EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 25, 1995

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[English]

The Chairman: Colleagues, welcome back from your two weeks away. The first order of business today is a motion you'll find on your agenda. Because of the budget bill, we have to amend our motion in terms of our subcommittee on grain transportation.

The clerk has developed a motion here:

That the motion adopted by the committee on March 15, 1995 establishing the Sub-Committee on Grain Transportation be replaced by the following....

Essentially it's the same motion, except it takes out reference to the actual budget bill. We've been told we have to take out the reference to the budget bill because it's going to another committee.

Are there any questions?

Mr. Pickard (Essex - Kent): Is this an error that was made after the budget?

The Chairman: No, the budget came after our motion.

Mr. Pickard: Why would our motion be changed? It seems every time something happens you have to change a motion that was in the past. It's the intent of the motion of the past and not the wording that's significant here.

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It seems odd to me that we would back up and redo a motion because a budget has come down in the interim.

The Chairman: I think the intent of the motion is still there. It just takes out reference to a particular bill that we don't have the authority to handle.

Mr. Easter (Malpeque): Basically, the problem is that immediately after the budget came down we prepared a mandate. It specifically stated that budgetary matters end with the budget, or something along those lines, which does two things. It has two committees looking at almost exactly the same thing, and that's one problem. Secondly, which committee do witnesses and the general public go to if the committees deal with the same issue?

From discussions I've had with a number of people it was felt wise to change the mandate to say the future of agriculture, in the absence of those particular budgetary decisions that are related to in this motion.... I think it puts us in the position of looking more to the future and not being in conflict with the committee looking at Bill C-76.

I've been expressing to people who are wondering about this matter that if they want to deal with the technicalities of the budget bill, Bill C-76, in terms of the $1.6 billion, etc., they're best directed to go to the committee on finance looking at that matter. If we're looking at impacts as a result of changes proposed in the budget, those issues should be addressed to this particular subcommittee to clear them up.

Mr. Pickard: There's a change of intent.

Mr. Easter: Yes.

The Chairman: Are there any other questions?

Mr. Pickard: Do we withdraw the motion that was on the floor earlier?

The Chairman: We replace it with this motion.

Motion agreed to

The Chairman: Our order of business today is a briefing on the main estimates process. The purpose today is to talk about the new process that has been developed to look at the long-term view of the budget. We have with us today Dr. Gordon Dittberner, ADM. He will take about an hour to brief us on it and then we will have questions directed toward this process.

Welcome.

Dr. Gordon Dittberner (Assistant Deputy Minister, Corporate Services Branch, Agriculture and Agri-Food Canada): Thank you very much, Mr. Chairman. First of all I'd like to introduce my colleagues from the department. Dennis Kam is the director general of finance and resource management in the department. Robert Caron is our senior corporate financial planning adviser. Dick Robinson is the chief operational planning officer. They are all very involved in putting together the part IIIs of the main estimates. We will take the time to go through some of the parts of our agenda today.

My plan for today is to cover a bit of general discussion on our part IIIs. I'd like to start with Mr. Kam giving an overview of the new expenditure management system that is being introduced into the government. After that I will briefly explain the differences among part I, part II, and part III. Then we'll ask Mr. Caron to give a more detailed explanation of what part III contains and how to use the book itself. Lastly we'll come to what is now known as our outlook document, ``Securing our Future''.

Everyone should have received copies of part III, and I'm sure you have all received copies of ``Securing our Future''. It is also known as our outlook document. It was also part of the budget papers when the budget was announced.

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Lastly, we have circulated to members a very short package of handouts covering part 5, which Mr. Kam will be referring to. There's a laminated piece, which is an easy guide to our part IIIs. The last piece is just some of the changes that have taken place in our part IIIs.

If I might take one moment, I'd like to remind everyone that our part IIIs do constitute our annual reports. In fact, we have consolidated many of the annual reports into the part IIIs. We are hoping to make further changes to the part IIIs as we go along. As you probably are aware, we've been going through a process of revising and updating these plans on a continual basis.

We hope by the end of today, and perhaps through the months ahead, we can get additional information from members on how we can improve the part IIIs. I know there are a number of people who have some difficulty in reading the details. Either they are too detailed or they have insufficient detail to answer some of the questions you may have. Any feedback we can get on improving this will be helpful.

We are, of course, constrained by some of the requirements of Parliament on how material should be presented and what the part IIIs contain. Nonetheless, that's what we'd like to cover today.

We'll come to this again a little later, but I should also say that this year's part IIIs marks the first time we or any department in government has provided a three-year financial planning horizon. Normally it has just been a one-year document of the amounts and the funds that have been approved. This year we're not only talking about a one-year plan that has been approved; we're also talking about planned expenditures for the next two years. This is the first time you have a three-year planning horizon. We're the only department to have done it.

I'm really pleased we were able to do this, because I think as parliamentarians you will be in a much better position to judge and to question the pertinent information that's required on the direction that agriculture and agrifood is going in the years ahead.

Perhaps with that as an introduction, Mr. Chairman, I'll turn the floor over to my colleague, Mr. Dennis Kam.

Mr. Dennis Kam (Director General, Finance and Resource Management Services, Agriculture and Agri-Food Canada): Thank you, Mr. Chairman. We thought it would be useful to start the briefing with an overview of the expenditure management system because Agriculture and Agri-Food Canada's estimates and expenditure plan will be carried out within the context of that overall expenditure management system.

I'm aware that some of you probably have already received a briefing on the expenditure management system. The formal document was tabled by the President of the Treasury Board in mid-February; I think it was February 15 when the document was tabled in the House. A description of the system was reprinted in part I of the estimates, which was tabled at the end of February. You have a reprint of that; it's chapter 5 of part I of the estimates.

The document that was released by the government in February was the first formal statement of the process by which the government sets its priorities and allocates resources. It was the first formal statement in fifteen years. The last such document was published in 1979-80 and at that time it was called the policy and expenditure management system. So this document in a sense is a watershed. It's the first time in fifteen years that a new document describes the formal process by which the government makes its decisions in setting priorities and allocating resources.

Of course, as you're all aware, a number of informal processes are involved when the government sets its priorities and allocates its resources. But the formal process by which paper flows through the cabinet decision-making process and the mechanisms involved in formally recording decisions are set out in this particular system.

Basically, there are three guiding principles that were brought to bear in developing this new system. As the document points out, the system has effectively been in place since October 1993, when the new government took over. The guiding principle was to integrate a more consultative budget process into the expenditure management system of the Government of Canada.

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As you're aware, a formal budget consultation process was introduced by the former government in the mid-1980s. Each year it became a little more formalized. The new system formally makes it part of the decision-making process of the Government of Canada. As I'll come to later, this formal documentation is now expected as part of this budget consultation process. There's a role for standing committees, particularly the Standing Committee on Finance, in the process of reviewing the budget consultation documents.

The second guiding principle was to respond to parliamentary reform. Again, as some of you are probably aware, in February 1994 the Standing Orders of the House of Commons were amended to empower standing committees to review the future year spending plans and priorities of government departments at the time they were reviewing the estimates. This system sought to integrate that new power formally to examine the estimates granted by Parliament to standing committees and to play a more formal and explicit role in the review of government expenditure plans.

The final guiding principle was, of course, fiscal restraint and an emphasis on reallocation. The government had stated in the 1994 budget and it reiterated in the most recent budget that new spending initiatives that may be identified by the government would be funded through reallocation from existing programs. This new system provides the discipline to ensure that happens within the overall decision-making processes of the government.

