Government Operations Committee on May 7th, 2012

[The Chair, NDP, Pat Martin]

We can take five minutes at the end of next meeting.

Okay. Agreed.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

The longer we put it off, the more they can say they're unavailable.

[The Chair, NDP, Pat Martin]

Mr. Thomas, can you hear us?

[Prof. Paul Thomas, Professor Emeritus, Political Studies, University of Manitoba, As an Individual]

Yes, I can, Mr. Martin.

[The Chair, NDP, Pat Martin]

Welcome, Paul. It's a pleasure for you to join us here today. This is a real day for getting some prairie sensibilities. We just had representatives from the Legislative Assembly of Alberta and now we're consulting Professor Emeritus Paul Thomas from the University of Manitoba.

Or are you still teaching?

[Prof. Paul Thomas]

I'm retired officially and doing lots of things, so I haven't stopped dead in my tracks.

[The Chair, NDP, Pat Martin]

I understand. Well, you're very welcome here and thank you for taking the time to be with us today as we undertake this study as to how to provide more scrutiny and oversight of matters of supply.

We note that you have studied this and have written extensively over the years and made recommendations. We very much welcome your comments today and then, of course, the opportunity for us to ask some questions as well.

Why don't I just give you the floor and ask you to take as much time as you need to introduce the subject and we'll get under way. You have the floor, sir.

[Prof. Paul Thomas]

Thank you very much.

It's a real privilege to be here. I welcome this opportunity to share some of my opinions that go back to the days of being a parliamentary intern in '72, which I should hasten to add was 1972, not 1872. So it's good to be here.

I've given the committee a short submission consisting of two parts: a diagnosis and a prescription. I've given your crack committee staff a longer, more academic paper on the Australian supply and estimates process, because I know that you've been listening to witnesses from other jurisdictions.

I intend to be very brief in these opening remarks and leave the maximum amount of time for questions and discussion with the committee members. I look forward to that very much.

I begin my submission with the observation that there has never been a golden era when Parliament was effective in examining the spending proposals of government in any systematic, comprehensive, and in-depth manner. The fact is that Canada's Parliament is not exceptional in that regard. Legislatures around the world find it difficult to cope with the complexities of modern public finance and using the estimates process to hold the political executive and the permanent bureaucracy accountable for spending to ensure they spend in ways that add value to Canadian society.

The exception to that general problem of legislatures coping with public finance matters is the U.S. Congress. In my submission I say to be careful what you wish for, because Congress has its own problems in ensuring that public finances are well managed.

The deficiencies in Canada's estimates process are caused by a number of factors. I'll briefly list them in a general way, and if you wish, I can go back and offer more detailed comments on each broad set of factors.

The first set is constitutional and legal factors, and this is familiar to committee members. All spending must originate with the crown making spending proposals based on the recommendations of responsible ministers. The passage of the estimates is seen to be a confidence convention. There are a number of other sort of conventions and rules that are constitutional and legal in nature.

The second source of limits for the parliamentary estimates process is procedural limits. For example, committees cannot change votes except to eliminate or reduce them. They can't add to spending. There were rules in the past, which I think no longer apply, that committees shouldn't make substantive recommendations, and should limit themselves to comments and actions or proposals related to the estimates themselves so there are procedural limits.

There is the factor of time. There is a short time period between the tabling of the estimates and May 30, when they have to be reported back to the House, so the committees have to rush through the estimates if they propose to examine them in any way. Most of the estimates are deemed to be reported upon when the deadline arrives.

A fourth factor is informational and formatting issues around the presentation of financial information. You can't really say that you lack for information, because a mountain of information is tabled in Parliament annually. There is a virtual alphabet soup of documents presented to you, whether we're talking about reports on plans and priorities, departmental performance reports, MAF reports, audit reports—the list goes on and on. You have not only multiple documents, but also multiple departments and agencies.

There are informational and format questions that give rise to problems, because most of these documents, frankly, go unread. Somebody needs to do a cost-effectiveness analysis on producing all of this information, at least for purposes of external accountability. One of the problems is that many of those documents are produced by bureaucrats for fellow bureaucrats inside the government.

I think the biggest source of problems is my fifth one, and that's the political, cultural, and attitudinal problems or factors. A fundamental fact of Parliament is that it's dominated by competitive, disciplined political parties, and reforms that ignore or seek to stifle partisanship are bound to have limited success in my view.

