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EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 14, 1996

.0933

[English]

The Chair: I call to order this meeting of the subcommittee on the business of supply and ask our researcher to get us going.

We have two new members of the committee. I don't know if we have any indication whether the Bloc representative will be attending, but they do have the briefing book, I understand.

Mr. Brian O'Neal (Committee Researcher): Good morning, Madam Chair and members of the subcommittee. I've been asked to give a briefing to the subcommittee members to help orient them to the subcommittee's work.

I'm going to discuss the following things: the business of supply, and why this is a good time to take a close look at the procedures surrounding it; the subcommittee's terms of reference; the sections of the briefing book that I think would be of most help to you; the issues that were of greatest concern to the subcommittee during the first session; and some of the observations and suggestions made by witnesses who spoke to the subcommittee.

I will probably be going over issues that some of you are already quite familiar with, so I'm going to ask your indulgence and your patience. I invite members who sat on the subcommittee during the first session to offer their comments and observations when I've finished.

I also want to apologize; this may be a bit lengthy, but there's a lot of material to cover. If you could just bear with me, I'll get through it as quickly and as smoothly as I can.

Supply, quite simply, is the process by which government submits its projected annual expenditures for parliamentary approval. The process of scrutinizing and granting supply lies at the very heart of why Parliament, as a democratic institution, came into being. Without too much exaggeration, one might say that it is one of Parliament's principal raisons d'être.

Like so many aspects of Canadian parliamentary procedure, the practices and traditions surrounding supply were inherited from the British Parliament. According to these traditions and to the Canadian Constitution, government alone can propose expenditure. The powers and responsibilities for this are concentrated in the hands of ministers. However, the Constitution also specifies that government cannot make these expenditures unless authorized by Parliament to do so. For its part, Parliament may really only do one of three things when the government makes its expenditure proposals. Parliament may reject them, it may reduce them or it may approve them.

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The funding for the government's expenditures comes out of the consolidated revenue fund. In order to get Parliament's approval to make expenditures out of this fund, government must specify the purposes for which the money is needed and the estimated amount that it requires. This is done through the estimates. The main estimates are presented prior to the start of each fiscal year. Once the estimates are approved by the House, the House passes an appropriation bill authorizing government to spend up to a specified amount. Once passed, appropriation acts usually expire at the end of the fiscal year.

Initially the estimates were dealt with by Committee of the Whole, the House sitting as the committee of supply. From about 1945 onward, however, this practice became increasingly unworkable. In 1968 major changes were made to the process. From that year on, the main estimates and the supplementary estimates were referred to standing committees. In the case of the main estimates, committees were given until May 31 to review them and to report back on them to the House.

Problems have arisen since the new procedures were adopted. These problems, which many of you are probably all too familiar with, are detailed in the briefing book and in witness testimony.I will just mention some of the major ones now.

There is a lack of incentive for members and standing committees to spend much time on the estimates. If committees do not report back to the House by May 31, they are automatically deemed to have reported. If they do report, there is very little they can change. They cannot make recommendations that affect the substance of the estimates. All they can do is concur, reject or reduce an estimate. There is little likelihood of this happening when there is a majority government in office. Even if a committee were to reduce an estimate, the government has means at its disposal to restore the original amount.

As a consequence, few committees spend much time on the estimates. For example, in 1993-94 committees held just over 48 meetings on the estimates and only one report was issued. In 1994-95 there were 65 meetings held, five of which were briefing sessions, and nine reports were tabled.

This is a good moment to take a close look at the supply process. Although the basic principles underlying supply have remained unchanged, the practices used by Parliament to deal with supply have evolved over time. This is the right moment to stop and ask whether the practices as they now stand uphold the principles they were meant to serve, and if not, what changes need to be made.

There are at least three reasons, and probably more, why this is a good time to look at the business of supply.

Firstly, as I mentioned, there is frustration with the current process and a consensus that it needs to be changed. So there is a willingness if the right means can be found.

Secondly, one of the greatest impediments to a more thorough examination of the estimates may be in the process of being removed. Treasury Board Secretariat has a project under way to make the information contained in the part IIIs easier to understand, more accurate in describing what departments and agencies actually do, and more timely. There are also plans under way to separate information on departmental performance from the part IIIs and to report this information in the fall.

If all of this works, it should be easier not only to understand the financial information in the estimates but to understand what departments have achieved with the money granted them by Parliament. This should allow for a more informed review of future expenditure plans when they are presented to Parliament prior to the beginning of the fiscal year.

Thirdly, members have complained that they cannot alter the government's expenditure plans, that they cannot influence them. This complaint has been addressed partially by a change made to the Standing Orders in February 1994.

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At the same time as they review the main estimates, standing committees may also review the future spending plans and priorities of departments and agencies. To facilitate this kind of review, departments are now required to table outlook documents that describe their future plans. Committees can review these plans and can report back to the House on them by the end of June.

While government is not obliged to adopt any measures recommended in these reports, members and committees have been given a new avenue for potential influence that was not open to them previously. Note, however, that the fundamentals remain unchanged. Committees still face the same obstacles if they or some of their members wish to reduce or reject proposed expenditures for the upcoming fiscal year.

However, in light of the important changes that have occurred or are occurring, it may be appropriate to make changes in the way in which the House and its committees deal with the estimates. Identifying these changes is of course the challenge facing this subcommittee.

I'm going to mention the orders of reference that were given to the subcommittee. On June 7, 1995, the House of Commons unanimously adopted an order of reference instructing the Standing Committee on Procedure and House Affairs to undertake a comprehensive review of the business of supply, with particular attention to the reform of the estimates and the processes and mechanisms by which the House and its committees may consider and dispose of them.

When Parliament was prorogued in February, the subcommittee ceased to exist. The subcommittee was re-established in mid-April, and its order of reference remains virtually the same. It has been given the reporting date of June 14, 1996.

For new members at the committee, I'm going to mention the contents of the briefing book. A briefing book was prepared for the subcommittee when it first began its work. All sections are worth reading, but given the short amount of time available for the subcommittee to complete its work,I would like to draw your attention to what I think are the essential sections.

