[Recorded by Electronic Apparatus]
Thursday, May 16, 1996
.0953 
[English]
The Chair: I call to order this meeting of the subcommittee on the business of supply. This is a working meeting.
I'm sorry Mr. Williams can't be with us today. However, I will speak to him and make sure that he has whatever input he wishes to have directly with Brian. So at least some work can start over the break.
What's your recommendation, Brian? Should we start with the issues?
Mr. Brian O'Neal (Committee Researcher): If you like. Otherwise I would suggest that you might look at the witnesses for the next couple of meetings. It's your pleasure, though, if you'd like to start with the issues or start with the outline of the draft.
The Chair: Let's look at the outline of the draft report first and then the issues. I think we can then determine better if there are other witnesses we still want to hear and whether we in fact have time.
[Translation]
Mr. Laurin (Joliette): Madam Chair, I would appreciate very much if you would explain the origin and terms of reference of the committee for me. I was not present at the beginning, but I know that this is a sub-committee of the Standing Committee on Procedure and House Affairs.
Will we be discussing votes related to the House of Commons only, or all the votes in the Main Estimates? I would like some explanation, please.
The Chair: The sub-committee was created as a result of an order of reference from the House...
Mr. Laurin: Yes, we got that this morning.
The Chair: ... to the Standing Committee on Procedure and House Affairs.
.0955
[English]
The committee then set up the subcommittee to take on this task. That was in June, just as the House was breaking. The purpose was to look at the whole business of supply, the involvement of committees, and whether changes needed to be made in how Parliament considers the estimates and the information it gets. This was so that Parliament and individual members of Parliament could play a more significant role in the whole business of establishing the estimates, controlling expenditure, and overseeing the $160 billion the government spends every year.
I think it arises partly out of the fact that we get these huge volumes of estimates every year. They're all referred to their committees. The committees very seldom spend any time on them and very seldom report to Parliament on them. At the beginning of this Parliament a change was made to the Standing Orders allowing the committees not only to review the estimates but to make recommendations for next year's budget. Very little of that has been happening.
Our job is to look at how the estimates are handled and whether there are ways of giving Parliament a stronger role in controlling the expenditures and what they are accomplishing.
Is that a fair summary?
[Translation]
Mr. Laurin: If I understand correctly, our role is similar to that of the Public Accounts Committee, except that we are involved before the budget is tabled, while the Public Accounts Committee is involved afterwards.
[English]
The Chair: I think it's fair to say that the public accounts committee tends to look at specific spending issues, and our concern is how we can make the whole process of Parliament and the estimates work better. Once our subcommittee has made its report and any changes are implemented, then essentially our work is done. Then it's up to the committees to carry on.
One of the possibilities that's been raised with us by a couple of witnesses is that we might want to consider recommending the establishment of an overall budget committee. It would not be as narrowly focused as the public accounts committee, which tends to deal specifically with the Auditor General's reports. An overall budget committee, and you can see some of the testimony, would focus almost strictly on estimates and budget.
[Translation]
Mr. O'Neal: The Standing Committee on Public Accounts looks at what happened in the past, and this committee will look at the future. There is also a procedural matter involved.
Mr. Laurin: The committee is simply trying to make recommendations about a study procedure. This committee will not be returning annually to review budgets, unless we recommend that a sub-committee of a standing committee review the estimates annually.
Mr. O'Neal: Or the business of supply.
Mr. Laurin: Exactly.
[English]
The Chair: Does everybody have the outline of the possible report?
Mr. O'Neal: Madam Chair, would you like me to explain?
The Chair: If you would, please.
Mr. O'Neal: This is a proposed outline that I put together. It basically just focuses on the areas that were of most concern to the subcommittee while it was meeting. It's a fairly straightforward outline, I think.
I've taken the liberty of choosing a title for it, which came out of one of the witness's comments. This is followed by a preface that would explain the work and the two previous reports the subcommittee has issued. Then there would be an introduction that would talk about the subcommittee's overall objectives, the principles that guided its work and the general themes that underlie its report and recommendations.
.1000
That would be followed by a section on the origin and evolution of the business of supply. That probably would be taken directly from the briefing book that subcommittee members already have. There would then be a section that describes the current procedures.
