Government Operations Committee on June 20th, 2017

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. Clarke, you have seven minutes.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

Good morning, Mr. Fréchette. It is an honour to meet you and your team. Thank you for joining us this morning.

Last fall, in 2016, we debated some reforms of the main estimates a little. We did so without focusing on whether the figures or the accounting methods were exact and without discussing all those questions of a technical nature. Instead, from a more philosophic perspective, we spent time discussing whether the reforms would actually reduce the time allocated to members to scrutinize government spending in depth.

In your opinion, if these reforms were adopted, would that actually reduce the time allowed to scrutinize the expenditures?

[Jean-Denis Fréchette]

Thank you for the question. The answer comes in two parts.

First, we all know that your time is limited. So, if the documents are clearer and easier to understand, and if the figures in the budget and the main estimates are better aligned and better organized, clearly, your examination of them will be made easier, and consulting the documents from end to end will be quicker.

Second, according to the proposed changes—you are referring to those that are the result of the reforms and probably to those regarding the Standing Orders of the House—the amount of time you have is still being increased. Even if you put the tabling of the main estimates back to April 16, parliamentarians still have more time, up to June 10, to examine them.

That is certainly enough time if the documents do indeed turn out to be clearer, plainer and easier to understand. As I said, if we, as experts who have been observing the budget process for years, have difficulty in finding figures ourselves, we can understand how difficult it can be. Any reform proposal that clarifies the process is clearly welcome.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Right.

On the third page of your document, you say: “the government may be able to address some of these challenges by preparing and presenting its budget and estimates concurrently…”

What exactly do you mean? Does concurrently mean on the same day and with the same figures? Is that what you mean?

[Jean-Denis Fréchette]

And with the same accounting, yes.

That was a recommendation of the committee in 2012. As I explained, it is what happens in other countries. The difficulty is that I am not convinced that it can be done and I refer specifically to 2012. That is when senior officials said that the main estimates and the budget could never be aligned, for various reasons, such as accounting, financial year and cash flow, but also because of the amounts of the spending. They said that we would always need supplementary estimates in order to align some expenditures, and we agree on that.

That is why alignment could be extremely difficult if there is no change of culture inside the public service itself in terms of providing data. We will not achieve that by changing the Standing Orders of the House. I do not see what incentive there would be, especially as that change is for two years. It goes to the end of the current, 42nd Parliament, unlike other regulations that, once changed, stay changed forever—accepting that nothing is really forever. However, in this case, it is a trial run for two years. So it has to be seen as a pilot project.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Yes, in Australia, when changes were made to align the budgets, it seems to me that it was done immediately, was it not? They did not take two or three years to conduct pilot projects.

[Jean-Denis Fréchette]

Jason, on Australia...?

[Jason Jacques]

Sure.

In the specific case of Australia, many years of work were undertaken leading up to that alignment. To highlight the point that the President of the Treasury Board and Mr. Pagan made in the past at this table, and that we've also made, it is a complex undertaking, but again, it's an undertaking that primarily starts within the public service. It's alignment within the public service, government departments, and especially central agencies working very closely together to ensure that the documents that can be furnished to parliamentarians and upon which they're voting are well aligned and very well integrated. It does require a tremendous amount of internal work and machinery changes within the public service.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Mr. Fréchette, I will let you have the floor for the two final minutes, so that you can make any comments.

[Jean-Denis Fréchette]

Thank you, but I have no further comments, except to repeat that we find the approach very commendable in trying to harmonize the estimates and providing parliamentarians with clearer documents. I want to be very clear on that. In the budget process, it is your role to approve those sums of money. In order to do that, you need clear documents that are easily understood in a short time. That is my main comment.

However, as Mr. Jacques and I mentioned, It is currently difficult to take such an approach in the public service and the two central organizations. We hope that the reform will result in the main estimates being presented a little later, and that it will bring about better alignment.

Based on our analyses of the last two years—I am not giving you an opinion of mine—70% of the funding proposed in the budget was accounted for in the 2016-2017 supplementary estimates (A). That was easier, because it was about overall infrastructure programs. This year, it is more difficult because it is about individual programs. So the performance of the departments has to be a factor.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Right.

I have one final question.

Is the alignment of the budget and the supplementary estimates designed to improve the management of the public purse or to make the documents easier to study in committee and for the public and MPs to understand? Basically, we have been operating in this way since 1867. I feel that Canada is a fantastic, rich country anyway. We all agree that it is a great democracy.

Is the goal of the reform to manage an internal process on Parliament Hill or is it really to improve the management of the public purse?

