THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, February 8, 2023
The Standing Senate Committee on National Finance met with videoconference this day at 6:45 p.m. [ET] to study matters relating to federal estimates generally and other financial matters.
Senator Éric Forest (Deputy Chair) in the chair.
[Translation]
The Deputy Chair: Honourable Senators, I want to welcome all senators and also all Canadians who are watching us on sencanada.ca.
My name is Éric Forest and I am a senator from Quebec, Gulf division, and Deputy Chair of the Standing Senate Committee on National Finance. I would now like to go around the table and ask my colleagues to introduce themselves.
Senator Pate: Kim Pate, Ontario.
Senator Galvez: Rosa Galvez, Quebec.
[English]
Senator Boehm: Peter Boehm, Ontario.
Senator Bovey: Patricia Bovey, Manitoba.
Senator Smith: Larry Smith, Quebec.
Senator R. Patterson: Rebecca Patterson, Ontario.
[Translation]
The Deputy Chair: Thank you. With us today are our clerk, Mireille K. Aubé, and our analysts, Sylvain Fleury and Shaowei Pu.
We are meeting today pursuant to a general order of reference. We are pleased to welcome senior officials from the Treasury Board of Canada to discuss the parliamentary fiscal cycle — which is a concern to a number of us — and the preparation of the estimates. We are pleased to welcome from Treasury Board of Canada Secretariat: Annie Boudreau, Assistant Secretary, Expenditure Management Sector; Rod Greenough, Executive Director, Expenditure Strategies and Estimates; Andres Velez-Guerra, Senior Director, Policy on Results and Engagement Unit; Monia Lahaie, Assistant Comptroller General, Financial Management Sector; Diane Peressini, Executive Director, Government Accounting Policy & Reporting, Financial Management Sector.
Welcome to you all and thank you for agreeing to appear before the National Finance Committee. It is always informative for us to meet with Treasury Board officials. I believe Ms. Boudreau will make a statement. Please go ahead.
Annie Boudreau, Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat: Thank you very much. Thank you, honourable senators, for this opportunity to speak to you today about the parliamentary fiscal cycle and the preparation of the estimates. I want to mention that I have provided you with a placemat that I will refer to during my remarks, and probably when I answer your questions.
While TBS usually appears in support of a particular Main or Supplementary Estimates — and I look forward to doing so again in the coming weeks — I think it’s always helpful to take a step back from time to time to look at the process itself.
As you know, in keeping with the Westminster system, the Canadian federal government cannot raise taxes or spend funds without first obtaining Parliament’s approval through the adoption of legislation. For some government expenditures, including large programs such as elderly benefits or equalization, that legislation provides ongoing authority, so Parliament does not approve these expenditures on a regular basis.
However, many expenditures, including the costs to run government departments, are approved on an annual basis through appropriations acts. By themselves, appropriation acts do not provide much detail on planned expenditures. In addition, according to House of Commons procedures, the appropriation bills are introduced and voted on in the House on the same day, leaving very little time for study. Estimates documents are prepared and tabled in advance, to inform the consideration of these proposed expenditures by committees and individual parliamentarians.
These estimates documents, as well as the appropriation acts they support, set out the maximum amounts which departments and agencies may spend. They do not compel organizations to spend the full amount approved. Estimates documents are prepared and tabled according to a regular annual cycle. The graphic, which I’ve shared with you, shows the cycle in a normal fiscal year. On or before March 1, in accordance with the Standing Orders of the House of Commons, the President of the Treasury Board tables the Main Estimates for the upcoming fiscal year. The Main Estimates show funding levels for the upcoming year as they are currently planned and approved by the Treasury Board.
Soon afterwards, departmental plans, prepared by individual departments and agencies, following Treasury Board Secretariat guidance, are also tabled by the TB president. Departmental plans describe departmental priorities, planned results and associated resource requirements, covering a three-year period.
In order to provide parliamentarians time for study of the Main Estimates and departmental plans, the planned expenditures set out in the Main Estimates are approved through two appropriation acts. The first appropriation of the fiscal year, what we call interim supply, is passed before the beginning of the fiscal year and provides enough funding for organizations to pay their expenditures until passage of the second act.
In a normal year, the second appropriation act, which we call full supply, is introduced and passed in June. The second act approves the balance of expenditures presented in the Main Estimates.
Of course, the Main Estimates are only the first estimates document tabled for the fiscal year. Supplementary estimates are tabled after the fiscal year has begun, presenting information on additional spending requirements which were either not sufficiently developed in time for inclusion in the Main Estimates, or have subsequently been refined to account for developments in particular programs and services.
There are three supplementary estimates, one in each of the supply periods of the House of Commons.
The spending in each supplementary estimates is approved through an appropriation act, which is introduced by the deadlines in the Standing Orders of the House of Commons.
As you see on the graphic provided, the deadlines to introduce appropriation bills in each of the three periods are June 23, December 10 and March 26.
[English]
Much of the new funding presented in the federal budget seeks parliamentary approval through supplementary estimates. As you know, the budget is much more than a set of projections. It is a primary vehicle for communicating the government’s overall taxation and spending priorities, including many new funding announcements.
If you have questions on the content, timing or process of the federal budget, I suggest that you invite officials from the Department of Finance who are the experts in that area.
