Government Operations Committee on Oct. 30th, 2012

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

[Sally Thornton]

We will address that in our response on recommendation 2, which is due to you by the end of this fiscal year. We'll include the timeline for the other items.

[John McCallum, Liberal, Markham—Unionville, ON]

Another thing we emphasized was to focus on strategic incomes and program activities, but the committee recommended a vote structure based on program activities. Can you clarify the government's intentions with respect to this revised vote structure?

[Bill Matthews]

Sure. This had some discussion earlier on, but I will repeat it for your benefit.

The government commitment here is to put in place, in front of the committee, a revised vote structure for consideration, because changing the vote structure would require an intensive amount of work and dollars, and it would be unfortunate for us to go down that path and then find out at the end that what was developed wasn't quite what you wanted.

Before we actually take that step, I mentioned that we would like to come back to this committee, ideally before Christmas, with a mock-up of four departments' main estimates from last year to show what they would look like under a potential new structure. During that time period as well, we'll be working with departments to nail down what the costing would be to move to that structure, so that everyone understands that it would be useful and be an improvement and be worth the cost. That's where we're headed.

[John McCallum, Liberal, Markham—Unionville, ON]

I think we all understand that it will cost some money and take some time, but I think I hear you saying you are committed to proceeding along this path.

[Bill Matthews]

We are committed to putting a mock-up in front of the committee for discussion. If it turns out that the mock-up is not useful, that would put us back, but our commitment is to move forward and put something in front of the committee for discussion, so we are pursuing this.

[John McCallum, Liberal, Markham—Unionville, ON]

Finally, on the question of tax expenditures, I understand the logic of what you say regarding the Minister of Finance. The annual report on tax expenditures indicates the costs of each one of them, but it doesn't help us to determine whether those tax expenditures are successful or whether they are achieving their goal. Whether it is in a single financial report or multiple reports, is it possible to have information on the success or otherwise in relation to the goals or objectives of these various tax expenditures?

[Frank Des Rosiers]

Mr. Chair, the Department of Finance publishes now, since the year 2000, a thorough evaluation and studies; they are being published alongside the tax expenditures report. There have been 20 of those studies published, precisely on this very issue of effectiveness and whether we are accomplishing the desired objectives.

[John McCallum, Liberal, Markham—Unionville, ON]

Such studies already exist in terms of effectiveness.

[Frank Des Rosiers]

Yes, they are on our website. They are published annually, around the time of publication of the report. We tend to be a humble bunch in Canada, but it's worth noting that publishing not only the data, as we do, but also the studies is seen as very much a best practice among OECD countries.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay, very good.

Thank you very much, Mr. Chair.

[The Chair, NDP, Pat Martin]

That's very interesting, actually. Thank you for those questions. I've learned something from them, too.

Costas Menegakis is next.

[Costas Menegakis, Conservative, Richmond Hill, ON]

Thank you, Mr. Chair.

I want to thank all of our witnesses for being here with us today and I want to thank you for the work that you do. You're not in easy departments. Certainly the Treasury Board Secretariat and the Department of Finance are the nerve centre of what happens financially in our country.

I want to touch base on some of the material that we've covered already this morning for a little more clarification.

The budget, admittedly, is a very comprehensive document. It is a policy document. I think you're correct, Mr. Matthews, in stating that on a number of occasions this morning. It is comprehensive. It is over 400 pages long this time around. Quite frankly, I don't see how it cannot be. We're talking about $275 billion to $280 billion worth of expenditures across a wide range of programs and departments. I find it difficult to believe that it's as short as it is, to be quite frank.

I know members of the opposition have tried to make hay out of the length of the budget, but there are high school and university students right across this country who have textbooks that are longer, with a lot of comprehensive and very difficult concepts to understand and grasp.

However, it does highlight one thing: to better understand what is in that budget and how that money eventually gets spent in our country, we need to have perhaps a clearer way of understanding it, especially the non-initiated, the people who are not in the departments that know exactly where every dollar is being spent.

You have agreed with recommendations 4, 5, and 16, which deal with information by program activity for three previous years and three future years so we can see them on a comparison basis and see what the major differences and variances are. We've talked a lot this morning about an online program that we can access so that we can see this clear picture. I know you're studying it, but can you give us a sense of some of the options you're considering?

[Bill Matthews]

Regarding recommendations 4 and 5, they're very straightforward. The RPPs contain additional information about a three-year history and about three years looking forward in terms of numbers. Recommendation 5 is some text around explaining changes in those numbers. That's very straightforward.

With respect to recommendation 16, the database, it really is early days. What you'd be looking for is something, conceptually, that would map departments' authorities achieved through main estimates and supplementary estimates, building through the year, as well as some information on what they've actually spent. You could link up planned spending with in-year spending as it's available, and then historical spending for previous fiscal years. Broadly speaking, those would be the objectives.

I'll see if Sally wants to add anything to that.

[Sally Thornton]

That is it. It's so you can see the story and start to build it over a period of time rather than have only a one-off, that one-year appropriation without the broader context. Ultimately, of course, it would be more at the strategic outcome program activity level so that it can fully align with what's being put to Parliament for approval.

