Journals of the Senate
51 Elizabeth II, A.D. 2002, Canada
Journals of the Senate
1st Session, 37th Parliament
Issue 98 - Appendix
Tuesday, March 19, 2002
2:00 p.m.
The Honourable Daniel Hays, Speaker
Tuesday, March 19, 2002
The Standing Senate Committee on National Finance has the honour to present its
THIRTEENTH REPORT
Your Committee, to which were referred the 2002-2003 Estimates, has, in obedience to the Order of Reference of March 5, 2002, examined the said estimates and herewith presents its first interim report.
Respectfully submitted,
LOWELL MURRAY
Chairman
First Interim Report on 2002-2003 Estimates
INTRODUCTION
The 2002-2003 Estimates were presented in the Senate on March 5, 2002 and referred for study to the National Finance Committee. As is customary with this Committee, several meeting dates have been set aside for the review of the Estimates. The Committee's initial examination began on Tuesday, March 12, 2002, and will continue at later meetings this spring. At the first meeting, officials of the Treasury Board outlined the government's planned spending and explained the main features of the new Estimates. Appearing from the Treasury Board were Mr. David Bickerton, Executive Director, Expenditure Operations and Estimates Directorate, Comptrollership Branch and Ms. Laura Danagher, Senior Director of Expenditure Operations. In addition to making a presentation, the officials answered Senators' questions and committed themselves to obtaining additional information on several items of interest to the Committee.
There are four components to the Estimates. They include PART I, which provides an overview of federal spending by summarizing the key elements of the Main Estimates and highlighting the major change. PART II, directly supports the Appropriation Act. It lists in detail the resources that individual departments and agencies require for the upcoming fiscal year. It also identifies the spending authorities and the amounts to be included in subsequent appropriations. The Report on Plans and Priorities provides additional details on each of the departments and agencies in terms of more strategically oriented planning and results. It focuses on outcomes expected from government spending activities. Finally, the Departmental Performance Report provides a focus on results-based accountability by reporting on accomplishments achieved against the performance expectations and results commitments as set out in the spring Report on Plans Priorities.
THE EXPENDITURE PLAN — AN OVERVIEW
The Minister of Finance's Budget Plan of December 10, 2001 sets out the government's budgetary expenditure plan that amounts to $172.9 billion. The plan includes $136.6 billion of program spending, plus public debt charges of $36.3 billion. The Estimates for 2002-2003 present budgetary spending authorities totalling $168.3 billion. This represents 97% of the expenditure plan found in the Budget Plan. It should be noted that the Estimates differ from the expenditure plan presented by the Minister of Finance in several ways:
A number of items do not appear in the Estimates because of timing in the Budget decisions or because they depend on the passage of separate legislation;
The estimates do not include funds that are set aside within the Expenditure Plan for operating contingency purposes or for items that are still subject to Parliamentary or Treasury Board approval.
The Estimates do not include the provisions for the revaluation of government assets and liabilities as stipulated in the Economic Statement and Budget Update.
Some spending authorities in the Estimates are expected to lapse.
An overview of planned expenditures is provided in Table I below. For a different way of organizing the information in Table I see page 1-3 of the 2002-2003 Estimates, Part I — The Government Expenditure Plan.
TABLE I
THE EXPENDITURE PLAN AND
MAIN ESTIMATES 2002-2003
(In million of dollars)
| Public debt charges | 36,300 |
| Operating and capital expenditures | 37,127 |
| Elderly Benefits | 26,350 |
| Employment Insurance | 15,900 |
| Canada Health and Social Transfers | 18,600 |
| Fiscal equalization | 10,545 |
| Other transfers and subsidies | 18,805 |
| Other statutory obligations | 4,698 |
| Total Budgetary Main Estimates | 168,325 |
| Adjustments to reconcile with Budget | 4,575 |
| Total budgetary expenditures | 172,900 |
Source: 2002-2003 Estimates, Part I, page 1-3.
A. The Main Estimates
The Main Estimates present information on both budgetary and non-budgetary spending authorities. Budgetary expenditures include the cost of servicing the public debt; operating and capital expenditures; transfer payments to other levels of government, organizations or individuals; and payments to Crown corporations. Non-budgetary expenditures (loans, investments and advances) are outlays that represent changes in the composition of financial assets of the Government of Canada.
Of the $170.4 billion set out in the Main Estimates, $114.0 billion, or 66.9% are statutory expenditures. The remainder, $56.4 billion, requires Parliamentary approval. In this year's Estimates, 20 departments or agencies plan to spend over a billion dollars in the fiscal year 2002-2003. The three largest budgets belong to the Department of Finance ($65.3 billion), the Department of Human Resources Development ($30.9 billion), and the Department of National Defence ($11.8 billion).