After the end of the fiscal year, the Receiver General prepares the Public Accounts, which includes the audited consolidated financial statements as well as information from departments, agencies and Crown corporations on actual spending during the year as compared with authorities granted by Parliament.
The final estimates documents of the fiscal year — the departmental results reports — are individual department and agency accounts of actual performance for the most recently completed fiscal year against the plans, priorities and expected results set out of their respective departmental plans.
Departmental results reports inform Canadians of the results achieved by government organizations for Canadians. The reports are tabled after the Public Accounts as they include expenditure data from Volumes II and III of the Public Accounts.
In addition to estimates documents, the government has made online reporting tools available, such as GC InfoBase and the Open Government portal. These tools present easy-to-understand information to Canadians about the authorities approved by Parliament.
That concludes my short overview. Honourable senators, I would be pleased to take your questions about the fiscal cycle and the estimates process.
The Deputy Chair: Thank you very much for your statement.
[Translation]
That was very interesting as your remarks included a lot of factual information about the budget cycle.
We will now begin the question period. I wish to inform senators that they have five minutes in the first round and three minutes in the second round. I would ask you to ask your questions directly, and the witnesses to answer quickly.
Senator Smith: Welcome everyone.
[English]
We are in the midst of starting off in terms of the cycle, and when I say “starting off” I am being incorrect. We are pretty well coming to the end of our cycle. If we look at the graph, January to March 26 represents the end of that cycle.
Ms. Boudreau, you suggested and talked about some of the departmental results. In 2016, in a government discussion paper on reforming the estimates process, the Treasury Board of Canada Secretariat committed to reforming the departmental plans as well as the departmental results reports to include better information on spending as well as results. I am just wondering, because it has been a topic, could you please provide us with an update in terms of the progress of the reforms?
How have the departmental plans and results improved since that time? What has the success been with that implementation?
Ms. Boudreau: Thank you very much for the question. It is very timely.
I would like to mention the policy on results was put into place in 2016. As per our internal processes, we need to review those policies every five years. We are in the midst of reviewing the policy.
As a first step, what we did is we met with the deputy minister as the client of the policy. They are the owner of their plans. They are the owner of their results. We wanted to get their perspective on the policy right now and what could be improved or what could stay, because it is working well.
We did interviews in November and December. One thing that we have learned from them is there are too many indicators out there.
If you go on the GC InfoBase, the tool that I just mentioned, you will see that for the Government of Canada we have more than 2,700 indicators. It is a lot of indicators that departments need to follow and report on. That is something that we are looking at very closely for the next round of the policy, to make sure that indicators that are out there are meaningful for Canadians and they are based on outcomes.
Another thing we have learned is how we can make the policy more in line with the notion of reconciliation with Indigenous peoples, how we can integrate that into the policy. It has been looked at, but there are still ways to improve. That is something else we will be looking at.
Senator Smith: With 2,700 indicators, how do you go about selecting, eliminating or reducing the number of indicators or consolidating the number of indicators so that you can have more timely releases of your reports and your results? That seems to be a challenge right now for the Treasury Board.
Have you had a chance, with the group, to analyze where your adjustments are going to be so that you can improve the actual performance of getting things out on a more timely basis?
Ms. Boudreau: That is exactly the work that we are doing, as we speak.
We have working groups that are helping us with this undertaking. The goal is to reduce the number of indicators, making sure that they are more meaningful. We need to work in partnership with departments and also the people in charge of programs, because they are well placed to tell us what is working from their perspective. We can advise them, give them guidelines and procedures, but at the end of the day, they are the best positioned to make sure that the indicators that are out there are working for them.
Senator Smith: Thank you for that answer.
I apologize to our group. I was stone-deaf in terms of my mind. I have had too many hits on the head over my career. We are in that January to March 26 period, which is the Supplementary Estimates (C). I apologize for that. I should know better, since I was the chair of the committee a few years ago.
[Translation]
Senator Bellemare: My question is from Senator Clément Gignac, who I am replacing at this meeting.
He and I are very interested in everything relating to monetary policy. That is another topic, of course. Nonetheless, in relation to the government’s budget estimates, we know that inflation and cost of living allowances have always played an important role in collective bargaining. Given the current inflation rate of 6.3% and a long road ahead to reach the target of 2%, how does TBS take account of trends in evaluating expenditures?
Ms. Boudreau: Thank you for the question. Some of the expenditures in the main estimates and supplementary estimates take inflation into account.
In the case of legislative expenditures, for instance, we have already factored in increases owing to inflation. There are other expenditures that reflect inflation. In the agreements concluded with self-governed Indigenous groups, for instance, inflation is always factored in for future payments.
Further, Treasury Board has an appropriation to cover payroll for public servants, an expenditure that also reflects the rising rate of inflation. To some extent, that is all factored in, but if a department thinks it will need more funds as a result of inflation, it has to submit a budget request to the Finance Department.
Senator Bellemare: My second question pertains to the management of public funds. Since the Supplementary Estimates (C) are usually approved by Parliament at the end of the fiscal year, how do departments make expenditures in a predictable manner during the fiscal cycle, without legislative approval of the related votes?
In other words, I suppose you manage public funds, but how do you function with respect to expenditures that are made without parliamentary approval?
Ms. Boudreau: Thank you for the question. I would like to make two points. First, under section 32 of the Financial Administration Act, once the Supplementary Estimates (C) are tabled in Parliament, even if the bill has not yet been passed, departments and agencies have the right to commit funds. That is set out in the Financial Administration Act.
