Proceedings of the Standing Senate Committee on
National Finance
Issue 8 -- Evidence
Ottawa, Thursday, May 9, 1996
The Standing Senate Committee on National Finance, met this day, at 11:00 a.m., to examine the Main Estimates laid before Parliament for the fiscal year ending March 31, 1997.
Senator David Tkachuk (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, we have a budget to approve, which I believe the clerk has distributed, and I need a motion to take it to Internal Economy. It is a fairly conservative budget, if I may say so. It includes just research, communication, money for witnesses' travel, and eight working lunches. That is to cover situations like like we had last night, when we were here till 8:30. Although I have asked that that be put in the budget, of course, because this was not yet passed, I was not able to order lunch yesterday evening. Are there any questions or problems with this budget?
Senator Lavoie-Roux: No, Mr. Chairman; it looks fairly reasonable to me, and everybody knows how tight I am on expenses. I move that we pass the budget.
The Chairman: It is moved by Senator Lavoie-Roux. Is it agreed?
Senator Poulin: We have questions.
Senator Maheu: The budget item for Mr. Ketchum, Director of Research, 6 months at $70,200. Is that right?
The Chairman: Yes.
Senator Poulin: Does that mean that the annual salary is $140,000? That is what it says here. You would like it to be $140,000?
The Chairman: No, it does not mean it is $140,000. It is done on a fee-for-service basis so it is, I think, based on $250 a day. It is not the salary for the research assistants, it is a straight fee, which would cover all the overhead of their company.
Senator Maheu: It is for one year in that particular instance and not six months? It says six months down below.
The Chairman: It is six months here, yes. If we need it again we will consider it at that time, another $70,000.
Senator Poulin: Is that what you call the charge-back process?
Senator Stratton: Cost recovery.
Senator Poulin: The parliamentary cost-recovery process? Have we ever negotiated with the parliamentary centre the cost to the Senate? Has that been negotiated?
The Chairman: Yes.
Senator Lavoie-Roux: It is the same thing as last year?
The Chairman: Yes, it is. There has been no increase.
Senator Lavoie-Roux: It has been this way year after year.
The Chairman: And we need him. If there are no more questions, I will assume that it is agreed.
Senator Lavoie-Roux: Agreed.
The Chairman: Agreed.
Senator Lavoie-Roux: Actually, I don't know if I can move a motion and then agree to it.
The Chairman: Yes, you can do both.
This is the third meeting to examine the Main Estimates for the fiscal year 1996-97. We have before us witnesses from the Treasury Board: Mr. David Miller, Assistant Secretary, Expenditure Management Sector, who is becoming almost a member of our committee here, and Mr. Tom Hopwood, Director, Office in Charge of Improved Reporting to Parliament.
We have asked Treaury Board for a briefing on the expenditure management system. Because we do not really know what it is and we will be studying the Main Estimates, we thought it would be a good idea if they briefed us on what exactly they mean by this. I will ask Mr. Miller to lead off.
Senator Stratton: Mr. Chairman, there is a third person at the table.
Mr. Ronald Duhamel, Member of Parliament (St. Boniface): I am Ron Duhamel, member of Parliament for St. Boniface. I am the chairman of this working group and perhaps I could make a few introductory remarks.
[Traduction]
Thank you for giving us this opportunity to make this presentation. Mr. Chairman, this is a very important initiative. We need your feedback and your comments on this project with which I have been closely associated for some time now. I have my own slant on things perhaps and it is important to get another perspective.
We greatly appreciate the opportunity to present this information. This is a project close to our hearts. Steps must be made to improve the information that we share with members and senators and we need your help. This is not something that we want to push through at any cost. It is a proposal on which we wish to act, if action is warranted.
[English]
Dear colleagues, we appreciate very much the opportunity to be here today to talk about the changes we hope to introduce as part of our Improved Reporting to Parliament project. Our main purpose here today is to ask for your assistance at this critical stage in our project. Many of you will know that I chair this parliamentary working group comprised of members of the House and Senate that has reviewed and commented on a broad range of ways to improve reporting to Parliament.
Over the last year we have built a strong consensus, I believe, on ways to improve the reports to Parliament. The Part IIIs that you have received represent the first step towards achieving this goal. There are six departments which have pilots; that is a beginning and we will see whether or not it goes beyond that.
A report of the working group contained a number of recommendations to officials, one of which was that the revised Part IIIs be subject to an evaluation of whether they represent better information for members and committees, and that members in relevant committees be included as part of the evaluation process.
Ladies and gentlemen, this recommendation was carried forward in the report to the House that resulted in the tabling of the six revised Part IIIs, and this evaluation, which we hope you will assist in, will help us to determine whether or not we should proceed with the implementation of these ideas -- indeed, whether or not we should proceed further. We freely admit that there is still some distance to go with individual documents, but we believe that the direction we are heading in is the right one. We believe it is the right one, but we are open to your feedback; in fact we welcome it. I would ask you, therefore, as you examine the new documents, to focus as much on where we are going as you do on how far we have moved thus far.
[Translation]
As I just mentioned, we welcome your comments. We do not want to proceed without knowing where you stand on this matter.
[English]
I would now like to pass on to Mr. Miller. Next to him is Mr. Hopwood, who will provide you with details and probably answer all of your questions.
Mr. David Miller, Assistant Secretary, Expenditure Management Sector, Program Branch, Treasury Board of Canada: I would like to take this opportunity to thank Mr. Duhamel and the other parliamentary members of his subcommittee for helping us, over the last six or seven months, to come to grips with what we consider an important issue, and that is basically improving how we provide information to Parliament. Without his assistance and the work done by the committee we would have never progressed as far as we have.
