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Evidence of meeting #45 for Government Operations and Estimates in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Bill Matthews  Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
Sally Thornton  Executive Director, Expenditure Operations and Estimates, Expenditure Management Sector, Treasury Board Secretariat
Douglas Nevison  General Director, Economic and Fiscal Policy Branch, Department of Finance

4 p.m.

Conservative

Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC

On page 8, you deal with the appropriations and the basis for votes. There is a list, showing 2,064 programs and 593 program activities. A number of witnesses have suggested studying them program by program. When you look at those numbers and those statistics, you see how huge and tedious a task that would be. I figure that you could get all the committees of Parliament together to study all those programs and we would run out of year before we finished. The next year would be starting. Is there a way of grouping things together? Is what we are doing at the moment the most logical thing that can be done?

4 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

One of the things that can be done when you look at strategic outcomes.... As we've said, there are 300 or 298 there and there are over 2,000 programs. When you look at the departmental documentation, the report on plans and priorities, you'll see the dollar value attached to these. Not all of them are the same size.

So I think the committee could make great progress by studying the larger strategic outcomes. By studying a strategic outcome, you can then study the programs that are underneath it. I would tend to agree that studying each and every program would be a rather significant undertaking, but there is a way, based on the dollar spent, to actually look and maybe select.

4 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

Thank you.

Mr. Larose.

May 14th, 2012 / 4 p.m.

NDP

Jean-François Larose NDP Repentigny, QC

Thank you, Mr. Chair. My thanks to our guests for joining us today.

I find this interesting. I have just started looking at all the material and I have to confess that assimilating all this very complex information is more and more of a problem. Really, it should not be this complicated.

When I do my budget at home, it contains everyday expenses. For a country, there are always things to be paid, whatever the date on which the budget is presented.

I cannot get my head around some of the problems and, honestly, that bothers me a lot. How come we are deciding whether a budget has been effective a year and a half after the fact?

The study that was done is interesting, I find. Some countries have asked themselves whether they could find better solutions, and they have implemented them. All I hear now is that it would cost a lot, it would be complicated and it would slow the process down. But why don't we do it properly once and for all, so that we do not have to keep asking the same questions? We have been constantly wondering how to be more efficient for 30, 40, 50, or 100 years. Unfortunately, concrete steps are hardly ever taken.

If the government and everyone involved took some action, if they decided to make major changes, there would be costs. But, given the increased efficiency and the reduced annual costs, would the impact be positive? That is the question. If other countries in the world have done it and it gives them excellent annual budgeting, I do not see why it would be a problem for us. What resources would we need? Has any in-depth study on the matter really been done? Is it always kind of brought forward and then set aside because people see how complex it would be and they do not want to take any chances?

4:05 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

In terms of the resources required, it really would depend on what changes are being contemplated. We've mentioned a few here—to actually do a better job of connecting the various documents and simplifying the documents, not much at all; to build a crosswalk, not much at all. If you were thinking about changing a vote structure, that's more of a time requirement, and yes, there would be some resources involved.

The point I was trying to make on this was don't expect that this is something we can turn around overnight. It doesn't mean it can't be done. The accrual appropriation versus cash has been looked at many times, and people have shied away from it because it's big and accrual is typically viewed as being more confusing.

The questions around the vote structure—capital, operating, maintenance versus some sort of program structure—this is the first time I recall that someone has really started to look at this seriously. It's worth a good discussion. I'm not saying don't do it. Just understand that if this is what you want, it will take us some time.

You've heard a lot of witnesses actually say that moving to a program-based vote structure would be more relevant because parliamentarians think of departments in terms of programs. If that is what is desired, absolutely, it's doable. We're not saying don't.

Cash accrual has been around for a long time and people are scared of it because there's a fear that it will make things even more confusing. But the change in the vote structure—yes, it's significant, and yes, it's worth considering.

4:05 p.m.

NDP

Jean-François Larose NDP Repentigny, QC

Thank you.

It is precisely because we have just come out of a crisis that we are realizing something in our society more and more. That is that the money we are managing here is not ours; it belongs to the taxpayers. Every cent must be accounted for. Perhaps it is fanciful on my part, but I think that every cent invested should give more than a cent's worth of performance. Unfortunately, that is not the case.

You mentioned the long term. In your view, given the things that have to be done and the ways we have to do them, how long could those changes take? Are we talking about a 10-year project, a project that would take generations, 5 years, 20 years, 25 years? Clearly, it would vary depending on how complex the changes are. We are talking about changes that we can achieve.

4:05 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

Again, Chair, it depends on the nature of the changes how long it would take to make some of these more minor changes. We make changes and improvements, we hope, from one set of supplementary estimates to the next. For the horizontal items that's easily done. If you are thinking about a change from cash to accrual appropriations, you're probably looking at close to seven years. If you're thinking about a change on the vote structure, it's probably three to five years. So it's not 20, but I just wanted to give a sense of the significance of the changes.

4:05 p.m.

NDP

Jean-François Larose NDP Repentigny, QC

Okay, thank you.

4:05 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

Next up is Mr. Armstrong.

4:05 p.m.