A fourth section would explain why this is a good moment to be looking at changes to the procedures that are used for approving supply. You can see I've broken that down into various areas. The first one would deal with complaints about the current procedures. ``Complaints'' probably isn't a good word. If you can find another one I'd welcome it. I would then talk about changes that have been occurring in the expenditure management system, the reform of the estimates project, and lastly, an issue the chair touched on at our last meeting, the needs and expectations of Canadians.
Section five would get into the main body of the report, where the recommendations would be made. The first section under section five would deal with the role of standing committees. That's broken down into various issue areas that involve what standing committees do with the estimates and ways in which the standing committees might do a better job.
The second part of that would deal with the scope of parliamentary financial review. A lot of witnesses have said they felt that more attention ought to be paid to statutory spending and that committees should have different time horizons established for reporting back on the estimates or on the outlook documents. Then there's the question of whether, when Parliament votes supply, it should be voting on net or gross amounts.
The third subsection would deal with the subject of supply days.
A fourth would deal with the accountability of ministers and deputy ministers. This issue was raised by one or two of our witnesses.
A fifth subsection would deal with the ability of parliamentarians and committees to actually influence future expenditures. We're talking about things like amending the estimates or reallocation of money with votes, the use of existing powers and the ability to make some input into future expenditure plans.
A sixth section would deal with the confidence convention and the business of supply. This area has been of particular concern to Mr. Williams.
The seventh would deal with parliamentary attitudes towards supply and expenditure. A fairly substantial number of witnesses indicated that a change of attitude was required before any new kinds of procedures would actually bring any benefit.
Finally there would be a conclusion. You'll note that I've tried to be very careful not to conclude ahead of time what your thinking in any of these areas is going to be.
I also point out that this is a recipe for a fairly lengthy report and that the subcommittee may wish to see a shorter report, in which case I'd have some suggestions as to which sections of this outline could be eliminated.
The Chair: There are two possibilities here, given the time we have between now and the summer recess. We can do a shorter report or we can recognize that we may want to do an interim report dealing with one major chunk of this report.
.1005
One of the issues the subcommittee has looked at a lot in the past and that perhaps should be one of our priorities for reporting on in June is the whole business of the scope of parliamentary review. Should Parliament have more ability to review statutory programs, tax expenditures and loan guarantees? Mr. Williams is particularly interested in crown corporations.
I'm focusing on that particularly because it seems to me if we want to have any of that worked into next year's estimates process, we would need to report by June so the government could address how that might be worked into the estimates for next year. It would be good if we could report on other things before the end of June, but it's probably less crucial in terms of actually making a change in next year's process.
Mr. Laurin.
[Translation]
Mr. Laurin: Madam Chair, one point in the outline talks about considering expenditure and performance separately. Does that refer to program evaluation, and so on? I'm referring here to a recommendation made by the Auditor General, who told us that 70% of government programs are not evaluated at all. That means that we are voting supply and passing estimates without determining ahead of time which method we will use to evaluate their performance.
I would like it if, every time we vote supply, we be required to state how we intend to evaluate its performance. Do you plan to deal with this aspect in chapter V.1 of the document entitled: The Business of Supply: Completing the Circle of Control, which reads as follows:
- V.1 Role of standing committees
- (i) Approaches to the Estimates
- - Linking policy to expenditure
- - Considering expenditure and performance separately
- Is that what is meant here?
Mr. O'Neal: It's possible to deal with that issue in the context of section V.5, under ``Influencing Expenditures''.
Personally I would put it under V.5, because the point to be made there is if members of Parliament and committees are going to be able to challenge the future expenditure plans of departments and agencies and of government, they need to do it on the basis of good, sound information on past performance.
So the points Mr. Laurin has brought up could be and probably ought to be mentioned under that section, certainly under subsection (iv), which talks about input into future expenditure plans. If the subcommittee wanted, program evaluation could be dealt with there.
The Chair: I'll clarify. We're doing our work in parallel with another process going on within Treasury Board. They've done some pilot projects in six departments, where they've changed the format of the estimates. They're reporting their estimates now more along the lines you're talking about. They are indicating in the estimates their objectives and what they're going to be trying to accomplish.
