Public Accounts Committee on Feb. 14th, 2013

[Malcolm Allen, NDP, Welland, ON]

Ms. Cheng, you noted, I think it's on page 2.41, CBSA.... Do you have any sense of where they're at now? You've suggested they're going back to 2002-03 and trying to consolidate the fact that they couldn't count the GST/HST in a proper way, in the sense that it wasn't matching up well in what they were reporting. Is there any sense that we're on the march to the right place?

[Nancy Cheng]

Certainly we're happy to see that CBSA is moving forward and having a strategy to do all these reconciliations, and now are going back into further and further years.

What is still outstanding is the ability to have this receivable system that they thought they would be able to put in place in 2013. Provided they're able to get on track with that, we'll see a lot of these reconciliations starting to go down. The problem is that they couldn't reconcile all the subsystems with the bigger general ledger, and with system changes, that should accommodate the need and lessen the need for such reconciliation.

So we're happy to see they're going down that track, but I think we still have to see whether they are able to implement the system as they said they would.

[The Chair, NDP, David Christopherson]

Mr. Giguère.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

I have a question about structure. It concerns lapsed funds and the reallocation of funds. I would like to know whether the new full accrual accounting strategy will prevent those regrettable cost overruns of certain programs, such as the gun registry. The cost of that program was supposed to be $20 million but ballooned to more than $2 billion.

Now that the new system is more firmly established across the departments, will it mean no more having to reallocate lapsed funds?

[Jim Ralston]

Fundamentally, accrual accounting is about assigning costs to the proper time period, and again I use the earlier example of a capital asset. As an example, you purchase it in year one, but you use it over 10 years. Under cash accounting, the cost would be recorded in the first year—

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

No, you're totally missing my point. That's not at all what I'm talking about.

I'm talking about accounting for a full year. There's a $50-billion budget for a total of 10 departments. You've got lapsed funds, money that wasn't spent, and this business of reallocation. It's immediate, not over 10 years. It's in the same fiscal year. That's what I'm talking about.

[Jim Ralston]

My point is just that the question you're addressing is not something that is dealt with in the context of accrual accounting. That has a different purpose. That's what I'm saying.

[The Chair, NDP, David Christopherson]

Okay. Time has expired. Thank you for the exchanges.

To wrap up the first go-round of our rotation, Mr. Kramp, you have the floor.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you, Chair.

I'm going to address this question to Finance, if I may.

Mr. Byrne, in his comment earlier, alluded to impact from program review, obviously with the commendation that will come from numerous national and international bodies and sources with regard to the stimulus that was obviously part of Canada's economic action plan.

I'm wondering if you can explain how this not only helped cushion our economy but correspondingly contributed to our successful recovery. Many people have said this was the right thing at the right time, but from the perspective of Finance, could we have done it better? Did it work adequately? Did it work in an exceptional manner?

[Douglas Nevison]

As I mentioned, I think the general feeling is that the action plan was successful. There were a number of reasons for that. I mentioned the size of it. That was one of them. Timeliness was another. It was rolled out very efficiently and quickly over a two-year period when it was needed most.

I think the fact that it was targeted also helped. It was targeted at areas that had what we economists refer to as relatively high multipliers, which meant that for every dollar you spent, you got an extra boost in terms of economic activity. So things like infrastructure spending, skills training on the EI side, and a number of measures were part of the program, and I think, as I said, they were targeted effectively.

The fact that it was temporary meant that, as I said, the stimulus wound down at the right time. It wasn't in place when the economy started to pick up, so it would have a pro-cyclical impact on the economy, and also, because it was temporary, it meant that our fiscal position didn't get too far removed from the low-debt position that we had going into the crisis.

I think those were the factors that contributed to the success of the program.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you very much.

Chair, I would like to just follow up actually from where I was in the first round, if I might, with Mr. Ralston.

Of course, as I said earlier, drafting public accounts is a monumental project. It really is. A number of people wonder if it is worth it.

This committee obviously sees the reality that yes, it is. It's important to have this information before us.

Frankly, I'm encouraged—and I think all Canadians should be encouraged—at the thoroughness and the diligence that goes not only into drafting and publishing this account, but also into the audit process that correspondingly goes along with it. We thank you for that.

As I mentioned, it's very complex and all-encompassing, and we have only just done lip service to the scope of this actual procedure.

Mr. Ralston, in whatever time we have left, could you please elaborate now on what public accounts are so that the public is aware of everything that takes place within the procedure? It's not simply looking at a balance sheet and/or a P and L.

[Jim Ralston]

The outcome of public accounts, I would say, is the key financial accountability document of the Government of Canada, and for that reason it needs to be comprehensive, reliable, and of high quality.

I kind of summarized earlier some of the many players that are involved. Obviously there are also a lot of quality control activities that go into it, the final one being the audit by the Auditor General. It's a combination of strong policies, strong systems, and strong people doing the accounting in each department.

I think we have a very impressive and robust combination of those factors that allows us to produce this result each year.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you very much.

That's good for me, Mr. Chair.

[The Chair, NDP, David Christopherson]

All right. Thank you, Mr. Kramp.

Colleagues, I have consulted with the caucuses. I believe there is agreement to use the remaining time to move into committee business. Unless someone has an objection, I'll move forward on the assumption that I have unanimous consent for that.

Of course, we'll begin first by thanking our guests today. I appreciate very much the responses and the fulsomeness of the responses. Nobody had to go chasing after anyone to get answers, and I thank you for your willingness to provide information.

Mr. Ralston, we've made note; you'll have that to us within a month at the latest. I would also thank you for keeping your answers as brief as you did.

With all of that, please have our thanks. We'll see you again next time.

With that, colleagues, this meeting stands suspended for two minutes as we move in camera.

[Proceedings continue in camera]