Proceedings of the Standing Senate Committee on
National Finance
Issue 16 - Seventh, Eighth and Ninth Reports of the Committee
OTTAWA, Thursday, June 15, 2000
The Standing Senate Committee on National Finance has the honour to present its
SEVENTH REPORT
Your Committee, to which was referred Bill C-32, an Act to implement certain provisions of the budget tabled in Parliament on February 28, 2000 has, in obedience to the Order of Reference of June 13, 2000, examined the said Bill and now reports the same without amendment.
Respectfully submitted,
OTTAWA, Tuesday, June 20, 2000
The Standing Senate Committee on National Finance has the honour to present its
EIGHTH REPORT
Your Committee, to which were referred the 2000-2001 Estimates has, in obedience to the Order of Reference of March 2, 2000, examined the said estimates and herewith presents its second interim report.
The 2000-2001 Estimates were tabled in the Senate on 2 March 2000, and referred for review to the National Finance Committee. As is customary with this Committee, a meeting was arranged for the initial review of the estimates with the intent of holding additional meetings at a later date. On Wednesday evening, 22 March 2000, officials of the Treasury Board appeared before the Committee: Messrs. Keith Coulter, J. Kevin Lindsey and Andrew M. Lieff. They answered questions of concern to members of the Committee. The findings of this meeting were contained in the Committee's Fifth Report: the First Interim Report on the 2000-2001 Estimates, which was submitted March 23, 2000. Since that date, the Committee has continued its examination of the Estimates.
FURTHER HEARINGS
A. The President of the TreasuryBoard
On Tuesday, 30 May 2000, the Honourable Lucienne Robillard, President of the Treasury Board appeared before the Committee and discussed numerous elements of the Estimates. In her opening remarks, MinisterRobillard outlined some significant changes in the Estimates, and highlighted several initiatives. She noted Canada's relatively strong economic performance among the G-7 countries and its achievement of a one trillion dollar economy.
The Minister explained that there are several reasons for the increase of $4.6 billion in this year's Main Estimates over last year's figures.She noted that the government will be investing an additional $1 billion in the Canada Health and Social Transfer, and it will increase Old Age Security by $700 million. The increase in the area of Old Age Security, guaranteed supplement and spouses allowance is necessary because of our ageing population. It results in part from the increase in the number of benefit recipients and in the increase in the average benefit rates.
Minister Robillard also reviewed other aspects of the economy's performance and of government economic policy. Her observations and statements elicited considerable discussion between the Members of the Committee and the Minister.
For instance, several aspects of the estimates puzzle Members. They wonder why the announcements contained in the Budget are not to be found in the Main Estimates. It seems that there is a regular discrepancy of $3 billion or $4 billion between the two documents. The Committee questions if in this age of computer technology it is not possible to reduce this difference. Senators would like to examine up-to-date government spending plans. The Minister acknowledged that the discrepancy is an irritant to parliamentarians. She reminded the Committee that government-reporting procedures are constantly evaluated in the hope of improving the accuracy and timeliness of all documents. However, some accounting practices are always going to result in differences between the two major expenditure documents.
Senators were interested in Canada's spending on foreign affairs programs. Members note that these expenditures might involve several departments and agencies: the Department of Immigration, National Defence, Foreign Affairs and International Trade, the Canadian International Development Agency or the Department of Finance. In particular the Committee has observed numerous programs of debt forgiveness for developing countries. The country also has war or peace-making expenditures, export development contributions etc. Although some of these commitments result from Canada's treaty obligations, Senators are concerned about the wide margin of discretion accorded the executive in the departments regarding these types of expenditures. Members wonder if there should not be more parliamentary involvement in establishing the budgets for the international actions of the country. The Minister responded that there is considerable involvement at the Cabinet level to ensure some degree of coherence exist across the government. Furthermore, all departmental spending is subject to Treasury Board guidelines and review to ensure there is no abuse of spending authority.
Committee Members also expressed concern about a number of issues in the field of personnel management ingovernment. They were concerned about the representation of women and minorities in both the Quebec and federal civil services; they wanted clarification on the Treasury Board's concept of employment equity and the values it has enunciated; and they expressed a need for "whistle-blowing" legislation.
Minister Robillard acknowledged that employment equity issues are a real concern for her department. She would like to have a public service which is representative of our society. Although the participation rates of men and women in the public service are equitable, she questions whether women participate equally at all levels. She recognises that some progress has been achieved with respect to other groups such as disable persons and minorities, but that the achievements are not enough. At this time she is not convinced that there exists a need to introduce whistleblowing legislation.
