SIRP Committee Meeting

SUB-COMMITTEE ON IMPROVED FINANCIAL REPORTING TO PARLIAMENT OF THE STANDING COMMITTEE ON PROCEDURE AND HOUSE AFFAIRS

SOUS-COMITÉ SUR L'AMÉLIORATION DES RAPPORTS FINANCIERS AU PARLEMENT DU COMITÉ PERMANENT DE LA PROCÉDURE ET DES AFFAIRES DE LA CHAMBRE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, June 6, 2000

• 1535

[English]

The Chair (Mr. Paul Szabo (Mississauga South, Lib.)): Welcome. We are resuming consideration of the order of reference from the Standing Committee on Procedure and House Affairs to improve financial reporting to Parliament.

Today we have with us again Mr. Richard Neville, of Treasury Board, who has come to respond to some matters that were raised previously. As well, the committee intends to consider the draft report, which has been previously circulated. We'll start with Mr. Neville.

Welcome. Please introduce your colleagues and give us your words of wisdom.

[Translation]

Mr. Richard J. Neville (Deputy Comptroller General, Treasury Board Secretariat): I am always pleased to come here, especially since this is the second time in two weeks that you have invited me. I consider it a privilege. I would like to introduce my two colleagues: Mr. John Morgan and Mr. Martin Ulrich. They are experts in their field. If you have any technical questions, I hope you will not mind my asking them to assist me.

[English]

If you recall, at the last meeting there was a good discussion, a fulsome discussion, on the question of consultation. So in the context of consultation, I thought it would be appropriate to take a few minutes of your time this afternoon and suggest that this would be a methodology that could be used and could probably allow you all the opportunity to consult and to provide us with your views. There's a document that I understand has been circulated.

[Translation]

I will be referring to it during my presentation.

[English]

In terms of the purpose, it's a consultation plan with members of this committee, as well as others, which I'll get into in a few moments, to get a better understanding of accrual accounting and budgeting, and as well, to bring into play the potential impact both on the reporting and on the decision-making by parliamentarians.

If one were to ask what is accrual accounting and what is accrual budgeting, this would be the means by which we'd like to sensitize all those who are part of the discussion in terms of providing them with a better understanding of the documents, the methodologies, the practices, the principles, and the outcomes. So that would be the purpose, a very fulsome consultation plan that would allow everybody to get that kind of basic understanding.

In terms of the proposal itself, we at the Treasury Board Secretariat would take it upon ourselves to inform and try to engage parliamentarians on the issues I've just raised and do that during this fall, fall 2000, through a number of information sessions, which would be basically in terms of orientation and education, and allow everyone to get a good understanding of what these very technical issues are all about, and to then move on to a round-table stage, round table being in the context of now that everyone is informed, one can have a meaningful discussion about proposed changes and how to move these files forward. So that's information sessions first, followed by the round tables.

I think it's fair to say that based on the discussion we had at the last meeting, we would want to work very closely with the Clerk of the House and with a number of individual clerks of committees in order to organize these events.

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Assuming the House resumes in the fall—that is, September 2000—we would send out to all 301 members of Parliament, as well as all senators, additional information that would assist them to get that kind of basic understanding and provide them with an invitation to participate in these discussions. I think it's fair to say we would be putting the emphasis on inviting and even targeting the standing committees and ask that at least one member from each standing committee be designated to participate in the information sessions and then the round tables.

So in October we'd start the series of orientation sessions with the same objective of increasing everyone's understanding and knowledge. If I could try to make it more meaningful for you to understand the basic components, we'd be looking at accrual accounting and budgeting concepts, at the estimates and basically how we could have a better understanding of what the estimates are all about and sharing that, then the same thing with the public accounts and making a linkage between the budget, the estimates, and the public accounts, then looking at the impacts of full accrual accounting on the public accounts—I think a lot of individuals are not fully aware of the implications of that kind of linkage—the impacts of full accrual accounting at the departmental level, and then trying to bring it home in terms of the impacts of accrual budgeting on the estimates and appropriations.

I think it might be of interest to all the members as well that we share with them during this consultation process the experiences of other jurisdictions, both on the international scene and on the provincial scene. As you are aware, a number of other countries have in fact put in play these changes, and from the provincial perspective at least four provinces in Canada have committed themselves to doing that as well.

To summarize, in October there would be a series of orientation sessions with a significant number of members of Parliament and the Senate. In November we'd move to round tables, so we'd have round-table discussions again engaging parliamentarians in a dialogue with the view of the impact of implementation of accrual accounting, the potential impacts of adopting accrual accounting principles for budgeting, both affecting the estimates and the appropriations.

The impacts in that particular instance would be looked at in detail with the parliamentarians and would include all your members of Parliament, the senators who are interested, some TBS officials—we'd have experts in various fields—departmental representatives in order to give you the impact on departments, Library of Parliament staff, and the Office of the Auditor General, which has shown significant interest in this process.

We'd be prepared, then, to submit a report on these sessions and prepare a draft that would be distributed to all those who had participated prior to the Christmas break.

I think that's a fulsome consultation plan that was discussed at the last meeting. We did not have it at that point in time, and I apologize. I think it would have probably helped the discussion if we had this consultation plan at that point in time, but it is here and I'm willing to share it with you and open it up for questions.

The Chair: Okay, thank you very much. I appreciate the quick response to Ms. Catterall's suggestion or query.

Are there any questions to Treasury Board officials with regard to the outline of the consultation process? Okay, that's great.

There was one matter I did want to raise that it seems important we not miss. I have been asked whether there are any changes required to the Standing Orders as a result of the adoption of the proposals. Other than, I think, with regard to reporting, that has already been approved and we're proceeding with that for the next fiscal year, commencing April 1, 2001. I assume that changes to the Standing Orders are in process. To the extent that we would change the basis of reporting for the estimates of the budget, do I assume that there would also be required some changes to the Standing Orders?

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Finally, to the extent that there is the issue of horizontal reporting as conceptual reporting where all of a sudden we were crossing lines between departments, does that affect the mandate or authorization of a standing committee in terms of dealing with other departments, not necessarily in the ministry to which they are established to review?