At tab 1 you will find excerpts from the Standing Orders that relate to supply. In particular you should note Standing Order 81.(7), which was added in February 1994. This is the change that allows committees to examine and report on the future expenditure plans and priorities of the departments and agencies. This is an important new power for committees, which were previously restricted to a consideration of the estimates for the current fiscal year alone.

To understand how the supply process works, it is helpful to see how it has evolved over time. Tab 3 contains the paper that discusses this evolution, including some of the changes that have been made recently.

Scrutiny and approval of expenditure are part of a larger fiscal management and planning process that occurs throughout government. This larger process is undergoing significant change that may affect the way in which Parliament deals with supply. The material in tabs 6 and 7 will help you understand some of those changes and locate supply within this larger context.

Most people acknowledge that there are some fundamental problems with the current supply process. An article by Mr. Peter Dobell, at tab 8, provides a good summary of the complaints made about the process and proposes a number of improvements.

Finally in the same vein there is an excerpt from a paper entitled ``Accountability: Closing the Loop'', by Ronald Huntington and Claude-André Lachance. This paper, written by two former members of Parliament, who were also witnesses before the subcommittee, proposes several ways of improving the supply process, most notably by creating a committee whose sole responsibility would be to deal with all of the estimates.

I'm now going to mention the work the subcommittee has done so far, including the meetings it has held and the issues it has looked at. During the first session the subcommittee was interested in the following broad issues related to supply: first, the supply process as a mechanism for holding government accountable; second, the role of standing committees and studying and reporting on the estimates; third, the scope of parliamentary financial review, including such things as statutory spending for better review of the estimates of crown corporations and tax expenditures; fourthly, Parliament's ability to influence current estimates and future expenditure plans and priorities; and finally, the confidence convention as it relates to the voting of supply.

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An issues and options document has been circulated to you that breaks these main issue areas down to a series of components and outlines the comments and suggestions made by witnesses. Please note, however, that witnesses did not always address all of the subcommittee's concerns.

I'd also like to add that back in November we prepared a document that listed the issues the committee might be interested in looking at. I find that document to be particularly useful and I've asked the clerk of the subcommittee to have it circulated to committee members this morning. You should have that and it should be of some help.

What follows is a summary of what the witnesses had to say.

The first meeting was held with the Clerk of the House of Commons, Mr. Robert Marleau.Mr. Marleau discussed the evolution of the supply procedures in the House. He pointed out that when committees deal with the estimates they only have three options: approve them, reject them, or reduce them. Reduction is an option that is rarely exercised.

Increasing an item in the estimates or redirecting spending from one area to another are not options that are open to committees. As long as government is in a majority position, the chances are slim that an item or items in the estimates would be reduced or eliminated.

Turning to the subject of confidence as it relates to supply, Mr. Marleau stated that this is a matter for governments to decide. He saw no way in which a government could survive politically if it were to lose a vote on a supply issue. While deciding what constitutes a matter of confidence is government's prerogative, the responsibility and authority to hold government accountable belongs to the House. This is exercised through the supply process.

Unfortunately, according to the clerk, political considerations usually dominate and accountability takes a back seat. Supply days, for example, tend to focus on issues other than the estimates.

Mr. Marleau felt, however, that members could be given incentives to pay closer attention to the estimates in committee. For example, the government could announce in advance that it would accept recommendations from committees that expenditures be redirected within votes. This might lead members to review the estimates more thoroughly.

On another note, he suggested that it might be a good idea to have all the estimates referred to one committee, whose only job would be to review and report on them.

Lastly, certain supply days could be specifically set aside for debate on a particular vote or supply item. This could be done by either rule change or simple agreement among opposition parties.

In early October the committee heard from Mr. Ron Duhamel, at that time parliamentary secretary to the President of the Treasury Board, and officials from the Treasury Board Secretariat. During this meeting the subcommittee was told about a pilot project to change the way in which financial information is presented to Parliament. These changes include revisions to the format of part III of the estimates and the release of information on departmental performance in the fall.

If this project is successful, it should remove one of the major frustrations experienced by members who want to become more closely involved in the estimates and supply process by providing them with information that is relevant, timely, and easy to understand.

The project has already resulted in the release of redesigned part IIIs for six departments. This is on an experimental basis. In case you're interested, the departments are Agriculture and Agri-Food Canada, Indian and Northern Affairs, Natural Resources Canada, Transport Canada, Fisheries and Oceans, and Revenue Canada.

I have copies of all of these part IIIs if any of the members of the subcommittee are interested in taking a look. You might note that the part IIIs that have been put together are not perfect. I believe the estimates for Revenue Canada, for example, don't have an index in the back, so it's difficult to find things you're looking for.

Thank you.

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The Chair: Before I miss this, the Parliamentary Centre for Foreign Affairs and Foreign Trade held a kind of seminar session two weeks ago in which Reg Alcock and I participated. John, I think you were going to be there.

Mr. Williams (St. Albert): I intended to be there, Madam Chair. I was sick that day and unfortunately was unable to attend.

The Chair: The session was also reviewing these and whether they had accomplished what they were supposed to accomplish. I'm not sure what kind of report is going to be done about that day, but I would think the sooner that's available, the sooner it might be of help to this committee.

Mr. O'Neal: Certainly. I'd also point out that when the Auditor General came to speak to the subcommittee he pointed out that he and his office would be monitoring the developments of these new part IIIs very closely, because they do touch on performance information, something he's quite interested in. So we should have a report back from the Auditor General, maybe not in time for the subcommittee, but at some later date.

On October 19 the subcommittee heard from Auditor General Denis Desautels, Senator John Stewart, and Mr. Peter Dobell, director of the Parliamentary Centre for Foreign Affairs and Foreign Trade.

The Auditor General has concerns about issues of accountability, reporting on financial information to Parliament, and departmental performance measurement and reporting. Senator Stewart was closely involved in the last series of major changes to the supply process when he was a member of the House. Mr. Dobell has a longstanding interest in the business of supply.

