Bill S-201 (Historical)

An Act to amend the Financial Administration Act and the Bank of Canada Act (quarterly financial reports)

Financial Administration Act

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am pleased to speak for the NDP on Bill S-201. Our caucus had a discussion about this bill. We certainly support the principle of the bill. Quarterly reports for all departments and agencies is something that does increase the transparency, openness and accountability of the federal government, and we think that is something that needs to be emphasized.

We also note that the Office of the Auditor General has raised concerns about the ability of the government to satisfy the bill's requirements. In fact we believe it would cost about $10 million annually to implement this bill.

The Office of the Auditor General, while supportive of these kinds of measures, has said that priority really should be given to other initiatives, such as the ongoing adoption of accrual budgeting, which is a much more current, transparent and accountable form of budgeting, and auditing of departments' financial statements. Although there is nothing in this bill that is contrary to that, it really is just one small item in terms of the larger picture of financial and political accountability of the federal government.

Others have made mention in the debate today that we now have the Parliamentary Budget Officer, another step that was finally taken by Parliament. I want to point out that the proposal to have a parliamentary budget officer was first made in 2004 by the member for Winnipeg North, who was our party's finance critic at the time. She made that proposal because we were so fed up with the ongoing scenarios where the government of the day would make financial forecasts of budgetary surpluses and would usually underestimate the forecasts, really for the political optics. This would occur cycle after cycle and year after year. Our finance critic, the member for Winnipeg North, at the finance committee made some very strong proposals that were adopted by the other opposition parties of the day to bring in a parliamentary budget officer. We are pleased that has actually happened. Again, that relates to the bigger picture of financial transparency and accountability.

I would remind the House that several years ago, Ed Broadbent, a very respected former member of the House of Commons and the former leader of the NDP, unveiled a whole package of ethics which, if it had been implemented, along with a measure like this and along with the Parliamentary Budget Officer, would have brought tremendous ethics and accountability to this House. It is very disappointing that although the so-called Federal Accountability Act passed, it has been an act of many broken promises.

If we had adopted Ed Broadbent's ethics package, floor crossing, for example, would be a thing of the past. A lot of people are fed up with the idea that a member can be in one party and then, because of something that happens or because of political opportunism, the member can cross the floor without first going back to his or her constituents. We have certainly seen that happen here in terms of the member for Vancouver Kingsway. Part of the NDP's ethics package included proposals that would not have allowed floor crossing.

It also included real accountability for leadership campaigns instead of the half-measures in the accountability act, which still has big loopholes. For example, leadership candidates can borrow huge amounts of money, often from their own family members. We have seen that happen in leadership campaigns.

The NDP's proposal would have closed the revolving door for lobbyists in ministers' or MPs' offices. I have to point out that the Conservative government promised to address this in the Federal Accountability Act. However, some of the measures that were put forward to address those issues have not been implemented even now, many months after the accountability act was passed.

Another aspect of transparency and accountability that should be of concern to all of us is the lack of updating the access to information. In fact, I note that the member for Winnipeg Centre introduced a bill the other day, Bill C-554, which looks to update access to information. We see that as a very important tool for media, for organizations and for the general public, to have access to information and to have good processes available to them. This has not happened under the government, even though it was promised.

The list goes on and on around the issues of accountability and trust. It is ironic because it was the first bill the Conservative government brought in when it was elected. It put its brand on it and said, “This is what we are about”. However, when we look at the bill and when we look at what has not brought in, we can see there are many broken promises.

To come back to the bill before us today, we do not see it as a huge step in transparency and accountability, but nevertheless it is a measure that will improve access to information in terms of financial reporting. We need that in the federal arena. It will ensure that record keeping will become more readily available to members of Parliament and of the public, and that is a good thing.

For those reasons, we support the bill, but we must not lose sight of the fact that there are much bigger issues around accountability and transparency in government. We need to hold the government to account on that.

[Richard Nadeau, Bloc, Gatineau, QC]

Mr. Speaker, the Bloc Québécois supports the principle of Bill S-201, requiring quarterly financial reports.

The confidence of Quebec taxpayers in the federal public administration has been severely eroded in recent years after the abuse of public funds by the Liberals and Conservatives.

The requirements of a firm financial disclosure policy for federal public administration and Crown corporations and frequent disclosure to Parliament would no doubt lead to more transparency. The discipline of more frequent financial reporting would give early warning of problems to avoid the complications and difficulties associated with big government, and to ensure that the government has credibility with the public.

