Evidence of meeting #50 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 main.
A video is available from Parliament.
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
We will have to have that examined by the committee and the departments. In Ontario, for example, votes are associated with the programs. Under legislation on votes, it is possible to transfer votes without statutory approval. In Quebec, vote transfers are limited to a maximum of 10%.
The departments must therefore understand the limits of flexibility and identify ways to ensure transparency while allowing a degree of flexibility in order to deliver programs and services.
Conservative
Alupa Clarke Conservative Beauport—Limoilou, QC
The document provides no specific figures such as 10% in Quebec, for example. Do we expect to establish a threshold?
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
We do not plan to propose a specific way to set limits. However, that is one thing that should be examined. We would like to work with the committee and the department to identify the best approach to adopt in this regard.
Conservative
Alupa Clarke Conservative Beauport—Limoilou, QC
Thank you once again for your answer.
Further on, the same report contains the following sentence:
“This flexibility allows departments to minimize the amount of lapsed funding.”
However, my Conservative Party colleagues on this committee and I are afraid that flexibility will be used
to mask true program costs and also to move money around in a less transparent way.
What do you think of that?
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
That is a good question.
For us, it is matter of establishing a clear understanding and aligning resources with programs.
Earlier I discussed the Department of Foreign Affairs. It currently has only one operating vote. In future, we may be able to consider an approach under which specific votes would be provided for development, diplomacy, and trade. That is one example of what is called
purpose-based votes.
A larger number of votes obviously complicates matters for the departments. There are more likely to be lapsed votes because they will not have the flexibility to transfer them. We would like to look at the possibilities and identify a balanced approach between transparency and flexibility.
NDP
Erin Weir NDP Regina—Lewvan, SK
In terms of presenting the estimates by May 1, there would still be a need for interim supply for departments during the initial months in a fiscal year. I'm wondering if you could give us a sense of how that would work under the proposed reforms.
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
Thank you, Mr. Weir.
In fact, in the discussion paper, there is an annex that presents an illustration of what interim estimates could look like. We would envision it being very much similar to the present case, where we would present interim estimates on or before the 1st of March. However, these would be based on a continuation of the current-year authorities rather than future-year, which we don't know yet because of the budget.
In our mind, this would have the advantage of avoiding some situations that we've seen in the past. This committee may remember the case of Marine Atlantic in 2015-16, where continuation of certain funding was contingent on a budget decision. Because the main estimates were presented before the budget, there was a fairly significant decrease in the main estimates for Marine Atlantic that year. It was assumed to be some sort of cut, and in fact it wasn't a cut; it was simply the fact that the continuation of the funding was ad referendum the budget.
By presenting interim estimates that would be based on a continuation of existing authorities, there would be no reductions unless those reductions were announced in the budget, and the interim main estimates would continue to be based on a fraction. We talk about “twelfths”. Interim supply is usually 3/12ths of a department's overall requirements.
That would continue to be the basis of interim supply, but we would work with departments. They could identify specific needs very early in the year. They would get incremental fractions to reflect that authority. For instance, grants and contributions that are made to aboriginal bands right at the beginning of the year would justify a higher—
NDP
Erin Weir NDP Regina—Lewvan, SK
That was one of the points I wanted to hit on. It does strike me that one of the potential pitfalls of basing interim supply on the current year is that you might have departments that actually need to spend more money for a legitimate reason right near the start of the fiscal year. I guess you're acknowledging that there would have to be some kind of special allowance for that.
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
Absolutely. I believe the interim document does present that possibility.
NDP
Erin Weir NDP Regina—Lewvan, SK
Okay. Excellent.
I have another question about the kind of overall system and the reforms proposed. Currently Treasury Board doesn't really get involved until after the budget is tabled. Would you envision, or should our committee be considering, the possibility of Treasury Board getting involved in the budget-making process at an earlier stage?
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
Thank you, Mr. Weir, for the question. That's in fact at the heart of the issue of timing and our recommendation for a May 1 tabling of main estimates.