The Auditor General told the committee that in their current form the estimates do not reveal the full scope of departmental financial activities. Such things as tax expenditures, regulatory practices and loan guarantees are not adequately dealt with. He singled out statutory spending as an area of concern. It is 70% of total expenditures and is not subject to voting during the annual supply process.

Another area of concern was legislating through the estimates, a means by which government obtains approval to spend money without having obtained sufficient legislative authority. The Auditor General identified the use of the confidence convention and inability to influence spending plans as disincentives preventing members from devoting more time to the estimates.

Monsieur Desautels felt that ways should be sought to improve the effectiveness of the committee system. He stated that having standing committees deal with legislation, policy issues and the estimates helps them establish a link between policy and expenditure. Thus he appeared not to favour the creation of a single estimates committee.

Lastly, he noted that financial information in its current form discourages members from dealing with the estimates. Mr. Desautels identified changes to the standing orders allowing committees to review and report on the future spending plans of departments and changes to the government's financial management system and the information it generates as steps in the right direction.

He concluded by saying that his office sees the estimates as the end of the process and not just the beginning. Members, he believes, will become more involved if they can challenge and influence future spending plans and if the information they are provided supports this involvement.

Mr. Dobell indicated that the Canadian Parliament is among those which exercise the least influence over expenditure. Proposed changes to financial information reported to Parliament and a focus on future expenditure offer the potential to overcome this lack of influence. However, there are problems with scheduling and organizational structure that will need to be addressed.

The current June reporting deadline for the outlook documents is unworkable. A later date in mid-autumn, for example, or no deadline at all should be considered.

The creation of a single estimates committee should also be considered. This would offer two advantages. The committee would attract members interested in public administration and it would not be distracted from its work by other issues. Its disadvantage would be that it could not cover all of the estimates within a single year. Instead, the committee could focus its attention on two, three or four departments each year. It could call on other standing committees to help it in its work. To enhance their influence, committees could be given the formal authority to shift expenditures within votes. Dobell also recommended that committees be given enhanced staff support to help them deal with the estimates.

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Senator Stewart discussed problems with the pre-1968 process and indicated that the new one, that is, the one in place today, was implemented to make the House work better, not necessarily to produce a better examination of the estimates. He defended the current process, arguing that better examination of the estimates requires a more determined effort on the part of parliamentarians, not a change in the rules. Changing procedure and the form of the estimates may not result in better scrutiny of expenditure plans.

He suggested that perhaps there ought to be a closer link made between spending and taxing. One way of doing this might be to re-enact the Income Tax Act on an annual basis, as is done in the British House of Commons. He agreed that perhaps members would be more attentive if they could reduce the estimates. He also agreed there ought to be closer examination of statutory spending, which could be used as an avenue for examining larger policy issues.

On November 23 the committee heard from two former members of Parliament, the Hon. Ronald Huntington and Claude-André Lachance. These gentlemen authored a study in 1982, entitled ``Accountability: Closing the Loop'', which is included in your briefing books at tab 11.

The witnesses told the subcommittee a major disincentive is that members who spend time on the estimates do not attract much attention. To reverse this lack of attention, they need to be able to influence outcomes and establish a track record. They also need better staff support. A single estimates committee should be formed that could view the expenditure process in its entirety. This is what Mr. Claude-André Lachance referred to as the ``40,000-foot view''.

Then this committee could allocate work to the standing committees. This committee could review some estimates every year, others on five- and ten-year cycles. Statutory spending needs regular review. Committees should not reallocate expenditures on a line-item basis. This would be micromanaging. Instead, they should look at broader issues, challenge the government's priorities and recommend reallocations within broader areas of expenditure.

With regard to confidence, Mr. Huntington said he saw no reason why a government could not sustain a loss on the supply vote and follow it with a formal vote of confidence.

Mr. Blaikie, one of your colleagues in the House, sat in on the meeting and suggested that the key to a more effective examination of the estimates lies in changing the political culture of the House, not the rules already in place. Committee membership, he said, needs to be more stable to allow members to develop greater expertise. In addition, members need to be rewarded. Ways have to be found to interest the media in the good work being done by members of Parliament.

Finally, in November the subcommittee heard from three academics: Dr. Franks, a political scientist with a special interest in parliament; Dr. Mallory, a retired professor of political science; and Dr. Evert Lindquist, a professor of political science at the University of Toronto.

Dr. Mallory said having committees look at departmental plans and performance in relationship to the estimates is worth trying to achieve effective oversight. This change could improve accountability as well. Committee study of supply should focus on accountability management, not on major policy objectives. Aside from this, the best way for members to be more effective in examining estimates is for them to develop knowledge and experience in a particular policy area, and knowledge of the current rules and procedures. He did not think having a single estimates committee that breaks down into subcommittees to examine individual estimates would be an improvement over the status quo.

Professor Franks said the main budget motions are indeed confidence motions, and the overall budget of government is a basic policy document. Government defeats in this area do constitute losses of confidence. However, he thought specific expenditures in the estimates could be reduced without impairing confidence. And in regard to examination of statutory spending, Dr. Franks said the statutes underlying statutory spending could be reviewed more consistently. When examining and voting estimates, Parliament should focus on gross, rather than net, amounts.

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In order to be more effective, committees need long-term membership with a long-term perspective. Tinkering with the committee system will not have much impact as long as government exercises strong control over committees and their internal culture does not change. Longer horizons - three to five years - are needed for budgets and expenditure plans.

The advantage of having a single estimates committee is that there would be one committee with that clear function. The danger would be that it might not live up to expectations. All and all, though, having such a committee would not be a bad idea, except that Dr. Franks was not sure whether or not it would be wise to have standing committees overseeing departments without looking at their estimates.

Dr. Lindquist spoke primarily about accountability, performance evaluation and business plans. From his point of view, the new accountability tools are not entirely reliable, so it would be difficult to make sound judgments about future expenditure plans when using these tools as a guide.

The Chair: Can you clarify that? I think it's the first thing I've heard you say that left me not quite sure what it is you were talking about. What did he mean by ``new accountability tools''?