[Jean-Denis Fréchette]

I would say—

[The Chair, Conservative, Tom Lukiwski]

Monsieur Fréchette, I know that your answer will be a little more comprehensive than perhaps we have time to allow, so I will ask you to keep your thoughts. The answer to Monsieur Clarke's question may come up in subsequent rounds of questioning.

We'll now go to Mr. Weir for seven minutes, please.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thank you.

Thank you, Mr. Fréchette. As you mentioned, last week the government put forward a motion in Parliament allowing it to table main estimates as late as April 16 as opposed to March 1. The downside of this proposal is that it reduces the time available to parliamentarians to scrutinize the main estimates. The potential upside is that it allows more time for better alignment between the main estimates and the budget.

I'm looking for your assessment of whether this proposal will achieve that goal.

[Jean-Denis Fréchette]

My assessment is that we won't have the choice; we will see. As I said, it's clearly a pilot project. We will see next year how parliamentarians will react to that. Mostafa might want to add something to that.

We have views, but I'm a very positive person. As I said, you will also have more time at the end because the deemed reporting to Parliament will be pushed to later in June. It will give you some time. If the documents are clear and easier to understand, maybe for you it will be preferable.

Mostafa.

[Mostafa Askari]

It gives the government between two and six weeks of extra time, essentially, because the budget date is not fixed, so we don't know when the government will actually table the budget. It could be the beginning of March, it could be the end of March, it could be in April. We don't really know how much extra time the government will get with this proposal.

The other part that has already been mentioned is that the problem really is not the date of the main estimates; the problem is the internal processes for the Treasury Board to approve the various budget measures. Based on the report from the government, those could take up to 18 months. If that's the case, then four or five weeks or two weeks of extra time will not help the government to include most of the budget measures into the main estimates.

Another problem with this proposal is that you are going to lose the supplementary estimates (A), which are normally tabled in the month of May. What that means is that you will see most of the budget measures in the estimates only in November, when the first supplementary estimate is tabled.

It's not clear this is actually an improvement relative to the current system in terms of the alignment between the budget and the main estimates. What you need, really.... The test is very simple for every kind of measure that is proposed by the government in this regard—namely, is this going to increase the capacity of parliamentarians to hold the government to account and scrutinize their spending? Based on our evaluation, this proposal is not going to do that. Again, the problem is not the date; the problem is the internal processes. The Treasury Board submission process is completely separate from the cabinet process for approval of the budget measures, so when you get the budget approved, then you have to start the Treasury Board process, which will take up to 18 months. That's why we don't see the budget measures included in the main estimates.

[Erin Weir, NDP, Regina—Lewvan, SK]

We're all in the position of having to vote on this proposal very soon. If you had to vote on it, would you vote for or against it?

[Mostafa Askari]

I'm not a member of Parliament, so I don't decide. I don't make that decision. Really, the challenge is for you, not for me.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay. Well, indeed that is the case.

You mentioned the fact that the budget date is not fixed, and of course that raises the question of whether it should be. I mean, certainly one way of allowing more time for alignment between the budget and the main estimates would be to present the budget sooner. Is that something we should be looking at as a proposal?

[Mostafa Askari]

That was the proposal by OGGO in a 2012 report, that the budget date should be fixed. There is really no reason for not having it fixed, but obviously the government wants to have the flexibility of choosing the date of the budget. You know, this is their choice, but the problem is that when you fix the main estimates date but not the budget date, then you don't really have much room to play with, because you don't know when the budget is going to be tabled. Again, moving the date four or five weeks forward is not going to change the system significantly.

[Erin Weir, NDP, Regina—Lewvan, SK]

Right.

Mr. Fréchette, you just described this current proposal as a “pilot project,” which I think is an excellent analogy. We're going to have two estimate cycles under this new proposal, if it's passed by the House. Do you think that will be enough time to assess whether or not it works?

[Jean-Denis Fréchette]

I think the first year will be the acid test for that pilot project, because we will see if it's possible to have this alignment very quickly. The first year, we'll have some kind of a really good test.

The point here, to go back to what I said and to what Mostafa explained very well, is whether it's an incentive for both Treasury Board and Finance to have better collaboration and come with something that will be aligned with the budget. We will see that right in the first year.

[Erin Weir, NDP, Regina—Lewvan, SK]

I think you've all made the point that the real problem here might not be the dates and the Standing Orders but rather a lack of alignment or co-operation between Finance and Treasury Board within the public service. I'm wondering what you see as the solution to that problem.

[Jean-Denis Fréchette]

I don't have a solution.