[Bill Matthews]

The ideal is to link in the tougher pieces, such as the program performance information. That's a challenging piece, because you get into text and performance measures there, but if you look down the road, that's where this would go.

[Costas Menegakis, Conservative, Richmond Hill, ON]

Creating an online database for something like this, which is comprehensive in detail, will require interdepartmental cooperation at some point. How are you planning to proceed with that? Are you developing a task force or a committee to see how quickly we can implement an online database to have all this information available?

[Bill Matthews]

There are a couple of key pieces. One piece is the technology. We have technology folks within the Treasury Board Secretariat, so we're working with them on that piece.

On the link back to departments, this really is their data. We have access to some of it at the centre. You want to make sure the data we're accessing is data that matches their numbers. There's no special ad hoc committee, but there is some work required to make sure we all agree on what the right data is. We'll work with the chief financial officers of each department to make sure that gets done.

[Costas Menegakis, Conservative, Richmond Hill, ON]

Would you concur with that?

[Frank Des Rosiers]

This is very much led by the Treasury Board Secretariat; I trust my colleagues a whole lot.

[Costas Menegakis, Conservative, Richmond Hill, ON]

Thank you very much.

Thank you, Mr. Chair.

[The Chair, NDP, Pat Martin]

You're very welcome, Mr. Menegakis.

Next is Mathieu Ravignat, for the NDP.

[Mathieu Ravignat, NDP, Pontiac, QC]

You may understand some of our frustration, because this isn't the first time this committee has studied this process. In fact, I think the committee has studied it at least three times. Every time we do so, we hit a culture that is hesitant to change. I'll give you an example of part of that culture in the way you answered the question with regard to tax expenditures. If I understand your answer correctly, it's that the expertise doesn't exist in the different departments in order to do this, but it exists in finance. If we make this change, it would be clear that this expertise would have to exist in the ministry.

What I'd really like you to do is try to think about whether it would be positive if we did this. Would it be a positive change? What we're concerned about is that we can't tie certain tax expenditures, or we can only tie them with a lot of difficulty, to the different departments and ministries. I'd like to turn your negative into a positive. Could you think about whether it would provide us with better information if we did this? Maybe not, but I think the onus is on you to tell us whether or not it would be a positive change.

Thank you.

[Brian Pagan]

I'll take a stab at a response.

The suggestion that this is a culture that's resistant to change reflects some of the complexity of the environment. It's a big operation, with 135 appropriation-dependent departments, cabinet committees, the executive, the legislative branch.

The reality from where I sit is that there have been a number of innovations over the last number of years that respond to calls for increased transparency, accountability, and reporting.

In the mid-1990s, coming out of program review and the significant changes related to government programs, there was a multi-stakeholder approach to revising the main estimates, and that saw the estimates separated into main estimates and the RPP-DPR process, with an emphasis on planning and then reporting back against what was achieved.

Once we put planning documents in the public domain, it created a call for better structures around which to plan, and we're seeing that debate play out now in whether you want to control by vote or program activity. There's clearly an interest to planning by program activity and controlling by that. The work that TBS has done over the last number of years on the MRRS and program activity structure responds to that ongoing demand for change and better information.

I also mentioned the introduction to the expenditure cycle of new supplementary estimates documents, the supplementary estimates A in the spring. One of the constraints that we work under is that Parliament has three supply periods. You vote on appropriations three times during the year. We took the step of introducing a supplementary appropriation for each of those three supply periods.

Finally, with respect to timing and alignment of the budget and main estimates, which is an ongoing challenge, Mr. Matthews mentioned the innovations coming out of budget 2009 and the call for timely stimulus. This was the earliest budget in many, many years. It was on January 27. That was the budget. It forecast what the government wanted to do to stimulate Canada's economy and respond to the global recession. In order to make that work, there was a very innovative measure in the main estimates known as the budget implementation vote. That required that Parliament effectively delegate to Treasury Board ministers the ability to make appropriations and get money into the hands of departments in a timely way.

[Mathieu Ravignat, NDP, Pontiac, QC]

I'm going to have to interrupt you there, because I won't be able to ask my second question.

Thank you for that information, but I guess what we're telling you is that the quality of the information we have is still not sufficient. That is the fundamental issue for us as parliamentarians: to be able to actually understand the information that's given to us.

Anyway, you said something very interesting about program architecture and program activity. I know that there's a review process in place for all the departments to review their program architecture. The problem is that a lot of that program architecture is out of date. A lot of it lacks a lot of detail. A lot of it is strategic with regard to receiving budgets intentionally worded in certain ways in order to be vague.

As for my question, what actually interests me as a parliamentarian is knowing what the sub-activities are within the programs' architecture. It's something that I think would actually add some significant detail to how money is being spent or to how money is intended to be spent. Now, that's a sea change, I know, because every department will have to provide detailed information, but I think it's extremely important when it comes to making sure that our government spends responsibly.

Could I have a little bit of a response to that?