Government Operations Committee on May 31st, 2016

[Stein Helgeby]

No. This is one aspect of the budget process where governments change and processes change. Some people would run a process exactly as you describe, but at other times in our history, there would be different kinds of arrangements in place. None of those processes would be public processes. They are all within the executive government.

[Nick Whalen, Liberal, St. John's East, NL]

Another document that our analysts have referred us to in preparing for tonight's meeting is the “green brief”. I guess this is a costing document prepared by the Department of Finance on the new proposals. Is this again a secret document in cabinet or is this a document that would be available to be scrutinized and debated in Parliament?

[Stein Helgeby]

Again, it's a document within the executive government.

Essentially, as individual ministers develop proposals that then come to a cabinet committee for consideration, the finance department takes the lead if it's a spending thing, producing a green brief, which is two things in one. It's a summary of the proposals and it's a commentary on the proposals with recommendations, which are usually agreed to, but not always, among the three central agencies—the finance and treasury departments and the prime minister—but Finance takes the running on preparing those things.

That document goes into a cabinet committee. It is used as the agenda for cabinet consideration, or for cabinet committee consideration, but it is never intended for public consumption. It is part of the deliberative process of cabinet.

[Nick Whalen, Liberal, St. John's East, NL]

Is there any type of a parliamentary budget office that, later in the process, after the budget has been tabled, would provide its own costing that could be compared against the green brief?

[Stein Helgeby]

We do have a Parliamentary Budget Office. It has its own legislation. It has responsibilities for preparing costings. It can prepare costings on behalf of non-government parties, for example, and has a particular role during an election campaign—we're in a caretaker period now—but they would typically not be commentaries on the green brief. They would be independently prepared costings, usually drawing on information and models provided by the Department of Finance and other agencies.

[Lembit Suur]

One point to make is that the outcome of any cabinet decision about individual budget measures is published as part of the budget documentation, so the result of the green brief, if you like, as reflected in the government decision, is a matter of public record. Individual measures are published in budget papers. There are also portfolio budget statements that accompany the budget papers. They show individual measures and the performance measures that are attached to them so Parliament can judge the success of any new program or any new spending.

What is a matter of internal government record, if you like, is the information that's produced for deliberative processes, but the outcome of those deliberative processes is a matter of public record, with a fair degree of granularity.

[Nick Whalen, Liberal, St. John's East, NL]

The budget is tabled in early May. The information that's fed into the green brief presumably is found in the various estimates and reporting documents that accompany the budget.

[Stein Helgeby]

Yes. Typically, the life cycle is as follows: ministerial submission, green brief, and measure, as we call it, which is a decision. It gets published in the budget papers and is reflected in other documents, such as the portfolio budget statements, as we call them, and in corporate plans, etc.

[Nick Whalen, Liberal, St. John's East, NL]

Could you describe a little more the types of documents that are tabled at that time in terms of the forward-looking costing information that's available to parliamentarians for review prior to voting on the budget?

[Stein Helgeby]

In addition to the budget speech, we have four main budget papers, which are papers issued by the treasurer and the finance minister. They go through the strategy and the economic position, and they present the financial information and a whole range of things. For example, there are things that go to relationships between the Commonwealth and the states. Also, they present all the measures and the measures' descriptions. They are the main budget documents.

Then there are the portfolio budget statements, as Mr. Suur described. They are for each portfolio and they go into more detail about things that have impacted that portfolio.

Those are the key six.

[Nick Whalen, Liberal, St. John's East, NL]

Thank you.

In an election year like the one you're currently in, would there be an opportunity for budget process operational rules to be tabled immediately upon the election and to have an abridged process for a quick budget? Or would you have to wait to follow the same process as normally exists?

[Stein Helgeby]

The process is always at the discretion of the government of the day, so it could choose to design the process quite differently. In fact—

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Gentlemen, we will be going to five-minute rounds now for questions and answers.

Mr. Blaney.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Bonjour. Thank you so much for sharing your experience with us.

My question relates to the transparency and accountability you face when you shift from one accounting method to the other. I would like to hear from you how you were able to deal with the questions concerning the reserve funds that built up in departmental accounts, which, it was said, were used at the discretion of the ministers. Is this accounting method having an impact on transparency and accountability? If so, how were you able to ensure there was a proper review by parliamentarians and the public in general?

[Stein Helgeby]

That's a very good question. Thank you.

To give some sense of it, in each budget there are the four budget papers, which, if it makes any sense, would look very wide in terms of stacking them side to side, so maybe 1,000 pages across the budget papers, plus maybe 5,000 pages of portfolio budget statements. In many ways, I think, we've seen a rapid increase in the volume of information, presented in different ways, that is made available to the public and the Parliament.

