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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

4:30 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

One of our witnesses had an interesting approach, and I'm not sure it was quite accurate. The Government of Alberta was in front of us—I guess they were clerks from the department—and they indicated there was no issue of confidentiality between the budget and their development of the estimates.

Tell me if I'm wrong, but my understanding is that the budget is a secret document and very few people know all of the parts that go into it. It would expand the ring of knowledge if we were to have the estimates match or come closer to the budget, in that a lot more people would have to be in the loop to be able to produce those budget documents.

Is that an accurate statement? Do you have any idea how they can do it in Alberta and we can't do it here?

4:30 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

I do have an idea. Under the current system, if you thought there would be a new program that was going to be in the budget and you wanted that department working on the program design at the same time that the budget is being formulated, absolutely, you would be expanding that loop. I'll let my colleague maybe comment on that aspect. That would allow departments to start preparing new program design at the same time that the budget is being contemplated.

The downside to that, of course, is that sometimes there are ideas that don't actually make it all the way to the end. You might have people designing programs that don't actually make it into the budget.

What you will see in some of our provinces—I cannot speak to Alberta's situation with certainty—is that the folks who do the main estimates are in the same department as the folks who do the budget.

4:30 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

Okay.

4:30 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

That allows additional sharing of information without compromising the secrecy.

I'm not sure if you wanted to add anything.

4:30 p.m.

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

Douglas Nevison

I think that's a good point. There's going to be a trade-off between secrecy and.... Obviously budget information is very sensitive and can have very powerful effects on the market moving and the like. So trying to keep it as tightly held as possible is something we try to achieve during the budget process.

As Bill mentioned, as far as jurisdictions are concerned that have managed to somehow integrate them or bring them closer—again I'm not an expert on the provincial side, but I know you've had some international experience. I believe in some countries like Australia and the U.K., the Treasury Board function and the finance function are integrated into the same ministry. If I remember correctly, that's actually how it was done in Canada until the late sixties. Then there was a feeling that it was too centralized. As a result we moved to this two keys type of system. I guess the pendulum swings back and forth.

4:30 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

I have one really quick question for Sally. It's on your recommendation, which I think is an interesting one, about pre-submitting questions so you have the right staff here and the answers. I'm assuming that if parliamentarians submit the questions in advance you'll be here with the answers, and that wouldn't preclude members from being able to ask questions that they have not previously submitted. Is that your view?

4:30 p.m.

Executive Director, Expenditure Operations and Estimates, Expenditure Management Sector, Treasury Board Secretariat

Sally Thornton

Yes. As a consideration, if the question is provided in advance the work is done and people come prepared to respond to it. It doesn't preclude others. That being said, we often get 10 or 20 questions from parliamentary researchers and not a single one of those questions is asked when we arrive here, although we are prepared on all of them.

4:35 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

Okay. Thank you.

That's the end of my turn.

Monsieur Blanchette.

4:35 p.m.

NDP

Denis Blanchette NDP Louis-Hébert, QC

Thank you very much, Mr. Chair.

The documents produced hitherto were produced because they had some value. I am not one of those who says that documents should be eliminated just because they have lost some value. I would be more in favour of seeing how we could give them their original value back.

Normally, in a budget, the Minister of Finance and the Treasury Board Secretariat have to be on the same wavelength. They have to be looking at the same figures. If you are in agreement from the beginning, everything falls into place as it moves downwards.

So what is stopping you from presenting the budget and the estimates almost at the same time?

4:35 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

The budget's a very high-level policy document. It's not about what's in the estimates document itself. It's about what has to happen behind the scenes for an expenditure item to be included in an Appropriation Act, and it means a well-designed plan. Where you have ongoing programs that were there for a number of years, the numbers in the budget are absolutely lined up with the numbers in the estimates. That makes perfect sense—one's cash, one's accrual. But don't discount the behind-the-scenes work required to get expenditure approvals for a new program. That's the key thing.

I will tell you that when Treasury Board is doing its work and a proposal for spending comes in, the first question is whether it was covered by a budget. If the answer is, no, it's a full stop. That's kind of the first check. The budget is step one, but to properly design a new program and get expenditure authority there's a lot of work required after the budget. In my mind it's not a disconnect; it's a timing difference. The budget is step one. The estimates are further down the track and the last approval you need before you go to the Appropriation Act and start spending money.

