Government Operations Committee on May 11th, 2006

[Mike Wallace, Conservative, Burlington, ON]

Can I get some technical information on that?

[The Chair, Liberal, Diane Marleau]

We're here to help you, so I don't mind, providing our guests can stay.

[Mike Wallace, Conservative, Burlington, ON]

You may be able to help on this. I've gone through this and I have questions. I'm new, as you can tell.

Just from a process point of view, I'm so used to having a delegation in front of me, and we just continue to ask questions until we're done with them. Obviously, that doesn't happen here. I have these questions. Do I submit them through you, Madam Chair, and it goes to everybody and then they respond, or can I just submit them to the Treasury Board? Is there any process to this at all?

[The Chair, Liberal, Diane Marleau]

If you have any questions, feel free to ask the witnesses, feel free to ask the minister of the Treasury Board. There are many avenues for you to get responses to your questions. There are certainly all sorts of things.

[David Moloney]

We would certainly be happy to. We certainly respond to direct questions from parliamentarians as well as questions by committee.

[Mike Wallace, Conservative, Burlington, ON]

The horizontal piece in here, can you explain what that means? Is that the stuff that happens across the board, and is that why it's called horizontal? I'm not exactly sure what that is.

[Laura Danagher]

For the purposes of this report, the horizontal is where departments are asking for initiatives that are common among a number of departments. We summarize it for you, so you can get a sense of how much money is actually being spent on that initiative by all departments. Otherwise, you're looking at the individual departmental pages, which will list the same initiatives. This gives you an overview across government for the period of the warrant--how much money was spent on that specific initiative.

[Mike Wallace, Conservative, Burlington, ON]

I have a specific question, because I picked out an example from looking at this, and it might not be a good one, but I picked it out. Parks Canada, page 29--it's listed in three places--from February to March they got $53 million, which is about 15% of their normal budget for the year, based on the number I see here on the previous estimates of $375 million.

Then I went to the detailed page about explanation of requirements, and I think it goes along with Mrs. Thibault's questioning: some of this stuff doesn't look as if it's terribly urgent. It looks like ongoing funding that would normally have happened in that regular budget. How much authority do you have to say "Come on, this isn't that urgent"?

[David Moloney]

I think two things are relevant. First of all, it is an individual minister who's attesting, but importantly, this instrument dates back to the 1860s. Financial administration acts over the 140-year period since then have added certain kinds of uses.

But since the 1890s, I believe it is, it has been considered in the Financial Administration Act that the normal core ongoing operations of government are eligible uses for Governor General's special warrants. So that otherwise put, the Financial Administration Act does not contemplate that provisions of standard core services provided by the Government of Canada would need to be disrupted because of supply being disrupted by Parliament. An individual minister still does need to attest that their interpretation of core operations of the government meets that test.

[Mike Wallace, Conservative, Burlington, ON]

I'd agree with that, but based on that answer, would not the main estimates have covered off the everyday requirements of the department? Do we not try to discourage the use of specials, because it's really going outside the normal voted-on process of allocating funds?

[David Moloney]

I think the guidelines...well, it's not just guidelines; the legislative requirements are quite clear and provide restrictions. It's important, for example, in the case of Parks Canada that you asked why wouldn't the main estimates have been able to provide for this?

Well, of the $53.866 million, the very first item, $23.726 million is in respect of collectively bargained salary increases, which took place after the main estimates were essentially closed. So that is an amount the government was simply not able to.... So that accounts for not quite half, but is an important amount.

[Mike Wallace, Conservative, Burlington, ON]

Again on that particular item, I find it strange that we're not able as management to forecast the potential increase in settlements within the year and have that in the main estimates at the beginning of the year.

[David Moloney]

It's a reasonable expectation. We have to balance three things. One is the government's ability to manage its overall fiscal framework, which absolutely requires a reliable forecast of what the ongoing costs of the government will be. And we do that; one of my other jobs is to provide the Department of Finance precisely that.

On the other hand, there are two other issues. One is that the government, like any other major employer, could not go before Parliament and detail its collective bargaining strategy publicly before it has signed deals. The third aspect is that we are seeking, in front of Parliament, actual legal authority to spend money which, by convention and practice, we limit to those collective agreements that are actually signed.

So we inform Parliament about our overall fiscal framework needs but seek the spending authority when we can detail it very precisely.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Madam Chair.

[The Chair, Liberal, Diane Marleau]

Just before you ask your question, we did not pass interim supply either in the fall, did we? I don't recall.

[David Moloney]

In terms of interim supply for 2005-2006?

[The Chair, Liberal, Diane Marleau]

Yes, the supplementaries.

[David Moloney]

That $7 billion of voted spending authority did not come to a vote.

[The Chair, Liberal, Diane Marleau]

It didn't come to a vote. So there was also a lack of time.

Mr. Kramp.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

This is a bit of a broad question, based on your experience.

Many of us have dealt with government agencies, and there's always at the end of the fiscal year a mad rush to spend the money. We've seen so many times that if you deal with a government agency you know the POs are going to be coming out left, right, and centre in the last month. In such cases there doesn't always appear to be really intelligent spending in that last desire to get rid of the budget. Has there ever been an analysis done on what proportion of spending takes place in regular government departments in that last month?

[David Moloney]

In fact there's detailed reporting, inasmuch as the Department of Finance releases a monthly fiscal monitor within 50 days after the end of each monthly period. That's publicly available on the Department of Finance's website. You can see, by major spending category, in great detail what the spending pattern is by month.

Past Auditors General have exhorted the government to take steps to try to change the incentives for departmental managers. An important innovation took place a number of years ago, in 1995. We then put in place a 5% operating budget carry-forward, such that in order to lighten although not necessarily totally remove the incentive a deputy minister is allowed basically the fiscal framework, and Treasury Board Secretariat are bound to allow for carrying forward up to 5% of the full year's operating budget if it is not required to fulfill the planned spending. They get that plus what they normally would have gotten. That gives a better incentive to the manager.

A third point is that the committee may be interested in talking to the Minister of Public Works. There is a procurement modernization strategy underway that's both dealing with the tools of procurement but also planning for procurement more generally as a further step.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you very much.

[The Chair, Liberal, Diane Marleau]

Thank you very much. That was very helpful.

I hope it's more than 3%.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

My intake is low. It's not their problem; it's mine.

[Mike Wallace, Conservative, Burlington, ON]

Can I ask a question on the summary report from our research staff?