The dictum of reallocation and restraint has other implications. It implies an ongoing review of existing programs to identify programs of lower priority and opportunities for increasing efficiency. It also implies a greater emphasis on performance reporting, reporting on results, on the achievements of programs, to the government and to Parliament. There'll be an increased emphasis on reporting, through part IIIs of the estimates, on the performance and achievements of programs.

With those guiding principles as a framework for the new system, several features are set out on page 59 of the hand-out you have; it's page 63 in French. I'll quickly run through those. I might add as well, if you have any questions as I go through this, don't hesitate to ask.

Page 59 lists seven main features of the system. As you see, many of them respond to those guiding principles I enunciated already.

The first and probably the most critical one is that the budget planning process has been made the primary vehicle by which the government will set its priorities and allocate resources. That means the budget itself will be the process by which the government decides and announces how new spending initiatives will be introduced, what they will cost and how they'll be funded. They'll be funded from the reallocation of resources from existing programs. That means cuts - scaling back existing programs in order to fund new initiatives.

The system formally integrates the consultation process as a way of obtaining information and advice for government and cabinet in making its budget planning decisions. I'll come to that when we talk about the cycle by which the information flows and decisions are made.

The second critical feature of the process is the ongoing review of programs, which was triggered by the requirement for reallocation of existing resources.

A third critical feature is the elimination of central policy reserves. Some of you may be aware that each year when the government set its fiscal plan in the budget, traditionally provision was made for a reserve of varying amounts that would be used by the government over the course of the year, post-budget, to fund new initiatives.

As new ideas floated up from the system, from departments and ministers, there was competition for those reserves at cabinet. Once or twice a year, the cabinet would make a decision to allocate those reserves and those particular items subsequently would be funded through the tabling of supplementary estimates in the House.

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In order to impose the discipline required for the reallocation of existing resources, it was decided under the new expenditure management system to eliminate policy reserves entirely from the system. This meant the only opportunity to fund new initiatives was to reduce existing programs. So there are no loose, unallocated funds in the fiscal plan of the Government of Canada that can be used to fund new initiatives. For any decision to fund something new, there has to be a coincidental decision to reduce something somewhere else.

The only unallocated reserve that does exist in the system at this point is a small operating reserve funded by Treasury Board. It is used to deal with emergency health and safety situations that may arise during the course of the year. It's also to provide short-term funding for critical programs in which the service levels may be in jeopardy because of unanticipated workload increases.

That operating reserve will be managed or rationed very severely by Treasury Board. Departments have generally been instructed not to look to Treasury Board for the funding of any ongoing cost increases or, indeed, any other requirements. Departments should look internally to deal with new requirements and fund them through reallocation within existing, approved budgets.

The fourth element of the new system is the introduction of business planning into departments. In the past, departments submitted what were called multi-year operational plans to Treasury Board every fall. These submissions set out the three-year requirements for the departments. They set out the additional workload anticipated by the departments and the funding requirements to meet those workload increases. It was also used to assist Treasury Board in preparing the main estimates every year.

The multi-year operational planning process has been suspended. It has been replaced by the business planning approach, which requires submission of business plans to Treasury Board each spring. The business plans produced by departments are expected to describe how departments will adjust their internal operations and programs to respond to the direction and decisions that flow from the budget.

For example, in the current year, the 1995 budget announced a number of reductions in existing programs and a number of new cost-recovery initiatives. The departmental business plans will be submitted to Treasury Board and will set out how departments will go about implementing those decisions announced in the budget. They will describe how departments will manage within the resources allocated to them in the budget. This means departments will have to develop strategic planning with respect to their emerging program environment and make appropriate adjustments to respond to the evolving environment within the resources allocated through the budget process by the government.

A fifth feature of the new system - and in large part this is in the planning stage - is a statement of intent to provide more flexibility to departments and ministers in the management of the approved, allocated resources. It was recognized, in introducing this additional discipline into the system, that ministers and departments would require more flexibility to reallocate resources across their individual activities, across their votes within the estimates, in order to accommodate the evolving, changing requirements over the course of the year.

Treasury Board has announced a number of initiatives it's pursuing to provide additional flexibility to ministers and departments. As I said, most of these are in the planning stages.

Treasury Board is reviewing all its policies that, from the perspective of the departments, are largely considered to impose an administrative burden on departments. The policies are being reviewed to identify a means of streamlining them and reducing the reporting and the administrative burden on departments. It's expected that over the next several months Treasury Board will announce some changes in its current administrative and personnel management policy framework to provide more flexibility to departments and to manage the allocated resources.

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Another element of this additional flexibility is a major project undertaken by Treasury Board that will eventually involve all departments in an effort to examine opportunities for reforming the estimates. As you know, there are three parts to the estimates, part I, part II and part III. Part III, over the last twelve to fifteen years of its existence, has grown very large and become very complicated in many respects. There have been demands from the Auditor General and from standing committees to revisit the current content and structure of part III to improve and streamline it and make it more readable.

Treasury Board has undertaken to look at reforming the estimates. I'm aware that a number of members of Parliament have already been approached informally for their advice on opportunities for reforming the estimates. Some standing committees have been briefed and have become involved in this reform project.

In that context, Treasury Board wishes to examine the opportunities for changing the vote, program and activity structures set out in the estimates. I'm sure that Treasury Board officials would be happy to obtain advice from any members who have ideas and wish to provide advice to Treasury Board as to how this documentation could be improved.

As I mentioned at the outset - this is the sixth feature - there will be an effort, as part of the reform of the estimates, and more generally as part of the business planning process as well, to improve the information on program performance to assist the government to assist parliamentarians in reviewing departmental budgets and assessing the priorities that should be assigned to the programs of the government.

If you have studied part III over the years, you know there have been improvements in performance reporting, but it's a very difficult process to put in place, in part because there are difficult measurement problems. However, there will be another push from Treasury Board to improve the reporting on the performance of government programs.

As I said at the outset, the last feature is to recognize formally the role of the House standing committees to review government spending priorities as set out in departmental spending plans. There's an opportunity for standing committees to provide advice to the government as it goes through its budget-planning process and as it reaches decisions on the budget. I will come to that in a minute, in terms of the cycle.

If there are no questions, I'll move you to page 63 in the English version. It takes you through the cycle of how the information flows and where the key decision points are in the process. One can start anywhere in the cycle, since it's continuous, but let's say we break in at 12 o'clock, which is at the budget speech itself.

In a sense, the budget speech and documentation every year, along with the estimates, which are tabled a few days later, will set the overall fiscal plan for the government and the overall set of new priorities that may be announced in the budget. One can anticipate that an annual budget would announce some new initiatives, therefore some reductions or further reductions to allow the government to deliver on any fiscal targets that may have been set out. In any event, the budget speech will set out the overall fiscal priorities of the government as well as its overall spending and program priorities. That will basically provide direction to departments so they can begin to prepare their business plans to describe how they will implement what the budget announced.

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The budget will set out the what - the what in terms of reductions, the what in terms of new spending initiatives - and the business plans will be prepared for the Treasury Board to explain how departments will put those decisions in motion. Treasury Board is seeking those plans in order to provide assurances to the government, to the cabinet, that the plans put together by the departments are credible and viable, and indeed that they will be able to deliver on the announcements made in the budget. So it's an internal check by the Treasury Board on behalf of cabinet that the plans are sound.