Mr. Richard Neville: That's a very good question. To the best of our knowledge, we do not believe that there's any need for any changes to the Standing Orders. Having said that, though, I'd like to confirm that, because it's a very important question. Our initial reaction would be there are no changes required, but if you could give us a little bit of time, there is something in the back of my mind I'd like to follow up on with colleagues.

The Chair: Ms. Catterall.

Ms. Marlene Catterall (Ottawa West—Nepean, Lib.): It's an important question, because the Standing Committee on Procedure and House Affairs is right now preparing for a review of the Standing Orders that would start in the fall, and I would think we might need an amendment to the mandate of committees to specifically mandate them to examine programs in other departments that are related to theirs.

Mr. Richard Neville: When there's a horizontal issue.

Ms. Marlene Catterall: Yes.

Mr. Richard Neville: I think the key word there is there would have to be a horizontal issue. Can we take a look at that as well and—

Ms. Marlene Catterall: Yes, I think that's the language, but I don't think you need to worry about the wording of it. That's something the clerk will work on for us.

Mr. Richard Neville: But specifically for accrual accounting, at this point I don't think we need any changes. If it affects the budgets, we'll take a look at that as well.

The only thought I had, again, as I said, is there's something in the back of my mind, with the DPRs. When we broke part III up into two parts, the reports on plans and priorities and the departmental performance reports, there was a change at that point in time. I'm not sure if we've closed that loop, but I'll get back to you with a written response.

The Chair: Are there further questions or comments to Treasury Board? If not, thank you very much for your kind assistance.

Mr. Richard Neville: I hope you'll consider the consultation plan in your deliberations as you finalize your report.

The Chair: Thank you again for responding so promptly.

Mr. Richard Neville: Thank you.

The Chair: Colleagues, the draft report of the committee has been circulated. I apologize, I understand it may not have got to everyone on a very timely basis, but I believe that everybody's had an opportunity to review it at least once to ensure that it reflects the consensus of view of the committee, as well as fairly reflects the testimony of the witnesses and that we've commented where appropriate.

As you know, when we started the process our intent was not to try to comment or take a position on each and every proposal, but rather to deal with the proposals under each of the four themes and make the blanket statement that we endorse or support the proposals and comment only on those in which we had additional input or suggestions on how either they may be improved, or the reason why we felt it may not be practical to adopt a particular proposal. And that's how the drafting has been done.

Having said that, I have received input from Mr. Williams, who is also right now involved with the public accounts committee. He has provided his input, mostly on typographical and grammatical items, in addition to reaffirming his concern about the three-year reporting for small departments, or areas of responsibility, which I believe the committee as a whole probably has suggested would not be appropriate. So I think we concur, and that is in the report, as a matter of fact. So I believe Mr. Williams' input has been there.

Mr. Sauvageau has also given me his input. He's unfortunately not in town today, but he has passed on his comments, which are generally of the nature of grammatical and clarifying.

Ms. Catterall also has passed on some of the housekeeping items.

Maybe I'll just open it up now. Are there are any substantive items in the report that members would like to raise at this time to ensure that we have a clear understanding of what the consensus opinion of the committee is?

Ms. Catterall.

• 1550

Ms. Marlene Catterall: Yes. I was going to suggest that, again, our witnesses raised the whole issue of incentives or disincentives to members of Parliament participating as fully as they might in that whole cycle of the performance reports, the plans and priorities, the estimates, and so on, and integrating that with their other policy work. I'd like to see us include a recommendation, Mr. Chair, that the government and the House leadership of all parties review the recommendations of the committee's earlier report and endeavour to implement some of the recommendations to support the participation of members.

The Chair: On that suggestion, are there any comments? As you know, part of the reason we're doing this work is a result of continuity from the work that was done from the round tables in the Catterall-Williams report. One of the things I thought might be helpful, and it was in the materials that were circulated to us at the beginning of our process, is a summary of all the recommendations from Catterall-Williams as well as the government's response.

Subsequent to that, a chart that shows some of the recommendations from Catterall-Williams, and those that have been implemented since, etc., has been prepared and received by us. It's a bit of a progress chart, which I think was quite well done and useful. Maybe we could also incorporate that as an appendix. So the beginning of our report will refer to these appendices as here is where we have come from: we're not a brand-new committee starting fresh on a subject matter, but in fact this is another phase of an ongoing process that has been going on for some time. And members who read our report will see the linkages to the previous work done by prior committees and the round tables and see how it ties into the proposals that have been presented to us by Mr. Lenihan on behalf of Treasury Board.

That's acceptable? Okay.

Is there further input at this time with regard to the recommendations or the report generally?

[Translation]

Mr. Godin.

Mr. Yvon Godin (Acadie—Bathurst, NDP): Mr. Chair, I went through the document yesterday and I am ready to make recommendations.

The Chair: Thank you.

[English]

Ms. Catterall, other than the matters you raised with me in terms of tidying up the report—

Ms. Marlene Catterall: No, I'd be happy to give you my copy of the report if that would be helpful to you.

The Chair: That would be appreciated.

Now, there are three motions we should consider. I think we're at the point now—subject to confirming with Mr. Williams and Mr. Sauvageau their final input with regard to the report, whether they be amplifying the consensus position or not, which I know they're now supporting—that we'd like to have all possible input from all members into the committee report.

The first thing I would like to do is have a motion that the researchers and the clerk be authorized to make, in consultation with the chairman, such typographical and editorial changes as may be necessary without changing the substance of the report.

It is moved by Mr. Byrne.

[Translation]

Mr. Cardin.

Mr. Serge Cardin (Sherbrooke, BQ): As you know, those who are absent are always wrong.

The Chair: Yes.

Mr. Serge Cardin: Nonetheless, may I ask you exactly where we are?

