Thank you Mr. Chairman.
I don't propose to go through my opening remarks, per se, but instead will summarize them and hopefully within the next five minutes.
At one time, when I was working at the Department of Finance back in the early 1980s, the estimates were a fundamental input in setting the expenditure framework contained in the budget. Officials from the Department of Finance and from the Treasury Board Secretariat would spend weeks compiling the individual expenditure forecasts for the departments and agencies, and then roll them up into an envelope-type of system, which then would form the basis of the direct program spending that was contained in the budget.
However, the budget and the audited financial statements, which sort of relay how well the budget did, evolved over time. All activities controlled by the government are included, cash accounting was replaced by accrual accounting, and the expense figures and revenues are presented now on a gross basis, rather than a net basis.
The estimates, however, have remained relatively static. Today, the estimates are largely irrelevant for budget planning. I believe that the budget should be the anchor for the estimates. The estimates should be put on the same basis as the budget and the audited financial statements, and they should be tabled after the budget.
Under the current supply processes, and with the fiscal year beginning on April 1, this would require that the budget be tabled no later than the middle of February.
Until recently, this was the practice, primarily based on a discussion paper that was released by the department in 1984. At that time we had the budget, we had a borrowing authority bill, we had projections of expenditures to the provinces, and we had the estimates. The budget sort of formed the basis for those three types of information, the estimates, the borrowing authority bill, and the transfers to the provinces.
Of course today, we don't have a borrowing authority bill anymore, so that reduces some of the importance of that linkage.
Tabling the budget before the estimates would mean that the estimates would be more in line with the budget. Reports on plans and priorities should be tabled with the estimates, incorporating the impact of the initiatives proposed in the budget. If that's impossible to do, there should at least be a full reconciliation of those things that were included in the budget but not included in the estimates.
Parliamentarians would then have a much more comprehensive picture on proposed spending by department for the upcoming year. Based on current reports, detailed information on the impact of the spending cuts proposed in budget 2012 will not be fully available until some time in 2013, and the reports on plans and priorities, which normally should have been tabled shortly after the estimates are now not expected until some time in May, and will not incorporate these changes.
One has to ask themselves, what is the use of the reports on plans and priorities, especially in this round?
There should also, as I mentioned, be a detailed reconciliation between the budget and the estimates. They will never be on the same basis. There will always be some differences, but there should be a full reconciliation of that difference. The last time there was a reconciliation between the budget and the estimates was in budget 2007, whereby the expenditure numbers, the expense numbers in the budget, were fully reconciled to the expenditure numbers in the main estimates.
We haven't seen that since.
If the estimates are to remain as is, then I believe they should be tabled much earlier in the process, say, for example, November. There is no reason why not, if they're not going to be tabled, or they're not going to be based on the budget estimates, and they're not going to be consistent with the budget accounting on a conceptual basis.
In that time, that would give parliamentarians much more time to assess the estimates and get them passed before April 1.
The estimates, in my view, then should only contain voted expenditures. Statutory expenditures should not be included. They're not being voted on. They're good for information purposes, but at the end of the day parliamentarians do not spend a lot of time on statutory programs unless there are proposed changes to those statutory programs, as we saw in budget 2012.
Statutory programs need a basis to be included anywhere. They need an economic context and unless you're tabling with the budget, I see no reason why these estimates should contain statutory spending.
With respect to the Parliamentary Budget Office, I believe it should be made an agent of Parliament, as it was originally promised, with increased resources and much more access to information.
Now, last week the PBO published a report entitled “Budget and Expenditure Reporting to Parliament: Strengthening Transparency and Oversight in an Era of Fiscal Consolidation”. I would recommend that this committee seriously consider the recommendations in that report.
I think it does go a long way to help focus what type of information should be obtained and how that information could be used.
That concludes my opening remarks. I would be pleased to answer questions the committee may have.
Thank you, Mr. Chairman.