The Chairman: Perhaps I could break in just for a second. The business plan we don't see as a committee, then, but it would reflected in the part IIIs, essentially.

Mr. Kam: That's right.

The Chairman: What we look at is the departmental outlook.

Mr. Kam: Yes. The departmental business plans are an internal document, because they will also address administrative adjustments, and a lot of managerial considerations and options that will be discussed with the Treasury Board. Parliamentarians, standing committees, will be provided with the part IIIs, which set out the program adjustments, and the outlook document - which I'll come to - which will set out the three-year plan, again at the program level, setting out the directions in terms of the numbers and what underlies them from a...

Mr. Pickard: Just a clarification on the process that is going on. I would assume that back in the period of October or whatever time through until the budget is prepared and presented, that business plan and the estimates are all worked out in a detailed plan. Is this just a check through Treasury Board, or is this.... I'm not sure how you're describing this. I'm assuming the department did that for six or eight months before they got to that....

Mr. Kam: As we move around the cycle I'll come to and explain that. You're quite right. Work's been ongoing. The business plans are finalized. Once the budget comes out, departments have about six to eight weeks to finalize their business plans and submit them to Treasury Board. That kicks off the next budget planning process, which runs over the next twelve months.

Mr. Pickard: So we're talking about the final dates, really, for getting things in place.

Mr. Kam: Yes, that's right. But it's an ongoing, continuous planning process, and there are certain reporting dates and certain points when documentation is released.

I should point out that the official deadline for the submission of business plans to the Treasury Board is mid-April. So right now indeed, since we're surely past it, the Treasury Board is receiving departmental business plan submissions.

At the same time, departments are also preparing their departmental outlooks, which will be provided to standing committees of the House. Under government direction, the departments must prepare these outlook documents. These are outlooks on departmental priorities and spending plans, which must be provided to the standing committees by the end of April. We'll address later the outlook for this committee. So all standing committees will be receiving departmental outlook documents by the end of April. Those outlook documents will set out, again, the program adjustments that departments will be undertaking to implement the budget measures.

As you know, under the House rules committees have until the end of May to review and report on the estimates. Under the new House rule passed in February 1994 the committees have until the House rises for the summer to review and report back on the outlook documents. So over the next several months you'll be reviewing the estimates and reviewing the outlook document. That outlook document, which will be reported in late June, will form part of the advice that flows to cabinet and the government on its next budget planning process.

It's anticipated that the committee report on the outlook documents will be responded to by the budget consultation papers, which will be released by the government in October. Rather than formally tabling replies in the House to each committee report, the government hopes to integrate a response to the outlook reports by committees and provide an overall response in the budget consultation documents.

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Moving down the cycle...we've talked about the business plans, the review and release of departmental outlook documents in April, which are reviewed in May and June. In June, normally mid-June or so, there'll be a major cabinet meeting to review all the information generated over the spring and early summer by these processes. For example, in June the President of Treasury Board will report to cabinet on the Treasury Board review of business plans. At that time the president of the Treasury Board will have some insights into the new spending pressures facing departments within their existing budgets, perhaps new spending pressures facing departments and being imposed by the external environment. Cabinet will have the advice of the standing committees in their review of the outlook documents.

At the same time the departments and cabinet policy committees will be examining new priorities that the government may wish to consider through the next budget planning process. So cabinet will also be getting advice in June from the departments of government and from its policy committees on possible new spending priorities, possible new program priorities, that could be considered through the next budget planning process.

So in June it's expected cabinet will take decisions that will set the broad direction of priorities for the next budget planning process, and that will provide direction to the President of the Treasury Board and the Minister of Finance on what sort of fiscal targets should be pursued to the next budget, and therefore what sort of reduction or reallocation measures must be pursued in order to deliver on the fiscal plans and to fund any new spending initiatives that may be considered, and basically to provide advice to departments on what sort of summer work plan they must engage in in order to support that cabinet planning process.

So there'll be a major cabinet meeting in June, with advice from cabinet on the budget consultation strategies and action plan. Work will proceed during the summer and culminate in the fall - once cabinet has reviewed the final budget consultation strategy - with the release of budget consultation papers. That will normally be in mid-October. Those papers will be referred immediately to the Standing Committee on Finance, which under House rules will examine those consultation papers and report back to the House by early December. Again, that was a change in the House rules in 1994.

The release of the budget consultation papers will kick off the formal consultation process the Minister of Finance undertakes with interest groups, with the public more generally. That process will continue until a cabinet review of the budget strategy, which takes place in January.

So by January the Minister of Finance will have carried out his consultation process, will have provided advice to cabinet on his recommended fiscal approach, the recommended fiscal targets of the government. The President of Treasury Board will report to cabinet at that point on options for reallocation and reductions. The chairmen of the policy committees of cabinet will report on recommended sector priorities that could be considered part of the next budget. In January Cabinet will start to make the trade-offs between proposed new spending initiatives, potential reductions, reallocations, and the requirements to meet any new fiscal target.

Once those decisions have been made, the Department of Finance will begin drafting the final documentation for the budget. That will be confirmed by the Minister of Finance and the Prime Minister, normally in early February. With that the budget will be delivered and the cycle will begin again.

So as you see, three critical decision-making points are taken by cabinet in the expenditure management process and there is a continuing flow of planning information that flows from departments, from ministers, from committees, from the public, to inform that decision-making process.

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That concludes my presentation. Are there any questions?

The Chairman: Is that your final presentation or is there one more?

Dr. Dittberner: That will conclude in terms of the new expenditure management system. I'll briefly say a little more on part I, part II and part III. Bob Caron will do a little more on the actual part III.

The Chairman: Why don't we take some questions on the expenditure management part of it first, and then we'll move on.

[Translation]

Mr. Crête (Kamouraska - Rivière-du-Loup): I'm looking at the cycle that you have here and trying to make sure I understood properly when, for instance, the parliamentary committee could have an impact on the government.

Let's take research and development. A parliamentary committee could feel that cutting the expenses in research and development in the field of agriculture would be rather ludicrous. This is an opinion that one can hold. Therefore, at what time in the cycle are we going to be able to have a real impact?

In the former system, we would get the news in the blue books and hence try and have an impact. So, what would be the best time to give advice, make proposals and state the major principles that we should abide by? Take the example of research and development in agriculture.

[English]

Mr. Kam: You're correct about the process. The window is May-June. The outlook document that has been introduced is a brand-new document. It was designed to respond to the powers granted to standing committees to review future-year spending plans and priorities.

This is the first time three-year spending numbers at the detailed activity level of departments are being released. Those three-year numbers indicate, in very summary form but very transparently, the priorities and spending plans of the department, the trends and numbers over those three years. The narrative should explain why those numbers are trending as they are. It provides an opportunity for committees, in reviewing those outlook documents and preparing the report to Parliament, to provide advice on the priorities that are explicit in the outlook document.

If the committee wishes to make other suggestions for how expenditures should be allocated by activity over the planning period, the report on the outlook document is the opportunity to do that. The government will be required to respond to that report or advice and take account of it in its budget consultation documents or by responding directly in the House.

You're quite right that in the past just the estimates documents were tabled, and under the current conventions the estimates are normally not amended. It would raise the question of confidence if there were an attempt to amend the estimates.