Secondly, as you said, all departments manage public funds, but they also manage risks. They identify the priorities for their department and may allocate the funds they already have for those priorities. As long as they do not exceed the maximum allocated to them, they have that flexibility.
Senator Bellemare: Thank you very much. That’s all for now.
[English]
Senator Pate: Thank you all for being here. It is nice to see you in person after such a long hiatus of in-person meetings.
Yesterday, we heard from the Office of the Parliamentary Budget Officer about some concerns around the lack of data collection by some governmental departments — in fact, a number he has indicated — and well as the unwillingness of some of those departments to share information that he regarded as necessary to fully inform us, as well as you, in terms of discussions about Canada’s financial affairs.
In particular, he talked about the fact that the Canada Revenue Agency has been unwilling to share information with organizations like the PBO, largely claiming privacy issues where, in fact, aggregate tax data could be made available to address the kinds of questions they are asking and that we are interested in as well, such as how do we examine the oversight of the revenue sources in an aggregate way; how do we determine the extent of tax fraud, in which categories; tax avoidance?
In your experience, your expertise, how do you determine and respond to these sorts of issues when they come up from departments? In particular, a number of us are interested in Revenue Canada and the very issues that I just raised.
What do you take into consideration when you are looking at those oversight functions, the oversight function that you have in this respect?
Ms. Boudreau: I will not be able to talk about the specific case that you are referring to.
From our perspective, when we need information from departments or organizations, I have never encountered any issue at getting the information.
With regard to what the Parliamentary Budget Officer shared with you yesterday, I am not aware of that case, obviously. Unfortunately, I will not be able to provide additional information on that specific case.
Senator Pate: In which case, could I request then, on behalf of our committee, that you obtain that information? We have been asking for it from the government as well, a number of us, in different contexts.
If you need a written request, we could do that. It strikes me, with a request today, if you could provide that information, that kind of breakdown, it would be extremely useful: revenues, the basis particularly with respect to taxes; revenue lost, perceived revenue loss in terms of tax evasion, offshore tax, as well as some of the fraud issues.
In particular, I am thinking of the information that would be available following up on the pandemic relief; particularly, a lot has been made of the most impoverished folks, but what about corporations and businesses that benefited and how those amounts play out? That would be extremely useful.
Ms. Boudreau: My recommendation will be that your specific request, with all of the information that you are looking for, is better addressed to the Canada Revenue Agency.
Senator Pate: Okay. Shall we copy you as well, if we do not get it?
Ms. Boudreau: Absolutely.
Senator Pate: One of the things I am interested in, how do you fact-check the information that you get from departments?
Ms. Boudreau: Can you be more specific? What kind of information?
Senator Pate: For instance, if you are looking at the revenues, there have been a number of instances where we have asked questions about where revenues end and the cycle that you have gone through do not always add up; how do you fact-check that? Do you go through the ministers? Do you go directly back to the department? Could we have access to that process as well?
Ms. Boudreau: So here it is just about expenditures and expenses. So we do not look at revenues. That section will be Department of Finance who will be in charge of looking at the revenues. We do not look at that. It’s not part of our cycle.
Senator Pate: So you don’t ever compare the two?
Ms. Boudreau: No.
Senator Pate: Okay. Thank you.
Senator Bovey: Thank you all. I find this really fascinating. I’m a very new member of this committee. I have a couple of questions, but I want to go back to Senator Smith’s question.
In our prior lives, we have all obviously done a lot of reviews and needed timely reviews for whatever organizations and public we served. The concept of 2,700 indicators just blows my mind. Is that a total of 2,700 indicators across government or is it the same 2,700 indicators for each ministry?
Ms. Boudreau: The total —
Senator Bovey: The total.
Ms. Boudreau: — for the Government of Canada.
Senator Bovey: For the Government of Canada.
Ms. Boudreau: That is correct.
Senator Bovey: As you’re doing the review of indicators and looking at tightening them up and making sure they are relevant, are some of those indicators defined as a result of conversations and discussions a department will have had with their clients?
Ms. Boudreau: In some cases, yes. For example, if we look at Indigenous Services Canada or Crown-Indigenous Relations and Northern Affairs, they will have discussions with their partner organizations to make sure that indicators are — like the word you use — relevant for them as well in order to report on them.
Senator Bovey: Do these indicators relate to outcomes of monies expended? You’re looking at expenditures, and we were told yesterday that the PBO — that department — doesn’t really look at the outcomes of the expenditures. Are you looking at the public outcomes and benefits of those expenditures? Is that part of your assessment?
Ms. Boudreau: It is part of our assessment, but it is not a perfect science. You are correct by saying that sometimes you will find outputs in those documents, but that’s why we are reviewing the policy on results; it is to make sure that it is stronger and also to make sure that they have to support departments and agencies to better report on outcomes.
Senator Bovey: I have two follow-up questions. Yesterday, a question was asked about the effectiveness of programs across ministries and departments. There was a question asked concerning the duplication of expenses in department A, department B and whether they know. My question comes the other way.
