Government Operations Committee on March 10th, 2009

[Vic Toews, Conservative, Provencher, MB]

Thank you.

[The Chair, Liberal, Derek Lee]

Thank you.

All right, Mr. Anders for five minutes.

[Rob Anders, Conservative, Calgary West, AB]

Thank you, Mr. Chair.

This morning, as Mr. McTeague was going on about accountability measures, I had something come back to me from my first term as a member of Parliament, which I'd like to put on the record and have the minister respond to. I was at the time sitting in Room 112-North in Centre Block, and I remember that Eleni Bakopanos, who was a Liberal member for the government at the time, put forward amendments to go ahead and change the way political parties were financed in this country. I remember, Mr. Chair, you were there at the time and you gave her a hairy eyeball, looking at her as though she should be quiet and desist from proceeding forward with her line of questioning and speech.

I didn't know quite what was going on, but then Mr. Boudria, who was at that time the Liberal House leader, and his staffer, Mélanie, who still works for the Liberal Party, proceeded to replace every single Liberal member who sat on the Standing Committee on Procedure and House Affairs. Then what happened was the Liberal Party, the government at the time, forced through public financing of political parties. And then subsequently, of course, the Liberal sponsorship scandal all unveiled. It turns out that what it was doing was covering over the tracks of the Liberal Party of Canada with regard to their kickbacks, with regard to money that was siphoned through Chuck Guité, with regard to brown paper envelopes being passed around in Montreal to prop up failing Liberal candidates in the province of Quebec.

Mr. Minister, Mr. McTeague's questions this morning with accountability bring those issues back to my mind. I would like you to speak to the issue with regard to accountability and how what you're doing with regard to the money that's going out to fund the GO Train and various projects to stimulate infrastructure in this country is fundamentally different from the Liberal sponsorship scandal and what that party was up to with regard to slush funds and taxpayer dollars wasted to promote their own partisan interests.

[Vic Toews, Conservative, Provencher, MB]

I don't want to get into too much detail about that unfortunate chapter in our country's history, but from a procedural point of view, it is important to make a distinction between what happened with the sponsorship issue and what is happening here.

With the sponsorship issue, in fact, the first big problem was that it bypassed the public service completely. It was simply a political fund that was set up. As I recall, and I was on the public accounts committee, when the deputy minister was there, he said that he had nothing to do with that project and that it was Mr. Guité who went directly to the minister. The minister and Mr. Guité decided on the projects, on what was apparently a very political basis.

So the first thing that happened was that the public service itself was completely shut out. There were no criteria. There was no Treasury Board oversight. There was, in fact, not a specific appropriation by Parliament. I'm still not exactly sure where that money actually came from.

We are not going down the road of a lesson that we have all learned. All we are doing here is saying that there has to be a balance between appropriate due diligence and transparency and the rapid delivery of stimulus measures. But you don't dispose of all the safeguards that were in fact put in place by Treasury Board or by the government or by Parliament itself in order to get that money out the door.

So we have now, in this particular fund, the broad parameters, as I've said, in the economic action plan, which will define which programs will benefit from this money. Treasury Board will still review the expenditures. And as I've said, there is some streamlining of that process in cases where we would simply be duplicating what we are doing in terms of approvals. It's not necessary to go through the same forms if that's already been done.

Departments, I would also say, now have independent internal audit committees that include members external to government. They will also have input into these programs. Our government has taken steps to ensure that only qualified chief financial officers are appointed in departments and agencies. And of course we brought in the Federal Accountability Act, which makes a huge difference in terms of the responsibility that department heads, such as Mr. Wouters and other deputy ministers, have in respect of Parliament and the obligations they owe. So you could not go around the deputy minister, as happened in that unfortunate period in our country's history that we've come to know as the sponsorship scandal.

[The Chair, Liberal, Derek Lee]

Thank you. That's over five minutes.

We'll go to Ms. Hall Findlay. You have five minutes.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you, Mr. Chair.

I don't know whether my question would be to the minister or to Mr. Wouters or to someone else.

