Proceedings of the Standing Senate Committee on
National Finance
Issue 3 - Fourth Report of the Committee
Wednesday, March 10, 2004
The Standing Senate Committee on National Finance has the honour to present its
FOURTH REPORT
Your Committee, to which was referred the 2003-2004 Main Estimates, has, in obedience to the Order of Reference of February 13, 2004, examined the said estimates and herewith presents its report.
Respectfully submitted,
LOWELL MURRAY
Chairman
FINAL REPORT ON MAIN ESTIMATES, 2003-2004
INTRODUCTION
As is customary, the Standing Senate Committee on National Finance held five meetings to examine various aspects of the federal government's planned expenditures, including two hearings on the Supplementary Estimates (A), 2003- 2004 and one meeting on the Supplementary Estimates (B), 2003-2004. Officials of the Treasury Board Secretariat appeared on all five occasions. Appearing once was the Honourable Lucienne Robillard, President of the Treasury Board, M.P., P.C.
PREVIOUS REPORTS
As a result of these meetings, the Committee submitted four reports:
1. A First Interim Report on the Main Estimates, 2003-2004 dated 25 March 2003.
2. A Second Interim Report on the Main Estimates, 2003-2004 dated 27 May 2003.
3. A Report on the Supplementary Estimates (A), 2003-2004 dated 21 October 2003.
4. A Report on the Supplementary Estimates (B), 2003-2004 that the Committee will submit concurrently with this Final Report on the Main Estimates, 2003-2004.
While the Committee examined a number of issues, as reported, there are several that stand out. The First Interim Report on the Main Estimates, 2003-2004 noted that Senators attempted to reconcile figures cited in the 2003 federal Budget with items in the planned expenditures. For instance, under the heading of ``Investing in Canada's Health Care System,'' there was a total of $4.6 billion that would be paid to a third-party trust until legislation is passed. Although these funds were booked in 2002-2003, there was no corresponding item in the Supplementary Estimates (B), 2002- 2003. Furthermore, Senators could not find the authority that allowed the federal government to set aside funds in one fiscal year for a program that may or may not be passed by Parliament in a subsequent fiscal year. Senators were concerned that this budget item is similar to ones that the Auditor General has highlighted in past reports with regard to the creation of foundations. Specifically, some Senators were concerned that toward the end of a fiscal year, the government was advancing money from the federal budget surplus to set up organizations that while having a worthy purpose should not have precedence over the stated policy of paying down the federal debt with any surplus funds. The Auditor General objected, for accounting reason, to the practices of setting up foundations using contingency funds. Some Senators objected to the practice because such transactions are not transparent and accountable to Parliament. While the Committee has not completed its study of the creation and oversight of foundations by the government, it remains a concern of Senators.
On 23 April 2002, the Committee initiated hearings on the use of the Treasury Board Vote 5 — Government Contingencies. The first witness, Ms. Sheila Fraser, the Auditor General of Canada, explained her concerns about using Vote 5 to fund new grants. On May 1, Treasury Board Secretariat officials Mr. Richard J. Neville, Deputy Comptroller General, Comptrollership Branch, and Mr. David Bickerton, Executive Director, Expenditure Operations and Estimates Directorate, Comptrollership Branch, explained technical points regarding the use of government contingency funds. On May 8, Mr. Frank Claydon, Secretary of the Treasury Board and Comptroller General, and Mr Neville, explained the policy governing the use of government contingency funds. The Committee's findings and recommendations on the use of Treasury Board Vote 5 are contained in a separate report (the Committee's Seventeenth Report of the 37th Parliament, 1st Session, dated 6 June 2002). Subsequently, the Treasury Board Secretariat considered the Committee's recommendations and prepared a Discussion Paper on its proposed changes to the use of Treasury Board Vote 5. The Committee reported in its Sixth Report (the Second Interim Report on the Main Estimates, 2003-2004, dated May 2003) that, at a meeting on 13 May 2003, officials of the Treasury Board Secretariat sought the Committee's views on the proposed changes to the Treasury Board policy on the use of Treasury Board Vote 5, on the Vote wording and on the guidelines for their analysts. The Committee appreciated the opportunity to comment on the Secretariat's proposals and expects that there will be further discussions on this issue at a later date.
Throughout the year, Senators revisited the issue of the Canadian Firearms Program, which has long been of interest to the Committee. In particular, the Senators sought assurance that the Main Estimates, 2003-2004 provided a reasonable prediction of planned expenditures on this program and that there would not be requests for further funding in the Supplementary Estimates. At a hearing on 7 May 2003, Minister Robillard acknowledged that there have been difficulties in the past regarding program costs. Although she could not guarantee that there would not be additional funding requirements sought through Supplementary Estimates, she did state that the current amount sought in the Main Estimates, 2003-2004 was prepared with great care and should be adequate.
The Auditor General of Canada has asked that the federal government develop guidelines for determining the level of compensation for the senior executives of agencies and Crown corporations. Senators inquired of Minister Robillard whether any work had been undertaken to develop such guidelines. In particular, some Senators were sceptical about the comparability of senior public service compensation with senior private sector management positions. Minister Robillard explained that, for some years, the Treasury Board has relied on the advice of an external committee in setting the level of compensation in the senior public service.
In its Ninth Report concerning the Committee's examination of the Supplementary Estimates (A), 2003-2004, Senators acknowledged their support of the acquisition of certain lands in Gatineau, Québec by the National Capital Commission (NCC). They were dissatisfied, however, with the lack of transparency in the implementation of this federal initiative. Specifically, they wanted more information available through the Estimates, which would allow them to assess the merits of the proposed activity for which the National Capital Commission was seeking funding. More importantly, they were concerned about the timing of these actions by the Commission. The public announcement gave the impression that the transactions were finalized before the NCC had obtained Parliament's approval for the funds that it required. In reality, the National Capital Commission and George Weston Ltd. only completed an agreement to purchase subject to approval by the federal government. The Report noted that future confusion could be avoided if federal departments and agencies did not make public announcements that are contingent on obtaining the approval of Parliament for appropriations, or they should ensure that Parliamentarians are fully informed of the status of the activities for which funding is sought.
In an earlier appearance before the Committee, Minister Robillard explained that the Treasury Board Secretariat would set aside approximately $40 million to introduce measures that would allow the Public Service Commission to eliminate its reliance on geographic limitations in the recruitment of federal public service employees. Some Senators were interested in identifying the location of such funds within the Main Estimates, 2003-2004 and within the Supplementary Estimates (A), 2003-2004. The Report on the Supplementary Estimates (A), 2003-2004 explained that the amount existed in the planned expenditures of the federal government for the fiscal year 2003-2004.
These and other matters listed in earlier reports were discussed during the Committee's examination of the Main Estimates, 2003-2004, the Supplementary Estimates (A), 2003-2004 and the Supplementary Estimates (B), 2003-2004.