Government Operations Committee on Dec. 5th, 2006

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

To my mind, that makes the work of parliamentarians all the more difficult. We have to work with even greater zeal to find the proof required.

It is obvious that you do an enormous amount of work, and we are very grateful to you. It allows us to help the constituents we represent. However, in spite of all our efforts and all our good intentions—and I am talking about all parties—we cannot kid ourselves that we go through the estimates with a fine tooth comb.

There was a time, not so long ago, when public service managers had to state virtually every year how much money they would require. I do not remember what the process was called in French, but I think it was called zero-base budgeting in English.

Am I right in thinking that such practices are no longer used? There is no rationalization. Managers no longer provide a justification of their expenditures. They no longer have to describe the programs they manage on behalf of the organization or prove that, in order to meet government priorities, they need such and such an amount of money. Is that correct?

[Sheila Fraser]

No. Such questions are examined during general program review exercises, but these are not carried out on a scheduled basis.

We primarily focus on new programs and new expenditures. We neither question existing programs and expenditures nor analyze whether an existing program should be cancelled or changed when a new, related program is introduced. Furthermore, there is a lack of performance data and performance indicators that would allow us to properly evaluate whether existing programs are still relevant, effective and good value for our money.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

We also receive performance reports and so forth. We try to establish correlations. Is Treasury Board Secretariat not being stringent enough? Is it being a little lax?

During your recent appearance before the committee, we had the opportunity to talk with Treasury Board representatives. They appeared to be exacting in their work, saying that they can or cannot for such and such a reason, etc. How should they fulfil the important responsibilities incumbent upon them?

[Sheila Fraser]

That is a question you would have to ask them.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

We could summon them before the committee.

[Sheila Fraser]

They agree with you. They have started their own review and want to change the expenditure management system so that programs are reviewed on a cyclical basis. Obviously, all programs cannot be reviewed every year—we could go through them on a rotational basis. We should review all programs and expenditures, not just new programs.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

My last question concerns the difficulties we are currently experiencing, difficulties that date back to 1997. The past two Parliaments have seen minority governments. Does this contribute to the continued use of supplementary estimates?

At the moment, no government knows how long it will be in power and so wants to establish its priorities and make its mark. Do you think that this contributes to the budget trends I asked you about at the beginning of my intervention?

[Sheila Fraser]

I would struggle to answer your question. We have not analyzed the impact of a minority government on the estimates. Most programs continue to exist because they are statutory programs. We talked about the Old Age Security Program, which costs $28 million—such programs will continue, regardless of a change in the governing party.

That being said, part of this surplus recorded in the last fiscal year can be attributed to the elections. During an election period a warrants system is used; it is not possible to obtain funding for new programs, there are restrictions to what can be done. In contrast, over a period of six months, a government can implement new programs or authorize additional expenditures.

[The Chair, Liberal, Diane Marleau]

Merci.

Mr. Kramp.

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

Thank you, Madam Chair.

Welcome again. Your comments, of course, are general knowledge to everyone, and I may preface my question with a comment, that it's not what you make but what you spend, whether it's personally, under corporate control, or of course within government.

I noticed our spending in the last six years has gone from $162 billion to $209 billion, representing a significant increase in spending.

With the duty and the responsibility of this committee being oversight, I don't think there is, other than of course the little attention we've paid to accrual accounting as being part of the process of oversight.... One of the main focuses of your latest report is managing this total...I don't know the word to describe our expenditure process, but it's just voluminous; it's huge. So managing that is crucial.

My concern is that we have weaknesses in the system, as you've identified. Do you see this as being more of an attitudinal weakness and/or a technical weakness, such as lack of equipment or a lack of systems? Or is it more of a human weakness, whether through abuse of the political process or because staffing is not up to par? Where do you see the main glaring weakness?

[Sheila Fraser]

That's an interesting question. I would say a large part of it would be classified as technical. The system was developed during a time of restraint, so new spending got a lot of focus. That system has continued, and now we're in periods of surplus. The system needs to be adapted to reflect that.

There's an underlying weakness in the system. There really isn't good performance information, so government is indicating they're also reviewing this and they want to make changes. It will take time before there is a really effective expenditure management system in place, because the performance information isn't available now. It will take some time to develop, and it's hard to assess programs if you don't have that information. It will take time to modify the system, so there would be a good challenge over existing spending.

