Statement made on 09 June 2010 by Senator Joseph Day
Hon. Joseph A. Day:
Honourable senators, we are now beginning debate on the second interim report on the Main Estimates for this fiscal year. I will begin by thanking all the honourable senators who serve and have served on the National Finance Committee. We have had extensive meetings in relation to the Main Estimates, as will be apparent from this report filed yesterday.
We started with the President of the Treasury Board, the Honourable Stockwell Day, who provided us with his views on the Main Estimates. The Main Estimates are part of the fiscal cycle and honourable senators will all have them in their desks for quick reference. The Mail Estimates deal with all the departments and agencies, and the requests that the departments and agencies of the government have in relation to expenditures for the coming year.
It is important for honourable senators to be aware that not all of the budget initiatives for this particular fiscal year, 2010-11, are reflected in these Main Estimates because the annual cycle requires that the Main Estimates be prepared before the budget is fully developed. As a result, honourable senators will be looking in the Main Estimates for some initiatives of the budget that are not there.
They come in supplementary estimates, and there are usually three of them. Supplementary Estimates (A) are before our committee at the present time. Both Supplementary Estimates (A) and the main supply from these Main Estimates must be passed by the end of this fiscal period, which is the end of this month. Therefore, these measures would have priority from a government point of view. We in the Standing Senate Committee on National Finance are working diligently in cooperation with our colleagues on the government side to deal with these particular matters.
Honourable senators, Main Estimates were made available to us in early March. We have to provide the government with some funding at the beginning of the new fiscal year, which starts April 1. We do not have time, therefore, to fully study these particular estimates, which are quite extensive, as you will see. They are almost as large as Bill C-9.
Therefore, we begin with an interim supply and an interim order. Earlier, honourable senators received the first interim order of our committee, which outlines the cycle and the process, and indicates that in these Main Estimates for this fiscal year, $96.3 billion are to be voted. You are being asked to vote and approve government expenditures of $96.3 billion. That is up from $85.7 billion last year.
In addition to the voted expenditures, there are statutory expenditures that we have approved in other pieces of legislation, making the total expenditures for this fiscal year — just so honourable senators have it in their minds — in the Main Estimates, which come before the supplementary estimates, $278 billion, as compared to $248 billion from the year previous.
Honourable senators, that was in your first interim report. I expect that we will be receiving, somewhere around June 23, the supply bill that goes with this report.
Our process and procedure here is that we study the estimates and generate a report based on our study, which forms the basis for the supply bill when it is received. When the supply bill comes to us on June 23, to be passed before June 30, we have already studied the subject matter of that particular bill. If honourable senators see fit to adopt this report, then the subject matter of the supply bill will already have been adopted by this chamber.
As you might guess, as a result of all the meetings with representatives of the Treasury Board Secretariat, we have developed a very good rapport. I want to put on the record that Mr. Alister Smith and Mr. Brian Pagan, two members of Treasury Board Secretariat who have been before our committee on many occasions, have done a very good job in not only answering the questions but in researching and providing us with answers when they did not have the information before them. Each of those individuals is moving on to other positions. Mr. Alister Smith is staying within Treasury Board in another position and Mr. Brian Pagan is moving over to the Department of Fisheries and Oceans. On honourable senators' behalf, I would like to thank the two of them for the job they have done in helping our Standing Senate Committee on National Finance do the job that we believe must be done in order to hold the government to account.
Honourable senators, the approach that we normally take with respect to this extensive estimate document is to study a number of departments or agencies, typically departments or agencies that are asking for a fairly large amount of money. If we had studied one of those departments — such as National Defence — just recently, we might not choose to study that department again.
I will say a bit about the particular areas that we decided to concentrate on in the 12 meetings that have taken place in our committee thus far this year. I say "thus far" because we are charged with studying these Main Estimates throughout the year, and we will file a final report in March 2011. To give you a bit of flavour for what we discuss, I will talk briefly about several of those areas, including transfers to the provinces, the Public Service Commission, the Community Futures program, the Auditor General, Canada Post, AECL and the CBC.
The transfer to the provinces is the first area I would like to talk to honourable senators about. Our initial information was that the transfer to the provinces — such as health transfers, social transfers and equalization — was $1.7 billion less than last year. We had that clarified for us when Treasury Board and Department of Finance personnel were before us. They indicated that the $1.7 billion difference was as a result of last year's Main Estimates being $1.7 billion more than, in fact, was transferred last year. The budget had one figure and the Main Estimates had another last year, and we were comparing Main Estimates over Main Estimates.
In fact, there was not a reduction over what will be dispersed to the provinces this year, but there was a reduction last year over what was promised and what was disbursed. That is where the $1.7 billion discrepancy arose.
It is interesting to look at the figures over a number of years. In 2006-07, total transfers to the provinces were $11.5 billion and are up to $14.3 billion in this fiscal year. Saskatchewan, in 2006-07, was a significant recipient but is no longer. British Columbia was a significant recipient in 2006 but is no longer.
In 2006, 2007 and 2008, Ontario was not a significant recipient but is now. In fact, in 2010-11, $972 million will be transferred to the Province of Ontario.
Newfoundland and Labrador, in the first two years of this analysis of five years, was a significant recipient of transfer funds. In the last three years, it is no longer a recipient of transfer funds.
