Government Operations Committee on April 19th, 2007

[Raymond Simard, Liberal, Saint Boniface, MB]

Literacy.

[Vic Toews, Conservative, Provencher, MB]

Pardon me?

[Raymond Simard, Liberal, Saint Boniface, MB]

Literacy and court challenges.

[Vic Toews, Conservative, Provencher, MB]

All I can say is that the criteria that were utilized for any program adjustments I've outlined in my initial response to that question.

[The Chair, Liberal, Diane Marleau]

We will go to Mr. Warkentin, please.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Madam Chair.

Thank you, Minister, for coming. Thank you to each one of you who have come to speak with us today.

Minister, I want to talk a little bit about the expenditure management system. I think for the average Canadian, people who are paying taxes in my constituency and the hard-working people who pay their taxes and expect certain services from government, the past decade has been obviously scandal-ridden and people are very concerned about the method by which cabinet made decisions with regard to spending and funding certain programs.

I'm wondering if you can tell me about the government's movement toward very stringent and strong criteria when it comes to effective and efficient spending in terms of government programs. I'm wondering if you can give us an overview as to what you're doing to ensure effective and efficient spending.

[Vic Toews, Conservative, Provencher, MB]

Thank you.

It was a concern of our government—certainly it was a concern of mine—when we learned that in six years under the Liberals the A-base budget had moved from $45 billion to $90 billion, which reflects an increase of about $1,500 for every family of four in this country.

In reviewing the particular situation, my concern was—and I think this was a concern of the government generally—that there needed to be a more effective expenditure management review system. And so we set out key directions for the development of this system in the budget 2006, and “Advantage Canada”, and in a backgrounder released by my predecessor in November 2006.

Budget 2007 announced more details on the elements of the new approach that we are putting in place to ensure that all taxpayers' dollars are spent as effectively as possible. I think you will recall that in the budget there was a commitment made that these expenditures would be reviewed in a four-year cycle. That type of cycle was not in place prior to that announcement, and so the new expenditure management system will fundamentally change the way government operates in reviewing these expenditures in every four-year cycle. We are entrenching responsible spending as a new way of doing business, so that Canadians can be assured that they're getting value for money.

Now, on that expenditure management system, I can reveal details as the planning continues, but I can assure you that discussions in that respect are continuing, as they did before the budget, between the finance minister and myself, and they are continuing at this time as well. I know that I'm involved in a number of meetings with the Minister of Finance to develop the exact details of how we're actually going to implement that. I know that my staff has indicated that there are resource ramifications for that expenditure management review system if we're going to review these expenditures every four years, and that's something that certainly needs to be borne in mind as we're developing the system.

[Chris Warkentin, Conservative, Peace River, AB]

I appreciate that, Minister, and I appreciate your efforts in this area.

One of the biggest things I hear from my constituents is this idea that government just continues to add more, and I think it's a concern about the A-base budget. I think people are concerned about the fact that the previous government just started to move to increase that A-base budget regardless of whether the program was working or not. There maybe wasn't a criterion to assess it after a certain length of time.

[Vic Toews, Conservative, Provencher, MB]

In fairness, after the prior government had cut a number of programs and had reduced the A-base from about $55 billion to $45 billion—and certainly many of us in the provinces at that time felt the impact on health care, education, social programs—because it had been cut down to the bone so much, in fact right into that bone in many respects, what they didn't do was put into place a mechanism to review that particular $45 billion. It was always assumed that the $45 billion would always be good spending. There was no mechanism to determine that those priorities were still relevant for the people of Canada.

So the expenditure management system will in fact review all of that spending to ensure that the spending continues to address the priorities of Canadians.

[The Chair, Liberal, Diane Marleau]

We have enough time to allow a member of the Bloc Québécois to put a question.

Do you have a question, Mr. Nadeau?

[Richard Nadeau, Bloc, Gatineau, QC]

Yes.

Mr. Minister, in another vein, there is a principle whose application I would like to understand. The issue of lapsed funds was raised. As I understand it, three or four times a year, on a given date, the government committee that deals with operations, or with priorities, meets in order to evaluate the status of expenses for major projects, to see if there is enough money or whether some projects have not yet gotten off the ground for various reasons. During the time that Mr. Mulroney, and even Mr. Chrétien were in power, this was called the Prime Minister's money—this is an expression I picked up in my reading. This is not a pejorative term, we want to see what is being done with that money.

First, I would like to know how the lapsing system works. Am I right in what I've just said? Back then, if there was a budget surplus, the money was redirected elsewhere or else a program would be terminated because the decision had been made to do so even before the funds had actually lapsed.

[Vic Toews, Conservative, Provencher, MB]

For clarity, is there a concern here that there are moneys being transferred from one appropriation to another appropriation without the authority of Parliament? Is that the question?