In talking about the improved reporting project I should mention that that is the second phase of the expenditure management system and all that that entails; after we do our presentation on this phase, after Mr. Hopwood finishes, I will go back and put it within the context of what we call the expenditure management system, which I can describe in a few minutes for the committee as well.
This project was initiated about a year ago with the objectives of providing better information to Parliament and reducing the amount of effort required to provide that information directly. Today we would like to give you some of the background to the project, describing the changes we are proposing to make over the next year or so; we would like to ask for the committee's help in evaluating the direction we are heading in with the expenditure management documents that are provided to Parliament, and, as well, we would like your views on proposals to shift the timing for providing this information.
I believe a small handout has been available to the committee members and I would recommend it to your perusal.
The purpose of the changes that we have made through the expenditure management system, including those that we are recommending for this next phase, was to promote greater fiscal responsibility and, in particular, to place a greater emphasis on results and value for money, to promote program review and reallocation rather than incremental funding for new initiatives, and to encourage greater participation by Parliament.
With respect to the scope and approach of the project, it is important for us to indicate that we are looking only at the information that is used in the supply process. We have been working closely with the subcommittee on the business of supply of the House. That subcommittee is chaired by Ms Catterall and relates to the House committee that deals with procedure and House affairs, and she is addressing the supply process itself. We are just dealing with information. We are not trying to change any of the procedures or processes within Parliament.
Our project will influence all of the Main Estimates and the Supplementary Estimates and has implications for the budget documents, the public accounts and about 400 other reports that are provided to Parliament on the performance of government in certain areas. It will be linked to the president's report on review that was tabled for the first time last fall.
We are trying to take a very transparent and step-by-step approach to these changes. We are consulting extensively with parliamentarians directly or through the parliamentary working group chaired by Mr. Duhamel. Other stakeholders have been heavily involved, including officials of the Office of the Auditor General, academics and government officials.
Over the course of the last 12 months we have worked with key stakeholders, members of Parliament, senators, Office of the Auditor General officials, and departmental staff to generate ideas on ways to improve the expenditure management information that Parliament receives. This has resulted in suggestions for improvements in three areas described on the next page of the short handout.
As the objectives of the project, the first one deals with documentation, content and timing. Most stakeholders are dissatisfied with the current Part IIIs and other expenditure management system documents provided to Parliament. They are hard to read, are difficult to reconcile, excessively detailed, and are not oriented towards results; they do not provide a clear overall picture of priorities, plans and performance.
I should mention that we produce about 12 million pages of material as part of the Main Estimates each year. That is almost 80 separate books, each book comprising several hundred pages, and it is our belief and understanding that it adds very little value to the considerations and discussions that occur within Parliament. Despite the amount of effort we have made in trying to help parliamentarians understand the programs and directions of government, we seem to have missed rather badly; and this is the first time in 15 years that we would like to take a serious look at how we can improve that whole process.
The next element is what we call a control framework; by this we mean the way in which Parliament categorizes spending for review and approval. We have not had a look at this in several decades and we need to address some outstanding questions -- such things as which entities should report to Parliament; the design of the business-plan framework that we hope will underlie all of the information that is coming forward; and the orientation that we have, which is input, on how much there is for salaries and, for example, how much for telephone bills, as opposed to outputs or results information.
The third element that we would like to look at is technology. The existing structure was implemented about 15 years ago and I do not need to indicate to this committee about what kinds of changes we have had in our ability to communicate information and deal with it electronically during that intervening period.
Today we would like to focus on the first of these three areas, which, in particular, are the steps we are taking to make a clear distinction between planning and performance information and to adjust the timing for presenting this to Parliament.
Mr. Tom Hopwood, Director, Office in Charge of the Improved Reporting to Parliament, Program Branch, Treasury Board of Canada: With your permission, Mr. Chairman, I would like to provide a little more detail on exactly what it is we are trying to achieve and then get into the question of the evaluation that we are now performing and, in particular, how you could help us with this evaluation by giving us your views on where we are going.
Last December we received House approval to table revised Part IIIs for six departments. Those departments were Transport, Indian Affairs and Northern Development, Agriculture and Agri-Food Canada, Fisheries and Oceans, Natural Resources Canada, and Revenue Canada. We had six pilot departments working with us to design what we hoped would be substantially different and substantially better documents from Parliament's point of view.
A key element of the documents, and in particular the first three that I mentioned, Transport, DIAND and Agriculture, was to separate planning information from performance information. We found in the past that as you read the documents -- I have an old version of the DIAND document -- you had to flip through several hundred pages to find the performance information for various sub-activities; you never actually gathered a clear picture of departmental performance; you could not sit back and get a good overall view of how well the department was doing. A clear element of our proposal was to split planning information from performance information in a clear way. When you read the pilot documents for this year you will be able to identify them by a little logo on the front indicating, "Improved Reporting to Parliament -- Pilot Document." Then, when you go to the table of contents, you will see that it has a section on plans, a section on performance, and a third section dealing with supplementary information.
We want the documents to deal very clearly with high level plans and priorities, looking at what can be accomplished in the long term, in the future, looking at the past, in some cases going back 15 years, in terms of performance information, and moving a lot of what I thought were fairly mind-numbing reconciliations at the micro-accounting level into the supplementary information section. It is there if you need it, but we really wanted to focus on high level strategic plans, priorities and results, so that was a key element of our proposal.
