2005-2006	2006-2007	Total
1. December 22, 2005 to January 20, 2006	1,130.4	…	1,130.4
2. January 21, 2006 to February 19, 2006	755.8	…	755.8
3. February 20, 2006 to March 31, 2006	2,291.7	…	2,291.7
4. April 1, 2006 to May 15, 2006	…	11,470.2	11,470.2
Total	4,177.9	11,470.2	15,648.1

Source: Statement on the Use of Governor General Special Warrants, p. 17

Section 30 of the Financial Administration Act states that where a Special Warrant is issued, the funds provided shall be “deemed to be included and not in addition to” the monies appropriated in the next Appropriation Act. Pursuant to this section, the 2006-2007 Estimates reflect those funds provided by Special Warrants for the fiscal year 2006-2007.  For the funds provided by the three Special Warrants in the fiscal year 2005-2006, there was no further Appropriation Act for that year.  This was because of the dissolution of Parliament on November 29, 2005, which precluded the Houses of Parliament from voting on the 2005-2006 Supplementary Estimates (A).  As required by Section 30 of the Financial Administration Act, a Statement on the Use of Governor General Special Warrants was tabled in the two Houses of Parliament.  This document summarizes the Governor General Special Warrants issued during the entire period from November 29, 2005 to May 15, 2006.

 

EXAMINATION OF THE 2006-2007 ESTIMATES 

As previously noted, the President of the Treasury Board, the Honourable John Baird, appeared before the Committee on May 3, 2006.  During his appearance, President Baird thanked the Committee “for [its] continued scrutiny and guidance in allocating government resources to serve Canadians better.”  He noted the important work that Committee has done over the years in this respect. 

            During the course of the Committee’s initial hearings of the 2006-2007 Estimates, Senators raised a variety of issues, some of which are discussed below. 

 

A.        Treasury Board Vote 5, Government Contingencies 

Treasury Board may provide funding to departments and agencies for unforeseen expenditures. This type of funding is referred to as the Treasury Board Vote 5 funding, or TB Vote 5 funding.  Permanent funding is provided for pay list shortfalls such as severance pay and parental benefits, which cannot be predetermined.  Temporary funding is provided for unforeseen expenditures which were not provided for in the Main Estimates and which are required before supplementary estimates are tabled.  

The manner in which contingency funds are used under the TB Vote 5 has been an abiding concern for the Committee.  These concerns have focused on clarifying how the vote was used, the government's accountability to Parliament on its use, the overly broad wording previously used in the vote itself, and in assuring that the vote is used strictly for urgent requirements[2].  Last year, on March 9, 2005, in response to the Committee’s recommendations, the President of the Treasury Board provided the Committee with proposed changes to the wording of TB Vote 5 and to the guidelines which govern the work of the Treasury Board Secretariat analysts.  The intention of the previous President of the Treasury Board was that the new wording and guidelines would be ready in the Supplementary Estimates (A) in the fall of 2005[3].  Ms. Danagher explained that, because of the dissolution of Parliament on November 29, 2005, those guidelines were not adopted by Treasury Board ministers. She noted, however, that the guidelines are currently being implemented as an administrative measure, that is, they are being used by analysts of the Treasury Board Secretariat. Ms Danagher indicated that the guidelines will be approved by the Treasury Board during the summer of 2006.  Further, she informed the Committee that the proposed new guidelines incorporate most, if not all, of the Committee’s recommendations on this matter.  

Some Senators noted with satisfaction that these Estimates reflect the revised vote wording for Treasury Board Vote 5 as recommended by the Committee. The wording on page 1-82 has been modified, replacing the words “minor and unforeseen expenses” with the words “urgent or unforeseen expenditures.”  In addition, the words “awards under the Public Servants Inventions Act” have been deleted and the words “grants and contributions not listed in the Estimates and the increase of the amount of grants listed in these, where those expenditures are within the legal mandate of a government organization” have been added.

 

B.        Funding for the Vancouver Olympics

            Some Senators raised questions about the federal government’s total financial exposure to the Vancouver Olympics, which has been of interest to the Committee for some time. Some Senators referred to earlier testimony by the Honourable Sheila Copps, then the Minister of Canadian Heritage, indicating that the federal commitment for the Vancouver games would be capped at $310 million for capital and legacy costs. Funding to provide essential federal services such as immigration, customs and security, was capped at $100 million. Mr. Moloney explained that, in addition to the initial commitment, the February 23, 2005 Budget provided new funding for the Olympics, bringing the total federal commitment to date to $497 million.  It is expected that further funding of approximately $235 million will be sought in future Estimates.  

            Some Senators expressed concern about the possibility of cost overruns, which the President promised to relay to his colleagues in the government. Senators were also interested in the processes in place to monitor and control government expenditures in relation to the games. Senators learned that Canadian Heritage has created, within the Department, a Federal Games Secretariat whose responsibilities include managing federal funding to the Olympics. 

 

C.        Bill C-48, An Act to authorize the Minister of Finance to make certain payments

            In July 2005 Parliament passed Bill C-48, authorizing the Minister of Finance to make certain payments from unplanned surplus funds in excess of $2 billion for the fiscal years 2005-2006 and 2006-2007.  Senators inquired about the nature of these arrangements and their accounting in the Main Estimates. Mr. Moloney explained that, since Bill C‑48 provided statutory authority for the payments, those expenditures would be reported through the Public Accounts of Canada as statutory spending.  They do not, therefore, figure in the 2006-2007 Estimates, with which this report deals.  The President noted that the 2006 Budget Plan (page 160) allocates $3.6 billion in costs related to anticipated payments made under Bill C‑48, to be paid into third party trusts once the federal books are closed in the fall.

