House of Commons Hansard #197 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was c-15b.


Financial Information StrategyPrivate Members' Business

June 3rd, 2002 / 11 a.m.

Canadian Alliance

Philip Mayfield Canadian Alliance Cariboo—Chilcotin, BC


That, in the opinion of this House, the government should take immediate measures to ensure that the Financial Information Strategy is fully and completely implemented.

Mr. Speaker,I am pleased to speak on behalf of the people of Cariboo--Chilcotin on Motion No. 437

What is the financial information strategy? This strategy consists of implementing accrual based accounting practices to the full cycle of financial accounting in our federal government. It would ensure that the accrual based accounting method is used in the three major stages of the financial operations of our federal government.

The first stage is the federal budget itself usually presented to the House in February. During the second stage appropriations are presented in the spring. Those are the estimates that tell us how the policies announced in the budget would be paid for. In the third stage the public accounts or the financial reports of the departments are presented in the fall. These figures detail the previous year's spending and are the accounting record.

The budget and estimates are forward looking. They are the spending plans that would be implemented by the government. The public accounts delivered in the fall detail exactly what was spent and on what it was spent. The aim of the financial information strategy is to ensure that the same accounting language is used in all three stages. As it is now it is difficult for parliamentarians to compare what they voted on in the spring with the actual results that are presented in the fall. There is a translation needed for the facts and figures presented in the public accounts in order to compare them to what was in the estimates.

Accrual basis is the revenue that is recognized when earned. Expenditures are recognized when they occur not when the cash changes hands. For example, revenues are recognized at the time of sale for the service or the merchandise, and expenses are usually recognized at the time their benefits are received not when the cash is paid.

Cash basis on the other hand is when the revenue is recognized when it is received. Expenditures are recognized when they are actually paid. In other words, revenues are recognized and recorded only when the cash is received and expenses are recognized in the period when the cash payments are made. There is a major difference here. The cash basis does not amortize expenditures whereas the accrual basis does.

Problems arise when we compare these apples to the traditional oranges. While four important accountability documents, the budget, the public accounts, reports on plans and priorities and departmental performance reports, are all moving to a full accrual based accounting the government has not yet announced any plans to ask parliament to appropriate resources on the same basis. We are still speaking in accounting languages that do not always tell the same story.

This leaves out the fifth important accountability document, the main estimates and the associated appropriations. Departmental planning, managing and reporting on what resources are consumed to achieve desired results would significantly increase once the whole process moves to a full accrual basis with ministers, deputy ministers and government managers leading the way to this new basis of being accountable.

Appropriating funds on a full accrual basis is currently the missing link in the government's plan to move to full accrual accounting. Accrual based accounting practices would not only eliminate confusion but would help departmental managers on the frontline estimate the costs of what they must do and accurately judge how they fared once the work was done.

The financial information strategy will allow departmental managers to work with a whole new mindset. Instead of merely receiving a lump sum of money to accomplish a task, they will be able to more accurately predict how large a sum they will need. At the end of the task, they will be able to more clearly account for how much their efforts cost and thereby get a more accurate picture of what value they received for the money spent.

What is the history of the financial information strategy? Believe it or not, the FIS was initiated in 1989 and then relaunched in 1995. It needs to be fully and completely implemented. That is what is not happening.

It offers the following benefits. It gives government managers better financial information to use in making day to day decisions. It offers the advantage of modernizing federal government accounting by bringing it in line with the private sector and other public sector jurisdictions. Perhaps most important, it will link the cost of programs to the final results.

The weakest link in the traditional accounting chain of events is our limited ability to know what the government actually accomplishes with the money it spends. We need to measure outcomes realized from the inputs. We need to know what we get for the money that is spent.

All my motion asks for is that the financial information strategy be fully and completely implemented because that was the intent of the original plan. The word immediately is used because it has been 13 years since it was first decided that the strategy was desirable and it has been 7 years since the Liberal government deemed it to be desirable.

Progress is being made. The government has great expectations for the financial information strategy, as do taxpayers who are aware of this. The public has a significant interest in seeing this strategy embraced in all government departments and yet there is still a great deal of work to be done. The public wants this work done because it is our tax dollars for which we are seeking maximum value. The motion is easily supported by all sides of the House.

The FIS is not an easy thing to implement. I am not saying that this is something the government can say that it will do it today and that it will be done. It is not a simple thing to do. Looking at the totals of the estimates that each department has provided, the FIS is estimated to cost about $635 million to implement . However the funding is petering out and yet the work is not completed.

My motion is a friendly reminder and a gesture of encouragement for the government to follow through on the completion of this project before further moneys need to be allotted to get the job done and that taxpayers can begin to reap the benefits promised by this strategy.

I want to encourage all members participating in the debate today to remain non-partisan, positive and encouraging in their remarks. The debate should be aimed at encouraging the government to go ahead with the completion of the financial information strategy. Completing the implementation of the FIS is a difficult task, as I have said, but there is much work to be done.

The Treasury Board Secretariat is faced with choosing a model for full accrual based appropriations and budgeting. For example, we do not know if this should be a big bang effort where everybody starts all at once when they are prepared to do that or whether this should be more gradually phased in. The government has not made that decision. The departments are ready and prepared but decisions need to be taken by the government for this process to go on to final completion.

I want to use my time here to encourage the government to go ahead and do this. Once the FIS is fully and completely implemented there may even be problems or fine tuning to complete the job then. We understand that and are prepared to be supportive at a later date of doing that as well.

As I said, there will be problems but even the Auditor General of Canada cannot predict the problems that may be encountered, the modifications her office may recommend or what the treasury board itself will want to consider. However the auditor general insists that the movement to full accrual appropriations is budgeting is worth this effort.