When you see the performance reports, which they'll be tabling in the fall, you'll be able to compare the performance reports with what was promised in the previous estimates in terms of what they were going to accomplish. You will be able to compare what the money was allocated for and what was accomplished with it.
.1010
[Translation]
Mr. Laurin: I agree with you, Madam Chair, but less with our researcher. What he says is valid assuming we already have some experience with programs that we can evaluate and assuming that we can use this past experience to plan the future.
Most of the time, the programs are new and no one has had any experience with them in the past. So there are no reference points. The only way of ensuring that money is spent properly is to provide for evaluation procedures ahead of time.
If we adopt this approach, we should not be talking about performance in chapter V.5, but earlier, at the same time expenditures are set, unless it is considered in chapter V.4 entitled ``The Accountability of Minister and Deputy Ministers''. The subject could be included there.
The point I am making is that no individual nor department should apply for or plan for estimates without tabling a plan for evaluating the program in question. I understand that there are some urgent situations, but that is how we get caught.
The case of fishermen in New Brunswick is a flagrant example of this. It was urgent that the government intervene. The government felt that it had to rush to give these people grants because they were starving and needed food and subsidies.
No one bothered about any evaluation plan, and the government simply gave money to everyone. Some of those who got money had nothing to do with the fishery. By the time we start evaluating this, it's too late. The money has already been spent. It's impossible to get the money back from these people, because everyone was supposed to be acting in good faith. But in the meantime, the government has spent millions of dollars.
The Chair: I think Mr. Laurin has raised a very important issue that we have not discussed at length. It is very important because this is the type of question I ask myself. It's impossible to judge the performance of a program if we did not clearly understand its purpose and the evaluation method.
Mr. Laurin: I would like to raise another point, madam Chair. Under chapter V.1, we read:
- V.1 (iii) The Structure of the Committee System
- Creating a Single Estimates Committee
We could submit a preliminary report and ask for these committees' views, because the Standing Committee on Finance also deals with the estimates. The Public Accounts Committee reacts somewhat after the fact. But if we want to complete the circle of control, the right hand should know what the left hand is doing ahead of time, and vice versa.
If we all do our own study of the estimates, we might come up with different conclusions, and we would never agree on anything. Hence, before we table our final report, I would like us to submit a preliminary report and ask the other two committees to comment on it. In that way, we would find out if they would like to add something or if they think there's been any duplication. Subsequently, we could draft our final report for tabling in the House.
The Chair: That is one of the reasons we are trying to organize a round table with committee chairs during the week after the break. At noon today, I will be at the Liaison Committee meeting, with all committee chairs, to tell them what we are doing and why we want to hold a round table session with them.
.1015
That is an interesting idea. It is rather difficult when we have a deadline for tabling a report in the House. We could say in that report that we agreed to draft a preliminary report and that we would now like to consult other members of Parliament and other committees to clarify certain points and to ensure that we have taken every important subject into account, so as to avoid any duplication.
A preliminary report is a possibility.
Mr. Laurin: I would respectfully submit that if we cannot do our job within the time we've been allotted, we should ask for an extension.
I don't think there is any urgency here.
The Chair: No, that is true.
Mr. Laurin: Of course, when we try to improve the way the government works, we always have to rush to save a few pennies, but if we do not do our job properly, the end result may be the creation of yet another committee, another body that will make recommendations which may not be quite the right ones, and which will not produce the desired results.
If necessary, let's postpone the deadline and report in September, if we're not ready in June. I would like to make sure we hear from those who deal with these issues in order to avoid duplication. I think that's important.
[English]
The Chair: Why don't you go ahead and see if we can clarify this? Let's see what happens if we can get together the round table of the committee chairs. I think it's a question of whether we want our researcher to start preparing something that would be needed in the final report, whether it's in June or whether it's in October.
Mr. O'Neal: I'd like to stress that the subcommittee hasn't made up its mind about any of these things. They are still open for discussion. Actually, the discussion hasn't happened yet, so these are really just issue areas. It's entirely possible that when it comes to a single estimates committee, the subcommittee may decide it's not a good idea and it simply won't be accepted in the report.
Mr. Pagtakhan (Winnipeg North): Let me start with the title, ``The Business of Supply''. Then for the various parts you have estimates and expenditure and you spoke of the word ``budget''. Clarify for me again, as a layman, the difference between supply, estimates, budget and expenditure. Which is the overall encompassing term?
