EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, October 19, 1995

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[English]

The Chair: I now call this meeting to order. This is the Sub-Committee on the Business of Supply of the Standing Committee on Procedure and House Affairs. We're trying to get to the heart of accountability. I don't think we could have anybody better to help us do that than the Auditor General himself.

Mr. Desautels, would you introduce your staff and begin with whatever it is you want to say to the committee.

Mr. Denis Desautels (Auditor General of Canada): Thank you very much, Madam Chair. I do appreciate the invitation to appear before your subcommittee today.

I am accompanied by Mr. Jeff Greenberg. Mr. Greenberg is a principal in our office and he has authored a number of chapters for us, but in particular one in the 1992 report dealing with information for Parliament, which I think is relevant to your discussions today.

Mrs. Maria Barrados is an assistant auditor general. Among many other things, she is responsible for monitoring the changes that are being proposed to the expenditure management system.

On reading your committee's order of reference, I note you're concerned primarily with three things: a comprehensive review of the business of supply; the use of information provided to Parliament; and the reform of the estimates. In the recent past we have produced two chapters that have dealt specifically with the estimates and government reporting, and these will be the focus of our comments today.

For example, in our 1992 chapter we call for the reporting of the entire business of a department; in other words, its global stewardship. We found that the estimates, with their focus on spending alone, did not provide a complete picture of all the activities of a department, such as tax expenditures, regulatory practices, and loan guarantees.

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In carrying out our work, including discussions we had with both elected and appointed officials, we have noted other problems with the estimates. For example, currently about 70% of federal spending is statutory. While the related programs and amounts are listed in the estimates, they are not subject to voting during the annual supply process. In addition, within the other 30% that is voted each year there are other commitments, such as almost $2 billion appropriated annually for the Canada Mortgage and Housing Corporation, primarily in support of social housing, which while not statutory in nature nevertheless represents long-term commitments that would be difficult to reduce.

A further issue is the ability of government to use the supply process without a clear and substantive legislative base. For example, in 1993 we reported that the northern cod adjustment and recovery program, also known as NCARP, was funded through the estimates without a clear legislative base. In response to a subsequent request by the public accounts committee, the government has now committed that in the absence of a clear legislative mandate it will present to Parliament for approval programs similar in size and scope to NCARP. However, it reaffirms its position on the government's right to use the appropriation acts to respond to emergency situations.

[Translation]

Madam Chair, getting back to the contents of our 1992 Chapter, we noted that no one annual document could ever meet all the day-to-day information needs of Parliament. Instead, we called for government to provide Parliament with a reporting back on its stewardship of the authority granted to it by Parliament. We also said that this stewardship information should revolve around four deceptively simple questions. First, what does the department do? Second, how does it do it? Third, what are its plans for the future? And finally, how well did it do, including results information?

Our concept was that a department should describe to parliamentarians what it does at a relatively high level, with pointers to more detailed information if needed. In our 1994 follow-up, we expanded on the stewardship concept to include reporting on sectoral activities for which a department is the principal agent.

However, while proposing improvements to information, we heard clearly the frustrations of both its preparers and its users. The 1992 Chapter noted some of these significant constraints to better reporting.

One of the most important of these, and one that is particularly relevant to this committee, is the Supply process itself. The tabling of the Estimates and the passage of the related appropriation bill are seen by the government as confidence issues, because of their close relationship to the budget. As a result, the government does not allow changes to the proposed amounts. Consequently, since members of Parliament cannot influence the current year's Estimates, they told us that the process becomes meaningless to them and they naturally display little interest in the Estimates.

In fact, because there is no requirement to report back, or even to review the Estimates, we noted that very few meetings were held and even fewer reports were issued by committees.

A second constraint, according to members, was that there was far too much information to be reviewed each year, with much of it a repetition from previous years. They also believed that the estimates were not very helpful because they did not describe the business of departments completely or succinctly. Reporting was based largely on broad multi-faceted "programs" which were meaningless to most members. In addition, there was either too much detail or not enough information.

Because of the resulting lack of interest by members of Parliament, the departmental officials we spoke to also expressed frustration over the perceived lack of use of the information they produced.

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[English]

After several years of limited response to our recommendations, recently there has been some movement.

First, there were the changes to the Standing Orders in February 1994 to permit standing committees to review and to report on future spending plans of departments.

Second, the government, as we all know, is in the process of revising its expenditure management system and the information it provides in support of the changed role of standing committees. These changes are consistent with our thoughts about using departmental information for purposes other than the review of the current year's estimates.

We see the tabling of the estimates as the end of the process and not just the beginning. We are of the opinion that members of Parliament will place a greater importance on departmental information if they believe that they have a role to play in influencing next year's spending plans and if they believe that the information provided supports this role.

We must keep in mind the need for useful departmental information when considering how to improve the overall government financial and operational picture.

Will the government's new expenditure management system and associated documents deal with these issues? With your permission, Madam Chair, I would like to ask Mrs. Barrados to provide some comments on this subject. Thank you.

Ms Maria Barrados (Assistant Auditor General, Audit Operations, Office of the Auditor General of Canada): I welcome this opportunity to assist the committee in its deliberations.

Based on the work reviewed by the Auditor General, we have been following, with a great deal of interest, the Treasury Board Secretariat's project on reforming the estimates. We have met with Treasury Board officials and discussed the work they are doing.

I understand that your committee has been briefed on the proposed changes. Several of the government's proposals relate to questions of vote structure and supplementary estimates. They contain some interesting ideas, but our office has not had time as yet to form a view on them and would like to reserve comment. However, we will be discussing these ideas further with the secretariat.

Another part of the proposal aims at having a more efficient restructuring of the information provided to Parliament. We concur that the effective uses of technology and a rationalization of the information should be able to result in considerable savings and at the same time improve the access of parliamentarians to the kind of information they wish to have at any point in time.

In line with our past audit work, I would like briefly to discuss a major component of the proposals, the idea of separating planning and performance information from the estimates.

We generally support the direction being pursued by the government in this area, the suggestion of having a spring plan document and a fall performance report coincident with the public accounts. This has the potential of improving accountability information from the government to Parliament and of providing members with better information with which to scrutinize the actions of the government.

If carried out properly over the next few years, the changes should increase the ability of Parliament both to know what is being accomplished for the dollars and authorities granted to the government and to be able effectively to challenge government plans for future priorities and spending plans.

This is the potential. To realize it, in our view, several key elements of the reform must be effectively implemented.

First, to ensure effective scrutiny by Parliament, adequate time and opportunity would have to be available for committees to consider both the plan document and the fall performance report. The new outlook process this year did allow some committees to discuss future-year priorities and plans. The process was a reasonable start. The documents were sent directly to the committee chairs by departments.

There were some problems, however, with quality and timeliness of the documents. We are concerned that committees might not have had enough time available to hold hearings and agree to a report prior to the summer recess. No committee reported on its deliberations on the outlooks.

Committee reports would provide the basis for a government response and could be an effective way for committees to influence and be seen to be influencing the preparation of the next year's estimates, but the incentive and opportunity for committees to report would have to be real.

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Madam Chair, your committee may wish to consider how committees could effectively deal with a spring plan document and a fall performance report proposed by the government. Would allowing or even requiring committees to report by a later date, such as November 15, be something to explore? In the absence of effective committee scrutiny, the reforms are unlikely to result in the hoped-for benefits to Parliament.

Two other things are essential for the reforms to succeed. The spring plan must contain clear and meaningful commitments on what the various programs at the business service line of the government will be accomplishing with taxpayers' dollars and the authorities provided by Parliament. As well, the fall performance report would have to contain high-quality, useful information on what has actually been accomplished by programs in light of earlier commitments.

These are perhaps obvious points, but as the Auditor General has outlined just now, we have found the information provided to Parliament to be wanting. Process reforms can produce a lot of change and nice-looking documents, but the real test is in their content and use. Without an adequate focus on content, the reforms proposed could slide us backwards. We intend to watch the pilot work now under way very closely.

We feel the government has had quite a few years of experience under its belt in the area of performance information and evaluation, and we would expect good-quality documents, both plans and actuals, to be produced early in the process. Other jurisdictions in Canada and in many other OECD countries are moving aggressively towards better performance information for management and accountability.

