Public Accounts Committee on Feb. 26th, 2007

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

On a different topic again, Madam Fraser, we've talked about the supplementary estimates and the growth of them, but we haven't talked about some concerns you've had about recurring items on the supplementary estimates. Could you give us some information on that?

Then I'd ask Mr. Wouters to comment on that, please.

[Sheila Fraser]

One example that springs to mind is the case of the audit we conducted of the Canadian firearms program. Consistently there were large amounts of money that went through the supplementary estimates. I think it was 30% that was spent on the program through supplementary estimates. We were saying that a lot of these things should have been known and included in the main estimates. There might have been a question of timing, as we have indicated here, but we were of the impression, certainly at least on that program, that there should have been much more put into the main estimates so Parliament would have had a better idea of the total spending at that particular time.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

So I guess the quick question would be, will the future IMAA monitor things that will continue to occur like that?

[Wayne Wouters]

Yes. We would expect the new system to examine these programs on a more regular basis. So if there seem to be specific problems, part of that review would be a detailed review of those programs on a periodic basis to uncover those particular problems as they arise, as opposed to doing so after the fact.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Sweet.

Ms. Brunelle for five minutes.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good afternoon, Ms. Fraser, gentlemen.

Ms. Fraser, I find it very disturbing that you did not have access to certain documents for a period of several months. You now say that an order has been issued granting you access. What more can you tell me about this? Can you provide me with some assurance that in light of this order, you could access quickly any documents that the current government might decide to withhold from you? Would that in fact be the case?

[Sheila Fraser]

We came to an understanding with the government that as a rule, we should have access to documents that were withheld from us for these audits. I don't foresee a problem, but if ever that happened, our job would be to report to Parliament, as we did—

[Paule Brunelle, Bloc, Trois-Rivières, QC]

What would happen, in that case? I would image there would be some delays. You appeal to Parliament and the matter would be resolved fairly quickly. Correct?

[Sheila Fraser]

No. It wouldn't go quite like that. Obviously, we have production deadlines to meet and we try to come to an agreement with the government over access to documents. If we can't agree before the deadline, we report to Parliament and mention in the report that we were unable to examine all of the necessary documents in order to complete our audit. It's a matter of informing Parliament of the situation.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Therefore, even with this order, there is no guarantee that you will always have access to all of the required documents. Correct?

[Sheila Fraser]

I think we have to assume that people are acting in good faith. Moreover, we maintain a very professional, very constructive, working relationship. It was more a matter of clarifying our right to access these documents. I am hopeful that we won't face the same problems again down the road.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Mr. Wouters, clearly, financing predictability facilitates program implementation. I think we can all agree on that. By increasingly relying on supplementary estimates which, to my mind, are unplanned expenditures, are we not adversely affecting the effectiveness of certain programs in the process? That's what worries me.

[David Moloney]

I'd like to answer that question, if you don't mind.

Clearly, a good many programs or initiatives proposed to Parliament in the supplementary estimates are new. Normally, in year two, proposed funding for these initiatives would be set out in the Main Estimates. As the report indicates, it's true that some programs are funded for a set period of time or years, for example, for five years. Therefore, there is some uncertainty. A government may have decided to invest a certain amount of money in a program and after a number of years, an audit or evaluation is done to see if the problem or needs still exists and if the program is still working.

Clearly, from the standpoint of departmental managers, there is some uncertainty. However, the government made a decision for a specific reason. To our way of thinking, if decisions are based on better information and if Cabinet decisions target specific areas, then the government, Parliament or a department are better able to judge whether a program should be maintained or whether or funding for that program should be increased.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

As Members, we often hear talk about—Clearly, when a department like Heritage Canada, for example, is not guaranteed that some of its programs will be maintained, all groups awaiting funding from the department basically are left wondering if the process of redefining programs and criteria is not merely an indication of cuts. Of course this creates uncertainty and worry and makes long-term planning difficult. I was very concerned to see that these supplementary estimates are also a peculiarity of government.

You've brought this matter to our attention, Ms. Fraser. Do you have any solutions to propose to us?

[Sheila Fraser]

I think the government needs to review its action plan to see if, wherever possible, additional spending cuts can be made. There is always some obvious spending that can be eliminated. Members could also be encouraged to monitor supplementary estimates more closely.

[The Chair, Liberal, Shawn Murphy]

Thank you very much.

Merci beaucoup, madame Brunelle.

Mr. Lake, you have five minutes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I want to deal a bit with the issue of the trade-off between new versus existing spending. I find that kind of interesting.

I think back to being a 12-year-old kid, and not me but my friends spending 100% of their allowance in the arcade. This is lost on most of you around the table. It was a little after your time—sorry, I just slammed everybody at the table, except maybe Pierre. It was before Pierre's time.