I remain a little confused about the whole question of lapsing. My understanding is that at the end of the fiscal year, which is coming up in three weeks, if money that has been allocated has not actually been spent--and there's a difference between being committed and actually being spent--it either lapses, or if it has been reprofiled, it carries over.

If Mr. Smith can answer, that would be great.

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

Thank you.

The normal course of events is that money that is not spent does return to the consolidated revenue fund. There are always, in programs like infrastructure, commitments that are made and indeed spending has not occurred, but a commitment that was made with the province is close to being signed. An argument will be made once the fiscal year is closed to honour those commitments. When one looks at that, a case will be taken to Treasury Board and to the Minister of Finance to see whether the money can be reprofiled to one of those commitments going forward. So reprofiling is permitted.

The trouble is, it occurs typically very late in the year in this case. One doesn't know what the fiscal year brings until as late as September. Then we do the due diligence before we approve a reprofiling, and it may not occur until supplementary estimates B, which will be in December. So it's not as if it's a rollover of funds into the new fiscal year early on.

[Martha Hall Findlay, Liberal, Willowdale, ON]

So the answer is that there may be money that was allocated for infrastructure under the Building Canada fund. So it would only relate to a commitment, or a hint of a commitment that was made before the end of the fiscal year. Is that right? It's a bit loosey-goosey here. We have three weeks before the end of the fiscal year, so I'm really trying to pin down what will happen with all of that money, with the majority of the Building Canada fund that has been allocated. I'm not talking about the gas tax fund or the GST rebate, but specifically the Building Canada fund.The majority of that money, as far as we know, has not been spent. Is it that if there is a semblance of a commitment made some time in the next three weeks, or a commitment signed some time in the next three weeks, that this would be the subject of possible reprofiling?

[Wayne Wouters]

Mr. Chair, I think commitments are simply one aspect that we looked at. The government can decide on a program that has lapsed to reprofile that funding because the government says, look, we still think this is a priority for us as a government and we don't want to reduce overall spending on this program, even though we may not have spent that amount that was allocated in 2008-09.

So commitment is one factor, but another factor is simply the government saying we want to continue to have the same budget for that program, but since we didn't spend it last year, we will want to reprofile it so we can spend it in future years.

[Martha Hall Findlay, Liberal, Willowdale, ON]

That decision to reprofile can actually come well after the end of the fiscal year in which it normally would have lapsed?

[Wayne Wouters]

It normally does come well after the end of the fiscal year.

[Martha Hall Findlay, Liberal, Willowdale, ON]

A specific question.... What's the expected actual surplus of the 2009 budget? Is it about a half a billion dollars?

[Wayne Wouters]

Sorry, the federal budget?

[Martha Hall Findlay, Liberal, Willowdale, ON]

Yes, it's a slightly different question. I'm just pointing to the concern that we have raised a number of times on the lack of spending. The significant number of billions of dollars it had promised and announced under the Building Canada fund that have not been spent and will not have been spent by the end of this fiscal year significantly helped this government avoid a deficit as of the end of this fiscal year.

[Alister Smith]

We don't have a specific number, again, for the Building Canada fund. There is accelerated activity and we'll have to see what the year-end brings. But that is one program. It is not sufficient, if you wish, to ensure a surplus at the end of this particular fiscal year, if that's the question.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Except that we're talking about billions of dollars that have not been spent, which, I will note, have in fact been announced, even if formally they haven't been committed. There have been announcements made; money has not flowed. There is a significant concern that on a number of those projects, a number of those announcements, or a number of those opportunities, the money simply was not spent. It was held back, noting that the Building Canada fund does involve ministerial discretion. A significant amount of money was not spent. Our concern was that despite the economic need, despite the deterioration of our economy, it was not spent in time for the end of this fiscal year because this government wanted to avoid a deficit.

[Vic Toews, Conservative, Provencher, MB]

Let me just make a few comments.

First of all, the money doesn't flow to any particular project until the Government of Canada is invoiced for it. That is the process.

Now, should there be changes to that process? That's a good question. But the fact is that if we, as the Government of Canada, jointly make an announcement with the municipality and the provincial government, then the municipality goes out and gets the quotes from the tendering process. Then the shovels are put into the ground, and then when the invoices are received by the federal government, we pay. We don't pay before the work is done.