Mr. O'Neal: I would have to say that the budget is the overall encompassing term. After that are the estimates, which break future expenditures down into departments and agencies. And the process -
Mr. Pagtakhan: Never mind the process, just terminology. What is the difference between supply and estimates?
Mr. O'Neal: Estimates, quite simply, are what departments and agencies propose to spend, and on what, during the upcoming fiscal year. Supply is the money that comes out of the consolidated revenue fund to finance the expenditures proposed in the estimates.
Mr. Pagtakhan: What is the difference between expenditure and estimates?
Mr. O'Neal: Expenditure is actual spending. An estimate is an estimate. It's where government or departments set forth what they think they are going to spend in the upcoming fiscal year.
Mr. Pagtakhan: Sometimes I have seen reports with projected and actual estimates. What does that mean?
Mr. O'Neal: Actual, I think, is a reference to how much was actually spent after the fiscal year ended. Estimates are a projection of how much is going to be spent in the upcoming year.
Mr. Pagtakhan: So expenditure is the same as actual estimates?
Mr. O'Neal: Expenditure is actual expenditure, certainly.
.1020
Mr. Pagtakhan: No, no. Where you have estimates, I see the columns ``projected'' and ``actual''. There's no column about expenditure. Does that mean those actual estimates refer to the actual expenditures?
The Chair: Yes.
Mr. Pagtakhan: Okay. The reason I'm asking this is although I have been here for a few years, these terms are so confusing - simple but confusing - that no layman would understand this thing. So if we have to convey the simplicity of our work to the layman for him to understand and appreciate, we have to define very clearly the subtle differences between these two and where they overlap. It is incumbent upon us to define this, so I would propose that we have a section on definition of key terms.
Having said that, we have a title, ``The Business of Supply''. You said supply may be different from estimates, expenditures or budgets, actual and projected, and yet the title is only ``The Business of Supply''. So the title by itself already limits the discussion.
The Chair: It doesn't. In fact it gives it very wide scope. I'm not an expert in this by any means, but ``the business of supply'' refers to the whole scope of Parliament allocating money to the government to do certain things.
Mr. Pagtakhan: Yes.
The Chair: So it refers to everything. The estimates are the actual expenditure plans that are tabled in March. Actual comes up later.
Mr. Pagtakhan: What is the difference between the business of supply and the business of budget?
The Chair: Go ahead; you have a crack at that.
Mr. O'Neal: When I gave my briefing I started out with a definition -
Mr. Pagtakhan: No, no. Don't give me the introduction again. I know that. Just tell me this. Say a layman approaches you and asks what the difference is between the business of supply as a term and the business of budget. What do you say?
Mr. O'Neal: The business of supply I would say is part of a larger budgetary plan cycle, but this is -
Mr. Pagtakhan: So the two are different?
The Chair: Yes.
Mr. O'Neal: Supply is a component of the budget.
The Chair: Supply is the implementing of the budget, essentially. The finance minister comes in with his overall statement about the budget, and it lays out the global outline for how the government is going to operate, how much revenue and what expenditures there will be overall. It highlights some new programs -
Mr. Pagtakhan: And philosophy, mission and message.
The Chair: Right; long-term goals.
Mr. O'Neal: The budget would also include such things as taxation. Supply is the process by which government submits its projected annual expenditures for parliamentary approval.
Mr. Pagtakhan: The reason I'm asking this is we have a challenge to convey our work to the public, and I think it would be very useful for what seemingly is understood by all of us to be put in black and white on one page, with a definition of key terms such as ``budget'' and a statement of the government's missions, messages, philosophies, etc.
Maybe we can do it by going from the overall and encompassing to the more and more specific. Then when there are synonymous terms like ``actual estimates'' and ``expenditures'' that mean the same thing - if they do - we can put them on. That would really provide clarification, not only for the layman, but for the members of Parliament. I tell you sometimes we use the words interchangeably, by bad habit, including myself.
Am I sensing something here?
The Chair: You're sensing something very important.
Mr. Laurin.
[Translation]
Mr. Laurin: Madam Chair, I would like to add my two cents worth, if I may.