We have produced a draft set of principles for information provided to Parliament, which we have discussed with the secretariat. The principles build on our earlier work in 1992 and 1994. We intend to use these principles to guide our response to the implementation of the proposed reforms and to provide the basis for subsequent audits. We are appending a copy of the principles to our opening statement. We would welcome your comments on these principles.

Madam Chair, I hope these preliminary observations are useful to you and your committee.

The Chair: For those who are looking around for your copies of those principles, as I am, they are on their way. They are being photocopied right now.

Thank you very much.

We'll now take questions from committee members. Mr. Williams.

Mr. Williams (St. Albert): I welcome our guests this morning. I appreciate the overview they have given us.

I'm concerned about the co-opting of parliamentarians into the government's process of developing plans and ideas...rather than Parliament exercising its real role, which is to express an opinion and to approve the business of supply in order for government to do its work. With the planning documents and so on envisaged being placed before parliamentarians before supply is requested by the Governor General, are we co-opting parliamentarians into doing the government's bidding? Are we diffusing parliamentarians' role and responsibility for approving supply rather than debating what should be in supply?

Mr. Desautels: First of all, let me say I don't think anything done here, or anything we have said, either, should be interpreted as diminishing in any way parliamentarians' right to question and challenge the estimates presented by government in any year. That's a very fundamental principle, and I don't think any of this discussion should be interpreted as affecting that or meaning to change it.

What we have observed, though, as I was mentioning in my opening statement, is that many members of Parliament nevertheless find it difficult to influence the spending plans of government, given the manner in which estimates are approved by Parliament. There has been a certain amount of frustration on that front and a desire to find ways to involve parliamentarians more.

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I think we have to be careful not to get parliamentarians involved in micro-management or a level of management detail that would not be really the right role for Parliament.

If there is a valid process whereby members of Parliament can review and critique the outlook and future plans, I believe that could provide certain signals and messages to government in terms of the preparation of its future year plans. I don't personally feel that it is co-opting members of Parliament into managing government, as much as getting their views on the broad orientation of government and its various programs.

I think it is a concern we should be worried about. We should make sure that none of what we do here encourages micro-management by members of Parliament. I think it should be done in a way that helps them focus on the broader issues affecting each of the departments.

Mr. Williams: Looking at the Auditor General's report of 1993 on page 17, paragraph 1.12, you stated, Mr. Desautels, that ``Parliament's role is to approve or deny expenditures''.

Moving on to page 19, paragraph 1.22, if I can quote your synopsis of the situation:

...from March through May, standing committees have an opportunity to examine the Main Estimates in detail, before reporting them back to the House for concurrence and swift passage in Appropriation Acts. However, committees are spending less and less time on the Estimates. One major reason for this apparent lack of interest lies in the impact of the confidence convention, which, as currently interpreted, makes any motion to change a vote in the Estimates a potential test of the House's confidence in the government. Because failure to win a confidence vote leads to the resignation of the government, no changes can be made in the Estimates, even though the committees have the power - at least in theory - to reduce or reject Estimates votes.

In my opinion, Mr. Desautels, we have a stumbling block - the door is locked - when it comes to parliamentarians being able to express their opinion on the estimates. You said yourself in that paragraph that confidence prevents that from happening. You've also mentioned in your opening remarks this morning how the lack of opportunity to influence the decision-making has made the estimates review by parliamentarians perfunctory at best, and in many cases they've been totally ignored.

Yet, we spend $165 billion of taxpayers' money every year. We know how much our debt is as of today, the concern that Canadians have regarding the debt, and the concern that you yourself have expressed regarding the debt.

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I'd like to get your specific opinion. Do you feel if confidence were relaxed parliamentarians would then take a greater interest in the estimates process and that would start a process whereby real debate of parliamentary spending would come back to the floor of the House and we would have meaningful control of spending by government?

Mr. Desautels: This is a very fundamental principle, of course. I don't think I can really answer that question the way it was posed by Mr. Williams.

The rules by which the House functions are rules of its own making. They are also based, as far as I understand, on the long-established traditions of parliamentary democracy. So for better or for worse, those rules are there. We were not in any way implying that those should be changed or relaxed. It's up to Parliament and other interested parties to decide that.

But in recognizing this lack of flexibility, we were encouraging government and members of Parliament to look for ways to overcome some of the frustrations the rules seem to engender. We ourselves have made certain suggestions. The proposals by government to modify the expenditure management system are intended, as far as I understand them, to overcome some of these frustrations. To that extent we are supportive of that kind of effort.

We're not really trying to change the basic rules of Parliament. We're looking for ways to make this process of more direct interest to members of Parliament.

The Chair: Mr. Malhi.

Mr. Malhi (Bramalea - Gore - Malton): The Treasury Board Secretariat is currently exploring ways to improve the estimates material. Has your office been involved in this process, and do you think the proposed changes will enhance Parliament's ability to hold the government accountable?

Ms Barrados: We have been discussing with Treasury Board officials the nature of the changes they have been making. We are encouraged by a lot of the initiatives they are taking, because there is hope that with this process the information flow to Parliament will be improved. As I said in my opening comment, the prospects for improving the information flow are there. Now we have to start seeing improved information.

The Chair: Mr. Arseneault.

Mr. Arseneault (Restigouche - Chaleur): I listened quite closely to the presentations this morning. I had the occasion to sit in opposition for a while and we studied the estimates; I sat on the government side and we studied the estimates; and I tend to agree with you, quite often there's not enough time for parliamentarians to look at the estimates in some detail. You tend to feel you're useless; you can't effect any changes to the estimates. I don't see how any of the changes you've mentioned today, having a spring plan or a fall performance report, are going to allow me as an individual parliamentarian to influence the government in making a change or a policy direction.

As you know, committees make reports every year, maybe two or three reports on different items. None of those reports or recommendations are binding on the government. Those reports are public. Most of the recommendations are unanimous in committee, and some of them go directly against a policy of the government.

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In other words, they're cutting out a certain program, because of lack of funding, or whatever. The committee recommends that the program be reinstituted. The recommendation is right there. The minister has it and replies within so many days to the committee, and after that, that's it.

I don't understand how any of this is going to change, how, as you claim, we're going to have a better way of influencing the spending plans of Parliament just by having more information, because it's tied, as Mr. Williams rightly said, to the question of confidence, for one thing, and the ministers and the government have their own priorities and they have a certain mind-set.

I ask you to comment on that.

Mr. Desautels: I'll try to answer that. It's not an easy question to answer.

Mr. Arseneault is correct that there is absolutely no guarantee that the changes suggested here will enable standing committees to influence government decisions. It will happen only if the government is willing to accept the recommendations, or at least some of the recommendations that come out of the committee hearings on particular outlooks or performance reports.

I'd like to clarify just one thing. The expenditure management system that is being proposed here is not being proposed by our office. It's being proposed, of course, by the Treasury Board Secretariat. I guess you've invited us here to comment on that. As you heard from Ms Barrados, we're tracking it, but it's essentially the Treasury Board Secretariat's project.

Maybe I'm naive, but if the outlook documents are well done, and the standing committees have a real opportunity to get into them and question them and prepare, as a result of that examination, clear reports or conclusions on that examination, then I happen to believe that there's a chance that this might influence the preparation of the next year's estimates.

There's no guarantee of that. But if it doesn't happen in that way, then at least the same standing committees, when those estimates will come around the next time, actually will have grounds or elements in hand to question, again in a meaningful way, why the estimates of the following year do not reflect maybe some of their recommendations from the previous year. So nobody can guarantee that all of this will happen perfectly and that the government of the day will listen to the recommendations of the standing committee, but at least it provides some mechanism for attempting to put across some views and maybe have them taken seriously.

Mr. Arseneault: Does your department assist individual parliamentarians or parties by providing expertise at the table when estimates are being studied? I ask this because we're not experts in some areas.

What I have found in my experience with estimates is that the time is limited, for one thing - you get 10 minutes. You're dealing with bureaucrats, who realize that they live in a political world and they have a political master and they are limited in some of the answers they can give. I'm not talking just about commenting on policy; I'm talking about when you ask for straight answers about finances in this, this, and this.