In his 1997 report, entitled “Accounting for Results”, the President of the Treasury Board re-emphasized this call for improved financial information for management decision making by stating:

In general, however, existing sources of information do not answer questions about the cost associated with specific results. Although conclusive information linking costs and results is often difficult to obtain, improvements are being made through the government's Financial Information Strategy. The Strategy aims to enhance government decision making and accountability and to improve organizational performance by providing more complete information on the costs of programs and activities.

Parliament controls the public purse through the granting of supply, setting limits on the amount of money available to managers to acquire resources. It does this by approving the Appropriations Act which identifies, by spending a authority, the amount of money available to the government. As a result, departmental planning, managing and reporting are primarily concerned with spending money to acquire resources.

However governments do not exist to acquire resources. They exist to deliver programs and services. In doing so, they consume or use resources. For example, a government may acquire a building in a particular year to help deliver a program over many years. In doing so, a portion of the building's cost is consumed each year following.

How much does it cost to finance the purchase? How much does the maintenance cost? What are the benefits derived from the building once the government has purchased it? Does the capital value of the building appreciate or depreciate?

Those are all elements that would be recorded in the accrual based accounting to give a clear picture of the government's performance and the cost of that performance.

Accordingly, a far better basis to plan, manage and report departmental operations is to focus on the cost of resources consumed, not just the cost of resources that are acquired which requires full accrual accounting as envisioned by the financial information strategy.

Another example of the importance of using full accrual accounting is seen when we consider that the government makes no distinction between a $25 million outlay, for example, to renovate a building that would provide benefits for perhaps 15 or 20 years and a yearly $4 million outlay to lease equivalent space in a private building. Those are things that managers need to know and to understand when they are determining costs. Accrual accounting would encourage these kinds of distinctions to be made in decision making.

In 1995 the former minister of finance announced the government's intention to adopt full accrual accounting for the preparation of the annual budget and for reporting back to parliament on financial results in the Public Accounts of Canada.

In 2001 the Standing Committee on Public Accounts issued two reports urging the Treasury Board Secretariat to act on the issue of accrual based budgeting and appropriations.

In the departments, managers are prepared to present accrual based financial reporting but they are only part of the financial reporting process and not all parts of this process are ready for the financial information strategy. The government needs to implement accrual based budgeting and appropriations throughout the whole system and lead the way in doing this. There needs to be one set of books, not two sets of books as is necessary now.

Finally I want to speak to a unique situation that I am in, in presenting this financial information strategy to the House today. Last week, as a favour to a Liberal colleague in the House, I was asked to trade my time for this speech with his time which was to be presented this morning.

The problem is that even today I do not know whether or not my motion is votable. That is a unique situation. I would like two more hours to debate this and to have a vote on it but that is not to be.

Later I will be asking members to consider this unique situation and to give unanimous consent to the granting of further time to discuss this and then to vote on this important piece of business that the government needs to consider.

Financial Information StrategyPrivate Members' Business

11:20 a.m.

Durham Ontario


Alex Shepherd LiberalParliamentary Secretary to the President of the Treasury Board

Mr. Speaker, I thank the member for Cariboo--Chilcotin for bringing this matter to the floor of the House of Commons this morning. I do not think he mentioned the fact that there is no need for divisiveness across the way. The government has been very supportive and has taken the initiative to implement the financial information strategy.

The member gave us a rough outline of the difference between accrual accounting and cash basis accounting. I am sure for all those who are watching today, it must be a big yawn when accountants get together.

I would like to briefly explain this, more or less building on what the member has stated. The government's accounting system is basically a cash basis of accounting. We record when the money comes in and when the money goes out. It is as simple as that. That is how most people's personal income tax returns are filed. It is based on income that they receive during a year and expenditures that they pay during the year is called a cash basis of accounting.

A lot of our farm community are still allowed to be on a cash basis of accounting. In my days as an accountant for many farmers it was always amazing to me that they had fields full of cattle but never had recorded these as inventory. They showed them as an expense when they bought them. We can see how it is sort of an absurd accounting system but it is a very simplistic one to use.

This is the one the government has used for countless years and most other countries in the world have started initially with cash basis or fund basis accounting.

In the private sector, although it has been on an accrual system for a long time, that means that they record their inventories at the end of the year. General Motors will record its inventory of car parts and so forth at the end of the year as an asset, whereas the government may have bought a destroyer and has recorded it as an expense, like it is off the books. This is a big difference of opinion. Even within the private sector accrual accounting is treated differently even within some industries.

I can well remember different airlines having different depreciation methods for their aircraft. Some felt they had a better maintenance program and so forth and therefore their aircraft declined in value slower than did some that maybe did not spend enough money on maintenance. Even within the private sector thereare judgment calls as to what type of accrual methods to use.

When I first came to the House in 1993 there was a major concern about government deficits and the amount of debt this country had. With hindsight we have been able to deal with some of that. However, what is the government really worth? At the time the auditor general talked about the sustainability of Canada's debt. How long can governments continue building up huge debts and servicing them?

What is the House of Commons worth? If we look at the financial statements of the Government of Canada we will not see the assets of the House of Commons. Most of us would believe it must be worth something. The difficulty is how we apply a value to it. We could go back to its original cost, which was built after the fire of 1919, but that would not be a proper evaluation because that would be historic. We could go to replacement cost. What would it cost to replace it today? There are various methodologies of arriving at this. One of the major departments of government, the biggest issue is with defence. What is the value of a destroyer? The destroyer has a better value in wartime than it does in peacetime. If we do not maintain it properly, what is its real value today?

This has been an ongoing problem within government to find ways to value these assets. The concept of accrual accounting is not new but it certainly is new to government since governments have been very slow to react to this kind of accounting methodology.

