Evidence of meeting #3 for Government Operations and Estimates in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was votes.
9 a.m.
Liberal
The Chair Liberal Diane Marleau
Seeing that we have quorum, I'm declaring the meeting open.
Welcome to our committee. We have officials from the Treasury Board, and I'll ask you to introduce yourselves. We've allowed you five to ten minutes, but because this is an information meeting, if you think you may need a little longer, please let us know. Otherwise, it will be back to questioning and the usual format.
Sir, introduce yourself and your colleague, please.
9 a.m.
David Moloney Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
Thank you very much.
My name is David Moloney. I am assistant secretary at the Treasury Board responsible for the expenditure management sector. This is a sector that was created about a year ago now, merging expenditure operations reporting and a budget office unit.
9 a.m.
Laura Danagher Executive Director, Expenditure Management Sector, Expenditure Operations and Estimates Division, Treasury Board of Canada Secretariat
I'm Laura Danagher. I'm the executive director of the expenditure operations and estimates directorate. I work for David in the expenditure management sector. My area is responsible for producing the main and supplementary estimates.
9 a.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
With members' indulgence, we have distributed a slide deck. I think it will take me a little longer than ten minutes to go through. We understood that the committee was interested in a fairly detailed run-through of what constitutes the main estimates and some of the details therein. Also, we have added material here about both how we develop the main estimates through a process we refer to as the annual reference level update, and then also the linkage between main estimates and the process of supply—the appropriations bills. We talk about the normal timelines, which run through the year.
If members have the slide deck in front of you....
I will do my presentation in both languages. I will start in English.
In overview, on slide two of the deck, there are essentially two main components, to describe them informally, to the budgeting and resource allocation process in the Government of Canada.
What we've referred to there is the executive resource allocation process—which is managed and works through cabinet and the Treasury Board, with efforts at Department of Finance as well as at Treasury Board Secretariat and the Privy Council Office—and secondly, the legislative or parliamentary aspect, which provides spending authority to the government.
Slide three summarizes briefly some of the key steps around the executive process for allocating resources managed, as I mentioned, by bodies of cabinet as well as by key central agencies.
It begins with looking ahead at the fiscal year to come, with the development of the budget that is proposed by the Minister of Finance and tabled in the House, typically in the month of February.
A government's two-year fiscal plan is the core element from the point of view of the fiscal framework that informs estimates and, for Parliament's purposes, in terms of spending allocation. It provides an overview, as members know, of federal revenue and expenditure plans, the key economic assumptions that underlie those plans, and new spending and tax measures.
New planned spending in the budget is allocated to departments. The fiscal framework that underlies the budget also provides a certain number of reserves to provide for executive-level approvals during the course of the year. These are very constrained and are for specific uses in new initiatives, changes in expenditure forecasts, or emergencies. We'll talk particularly about the vote structure that is associated with that.
Going on to slide four, a key element of the executive process, which goes on for a period of six to nine months prior to the budget, is the annual exercise that every department or agency in the government engages in, managed by the Treasury Board Secretariat, to establish the expenditure baseline for what we refer to as direct program spending. The direct program spending component of the budget's fiscal framework for the upcoming three years is established through this process, which also serves as the basis for the appropriations that are sought from Parliament in the upcoming main estimates that are tabled each February. We refer to this, as I said, as the ARLU or annual reference level update.
Going on to slide five, technically the way this works is that Treasury Board Secretariat and departments begin with the existing reference levels. There are 122 organizations in the government that seek appropriations through the main estimates. They include a certain number of appropriations-dependent crown corporations and all of the departments and other agencies of government. Each of those has an approved reference level, which means the level that has ongoing approval.
Then, through this process we roll in changes that have been approved by Treasury Board on the basis of submissions proposed by individual ministers since the previous estimates exercise, or in fact since the previous ARLU exercise.