[English]

The Chair: As you know, the draft report was circulated to the members. Mr. Sauvageau does have a copy. I know you're here on his behalf because he has other work going on at the same time. He has given me his preliminary comments. I understand from his office that he's available to provide any final thoughts to amplify on his input tomorrow. And subject to receiving his final comments to be incorporated in the report, we will proceed with producing the final report. So Mr. Sauvageau's comments will be incorporated.

At this time what we'd like to do with all of the input we've received from the members is to authorize the clerk and the researcher to incorporate those into the draft, to fix the typographical and grammatical errors, etc.

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One additional recommendation has been brought forward by Mrs. Catterall with regard to including a recommendation on reviewing or revisiting the recommendations of a predecessor report, which has been referred to as the Catterall-Williams report. I believe we have consensus that it would be a good thing to do, as well as to include in our report certain appendices with a summary of their recommendations, the response of the government, and a chart that shows the progress that has been made on the various recommendations that were raised in that report.

Ms. Marlene Catterall: Here comes Mr. Williams. There goes the consensus.

The Chair: There we go.

We're now at the point where we'd like to move toward putting together the final draft report for a full update, translation, and circulation to the members. If we move through the other two motions we need to do, we will agree to make those changes, circulate to the committee, and report on time, as requested by the Standing Committee on Procedure and House Affairs.

[Translation]

Mr. Serge Cardin: You alluded earlier to discussions that you will be having with Mr. Sauvageau, but if you have no objections, I could nevertheless raise some other questions with you immediately. It would not take long.

In the documents that I have on phase 2 of the improved reporting to Parliament project...

[English]

The Chair: I suggest that if you have matters of correcting grammar, translation, or spelling, we welcome you to give them to the clerk to incorporate, so we can deal with matters of either recommendations or substance. However you wish to do it, I understand you're in an awkward situation to present this.

We want to incorporate all the small items, to make sure it's a good, readable report. But what we're really interested in at this time are matters of substantative changes to the report that all members should maybe consider.

[Translation]

Mr. Serge Cardin: On this very subject of translation, the word “propositions” is used in this document on phase 2. I imagine that the word “recommandations” should be used instead in French. “Proposition 1.1” should instead read “recommandation 1.1”. That is what should be used.

[English]

The Chair: We will change that, as appropriate. If the correct translation is recommandation.

[Translation]

Mr. Serge Cardin: Yes.

The Chair: I agree.

Mr. Serge Cardin: It is more positive.

You also mentioned funds earlier. Is now the time to bring this up, or will there be other working sessions set aside for this purpose?

The Chair: There will not be a meeting set aside for this purpose.

Mr. Serge Cardin: Therefore, if one has recommendations to make, now is the time to make them.

The Chair: Absolutely.

Mr. Serge Cardin: Are we beginning right away?

The Chair: Yes.

Mr. Serge Cardin: With regard to the way the government's financial reports and statements are actually presented, there are often changes in titles and in programs. Sometimes, new money is involved; sometimes it is money that was already allocated in budgets or was already in the system, and the name has changed. In the case of new programs and new sums of money, could this information be included somewhere in the financial reports?

[English]

The Chair: Absolutely. That is part of clarifying or improving financial reporting. Not only are we reporting numbers, but we're getting right down to things like societal indicators and objectives. The fact that this is either replacing a program or a brand-new program is very important to parliamentarians, as you well know.

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It's certainly part of the proposals under the various themes in fact to incorporate not only the how but also the why, which came from our witnesses, as well as to provide those kinds of commentaries. That's a very good point, and in fact it will be fully reflected in the report.

[Translation]

Mr. Serge Cardin: Okay. So, there will be a recommendation to that effect.

With regard to the missions or mandates of the various departments, would it be possible to consolidate information? For example, take Aboriginal affairs. You are quite aware that, if we want financial information on exactly how much that costs, we have to go through an exercise that is not perilous but involves considerable effort, gathering information from a number of departments. That is what one must do to obtain the actual amounts that are allocated to a mission or a mandate. Therefore, would it be possible to consolidate these amounts by missions or by mandate, somewhere in the government's financial statements or financial information?

[English]

The Chair: One of the principal proposals under the blanket of proposals that have been presented to us by Mr. Lenihan of Treasury Board, and which is basically the reason this subcommittee was established, is that we move toward horizontal reporting, where the activities go beyond one ministry. We have in fact embraced that. There's a consensus that there should be that kind of information.

As a matter of fact, one of the matters we discussed briefly with the officials and asked them to clarify is, to the extent that we adopt such proposals and move to things that would encompass horizontal reporting, whether it would be necessary to change the Standing Orders in order to authorize a standing committee to make inquiries in another ministry. We understand that the preliminary opinion is no, but they're going to confirm that to us.

Again, the point is correct, and the committee is agreed.

I want to finish with Mr. Cardin.

[Translation]

Mr. Serge Cardin: I just have another small point to raise in closing. I have already had the pleasure—even the honour—of sitting on the Public Accounts Committee, where we often talked about accountability. In a situation where the government is also operating with agencies, for which we do not always see all the data, or for which we cannot really get a full analysis and conduct thorough examinations, could this aspect of accountability of information disclosure be made part of government reporting, so that we will know more about the various agencies and organizations?

[English]

The Chair: As you know, all crown corporations are required to report annually to Parliament. In addition, one of our recommendations—and there has been a suggestion, which I believe came from Ms. Catterall, and I think we're agreed—is that we not only suggest that the government consider applying the same reporting standards to itself, but also that we recommend that they apply them to all of those agencies or crown corporations. We want the information on a consistent basis so that it would allow us to better understand exactly the point you're making, that there are direct and indirect activities going on with regard to government programs. Again, I believe we're agreed.

Ms. Catterall.

Ms. Marlene Catterall: The other point I raised in going over the report with you, Mr. Chair, was the three-year time horizon. That is probably adequate for the ongoing operations of government, but it's certainly not adequate for major projects. There are many of them, and they may go on over many years. I think what we had talked about was a recommendation that where... Again, I'll leave our researcher to work out the wording of this.

