Evidence of meeting #18 for Government Operations and Estimates in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was spending.
A recording is available from Parliament.
Liberal
The Vice-Chair Liberal Yasmin Ratansi
Members of the committee, we have quorum. We will start meeting number 18.
We have before us Minister Scott Brison, President of the Treasury Board; Madame Baltacioglu, secretary of the Treasury Board; Mr. Brian Pagan, assistant secretary, expenditure management; and Renée LaFontaine, assistant secretary and chief financial officer.
I understand, Minister, you have a presentation for a maximum of 10 minutes.
Scott Brison LiberalPresident of the Treasury Board
Yes, that's right. It may creep towards 11 minutes, Madam Chair, but it's because I—
Liberal
The Vice-Chair Liberal Yasmin Ratansi
You know you have given us only one hour, so we would like you to keep it as precise as possible, please.
Thank you.
Liberal
Scott Brison Liberal Kings—Hants, NS
Thank you, Madam Chair.
I'm delighted to be here with you this morning.
Today I'd like to focus on supplementary estimates (A), and I look forward to the discussion.
I'm delighted to be joined here by Yaprak, Renée, and Brian, our officials.
As you will see on slide 3 of the deck, supplementary estimates occur three times a year and present information to Parliament on spending that was either not sufficiently developed in time for inclusion in the main estimates, or has since been refined to account for new developments in programs or services. We want to make it easier for Parliament to hold the government to account.
To that end, I'm pleased to say that for the first time, supplementary estimates (A) compare funding announced in this year's budget with funding requested through this year's estimates. In the words of the parliamentary budget officer, this provides Parliament with “additional ability to provide scrutiny to the Government’s finances”.
What's more, we're making progress in better aligning the budget and estimates processes so Parliament can approve funding in a more timely manner. In fact, this year's supplementary estimates (A) include funding for 33 items announced in this year's budget. That compares with 11 items in 2015 and six items in 2014.
The PBO has said that these improvements “will ensure parliamentarians are more easily able to scrutinize major legislative aspects of budget 2016”.
We've made considerable improvement in aligning these processes.
In fact, more than 60% of the forecasted expenses in budget 2016 are included in the supplementary estimates (A).
Madam Chair, the Government of Canada is committed to fulfilling our commitments to Canadians and investing in the priorities of Canadians.
I draw your attention to the major voted items. Some of the highlights include $1.7 billion in funding for short-term investments in public transit, green infrastructure, and existing programs; $1.6 billion for affordable housing and social infrastructure projects; almost $503 million to maintain and upgrade federal infrastructure assets; $499 million in funding for a new contribution program called the post-secondary institutions strategic investment fund; $278 million for recapitalization of engineering assets, and for repairs and maintenance of federal buildings to provide a safe, healthy, and secure workplace;
$254 million in funding related to the assessment, management and remediation of federal contaminated sites;
—thank you to our translators for their patience—
$232 million to maintain mission critical information technology infrastructure; $202 million in funding to address climate change and air pollution; $150 million to resettle 10,000 additional government-assisted Syrian refugees in 2016;
$113 million for non-passenger screening; $112 million for airports; $112 million for Canada summer jobs; and $104 million in funding to support first nations communities in the construction of public infrastructure on reserve through the first nation infrastructure fund.
We seek Parliament's approval of these important investments in Canadians and their communities.
I'd like to walk you through the reconciliation table. This table compares funding announced in budget 2016 with funding requested through the 2016-17 estimates to date.
We begin with the figure for 2016-17 estimates to date of $251.4 billion.
The estimates exclude some spending that does not require annual spending authority from Parliament, but is reported as government spending in the budget, so we need to account for these items by adding them to our total. The largest is EI benefits at $21.1 billion. Most EI costs are paid directly out of the EI operating account rather than a departmental appropriation and are therefore not specifically included in the estimates. They are, however, incorporated in the budget.
The next is the new Canada child benefit at $20 billion. While it's considered an expenditure for government financial reporting purposes, Parliament doesn't authorize annual spending for this item or for other tax expenditures or refundable tax credits.
Other items in this category where spending is not subject to annual parliamentary approval include expenses of crown corporations and revenues credited to departmental appropriations. This category totals $19.6 billion. We must next account for differences in the accounting basis.
