REPORT OF THE COMMITTEE
Thursday, June 20, 2013
The Standing Senate Committee on National Finance
has the honour to present its
Your Committee, to which was referred Bill S-217, An Act to amend the Financial Administration Act (borrowing of money), has, in obedience to the order of reference of Tuesday, May 21, 2013, examined the said bill and now reports as follows:
Pursuant to rule 12-23(5), your Committee recommends that this bill not be proceeded with further in the Senate for the reasons that follow.
Your Committee was told by officials from the Department of Finance that in comparison to the previous legal framework, which Bill S-217 seeks to restore, the present borrowing authority regime has provided for a more efficient, flexible, responsive and prudent financial management and greater transparency and accountability. Officials from both the Bank of Canada and the Department of Finance emphasized the important part the current borrowing authority process played in facilitating Canada’s actions in the fall of 2008 to the global financial crisis.
The Committee was told by officials from the Department of Finance that the current regime introduced enhanced disclosure requirements on anticipated borrowing and planned uses of funds. In part, this is achieved through improvements to the Debt Management Strategy which is included in the Budget and is debated and voted on by members of the House of Commons each year. The Debt Management Strategy contains information regarding anticipated financial requirements, borrowing requirements, refunding requirements as well as detailed information outlining planned sources and uses of funds. This information forms the basis for the submission the Minister of Finance makes to the Governor in Council on borrowing authority.
The officials from the Department of Finance explained to the Committee that, in addition to the Debt Management Strategy, the Government is required to publish a Debt Management Report. This report provides a reconciliation of the projections in the Debt Management Strategy and what was actually required by the Government. This information, like the Debt Management Strategy, is available to Canadians and Parliamentarians. They also noted that under the current system, the Debt Management Report is required to be published within 30 days of the release of that years’ Public Accounts, 15 days less than under the previous process.
Although not discussed by witnesses, the Committee would also note that Bill S-217, as presently drafted, does not have a coming into force provision. This omission constitutes a significant structural concern for some members of the Committee. As it is now, if this Bill were to receive Royal Assent, the proposed changes to the Financial Administration Act would be immediate.
It is the opinion of the majority of the Committee that the present borrowing authority process strikes an appropriate balance between parliamentary oversight and the requirement for efficiency and flexibility.
JOSEPH A. DAY