4:35 p.m.

NDP

Denis Blanchette NDP Louis-Hébert, QC

Why can't you produce the estimates and the reports on plans and priorities at the same time?

4:35 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

The report on plans and priorities was designed to support the study of the main estimates. So when you actually look at the main estimates, the theory behind the report on plans and priorities is that it's a document, by department, to help committees complete their studies of the estimates. So it gives additional details for each department to help in the study of the estimates.

The report on plans and priorities was not designed to help assess the budget. The link for the RPP is the main estimates.

4:35 p.m.

NDP

Denis Blanchette NDP Louis-Hébert, QC

As things presently stand, there is a major gap between the two, to the extent that the report on plans and priorities is no longer doing its job. Perhaps we have to find a way to produce the documents at the same time so that the report on plans and priorities gets its initial value back.

That brings me to another matter. Given that the figures you have are very high level ones, have you any suggestions for parliamentarians as to how they could become more familiar with them in depth? Do you at the Treasury Board Secretariat have any techniques, any databases or any other information, in addition to the estimates and the report on plans and priorities, that would let us make the connections we need? My colleague mentioned horizontal programs, for example. There are also transfers from one department to another. Do you have anything that lets you follow it all? If so, can we get access to it?

4:35 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

What I would suggest to you that parliamentarians look at, and it's all public already, but I think it's up to us to better group these documents together.... If I were studying a department's main estimates, I would certainly look at the main estimates for the previous year and look at what the change is. That's public information.

What is not well linked is what the department actually spent the previous year, so again it's public but we could do a better job of linking it in. And depending upon at what point you are during the year, because there's nothing to say that this committee cannot study departmental plans and estimates at any point during the year, the quarterly financials are useful tools to look at what the department has actually spent so far this year, and how that compares to previous years. That gives you a really good sense of what's changed.

The whole question, in my mind, is what's changed since the previous year? In supplementary estimates, you'll get new items. They stand out. When you look at mains, you can look at the previous year's main estimates, look at the previous two years' actuals, and then, depending on what point you're at during the fiscal year, you can look to the quarterly financial statements for a given department and say, okay, what's going on with this department? How has it changed since the previous year? That's all public already. What is not easy is finding a spot where you can see it all at once, and that's what we have to figure out.

Sorry, my colleague would like to add something.

4:40 p.m.

Executive Director, Expenditure Operations and Estimates, Expenditure Management Sector, Treasury Board Secretariat

Sally Thornton

If I may, you know the big binders we come equipped with for main estimates, about three years ago committees asked us if we could share that information. There was a significant change made to main estimates where we did departmental highlight sections, so you now have the information that had been in those main estimates. If you see information out there that is available, you see us using it, and you would like it in another form, please, let us know. We have made those changes in the past.

4:40 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

Next from the Conservatives is Mr. Braid.

May 14th, 2012 / 4:40 p.m.

Conservative

Peter Braid Conservative Kitchener—Waterloo, ON

Thank you, Mr. Chair, and welcome back to the witnesses. Thank you for being here this afternoon.

This notion of reviewing and approving based on a reorientation to a view of programs—one of the reasons that I think admittedly I'm drawn to it is that I think one potential byproduct of a reorientation of review by programs is that there will be a greater focus on results, a greater focus by federal government employees, by departments, by members of Parliament, and by Canadians. Do you have any thoughts or comments on that?

4:40 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

Thank you for the question.

I'll make a couple of quick comments. There is all sorts of information out there on programs now, so there's nothing to prevent parliamentarians from reviewing departments by programs, and you could leave the vote structure the way it is, or you could change it. But the focus of the study could be by programs right now, and nothing would have to change on that front.

What you do have at your disposal, if you are looking at programs, is that every program gets an evaluation every five years, and that's public. You can actually see the results of the programs that have had evaluations done. In addition, all internal audits are made public, so if there's an internal audit that is related to a specific program, that's public as well. So you have those two additional sources on top of your reports on plans and priorities, which are very much designed around programs, as well as the departmental performance reports. You have quite a suite of information available to you. There's nothing that would stop the committee from taking a program view right now on its study.