Departments need to be encouraged to adopt accrual accounting, where this has not yet been done, and, in the same vein, to take the necessary time to do so without delaying the introduction of greater transparency. Some federal government departments and agencies have not yet adopted accrual accounting. The idea is to take what is already underway and create accountability. If we go about this with intelligence and commitment, accrual accounting will eventually be in place for the whole of government.

The Bloc Québécois notes that some organizations, such as Export Development Canada, already prepare quarterly financial reports. These reports are not public per se when they are tabled here, but it is certainly easy to produce them and make them available to the public. On the downside, however, the Bloc Québécois is concerned that producing quarterly financial reports could paralyze the federal public service and increase bureaucracy. The government will have to proceed carefully to ensure that departments and agencies do not get bogged down in details and create additional layers of bureaucracy.

Consider what John Wiersema, deputy auditor general with the Office of the Auditor General of Canada, told the Senate committee when the bill threatened to bog down the machinery of government. We have to take his words seriously. He said, “—we are concerned about the government's capacity to implement all of these initiatives. ... it will remain difficult for departments to produce reliable quarterly financial reports in the time frames required by this bill.”

We must therefore take a very close look at this aspect and ensure that the mechanism to achieve greater transparency can work seamlessly with the machinery of government and not make procedures more complicated.

Perhaps we should also limit the scope of the bill to exclude small organizations and departments and non-commercial institutions. Once again, we must act consistently to ensure that the government is working to meet the needs of the people and is not getting bogged down in red tape and paperwork. We have to ensure that, according to the principle we agree with, the process will be as simple and coherent as possible. The machine has to be well-oiled to meet the need for transparency.

The Bloc Québécois believes that until the government introduces accrual budgeting and appropriations for departments, and until the government is able to produce annual departmental financial statements that are auditable, it will be difficult to implement Bill S-201 as it now stands. There is still work to be done and it must be done in a spirit of transparency, which is something we cannot oppose.

You know as well as I do, Mr. Speaker—you follow politics, as do members of the public—that the Conservatives, like the Liberals, have shattered the confidence of taxpayers. This was said earlier. Quebec taxpayers' confidence in the federal public administration has been shattered by the fact that the Liberals and Conservatives misused public funds.

Under the Liberals, there were numerous scandals involving misappropriation of public funds. There was the sponsorship scandal, the $250 Christmas ornaments, all the attempts to convince Quebeckers to forget their own identity; the Department of Human Resources' transitional jobs fund; the administrative problems of the gun registry, and on and on.

The Conservatives are not much better. The Minister of Public Works seems to be unable to stop the eccentricities of his cabinet colleagues. More than $17 billion in military spending occurred without any real call for tenders. That is what is going on right now and it is unacceptable.

Without a call for tenders, a security fence was installed that cost the taxpayers almost four times more than it was worth—remember Montebello?

The Conservatives conduct two polls every business day. They, who spoke out against this practice, are the champions of it. In fact, as far as polls are concerned, the Conservatives have managed to spend even more than the Liberals.

More and more contracts are being awarded to friends. The Minister of Finance acknowledged awarding a $122,000 contract without a call for tenders to Hugh MacPhie, a former Mike Harris aide.

Andre Harvie, a former Progressive Conservative minister under the Brian Mulroney government, a chemical engineer by training, received a non-competitive contract amounting to $500,000 to act as the lead federal negotiator on the assignment of rights on certain public land in the Northwest Territories.

You are well aware, Mr. Speaker, since this happens in your party, that they make partisan appointments. The Prime Minister has made dozens of partisan appointments at all levels of the machinery of government. Yet he criticized the Liberal government for doing that. It seems the blue Conservative banner and the red Liberal banner are interchangeable.

The following are a few examples. Elwin Hermanson, a former Reform member and former employer of the current Minister of Agriculture and Agri-Food, was appointed by the latter to head up the Canadian Grain Commission.

Leo Housakos, a fundraiser for the Conservative party was appointed—you know where, Mr. Speaker—to the VIA Rail board of directors.

William Elliott, former special adviser to the Prime Minister and Don Mazankowski's chief of staff—from 1990 to 1992—was appointed Commissioner of the RCMP.

Gwyn Morgan, a Conservative fundraiser, was nominated as the chair of the new public appointments commission.

Howard Bruce, former Conservative candidate for Portneuf, was appointed to the Transportation Appeal Tribunal of Canada. And there are others. Whether the Liberals or the Conservatives are in power, the recipe for cronyism is the same.

And that is the complete opposite of transparency. The Liberals got themselves into an appalling situation. They will be punished for a long time. I do not even know if they will elect any members in the next election—even in Quebec—because their role in the sponsorship scandal damaged their reputation.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, I am pleased to rise today to speak to Bill S-201, An Act to amend the Financial Administration Act and the Bank of Canada Act (quarterly financial reports).