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Let's take, for example, the purchase of the frigates or the renovation of Parliament Hill. The concept I think we should recommend is that where there is an ongoing project, as opposed to a program, the estimates should include a complete life history of that project from the time it was initiated, how much was projected to be spent, what has been spent and accomplished to date, and what is projected for its completion in the future. In the case of the Parliament Buildings, that would be 20 years. In the case of frigates, it would be perhaps 10 or 12 years. For one thing, Parliament would start looking at how long it takes government to do a simple contract for some boats. But I think that's the context Parliament needs for those kinds of major capital projects.

The Chair: If I can give you a reference, in your report, on page four, there is “developing of government-wide standards for reporting costs”. It talks about the standard, and below that “reporting to cover a three-year planning period”.

In our discussion three years was a medium term. But the point that's raised by Ms. Catterall is that there are circumstances in which it would be more appropriate to report on the project life or the initiative life, and that might be two years or it might be seven years. So when the cycle, the investment, or the program was for a longer period, we'd like to see the reporting over the life and what is the projected impact of certain things. I think this is something we should get consensus on as a committee, that restricting this simply to three years is not magical and that it really should be more appropriate for the nature of the item that happens to be a government initiative or program.

Ms. Marlene Catterall: Can I make one small additional point on that? I have not seen generally this kind of reporting on projects, nor have I seen the ongoing impact on operating costs. I don't know how Treasury Board feels that's being accounted for. I think it's important to know what the project is going to cost you. But if it's also going to cost you an extra $10 million every year to operate that project, I think Parliament needs to know that as well.

The Chair: Mr. Williams.

Mr. John Williams (St. Albert, Canadian Alliance): I have two things. I think what Ms. Catterall is suggesting is excellent, and I commend her for making that recommendation.

Talking about the reporting covering a three-year planning period, remember that the estimates are now split in two: the estimates part and the performance part. I thought we were talking about three years for the estimates and three years of historical information on the performance documents. So in actual fact I envision six years, Mr. Chairman, rather than three years. It's three years for each half. So when we get the estimates presented to Parliament for any particular year, it's within the context of projecting two. When we get the performance documents, again it's in the context of the last three years. So if you combine the two documents, you actually have six years. I don't think that is really too much to ask for.

Dealing with Ms. Catterall's point, first of all, that three years forward and three years back is for ongoing program activity of the government. When it comes to capital acquisitions, that rule does not apply. We're concerned about the capital project and whether it's going to take five years to build, in the case of a large ship, for example... I don't know how long it takes to build a large ship, but let's say it takes five years—

Ms. Marlene Catterall: It takes one year to build and nine years to contract for.

Mr. John Williams: Well, there you go. There's the answer. So it's ten years.

The point is that I would imagine that any prudent manager, and that includes the Treasury Board, would want to project the cashflow expenditures. So they would have to have that information on file anyway—or if they don't, they certainly should have it—as part of their planning as to what cash they are going to require in each particular year so that we know how much tax we're going to pay and how much Parliament is going to vote for that particular project.

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It's not asking very much for them to put in major capital acquisitions. If an individual exceeds $100 million or whatever figure, that won't be reported independently. However, for small capital acquisitions you'd just have the cost of cash—

Ms. Marlene Catterall: Except computers. You have a major project that may go on for years. We've just seen recently what can happen, how the cost of one of those can get totally out of control.

Mr. John Williams: We may want to set a figure. I picked one out of the air of $100 million. That would be reported individually. If it were less than that, they would be reported on a departmental basis as a capital expenditure on a year-by-year basis as projected out so that we as parliamentarians and as the board of directors could ask some intelligent questions.

Ms. Marlene Catterall: I don't know that we need to pick a figure out of the hat right now, John. We'll leave that to Treasury Board.

Mr. John Williams: We'll leave it to the Treasury Board to say there should be some kind of line drawn between ones that have to be reported individually and others that just can get added in the collective capital expenditures. I'm in full agreement with Ms. Catterall on that one, Mr. Chair.

I had indicated that I thought we should perhaps make some recommendations on the voting procedure of the estimates, as was contained in the Catterall-Williams report, and make some changes in that area. I thought it might be prudent if we could reinforce that.

The Chair: We discussed incorporating as an appendix to the report all of the Catterall-Williams recommendations, a copy of the government response, and a chart that's been prepared that shows which of those items have been implemented or addressed and the continuity. This paints a good picture of where we fit in the process. This is where we came from.

Indeed, in the report we are actually specifically commenting on the issue of the creation of a permanent standing committee on estimates, not the powerful committee that Mr. Dobell... We'll have to check the transcripts, but it was referred to by someone as a powerful committee. Rather it would be in the context of being a support committee for the other committees.

Mr. John Williams: Yes, with some technical knowledge and understanding and continuity and these types of things. It was certainly never intended to supplant the standing committees. I could see this estimates committee working on a year-round basis. There are crown corporations and others that need to know that Parliament does take an interest in these things.

Ms. Marlene Catterall: I think Mr. Williams hadn't arrived when we talked about another recommendation. A lot of our witnesses focused again on the impediments to parliamentarians. What I'd ask is that a recommendation be added that the government and the House officers of all parties, i.e. the leaders and the whips, again review the recommendations of our report with respect to incentives, to encourage the participation of members of Parliament in the estimates process.

The Chair: I just wanted to check with the clerk. To the extent that this constitutes basically a new recommendation, should we pose the motion that we recommend this?

The Clerk of the Committee: If we can narrow down the wording and if you can see where it would fit in the report, that would be helpful.

Ms. Marlene Catterall: There are two places where we talk about the participation of members of Parliament, so there are basically two places where I think it could fit. I'm quite happy to leave that to the researcher to refer to the minutes.

The Chair: On page 39, we have recommendations at the end of the 13.

Ms. Marlene Catterall: That would be a very good place for it.

The Chair: So it would be recommendation seven and we would renumber the rest.

Mr. John Williams: What is it that we're proposing again?

• 1615

Ms. Marlene Catterall: That the government and the House officers of all parties review the recommendations of the Catterall-Williams report with respect to encouraging and supporting the participation of members of Parliament in the review of the estimates.