Mr. O'Neal: Specifically, he was talking about things like reporting on performance evaluation, and having the departments draw up business plans to set forth their priorities for future activities - that sort of thing. He seemed to be saying that a lot of this is still in the experimental stage. He suggested, as I recall, a go-slow approach when using these measurements, and he also cautioned against making judgments about how departments and agencies had actually performed throughout the year based on these kinds of instruments, because they wouldn't necessarily give an accurate picture.

I think Dr. Lindquist is somewhat unique in that he is one of the few people who are actually quite critical of some of these new methods. It was therefore interesting to hear from him, but it was too bad the subcommittee couldn't have heard from someone who might have defended the new measurements.

The Chair: It's okay, Treasury Board is doing that quite adequately.

Mr. O'Neal: As I say, Dr. Lindquist argued in favour of a trial-and-error approach in order to perfect these tools.

Last of all, the subcommittee received a paper from Dr. Paul Thomas, an academic with a longstanding interest in the supply process. Dr. Thomas makes the following points in his submission: firstly, political practice relegates Parliament and its members to a marginal role in the supply process. The concentration of power in the hands of cabinet means that changes in organization and procedure will do little to increase Parliament's influence over expenditure.

The format of the estimates may have played a role in discouraging members of Parliament from becoming involved in the supply process, but this is not the main cause. The new expenditure management process has promise, but whether or not it will enhance parliamentary influence will depend on changes in the attitude of government and members of Parliament. Annual approval of the estimates will probably remain a feature of the system; however, programs could be reviewed on a longer-term and cyclical basis.

The review of programs, rather than the approval of the estimates, offers the greatest potential for parliamentary influence. A new committee, one that Dr. Thomas calls the standing committee on program and expenditure review, should be created. It should be made up of thirty members of Parliament, be chaired by an opposition member, have a permanent staff, and be divided into three subcommittees. A special liaison committee should be formed to coordinate the work of this new committee with the work of the finance committee and the public accounts committee, as well as the Senate's national finance committee. Supply days should be retained, but the liaison committee that Dr. Thomas proposes should be authorized to identify committee reports on financial matters or program reviews for debate on five or six of those supply days.

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I should mention that I think Dr. Thomas's paper is a very interesting one. Unfortunately he wasn't able to come and speak to the subcommittee during the first session. It might be worth considering seeing whether he is available to come and speak to the subcommittee during this session. He does have a very broad knowledge of this topic and he has some very interesting proposals that you may wish to consider.

Madam Chairman, that brings my briefing to an end. Again, I apologize if it was a bit lengthy.I would be more than happy to try to answer your questions now, or if you have questions later I'll make sure you have my office phone number. Please feel free to get in touch with me about anything I've said or anything in the briefing book.

The Chair: I just wanted to make a comment from the parliamentary side that I think the whole issue of accountability, while it's not one of those things that rings bells in the media or with many of your constituents, at bottom is what a lot of them are asking for. We want to know that Parliament has a handle on what's being spent and how it's being spent, and that our members of Parliament are there to make a difference, to be able to hold the bureaucracy accountable for what's going on.

I don't know about all of your offices, but the one thing that triggers phone calls to my office is one article on $20,000 that was misspent in ridiculous ways. That will trigger a slew of 10 to20 phone calls, much more than on fairly serious issues. I think that's a symbol of a malaise out there in the public. They feel that nobody is really watching.

My own personal view is that as parliamentarians and as members of committees of Parliament, we really haven't taken the effective role that we could, not only in checking how the resources are used but in trying to influence future patterns of spending.

John, did you want to add anything? You've been through this from the beginning.

Mr. Williams: I think your summation, Madam Chairman, was fairly good. Parliament has become a stylized debating society that is by and large required to endorse the position of the government. As Brian has so ably pointed out this morning, it is the role of Parliament to hold government accountable. Yet he went on to say that Parliament has become marginalized in its role. When a government has a majority, it has been able to achieve its objectives by virtue of its majority.

I think we're talking here not about a major revamp of the estimates process, but about trying to put our finger on the causes that have allowed parliamentarians as a group not to seize the estimates as part of their responsibility of holding government accountable.

We have the non-confidence measure, which is a major stumbling block, as we all know. Brian has mentioned that defeat on an estimate could cause the collapse of the government, and that was echoed by some of the witnesses we had. However, I think one of them also said that confidence is in the eye of the beholder, being normally the Prime Minister. We can go back to the last time a government accepted reductions in the estimates, which was when there was a minority government in 1972, when the second party in the coalition said it wanted to see some change. To maintain the solidarity of the coalition, the government of the day accepted some minor tinkering with the estimates.

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Therefore, it proves that confidence is in the eye of the beholder. It only applies when the beholder says it does apply. That has given the government of the day, especially a government that has a majority, the opportunity of achieving its objectives.

I recognize that in the complex world we live in we can't just look at one line of the estimates and say well, I don't like that, so let's see if we can remove it. That doesn't achieve very much. We have to have some methodology whereby we can make an intelligent contribution to understanding the estimates. If, in the process of understanding the estimates, we feel that something is superfluous or should be eliminated or reduced, then we should have the opportunity of achieving that without thinking we're going to bring down the government.

There are three major areas of expenditure. One is the estimates, which is the ongoing administration of government, such as salaries and rent and telephone bills and that type of stuff. That's what we vote on and that only accounts for about 30% of the total spending today.

There's 70% that is statutory spending. That is provided to us for information only, and we're not even allowed to express an opinion, much less vote on it. I think we have to deal with that in some way, shape or form. I think a program evaluation on a cyclical basis, as has been pointed out this morning, is an excellent tool for that.

The third major area is crown corporations, which we have to deal with as well.

I would like to see some methodology by which we give parliamentarians more authority to have their voices heard on the estimates. If they have more authority and their voices are heard, they're going to take a greater interest in the estimates. I think the two go hand in hand. Why would anybody spend any great time and effort on the estimates when he knows before he starts that there will be a total and absolute rebuff?