The only other point I wanted to make is that some honourable senators believe that it is the non-receiving provinces that transfer funds to the receiving provinces. That is not the case, and that was made clear by officials from the Department of Finance who were before us. This is entirely a federal government program. According to the formula, whatever funds are transferred to the various provinces are transferred from the federal government funds and not from the non-receiving provinces.
Honourable senators, a second item is the Public Service Commission. The Public Service Commission is chaired by Maria Barrados, who has been in this position for a good number of years. Her mandate is about to expire. She has approximately a year to go. She has done a wonderful job in keeping us informed about the civil service, the public service and the various programs in place.
A number of years ago, we passed a piece of legislation that was called Public Service Modernization that provided for the Public Service Commission, which is the normal hiring body of all new entrants into the public service, to delegate that power to the various managers and the various deputy ministers and require them to be accounting officers. I know His Honour is familiar with that term. When he was Chair of the Standing Senate Committee on National Finance, the committee looked into that term extensively.
The role now of the Public Service Commission is to monitor and audit what takes place in terms of hiring to ensure the rules are followed. Maria Barrados explains to us in her report that role is her primary mandate. She can withdraw the delegated power if it is abused or not properly handled by smaller agencies. She can also provide services to some of those smaller agencies that do not want to hire support services that are necessary to meet all the rules. She can provide that service for a fee. She generates funds for her department that way.
The total budget for the Public Service Commission is $99 million. That budget is up from $91 million last year but, as Ms. Barrados explained, that increase is primarily a result of the public service resourcing system. The computer-generated system is used to help in hiring and will allow for Canada-wide hiring, which is something that Senator Ringuette has been pursuing doggedly for a good number of years. Canada-wide hiring appears to be coming into place.
However, we learned that there are always glitches, and if someone wants to go around the rules, there are ways to do so. It is the job of the overseer, the Public Service Commission and Maria Barrados, to find out what is being done that will result in a less-than-ideal public service.
She indicated two things to us. One is the use of contractors and the other is the use of casual employees. She was concerned about those two situations. She said there is a time when contractors are appropriate, such as a one-off specialized activity that does not take place a lot. If there is a repetitive type of activity, then the contractor option should not be used. We should go for merit and follow all the rules set up to make our public service reflective of Canadian society in all its senses. Ms. Barrados follows that principle closely.
She says there is too much tendency to come into the public service on a casual contract, which is for 90 days, and for which there is no merit criteria. One of the primary rules with respect to hiring is that merit must be met, but they use the casual classification to get around that. Then they hire on the basis of term employment, and still there is no merit. Then when they go for the final test to see if the person will be hired, what happens is that person who has had all those breaks is hired.
Maria Barrados points out that activity is totally unacceptable, and she is watching to ensure that it does not take place.
Honourable senators, with respect to the comment, "You never did that," I take that to mean that the political party with which I am affiliated never did that. As the Chair of the Standing Senate Committee on National Finance, I take seriously my role of trying to be balanced and trying to have a committee that functions in a reasonable manner in the best interests of Parliament and all Canadians. Honourable senators, I will not stand up here and make a political speech on items that I believe are critically important for all of us to understand.
The Community Futures Program, honourable senators, is a worthwhile program. I invite honourable senators to look at this program. It is run by the development agencies across the country. This program is a bit arm's length from the government which, in my view, is desirable. It seems to work nicely. This year, they will spend $85 million in 273 community futures organizations. Their mandate is to look after small communities and small- and medium-sized businesses. I think the program that has been operating now for about 11 years is commendable.
The Auditor General is another officer of Parliament who will retire and leave us in the next year or so. Honourable senators will know how much she has helped us as parliamentarians as an officer of Parliament — not an officer of the Canadian public, not an officer of the media; an officer of Parliament. She is there to help parliamentarians to hold the government, the executive, to account. That is her role and function, which is well defined. We provide to her a budget of over $80 million a year to hold the government to account, and she has over 635 people working for her. Half of them do what we typically think of as a financial audit that a chartered accountant or a certified general accountant would do. The other half of her staff apply what is called a performance audit, a value-for-money audit. This type of audit looks at how the money is spent and the value to the public. There is a real danger, when they start looking at value for money, of moving into the policy side of things.
We had an extensive discussion on that issue, and the discussion is reflected in our report.
I want to talk to honourable senators about Canada Post. The third person I will talk about today, who will not be with us much longer, is Moya Greene. She has done a wonderful job as president and chief executive officer of Canada Post. She has been hired by the Royal Mail to be their president and CEO, having done such a fine job in straightening out the Canadian situation.
There are a number of important points in this report, but I draw attention to the fact that she indicates that Canada Post needs diversity. She sees Canada Post moving into a completely different area over the next while from where it is now, and that certain banking aspects could well become an important aspect of their business over the years. We may not even recognize Canada Post in the future.
Atomic Energy of Canada we will deal with again during Bill C-9, but we had good discussion here. I commend honourable senators to review this AECL report.
Honourable senators, these items are the main features of this particular report. I hope that honourable senators will take the opportunity to review the various reflections of our committee and, in due course, hopefully before we receive the supply bill that relates to this report, this chamber will adopt this particular report.