If there was a relevant discussion of outputs or outcomes of these programs, is there, in your view, a cost-saving benefit from understanding how one silo could, in fact, possibly affect another? This has been much of my research over many years. I can cite numbers until I’m blue in the face, which you don’t want. I’m concerned whether you are able to get into the weeds enough to know, for instance, art spending across into Ministry of Health and how that affects reducing the days in hospital, increasing wellness, reducing the number of missed workdays. The stats are amazing.
It seems to me that at the federal level, those links aren’t put together. That dot-to-dot game hasn’t been played and could be played to great effect so that our expenditures are really meeting some new ways of looking at outcomes.
Ms. Boudreau: If you allow me, perhaps I will use an example that could answer your question. We are calling those initiatives “horizontal initiatives,” and a good example would be infrastructure plans that we have currently where we have 20 departments and organizations working together in order to deliver outcomes.
Those initiatives usually are assessed or determined at the memorandum to cabinet stage. We’ll say this is a horizontal initiative and a lead department will be named. In this case obviously it is Infrastructure Canada as the lead department.
Every year in Infrastructure Canada’s Departmental Results Report, you will see an annex on this infrastructure plan reporting on outcomes across the 20 partner organizations that are there to deliver for Canadians. That does exist — horizontal initiatives — and we see them more and more because, as you said, there are so many programs and initiatives that several departments need to work together in order to be able to deliver in an efficient way.
Senator Bovey: It is possible?
Ms. Boudreau: It is possible.
Senator Bovey: Thank you, Ms. Boudreau.
[Translation]
Senator Galvez: Thank you very much for being here, ladies and gentlemen. Welcome to our committee.
[English]
It is very important that we understand these financial cycles and reporting. The Senate works in a different way than the other place. In the other place, they have their committee on Public Accounts and they look at it. Here, we have to look at both the revenues and expenses. But the purpose of the Public Accounts of Canada is to provide information to Parliament, passed to the public, which will enable them to understand in every way the financial position and transactions of the government.
When we look at our role, we want to do the check and balance, and the way the government works is a little bit complex. You have the Treasury Board, the Public Accounts, the Auditor General and you have the Receiver General, and you said when you were talking about your cycle you said that it was normal. But we have been living in years that we don’t respect these dates that you are putting in there.
For example, there are recent years where was no budget because of COVID, so the cycle dates were not respected. Yesterday, talking with the PBO, he reminded us about amendments to the Financial Administration Act in order to make better sense and to give us the opportunity to do the check and balance.
For example, he said move the required release date of the Public Accounts by three months from December 31 to September 30. Then another says, “require Departmental Results Report to be released not later than September 30.” He says the request is in case Parliament is not sitting during the fall, so it would permit the government to release audited Public Accounts prior to their tabling in the House of Commons.
What do you think about this? Do you support this request?
Ms. Boudreau: Thank you for your question. I’m going to ask my colleague to talk about Public Accounts, as she is in charge of them.
Monia Lahaie, Assistant Comptroller General, Financial Management Sector, Treasury Board of Canada Secretariat: On the Public Accounts, we are looking at opportunities to improve the timeliness of the accounts. We have been asked by the Public Accounts Committee to review the modernizing of Public Accounts. How can we make the information more user friendly and accessible while ensuring that we keep the degree of transparency and accountability in place? As well, how could we bring the date forward? The date that they have asked us to consider is October 15 for tabling and that’s being evaluated. A response should be coming shortly on what the next steps will be. Every year, we are looking at doing it faster. If you look at our trend, normally we publish in October; mid to end of October is our average.
The challenge within the Financial Administration Act, it says that we have to table when Parliament is sitting. In a year of an election, we cannot table — the election period is in October/November — them until the government comes back. That’s in the act.
We have always respected the date mandated in the Financial Administration Act, which is for December 31, but we’re looking to bring it forward. We are very close in our average. We are in October normally. I think it has happened twice that we were the end of September.
It all depends on the challenges in that year, if there is a more complex accounting situation that we need to look at and things like that. It involves everyone in government when we do this. All departments have to produce their statements. We have clear deadlines for them, and they always meet their deadlines. Then it’s the Auditor General who reviews these transactions.
Senator Galvez: You don’t oppose to change the date to October 15? Are you going to propose an amendment to the —
Ms. Lahaie: We are going to study the options and come back with options on what it would mean. If we were to publish earlier, for example, once it’s signed, it takes five weeks to produce the printed versions of this statement in four different formats. We are working with our colleagues to see what options we have to reduce that timeline and be more efficient, which would help us meet the shorter timeline. So we have consultations to make. Do we want to go electronic? Would that be acceptable? And reduce the burden for production. There are all sorts of options, and we’ll come back and discuss those with you as well as the Public Accounts Committee. We would be happy to do that.
Senator Galvez: What happened when, for example during the COVID years, the budget was not tabled on time? How does this affect, for example, the Public Accounts?
Ms. Lahaie: It does not affect the Public Accounts per se because Public Accounts are at the end of the cycle. We publish what actually happened. It would be more on the estimates side.
Senator Galvez: Yes. So what happened on the estimates?
Ms. Boudreau: The year that there was not a federal budget was 2020, and in that year, although there was not a federal budget, there were still decisions that were made by the Department of Finance. We call that an “off-cycle decision.” Those decisions were reviewed as usual by Treasury Board to make sure that the implementation was acceptable and also to look at the indicators and results.
All those months approved by Treasury Board were included in an estimate. So there was no federal budget, but all the expenses that were announced were included in an estimate that was tabled to Parliament.