The second one is on the statutory programs. They are so big and complex that it's not even feasible to think we're going to have an intelligent analysis on an annual basis. Therefore, I like the idea of a cyclical situation. Because crown corporations have a quasi-business, quasi-public policy, we have to debate how we're going to hold them accountable. Remember that Parliament's role is to ensure that government is held accountable. That is our role.

The Chair: I disagree with that, but I'll let you continue.

Mr. Williams: That's why I would like to see change, and this subcommittee was created because the Reform Party said we want to see change. We want to see accountability. We want to see real input by parliamentarians.

I welcome the new members to the committee. We had a harmonious relationship in the past and I'm sure we can continue that. What we want to achieve is not fine-tuning, but it's not a major revamp. We want to make this system accountable and I would like to see it working very well.

[Translation]

The Chair: I would like to welcome Mr. Laurin, member of Parliament for Bloc québécois and member of the subcommittee. Our researcher just gave us a breefing session. I believe that he will be happy to meet you if you need more information.

Mr. Laurin (Joliette): Thank you.

The Chair: Have you received the breefing book?

Mr. Laurin: Yes I have.

[English]

The Chair: Okay. I was going to suggest questions or comments from our newer members, and then we might go on to look at future business of the committee, a work plan, and how we can get to where we have to get to before Parliament breaks.

Mr. Pagtakhan.

Mr. Pagtakhan (Winnipeg North): Certainly I'm a new member of the committee, but in all modesty, I've been a member of Parliament since 1988, so I have seen the two sides of Parliament, within opposition and now within government. I would just like to make some observations.

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When we say there is frustration on the part of members of Parliament, I think we have to be more specific. You see it on the part of the opposition and also on the part of the majority members of Parliament.

I find it difficult sometimes, Madam Chair, when we sometimes lump everybody in when in fact the majority of members of Parliament are not frustrated. We prejudge the decision of the majority of the members of Parliament as though the opposition is speaking for the whole of Parliament. I think we have to be very discerning when we make statements like that.

Second, in terms of accountability and performance, we heard from your testimony that new tools are being explored, that these are pilot projects. If this is true, we cannot make a prejudgment of whether indeed this will be good or bad. The decision to ascertain this, in the definition of a pilot project, is...after a period of time we shall have determined that it is obtaining what we hoped it would better obtain. So any judgment now would be premature. Otherwise, the essence of the pilot project is lost as a pilot project to ascertain the goals.

Therefore, along that line - and I will have a question on that point - when do we assess these pilot projects? What is the timetable? When do we expect a report on that assessment? Who will be assessing these pilot projects? I was not clear on it after your presentation. Have we today determined a particular authority who will make this overall assessment of the six projects? Maybe I missed it in your presentation. I would like you to comment on that.

Mr. O'Neal: Madam Chairman, I'll just quickly reply to the three questions.

First of all, I apologize if I've made any statements that are a bit too sweeping regarding frustration on the part of members. To be precise, I was basing that on an observation made by a government member in the previous Parliament who had stated that he was frustrated with the process because he couldn't do anything to reduce the estimates of certain departments he wasn't too fond of.

Second, as far as the new accountability tools not being prejudged, I tried to be careful in my presentation. I think the witnesses also tried to be careful to say that all of this is very tentative. We have to wait and see. There's potential here, but we'll have to see whether or not the potential is actually fulfilled.

In particular, the Auditor General's office has said that they have some concerns about the performance reporting that is going to be done, because it all depends on what you report on and how well you report on it. And who knows, in the worst-case scenario you may just get information that isn't at all useful to you about things that aren't relevant to the actual success of a program in living up to the goals that were set for it. That leads into the third part of my response.

We know for sure that the Auditor General's office is keeping a very careful eye on these pilot projects, because they're very interested in the kind of information that's being reported to Parliament. I don't really know when they are going to report back on their observations, but I could certainly try to find out for you.

Mr. Pagtakhan: On that note, I would suggest to the committee that we make a specific memorandum to the Auditor General's office, if it is within our purview, to so request such a report at a reasonable time so that we have a timetable for that particular kind of information should we deem it necessary to have it.

The Chair: Let me just add to that, though, because I think there's a step before that. There are two processes going on in parallel here. One is what's going on in Treasury Board with respect to what's reported to Parliament, and there's no question that relates to the work of this subcommittee, which is basically more focused on what Parliament then does with the information. I've been concerned about the lines between those two processes getting blurred, and I think John has as well.

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When this pilot project was being prepared, Treasury Board officials and Ron Duhamel as parliamentary secretary did come to this committee and do a presentation. They asked us to indicate, through the procedure and House affairs committee, our concurrence with the project.

We put some conditions on that concurrence, and I'd want to go back and review what we asked them to do. One of the things we asked them to do was design an evaluation process so the committees involved could evaluate the new form of reports. We also asked whether they assisted the committee's work on the estimates, and if they did, why.

They were to come back to this committee with what their evaluation process was going to be. That hasn't been done, as I understand, so we might want to follow that up, Brian, and share with this committee the views of the evaluation.

When we get to the future business section of our agenda this morning - and I'd better stop talking or we won't get there.... One of the things we had planned before the prorogation was a round table with committee chairs, and six or seven committee chairs were interested in that. So we want to talk about setting that up again as soon as we come back from the break.

Mr. Pagtakhan: So, Madam Chair, you have not seen the evaluation form you have requested?

The Chair: No. We haven't been informed yet what kind of evaluation Treasury Board is undertaking, but it is something we need to follow up on.

Mr. Pagtakhan: Were you to convene that meeting of this committee with the other chairs, it would be very important to see, in terms of a field pilot study - and maybe our researcher could alert himself to this.... Where you have the views of those six committees on a new process or a pilot project and then other chairs not having been introduced to the new process, you can then have a comparative analysis of the system. It would be very interesting to me.

But let me go to another point. I heard Mr. Williams' comment about the statutory and the non-statutory, which you commented on as well, Madam Chair. Certainly it's something worth pursuing to have greater involvement on the part of all members of Parliament, government side and opposition side, on this statutory matter.