The budget is present on a full accrual basis, whereas the estimates are presented on a modified cash basis. This results in an addition of $4.8 billion. One of the objectives of this reconciliation sheet is to try to explain that in a transparent way.
Next is budget 2016 and other measures not yet approved by Treasury Board. These are items that have been approved and earmarked in the fiscal framework, but parliamentary spending authority has yet to be sought for them. This includes the remaining budget 2016 spending measures.
The difference exists because the budget is forward looking and presents expenses anticipated for a given year, while the voted expenditures shown in the estimates refer to amounts that have already received Treasury Board approval as of a particular date. This results in an additional $4.9 billion to our total.
The budget forecast also recognizes that some amount of spending included in the estimates will lapse at the end of the fiscal year, and either be reprofiled to future years or simply remain unspent. The subtraction of $6.1 billion to our total represents the lapsing of authorities that, if used, would have resulted in expenses.
Finally, we have the last category, “Other”. I'll be pleased to explain this more granularly in the Qs and As. This category totals $1.4 billion and represents a number of diverse factors, including provisions for the cost of future liabilities and cost increases.
This brings us to the budget 2016 expense total of $317.1 billion. With the changes we've made in the reconciliation table, we're again improving the openness, transparency, and accountability of our budget and estimates processes together with accountability to Parliament. This is just the beginning. Because of timing issues determined in part by the House's Standing Orders, the budget items for a given year are not reflected in the main estimates for the same year.
Simply sequencing the main estimates presented to Parliament after the budget rather than before would mean that we would not need to table spring supplementary estimates just two months after the main estimates. This would be a big step forward and a significant improvement.
I know that you have been engaged with this as a committee and that you've engaged with representatives from other governments, both within Canada and from other countries, including Australia, to learn about their budget and estimates processes. I look forward to working with you and to benefiting from some of the research and study you're doing on this on how to better align the budget and estimates processes so that Canadians can more easily track how government spends their money and so that parliamentarians can hold governments to account.
I'll conclude my remarks there. My officials and I would be pleased to answer any of your questions.
I understand that was nine minutes.
Liberal
Scott Brison Liberal Kings—Hants, NS
She's an accountant. You're an accountant. Don't frig with the accountants.
Liberal
The Vice-Chair Liberal Yasmin Ratansi
On the first round of questions, the seven minutes will go to Mr. Whalen.
Liberal
Nick Whalen Liberal St. John's East, NL
Thank you all for joining us today, and thanks, Madam Chair, for having me speak first.
Rather than getting into the details of supplementary estimates (A), first, it being an election year, 33 new items had to be addressed in supplementary estimates (A) that weren't done in the main estimates. If we move to some type of an integrated approach to the estimates and the budget that had the timing harmonized, what type of a time frame would we be looking at for the issuance of a budget in an election year? What type of measures would we need to have in place, in your opinion, in order to bridge the gap between that period just after April 1 where spending would be somewhat up in the air, and then to get the necessary costing in place that would be necessary for full supplementaries?
Perhaps Mr. Pagan wants to answer that.
Liberal
Scott Brison Liberal Kings—Hants, NS
I can start, and then I will ask Brian to provide some further thoughts.
First, the progress we've made so far has been in part because of a deeper level of co-operation among Treasury Board, Finance, PCO and PMO in terms of the budgeting process. We've been very closely aligned with the Treasury Board engagement throughout in terms of the work, such that when the budget comes out.... You know, we are getting closer to that objective of budget and main estimates simultaneously, as it is in Australia.
The advantages of that are that funds can flow more quickly. In the past there has been an 18-month delay from when a budget comes out and when the funds actually flow. It takes a much greater co-operation between central government agencies, like TBS, Finance, PMO, PCO, but also individual departments. One of the things we're doing, as part of our results and delivery agenda as the government, is actually requiring a more results focus on reporting as we're moving forward. This will require a much more closely aligned process in terms of budgets. As Treasury Board approves expenditures, departments will be required to report on results in a much more robust way than has been the case in the past. There's going to be greater integration going forward.
In terms of the election year, there will always be some challenges around that. We now have fixed election dates, barring any changes on that, but we have fixed election dates. There will always be some challenges as governments become elected, new governments with new mandates, and that will be incorporated into it, as has been the case this year. In fact, despite an election year this year, we've actually seen progress on these.