Mr. John Williams: Are we trying to put in there somewhere “and incentives”?

Ms. Marlene Catterall: Yes. Providing incentives and support to whatever. Let's leave it to our researchers.

Mr. John Williams: We're not talking cash incentives here.

Ms. Marlene Catterall: No, no.

The Chair: Motivation.

Mr. John Williams: We're talking about the process that motivates people to participate.

Ms. Marlene Catterall: I think the other one, in terms of the longer-term reporting, probably comes under section 4, “Improving Information to Parliament on the Government's Expenditure Plans”.

The Chair: The item is included on page 4. It's not a recommendation, but it is from the Lenihan report about the three years. We want to comment on the three years. What we've done is to generally say that we embrace these proposals; however, there are certain items we would like to comment on. The three years will be one of them.

Ms. Marlene Catterall: I think it should be a recommendation.

The Chair: A specific recommendation?

Ms. Marlene Catterall: Yes, as well as the long-term big projects.

The Chair: Okay. That should come under... Is that theme one?

Ms. Marlene Catterall: Three years.

The Chair: It's under theme one. It would be after recommendation 3, which is with regard to the comment... Again, I think we've heard the discussion on the language and getting the right words that convey the... It's basically that the information provided should not be... For those ordinary items, we agree it should be on the three years for ongoing, long-term, but to the extent that there is a life cycle or a program period, etc., the information should be presented for the full cycle or the full program, as opposed to restricted simply to three years.

Mr. John Williams: I'm not sure what you mean by program.

The Chair: Project.

Mr. John Williams: Project, that's the word. A good example, as Ms. Catterall pointed out, is the renovation of Parliament Hill, which is a 20-year project. We see how the budget escalates every couple of years when we do the analysis. I think we need to know those things. Again, a prudent manager is doing his cashflow analysis and needs to know what his cash expenditures are going to be, so that information is available.

The Chair: Are we agreed with regard to the proposed new recommendation?

Mr. Cardin.

[Translation]

Mr. Serge Cardin: I hadn't quite finished yet. I thought Ms. Catterall was going to deal with the same subject. I just want to ensure that the points that I raised will be included in the recommendations.

The Chair: I apologize.

[English]

I thought that as well.

[Translation]

Mr. Serge Cardin: That's fine. No problem. I knew that I would have time to come back to it. When I sat on the Public Accounts Committee, we dealt with the government's financial information system. I imagine that things have evolved and that more detailed information can now be included in the reports. Earlier you mentioned the horizontal analysis. Can that be done with the government's system or equipment? Let's take a timely example, the Canada Information Office. Its mandate is information. We see a sum of $20 million, but if you conduct a horizontal analysis, you will perhaps determine that 30 or $40 million has gone to providing information in Canada. Could the system allow us to do that?

• 1620

[English]

Mr. John Williams: Well, we're installing state-of-the-art, Mr. Chair, and I would certainly hope state-of-the-art would allow it. Every other organization can do it, so why can't the Government of Canada do it?

The Chair: If you can conceptualize it, we should be able to do it. And that should be our standard. If the information is more helpful being presented in a certain way, it should be, and even enhanced further by the fact that the recommendations include electronic access to information, so the accessibility is also going to improve.

We shouldn't be afraid of the enormity of the task. We're talking about information processing, and I believe...

[Translation]

Mr. Serge Cardin: We would save a great deal in research costs.

The Chair: You're right.

Ms. Catterall.

[English]

Ms. Marlene Catterall: Another point you and I discussed is societal objectives. I don't know how the committee feels about this, but I thought it was important that we make the point, even though it's not directly based on testimony, but as I read the report.

I don't think any one department can set societal objectives. There's an example I think in Mr. Lenihan's report about how the needle exchange program in Vancouver may contribute to the achievement of a certain objective. It has a purpose. That purpose also contributes to a broader objective.

It seems to me we need to make the point that the same societal objectives need to be established across the government. For instance, if you look at the health of the population as a societal objective, that needs to be established across government. Health contributes to that certainly. So does environment, so do natural resources, so does agriculture, and there are probably two or three more I haven't thought of. That's one societal objective. If reducing economic disparity is a societal objective across government, numerous departments contribute to that.

So if you really want to get this idea of real results for Canadians and horizontal reporting, those have to be established across government, and then departments would be in the reporting, indicating how a specific program or activity contributes to the achievement of one or more societal objectives.

Mr. John Williams: That's good stuff, but let's not get too carried away into the esoteric societal objectives until we develop our expertise. We can go down that road, and given some time we can make real progress going down that way. But the first thing is, again, using Mr. Lenihan's example of the needles in Vancouver, you don't start counting the needles handed out and try to quantify how this is going to improve society's health.

Ms. Marlene Catterall: No, no.

Mr. John Williams: You have to do it from the top down, saying our objective is to improve health, and we have all these programs across all these departments that are all deemed to contribute to the overall objective.

It gets back to what we were talking about in the Catterall-Williams report: what are we trying to do? What is a program designed to do? Why are we doing this for society? Only after you have that articulated can you then ask the question, how well are we achieving what we're setting out to try to do?

Another way of talking about program evaluation that we talked about in the Catterall-Williams report is to first of all say, why are we doing this? Initially, until we develop some expertise in this area, we may not be able to quantify it into numeric numbers and specific goals, but if we start down that road, it may be amazing where we get in ten or fifteen years.

Ms. Marlene Catterall: My point is you start down that road if every department is saying “This is our societal objective”.

Mr. John Williams: I agree with you. I don't think it can be done on an isolated-department, stand-alone basis. Let's start down the road and see where we go, but don't think that next year everything is going to be quantified on a digital basis and numeric. It's not going to work.

• 1625

Ms. Marlene Catterall: Societal objectives can take generations to achieve.

Mr. John Williams: I appreciate that. It could take us a long time to evolve our knowledge of measurement.

Ms. Marlene Catterall: Yes, and our method of measuring.

The Chair: It would be interesting to see what happens if one committee discovered that these societal objectives they had articulated were in conflict with another department's objectives.