[Translation]
The Deputy Chair: We will now begin the second round of questions.
[English]
Senator Boehm: The advantage of coming in at the lower end of the echelon is that most of the questions I wanted to ask have been asked by my colleagues.
I’m going to come back to a few points. Senator Smith pointed out early on, of course, the changes that took place in 2016, greater information for parliamentarians and the like. There was some churn as well, and then temporary measures in 2017 that were not renewed then in the Forty-third Parliament.
During this period, I was one of the people who was receiving requests for indicators. They were coming in like spears into my department. It required a lot of shifting, in terms of personnel, to meet the reporting requirements. Not that I’m disputing those. They are necessary for accountability. But this churn of change and procedure also required a change in the way of doing things in the accounting and in the departments per se.
In following up on what Senator Galvez just asked, taking into account the COVID period where most people were basically working remotely, there were extra pressures, of course, that the pandemic put on. Now in the public service you are in this phase where you are looking at three days of work in the office and the rest perhaps remotely, and that’s continuing. Has this had an impact, in terms of the cycle, from a Treasury Board perspective? I know you are not with OCHRO, with the human resource side — I appreciate that — but just in terms of getting the product out in a way that you consider satisfactory, and the impact on public servants.
Ms. Boudreau: I will speak from my perspective, and I will refer again to this cycle. Since COVID-19, we have been able to produce all the reports as per the deadline. Could we be more timely? For sure. We can always be more timely. Like my colleague was referring, Public Accounts, December 31, can we try to advance the date? They are looking into that.
Same thing with our Departmental Results Report. We don’t have any legislative date for those reports. They just need to be tabled after the Public Accounts. And why? Because information in those reports needs information from Public Accounts. One feeds the other one.
Are we looking at trying to streamline those reports? We are looking at streamlining those reports, looking first at the indicators, like I was referring to earlier. But other sections as well. Is there any duplication? Is there information that we can find somewhere else and that we can refer Canadians who want to have more information? So it is an ongoing process that we are looking at all the time. Hopefully, we will be able to make some changes in the year to come.
Senator Boehm: In terms of standard operating procedures, you are looking at those and how they can be improved? It’s a case of lessons learned from this very difficult period because we are probably going to encounter other difficult periods for whatever reason.
Ms. Boudreau: Absolutely. From a personal perspective, I am coming from a line department. I worked for 13 years at the CRA and two years at Crown-Indigenous Relations, and I know how difficult and time consuming it is to produce those reports. So I have that in mind when I discuss with my team and I push them a little bit to think about what we can do to help people in those departments to reduce the burden and improve efficiencies, always taking into consideration, though, transparency and accountability.
Senator Boehm: And the health of your employees.
Ms. Boudreau: Absolutely.
Senator Boehm: Thank you.
[Translation]
The Deputy Chair: It is Senator Patterson’s turn now, welcome to the Standing Senate Committee on National Finance.
[English]
Senator R. Patterson: I am going to pull on the indicator threads a little more. We know we are talking about accountability to the Canadian public in a manner that is meaningful to them. While I have not been on the GC InfoBase, I know what you’re talking about. I came from a department trying to feed the beast.
When we talk about meaningful indicators to Canadians — I’m going to use WAGE — you actually did talk about the infrastructure being sort of the horizontal department integration. One of the drivers from WAGE is Gender-based Analysis Plus. It’s meant to look at what Canadians are interested in.
While I realize you receive the indicators, there are some that you’re going to need for fiscal reasons. If you’re looking at what is meaningful for Canadians, how do you integrate GBA plus into either what you’re asking or what your expectations are from departments? I know it’s a hard question, but I’m genuinely curious. We have an example within Indigenous, but how do we expand that so money is spent for all Canadians?
Ms. Boudreau: Thank you for the question. Maybe I would like to start by saying last fall, the AG produced a report on GBA Plus. It was a follow-up report, in fact, on their 2015 report, and 5 of the maybe 10 recommendations were addressed to us, Treasury Board. It’s all about sharing information. So once the budget has been approved, departments come to Treasury Board with their submission. When we talk with the departments, we sometimes see inconsistencies in the way that they are applying GBA Plus or lack of applying GBA Plus. One of the AG recommendations is to meet with WAGE on a yearly basis to provide them with the findings that we have from those reviews. That is something we are starting very soon, to meet with them, so they have that knowledge, that intel in order to improve the processes.
We are also working with the Canada School of Public Service in order to have additional training and guidance for all of us public servants all to do a good GBA Plus analysis, again, that is meaningful for Canadians.
Senator R. Patterson: I think that is fantastic, and like any new analytical tool — because that’s what it is — it can be challenging.
The role of the Treasury Board is very significant, especially federally, and you could be a good leader in this domain. I thank you for the work that you are doing. I look forward to where you are going with this, and to be more timely, we will have to really knuckle down on what is important to Canadians and what you actually need to be able to do true public accounting.
[Translation]
The Deputy Chair: Thank you very much.
Earlier you said that section 32 of the Financial Management Act enables departments to set aside funding for potential future expenditures, is that correct? If so, section 33 of the act allows them to make the expenditure, and section 34 provides for verification that the expenditure was duly made and that the goods were received.