A second key element of what we are doing is we are trying to improve the timing of the display of the information. Right now the Part IIIs of the Estimates are tabled right on the heels of the budget decisions and, if you take a look at our pilot Part IIIs, in particular Agriculture and Revenue, you will see that there were several budget decisions that departments did not have time to include in the documents that were tabled as part of the Estimates. They simply did not have time to accommodate the budget decisions included in the documents in time for us to print the 12 million pages that are tabled in the House.
We want to do two things: we want to provide the planning information within four weeks of the budget decision, to allow departments up to four weeks to accommodate budget decisions in their planning information; we also want to provide the performance information six months earlier than it is now provided by making it available in the fall and linking it to the president's report on review. That would give a fall window for accountability, a spring window for planning and it would adjust the cycle rather than having to deal with all of it within that narrow window right after the Estimates are tabled.
There are two key elements of what we are asking for your feedback on today: one is the move towards more strategic top down documents that make that clear separation between plans and performance, and the other is the matter of timing.
Last December, when we made this motion, the report that was tabled in the House required that we carry out an evaluation of the documents. We intended to do that anyway, so we are right at the point now of being able to bring together a lot of that information, and we wanted to include your views in that document.
In evaluating the Part IIIs, we have identified six questions that the evaluation is dealing with, and you can see those on page 5 here. The first three relate more specifically to members of Parliament; the last three are being addressed by expert assessments carried out by experts in the areas of communication, disclosure standards, and so on. We would appreciate it if you would provide us with your views on the first of those three questions. In particular, could you focus on the question of whether you agree with the movement towards making the documents more strategic and results-oriented? As to the split between plans and performance, do you like the idea of adjusting the tabling? And, third, do you feel that you have had the ability to influence the design and shape of the documents in the past?
The point that we always make is that these documents are not written for Treasury Board or for departments; they are written for parliamentarians; and some parliamentarians are surprised when they find that, in fact, we are actually looking for their views and their ideas on the information the documents contain and how they are presented. Do you feel that you have had the capacity to influence them in the past?
On page 6, just by way of other background information, we have had feedback from members of the Senate in a variety of ways. The first was already mentioned, Mr. Duhamel's parliamentary working group had two members from this committee on it, Senators Bolduc and Olson, and we also included Senator Stewart on the committee, who is a recognized expert in the area of the Estimates and the supply process.
Senator Cools: You are referring to Senator John Stewart?
Mr. Hopwood: Yes. We received very good feedback and participation from those members, and the report that was issued from that working group played a key role in the motion that we tabled in the House. We have also met individually with members and we will try to set up contacts with others. There is an open invitation here: if any of you would like to contribute to the process, we would be more than happy to meet with you and discuss this one on one.
We also conducted what we called a Forum on Performance Reporting. That included a wide range of recognized experts. Senator Stewart took part in that forum, which took place last week. All of this input will be merged into an evaluation report that we should be able to get out within the next few weeks. Our timing is very tight, because we have to go back to the House in late May or early June to get approval to proceed with the later stages of the project. Moreover, because of the earlier prorogation we found that our schedule was very full, so we apologize for the short time frame, but we are working on a very tight schedule.
With respect to the results of our parliamentary working group sessions, we are going to preseent two reports; one will be an evaluation report and the other will be a report on the performance symposium. I would be very happy to make those reports available to this committee when they come out.
The last slide of the deck gives an overview of our timing, repeating the point that in December we received concurrence to pilot these revised Part IIIs. In March they were tabled; we are now in the process of evaluating March, April and early May, and in late May and early June we want to go back to the House with a motion to proceed with the project.
In the fall of 1996 we will be introducing another element as a key part of our process. It will be to provide better information on Supplementary Estimates. Right now the Supplementary Estimates are difficult to read in terms of what actually happened within an organization to result in whatever is viewed in the Supplementary Estimate as the incremental change that goes to Parliament for approval. We want to provide a fuller disclosure of what happened within business lines and within the department to support that.
Again in the fall of 1996 we want to expand the number of pilot entities; so, for the tabling of the fall performance reports, we hope to have up to 16 departments involved and not just the six that are working with us now.
That concludes my presentation, Mr. Chairman.
Mr. Miller: Mr. Chairman, before we get into questions, I would like to clarify the role of this particular project in relation to what you alluded to earlier, which was the entire expenditure management system. Quite simply, if I were to summarize what the EMS, as we refer to it, really means, it is the decision- making process of the government. The difference is that over the last year and a half we have been putting in place a structure and a decision-making process through which money can be reallocated. In other words, money can be moved from a lower priority to a higher priority; that is the method for providing funding for new projects; there are no pots of money set aside within the fiscal framework to deal with new policy initiatives.
That is a major switch from the way the federal government has been doing it over the last 15 years, and as a result it has put a lot of emphasis on another item which I am sure senators are aware of, namely the program review. That extensive review by cabinet of all programs of government resulted in some serious and far-reaching changes in the services, products and ways things are delivered.
In summary, the expenditure management system is really the process used to reallocate money based on the priorities of the government. It is the identification of lower priority items, which can be reduced or eliminated to make room for existing or new higher priority items that require additional funding. That is really all it amounts to in terms of the process. It does tie in to the budget consultation process and how the priorities of government are identified in time to be included in the fall, with an understanding of the impact that those new changes will have on existing programs -- and that all feeds into the budget.