I think the problem everyone has in the system now is how to really look through the volume to look to those things that really matter. I think the process we're going through at the moment in our third wave is really about trying to tighten up relevance and get a clearer connection between bits of information. In many ways we've had information, but not the ability to follow through to say that this is what government intended, this is what Parliament approved, this is what happened, and this is the impact. We haven't been able to follow that through.

Our shift now is not so much to add to the volume of material, although that continues to happen for other reasons, but to really tighten up the relationships between different types of information to make it more useful to Parliament and to the people.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Yes, too much information is like no information, in many ways.

Tell me, how did you overcome, or is it still an issue, this executive power for ministers.... You mentioned this a little earlier when my colleague asked about some funds where the depreciation was spent. Do ministers have a bigger margin to manoeuvre with this accounting method than with the previous one?

[Stein Helgeby]

I would say no, particularly once the depreciation was taken out of the appropriations. In essence, we don't see large volumes or large numbers in accumulated funds sitting around the place.

I should also flag that we manage cash centrally on a daily basis. Mr. Greenslade's area sweeps cash out of all the bank accounts every day and allocates cash the next day according to projected needs. We don't leave money sitting around in people's bank accounts. We keep a tight eye on it.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Please go ahead, Mr. Suur.

[Lembit Suur]

I just wanted to add that there is another control in the system, which is the level of appropriation that is granted by the Parliament for a given year. Parliament makes money available, but it also sets an appropriation limit that takes account of funding that a government entity might derive from other sources, such as, for example, charging for its services and things like that.

When that funding level is reached, a minister has to come to the finance minister to seek the finance minister's agreement to running what's called an “operating loss”. The finance minister has to agree to any expenditure over and above the cap that Parliament has set.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Next on my list I have Madam Murray.

Welcome to our committee. You have five minutes, please.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you very much. I appreciate the opportunity to ask our guests a couple of questions.

You mentioned that something new is performance statements as part of budgeting and reporting. Our system has that in terms of reporting on plans and priorities, and then the departmental performance reports. I think they were considered by a previous parliamentary study to be a lot of information that doesn't have a lot of high value, so I'm interested in your approach to following through to make information more usable for Parliament. What are your ways of connecting the dollars to the programs and the priorities of the ministries? Could you talk a bit about that?

Second, I want to ask about the appropriations vote structure. I guess in our system it's called “input-based”. The input is dollars for capital, which is a vote. If the input is dollars for operations, that's a vote for a ministry. There is also advice from that previous parliamentary committee to consider changing the vote structure to give parliamentarians more control over program activities, so the vote approvals, appropriations, may be by program or purpose as opposed to the broader categories of the input of the funds. I'd like to know what the Australian mechanism is for the actual votes for appropriations.

[Stein Helgeby]

I'll make some brief comments on that, and then maybe Mr. Suur can handle the first part of the question, briefly as well.

Under annual appropriations, we run appropriations for ordinary annual services, which basically means anything that's pre-existing, that is a normal part of keeping things ticking over, such as salaries and these sorts of things, and then we run another type of annual appropriation that covers new outcomes or other kinds of one-offs and these sorts of things. We make the split that way.

In each case our appropriations are divided by portfolio, by agency, and by outcome. This means that Parliament can always see what is the purpose, expressed in terms of an outcome, to which it is appropriating.

We have recently had a lot of High Court interest in our appropriations system, and we are finding that the requirements on specificity in our appropriations and in how Parliament approves appropriations are evolving. The High Court interpretations effectively are putting a lot more weight on legislation or legislative-type authority that specifies purposes and that sits outside the appropriations but is referred to in the appropriations. We are evolving in that respect, but in essence, Parliament sees the outcome to which an appropriation is being made in all of our bills.

I might just ask Mr. Suur to talk briefly about the performance side.

[Lembit Suur]

I might just make the point that our outcomes are pitched at a pretty high level, so in the case of about 85% of them, each entity that gets appropriated has only one outcome that covers all of its purposes.

Underneath the outcome, we usually, in mainstream government, appropriate for two streams of money. One is called “departmental” and the other is called “administered”. The departmental is for ordinary operational costs of entities, and that money doesn't lapse at the end of a budget year but continues on to the next year. Administrative monies are monies that are usually applied externally or paid externally. Those appropriations lapse at the end of each year.

Our appropriation structure is outcomes, departmental and administered, but sitting underneath the outcomes are programs, and the budget papers show how much of the money appropriated to a particular outcome will be applied to particular programs. In relation to—

[The Chair, Conservative, Tom Lukiwski]

Thank you very much. I'm sorry, sir, our time is up on that, but perhaps another questioner will be able to recover your answer.

Mr. McCauley, we have five minutes for you. Go ahead, please.

[Kelly McCauley, Conservative, Edmonton West, AB]

You can go ahead and finish your answer to the previous question.