Government Operations Committee on May 8th, 2018

[Kelly McCauley, Conservative, Edmonton West, AB]

Gentlemen and Ms. Mask, welcome back.

Mr. Fréchette, thank you for your service to Canada. I was disappointed to read that you would not accept another sentence to continue as PBO. I want to thank you for your work. You definitely will be missed.

I want to go right into the $7 billion that has been described as a slush fund. Considering that none of the $7 billion in table A2.11 has actually made it into the individual department plans, can we say that the estimates are properly aligned with the budget when we don't have the follow-up of the breakdown on the department plans?

[Jean-Denis Fréchette]

They will be, if the commitment is followed, and if the amounts that you see in table A2.11, which is in the appendix of the main estimates but is not included in the vote.... This is the main problem that we identify—

[Kelly McCauley, Conservative, Edmonton West, AB]

They're not in the department plans, either.

[Jean-Denis Fréchette]

That is why if you can see it in your own vote 40, or the supply bill, being included annually, you will have this kind of alignment with the budget and you would be able to see it, which is what I said in French. Knowing it is something, and you certainly trust the minister, the President of the Treasury Board, but seeing it is imperative for a vote by parliamentarians.

[Kelly McCauley, Conservative, Edmonton West, AB]

As I mentioned, virtually none of the $7 billion in vote 40 has made it into the individual departments. We don't know what the expected results of that $7 billion are going to be. It also doesn't go through the standard Treasury Board security before the government can start spending it. The Treasury Board's mandate says they are to “[p]rovide guidance so that resources are soundly managed across government with a focus on results and value for money.” We are not going to see in the departmental plans what the proposed results would be for the $7 billion. We are also not going to see the money go through traditional Treasury Board scrutiny to see whether it is a valid program and whether we actually get value for the money.

Do you feel that this violates the Treasury Board's stated mandate of providing value and oversight for the money?

[Jean-Denis Fréchette]

It's certainly an improvement that they will have to come up with in the future.

Mostafa, do you want to add something?

[Mostafa Askari, Deputy Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

There is a trade-off here between getting the authority earlier and getting the budget measures implemented faster through this process. The normal procedure for the Treasury Board is to do the due diligence first and then come to Parliament and ask for approval. This is an issue and we raised it in our report.

[Kelly McCauley, Conservative, Edmonton West, AB]

We're skipping over the Treasury Board process of scrutinizing what this money is for. We're not seeing what the results are going to be in the departmental plans. Does this fulfill the Treasury Board's mandate, in your view, of an oversight of the money and a focus on results, when we're not seeing what the results are going to be?

[Mostafa Askari]

That's correct for the time being, but the Treasury Board—as they say and as the minister has said—is going to do due diligence before allocating those funds to the departments. I suppose you will see the results of that process in the monthly report that the government has promised to make available to Parliament, and see how exactly they made progress on that front when they did their due diligence.

[Kelly McCauley, Conservative, Edmonton West, AB]

In various reports, the PBO and the Treasury Board itself have admitted that the main problem with the alignment is the snail's pace of the government's own internal process. If the Treasury Board and the government could just address the issue that you and the President of the Treasury Board have noted, could we assume that there wouldn't be a need for the $7-billion vote that would take away parliamentary oversight and results-driven oversight?

[Mostafa Askari]

I assume that this will be the case. If that process starts earlier, with the Treasury Board and Finance collaborating on the spending budget measures, then the Treasury Board submission process could start much earlier, before the budget is actually tabled and approved. Then you wouldn't see those kinds of delays. Exactly how they can manage that is something they will have to—

[Kelly McCauley, Conservative, Edmonton West, AB]

That leads to my next question. They've put through the Treasury Board process only 25% of what we did last year, so if anything, they're getting more “sclerotic”, as has been quoted in the old report. We're actually going backwards, then, in speeding up the process that is causing the government to put the $7 billion into this almost fake vote in order to have access to spending. We're seeing oversight being taken away and a lack of clarity on what the results are going to be, but the government is actually going backwards in the administrative process. Does this cause you concern? If this continues, do you think we're going to end up needing a $10-billion or a $15-billion vote for the next year?

