John Williams

[Department Of Finance, February 11th, 1994]

Mr. Speaker, in order to save taxpayers' money, would the minister be willing to support an amendment to the Auditor General Act that would empower his office to conduct the review of the revenue estimates?

[Department Of Finance, February 11th, 1994]

Mr. Speaker, my question is for the Minister of Finance.

The accounting firm of Ernst & Young has been hired by the finance department to study the department's longer term deficit forecasts. They are to examine why the department's forecasts over the years have been so inaccurate and what can be done about this. Could the Minister of Finance tell the House why he has chosen an outside accounting firm as opposed to having the office of the Auditor General study the problems of the Department of Finance, and could he tell the House how much the study will cost?

[Supply, February 11th, 1994]

Mr. Speaker, I appreciate the comments by my hon. colleague in recognizing that the Auditor General's report is working and that action has been taken on these particular reports. He also acknowledged that the report now in front of us has caused a change in policy in the use of government aircraft. While he said many things and defended the current system of government response to the Auditor General's report one of his colleagues, the member for Ottawa-Vanier, proposed earlier that perhaps the Auditor General's

report should be tabled and discussed in the House on an annual basis, or perhaps certain days should be set aside.

Does the President of the Treasury Board agree with his colleague from Ottawa-Vanier it would be a good idea that specific days be set aside to debate the Auditor General's report on an annual basis?

[Supply, February 11th, 1994]

I appreciate the comments made by the hon. member. These types of things can be brought out in a debate such as we are having today on the Auditor General's report.

There are many ways to skin a cat and the member has put forth a positive and sincere suggestion. If the debate continues this way for the rest of the day we will come away from here with some serious proposals and suggestions to ensure that our taxpayers' dollars are spent wisely and effectively and that we get the best bang for our buck. That is what we want to ensure every time, at all times.

On a point of order, Mr. Speaker, on behalf of the Reform Party I would like to advise the House that pursuant to Standing Order 43(2) from now on our speakers on this motion will be dividing their time.

[Supply, February 11th, 1994]

Mr. Speaker, I think we actually talked that motion to death yesterday. Therefore we should pertain to other matters contained in the Auditor General's report.

[Supply, February 11th, 1994]

Mr. Speaker, I confirm to my hon. colleague again we recognize there is a problem and it has to be dealt with as far as the dearth or extinction of the fish in the Atlantic and the Grand Banks and the need for Canadians to help the fishermen there is concerned.

I just want to point out there has to be clarity in the role. the House has set forth a specific direction within the legislation that perhaps was not clear. The Auditor General has picked that up. As our servant he is telling the House that we should revisit that and ensure our instructions to the government are crystal clear and the government can then follow through.

I do not in any way whatsoever dispute the need to help the fishermen in Newfoundland and other areas which have been hard hit by the extinction of the fish stocks.

[Supply, February 11th, 1994]

Mr. Speaker, my hon. colleague has made tremendous recommendations.

I started my speech by saying that this is only the third time in the history of the House that we have had a serious debate on the Auditor General's report. I would certainly encourage and support any action that can be taken by the government that the debate of the Auditor General's report be given much more serious attention and become a standard part of the calendar of the House.

[Supply, February 11th, 1994]

That this House call on the government to demonstrate its commitment to accountability and to the efficient and effective use of public funds by reporting to the House, no later than the first week of June each year, what measures have been taken by the government to address unresolved problems identified by the Auditor General in his report such as, but not limited to:

(a) that the Minister of National Defence provide Parliament with an accurate and complete costing of government use of aircraft utilized for Ministerial and other VIP travel, and conduct a comprehensive review of the cost effectiveness of the use of government aircraft to transport VIPs;

(b) that the Minister of Fisheries and Oceans clarify the legislative authority for the Northern Cod Adjustment and Recovery Program and clarify the criteria for those eligible under the program's terms and conditions;

(c) that the Minister for CIDA establish a more accountable and results oriented mode of operation for the bilateral Economic and Social Development Programs;

(d) that the Minister of Finance clarify the wording of the legislation relating to resource allowances in the Income Tax Act to ensure that Parliament's intent is met;

(e) that the Minister of Indian and Northern Affairs address the problems in the Canadian Aboriginal Development Strategy by instituting appropriate performance and evaluation criteria;

(f) that the Minister of the Environment address the duplication of regulations between the federal government and the provincial governments regarding pulp and paper industry and that the Minister improve the department's Regulatory Impact Analysis Statements to provide better information to Parliament on proposed regulations;

(g) that the Minister of Human Resources Development take measures to better control the administration of payments and the collection of overpayments in the Canada Pension Plan and Old Age Security Programs and that the Minister of Health provide complete information to Parliament regarding the Senior Strategy Program;

(h) that the Minister of Industry implement the government's established accounting policy in order to more accurately reflect the Department's liabilities.