[Richard Nadeau, Bloc, Gatineau, QC]

Perhaps I am not using the right words, but I would really like to know whether, among the host of programs, there are funds that have not been spent for various reasons, not necessarily bad reasons, and that can be redirected elsewhere, either within the same department or for other objectives, following a decision of the Committee on Government Operations and Estimates.

[Vic Toews, Conservative, Provencher, MB]

If an appropriation hasn't been made for that specific expenditure, I don't think that a committee of cabinet or otherwise is authorized to take that money and spend it in another appropriation. We have adjustment votes for precisely that eventuality, and that is always reflected, and should be reflected, in the documents brought to cabinet.

I know that there was a concern, for example, with the gun registry, that there had been a commitment to spend no more than $25 million a year, I think it was, and then money was taken from an appropriation that was not authorized for that gun registry and spent on the gun registry. That drew criticism from the Auditor General, as I recall.

If that's the issue you're raising, I think it's a very important issue, because if money is not appropriated for a specific use or within that general appropriation, it cannot be used for that. There must be a vote of Parliament and not of the operations committee to transfer money from one appropriation to another appropriation.

[Richard Nadeau, Bloc, Gatineau, QC]

Is it correct to say that this money can be simply returned to the consolidated fund, as the case may be, or does it remain in the budget without being spent?

[Vic Toews, Conservative, Provencher, MB]

The money lapses every year, and so in that sense it goes back into the consolidated fund. That's why, for example, trusts have been developed. There's, I think, a good use for trusts to...I don't want to say avoid that yearly lapsing, but it has to be structured in a very careful way to ensure that when money is appropriated for that purpose in that trust, it can then be continued beyond that particular fiscal year.

Other than the mechanism of the trust or perhaps a crown corporation or something like that, that money, once it lapses, goes back into general revenues. I don't know the technical transfer words, but perhaps the secretary can explain it.

[Wayne Wouters]

Every year departments receive an appropriation of funds. They must live within that budget. If in fact the money isn't spent, there is a provision to allow, at least for operating and maintenance, a 5% carry forward. That's to prevent that ramp-up of spending at the end of the fiscal year, but anything over that, those funds do what we call lapse, so they go back into the consolidated fund.

Last year, for example, in 2005-06, $5 billion in fact lapsed, and that money would be available for other uses.

[The Chair, Liberal, Diane Marleau]

Thank you.

Ms. Nash.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Yes, there are a couple of things.

First, I want to correct the record. Earlier there were comments about the proposed appointments commissioner. Gwyn Morgan's name was put forward, and he came to this committee as a potential candidate to head up the Public Appointments Commission. He was questioned by the committee, and ultimately the committee found that he was not suitable for the position, which was entirely within the committee's purview. He was not treated disrespectfully, nor was he given a rubber stamp to walk into that position.

So it is a legitimate question that after all this time, why has there been no other appointment or no other name put forward? It seems somewhat as if it's my way or the highway, in terms of only one person being a potential candidate.

I want to move on to raise a question about adult literacy. There are many hard-working people across the country who, for one reason or another, lack adequate literacy skills. When the government announced that it was cutting funding for literacy, many people were shocked.

In my own community, where there's a very high poverty rate, there's a growing gap in income levels. Some people are working so hard to get basic literacy skills. This government has said in the past that the actual classroom program funding was not cut. But I know from meeting with literacy teachers that funding for program and teacher development, and all of the supports that go with that important work in the classroom, have been undermined.

There may be other places where the funding is covered, but for example, on section 14, page 9, there is a cut of about $6.5 million. But there may be other places where funding is mentioned.

Maybe the minister could give us an update on where literacy funding stands. Is this an overall cut, or is the money cut in one place and balanced out someplace else?

[Vic Toews, Conservative, Provencher, MB]

I'm surprised that anyone would seriously advance the position that literacy funding in this country has been cut. If we look at the budgets, for example, let's say Manitoba—

[Peggy Nash, NDP, Parkdale—High Park, ON]

No, it was cut earlier as part of the funding cuts. Mr. Baird came here and talked to us about the funding cuts.

[Vic Toews, Conservative, Provencher, MB]

But let's look at it in the context of the money that has been given to the provinces.

For example, if you look at the province of Manitoba—and I'm most intimately familiar with those figures, as opposed to other figures—the per capita transfers and so on for post-secondary education, those transfers are—

[Peggy Nash, NDP, Parkdale—High Park, ON]

No, I'm talking about adult literacy, not people in university—people who maybe didn't even get their high school diplomas.

[Vic Toews, Conservative, Provencher, MB]

No, but it's the social transfer to the provinces. For example, in the province of Manitoba, almost 40% of all moneys spent by the provincial government are federal dollars. For 1.1 million people, $3.1 billion was transferred to Manitoba.

In respect of issues such as child care, in respect of education—

[Peggy Nash, NDP, Parkdale—High Park, ON]

Let's look at literacy. I'm looking at the specific numbers on page 14-9, which have declined. Is there some other place where literacy funding has increased? Is that what you're getting to?