Proceedings of the Standing Senate Committee on
National Finance
Issue 11 - Fifth Report of the Committee
MONDAY, June 15, 1998
The Standing Senate Committee on National Finance has the honour to present its
FIFTH REPORT
Your committee, to which were referred the Supplementary Estimates (A), 1998-99, has, in obedience to the Order of Reference of Wednesday, May 28, 1998, examined the said estimates and herewith presents its report.
Your committee held a meeting on Wednesday, 3 June 1998 to review these supplementary estimates. At this meeting, officials of the Treasury Board Secretariat appeared as witnesses and provided two explanatory tables, which form part of this report. Together, the tables summarize the major changes in the federal government's financing requirements in fiscal 1998-99. Supplementary Estimates (A) is the first of a set of supplementary estimates that will be issued in the 1998-99 fiscal year that ends on 31 March 1999.
The first table, entitled: Summary of Expenditure Framework and Estimates for 1998-99, displays the various totals as they appeared in the Main Estimates, 1998-99. It also provides a quick summary of changes proposed by these supplementary estimates. Total planned spending will rise from $145.5 billion to $146.7 billion. The bulk of these expenditures, $102.9 billion or 70.1 per cent, are statutory expenditures that do not require a vote. The $1,290 million change in the total estimates proposed in the supplementary estimates represents less than a 1 per cent increase in the original planned government expenditures for fiscal 1998-99.
The second table, entitled: Supply to Date for 1998-99, shows the Appropriation Act passed in fiscal 1998-99, and the amounts approved by Parliament to date. It also shows the amount sought in the present Supplementary Estimates (A). Appropriation Act No. 1 has approved $14.7 billion to date. The current Supplementary Estimates would add a further $1.3 billion, to increase the total appropriations to $15.9 billion.
Supplementary Estimates (A) 1998-99 provide estimates of the spending requirements for departments or agencies of the federal government. Both the general spending plans and specific items in these new estimates were of interests to members of the Committee.
Mr. Rick Neville and Mr. Andrew Leif, officials from the Treasury Board of Canada, outlined some significant changes in the Estimates and responded to questions from the members of the committee. They noted that items included in these Supplementary Estimates serve two purposes. They seek Parliament's authority to spend money which, while provided for in the fiscal plan set out in the 1998 budget, was not included in the 1998-99 Main Estimates. The second purpose of these estimates is to provide Parliament with information about changes in projections of statutory spending it has already approved in legislation.
In its review of the estimates, the committee was interested in the supplementary estimates of the department of Indian Affairs and Northern Development, which is seeking a $356.1 million increase in its 1998-99 appropriations. This represents a 9.4 per cent increase in its estimates for this period. The absolute size of the increase is also the largest new item in the Supplementary Estimates (A). Most of the new funds ($350.0 million) are for a grant to the Aboriginal Healing Foundation to deliver the Healing Strategy. Mr Neville reminded the committee that the intent of the Healing Strategy is to provide some compensation to aboriginal persons who suffered abuse as a result of past federal programs. The implementation of the Strategy was to be carried out by the Aboriginal Healing Foundation, an agency that would act independently of both the aboriginal community and the federal government. The Foundation would remain accountable to the minister for its spending decisions.
The committee observed that several departments were involved in compensation of persons affected by last winter's ice storm in eastern Canada. Under Vote 10a, the Department of National Defence is seeking to increase its budget for contributions to provinces for assistance related to natural disasters by 108 per cent. This $183.4 million increase appears to be due entirely to last winter's ice storm. Under Votes 55a and 60a, the Economic Development Agency of Canada for the Regions of Quebec is asking for additional appropriations of $66.7 million. This represents a 27.1 per cent increase in funding under these two votes. Most of the new money is to be allocated to the Economic Recovery Assistance Program -- Ice Storm. Finally, the Department of Agriculture and Agri-Food seeks an additional $66.3 million under Vote 10a. This amounts to an increase of 24%, of which an amount of $33 million is set aside for the Economic Recovery Assistance Program -- Ice Storm. Mr. Neville reviewed these items and explained how the federal assistance for this disaster is progressing.
The committee was pleasantly surprised to note that the major research granting councils, which include the Medical Research Council, the National Research Council of Canada, and the Natural Sciences and Engineering Research Council, are all receiving increases in their grants and contribution budgets. Members of the Committee welcome this development and suggested to Mr. Neville that they would support further government efforts that put more funding at the disposal of Canada's scientific research community. Members felt that not enough funding is available to stem the loss of Canadian scientific talent to other countries.
Under Vote 5a, the Department of Foreign Affairs and International Trade is requesting an additional $49.6 million for capital expenditures. This represents a 60.7 per cent increase in the amount requested in its 1998-99 Main Estimates. In last year's Supplementary Estimates (A), the Department requested an additional $41.0 million for capital expenditures. That amount represented a 59.1 per cent increase in its original Estimates for the 1997-98 fiscal year. The committee asked for some clarification of the department's difficulties in estimating its annual capital budgets. Mr. Neville reassured the committee that the department was not experiencing any unusual difficulties.
The Department of Canadian Heritage is looking to add $59 million to the Canada Television and Cable Production Fund. This will increase the 1998-99 funding by 12.7 per cent to $522.9 million in only three months since its creation. Mr Neville explained that this amount reflected other programs that were being added to the fund. He reassured members of the committee that the fund is not yet exhausted.
The Department of Finance is seeking authority to issue a demand note for U.S.$ 7.3 million to the European Bank for Reconstruction and Development. Mr. Neville explained that this was part of Canada's obligation under an earlier agreement by all members to increase the Bank's paid up capital. Canada's obligation (approximately U.S.$ 12.0 million) could be either in the form of all cash or a combination of cash and a demand note. By issuing this note Canada will have fulfilled its obligations.
Some new agencies also attracted the attention of members. For instance, members wanted more information on the $44.6 million that is requested for the creation of the Millennium Bureau of Canada. In particular, the committee was interested in the structure of the bureau, in its operations and about the criteria for distributing its assistance. Mr. Neville was able to answer several questions and volunteered to provide additional information as soon as he could obtain it.
Another new agency is the Canadian Blood Agency which is to receive a $7.0 million contribution to help cover unspecified transition costs. Members also noted that a grant of $30.0 million was being provided to the Canadian Blood Service, also for unspecified transition costs. Mr. Neville briefly reviewed the history behind the creation of both the Blood Services and the Blood Agency. He also explained how the current appropriations were to be used.
Respectfully submitted
TERRANCE R. STRATTON
Chairman
Table 1
SUMMARY OF EXPENDITURE FRAMEWORK AND ESTIMATES FOR 1998-99
| Expenditure Framework:
|
|
| Budgetary Main Estimates
|
$145.5 billion
|
| Budgetary Estimates to Date
|
$14.7 billion
|
| Projected Budgetary Estimates
|
$148.0 billion
|