Government Operations Committee on April 2nd, 2012

[Robert Marleau]

I was referring to the parliamentary session. By parliamentary session, I mean that period between the call letters and the prorogation, but without whip interference.

[The Chair, NDP, Pat Martin]

I see.

[Robert Marleau]

As parliamentarians, there are various levels of seniority and expertise. You may want to get on with part of your life doing something else than appropriations for a full five years. There would be a chance for some membership rotation in those windows, but the chair should be there for the full five years, as should the vice-chair.

[The Chair, NDP, Pat Martin]

Thank you very much, Mr. Marleau.

We found it very interesting. We may even wish to call you back as we go further in our study.

[Robert Marleau]

Oh my.

[The Chair, NDP, Pat Martin]

It's very helpful. Thank you for being here.

[Robert Marleau]

I'll do whatever I can, Mr. Chair.

Thank you for listening to me. I apologize for being a little winded on some of the answers.

[The Chair, NDP, Pat Martin]

Not at all. They were very helpful and useful. Thank you.

We're going to suspend while we change up our witnesses.

[The Chair, NDP, Pat Martin]

We will reconvene our meeting, the 37th meeting of the government operations committee on the study of estimates and supply.

Now we're very pleased to welcome a former colleague and former chair of the public accounts committee, the chief executive officer of the Global Organization of Parliamentarians Against Corruption, and someone who is well-known to all of us and has a great wealth of experience on this subject, Mr. John Williams.

You're very welcome here, John. You have the floor for as long as you see fit, and then we'll open it up to questions.

[John Williams, Chief Executive Officer, Global Organization of Parliamentarians Against Corruption, As an Individual]

Thank you very much, Mr. Chair.

My congratulations to you. It's nice that we've worked together in public accounts, and it's nice to see you sitting there as chair.

[The Chair, NDP, Pat Martin]

Thank you.

[John Williams]

Mr. Chairman, I thank you for the invitation to appear before the Standing Committee on Government Operations and Estimates today to present on the estimates process by which Parliament reviews the estimates, or funds, requested by the government.

It is an honour for me to be here. This is the nation’s House, where the nation’s business is transacted, and it is a pleasure to be invited to appear before you.

In a democracy, the people have every right to expect that their taxes are used in a manner that is acceptable to the people. The House of Commons has the responsibility to represent the wishes and desires of the people and to ensure, by way of approval of the estimates, that government spending is prudent and in the best interests of the people. Since nothing happens without spending, it makes the approval of the business of supply the most important role of the House of Commons.

Control of the public purse by Parliament has its origins in the Magna Carta signed by King John in 1215, when the king agreed to accept the “common counsel of our realm” when levying and assessing an aid or a scutage—scutage being what we call taxes today. Parliament has had control of the public purse down through the ages, and it's still very much at the core of our democratic government.

Today, Standing Order 80 clearly indicates that the House of Commons still retains that authority by stating: “All aids and supplies granted to the Sovereign by the Parliament of Canada are the sole gift of the House of Commons”.

That puts it in perspective, Mr. Chairman. The government has no money except that which is given by the House of Commons.

For the fiscal year ended March 31, 2011, according to the financial statements audited by the Auditor General, the government spent $270.5 billion dollars, granted by the House of Commons by way of approval of supply.

That volume of spending poses a quandary for the members of Parliament. Given that amount and the complexity of proposed spending by the government, how are members supposed to be able to scrutinize it properly? If you want to look at the detail, the mountain of paper would be so big that you would not know where to start. If you want a manageable amount of paper, the overview contains so little detail that there are no apparent questions to ask.

In addition to that, of course, the government considers the estimates to be a matter of confidence. What backbencher wants to carry the responsibility of triggering an election?

It doesn't stop there. Let us suppose that a parliamentary committee recommended a reduction in the estimates. First, it can only be debated and voted on a supply day. Should it pass and the estimates be reduced, the government could consider it a loss of confidence and trigger an election.

However, even without a supply day vote, a reduction recommended by a committee would cause the President of the Treasury Board to introduce a motion to restore or reinstate the original amount if the proposed reduction was not acceptable to the government. The vote on the motion to restore or reinstate the government’s request for funds is a vote on an opposed item, and the adoption of this motion overrides the committee’s recommended reduction, which means nothing will happen.