Why do we want to implement it? It is because the people in control of the assets, the managerial class within government, have a responsibility to administer their portfolios effectively. We have all heard about the situation where come the end of March we need to spend a whole bunch of money to get money off the books because of the budget. People look at this as a ludicrous concept.

We want people to manage the resources they have effectively. It is not about spending money. It is about managing buildings, assets, people, human skills and so forth effectively. The motion would provide an impetus for better management of financial assets within government. We have been talking a lot about that recently. People want more accountability and transparency in government.

It is hoped this would lead to better management decisions. The hon. member touched on that. In other words, given the resources under one's command how does one measure the effectiveness with which one administers the assets? There should be a measurement tool.

The hon. member talked about outputs. That is where governments want to go today. Let us measure what we provide for citizens. Ultimately what governments do is transfer money from one set of taxpayers to another. These are all agreements we have among ourselves as people. As a people we want to know how programs are delivered, whether they are effective and whether they are efficiently provided. We need to do more than provide programs for the sake of providing them. We need a measurement tool to see if they are effectively achieving goals.

My minister, the President of the Treasury Board, has been forthcoming in providing a leadership role to ensure we find a way to measure this. In the area of health care, presumably we want to measure infant mortality. We want to measure all these things to be able to say our spending has a significant effect on the people to whom it is directed. Child care is another area. Are we improving the lives of younger citizens of the country?

As the hon. member has mentioned, the program was kicked off in 1995 by the former minister of finance. In March, 2000 the President of the Treasury Board issued a proposal called “Results for Canadians: A Management Framework for the Government of Canada”. In the document she set out a framework for management and an agenda for change designed around commitments to focus on citizens, sound public service values, the achievement of results for Canadians, and responsible spending. An important element of the agenda for change was the initiative to modernize comptrollership across the system.

Once again this gets back to how managers manage. We have had a lot of problems with this in government. Sometimes we do not like managers to manage because we are afraid they will make mistakes. This is where the opposition often makes headway in the headlines. When a manager makes a mistake, all of a sudden it is the direct responsibility of a minister and so forth. For this reason governments have been slow to allow the managerial class to manage these assets.

We need to change our thinking as a people and as a country. People make mistakes. We need to take a bit of risk to get good management. Managers should be responsible for decisions within their control. This is the way we are trying to evolve but it has been a slow process. There has been a culture of change in the federal civil service where things take a long time to evolve.

We need to develop standards and practices to integrate financial and non-financial performance information to properly assess and manage risk and to ensure appropriate control systems. We need to improve procurement, real property asset management and other financial management policies. The Financial Information Strategy was implemented in this context to enable modern comptrollership to happen. It provides the technical infrastructure, business-like accounting policies, modern financial system and trained staff necessary to support modern comptrollership.

We are not opposed to the hon. member's motion per se. We are opposed to the aspect that talks about the immediacy of change. The reality is that the change in process. It is happening. We must let the evolutionary process take its natural course, but we are pretty close to being there.

Financial Information StrategyPrivate Members' Business

11:30 a.m.


Pauline Picard Bloc Drummond, QC

Mr. Speaker, I am pleased to speak to the motion by the hon. member for Cariboo—Chilcotin, which reads:

That, in the opinion of this House, the government should take immediate measures to ensure that the Financial Information Strategy is fully and completely implemented.

I will start by saying that we of the Bloc Quebecois are in favour of this motion. This information strategy has been in the works for some years, and even had a whole chapter devoted to it in the auditor general's report in 2001.

Implementation of an information strategy has been discussed ever since 1989. It was to be fully implemented by April 2002, but we are far from that stage still. That is why the auditor general had a number of recommendations to make.

It is very important that this initiative be put into place so that accountability of the entire public administration will be more easily attainable. As well, this will enhance organizational performance through the strategic use of financial and other data.

As I have said, this modernization of accounting was first raised back in 1989 and again six years later, in 1995, before being addressed in this motion.

We believe that the implementation of the strategy will give government managers a better financial information tool for making decisions, as it will allow them to tie program costs to the results obtained.

There is one question we have on this matter. In the past, the former Minister of Finance missed the mark on more than one occasion with his estimates. He had the bad habit of underestimating the estimates, which resulted, by a principle of accounting, in the surplus being allocated to the debt when the provinces had great needs, particularly in the areas of education and social assistance. During this debate, I would like to hear from the member who moved this motion, to see if he thinks this strategy will help the new Minister of Finance with the estimates any better.

When it comes to how the strategy will work, it is made up of modern financial systems. It will allow for a more accurate snapshot of our financial situation, as soon as one is needed.

Essentially, the financial information strategy will encourage better management by providing managers with access to information not only on the cash flow required to carry out programs, but on all of the costs.

Managers will also have the opportunity to compare program costs with their results.

Another question that is raised is whether or not this strategy will allow for any readjustments or changes if the program does not meet its objectives.

In her 2001 report, the auditor general praised the financial information strategy, but did not mince her words when it came to her criticism of the government for being slow in implementing it.

She strongly recommended that the federal government finish the work that was started to improve the government's financial management and decision making process.

She said, and I quote:

The federal government achieved an important milestone on 1 April when the final 60 of the 95 departmental financial systems went on-line. Now it has to take the final critical step in implementing the strategy—getting the information to managers and motivating them to use it.

So, the strategy is a step in the right direction, but more must be done. The government cannot pat itself on the back until the financial reports of each department have improved and until they comply with the strategy. A lot remains to be done.

Another question that we must ask ourselves is: If the financial information strategy were already in effect, would it have saved us from having to dig up the scandals and the allegations that this government is facing?

How can this government explain the delay in the implementation of the strategy, after deciding itself that it would be implemented in April 2001?

What did the Treasury Board Secretariat do to ensure that the departments have adequate plans to complete the implementation of their system so as to comply with the requirements of the financial information strategy? These are questions that this government absolutely must answer.