At the present time we have no way of knowing the statutory spending at all. We know that, right?

Mr. O'Neal: In the main estimates that are presented every year, the amount of money being spent in areas of statutory spending is listed, but it's listed for information only. So it's not voted on. That doesn't mean it couldn't be looked at; it's just not voted on.

Mr. Pagtakhan: Right, yes.

Mr. O'Neal: I have two other pieces of information to add.

First of all, Madam Chair, I'm glad you brought up the subcommittee's report on pilot projects. I was going to bring that up myself. It's a very important thing to note.

Mr. Pagtakhan, I will get a copy of that report for you.

I note that in the report the committee says much of what the chair has said to you this morning. The subcommittee also says that it intends to monitor developments in this area and expects the Treasury Board Secretariat to report back to it on the steps that have been taken in response to the concerns the committee has listed in the report.

As to an evaluation framework for the new part IIIs, one was apparently submitted two weeks ago. Inside Treasury Board Secretariat their evaluation and audit group is conducting an evaluation of these pilots, and they're supposed to report at the end of this month.

Mr. Pagtakhan: Along that line, if it is not too late - and I do not know what Mr. Williams would say - it would be interesting, if it is allowable, to have that evaluation form looked at by the Auditor General's office for commentary. Is it indeed a form that will measure what we hope to measure? If we can use the experience of the Auditor General's office, whose main job is measurement of performance and accountability, it may serve a purpose before it is too late to use that form, and then, oh, we did not think of this particular tool.

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The Chair: I think he has been consulted about it. In a few minutes when we get into future business, we might want to think of where and how we want to schedule that.

Mr. Pagtakhan: My last comment is that there was mention of a new committee of 30 chaired by the opposition, presumably to have a better sense of accountability. How does this relate to the public accounts committee that we now have, that its main purpose is in fact accountability?

Mr. O'Neal: First of all, this is a proposal that was made by Dr. Thomas. The best way of looking at it is that the public accounts committee takes a retrospective look at what has been done. To assist in doing its work, it receives the reports of the Auditor General and it studies certain chapters of those reports. The chapters in the Auditor General's report aren't necessarily focused, however, on the past fiscal year. They are a bit broader than that. The performance reports that are going to be issued in the fall will just focus, I believe, on the fiscal year in progress.

I believe that what Dr. Thomas is proposing is a single committee that will look at the estimates for the upcoming fiscal year. They will be taking a prospective look, a look into the future at future plans. Also, if I understand him correctly, they will be looking at programs that are in existence over a number of years or across a number of fiscal years, taking as I guess Mr. Lachance would have said, a 40,000-foot overview of the whole process.

Mr. Pagtakhan: Historians have told us that if we do not know history, we are bound to repeat it. A knowledge of the information obtained during a retrospective analysis is very vital, including the present, when we project into the future. If you have two committees and these two committees do not coordinate their activities, we will miss the opportunity for that sort of cohesive look at the whole picture.

If we consider changing the structure or creating a potential new committee, it is very clear...because I agreed with you, as I was listening to your presentation, that if we change to that new committee, the business of supply and estimates will always be about a year later. That is the essence that I can see.

If that were to be the case, then we have to consider at this early stage its critical role with the public accounts committee, with the latter to continue. Otherwise we would miss the opportunity for a comprehensive look at the full issue of performance accountability in spending, taxation, etc.

Those are my comments, Madam Chair.

The Chair: Have the minutes of the subcommittee been circulated to the new members? Are you interested in receiving them?

Mr. Pagtakhan: Yes.

The Chair: What about the submissions to the committee, Brian? Should they be -

Mr. O'Neal: Madam Chairman, I can check with our regular clerk when she's back. She should be back tomorrow.

The Chair: As you heard, there was at least one brief we had in written form only. I want to be sure that you have that and any other material.

Mr. Pagtakhan: I congratulate you, Madam Chair, and Mr. Williams, for the task you have set. I think it is time that this new approach be looked into more seriously.

The Chair: Mr. Loney had some questions.

Mr. Loney (Edmonton North): In consideration of the estimates for crown corporations, is there a role for Parliament to play in overseeing expenditures of crown corporations? If so, how should that role be defined? Should members of Parliament be appointed to the board of crown corporations?

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Mr. O'Neal: That's a question that in all honesty I don't feel qualified to answer. I will say that Parliament already does exercise some scrutiny. For example, as for the CBC, a large crown corporation, I believe it either has its estimates reviewed or has the opportunity to have its estimates reviewed in committee.

I think the concern, particularly by Ron Huntington and Claude-André Lachance, was that as large entities that expend a considerable amount of money, crown corporations weren't receiving the kind of scrutiny they really warrant, and that some sort of special arrangement ought to be made to take a look at them specifically and in greater depth. They felt they weren't, in terms of the current context, getting sufficient scrutiny.

Whether or not members of Parliament should sit on the boards of crown corporations, I'm not certain. The only thing I would point though is that I think some of these agencies were set up in order to keep a kind of arm's length relationship with government.

Mr. Loney: This is a concern of our constituents. I get a complaint, you might say, every now and again, Madam Chair, particularly when constituents read in the paper that there's been a $20,000 or $30,000 grant given to some group that's going to study, let's say, the mating habits of the tsetse fly between 1920 and 1930. Their immediate concern is: don't you, in your role as a member of Parliament, have any control over this?

The Chair: My answer is no, nor do I want to choose what artist should get funding. Politicians are the last ones to make decisions about arts or science.

Mr. Loney: I'm not so concerned about the arts and the sciences as I am with some of these other projects that are absolutely ridiculous.

The Chair: But the other side of that then is how do we hold those bodies accountable for the results coming out of how they allocate those grants?

Mr. Loney: I would hope we could generate something of that nature in this committee, or in a similar committee, to answer that question.

Mr. O'Neal: I should say that the information on grants and contributions is usually contained in the public accounts that are published each year, which are the responsibility of the Standing Committee on Public Accounts. So I would imagine that if they were concerned, there are certain aspects of grants and contributions they could look into.

