No, I'm guilty.
One of the witnesses, Dr. Franks, expressed doubts that changes to the committee system or to the techniques used by committees to examine the Estimates would result in any improvement.
So I expressed my doubts, and the committee went on to say:
Although we understand this view, the Committee does not entirely share it. Yes, there are constraints that limit committee effectiveness, but these need not be completely debilitating. The Committee believes that there are ways in which committee study of the Estimates can be made more effective and are confident that the following suggestions will produce positive results.
They made...oh gosh, it was something like 90 recommendations, and nothing happened. There were a couple of tiny changes, but no significant ones. Then, in 2003, also as a witness, I was before a committee that went over the same area. It made fewer recommendations—23—but that did not lead to significant change.
So it might be my fault as adviser to the committees, but with a track record like that, I don't feel that I'm in a position to offer mammoth changes and to say, “Yes, sure, this will happen.” Because it doesn't.
Also, there are some problems in it that are constitutional, in the way the Constitution is interpreted in Canada. The fundamental principles of parliamentary cabinet government limit the role of Parliament in the estimates process. Ours is a system of government in and with Parliament, but not by Parliament, and nowhere is this more apparent than in the financial processes. The government is responsible for preparing the budget and estimates.
Parliament approves the estimates and authorizes the government to spend money, though only for purposes, in amounts, and through processes authorized by Parliament. The government, not Parliament, spends the money. Parliament again enters the financial processes in the third, accountability processes, after the money has been spent, with the audit by the Auditor General and the review of the Auditor General's reports by the public accounts committee.
Even in the estimates process, the role of Parliament is limited. It can only make one of three decisions on a particular expenditure item: it can lower the amount proposed by the government; it can reject the proposal in its entirety; or it can approve it unchanged. Parliament cannot increase an estimate, because this requires the recommendation of the crown. Reduction or elimination of an item of expenditure would normally be regarded as a want of confidence, and not surprisingly, this rarely happens.
I go into a discussion of the vote structure, which is the key to parliamentary control of the estimates.
The budget is divided into votes. The government cannot increase the money in a vote without coming back to Parliament, nor can it shift money from one vote to another. Within a vote, it can shift from one part of the vote, what's called an allotment in Canada, to another. In the U.K. system they are called sub-votes, and the process of moving them is called virement. We adopted our own terminology.
I want to offer my answers to six questions that have come before this and earlier committees.
First, should the budgets be on a cash or accrual basis?
As many of you will know, having been in the private sector, accrual is the normal basis for doing budgets in the private sector. Government is on cash, of course.
I'm conservative enough on this one to think that we should retain the cash system, partly because it's a very simple and straightforward system, whereas in accrual accounting, you get into problems of relating the future to the present. With all due respect, every time you're making a judgment like that, you're opening up more avenues for fudging the books. The experience of governments now is that budgeting, from the parliamentary perspective, is cash budgeting and cash accounting. The internal records are often kept on an accrual basis. I don't mind that difference. The interest of Parliament, which is to make sure they get very accurate figures and know what the government has been given to spend, what they have spent it on, and how much they have spent, is best assured on the year-to-year cash basis. That's my view, and I will not go on any further.
I consider the vote structure the essential element of control over the budget. Parliament grants money in votes, in lump sums. The budget estimates are divided into votes. The government cannot spend more than Parliament grants in that vote without coming back to Parliament. That's an absolute, hard rule. They come back with fairly healthy looking supplementary estimates at the end of it, and I like that idea.
A second question I look at is whether votes should be netted.
The answer, I think, is absolutely no. For the purposes of parliamentary control, the whole budget, the whole, one might say, intrusion of government into the economy, has to be looked at. Whole expenditures, as part of the total finances of the country, you can only get through a non-netted total budget.
There are other reasons too, but what I say here is that how government raises money and how government spends money are two quite separate and distinct matters. There's no logical reason that government programs should break even, let alone make a profit. Government is not a business. How it raises money poses one set of issues; how it spends money poses another and very different one. I believe in separating those as clearly as you can.
Should a distinction be made between capital and operating budgets? Once you make a distinction that way, I worry, because—again—a capital budget is going to relate present expenditures to future needs and expenditures, and vice versa, and again you get into far more complex accounting than I believe Parliament can keep control of.
Should the estimates be deemed to be passed by a given date? I do not like the process of deeming, which means that the votes are deemed to be passed whether they come out of committee or Parliament has approved them or not. But bearing in mind the capacity of parliamentary committees and Parliament itself to delay, procrastinate, and simply obstruct business, I think deeming is an essential part of the Canadian financial processes. It's unfortunate, but yes....
My final comment here is that I'm in favour of a budget speech being held on supply, rather than on ways and means as it now is. The estimates present a more complete picture of the government's intentions on how the government will affect individuals, families, and the nation generally than do matters of ways and means. The government's intentions expressed in expenditure proposals hold more significance for both Parliament and the public than do ways and means issues, and I would like to see it changed.
Another reason, which I didn't put in my written remarks, is that ways and means has a pretty well fixed date for the introduction of the estimates into the House of Commons. So we would have a pretty well established budget speech date and budget presentation if we went to that. That's a change I would like to see.