For example, we made certain announcements, I believe, in the Toronto area, in 2008, where not one dime has been spent by the proponents of the project. It's not our project. The proponents haven't spent a dime. Money cannot legally flow. So if you're suggesting that we flow money before it's legally permissible to do so, that's not going to happen.

[Martha Hall Findlay, Liberal, Willowdale, ON]

No, of course I'm not suggesting that.

[Vic Toews, Conservative, Provencher, MB]

But that's what you're saying.

[The Chair, Liberal, Derek Lee]

Ms. Hall Findlay--and I'm asking all members--please avoid interrupting.

Mr. Toews, I'll let you finish your answer. We're over the five minutes.

[Vic Toews, Conservative, Provencher, MB]

Unless there's an agreement to the contrary, the money cannot, in fact, flow until we've received an invoice for that money. This has nothing to do with the Government of Canada withholding dollars. It's a question of the proponents not invoicing the Government of Canada or commencing these projects, and that is an issue.

Now, the member from the Bloc did point out that there are some federal projects that should be moved along because there is in fact no other consent required, and that's a good point.

[The Chair, Liberal, Derek Lee]

Good.

I have to cut you off. We're at eight minutes. The rest of the colleagues here will be jaw-droppingly upset with me if we don't go to the next round.

Mr. Warkentin, go ahead for five minutes.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Mr. Chair.

Thank you, Mr. President, for being here before our committee this morning. We do appreciate your testimony and your work. I know that you're working overtime to ensure that the budget and the dollars that do need to flow do flow in due course.

It's interesting that the Liberals have engaged in one of the most severe second-blow types of arguments that I've ever heard. It was probably even more clearly articulated in the last statements by the Liberals, in which they changed their questioning from asking why you are going to expedite all of this money, this $3 billion, to at the same time asking why you aren't pushing this other money out faster.

I do not envy you, in terms of your responsibilities and your desire to make the opposition parties happy during this time as well.

Clearly you have worked very hard to try to explain to the opposition members exactly what this $3 billion will be spent on, but I think it is very important that the average person out there clearly understand that the $3 billion being brought forward in vote 35.... Maybe I should put this in the form of a question. Is there a single cent of that $3 billion that will be able to be spent on anything that is not outlined within the parameters of the budget, which the Liberal members have already voted in favour of?

[Vic Toews, Conservative, Provencher, MB]

No. Thank you for the question.

In terms of working overtime, I must compliment the staff and the public servants. They have done an incredible job in moving this ahead. I know it's difficult sometimes to change the way you do business, but Treasury Board specifically and public servants generally have responded well to this particular challenge, and I'm very pleased with their performance.

In respect of your specific question as to whether there are measures outside of what has already been announced, in terms of programs to which this $3 billion would be applicable, the answer is no. It must be spent in respect of the economic action plan measures outlined in the budget. That's what this money is for.

The purpose—and again, I don't want to repeat myself, at the risk of boring some of you—is to move the money out earlier than ordinarily would be the case. It's not that the rules have changed to allow government simply to create this sort of private fund. The public scrutiny of the expenditure of money and the Auditor General's auditing of specific programs will continue. Parliament will in fact receive regular updates in respect of the implementation of this so that Canadians can be assured that we are dealing with this money in a responsible manner.

[Chris Warkentin, Conservative, Peace River, AB]

I know your department is undertaking due diligence for many requests for funding for projects across the country, projects that don't all fall under the infrastructure program that we call the Building Canada fund. There are projects that are coming in terms of a request for funding for universities and colleges, a request for green infrastructure, and other programs that don't necessarily fall under the parameters of the Building Canada fund.

I certainly understand the Liberals. They keep bringing up possible funds that were not spent from the Building Canada fund from the last budget. But I think it's important that we make it clear and that we understand as committee members if there is a single cent that would be able to be spent for projects that were outlined in the budget, such as the initiatives regarding colleges and universities, green infrastructure, a number of other things. Could we pull money out of the Building Canada fund to fund those things--as I think there seems to be this insinuation--or do we need the $3 billion so that we'd be able to advance funds for some of these other things that are outlined in the most recent budget?