They'll give you the straight answers up to a certain point. It's not as if they'll mislead you, but they won't go the extra mile and say, well, there's also this, or there's another program in another sector that does this. They'll give you your answer, and after ten minutes it's, my gosh, we have to go over there. So you can't come back here and say, Mr. Desautels' staff is here helping us out, so what do you think of that answer? Should we quiz? Should be pose a little more? Is there some mechanism you're looking at to assist parliamentarians a little more on the spot in terms of being able to spot-check that? The other thing you mentioned - the one about effecting change, having those plans before you this year and then waiting until next year when you can double-check - is very rarely done.

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I also ask you about how much consistency there is in committees. Do you get the same members in committees? Maybe there should be one committee to do estimates, and it will do so many departments a year. Maybe there should be a set week for it - a full, complete week. Close down all committees and say a particular week is the one when estimates will be done, going from 9 a.m. to 9 p.m. every day.

I'm a little bit more concerned with the mechanics than I am with the overall philosophy there now, because I don't know if the overall philosophy will ever change. I don't know if we'll ever be able to effect change, because it's again linked to the idea or question. You automatically have your government members sitting on one side trying to protect their territory, with the opposition trying to find holes here and there with which they can make hay so that they can maybe get re-elected or get on the other side of the table after the next election.

Mr. Desautels: First of all, Madam Chair, in terms of our own involvement in the estimates process, we are always available to either individual MPs or standing committees to explain the issues we have been raising in the past on a particular department. This kind of information can at times be quite useful to a committee or to MPs when they're reviewing a department's estimates. So to the extent that we've reported over the last few years on a department, we're quite happy at the right time to provide information or further explanations on it to members of Parliament or standing committees. It has not been the practice, however, to participate in specific hearings on estimates in the manner you've described, to almost be a solicitor for the MPs.

Mr. Arseneault: Exactly.

Mr. Desautels: This has never been the practice in the past, and there are good reasons why it has not been the case. But I don't think we need to get into that today.

At the same time, you raised a question on the effectiveness of committees in reviewing estimates of departments. It's not my role to pass judgment on the effectiveness of committees in doing their work. I work for committees. You're my bosses in a way.

Mr. Arseneault: I think you should pass judgment on departments, and maybe you should pass judgment on committees.

Mr. Desautels: I report to parliamentarians. But I nevertheless observe things, Mr. Arseneault. Certain committees have been more effective than others in sustaining a discussion around an issue, regardless of party lines. In other words, the questioning doesn't stop when your time is up and it switches to the other side of the table. I think certain committees have been able to work coherently. On those committees, it's been seen as more of an alliance between parliamentarians on one side, from whichever party, who are trying to get through the bureaucracy and the language in order to get through to the real issues. I have seen it work effectively at times in some committees, but it is not universal. I think we should all be striving for ways to improve, no doubt, the effectiveness of the committee system.

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The Chair: Your time is up, Mr. Arseneault, but if you don't mind, the chair is going to take over and develop your theme a little bit.

I think we are looking at at least two views here: whether one wants to criticize the estimates and nickel and dime them after they are done, or whether one wants to have a longer-term influence on them, consistently and over years. It seems to me that goes right to the heart of the entire body of work of a committee.

The environment committee, for instance, has done a lot of work on global climate change and has made recommendations to Parliament, but it has never tied its policy work to the budget of the department. It has never taken the opportunity to say: given these times, in our opinion it is more important for the department to spend money on these areas because they are the major issues for the government in the area of environment. The department should be cutting back on spending in these less important areas in order that it can spend money in these more important areas. Here particularly are the kinds of programs we would recommend to achieve that.

It seems to me, Guy, that this can get rid of a lot of the frustration. We are making these policy recommendations and now we are saying, in terms of the budget, that here is what needs to happen with the budget for those policy recommendations to become a reality. Is that the kind of thing you are getting at?

Mr. Arseneault: Basically, I want to have some type of influence on it. Why sit around the table and spend time studying certain matters only to see it get put on a shelf somewhere to collect dust? That is an age-old complaint that has gone on, and I think the Auditor General has sort of alluded to that as well.

I wonder if we maybe shouldn't have that type of process that you had mentioned, and also have the other idea of having a super-committee to look at the estimates, at the nickel and dime part of it, with the standing committee doing what you are saying.

The Chair: I would appreciate our witness's views on that, because you have seen what other countries do.

There are two issues really: a more thorough and expert examination of the budget process, and how the budget is being planned ahead of time instead of after the fact. Do you need, or should this committee consider, a budget committee that would have this as its prime focus? As for the second aspect, it removes the consideration of budget from the consideration of policy that the standing committees could bring to it.

Could you give us your views on those two possible directions?

Mr. Desautels: Well, I think you are laying out two options here. One is a committee specializing in review of estimates, as Mr. Arseneault was putting forward. The other option is to have every committee looking at it. The latter one is really the current option. It is the option that I think makes it easier to reconcile policy direction and budgetary objectives.

Maybe there are other experts around who have seen the other option at work. I don't know. I know it does exist in some other countries, where you may have a type of budget committee that actually does concentrate more on the budgetary and estimates issues. It is possible, but it hasn't been the recent tradition of the Canadian federal Parliament.

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We've been focusing on the current approach, on the model suggested, I think, by the expenditure management system. We think it's a fairly logical approach and I would, on the whole, lean that way. There's a lot to be said for looking at policy and budgetary objectives at the same time, making sure the two link together. I think there's a certain rationale in the present approach, a certain logic, which might be lost if you split off completely the budgetary review from the other considerations. So personally, if I had to put my money on the table now, I would lean toward some kind of integrated approach that would then be carried out by each of the committees.

The Chair: That's really interesting, because one of the reasons that I've found many committees don't pay much attention to the estimates is that they haven't seen the potential for using the estimates process, especially for next year's budget, as a way of getting the policies they're interested in implemented. No committee I've been involved with has tied the policy papers they're writing to the review of the estimates in order to see how the two mesh.

Mr. Desautels: Madam Chair, I think it's also a good question to explore with the Treasury Board Secretariat. I think they probably have considered the other alternative and it would be useful to hear why they have chosen this approach, which I describe as an integrated approach in which you're looking at both at the same time.

The Chair: This is probably the last question I'll ask, because we have other witnesses waiting. To what extent do you think this new process being developed by Treasury Board either will or could address the issues you raised in your 1992 report of that information to Parliament?

Mr. Desautels: I'll ask Mr. Greenberg to try to answer that.

Mr. Jeff Greenberg (Principal, Audit Operations Branch, Office of the Auditor General of Canada): Thank you.

I would suggest that the approach the government is taking at this time does go a considerable way in answering some of the questions we raised in that chapter. We suggested that there clearly was a need to provide information for purposes other than simply the annual spending in the particular year. We felt that because of the confidence issue, it would be very difficult for MPs to have any influence on the supply in that year, which is why we felt the documents ought to be written in a way that allows MPs to use them at other times.

That chapter, though, went a little bit wider and said we also have to be careful that members be apprised of information that goes beyond annual spending. And that's equally important. There are many activities government undertakes that go beyond annual spending. The loan guarantee activity and tax expenditures are just some of the examples that we used.

The process the government is proposing at this time deals with spending. From what we have seen at the present time, we're reasonably supportive of that exercise. We did suggest that there's some further room to go, too.

The Chair: Okay, so it doesn't deal with all financial commitments, or all commitments with financial implications.

Mr. Greenberg: I would agree with that.

The Chair: Are there any other questions?

Then if I may, I have every reason to think we'll probably be calling on you again before we finish this task, but I thank you very much.

Mr. Desautels: Thank you, it's our pleasure.

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The Chairman: Mr. Williams is just out in the hall. Perhaps we should wait for a couple of minutes, if he's on his way back very shortly, before we begin with you, Mr. Dobell. We'll just suspend now for a few minutes.

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The Chair: I'd like to call the meeting back to order to not keep you waiting unduly. We will pass on what you have to say to us to Mr. Williams.

Mr. Peter Dobell (Director, Parliamentary Centre for Foreign Affairs and Foreign Trade): I'm honoured to have been invited to appear before your subcommittee this morning. I say this because if your committee succeeds in identifying procedures and practices by which the House of Commons can affect the estimates, you will have contributed hugely to restoring a role that once belonged to Parliament, to improving its public image, and to enhancing the self-esteem of members of Parliament.