Eventually those friends got a bit older and started to realize that as much as they loved Ms. Pacman, they wanted to spend some time with real girls. So they looked at new spending with maybe more value for money. They learned quickly to prioritize their new spending with the existing programs. This isn't me; this is my friends. They learned that they had to evaluate, and their new and existing spending went hand in hand. It was just common sense.

Coming here, I realize that there's a whole different political reality. Not only does the government need to have good information to evaluate competing priorities and make good decisions, which we talked about in the report, but there's a second thing. Based on my being here for a year, it seems that the government can make a decision to eliminate a given program for all the right reasons, and inevitably it will be criticized by those either in the opposition or too close to the program to deal with it objectively. I find that some of the decisions are based on common sense, and the loser in this is the Canadian public.

There's a second component to this. It's not just the need to make decisions; there is also the need to communicate, so the public understands them. When I think of the idea of coming up with a good rationale for these decisions, once you have that structure in place—or let's say, if that structure is missing—not only do you have trouble making the right decisions, but you have trouble articulating those decisions, so people can kind of understand them. That was a big part of why I got involved into politics, right from the beginning.

Look at the agency response on page 41. Mr. Christopherson referred to it and rightfully said that it was somewhat vague. The concept that the government is committed to the following programs...“should focus on results and value-for-money”...“consistent with federal responsibilities”, and “programs that no longer serve the purpose for which they were created should be eliminated”.... I agree wholeheartedly with the sentiments in there; in fact, I campaigned on those things.

But I want to know a little more about the action steps further to the Auditor General's comments here that the committee might want to ask witnesses for more information on these reforms, including the implementation plan, in order to assess the extent to which the plan to reform the expenditure management system addresses our observations. I'd like to hear a little more about those next action steps. Where are we going? When are we going there?

[The Chair, Liberal, Shawn Murphy]

You have a minute and a half to answer the question.

[Wayne Wouters]

Thank you for the question.

My kids spend all their allowance too. They're in their twenties and still spend their allowance.

[Some hon. members]

Oh, oh!

[Wayne Wouters]

Again, what I've noted is that the government still needs to make final decisions on the plan and its details. They are still subject to cabinet review. But once those decisions are made, we would be quite prepared to come back before committee to outline the details.

As a comment, I would say this is not easy stuff. I was the public servant who recommended to the previous government the current expenditure management system that's been in place for the past decade, so I kind of know what we put in place about 10 years ago and why it needs to change. But this will not be easy.

There are always a lot of issues around reviewing and reallocating existing programs, and you raise some of those issues. When you cancel programs, when you reduce the size, that often gets a lot of attention. It gets a lot of attention in government simply because we don't do it on a regular basis, and there is a need to look at the programs we have in place. Are they meeting the needs of Canadians? They may have met the needs of Canadians five, six, or ten years ago, but they may no longer be meeting the needs of Canadians, and there may be other ways to address those concerns.

That's why we think that a systematic review of existing programs is a key part of the plan. We are prepared to talk in more detail about the plan once approvals are received.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I have a further question.

At the end of chapter 1 some other jurisdictions are pointed out: the United Kingdom, the United States, Chile. What kinds of comparison have you done with other jurisdictions? What best practices are out there that we might be shooting towards? Who has set the bar, right now, in terms of other jurisdictions, and how high is it?

[Wayne Wouters]

We have done a significant amount of comparison with what other countries have done. Often we tend to focus on Commonwealth countries--New Zealand, Australia, Great Britain--because they have a system of government similar to ours. But we also focus on the U.S. model. All those national governments have gone to a system of integrating new spending more with existing spending and with periodic review of existing spending. So there are models out there that we have looked at very carefully. In fact, we have taken, in certain cases, elements of those models and incorporated them into the proposals we have presented to the president and to cabinet.

Again, often we can learn a lot from other governments that have tried different approaches, and we think we have. David's been to Australia to talk to what they've done. We've had the Brits over talking to us about what they have done. We've gained a lot of information through those particular sessions. While we have a Canadian model and we have a set of proposals that will be different, we think there will still be some similarities between what they're doing and what we plan to do.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Lake and Mr. Wouters.

Mr. Christopherson, you have five minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Mr. Chair.

I would like to return to an area that Mr. Sweet raised. That would take us to page 85, paragraph 2.82. I'm back on the supplementary estimates.

The report states: “Our review shows that items reappear for different reasons such as for ongoing programs without a permanent source of funding”. The overarching concern about this is that supplementary estimates are being used because politically often it's easier to get something through there than it is through the mains, because there isn't as much attention at the time. So on this notion that programs are being put forward when there's no permanent source of funding, if that's happening on a regular basis, that has to be problematic.

Then the report states that different projects are being submitted each year under the same title. The third piece is that those are reappearing year after year, when most of your argument is about timing—surprise—and things that are out of your control. If the Auditor General is finding things coming up year after year, that suggests a real weakness in the process, not legitimate reasons for the exercise of supplementaries.

Whoever is interested can answer.