Mr. Speaker, today the Reform Party has put its first supply motion on the books. We are talking this morning about the Auditor General and the role he plays in the governing of the country and the watchdog of our finances.

It is only fitting that the Reform Party use this first supply day to talk about the Auditor General because during the election we placed such a high importance on the management of the funds of the government, that the taxpayers' dollars be spent wisely. The Auditor General is the watchdog on our behalf to oversee and ensure that these things are followed through.

The office was created in 1878. For about 115 years now we have had an office of the Auditor General to look over and watch on behalf of Parliament how the taxpayers' money has been spent. It has done a tremendous job and has saved the taxpayer millions of dollars over these years.

Before I was elected to the House I had an accounting business. I remember I used to tell my clients that as long as we have money to spend and taxes to pay we will always have accountants and auditors. We are going to see the Auditors General around for a long time because we are going to have taxes to pay and money to count.

If I may change the wording of an old phrase, while old soldiers may fade away, Auditors General will be here for as long as we have taxes to pay and money to count.

Back in 1977 the House felt there was a need to widen the role of the Auditor General. Prior to that time he had only counted the money and made sure that the taxpayers' money had been accounted for. We saw at that time there would be a wider role for the Auditor General and this House expanded his authority,

not just to attest that the money had been spent and had been spent legitimately, but that we had given him authority to do compliance auditing.

In the words of the Auditor General, that means whether the government collected or spent the authorized amount of money for the purposes attended by Parliament. That has become a very major part of the Auditor General's report and job, to ensure that the intent of the House is carried through.

We may authorize money to the government to go ahead and spend and after we make that authorization what real supervision do we have to ensure that the money we have allocated to a particular fund meets the criteria that we have set down? That is why we have given the authority to the Auditor General for compliance, to ensure that the money and the civil service go ahead and the government spends that money as we had intended.

One of the other areas that we have given to the Auditor General is called value for money auditing. Again, in the words of the Auditor General, this is whether the programs were run economically and efficiently and whether the government has the means to measure the effectiveness of the programs that have been authorized.

This is a very real role for the Auditor General because we spend $165 billion in the country that is authorized by the House. We would surely want to know that after that money has been spent we did have value for our money, that the programs we have authorized are doing their job, that the money is being spent effectively and usefully and that what we had intended is being done.

To recap, in 1977 we expanded the role of the Auditor General to ensure that the money is spent in accordance with the law and legitimately as any auditor would do. He also has compliance auditing to ensure that the money is spent in accordance with the wishes of the House and that the money is spent effectively to ensure that the programs are managed on our behalf, on behalf of this House, to provide the benefits that we envisage for Canadians.

The Auditor General is a servant of Parliament. He is not a minister; he is not a department. He is our servant. He is our watchdog. He is our hands, our eyes and our ears out there to ensure that the money we allocate and appropriate every year is followed through and he reports back to us. On January 19 this year his report was tabled in the House.

He works through the public accounts committee and that is how the House ensures and follows through to examine the areas he has brought to our attention that perhaps require investigation by the House. That is how yesterday when we had our first meeting we elected a chairman who is a member of the opposition. We have government members on the committee and we have five members of the opposition as well. That is how the House monitors the expenditures as approved by the House.

As servants of the House we should always do what we can to encourage and assist the Auditor General in performing his role. We have seen in the past that there have been some recommendations by the public accounts committee to make changes to the Auditor General Act. There is currently a private member's bill on the floor introduced by the hon. member for Ottawa-Vanier that would allow the Auditor General to report more than once a year.

We have constrained him to make only one report which is a huge report. Perhaps the House may want to consider supporting the legislation that would allow the Auditor General to report to the House as he feels appropriate.

Therefore I can only recommend at any time and at any opportunity I have the importance of supporting our servants of whom the Auditor General is one.

I would be remiss if I did not mention at this time that we recognize the civil service, the tens of thousands of people across the country who provide a valuable service to this land by performing their jobs efficiently, doing the will of the House and providing the programs that Canadians want and deserve. There are tens of thousands we do not hear about who go on working anonymously. I would like to pay tribute this morning to the contributions they have made to our society.