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This is a tough challenge. It's an area where few parliaments have had much success, but unfortunately the Canadian Parliament is among those that exercise the least influence on expenditure.

I'm aware of the political differences that complicate your task, but there are signs from which I draw some encouragement.

First of all, members are united in recognizing that the current practice is unsatisfactory, and I was listening to Mr. Arseneault very carefully on that point. The review of the estimates is not one of the areas of your job, I think, that gives much feeling of pride to members of Parliament.

The second reason for confidence is that the government House leader, Herb Gray, is personally committed to seeing an improvement. As one of the deans of the House, he's especially aware of the deficiencies of the current practice. He's prepared to use his authority to press for change. He sees your subcommittee as an ally and adviser, and that gives your subcommittee an enormous potential influence if you can agree on a report.

I thought it would be helpful for me to organize remarks and for you to follow them if I addressed a number of questions that I regard as being important. I've put those questions on a sheet of paper in front of you.

The first one asks what kind of difference in the process would result from the improved documentation that Treasury Board is working on.

I'm impressed by the methodical and constructive approach adopted by Tom Hopwood for dealing with a very difficult problem. When government was small and simple, votes in the estimates corresponded with discrete items of expenditure, and it was easy for Parliament to focus on those individual items. But as government has become larger and more complex, votes have been consolidated, and there is now even talk of a single vote for each department. Whether or not this idea is adopted, there can be no turning back to the discrete items of expenditure.

I think Hopwood and his colleagues are right in focusing on tying objectives, output and performance. But they do face a challenge within government itself because not all deputy ministers and not all ministers wish to be committed to setting objectives publicly and having their performances related to those objectives subsequently. They fear, in a way, they will become targets in a shooting gallery.

This again is an area where Herb Gray is already exercising his authority. He was clearly not pleased with the outlook documents that were prepared for the spring review of the estimates, and he knows that much more information of a substantive kind is necessary for proper accountability.

In passing, may I offer one small piece of advice to your committee? I think you should insist that any documentation provided by Treasury Board or by departments is sent not to the committee chair directly but to the clerk of the committee for distribution to all members. You may be aware that no one is absolutely sure how many outlook documents were presented. This is partly because some chairs received copies, but copies were lost in their offices.

To return to my first question, assuming improved documentation is produced - and I take that for granted - what difference will it make?

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I do believe this kind of information will be extremely useful to the interested public, because they will have the time, and often the expertise, to look carefully at this material. It will also be potentially useful to Parliament. But of itself, it will not lead to a satisfactory supply process.

Madam Chair, I think you were right in your previous comments in other meetings to focus on how the House of Commons and its committees organize their work, because that is an essential change.

This leads me to my second question. Is the idea underlining Standing Order 81(7) valid? The focus on future expenditure has one enormous merit. It allows committees to escape from the deadly dual of Parliament: government MPs committed in mortal combat with opposition members.

For future expenditure, government members are bound to defend future expenditure, because the government has not yet taken a position. So all members can exercise a personal judgment. Thinking of you, Madam Chair...it's really rather like the situation you find in a city council.

This is important, because I see no prospect that the parliamentary dynamic will change in the current estimates. As Bob Marleau noted before your committee, the political culture of Canada supports the most strongly disciplined parties among any of the Westminster parliaments. I did a study for the Macdonald royal commission, and I concluded there were certain factors, having to do with the size of the country, the ethnic mix, and the federal structure, that resulted in a particular desire for discipline even from members of Parliament themselves.

The situation I describe is reinforced by the fact that estimates are not like a law. If a law is deficient, it must ultimately be amended, and in the interval the courts have to apply it. But if a proposed expenditure is deficient, the government just won't spend the money. It doesn't have to ask anyone's permission not to, and it doesn't need Parliament's approval not to.

My conclusion to this point is that there is some merit in concentrating on future expenditure, but there are problems with the scheduling and the organizational structure.

At this point I wish to digress briefly to look at the way the current system for the approval of the current estimates would work under minority government. It's not an area that gets much attention, because since the reforms of 1968 there have been only two minority governments: the Liberal government of 1972-74 and the few months of Joe Clark's government in 1979. I won't take the time to go into details, but it is significant that the only changes that have been made by committee action occurred in the minority parliament in 1973. There weren't many actions at that time, but I would conclude that the model now exists, and in any future minority parliament we should anticipate substantial committee action to modify the estimates; to cut them, or even to negative them.

I remind you that from 1962 to 1974 minority governments were returned in five out of six elections. There seems to be a running in waves, but it is something that could happen again. If it does, there will be a major problem for the bureaucracy and for the government of the day.

It is a situation on which I think you should reflect. In particular, I want to suggest that the experience of the one minority parliament seems to demonstrate that committee changes to estimates are not viewed as a matter of confidence - not in the formal sense. If the committee changes the estimates and reduces them, it goes to the House.

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Unless the government decides to seek to reverse that decision, and that motion is defeated in the House, in effect a committee decision to reduce the estimates has occurred without the question of the confidence in the government being raised.

It is even possible as shown in the experience of the Liberal government when Mitchell Sharp's financial motion was defeated in the House. The government determined that it was not a matter of confidence, a vote of confidence was held very soon after and the government's position was established.

I revert now to the prospects for the useful committee examination of future expenditure. I don't need to tell you the June deadline for reporting renders the process unworkable. The Auditor General has encouraged you to establish a later date. You may remember - I guess all of you will remember - that the Liberal red book spoke of the committee having the autumn to work out and produce a report.

However, after the government was elected the Treasury Board advisers pointed to the need for departments to submit their proposed estimates to Treasury Board by October. This is the reason why the June deadline was introduced.

After some pressure from Herb Gray, I believe that a somewhat later date may be acceptable to Treasury Board. But even if that happens and there is a mid-autumn date for reporting, I suggest it would be necessary to have the outlook documents by April. I think that's probably possible, but it certainly wasn't the case this year.

The committees would have to work steadily to produce a substantial report by the autumn, bearing in mind in particular that few committees will work during the summer. Even if the committee gives itself that task, will it in fact continue to give priority to the estimates during half the year, especially if more pressing issues arise? For example, what if legislation is submitted to the committee or if a pressing political issue arises that is of concern to the members of that committee?

A possible answer would be to lift the deadline entirely so that a committee could report at any time on future estimates. I recognize that the consequence, however, is that there might be a year or more before recommendations in such a committee report were reflected in the estimates. The Senate is prepared to do this. The national finance committee does make reports, but you will recognize that the senators have a longer time horizon than members of Parliament.

However, this suggestion does draw attention to the problem of concentrating on future expenditure. It means there is a minimum waiting period of six months to see how the government has reacted to recommendations in a report. This is a second reason why for many members of Parliament it's difficult to commit scarce time to reviewing future expenditure.

This conclusion has led me to return to an old idea, one that's framed in my fifth question. Would a single, larger estimates committee be more effective?

The British Parliament has had a large estimates committee with several subcommittees. It lasted until they adopted changes in 1979. They adopted a committee structure and system that is very much like the one we adopted after the Lefebvre and McGrath committee reports.

.1045

Incidentally, under this current system, which is similar to our own, the British committees also pay very little attention to estimates, and it could not be considered that it is a success there either. So I personally think they would have been wise if they had retained their estimates committee along with other committees.

I should also draw attention to the fact that this is the way in which the Canadian Senate organizes its review of estimates. The Senate national finance committee receives all of the departmental estimates. Over the years that committee has produced several influential reports, starting with an examination of the manpower program in the mid-1970s, which led to many changes in the way in which the program was delivered - in spite, by the way, of the effort of the minister of the day, Bob Andras, to persuade Paul Martin not to give the reference to the committee, because he said it would be a waste of the government's money and time. In the end, his deputy minister considered it to be one of the most effective reports he had ever received.

More recently the Senate committee has produced some excellent reports - with which, incidentally, Senator Stewart was closely involved - on one-dollar items and the royal recommendation.

The fact is that senators have been prepared to look at future expenditure and their standing committee has no time limit on the referral of estimates. It's before the committee throughout the year.

This is a subject to which you might want to return when Senator Stewart appears.

