Government Operations Committee on April 23rd, 2012

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Your other point was about having more budget items in the main estimates. We would either have to introduce the budget earlier or push the start of the fiscal year later.

From your 15-plus years of experience here in Ottawa, what do you think would be easier to implement, and what would be the implications?

[Dr. David Good]

That's a tricky question. I think the best and most honest answer would come if the committee were to call as witnesses the Deputy Minister of Finance and the Secretary of the Treasury Board to ask that question. I think that will be important. I think officials from both those agencies should be looking at that issue.

One thing is clear. Given that budgets are multi-purpose documents, one of which is to manage the macroeconomic situation or economy, we know the importance to the Minister of Finance, to the government, and indeed to all Canadians of having some flexibility in when you can bring a budget down given the economic situation. So that has to be examined.

But I think there could be opportunities to either extend the start of the fiscal year, given the requirements that have been set out, or, clearly, to get a date on which the budget would come earlier. But there are many practical considerations that need to be looked at, including the time when Parliament would review things, the traditions of summer and what these mean in this country, and various other things. So those are things that need to be looked at as a way of doing it.

I think what's important is that we commit ourselves—and hopefully the government will do this, with Parliament's strong advocacy—to ensure that can find ways to include these budgetary items in the main estimates.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you.

I have less than a minute and have one last question about the issue of being deemed. As you know, if committees don't have the chance to review the information that's submitted, it just proceeds as normal and everything moves on. What's your thought about requiring that the documents be reviewed before they're considered deemed?

[Dr. David Good]

In an ideal world I think it would be better not to use this word “deemed”. I think deemed puts a bitter taste in people's mouths, a certain perception of losing things. On the other hand, Parliament needs to move on with its work.

I think if committees were to take a focused approach to the estimates, they could provide reports and should provide focused reports on one or two particular items in the estimates that they feel are important. That would be their report. We would not then have to deem it, and that report would be submitted before the deadline. Parliament would then be better served; I think it would be well served in that the committees would review those reports.

Secondly, if the Parliamentary Budget Officer were supporting these committees, I think he or she would be able to assist in connecting the dots, if you will, focusing on some of the key issues when Fisheries and Oceans, Defence, and HRSDC and various other departments and agencies come to committee.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you very much.

I appreciate your answers.

[The Chair, NDP, Pat Martin]

That is your time, thank you.

Thank you, Dr. Good.

Next, for the NDP, we have Pierre Dionne Labelle.

Pierre, you have five minutes.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Good afternoon, Mr. Good. I listened to you speak with great interest. You said that 113 recommendations had been made over the years to improve accessibility and consistency, and that none of them had been implemented. How do you explain the resistance to change? My colleague mentioned corporate resistance. Do you think there are also political factors at play in this resistance?

[Dr. David Good]

That's a very good and very difficult question. I think one has to look at the broader historical perspective. On the one hand, in modern budgeting there has been a diminished role for legislatures over a period of time. If we go back to the Magna Carta, back to the king, and see what's happened, we have seen a gradual reduction in the role of the legislature.

I think you're having Professor Schick, who is the international expert in this area, come to the committee in the future. It's a very good question to put to him. I think the role of Parliament has been smaller with regard to the actual analysis of the estimates, largely because it fundamentally cannot change what's in the estimates, save for a minority situation. I think that's had an impact on it.

I also think the budget has become the everything of government. The focus around the budget is enormous, and that has had an enormous impact on how the budgeting of public money has been perceived and I think the work of committees has gone somewhat unnoticed. I think if there were greater opportunity for some of the work of committees to be better noticed in the review of estimates, by focusing on one or two key areas, there might be greater opportunity to give more focus to it and, I hope, bring about some of the changes that are necessary.

The last point I would make is that Parliament has to present its position in a coherent way in its reports as well, and push forward with some determination and strength to deal with the issues that are there.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

I get the sense that when the Auditor General eventually informs us that program X or program Y is failing, it is usually too late. Midway through, the committee dealing with the department in charge of the program in question is not able to detect or see that the program is falling short. We are talking about reconfirming Parliament's role in budgetary oversight. But there is a flaw here. We don't have the tools we need to prevent these failings. Regardless of the government in power, this information always comes to light too late.

That was not a question. I would like to hear your thoughts on that. I would say you are quite bold in suggesting a non-partisan approach as far as the Parliamentary Budget Officer's role goes. You also mentioned tax expenditures; that's quite a bold suggestion on your part given the current majority government.

