Mr. Speaker, I am very pleased as a member of the Standing Committee on Government Operations and Estimates to participate in this debate today.
The committee's work has provided an opportunity to further strengthen the business of supply, a process that goes to the heart of our system of parliamentary government.
One of the fundamental roles of Parliament, of course, is to hold the government to account for how it spends public funds. As stated in the Financial Administration Act, “No payment shall be made out of the consolidated revenue fund without the authority of Parliament”, and it is by scrutinizing, reviewing and approving government spending that Parliament fulfills this important function.
Our government is as committed as ever to supporting parliamentarians in exercising this constitutional duty. It is part of our strong commitment to make the government more responsive, transparent and accountable to Parliament and Canadians. I believe that our actions speak for themselves in this area.
Indeed, over the past few years, we have taken a number of steps to ensure that Parliament and Canadians are better informed about public spending. This includes steps to improve financial reporting, which has, admittedly, changed significantly in recent years.
We have all heard the expression, “Sunlight is the best disinfectant”. It was made famous by former U.S. Supreme Court Justice Louis Brandeis, who used it to refer to the benefits of openness and transparency.
Financial reporting is sunlight in the world of any organization. It shines a light on its operations and allows for the proper evaluation of its performance, which is why the government has been committed not only to improving the quality of financial reporting to Parliament and to Canadians but also to increasing its frequency.
To that end we have introduced quarterly financial reporting on government spending for departments agencies and crown corporations. This practice has been in place since April 2011, and it has made government operations more transparent and helps Parliament exercise its oversight role.
It is worth noting that up until recently, parliamentarians could get information on how departments spend only once a year. That was through the Public Accounts of Canada, which include the government's consolidated financial statements and are tabled several months after the end of the fiscal year.
The introduction of quarterly financial reports has changed all of that. These reports provide information on how money has been spent over the past quarter and how that spending compares with prior periods. I would add that these quarterly report are among the existing mechanisms that the government is using to provide information on the implementation of economic action plan 2012 measures.
Anyone interested in the impact of the budget should pay particular attention to a new section called “Budget 2012 implementation”. This section has been a part of quarterly financial reports since the first quarter of 2012-13. It includes information on the initiatives and savings announced in the last budget, including planned expenditures in relation to personnel.
I would add that not all departments would have seen the impacts from the economic action plan 2012 restraint measures in the first quarter of the year. This is because these measures are being implemented by departments and agencies in accordance with their plans over a three-year timeframe. However, I can assure hon. members that departments and agencies will continue to report on the implementation of economic action plan 2012 in their quarterly financial report as savings measures are gradually implemented over time.
Quarterly reporting is just one of the many things we have done to strengthen the way we manage public expenditures. Another important change has been the introduction of annual departmental financial statements. Since 2006, departments and agencies have been publishing their own financial statements every year on the nature and extent of their activities. These statements have contributed to Canada's leadership in financial reporting. Indeed, very few jurisdictions publish annual financial statements at the departmental level.
Our leadership is also evident in the fact that the Public Accounts of Canada have consistently received a clean opinion by the Auditor General of Canada. In fact, the Auditor General has given these financial statements, which are one of the most important accountability documents prepared by the government, a clean opinion for 14 years running. This testifies to the high standards of the government's financial statements and reporting.
I could go on describing the actions this government has taken to strengthen the way it manages and reports its public expenditures. I would just say that the reforms I have been talking about are all about sound stewardship of public services. They are just some of the ways the government provides more timely and relevant financial information for parliamentarians and Canadians. They demonstrate that the government is as committed as ever to supporting parliamentarians in exercising their constitutional duty of holding the government to account for how it spends taxpayers' money.
Moreover, these actions complement the many steps that parliamentarians have taken to improve the oversight of government spending. Today, for example, the Leader of the Opposition can select two departments or agencies to have their estimates considered by the committee of the whole in the House. The responsible ministers are then required to submit to questions by the entire membership of the House of Commons for up to four hours. This change, made possible through an amendment to the Standing Orders, puts a direct spotlight on the activities of individual federal organizations and their ministers in a very public and open way, and I believe it has added an important level of scrutiny to government spending.
There is always room for improvement. This is the case with most things in life and it is certainly the case with the estimates and the business of supply, which have seen innumerable changes over time. That is not surprising when considering that we are talking about something whose origins can be traced back to medieval England.
That said, the government welcomes the committee's recommendations to strengthen this long-standing practice. The recommendations include a number of suggestions to make the estimates and supply more meaningful for members of Parliament and the general public. They also represent a good balance of recommendations applying to parliamentarians, on the one hand, and the government, on the other. This balanced approach speaks to the fact that ensuring greater and better scrutiny of public funds is indeed a shared responsibility, and I can assure the House that it is a responsibility that the government takes very seriously.
The committee's report has given the government much to think about and I am pleased to say that we are generally supportive of the recommendations falling within our purview. This includes the recommendations that address the contents of the reports on plans and priorities. As I am sure many of my hon. colleagues have noticed, the reports on plans and priorities have already seen many positive changes in recent years. For one, they have become a lot more user friendly. This is due to the efforts that have been made to streamline the reports to make them more concise and written in plain language. It is also due to a focus on results-based management, requiring federal organizations to demonstrate clear outcomes for their programs.
Today, RPPs must clearly state how an organization will achieve results for Canadians, and the departmental performance reports provide information on the results achieved. These changes have certainly shed sunlight on the workings of government. To put it bluntly, it has made it easier to follow the money.
The recommendations proposed for the RPPs by the committee would also make it easier to track performance. This includes the fourth recommendation that financial information by program activity be included for three previous fiscal years and three future years. It also includes the fifth recommendation that an explanation of any changes in planned spending over time be included, as well as any variance between planned and actual results by fiscal year as available. The government agrees with both of these recommendations.
Another straightforward recommendation is the one calling on the government to identify all new funding in the main and supplementary estimates and to cross-reference that funding to the appropriate budget source. The government agrees that doing this would add clarity to the estimates process and, as such, we are committed to identifying all new programs that appear for the first time in all estimates documents. We will also link them to the appropriate source of funds from the fiscal framework.
These changes reflect our government's commitment to strengthening the linkages between the budget and the estimates. By the way, we will never have a perfect alignment of these two documents. It is simply not possible.
I bring this point up because the committee has also called on the government to change the timing of the budget and adopt a fixed date of no later than February 1. This recommendation is an attempt to have budget items for a given year reflected in the main estimates to the greatest extent possible.
The government has offered reasons why this has not been adopted. First, it would restrict the government's flexibility to respond to global and domestic economic conditions, such as the economic downturn and the troubles in the Euro zone. In many cases, these global and domestic comparatives play a determining role in decisions related to budget timing, and the government should not be bound by arbitrary dates that constrain its ability to respond to a dynamic economic environment.
Second, a fixed date would simply not ensure that the budget items are included in the main estimates. This is a question of process. After the budget is tabled, departments then go about the complex process of developing detailed program terms and conditions that need to be approved by Treasury Board. Therefore, if we respect that process, it may take several supply cycles before we see budget items in an estimates document. This is an important point to remember.
The government has committed to ensuring that parliamentarians have the information they need to hold the government to account for how it spends public funds. I believe the government's response to the report, which I have discussed in part today, supports this commitment. Parliament represents a crucial link between the federal government and the public, who expect the best use of their tax dollars. By supporting the vast majority of the committee's recommendations we are making that link stronger.
I would like to thank all the members of the committee for the excellent work that was done. It builds on the many positive changes that we have seen to the estimates and the business of supply in recent years.