Conservative

Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS

Thank you, Mr. Chair, and I thank our guests for being here today.

I'm going to focus first on the issue of timing, because I think we've had a lot of discussion from many intervenors on the issue of timing.

First of all, would you agree that moving the start of the fiscal year probably is pretty much a non-starter, since doing so would be so invasive for the economy and for our relationships with the provinces and when the provinces needed to get their transfer payments? Am I accurate in saying that's probably not the direction we should go in?

4:05 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

From my perspective, Chair, changing the fiscal year does absolutely no good whatsoever, and it may actually cause other people some stress. But the issue here is the link between the budget and the estimates, and in my opinion that is not impacted by the fiscal year. So that's the issue we have.

I'm not sure if Finance had anything to add.

4:05 p.m.

General Director, Economic and Fiscal Policy Branch, Department of Finance

Douglas Nevison

If you go way back in history, the fiscal year started at the end of June, June-July, and it was changed to April-May. There are cycles to these things. But, again, when it comes to the question of timing between budget and estimates, I don't think it makes a material difference.

4:05 p.m.

Conservative

Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS

Right. Taking that at face value, if we were trying to release the main estimates at the beginning of the fiscal year, and we wanted them to reflect what was in the budget—because we've had several people make several suggestions of when the budget would have to come down in order to accomplish that, and perhaps Finance would have the answer to this question—how much time would you need to bring down the budget in order for the estimates to be produced and released at the start of the fiscal year?

4:05 p.m.

General Director, Economic and Fiscal Policy Branch, Department of Finance

Douglas Nevison

Well, I think, as Bill said, even if you had perfect sequencing, there's no guarantee that a spending decision on a budget will show up in the estimates. Some take a couple of years to get through because of the due diligence process that needs to be considered before it's approved.

Some of the witnesses have recommended that a fall budget would be appropriate, but as Bill mentioned, given that the cut-off date really remains in December, that wouldn't necessarily give you much extra time either. You really would be looking at a budget very early in the fiscal year. That would be doable, but you would lose a lot of precision in terms of your economic and fiscal forecast.

As Bill mentioned, one of the key aspects of the budget is that it's the government's five-year economic plan, so economic and fiscal forecasts are very important and getting the first year—the “in” year—correct is key to your forecast. So if we have a budget towards the end of a fiscal year so it informs the next fiscal year, we'll have more fiscal information that comes through our fiscal monitor, for example. We'll also get to have more recent economic data, to provide a very good snapshot of where we are economically and fiscally, to present that plan going forward.

4:10 p.m.

Conservative

Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS

So in order to have the estimates reflect what's in the budget, I think Mr. Matthews said on a couple of different occasions, the more time you have between the two, the more reflective it's going to be. But the problem is that if you push it back farther, the actual information that's in the budget doesn't do what we really need the budget to do. There's a balance we have to find there. So the timing issue is something that this committee, when we're making our recommendations, is going to have to really spend some time on. We're going to have to really consider what we suggest on that, because it could have a huge impact both on your departments and on the Canadian economy.

I'm going to move on to the issue of statutory and discretionary spending. One of the problems we have is that when we do receive information, it's kind of all rolled into one, and we get these huge, thick documents. Do you think it would be at all possible to eliminate statutory spending, unless there were changes in the statutory spending because of the budget, and to produce documents in which we could actually see more of the discretionary spending, and focus on that? Would that be something we could do, as parliamentarians, to be more effective?

4:10 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

If you're speaking about it from an estimates perspective—

4:10 p.m.

Conservative

Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS

Right.

4:10 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

—there's no need to include statutory information in the estimates documentation. The reason for doing so is that statutory spending is roughly two-thirds of the government's total spending, give or take, in a given year. Some people like to see that perspective.

The other perspective, of course, is that it just adds a bunch of material to the document that is not really relevant for the study. If we were to exclude statutory, we would certainly shrink the documents. We do typically use supplementary estimates.... Where we have an update from finance on a forecasted statutory expenditure, we take that occasion to update the forecasted spending for the year.

As you say, there's no reason for.... It's not voted on by parliamentarians. Whether it's useful to parliamentarians, that's up to you folks.

4:10 p.m.

Conservative

Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS

How much time do I have left?

4:10 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

You have 12 seconds.

4:10 p.m.

Conservative

Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS

Okay. Thank you very much for your time today.

4:10 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

Next, from the Liberal Party, Mr. McCallum.

4:10 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Thank you.

Thanks to all of you for being here.

I think, as you're hearing, one of our major preoccupations is the timing—aligning the timing of the budget and the estimates.

Now, one of the issues related to this is that the president of the Treasury Board is now saying that he can't release information about the expenditure reductions in the last budget because it is against the rules of the House of Commons.

Can you explain what rules it is against? Because I have not been able to figure that out.

4:10 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

I think the comments made were around the process for notifying employees, which is governed by our collective agreements with employees. The process that was articulated in the budget was that there would be discussion, with the unions notified first, then employees, and then you would actually see some—

4:10 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

No, but we had, for example in budget 2005, each program and each department highlighted in the budget for expenditure reductions, and certainly there was no information there that revealed which individual employees might lose their jobs. So I don't understand that.