Evidence of meeting #18 for Government Operations and Estimates in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was billion.
A recording is available from Parliament.
Secretary of the Treasury Board of Canada, Treasury Board Secretariat
They do not.
Conservative
Mike Wallace Conservative Burlington, ON
I have a chart, which is a work in progress, to be perfectly honest with you. On my chart, I compare the asks in the supplementary estimates with the asks in the main estimates. I understand the budgeting process and how in the heck you can you do it in the main estimates if you don't even know what is in the budget, or it's two weeks later.
For some of the departments, which will go unnamed, if you add up all their supplementary estimates, there are differences of 11%, 12%, 27%, 41%, 35%, 35,%, 23% between what is asked for in the mains and what is asked for in the supplementary estimates. There are some—don't get me wrong—that are down to 1%, 2%, 3%, which I think is reasonable.
Are there any guidelines on what can and can't be asked for, because some of these departments...? And this isn't just for one year; this is after five years, so this is prior to the economic action plan. It's inconsistent.
Secretary of the Treasury Board of Canada, Treasury Board Secretariat
You mentioned the budgeting cycle. The bulk of the requests for adjustments, through the supplementary estimates, are generated by two sources. One is new initiatives that are identified in the budget, and the other is programs or initiatives that sunset in a particular fiscal year; and the decisions with regard to either their continuation or changes happen after the period.
November 24th, 2011 / 4:55 p.m.
Secretary of the Treasury Board of Canada, Treasury Board Secretariat
I would say those are the two main drivers of the variations. Then you will have the exceptional circumstances. For example, you will see some adjustments or payments if there are major floods or fires, emergencies, crisis situations. Those will also generate adjustments, and those are largely unpredictable. But the two main steady drivers, if I can put it that way, are really the budget and funds that are expiring in one year and then are either confirmed or not, or adjusted.
Conservative
NDP
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
I am reading the document you provided to us. First, I would like to thank you again for being here with us.
We are studying the supplementary estimates (B). They are on the order of $6.6 billion. That is a lot of money that was impossible to foresee earlier. Last year, in 2010-2011, the supplementary estimates (B) came to $3.1 billion. The budget from last year has been more than doubled.
Do you have an explanation? Why this sudden leap in unforeseeable supplementary estimates?
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
To explain that, it is important to understand that the supplementary estimates are not an estimate of—
Don't rely on the supplementary estimates to judge whether departments forecasted properly. This is solely a case of when departments actually received Treasury Board authority to spend money. You will see things in estimates—and it's quite normal—from a previous budget two or three years ago, if it's a complex program, because to design a program and get it into Treasury Board for approval takes that much time.
If you are working from the premise that seeing a great deal of money in supplementary estimates is an indication of poor forecasting, that's not the case. As the secretary mentioned, when you have new programs and new initiatives, it takes time to design them in enough detail to get Treasury Board approval. Then we update the spending authorities of departments.
If you look at these estimates, you have things for Agriculture Canada having to do with excess moisture, and supplements for farmers concerning lack of forage, and those types of things. This is not about forecasting; it's about new programs that were designed and then brought into Treasury Board for approval. I would suggest that it's in the nature of some departments that you see repeated or more frequent requests for additional funding. It's that's not an indication of poor forecasting, but an indication of when they actually received Treasury Board approval for their programs.
NDP
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
I understand your explanation, and, yes, it is informative. At the same time, this is also a little troubling. When we look at the main authorities in the supplementary estimates (B) for this year, we see that for CIDA, there is a grant of $125 million for international organizations. I am having trouble seeing that line.
Are grants to international organizations not a new program?
Secretary of the Treasury Board of Canada, Treasury Board Secretariat
In that case, it is a change of authority. It goes from being a contribution authority to being a grant authority. To make that change, Parliament has to approve it. It is a transfer. There is no financial change, it is not an increase. It is simply a transfer between two authorities, but the amount stays the same.
Once again, that is one of the mechanisms, because Parliament has to approve these transfers. An explanation has to be provided and it is done in the document that supports the supply bill.
In the actual bill you will find that this is a transfer of authorities. However, the amount stays the same.
NDP
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
Perfect.
We also see, in the major voted items, operating and restructuring costs of $201 million for Atomic Energy of Canada Limited.
Will part of the funds requested be spent directly or indirectly for the commercial component of Atomic Energy of Canada Limited, which has already been sold to SNC-Lavalin?
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
There are two pieces to AECL, as I mentioned. The first piece relates to the ongoing operations of AECL. That's the voted bit. The second piece relates to the divestiture.
You're right, the sale has been concluded. That agreement actually included an acknowledgement by that new company that there were some projects under way that were started by AECL and that are over budget. The government has effectively agreed to hold the company harmless for those cost overruns, because we know those projects are behind schedule. So when you see the divestiture, the statutory piece, that's because we've agreed to include funding to effectively offset the losses because of those project delays.
NDP
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
If I am not mistaken, because of delays, we are authorizing public expenditures to a piece of a company that has already been sold to a private company.
Secretary of the Treasury Board of Canada, Treasury Board Secretariat
If I can add something, the government had already made contractual commitments. This relates to the Pointe Lepreau refurbishment and a project in Korea, for example.
These are commitments the government of Canada had made. It agreed to continue providing the necessary appropriations, because it had committed to doing that through the company, which was a crown corporation.
So as not to penalize the company that was taking over its contracts, the government honoured its obligation under those contracts, but it set a limit on the amount paid to the company to complete those contracts.
NDP
The Chair NDP Pat Martin
That's it for your time, I'm afraid, Alexandre.
Next, it's Mike again. Mike Wallace.
Conservative
Mike Wallace Conservative Burlington, ON
I have two quick follow-up questions.
When you something isn't expended in a year and is reinstated, is that because the estimates are presented to us on a cash accounting basis? Tell me if I don't understand this.
Is that not correct? If cash isn't spent in one year, you have to get it reapproved the next year. Is that correct?
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
It's correct that it's cash, but the more important point is that it's an annual appropriation. With few exceptions, where we have a few agencies that get multi-year funding, it's an annual appropriation. It expires at March 31 if you have not spent it, and that's why we have to come back in the new fiscal year to get it.
Conservative
Mike Wallace Conservative Burlington, ON
If it were presented to us on an accrual basis, would we have to go back again and get it re-passed?
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
I would say yes. Again, it depends on the model that you're using, but if you actually look at an annual system, if it's not incurred in the year, you would have to come back for Parliament's authority yet again. So it's not a matter of cash versus accrual; it's a matter of it being annual.
Conservative
Mike Wallace Conservative Burlington, ON
And is this done at all government levels?
I was a municipal councillor for 13 years. I don't remember having to re-budget things every year, if they hadn't been completely expended that year.