The use of the new financial information should also allow managers to do a more effective job. They must have access to it and, more importantly, they must trust its accuracy. This is a major challenge for departments.

We must put an end to the use of black books by managers who cannot use the new financial systems and who continue to manage information by using the old manual methods.

It remains to be seen whether the government will have the courage to make good on its intentions. Considering the magnitude of the task and the rigour required by the strategy, we are concerned that the government may decide to shelf this initiative, as funding measures dry up and project offices reduce their activities.

Parliamentarians and taxpayers hope that all the moneys invested and the efforts made so far regarding this project will bear fruit. If the government wants to ensure transparency, it has a duty to complete this important modernization process of our financial systems.

The motion before us is a reminder to the government that it is too soon to celebrate and that, even though progress has been made, there is still a lot of work to do.

It is necessary that managers use the new financial information available and, more importantly, that they be encouraged to use it in the decision making process. The issue of estimates and supply must be settled once and for all.

This is why we support the motion that:

—the government should take immediate measures to ensure that the Financial Information Statement is fully and completely implemented.

A lot remains to be done before the strategy can be deemed to be completed.

Financial Information StrategyPrivate Members' Business

11:40 a.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I too would like to thank the member for Cariboo--Chilcotin for bringing forward this very timely and very topical subject for debate in the House of Commons today.

I share his point of view in that I also hope that by the end of today the motion will be deemed votable. The hon. member has brought an issue to us that many Canadians care about very much, especially in light of recent information in regard to public spending, scandals to do with technology partnership loans, scandals to do with sponsorship contracts involving Groupaction, and information regarding the auditor general's comments on the way this government uses foundations to squirrel away money and keep it away from public scrutiny. The very issues of greater accountability, greater transparency and a more understandable method of accounting practices are things many Canadians are very much interested in. It is not too much of a leap to say it is an issue of natural justice that Canadians be able to understand the accounting methods that the government uses in managing billions and billions of dollars on our behalf on a daily basis.

The financial information strategy is simply one step in a comprehensive package that hopefully will lead us toward an era of greater understanding regarding the accounting and the spending practices of the government. As I understand it, the major issue of the financial information strategy has been generated from a comment in the auditor general's report that it has taken far too much time to implement what everyone here agrees is a better methodology for accounting practices.

One of the issues is that this was first introduced 13 years ago in 1989. It surfaced again in 1995 with an introduction date of April 2001. That date has passed. The public accounts committee, on which I sit as a member on behalf of our party, recommended that April 2003 perhaps would be a more realistic goal for the introduction of the whole financial information strategy. The auditor general has commented once again that to date only 60 of 95 government departments are operating under this new and better accounting methodology.

This almost would indicate that the government is dragging its feet in the implementation of the financial information strategy. One would wonder what the reason would be for delaying, stalling and putting roadblocks in the way of the introduction of such a common sense accounting practice. One can only think that there is some benefit for the ruling party to have methods of estimates and accounting after spending takes place that do not jive, that somehow contradict each other and make it easier to secret away facts and details. It is a strategy of--

Financial Information StrategyPrivate Members' Business

11:40 a.m.

An hon. member


Financial Information StrategyPrivate Members' Business

11:40 a.m.


Pat Martin NDP Winnipeg Centre, MB

Obfuscation is the word, with the assistance of the member for Palliser.

It is worrisome to Canadians. There is a renewed cry across the land for a better accounting system, one that is more understandable and more up to date and modern, yet 13 years after the subject was first introduced we still have to put forward private members' bills to encourage the government to introduce these measures.

Our reading of this issue, and I think I speak on behalf of most Canadians, is that even though the government's financial statements are now being prepared under accrual accounting practices, government estimates are not being prepared in the same manner. There is a contradiction here. There is a yardstick by which spending practices and perhaps spending outcomes are estimated and these differ from the yardstick used to measure the spending that took place. Surely this is contradictory. Not being a CA, I think that is a pretty simple way of rendering it down to an understandable and capsulized sort of statement.

There are two different yardsticks and all the bill seeks to do is coerce the government into implementing a strategy, which it agrees is the right thing to do, but to do it with some haste, energy and enthusiasm. Frankly, I think that the ruling party and the government actually could look pretty good in the public's eyes were they to do this.

Under the previous regime, prior to introducing the idea of the financial information strategy, the purchase of capital assets was deemed to be an expenditure in the fiscal year in which they were acquired. That is pretty basic and we can follow that, but under the new rules the asset is depreciated over its useful life. Let us say that the capital asset has a useful life of 10 years. In the year the asset is acquired, only one-tenth of the total value can be recognized as a government cost for that year.

As members can see, one cannot be budgeting one way and reporting actual expenses another way. That is why I think the Standing Committee on Public Accounts would welcome this motion, because it is the Standing Committee on Public Accounts that has been pushing for a modernized, revised way of doing our accounting practices.

I would point out that were that to happen we would be falling in line with the way the whole private sector works. Why should the government be doing its books in a way that is different from that of the private sector business community? Businesses, through pressure from their shareholders, have implemented a more understandable and common sense approach to their accounting practices. Why then should the government cling to what is viewed as an outdated practice? It is an incomplete way of viewing our national assets if we do not realize the whole depreciation factor.

This is why this is an important issue. I think it speaks to a larger issue of some ulterior motive, that is, that the government does not really want to complete the implementation of these practices because under the current regime it is easier to be secretive and less than forthright, even though on paper, if one can plow through reams of paper currently produced in the public accounting system, it is not as understandable as it could be. Again I raise the point that it is an issue of natural justice. People deserve to know. As well, it is one of the commonly made points in the literacy community that we are all trying to simplify our language so that it is more comprehensible.

