Government Operations Committee on April 2nd, 2009

[The Chair, Liberal, Derek Lee]

I see a quorum.

Today we have witnesses from the Treasury Board Secretariat, the Privy Council, and the Department of Finance to assist us in what I have described as somewhat of a planning meeting to raise our awareness of the procedures that will govern the spending of the stimulus package money contained in what the government calls Canada's economic action plan.

Because some of the procedures are arguably new—it's a road we haven't gone down before—this particular committee has not participated in this type of context before. Most of us are aware of the other-worldly, arcane nature of procedures that govern parliamentary appropriations. Our purpose today is to ask the public servants here, all of whom are experienced in this stuff, to help us lay the groundwork for the meeting that will follow after the Easter break.

So this is not the meeting, at which we would be aggressively probing the envelope as parliamentarians. This is rather a meeting where we're asking the public servants to help us better understand, so when we get to asking the tougher questions, the more meaty questions, we'll all be heading in the same direction.

I'll pause there and invite Mr. Smith, who has some opening remarks.

Before you do, I want to raise a matter I've raised with members before. I'd like the public servants here to take the message back, that this chair has had enough of the circumstances whereby the witnesses come with information in one language only. If we had a witness from out on civvy street, not in government, we would accept that. Occasionally that will happen. Every citizen has the right to be here and work in the language of his or her choice. But when we have ministers—ministers are public servants—we do expect they will come to us with written work in both languages, that it will have been translated. In circumstances where it's a last-minute thing, all the members here will understand: the document will come in French or in English, and we can't do much about that.

I'm being very polite in my remarks. There are other members in the House who would not be so polite. I want that registered. I don't want to see this happen at this committee again, so make sure your ministers know it. Make sure your ministers' staffs know it. I have taken the trouble previously to try to communicate this to ministers' staffs through the government members here. I'm just registering that.

You can reply. If you want to say something about that, you can; you're free to do so. I don't want to extend the debate on this too far, but I think my message is clear.

Mr. Smith.

[Alister Smith, Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat]

Thank you, Mr. Chairman.

I do have some remarks, and I was concentrating in my opening remarks on Treasury Board vote 35, but more generally, you may have questions that go beyond that.

Good morning everyone.

I would like to thank the honourable members of the committee for the opportunity to speak with you about the new central vote introduced in the main estimates for 2009-2010, Treasury Board Vote 35.

The Minister of Finance said that stimulus spending needed to begin flowing within 120 days of the January 27 budget. That is before June and preferably sooner. It's important that funds flow as soon as possible to have the desired impact on the Canadian economy. Due diligence, of course, must be respected.

Funding for budget initiatives typically comes from two sources of funds: the Budget Implementation Act and supplementary estimates. In this case, this year and in most years, the short gap between the tabling of budget 2009 and the tabling of main estimates for 2009-10 did not allow sufficient time for departments and agencies to develop detailed program plans and seek funding for initiatives outlined in Canada's economic action plan through the main estimates.

In the past, departments had to wait until December to receive cash through supplementary estimates to implement initiatives presented in budgets tabled in late February or early March.

In effect, departments had to manage new spending on budget initiatives within their existing budgets through much of the fiscal year. Given the scale of the stimulus spending in budget 2009, that would not be possible for many departments and agencies involved in delivering budget initiatives this year. This spring we will therefore again be tabling supplementary estimates A in May to seek Parliament's approval to implement those budget initiatives that are ready for implementation.

The central vote, TB vote 35, is a bridge to supplementary estimates to ensure smooth implementation of budget initiatives to departments requiring funds before supplementary estimates.

The maximum allowable amount of 11/12ths of the vote, $2.75 billion, was approved through interim supply. The remaining 1/12th, $250 million, would be made available for potential allocation between the date of full supply, tentatively set for June 9, and June 30.

The objective of TB vote 35 is to ensure that departments have the resources and authorities required to implement budget initiatives. Consequently, funding is now available for allocation to organizations for the immediate implementation of initiatives identified in chapter 3 of budget 2009.

Let me now turn to the process for accessing the vote.

As mentioned, TB vote 35 is intended to serve as a bridge until Parliament's approval of supply in June and December. Treasury Board ministers are authorized to allocate up to $3 billion for budget initiatives directly to departments that have provided us with demonstrated forecast requirements in advance of the supply periods.

Allocations made under Vote 35 can occur from the period of April 1 to June 30, consistent with Treasury Board approval.

Each initiative seeking funds from this vote requires a Treasury Board authority. Treasury Board officials will review cashflow requirements to ensure that only funds that are required before the next supply period are recommended for allocation. Funds unallocated at the end of June will lapse in TB vote 35, and departments will seek to obtain funding in accordance with normal supply periods thereafter.

If I might, I'll mention reporting again.