 

D.        Funding Mechanism for Officers of Parliament 

            On May 19, 2005, during the previous Parliament, the Committee had presented a report regarding the funding of Officers of Parliament.  A central concern was that Treasury Board makes decisions on spending requests by Officers of Parliament, as part of the process by which the spending request that go before the Houses of Parliament are developed. This raises possible concerns about the independence of the Offices.  One of the Committee’s key recommendations to address this concern was to have the process of determining the budgets for Officers of Parliament actively involve Parliamentarians and an advisory panel.[4]  Some Senators were pleased that this recommendation had been implemented in a pilot project by the Treasury Board. The advisory panel considers requests for new funding developed by the Officers of Parliament, and provides Treasury Board with its non-binding recommendations[5].  However, some Senators noted that at present no Senators sit on this advisory panel.  During his testimony, President Baird confirmed that the pilot project will continue this year and stated that he would bring the issue of Senators’ participation to the Leaders and Speakers of both Houses.

 

E.        Cost of Accountability

            Mr. Moloney agreed to provide the Committee with a compilation of costs of the internal audit functions of departments.  Senators were interested in learning that pursuant to the accountability measures included in Bill C-2 (the Federal Accountability Act), the May 2, 2006 Budget allocates $57 million for the federal accountability action plan and $16 million for internal audit functions[6].  In response to concerns that Parliament did not have the capacity to be able to hold the government to account, Bill C-2 also creates the position of Parliamentary Budget Officer within the Library of Parliament. The Officer will have explicit responsibility for analysis related to Parliament’s consideration of government budgets, as well as the cost implications of Member’s bills and parliamentary initiatives. The President has committed to making the establishment of the new Officer a priority following the passage of Bill C-2. Some Senators expressed their interest in working with the new Officer. 

 

F.         Governor General Special Warrants

            The Committee noted the importance of the four Governor General Special Warrants that were issued during the dissolution of Parliament.  Some Senators were interested in knowing whether the Special Warrants could provide supply to a program or organization where authority had not previously existed and questioned if a Special Warrant could be issued to establish new grants or to increase existing grants; Mr. Moloney stated that they could not.  

            On a related point, some Senators noted that this year’s supply process was too accelerated. Recognising that this fiscal year was exceptional, some Senators noted that the process generally does not provide adequate time for full consideration of the Estimates. Some Senators asked the President to consider making changes to the process by which supply bills are introduced in order to address this important issue.  On this point, it was noted that the government has significant control of the agenda in both Houses, and should use this to avoid situations in which Parliamentarians are asked to vote on significant sums of money in great haste.

 

G.        Clarity of the Estimates Documents

            The Committee expressed continued concern on the lack of clarity in the Main Estimates and in particular, a lack of transparency in the departmental details of the Main Estimates. As an example, FedNor, the federal regional development agency in Ontario, is not separately identified in these Main Estimates, which may leave the impression that the agency is not receiving federal funding in 2006-2007.  Mr. Moloney reassured the Senators that FedNor is receiving funding; however, Industry Canada, the department responsible for FedNor, chose not to identify the agency as a separate Program Activity but instead to include it within the core activities of the department. 

            Some Senators expressed appreciation of past efforts by the Treasury Board to include a section in the Estimates documents that reports expenditures horizontally across departments, and expressed a desire to see a similar section in the Main Estimates.  Mr. Moloney stated that although it is possible to compile these tables for the Supplementary Estimates as they typically total less than $10 billion, it is more difficult to arrange $100 billion of program spending in the same manner.  However, he indicated that officials of the Treasury Board Secretariat will undertake to do so.  Mr. Moloney noted that information on linkages between government departments and agencies on horizontal programs can currently be found in departments’ Reports on Plans and Priorities.

 

H.        Budget 2006

            Some Senators were interested in reconciling government’s spending plans as laid out in the Main Estimates with those outlined in the May 2, 2006 Budget. Programs mentioned included those related to climate change and the environment, the gas tax funding committed under the New Deal for Cities and Communities, and the Toronto Waterfront revitalization initiative. The Committee was informed that the latter two programs will continue. With respect to environmental programs, the Minister of the Environment will shortly be making an announcement regarding an initiative to reduce greenhouse gas emissions.  Senators were also interested in knowing whether the increase in the budget of National Defence over the next five years as outlined in the 2006 Budget represented new funds in addition to those announced last fiscal year. The President promised to confirm these details and provide the Committee with a response shortly. 

            Senators were also interested in the government’s planned savings of $2 billion over the next two fiscal years. The President indicated that some savings have already been realised and that there are several criteria laid out in the budget documents that will guide further decisions.

 

CONCLUSION

During its initial meetings on the 2006-2007 Estimates, the Committee debated these and other matters, including:  gender-responsive analysis of the Estimates; national debt reduction; Arctic sovereignty; environment programs; infrastructure funding; the removal of geographic restrictions in the hiring of public servants; and the issue of decentralising the public service.  The Committee intends to more fully examine the government’s spending plans for the 2006-2007 fiscal year, and will present further interim reports as it continues its work.   

The Standing Senate Committee of National Finance respectfully presents its first interim report on the 2006-2007 Estimates.