If I recall correctly, during one of the last meetings of the Standing Committee on Public Accounts, when we were looking at the Atlantic Canada Opportunities Agency, one of the members of the committee, Mr. Paradis, took the opportunity to question certain items in the public accounts relating to grants and contributions made by ACOA. That's a retrospective accountability after the fact, in terms of -

Mr. Loney: That's the problem

The Chair: This is a good example, John, of the role a committee could play. The Standing Committee on Industry, for example, could take on, as a special project for the estimates, examining all grants, contributions, and tax write-offs that are given to accomplish the purposes of the department. In fact, it could go through all the grants that have been given either directly by the government, or by its granting body such as NSERC. It could ask pertinent questions, like those you've just asked, about why these grants are relevant. We may increasingly have to do this ifMr. Williams digs them out.

Mr. Williams: The point, Madam Chairman, is that I think few people have any concept of the magnitude of the number of grants.

The Chair: Exactly, and the dollars involved, and the lack of accountability for how those dollars are spent. So I think it's an excellent point, John.

Mr. Loney: Even if we were in the beginning dealing in retrospect with what was a fait accompli, it would be a sort of directive for those responsible for the next round.

The Chair: I guess one of the things we've been struggling with is that committees have the power to do that right now, and they're not doing it. Why? Can we give them the incentives and the information with which to do it?

We don't have a lot of time left, John. Can I get a quick comment? But I'd like to get on to organizing our business for the next few weeks.

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Mr. Williams: The comment I would like to make is that we're trying to create a system that develops proactive accountability. It is not that after the fact we second-guess the decisions that have been made by the public service, but we put in place a methodology of accountability so we can look at the estimates, which is the anticipated spending by government, pass intelligent comment, and have that comment heard. That's what we're trying to achieve.

The Chair: I know that Brian will be available to any of you who want to have an opportunity to ask him further questions on this or to request further information. Maybe you have a list of the witnesses we've had, Brian, or anything you can think of that would be helpful to the new members for getting their heads around this.

Mr. Loney: Could I have a copy of your presentation this morning?

Mr. O'Neal: Sure. I'll have to make a photocopy, but certainly you can have it.

Mr. Pagtakhan: Madam Chair, looking at this summary of options - well done - when shall we form the committee's view on these many options? Is that part of the plan of our work?

The Chair: Why don't I ask Brian now to switch to the future business of the committee, some of the things that were left undone when the House prorogued, and when we might proceed?

My own view is that we've got a substantial amount of work before us and that we may not in fact complete a full report before the House breaks for the summer. We should be able to report on some significant matters and indicate other matters on which we intend to report further.

Mr. O'Neal: Yes, Madam Chairman, we have two witnesses lined up to appear before the subcommittee. We have Mr. Boisclair, from the Canadian Comprehensive Auditing Foundation, who is coming to speak to the subcommittee about issues of governance in large organizations. Second, we have the High Commissioner of New Zealand, Mr. McTigue, who's a former minister from the Government of New Zealand. He was present in that legislature when significant changes were being made in the way that government accounts for its fiscal management. He was going to speak to the subcommittee about the kinds of changes that his legislature made to accommodate itself to the changes in the financial management policies of his government.

Those were the only two witnesses we had lined up for sure. I already have briefing notes prepared on both of them, which we could distribute. I believe the clerk has been trying to contact both of these two gentlemen to see if they would be available again to come to speak to you.

Also, as I suggested, Dr. Thomas was not available during the last session, but he might be available this time. So if the committee is willing, I would recommend that the subcommittee hear from him, if that's possible.

I think, depending on whether or not the subcommittee decides to hear from further witnesses, once that has happened, then it's quite possible for the subcommittee to sit down and go through all of the issue areas it has considered. It can start issuing instructions to me in terms of drafting a report.

The Chair: The clerk was just pointing out to me the decisions that were made at our last meeting, before Christmas.

One was to hold a round table of the committee chairs. As I've indicated, I think that might be quite valuable, perhaps even more now that some of them have seen these new estimates. I know Bill Graham is the chair of the Standing Committee on Liaison, which is committee chairs. Bill is quite interested in seeing how their whole process can be improved.

So I'd like to go ahead and try to set that up, possibly for the Monday we come back. I'd like to know people's availability. That would be the Monday evening, probably.

Mr. Williams: I'd have to check my schedule on that, Madam Chair.

The Chair: Okay, would you do that?

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Mr. Williams: Yes, certainly.

I think I would like to see a meeting of the chairs. I'm not that enthusiastic about continuing on hearing more witnesses. Our time is short. I think we're going to have to spend several meetings deliberating and finding out exactly how each of us on the committee feels about the issues. It's not going to be a case of listening to the witnesses and writing a report. We're going to have to spend several meetings talking about this. Therefore, I would suggest that we hear the chairs, stop the witnesses at that point, and start some deliberations.

The Chair: The other thing we had looked at and agreed to was a draft questionnaire on the estimates process that consideration by committee and Parliament be distributed to members of Parliament and that we invite comments from members on their experience with the estimates process and what they would like to see. Is that still a worthwhile thing to do? It would be a fairly short, simple questionnaire.

Mr. Williams: Yes, I think we should go ahead and see what kind of response we get.

The Chair: All right, we'll go ahead with that then.

Mr. Pagtakhan: Madam Chair, Mr. Williams said that after hearing the chairs that will be the end of hearing witnesses. In light of what our witness today said about these three potential witnesses we may have, are you suggesting that we do not hear the last three witnesses he suggested? Then we have to come to a consensus as to what we do with those two opposing views.

The Chair: I think the other thing we have to factor in here is that Mr. Duhamel, even though he's no longer parliamentary secretary to Treasury Board, is continuing with this informal working group of parliamentarians on improving the reporting to Parliament. They now have a report, which they've sent to the chair of the procedure and house affairs committee. This is the evaluation framework for the improved reporting, what you were asking about earlier.

They're interested in making a presentation to the subcommittee. Do we want to proceed with that now or do we want to get on with our main work here?