I say in my document that fixing the supply process is not mainly about finding the right rules for how estimates will be voted, the optimal number of committees, the appropriate staffing for such committees, and the best formats for presenting evidence to such committees. These things matter, but only at the margin. What is more important is a bargain that recognizes the divergent interests of the competitive parties represented in Parliament.

It seems to me that one of the things we have to look at more seriously is how to create the right set of incentives and disincentives to motivate more MPs to take their financial duties seriously. I talk about the way in which government and opposition MPs, the leadership of parties, and backbenchers in parties have different incentives to take this process seriously.

Most MPs see the work on estimates as an exercise in futility. They feel they can't change anything. Even in minority parliaments when your committee for example, the operations and estimates committee, has changed estimates, either for the Governor General or the Privy Council Office, it's usually been a symbolic victory and not one that is attempted very often. MPs also, it should be noted, tend to favour restraint in the abstract, and when it comes to their own constituencies, they are usually advocates for additional spending.

That's a summary of the diagnosis I offer.

The prescription is that I think you might be better off looking at a relatively large joint committee, a standing joint committee of the House of Commons and the Senate, and give it a title of something like “Government Finances and Public Administration” so that it's broader than the estimates in many ways. The committee could be perhaps 40 members. It might have a balance between a larger number of MPs and a smaller number of senators, recognizing that the House of Commons, at this stage at least, is the body that holds government responsible, in the sense that it can defeat governments if it so feels.

The mandate of this committee should be to examine government spending on a cyclical basis, perhaps over a five-year span, and in each year take a number of major departments and agencies and examine not only their spending but also performance reports and administrative issues that have surfaced from bodies like the Office of the Auditor General and so on. Rather than focus on the details of estimates, the committee would focus on the evidence of the success of policies and programs in delivering value to Canadian taxpayers.

The membership of this committee should be relatively permanent. There's too much mobility on the committees. MPs, particularly, need to settle into a committee. It would give them the opportunity to acquire the knowledge they need to understand government finances better. It would also allow the committee to plan its program of study and investigation over a number of years. Adding senators, I think, would be useful because senators [Inaudible--Editor]...at least until Mr. Harper gets his wish and has an elected Senate. The partisanship in Senate committees tends to be somewhat more muted than in House of Commons committees.

In the submission I recommend that staff support to the committee be provided by the Parliamentary Budget Office, which I note was launched on the basis of an unclear mandate. It was given an inappropriate organizational home in the Library of Parliament and, shortly after its creation, was drawn into the swirl of successive minority governments and nonstop campaigning within Parliament. All of this made the office and its leader, Kevin Page, the subject of controversy. He's a person with very strong opinions, obviously.

One thing that Mr. Page told a student of mine, who did a master's on the evolution of the Parliamentary Budget Office, is that his office had not done a very good job in assisting committees with examining the estimates. I think the office should create a designated division simply to serve the new joint committee that I'm recommending. This committee would then become the parliamentary home for the Parliamentary Budget Office. It's the committee to which the PBO would answer in explaining what it proposes to study and in submitting its own budgetary requirements on an annual basis.

I think the joint committee might divide itself, depending on how many members it has, into a number of smaller subcommittees and, over time, those subcommittees would develop specialized knowledge in the various domains of public policy.

You would really use your activities of studying to influence longer-range thinking of government. I say in my submission that there's nothing really all that magical about the lapse of 12 months in terms of government spending. Most government spending is done over multi-year horizons, and Parliament needs to become aligned with that sort of orientation.

To promote the cultural and attitudinal change I talked about would require endorsement by leaders of the parties represented in the House of Commons and Senate. You want to reduce the amount of partisan gamesmanship that goes on in this committee and allow MPs and senators on this joint committee to relate more to the evidence and to engage in a search for greater efficiency, effectiveness, and equity in public spending. My hope would be that this would be launched with the endorsement of all party leaders.

There's no guarantee that you'll bring about this cultural and attitudinal change. I supported the work done by the McGraw committee back in 1985 and the work done in 2003 when the late Ron Duhamel was involved in the reform of the supply process, and we had a debate about whether structural and procedural change produced attitudinal changes, or whether that relationship is reversed and attitudinal and cultural changes have to precede structural and procedural changes.