Several other items were discussed, among them were: the growth of expenditures relative to GNP, the concern for rising interest rates, immigration policy and the accreditation of professionals, and the government's plan for retaining experienced employees of the public service.
B. Canadian International Development Agency
On Wednesday, 31 May 2000, Mr. Len Good, President of the Canadian International Development Agency (CIDA) appeared before the Committee and answered questions about the estimates of the Agency. In his opening remarks, Mr. Good explained what he saw as the historical evolution of government policies with respect to foreign development assistance. He identifies four phases in this evolution of policy.
Immediately after the Second World War governments were involved in the rebuilding of Germany and Japan. The reconstruction of these economies seemed to work well and a similar approach was adopted for developing nations: the building of roads, bridges and dams ensued. This approach did not succeed because there was no sense of things social like health, education or institutions. The period was characterised by a sense of altruism. Governments and persons of the developed countries set out to build things in the developing countries. We had Canadian University Students Overseas, or CUSO, and the Creation of CIDA in Canada. Although less important as a guiding principle that sense of altruism is still very relevant in development assistance.
Development in the 1960s, 1970s and 1980s was driven, to a degree, by altruism, but much more by the Cold War. The Cold War drove bilateral aid and it significantly influenced multilateral aid. The consequences of this misguided approach still haunt parts of the developing world, Africa in particular. The Cold War drove not only the amounts of aid but also where it was spent.
For many donor countries, the end of the Cold War in 1989-90 eliminated the rationale for aid and development assistance. According to Mr. Good, governments began to question the reason for continuing foreign assistance programs. He noted thatthe numbers for official development aid in the 1990s stagnated, such that by the end of the decade, assistance from industrialised countries isat the same level now as it was a decade ago. The Committee notes that although Canada's ratio of Official Development Assistance has fallen in the 1990s, the decline is the result of fiscal restraint measures introduced to deal with the country's deficit problem. The decline in Canada's levels of assistance is not a result of any fundamental change in Canada's desire to provide foreign aid to developing nations.
The lessons learned in the last 50 years can be summed up quickly. First, one must be comprehensive in one's approach to development. Infrastructure like roads, schools, and so on are needed, but you also need social infrastructure. Attention must be paid to health, education and to social safety nets. Institutional development is important: a country needs good courts, a good legal system and good public services. Those are the underpinnings of a successful society. The second lesson according to Mr. Good is that donors have to work together -- for many years, they did not. They worked in a very uncoordinated fashion. This is changing; we are seeing donors work more closely together. Third, it was important that the developing countries themselves lead the process of development. Where the World Bank or bilateral donors controlled the development agenda, the interest and enthusiasm of the recipient country soon waned and development programs came to nought. All that was left was a big pile of debt, which subsequently had to be addressed.
In the fourth and current period, development assistance policy is conducted with Canadian self-interest in mind. By "Canadian self-interest" he does not mean the short-term approach, which focuses on markets for Canadian goods or more jobs for Canadians. The new rationale for development co-operation in the years ahead recognises that it is very much in Canada's self-interest to help these countries develop. Altruism will always run underneath the efforts, but it is not the primary motivation. Canada has a new rationale for expanded co-operation. So much of our domestic policies are determined or influenced by world events, by global markets and weather patterns, that in order to ensure the well-being of its citizens it is necessary to be aware of the needs of the developing world. The problems of these nations will affect Canada. Increasingly, as a government, as an agency, Canada must try to develop that way of thinking about the world and communicate it and help to address a problem that still is very much unresolved.
The senators welcomed this outline of the framework within which Canadian foreign policy needs to be conducted. However, they were concerned that perhaps the guidelines for administrators are too broad. They are not selective enough and are not based on criteria that are measurable. Somehow, there should be some parameters to government programs. For example, on occasion, assistance has been provided to authoritarian regimes. Sometimes Canada gives money to governments that have large military expenditures. That is embarrassing in light of the internecine conflicts in Africa. The Committee questioned why there are not more restriction on the areas where foreign assistance may be provided. Mr. Good agreed that the country's list of six priorities has nothing to say about geography and where CIDA operates. The nation's foreign aid priorities deal with how the Agency will operate within a country.
The Committee questioned the extent to which CIDA's activities might be guided by Canada's commercial concerns. Mr. Good was quite candid when he acknowledged that it is the role of other departments to look after Canada's commercial interests. However, he clearly stated that such interest do not guide CIDA's work. While the Agency is interested in engaging other departments with respect to development, they now find that almost every department has an international dimension to its work. Whether it is the Department of Agriculture or Justice or Energy, they have important knowledge and funds, to contribute to development. CIDA is looking, much more than in the past, to working closely with other departments to get development impact, but less so when these departments talk to CIDA about doing it to open markets for Canadian exporters.
