Government Operations committee  At the risk of offending provinces—I won't name any specifically—certainly my belief is that some have very good budgeting practices that are very consistent with their accounting practices. I think there are others that still need some improvement, perhaps, in some of their budgeting practices, so because of that I won't actually name names.

Government Operations committee  I'll hazard a guess--or not a guess, but I'll take a chance on it. I would suggest probably looking at Alberta and British Columbia in particular probably as potential good areas. That doesn't mean I'm saying all the rest are bad; I'm just picking those two out as two that come to mind as having good practices.

Government Operations committee  Again, it is before my time. I believe that it was a time of rising surpluses, and that probably contributed. It's my understanding that contributed to the ability to have supplementary estimates.

Government Operations committee  In....

Government Operations committee  Oh, okay. Again, we stand behind that recommendation—

Government Operations committee  There were those challenges, even in a smaller province. For example, at the provincial level the hospitals in New Brunswick were fully consolidated in the province's financial statements. In the main estimates document, there would have been one line for grants to hospitals, which in comparison to the province's total budget would have been a very large number, but the only thing it would have said would have been “grants to hospitals”.

Government Operations committee  I'm sorry, were you referring to a recommendation we made? Yes? Okay. Which recommendation?

Government Operations committee  I'm sorry to keep sounding like an accountant, but I am one, after all. I think fundamentally the starting point has to be an agreement, as I said earlier, on how you define the entity—so what the government is—and then how you account for things. On those two things there are recommendations by the Public Sector Accounting Board on how that's done, and the federal government follows those recommendations in preparing its actual financial statements.

Government Operations committee  I think I can mention some of the things that I felt were good practices in New Brunswick, and that should at least be considered at the federal level. I'm not sure whether they could actually be adopted. Despite the fact that the budget was broken down into many different types of categories—and at the federal level we have things like grants and contributions and capital and all kinds of different categories—we always had a reconciliation between that breakdown and the expenses in the budget.

Government Operations committee  Thank you for the clarification. I think I understand better. Instead of moving the fiscal year-end, the same thing could be accomplished by saying that the budget needs to come out in December or in January or whenever, right? As I said, the capital budget in New Brunswick was always done in December.

Government Operations committee  Again, we have made the recommendation that the main estimates should be on the same basis, an accrual basis, as the budget and the financial statements. We have also made the comment that when you can't make the reconciliation between the main estimates and the budget, it makes it difficult to understand what's in the main estimates and what's not.

Government Operations committee  I'll go back to my experience in New Brunswick. The main estimates would have agreed with the budget, so when the budget was brought down there was a main estimates document that tied in exactly to the budget. Subsequent to that, during the year it would be possible that there would have been a supplementary estimate brought down, but it would be very clear to everybody that the supplementary estimate would be spending that is outside the original government's budget plan.

Government Operations committee  As a personal observation and simply going back to my history—and again, understanding that I don't know the complexity of the federal government process—I always felt that it was important to have the main estimates on the same basis as the budget and as the financial statement, so that then you have a very clear trail from one to the other, which would imply, as the Office of the Auditor General of Canada has recommended in the past, that you would use an accrual-based approach for the estimates.

Government Operations committee  So in that type of approach, you need to have both. You need to have the expense on an accrual basis, but then you need to consider also including some other items that represent additional cash that would have to be paid out.

Government Operations committee  Certainly we are always willing to sit down with any member of the committee and talk through what we know about it. But again, we haven't done any audits and we're not doing any audits on this, so we're not going to present any report to Parliament on that. We have also presented an overview of the estimates process, which this committee, in the past, recommended we do.