We also, at Treasury Board Secretariat, working with departments, use this process to make other straightforward adjustments, such as re-profiling funds, for example, from a current year to a future year, where funds had been approved in a budget to be spent in year one and then some amount of those funds needed to be re-profiled because the departments in question weren't able to spend them as planned. Second, for recent collective agreements that had been signed since estimates had previously been tabled, adjustments are made to compensate departments for the impact of any such collective agreements. Third, there is realigning of existing resources between activities within a department; that can mean between votes, for example. Finally, there are certain transfers that we would refer to as non-controversial transfers between organizations, where there are no program issues and where we have a clear record of a ministerial agreement on both sides.
Going on to slide six, we also, through this process referred to as ARLU, make adjustments to the funding levels for what we refer to as quasi-statutory items. Members will know that Parliament votes, through statutory programs, spending approval on an ongoing basis; for example, for the equalization program or the employment insurance program.
There are other programs that are essentially formula-based, so approved spending levels can change, but the change does not occur through formal statute. For example, the Department of Foreign Affairs has certain costs it incurs, expressed in foreign currencies, from their operations overseas. With verified currency and inflation adjustments, their reference levels are, subject to that due diligence, automatically adjusted, and there are a range of such items.
We also incorporate funded cabinet approvals when, in the judgment of the Treasury Board, there was not a need to formally bring a submission, although that's a small subset. Then there are other so-called minor statutory programs, such as the Canada education savings grants and the Canada study grants, in which the amounts approved are subject to forecast--how many students or how many parents will plan to make contributions to take up these education savings grants, for example.
Let us go on to slide seven. The timing of this exercise is driven by our need to, on the one hand, provide to the Department of Finance the direct program spending component of the fiscal framework that they use to put together the budget. As is pointed out on slide 7, this is the cost of all existing policies and programs for which voted appropriations must be sought--that is, excluding what we call the major statutory programs and the contingencies.
We also need to complete this process to provide the basis for the main estimates for the coming year only, which must be tabled--and we'll come back to this--on or before March 1, according to the standing rules of the House. We establish Treasury Board-approved spending levels on the basis of cabinet funding approvals for each of the following three years as well--most recently, for example, for 2006-07, for 2007-08, and for 2008-09--so that departments will be able to come forward in their reports on plans and priorities, which will typically be tabled later in March, which they would again table in front of the House.
Slide 8 presents the normal time lines, then, for the ARLU process. We work only on requests that have been formally approved and requested by ministers, so each minister responsible for these 122 appropriation-dependent departments and agencies must formally sign a submission. It is generally worked on through the summer and through September, and by October 1 needs to come to the board. Laura and her team then pull these together; the program sector colleagues in Treasury Board Secretariat review these for accuracy as well, and ensure that all the authorities are in place. We then go to the board, typically in mid-December, with what we call an omnibus Treasury Board submission, which formally seeks approval for the adjustments to the reference levels to be made.
By mid-December we don't have all of the necessary details for statutory programs or some of these other formula-driven programs, nor has the Department of Finance typically been in a position to make the adjustments--what I referred to as reprofiling--based on their knowledge of the fiscal framework, so between mid-December and the end of January or so in a typical year, further technical adjustments are required, in consultation with the Department of Finance.
By early to mid-February--preferably early February--we need to finalize the main estimates manuscripts and receive departmental ministerial sign-off if there were changes since the October 1 submission. Any material change goes back to a minister for a signature.
We then need to print, so that the President of Treasury Board is able to table main estimates in the House by the first day of March.
That summarizes what we refer to as the executive process.
We'll go on to slide nine.
This is the legislative process. According to the section 26 of the Financial Administration Act and to section 53 of the Constitution act, the government cannot make any tax expenditures without Parliament's authority, even with this whole planning process.
Translating executive level recommendations -- that is from Cabinet and from Treasury Board -- into Parliamentary or legislative spending authority involves two things : first, some Estimates, or information documents and, second, Votes, or legislative proposals.
