Evidence of meeting #5 for Government Operations and Estimates in the 41st Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was vote.
A video is available from Parliament.
Director, Expenditure Analysis, Treasury Board Secretariat
That's correct.
I can show you very briefly. If you pick Finance Canada, for instance, there is a button on the Finance Canada overview page in the details entitled “open data link”. If you click on this open data link, it will take you to a web page on the Treasury Board website where you can download the information underlying any of those tables for the entire government. You would get an entire Excel table with all of the information pertaining to that subject.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
That's fantastic. It's a couple of clicks at the most. It was worth getting out of bed this morning. I learned something new.
As far as the cost savings, it's hard to anticipate. Access to information is great. We want to have open government and make this information as accessible as possible.
As a department, have you been able to quantify the implementation cost to date?
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
The implementation costs have been minimal, and I will turn to my colleague in a moment to explain what software tools we used and what the cost was.
Where we can't quantify anything is on the access to information requests, which are going up—that's just life in government. We're unable to say that the creation of this database has resulted in a reduction in access to information costs. We just can't get our hands on those because the trend line for access to information requests is rising.
In terms of costs, Derek, do you want to speak to that?
Director, Expenditure Analysis, Treasury Board Secretariat
The expenditure database did not require any procurement costs. We bought no special software or hardware to create this expenditure database. We used one of my analysts—a good chunk of his time—programming in JavaScript, to create what is essentially a very fancy web page tied to the data underneath. Over the course of several months, he managed, with the rest of my team, to put together the expenditure database in the form that you see it in now.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
I think it speaks to accolades for the fiscal conservative stewardship. That's very good.
Thank you.
NDP
Liberal
Gerry Byrne Liberal Humber—St. Barbe—Baie Verte, NL
Thanks, Mr. Chair.
One of the pieces of information that is always useful for Parliament to know is whether or not a budgeted expenditure and an approved expenditure actually end up being spent on its particular purpose. Instances can occur where money is retained within a vote but is journal vouchered to a different department, for example. Another instance may be that a department allocated a certain amount of expenditure within a particular vote, but then used the money for a different strategic outcome.
Does this system track that in any way, shape, or form?
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
There are two things.
Yes, it will help track it, but in addition to some other tools. In terms of the parliamentary control, I do want to emphasize that it is at the vote level. The question is quite accurate in terms of money being moved from a vote in one department to another one, but that does go through Parliament. A vote may be transferred from the Canadian Food Inspection Agency to Agriculture Canada, which it often partners with, so you'll see some vote transfers, but that is always run through Parliament.
Below the line of parliamentary control, the vote transfer, you could see money estimated for one strategic outcome, but in fact less gets spent there and more gets spent somewhere else. The most helpful place to look for that is a relatively new invention; it's in the reports on plans and priorities.
This committee recommended that each department, in their reports on plans and priorities, forecast out their program expenditures three years forward and three years backwards, so they would have actuals as well as forecasts. More importantly, you could provide a narrative if the estimates changed on why they changed. You'll actually pick up in the text that not as much was spent in area A because it was moved to area B, or whatever the explanation. That narrative is critical. It is that narrative that the database is not equipped to pick up right now, so there will have to be a little digging outside of the database.
Liberal
Gerry Byrne Liberal Humber—St. Barbe—Baie Verte, NL
Thanks very much.
What is the procedure, in terms of an authorization by Parliament, for a transfer of a vote, an expenditure within one vote, or assignment to a particular department to be transferred to another department?
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
When supplementary estimates are presented, there is a list of vote transfers, increases to votes. You'll see that it could be new money that's being voted or it could be money that's coming to a department from another department. You will see that in the supplementary estimates: the vote for one department is increasing, and you'll see a corresponding decrease from another department. I did mention the example of the Canadian Food Inspection Agency and Agriculture Canada. It's quite common, but you will see that through supplementary estimates. It's the mechanism.
Liberal
Conservative
Bernard Trottier Conservative Etobicoke—Lakeshore, ON
Before we break, I have a quick question.
I noticed you had some program activity cost information, and this was past as well as estimated. These were estimates in there. Is that correct?
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
The program information in the RPPs that I was speaking about is historical for three years and then going forward three years.
Derek, do you want to run through that on the database, just to show it?
Director, Expenditure Analysis, Treasury Board Secretariat
The information in the database is actuals, as reported in public accounts or in quarterly financial reports.
Conservative
Bernard Trottier Conservative Etobicoke—Lakeshore, ON
So there's nothing that are estimates at this point? That's at the program level.
