Standing Committee on Public Accounts

HOUSE OF COMMONS CHAMBRE DES COMMUNES OTTAWA, CANADA K1A 0A6

Comité permanent des comptes publics

For immediate release

Ottawa, May 27, 2009 -

The federal government needs to improve its ability to verify results for funds transferred through trusts to provinces and territories, according to a report of the Standing Committee on Public Accounts presented in the House of Commons today by Chair Shawn Murphy, MP.

Each year, the federal government transfers considerable funds to the provinces and territories, which in turn use these funds to deliver programs and services to Canadians. In 2006-2007, federal transfers to the provinces and territories amounted to approximately $50 billion, or just under 23 percent of all federal expenses.

In February 2008, the Office of the Auditor General released a study of the federal government’s transfers to provinces and territories in order to describe to parliamentarians the main mechanisms the federal government uses to accomplish these transfers. The study identified three major types of transfers: four major statutory transfers, such as Equalization, which have minimal conditions; program specific transfers, which often require financial and compliance audits; and trusts, which are provided at the end of the fiscal year and have no ongoing conditions.

The Public Accounts Committee is concerned that the use of the trust mechanism to transfer funds may be misleading, as the federal government often claims specific results for these funds without having adequate means to verify the results. “It is essential that Parliament and Canadians have assurance that federal funds have been used as intended and expected results have been achieved,” commented Shawn Murphy.

The Committee recommends that the federal government clearly explain what ongoing conditions are attached to transfers and ensure that transfers through trusts incorporate mechanisms to verify the results achieved.