In a planning context, in this current year numbers are set out for the two out-years, 1996-97 and 1997-98, which are planning numbers at this point. There are two more cycles to go through before those numbers become locked into the estimates; 1996-97 one year and 1997-98 two years. The government has the opportunity, through each run of the cycle, to adjust those numbers. It will do so through the budget planning process based on the advice received from Parliament and the public. Based on changing fiscal targets as well there will be reallocations and adjustments. It provides a window of opportunity for committees to provide advice that didn't exist before.

[Translation]

Mr. Crête: I have another question. Is there not in the cycle a specific period when things can be changed? In a document of such wide scope, some sheer nonsense could only appear after careful reading and would therefore need to be changed. In the new cycle, it is not possible, because of the confidentiality of it all, to get such documents before they become official budget documents.

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Take page 30. We read that the experimental farm must be closed because research in the sheep industry is of a higher priority. Yet, since we have received the briefing documents, we have been able to demonstrate that this was a mistake. Even the department has recognized it as a mistake. I do not want to debate this issue but would there not be a way of solving this problem so that we could provide advice on such matters before it becomes an official government document? In politics, once these documents are made public, it is very hard to get anything changed.

[English]

Mr. Kam: All I can say is that in a planning context there is an opportunity now for the committee to provide advice to the government on 1996-97 and 1997-98, and that will be taken into account. Given my experience before committees, when a committee reacts and asks questions officials normally respond, provide more information and are aware of the concerns of the committee. In making future recommendations they will take account of those concerns.

Now there is a window of those two years where the advice and concerns of the committees can be factored into the decision-making process before things are locked in. When the estimates are put together and tabled, things are really locked in for that year. The future years are never locked in until the year appears.

Mr. Easter: How much staff time will be taken up doing this particular chore or this kind of work related to Treasury Board's needs?

Mr. Kam: I don't quite know what you're getting at.

Mr. Easter: I'm increasingly concerned about the on-ground services that are provided for this process. If we have a budget of close to $2 billion, how much time is taken up by the department doing what is really, in effect, Treasury Board work?

Mr. Kam: It's not really Treasury Board work. All departments submit annual budget plans to the Treasury Board because it is responsible for coordinating the preparation of the estimates.

There has always been a process in government to generate the budget and the estimates. This new process changes some of the relationships and steps required, but it imposes no additional workload. One could argue it reduces the burden on departments over the previous process.

Mr. Easter: I wonder if it would be possible for you to provide me with what's required in staff time and expense for this procedure versus the past procedure.

You mentioned, Mr. Kam, the role of standing committees here, and you emphasized particularly the role of the Standing Committee on Finance. What do you mean by that?

Mr. Kam: When the House rules were amended in February 1994, all the standing committees were empowered to examine the departmental spending priorities and plans for those departments for which they were reviewing the estimates. When the estimates were before the committees they would also have the authority to review future-year spending plans and priorities and report by the end of June.

About the Standing Committee on Finance, the House rules made a provision whereby when the budget consultation documents are tabled in October, they are referred only to the Standing Committee on Finance. So the Standing Committee on Finance under the House rules has been asked to examine the budget consultation documents and provide advice to Parliament on the credibility of the government's fiscal and economic assumptions.

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Mr. Easter: I think you said one of your guiding principles was deficit reduction. I'm not sure if that's exactly it. In any event, there's certainly a view out there that governments have become finance-driven. I'm particularly concerned about this new process. The budget itself will decide what does and doesn't happen in our system.

From your perspective, how does that affect the very principles of democracy and policy development? If I could put it another way, there's a real world beyond the number crunchers out there. The number crunchers at Finance and even the Standing Committee on Finance, which nobody from the farm community is on, do not understand the impact out there on the ground of the various policy changes that are being made relative to community and people development and agricultural policy development. In this process, basically I'm seeing a very heavy erosion of power from politicians and even from ministers to the bureaucracy - the combination of bureaucracies and the joint meetings of deputy ministers. What's your view on that?

Mr. Chairman, with all due respect, I think we're seeing an erosion of power from the politicians here. We're moving towards a bureaucratic system. Even with the three-year review, it's all well and good in terms of intent, but we will end up as politicians discussing the technicalities rather than the immediate policy needs. We will be in a discussion on the numbers proposed to us rather than the policy format that may be required by primary producers out there.

Mr. Kam: Just like the previous process, this process is cabinet-driven. That's a reflection of how our government works. The Westminster model is used, where cabinet makes decisions on behalf of the government. That has not changed. Simply, the budget is being used as the vehicle for making all those decisions because of the fiscal environment and the fiscal discipline that's required.

Basically, this recognizes a fact that is reflected in how most western industrialized countries now are managing their budget planning process. It's becoming more centralized, with fiscal restraint and fiscal discipline required. Normally decision-making becomes more centralized.

The previous system the government tried in the early 1980s - the policy and expenditure management system - was a decentralized decison-making process whereby individual policy committees of cabinet could make decisions on policy and fund them through reserves that had been set aside for that purpose.

The trade-offs were not made between existing resources, existing spending and new spending. There was a tendency for new spending to continue to go up year after year. With the elimination of policy reserves, the budget process becomes the mechanism for forcing trade-offs. With policy reserves, under the previous system, there was discontinuity between decisions to cut and decisions to spend. At no time did cabinet really sit down and balance the costs and trade-offs involved in cutting something here and spending something else there. This system requires that. They have to make that decision through the budget planning process. If they're going to cut somewhere and spend somewhere else, those trade-offs will be made.

Of course, the other scenario does happen; it did happen in the 1995 budget. Cuts were made to deliver on the fiscal target - the government's commitment to reduce the deficit to 3% of GDP by 1996-97.

The Chairman: Thank you, Mr. Kam. We have to move along here. Mr. Hermanson has a question on this specifically.

Mr. Hermanson (Kindersley - Lloydminster): Thank you, Mr. Chairman. It's good to have our witnesses before the committee.

I read the words ``expenditure management system'' and it sounds good and it's pretty easy to write on paper. I've actually seen this wheel before, brought to us by Treasury Board.

But Mr. Easter alluded to some of the problems we're facing. I'd like to take a slightly different line on the same approach.

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As far as federal spending is concerned, certainly individual members of Parliament have almost zero impact on budgeting and on the whole expenditure management process. This is simply because 70% of all government expenditures are statutory. I'm not sure how that relates to agriculture; perhaps you can tell me. In other words, we as parliamentarians have no power. Even as a committee, we have absolutely no power over those expenditures.

About the estimates and votable portions of the estimates, certainly for opposition MPs it's very difficult to see any reduction, change or elimination of any of the funds in those votes, although the committees do have the power to pass a motion and vote to reduce the estimates if the government members see fit to reduce or eliminate votes. However, even that process can be bypassed in the House of Commons when all of the votes are brought back in their original form and we once again vote on them.

So that is a major concern.

This says ``expenditure management system''. I'm wondering how this system improves the management of expenditures over what was in place before, not only with the budgeting process, but also with accountability for funds. Is there any accountability in this process? This is always looking ahead as to what the cabinet and the committees are going to do. But I don't see any accountability. In other words, we can't hold the departments accountable for funds they've expended after they've already been spent.

For example, the Department of Fisheries and Oceans just spent a considerable amount twice for furniture while the TAGS program is short on funds. In Agriculture, we've seen significant reductions in funding for research, which is very important, and in the safety net funding. What accountability is there to ensure not too much money is being spent on senior or middle management or on capital assets that may not be as necessary as the basic programs for agriculture?

