ETHI Committee Report

CHAPTER TWO — WHAT THE COMMITTEE HEARD

In the course of this study, the Committee held a series of meetings to gather information from all of the Officers of Parliament, from academics in the field, and from officials of the Treasury Board Secretariat, which provides advice to the government’s management board, the Treasury Board. We note that, concurrent with the Committee’s work, a consultation process is underway between the Treasury Board Secretariat and the Officers of Parliament, aimed at the development of a pilot project to test a new funding mechanism for their offices. That process will likely continue beyond the publication date of this report.

Issues about the current funding mechanism for Officers of Parliament include the adequacy of funding levels, timeliness of the process, transparency, and the capacity to respond to changes in funding needs due to technological change, mandate expansion and rising demand for an Officer’s services.

INDEPENDENCE FROM GOVERNMENT, BUT NOT PARLIAMENT

Officers raised the discomfort they feel with a funding mechanism which requires that those who scrutinize government’s performance in several important areas, seek approval for budgets from the very government which they investigate. As Information Commissioner John Reid described it,

With all due respect, it's very difficult for the government to play both roles as the funder and as the people who are being investigated. I think there's a certain friction that must take place under those circumstances. On balance, therefore, I prefer to have members of Parliament take on the responsibility of funding, rather than have it in the hands of the government. (10 February 2005)

The possibility of a conflict of interest for the government as both source of funding and subject of investigation arises with all the Officers of Parliament that we examined, with the possible exception of two. The Ethics Commissioner, as described in Chapter One, is already funded under a mechanism managed by Parliament. The Chief Electoral Officer receives most of his funding by statutory authority, under parameters set out in strict detail by the Canada Elections Act. Only the salaries for his permanent staff are paid from an annual appropriation vote through the Estimates process.

Unlike most other Officers of Parliament, the Chief Electoral Officer is not an ombudsman. He is responsible for the delivery of two fundamental democratic rights: the right to vote, and the right to be a candidate in an election. In accordance with this unique role, the independence of his Office from political influence is safeguarded in a number of ways, including the funding mechanism, but more importantly, the appointment and removal processes. He also reports publicly and appears annually before the House of Commons Standing Committee on Procedure and House Affairs on his Estimates. The two sources of funding for his Office, and the need for the statutory draw funding mechanism in particular, were explained in the following manner by Chief Electoral Officer Jean-Pierre Kingsley.

There are two budgetary authorities that fund the activities of the Office of the Chief Electoral Officer: the statutory draw and an annual appropriation vote. Both are authorizations from Parliament to expend money and reflect the constitutional principle that public funds cannot be accessed without the approval of Parliament. … The various functions and duties relating to the delivery of elections could not be performed in an effective, efficient, independent, and impartial manner without the statutory draw. That is because the timing of elections is not known, making the use of annual appropriation votes unsuitable. It is also imperative for the conduct of an effective, fair, and impartial electoral process that funding be insulated from executive control or political agenda. (15 February 2005)

For the Ethics Commissioner and the Chief Electoral Officer, existing mechanisms may already contribute to a level of independence from the government of the day. For the other Officers of Parliament, an enhanced role for Parliamentarians in the establishment of their budgets is seen as a key remedy to the perceived conflict that exists when a government department is both funder and object of scrutiny. The Commissioner of Official Languages, Dyane Adam, alluded to the sensitivity she saw as inherent in seeking budgetary approvals from the same government that she is called upon to criticize. Canada’s Auditor General, Sheila Fraser, agreed that whatever new mechanism was developed, there must be a strong role for Parliamentarians.

There is a legal basis for a need for independence for the Officers of Parliament, argued Professor Craig Forcese of the University of Ottawa. As Professor Forcese explained, based on the Rowat case,⁹ in order for the Information Commissioner to validly exercise his investigative and contempt powers under the Access to Information Act, he must be independent of the government. Professor Forcese extended his argument to all of the Officers of Parliament as well.

[A]t least five Officers of Parliament are obliged to meet court-like standards of independence. These five officers — the Access, Privacy, Official Languages, and Ethics Commissioners, and the Auditor General — have the powers of a court of record to compel the attendance of witnesses and the giving of evidence. They therefore have the power to punish for contempt in response to acts committed in their presence. Because they possess this power, the Constitution requires that these officers be sufficiently independent of the government. (8 March 2005)

The importance of independence from government was also emphasized by Professor Paul Thomas, of the University of Manitoba, in a written submission to the Committee. He argued that the budget-setting process for Officers of Parliament should reflect the primacy of their relationship with Parliament. He also stated that, as Officers charged with tasks designed to assist Parliament in its scrutiny and accountability functions, these independent parliamentary agencies should not be subject to unilateral executive control of their budgets and staffing. However, Professor Thomas recognized that such agencies should not be sheltered from government-wide financial realities of the day, either, and argued that they must be held accountable for the “economy, efficiency and effectiveness of their spending.”¹⁰

In making its recommendations in this report, the Committee is aware of the importance of protecting the Officers of Parliament from conflict that might arise from their functions as watchdogs who scrutinize the government’s performance in meeting various statutory responsibilities, and their dependence on that same government for funds. Inadequate funding threatens to undermine the Officers’ abilities to discharge those statutory obligations created for them by Parliament. However, as Auditor General Sheila Fraser stressed, the Officers’ concern goes well beyond the adequacy of budgets.