Ms. Marlene Catterall: Yes, exactly.

Mr. John Williams: However, I should point out, Mr. Chair, just as a little bit of a side comment, that the estimates in New Zealand—and I know the Treasury Board is listening—have a line for the cost of recapturing prison escapees, because they acknowledge they're going to have a few. It will be quite the day in Canada when we see that line in our estimates.

Ms. Marlene Catterall: Oh, yes. You see what you can do about that, John.

Voices: Oh, oh!

Ms. Marlene Catterall: May I make one final point, Mr. Chair?

The Chair: Go ahead, Ms. Catterall.

Ms. Marlene Catterall: We talked about the vocabulary of the report. It has annoyed me immensely for as long as it's been happening that we talk about business lines. Government is not a business. Government's purpose is not business. Government's purpose is the public good. I am getting fed up with this neo-con vocabulary—and that's nothing to do with any particular political party, John.

Mr. John Williams: Good.

Ms. Marlene Catterall: I complimented the Library of Parliament on their reports this year, because they used the word “function” instead of “business line”. I would like us in our report, no matter what Mr. Lenihan has done, to refer to “functions”, or any other suitable word but “business lines”. It might even make our public servants start believing again that they have a contribution to make to the good of this country.

The Chair: That's a point well taken.

Mr. Yvon Godin: Which party prefers to use “business lines”?

Ms. Marlene Catterall: Guess.

Mr. Yvon Godin: They should run it as a business.

Voices: Oh, oh!

The Chair: We should receive some input from Mr. Cardin.

I feel badly, because we've chopped up and interrupted your input, and I don't want to miss the opportunity to have the full explanation of any matters you came to raise with the committee. Is there anything else, Mr. Cardin, at this time?

[Translation]

Mr. Serge Cardin: That's fine.

[English]

The Chair: It's also important that while we have those thoughts and will ensure they are incorporated in the report, I don't believe... I checked with the researcher and with the clerk, and it appears the points you have made have been or are reflected currently in the report. At this time, unless there's a specific new recommendation or you think there should be a supplementary recommendation, there won't be one, but the thoughts will be incorporated in the narrative of the report so that those who read this report will understand our thinking.

So the points you have made in fact will be reflected in the report. There may not be a specific recommendation, whether it be on new money or whatever. I don't think right now we have a recommendation that says “If there's new money...”, but there is a recommendation that says for all of these items, regardless of whether they're new money or not, that kind of disclosure, of which new money would be one aspect, is the kind of disclosure that is being asked for on a blanket basis.

If you feel strongly enough that there should be a specific recommendation with regard to new money—if this is an issue Mr. Sauvageau or the Bloc feels it's especially important to have a stand-alone recommendation on—we can do that, if you think it's important.

[Translation]

Mr. Serge Cardin: Yes, I thought it was important. You seemed to indicate that the questions that I raised earlier were relatively important. Therefore, if the committee agrees, this could be expressed in a properly worded recommendation.

• 1630

[English]

The Chair: I'm in the committee's hands here. In the work that has been done previously, has this been an issue, about disclosure with regard to whether it's replacing existing money or whether it's new money? Is this the kind of disclosure that has been a problem, or should we specifically recommend that in the event it is new money, we want to know that fact specifically?

Mr. John Williams: Could I ask Mr. Cardin to reiterate his concept for me, please?

[Translation]

Mr. Serge Cardin: I would like the government's financial results to indicate clearly any new programs, therefore any new money. Money is sometimes transferred from one program to another. This would have to be clearly indicated. Of course, as to how this would be done, it's up to the government or to the various departments responsible for presenting financial results to determine that. But it seems to me that we should examine it. Otherwise, we will lose track of the government mandates or functions that are transferred from one program to another.

We might think, at some point, that these are amounts that have been allocated for a new program, but the name of the program might have changed and the money might be coming from another program. Transfers take place. It doesn't necessarily involve new money. Transfers take place constantly and we can't always know exactly what is happening. There are various methods for supplying information, but the information will have to be provided somewhere.

[English]

The Chair: Under theme one, we have a description of how we improve the context for information, for instance, using societal indicators, but that's certainly one element. The second element might also be to describe it in the context that this is a replacement program or this is new money, and the rationale.

I guess it would come under theme three. We could incorporate or expand our commentary with regard to the recommendation for theme one.

Mr. Williams.

Mr. John Williams: There are two things. There is a limit to how far we can micromanage this issue, but at the same time, the one that comes to mind is the Transitional Jobs Fund, which became the Canada Jobs Fund. I don't know how that was reported in the past, but the key was that one was strictly a continuation of the other. One was temporary, and then it became permanent.

The point is, how was that reported? Was it reported here as a temporary jobs fund with expenditures, and so on? In the year of the transition, did it also show the new program of the Canada Jobs Fund, or did it just show them both together with no explanation that a temporary one had become a permanent one?

I would hope that in the light of and the spirit of the government trying to be open and transparent about their reporting to Parliament, using that as an example, they would either have a notation to say it had gone from temporary to permanent, hence a name change, or show the termination of one and the commencement of the other.

I think that's what Monsieur Cardin is speaking about, that the government recognize their job is to illuminate, rather than obfuscate, parliamentarians. If they approach it in that spirit, I think that would address Monsieur Cardin's concern, because I don't want to get into micromanagement.

The Chair: Sure. I believe this comes under theme one subjects, where there are two recommendations. One is extending or coming under a single heading of consolidating reporting. This is the horizontal aspect. The second is extending the direct and indirect that Mr. Cardin referred to earlier to other types of federal entities to have these reporting standards be applied to those. And we could insert after recommendation 3 another one, which embraces the recommendation of having additional information regarding whether it be activities, programs, or services that are either new or replacement, or new money or new initiatives, so that this information is put into context as to its sourcing of funding.

• 1635

Mr. John Williams: Or you could use wording along the lines that Treasury Board bear in mind that their job is to inform Parliament—that when there are new programs or changes in programs, they adequately report the same for our understanding. It has to be—

The Chair: Full disclosure.