My understanding of Mr. Pagtakhan's request is as follows. The estimates are the total amounts requested of Treasury Board by all government departments and agencies. These departments and agencies make the request and Treasury Board and the Minister of Finance set aside $160 billion, say, for expenditures during the year.
.1025
Once the budget has been approved, it has to be distributed. A particular department will have to be told that it is entitled to a vote of $50 billion, out of the total $160 billion in the budget. That's just an example.
The department in question will be entitled to spend a maximum of $50 billion. It will begin its operations and will spend certain amounts of money. At the end of the exercise, we will check to see how much of the $50 billion it has spent. It will have spent less, more or the exact amount it was authorized to spend. If it spent less, we will say that it saved the government money. If it spent more than the budget, we will say that it wasn't entitled to do so.
If the department plans to spend more than the $50 billion approved by Treasury Board, it will have to ask the latter for supplementary estimates. At the end of the fiscal year, it will be determined how much was actually spent - $50, $55 or $60 billion.
Establishing a budget isn't the whole story. The department has to live within it and give various programs certain amounts of money. Our order of reference gives us the job of determining how these amounts should be granted. When the government gives an agency a certain amount of money, we will say that we want to look at how the department assessed the needs of the agency and how it justifies the amounts in question.
This is my understanding of the estimates and expenditures. I don't know whether I've explained myself clearly. I don't know whether you believe that what I've just explained is correct, but that's what I was taught at the ABC. I hope I remembered it correctly.
[English]
The Chair: I think René raised a very good point, from two points of view.
One, can we write this report in a way that makes clear to a broader public the importance of the business of supply and the accountability of members of Parliament?
Two, you raised an interesting point as to whether one of our recommendations shouldn't be the importance of the members of Parliament having a handy reference guide to the budget process. That might be one of our recommendations.
[Translation]
Mr. Laurin: With your permission, in order to illustrate what I was saying earlier, I will take the example of the Department of National Defence.
This department has estimates of $10 billion annually, but not all expenditures can be anticipated within this amount. Let's assume that tomorrow morning, all of a sudden, we have to send a peace-keeping mission to country x. In that case, the Minister of National Defence would ask for supplementary estimates to send Canadian troops there. That is where the idea of estimates or supply comes into play.
The department will have a budget of $10 billion, which is broken down into various votes. Expenditure of this money will be studied later. In other words, every time an expenditure is made, the department has to obtain the funds required to do so. When we're told there's no more money, no further supplementary estimates will be possible.
[English]
Mr. Pagtakhan: So then once we have clarified this terminology...
Part of the reason, incidentally, is that when a minister for a given department speaks about the budget for his own department, he does not say ``I do not have it in my supply'' or ``I do not have it in my estimates''. He says to the layman ``It is not within my budget''. He tells his colleagues ``It is not within my budget''. So there is departmental budget that is the government budget.
Let us make these tentacles clarified in the interrelationship. This can all come in part two of the introduction. We can say ``This report will focus on...'' whatever we agree to focus on. That is the term of reference of this report. In other words, we will put it in the context of the total if we cannot cover the total. Otherwise I will be lost again.
What I'm envisioning is if I were to go to a grade 12 class and give a lecture on the federal budget, the way I would approach it, if I had done my research, would be along that line: What is a budget? I should be able to explain it at that level. If I can't, then I cannot understand it either.
.1030
We ask the question, should it be a short- or long-term report? If that report were to be seen at the round table, given beforehand for their input, my suggestion would be a long report, because the deficiency...unless we include every component but in an non-abbreviated form. That is okay. But if we cut sections, those are the very sections those participating at the round table may ask about. So I would begin with a longer report at the round table, and we can contract the report if need be. That is one proposal.
The second is to try to utilize in the report a few diagrams or sketches, when you feel they're useful, rather than words. We could use a couple of them.
When you say, for example - and this is just on the format - this is statutory spending, immediately it begs the question, what about non-statutory spending? Right then and there will be statutory and non-statutory spending so that you immediately set the tone for the differences between the two. If there are any other kinds of spending beyond statutory and non-statutory, we should indicate the third ``other class'', as you indicated before.
Time horizons: a horizon is something that never ends, the way I look at it. Maybe they meant time lines, because a horizon is something you never reach.
The Chair: I wasn't sure what Brian meant by that either.