What interests me in this process... In many cases, there is a delay in the approval of the Supplementary Estimates (C), which are usually tabled quite late... So the expenditure can be earmarked in our budgets, the funds can be earmarked, but generally speaking we should have received the goods before the end of the fiscal year. In many cases, it is certainly assumed that the approval would be forthcoming.
In the past, we adopted Supplementary Estimates (C) for the G7 Summit. A number of expenditures were for orders of special vehicles, vehicles that are not available from dealerships and have to be ordered. We know what delays there can be.
The Supplementary Estimates (C) are approved, but do the goods have to be received for funds committed before the end of the fiscal year?
Ms. Boudreau: Thank you for the question.
The second point in my answer earlier was the following: Departments manage their funds on the basis of their total budget.
At the start of the year, they receive money under the Main Estimates. The Supplementary Estimates (A) and (B) come later.
If they have not yet received the funds to make an expenditure because the funds are part of the Supplementary Estimates (C), they can always use the money they already have in their bank account to make that expenditure as long as they do not exceed the total appropriation allowed. They manage their funds on the basis of their total appropriation, and not for a specific activity.
The Deputy Chair: Even if the merchandise arrives after the end of the fiscal year, that is not a problem on an operational level?
Ms. Boudreau: No. We use accrual accounting.
The Deputy Chair: Yes. And?
Ms. Boudreau: The estimates are cash-based accounting, the federal budget is accrual accounting, and the Public Accounts of Canada are accrual accounting. If the expenditure is committed before the end of the year but the goods are received after that, an accounting transaction is made. The expenditure can be incurred and paid later on.
The Deputy Chair: Thank you. With respect to accountability for the expenditure, the minister is ultimately responsible, but within the department or organization, is the director of finance responsible? Who is responsible for ensuring that the rules are followed?
Ms. Boudreau: Delegations of authority exist in all departments. There are financial delegations and resource delegations. If I am a manager with a financial delegation, then I am responsible. Ultimately, when departments must produce their own financial statements, these are signed by the chief financial officer and the deputy minister of the organization.
The Deputy Chair: Thank you. We will now start the second round of questions. I will be a little more flexible given the number of senators. We can increase the number of minutes allocated to you.
Senator Smith: We had a good discussion yesterday with the Parliamentary Budget Officer.
[English]
One of the major issues or areas of concerns with estimates and the process was a lack of alignment — I think that we have had that discussion before — between the federal budget, the Main Estimates and the lack of alignment means that budget items are not covered in the Main Estimates, which makes attracting different programs incredibly difficult.
The PBO suggested that the process has some problems in terms of coordination — and he is not being critical; he is just outlining, I think, a fact that we can agree on, which is lack of coordination between Finance Canada and the Treasury Board.
How can you handle this alignment issue and what type of plans do you have to try to get it in line? Recognizing Senator Boehm’s question in terms of COVID, with people working out of their homes and now they are back, this is a process that affects you from a human resources perspective. How do you handle that, to get it back into a state that is probably running smoother than it has been in the past?
Ms. Boudreau: Thank you for the question. Misalignment between the federal budget and the estimates has been a subject since I joined Treasury Board.
We have a process that links the two together. I will try to explain it. If you look at the supplementary estimates, every time that there is money coming from the federal budget, you will see a line item in that document, and in brackets it will be included, “Federal Budget 2022.” So you know that the money was approved in the federal budget. That is what we are calling “tagging the items” from the budget to the supplementary estimates.
But you are right. In the Main Estimates that we are tabling March 1, as per the standing order, it is impossible to get any information about the federal budget because usually the federal budget is tabled after that.
In addition to tagging individual items in those documents, we also have at the beginning of the document a reconciliation between the federal budget, the total expenses versus what we have in the estimates.
As I was saying, the federal budget uses accrual accounting. Here we use cash. So there is a reconciliation that we do in order to provide and tell you that, although they do not align, we are able to reconcile both documents. It is not perfect, I agree. But at least it is a way for you to see items from the budget that have been discussed, approved at Treasury Board and now included in the estimates that are for you to approve.
Senator Smith: What steps do you estimate implementing so that this alignment can improve over time? I would assume it is an objective to make sure that, at some point in time — it may be a historical reality that exists — moving forward, the meshing needs to take place so that you will have some consistency, I would assume. Is that not a realistic expectation?
Ms. Boudreau: The dates being here, we have no choice. As per the standing order, Main Estimates have to be tabled by March 1. I think that you referred earlier to the estimates reform that happened in 2018 whereby the standing orders were changed and the estimates were tabled April 16.
During those two years of the estimate reform, we were able to align those two documents — the federal budget and the Main Estimates — at 100%. It was an experiment that was put out there for two years, and at the end of the day, it was decided that it was not what was needed for parliamentarians. The decision was made to stop the reform and to revert back to the current process that we know.
Senator Smith: Within the current process, as we know, if there is an issue of coordination, whatever it is, is there a plan in place to try to over time — we recognize that it could take time, following the COVID experience and all of the issues that you are going through now with three days a week, as Senator Boehm outlined, how do you move forward? What steps need to be taken so that there can at least be a coming together in a more timely fashion?
Ms. Boudreau: It will have to be a change to the standing order to give us more flexibility. Because tabling this March 1 will never include the federal budget unless the federal budget is tabled January 1, as an example.
[Translation]
Senator Bellemare: I have a question about the flow of money in the Insurance Employment fund, because EI funds come from the Consolidated Revenue Fund.
