Government Operations Committee on May 3rd, 2018

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

It's all post-approval, so that's Parliament studying the money after it's been spent. It's not Parliament trying to get those answers beforehand.

[Brian Pagan]

Well, that's part of oversight.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

But isn't that part of the fundamental role of Parliament, to provide that kind of scrutiny—

[The Chair, Conservative, Tom Lukiwski]

Excuse me, Mr. Blaikie we'll have to leave that question unanswered. We have to move on to Monsieur Ayoub.

Mr. Ayoub, you have seven minutes.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

I'm going to talk about a topic similar to Mr. Blaikie's line of questioning, but different nonetheless.

I want to talk about confidence. We see a shift in paradigms and a seachange. The minister has come before us a few times now and has spoken about his desire for transparency and for more information. We are striving to be more transparent, but this does not seem to be enough for the opposition MPs. A little while ago, the minister spoke about his intentions and he did all he could to reassure us.

For those of you who work within government or the public service, how certain do you feel of being able to provide clear and precise information to parliamentarians? Are we improving the situation? Do you think that things are being hidden from us? Accusations were made earlier. It was said that we had a slush fund, that we wanted to keep things hidden and that we had our hand in the cookie jar.

I would like to know what do you think. In your day-to-day activities and when you work with the minister, how sure are you that you are helping things along for the greater benefit of Canada and of Parliament?

[Brian Pagan]

Thank you for the question, Mr. Ayoub.

In the whole, we have made rather good progress to prove our commitment towards transparency and clarity.

The president cited a number of the steps we have taken over the last number of years as part of his mandate to improve reporting and clarity of public finances. It began in the 2016-17 estimates process where we provided a high level of reconciliation to the budget in the supplementary estimates (A). We brought forward a number of the budget initiatives.

In that year, we also introduced for the first time, in the final supplementary estimates of the year, a table that indicated all of the money that had been approved by Treasury Board and by Parliament but was not going to be spent. We call this “lapsed funding”. We were identifying, for the benefit of parliamentarians, the money you had approved but that would not be available for spending by departments. Again, the PBO cited that as a very important step forward in putting the legislature on a level footing with the executive.

We have continued, because of the changes in the standing order, to bring a much-needed coherence to the way in which spending information is presented to Parliament. We had the budget this year in February that laid out the objectives of the government. In that budget, for the first time, there was a detailed table that itemized, by department, by initiative, and by amount, exactly what was going to be spent to support the government's priorities. The expenditure plan that is included in these main estimates reflects that budget. We have brought a level of coherence between the two documents that simply never existed before.

I'm very comfortable that we have begun a process that shows a commitment to alignment with the budget and to transparency for Parliament, with a great level of detail, and that there is a way forward to achieve even greater coordination, clarity, and transparency in terms of what we're doing.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Will this progress increase Canadians' confidence and improve our system, which is almost as good as the best there is, which is Australia's? Are we on the right path towards transparency, towards the sharing of improved data and alignment?

This involves a change in culture, and change is always difficult. What are the next steps and possible bumps on the road to perfection, in your opinion, if this is indeed possible?

[Brian Pagan]

Thank you, Mr. Ayoub.

I can indeed confirm that change is very difficult, especially in this context. You are right; in our work, we aim to make the main estimates more transparent and clear, and then align them with the federal budget.

As to the next steps, you may remember that the minister suggested a reform program in the fall of 2016. He set deadlines, and we have been making good progress in aligning ourselves with the budget. We have accomplished this objective.

Then comes the question of parliamentary oversight. Currently, this oversight is done through votes on operating expenses, grants and contributions and capital expenditures. The Treasury Board president has proposed other models for program objectives. This is an interesting avenue for us.

Lastly, as to performance and the need for more detailed reports to be submitted to Parliament, the president has mentioned the government of Canada's Infobase, a tool that provides any necessary information on expenditures.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll have time for two more five-minute interventions, starting with Mr. Kelly.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you, Mr. Chair.

Some of the programs laid out in table A2.11 are really broadly written. They don't really read like a specific expenditure that one could readily understand as a particular project. When you have headings that appear multiple times, with funds allocated to ensure “Security and Prosperity in the Digital Age” or to ensure “Rules-Based and Responsible Trade”, these are more descriptions of method in some cases, such as for things like “Evidence-Based Policy”. That's how you do something. It's not an actual project in and of itself.

Under these very broad headings, which appear throughout that table, how many different projects or different specific initiatives are funded or could be funded? Are each of these supposed to represent just one thing? Or are there multiple projects under one of these loose headings?

[Brian Pagan]

I do take the point that the description in A2.11 is a headline, and that underneath that there's a great deal of detail. We will find that detail in, for example, the annex to the estimates that indicates the approvals already provided by Treasury Board. There's a description of these measures using the same title, the same headline, that you see there.

The other point—and you're quite right—is that some of these headlines or titles are repeated in different departments. That is by design in the budget, because the intention is to allocate certain sums of money to each department, but in some cases we're allocating money to these various departments for the same initiative. We call that “horizontal initiatives”.

The earlier question from Mr. Deltell is an example. Security for the G7 is an exercise that is going to involve the RCMP, the Canada Border Services Agency, Public Health, and Citizenship and Immigration. Where there are initiatives such as this that are going to a number of different departments, you will see the same title in that annex. That is for maximum transparency.

Another example is the opioid crisis. Again, the president cited that. He was referring to $154 million going to Health Canada, but in fact there will also be money for this initiative in the budget table for the CBSA, Public Health, and Stats Canada, because they will be working together as part of this initiative.

