Government Operations Committee on Feb. 27th, 2012

[David Macdonald]

When it comes to the main estimates on the expenditure side, if MPs were given a full list of what that was buying in each department and the historical context of how it's changing—how many people are being employed and why it's changing—this committee and others could ask much more pertinent questions about departments and hopefully better spend that money in the future.

[The Chair, NDP, Pat Martin]

Thank you, Denis. That uses up your time.

Thank you, Mr. Macdonald.

Next is Mike Wallace, for the Conservatives.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair, and thank you, Mr. Macdonald, for coming.

I have a couple of questions.

You talked about the RPPs—the reports on planning and priorities—and timing. You do realize that in terms of the main estimates, changes to the budget are not included in the main estimates. You understand that, correct? Any changes that happen from the budgetary activity are not included in the main estimates; do you understand that?

[David Macdonald]

That's right. They're included in the supplementary estimates.

[Mike Wallace, Conservative, Burlington, ON]

Okay. Then the plans and priorities documents come out.

You never mentioned anything about the performance reports, the DPRs. Do you have any comments on them?

[David Macdonald]

I didn't look at them extensively—

[Mike Wallace, Conservative, Burlington, ON]

So you looked at the plans, but you didn't look at the reports.

I don't disagree with you—I think the RPPs could be tightened up quite a bit—but you didn't do a comparison of what the departments report with the actual results they had.

[David Macdonald]

I have looked at that aspect in the past, absolutely, but not in this particular report.

[Mike Wallace, Conservative, Burlington, ON]

On the PPRs, or whatever it is, the planning documents—that's how I'll refer to them, “the planning documents”—you talked about three years in advance and three years in the past.

[David Macdonald]

Yes.

[Mike Wallace, Conservative, Burlington, ON]

In terms of comparison, do you mean estimate against estimate, or estimate against reality in terms of actuals, or...? What do you want to compare in the future?

I can understand three years in the past. That, I think, would delay their coming to us even longer than they already are, but what are you comparing in the future, and have you actually looked at the budget cycle?

I've been an advocate of presenting our budget in the fall and having the main estimates reflect the majority of the changes come April 1. Have you looked at that at all?

Those are two questions.

[David Macdonald]

The calendar shift seems like an interesting suggestion. It would certainly be more interesting to see the mains reflect the budgetary changes than to wait throughout the year for the supplementals to update what's actually happening.

The reports on plans and priorities estimate departmental spending and program area spending for the current year and the next two years into the future, as I'm sure you know. However, they often only report the present year, so it's difficult sometimes to get an idea of how program areas, for instance, are changing over time.

In terms of reconciling the RPPs with the main estimates, you have a variety of other issues as well when you start to incorporate the cash versus accrual problem, as I'm sure you know, but I think the RPP documents are some of the more accessible ones in terms of looking at how government spending is changing into the future. They can be quite useful if you want to see what departments are planning to spend two or three years out, not only at the department level but also at the sub-level, so I'd argue that they are a good foundation for reporting on how government expenditures are changing and also on why they're changing over time.

[Mike Wallace, Conservative, Burlington, ON]

Perhaps you could just add some clarity for me, because I didn't understand. When I look at this, and the estimates say they're going to be spending x dollars, it is a budget, of course, and you don't want to blow your budget or blow your vote or whatever, but there's always going to be a differential, hopefully, between budgeted and actual—

[David Macdonald]

Oh, yes.

[Mike Wallace, Conservative, Burlington, ON]

—and it should be in the negative side, in that sense.

In terms of your discussion of the revenue stream, when I see the number there, I assume the revenues are going to be provided to make that happen, based on that budget. I'm not sure exactly what you want here. Is it that you don't like tax credits, or that you want to see what their effect is? I'm not sure exactly what you're asking for here.

[David Macdonald]

Let me be a bit more specific there. In the revenue estimates that come in every year, as you say, there's a fair amount provided in tax credits, so there are, in effect, expenditures in a sense, and there is less revenue in another sense. I think there is room for evaluating tax credits and other exemptions to the tax code to see whether they're providing the benefit they should be providing, in the same way that departments are expected to take programs and try to justify why they exist and why they are providing the benefits they do.

[Mike Wallace, Conservative, Burlington, ON]

Whether it's a program or a tax credit, it's still a policy decision. One is using the tax code to make change and the other is using a program to make change—positive or negative, depending on your view, of course.

If we did get down lower to program evaluation, you're saying that we should be evaluating, on the transit tax credit, whether it actually generated a number of travellers on the system, or...?

Is it that kind of information?

[David Macdonald]

Yes. I think that would be great.

[Mike Wallace, Conservative, Burlington, ON]

Okay. Thank you very much.

Is that it?

[The Chair, NDP, Pat Martin]

You're right on the money there, Mike.

Next, for the NDP, we have Alain Giguère.

Welcome, Alain.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Thank you for being here, Mr. Macdonald.

In recent years, we have seen the emergence of expenditure plans spread over a number of years. Take, for example, the 2008 budget for national defence. It showed $60 billion in purchases and $140 billion in maintenance spread over 20 years.

The problem is that, in his interim report, the auditor general told us that, since there were significant overexpenditures on the purchasing side, they were dipping into the maintenance budget. That explains why brand new helicopters were grounded because there were no spare parts.

I can assure you that, when Parliament passed those budgets, we were not buying helicopters so that we could watch them rust on the ground.

Is there a better way, in your view? How can we get a better handle on these expenses?

[David Macdonald]

It's definitely challenging once you start getting into capital purchases that are accrued over 10 or 20 years, as you said, in the sense that for most departmental spending, we have an idea three years out, say, and after that, it's my understanding—although I stand to be corrected—that Finance Canada is simply estimating based on some sort of standard growth multipliers. In reality, in terms of government spending, we could only really know probably three years out, so it is certainly challenging on these longer-term capital projects, and also in terms of reconciling cash versus accrual, when parliamentarians vote on these sorts of things.

I think what parliamentarians vote on should be what they get, but then again, there obviously can be changes over time. I don't know that purchase in detail, but there certainly can be challenges in terms of what the estimates are on capital purchases like that.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

My second question is about another long-term project. It deals with expectations vis-à-vis the Kyoto Protocol.

In October 2011, the Commissioner of the Environment and Sustainable Development apparently produced a report on government expenses totalling $9.2 billion. An amount of $2.3 billion was discovered to have nothing at all to do with reducing greenhouse gases. I am beginning to wonder about the relevance and even the structuring of the budgets. Why include items in budgets that have absolutely no business being there? Why do we find expenses that are impossible to attribute to a budget year? Seven departments are involved with the Kyoto Protocol and we have no way of knowing how much each of them spends on that specific item each year. I have tried to find the figures, but I have not been able to. That is why I would like to hear your comments.

[David Macdonald]

I don't know that there's any way I would be able to find them. You're much better placed than I am, given that you have better access to the system of Parliament and the Library of Parliament.

I think that may speak to one of the challenges in not having sufficient detail for the Department of the Environment, for instance, in terms of what they're spending their money on and how that is changing over time. Certainly, if there were a line in the reports on plans and priorities or the main estimates or whatever that said “Expenditures on Kyoto”, and if the number should have been $9 billion over five years and it was $1 billion over five years, with that kind of detail you could start to ask those questions.

Without that kind of detail, I think it's very difficult for parliamentarians or outside observers to look at these public documents and determine exactly how that money is spent. It is a real challenge for parliamentarians, whether it's on Kyoto or whether it's trying to figure out where government cuts are. It's certainly a challenge.

[The Chair, NDP, Pat Martin]

You have about 30 seconds, Alain.