to do that is to vote on the expenditure. If we don't know what the expenditure is for, in the sense of its being in an operational line when it turns out to be a capital line, are we really being well.... I shouldn't use the word “advised”, but are we at least being well looked after in the sense of understanding what we're voting for if it's hidden in somewhere else?
On the other side of it, when money gets transferred that's been approved in a vote at a capital expenditure and ends up elsewhere, is there a mechanism you would see that helps us understand that it moved, other than trying to find it on page whatever in section whatever of volume III? Ultimately we voted for something, and not knowing where it ended up makes it extremely difficult to understand that it went somewhere else.
Collapse
Nancy Cheng
View Nancy Cheng Profile
Nancy Cheng
2011-12-05 16:55
Expand
There are two points here. First and foremost, you set up a capital vote for a reason. You want to set a certain ceiling to the amount of capital expenditures you want to have incurred for a particular entity. If there is to be a change, I believe there is a process you can follow through the estimates process. They will rectify that in a supplementary estimate to adjust it so they can move money between votes. But it is a decided exercise, because Parliament will have voted on it in the first instance, and it's not a trivial matter to try to adjust it. So it does require a fair bit of work behind the scenes from the public service to make sure it gets corrected if there is a need for a change.
Second, if you see fit to put in some kind of capital ceiling, you want to know that the capital expenditures are flowing through that. Right now the mechanism is set up in such a way that there is inconsistency in practice, and some major expenditures can flow through the minor capital.
We're not suggesting any element of wrongdoing; it's just the way the system is set up. It's not conducive to your oversight, if you choose to exercise that oversight. So in what's before you, it is not necessarily easy for you to see that various capital expenditures are falling below the limit you've set out for that department or agency.
We suggest that perhaps it's time to take a look at how they actually set up those votes, who should get capital votes, and who shouldn't. Right now there's a $5-million limit, but at the end of the day, by the time you do financial reporting you see that there are patterns of departments that will be exceeding the $5 million, but they didn't get a capital vote in the first place, so no separate ceiling was set up for capital expenditures, and then everything is flowing through capital.
There are a few things in the system itself, in the framework, but there are also parameters they use that perhaps would be helpful if the government could take a look at it. Our understanding is that the government is in agreement and said they would take a look at that framework in the coming year.
Collapse
Results: 1 - 6 of 6

Export As: XML CSV RSS

For more data options, please see Open Data