In June 1995, the Standing Committee on Procedure and House Affairs created a subcommittee on the business of supply, and I was privileged to sit on that committee. The report, of which I believe you all have copies, is I think the best and most comprehensive report on the business of supply in Canada in modern times.

I would like, Mr. Chairman, to acknowledge Mr. Brian O’Neal of the Library of Parliament, who was the principal researcher for the subcommittee and whose great work contributed immensely to the quality of the report.

In addition to placing the business of supply in an historical perspective, the recommendations of the report can be broken down into six areas: one, the creation of an estimates committee with overarching authority on the business of supply; two, the confidence convention and the business of supply; three, granting committees the capacity to reallocate up to 5% within the department under review; four, long-term cyclical reviews of statutory spending, which we call program spending; five, review of crown corporations that do not report through a minister; and six, a review of tax expenditures and loan guarantees.

The subcommittee, Mr. Chairman, reported back to the Standing Committee on Procedure and House Affairs with this report, which was adopted by the Standing Committee on Procedure and House Affairs in late 1996 or early 1997. The report was subsequently tabled in the House of Commons, but the House was dissolved for an election in April 1997 and the report died on the order paper. I was unable to have it resurrected by the Standing Committee on Procedure and House Affairs in the subsequent Parliament, therefore I tabled a private member’s motion to adopt the report.

The private member’s motion was adopted by the House, but since the subcommittee report had not been tabled in that Parliament, the motion was advisory rather than an order of the House, and no action was taken.

However, if you look at Standing Order 108(3)(c), you will see that the first recommendation of the subcommittee—that there be an estimates committee—has already taken place. That is why you are here today sitting as the government operations and estimates committee.

I believe it was in 2002 when I became aware there were to be changes to the committee mandates. I therefore lobbied for the creation of the estimates committee with a mandate according to the subcommittee report, and here you are.

If you study the mandate of the estimates committee in Standing Order 108(3)(c), you will see that it is virtually identical to recommendations of the subcommittee, so that part of the work has been done. As far as I am aware, however, the estimates committee has yet to make full use of the mandate in the Standing Orders to pick up on the business of supply or examine government spending that is outside the estimates. I believe that approximately 30% of total government spending is voted on through the estimates. The rest is statutory expenditures authorized as program spending in legislation by the House of Commons.

With the new mandate, the estimates committee can now look and examine spending right across government. You will find in the subcommittee report—recommendations 35 to 39—a proposal for the estimates committee to examine statutory spending on a cyclical basis using the concept of program evaluation. All government programs should be evaluated at least once every ten years to: one, articulate the public policy objectives of the statutory program; two, decide whether or not these objectives are being met; three, whether or not the program is being effectively managed; and four, whether there are alternative means of meeting the same policy objectives.

These points are virtually identical to a private member’s bill that I had on the order paper for a number of years, which never made it to the House for debate. The point is that the estimates committee now has the authority under Standing Order 108(3)(c)(x) to examine statutory expenditures. To do so, it can ask the House to request that the government conduct program evaluations as outlined above to assist the committee in its work.

The estimates committee can also look at loan guarantees and tax expenditures that do not show up anywhere in the financial statements, and crown corporations that do not report to any other committee. These can represent huge sums of money and important public policy; therefore, the House needs some way to scrutinize them. That is the role of the estimates committee. The Public Service Commission, which is independent of government and therefore cannot report to the House through a minister, now reports directly to the House and is referred to the estimates committee.

The big item is the consideration of the estimates by Parliament. The most important function of Parliament—control of the public purse—is not even given a perfunctory examination. Many members of Parliament don’t understand the process, and therefore stay with more politically rewarding agendas. The big problems are how do you understand this mountain of paper; and if you did understand the paperwork and wanted to make a change, the Standing Orders and the confidence convention prevent you from doing so. Based on the premise that there is no gain for the pain, the estimates are left untouched and a mystery to many. Supply days are for political football with never a mention of supply.