[Dr. David Good]

On the question of the Auditor General, we have a system where Parliament is involved in three areas when it comes to public money. One is before the fact, and that's in the finance committee, in its pre-budget consultations and discussions. That has worked very interestingly. In my view, ministers of finance have listened to what has been reported out of that committee and what has been done before the budget. It has had some indirect and subtle impact.

At the back end of the process we have the Auditor General. The Auditor General is a long-standing tradition in our country, a key part of parliamentary democracy in holding governments to account. We have a public accounts committee. All of that handles things after the fact.

The question is, as we see those dilemmas what do we learn and how does it get incorporated back into the system?

Squeezed between those two beginnings, the front and back bookends, is the estimates process, which approves and reviews the estimates and the business of supply. Your sentiment of trying to increase the learnings both from the front end of the process and the back end of the process particularly—back into the appropriations process—I think would be a very good idea. I support what you've said.

Just how that is done, I think, requires expertise and skill. I think some of my recommendations would indirectly help in that, including permanent membership on the committees, support from the Parliamentary Budget Officer, making sure budget items are included in the estimates, aligning the vote structure in a better way with the activity structure, and also ensuring that we handle expenditure reviews in a focused manner.

[The Chair, NDP, Pat Martin]

Thank you, Pierre. Thank you, Dr. Good.

Next, for the Conservatives, we have Mr. Bernard Trottier.

Bernard.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Thank you, Mr. Chair.

Thank you, Professor Good, for speaking with us today.

I want to talk about your recommendations. There have been other witnesses before this committee who have had some similar recommendations, and we could quibble about some of them.

The one I want to focus on is your last one about committees needing to develop more of a strategy for reviewing the budgets and the estimates. We had one witness here, John Williams in particular, who talked about the challenge of trying to be broad and shallow when it comes to looking at all of the estimates, versus going narrow and deep. Broad and shallow would be a high-level look at macro estimates, versus taking one or two departments and doing more of a dive and getting into things like departmental performance reports and reports on planning and priorities. I think you alluded to that.

I think it would be useful for parliamentarians to actually spend some time looking at the DPRs and the RPPs. I don't think many parliamentarians actually look at them, ever. They are available. They are all online. The public can help themselves. Parliamentarians can help themselves, but they tend not to. Unless you put a structure around it for parliamentarians to do a deeper investigation, you won't get some of those important questions coming out.

I want to get some further feedback from you. There are two scenarios that come up in my mind when it comes to wanting to compel parliamentarians to spend some time with the RPPs and the DPRs.

I suppose one scenario is that the government operations committee could be the committee appointed to spend the time looking at those things on a selective basis. With 87 departments and agencies, we can't do all of them in a given year, but we can certainly dive into some of them. I suppose another approach is to compel other committees, not just the government operations committee, to spend some time looking at the DPRs and RPPs—for example, the aboriginal and northern development committee looking at the DPRs and RPPs for that department.

Could you expand on your recommendation? How do you think that could actually work in a parliamentary process when it comes to reviewing those kinds of reports?

[Dr. David Good]

I think you need the committees and you need an “s” on the end of “committee”. One committee cannot do it all. The Government of Canada is so vast, so large, has so much expenditure, so much complexity, all of this can't be done.

One thing I've learned, having spent 30 years in government, was how differentiated the business of government really is. What they do in the Food Inspection Agency is very different from what goes on in Industry Canada, where they manage the spectrum; or what they do in Fisheries management and how that's handled; or in HRSDC and its disability payments. I think one needs a certain element of expertise and capacity. That's why I think support by the Parliamentary Budget Officer would be very helpful to those committees.

I think this committee can play a more horizontal role, can play a coordinating role, and can perhaps provide a bit more of an overview. But I think you need that specialized, in-depth examination.

By “in-depth” I mean focused. I don't mean looking at everything. I mean saying that in Fisheries and Oceans what we really want to focus on this year is capital acquisition with respect to the coast guard. I don't know what the issue is, but that's what I'm getting at. In the case of HRSDC, maybe it's really about disability. Maybe that's what one wants to look at. And you have to look at the tax expenditures and the direct expenditures.

It's about trying to get the committee to decide upon—and this is not easy, particularly in a parliamentary committee—what the focus is and what the one or two areas are that it really wants to focus on, and then getting the support to do that and then writing the report around those things. That may also not just have impact on these estimates, but I hope can have forward impact on future estimates as well, sending certain signals and certain messages as to where you see risk, where you see problems, and where you see greater opportunities in the future.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

It sounds as if you're saying that we should become even narrower than I was suggesting, and not just pick a department but take a few items within a department's area of responsibility and do a deep dive in those.

Is that a good way to paraphrase what you're saying?