Director, Expenditure Analysis, Treasury Board Secretariat
That's correct.
Conservative
Bernard Trottier Conservative Etobicoke—Lakeshore, ON
I was thinking we might have arrived at a shortcut to presenting the estimates at the program activity level, without our knowing.
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
There is estimated spending on programs presented now. It's in RPPs. It's on the website. So it does exist, but again it's for information purposes in studying the estimates.
NDP
Anne-Marie Day NDP Charlesbourg—Haute-Saint-Charles, QC
Your colleagues have provided us with some training, a sort of refresher of our knowledge of the budgetary cycle. Among other things, they told us there were certain costs we could not control, for example employment insurance costs. Indeed, demand may be higher than previously estimated, for example in the case of the guaranteed income supplement for seniors, a major natural disaster or involvement in an armed conflict. Such expenditures cannot be forecasted as accurately as the number of people assigned to payroll, for example. Those expenditures are more difficult to control.
With respect to integrating your system, how do you go about forecasting such expenditures? How do you ensure that we have the best forecasting with a three-year budget? I would like to emphasize that it is quite normal to have a three-year budget and to see which expenditures are actually being allocated.
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
It is certainly true that some categories of expenses are quite difficult to forecast.
Employment insurance is a great example; that varies with the economy. What you will see is the budget will use both economic forecast and historic information to make its best projection three years out, and in some cases longer. The main estimates would pick up how much of that funding is expected to be spent in the current year. Then the Department of Finance monitors those large statutory amounts, the ones that are not voted on, on a regular basis, and where there's an update necessary, they will use the supplementary estimates process to update Parliament on revised forecasts on some of those.
If you were to look at supplementary estimates (B)—I'm going from memory here, which is a little dangerous at times—I believe there's a revised forecast in there for interest on public debt. The Department of Finance has reduced their forecast from what was in the main estimates. So we do use the supplementary estimates process both to request Parliament's approval of voted expenditures and transfers between votes, but also as a chance to update Parliament and Canadians on revised forecasts related to statutory amounts. If there's no change, you'll see nothing, but if the Department of Finance has a view that there's been enough of a change to warrant an update, we will do that through supplementary estimates.
NDP
Anne-Marie Day NDP Charlesbourg—Haute-Saint-Charles, QC
As to horizontal data, will the public truly understand what they mean? Given that these programs are being administered by several departments, will the exact expenditure be assigned to each department? Will the website allow for that? If a department, for example the Department of Public Safety and Emergency Preparedness, does not spend its entire budget, will its budget be reduced the following year? Will that department's budget be lowered? Must the department spend absolutely everything that was forecast? At this time, given horizontal expenditures, the situation grows increasingly complex. How will we explain the principle of horizontal expenditures to the general public?
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
Thank you for the question.
It is quite complicated. Perhaps I will begin by discussing initiatives involving several departments.
With respect to its own expenditures, each department
must receive its proper funding allocation. So yes, it's horizontal, but there are a few basic rules around estimates that come into play.
Number one is that the money that is voted is good for only the current fiscal year. We don't vote for multiple years. We plan for multiple years, but the vote is for one year. The vote is by department, so even though there are three, four, or five departments involved in an initiative, the estimates must break out how much each department is going to receive. What's of interest to parliamentarians is understanding each department's piece, but they want to see the whole picture, and that's why we have the horizontal database for horizontal initiatives, which is a separate database from this.
That being said, if a department cannot spend its allocation, if it wishes to transfer to another department, that must get picked up through supplementary estimates. Parliament must approve those vote transfers.
If the year passes and the department has not spent it, three things could happen.
First of all, each department is allowed to carry forward into the next year up to 5% of its unspent operating and up to 20% of its unspent capital. So they could reprofile it or move it to the next fiscal year that way.
If the amount is in excess of those things, or if it relates to grants and contributions, they can resubmit the expenditure for approval. The Minister of Finance could say, in making the next budget, “Yes, I understand why that was not spent. You can spend it in the upcoming year instead.” That often happens with our major infrastructure programs. When agreements with a province are not reached and there is still every intention to flow some money to the province but things just didn't happen as quickly as we thought they would, it goes to the next fiscal year.
The third thing that could happen, depending on the nature of the expense, is the Minister of Finance could decide, in making the budget, “No, you cannot re-spend that. The time has passed, there is no longer a need.” That money could basically be taken back by the centre.
So all three are possible: the carry forward based on 5% or 20%; a resubmission for reapproval into the next year's estimates; or the money could indeed return to the fiscal framework as being unspent.