When Parliament was looking at the committee structure and powers in the early 1980s, the idea of a large estimates committee was advanced by Ron Huntington and Claude-André Lachance, a Conservative and a Liberal member respectively. It was part of a much larger reorganization that they were advocating, some of which is beyond your mandate and some of which has been overtaken by subsequent reforms. That particular idea is still valid and still should merit your attention. I say this because it has two major advantages.

Such a committee would attract, as the public accounts committee does, MPs with a particular interest in administration. As all of you are aware, not every MP wants to spend time on administration.

The second advantage is that it would not be diverted, because estimates would be its sole responsibility.

These are two major reasons why I feel that such a committee could do good work.

Its disadvantage is that even with several subcommittees, a single large committee could not hope to cover all departments and agencies in a single year. Huntington and Lachance suggested that it be over a five-year cycle.

Such a committee, supported by improved Treasury Board documentation, could indeed make a significant contribution.

When working on an individual department, it would also be possible to involve the relevant standing committee and bring them in indirectly. It's a model, therefore, at which I encourage you to look, and I noted with interest that Mr. Arseneault had raised the matter himself.

I would now like to return to another rather different approach, one that was briefly noted by Bob Marleau and is captured in my question: should committees be given formal latitude to shift expenditure within departments?

I've watched the U.S. Congress very closely for many years. Their power is rooted in the capacity to cut or to increase appropriations. When you watch a department of the U.S. government appearing before a congressional committee, they are as persuasive as they can be, because they know that unless they can convince that committee, their particular appropriations may be at stake.

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I don't suggest that this would happen in the Canadian Parliament to the same degree, but I do believe that giving committees the capacity to make some change would force public officials to take committees much more seriously than they do.

Part of the problem, as Marleau pointed out, is that members of Parliament are more comfortable recommending increases in expenditure than cuts. If committees were formally given the power to shift expenditure, that could imply some increase in expenditure, and that is contrary to the basic traditions of parliamentary government.

I suppose, however, that if departments moved to a single vote, it could be said that shifting expenditure from one activity or one program to another would not involve an increase in expenditure, providing that a recommendation - no, it would be a decision by committee - would be coupled with a decision to make a corresponding reduction in other programs.

As Mr. Arseneault pointed out, members aren't prepared to spend the time on estimates unless they feel their time is going to be used or is going to result in some useful outcome. I am sure this proposal would engage the interest of members. If that power were formally extended to committees, I believe it would be much easier for government and opposition members to work together. I don't say it would be a piece of cake, but I think it would be more like committee reports on matters of policy, where it is quite often possible to get consensus.

Attractive as this idea may appear, I am a bit uncertain - I am rather doubtful, in fact - that any government would wish to relinquish the power. I am absolutely certain that departmental officials will strongly resist.

Whatever decision you take, I think it essential that you address my final question: how important is staff? In my view this is an area where substantial staff resources are essential.

The new documentation that Treasury Board and the government are working on will certainly be improved, but it is not going to be readily accessible on a quick read. Someone is going to have to spend a lot of time working on it. To some degree that work will be done by interested agencies or organizations outside of Parliament, but ultimately a committee is going to need professional support that is qualified in the field of expenditure management.

The House of Representatives appropriations committee in Washington has around 100 staff, many of whom have spent decades in the service of the committee, and there is an enormous accumulated knowledge. It's worth reflecting on the fact that our own Auditor General has a budget of something like $15 million and something like 500 to 600 staff members. These examples are obviously entirely out of reach of parliamentary committees, but I doubt that the present resources available to committees would allow them to do serious work on current or future estimates.

To give yourself some feel for the kind of help that would be necessary for either an estimates committee or for standing committees - and my own preference would be for estimates committees - it might be useful for your subcommittee, Madam Chairman, to make a short visit to Washington and meet members of the appropriations committee and their staff.

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I can remember organizing a visit where, among others, Jean-Robert Gauthier was present, and as you know, it has always been an issue of great interest to him, and he considered himself to be knowledgeable. He was absolutely staggered by the quality and the knowledge of the officials from the appropriations committee staff he met on this particular visit.

Incidentally, the requirement for staff is one that was insisted upon by both Huntington and Lachance in their paper.

I hope you feel I have addressed some of the important issues you would have to deal with as a committee. In the time that remains I would be ready to respond to questions and comments.

The Chair: Mr. Malhi.

Mr. Malhi: The supply procedure implemented in 1968 was designed to achieve four basic effects. Have these intentions been fulfilled? If not, what further procedures would you recommend?

Mr. Dobell: The aspirations of 1968 have largely failed, with one exception. The one major exception is that the government can now count on getting supply approved by a fixed date. That had become a major problem by 1967. Indeed, as I remember it, the Diefenbaker government was defeated on estimates after the eleventh month. Maybe I am wrong on that detail, but certainly Parliament was voting one month at a time.

The other hope of the time was that committees would find it possible, with much more time, and with the expertise committees were deemed to have, to make a very serious examination of the estimates. In fact, as is perfectly apparent, this has not happened. Members in effect have voted by their decision not to spend time on the subject. Indeed, in the last year but one of the last parliament, when many members had been around for ten years, of 884 meetings of committees in that year, only 20 were devoted to the estimates, essentially one per committee with the minister. That was a recognition of the fact that it was a waste of their time.

What essentially happened is that before the reforms of 1968, the opposition could in effect hold the government to the fire. They would keep the meeting going all night. Eventually government ministers of whatever department was under fire would compromise and the opposition would claim some small victory.

I don't think that was a very efficient system, because those changes were recorded without a great deal of attention and thought. They were really more political actions. But in terms of Parliament it was achieving something. It was making a difference.

What happened is that once the examination moved into committee, a minister would come, as you have seen, and stay an hour and a half. When the bell rings, he leaves. You can't hold him there. You may or may not get him back. But in any case, except in the minority parliaments, there has been no instance in which a committee...the opposition has persuaded the government members to make a change.

So as I said at the beginning, I don't think this current situation is one members of any party are proud of. I tried to identify in my remarks the ways in which change might help to improve the current situation.

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Mr. Arseneault: I appreciated your comments, but your opening remark with regard to restoring the role of parliamentarians seemed to indicate to me that at one point in time that power or that role did exist in which parliamentarians did have a certain authority over the estimates. I'm wondering whether you could comment on that, when that happened, and what type of procedure that was.

The other point you made was an allusion to the present system not being very effective and whatever, and that the Brits went in that direction as well. That's not very effective. Is there one system, following the Westminster model of government, that is effective somewhere in the Commonwealth? Is there one system that is actually effective? Could you describe that system?

Mr. Dobell: To respond to your first question, until about the turn of the century, even perhaps until the First World War and to a considerable extent up until the Second World War, Parliament had in every respect a larger role. It's worth remembering that up until Mackenzie King, and including his period in Parliament, he sat through almost every debate in the House of Commons. That was where the real decisions were taken.

Debates were extremely important. This applied equally to the estimates. I'm not saying you didn't already, by that period, have considerable discipline in Parliament, but I wanted first to suggest that in that kind of Parliament ministers were listening to and affected by the speeches of the House of their peers and by the informal contact that was easy with their peers.

I can't refrain from telling a story about young Paul Martin, Sr., when he first came to Parliament and he became a friend of Prime Minister Bennett, who became Viscount Bennett. He was having tea with him one day. He asked how a young man like him gets noticed. How does one make one's way in this place?

Bennett said he would do it for him. He said Martin should make a strong speech in the next debate that takes place. Bennett would savage him, but he would make Martin's reputation.

So that speech occurred. At the conclusion of the debate, he focused his entire remarks on Paul Martin's speech. Those on the opposition front bench were straining their necks toward this man in the fourth row who had clearly, in some way, got under the skin of the Prime Minister.

As for the actual influence over changes in expenditures, up until about the end of the First World War, the estimates were still relatively simple. As I suggested, many items were actual single programs, so it was relatively easy to focus on them. Second, it was only at about the turn of the century that discipline began to be seriously exercised, so there was a much easier movement.