As Mr. Hopwood was referring to, our one dilemma now is that we have decisions in the budget that we do not have sufficient time to reflect in the departmental spending plans; but by having that window of about four weeks between the time when the budget is issued and the detailed plans are produced would allow that information to be included. It would not affect the actual tabling of the Estimates; the details, which are in Part II of the document and are used to support the Appropriation Act, would still be tabled in conjunction almost with the budget, but the departmental information to support what those numbers mean would then be delayed for a period of time to make sure that messages were consistent.
That is the extent, really, of what the system represents, and it is a process used by cabinet to deal with priorities and pressures.
Senator Cools: Before we really embark on questions, I have just been thumbing through some of the material here, and these gentlemen are saying they want our input. I cannot find mention of the Senate at all; it is as though the Senate does not exist. Maybe you can enlighten me.
Senator De Bané: No, but they talk about Parliament, which has two houses.
Senator Cools: Yes, but they talk about the "House". In Parliament, the "House" usually means the House of Commons. This happens all the time. People draft these documents as though the Senate does not exist. I am just thumbing through, so I may be wrong, but it happens a lot.
Mr. Duhamel: Your point is noted.
Senator Cools: For example, "House Standing Committee" usually means the other side. We know very well, and it has been the case for years and years, that when you say "the House" it means the House of Commons.
I simply make the point that here you are, wanting our input on these things, and yet, as I thumb through the material from beginning to end, it is as if the Senate does not exist. This is very common. Since you are PSs you can take the message back. Frequently, even though the Senate is still sitting, the news goes out that Parliament is adjourned, because Parliament means the House of Commons. I would not say it is a tender point, but I would say it is a matter of concern to me. I just put that out to begin, as people seek our input.
The Chairman: Your sensitivity is noted, Senator Cools.
Mr. Miller: If I may add to that senator, in the past when departments have appeared before Parliamentary committees in dealing with items such as the Estimates, I can guarantee they were always more nervous about appearing before the Senate Finance Committee. I know that from personal experience.
Senator Cools: I just made the point in passing because it just suddenly leapt out at me.
Senator Poulin: Now that Senator Cools has so diplomatically expressed that concern, may I say that as parliamentarians, we are very concerned with the federal public service, and that is why you see us sitting here as parliamentarians in this committee. We see our role here as contributing to the objective of facilitating and helping our public service to decrease the cost to the public of the public service, because of the current economic environment and because of the fact that over the last 15 years, as you were saying, tools have been developed to facilitate management of funds, to facilitate management of information, to facilitate management of the geographic gaps, or distances, that exist in this country.
Bearing this in mind, therefore, what I would like to know is how this objective helps us to decrease the actual costs of the internal management of the public service, while protecting the real costs of program delivery, which is a priority, public policy development, which is another priority, and the communications and consultations to remain in touch with Canadians across the country and the growing trends across the country.
Whereas each department is very concerned with the delivery of its program, as I see the responsibility of Treasury Board, it is to develop the appropriate guidelines and give the appropriate tools for the management of the public funds, to develop appropriate public policy in these changing times, and to communicate with the public and to consult. How does this help?
Mr. Duhamel: Mr. Chairman, perhaps I could just initiate the discussion. First of all, I want to pick up on Senator Cools's point, which is good and which I have accepted, and I am not offended at all. We need to keep being reminded of this, and I am sure that you and your colleagues will do so, and I welcome it, because I have often felt that the Senate is not given its appropriate place. This is not by "mauvaise" intention; it is forgotten.
I want to remind you though, as chair of this committee, that we have had senatorial involvement and very useful, very insightful, very constructive comments by your colleagues who have been in this particular committee, and we were anxious to come here today because we believed that you would make some constructive, useful criticism.
With regard to the broader question that has just been raised, I have a couple of points. Because the information we have is so massive, and we are so busy and so tangled because planning is mixed in with results and you must try to decipher all of this, it is my belief that what we do now is not very useful to parliamentarians, whether they be members of the House of Commons or senators, or are even members of the general public. However, assuming that we can improve the quality of the information through this project, then we will in fact be providing a useful service, not only to parliamentarians in the broadest sense but to the general public, those who need to know and who want to know. That is number one.
With regard to the actual assistance in management, assuming we reach this particular objective, this particular goal, I think, ipso facto, that will permit managers to be better managers and those who surround them to be able to reach objectives more easily, more clearly. Hopefully, that will be an important by-product.
Insofar as saving money is concerned, I will turn that over to Mr. Miller and Mr. Hopwood, but I will give a little preamble. I am not going to be offended if I am corrected here, I assure you, but it is my sense that it is a little too early to determine with any kind of exactitude just how much might be saved, but we do know we do not have any more money to do it and we do know that we are going to have to operate within the current existing guidelines. There will not be additional expenditures. Mr. Miller and Mr. Hopwood may want to pursue that, and, again, if I am incorrect in anything I have said, please correct it.
Mr. Miller: Certainly. Just to clarify the point, one thing I did not mention about the new expenditure management system and the new directions Treasury Board is requiring of departments is something that we are calling "business plans." Departments are required to develop business plans and provide a copy to Treasury Board for review.
A business plan, for those familiar with the private sector, probably means something different, but for us it is a strategic document. It is a document that most departments develop to ensure that they can get their messages consistently throughout their organization or to the client groups they serve. What the plan is intended to do is to look, in a top-down direction, at what kind of business lines a department or agency is in, what kind of services they deliver, and what kind of results or outputs they expect from that.
