Journaux du Sénat
52 Elizabeth II, A.D. 2003, Canada
Journals of the Senate
2nd Session, 37th Parliament
Issue 43 - Appendix "C"
Tuesday, March 25, 2003
2:00 p.m.
The Honourable Daniel Hays, Speaker
Tuesday, March 25, 2003
The Standing Senate Committee on National Finance has the honour to present its
FOURTH REPORT
Your Committee, to which were referred the 2002-2003 Estimates, has, in obedience to the Order of Reference of November 5, 2002, examined the said estimates and herewith presents its final report.
Respectfully submitted,
LOWELL MURRAY
Chairman
FINAL REPORT ON THE
2002-2003 ESTIMATES
INTRODUCTION
As is customary, the Committee held several meetings to examine various aspects of the Government's planned expenditures. In all, 13 hearings were held, including one each for the 2002-2003 Supplementary Estimates ``A'' and the 2002-2003 Supplementary Estimates ``B.'' Officials from the Treasury Board Secretariat appeared on five occasions and the Auditor General made three appearances. Appearing once were the Honourable Lucienne Robillard, President of the Treasury Board, the Honourable Maurizio Bevilacqua, Secretary of State (International Financial Institutions) and the Honourable Sheila Copps, Minister of Canadian Heritage. Also appearing on one occasion was Marcel Beaudry, Chairman of the National Capital Commission and Dr. Marshall Moffat, Director, Knowledge Infrastructure, Innovation Policy Branch of Industry Canada.
PREVIOUS REPORTS
As a result of these meetings, the Committee submitted six reports to the Senate:
1. A First Interim Report on the 2002-2003 Main Estimates dated 19 March 2002.
2. A Report on the Use of the Government Contingency Funds — Treasury Board Vote 5 to fund government initiatives dated 6 June 2002. This report contains nine recommendations regarding the wording of the Vote, the policies of the Treasury Board Secretariat and the guidelines used by Treasury Board officials.
3. A Second Interim Report on the 2002-2003 Main Estimates dated 6 June 2002.
4. A Report on the National Capital Commission's land management practices dated 13 June 2002. The Report contains four recommendations aimed at changing the procedure used by the National Capital Commission in its acquisition and disposal of land.
5. A Report on the 2002-2003 Supplementary Estimates ``A'' dated 2 December 2002.
6. A Report on the 2002-2003 Supplementary Estimates ``B,'' which the Committee will submit concurrently with the final report.
With respect to the Treasury Board Vote 5, the Treasury Board Secretariat indicated that it is aware of the Committee's concerns and is undertaking a major study aimed at clarifying and improving the policy and guidelines governing the use of Vote 5 as well as the associated vote wording. The Committee has been assured that its guidance in reviewing the criteria has been used in refining the work of the Treasury Board Secretariat.
With respect to the Committee's Report on the National Capital Commission, the Honourable Sheila Copps, Minister of Canadian Heritage, was asked to comment on three of the Committee's recommendations:
Recommendation 1
We recommend that the National Capital Commission develop a meaningful public consultation process, which would apply to either the disposal or change of use of property held by the Commission.
Recommendation 2
We recommend that the Treasury Board rescind its 1991 Real Asset Management Funding Strategy as it relates to the National Capital Commission and that monies received by the Commission for the sale of surplus assets be directed to the Consolidated Revenue Fund as these were assets held for all Canadians.
Recommendation 4
The appeal of the National Capital Commission before the Ontario Municipal Board regarding the rezoning of the Moffatt Farm be withdrawn.
The Minister reminded the Committee that there is a strict arm's length relationship between herself and the Crown corporations that report to Parliament through her. She acknowledged that she has been asked to intervene a number of times with regard to various Crown corporations, and that she has not intervened on the substance of their day-to- day operations. Furthermore, she stated that in Crown asset disposal she does not get involved. In her view, as the Minister of Canadian Heritage, it would be inappropriate for her to become involved in the day-to-day operations of any Crown corporation.