I raised one of the issues that is drawing the scrutiny of the public to public spending in a way that it never has in recent memory: the issue of the technology partnership loans. Were this new accounting practice put in place fully, and if we had the new government operations and estimates standing committee in place, the merit of those planned expenditures would be tested against a whole different yardstick. In other words, much as most provincial governments do, any kind of major program spending would have to meet the tests under this new set of accrual accounting practices. We would want to know the predictable outcomes, or at least the goals and objectives, and by what yardstick those goals and objectives shall be measured as to whether they are met or not.

Under such a system or regime of accounting, I do not believe that the technology partnership loans would ever have gotten off the ground. This was program spending that was introduced, we argue, on a political whim more than on any kind of an economic rationale, to give money to corporations that do not need it in exchange for large contributions to the ruling party.

I am not overstating things when I suggest that, because why else would the government give $33 million to IBM to develop a technology research program? That is not a struggling, upstart young company and neither are Bombardier, Pratt & Whitney, Spar Aerospace or SNC-Lavalin. These companies did not need that investment, yet they dutifully kicked back large amounts of money to the Liberal Party to thank it for that investment.

If we had put in place the new government operations and estimates standing committee, whereby we could have reviewed the spending before it happened under a new accounting regime that measured outcomes in the same way we measure expenditures after the fact, the whistle would have been blown earlier on and we could have saved a lot of grief.

It is with regret that I note we have only 10 minutes to speak to this important subject. If the hon. member moves that the motion should be deemed votable, he would certainly have the support of the NDP caucus.

Financial Information StrategyPrivate Members' Business

11:50 a.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, it is with pleasure that I rise today to speak on Motion No. 437. Particularly given what has occurred in the private sector in recent months and years and the increased level of scrutiny and focus on some of the corporate governance issues, we should only expect that the public sector and legislatures, and in this case the House of Commons, try to achieve the same level of clarity and granularity in the types of accounting and bookkeeping methodologies we use in order to maintain some level of credibility.

This is a time when international markets are looking very seriously at the way governments maintain and handle their accounting and the fiscal governance that are issues that are so important. Transparency, consistency and ongoing accountability for these numbers and the methodology are important.

Further, I would support us restoring the debating of the estimates of the government on the floor of the House of Commons, which was the case until the late sixties. That of course would improve and increase the level of scrutiny of the estimates and would lead to far more rational government spending patterns.

It was no accident that the spending increased so significantly during the late sixties and throughout the seventies under Liberal governments after the House of Commons was denied the opportunity to have the estimates debated on the floor of the House of Commons. The hon. member's motion to improve the financial information systems for the government would go a long way to help strengthen the scrutiny for members of parliament and the House of Commons over government spending and would also help individual Canadians be better aware.

The issue is particularly important given the events of the weekend. Today international financial markets are looking very closely at Canada. Early indications on the European markets, prior to the Canadian markets opening, were that we would see a downward trend in the Canadian dollar today.

We are at a time when, because of a dispute between the former finance minister and the Prime Minister, the government has placed in great jeopardy that confidence we as a country are seeking to achieve in the international financial markets. At a time of tremendous tumult in international financial markets, at a time when we need to be presenting a strong and unified front on behalf of Canada in the form of the government, the government has been divided at the most senior levels. Therefore, while we could say this is about accrual accounting it could also be said that it has been a cruel weekend for the government. The fact is that the government, by not resolving internal issues, has placed the country in jeopardy and effectively has chosen to risk the well-being of the Canadian economy at a very critical time.

When international financial markets question the stability of a government, sometimes central banks within those countries will increase rates in order to maintain some strength of the currency. We see now that the Governor of the Bank of Canada has indicated that we will be seeing higher rates over the next period of time. The reason the Bank of Canada is strengthening rates at this time is to mask a lot of the structural weaknesses that exist within the government. The government has not embraced some of the aggressive and innovative fiscal policies that other countries have utilized, like tax reform, to strengthen and improve productivity and improve the Canadian economy.

The Canadian dollar has suffered. We lost about 20% of the value of the Canadian dollar relative to the U.S. dollar since 1993. Now I think we will see the governor of the Bank of Canada and the Bank of Canada making a decision to maintain the Canadian dollar as much as possible at its current level by increasing rates. As such, when the government has an internal feud between the former finance minister and the current Prime Minister, which affects the degree to which international markets trust the government and have faith in its policies, I believe we will see a more aggressive interest rate policy from the Bank of Canada.

When Canadians buy their homes, sign their mortgage documents, buy and finance their cars, they will pay a higher price in part because of the fact that the government has not managed its internal issues as well as it should have. The fact is that when higher interest rates are used to try to put a band-aid over some of the structural weaknesses in a government or some of the dysfunctionality between personalities of some of the most senior ministers and members of cabinet, Canadians pay a price where it counts and that is every month when they pay their mortgage and car payments.

What does that do for Canadian productivity? Obviously it has a negative impact on productivity. What does it do for standard of living? It reduces standard of living because Canadians can afford less.

We have seen a dramatic drop in the Canadian standard of living relative to that of the U.S. since this government was elected. This type of internal warfare between cabinet ministers within the government adds to that policy malaise and that drift of government at a time when we have an agricultural crisis, a health care crisis and a productivity crisis where Canada has become less competitive in recent years compared with our trading partners. The dollar currency is in significant decline and has been in a secular decline since the government was elected in 1993.

The last thing we need at a time like this is some internal dispute between the former finance minister and the current Prime Minister. My belief is that the Prime Minister has demonstrated that in many ways he is out of control. We are trying to seek ways in the House today with this motion to try to improve control over the nation's finances.

We have a Prime Minister who is behaving almost as if he is out of control. The government has placed this parliament in an almost minority parliament situation. The whip of the Liberal government cannot depend on a large portion of that caucus to vote in the ways that the government would want them to vote. We are in a minority situation right now as a parliament.