That is the start. Sometimes we -- "we" being the Treasury Board Secretariat -- confuse departments with that document by not providing precise guidelines, by not saying, for instance, "On page 4 you shall have a table that does this." Rather, what we say is, "You have messages to communicate, you have objectives, you have plans; tell us what you will do. We will not give you the precise information; you have to communicate that to us and that will be reviewed by the Treasury Board." It is not approved, it is reviewed.
Once we move the Information Reporting to Parliament project to the next level it is our hope that those business plans will then obviously form the basis for the information that is actually provided to Parliament. In that way it would be the same consistent messaging, the same directions, the same targets for financial details as well as performance targets that would then come to Parliament and be reviewed by the various committees. At that point we would be able to replace the Part IIIs and the "Outlooks," which is another document that deals with a three-year horizon and is also tabled. These plans would replace both of them.
In internal management our hope is that it would be that one consistent message and theme. There may be a few variations in words, but the business plan would form the basis for being accountable to Parliament and would therefore, on the performance side of it, report on actual results.
The Chairman: Could you give me an example of what the difference would be for, say, the Department of Transport? What would they be doing now, by bringing their business plan with them, as apart from what they were doing before? What would be the addition to this?
Mr. Miller: I could perhaps start by describing the previous system briefly. We did have a planning process, but it was almost 15 years before it had been reviewed and it was very much a question of, "What did we put in this document last year, so that we can do it again this year and get through the process?" There was no value added in most cases.
The same thing applied to the Part III information: "What did we have in last year? Let's do it again the same." There was no strategic input into that. However, with the business plans we are saying, "This time you have to be able to describe somehow what you are doing with your programs."
In other words, this could be a planning document for any institution, whether it is a government department or a private business, because you are setting out objectives and, with the resources you have or expect to have, are indicating what you are going to do with those funds and the relative priorities you place on the different programs. This is done in such a way as to get the agreement of the minister, and with the full understanding that you can also communicate that to your own staff and, in many cases, the client groups that you serve.
Let me use an example I am more familiar with than Transport. Transport, although it is one of our pilots, is going through a lot of change now, so it is difficult to assess in a comparison between the old and the new because it is quite obvious that its organizational structure is completely different. However, with Agriculture, for instance, you can be quite specific on what your plan is trying to achieve. You can pick specific objectives, whether in research or in the food inspection area or the support programs provided to producers, and you can identify the kinds of change and direction you want to see in those areas.
Then in the plan that comes forward for Parliament to approve we normally have, and will continue to have, one year's worth of approval; so the Estimates would come forward in a year, but parliamentarians would have two years' worth of future information for determining the directions that this would lead to. For example, where we will end up if we reduce research activities, and what will the impact be over a planning period on the various things that are going on? Then parliamentarians can have an input in that in reviewing exactly the overall directions and priorities that are outlined in the document.
It has to be very much from the minister's own view of where he or she would like to see that department and that program go, because that will be used to communicate those kinds of things both to Parliament and to the Canadian public. Certainly, the other documents were internal and they ended up being very rigidly structured and competitive.
Senator Poulin: I believe the business-plan approach was developed and implemented, if my memory serves me correctly, about two years ago?
Mr. Miller: We are just going through it now; it is the second round. Last year's documents focused on how departments would do program review, which of course was a major structural change. This year we are making them a little more comprehensive and asking for all the programs and priorities within the department, and how those are being dealt with over the planning period.
Senator Poulin: Having in my past lived both experiences, I can understand when Mr. Miller is explaining to us that the objective now is to truly focus on the service to the public in terms of writing the business plan, the presentation, and making sure that the minister, when he talks of his department, is truly speaking about those objectives very clearly. What is not as clear to me is knowing the business plan, knowing the approach of the outlook. What is the link between what we are discussing today, in terms of reporting, and the business plans and the outlook? I do not see that link.
Mr. Miller: If it evolves as we hope -- and there is an "if" there only because we are asking departments to do this as opposed to directing them from a central agency perspective -- if it evolves as we hope, the business plan will formulate the basis that then leads to how the information is provided to Parliament, and that will be the planning document that we have talked about so far this morning. That planning document will then mean that we do not need an "Outlook" document or a Part III. Effectively, it will replace those two. In essence it will be the fundamentals of the business plan presented from a parliamentary perspective, since that is still obviously the primary audience of the planning information.
Senator Stratton: When you talk about a modified form of business plan -- and I have been involved in a few of these -- there is always the objective of satisfying the guy you are trying to sell on it, the banker or the folks you are trying to raise money from to run the business; normally they have time frames and forecasts and like to see yearly forecasts, over one, two, three, or five years, of how your income will change, if the banks are nice enough to give you the money.
In essence, intead of asking the banks to give us the money, we are asking the people of Canada to give the money to Parliament, for these different agencies or bureaucracies to spend. You talk about an objective, you talk about resources, you talk about expectations and priorities. In respecting the business plan, I would expect that in those four topics you would always be looking at the future and not just current reporting, so that there would be a clear direction from each government agency, saying, "Here is where we are going; here is our objective."
I just want to make sure I am correct on this, because I want to be clear that I understand where you folks are coming from. You would then break it down into current year and then, maybe not completely accurately but within a range, forecast out. Am I clear that that is your objective? That is my first point. Then, secondly, to carry that forward, how far are you going to forecast? Is this a five-year forecast, is it a three-year or two-year forecast, or have you decided that?
