Government Operations Committee on Nov. 24th, 2011

[Bill Matthews]

I can't speak for all, but I will say that provincially you have a mix. Municipalities typically operate more on a cash basis than the more senior governments. In the federal government you have a mix of accrual and cash. The estimates are cash; the budget is accrual. Municipalities were actually very slow to make the transition off cash, so I would expect they were largely dealing on a cash basis.

[Mike Wallace, Conservative, Burlington, ON]

I'll have to check with our treasurer in our city.

Thank you for the answers. They're always very well prepared.

The last question I have for you is a management question. We made the decision to take the debt collection of student loans out of the private sector and move it into CRA, with the assumption that we were going to do a better job than what we were paying the private sector to do—and some of that delta.

Is this about what we normally write off annually? Or is this higher or lower? Do we know?

[Sally Thornton, Executive Director, Expenditure Operations and Estimates, Expenditure Management, Treasury Board Secretariat]

This is normal and this is a three-year accumulation and it's also very similar to what we experienced when we had arrangements with banks and other organizations, rather than in 2000 when we implemented the new system.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

So here's my management question. Who makes the decision or decides or looks at that program to say yes, we were right, or yes, we were wrong? Is it the responsibility of Human Resources to do that or is there another body that actually looks and says here is where we made the change, we had a look at it and maybe it didn't work or did work? Who's responsible for that?

[Michelle d'Auray]

It is HRSDC. They would be responsible, because they're the ones who are responsible for the program.

[Mike Wallace, Conservative, Burlington, ON]

So they made the recommendation. They implemented it and they're responsible for the evaluation.

[Michelle d'Auray]

There was an evaluation done and there will be an evaluation done to determine whether or not this particular mechanism is more effective.

We can get back to you with further information, but as I recall, it was felt that because CRA was already in the collection business on a number of bases for government-funded initiatives, it made sense for it to take on that responsibility.

[Mike Wallace, Conservative, Burlington, ON]

Right. Thank you.

Thank you, Mr. Chair.

[Bill Matthews]

Mr. Chair, the advantage for CRA is that they can offset student loans against tax refunds. So you have an integrated collector there, because CRA--

[Mike Wallace, Conservative, Burlington, ON]

I'm not complaining about it. But for us to review whether the decision was a right one, I would like to see the answer.

[Michelle d'Auray]

It is an evaluation that would be done. Normally, evaluations are done on a five-year basis to be able to ascertain whether or not the program has achieved the results provided.

If I just may add something on the question of reprofiling. Not every program for which funds haven't been expended is automatically reprofiled. There is in fact a fairly extensive challenge function that is undertaken, and the approvals have to be given for the reprofile to be presented. So there isn't an automatic reprofiling.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

[Michelle d'Auray]

I just wanted you to know that. There seemed to be an assumption that just because--

[Mike Wallace, Conservative, Burlington, ON]

So it's not as if, “We get it approved this year, don't worry about it, as we'll get it automatically approved next year.”

[Michelle d'Auray]

No, there is no automatic approval. The only “automatic”, if I can put it that way, is the 5% carry forward, called the operating budget carry forward.

[Mike Wallace, Conservative, Burlington, ON]

Right.

[Michelle d'Auray]

That is also capped to the operating expenditures of a department.

[Mike Wallace, Conservative, Burlington, ON]

Thank you very much.

Thank you, Mr. Chair.

[The Chair, NDP, Pat Martin]

You ended up using up your five minutes after all.

Next for the NDP, we go to Mathieu Ravignat.

[Mathieu Ravignat, NDP, Pontiac, QC]

First, I would like to thank you for being here and for your important contribution.

My first question relates to a development contract for certain federal buildings between SNC-Lavalin and Public Works and Government Services Canada. The reason I am asking is that the representatives of this department could not answer my question.

Where does the overbilling, which is rather substantial, appear in the cost estimates?

[Michelle d'Auray]

I did not follow the comments by Public Works and Government Services Canada. If there was a recovery, it would be in the public accounts. You would see a recovery for overbilling, if there was. So you would see those items in the public accounts, but probably at a fairly high level of aggregation. A line might say "Recovery for certain activities" as is the case for payments made in relation to various initiatives or activities.

[Mathieu Ravignat, NDP, Pontiac, QC]

Would that be for overbilling in the general sense of the term?

[Michelle d'Auray]

It would really relate to recovery. That is, if there were a recovery or there were somewhat more specific cash inflows, that would be in the public accounts.

[Mathieu Ravignat, NDP, Pontiac, QC]

I see that Mr. Matthews and Ms. Thornton are searching in the document. Could you be more specific?

[Bill Matthews]

Merci.

I just wanted to find the actual amount given in the supplementary estimates to Public Works, and there is funding for the renovation of the parliamentary buildings. There's nothing in here about recovery of costs.

The way cost recovery works, as the secretary indicated, is that it shows up in the public accounts. If it's recovered in a subsequent fiscal year, you actually have to ask for the money again, because we're into a new fiscal year. So you will not see net recovery of costs in a supplementary estimates document.