The Standing Senate Committee on National Finance has the honour to present its

FOURTH REPORT

Your Committee, to which were referred the 1999-2000 Estimates, has, in obedience to the Order of Reference of 14 December 1999, examined the said Estimates and herewith presents its final report.

This report is preceeded by two interim reports and by two reports on Supplementary Estimates.

The 1999-2000 Estimates were tabled in the Senate on 1 March 1999, and referred for review to the National Finance Committee. As is customary with this Committee, meetings were arranged for an initial review of the estimates, followed by an interim report. Additional hearings on the estimates were held throughout the remainder of the fiscal year to cover members’ other concerns in greater depth. The first set of hearing began on Wednesday evening, 24 March 1999. At that time, officials of the Treasury Board appeared before the Committee to answer questions of concern to members of the Committee. On the next day, March 25, the officials returned to provide additional information on issues raised by Committee members. An Interim Report was submitted to the Chamber at that time. On Wednesday, 2 June 1999, Mr Ianno, Parliamentary Secretary to the President of the Treasury Board appeared to respond to the additional concerns of the members of the Committee. Shortly thereafter the Committee submitted a second interim report on the 1999-2000 Estimates. This year, the Committee examined and reported on Supplementary Estimates (A) in November 1999. The Supplementary Estimates (B), 1999-2000, which were referred to the National Finance Committee on 2 March 2000, were examined on 21 March 2000.

In its earlier reports on Estimates 1999-2000, the Committee expressed concern that the growth of government expenditures may be greater than the rate of growth in the Canadian economy. The current Supplementary Estimates "B" show that total spending continues to grow and is now 3.6% greater than was initially forecasted last spring.

A major area of concern of this Committee involves the accountability of government and particularly departments to Parliament. Related to this issue is the ability of Parliament to scrutinize spending plans. Members have expressed a degree of frustration with the increasing proportion of non-discretionary expenditures in the annual spending plans of the Government. This seem to take away from Parliament ability to scrutinize spending intentions. For instance, almost 70% of government expenditures are now fixed commitments of Parliament, that is, they are statutory expenditures that do not appear to require an on-going examination by parliamentarians.

Another related issue that also appears to reduced accountability is the introduction of a provision to create a two-year spending authority. Under such a spending authority, an organization would only submit spending intentions every other year. This is clearly not the level of examination to which Parliament is accustomed with regards to government organizations. The Canada Custom and Revenue Agency and the Canadian Parks Agency are two specific examples of government organisation that will be using this type of authority. Last May, Mr. Ianno, agreed that while this two-year appropriation provision lies somewhere between an annually voted appropriation and a statutory appropriation, it will still be open to regular parliamentary scrutiny and will continue to be reported annually in the estimates.

Along similar lines Members of the Committee highlighted the use of Treasuary Board Vote 10 as a measure that obscures the spending intentions of government. Members felt that Parliamentary accountability might be eroded by the use of this vote, which allows for the approval of appropriations on a government wide basis, rather by individual departments. Members felt that this practice could lead to reduced departmental accountability because there is now an opportunity to hide too many small, but significant expenditure under such a broad provision. Mr Ianno explained the efficiency requirements that have led to the adoption of such an approach in reporting government expenditures and he reassured the Committee that the Treasury Board is diligent in examining departmental spending requests that fall under this vote so that it is not used by departments as a way of avoiding Parliamentary scrutiny.

Members were concerned over the relatively high cost of recovery and investigation of the Swissair disaster off the coast of Nova Scotia. This has been a recurring topics of discussion during the year as the expenses involved continue to rise. Of specific concern to Members in the realisation that the entire cost of this recovery operation must be borne by Canada. Members were informed that this is the practice adopted by international convention. Neither the airline or other nations are expected to defray any portion of the cost of recovery and investigation of the tragic accident.

Over the years, the Committee has become aware of a host of international obligations that at times involve relatively large and recurring amount of international debt forgiveness. These expenditures occur in both the Main Estimates and in the Supplementary Estimates. In order to provide an appropriate level of scrutiny on these expenditures, the Committee sought further clarifications on a number of programs from the Canadian International Development Agency (CIDA). At a meeting held in June 1999 the Committee met with the officials of CIDA in order to discuss Members concerns. The meeting proved to be very informative, and Committee hopes to have occasion in the future to discuss further points of interest with officials of the Agency.

 Respectfully submitted,

Lowell Murray
Chairman