Mr. Miller: The government currently uses a three-year forecast, so it will be three years into the future and it is very clear that the planning documents that we are discussing, which is again a variation of the departmental business plan, would cover that time period.
One of the difficulties we have with the information we now present to Parliament is that for a particular fiscal year there is just so much information. I can use the documents tabled last February for the 1995-96 fiscal year. There were five sets of numbers at play in the documents produced in the Main Estimates and the budget. It keeps me up at night during that time if someone asks a question about why a particular number is different from another one; there is always some logical explanation, but somehow, by being that precise and that accurate with every number, we have lost the message.
Senator Stratton: Put aside the idea of parliamentarians for the moment, and instead call us bankers, because you are making your presentation to bankers, in essence, and the same thing happens in the private sector; instead of the Parliament being there questioning you, you have the bankers asking how come you forecast one thing and got another.
We recognize that forecasting is not absolutely accurate, and that trying to forecast the future and the economic growth, or no growth, is pretty hard to do; it is like looking into smoked glass. But it is good to see you doing it, despite the difficulty, and I will be defending you in that approach because that is absolutely what you must do.
The only point I would make is that governments and companies do more than just look down the road three years ahead. They have to go beyond that, but in a certain sense they should not give numbers, because to go beyond three years with any accuracy is very difficult. But you do have to come forward with the objective of saying where you will be in five years, and what the end result will be of what you are trying to achieve. That is so important, because once that message gets out there clearly to Canadians there will be a better understanding of where we are going. That is really, I think, fundamental to the process.
Mr. Duhamel: There is another important series of points. First of all there is confirmation that we are indeed looking to the future. Furthermore, as you have stated yourself, the further we go, particularly with numbers, the more difficult it becomes, and we do not want to do it simply because people are insisting that it be done; we would rather provide good information. Quite apart from the numbers are the issues and the challenges and the vision that we are articulating in terms of the various departments, and that is what we are trying to do as well, because if that can be done more clearly, more simply, and be communicated in a way that people understand, then I think that will improve a number of the points that you have made automatically. It will automatically improve that. Clearly that is part of this; and the other points that have been raised are all related.
Let us remember a couple of things first of all; we want to simplify the information, we want to package it differently, we want to make it available through different mechanisms and also we want to put it out there in a more strategic sense; in other words, we want to disentangle it but also produce it in time lines that are easier for us to deal with, not only because of amounts. If it is not relevant information, if it does not speak to vision, to issues, and, to the extent possible, to figures -- because we will have resource problems accompanying those, then we have not improved a whole lot.
The staff may want to add to that.
Mr. Hopwood: If I could just add one comment, the intention of the changes that we are making is very much to shift the focus from the upcoming fiscal year and the approval of votes that are input-oriented and do not provide a lot of information in terms of where the program is going, towards a way of determining where the program is going over the longer term and to give parliamentarians the opportunity to influence that direction.
The idea is that the plans we are talking about will be tabled in the spring, and there will be an opportunity to comment on those and report on those; in the fall the performance reports will give parliamentarians the opportunity to assess how well the program is doing relative to targets set in previous years, and all of that can then contribute to the budget decisions that will be made in the December-January period. It changes the dynamic a little bit from the short-term approval of this year's money based on inputs to the longer-term view of where our program is going.
As one of the ministers of one of our pilot departments said, when he read his own Part III, he did not recognize either his department or where it was going. It was so heavily prescribed in terms of tables and charts and sub-activity descriptions that he could not get his message out, and he wanted to get freed up so he could bring that forward. That message will be brought forward in the business plans at Treasury Board reviews, and we want to bring that information forward to Parliament and have everybody talking about the same kinds of directions and priorities.
Senator Stratton: Just for the sake of discussion, the political objective would still be -- or I would expect it and hope it to be -- that by the year 2000 you would have a balanced budget; it could be further out or it could be closer up, but thereafter the debt, which would become the next issue, would be addressed. All things being equal from a strategic point of view, the debt must start being addressed in a certain time frame. What is the point of getting all this information if you do not have that end objective down the road. That is really the fundamental issue to all of this.
Mr. Duhamel: Questions such as that one, senator, are obviously at the more macro-level, if you wish, but there might be others, such as Senator Poulin has raised in terms of services to clients. For instance, a minister might say, "I now have ten per cent of my resource allocations devoted to direct services to clients and I want to move that to fifty per cent by the year 2000." I pick that at random, obviously. Macro-questions such as the one you raised, as well as the more micro-questions that are perhaps equally important, I would hope would be addressed in those documents and with this new system.
Senator Stratton: I presupposed that, and I thank you for your input to clarify it.
Senator Cools: For the sake of the record, Mr. Chairman, the document I was referring to was the Expenditure Management System of the Government of Canada. In particular, I was looking at page 8, figure 1, the Expenditure Management System, and figure 2, Roles in the Expenditure Management System.
Mr. Chairman, I found the comments of the witnesses quite interesting with respect to our colleague Senator John Stewart's having made significant inputs into this subject matter and into their proposals. Perhaps as a committee we could approach Senator Stewart and ask him if he would be so kind as to meet with us privately, or formally, at some point in time to give us, as senators, some of his own private feedback.
As to the subject matter itself, although I have been listening to you quite carefully, I am not sure that I have fully grasped what it is that you are attempting to do; but I know that with time I will grasp it totally. We have burdened Parliament with many things -- human rights and everything else, but Parliament really is about two things: levying taxes, or raising dollars, and spending them; that is what Parliament does. What parliamentarians are supposed to do is control that raising of money and its expenditure. Basically we are to keep control of the purse; that is the business of Parliament.
