Public Accounts Committee on March 8th, 2011

[John Wiersema]

Yes, Mr. Chairman, it would be correct to characterize these as employer and employee premiums.

[David Christopherson, NDP, Hamilton Centre, ON]

It's very important that it's not taxpayers' money. It's those companies' and those workers', it's their money that evaporated. I say “evaporated” to be kind.

So $57 billion was notionally in that account. It's all in one Consolidated Revenue Fund, but when you're recapping what the money is for, there's a notation that this amount of money is recognized as EI income, and that's ultimately where the cumulative $57 billion came from, correct?

[John Wiersema]

That is correct. It's an accumulation of premiums collected, minus benefits paid, plus interest paid on the balance in the EI account. Previously, there was interest paid on the balance of that account as well.

[David Christopherson, NDP, Hamilton Centre, ON]

Right, and the last budget effectively wiped it out and said it just didn't exist anymore, and then they started anew with the fund you've been talking about. Is that also correct?

[John Wiersema]

Yes, Mr. Chairman.

[David Christopherson, NDP, Hamilton Centre, ON]

It's interesting that it took the Conservatives and the Liberals to pass that budget. So the Liberals have their fingerprints all over this thing, notwithstanding that it was the Conservatives who also agreed they weren't going to pay those people back the money they were entitled to. But the Liberals were part of making sure the $57 billion was taken, which rightfully belonged to every person who went out and worked and had premiums taken off and every employer who paid out a premium for every hour worked on their behalf. It's their money that was taken, and it was their money that was wiped out by the vote of the Conservatives and the Liberals, just to be clear on how that worked.

Now, this question has to be asked. I'm actually doing work for Mr. Kramp here because normally this is his job. He normally wades in, in this area. The question has to be asked. In volume I, page 2.36, bottom of the page, accrual—

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

I knew it.

[David Christopherson, NDP, Hamilton Centre, ON]

Accrual, Daryl. I'm disappointed you weren't there, man.

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

David, give me another minute and I would have been.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay. Were you coming to it?

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

Yes, I was.

[David Christopherson, NDP, Hamilton Centre, ON]

Are you going to get a turn?

[A voice]

No.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay, then, it has to be asked, so here we go.

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

Go ahead and do it for me.

[David Christopherson, NDP, Hamilton Centre, ON]

On behalf of my friend, Daryl, and me—

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

I have confidence in you.

[David Christopherson, NDP, Hamilton Centre, ON]

That's probably the first ever, a joint question.

[An hon. member]

A new coalition.

[David Christopherson, NDP, Hamilton Centre, ON]

That's right, a new coalition. It's happening all over the place.

I'm quoting the Auditor General:

As I noted and I continue to observe, the government has yet to commit to an implementation date for adopting accrual appropriations or to explain why it would not be prudent to do so.

I raise that, not just because it's a bit of an ongoing joke, because we've been dealing with this since we got here in 2004, but because we've actually taken some time to make recommendations around this over and over, and the government's been part of that in terms of saying, at least look at a date; give us a target date. We can't even seem to get that.

I know you can't answer the question; you're pointing out the problem. Maybe you could just give us some sense of the discussions you're having with the government. Are there legitimate impediments that we're not aware of, that we're not taking into account, and therefore possibly we're being unfair in our comments, which we would never want to be?

[John Wiersema]

Perhaps I'll start, Mr. Chairman, and then perhaps the Comptroller General should comment.

I believe it would be fair to say, Mr. Chairman, that the Auditor General shares the member's frustration. We believe this is the way to go and have been so indicating, which is why we keep coming back to it. I know the government has looked at it; I know the government has considered international practice, which varies. There are some views out there that we need to be prudent, but we have indeed been looking at this for a very, very long time.

I know the government now requires some departments to put what is called “forecasted financial statements” into their RPPs, their reports on plans and priorities, and the DPRs. Personally, I don't think that helps. I don't think it's going to help to advance the yardsticks of accrual budgeting and accrual appropriations. So the Auditor General shares the member's frustration. It has been studied for a long time. We believe it's time to make tough decisions.

It will have profound implications for how Parliament manages the appropriations process, and that needs to be carefully thought through. It requires leadership to make a decision and then move forward with that decision, whatever it might be. We continue to encourage—

[The Chair, Liberal, Joe Volpe]

Thank you, Mr. Wiersema.

Mr. Christopherson, I know you wanted to get Mr. Ralston in on this, and I draw attention to all members to a communication item they've all received through the clerk from the Auditor General that essentially says what Mr. Wiersema has said. I note that Mr. Ralston also got a copy of it, as did the Secretary of the Treasury Board.

I'm going to give Mr. Ralston just a moment or two, or at least the 30 seconds that Mr. Wiersema took to respond, to let him have a say. I don't want him to go unnoted.

[James Ralston]

Thank you, Mr. Chair.

Mr. Wiersema did note that there is no international consensus on the benefits of accrual appropriations. In fact, there is nothing authoritative that suggests this is the way to go. There is no standard-setter that has suggested this is the way to go, so it's therefore not a requirement. It's not even recognized generally as a best practice.

Australia, which tried it out, concluded that the accrual appropriations led to a loss of transparency and has decided to re-implement cash-based appropriations. So there's nothing authoritative to support this.

Mr. Wiersema has expressed the Office of the Auditor General's preferences, but in terms of actually demonstrated benefits--and I do say demonstrated as opposed to hypothesized benefits--there is no international evidence of that. That is why there is no consensus. That is why standard-setters have not gone that route. So, as I say, it's the Office of the Auditor General's preference at this point in time.

[David Christopherson, NDP, Hamilton Centre, ON]

It's one thing to disagree with me and John; it's quite another to disagree with Sheila.

[The Chair, Liberal, Joe Volpe]

Speaking of that, I'm going to go to Mr. Young.