Brian, you may want to add something there.
Brian Pagan Assistant Secretary, Expenditure Management, Treasury Board Secretariat
Thank you, Minister. Thank you for the question, Mr. Whalen.
As the minister has made clear, we've made very good progress in better aligning or integrating, as our Australian friends mentioned, the budget and the estimates process. We believe that by properly sequencing the tabling of the documents so that the estimates come at the same time or slightly after the budget, we can make additional progress.
Using last year, 2015-16, as an example, if we were to have a more integrated process, it's quite conceivable that a fixed election would have no impact on supply in the sense that it is the intention to table budgets, present budgets, in the February-March timeline and our estimates in the April-May timeline. That's what happened, in fact, last year, and we were able to get through the election process with full supply for departments. They had all the authorities they needed to implement programs and services, and we were able to deliver those programs and services without resorting to extraordinary measures such as Governor General warrants.
Liberal
Nick Whalen Liberal St. John's East, NL
To follow up on that, if you were able to consolidate this process so the amount of work that went into the main estimates and the supplementary estimates (A) would happen at the same time, who in government would be doing the costing? Would there be enough time to get all the costing done in an election year between October and February so that the new budget, the new programming and the costing associated with that, could all be baked in, so that at the end of February time frame, say, you could have the budget ready and the full costing done for an integrated main estimates and supplementary estimates (A)?
Liberal
Scott Brison Liberal Kings—Hants, NS
First of all, you are right in identifying that it will take a more constant...a lot of work in a shorter period of time to do that. If it did take more time, Yaprak may want to....
Yaprak Baltacioglu Secretary of the Treasury Board Secretariat, Treasury Board Secretariat
Ideally, when programs are appearing in the budget, there should have been a lot of work done to start with, so that is number one. If we can't do everything, then we can use the supplementary estimates as an exception, but at least the majority would be in the estimates and the budget.
Liberal
Scott Brison Liberal Kings—Hants, NS
One of the things, having engaged with the Australians, is they have been quite successful in this, so we would look to their model, as well as some of the provincial models where this has happened and has been working well for some time.
Liberal
Nick Whalen Liberal St. John's East, NL
With respect to information on risk and future liability, what do you feel Parliament should be getting to review, maybe in the case of accrual-based accounting in the supply votes, that we are not currently getting? What should we keep from the cash that we currently have that provides us the oversight we need to maintain, if we are going to truly follow the Australian example and have largely accrual-based accounting, except in capital projects where they pull out the depreciation?
Liberal
Scott Brison Liberal Kings—Hants, NS
In terms of the Australian model, my understanding is that they tried to move to one system, but there were some challenges. They pulled back to a modified approach. Brian may want to comment on that further.
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
I will simply say, Mr. Whalen, that the budget planning process includes a risk provision—the Department of Finance will include a component of risk in its budget forecast—and also that Parliament votes the Treasury Board a contingencies vote, $750 million for government contingencies, which is a release valve for pressures on programs and services.
Liberal
The Vice-Chair Liberal Yasmin Ratansi
We will go to the second seven-minute round.
Mr. McCauley, go ahead.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Thanks again for joining us. It is always a pleasure.
I will jump right in. One of Treasury Board's mandates is to ensure that public monies are spent effectively, department by department. I don't want to get partisan, but it will seem that way. We have been chatting about...there is no better word than “debacle” for the infrastructure minister's office spending. No matter how you cut it, $800,000 is a hell of a lot of money for a small number of offices. We are looking at billions being spent for other programs. How can we be really sure that we are actually going to get proper oversight? I don't blame Minister Sohi, but I do blame the system that allowed $800,000 to be spent on a few offices. How are we going to ensure that these other billions being spent are going to have proper oversight, so we don't end up discussing this on a much larger scale?
Liberal
Scott Brison Liberal Kings—Hants, NS
Thank you for your question.
Part of this is reflecting a change in the machinery of government in terms of Minister Sohi's department.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I don't blame him. I blame the system. I want to make sure the system doesn't continue on.
Liberal
Scott Brison Liberal Kings—Hants, NS
I am saying that there is a new minister's office and a new deputy minister's office, and putting them close to the public servants who are actually doing the infrastructure work.... My understanding is that, in the past, the ministers and deputy ministers were not housed in the same location as the public servants. The point is—