Recently I spoke to a high school class from Toronto, and if you were to ask them what is the function of government or what is the function of Parliament, they would not be able to answer; nobody seems to know that any more. The issues that you have raised really go to the essence and to the heart of our jobs.
Having said that, as I listen to you I hear you say that you are revamping not the information but the presentation of information. This is what I am understanding you to say. You talk of simplifying the presentation of the fiscal information; you use terms like "simplifying", "packaging" and "putting it out there". This information does not really have to go out anywhere; it is just supposed to be for Parliament.
Let us understand that the business of this committee, or any equivalent parliamentary committee, is very dry. Numbers are naturally very dry. That is the nature of budgetary information; it is dry. It is not sexy; it is not exciting; it is lots of charts and lots of graphs. You find for the most part that we have now drifted into an era where the majority of the members of Parliament have no more interest in this sort of subject matter. You often hear this question: "Why do you want to be on that committee? It is so boring."
Have you done much thinking or study on whether or not your efforts -- and I am not sure that I have grasped all your efforts -- are not largely a communications issue rather than a parliamentary issue? In other words, could you show me more clearly how the suggested changes you are proposing will assist members of Parliament to hold ministers and the government accountable and responsible? Government responsibility and ministerial responsibility is a familiar refrain of mine. How are your proposals going to assist all ten of us here to hold ministers responsible and accountable? I ask that because over the last ten years we have had a lot of trouble.
Mr. Duhamel: First of all, it is good to be reminded that levying taxes and accountability in spending are the essential roles of Parliament, and frankly I want to start the initial response because I used some of those terms in an attempt to communicate the essence of what we are trying to do; but I see it as directly supporting those particular principles.
Perhaps you will recall that as part of the presentation we indicated we want a better sense of where government is going, where various departments are going, and the linkages among them, and, therefore, the simplified information -- perhaps that was not the better term; but more relevant information. In other words, the question is: "As a minister, where are you taking your department? What are the resources that you have to do that as a minister?" And then, later on, "What is it that you have really achieved?" That is the accountability portion. In fact I would suggest -- subject to correction if I am off target, and I would appreciate that too -- that to try to link the results with the vision and the resources is the very heart and soul of this particular initiative.
The Chairman: Are politicians going to like that?
Mr. Duhamel: I guess it is an ideal that we are going to try to reach.
When I said "packaging", again perhaps in my attempt to get the main message across, let us remember that these documents have been cumulative. It is a little bit like looking at a telephone book and saying, "Well, this page is no longer relevant; this one is no longer relevant either, but we will add these four." And I do not say that to denigrate anyone. Over time it has not been related to the initial rationale, so we say, "Okay, if it isn't, can we do something better?" And we are saying that we think we can, by providing more relevant and better information in a more timely way. "Timely" means as well, and it is why I use the word "package," that it is better presented so that it is more easily understood, but also it is timed so that we are not inundated with those 12 million pages all at one time. Because there are 12 months a year perhaps we could get it in bits and drabs, but it is related, so that is what I meant.
Now the staff will clarify that or give some additional information.
Mr. Miller: One of the items on the accountability side is that, under the current structure of Part IIIs, departments report on results for the year completed; so they have one year of financial information and one year of results-type of information. If you look at that, I guarantee that what departments will say is, "Well, don't worry about what has happened, because things have changed now, and we want the reader to focus on where things are going in the future. So don't worry about the actual results."
Separating out a performance document in the fall will provide a distinct focus for results and output. It will also allow for a different type of message, and one of our pilot projects, Indian Affairs, brought that home to me. Another important program is the retention rate of children in high school. In fact, there is a whole series of programs designed to keep kids in school. You cannot measure the success of that program in one year. They actually look at it over a 20-year period and say, "Well, what have these programs done to help that along, to make sure that we are retaining kids towards completion of high school?
This was the first time they have been able to get that 20-year period of history and evolution out on the table to substantiate why they feel it is still a priority to continue those types of programs. In this sense we are trying to look at it from a perspective which better reflects the kinds of issues and programs government is involved with, which almost always tend to be of longer duration.
Another thing that bothers me on the planning side with our current process is that, when we ask Parliament to approve a program, for example, of $600 million to help producers over the next three years, Parliament does not approve that $600 million over the three years. Rather, Parliament approves the cash flow for one year of that three-year period, for one particular province, or for one project under that overall program. Consequently, each year the Estimates include bits and pieces of information.
So while the government announces at the beginning that there will be a $600 million program over three years, the details of how that fits together are not communicated to Parliament. Now, by having a planning document that covers those three years and that focuses on the direction in the future, the government will have the opportunity to get that message out to indicate that, "Yes, we have a three-year program; it is a transition program designed to accomplish this objective, and by the end of that three years, therefore, the producers should be in this kind of situation or position." It is better for new messages and it is better for reporting on events that have occurred in the longer duration.
Mr. Hopwood: I would like to elaborate on the point about communications. The other points are very valid that we want to change the focus and the intent of the document, but another key element of what we are trying to do is actually improve the communications value of the documents. The documents in the past tended to be written by financial officers, who accumulated a bunch of information from people scattered throughout the department and packaged it together; and, even though it was in the primary form of communication between departments and Parliament, it was seldom edited and the communication experts did not get involved.
