Mr. Speaker, I move that the seventh report of the Standing Committee on Government Operations and Estimates presented on Wednesday, June 20, be concurred in.
He said: I realize that we are delaying the debate on the budget Bill C-45 but I believe it is for an important reason. The government operations committee conducted a detailed report on how the House studies the estimates and produced a report that was unanimously supported with one minor exception.
Before members of this place can begin to properly debate the budget and the proposed expenditure cuts, we must clarify our desire for better and more timely information. Concurring in this report would do just that. I hope members on both sides of the House appreciate that this is not a hostile move. I believe that the President of the Treasury Board indicated on Monday during question period that he will support concurring in this report and I am confident that the motion will also receive the support of opposition members.
I will begin by providing a little background for the study in the words of the report itself. It reads:
In recent history, there have been two wide-ranging reviews of the estimates process, one by the House of Commons Standing Committee on Procedure and House Affairs in 1998, and another by the House of Commons Standing Committee on Government Operations and Estimates...in 2003. Of the 75 recommendations that came out of the two reports...few changes were made. The process for considering the estimates and supply should be revitalized, as there is still a need for more meaningful scrutiny.
In terms of an overview of the study, I will quote O'Brien and Bosc from The Procedure of the House of Commons: A Study of Its History and Present Form by Josef Redlich in terms of the importance of this topic. He writes:
The whole law of finance, and consequently the whole British constitution, is grounded upon one fundamental principle, laid down at the very outset of English parliamentary history and secured by three hundred years of mingled conflict with the Crown and peaceful growth. All taxes and public burdens imposed upon the nation for purposes of state, whatsoever their nature, must be granted by the representatives of the citizens and taxpayers, i.e., by Parliament.
Because Canada follows the British parliamentary model, that same statement applies to this country.
The first topic of the report I will talk about is “cash versus accrual accounting”. Recommendation 1 of the report is:
That the Treasury Board of Canada Secretariat complete its study of accrual-based budgeting and appropriations and report back to Parliament by March 31, 2013.
We have been told by the government that it will provide this report by March 31, 2013.
In terms of the rationale, I will read, again, from the report:
In the course of its study, the Committee considered the matter of cash versus accrual-based appropriations in the context of what information is most useful for parliamentarians in their consideration of estimates and approval of supply. The Committee heard from some witnesses who suggested that the financial information and appropriations in the main and supplementary estimates should be presented on an accrual basis as opposed to a cash basis. However there was no consensus among witnesses on the matter and the Committee heard from several witnesses who strongly favoured that information in the estimates remain on a cash basis.
In other words, there was no consensus among the experts as to whether cash or accrual accounting was better and, therefore, we did not pronounce on that issue, but we have asked that the Treasury Board Secretariat complete a study in the coming months.
The next issue concerns the timing of the budget versus the main estimates. Recommendation 6 reads:
That, to the extent possible, the budget items for a given year are reflected in the main estimates for that same year; and therefore that the government present its budget in the House of Commons no later than February 1 of each year; that the Standing Committee on Procedure and House Affairs pursue amendments to the Standing Orders, procedure and practice of the House of Commons in order to move the date on which the main estimates are presented to the House back to a later date in March; and that the Committee report to the House on its study by March 31, 2013.
The government does not support fixing the budget date as no later than February 1. The rationale for this, as confirmed by many expert witnesses, is that the earlier the budget is made, the more it is likely the budget measures of the current year will be included in the main estimates. The government makes the argument that this reduces the flexibility of the government. However, in the view of the committee, such a flexibility reduction is worth it in order to bring promptness of information to those who study the estimates. Indeed, Auditor General Michael Ferguson confirmed this point when he stated at committee:
The Main Estimates do not provide a complete picture of the spending plan and is not connected with the Budget. When we performed the audit in 2006, we found that the main reason for including items in the Supplementary Estimates was timing. The tabling of the Main Estimates in advance of the Budget was a key factor that gave rise to increased use of Supplementary Estimates.
In other words, the timeliness and usefulness of the information would be much enhanced if the government would agree to the committee's unanimous proposal to say that the budget must not be later than February 1.
The next issue involves questions in advance.
Recommendation 10 states:
That, where feasible, standing committees provide questions to departmental officials in advance of hearings on the estimates, and that committee members endeavour to ensure the necessary departmental officials are invited to appear for estimates hearings.
This is an issue that falls within the purview of the House of Commons rather than the government.
Recommendation 11 states:
That standing committees review statutory programs on a cyclical basis, at least once every eight years. This also falls within the purview of the House.
Recommendation 12 states:
That departments and agencies include tax expenditures, currently included in the Department of Finance’s Tax Expenditures and Evaluations report, in their reports on plans and priorities, as determined by the Treasury Board of Canada Secretariat to best fit their mandate.
The government does not support putting the tax expenditures in the reports on plans and priorities, but has said that it would coordinate the release of the annual tax expenditure report with the main estimates and that the Finance Department would offer briefings.
Recommendation 13 states:
That standing committees review tax expenditures presented in departmental reports on plans and priorities on a cyclical basis at least once every eight years to assess whether or not they are meeting their intended objective.
This too is within the purview of the House of Commons.