We have not asked for more money. What we are asking for is a rigorous review of the Office, which in fact might even save money, and as well a process where we do not have to negotiate with an analyst at the Treasury Board Secretariat to have us put in a submission and have the Secretariat refuse to put it to the Treasury Board. I find that, quite frankly, unacceptable. I can't go and lobby a minister to say, “Minister, we have this submission that has been put in and your people are blocking it”, and then have my budget cut by 15%. That's what almost happened to us last year. I'm not asking for more money. I'm asking for a process that would give us an independent, rigorous challenge and that would make us accountable to Parliament. That's who we should be accountable to. (24 February 2005)

OTHER OBJECTIVES

In addition to establishing a funding mechanism that maintains the Officers’ independence from government, witnesses also urged the Committee to consider a number of other criteria in developing a new process. For example, the process should include the elements of the government-side budget design and approval process that ensure accountability to the public for expenditures of public funds. Primarily, the components of that process are now found in the challenge function performed by the Treasury Board Secretariat. Stephen Wallace, Acting Assistant Deputy Secretary, Government Operations Sector, Treasury Board of Canada Secretariat, argued that the best funding mechanism for Agents of Parliament would be one that strikes “the right balance between a degree of independence of Agents, a critical role for Parliament, and the responsibility of government for sound stewardship of funds.” (17 February 2005)

The Treasury Board Secretariat challenges Officers of Parliament, and all other departments, agencies and Crown corporations, to ensure that the impacts of program proposals are thoroughly analysed in the context of the priorities of the Officer and the government of the day. In addition, program proposals must be examined against relevant Treasury Board policies. Generally, a new policy or initiative needs government approval before it can be implemented.

Officers’ proposed budgets are reviewed by Treasury Board Secretariat staff, who make recommendations to Treasury Board ministers to approve, not approve or approve with conditions the proposals contained in an Officer’s submission. Once the Treasury Board Secretariat receives an Officer’s submission requesting incremental funding, it must ensure that the new spending has a source of funds. This funding can come from the Budget, the fiscal framework, internal reallocation, or through other means. Once a source of funds has been confirmed, a program analyst reviews the submission guided by the following questions:

•	Authorities — Does the proposal conform to legislation, government regulations, departmental mandate, and current policy approvals?

•	Priorities — How does the proposal affect the broader set of government priorities

•	Affordability — What are the costs and who should pay?

•	Effectiveness — Will the proposal achieve the desired policy outcomes?

•	Program delivery — Could the proposal be delivered better in a different way?

•	Prudence, Probity and Equity — Are there appropriate safeguards to protect public funds?

•	Performance Measurement — Is there a clear understanding of the results to be achieved and an ability to measure or evaluate the success of proposals?

Beyond the fiscal considerations applied by the Treasury Board Secretariat, funding decisions for Officers of Parliament could also involve the consideration of technical and professional input from outside the offices of the Officers of Parliament. In some cases, the Officers of Parliament argued that experts in various fields could shed important light on technological or other changes that expand the field in which the Officer functions, assisting decision-makers in the assessment of any requests for adjustments to expenditure levels. Both the Auditor General and the Privacy Commissioner stressed this particular need, and it informed their recommendations as to how the funding mechanism should be re-shaped.

Sheila Fraser, in her appearance before the Committee, stressed the need for the Office of the Auditor General to be subject to an effective challenge from people who are knowledgeable about audit offices. (24 February 2005) In her own field, Privacy Commissioner Jennifer Stoddart identified the international circulation of personal information and related technological developments as necessitating the input of experts who could properly assess her budget requests in their ever-changing context. (10 February 2005)

The desirability of having the House of Commons standing committees to which the Officers currently report become more involved in funding decision-making was also discussed. While some, such as the Commissioner of Official Languages, argued that their expertise would qualify these committees to become involved in the budget-setting process, others argued that their role in reviewing, overseeing and supporting the work of “their” Officers of Parliament should be continued, with the funding matters going to another parliamentary body. Specialized parliamentary committees would continue to receive reports from the Officers of Parliament, hear their concerns, and deal with their Estimates in the normal course of events.

Expanding the fiscal period covered by the funding process so that resources could be allocated for a longer period of time was also recommended by several witnesses. The annual Estimates process is seen as a great consumer of resources in itself, and a longer-term planning cycle could enhance Officers’ effectiveness. This option was advanced by Professor Forcese:

A more cost-effective system that would address concerns about independence is multi-year formula funding; meaning funding pre-established to grow according to an objective benchmark like inflation, the size of government, the number of complaints received by the officer, or other similar measures. Obviously even with this system, some sort of review would have to be conducted to set the starting level budget for Officers. Further, periodic update reviews would have to be held to make sure that the formula mechanism is operating appropriately. Here, however, reviews of officer budgets by Parliament, the government, or some blue ribbon panel would be relatively infrequent, minimizing the perception that officers are beholden to any of these groups. (8 March 2005)

The Committee heard from a number of witnesses that the effort to secure a new funding mechanism has been underway for some time, as outlined earlier in this report, and that there is some consensus that the new mechanism, at least in the form of a pilot project, should be in place for the next funding cycle. For example, Auditor General Sheila Fraser expressed her concern that the issue should move beyond the study and consideration stage in fairly short order.

In 2001, Treasury Board decided that a mechanism should be put in place by December 2002. It is now February 2005 and we are still talking. I can understand that this is not a top priority for the Secretariat, but the fact remains that very little progress has been made and there has been very little reaction from officials in this regard. … It is still being discussed. Studies of all the possible models have been done, and now they are starting to say that they would like to do them all over again. In my view, we have had enough studies. (24 February 2005)

---

9	Rowat v. Canada (Information Commissioner) [2000] F.C.J. No. 832 (F.C.T.D.).

10	Paul G. Thomas, “Notes for Submission to House of Commons’ Standing Committee on Access to Information, Privacy and Ethics on the Topic of Funding Mechanism for Officers of Parliament,” 5 March 2005, page 1.