The development of the budget is the responsibility and prerogative of the Minister of Finance, so we have to be very mindful of that responsibility. At the same time, for a number of years now we have worked very closely with the Department of Finance, in advance of the tabling of the budget, to get a sense of those initiatives that are likely to be supported, so that we can begin working with departments to pre-position Treasury Board submissions and proposals to Treasury Board ministers for their approval.
As the minister was saying, we intend on deepening that relationship so that we can work ever more closely and lessen the gap between the budget and the presentation of main estimates.
NDP
Erin Weir NDP Regina—Lewvan, SK
Okay.
We had a fair bit of discussion about the Department of Transport as an example. It just reminded me to follow up with you on something that I asked you and the minister about at a previous meeting. It was about the Global Transportation Hub, which is a crown corporation in Saskatchewan that receives significant federal money. It has also spent millions of dollars buying land at grossly inflated prices from businessmen with close connections to the governing SaskParty.
The initial response to this was that you and the minister would look into it. The response subsequently was that it had been referred to the provincial Auditor General. The provincial Auditor General has now reported and confirms that there was vast overspending on this land.
In this work the Treasury Board has been doing with the Department of Transport, has there been any recourse with the federal money that's tied up in that project?
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
Thank you, Mr. Weir. I'm not familiar with recent reports from the Auditor General or any response from the department. We would have to go back and look at that.
NDP
Erin Weir NDP Regina—Lewvan, SK
I appreciate that. The provincial Auditor General has reported, so I'd be very interested to know the federal government's stance regarding the millions of dollars it has put into the Global Transportation Hub. If you could come back to us at a later date on that, it would be greatly appreciated.
NDP
Erin Weir NDP Regina—Lewvan, SK
Okay.
Mr. Pagan, it struck me that there was some information you were hoping to present about budget timing that you hadn't had a chance to do due to the time constraints earlier. If you'd like to take a minute for that, you'd be most welcome.
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
Thank you.
I mentioned that over the last 10 years budgets have been presented as early as the end of January or as late as the 21st of April. There are good and valid reasons for that.
In 2009, the global economic crisis, it was very important for the government to send signals to Canadians and the Canadian marketplace about its ability to invest and support employment and the functioning of credit markets. That is an example of the government's acting early.
More recently, in 2015, with the dramatic drop in the energy market there was some confusion as to whether this was a temporary dip and was going to rebound quickly or if it was a more permanent feature that would impact underlying economic environment, capital investment, employment levels, etc. In that year the government actually delayed the budget, looking for the best information possible before presenting its plans.
Those two extremes, if you will, point to the benefits of some flexibility in the tabling of budgets. Our proposal of May 1 would accommodate either scenario and would present the main estimates after the budget, which would render the documents more coherent and reconcilable.
Conservative
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
Thank you, because I'm a little confused about something.
There was a question asked to you about the ability of parliamentarians to “study”. At the moment, we study the main estimates—we really don't study the budget, but we study the main estimates—and sometimes those main estimates are not in line with the budget. Help me understand: if you align it, how much time will parliamentarians have to study what the government is actually spending?
Assistant Secretary, Expenditure Management, Treasury Board Secretariat
Thank you for the question, Ms. Ratansi.
The issue of the first pillar, of timing, is very important, I believe, to all of us, because it would present a main estimates, or at least the possibility of a main estimates document, that is more useful, more reconciled to the budget. That in itself is a benefit. Nothing about the proposal is meant in any way to diminish the number of supply days or the ability of committees to examine the estimates on an ongoing basis.
There would continue to be three supply periods. We would be presenting estimates documents in each of the supply periods; therefore, committees would have the ability to call witnesses and hear from ministers and staff about not only the main estimates but also the ongoing operations of departments.
Bob Marleau, who the minister mentioned in the introduction, has underlined the fact that committees should be encouraged to look at the estimates on an ongoing basis rather than just episodically in the spring. We would support that.
Conservative
The Chair Conservative Tom Lukiwski
Thank you very much, Mr. Pagan and Ms. Santiago. Thank you for your appearance here again today.
Committee members, we are back in this same room at 3:30 this afternoon for a continuing study on Canada Post.
The meeting is adjourned.