On some of the other issues, the use of supplementary estimates, that may in part be a question of timing. When do the main estimates come in? There could be issues like that to be looked at as well.

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

That's where I was going.

I took a look at page 38 of your report, I believe it is, where you were comparing the supplementary estimates to the regular estimates, where periods of surplus—

[Sheila Fraser]

Mr. Kramp, can you tell us which chapter?

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

I'm sorry. I'm on the “Overview of the Federal Government's Expenditure Management System”, chapters 1 and 2, and I'm on page 38.

When you're comparing the expenditures on main estimates versus supplementary during either the budget surplus period or a budget deficit period, that gets away from the technical ability due to lack of IT technology, etc., but it gets back to the human decision. That's where I've noticed the supplementary estimates went from 4.5% at the time of deficit up to 10%.

This gets me back to this particular government's decision. Not wanting to play the political card, but for many years the previous government ran significantly large surpluses. The common complaint was that these became discretionary, so there wasn't enough attention paid to expenditure control; whereas if we are able to bring the surpluses down to a much more modest level, then potentially we would not have that discretionary spending available, whether it's last minute for electoral or for whatever particular gain. Then we can get back to departmental spending, which would be much more stringently controlled and ideally confined to the requirements of that department.

Is that a fair statement of the direction the government should be going in?

[Sheila Fraser]

I think that's more of a political statement than a statement to—

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

I apologize. I'm not trying to draw you into this argument, but I want to try to make a point, and if you concur, that government spending should be at the discretion of a regular parliamentary process rather than simply what I call binge spending—

[Sheila Fraser]

The point we're trying to make is that when a significant portion of spending is going though the supplementary estimates, when parliamentarians review the main estimates, they are not receiving full information on spending in departments.

There will always be supplementary estimates, for a variety of reasons, and supplementary estimates are necessary. You have to have the ability to get additional funding as you go through the year. When the proportion becomes relatively large, then we become concerned that parliamentarians don't see the full picture.

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

Okay. Thank you very much.

I'd like to go back to the point that Madame Thibault raised about the lack of cooperation your department received when asking about the Access to Information Act.

Was there any direct reason given to you, other than we don't want to do this? Were there any specifics, other than what they said in a particular motion?

[Sheila Fraser]

It was due to an interpretation of the 1985 order in council spelling out what access we have to cabinet documents. We were simply told that the documents we were trying to get—the analyses done by the Treasury Board Secretariat—were cabinet documents of a nature not available to us. The explanation didn't go any further than that, because then they would obviously have to disclose what is in those documents. If you want to have a more—

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

So it wasn't just blacked out or anything like that? You were just told they were not available?

[Sheila Fraser]

No, no. We were given copies of reports, for example, with the pages all blacked out, which made the document essentially meaningless, or we'd get a title page and we wouldn't get the actual study.

We take exception to the interpretation that was given, but there is no recourse for us except to report it to Parliament. As I mentioned, this has been modified and clarified going forward.

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

Okay. Slipping over to IT technology now, I can recall, just as an example, that I put a small IT system into a small business I was involved with. I could have picked up the software for about $4,000 or $5,000, but I said, no, I want something personal that is really going to give me the results I want and need. Of course, before I knew it, I'd spent $50,000. I said, my goodness. It didn't work effectively, so I went back and put in the $4,000 one, and it is still working to this day in a magnificent fashion.

Do we have some parallels to that simple parable in our IT acquisitions? I think we have seven systems. You've identified five that have not exactly been successful. I don't know if I have that number right, but there are a number of them that are not performing to the level they should.

Are we trying to be too inventive, and can we not go out to other jurisdictions where technology is now available off the shelf—tried, tested, true, and ready to go—and not go through such a waste of capital, time, and manpower?

[Sheila Fraser]

There have been some cases we've reported on in the past where departments had tried to over-customize programs, but I think we have to recognize as a starting point that given the complexity and size of the federal government, there are very few other public administrations that would have the kinds of systems.... For example, even with the extraction from the census, Stats Canada is the only one that does that.

So a lot of the systems are very specific or very large. For example, when you look at the system for old age security, handling $28 billion a year, there aren't many systems like that. I do believe—and perhaps this would be something to question government about—that when they go into these projects, they generally try to see what is available.

Our main concerns were with the business planning, which is obviously an aspect of this. Is the business plan complete before they start these things?

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

Thank you.

[The Chair, Liberal, Diane Marleau]

Thank you very much.

Ms. Nash.