Mr. Kam: The part III documents provide actual historical expenditures. Increasingly they'll be providing better performance information on the achievements of programs. I think the information contained in part IIIs provides an opportunity for the standing committees to hold departments and ministers to account for how money has been spent in the past.

Of course the public accounts committee also reviews the public accounts and calls ministers and officials to account for the results reported in the public accounts and commented upon by the Auditor General. Those processes continue.

We expect to have better performance reporting through the documentation that's released in this process. But the review of public accounts will continue. The Auditor General, who will be reporting more frequently, also is a major part of the accountability equation.

Mr. Hermanson: Is there any internal accountability within this management system? Within the Department of Agriculture and Agrifood, is there an accountability factor that is improved because of this process?

Dr. Dittberner: I don't think there's a change within the department on accountability. Each of the managers remains accountable, as in the past. No, I don't see a change there.

I would like to go back to two of the points you raised. One was about the statutory amounts. In the Department of Agriculture and Agrifood, it's about 60% or perhaps a little less. On page 15 of the part IIIs there is an outline that identifies all those expenditures that are statutory and those that aren't.

I think you raised a point about where you would have the opportunity to have influence, and whether this new system is better than it was in the past. My answer as a bureaucrat would be that I think it is improved for you in two ways. One, it now makes sure that the allocation of funds is not approved until you've had a chance to review some of the material that's before you, because it has a three-year horizon.

When we say three years, these things haven't yet been formally approved in the sense of going through the Treasury Board Secretariat. We've received approval here only for our first year. But there is an indication of what is going to happen. There are planned expenditures for the years ahead. You do have that opportunity.

In addition, as Mr. Kam has explained, you have the opportunity before the June period to respond to the outlook documents. You already have those documents.

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So in that sense I would like to suggest that I think there is a better opportunity. That will be for the expenditures that are upcoming. You will have an opportunity to meet with the minister, etc., to discuss some of his planned expenses, because now at least you can see what those amounts really are, when in the past you'd say, well, how much are you going to be reducing, or, how much are you increasing? There was always a tendency to be able to say, well, we anticipate we will be spending more. But when it came to the actual fact you never saw that.

So I think there is a real improvement for you as parliamentarians.

The Chairman: Mrs. Cowling.

Mrs. Cowling (Dauphin - Swan River): It's my understanding that cabinet is primarily going to drive the new process that's coming into place. I would think likely with the new initiatives there'll be lower priorities on some of the programs that are already there.

What criteria will be used to decide what in fact those priorities should be? Will there be a consultation process with the industry people, the people at the grass roots, or a consultation process where this standing committee or members of Parliament can be involved? I believe that question has been raised before, but I'd like that on the record.

About eliminating the central policy reserves, you indicated that there would be emergency reserves. For instance on the prairies, where in parts of the prairies right now we're looking at drought conditions and in other parts we're looking at flooding, does that include ad hoc programs -

Mr. Kam: No, it does not.

Mrs. Cowling: - because of climatic conditions, which are no fault of the farm community?

Mr. Kam: In the case of Treasury Board operatives, no, it wouldn't apply to that. It's health and safety emergency situations with respect to the health or safety either of the clients of the government programs or of the public servants themselves. For example, an unsafe condition in the laboratory would have to be dealt with, or an unsafe building where something is falling off the roof would have to be repaired on an emergency basis. Those are the sorts of things that are being thought of. Or an emergency safety situation in the penitentiary which endangers the inmates: something like that would be dealt with through the Treasury Board operating....

New subsidy programs would be part of the budget planning process. It would basically be a new spending initiative that would have to be addressed within the overall budget planning context.

Mrs. Cowling: Then where does the farm community, the people who produce food, fit into this scenario? Or do they?

Mr. Kam: Yes, they do. As in any other government program, the minister responsible is the steward of those programs. His recommendations will be carried to cabinet as some of many. Basically there'll be an opportunity for all ministers to seek to convince cabinet that their ideas, their requirements, are worthy of funding and are worthy of making cuts elsewhere in government programs in order to fund that requirement.

The Chairman: Mrs. Cowling, if you look at the outlook document Securing our Future here, which is a departmental outlook document, on page 14 it says:

A House of Commons committee will also review departmental spending estimates with recent changes to estimates to reflect the three-year planning horizon and the release of Securing our Future. The committee will have unprecedented amounts of information with which to contribute to the discussion of the future.

By reading that, I would suggest it would be our mandate to go out and find that out. That's giving us a mandate to go out and search for that information from grass-roots farmers, and to reflect that in our report.

Mrs. Cowling: I just wanted to be sure I heard that from the group that is making the presentation today.

The Chairman: That's my reading of that.

Dr. Dittberner: Mrs. Cowling, you raised the point about the priorities between departments. I think we have some of the same questions from within the department. It's not going to be an easy process. But that is going to be very much a cabinet decision on where they set the priorities among the respective departments.

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I'm sure it's going to be a very difficult exercise. I can't give you what those criteria are in that situation.

The Chairman: Mr. Calder.

Mr. Calder (Wellington - Grey - Dufferin - Simcoe): Thank you very much, Mr. Chairman.

Dennis, I'd like to go back to you for a minute. Some of my questions are going to overlap with what you've already answered, but I just wanted to get some clarity here.

In this document, point 2 on page 59, you're talking about emphasizing the ongoing review of programs and management within available resources through reallocation. Then it talks about reallocation from lower-priority programs. One of the questions I would like to have answered here is what would be a lower-priority program? What would be the criteria used by your department to establish that? Finally, what would the standing committee have to say on your criteria and definition of a lower-priority program?

Mr. Kam: You'll notice that this does not say ineffective programs, because I guess there's a perception that almost all programs now are effective; that all the ineffective programs have been weeded out long ago. So it refers to lower priority.

It's really a judgment call, I think. It's in part a political judgment by the government as to what is considered to be a low priority.

About providing some insights into whether programs are relatively more or less effective, there'll be increased emphasis on evaluation and audit studies undertaken by departments, providing advice to senior officials and ministers on what programs are achieving.

But ultimately it will be, in the final crunch, a judgment call by ministers, seeking advice from the public, seeking advice from standing committees, as to what should be the priorities of programs, as I said, informed, in part, by evaluation audit studies. But it's ultimately the political process that determines which are the lower-priority programs, which are the higher-priority programs, what are perceived to be the needs, the requirements the government should respond to, given the scarce dollars and the need to ration dollars.

Mr. Calder: Then, heaven forbid it happening, if your definition of a lower-priority program were wrong, where would the standing committee sit on this? Obviously we will hear input on the grass-roots aspect of it as to whether that program was, in fact, low priority or high priority. Where would our input be back to your department, for instance to get a change in what your definition was?

Mr. Kam: The input will be twofold. It will be input that flows through this forum in terms of reviewing the estimates and providing comments and expressing concerns to the minister and his senior officials, and it will be more formally through the committee report on the outlook document, which will be tabled in Parliament and could take issue with the priorities that are explicit in the planning numbers set out in the outlook document.

Dr. Dittberner: Perhaps I can add one word. When the minister appears before you he's probably going to explain, within the department, how the priorities were set in the program review exercise. I'm sure that will be an opportunity first to see the types of priorities he had set and why they were made in that particular manner. I think that becomes the first opportunity to be able to question the priorities, and subsequently to that, whether you want to make other forms of address to those things as priorities.