The great riding of Thunder Bay--Rainy River takes 7.5 hours to drive across, over two time zones. It covers 27 communities, of which 16 are municipalities and 11 first nations. The principle of Bill S-201 is certainly something that my constituents would support.

The bill would require crown corporations and the Bank of Canada to submit quarterly financial reports to both the House of Commons and the Senate. I do not see anything wrong with increasing the disclosure and the transparency of these corporations.

In the riding of Thunder Bay--Rainy River, there is an expression that there are two times to plant a tree: one is 20 years ago and the other is today. Is this legislation timely? I believe it is, because from time to time in the House, we see an annual report that raises some serious concerns about the administration of one crown corporation or another. Parliamentarians then jump to action to correct the problem, but of course this is typically after the damage has been done.

If crown corporations are required to table reports on a quarterly basis, it will be much easier for parliamentarians to identify any problems early on and move to correct them before they become too serious. In short, it will help parliamentarians to ensure that the government is properly managing public funds through its crown corporations and the Bank of Canada.

Under existing legislation, publicly traded corporations, including our banks, are required to make quarterly reports to their shareholders. It is not beyond reason to expect that our government-run crown corporations can at least match that standard of disclosure.

Let me give one concrete example of how this legislation would be of use to Canadians. One crown corporation that many Canadians frequently want more information from is the Canada Pension Plan Investment Board. As of right now, the CPPIB, like all other crown corporations, currently tables one report annually. In that report, the CPPIB discloses all of its holdings so that Canadians can see where their pensions are invested.

Unfortunately, if Canadians want an updated version of the CPPIB's holdings, they are out of luck. They have to wait until the spring of each year to see what has been bought or sold. If they call the investment board with a question, they are told to wait for the annual report.

In the aftermath of the government's broken promise never to tax income trusts, many Canadians wanted to know how much exposure their pension plan had to income trusts. They could look at the last year's annual report and see that the CPP held over $1 billion in income trusts seven months ago, but there was no way to know how much it held at the time of the Minister of Finance's income trust massacre.

With Bill S-201, however, Canadians will hopefully be able to see an updated holdings list that is no more than 90 days old.

There is, of course, an administrative cost to increasing to this level of disclosure. Quarterly disclosures at the Bank of Canada and our crown corporations will certainly increase their workload and they will have to dedicate more resources in order to achieve it. As the managers of public funds, we need to ask if the cost-benefit of Bill S-201 is worth it for Canadians. My constituents would certainly argue that it is.

I trust that when the bill proceeds to the appropriate committee, the members there will perform such a cost benefit analysis that the bill can again be supported at third reading, and I would be glad to do so.

We do have to recognize the input that has already gone into this from the senators, which has been positive, thoughtful and comprehensive. It included many important amendments and ideas.

Regarding the income trust scandal, many people were hurt. And many people here are trying to remember which scandal this is because we have had a few of them and it looks like the record of the present government will pass the previous record of the last Conservative government.

In my riding there was an astonishing number of people who formerly supported the Conservative Party who just could not believe that the Prime Minister would actually break that campaign promise with such devastation to their long time savings.

I was actually not the one who reminded them of the string of broken promises. It was my constituents, again former Conservatives, who have seen the light and who reminded me that it was the current Prime Minister who promised to eliminate the double taxation on gasoline pricing and eliminate the taxation after 85¢ a litre.

I just received correspondence the other day reminding me that since January 2006, gas prices have almost doubled, so hon. members can draw the correlation.

The bill could perhaps reassure people, give them some faith in government, and hopefully recognize in our discourse today that the government will actually take heed.

There was a question from another opposition member about how this would be implemented and how we would actually see the results of it.

I am hoping that the people from crown corporations and the Bank of Canada, who are watching this debate, and are perhaps concerned about their own workload and quarterly reporting will know that for us, who really want to restore people's faith in democracy, we want them to know that the Canadian public service and its crown corporation divisions are of the highest standards of accountability and transparency. That we, as elected representatives, have the utmost faith in their ability and competence, and that those of us in the opposition ranks have a duty to ensure that the government maintains those high standards.

I am hoping that as we proceed through this debate, the bill will succeed. I believe that it should, and that those people who want their faith restored, those elected representatives who want a quicker turnaround in this rapid age of communications to review changes that can still affect pricing and changes in people's investments, we can do this. We can do this in the spirit of understanding that without a strong public service and strong set of Crown corporations, even at arm's length, this is a nation that is built on people who hold the highest of standards.