What is the role of the Treasury Board in the distribution of money to EI recipients? I know that Service Canada is responsible for that, but do you have a role to play that could accelerate the payment of these benefits? Why does it take so long for the money to get to the people who are supposed to receive a cheque given that a reform centralized many things?
Ms. Boudreau: Unfortunately, everything to do with Employment Insurance is excluded from the estimates. Employment Insurance is part of a separate account and is not included in the estimates.
If you look at the reconciliation that I referred to a little earlier, it is very clear that the expenditures related to EI are excluded. Unfortunately, I cannot answer your question about how to improve the process to speed up payments. That question should be addressed to the department responsible for EI.
Senator Bellemare: Is that department responsible for managing the money? The contributions are deposited in the Consolidated Revenue Fund. Notional accounting is used, but the contributions are deposited in the Consolidated Revenue Fund and the contributions are remitted subsequently.
Could someone clarify this for me?
[English]
Diane Peressini, Executive Director, Government Accounting Policy and Reporting, Financial Management Sector, Treasury Board of Canada Secretariat: All the accounting of the EI account is disclosed and reported in Volume I of Public Accounts and so it is, I think, in section 6. The EI financial statements are also included in there.
Our focus is on the reporting of the results that went out, not the governance or the control over the process around which the services are provided.
[Translation]
Senator Bellemare: It is Service Canada, but is there another department that looks at all of that and provides oversight to ensure that good results are achieved and that the benefits are paid in a timely manner? Does the department do its own assessment of the process? Service Canada manages itself —
[English]
Ms. Peressini: As far as I’m aware, it’s only ESDC, Employment and Social Development Canada, that oversees the EI account. I’m not aware of any other governance mechanism that has oversight from one of the other central agencies. The financial statements would be subject to audit by the Office of the Auditor General. So you have that level of control. I’m sure that the Auditor General could, if we wished, do a review or a performance review of the EI account. I’m not aware if one has been done recently.
[Translation]
Senator Bellemare: Treasury Board has nothing to do with that. Very good. Thank you.
[English]
Senator Boehm: Given that our Parliament has been here for a long time — and there are other jurisdictions that have similar Parliaments that are in the style or in the tradition of Westminster and they, too, have their budgetary, accounting and measurement processes — whether at any time as you have gone through all of these measures, have you had a chance to look at other jurisdictions? I am thinking in particular of Australia, maybe New Zealand — although New Zealand abolished its upper house, maybe that is not a good example.
And there are also our provinces. Is there is anything that you can draw from them? I am thinking particularly on the indicators, the measurements and the like.
I know that this is probably not what would be your day job, but it is something that you might be interested in or that management in the Treasury Board might have an interest in.
Ms. Boudreau: That is a very timely question. I was in Belgium last week for a conference on performance measurements and results. I met a nice lady from New Zealand. She was quite interested in the GC InfoBase that we have. We are very well advanced in terms of information out there, transparency and sharing information with Canadians. She wants to know a little bit more and how to build the same system that we have, and it is the same thing for other countries.
I was very surprised to see that, in terms of reporting, Canada is quite advanced compared to other countries.
Senator Boehm: Might there be something in other areas of your department’s work, of the board’s work that you can pick up from other countries too? I suppose that is what conferences like that are for.
Ms. Boudreau: Absolutely. There was a lot of discussion about doing reviews on a regular basis to make sure that we have value for money. That is one area that I would love to know more about from other countries, to be able to adapt or implement for us.
Senator Boehm: Thank you.
Senator Galvez: Treasury Board is also responsible for implementing two strategies that I find particularly interesting; one is the Greening Government Initiative and the other one is the National Action Plan on Open Government.
Each one of these strategies or programs have goals. For example, we should be using 100% clean electricity by last year. And we need to provide access to information on climate change to people.
Can you please update me on where we are with these two initiatives?
Ms. Boudreau: Thank you. Unfortunately, we are not the ones responsible for those two initiatives, but we would be more than happy to come back to you with a written answer.
Senator Galvez: Can you do that? I would appreciate that very much.
Ms. Boudreau: For sure, yes.
Senator Bovey: I thank you for what you are giving us.
You mentioned value for money in your response to Senator Boehm. We’re interested in what you were hearing about how other countries use it. Do you have a program of value for money? I know I’ve been part of some of the Auditor General’s audit reviews on value for money. What about Treasury Board? Do you do analysis for value for money for programs?
Ms. Boudreau: That would be maybe for OCG, the internal audit, no?
Ms. Lahaie: To internal audit, there is also the valuation teams in all departments, separate from the internal audit actually, but every department has an evaluation team that applies the results policy and approaches to evaluate their program. We are really on them, and they produce reports on a regular basis shared with their performance evaluation committees in each department. But from an overarching perspective at TBS, we don’t look at that for each department.
Senator Bovey: So they are done internally by departments?
Ms. Lahaie: Yes.
Senator Bovey: I think they are very interesting. I have found it of great value being part of three of the major audits on that. When you mention it, is it something that you are looking at developing within Treasury Board? Was it just something that was of interest that relates peripherally to some of the other things you are doing?
Ms. Boudreau: In a way, we are looking at evaluation as part of our review on the policy on results. Evaluation is a big part of the policy on results.