Mr. John Williams: Yes, full disclosure.

We don't want to micromanage, but we want to get the point across that the job is to inform. I don't want it to get into process orientation so that if we did it last year, we do it the same way this year and the same way next year, and they forget that what they're providing is not information but just going through a process of producing something.

The Chair: So were we suggesting to parallel basically what recommendation 2 refers to, that the reporting of activities, programs, or services should include an explanation of the reasons for the program, whether it is new programs, new funding, or replacement programs, so that there is full disclosure as to the nature of that activity, program, or service, where actually this is a disclosure issue in terms of telling us what we need to know, whether it be things like whether it's new money or replacement money or if this is a new program or is replacing an old program, so that we know what dropped off the table and what came on the table?

I think that's sort of the point you're getting to, so that we understand whether this is a change of policy or an amplification of a current policy, or it could be expansion of an existing program, or it could be brand new and new funding, and so on. So I guess it's just information for parliamentarians.

Ms. Marlene Catterall: I think, by and large, that's already done. I usually see in the estimates of reconciliation with last year's expenditures that this program got cancelled, this new program got created, or this program got transferred to another department, that kind of thing—just as, as you know, regarding vehicle emissions, and so on, that is now in Environment. That will be reconciled.

If we feel we need to make the point that it's a good thing to do, perhaps we can do it quite simply by saying that the estimates should highlight for members of Parliament significantly new or enlarged programs, or programs that have been significantly decreased or eliminated.

Where you get a lot of that information about transfers of funds is in the supplementary estimates. I don't know any committee that pays a lot of attention to the supplementary estimates, but that's where you'll see “We planned to spend this much on this program, and in fact here's what has happened, so we've transferred the money somewhere else”, and so on.

Mr. John Williams: The estimates are really not user-friendly in their presentation. They're not there for the layperson, for the parliamentarian. They're designed for somebody who uses them all day, every day. I would hope that the Treasury Board would think about that when they're revamping the estimates and the performance documents.

Ms. Marlene Catterall: They've been thinking about it for a decade, John.

Mr. John Williams: I know. Maybe they have to think a little harder.

Ms. Marlene Catterall: We have to tell them what we want in it.

Mr. John Williams: They have to focus a bit more.

I've already had on the record the self-serving aspect of the performance documents. In fact I was talking to the President of the Treasury Board earlier this afternoon about progress that she is making in having the Treasury Board act as a policeman to ensure that Treasury Board rules are implemented and applied, and so on. I think it's great that the Treasury Board, under the president, is ensuring as a central manager that the job by departments is being done well. So I'd keep edging her along in that direction.

• 1640

The Chair: If I read the committee, we have a pretty good consensus that we would like to see a recommendation here that where we have significant changes, whether they be new and enlarged, reduced, or eliminated, we want the relevant information highlighted for the assistance of parliamentarians, to understand the nature of the changes being proposed.

Ms. Marlene Catterall: I think that's already done.

The Chair: It's probably done, but this is for further emphasis.

Ms. Marlene Catterall: Of course, if we'd ever give departments a chance to present their estimates to committee, we'd know all this stuff. We never do, ever.

The Chair: Okay.

Monsieur Cardin, the other item you raised with us was the groupings, the horizontal, and I believe we've embraced that there should be this across departments. That is part of the proposal we have embraced. I think we're comfortable that we don't need a specific recommendation on each and every one of the proposals, but we are embracing what has been recommended by in fact Treasury Board through Mr. Lenihan's report.

[Translation]

Mr. Serge Cardin: I assume that means that it was in the recommendations.

[English]

The Chair: Yes, it is in the recommendations.

Are there other key substantive items for our consideration with regard to moving forward to a final report?

Mr. Williams.

Mr. John Williams: I'm not sure if you want to put this in the report, Mr. Chair, but the government is on the threshold of finally being able to implement a major revamp of their financial management system. After 130 years, I guess this would be the most major one they've ever undertaken. It's going to take them quite some number of years to move to full proficiency of being able to understand and use the financial information they will now have at their fingertips.

I would hope the government, the Treasury Board as a central manager, and departments as service deliverers are oriented towards functions rather than business lines. I have no problem with Ms. Catterall's recommendation. But the key is they're now going to have at their fingertips the possibility of a vast amount of managerial information, from lease commitments, which every other organization has to put in its financial statements, to capital acquisitions over a number of years.

We've talked about changes in dropping new business or function lines and creating new function lines, or whatever the term may be, and we're talking about societal indicators as the government tries to accomplish its objectives in society. I would hope the Treasury Board and government departments recognize they now have a tool, and it will take them quite a number of years to catch up to what business has been doing already for a number of years.

Business has been able to improve its productivity and efficiency in the last ten or fifteen years by re-engineering work. The Treasury Board and government departments have to start thinking about how they can re-engineer work with the information they're going to have available to them, so that they can improve their productivity and efficiency, because I am quite sure it can be done.

We had program review in the early 1990s, which is basically doing the same amount of work and the same work with fewer people. There was no real re-engineering. I would hope this would be a catalyst for them to start recognizing there's a wealth of knowledge out there in the private sector they may wish to avail themselves of to start recognizing they have to go down this route.

Ms. Marlene Catterall: That's something an estimates committee could take on, or the government operations committee.

Mr. John Williams: That's right.

Ms. Marlene Catterall: It has not, as far as I know, John. Even the public accounts committee maybe could.

• 1645

The Chair: Hopefully, many opportunities for improved productivity will result from adopting and moving forward.

Colleagues, I'll ask one final time if there are any other substantive matters that would affect changes to recommendations in the report that we would like to discuss.

Mr. John Williams: I have one point, Mr. Chair. since I really haven't had, unfortunately, the time to analyse what we have so far in detail, I would hope that I have nothing else to bring forward. But if I did, it would only be with a great deal of consideration, and consultation with you, that it was vital to be included. So with that one caveat, I'm happy.