I think it's a bit of both, but unless the party leaders get on board and say they're prepared to allow their MPs to work with a minimum amount of partisanship, this won't work. Individual MPs and senators will have to recognize that this is a job for which there's not a lot of publicity and a lot of glamour. It's about contributing to sounder, better-quality government and getting value for tax money.

We know that the public respect for Parliament and its members is low. The esteem in which the institution is held is not as high as it used to be, and we have to get away from political gamesmanship and spend more time constructively inquiring about what works and what doesn't work.

Those are my opening comments, Mr. Chair. I'd be pleased to respond to questions and comments.

[The Chair, NDP, Pat Martin]

Thank you very much, Professor Thomas. You have given us a lot to think about, and I'm sure we'll have many questions for you.

First, for the NDP, the official opposition, we have Linda Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair.

Thank you, Dr. Thomas.

I have to say, and I would probably be speaking for my party, that I don't think I'm very excited about your proposal to have the Senate there.

If you're talking about equal members and so forth, obviously there is going to be a disproportionate number of members from some parties and not from others. I find it odd that the Senate would be there, being a non-elected body, talking about this process of the passage of budgets and estimates in the House of Commons. I find that a little odd.

You're not the first to suggest that there should be continuity in this kind of committee—or super-committee, as Mr. Wallace suggested a while back. The problem is that it's out of our hands; at least, for four years it could be. But we can't guarantee that the members who are appointed will be around in the next election. Maybe you have to pick all young members. I don't know.

So it's a nice theory, but fortunately our processes continue to be democratic, and so long as they are, this is a bit of an anomaly.

I'd certainly have to agree with you, Dr. Thomas, that this is an area that takes a while to grasp. It would be helpful—and you would want—to pick people who really liked this kind of dialogue, going after the theory of better management of finances and so forth and not the niggly department-to-department matters.

I saw a bit of a contradiction in your comments about parliamentary budget officers, and I was encouraged by your comments today. In your article, which you kindly provided or our researchers found, “Parliamentary Scrutiny and Redress of Grievances”, which was very interesting, you seem to have a lot more cynicism about all of these advisory bodies established under the Accountability Act.

Could you elaborate a bit more? Do you see value in, for example, the office of the Parliamentary Budget Officer?

[Prof. Paul Thomas]

Let me just comment on the first two points.

The Senate does very useful work and I'm not one of those who say that the Senate is a completely useless institution. Most of its good work happens in committees, and in a book edited by Senator Joyal I make a case for the role that committees play in providing scrutiny of ongoing policies and programs. I think the Senate is a bit of an anachronism, being unelected, but the Senate is there. We pay for the Senate. We might as well get some value out of it. A body like the Senate national finance committee does good work. That's why I included them. It's hard, even in a House that's growing to 330 members, to find enough MPs interested in the dull, grinding work of understanding government finances to create a mega-super-committee with MPs alone.

As to the movement of MPs, you're right. We have to respect democracy, and we have a very high turnover, one of the highest of all western legislatures. About 45%, I think, are freshmen MPs after each election. So we lose a number of members who are building up experience, but the MPs add to that problem by moving around committees. At least, they used to do that a lot.

On the role of officers of Parliament, agents of Parliament, I think the document you're quoting from was actually a speech. I was entitled to be theatrical and be provocative, and that was my intention. But the PBO is there. I think if there is going to be a parliamentary budget officer, you have to find the right balance between giving him independence and giving him accountability, and you have to make him serve the committee rather than have the committee serve him. Sometimes rollovers will happen in the public accounts committee where the Auditor General, just by the force of his or her expertise and the depth of his or her capacity, can lead the committee down certain paths, and the committee doesn't do as much as it might to set its own agenda.

So I think the PBO needs to be put at the disposal of members of Parliament, and that's why I suggested it needs a place where it can come and answer for its budget on an annual basis. These people can develop into superheroes in their own minds. They get to point out the problems in government, and given a government the size of the Government of Canada, there will always be problems. So from the sidelines they can self-righteously criticize people in government for things that go wrong. But I think they have to answer for the judgments they make and do that in front of the elected representatives.

So I'm not entirely cynical. There was another committee on the past, present, and future of officers of Parliament where I set forth five structural conditions meant to ensure the right balance between independence and accountability.