When I arrived here in 1993, the last supply day in June used to be a full-day debate on the estimates, but even that was changed so that the debate on the estimates does not start until 6:30 p.m. and finishes at 10 o'clock. That's $270.5 billion dollars fully considered in three and a half hours. Pretty soon the House will be examining the estimates at the rate of $100 billion per hour, which really is a sad reflection on the state of our democracy.

If you read the report carefully, you will find that the subcommittee suggests a methodology by which House of Commons committees can recommend a reallocation of up to 5% within a department, and even reductions in the estimates without triggering the confidence convention. The report sets out a clear timetable for consideration of the estimates by the committees, and if a House committee recommends a change or a reduction, they must give their reasons for doing so. In response, the President of the Treasury Board can either accept or reject the committee's proposals.

If the Treasury Board accepts the committee's proposals, a modified royal recommendation can be tabled. However, if the committee recommendation is rejected, reasons must be given. This should lead to a reasoned debate in the House when the estimates are debated. It would be nice, of course, Mr. Chairman, if the Standing Orders were changed to allow more than three and a half hours of debate in the House.

Regardless of the issue, if you change the motivators, you will change the results. Supply days have become political, because MPs cannot change the endgame. If you allowed a process whereby estimates could be reduced, then I would hope that MPs would take the estimates more seriously and would hold a number of serious meetings on the issue with senior department officials.

Now, Mr. Chair, if I can change the topic slightly, I will talk about the plans and priorities documents themselves.

I sat on a committee that revamped the old part III documents into the plans and priorities documents, which presented the proposed spending for the coming year within future projections going out three years. This was something new.

The committee also recommended the introduction of departmental performance reports, tabled by the government in the fall. These two documents, plans and priorities in the spring, which are forward-looking, and the departmental performance reports, the DPRs, in the fall, which report past experience, should present the information in a similar manner, the plans and priorities having three years going forward and the DPRs having three years of historical information.

Unfortunately, Mr. Chairman, I saw these DPRs being what I called self-serving fluff, without real substance. I therefore wanted two DPRs selected at random each year for audit by the Auditor General. This way, we would know if the DPRs were really telling the story within the departments.

The Auditor General tabled a report in Parliament in 2007, I believe, explaining the methodology by which DPRs could be audited. Since I have been gone for a few years, I am not sure if the Auditor General has, in fact, audited some of these DPRs.

Mr. Chairman, the government operations and estimates committee has a wide-ranging mandate, and I hope this committee will utilize that mandate fully to make the examination of the estimates by Parliament a meaningful exercise.

It is why Parliament came into being, and control of the public purse remains its most important function.

I thank you, Mr. Chair.

[The Chair, NDP, Pat Martin]

Thank you very much, Mr. Williams. We asked you here as a witness exactly because of your deep and long experience with the subject. I am well aware that you were the co-author, I believe, of the reports with Catterall.

[John Williams]

That's correct.

[The Chair, NDP, Pat Martin]

We're certainly using that as a starting point. Rest assured that the recommendations from 1995—although they didn't really get in until the 1998 study—and the 2003 study both formed the basis of where we're going with this project.

We're quite sincere about having firm, legitimate recommendations that will be, I hope, adopted.

We're going to go right to questions, then.

We have Alexandre Boulerice for the NDP.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chair.

Mr. Williams, thank you for your knowledgeable presentation. We are hearing from some outstanding witnesses today.

I also appreciated this overview of the signing of the Magna Carta, which led to the creation of parliamentarism. That's also a reminder that Parliament was created to do what we are no longer able to do today. I'm talking about the auditing of expenditures. My questions for you will be very similar to the ones I put to previous witnesses.

Since you represent an international organization, I will take advantage of your knowledge to ask you this. Can we find comfort in comparing ourselves to others, or is Canada cutting a sorry figure, on the international stage, when it comes to parliamentarians' capacity to audit and control the federal government's expenditures?

[John Williams]

I have two things in response, Mr. Chair.

As you know, Canada is a beacon for the world, and long may it continue to be a beacon for the world as far as democracy is concerned. Also, in many ways, when you look closely, it's perhaps not as vibrant and robust a year as it should be.

Parliament has the authority. Have no doubt that Parliament is the supreme institution of the land, if you want it to be that way. Therefore, there is nothing outside your capacity if you, collectively, as a Parliament, decide to do this.

