Public Accounts Committee on Oct. 31st, 2006

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

As I read through the history of this subject, I find that it often engenders a debate over who should be responsible for what. So we've been talking a lot about whether the Comptroller General is responsible for the viability of financial management or whether it's the deputy heads in departments.

Before I enter that debate—because I do have some comments on this and some questions to pose—I'd like to point to the most obvious responsibility, and that's to the ministers who are aware of actions going on in their department.

When you released your ninth report, you pointed to unauthorized expenditures that occurred without proper parliamentary approval. We responded to your report just yesterday, and so far the media has not really caught on to our report.

This all-party report was tabled in the House of Commons yesterday by the chairman, and it really is scathing towards the minister who was responsible at the time. It says:

The Auditor General reported and Mr. Bloodworth, Mr. Wiersema, and Mr. Baker, the principle public servants in this matter all indicated that the minister was aware of this problem. Regardless, evidence suggests that the minister knew, and she did nothing to ensure that Parliament was fully informed and for that she must accept responsibility.

Do you agree that when a minister is informed of an accounting controversy of this enormity and knows, or ought to know, that authorization should be required for additional expenditures, that this minister then becomes responsible before the public for expenditures that go on in the minister's department?

[Sheila Fraser]

I have difficulty responding to that, Chair, because although I know the minister was informed of the situation, I don't know exactly what was said to the minister and how fulsome that was. So I think it would be inappropriate to comment on that.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Fair enough. But through a report, this committee has come to the conclusion that she must accept responsibility. I think that was a wise conclusion.

On the subject of the degree to which financial controls ought to be centralized, this debate has been ongoing in Canada for the past 70 or 80 years, back to the early 1930s. When the Depression was hitting, the controls were so loose that R.B. Bennett actually appointed himself the finance minister and the Treasury Board president, and for all practical intents and purposes made himself a comptroller general, because he felt things were so out of hand.

Then over time things were decentralized. There was the Glassco commission in the 1960s that led to the position of comptroller general being eliminated from Treasury Board altogether, which left the responsibility to the departments to manage. Then in the mid-1970s the control had become so dispersed, as I have here in the report our researchers prepared for us, “that Parliament—and indeed Government—has lost, or is close to losing, effective control of the public purse”. That was what your office said in 1976.

In 2003, the last government—to its credit, I think—increased the control of Treasury Board and the Treasury Board Secretariat to manage and control spending. Yes, we'll give credit where credit is due; that's fair. So now it seems we're moving back in these years to more centralized financial management

But with the accountability act, we're also making the deputy heads accounting officers who are going to be responsible for this committee. As I see it, this is the first time we've done both: responsibility for the deputy head and responsibility for the central agency.

I want your opinion on how this can be adequately married, because it seems throughout our history, going back those 70 years, it's never really been done particularly well.

[Sheila Fraser]

I think it goes back a bit to the earlier comments, that there's this sort of pendulum that swings between centralization and decentralization. Given the complexity and the size of the federal government, we have to recognize that this has to be a shared responsibility. I don't think it can be totally decentralized; it would be impossible.

There has to be some central function, if not just to produce the financial statements and to issue the policies and the guidance to the departments. To totally centralize would also not be functional, given the complexities of these departments in and of themselves. So there has to be a shared responsibility, and what there probably needs to be is more clarity about what the role and responsibility of the central agency is.

When we talk about monitoring to make sure that policies work, if they find that something isn't working in a department, is it the Treasury Board Secretariat that should be responsible and accountable, or is it the deputy head? I think there needs to be more concrete clarification of those roles, and perhaps the whole accounting officer concept can help to clarify that.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

I think you're right.

I think the deputy head has to be answerable before Parliament. Gomery proposes to go one step further and make the deputy head accountable to this committee, which is distinct from answerable. I think he even recommended that the deputy ministers ought to be appointed by the public accounts committee, if I'm not mistaken.

[Sheila Fraser]

I don't believe so.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Or approved.

But anyway, to what extent do you think a deputy minister should be made accountable before a parliamentary committee?

[Sheila Fraser]

I think it comes back again to the role that is given to the deputy ministers. If you give them a role as an accounting officer....

Certainly if we look to Great Britain, the accounting officers are accountable before Parliament for the management within the department. And I think there is a clearer line or demarcation between the policy or political aspects and the management aspects within a department.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

The one last question I'll ask, if I have the time, is about the Public Service Human Resources Management Agency of Canada. The agency was created around 2003, specifically for the purpose of implementing the new Public Service Modernization Act. Has that act been fully implemented?

[Sheila Fraser]

I think the agency was created after our study or at the time our study was completed; I'm not sure. The Public Service Commission has done some work on it, and we are planning to do some work on that initiative within a couple of years, but we haven't done anything on it recently. I'm afraid I can't answer.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Okay.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Poilievre.

Thank you, Mrs. Fraser.

That concludes our time, colleagues. I'm going to ask Mrs. Fraser or Mr. Smith or Mr. Timmins if they have any concluding remarks. At the end of the concluding remarks, we will suspend for two minutes to reboot the system and reopen as a meeting in camera.

Mrs. Fraser, I invite you to give any closing remarks.

[Sheila Fraser]

Thank you very much, Chair. We thank you for inviting us today to discuss the role of the Treasury Board Secretariat. As I mentioned in our report, which we will be tabling at the end of November, we do have several pieces on the expenditure management system that I think will be helpful to the committee in their study.

Thank you.

[The Chair, Liberal, Shawn Murphy]

Okay. That concludes this segment of the meeting.

I will now suspend for two minutes and then we're going to resume and we're going to come back to the firearms report.

[Proceedings continue in camera]

[Public proceedings resume]

[The Chair, Liberal, Shawn Murphy]

Okay colleagues, we're going to resume the meeting.

I'm going to put the question, but before doing so, I'm going to read in public the motion moved by Mr. Christopherson:

That the clerk of the Committee do prepare a budget not exceeding $25,000.00 for the purpose of retaining, according to all parliamentary guidelines and requirements, the services of Dr. C.E.S. Franks, to assist the Committee in its study on the Review of the Roles and Responsibilities of the Treasury Board Secretariat.

You've heard the motion.

[John Williams, Conservative, Edmonton—St. Albert, AB]

I want to ensure that these terms of reference will include that if we want to, we will study the recommendation by Mr. Justice Gomery that this committee have resources in order to fulfil its mandate, as recommended in his report. I think this should be part of the criteria we're looking at, because if we're hiring the services of Dr. Franks, an eminent scientist, we should look at this issue as well.

[The Chair, Liberal, Shawn Murphy]

We certainly could put that issue to him; I don't see a problem.

Does anyone see a problem with that?

Let's call the question.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Please re-read what you said. Did you say something about Parliament?

[The Chair, Liberal, Shawn Murphy]

Yes, I'll read it again. It is:

That the clerk of the Committee do prepare a budget not exceeding $25,000.00 for the purpose of retaining, according to all parliamentary guidelines and requirements, the services of Dr. C.E.S. Franks, to assist the Committee in its study on the Review of the Roles and Responsibilities of the Treasury Board Secretariat.

[John Williams, Conservative, Edmonton—St. Albert, AB]

And the recommendation of Mr. Justice Gomery that we have funding.

[The Chair, Liberal, Shawn Murphy]

Do you want to make that an actual amendment to the—

[John Williams, Conservative, Edmonton—St. Albert, AB]

I think we have to have an amendment, because we can't just close it off there.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Do you want to throw this in as part of his mandate?

[John Williams, Conservative, Edmonton—St. Albert, AB]

Why not? I don't see any reason—

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

There's no problem, except we have enough at $25,000 now.