There are one or two things that the Auditor General would like to bring to our attention that are included in his report. When we look at the Auditor General's report we should remember that our style of government is not only a representative government but an accountable government. That is why we call the ministers and the government to question on matters raised by our servant, the Auditor General, and that is why we are having this debate this morning.

I understand this is the third time in Canada's history that we have had a formal and realistic debate in the House regarding the Auditor General and his report. I can give notice to hon. members on the other side that they will not have to wait so long before we have a fourth debate because the Auditor General has to be given the responsibility and the recognition for what he can do to resolve the problems that we have in ensuring that our money and funds are managed properly.

We will be talking throughout the day on various aspects of the Auditor General's report. I would like to look at one particular chapter concerning travel by government ministers on government aircraft. The horrendous cost of one trip in many cases is more than the annual salary of a taxpayer.

The Auditor General has questioned the costs of such items and we have been able to have the government take notice of the costs of these things and change the policy regarding the use of government aircraft, that they are not just there for jetting off here and there at any time. The role of the Auditor General has to be reinforced. That is a perfect example of how Canadian taxpayers' money has been saved through the highlighting of the actual costs of these trips. Now that we have brought that to

the attention of the government it has decided that perhaps commercial travel would be more appropriate in many cases.

I mentioned also that the Auditor General has a role regarding compliance auditing. Does the money spent by the government fit the authority given by the House? There was $587 million spent on the northern cod adjustment and recovery program that the Auditor General said was spent without clear legislative authority.

I do not dispute that the people in Newfoundland need some money and that we authorized a program to try to help them, but the government should remember that it does not have clear legislative authority to conduct that program, according to the Auditor General, and it should be coming back to the House to get that matter clarified before it continues any further. That is also the role of the Auditor General, to tell us in the House that we are the supreme body that approves these funds. When $587 million of taxpayers' money has been spent without the authorization of the House then perhaps the government should think clearly about coming back here and determining the will of the House in order that it may continue to provide that program.

What about CIDA, the Canadian International Development Agency? The Auditor General had some fairly harsh words about CIDA. That is a program that spends our money in developing nations where we recognize that we have a role around the world as one of the developed nations to help our fellow man. CIDA spends well over a billion dollars in this area to help those in need but unfortunately in many cases, as the Auditor General points out, we are turning some developed nations into another welfare program where we continue to pay money but we are not helping them to get up and at it. We are not helping them to improve their situation. We are just paying money to keep them in the style of destitution that they currently have.

We have to look at many areas of CIDA and the House has to ensure that it fulfils the mandate that we have given to CIDA.

I would like to quote one item of the Auditor General's report in chapter 12.57 which states: "Until recently CIDA did not fully acknowledge its accountability to Parliament for managing". It did not fully acknowledge its responsibility to Parliament.

The House has to recognize that we are the supreme body that approves the money in this country. Every agency, every department and everyone in government has to recognize that we in the House authorize the funds and that CIDA is accountable to the House. That is why the Auditor General fulfils a tremendous role in ensuring that we are aware of what is happening in these departments. CIDA may get carried away with what it feels is the appropriate direction to go. The Auditor General points that out to us. We should say to these departments: "Wait a minute, we call the shots around here. You listen to what we say and you recognize that the House has the final and full authority to say what goes on".

What about the resource allowance income tax provisions? There was $636 million of unintended tax refunds to the resource sector and another $538 million was given out as potential refunds of income tax while the department tried to prove a particular point. The government could have changed this tax loophole several years ago but it thought there was a point that it had to prove. It has cost the Canadian taxpayers $538 million to prove that particular point. I would hope that the Minister of Finance can justify to us that there must have been a very major point that the Department of Finance was trying to prove to cost the Canadian taxpayer that kind of money.

Canadian aboriginal development program strategy; $900 million spent by three departments over five years. The Auditor General said that after we had spent $900 million, three departments could not demonstrate that the program was meeting its objectives. We spent $900 million, almost $1 billion, and we are not even sure that we have accomplished what we set out to do.

That is the type of thing that the Auditor General should and does bring to our attention. That is the type of thing that the public accounts committee would want to know from the Department of Indian and Northern Affairs. How on earth can we spend $1 billion without knowing which road we are even trying to go down?