I come now to the topic of the Parliamentary Budget Officer. Recommendation 15 states:
That the House of Commons give its Standing Committee on Government Operations and Estimates the mandate to undertake a study of the Office of the Parliamentary Budget Officer which would include a thorough analysis of the mandate and function of the Office in order to better serve members of Parliament; and that in its study, the Committee should consider all structural models for the Office including, but not limited to, the Parliamentary Budget Officer reporting directly to Parliament as an Officer of Parliament.
This also is within the purview of the House. However, the government did not display great enthusiasm for this proposal, stating that the Library of Parliament committee had already studied the question of the Parliamentary Budget Officer. This was some time ago, and I think members of the committee, including Conservative members, were in agreement that now, just a few months before the current Parliamentary Budget Officer leaves the job and another person is appointed, would be a very good time to conduct a new study of the desirable mandate of the Parliamentary Budget Officer.
I will quote a couple of expert witnesses.
First, Allen Schick, distinguished professor, School of Public Policy, University of Maryland, stated, “Canada” in establishing a Parliamentary Budget Officer:
—was following a trend that is quite widespread around the world, and that is staffing up parliament to be able to better perform its budget-related responsibilities....The role often is to review the estimates to see whether they are reliable. The key budget work today around the world is not simply whether the money should be spent, but are the assumptions underlying the estimates robust? Are they reliable?
I think that is precisely the area where research done by the Parliamentary Budget Officer is invaluable.
Joachim Wehner, associate professor in public policy at the London School of Economics, stated:
The first one [change] is to protect and enhance the role of the Parliamentary Budget Officer....Internationally, the Parliamentary Budget Officer of Canada is very highly regarded, and it's certainly a major change...in the degree the parliament in Canada has access to an independent, highly professional research capacity...some adjustments are possible to the legal framework for the Parliamentary Budget Officer. In particular, this role could be strengthened, or the status be strengthened, if he were a full officer of Parliament. Moreover, steps could be taken so that the Parliamentary Budget Officer has total access to all relevant information. I see some scope for strengthening it also on the basis of international experience.
These are two very laudatory reviews of our current Parliamentary Budget Officer and very definite proposals that he be made an officer of Parliament.
I come now to recommendation 16 on online resources, which states:
That the government develop a searchable online database that contains information on departmental spending by type of expense and by program.
The government is committing to make this information available in a better digital format.
Recommendation 14 states:
That standing committees dedicate an in camera meeting at the beginning of a new Parliament, and periodically as needed, for a briefing session on the estimates and supply process and the related documents, with a focus on the committee’s role in scrutinizing government spending
This recommendation is within the purview of the House. The purpose is to ensure that all committee members have adequate training and information to carry out an examination of the estimates in an efficient and proper way.
Next is recommendation 2 on vote structure, which states:
That the Treasury Board of Canada Secretariat transition the estimates and related appropriations acts from the current model to a program activity model, that they assist federal departments with this process, and that they prepare a timeline for this transition by March 31, 2013, and transmit this timeline to the Committee.
The government said that it would provide a detailed report on transition to a program activity by March 31, 2013.
I would like to quote the current Parliamentary Budget officer, Kevin Page, because it is a very good quote. He states
On structure, it makes little sense in a 21st century world for parliamentarians to be voting on inputs like operations and capital, and grants and contributions that cut across a department spending many billions of dollars for a diverse set of program activities. Given the recent experiences with border infrastructure funds and aboriginal housing and education, would it not make more sense to consider program activities (five, 10 or 15 per department) or their associated outputs as more relevant control gates? Why should ministers and their accountability officers be able to move monies from one activity to another without scrutiny or consent? Would voting on program activities not encourage more meaningful scrutiny on service level impacts as we move forward with spending restraint? Would this not help simplify our estimates system, which collects financial and non-financial performance data on program activities?
The answer to all of those questions is a definite “yes”. I can assure members that the committee was absolutely unanimous that in the 21st century it made absolute sense to proceed with estimates based on program activity.
Next I come to the deemed adopted rule. Currently, the main estimates must be tabled by March 1 and reported back by May 31. Supplementary estimates must be reported back no later than three sitting days before the final supply day in the related supply period.
Recommendation 8 states:
That the Standing Committee on Procedure and House Affairs pursue amendments to the Standing Orders, procedure and practice of the House of Commons in order to require standing committees to consider during a minimum amount of time the estimates referred to them, and that the Committee report to the House on its study no later than March 31, 2013.
That is within the purview of the House, as is recommendation 9, which states:
That as part of its amendments to the Standing Orders, the Standing Committee on Procedure and House Affairs examine the feasibility of providing standing committees at least two sitting weeks to consider and report on the supplementary estimates, and that the Committee report to the House on its study no later than March 31, 2013.
I will quote Ned Franks, professor emeritus of the Department of Political Studies at Queen's University, who thinks that the deemed adopted rule needs to stay.
I do not like the process of deeming, which means that the votes are deemed to be passed whether they come out of committee or Parliament has approved them or not. But bearing in mind the capacity of parliamentary committees and Parliament itself to delay, procrastinate, and simply obstruct business, I think deeming is an essential part of the Canadian financial processes.
He later continues:
—I think we need that deeming thing in there as a protection against just pure bloody-minded obstruction and the refusal to pass budgets in minority parliaments.
Some of my colleagues might believe that there is never any bloody-minded obstruction in this place, but that is what the expert has suggested. It is for that reason the committee did not propose to get rid of the deeming rule, but rather to propose measures that would ensure a certain minimum amount of time was spent in examining the estimates and the supplementary estimates.
That completes the essence of our recommendations.