Mr. O'Neal: It was an expression used by the witnesses. I suppose they felt that if you look, you can see the horizon. They were talking about whether we are looking at three years into the future, two years into the future or just one year.
Mr. Pagtakhan: But the horizon, when I look at it, never ends. I don't think they would like to do that. While it's still a future, it is something with a definite end to it, and it is within our capacity to comprehend the future. Otherwise, it may just be used as an excuse for procrastination. I'm just worried about the terminology.
Mr. O'Neal: If I could just assure the member, Madam Chair, when I draft this report each and every one of these sections will be prefaced with at least a paragraph or two explaining exactly what this is going to be about so that people will understand and it will be clear.
Mr. Pagtakhan: That would be good.
Mr. O'Neal: Just to come back to your suggestion about terms, somewhere in the preface or the introduction there could be a glossary of terms. Would you see that as being useful, then?
Mr. Pagtakhan: Yes.
Mr. O'Neal: It could be just a two- or three-sentence explanation of each one of the terms people will find in the report.
Mr. Pagtakhan: But see to it that if they have to be used, we answer the questions of whether they are different, and if so, in what respect. If they are not different, indicate that they are synonymous. Because the two are very important.
The Chair: I think your problem is ``the Budget'' - capital B - and ``the budget'' of the department - small b.
Mr. Pagtakhan: My last point is that Mr. Laurin made the comment about performance of a program being in our report. We should address the issue of whether it is a mere requiring of a report that will speak of performance or a duty to in fact evaluate at all times. In other words, we may have the option to evaluate.
I raise that because the Auditor General does an evaluation of programs from time to time, not all the time on all of them. So we would like to avoid any duplication of effort. At the same time, I agree that we must have at the very minimum a report based on an evaluation performance that the committee may look at, and if it so wishes, can pursue further evaluation. But it is not a duty.
In other words, if I gave you an evaluation report of my performance, and you did not tell me it was bad, tough luck. You cannot come back to me five years later and say I did not do my job. You had an opportunity in year one to tell me I hadn't done a good job.
.1035
That kind of approach would avoid duplication. If there is an imposed duty, failure to do it would be negligence, whereas if it were submitted to you, you'd have the option to act on it. I would just like to make that subtle distinction. So my suggestion would be more of a requirement for a report but not a duty to evaluate. The option always remains with the committee at any time anyway.
I agree with the new program having a built-in monitoring system along the same line. I would like to see a section on the evaluation of the Treasury Board pilot projects be included in the draft report, if that's not already envisioned.
Mr. O'Neal: Sure. That relates in part to the reform of the estimates project.
Mr. Pagtakhan: Very good.
Mr. O'Neal: Those are observations or comments that could be made there.
I just want to add that I think in relation to what Mr. Laurin said, Treasury Board currently requires that new programs have what's called an ``evaluation framework'' established for them at the outset. Maybe the approach to take would be to make sure those evaluation programs are made public, either in the estimates part III or -
The Chair: And reported to Parliament and the committee.
Mr. O'Neal: When you are being asked to vote money for a new program, you'll see the evaluation framework established for it ahead of time.
[Translation]
Mr. Laurin: I don't think Mr. Pagtakhan understood me correctly. We're not talking about the same thing. I am not suggesting that there be a report. We already have too many of them. Officials who are even the least bit resourceful can come up with fine reports that mean nothing or that seem to cover everything.
One report might say: "Yes, in the $5 million project, we expected to create thousands of jobs." In its report, the department will say: "The department did in fact create thousands of jobs." Are these real jobs or not? How does it evaluate that? We don't know. So it's a high-sounding statement that may or may not be true and cannot be verified.
I used to be a teacher, and I would tell my students: "This is what I'm going to be teaching you over the next month. We will proceed with this program, and at the end of the month, I will evaluate you in the following way. That way, we will be able to determine whether or not I have met the objectives that were set, and how I should proceed as a result."
That is what we asked the Department to do. When you plan a job creation program for... Let's take the infrastructure program, with which we have some recent experience. The federal government invested $2 billion in it, and there were matching contributions from the provincial and municipal government. This made for a total budget of $6 billion. Was any provision made, before the money was spent, as to how to check whether the objectives that were established would actually be met?