With respect to the National Capital Commission, the Minister has had discussions with the Commission and wrote to the chairman some years ago because of her concern about the impact of the Treasury Board's Crown asset disposal policy on its land management practices. The 1991 Real Asset Management Funding Strategy, as it relates to the National Capital Commission, allows the Commission to use the proceeds from the sale of its properties to purchase other holdings. The concern is that, as a result of reduced funding, the Commission might be tempted to acquire properties on the basis of potential future gains that would allow it to fund its land holding activities independently of Parliamentary appropriations.
At the same time, the Minister was concerned about the requirement of the National Capital Commission to be cognizant of local input on issues. She stated that it was her understanding that the Commission did undertake a series of changes to their structure to ensure broader consultation on any decisions under its mandate.
CONTINUING INTERESTS
The Committee also examined a number of other issues on which it has not yet reported.
A. The Canadian Hosting Policy on Major International Events
Canada has hosted a number of major international events, including international sporting events such as the Commonwealth Games, the Games of the Francophonie and the Olympic games. The country has also hosted international Expositions, in Montreal in 1967 and in Vancouver in 1986. There have also been international religious and social events in Canada, such as the recent Catholic World Youth Day 2002 gathering in Toronto. In many cases the federal government has provided some financial support to the organizers of these events.
The federal government may have many reasons to support such activities but foremost among them is that international events offer Canada the potential to bring direct and significant benefits across a broad range of government priorities and can act as a catalyst for the achievement of other federal objectives. In general, there are benefits to hosting international events for the participants, the organizers and the community at large. There are also costs involved, and the possibility of cost overrun on any international event has become a genuine concern of governments, since on several occasions, taxpayers have had to cover any financial shortfall.
Given the federal government's experience with the funding of international events, a policy is needed to guide public servants and the organizers in determining the extent of federal support that is available for such activities. In fact, such a policy exists to guide applications for federal financial support for organizers of international sporting events. The Committee is interested in the overall process, particularly in the decision-making process of departments, the guidelines that ensure accountability on the part of organizers and the mechanisms set up to monitor the overall federal funding commitment. Consequently the Committee discussed the matter with the Honourable Sheila Copps, who is responsible for federal sport policies. The Minister explained the manner in which the federal government determines its financial involvement in the hosting of international and national sporting events. She also discussed some of the difficulties involved in estimating the cost of such events.
B. Alternative Delivery Mechanisms
During the year, the Committee also examined the federal government's practice of creating arms length foundations to carry out programs and policies that in the past were implemented by departments. Providing information on this issue were the Honourable Maurizio Bevilacqua, Secretary of State (International Financial Institutions), Mr. Kevin Lynch, Deputy Minister of the Department of Finance, Dr. Marshall Moffat, Director, Knowledge Infrastructure, Innovation Policy Branch of Industry Canada, Ms. Sheila Fraser, Auditor General of Canada, and Mr. Richard Neville of the Treasury Board Secretariat.
The Committee's interest in this topic was first aroused by the comments of the then outgoing Auditor General, Mr. Denis Desautels, when he appeared before the Committee on 28 March 2001. At the time, he expressed his concern that government transactions were becoming less transparent. He was especially concerned that federal spending on programs lacked accountability because a number of the newer agencies and foundations operated at arms length from government and were not subject to the usual financial supervision. This includes both large agencies, such as the Canada Customs and Revenue Agency, and numerous foundations that oversee relatively large budgets, such as the Foundation for Sustainable Development Technology in Canada and the Canada Foundation for Innovation.
During the Committee's examination of the 2002-2003 Estimates the current Auditor General, Sheila Fraser, released her April 2002 Report which contained further indications that there may be accountability issues surrounding the creation of alternative delivery mechanisms. Subsequently, the Committee began to focus its attention on the nature of these institutions, with particular interest in their accountability to Parliament through federal ministers.
At this time, the Committee has not completed its work on this issue and intends during the coming fiscal year to continue its examination of these foundations and to submit a report at a later date.