To that end, I would hope that we could all support Bill S-201.

[Chris Warkentin, Conservative, Peace River, AB]

moved that Bill S-201, An Act to amend the Financial Administration Act and the Bank of Canada Act (quarterly financial reports), be read the second time and referred to a committee.

Mr. Speaker, I appreciate the opportunity to stand in the House again this afternoon to speak. This time it is with regard to Bill S-201.

Mr. Speaker, before I get started, I want to commend you and the other chair officers who have been working late hours the last couple of nights and yet you are still here on Friday afternoon. I would like to commend you for your diligence in this respect.

Today I am here to talk about Bill S-201, An Act to amend the Financial Administration Act and the Bank of Canada Act (quarterly financial reports).

I will begin by commending Senator Hugh Segal who brought this forward and has been working diligently with respect to the matters that are addressed in this bill and issues of accountability and transparency that the senators and I share.

I know this bill had a previous incarnation in the Senate before prorogation last fall but, unfortunately, it did not get out of committee before prorogation and therefore had to go through the whole process again.

I know that the careful consideration that was given by the hon. senators in the other place, especially within the national finance committee, is greatly appreciated by all members of the House. My private member's bill, Bill C-428, is in the other place and is going through the same consideration, the same thoughtful process that I know this private member's bill has gone through. I would like to commend the senators who worked diligently not only on this bill but also on my bill and many of my colleagues' bills as well.

The bill that we are here to discuss is Bill S-201, which seeks to amend the Financial Administration Act and the Bank of Canada Act. The requirements that would change are as follows. This would require that all departments, agencies and parent crown corporations would table financial statements on a quarterly basis. The bill would create a more transparent financial management system in government and would allow parliamentarians and all Canadians to see the way the government is spending money and ensuring that it is delivering programs effectively.

I wholeheartedly agree with the objectives of this bill. It would ensure greater accountability and transparency of government. The good, hard-working Canadians who pay their taxes on a regular basis and the people from my constituency really deserve no less.

The objectives are really in keeping with our government's commitment to Canadians to increase accountability of government. Accountability is the foundation of Canada's system of responsible government. It is key to assuring Canadians and Parliament that public resources are effectively and efficiently used.

I am especially proud of the Federal Accountability Act that this government brought forward as its first piece of legislation because it provides Canadians with the assurance that the powers entrusted to government are being exercised in the public interest.

However, accountability does not stop there. It has to be throughout government. An accountable government ensures that Canadians' hard-earned tax dollars are not wasted and ensures they are invested in responsible and effective programs that meet Canadians' needs. In fact, the sound stewardship of Canadian tax dollars ensures they receive value for money, and that is a top priority for myself and our government.

There have been some important improvements brought forward by our government in working to ensure that Parliament has the information it needs to hold any government of any day to account. For example, we have made several improvements to the estimates documents to provide more meaningful information to parliamentarians and make these documents more user friendly.

The Treasury Board Secretariat has worked with departments and agencies to improve the quality of information presented for their individual requirements. This has resulted in better information describing the nature of transactions, including the offset of new spending requirements through the use of existing spending authorities.

In the past year we have made other changes, including provisions of clearer summary tables, a presentation of gross financial requirements for each organization and an explanation of the funds available to offset new spending requirements. These improvements allow hon. members in the House to get a better understanding of the government's spending plans and to ensure that they can hold the government to account.

We are also strengthening the oversight role in the use of public funds. The creation of a parliamentary budget officer is a long realized dream of my predecessor, the member from Peace River, whom I replaced, Charlie Penson.

After a decade of advocating for this officer of Parliament who would provide objective analysis to the nation's finances, Mr. Kevin Page was appointed by the Conservative government as our first Parliamentary Budget Officer, and that happened in March of this year. This is another move to realize a decade long dream of advancing transparency and accountability within government that my predecessor had and for which I know many members of the House have been advocating for nearly a decade.

This new officer of Parliament position was announced in the Federal Accountability Act and is now included within the Parliament of Canada Act. The person has three main responsibilities: first, to provide objective analysis to the House of Commons and to the Senate concerning the state of the nation's finances and trend within the general economy; second, he has the responsibility to undertake economic and fiscal research for House of Commons standing committees; and third, he estimates the financial cost of proposals currently or prospectively under consideration in either the House when requested to do so by a member or a committee of the Senate or the House of Commons, or a committee of both Houses.

In talking with the new Parliamentary Budget Officer, I had an opportunity to discuss the bill that is currently before us today, Bill S-201. I can say that our new officer of Parliament is very supportive of this new bill. It would actually improve his capability of helping out members of Parliament and senators.