We have to know ahead of time what method will be used for the evaluation. Then we can make our comments and express our opinion.
The Chair: I understand your concern, and our researcher does as well. In our report, we must mention the importance of the evaluation and take into account the points of view that have been expressed today. It is very important that we explain the links between evaluation and the accountability of Parliament.
[English]
Okay?
Mr. Pagtakhan: That is what I wanted - completely.
The Chair: Are there any other comments on the outline here?
I guess I would go down to V.2, ``The Scope of Parliamentary Financial Review'', for some additional comments. During the course of the hearings, which neither of you has participated in, we've identified a number of things not currently in the scope of parliamentary review. I think we were tending to say they should be. Statutory spending was certainly one of those things.
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There are other things Parliament never gets a look at, such as tax expenditures. Loan guarantees is one the Auditor General raised with us, and the idea of whether departments should be reporting net or gross spending. They don't report revenue in their estimates, and his feeling was that they should. That's my feeling also.
Another one we have discussed is capital expenditures. When you see a budget, you don't necessarily get a good sense that here's a major project that's going on within this department for the next ten years. Here's what's being spent on it now and here's what will be required the following years. Capital projects are not really clear, and I think Parliament needs to have a better handle on what those are, what they'll mean in future years, before they approve money for this year's capital projects. They need to know what it's going to cost for the next ten years - that kind of thing.
I guess my comment is I would want to see that scope expanded substantially beyond just the statutory spending. I feel that's the part of the report on which we may need to move most quickly if we want to have any influence on next year's estimates and the information Parliament gets. That doesn't mean we can't have the kind of consultation you're talking about, but if we want to influence that at all, perhaps before this Parliament is over, that's one area in which we might have to report to Parliament before the end of June.
[Translation]
Mr. Laurin: Let's try to do that.
[English]
The Chair: We'll do our best.
Mr. Pagtakhan: There's one other thing, Madam Chair. I once heard and read about, a long time ago, finance ministers' comments on ``That's a different accounting procedure'', etc. Is there any relevance to having a section on accounting procedures of government?
The Chair: There is something happening the subcommittee hasn't really gone into, and that's the apparent intention to switch to accrual accounting. I do not understand it well enough to say whether or not I think it's a good idea. But I certainly think it's important that this subcommittee get an understanding of it. I am one of those who is not convinced.
Mr. Pagtakhan: We have to be given an introductory course on that by a section.
The Chair: I don't think we can accomplish that before the end of June, but I can easily see the work of this subcommittee going on into the fall.
Mr. Pagtakhan: What if we just request that the Department of Finance's deputy minister give us a short page on what is the difference between accrual accounting and -
The Chair: In laymen's terms.
Mr. Pagtakhan: Yes.
Mr. O'Neal: There's also someone who's very good over at the Office of the Auditor General who can explain the difference between accrual and cash accounting.
Mr. Pagtakhan: Yes. We can just repeat it and give credit to the Auditor General for the reference material. We should put it in one concise reference book from the subcommittee, because that will invariably come up for discussion.
The Chair: I don't see how we can even deal with that before the end of June, but I think it's something that needs to be dealt with by parliamentarians.
Mr. O'Neal: In the interim, Madam Chair, maybe I could undertake to locate a simple one- or two-page explanation of what accrual accounting is and have it circulated to the members. It is important. The finance minister announced in I believe his 1995 budget that the government was moving toward accrual accounting.
The Chair: Everybody except the accountants in the country yawned and went back to sleep.
We've just started this, and you two, particularly, I'm expecting a big contribution from, but I know you're trying to get caught up with a lot. If you do spend some time on it, if you can get in touch with Brian I'd like to see him start some work on fleshing out some of these sections, paying attention, of course, to the suggestions that have been made here this morning.
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When we come back after the week's break, one thing I would like us to put our minds to - and maybe it's a good place to start in the report - is the principles. I always believed if you establish your principles and then tie your recommendations to your principles and your general themes, it certainly helps your decision-making a lot.
If Brian were to do some work on some of these sections over the break, then we could start having a look in more concrete terms when we come back. Particularly there should be some work on the guiding principles for the committee's work, with issues like accountability. Those principles and themes can run throughout our report. If we agree that accountability's an important principle, does this process help accountability or not? Is this something that needs to be strengthened for greater accountability or not?