The Chair: There is a room booked for Thursday that's being reserved if, as, and when it is needed. I expect to also talk to Mr. Sauvageau to be absolutely sure that he's comfortable. We will not push the button to produce the final report for delivery until we have your final okay, knowing that your other commitments have meant that you haven't given it all the attention you still want to give it. So it's certainly open, subject to getting that.

For all members, I'd note that Thursday we'd like to be complete. I know that the clerk and the researcher have been in touch with the procedure and House affairs committee to ensure that they know exactly when our report must be delivered to their clerk so that they will have it in time to be tabled at their meeting to be addressed.

I think it would be appropriate for us to go back—

Mr. John Williams: One point, Mr. Chair.

The Chair: Mr. Williams.

Mr. John Williams: And the Catterall-Williams report recommendations are going to be appended to this report, including those that have been implemented, those that... What's happening to the rest of them?

The Chair: The full list of recommendations, the government response, and the chart that was prepared showing which ones have been implemented... I guess by default, the rest are open or have been rejected by the government through its response.

Ms. Marlene Catterall: We can quibble about how far “somewhat implemented” goes.

The Chair: But that gives us a chance to provide some continuity or some continued momentum of that work, because we haven't dealt with all of the Catterall-Williams report, but I think it's all relevant. All that work that's been done through the round tables, etc., has been reflected in the Lenihan report to us, but I think the roots of what we're dealing with right now are back in the Catterall-Williams report. We'll keep that.

Mr. John Williams: That was a good report.

The Chair: What is this, a mutual admiration society going on here?

Ms. Marlene Catterall: Yes, as a matter of fact it is.

The Chair: Okay.

Ms. Marlene Catterall: We have the same quirky mind.

What time have you got booked on Thursday, Mr. Chair?

The Chair: It's 3:30 again. That's if it turns out that the consensus of the members is that we would have to have a meeting to consider new recommendations.

Mr. John Williams: I'm on the public accounts committee on Thursday, as usual, Mr. Chair.

The Chair: Let's deal with it if, as, and when.

Mr. John Williams: Okay.

Ms. Marlene Catterall: He's hoping we don't have to have a meeting.

Mr. John Williams: Yes.

Ms. Marlene Catterall: Do you know when we'll receive the report? When will we receive another draft?

The Chair: Before the end of the week. Before the end of the week, we'll be incorporating all of the input we have had to this point, plus what we would get tomorrow from Mr. Sauvageau or other members who... I'm going to go on the assumption that at this point we have all of the substantive input. I think it would be just to make sure that in the event that there is no new information to make us come back, we assume we have the substance for the final report. So I would entertain the motion that the researchers and the clerk be authorized to make, in consultation with the chairman, such typographical and editorial changes and the changes that have been proposed at this meeting, without changing the substance of the report.

Ms. Marlene Catterall: So moved.

(Motion agreed to)

The Chair: Thank you.

Ms. Marlene Catterall: This is great trust we're placing in you. You'd better not abuse it.

The Chair: There you go.

And I am undertaking that you will have the report with these changes incorporated and translated so that we can be sure the translation is right.

Will the changes be marked?

The Clerk: Yes.

• 1650

The Chair: So you will see where the changes have been made to the report that you currently have.

[Translation]

Mr. Yvon Godin: Will we have it before Thursday?

[English]

The Chair: Thursday afternoon?

[Translation]

Mr. Yvon Godin: Agreed.

[English]

The Chair: I'm going to meet with the researcher tomorrow to make sure we have the changes Ms. Catterall was going to give me—her report.

Ms. Marlene Catterall: Yes. I'm sorry I didn't bring it with me, but I'll make sure you get it at the vote tonight.

The Chair: Thank you.

We also need a motion, pursuant to Standing Order 109, that the subcommittee requests the government to table a comprehensive response to the report. It is my understanding that as this is a subcommittee of the procedure and House affairs committee, the procedure and House affairs committee will receive it.

Ms. Marlene Catterall: Yes, and they'll make it that the committee requests it.

Mr. John Williams: So moved.

(Motion agreed to)

The Chair: Finally, there is the motion that the subcommittee's report on improved financial reporting to Parliament be adopted and that the chairman present it to the Standing Committee on Procedure and House Affairs, which is the order of reference.

Mr. John Williams: So moved.

(Motion agreed to)

Ms. Marlene Catterall: And in case we don't have a meeting on Thursday, my compliments to the chair on a job well done. He's a slave driver, but...

The Chair: I'm not sure if there's any sensitivity to such things, but it seems I've heard “Catterall-Williams report” so often, and that's not the formal name of the report.

Ms. Marlene Catterall: No.

The Chair: But every report does have a title, doesn't it? We haven't got a title to this.

Mr. John Williams: Yes, there is a title; it's called “Subcommittee of the Procedure and House Affairs Committee on the Business of Supply”. It's fairly close.

The Chair: The researcher thought that since there are a lot of words in that, and since we're not going to call this the Szabo report, because I don't want to, he would like to add simply the words “Moving Forward” as a—

Mr. John Williams: On this report?

Ms. Marlene Catterall: What did we call our report?

Mr. John Williams: It was the business of supply report.

Ms. Marlene Catterall: No, no, it had a title: “Completing the Circle”.

Mr. John Williams: That's right, “Completing the Circle”; that was the one, yes. I had forgotten about that.

Ms. Marlene Catterall: “Moving Forward” sounds good to me.

Mr. John Williams: I always called it “Business of Supply”.

The Chair: It's been recommended.

Mr. Yvon Godin: The other report was stalled, and now it's moving forward.

The Chair: There you go. I knew the researcher had some raison d'être. So if that's agreed, we'll call our report “Moving Forward”.

Mr. John Williams: That's quite good, Mr. Chairman. I think in about three to five years from now we should be back revisiting the issue again.

Ms. Marlene Catterall: I would suspect that within a year there'll be another subcommittee. It's all the more reason why we need a permanent estimates committee to be on top of these things.

Mr. John Williams: That's right.

The Chair: Colleagues, thank you very much for all your hard work. I look forward to receiving any final minor items you'd like to include, and your final clearance, as we discussed. Thank you again.

We're adjourned.