We are now at page 10. What are the Estimates? Each year, the government prepares Estimates in support of its request to Parliament for authority to spend public funds. This is the basis for government accountability to Parliament. As I've already mentioned, the spending Estimates are tabled in the House of Commons by the President of the Treasury Board.
Page 11 shows what one can find in the spending Estimates. First, there is information to Parliament in support of appropriation bills. There are also forecasts of statutory expenditures already approved by Parliament. Ongoing or statutory appropriations cover approximately 65% of overall spending for 2006-2007, including the cost of financing the debt, as well as the major transfer payments to persons and to the provinces. The links between the spending authorities requested and the expenditures forecast in the Estimates are normally explained in this document.
Page 12 deals with three major components of the spending Estimates. Part I is the government expenditure plan, as I have already explained. Part II includes the Main Estimates. It is a much more detailed document where you can find the budgets of each department and agency. Part III is made up of the department or expenditure plans which, for several years now, have been separated into two parts : the Reports on Plans and Priorities, or RPPs, and the Departmental Performance Reports, or DPRs. The RPPs are tabled in Parliament before the start of the relevant fiscal year, and the DPRs are tabled in Parliament after the end of the fiscal year. Then, if necessary, there are Supplementary Estimates.
Part one, the government expenditure plan, as I said, provides an overview of federal spending. It summarizes the relationship of the estimates to the expenditure plan set out in the budget. As you'll see in this year's documents, we pull the key elements together by theme and by broad sector of the government, laying it out by departments.
Slide 14 has part two of the main estimates. The main estimates identify the spending authorities, the specific votes, and the amounts to be included in the subsequent appropriations bills that will actually be brought forward for vote in Parliament. These votes must be approved by Parliament before the government can proceed with any of its spending plans.
On slide 15, you will find the main estimates are organized by ministry and where there are multiple agencies within a ministry, then in order within those ministries. For each department or agency, it provides the strategic outcomes, a description of each of the related program activities, the proposed expenditures structured by program activity as well as by type of payment, and a listing, specifically of all proposed grants and contributions. These strategic outcomes and description of proposed expenditures were introduced in the 2005-06 estimates. In fact prior to that, spending was organized solely by votes.
As an innovation to try to bring greater transparency and accountability to Parliament, the objectives of the specific activities that drove those votes and drove that spending were set out. Treasury Board put a policy in place for departments on April 1 called the management resources and results structure policy. As of the 2005-06 estimates, each department must now structure its activities according to these strategic outcomes, present performance targets to Parliament, and then measure performance against those targets.
Now, on to slide 16. The report on plans and priorities, which is one of the elements of part three, provides information specifically drilling further into those departmental priorities; details the strategic outcomes and the related program activities; and details the expected results for Parliament, including links to related resource requirements over a three-year planning time horizon. This is for information, not for vote. These are normally tabled later in March in support of committee review of the individual main estimates.
Departmental performance reports, which are generally tabled in October, report on the accomplishments achieved in the year that ends the prior March 31. Those are the accomplishments achieved against the specific expectations and results commitments that had been presented to Parliament some 18 or 19 months prior.
On to slide 17.
I have already stated that it is possible to table Supplementary Estimates. In principle, two Supplementary Estimates are tabled each year. Specifically, according to the Standing Orders, the government can table one in December and another in March. These Supplementary Estimates are used to seek Parliamentary approval for additional authorities relating to items not included in the Main Estimates and to decisions made post-Budget or during the fiscal year. They may be the related to vote transfers, new programs, debt write-offs, loan guarantees, creating or increasing grants, and authorized changes to legislation.
Page 18 now. The Supplementary Estimates provide information on new items including vote wordings, explanation of requirements, objects of expenditure, transfer payments and major capital projects if any. Also, for information purposes, they update forecasts on statutory programs and contributions.
Page 18 is entitled Supply.
Let's see how the government obtains spending authority from Parliament via annual appropriation bills, which means we are talking about legislation.