The Chairman: Can I follow up for a minute on the point I think Mr. Calder is trying to make. You're talking about reallocating from lower priority programs. Is this a new policy change? What would happen, let's say, in a disaster relief situation, where you would have a disaster? This funding, instead of coming out of general revenues, will now come out of the department itself and be reallocated from lower-priority spending. Is that the case?

Mr. Kam: Or from other departments.

The Chairman: Or from other departments.

Mr. Kam: Yes. The normal process would be through the budget planning process. So it puts a premium on strategic planning, on departments looking forward and getting, in a sense, into the budget queue.

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If there's a good idea that a minister wants to sell to cabinet, they basically have to start building a case for that in May or June, and forging alliances until the decisions are made for the budget in the following January. If something can't wait; if there's a true emergency on a large scale...and the example that might be cited here is the Gulf War situation a few years ago. The government had to find $500 million quickly to fund the participation of National Defence in the Gulf War. That was funded through a cut on all other departments.

One can anticipate that if a large requirement were forthcoming and the government had no fiscal room - it wanted to manage very tightly fiscally - it would impose cuts on all other government departments. So across-the-board program cuts will take place elsewhere in order to fund a large new requirement in the year. Otherwise it will happen through the budget-planning process, with greater anticipation and with probably more advance warning.

Mr. Benoit (Vegreville): Mr. Easter expressed some frustration that we, the elected representatives, don't receive enough information to connect the numbers provided in part III and other documents to the programs being delivered and to know the effect on people, such as farmers, those in agri-business and others. I certainly agree with that.

You have said there's better accounting in the part IIIs than before. That may be the case, but certainly not enough information is provided to this committee to allow us to take these numbers and make a connection with the programs we know are being delivered to farmers and to others.

The numbers just aren't there. I would just like to know why the committee can't get numbers that are more detailed so we can make the connection between what's provided in part III and the programs that are being -

The Chairman: Mr. Benoit, we're going to be moving on to part IIIs after this.

Mr. Benoit: But I'm asking a general question on information. It fits in with what we're talking about.

Dr. Dittberner: I'll try to answer by saying I think we have as much information as possible. In my opening I referred to the difficulty of going from anything that's too general to anything that's too detailed.

There is still opportunity if there's insufficient detail. There's considerable detail in these part IIIs. As I said, there's more than from any other department. But if there is, in addition to that requirement, still an opportunity to seek any available information from us, any information you seek can be made available to you. As you look for information, if you can identify what that specific information is, we'll do whatever we can to provide that to you.

Mr. Benoit: What will the level of detail be in the outlook documents to be provided, compared with in the part IIIs?

Dr. Dittberner: Let me make it clear again. The outlook documents have already been provided to this committee. The outlook document is Securing our Future.

Mr. Benoit: I know the level of detail.

Dr. Dittberner: As you can see, the instructions to the department were, give us something short. The initial instructions were a six-pager.

We have gone beyond that. We have tried to provide much information of a general nature to the committee.

Securing our Future is the outlook document. It is meant as an overview of the part IIIs, and the part IIIs are where most of the detail will be found.

Mr. Benoit: Six pages of numbers could provide a lot of background information.

You are saying you think ample detail is provided? When you look at page 10, which lays out the spending by envelope, which is what we vote on in the House, there is one number, which is a total figure. Why aren't we given a breakdown of this number in enough detail, such as two or three pages of numbers, so we can relate each of these numbers to the program it's connected with? Why can't we be given that level of detail? Then we can make the connections Mr. Easter wants to make between the numbers in the part IIIs and the programs being provided.

Dr. Dittberner: They are there. Mr. Caron will take you through to show you how to find -

Mr. Benoit: I went through this document; they are not there. I'm talking about a lot more detail than that. I'm talking about enough that you can make the connection between the numbers presented here and the programs they are being spent on. That's what Mr. Easter is getting at too, I believe.

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Mr. Easter: It's a totally different point.

The Chairman: Why don't we leave that until we get to the part IIIs? It's an interesting point.

Do you have any other questions on the expenditure management side of it?

Dr. Dittberner: We don't mind if you'd like to come back to any of those particular questions.

The Chairman: Yes, once we take a briefing on them.

[Translation]

Mr. Landry (Lotbinière): Thank you, Mr. Chairman.

I have in front of me the document on the Canadian Government's management system, item 5, where ministers and departments have plenty of space to help them manage their activities within the approved resources levels. There is some ambiguity here.

First, is item 5 carved in stone or can it be changed? Secondly, couldn't we add to item 5 ``to the ministers and departments'', ``parliamentarians''? Who decides not to include the word ``parliamentarians'' in this item?

[English]

Mr. Kam: Point 5 refers to the ability of ministers and departments to manage approved budgets. Once Parliament approves the appropriation act allocating resources to departments, there is a question of the management constraints, primarily imposed by the Treasury Board on departments, in allocating the resources approved by Parliament.

Once the estimates are approved and resources allocated to departments, and they can start spending funds out of the Consolidated Revenue Fund, there are certain hoops they have to go through and certain constraints they have to face that are imposed primarily by Treasury Board for administrative control purposes. It's a question of whether those can be relaxed. Parliament is not normally involved in spending the resources allocated through estimates.

Dr. Dittberner: I'll give you an example. If the minister decided he wanted to sell some property owned by the department, how much of that money could actually be credited to the department to use for future spending? That is the question being asked right now. Can the departments have more flexibility?

Right now, if the department sells some property, it doesn't mean it can use all the revenue for its own expenditures or for replacement of new buildings. It has to get special authority. This is one of the flexibilities ministers and departments would like to have in order to manage their restricted budgets a little more effectively.

That's just one example.

Mr. Pickard: I would like to thank the department officials for coming.

Since we're talking about process here, I have some major concerns about where parliamentarians fit in the process. I realize the government is different from the House of Commons and parliamentarians. I also realize departments structure all direction, probably do all the planning, and control 99% of the action that occurs within these premises.

We have come to a process where a committee reacts and responds to decisions of the department; is almost totally excluded from planning the direction it's going in; and is placed in a position of responding to the actions the department makes.

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Many parliamentarians feel just responding is not enough. I think that's where the conflict may be coming between your plan, your design, and where we see everything going.

I realize the government is not Parliament. There's a very distinct difference. But is there any possibility that - and it would take a total change - in your structure, parliamentarians may be part of the planning process rather than the responding process?

Secondly, where do you visualize, in your process, committees standing? I see your process has placed committees in a position just to respond to what you've put forward. I think there is adequate information from the departments when we request it. I have no question about that. But looking at the process itself...centres of excellence, an idea that came through the department. Each of us had no idea of this kind of planning going on in the department. I think as an agriculture committee of the House of Commons we should have had some idea about where things were going.

The plans for safety net programs: again, they're being developed and done by the department. This committee is in a position of hearing and responding...but not a lot of planning. When the grain transportation act was changed, our position was to respond to it, rather than to sit down and look at the ins and outs of practicality of all of the decisions that are made by the department.

The department is really running the government. I understand that and I understand you set that forward in your estimates and we then respond. But I guess my feeling is that's not enough.

First, I would like to know what you think of parliamentary committees and their roles of planning. Secondly, I would like to see where you have integrated or will integrate committees...and not just responding and trying to change some things that are complete or in process, because it's very hard for me to go back and deal with certain issues as a reaction rather than as a proactive force within our area. I think this committee may be having a problem with that as well. I think there's too much department planning that totally excludes members of Parliament.