The table beginning on page 1-24 of the 2002-2003 Estimates, Part II, entitled Budgetary Main Estimates by Standard Object of Expenditures, is an excellent place to begin a general review of the Main Estimates. The spending plans of all departments and agencies are divided among 12 categories of expenditures. The summary provided by the table allows a quick comparison of spending intentions among the various agents of the federal government. For instance, although the Department of Finance is requesting the largest appropriation, most of its budget (55.8%) is composed of ``public debt charges,'' an item that occurs in no other department's spending plans.
B. 2002-2003 Estimates Meeting March 12, 2002
Senators began their examination of the 2002-2003 Estimates by reviewing the creation of a number of new initiatives in the Department of Natural Resources, which seem to appear before Parliament for the first time. For instance, on page 17-7, they identify among others a $3.1 million contribution in support of electricity distributors to promote the sale of electricity from emerging renewable resources; a $1.6 million contribution to the International Energy Agency Weyburn CO2 Monitoring Project; and a $4.5 million contribution in support of organizations associated with impact and adaptation research related to climate change. Senators wanted to know the authorities under which these and similar contributions are made. Some Senators are increasingly concerned about government initiatives that first come to light only in the Estimates. Mr Bickerton responded that these types of initiatives that first come to Parliament's attention through the Estimates process are generally created under several different types of statutes. In some cases, the initiative was created under an act for a specific program, which has been authorised by Parliament in an earlier year. In some instances, the appropriation is sought under the statute defining ministerial authorities. In the future, Senators would appreciate a reference to the Statute under which a significant new initiative is undertaken. He reminded the Committee that some foundation must exist to support the initiative to appear in the Estimates. Some Senators are concerned about statutes that give ministers the powers to spend large sums on initiatives that have not received Parliamentary scrutiny.
Questions were asked about the level of funding provided to the National Library. On page 4-24, the Estimates show that the Library's budget will only increase by $489,000 to $36.7 million in the fiscal year 2002-2003. At the same time the National Librarian has indicated that there is serious physical deterioration in the quality of the facilities that house the national collection. Senators were appalled to learn that the Library's facilities are so badly deteriorated that the collection is threatened with continuing water damages and potential fire hazards. Some Senators had the impression that the government has not responded to the National Librarians request for funding to correct the problems that result in damages of valuable documents. Mr. Bickerton acknowledged the existence of a problem at the National Library and informed the Committee that the Library has recently requested additional resources in the amount of $1 million. He expects that the amount allocated to correct these problems will appear in the next set of Supplementary Estimates. Although he could not confirm at this time that the requested amount would be sufficient to end these problems, he made it clear that it is Treasury Board policy to encourage agencies and departments to prepare capital expenditure plans to allow for ongoing repairs and maintenance of their facilities.
On page 4-1, the CBC estimates that in 2002-2003 it will have revenues of $455.1 million. This is 13.9% or $73.6 million less than the $528.7 million included in last year's estimates. Senators wanted to know why the new estimate was so much less than that of the previous period and whether the estimate for revenues in 2001-2002 remains accurate. Ms. Danagher told the Committee that the CBC expects revenues for the fiscal year 2001-2002 to be within 5% of the original estimates. She also explained that two reasons account for the differences in the revenue projections between the fiscal year 2001-2002 and 2002-2003. The first is that the fiscal year 2001-2002 includes the additional revenues earned from the broadcast of the Salt Lake City Olympic Games. The second is that the CBC has adopted a policy of reducing commercial interruptions in its broadcasts, which means lower revenues.
Senators expressed an interest in the operations of the National Capital Commission. Specifically, they noted that the Commission was seeking additional appropriations of $34.2 million, most of which is earmarked for real asset management and development. In this connection, Senators require further assurances that the legitimate planning concerns of local governments are given proper weight in the decisions of the Commission. Senators were also interested in the Commission's expenditures on professional services related to new projects in the National Capital Region. Mr Bickerton did not have the details on hand, but he was able to explain that most of the Commission's increased requirements under its real asset management and development item referred to expenses in the preparation of the LeBreton Flats property. This includes amounts for the planning and the decontamination of the site to be used for the construction of the new museums.
Senators observed that the estimate for the Canada Student Loans program has declined by $100 million compared to the level in the fiscal year 2001-2002. Mr. Bickerton explained that this does not result from a change in policy, but rather from an improved ability on the part of the government to forecast the actual take up in Student Loans.
Although the officials always attempt to provide immediate answers to Members questions, there remain outstanding matters. The officials agreed to provide information at a later date on several topics including on the activities of the national Capital Commission, the distribution of Canada Health and \Social Transfers and Equalization Transfers among the provinces, the distribution of spending between the English and French services of the CBC, on the decline of funding for the Lieutenant-Governors etc.
As indicated above, your Committee expects, at a later date, to examine in greater detail various aspects of the government's spending plans.