We are dealing here with votes covering the portion of expenditures that has not already been approved by Parliament, that is to say statutory items. Annual appropriations are required for approximately 35% of overall spending, primarily to cover the costs of operating departments.
Page 20 indicates that Parliament approves and controls the spending authority through individual appropriations or votes for each Department. For the largest departments, there are several votes. They are approved for one year, except those of Parks Canada, the Canada Revenue Agency and the Canadian Border Services Agency, which are approved for two years according to their own legislation.
Page 21 refers to the review and passage of interim votes and of the supply bills for the Main Estimates, the normal time-frame being mid-March and early June. The review and passage of bills for the full supply relating to the Supplementary Estimates usually happen in mid-December and mid-March.
On page 22, we go still further into detail on the types of votes. There are two main types of voted authorities set out there. First of all, there are budgetary expenditures. These include the cost of servicing the public debt, any and all operating and capital expenditures, and transfer payments to other levels of government or to persons. Non-budgetary expenditures are also voted, and these reflect loans, investments, and advances, which are outlays that represent changes in the composition of financial assets of the Government of Canada but do not represent a net change in the financial position of the Government of Canada.
Slide 23 goes further into the budgetary votes. Program expenditure votes are used when there is no requirement for either a separate capital expenditures vote or a grants and contributions vote because neither of those equals or exceeds $5 million. So we don't bother with votes of those kinds if they are below this threshold of $5 million.
Operating expenditure votes are used when there is a requirement for either a capital expenditures vote or a grant and contributions vote, or both--that is, when expenditures of those types equal or exceed $5 million.
Capital expenditures votes, as I've already mentioned, follow when we have that threshold of $5 million.
I'll go on to slide 24, grants and contributions votes. Again, they are done when those specific types of activities in a program equal or exceed $5 million. Special votes are also provided for in the estimates. These are referred to as Treasury Board centrally financed votes. These support the Treasury Board in performing its statutory responsibilities for managing the government's financial, human, and material resources, and are statutory according to the Financial Administration Act. An example, and the key one, is the government contingencies vote, vote 5, which I'll come back to. We also have a much smaller government-wide initiatives vote, vote 10, and vote 20, the public service insurance vote.
Slide 25 goes into further detail on TB vote 5, which is traditionally a source of parliamentary interest. TB vote 5 is intended to provide temporary funding in its current use to departments between supply periods for urgent and unforeseen events. So it provides funding in advance of supplementary estimates, in particular when departments are unable to cash-manage within existing spending authority, and it also provides spending authority for the payment of urgent grants.
Permanent access to TB vote 5 is permissible under this vote wording, but is restricted solely to year-end adjustments relating to what are called paylist shortfalls, which are funded separately. This means certain wage and salary costs that we cannot necessarily or departments are not able to perfectly forecast. They may relate to payments around early retirements, parental leaves, and so on, which must be paid according to collective agreements, and if there should be a shortfall, we must use TB vote 5 as the only possible source of funds if we're beyond a period where we have supplementary estimates still in front of us. In this regard, TB use of vote 5 has been far more conservative than the legal interpretation of the vote wording would allow traditionally.
Slide 26 mentions, however, that the vote wording has been the object of concerns raised by the Auditor General in the past, by the Senate National Finance Committee, and at times by other parliamentarians. Those concerns have run along a common set of lines and have focused on clarifying the following: first, the grey area between spending and legislative authority, especially as it relates to the use of TB vote 5 for new grants, since grants are, as I mentioned earlier, listed in main estimates or in supplementary estimates; second, the government's accountability to Parliament and the funding authority that Parliament confers upon Treasury Board through the wording of TB vote 5 that has been there in the past; and third, the broad wording, traditionally, of the vote itself, particularly in defining what were listed there as miscellaneous, minor, and unforeseen needs, and in ensuring that the vote is used strictly for urgent circumstances.