Finally, the Committee continued to press for more information on the ongoing support that CIDA is providing for the participation of Canada's judges in international development. In some of the programs, Canada's judges are providing advice on the development of justice systems in other countries. The Committee is concerned that such practices on the part of Canadian sitting judges may not be appropriate given their exclusive judicial obligations under Canadian law, except where provided otherwise. Although Mr. Good was able to supply program rational for Canada to provide expert assistance in the establishing court systems in foreign countries he was not able to address the Committee's concern that such assistance should not in any way involve sitting Canadian judges.
C. Department of Justice
On Tuesday, 6 June 2000, Mr. Morris Rosenberg, Deputy Minister of the Department of Justice, answered question on the Department's Estimates for 2000-2001. He described the functions and role of the Department within government. Members were interested in several aspects of the Department's operations, including its influence on government legislation, on regulations and on international treaty formulations. In light of the answers received, Members expressed a concern about the possible conflict of interest that might arises when senior public servants published articles that dealt with topics or issues of current political interest. Although Mr. Rosenberg suggested that departmental lawyers were able to distinguish between their personal and official pronouncements, the Senators are not convinced that such a practice on the part of senior public servants best serves the interest of Parliamentary governance. Theyare concerned thatproblems of confidence in the senior public service may arise if its membersspeak out on topics that arerelated to public policy issues. The Senators feel that this may be a significant issue throughout the public service. Hence, the Committee intends to examine this matter at greater lengths in future hearings.
Senators also had numerous questions that dealt with privacy issues. They were concerned about the ability of companies to access government information about individuals, and to use it for commercial gain. They were also concerned about the use of personal identification numbers, in particular the use of the Social Insurance Number. Mr. Rosenberg agreed that these were legitimate concerns and he assured the Committee that the Department is looking into the matter of privacy legislation. The government considers this an important issue and is looking at how it will proceed. The Committee reminded the Deputy Minister that it views the matter as very important and deserving of immediate attention.
The Committee and Mr. Rosenberg had a long and very serious discussion about the failings of the current system of child support payments under the Divorce Act. Members view the mechanism as inappropriate and unfair in several ways. In particular, they are concern about its failure to take into account the income of the custodial parent and thus place the entire burden of support on the non-custodial parent. There is also concern about some of the tactics employed to collect payments. The Committee considers the current available evidence sufficient to warrant an immediate change to the legislation. Mr. Rosenberg could not assure the Committee that any changes would take place before 2002, the scheduled review date. His reasons for this delay did not satisfy the Committee who feels that immediate corrections are possible and justified.
The above issues, along with discussions on the creation of a data bank at the Department of Human Resource Development and the Firearm registration program, left Members with a feeling that government intrusiveness in private life is growing at an alarming rate. The Committee wonders if there is anyone in government that should be looking out for the privacy concerns of individuals when legislation is developed. The Committee feels that too much legislation is forcing people into a position where they must take a stand, whereas before they did not necessarily feel that way. Although Mr. Rosenberg acknowledged that there is a growing sense of frustration in parts of the population, he was not sure that much could be done. He reminded the Committee that public policy involves a balancing of interest among conflicting points of view. On firearms, for example, there is the issue of the balance between providing public safety, the means chosen to protect the public, the cost in terms of licensing, registration, et cetera, and whether or not that balance is the right one. Increasingly the government has resorted to public consultations before any major legislative initiative. Citizens are much more engaged, more involved and have an opportunity to express their point of view.
Finally, the Committee raised with Mr. Rosenberg its concerns about payments to sitting Canadian judges participating in Canada's international activities. In particular, the Committee was concerned about the validity of such practices, and the mechanism by which expenses are approved and funded.
CONCLUDING COMMENT
As is customary, your Committee expects, at a later date, to examine in greater detail these and other aspects of the government's spending plans.
Respectfully submitted,
OTTAWA, Thursday, June 22, 2000
The Standing Senate Committee on National Finance has the honour to table its
NINTH REPORT
Your Committee, to which were referred the 2000-2001 Estimates has, in obedience to the Order of Reference of March 2, 2000, conducted a study on Canada's Emergency and Disaster Preparedness and hereby tables its final report entitled: A Report on the Committee's Examination of Canada's Emergency and Disaster Preparedness.
Respectfully submitted,
LOWELL MURRAY
Chairman