If we could have a little more of a report and particularly agree on our principles, that would help our work a lot. So I invite you to have another look at it if you want to get any comments to Brian.
I would like to spend a few minutes looking at the issues and options paper. Does everybody have that?
Mr. O'Neal: The issues and options paper essentially just outlines this in greater detail, but maybe committee members would want to make reference to that document in conjunction with this over the break. It really just fills this out a little bit more.
Mr. Pagtakhan: I have one last point, Madam Chair. In V.4, ``The Accountability of Ministers and Deputy Ministers'', what is envisioned by that?
Mr. O'Neal: I'll explain. This comes out of a suggestion that was made by Dr. Paul Thomas in his submission to the committee. He felt there ought to be a series of very clear guidelines issued to ministers and deputy ministers in terms of their appearing as witnesses in front of committees to explain their estimates.
In other words, there's a separation between policy and administration. Ministers can answer certain kinds of questions related to policy; deputies really can only talk about the administration of that policy. He seemed to think there needed to be some clear instructions for them.
Mr. Pagtakhan: Very good.
Mr. O'Neal: That's why I put that in there.
The Chair: I don't think we have time to spend looking at our witness list, but Brian has prepared a list of the witnesses who have been here and others we had considered calling but hadn't gotten around to yet.
It would be helpful to me if I had the agreement of the committee that I work with Brian over the break to do our best to put together a work plan and determine whether we have time to and whether we need to hear from additional witnesses, and if so, when. If the committee would agree to give me that authority, we'll do our best to meet what we all have to do together.
Mr. Pagtakhan: Without calling a meeting?
The Chair: Yes, without calling a meeting.
Mr. Pagtakhan: You have my confidence, Madam Chair.
The Chair: I would like to ask you all something.
We had scheduled our round table with committee chairs for the Monday night after the House returns; that's May 27. Subsequent to that, our caucus has now organized a briefing for caucus on communications, so that may be impossible. Since all but one of the committee chairs are Liberal members, we'll have to determine whether they would want to be at that round table or would prefer to be at the caucus briefing.
I'll consult with the committee chairs and so will our clerk and researcher, and we'll try to set that up whenever it looks as though we can get the most committee chairs involved in the week to week and a half after the House comes back.
[Translation]
Mr. Laurin: Madam Chair, how do we plan to use this questionnaire?
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[English]
The Chair: The intention was - and this was something the subcommittee had agreed to do before the prorogation - to send out this questionnaire to all members of Parliament. We realize there won't be a large number of members of Parliament who will respond, but we thought it would at least give us the flavour of the frustration many parliamentarians feel with the estimates and perhaps help us consider things we hadn't.
All we were trying to capture with this questionnaire - and this would go to all members of Parliament - was a sense of why the estimates receive so little attention from parliamentarians and what we could recommend that might make it easier and more worth while for them to spend some time on estimates.
As I said, we're not expecting a huge response, but perhaps we'll get a few helpful suggestions.
[Translation]
Mr. Laurin: The committee will not be reporting on that?
The Chair: No.
Mr. Laurin: So it will just be used by the researcher...
The Chair: Exactly.
Mr. Laurin: ...who will comment on it if necessary in his report.
With respect to the proposed witnesses, have we already heard from representatives from the Association of Chartered Accountants?
The Chair: No.
Mr. Laurin: I see that we've invited that Canadian Comprehensive Auditing Foundation. I know that the chartered accountants publish a journal that contains studies, research and commentary on the administration of government and ways to improve it. I don't know why we didn't think of inviting them.
The Chair: Perhaps we could have both groups appear before the committee.
Mr. Laurin: Yes. In any case, if we had to chose, personally, I will prefer to invite the Association of Chartered Accountants, rather than the Canadian Comprehensive Auditing Foundation, because chartered accountants can talk about comprehensive auditing as well.
The Chair: We invited the Foundation, particularly because of its work on government management. However, I accept your suggestion; it is a good one. Will we have time to hear one or both groups at the same time? That is the big question.
Mr. Laurin: I was just bringing it to your attention, madam Chair.
The Chair: All right, thank you.
[English]
I think that's all we can accomplish today. I will now adjourn this meeting of the subcommittee.