I hope in future years that various ministers will be able to come back to us and point out that corrective measures have been taken and that from now on Canadian taxpayers will be getting real value for their money, that programs that are approved are working before we spend $900 million.

On the Canada pension plan and old age security, $120 million to $220 million is lost every year through overpayments due to inadequate control. That is a lot of inadequate control to cost us $120 million to $220 million. I would suggest the government take a serious look at that and answer to the Canadian taxpayer where this money is going. Why are we losing this kind of money? That $220 million would go a long way to doing something about the budget deficit.

I know we have a budget deficit of around $45 billion. Harold Hunt, the Texas billionaire, once said that a billion dollars ain't what it used to be, but we have to start somewhere. If we can identify an area where we can save through proper controls on $220 million, that would be an excellent start.

One of the great chapters in the Auditor General's report is chapter 5 which deals with the debt and the deficit. I know that the Auditor General does not have the authority to say exactly what he feels about the deficit. He feels that he has a role to play

and he has pointed out quite specifically in chapter 5 that the House has a responsibility to communicate to Canadians how serious the matter is and how corrective action should be taken and taken soon. I would encourage everyone in the House to read chapter 5. He is saying we should communicate simply and effectively to Canadians how seriously we are in debt and how difficult it is going to be for us to get out of that debt.

I ask the Minister of Finance to take note of that. There is no reason, when he brings his budget down in the next couple or three weeks, why he cannot tell Canadians, as the Auditor General has so clearly pointed out, that it is time we communicated simply and clearly to Canadians what the problem is, how big it is and how seriously it has to be addressed.

In conclusion, we have put this motion forward, which is a serious motion, for debate today asking that the government respond to the Auditor General's report in six months. This is the type of amendment to legislation I think the House will want to consider, giving the Auditor General the authority to require the government to respond to the Auditor General's report. That is why during the course of this debate I would like to see the government take a serious approach to what is contained in the Auditor General's report, that we treat it seriously and look at it as a mechanism to come back, address and recognize the importance of handling our money well for the benefit of all Canadians.

[Supply, February 10th, 1994]

Mr. Speaker, I think I missed the question in that little discourse but I do agree with the hon. member that there is more than one way to solve a problem.

The way that Confederation has been designed has worked great for Canada for the last 125 years. There is absolutely no reason whatsoever that it cannot continue to make sure that problems, programs, assistance and government overlap from one jurisdiction to another shall remain in the federal jurisdiction.

We see that in fisheries, for example, the flow-over from one province to another. We see it in other areas. The hon. member mentioned agriculture.

We also see other opportunities where governments of different provinces might address the problems of budget deficits and management of their own tax revenues. I believe New Brunswick was mentioned. In my home province of Alberta we have seen the government take a real hard firm stance to address these problems to ensure that it can live within its means. This is an example for us here in the capital to follow and perhaps other provinces that have the same problem.

I think the hon. member has a good point and it should be noted today.

[Supply, February 10th, 1994]

Mr. Speaker, on behalf of the whip of the Reform Party I would like to advise the House that pursuant to Standing Order 43(2) our speakers on the motion will be dividing their time.

First my congratulations to the Bloc for introducing a motion that deals with trying to come to terms with the problems of money and lack of money in the country. We are $500 billion in debt. It is nice to see the opposition and the government taking these things seriously.

It reminds me a bit of the parable of the prodigal son who left home and wanted to take a share of his wealth with him. Here we have the Bloc wanting to ensure that the fiscal House of Canada is in order so there is sufficient wealth for them to take with them. I would remind the Bloc that the end of the parable was that he did have to come home, unfortunately without his wealth.

I do not think anybody has spoken louder on managing the government's money than the Reform Party. During the last election we produced a four-page flyer that showed how we were going to reduce the deficit to zero. If anybody was eliminating waste it was the Reform Party because, as I say, it was a four-page flyer. My hon. friends across the aisle with a 120-page red book could only get the deficit down to about 3 per cent of gross domestic product or $25 billion. When it comes to the elimination of waste, duplication and extra effort the Reform Party is the party to which one should be looking.

The problem does not lie in the elimination of duplication of government expenditures. The President of the Treasury Board has already said, and other speakers have said so this morning, that we have a public accounts committee that is chaired by a member of the opposition. They have every opportunity to look at the expenditures examined by the Auditor General. He has pointed out that we are losing money here, that we are wasting money there: $10 billion is being thrown down the drain by this department; $100 million is not being collected by the Department of National Revenue through loss of taxation on the GST as half a million people have not been filing their returns. These things have been pointed out to us.

