Public Accounts Committee on March 8th, 2011

[Terence Young, Conservative, Oakville, ON]

You're using my time.

[The Chair, Liberal, Joe Volpe]

Good.

[Terence Young, Conservative, Oakville, ON]

Mr. Wiersema, do you have any comments on this?

[John Wiersema]

Perhaps I could use this as an opportunity to refer the member to section 1 of volume 1 of the Public Accounts, which includes a 10-year comparative table of all the government's revenues and expenses. This goes back to my earlier comment. I think the government has done a good job of preparing this report, because the member now can ask the type of question that he is able to ask here. Looking at the trend of corporate tax revenues between 2001 and 2010, you'll see that in 2001 corporate tax revenues were $28 billion; they dropped, increased again in 2005, and then increased a little higher to $40 billion--

[Terence Young, Conservative, Oakville, ON]

How can they go down? If tax rates are going down, how can revenues go up?

[The Chair, Liberal, Joe Volpe]

Thank you, Mr. Wiersema, for making that effort. Would you mind telling us what that page is again?

[John Wiersema]

Page 1.16. It's a 10-year comparative statement on the government's operating scheme.

[The Chair, Liberal, Joe Volpe]

Thank you very much.

I have Mr. Bains and Mr. D'Amours splitting their time.

Mr. D'Amours.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Thank you, Mr. Chair.

I am going to ask two quick questions.

Mr. Ralston, I asked the President of the Treasury Board a question today about a meeting that he had with Ms. Ouimet to discuss certain files. He initially said that the meeting never took place. Later, he remembered that one had taken place, or, rather, someone reminded him about it.

Have you had discussions, or have you been made aware of discussions between the minister…

[Andrew Saxton, Conservative, North Vancouver, BC]

I have a point of order. I'd like to say that this has nothing to do with the question at hand, which is why the witnesses are here. Unless the minister bought coffee for the agent of Parliament, I think this particular question is out of order.

[The Chair, Liberal, Joe Volpe]

Just a moment, Mr. D'Amours. I want to thank Mr. Saxton for bringing my attention back. I apologize to colleagues. I was distracted for a moment, so I can't even rule whether that was or was not in order.

I think Mr. Saxton would probably like me to have Mr. D'Amours repeat that so I can make a decision. Is that what he's asking me to do?

[Andrew Saxton, Conservative, North Vancouver, BC]

I'd like you to rule, Mr. Chair, on the point of order.

[The Chair, Liberal, Joe Volpe]

I already admitted I was distracted and I apologized for that.

[Andrew Saxton, Conservative, North Vancouver, BC]

I think that's just a tactic.

[The Chair, Liberal, Joe Volpe]

Good.

Mr. D'Amours, please continue the question. If I find that it's not in order, I will tell you so.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Thank you. Once I have finished asking my question, Mr. Saxton will know if it's in order.

Have you heard about discussions or about the meeting between the minister and Ms. Ouimet, about the Treasury Board submission on the transfer payment program?

[James Ralston]

No, I have no knowledge of what--

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Thank you, Mr. Ralston.

I have one last question, and then I will give the floor to my colleague.

Mr. Wiersema, we are talking about consulting contracts, employment agencies, adjustment funds for human resources where only 64% of the budget has been used, an agriculture fund where 91% of the amount hasn't been used, and high speed Internet, an area where 100% of the amounts allocated have not been used. Mr. Ralston said that these involve internal departmental decisions.

So, do you think that it is becoming even more important that a departmental audit be done by the Office of the Auditor General?

[John Wiersema]

There are many dozens of votes in the public accounts of Canada where Parliament has authorized departments to spend up to a certain amount—operating votes, capital votes, grants and contribution votes. Many of those votes aren't fully used and funds lapse.

If the committee wishes to pursue the reasons that funds were lapsed on individual votes, those questions would be best posed to the departments responsible for those votes and to which Parliament had voted the funds.

With respect to the question of the use of temporary help agencies and contractors in government, this is not something the office of the Auditor General has looked at in a performance audit. I would point out that an organization as large and as complex as the Government of Canada is going to have a requirement for temporary help periodically, and it is going to have a requirement for specialized assistance for those skills it doesn't have on staff. In my view, there will be some legitimate needs. We can question the extent of these needs, but there will certainly be some legitimate needs for temporary help, specialized assistance, legal advice, and other advice or skills that the government does not have on staff.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I respectfully disagree with my colleague that this is a clean audit. It's not a clean audit. I'm going to state that it's an unqualified opinion, because it's prepared in accordance with the government's stated accounting principles, and these principles were applied in a manner consistent with the preceding year.

You said that the Auditor General provided observations. I want to look at one observation you mentioned, just to demystify this myth that it's a clean audit. You said that the testing of tax revenue estimates continues to show significant differences from reported amounts. Could you elaborate on that? Are we talking about millions or billions of dollars with respect to the estimates compared with the reported amounts?

[John Wiersema]

With respect to the Auditor General's opinion on the government summary financial statements, in my opinion it would be correct to characterize it as a clean audit. It is an audit without qualification, and therefore it is properly characterized as a clean audit.

As with any audit, there are things that are noted during the audit. The auditors are always able to find something. Those issues that we think might be of interest and relevance to Parliament, we've included in our observations, which are included in the public accounts.

I believe the member is referring to the observation on tax revenue on page 2.35 of volume 1 of the Public Accounts. This is an issue on which we've had discussions with Mr. Ralston, in his present and former capacity, for a number of years. The biggest management estimate that appears on the government's financial statements is tax revenues. Some of that is hard cash and some of it is estimated under accrual accounting. We continue to encourage the government to test those estimates with actual data to make sure that their previous assumptions and estimates are the best possible. The government has been doing that. CRA in particular has been doing it.

In 2010, it wasn't able to complete all of the “back testing” that it had planned to do. Some of this revealed differences between what they had estimated and the actual numbers of between 20% and 30% of what was recorded. We've encouraged the government to refine those estimates, to continue to back-test, to validate the underlying data, and to update its methodology. It's an ongoing discussion that we have with the CRA and with the Comptroller General. It is not so significant as to affect that clean opinion. We are still comfortable with the amount of tax revenue reported on the summary financial statements.

[The Chair, Liberal, Joe Volpe]

Thank you, Mr. Wiersema.

Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer, AB]

I want to go to some of the economic action plan benefits. I know you've already talked about how the reduction in taxes had money in people's pockets so that they were able to buy and therefore help the communities. There are a couple of other programs, like helping the unemployed through the enhanced EI benefits and the training programs, the enhanced work-share programs, the injection of infrastructure spending, the home renovation tax credit, the improvement of infrastructure at colleges and universities, and the consequential support for research and technology. I wonder if you could explain what the outcomes were from that, and perhaps look at it from the point of view of a cost-benefit analysis.

[The Chair, Liberal, Joe Volpe]

Monsieur Robidoux.

[Benoît Robidoux]

Thank you, Chair.

It's difficult to go through all these programs. I would just mention maybe one that we have provided information on, I believe in every report we did, which is the work-sharing program. It has been very, very popular. We had about 20,000 Canadians benefiting from that program before the recession. We went up to over 200,000 workers benefiting from that program at the peak of the recession.

And again, the cost of that program is fairly limited and the benefit for those who stay at work is fairly high, I believe. They don't lose their experience and all that. They don't go out of the labour market. They remain in the labour market, so I believe the long-term benefit of that program was fairly high. It was a fairly successful program. So that's one example.