I should mention as well, as per the Financial Administration Act, all grants and contributions greater than $5 million need to be reviewed every five years. That is something that we are looking at as well as per the review, and it is something that was raised by the departments, the threshold and the timing. When you have to do an evaluation every five years, and sometimes it is a sunsetter that you are only going to have for the next two years, what is the value? Where do we draw the line? That is something that we are looking at.
Senator Bovey: Good luck with it. Thank you.
Senator Pate: Thank you very much. In terms of the Employment Equity Act and the responsibility the Treasury Board has there, I note that one of the areas you are focusing on is to encourage departments to increase executive positions and, in particular, for Indigenous people and other underrepresented groups.
I am curious what the departmental plans to increase the current percentages are. As well, links to the 2022 report of the Auditor General where it was estimated that vulnerable populations continue to be hard to reach for many of the departments where there are programs aimed to ameliorating their conditions, but there seems to be limited evidence that the outreach activities were actually reaching the recipients. I know we have asked questions about that in the past. I’m curious about where that sits today and what the Treasury Board is working on to try to help meet those targeted goals.
Ms. Boudreau: Thank you for the question. Unfortunately, another area within Treasury Board is in charge of the information that you are looking for, but we are committed to come back to you with a written answer for all of your questions.
Senator Pate: Thank you.
Ms. Boudreau: Thank you.
[Translation]
The Deputy Chair: I have a question I would like to ask to clarify the role of Treasury Board. I remember that the Main Estimates had been approved and when the Supplementary Estimates (A) were presented, the Main Estimates had not been approved yet. However, one department very quickly included a $650 million item in the Supplementary Estimates (A). I asked if this was an unforeseen event. It was a significant amount. They said no, that it was for an essential service, and that it had not been included in the Main Estimates.
It is difficult to imagine that such an expenditure was forgotten when our budget exercise was carried out. Does Treasury Board ask questions such as, “How could a $650 million expenditure for an essential service have been forgotten?” Or, is that not your responsibility but that of the managers of the department in question?
Ms. Boudreau: Unfortunately, I cannot speak about that specific case.
The Deputy Chair: I do not want to name the department.
Ms. Boudreau: When departments come before Treasury Board with their submission — because they cannot obtain a spending authority without making a submission — we obviously examine their needs and the timing of the expenditure. Yes, there are some reviews that are absolutely necessary and carried out with the financial officer and the people responsible for the programs to ensure that the funding need is imminent. Furthermore, we want to know what is the best time and the best way to integrate it into their expenditures.
Senator Galvez: My question is along the same lines.
[English]
As mentioned earlier, we know that there is you, the Treasury Board, and there is the Public Accounts, and we know that the Public Accounts are under the Minister of Finance and the Canada Revenue Agency, but there is also the Auditor General and the Receiver General. Can you explain the role of each one? Do you have an organizational diagram? I think that would help us understand.
Ms. Lahaie: Yes, I am just bringing up a table, and we can absolutely share that with you. It explains the role of every participant in the Public Accounts. Would you like me to go through it?
Senator Galvez: Please.
Ms. Lahaie: The Receiver General is responsible for compiling the data received from departments, agencies and Crown corporations, and they publish the Public Accounts of Canada.
The Office of the Comptroller General of Canada develops and interprets the accounting policies, and we determine related disclosure requirements for departments.
The Department of Finance is responsible for drafting the financial statements, discussion and analysis, as well as producing and releasing the annual financial report.
The Office of the Auditor General audits the government’s consolidated financial statements in the Public Accounts of Canada and provides a separate audit opinion on Crown corporations and other agencies, as well as a commentary on financial audits. That’s the role of the four entities.
Senator Galvez: You will provide that table or graphic?
Ms. Lahaie: Yes.
[Translation]
Senator Bellemare: I want to go back to my problem with benefits. I went to the Service Canada website. Service Canada distributes all sorts of benefits worth billions of dollars a year. I looked at the estimates and, obviously, the total amount of benefits is not found there, but I did find approximately $1 billion, probably for management.
I am wondering what department do the other amounts of money come from? I know that the employment department has some benefits for social security, but I am not certain that EI benefits come from that department. I did not check, but I do not believe so. So, all these accounts, where are they?
Ms. Lahaie: We have a separate financial statement for Employment Insurance. We could get back to you with that information.
Senator Bellemare: I will check again because Service Canada is relatively new. This department was created eight or nine years ago to centralize all information in one place for Canadians. However, at some point, that is a lot of things in the same place. Centralization, at some point, can cause bottlenecks, and if someone does not do their part in one area, there is a problem throughout the organization. I wanted to understand the Service Canada site, but I will have to ask the minister responsible to provide more details.
The Deputy Chair: Thank you. We have asked all the questions we wanted to.
[English]
I would like to thank the senior officials from the Treasury Board for appearing today. It is much appreciated.
[Translation]
Thank you, especially for the documents you gave us. I believe they contain a lot of pertinent and factual information. As for Senator Bellemare’s and Senator Galvez’s questions, we look forward to receiving your responses by the end of the day on February 24 if possible. This will give us time to table our report to the Senate for Royal Assent. I would also like to inform my colleagues that our next meeting will be held next Tuesday, February 14, at 9 a.m. We will resume our study of the 2022-23 Main Estimates. I hope you have a good weekend. Thank you for your participation.
(The committee adjourned.)