[The Chair, NDP, Pat Martin]

That uses up your time, Linda.

Thank you very much, Professor Thomas.

Next for the Conservatives, we have Kelly Block.

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

Thank you very much, Mr. Chair. I'm not sure that I'm going to use up my whole five minutes, but I know that I have colleagues who probably have some questions as well.

Welcome to our committee. This has certainly been a very interesting study and many of your observations have been made by others as well. So I think we're going to have a lot to talk about as we begin to look at the recommendations we're going to want to bring forward in regard to where we should go after this study is done.

You have observed, as other witnesses have, that we need to find a way to reduce the level of partisanship at a committee charged with this type of work. There may be some reluctance to include senators, whose participation you mentioned as one way of dialing down the partisanship. Barring that, though, what other ways would you suggest we could use to change the culture of partisanship on a committee like this?

[Prof. Paul Thomas]

It's very difficult. It's not like an organizational culture within an institution.

Parliament, as I say in my submission, doesn't really have a collective identity and a collective purpose. It's dominated by parties. Particularly in the last decade or two, we've almost been in a condition of a permanent election campaign. Therefore, opposition parties are looking for openings to challenge the governing party, and the government becomes defensive about its records and tries to spin the news about government activities to the best of its ability. There is no learning that goes on in those processes.

I've watched MPs sit on task forces and standing committees, special committees, and relate to the evidence, especially when we used to travel together more. They would come to a consensus in a broad, general way, and leave a lot of the narrow partisanship and more negative partisanship behind. Parties, seeing what Canadians are saying about the parliamentary process, how disappointed they are in the games that go on within Parliament, would actually reward members of Parliament who said, “I'm working on this committee alongside Liberals and New Democrats, the Conservative Party of Canada, and we're coming up with a consensus recommendation.”

Then there's a lot of pressure on ministers and on the public service to listen to that. Ministers can be held accountable by committees, and public servants who come to testify can be made to give fuller answers when the committee is working smoothly and effectively.

It has to come from the top, from the leadership of the parties. And it will take time. It's a slow process and won't happen overnight.

Then there's the other problem that the only time the media show up to witness a committee at work is when there's a scandal. That adds to the emphasis on looking for details that are negative in some way.

There's not an easy answer. It may be a matter of a turnover of MPs, with new MPs coming in. They may want to play a more meaningful role, not just standing in the House of Commons and delivering hard-hitting speeches but getting to actual work on the details of governing.

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

I thank you very much for those comments.

I agree with much of what you've just said. I know that being a member on this committee has certainly shown me the importance of a committee that provides oversight of the estimates process.

I want to get back to what you said about providing incentives. How do we incentivize other parliamentarians? If we don't go to creating a committee, such as you are suggesting, how do we incentivize other parliamentarians, other committees, to see the study and the approval of the estimates process as something that's important?

[Prof. Paul Thomas]

We've tried a number of things in the past. We used to do all of the estimates on the floor of the House of Commons, and that was just a game. It took up a lot of time. It wasn't very helpful in terms of giving meaningful advice to governments about how to improve their spending and the results of their spending.

We then went out to the standing committees, gave them investigations in view of legislation and the estimates. It seemed like a lot of work. There weren't enough committee meetings. There weren't enough committee members. There weren't enough time slots.

We tried saying you could change the estimates within a narrow range, maybe 5% above or below what's proposed, and make the government explain why it accepted or failed to accept that recommendation. As I mentioned in my opening comments, that was used rarely. It goes way back to the seventies, and it was rarely used by committees.

It really requires some discussion in each of the party caucuses behind closed doors to say to the leaders that you didn't come down here just to applaud when the great leader gets up to speak, and you didn't come here to thump your desk and yell across the chamber. You came here to contribute to better public policy, you want a chance to do that and you want to do it in a committee setting. You'll find your own ways to publicize to the folks back home in Saskatchewan that they're getting good value from their member of Parliament. Maybe through the local media you could talk about the work you did in changing agricultural policy, perhaps. It wouldn't happen overnight. It would take a number of years of reporting on the pattern of spending in the agricultural department, but eventually you'd get them to shift some money into an area you considered important to Saskatchewan.

That seems to me the most constructive role you could play.

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

That's great. Thank you.

[The Chair, NDP, Pat Martin]

Thank you, Kelly. It looks as though you did have five minutes' worth of questioning after all.