[Dr. David Good]

I think it is, but it may also be the case that you want to supplement the process by having this committee, government operations and estimates, look at one or two departments, at something that maybe goes horizontally across them. For example, there's search and rescue.

I'm picking out these areas, not because I'm saying they need to be examined, but because I know they involve many departments. They run across several departments.

So that could be an important role that I think could be played by the government operations and estimates committee. It may be the case that in some areas you want to have this committee look at departmentally or across departments, but I think inside the other departments you want to take a narrow and very focused perspective on what the key issues are you want to look at, the issues where risk is involved.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Thank you very much.

[The Chair, NDP, Pat Martin]

Thank you, Dr. Good. Thank you, Bernard.

Next for the Liberals, we John McCallum for five minutes.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, and thank you very much, Professor Good.

I'd like to go back to this issue that's come up about the timing of the budget and the estimates. Many witnesses have recommended that this timing be aligned, let's say, by doing the budget a few months earlier. I don't think I've heard any good reason to the contrary, why this would be a bad thing to do, other than that it would disturb long-standing tradition.

My first question is, are there any true counter-arguments? Let's suppose there are not. So my second question is, why has it been talked about all these years and never happened? One can think of bureaucratic resistance. Would it be Finance officials resisting giving information to their Treasury Board brethren in advance, or would Treasury Board be concerned?

Finally, at the political level, I think especially when it's a budget of cuts, politically government might resist giving out the details in a timely fashion because if they give out the details a year from now, everyone will have moved on. I think in your opening statement you regretted the fact that the budget information would not be included in the May documents, so maybe there's a political motivation for that as well.

I know that's more than one question, but I'd appreciate your views.

[Dr. David Good]

Thank you.

You had a lot of experience in dealing with these matters.

On the political side, I think there is a broader concern one needs to be sensitive to. I'll call it the politico-economic one, and that is the business cycle and the sensitivity of being able to bring down a budget when it's needed or of making an economic statement that is perhaps more than just an economic update, because of the trends.

If you go back and look at the dates of budgets since the Second World War, you see a huge change, a huge variation, in those dates. There have been fall budgets, spring budgets, and summer budgets. There's a whole series of them. I think there is a legitimate need for some kind of flexibility.

Now, that doesn't mean you can't establish a budget date by bringing it forward. Say you had an earlier budget because there was a requirement that you have it in December or November or something like that. I think that's certainly a possibility. Alternatively, change the fiscal year and push it back further, as the Americans have done. Their fiscal year I think starts November 1, if I'm not mistaken. I stand to be corrected on that. But it has been pushed back over the years. Those are other options that need to be considered.

I think, though, in the end there is also a need for very good cooperation between the Minister of Finance and the President of the Treasury Board and a clear understanding that the concept of budget secrecy is quite different today from what it used to be. As you well know, it was put in place because of tax advantages that could take place. The reality is that the budget deals with so much of government, well beyond taxation, I think that argument is less significant.

I think making sure that Treasury Board officials are plugged in and working with Finance is very important, particularly when you get into areas where Finance has less expertise, and that's in the operations of government. In fact, the areas that have recently been cut, the $75 billion target of the strategic and operating reviews, really fall under the bailiwick of the Treasury Board as opposed to the Department of Finance, inasmuch as those are the operations of government where Treasury Board's expertise lies. Finance needs Treasury Board to figure out how that money works and how it operates and how it's to be presented. That cooperation is extremely important at the centre of government.

Departments, of course, know more than most people, because they are there. But I think linking that together with Finance and Treasury Board officials will be very important if they are to do what you're proposing.

[John McCallum, Liberal, Markham—Unionville, ON]

On the question of the Parliamentary Budget Officer, I certainly agree with you that he should be a full officer of Parliament.

You made one point I hadn't heard before, that if he were a full officer of Parliament, he'd have greater access to information. Would he have some sort of statutory ability to get the information he lacks today?

[Dr. David Good]

Right now he has no statutory power to get information, as I understand it. If one were to amend the act and look at his being a full agent of Parliament, it's not inconceivable that one could also consider greater access, through statute, for the Parliamentary Budget Officer, as is the case for other agents of Parliament.

[John McCallum, Liberal, Markham—Unionville, ON]

I think that's a very good idea, but it's probably about the last thing this government would want to do.

Thank you.

[Dr. David Good]

I won't comment on the last question.

[John McCallum, Liberal, Markham—Unionville, ON]

It was just a statement.

[The Chair, NDP, Pat Martin]

We didn't expect you to.

Thank you very much. We can let Mr. Braid comment on it if he likes.

Mr. Braid, you have five minutes.