You have the power, collectively, if you use it.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

It makes me think of somebody saying not to let anybody tell you that you can't do that—I like the spirit.

There is some skepticism—if not pessimism—when it comes to the outcome of the study we are currently conducting. It is an important study, but it is not the first of its kind. You are familiar with the 1998 study—the recommendations that came to nothing—and the 2003 study, which does not appear to have changed the system.

We are under the impression that, even if we came to a unanimous agreement—which happens sometimes, but not very often—if the executive branch is not willing to change things and wants to maintain control.... When something is shrouded in much mystery, parliamentarians have little power and, in the end, the government has practically all the weapons on its side. Even if we agreed and produced a nice unanimous report, if the Office of the Prime Minister blocked....

What do you think is needed to really bring about some positive changes?

[John Williams]

I would like to see the estimates committee, first of all, collectively study the mandate you now have in the Standing Orders under 108(3)(c), which is wide-ranging and virtually limitless. You can look at everything the government spends. You do not really need a change in the Standing Orders.

Then don't get caught up in this confidence convention. Program spending is now within your mandate.

Mr. Marleau, the previous witness, said to set out a five-year plan. The business of supply report said not a five-year plan but decide if you're going to look at any specific program of spending the government does. Then you can ask through the House that an evaluation be done by the experts. The Parliamentary Budget Office has now appeared on the scene since this report was written.

There is a discipline called program evaluation that can give you a report of something of this magnitude on a particular program, asking four questions. One, what is the mission this program is designed to achieve within the country? Two, is it performing and fulfilling that mandate? Three, it is doing it efficiently and well? Four, is there a better way to do the same things? These are simple, fundamental questions that are long ranging in their application and do not invoke confidence. If you can get the professionals, the program evaluators, to give you a report of this magnitude on a program, you as a Parliament can now become engaged and make recommendations to the government that it would listen to going forward. Therefore, you can be very effective, in my opinion, if you act as a collegial committee moving forward in examining pieces of government spending in detail.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you.

[The Chair, NDP, Pat Martin]

You've got about 30 seconds, if you like.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

As we have some time, I would like you to talk about problems caused by the very long and somewhat absurd cycle of spending authorization.

Owing to that cycle, when we study the main estimates, we cannot compare that document with anything, since supplementary estimates (A), (B) and (C) have not been published yet, and there is also no connection with the budget document—the budget—put forward by the Minister of Finance. We study the main estimates, but we cannot compare that document with anything else. It's a bit like comparing apples and oranges. It is a difficult process.

[John Williams]

Don't get caught up with the budget. I agree with Mr. Marleau. It's a separate document, a policy document.

But the plans and priorities now give you three years going on, so that you get this year's proposed spending in context. I made mention in my statement that the departmental performance reports, which are the historical reporting against the budget with three years of historical information, should be comparable to the plans and priorities—one saying where they were going and the other one saying if they actually went where they said they were going. I called these departmental performance reports self-serving fluff, which is why the Office of the Auditor General developed a methodology for auditing them to ensure it gives Parliament the information it needs.

So you have six years of forward and retrospective numbers. This gives you the capacity to make the analysis in order to ensure the programs are effective. Coupled with program evaluation, I think it can be done if you work collegially as a committee.

[The Chair, NDP, Pat Martin]

Thank you, Alexandre.

Next is Kelly Block for the Conservatives.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

I also want to thank you for being with us today, Mr. Williams. I've appreciated your presentation as well as the presentation just before you. I know you were here for part of it.

You were a member of Parliament for 15 years, and you served as the chair of the public accounts committee as well as being—I think you mentioned—a member of the subcommittee on the business of supply of the Standing Committee on Procedure and House Affairs.

I want to pick up on one of the last statements you made in response to my colleague's question. You said, “if you work collegially as a committee”. Recently we heard from a former member of Parliament, Joe Jordan, that the estimates process is a terrible partisan mechanism for trying to embarrass the government, especially when ministers come to committee to present their estimates.

Throughout this study we've come to understand that we're in a partisan environment. You yourself said there's no gain for the pain when it comes to doing the work we need to do.

How do we change that culture?