Next is Jean-François Larose for the NDP.

You have five minutes, Jean-François.

[Jean-François Larose, NDP, Repentigny, QC]

Thank you, Mr. Chair.

I would like to thank our witness.

I retained three main points from your presentation, which I found very interesting. I am myself a young member of Parliament and I move from one committee to the other quite regularly. Even though we may not necessarily be in complete agreement with every detail, the fact that we are being presented with such tangible solutions for this system is, in my opinion, rather refreshing.

You also talked about the Constitution. Would the proposals that you have presented necessarily mean that we would have to once again open up the Canadian Constitution? If that is the case, what would be the grounds for doing this? The fact that we are talking about this matter today in committee is really important. We have been discussing this matter for a long time. However, I also know that this is not the first time that this has been done in Canada. It would be good if this motivation were to result in the implementation of long-term, tangible and concrete changes.

Finally, I believe I understood, at the beginning of your presentation, that you were using the Australian system as a reference to show what is done elsewhere. Could you elaborate on this matter? Are there any other countries that have made such a change, using a system that may be interesting?

Thank you.

[Prof. Paul Thomas]

All right, we'll start with the Constitution. One of the constitutional principles is that all spending must originate with the crown. In other words, on the recommendation of responsible ministers in the cabinet, the government puts forward its spending plans through the office of the Governor General. Along with that, governments have treated the approval or not of their spending plans as a matter of confidence. So you can't vote against the budget or even vote against individual estimate items without the government raising the threat of that amounting to a matter of non-confidence, requiring their MPs to vote with the government. So that limits the parameters within which the committees can be creative in criticizing and trying to change public spending.

There's also the question of whether you would want to go to a system like the American system where very powerful committees in the U.S. Congress, especially on the Senate side as opposed to the House of Representatives side, regularly defeat the President's budget, change it, or delay it, which leads to deadlock and instability. Institutional buck-passing is the way I describe it. No one knows who's to blame, whether the President or some part of Congress. If you transferred some real power to committees to recommend changes, would you worry, would Canadians worry, about relatively inexperienced members of Parliament—perhaps not fully informed of the budgetary choices that have been made inside government, how difficult they were, and all the considerations that went into them—having the right to change that estimates in that way? I'm not saying that there's anything pure or totally rational about the way governments decide budgets, but I'm just saying that they have the whole public service behind them.

In terms of Australia, I gave the committee staff a long paper on the supply process in Australia. I interviewed members of its House of Representatives and elected Senate. The main body in which the government is held accountable in the Australian political system is the Australian Senate, which is elected on a system of proportional representation, which has mainly meant that there's never been a government majority in the Senate. Then they have their calendar year for Parliament blocked out into two main periods, May and October, when Senate committees go to work to examine the estimates. The minister shows up first and spends a day, maybe, or half a day, in front of the committee. They go on from early in the morning, literally 8 o'clock in the morning, for the whole day. The Senate is not sitting at this time. They take this whole block of time over two weeks and they run through departments of government.

There are two main accountability documents in Australia. One is called the parliamentary budget statement, and the second one is called the annual report. The parliamentary budget statement, PBS, gets most of the attention. Public servants are grilled when they come before those committees. There's no government majority. The rules of engagement are better defined: What senators can ask public servants is better defined, as well as what public servants are allowed to answer. I think that it might be helpful in the Canadian context to have clearer rules around that. In Australia, public servants at the senior level, with the permission of their minister, can actually go to brief party caucuses, so there's more informed debate. It's not perfect and Australians are critical of it, but compared to what I've studied in Canada, they make a more meaningful effort and provide scrutiny of the spending plans of governments.

[The Vice-Chair, Conservative, Mike Wallace]

Thank you, Professor. Thank you, Mr. Larose, that's your time.

By the way, Mr. Martin had to leave, so it's Mike Wallace in the chair. I don't look quite the same.

I'm one of those little guys in the minority who like this.

Ron Cannan, from the Conservatives.

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

You're doing a great job, Mr. Chair, I might add.

Thank you, Professor Thomas. It is a pleasure to hear you.

[Prof. Paul Thomas]

He used to work on 60 Minutes.

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

Yes, exactly.

[Prof. Paul Thomas]

Since he used to work on 60 Minutes, I recognize him.