As we talk about ways that we want to strengthen our credibility from a financial perspective as a country and improve governance issues over the finances of the country, we should consider and mourn in many respects the way that the government has risked our credibility in the international financial markets.

We have the fact that the Bank of Canada will have to use interest rate policies to try to compensate for that and strengthen the Canadian dollar in some ways artificially to fight the trend of traders betting against the Canadian dollar at a critical time. We have the fact that we have a new finance minister who as industry minister once said that high taxes were good for productivity because they would force Canadians to work harder. All these things cause me to be very concerned.

It is important that we consider with Motion No. 437 ways to improve transparency and governance over the nation's finances. However we would be remiss if we did not take some time to consider how the government has placed the international reputation of Canada in the financial community in great jeopardy.

The Prime Minister's ego has taken precedence over what is good for Canada at a very critical time. It is not simply that the former finance minister has been treated shabbily. I think the country has been treated shabbily by the Prime Minister.

Financial Information StrategyPrivate Members' Business


Canadian Alliance

Philip Mayfield Canadian Alliance Cariboo—Chilcotin, BC

Mr. Speaker, I would like to begin by thanking each of my parliamentary colleagues for the support they have shown for my motion.

I would like to respond to a couple of comments. I would like to respond to my Liberal colleague's comments which objected to the immediacy. I have a bit of difficulty with that because we have been on the starting blocks of this for about seven years now. To talk about immediacy in terms of taking too long is probably the way it should be looked at. The difficulty is that when we are talking about immediacy, we are not talking about a full implementation happening tomorrow because I understand that would be an impossibility. However the government needs to make some decisions before the various departments can fully implement beyond where they have gone already. We need to know which model the government will have the departments follow.

When I talk about immediacy, we need the government to make the remaining decisions that are necessary for the completion of this process. Then we must go on from there and begin following that lead of the government by having a financial information strategy completed.

I would also like to thank the Bloc Quebecois member for the questions she asked. She asked if the FIS would help the finance minister. I would think that the kind of information demanded by the financial information strategy and accrual based accounting in the preparation of the budget would most certainly help the finance minister and his department focus on the most necessary aspects of how the money would be spent, where it would be spent and the outputs from that. I cannot see anything but help going to the finance minister on this.

The second question she asked was whether the FIS would allow a readjustment of our sights if we missed the target. Hopefully, to begin with, it would help us more accurately target in the money that would be spent and then give annual results of what our outputs would be, what we accomplished and allow a readjustment on a more timely basis should there be some inaccuracy in prejudging the results that we expected. I would like to thank the member for that.

The departments would like the government to make a decision on the model that can be adopted to implement accrual based budgeting appropriations. Unless the government provides the leadership and moves to accrual based budgeting and appropriations, managers will not focus on accrual based financial reporting. This makes sense because the departments can hardly be expected to prepare a set of financial reports that cannot be compared with the budget materials and the appropriation statements. Departments want financial information for all purposes to be produced on an accrual basis.

Furthermore, there are concerns about the interval of when they will have to prepare the information in their estimates on a different basis from the information of their financial statements.The risk that is being run is that the departments will be producing two views of the same data. They will have to prepare two sets of books, and we know the problems with having two sets of books. Resolving this issue will demand a major effort no matter what course of action the government decides to take.

The government says that choosing a model for accrual based budgeting appropriations is a complex issue that requires extensive study before a decision can be made and that meeting the public accounts suggested April 2003 target date to produce accrual budgeting and appropriations is unlikely.

The treasury board secretariat made little progress on the issue until August 2001 when it hired a manager to complete the study and make a recommendation on how to go with this by the spring of 2002. In fact, in the April report of the auditor general, the treasury board said that it had developed a plan to review alternative approaches to implementing accrual budgeting. Therefore, it is proceeding but slowly; some would say too slowly. We would like to have that process speeded up.

I do not want to hear from the other side of the House that the government has already implemented FIS. That would be inaccurate and would be a naive statement. It is not totally inaccurate, though. The important thing is that the treasury board needs to make a decision on moving to accrual appropriations in budgeting. It needs to decide whether to get ready and have everyone start using the whole process at once or whether to begin with everyone using a more gradual phased in approach.

This may sound simple but it is really a very complicated decision that has to be made and it needs to be made sooner rather than later. The government needs to ensure that the budget and the estimates use the same language that the departmental financial reports and the public accounts use.

To conclude, as I mentioned, this is an unusual situation because at this time I do not know whether the motion will be votable or not. I ask for unanimous consent that this motion be made votable--

Financial Information StrategyPrivate Members' Business

12:05 p.m.

The Speaker

Is there unanimous consent that the motion be votable?

Financial Information StrategyPrivate Members' Business

12:05 p.m.

Some hon. members


Financial Information StrategyPrivate Members' Business

12:05 p.m.

Some hon. members


Financial Information StrategyPrivate Members' Business

12:05 p.m.

The Speaker

The time provided for private members' business has now expired. As the motion has not been designated as a votable item, the order is dropped from the order paper.

Financial Information StrategyPrivate Members' Business

12:05 p.m.

Canadian Alliance

Philip Mayfield Canadian Alliance Cariboo—Chilcotin, BC

Mr. Speaker, I rise on a point of order. On that point I feel no decision has been made on this. I went to the committee. I very carefully constructed my motion to follow all five criteria. There has not been a decision given. I believe that issue needs to remain open until the committee has tabled its report at least.

Financial Information StrategyPrivate Members' Business

12:05 p.m.

The Speaker

I am afraid that whether or not I agree is not much help to the hon. member. The fact is the Chair is a servant of the House and is bound by the rules. The rules say that unless a matter has been designated votable by the House, because the committee has made a report to the House which may be deemed adopted upon presentation but has not yet been made, my hands are tied.