Dr. Dittberner: I think I understand the question, Mr. Chairman, and I think there is a recognition in government about some of the difficulties and the role standing committees play.

First of all, I don't think it's something I can decide, or even give you a complete answer to in terms of what the role should be in the planning process. I can tell you my understanding is the government, as a whole, would like to see standing committees more involved in the planning process and hence have encouraged us to use and introduce the new expenditure planning system simply to allow more involvement from the standing committees.

From a departmental point of view of how much more the department can involve the standing committees, that clearly is a decision and an involvement that my minister will want to be involved with. I'm sure he'll be willing to respond to that. From what I can understand, I think he is anxious to make sure he does get the full input from members of this committee, either individually or collectively as you meet with him.

I can say I would not be the one to be determining what that process should be. But I will take that back and we'll raise it. It probably is a question more appropriately discussed with the minister when he comes in.

I'm not trying to dodge your question.

Mr. Pickard: No. I'm trying to focus ahead. I appreciate your response. You're saying it's the minister's responsibility. He'll deal with it. That's fine.

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But my point is all kinds of things are floated in your department right now for three years down the road. You're discussing everything: every initiative, what you're going to do with your departments, what your staffing is going to be, what you're going to change in those departments. Maybe it is a very precarious position to place the department in, if you start discussing it in committee. That may be the reason why it's never brought forward to committee and committee only gets it afterward.

I don't know what the reasoning is. But it certainly is a process that excludes members of Parliament from the direction of this Canadian government. We are excluded. There's no question we're excluded. We are the last to know, in most cases.

People in industry tell us these things are going to happen. Then we get on our telephone and phone. Oh, yes, that's happening. Here are the reasons why. Here's what's happened. These are the conferences we've had.

But I'm the last to know; and I shouldn't be. That's where I have a problem, and I think many other people here are finding that similar problem.

Dr. Dittberner: I recognize the difficulty. I'm not sure I can add much to what I've said, except that there really is a sincere desire to try to involve people more. The process has not been such where departments have had to commit what their expenditure plans are for future years. Again, this is the first time. We are the first department that has put forward what those planned expenditure levels propose for three years down the road. So I think the movement is there. I think the intent is there.

Mr. Pickard: But the expenditures and the estimates would not give me the directions of the discussion, the directions of the departments, where we're going, whether Harrow research centre will be closed in three years, five years; whether certain types of research will be done in one area as opposed to another; whether we're looking at an integrated farm support program that's different from what we have; how transportation will be dealt with in agriculture in the years to come.

We get a lot of industry coming in and giving us viewpoints. We write all those things down rigorously. We go back and present them. You have people from the ministry listening to all of this conversation. But where does it all end up?

Dr. Dittberner: Again, I think there is more information than one realizes in the actual document, in the part IIIs, where it does spell out what is going to happen with each of the particular programs. Again, you will be having an opportunity of meeting with the program ADMs as well to discuss the specifics of each of those programs.

The Chairman: Finally, Mr. Pickard.

Mr. Pickard: I have just one final, very short point. I'm not trying to be argumentative, believe me.

Dr. Dittberner: No.

Mr. Pickard: If I were to take the estimates, could I tell where the budget in Harrow research centre is going to be four years from today, how many staff they're going to have, where we're heading, and what the direction is in that particular area? Do I have access to that information? The department does, but I don't. That's what I'm telling you.

The Chairman: I think that's the point Mr. Benoit was trying to make too. Thank you.

Finally, Mr. Collins.

Mr. Collins (Souris - Moose Mountain): Thank you, Mr. Chairman.

I like the idea of the three-year extended period of time. I could never figure out why they didn't do that a long time ago. It seems to me you just have to get up into the real world.

As you were going through...I heard you mention this kind of statement. As the business plans are prepared, someone is going to critique whether the business plans are sound. Now, if I prepared the business plan along with these people and then you sit down and critique it and you don't know the wherewithal, why we arrived at...how do we do that? How do you use an external agency to find you don't like our critique?

What I see now is we have so many overlaps of government that I use the octopus approach when I talk to people out west. They say, gee, everybody has an arm out and nobody has a head on the topic, and we're going in all directions.

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I see just layers and layers of bureaucratic structure. Politicians go, but folks like yourself stay, and then I wonder whose agenda we're moving. As Mr. Easter and Mr. Pickard have said, are we moving an agenda we see as being meaningful, or because you've been here for a long time do you say you know what's best? I wonder who's directing ministers. I think that's a concern they have.

Where you have policy reserves, I don't know whether it's fact or fiction, but there seems to be a kind of sense in some of these different departments that if you don't spend it it is gone. I saw that at the lower levels when I was in municipal government. People got into the process and thought if they didn't spend the money it wouldn't be there next year, so people raced to spend money without any accountability. I hope some moral conscience is being built into the process.

I'm glad to hear the Auditor General is going to report. I always maintained it was of no use coming at the end of the year, when it was eleven months too late to tell us what we'd been doing wrong. I think those business plans and his concerns and your concerns have to dovetail so we're headed in the right direction. Otherwise some other group will come here and ask the same thing: Where are we going?

But I commend you. I think we're on the right route.

Let me just touch on the area of transportation. We have people in transportation who are going to make decisions for us out west on rail issues and they don't have a clue. So I think it's critical.

Where do we come in? We have to be able to say, look, folks, it's fine for you to abandon the railroad, but you don't know what it's going to mean to us. They took sixteen miles of track out of my area, and now they have to move the product to Brandon to take it west.

That's my problem. I don't have a problem with your estimates. If I want to know them, I will go to you people and you'll be able to fill in the details.

Let me use one example. We sat down with this committee, plus the senators, and five out of the eight recommendations we were going to bring forward had to do with R and D. Some of my friends wanted to do wordsmithing for three or four hours. I don't have time. I want to know whether you people and the minister really take seriously what we found to be very important.

Five out of those eight statements or recommendations said to be careful about R and D; if you're going to put in an emphasis, put it there. I'd like to have some confidence that R and D is going to be the driving force out of those eight recommendations.

The Chairman: I would think when the department gets around to responding to our report - I guess it has until May - we'll probably find out then what it thinks.

Why don't we move on? We have about twenty minutes for part IIIs.

Dr. Dittberner: The reason the estimates are in three parts is part I is a very broad overview of government expenditure and it combines agriculture with the natural resource-based programs. So they're based in sectors. Part II is the next level down of detail. Again, it's not very detailed, but it puts out in general terms what is under the Appropriation Act; the key supporting information by ministry, organization, program and activity for agriculture. So it's a fairly high level. You can see that the part IIs contain the whole government and list each of the ministries.

The detailed information is left in part IIIs, and that is our opportunity to explain what our department will be doing. Normally it's the expenditure by year, as I mentioned. We've used it this time to carry over through the three-year period. We've also used it, as I mentioned, to report on the annual reports. Eight different annual reports are combined as part of the part III estimates.

I think that's all I'm going to explain about the three different parts. If you'd like we can either go through some of the changes in part III or take questions.

The Chairman: Why not start by going through some of the changes?

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Dr. Dittberner: I'll ask Mr. Caron to explain what is different this year compared with past years.