Mr. Pagtakhan: I would like to see those views heard by this committee for the benefit of us all, because I haven't seen the report. If it is a look at the very issue we're studying, hearing that first-hand rather than reinventing the wheel ourselves will provide a lot of background, to say the least.

The Chair: Why don't we begin then? You can check with Mr. Duhamel, but I don't think there would be a problem with distributing this to all members of the subcommittee. I'll talk to Mr. Zed. It's not as heavy as it looks. This is both the French and English versions.

Mr. Pagtakhan: After that, perhaps we can make a determination of the future witnesses beyond the chairs.

Mr. Williams: I tend to think, Madam Chair, that it's not a case of two opposing views.

The Chair: No, it's not.

Mr. Williams: It's individual opinions. We could go on and get opinions ad infinitum, because this problem we have is a subtle one. It is not black versus white.

The initiative that was chaired by Mr. Duhamel is a parallel and complementary initiative that has assisted us in what we're doing. It's timely in the fact that it's complementary, but it doesn't supersede or actively have a great deal of impact on what this committee is trying to do.Mr. Duhamel's committee was dealing with the presentation of the information and this subcommittee is taking information and looking at how Parliament deals with that information. If we have improved information presented to us, that is beneficial to us.

How we handle the information, how we deal with it in Parliament, is the role of this subcommittee today. It is not the information that's presented to you. That was a Treasury Board initiative that was timely and complementary.

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The Chair: Nonetheless, this is probably something we could ask our researcher to spend a bit of time on. It seems to me that some of the material that is being prepared now by Treasury Board does cross that line, and some of what they brought to us between the information for Parliament and how Parliament deals with it. I think what we might want to do is ask our researcher to go through this and other documents that have been provided by Treasury Board to pick out those areas. I certainly welcome any suggestions they have for improving how Parliament deals with the information as long as it enhances accountability instead of diminishing it.

Mr. Pagtakhan: Madam Chair, the reason I raised the issue is that I heard from the staff of the committee that it is one thing to get contact from this witness from New Zealand.... If people have decided no, that we should stop the contact....

The Chair: Well, in fact the subcommittee previously decided yes, and it's up to this subcommittee. I think we included the representative from New Zealand because New Zealand has been through many of the changes in reporting that our Treasury Board is now implementing. I think we felt it would be useful to find out how Parliament was handling the new way of reporting, how it changed Parliament's role, and whether it was positive or negative.

Mr. O'Neal: I'd like to add, Madam Chair, that New Zealand also has one of these single committees to receive all of the estimates from all of the departments and agencies and study them, etc. It might be useful to hear from Mr. McTigue exactly how that works in practice and whether it works well or if there are problems with it.

If I might just make a suggestion.... Unfortunately our regular clerk isn't with us today, but maybe the subcommittee might like to wait to hear from her in terms of the progress she's made in checking the availability of the three witnesses I mentioned. Since time is an important factor to consider if these people are available in short order rather than at the end of the month or in early June, that might be a factor the subcommittee might want to take into consideration before deciding whether or not to proceed with inviting these people.

The Chair: We have a meeting scheduled for this Thursday.

We didn't anticipate witnesses for that meeting, did we? I think we had planned to go through some of the issues and options to try to get a round-table feeling from members of the committee in order to provide direction to our staff in trying to lay out a report. A possible outline of a report has also been prepared. We could go through that.

If you want, we could have Treasury Board here. Was it just on this that Treasury Board wanted to come before this subcommittee, Brian?

Mr. O'Neal: There's actually more to it than that.

The Chair: I thought so too.

Mr. O'Neal: When Mr. Duhamel and the Treasury Board Secretariat appeared before the subcommittee in October, they were asked at that time whether or not they would care to prepare something for the subcommittee's consideration on the kinds of structural and procedural changes that might be made in order to help Parliament deal with the new kinds of information that are being provided. They agreed to. I believe they've prepared at least a draft document. I don't think it's been finalized yet. I'd have to check. But when it is finalized, I'm sure the subcommittee members will be interested in reading it and then perhaps hearing from Mr. Duhamel. He could take you through it and answer your questions. That's another possibility for a future meeting.

The Chair: Okay. Yes, that refreshes my memory. It was the request of this subcommittee that they give us their ideas and suggestions on how the parliamentary process could be improved to make the best use of the information being provided.

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Can I suggest that we will go ahead with our meeting on Thursday? Our prime purpose will be to look at the issues, to look at a potential report outline, to look at the options paper that has been prepared. If it looks like we can do that and also hear from Ron Duhamel, do you want to try to work in both? Or would you prefer to get the draft report from them first, have a chance to look at it, and then deal with it after the break?

[Translation]

Mr. Laurin: At what time should we meet on Thursday?

The Chair: I suggest to hold the meeting on Thursday from 9:30 to 11:00.

Mr. Laurin: Okay. The Committee on Procedure and House Affairs sits at that time.

The Chair: I am fully aware of it.

Mr. Laurin: I would like to have un copy of the report before hearing the witnesses.

The Chair: Certainly.

Mr. Laurin: When will it be possible to decide if it is timely to hear the witnesses after having seem the written report?

[English]

The Chair: Perhaps we could also try to put out a work schedule that would show us whether or not we in fact have time for more witnesses. It would be a draft work schedule that would allow us to see where we want to go.

Mr. Williams: On Thursday, I think it might be beneficial for us to spend some time trying to get some of the issues on the table in order to find out where we have disagreement and where we have areas of concurrence.

The Chair: Yes, and I think the issues and options paper is one good way of doing that. We'd kind of be looking at where we do agree and where we have to do further work. In order to start focusing our minds as well, we can also look at the report outline that Brian has prepared. I must say I haven't had a chance to focus on it yet, so I'll welcome the opportunity.

Is there any other business that members want to raise now? Let me just say

[Translation]

I am happy to see Mr. Laurin with us. The Bloc québécois has not been represented very often here. His presence is very important.

Mr. Laurin: I will try to be present as much as possible, Madam Chair.

[English]

The Chair: Is there any other business, clerk? No?

I now adjourn this meeting. Thank you.

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