While I have great sympathy with the hon. member, the Chair can do nothing to assist him. I suggest that he go back to the committee and make further appeals. I think if he looks, he will probably find that he can reintroduce his motion and maybe win another draw and have another kick at the can, as they say. We wish him every success.

The Chair has a notice of a question of privilege from the hon. member for West Vancouver--Sunshine Coast.

PrivilegePrivate Members' Business

12:05 p.m.

Canadian Alliance

John Reynolds Canadian Alliance West Vancouver—Sunshine Coast, BC

Mr. Speaker, my question of privilege arises out of a motion that the government intends to move with respect to time allocation on Bill C-15B. As you are aware, Mr. Speaker, on Friday the government House leader gave notice of his intention to close off debate on this important bill.

I must report that if the motion were moved it would be the 76th time a motion to curtail debate has been moved by the government. The last time this issue was raised with you, Mr. Speaker, the government's record was 69 times. I am aware that you were not sympathetic at that time, nor were you sympathetic on the several other occasions the issue of time allocation was raised. However I believe and I will argue that a Speaker does indeed have the authority to intervene in these matters and prevent a time allocation motion from going forward. It is not a matter of a Speaker having authority, but under which circumstances should a Speaker feel it necessary to intervene.

The government House leader should not be allowed to move his motion because the circumstances that justify an intervention exist more today than at any other time. The right of the opposition to prolong debate has not been respected by the government and one of the last tools the opposition had to slow down a majority government has been taken away. I am referring to the procedure developed by the Reform Party in the last parliament involving the report stage of a bill. Because it was so successful, the government took it away.

The right of the opposition to prolong debate is essential. Without it the public is left without an opposing point of view. We had one successful filibuster in this parliament and it was successful, not because of the opposition, but because the government allowed the filibuster to take place. Bill C-5 represents how essential it is to a democratic institution to have an opposition with the ability to prolong debate.

Let us consider the case of Bill C-5. The member for Red Deer made a good case for the virtues of a good, old fashioned filibuster that was published in a number of papers. He talked about the former Quebec Liberal Senator Philippe Gigantès, who filibustered the GST in the Senate for 17 hours and 45 minutes. Mr. Gigantès told the Hill Times that to delay legislation is the last great tool of democracy. Speaker Fraser put it this way in 1988 when he said:

It is essential to our democratic system that controversial issues should be debated at reasonable length so that every reasonable opportunity shall be available to hear the arguments pro and con, and that reasonable delaying tactics should be permissible to enable opponents of a measure to enlist public support for their point of view.

The member for Red Deer argued that if a filibuster is to be successful it must raise the profile of an issue and enlist enough public support to: put the necessary pressure on the government to back down, or make the government pay a price at the polls in the event it insists on passing the bill into law.

He described how the naval aid bill of 1913 represented the first time in Canadian parliamentary history that closure was ever used. The proposed legislation was introduced by the Conservative government of Sir Robert Borden and if adopted would have authorized the cash donation of $35 million to Great Britain for the construction of the Dreadnought class warships for its navy. Sir Wilfrid Laurier strongly opposed the bill and the Liberals filibustered throughout second reading and committee of the whole. At one point in committee of the whole they kept the whole House virtually in continuous session for as long as two weeks: the House sat from 3 o'clock on Monday March 3 until Saturday at midnight and then again from 3 o'clock on Monday March 10 to Saturday late in the evening. The naval bill was eventually defeated in the Liberal dominated Senate.

Closure was used again to close off the famous pipeline debate in 1956. Well known academic C.E.S. Franks said the pipeline debate was perhaps the most important debate in parliament's history and it had inaugurated the modern parliamentary age of both obstruction and reform.

The debate on the omnibus Energy Security Act of 1982 was made famous because the opposition caused the division bells to ring from 4.20 p.m. on Tuesday March 2, until 2.28 p.m.--

PrivilegePrivate Members' Business

12:10 p.m.

The Speaker

Order, please. The hon. member for West Vancouver--Sunshine Coast is treating us to an interesting historical review of the whole notion of time allocation or closure as the case may be. Interesting as that may be I would like to hear the question of privilege he is raising because, while the historical background of the situation may be of interest to hon. members, we are hearing a question of privilege. It is not a chance for a speech. I would be glad to hear from the hon. member what is the question of privilege he is alleging.

PrivilegePrivate Members' Business

12:10 p.m.

Canadian Alliance

John Reynolds Canadian Alliance West Vancouver—Sunshine Coast, BC

Mr. Speaker, sometimes to get to that point it takes some basis of building up to the argument. I know the Speaker has been around a while but I wanted to ensure this was all put into the proper context.

In the last parliament the Reform Party offered a unique approach to filibuster. Since the government, under the current House leader, was in the habit of preventing filibusters by closing off debate early and often the Reform Party targeted voting instead of debate and introduced hundreds of motions causing the House to vote around the clock for 42 hours straight. The Bloc Quebecois used it for the clarity bill and so on.

The member for Red Deer argued that the species at risk debate was a successful classic textbook filibuster in that it raised the profile of a controversial issue in Bill C-5.

Why this story is so important is because the debate on Bill C-15B is just beginning to get the attention it needs. The Canadian Alliance has fought for stronger penalties for those who break the law, including individuals who abuse animals. We object to recent sentences for blatant animal abuse that were far below the maximum penalties. Clearly this is inadequate.

Unfortunately, because of the way Bill C-15B is currently worded many ranchers, hunters and medical researchers may be subjected to harassment. The Liberal cabinet states that the bill would protect farmers, ranchers and researchers but the argument has three fatal flaws. Farmers would have to hire lawyers.