On your second question, I think it's unfortunately the case that no Westminster system has done a particularly good job on expenditure estimates. It's more parliaments like Germany's where committees are given more confidence by ministers. Ministers pay more attention to committees, partly because committees themselves focus more on the issues that are of concern to the minister or the government of the day. That allows communication to take place that is reflected in expenditure proposals. I don't say it leads to actual defeats of the kind Mr. Williams would look for, but it does lead to an influence on expenditure by the government.

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Mr. Williams: I'd like to thank Mr. Dobell for his opening remarks, which have been quite enlightening. You mentioned the concept of committees perhaps taking a review of departments on a five-year rotation, which means they would investigate one of several departments in depth. But Parliament is required to vote every year on the estimates, because I think we all agree it's fundamentally Parliament's role to approve supply for the government.

If committees look at one or two departments and ignore an examination of the others, and if that were the rule, wouldn't that be recognizing that Parliament has a perfunctory role in approving the expenditures of the departments it didn't look at?

Mr. Dobell: If you go back to the system prior to 1967 or 1968, the fights in the House were usually about one or two departments. That was all the opposition could get attention on, and it would choose the areas it wished to focus on.

I recognize that in an ideal world you would cover all the departments each year, but this is such a big task that if you are to do it seriously I think the public would be persuaded, if two to four departments were substantially reviewed each year, as long as all departments received such examinations over time.

Mr. Williams: We've talked a lot about confidence being perhaps one of the things that has denied parliamentarians from taking the estimates seriously. I'm looking at an article from The Economist dated December 10, 1994, on page 57. There are a couple of quotes here. One is talking about the Labour government of 1976-79. It says:

The 1976-79 Labour government led by Jim (now Lord) Callahan lost a score of votes, including at least three budget resolutions. It also talks about the current government under John Major, that had gone down to defeat on a spending bill. I'll quote the paragraph:

The package of tax increases and public spending cuts announced by the chancellor, Kenneth Clark, on December 8th will fill the £1 billion ($1.6 billion) hole ripped two days earlier, by the eight-vote defeat of the government's plans to increase value-added tax...

So while we look to Westminster, not as the sole authority but perhaps as an authority we respect, we have seen there that the government has been defeated on money bills; the government has been defeated in many situations, some that we would consider very important in this Government of Canada. Confidence is so tight in this country, wouldn't you think it would be more beneficial if confidence were relaxed to allow serious and meaningful debate, and perhaps reduction of the estimates?

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Mr. Dobell: Prior to your coming into the room, I happened to talk a little about this situation. I was referring to the situation in the minority Parliament of 1972-74 when some estimates were reduced by committee action. They were subsequently accepted by the government.

I drew the conclusion this meant that confidence in the procedural sense is not involved in a reduction in an estimate. I do recognize - and I had also talked about this - that party discipline in the Canadian Parliament is tighter than any other Westminster Parliament, and I've done some work on why I think this happened.

I went on to suggest that in the Pearson government of 1967, when a motion by Mr. Sharp, who was then the Minister of Finance, was defeated, that was not treated as a matter of confidence, although, unlike in Britain where our opposition will not allow such an event to occur without calling for the resignation of the government, a few days later a general motion of confidence was submitted and the House approved it. So although the motion failed, the question of confidence was accepted.

I think it is true that discipline is applied, but I gave some suggestions as to how I think it might be possible, within the current system, to allow for committees to make adjustments. However, I don't know whether the government would be ready to agree to those kinds of changes, but they would not then raise the question of confidence.

Mr. Williams: Confidence seems to be like beauty; it's in the eyes of the beholder. It is not defined in the Standing Orders, as you say, as a matter of process. Confidence does not really apply in the estimates process. Yet if we call it discipline, if we call it confidence, there is an ironclad guarantee, based on precedent, that as long as we have a majority government that is not dependent upon some negotiations to maintain its majority, the estimates will be approved as presented, period.

The Auditor General referred to the fact that if parliamentarians felt they had larger input into the process and meaningful input into the process, where they felt that changes could actually be accomplished, the relaxation of confidence, in my opinion... Wouldn't you agree that if there were a relaxation of confidence, much like we have in Westminster, whereby a government could be defeated on a motion followed by a formal vote of confidence, as we had during the time of the Pearson government where that actually took place in this House...? The government went down to defeat, but low and behold, the Prime Minister said that wasn't confidence. We don't know what confidence is except in the eyes of the beholder.

The Chair: You're running out of time. Do you want to come to your question?

Mr. Williams: Can confidence be amended much as it has been in Westminster, where it's not considered there unless it is formally in the motion?

Mr. Dobell: You're going to have to follow me...probably Canada's most knowledgeable authority on procedure. So I'm not going to take the risk of making statements here that he will then have to correct. I'm afraid there are already some statements I've made that he's probably going to correct for you.

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I find it to be significant that all opposition parties that become government succumb to requiring their members to support their estimates. That is so ingrained in the Canadian political culture that, short of minority government, I don't see it changing.

Just to be really provocative, if your party forms the government, then I shall be interested in what will happen.

The Chair: You talked about the possibility of an estimates committee. From the beginning we've had a range of discussions about what we're trying to accomplish here, and that's something we'll have to resolve at one point.

Certainly a couple of things seem to be evident. One is that parliamentarians need to do more to keep departments accountable for how they have spent the money. Secondly, they need to do more to influence what is going to be in those estimates. I'd probably put less emphasis on nitpicking at the estimates once they're tabled. To me, that is late in the game.

You talked about an estimates committee as being administrative. I tend to see the budget particularly, and then the estimates that flesh that out, as being the prime policy document of a government. Whatever is said in any other forum, how the money is getting spent tells you what the policies really are.

In terms of the priority the parliamentarians put on it, is it at all useful to start looking at the budget and estimates as a policy document and not as an administrative exercise, which isn't our business?

Mr. Dobell: In my opinion, the new financial planning and management system involves the finance committee in cross-Canada hearings, certainly in producing a report by, I guess, December 1. It seems to me that this is the committee that has been given responsibility for a broad look at the state of the economy and of the budget in that process.

Someone has to be responsible for looking at the performance of individual departments.

Perhaps I was wrong to use the term ``purely administrative'', because obviously there is a policy dimension. One of the problems - and there have been some suggestions to that effect, and I guess you yourself made one - of committees that produce reports without considering the financial implications is that they are failing in a major respect because policy is closely related to expenditure.

So I think some committee, whether it be the estimates committee or standing committees, has to look at individual departmental operations and to assess whether the programs for which they are responsible are effective or not and desirable or not.

The Chair: I think committee members would appreciate a two- or three-minute break before we hear from Senator Stewart, so we'll suspend for a few minutes.

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The Chair: Order.

I think Senator Stewart is no stranger to anyone familiar with the Parliament of Canada. He was also the author, in 1977, of The Canadian House of Commons: Procedure and Reform, and I think that's exactly what we're here to look at.

Senator, you could tell us a bit more about your activities in the Senate and why it gives you some expertise in this.

Senator John B. Stewart (Antigonish - Guysborough): Thank you very much, Madam Chair and members.

I thought it would be worth while to look back at the situation that prompted your House to make the changes made in 1968. Let me remind you that before 1955 all the estimates were considered in a committee of the whole House on supply. Whenever the committee of supply was going to sit, there had to be a motion that the Speaker would leave the chair. On every occasion before 1955 that motion was debatable. So it often happened that hour after hour would pass debating the motion that the Speaker would leave the chair, and they would get to the estimates only in the final hours of the day...sometimes very long days.

That was changed in 1955 so on only six occasions when the House was going to transform itself into a committee of supply would the motion that the Speaker leave the chair be debatable, and all those motions came to entail questions of confidence.

After 1955 there were two phases in the supply process. There were so-called ``supply motion days''. The motion would normally be moved on a Monday and the vote would take place the following Tuesday evening. That was two days on each motion, on six occasions, for twelve days. In the committee of supply there was no limit on the time taken up on the estimates. That's how it went, through to December 20, 1968.

I was a member of the House through three parliaments, all minority parliaments: Mr. Diefenbaker's last parliament and then Mr. Pearson's two parliaments. It was in those periods of minority parliaments that the present supply process was developed.

I was listening this morning, and I was wondering why we got such a bad grade on what we achieved. I want to defend what we achieved. I think we did a pretty good job.