In addition to the Parliamentary Budget Officer, the government has recently implemented a new expenditure management system as well. This system will rigorously and systematically assess all direct program spending and operating costs of major programs. Further, all government organizations are required to conduct their program strategic reviews to assess how and whether they are first, efficient and effective; second, able to meet the priorities of Canadians; and third, are aligned with federal responsibilities.

The first round of strategic reviews was completed in the fiscal 2007-08 year with departments identifying expenditures totalling some $386 million a year of program that are low performing or programs that are no longer needed.

In the fiscal year 2008-09, 16 departments and agencies are reviewing their program spending. This covers a total spending of $20 billion. These reviews will help us reduce spending in inefficient or ineffective programs and stop those that just do not work. These will help to ensure that every tax dollar that we collect, as government, is spent to deliver the necessary programs to Canadians. They will help us to control the overall growth of government spending.

This is simply good management. It is the same thing Canadian families to ensure they are spending efficiently. When they shift their priorities, they need to ensure they are living within their means. Governments should act no differently. That is good management, good government and it is good leadership for Canadians.

The first fruits borne by this more disciplined approach were announced recently in the savings of $386 million, money that will be redirected to new initiatives within departments or within the government at large.

Taken together with the key elements of this new expenditure management system, it will ensure that taxpayer dollars are well managed, that they are spent in responsible ways and that the management of doing this will ensure that the business of government is responding to the needs of Canadians.

I will now turn directly to the bill we are talking about this afternoon. The bill also supports accountability and the sound stewardship of all tax dollars. I will explain how.

By increasing the quality and frequency of financial reporting to Parliament and Canadians, the bill will ensure that they are informed of recent developments in government operations. As such, it will facilitate oversight by parliamentarians of government spending on a timely basis.

It is imperative that we have the correct information in a timely manner in order to combat waste of money. Every dollar the taxpayers pay must be treated with respect and must be closely monitored.

Let me step back for a second and outline how the current reporting system works. The government prepares a federal budget and summary financial statements on an annual basis. The Department of Finance also publishes a monthly fiscal monitor that reports on the government's overall fiscal results. While this report does contain some departmental information, it does so in such an aggregated way that it really only reflects government's performance overall.

This bill will require that all federal departments, government agencies and crown corporations would have to, in addition, submit quarterly financial reports to Parliament. This would be a substantial increase in the timeliness and quality of information reported to Parliament.

It is important to note that the Senate has already made some important improvements to the bill. For example, it was amended to require that financial statements are made public 60 days after the quarter end. This will provide for a more regular reporting timetable while lessening the burden on organizations. It will also avoid the need to defer the release of quarterly financial statements during recess or prorogation.

These are amendments that I thank the hon. senators for making, because they provide additional transparency for parliamentarians and Canadians.

I would also like to take this opportunity to explain that the government has been working diligently to strengthen financial management across the federal government. A sound system of financial controls improves this organization's ability to manage risk.

In this area, we have taken a number of steps to strengthen both our policy and our practice. For example, by March 2009, we should have in place a renewed financial management framework and policies that clarify the responsibilities and accountabilities of deputy ministers and senior officials within government.

In addition, our audit policy is strengthening public sector accountability, risk management, resource stewardship and good governance by reorganizing and bolstering internal audit functions on a government-wide basis.

This involvement ensures the independence of internal audit from line management by introducing two points. The first is departmental audit committees, which will include a majority of competent and experienced members drawn from outside the federal public service. The second is the organizational independence of chief audit executives, who will lead audit functions and must now report directly to the deputy head.

In conclusion, I want to ensure that there will be no doubt that the government is committed to improving accountability and increasing transparency. We have proven that not only in word but also in action. I will stand with hard-working taxpaying Canadians and support legislation like this bill, which will ensure greater transparency for government expenditures.

We support quarterly financial reporting requirements by all federal departments, agencies and parent crown corporations. The measures that I have talked about today will provide Canadians with the open and honest government they deserve, one that acts transparently, ensures value for money and demonstrates accountability.

[Chris Warkentin, Conservative, Peace River, AB]

moved that Bill S-201, An Act to amend the Financial Administration Act and the Bank of Canada Act (quarterly financial reports), be read the first time.

Mr. Speaker, I am pleased to sponsor Bill S-201, An Act to amend the Financial Administration Act and the Bank of Canada Act.

Bill S-201 would allow parliamentarians to track the nation's expenditures by introducing quarterly reports that would allow for more effective management and accountability.

(Motion agreed to and bill read the first time)