Recommendations have been proposed to past presidents of the Treasury Board, to the Treasury Board, and to the government again, particularly by the AG and the Senate committee, ranging from changes to the vote wording itself to tightening up the guidelines Treasury Board uses in assessing and approving allocations from vote 5.
Slide 27 notes that proposals for changes over the last two years or so were developed in consultation with the Office of the Auditor General and were discussed in the other place at committee. Two changes were reflected in these main estimates as a result and are now before Parliament. First, we have a revised description on TB vote 5 that's provided in the introduction of the main estimates, and we have changed the vote wording.
The approval of a framework specifically for TBS recommendations and guidelines on the use of TB vote 5 is also required according to our plans and will go, we are proposing, to the President of the Treasury Board and to Treasury Board itself this spring for approval. These guidelines have existed. In the past we have tightened the guidelines, and we will give them the force of Treasury Board authority, ministerial as opposed to official.
Slide 28, briefly, is on non-budgetary votes. As we mentioned before, these provide authority for spending in the form of loans or advances, investment in crown corporations. These loans and advances may be made for specific purposes to other governments, to international organizations, or persons or corporations in the private sector.
Slide 29: main estimates are clearly in support of supply bills. So the estimates for a new fiscal year, as I mentioned, must be tabled in the House under Standing Order 81, section 4, before March 1 of one fiscal year with respect to supply for the fiscal year to start April 1 thereafter.
Interim supply must be made available to permit government operations to continue from the end of one fiscal year until full supply is obtained. Full supply then completes the process and allows the committee time to report on estimates. So interim supply is normally voted in March. Full supply is normally voted in June.
Slide 30 then points out to members that the supply processes in the current context obviously were affected by the timing of the election. So a special order dealing with the business of supply was required and was approved by the House on April 4. That provided for a sequence under which main estimates were tabled April 25. Interim supply authority for nine months would be sought, and was, on May 3. Committees would report back on estimates on or before November 10, 2006. Full supply for the remainder of this fiscal year would be sought in the week of December 4, 2006, the normal December supply period. Tabling of reports on plans and priorities would be delayed until return of Parliament in September to incorporate any budget announcements that had not been contained in the main estimates tabled on April 25.
So supplementary estimates, if the government chooses to go forward with supplementary estimates, could on current plans follow the normal timetables. So the first of what we would refer to as supplementary estimates (A) 2006-07 would be tabled in late October of this year. This would be a first opportunity to implement spending plans as outlined in the budget and highlighted in RPPs in terms of proposing supply. The full supply for supplementary estimates and main estimates would be sought again in the week of December 4, 2006.
Annex A then just brings together the normal supply and main estimates timelines through the balance of the year.
I beg the committee's indulgence; it was a long presentation.
9:30 a.m.
Liberal
The Chair Liberal Diane Marleau
Thank you very much.
The only other thing, and this may come up in questions, is the issue of special warrants. You haven't touched on that. Perhaps I'll allow you to touch on that later when you answer questions. I now go to the first question.
Mr. Alghabra, for seven minutes. Remember, if you speak too long he doesn't get to answer.
9:35 a.m.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
No, I have simple questions.
First, you've got to understand this is my first time on this committee. In fact, I'm a newly elected member of Parliament, so I might have some very simple questions.
I'm trying to understand the difference. Where would the executive supply get the authorization to spend that money? Is it part of the legislative, or is there a contingency fund that is given to the executive?
9:35 a.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
Generally speaking, the executive process that we were describing here was to give members an understanding of the process that the government uses to develop the main estimates, which then go in front of Parliament for spending approval. The government has no legal authority to spend without it having been provided for in a vote, so we do have the government contingencies vote, for example.
The fiscal framework may set aside reserves for the government to plan to use funds that hadn't been specifically planned, but, with the exception of TB vote 5, no such plans or changes in the fiscal framework can actually give effect to spending without coming before Parliament through either main or supplementary estimates.