Mr. Robert P. Caron (Senior Corporate Financial Planning Advisor, Agriculture and Agri-Food Canada): I'd like to give you a quick overview of the major differences between the 1995-96 part III and the document we prepared in 1994-95. I'd also like to walk you through the document, if I may, to give you a better understanding of the structure and maybe provide you with some level of comfort when you're referring to the information contained in the document.

I'd like to make my presentation in both French and English, but for ease of presentation I think I should point out that when I refer to pages I'll be referring to the English version of part III. The page numbers do not correspond and I wouldn't want you to be flipping the book back and forth all the time.

The Chairman: Will you refer to the French page? Do you have that information?

Mr. Caron: I don't have the French page number, but maybe we can follow it through and find the French page number at the same time.

At the beginning of this session I provided you with a list of major differences, to which we'll refer in a moment. But I also provided you with an easy reference guide. It's a laminated card about the same size as your part III, so you'll be able to put it in your part III. It's in both official languages on each side and provides you with ready access to information that's contained in the document. It will reference major programs by page number.

If you'd like an example, if you wanted to talk about biotechnology you would look at the reference card, and it references pages 30 and 42. In French I think it's pages 34 and 47. You should be able to look at those two pages and find out a little more about the subject of biotechnology.

[Translation]

If you wanted more information on the Green Plan, you would refer to pages 36, 49, 105, and 154 of the document.

[English]

We have prepared this to give you at least an easy reference for where you're going.

On major changes from last year, we have provided you with a document in both English and French again. You'll notice there are four major changes from last year's document. Part III is the planned expenditures to 1997-98. We have now included those planned expenditures for those years in the document, which is something you didn't have before. It provides you, the committee, with information on future years' spending. This is because of your new responsibilities under Order 81(7).

Part III includes details of the department's plans for 1995-96 through 1997-98. It also supports the Securing our Future document, which you also have. So with those two documents in hand you have a lot of information.

I must point out that the document is quite thick as it now exists. If we tried to put more information into it we'd end up with quite a brick of information.

I'll get back to answering Mr. Benoit's question about the amount of information you have. I'll see if we can do that through this book.

Part III is the department's expenditure plan, as you well know, and we begin now with information related to the department. The agriculture portfolio information is now referenced at the back of the book rather than the front, because we're starting with the department first.

Last year we had a topical index at the back of the book. We have now prepared strategic and operational responses. We have put that at the beginning of the book, pages 2-9. Those short-term responses are identified with page numbers so you're able to go through the document more quickly.

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Those are the major changes from last year.

The 1995-96 part III represents the agri-food program expenditure plan, as I said, from 1995-96 to 1997-98. It's broken down into three sections.

You'll notice section 1 on page 2. It provides a quick reference to the issues facing the department. It breaks down the funding requirements of the agri-food program.

Section 2 starts on page 21.

[Translation]

A breakdown of program activities and sub-activities is provided in section 2, page 24. These relate to the ministers operational responsibilities. As you know, the department's program activity structure is based on a single program, agribusiness. This program is divided into seven activities. If you look at page V, you will see that every one of those seven activities is broken down into sub-activities.

To give you an example, on page 24 of the French text, the research and development activity is broken down into five sub-activities; resource conservation research, crop research, animal research, etc. An attempt has been made to break the figures down into smaller numbers.

Section 3 consists of two parts, part A and part B.

[English]

When we break down part A, which is on page 166 or page 178, it provides additional resources and statistical information on the program. For example, we break down personnel requirements, controlled-capital projects, transfer payments, revenue and so on.

However, part B, which is on page 183 or page 194, provides three things. It provides an overview of the other ministerial responsibilities within the department portfolio. For example, we also give you information on the Agriculture Products Marketing Board, the Farm Credit Corporation, the Canadian Dairy Commission, the Canadian Wheat Board and so on. Second, we provide a list of the statutes administered by the whole portfolio. We also give you a list of available publications for additional information on agencies and programs within the portfolio.

I'll go back to each of the sections.

[Translation]

Figure 1, on page 1, shows the planned resource requirements until 1997-1998. This is really unique. Again, as I said earlier, it is unique, particularly when you look at how other departments have set up their part IIIs. Contrary to what's been done in other departments, we have included future years. Thus, we are now providing you with more information, I hope you will find it useful.

As the Standing Committee's responsibilities have been widened to include a review of expenditures for future years, the department has seen to it that you are provided with more information to help in your review and to allow you to discuss spending priorities and patterns.

[English]

Consider figure 2 in section 1, which is on the pages through to page 9. We mentioned that a bit before. Deux à onze.

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This particular figure provides a list of various external influences that affect the agricultural sector, the effects these influences may have on the sector, and the long-term strategies proposed in order to deal with these influences. Also included are short-term operational responses to these long-term strategies.

We've provided page references for a quick reference to additional information. We're trying to give you as much information as we can within the thickness of the document we have.

Look at figure 10 on page 19, which is page 22 in French. This particular figure provides, at a glance, an overview of the financial and human resource situation of the department. I believe that's the quoted figure we were looking at a little while ago. It's an overall resource summary of the authorities we have received for the year. It provides, over the three fiscal years of 1993-94 to 1995-96....

I should mention at this point that this particular figure gives a total of $1.7 billion for 1995-96. Throughout the book, we've tried to break down this amount by activities.

Go to page 22. You'll find we're breaking something down for agricultural R and D activity. There's a number in the estimates column for 1995-96 of $276 million. That amount is part of the numbers on page 10. This is broken down for each activity.

On page 166 we go even further, to break that whole $1.7 billion down into standard objects, or objects of expenditure. So we have tried to break it down even finer.

There's always additional information we've used to compile these figures, but that's not available in this book. The reason, as I say, is I would have to give you about a foot of documentation. But we are more than happy to try to answer any questions.

Section 2 is an analysis by activity. This section provides additional information pertaining to each of the activities within a department.

We'll take an example. I'm again using agricultural R and D activity on page 21; page 24. This particular activity is broken down into the objective and a description of the activity. We break down the resource information into sub-activities. So we're going even deeper into it. We're doing this by fiscal year, on page 52; page 55.

Let's say the presentation I have started here gives you the information I wanted to give you. The structure, when we follow it, provides information for each of the activities in agri-food programs. So you can take research, inspection and so on and have everything set out the same way, so you have the same vehicle going through each of the areas.

Here's one of the things I wanted to point out. There's an activity called Corporate Management and Services. That refers only to management administration expenditures at the corporate level. They don't reflect any specific expenditures of this type associated with each of the activities.

On page 22 of management and administration expenditures, about $6.3 million is shown there. This refers only to agricultural R and D; it doesn't go to any of the corporate management services. So that $6.3 million is within research.

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Very quickly, look at section 3.

[Translation]

On page 166, page 178 in French, we have provided additional information relating to financial and personnel requirements, controlled capital projects, and so on. So, there is more detail provided in this section.

[English]

I mentioned before the supplementary information in part B that covers various responsibilities of the organizations that make up the balance of the portfolio. It should be noted that part III of the estimates integrates statutory reports to Parliament. Dr. Dittberner already mentioned that we have eight reports, which you can find in section iv at the beginning of the book.

[Translation]

I will end here, and if you have any questions with respect to the various programs, I would ask you to put them to the official responsible for each program when you meet with them this week or next.

[English]

The Chairman: We'll call it a day. I'll try to set up these meetings for next week. As the subcommittee will be meeting this week on grain transportation, it will probably have to be next Tuesday, if that's possible. We'll try to work that out and send notices to people.

The meeting is adjourned.