PrivilegePrivate Members' Business

12:10 p.m.

The Speaker

Once again, the hon. member is heading off into the merits of the bill. I would like to know what his question of privilege is. He is saying that the privileges of the members of the House are at issue here. I need to hear what the question of privilege is. The merits of the bill, with all due respect to the hon. member, are not affecting the privileges of members of the House.

PrivilegePrivate Members' Business

12:10 p.m.

Canadian Alliance

Vic Toews Canadian Alliance Provencher, MB

Mr. Speaker, on a point of order.

PrivilegePrivate Members' Business

12:10 p.m.

The Speaker

We cannot interrupt a question of privilege on a point of order. We must hear what the question of privilege is and I know the hon. member for West Vancouver--Sunshine Coast is keen to assist the Chair.

PrivilegePrivate Members' Business

12:10 p.m.

Canadian Alliance

John Reynolds Canadian Alliance West Vancouver—Sunshine Coast, BC

Mr. Speaker, citation 3 in Beauchesne's 6th edition outlines some elements of the Constitution Act and our system of government which I believe is relevant to this very point. It states:

More tentative are such traditional features as respect for the rights of the minority, which precludes a Government from using to excess the extensive powers that it has to limit debate or to proceed in what the public and the Opposition might interpret as unorthodox ways.

Earlier arguments regarding time allocation suggested that the Chair intervene on behalf of the collective rights of parliamentarians to ensure that traditional features, as outlined in citation 3, were upheld.

While the Speaker ruled not to intervene in the 69th time the government closed off debate or the 70th, 71st and 72nd time I would argue that since then, and since we are embarking on the 76th motion, considering that the last filibuster tool has been taken away, the moment has arrived to declare the measures imposed by the government today as excessive and unorthodox as described by citation 3 in Beauchesne's. Since the Chair possesses discretionary authority to refuse to allow a motion of time allocation to be put, now is the time to do it.

On May 2, 2000, during a discussion of the time allocation rule at the Standing Committee on Procedure and House Affairs, the former clerk of the House of Commons, Robert Marleau, responded to a question regarding the Speaker's authority to protect the minority in the manner described earlier. He said: exists intrinsically in the role of the Speakership all the time—where there could be the tyranny of either side. It could be the tyranny of the majority or the tyranny of the minority.

At a subsequent meeting on May 4 the former clerk suggested that with time allocation the Speaker was less likely to intervene. There is a reference to this in House of Commons Procedure and Practice on page 570. However, the clerk stopped short of suggesting that the Speaker would never intervene. He used an extreme example that if the government time allocated every bill at every stage the Speaker might intervene.

My interpretation of what the clerk said is that there exists a limit to what a majority government can do with respect to time allocation. My interpretation is supported by the citation I mentioned earlier from Beauchesne's which states that a government is precluded from using to excess the extensive powers it has to limit debate. The clerk used the extreme example in his response because he knew it was not up to him to establish the limit. We know that 69, 70 and 75 is likely not the limit. On Friday the government House leader gave notice of his intention to move the 76th motion.

Mr. Speaker, I would also like you to consider the matter of using Standing Order 56.1. In the last parliament the government used this procedure in all sorts of unorthodox ways that went way beyond its powers.

PrivilegePrivate Members' Business

12:15 p.m.

The Speaker

The hon. member said he was raising a question of privilege about the use of time allocation. Now we are into Standing Order 56.1. This is very interesting but we had better stick to the subject under discussion. Has the member any more points to make on time allocation with respect to this question of privilege or is he finished with that?

PrivilegePrivate Members' Business

12:15 p.m.

Canadian Alliance

John Reynolds Canadian Alliance West Vancouver—Sunshine Coast, BC

No, Mr. Speaker, I have a few more.

On page 369 of Marleau and Montpetit there is a reference to an intervention by the Speaker on a time allocation related tactic used by the government. It describes how Speaker Fraser ruled on the government tactic of skipping over routine proceedings to go to orders of the day. As we are all aware this tactic, if allowed, would secure for the government the opportunity to move time allocation.

While Speaker Fraser ruled such a motion in order on April 13, 1987, page 369 references another ruling where the Speaker ruled out of order a similar motion only a few months before. The Speaker was able to judge each situation and rule accordingly. Speaker Fraser demonstrated that a Speaker could and should intervene when a government abuses its powers and the rules of the House.

The rule governing time allocation can be found in Standing Order 78. It provides for more than one day of allocated debate yet the government never exercises this option. The government, by only allotting the minimum amount of time to debate each stage of a controversial bill, prevents the opposition from doing its job. It prevents the opposition from enlisting public support and getting its point of view across, thus affecting its privileges.

The right of the opposition to raise the profile of an issue in debate is one of the indispensable principles that make up parliamentary law. These principles, as described in Beauchesne's 6th edition, are:

To protect the minority and restrain the improvidence and tyranny of the majority, to secure the transaction of public business in a decent and orderly manner, to enable every member to express his opinions within those limits necessary to preserve decorum and prevent an unnecessary waste of time--

Mr. Speaker, you have never ruled in favour of these questions of privilege but there does come a time. The government is into record time allocations; the people have a right to hear this debate. This is an important debate especially for rural Canadians, something the government does not understand much about. I would ask you, Mr. Speaker--

PrivilegePrivate Members' Business

12:15 p.m.

An hon. member

I am a rural Canadian.

PrivilegePrivate Members' Business

12:15 p.m.

Canadian Alliance

John Reynolds Canadian Alliance West Vancouver—Sunshine Coast, BC

Well, maybe the member is a rural Canadian, but his government does not understand much about rural Canadians or we would not have this bill now.

We implore you, Mr. Speaker, to use the powers that you have to allow this debate to continue so Canadians can really understand what is in the bill.