If you take a look at the Indian Affairs and Northern Development document for this year, you get a sense of the use of graphics and charts and displays to show things like retention rates, percentage of bands that have adequate housing, the percentage of bands that have adequate water and so on. That performance information is what we are talking about as being included in the performance report in the fall. It is impossible for a performance report to describe everything perfectly, but it provides the basis for starting to understand how departments perceive the impact of their programs. So it is a different dynamic than you get with a 300-page document.
Here, for example, is the previous year's document, a 300-page document that is largely accounting and financial in orientation. From that you can judge that communications plays a very big role, because, as the Auditor General said about the previous documents, they were like reports where, the more you read, the less you wanted to read.
The Chairman: And the less you knew.
Mr. Hopwood: And finally you gave up. You could not get the message. What parliamentarians are telling us in our parliamentary working group is that they would like a 20-page summary, or they would like a two-page summary; they would like a minister's message of key plans and policies and priorities; they would like to get the picture quickly and then have access to the details that they need later on.
[Translation]
Senator Rizzuto: I wish to congratulate you on your desire to find solutions which would improve the state of the economy. We encourage you to continue. As soon as you have more concrete results, we would appreciate being apprised of them. The information could be forwarded to us. All members of the committee are interested in monitoring your progress.
Secondly, you will be called by our chairman and by the committee to provide us with a follow-up. We encourage you to pursue this initiative and please know that you can count on the committee's support.
Mr. Duhamel: I can assure you that after Senator Cools' reminder, we will ensure that you are kept abreast of developments. Do not worry. That goes without saying.
[English]
The Chairman: I would ask that you take three of what you consider the best of the pilot projects, which would be perhaps Transport, Indian Affairs and Agriculture, and with the Treasury Board officials, if we could get acquainted with these three documents on the Finance Committee, perhaps in June we could do an examination of them and gain some practical experience. That would be helpful. If you can make sense out of Indian and Northern Affairs it will be a miracle for me; so I am looking forward to that in June.
Mr. Duhamel: I want to say that we appreciate very much that kind of approach, the kind of comments that were made and the kinds of questions that were raised. They have been very useful to us.
Senator Maheu: I am not quite sure whether this falls under the parameters you have set for Part III of your Estimates, but a question was raised concerning departments rushing out just before the end of the fiscal year to spend the rest of their money on furniture, et cetera. Perhaps not enough or any attention is being paid to the lowering of costs in these specific departments that we are dealing with, or in the Treasury Board as far as that goes, because of the perception that departments are doing that. I think you all know what I am talking about.
Is it your responsibility to tell us whether we can use any encouragement mechanism, or reward system for departments that do save money, or even individual employees of the public service?
Mr. Duhamel: I will make three points with your permission, Mr. Chairman. First of all, in a sense this particular approach would be useful in addressing that problem, but it is not a major priority. Second, that problem was addressed by government, by the former President of the Treasury Board, because it was a real concern of all parliamentarians. There are reminders not to do that and there are incentives that it is to their advantage not to do that.
However, because I am no longer Parliamentary Secretary to Treasury Board, it is not for me to say that it is well in hand, but you could raise that matter with the President of the Treasury Board. My sense is that that is no longer a major problem.
Mr. Miller: Just on the comments, one of my other responsibilities includes aspects covered by the 1996 budget and the budget implementation bill that was recently introduced; members of the committee may recall that I appeared a few weeks ago on Supplementary Estimates (B) for 1995-96; in total we had 60 departments and agencies coming forward with funding that they did not use in the previous year which they were asking Parliament to approve again. One of the elements in the budget implementation bill is to allow that practice. By no means am I saying that there is any authority there, because right now the section in the Financial Administration Act says that appropriations shall lapse at the end of one year. However, what we have done through the current system is to say that is okay, but that we will go back and ask Parliament to re-authorize any funds that you did not use, if the need still exists.
We are hoping that, through an amendment to the Financial Administration Act that is currently being tabled, we can simply say that perhaps an appropriation will last longer than 12 months and could be approved either through an appropriation act or other legislation before Parliament, and there would be an explanation of that. This is my first opportunity to talk in detail about this before Parliament, but it is to say, "Let's give one year's worth of money to a department but allow them two years to spend it." For example, if at the end of the year you have two items in your budget, one being to pay your telephone bills throughout the year and the other one being to buy a new typewriter, you are not going to buy that typewriter until you are sure you have enough money to pay your telephone bills for the whole year. Then you get to March -- and this has happened to me in departments -- and you order your new typewriter, which was always in your plan, and they say it will not be here until April. Well, that is no good under our current system, because you do not have the authority to buy it then.
Another element that was introduced in the budget was service agencies; there were three introduced in the budget; and one of the things the government is thinking of doing is providing them an appropriation authority that extends longer than a year, not for the amount of money but simply so that those transactions that occur towards the end of the year are not perceived as being year-end spending. Obviously, year-end spending is something that the Treasury Board and the Auditor General, or anyone interested in good fiscal management, are concerned about; but that particular item would eliminate that difficulty. We are working with parliamentarians and the auditor general as well to do that.
The Chairman: Thank you very much for coming, gentlemen; it was a special pleaure to have you appear, Mr. Duhamel, because we were not expecting you. We are certainly glad you came. It was a useful hour, and we will focus on these three departments: Transport, Indian Affairs and Agriculture.
I would remind the members of the committee that we will meet on Wednesday; it will be an in camera meeting in which we will discuss our direction on the Main Estimates, what departments we may focus on, what direction we want to take and the communication plan. We will meet at 5:15 on Wednesday afternoon.
The committee adjourned.