What were the problems? There was what I will call the ``supply clot''. Day after day, week after week, the whole House was held up on all other legislative business by supply. You couldn't get to it, day after day, week after week. The Liberals did it to Mr. Diefenbaker in 1962-63. I was there when on February 5, 1963, Mr. Diefenbaker was asking for his eleventh advance, his eleventh interim supply against the total for 1962-63. His government was defeated. There was a supply clot.

The next thing was prolonged sessions and frustration by the members of the government and all the private members. There we were, bogged down in interminable wrangling. Very little business was being done. In the meantime the electorate was saying, they're all bad; let's defeat them all in the next election, regardless of their political persuasions. That was the second aspect of the problem.

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Another aspect of the problem was what I will call tiny minority power. There was no way you could close off the work of the committee of supply. It wasn't the case that the minority party or parties could hold up business. Five or six members could hold up business because they could speak again and again in committee and they did. It was no accident that the changes made on December 20, 1968, were made with the support of all the parties. It had become a situation where the supply business was so badly handled in the chamber everybody realized that process had to terminate. We had to have something else.

So in a sense the reason for making the change was not so much to improve the supply process, but to save Parliament. That's an exaggeration. We did hope the new process would be much better insofar as supply business was concerned. We hoped it would produce a structured year for members of the House of Commons on both sides instead of their being here on through July and on into August. On both sides there would be a basis for an annual calendar.

That is why we went to the three guillotines, the one on or before December 10, the one on or before March 26 and the one shortly before the end of June. That provides a backbone for the parliamentary year. I hope you like it, because I don't think you would like the alternative.

We did hope there would also be better examination of the estimates, because notwithstanding all that time spent on the estimates in a committee of supply, they were not very well handled. Typically, a few talkative members would eat up all the time and the back-benchers on both sides would moan and complain with great justification about what was happening.

For example, we thought that if we could get the estimates of Agriculture into a committee of agriculture where there would be members who were interested in agriculture and who represented farmers, the estimates would be examined more carefully.

Well, I guess it didn't happen. I haven't surveyed what goes on now, but I listen to the rumours. Insofar as examination of the estimates is concerned, I guess what was done was not successful.

But don't think the main aim of the change was to produce a better examination of the estimates. That was only one aspect. The main aim of the change was to make the House of Commons work better.

I think it is desirable that the estimates be examined more carefully. I don't think the main problem is procedure and I don't think the main problem is the form of the estimates. You can waste a lot of time if you think those are the areas of great difficulty. In other words, as Mr. Dobell suggested, the rules of the game aren't all that bad with regard to what a committee can do. The problem is the players.

Members of the House of Commons are very busy now. As was always the case - even when Mr. Diefenbaker was defeated on the estimates - the estimates don't influence government spending very much because the money is already spent. That is not the main problem. Members of the House - perhaps you're better now than we were - generally didn't want to cut the estimates. They wanted to know why programs that were particularly important to their voters hadn't been increased.

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There was, and as far as I know there still is, no connection between spending and taxation. If members had to say, ``Unless we cut this program, we're going to have to raise more money'', it might be a different matter, but because there is this structural distinction between taxation on the one hand and spending on the other, members can have it both ways: ``Let's cut taxes and increase spending''. Of course that's an exaggeration, but you see my point.

Normally there's very little zeal, I suspect, for cutting programs. At least in the bad old days when I was a member of the House there was very little.

Perhaps there is a point at which the form of the estimates becomes important, and it is that, as Mr. Dobell said, increasingly a vote becomes an omnibus.

When I was a member, I always used to watch the Public Works estimates, because I had a constituency with a long, active coastline. I wanted to know if a new wharf was going to be built at Stormont, and what was going to be done to repair the wharf at Larry's River, etc. You had an immediate concern about what was being done in your constituency. You could see it in the estimates.

Now you have these blanket votes, which are very hard to react to. They don't excite much attention. So I'm not blaming the members for having relatively little motivation, but I think the problem is there, rather than primarily in the form of the estimates or procedure.

Let me say that in another way: you could change the form of the estimates, you could perfect the form of the estimates, you could perfect procedure, but still not get what I think you want.

Perhaps I should stop there, Mr. Chairman, and see if I can cope with some questions.

Mr. Williams: I note your comment, Senator Stewart, on the fact that we have lost the connection between taxation and spending. In the old days, be they good or bad, it used to be - and I'm talking about before your time, many years ago - that taxation and spending were very closely linked. Now, of course, we have divorced the two, and look at our current economic situation.

You have talked and written in your book on the Canadian House of Commons about the supply process. Chapter 5 is about authorizing taxes and expenditure. You very definitely recognize that the approval of the supply rests with the House.

Am I correct in saying that?

Senator Stewart: Yes.

Mr. Williams: As you mentioned, you put in place in 1968 a process to regularize the process, to bring it into a more regular format, to provide some consistency in the way the House did its business, to get the estimates off the floor of the House into much smaller committees where hopefully they could be dealt with in some detail and with some level of expertise, and so on. What we have now, of course, is because members can't make any changes, they don't bother with even looking at the estimates any more.

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Do you feel that confidence is a major problem because they cannot change the estimates? Or to turn that around, do you think that if they were given the authority to change the estimates, the system you developed in 1968 would become more worthwhile and more a real exercise?

Senator Stewart: When you say ``change the estimates'', you mean reduce the estimates.

Mr. Williams: Yes.

Senator Stewart: Because for constitutional reasons you can't increase them.

Mr. Williams: My apologies; I meant reduce.

Senator Stewart: It was just a clarification.

Yes, I think members would be much more attentive if they could propose particular reductions in the estimates. I put in the adjective ``particular'' because an opposition, regardless of its party persuasion, will always denounce the government of the day for spending too much money. If it were a situation where a committee could say they've cut this vote, and where the vote was specific enough so that you knew exactly what was going to disappear, what program or what wharf or what new public building, there is no question - I think it would make the members more interested. It would also make those who wanted to defend that program or wharf or public building more interested, certainly.

Mr. Williams: The Standing Orders require that if an amendment is placed before the House on the final day of supply, the Treasury Board lay a motion first to reaffirm the estimates before the amendments are discussed.

One normally thinks that in the operations of a committee - and I'm not talking about just a House of Commons committee - one deals with the amendments to the main motion before one deals with the main motion. One deals with the main motion subsequent to dealing with the amendments. That process has been reversed as far as when the House deals with the estimates on the final day of supply.

Do you feel it would be appropriate to do two things: one, deal with the amendments first and deal with the main motion of supply, and then have it followed by a formal vote of confidence where it is recognized that one may amend the estimates, reduce the estimates, and yet express confidence in the government? Would that be an appropriate way to proceed?

Senator Stewart: I haven't been following the adjustments in your procedures, but perhaps I can say something that may be useful.

Our intention was that if a committee reduced a vote, it would be the vote as reduced that would be dealt with by the House unless the government took a step to reinstate the original vote. In any case, whatever you're voting on at that point, the work of the committee is being dealt with by the House, whether it's voting on the vote in the reduced form that came out of the committee or in the reinstated form as put forward by the government.

You brought up the whole question of confidence. Would you raise that again and refresh my mind?

Mr. Williams: I'm proposing a three-step process: one, dealing with the amendments; two, dealing with the main motion as amended or unamended; and three, after the main motion is dealt with, there would be a formal motion of confidence in the government that would be part of the final motion on the day of supply.

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Senator Stewart: Can I ask you why you think a motion that explicitly mentioned confidence would be more significant than a vote on the item in the estimates? I guess you're going to say - correct me if I'm wrong - it may well be that the members of the House would reduce an estimate, contrary to the government's intention, yet assert that they did not intend to indicate the government no longer enjoyed the confidence of the House. Is that correct?

Mr. Williams: That's basically correct.

Senator Stewart: The problem is that in a sense, the way it works out, it's not the House of Commons that decides whether the government enjoys its confidence. It's the government that decides.

In the British House, early in the 19th century, there was a vote that candles be now brought in; in other words, that they turn on the lights. The government side lost the vote and said, it indicates we no longer enjoy the confidence of this House and there will be an election. And there was. Don't ask me what the result was.

The question of confidence ultimately comes up at two points; first, when the House deprives the government of the day of the money necessary to carry on. You're out of money; you're through. That's one way. The other way is when the government says, we are not prepared to carry on with this House, and (a) we resign, or (b) we trigger an election.