A number of reporting mechanisms will be employed to ensure accountability and transparency around the use of vote 35. The government has committed to table regular quarterly reports in Parliament on the implementation and impacts of the budget. Included in these will be reports on allocations from vote 35. TBS will also report on the use of the central vote, as it does for all others, through summary tables and supporting narratives in supplementary estimates documents tabled in Parliament.

Departments and agencies will be required to report on all initiatives, including those funded with allocations from vote 35, in their departmental performance reports. In addition, TBS officials and/or the President of Treasury Board will appear before committees and respond to any questions that committees or members may have on the use of the vote.

In closing, I would like to thank you for allowing me to provide you with an overview of Vote 35.

[The Chair, Liberal, Derek Lee]

Thank you very much for that.

Does either one of the other witnesses want to present an opening statement from the perspective of your ministry? No? Okay. That's good.

I am just about as foggy on this as I was when you started. That's why we're here today--to try to clear the air.

I'll look to Ms. Hall Findlay. We'll do the usual rounds.

Please go ahead, Ms. Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I apologize. I was actually caught....

[The Chair, Liberal, Derek Lee]

We can come back to you.

[Martha Hall Findlay, Liberal, Willowdale, ON]

If we can, that would be very helpful.

[The Chair, Liberal, Derek Lee]

Mr. Szabo? No.

Then we'll go to Madame Bourgeois.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, Mr. Chair.

Mr. Smith, good morning. Good morning gentlemen.

If I understand correctly, you are taken by surprise. You stated that you did not have sufficient time to prepare a plan to explain how the $3 billion will be spent. Did I understand correctly?

[Alister Smith]

I don't think I was saying exactly that. What I meant was that when we table main estimates, which we have to table by March 1, and we have a budget that is tabled, in this case, in late January, there's not enough time to reflect the budget items in the main estimates.

This is a problem that occurs every year. It's partly the timing, but by House Standing Orders, we're required to table main estimates on March 1, and often the budgets are in February. As a result, with those timelines we can't develop the proposals sufficiently to bring them into the main estimates.

Therefore last year, for the first year in a decade, we created spring supplementary estimates, supplementary estimates A, which you will be seeing again in June. The idea there was to capture as many of the budget items as we could by that point, so that departments would have the ability to get cash in June instead of having to wait, as we did for many, many years, until December.

In a normal year, with a smaller budget, it was possible to wait until December, but it gave rise to a lot of cashflow problems for departments. Last year I think we were relatively successful with having spring supplementary estimates for the budget; this year, given the scale of this budget, we felt we needed something in addition, something that would actually allow funds to flow before, effectively, the end of June. That's why we created the central vote as a supplement, as a bridge.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

I would like to properly understand what this incentive measure consists of, the supplementary amount. I believe that it is Vote 35. Funds will be made available for projects submitted between April 1 and June 3, if I understood correctly. Is that correct?

[Alister Smith]

First of all, this amount actually is in main estimates. The $3 billion central vote was in interim supply. It is actually in the main estimates as a fund to be allocated. Now, it's not allocated directly to projects; it's allocated to programs, to initiatives that are in the budget. That's an important distinction--

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

All right.

[Alister Smith]

--that the Secretary of the Treasury Board mentioned when he was here.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

That's the difference with regard to the amount which is allocated for infrastructure. Pardon me, I was mistaken. As regards infrastructure, there are projects, whereas this famous $3 billion will be spent on programs. Is that correct?

[Alister Smith]

No, that's correct. These funds are allocated to the initiatives that are in the budget, those initiatives that are typically not in the Budget Implementation Act but that require funding. The funds are not allocated directly to projects. Projects come under the terms and conditions of the programs that departments are delivering.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Fine.

With your permission, Mr. Chair, my colleague will ask the next question.

[The Chair, Liberal, Derek Lee]

Go ahead, Monsieur Roy.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

You say that of the $3 billion, $2.75 billion could be released rather quickly. Are you maintaining a sort of leeway?

[Alister Smith]

Actually, we're only permitted to ask you for eleven-twelfths of a vote in interim supply, so therefore there was a limit set by that, and it's what gives rise to that $2.75 billion. The remainder would be allocated over the remaining period until the end of June.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

I have another question. Vote 35 amounts to $3 billion, indeed. You state that the allocation period expires on June 30. Does that mean that all of the amount must be distributed to each one of the departments by the 30^th of June? Once the expiry date has elapsed, will the money remain within the budget? Will it be allocated to the same programs?

[Alister Smith]

Well, the funding is allocated to the programs, so it has to be allocated by the end of June or the money lapses. The funding can be spent up until the next supply period, the supplementary estimates B in December.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Ah, afterwards.

[Alister Smith]

We require departments to provide us with some indication of their spending pattern under the program, but the window of opportunity for the allocations to those programs closes at the end of June. That's the way it works.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

You state that these are budget items, items that are contained in the budget. Does this include repairs to federal buildings, which falls well within departmental mandates?

[Alister Smith]

I think you're talking about post-secondary education and the knowledge infrastructure program, which is a Budget Implementation Act--