The separate question is, what does Parliament vote on? It could be programs, or you could just simply change the focus of your studies.

4:40 p.m.

Conservative

Peter Braid Conservative Kitchener—Waterloo, ON

That's very good.

In an earlier response I think you suggested that one of the things we could consider at this committee is a focus on strategic outcomes. Could you elaborate on what you meant by that?

4:40 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

It had caught our attention that many witnesses had mentioned the notion of changing the vote structure to programs and program activities.

Slide 8 of our presentation has the number of programs that were laid out, and 593 program activities and over 2,000 programs struck me as a rather large number—too big to study. So the idea of strategic outcome is that it's a higher-level grouping of programs. The committee could then pick and choose which strategic outcomes were of interest and delve into programs as needed, but it struck me that using 2,000 programs as a starting point was a rather heavy load.

4:40 p.m.

Conservative

Peter Braid Conservative Kitchener—Waterloo, ON

Right, thank you.

You've indicated that the whole budget process within government, the preparation of estimates, is rather labour- and resource-intensive. You have a group of 25 employees or more, and then you reach out to the various organizations—I think 135.

Is there any mechanism within government liaising between the Treasury Board Secretariat and the various organizations to get suggestions from federal government employees on how to improve this process? What is it, and what have you heard?

4:40 p.m.

Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat

Bill Matthews

If I may I will answer first, Chair, but Sally may have some additional comments.

We reach out to departments largely through the network of chief financial officers and their teams. I meet with the chief financial officers frequently, and they give us suggestions.

As I mentioned, the frequent theme is around reporting burden—why have you added these reports? The one I hear about more frequently is the one I mentioned, the future-oriented one.

When Sally and her team are preparing the estimates, they have a network of departmental folks as well, and I will let her speak to what happens at that group.

4:45 p.m.

Executive Director, Expenditure Operations and Estimates, Expenditure Management Sector, Treasury Board Secretariat

Sally Thornton

We hear a great deal from all 135 about things we could improve. Most tangibly it is reducing the system of internal controls, and we do. We insist on deputy head sign-off before something goes into your blue book. So we have assured ourselves that the items there have budget source of funds, they have received the appropriate executive approval, and then we still have the department deputy head sign off on the substance.

They have asked us if we could streamline that somehow, and we are looking at various options for data extraction. Right now it's largely done manually, several times. It's done manually in our call letter, in the department manually, and it comes back to us manually again.

We're in the process of changing that system. That should be a big one that will have an impact within TBS, not so much on my colleagues in the departments.

We are looking at ways that we could possibly streamline the mechanics, but not really the sign-offs because we do need that level of accountability.

There have been some real questions. For organizations that don't change from year to year that are basically FTEs, why do they have to keep coming in? Could we explore doing almost exactly the same thing from year to year where there are no changes, so they wouldn't have to input, but it would still come to Parliament—not a multi-year appropriation, but just no new paperwork—so you would know there have been no changes?

We frequently get questions as to supplementary estimates. Do we need three? Supplementary estimates (A) are important only for those fortunate few who have something in the budget that's well enough developed to get into supplementary estimates (A). Supplementary estimates (B) are the big ones. That's where you see the significant changes over the year. Supplementary estimates (C) are absolutely critical for somebody who has something urgent, but perhaps we could address it differently.

So some push back.... In a growing economy there were some very good reasons to have three, but less so as we're reducing. But it's also optional for organizations. They do not have to come in for supplementary estimates unless they require them.

It's really all the other add-ons to our reporting, when we send out requests for specific information where we need departmental input, we really try very hard to build on existing mechanisms because that's the primary complaint, and it goes to reporting burden.

4:45 p.m.

Conservative

The Vice-Chair Conservative Mike Wallace

Next, from the Liberal Party, we have John McCallum.

4:45 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Thank you.

Let's choose an arbitrary date and suppose the budget was in early November and the estimates process was the same timing. In terms of our desire to align, how much would we achieve by doing so—other than the cash accrual issue—50%, 80%, 40%?

Because I understand there is a cost. If you do it in early November you may be less accurate in predicting the upcoming fiscal year, so what's the cost-benefit ratio there?