[Mostafa Askari]

We raised the same issue you raised in the terms of the relation to last year. The number of measures and the amount of money that was approved and went through the Treasury Board submission process were much lower this time than last year. It is a concern, but I assume the government decided that, now that they have this new instrument they want to use to align the budget and the estimates, they don't need to do that process earlier. They are going to do that once the approval is in place, and then they will do their due diligence and inform Parliament. That's my assumption. That's what they have said publicly.

[Kelly McCauley, Conservative, Edmonton West, AB]

It's counterintuitive to the process of better transparency and better control.

[Mostafa Askari]

The main concern we raised—

[Kelly McCauley, Conservative, Edmonton West, AB]

I see Mr. Fréchette laughing.

[Mostafa Askari]

As Mr. Fréchette said, it's that $7-billion alignment with the table in the budget, and if that change is made and the table is included in the vote, then obviously that would address the problem. There are still some other issues, though, as you mentioned.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Madam Malcolmson, welcome to the committee. You have seven minutes.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Thank you, Mr. Chair.

Thank you to the PBO witnesses.

I'll follow up on the line of questioning that my colleague Mr. Blaikie has been pursuing. On May 3, we heard from the President of the Treasury Board in relation to the concerns expressed by the PBO. Mr. Brison said that the PBO was satisfied with the step of actually putting the items from table A2.11 into the supply bill. I want to double-check whether including those items in the supply bill, specifying both what the program is and the dollar amount, fully responds to the issues you raised in your May 1 report.

[Jean-Denis Fréchette]

When I spoke to the President of the Treasury Board on the phone and he told me that it was his intention to do that, I said that this would be an improvement. That was exactly my word. I also added that it was imperative, not only for parliamentarians but for PBO, that the monthly reports Mostafa alluded to—the monthly reports the Treasury Board is supposed to conduct after vetting all these budgets and as progressing over time—also be central to a better understanding of where the money is going and, back to the discussion we just had, making sure that all this money is vetted and that the Treasury Board is doing its job of being the comptroller of these budgets.

The office has maintained that it would be an improvement. Is it sufficient? Certainly it wouldn't be if the monthly reports aren't good. In the end, there will be another improvement to this procedure.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

I note that there was also concern about the wording of the vote itself so there be full clarity. This is such a departure from our public process of approvals in the past. Part of the concern was the wording of the vote itself and making sure it was clear. When the President of the Treasury Board talked to the committee, he did not commit to consulting with opposition parties on the wording of those changes.

Do you have any comments or concerns with regard to that concern, and do you know what the wording will be?

[Jean-Denis Fréchette]

No, I don't, because this is more of a procedural issue than a budget issue.

I mentioned in my opening remarks that having alignment between the budget and the main estimates is a good thing. Aligning that with the wording of the vote and with parliamentary procedure is imperative. Personally, I think there was some kind of bad link between this alignment and the parliamentary procedure. Not everybody understands, as you or the clerk or the parliamentary procedural people do, that sometimes what the executive wants to do isn't necessarily easy to do in parliamentary procedure.

I think the wording for vote 40 is okay as is, but you vote on one amount, $7 billion, and that's it. We've had discussions with some people who know way more than I do in terms of procedure. You can try to amend the vote, but the only thing you can amend is to reduce that amount of $7 billion, nothing else.

That's why, with the tables somewhere in the supply bill, I don't know how they will do it. I don't know the wording either, but that would help the procedure.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Do you think the Treasury Board process adds value to the costing process for new programs, and that parliamentarians benefit from having the answers developed in that process available to them?

[Jason Stanton, Financial Analyst, Office of the Parliamentary Budget Officer]

From the tracking report we released, “Following the Dollar”, roughly 31% of budget 2016 measures had either a lower amount or a higher amount than what was initially included in the budget. That difference would be related to the budget measure and the submission going through the Treasury Board for approval and scrutiny. Certainly some sort of revision and scrutiny did happen to refine those numbers.