9:35 a.m.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
Okay. And as far as the process of estimates and supply is concerned, that's done twice a year for the estimates. When a new government comes into place and a new budget is announced, if the previous government had made commitments for a year or two years, and if the new budget made significant changes to those, are there any rules or requirements that the previous crown commitments must be upheld? What are the rules over there?
9:35 a.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
The spending authority that's proposed to Parliament through main estimates is based on the decisions that a Treasury Board has taken. The government that is in power at the time that appropriations are sought must take a decision on the nature and substance of the estimates. It needs to balance its own plans against the need for spending authority to continue the core operations of the government. So the government of the day, on any given day, is fully capable of taking the decision of what estimates to present. As you see here in terms of the process, it takes quite a bit of time to put together the estimates. Changes can be made near the end of the process. The President of the Treasury Board and the cabinet of the day choose what estimates to put in front of Parliament.
9:35 a.m.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
So if I understand you correctly, they can dramatically change what the previous commitments were, even if the previous commitments were to extend beyond the current year?
9:35 a.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
All governments are accountable to Parliament for the specific appropriations they request.
9:35 a.m.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
Okay. So if we go through the current estimates right now, and we already know that there are going to be major changes or we can predict that there might be major changes for the fall.... I'm trying to reconcile this. While we are approving estimates, but really those estimates may be invalid by the fall, how do departments plan their expenditure, their expenses, and their projects?
9:35 a.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
In terms of the timelines, which we've discussed, main estimates must be tabled by March 1. The practice that has evolved in the Government of Canada--over a number of decades, really--is that typically a budget will be presented that provides a fiscal framework very shortly before that, typically in February. It is quite normal that main estimates would, as I mentioned here, have a reconciliation tabled at a very high level, alerting Parliament to the fact that there may have been recent budget initiatives not captured in the main estimates. So it's to reconcile between the overall spending levels for information purposes of Parliament.
If, say, one looked at the 2005 budget and then the main estimates tabled in Parliament in February of 2005 in respect of fiscal year 2005-06, and there was a substantial amount of spending planned through the budget that was not contained in the main estimates because they were tabled within a week or 10 days, for the bulk of new spending, Parliament received a request to spend through the supplementary estimates tabled last fall. Those supplementary estimates last fall contained about $7 billion of voted spending authority, most of which had been first announced or presented to Parliament in a fiscal framework way in budget 2005, some even in budget 2004.
So it is normal, because of our current timelines, that the appropriations are essentially catching up with plans after the fact. That's one of the key distinctions between the reports on plans and priorities, department by department; they will refer to the fiscal framework plans for the information of Parliament, not to the specific authorities that have actually been put to Parliament for voting. Obviously departments have to keep very close track of what is planned versus what is authorized.
9:40 a.m.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
I should have started by thanking you both for coming to help us through this process.
Thank you, Madam Chair.
9:40 a.m.
Bloc
Louise Thibault Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you, madam Chair.
Like my colleague, I want to thank you for providing us with explanations about matters which are quite complex, you'll have to admit.
First of all, if my colleagues agree, after you answer my questions, I would like you to talk about the whole issue of the Governor General's special warrants. The clerk of the committee has asked for some documents. Members of the committee have the duty to scrutinize the amount requested by the government in order to ensure that all moneys are spent appropriately.
Coming back to what is referred to as the Annual Reference Level Update, you state on page 5 that it allows the realignment of funds between activities. If it was a realignment between very different activities, or if activities changed significantly, I suppose you would come back to Parliament to ask for an authority. I guess you would not start with one thing and end up with something completely different.
Third, I would like to know what would happen if there was a reduction of the Estimates, instead of an increase, for example if there were major cuts in the Public Service. I am thinking here of what happened in the nineties. Public Works Canada might also decide to sell some buildings, which could lead to major savings. What would be the effect of that? We always talk about increased expenditures but, if there was a reduction, what would be the process? I'm sure that there are rules for that also.
My next question will seem a bit naïve about, when a government tables a Budget, as it just did, this Budget is a subject to a vote but there will be a delay before we get all the details. We know what the overall figures may be but, if I understand correctly, we will not get the details before Fall.