The table is very comprehensive. Again, it identifies by department, by initiative, and by dollar what they'll be provided with. In some cases, that includes some repetition.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

How will this be tracked? These expenditures in vote 40 are not part of departmental plans that cannot be as easily lined up, item by item, through public accounts. How will we know, and how will we be able to determine after the fact that these funds were expended in accordance with table A2.11?

[Brian Pagan]

We've already begun. It will be a two-track process. In tabled estimates documents, we will be including inserts with the detail of all the allocations and descriptions. We also have an online annex that is actually up and running now, which will be updated monthly to show disbursements from vote 40: where they've gone, to which departments, for what measures, and in what amounts.

As an example of that, in the table that exists right now, we have $12.8 million for the Canadian Food Inspection Agency to support its work on inspection of domestic and imported foods and improve the risk intelligence and oversight of Canadian suppliers. There's a whole sentence there that I won't run through, but there's a fair bit of detail on each of those initiatives. So it's a two-track process.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

This vote 40 exists, if I understood correctly, more or less as an expedient because there wasn't time for these $7 billion in expenditures to be properly vetted through Treasury Board. What's going to happen next year? How big will the similar vote be then?

[The Chair, Conservative, Tom Lukiwski]

That question will have to be left unanswered.

Madam Ratansi may offer you an opportunity to give an answer to that.

Madam Ratansi, you have five minutes.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you.

I have a question that you could answer, and then maybe you could answer Mr. Kelly's question.

My concern is with the difference between the opinions of the PBO and the Auditor General. The PBO asserted that the budget implementation vote does not allow sufficient oversight by Parliament, yet you have put in measures that allow for this oversight. The oversight has been the initiatives; you've got line-by-line items; they are controlled by legislation.

I've always been aware of this fight between economists and accountants. The accountants know their debits and credits; they know what to do with them. The economists do the fun things—not the fun things, the boring things. Could you explain how we can reconcile the two to clarify to parliamentarians that we still have the ability to keep the government accountable?

[Brian Pagan]

Thank you, Madam Ratansi.

I don't have the Auditor General's full remarks in front of me. If I understood the gist of his comments yesterday, it was that he did not see anything particularly untoward in terms of the construct of the vote. The language in that vote wording, if we look at the language of all of the other votes of departments, is sufficiently legalese that he didn't see anything untoward there. He made very clear that, if he had any concerns, he would audit this vote, but I believe he expressed some satisfaction that the combination of the vote wording and the detailed annex made very clear what the government's intentions were in this phase.

I believe that the concern of the PBO was that there wasn't an explicit reference in the vote wording to the annex and the president made very clear today that the final supply bill will make that explicit reference to the annex by department initiative and by dollar amount, so I think that would address that issue.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I have a question dealing with the line by line. When a line-by-line item sunsets or it's called lapsed funding, have you faced any challenges going back to Finance to say that this has lapsed or sunsetted and these guys have not used it, so can we get the money back? Normally it goes to the consolidated revenue fund. Could you explain where your challenges are?

[Brian Pagan]

If I had all day, yes.

[Voices]

Oh, oh!

[Brian Pagan]

It's a very important question, but it's an exceedingly complicated one because of the range of different programs and the different timetables they are on.

Your point about line by line is an important starting point. Parliament controls spending by aggregating a whole bunch of initiatives into a vote, so we do not itemize all the different spending of departments by program or by project. It is aggregated, and part of the reason the vote wording is so obtuse is to account for all the different complexities of these programs.

Underneath that, there is a great deal of control by Finance and by Treasury Board for each program and project. They're evaluated. They're reviewed. There are some that sunset, because they were designed to sunset.

There are some that lapse money; they couldn't come to an agreement with a partner or a stakeholder or another jurisdiction, and then a decision is made by Finance. They ask, what do we want to do? Do we want to move that money into a new year and pursue the initiative? We then say that the money lapses, and when it is brought forward into a different year, it's re-profiled funding. That is presented to Parliament. If we decide to go forward with an initiative, it is included in the department's main estimates, or in subsequent supplementary estimates.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

That is good for accountability and transparency, because previous governments have put it back into the consolidated revenue fund and reduced their deficits. This is something that will be preventable.

[The Chair, Conservative, Tom Lukiwski]

We have less than 30 seconds, if you want to provide an answer to Mr. Kelly's question.

[Brian Pagan]

Mr. Kelly's question was about vote 40 as an expedient. I would argue that the intention here is not expediency; it is clarity and alignment. The budget said we're going to spend $7 billion this year. Parliament endorsed the budget, and we're coming forward with an expenditure plan that includes the funding in the budget.

There will be a Treasury Board process to allocate that money, and there will be full reporting. Money will not be allocated until the program is good and ready and of benefit to Canadians.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

To all of our witnesses, once again, thank you for being here, and for your candour and your answers.

There are undoubtedly going to be other questions as a result of your presentation and the minister's presentation. I would assume, Mr. Pagan, that if committee members have further questions of you and your officials, you would welcome them and you would respond in kind in writing to our clerk.

Similarly, if you have additional information that has not been discussed today but you think would be of benefit to our committee when studying the estimates process, I would encourage you, again, to send those suggestions to our clerk.

Colleagues, we are suspended now for about two minutes. We'll come back for a very quick piece of committee business. We'll go in camera, and I'd ask that the room be cleared, except for those individuals who are authorized to be here.

[Proceedings continue in camera]