The thing to remember is that the deficit is $43 billion or $45 billion according to the Minister of Finance. The total spending by the federal government on its administration, on its salaries, on its rent, on its desks, telephones, computers and whatever else it needs to manage the country is only $17 billion. If we eliminated the entire civil service and everything that goes with it our deficit would still be around $25 billion.

Therefore if the members of the Bloc Quebecois think they can resolve the waste and deficit problems of the government by narrowly defining the idea they can find enough money in waste and duplication, they only have to look at the numbers and that will tell them that unfortunately they will not find the answer in another committee that looks at the same problem again.

In chapter 5 of his report the Auditor General talks about the debt and the deficit and concern about where this country is going. If we want to find out where we are going, it is always best to look at where we have been. He produced some interesting graphs and charts in chapter 5 showing it was in 1975 that our deficit really started to balloon. It was our colleagues on the other side of the House who decided it was time to start spending money on social programs by the billions. It was then they introduced what they called the just society.

I talked about this earlier in the pre-budget debate. At that time I said that if taxpayers had been given the bill to pay for the just society rather than borrowing the money to pay for it, we would have told them we could not afford it and we would not have the problems we have today.

Between 1974 and 1976 spending on programs mushroomed to about 130 per cent of the money collected in tax revenues. By the time we added the interest on the debt being created our spending exceeded 155 per cent of government revenues. That is where the problems started and why we have these problems today. Unfortunately we have to squeeze the social spending we have created in order to be able to afford government in the country. Not only do we have to eliminate the fat from the waste and duplication in services but we have to take a look at how we

spend our money on social programs in order that we can afford to balance our budget.

The Minister of Human Resources Development has decided to strike a committee to look at how we are going to revamp social programs and unemployment insurance. Last year we spent $19 billion on unemployment insurance. That is almost 50 per cent of the current deficit.

I do not suggest for a moment that we should get rid of unemployment insurance but we have systemic unemployment in this country of around 7 per cent. That is now to be considered full employment; 7 per cent of workers do not have jobs because of the problems with the social programs that say we do not have enough incentives built into them for people to go to work.

Our neighbours to the south have a systemic unemployment rate of about 3 per cent lower than ours. Their cost of unemployment insurance as a percentage of their gross domestic product is significantly lower than ours. That is the way we are going to balance the budget. It is not going to be through trying to save a nickel here or find a dime there by creating another committee to find out how on earth we are going to balance the budget. The answer is not there; the answer lies in social programs.

When we produced our zero in three flyer last fall we said that about $3 billion to $4 billion could be saved by providing incentives for people to get back to work. By reducing the unemployment rate, we reduce the cost of unemployment insurance and create additional tax revenues from people who are now working. That is where we are going to find the answers to our problems.

We said last fall that we should talk about eliminating old age security to families that earn more than $54,000 a year. It would save another $3 billion. We could save between $4 billion in UI and $3 billion on old age security, which comes to $7 billion. That is 40 per cent of total government expenditures we can save by looking at these two programs without having to go through every nickel and dime and line by line of the entire government expenditures. We identified $7 billion with these two programs alone.

Last fall when I was knocking on doors and talking to senior citizens in my riding they were concerned about our policy on old age security. For those families which make more than $54,000 a year, we are going to cut it off. Why should young families which are trying to get ahead have to pay taxes so that the rich can use their old age security to go to places in the sun in the winter? Many of the seniors I talked to said: "I wish we had seen $54,000 in our lives. My goodness, cut that off. By all means cut that off. We support you 100 per cent if we are going to balance the budget". Those are the types of things that my colleagues from the Bloc should be proposing in the motion.

The motion they have proposed today is far too narrow. The budget cannot be balanced if we focus on one thing. I know they have their own political agenda that says: "Put the blame on the federal government and that way we do not have to worry about what happens in the province of Quebec".

I am concerned about all of Canada not just the province of Alberta. I am concerned about Canadians who live in the province of Quebec. Everybody who lives in the province of Quebec as far as I am concerned is a Canadian and participates fully in this great nation of ours.

As I mentioned we laid out a full program on how to balance a budget last fall. We did it as volunteers. We did it as Canadians who wanted to make a contribution to the country. That is where we should be looking to resolve our problems rather than this narrowly defined motion as proposed.