I will conclude with an example that is dear to my heart but there might be others. In my region, some wharves need to be repaired. When will I be able to tell people in my region that the amounts have been appropriated? How will that appear in the Estimates? How will we be able to get detailed information about that? This may seem quite mundane but it is extremely important for people at the local level.
Thank you very much.
9:45 a.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
Thank you.
Should I refrain from dealing now with the Governor General's warrants?
9:45 a.m.
Bloc
Louise Thibault Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
Yes because, if you don't, you will not be able to answer all my questions during my time period.
9:45 a.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
All right.
First, about the information provided on page 5, that is the possibility to realign resources from one activity or vote to another, this is very important. It refers to the planning process. For example, if the government submits votes to Parliament, and if those votes are approved, the resources appropriated may be changed in future Estimates. In order to change the appropriation of resources between two Estimates,one has to apply to Treasury Board according to a formal process. Such a change cannot be implemented by a minister on his or her own. It is rather technical.
As far as reducing expenditures, I have to remind you that the government asks Parliament for spending authority. It is quite conceivable that the resources approved for each vote would not always be fully spent. Some amounts cannot be spent for various reasons relating to capacity or to a change of plans. In that case, the government would inform Parliament later on but it does not need to ask Parliament to reduce the vote. Now, if this was due to a change of policy, the government would normally inform Parliament.
9:45 a.m.
Bloc
Louise Thibault Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
Please, allow me to interrupt.
If the government made some savings in a program and decided to use that money for a completely different purpose, would it be required to inform Parliament? For example, the government might decide to make some savings in an activity because it wants to spend it in another, but the other overall amount would remain the same. Would it have to inform someone?
You said that ministers cannot do that on their own, which is understandable. They have to ask Treasury Board for the authority to use the money from one vote to another. However, could the government do the same thing without Parliament being made aware? I'm not saying this government intends to that, it is just a theoretical question.
9:45 a.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
It is a very valid question. Are both programs funded by the same vote? The government does not have the right to take moneys from one vote and use them in another. However, it may realign amounts within a vote.
You wanted to know also when you would receive the detailed information from the Estimates. Those amounts are submitted through a Supply Bill. When an initiative is announced in a Budget, approval is in two stages. First, Parliament votes on the budget, generally in the Spring, and departments are not allowed to spend those amounts before Supplementary Estimates are... Last year, we had a situation that proved that we could not necessarily rely on that process and so the Treasury Board Secretariat now demands that departments wait for Parliament's approval.
9:45 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Thank you, Madam Chair.
Good morning, all.
My question would be to either person who feels comfortable answering. Like a number of new members here, I'm getting my head around the entire process, so I'm not going to the overall concept here. I just want to cherry-pick a couple of items that jumped out at me at this particular time and ask for your thoughts.
In the context of a couple of hundred billion dollars, millions here or there appear to be puny and insignificant. But millions of dollars are still millions of dollars. I see one instance where we've set an arbitrary role of $5 million for expenditures that go through the different processes and don't need to have the necessary scrutiny. I'm wondering, why $5 million, and not $3 million or $10 million? That's one thought.
The second question is how many times was this used, and what percentage of total expenditure might this be? In other words, is this an occasional blip, or is there something more to this? Is a fair bit of spending consistently handled that way?
9:50 a.m.
Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat
I'll start that. I'll turn to my colleague to ask for a couple of specific points.
First of all, the main estimates are already, as members can see, quite thick. There are a great many votes, so there is a question of practicality: we have to keep the number of votes large but finite. What are the checks and balances? The two kinds of votes that are specifically highlighted here are grants and contribution votes. All grants and contributions above a very much smaller level are in fact listed. The question is only whether those grants and contributions would be the subject of a specific grants and contributions vote or they would be included with other kinds of spending. But all grants and contributions are listed above a number of.... I forget the number.