So in a sense normally it's the government that has the option. That's what gives a Prime Minister his control over his party. He'll say, well, you don't like what we're doing; I guess you want an election. Then they all say, oh yes, sir, we've changed our minds.

So the mere statement by the House of Commons that a vote does not entail confidence may mean nothing. The Prime Minister says, well, that's your view, but we regarded that as a vote of confidence and there'll be an election.

The Chair: Mr. Arseneault.

Mr. Arseneault: Senator, I'm glad to see you here this morning.

I want to get back a little to an area you may feel is not that important, but I feel it is, and that's the mechanics of it: types of committees, that type of deal. You've heard both witnesses this morning and the line of questioning I had.

The Auditor General took the position that the current system, the committee structure and that type of deal - but there had to be some changes to it - would seem to be his favourite type.

The second witness, Mr. Dobell, seemed to indicate he would prefer one central committee. He used the Senate as the model and said it seemed to work quite well in the Senate.

Could you give me your opinion on both those scenarios and say which one you would favour and why?

Senator Stewart: Perhaps the way to come to that is to talk a little about the Senate national finance committee.

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The committee normally takes up a major question with regard to expenditure, some particular program, or at one time the whole question of evaluation across several departments, the evaluation of the work of a department. In other words, when the committee was doing that kind of work, it wasn't dealing with specific votes in the estimates.

The second kind of activity of that committee when I was an active member of it related almost entirely to supplementary estimates. There, you see, you get into the particulars. They want $5 million for this particular purpose or for that. One would want to ask why they were going to build that.... I remember there was a question of a certain highway in Nova Scotia, what I used to call the Forlorn Road. We pressed very hard on that, but you could do it because it was a particular project. It was the supplementary estimates rather than the main estimates that got looked at in detail. When we were on the main estimates it was the work of unemployment insurance, for example, or some main topic like that, and the other parts of the estimates went through on the nod.

I think it's fair to say that the senators are fairly happy with the work of the national finance committee, whereas I detect in the House of Commons a kind of general indifference to the work of their committees on the estimates. That would suggest that the senate model has something to recommend it.

But there is something else I think you have to remember: senators are not under the kinds of compulsion that members of the House of Commons are. They don't have voters with whom to contend, and some of them are around long enough to develop a fair amount of expertise in the work of particular departments.

Mr. Arseneault: I'd like to explore another area with you, Senator. You mentioned the linkage between spending and taxation. I served nine years on municipal council, and when it came time we served on various committees. Those committees worked with the bureaucrats to develop budgets and whatever. There was always that linkage made, I must say, and it kept us in line to a certain extent.

It was a small municipality so it was very easy to equate expenditure with tax increases or tax decreases. The rule of thumb was that if you increased your budget by $20,000, your tax rate went up 1¢, and you know what the tax rate...to the municipality, your voters and whatever. So if you increased $20,000 here and reduced $20,000 there, then it was neutral. That linkage was always made and seemed to work quite well on a municipal level, obviously a much simpler type of budget in categorization and expenditure. You could see where the money was going.

It's more difficult at the federal level. Would you have any recommendation for the committee on how to increase the linkage, when reviewing the estimates, between spending and taxation?

Senator Stewart: I haven't really thought about the methods. I don't know what happens now, but I must say that I think, in retrospect, we wasted an awful lot of time in the House of Commons when I was a member on the so-called budget debate. We dealt in generalities and didn't really get into the detail of the tax and borrowing plan.

If in some way that could be done, it might have the indirect effect of prompting members to look at expenditures. It might not even be necessary to make a procedural connection between the two. If there was a greater focus on taxation, on the details of taxation....

You see, there's this difference between Westminster and Ottawa: at Westminster they re-enact their income tax act every year; ours is on the books, so members are not confronted with the same connection between spending and taxation in Ottawa as at Westminster. It's a very important difference.

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Mr. Arseneault: Is that just a rubber-stamp re-enactment?

Senator Stewart: No, it is not. I haven't examined it in detail, but I suspect that it will vary from year to year.

The Chair: I agree entirely with what you had to say about the approach of members of Parliament and the problem not being in the estimates as much as it is in the fact that members of Parliament, for whatever reason, don't have a serious look at the estimates and what they say about the priorities of the department, as well as how well they're managing the resources.

When I first got here, I was astonished - and you must have been too, Guy - that committees would treat the estimates process as an opportunity either to take potshots at a pet peeve or to argue for a pet project and weren't at all dealing with the global plan for expenditure and what that said about what your priorities were, obviously in detail, and how you were implementing that. I don't know how to get over that.

I'm even more concerned about Mr. Williams' suggestion that committees or individual members of Parliament should be able to put forward motions to take $10,000 out of here and $5,000 out of there, because that turns it even more into a shooting gallery as opposed to a serious examination of what these estimates mean for the public.

Do you have any suggestions on how this committee might recommend some changes that would make it clear to members of Parliament that they have a role to play, that it's a significant role, and that it's not simply a matter of tinkering around in the dark corners of some little program that nobody ever heard of?

Senator Stewart: I think it was the Auditor General who said earlier today that approximately 70% of the expenditures is statutory. So those figures will appear in the estimates, but the money is not there to be voted. The expenditures have already been authorized.

So what have you got left? A lot of it relates to what I'll call housekeeping expenditures, paying the salaries of public servants and so on. But I don't want to exaggerate that.

What you could do, in a sense, is what we did in the national finance committee. In agriculture, the agriculture committee could say, well, there is this particular program, the experimental farm program. There are all sorts of new developments in agricultural science. Are we spending the money properly there compared with, let's say, what's being done in the United States or the United Kingdom, or perhaps Australia, wherever there are comparable crops? Or are we simply maintaining laboratories that are doing what they did 20, 25, or 30 years ago?

It seems to me that you could use the estimates as a way of entering into important subject-matters.

The Chair: Exactly.

Senator Stewart: Unemployment insurance would be another one, if that one has not already been flogged to death. I shouldn't have mentioned it. Transportation: are we handling our airports properly?

So instead of looking so much at the bottom line, look at the program and see if it is still performing the function for which it was thought necessary in the beginning. You could do that.

That's really what we do in the Senate when we're not looking at supplementary estimates.

The Chair: Thank you very much.

I want to acknowledge the presence of your special assistant, Mrs. Irene Duy. If any of us sitting around this table, aside from the senator, serves Parliament as long as she has, then I think we will count ourselves as being quite lucky.

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Senator Stewart: Without her the Senate really would not operate.

The Chair: Thank you very much, Senator.

I think we should have just a quick look at how we're going to proceed for the next couple of weeks. The procedure and House affairs committee will be holding a regular meeting next Thursday at 11 a.m. to deal with the reports on electoral boundaries. Therefore this subcommittee would not have all morning to meet. We could meet from 9:30 a.m. to 11 a.m. I would like to suggest that we not schedule witnesses next week but we have a briefer meeting. It could possibly be on a Tuesday afternoon, if others are available, to look at some of the issues we want to deal with as well as the work plan for the rest of the committee's work.

Mr. Arseneault: Tuesday afternoon.

The Chair: That's one possibility I'm suggesting, Mr. Arseneault.

We won't be able to have our normal 9:15 a.m. until noon slot, so I'm suggesting we not schedule witnesses next week but we have a shorter meeting to deal with more administrative matters, perhaps come to some conclusion on a witness list, on the issues, and on the work plan for the committee on these projects. We don't need to wait until Thursday to do that. A lot of that material has been prepared by our staff, and if people are available we could meet on the Tuesday afternoon, perhaps.

Mr. Williams: Could we meet fairly early on Tuesday afternoon? We normally have public accounts on a Tuesday afternoon.

The Chair: At what time? 3:30 p.m.?

Mr. Williams: 3:30 p.m., yes.

The Chair: And you go until when?

Mr. Williams: Until 5:30 p.m.

Mr. Arseneault: How long would you expect the meeting to be?

The Chair: It might be an hour by the time we go through the witness list, go through the issues, come to some agreement on what the issues are we're trying to address, and then approve the work plan.

Mr. Williams: My choice would be 1 p.m. on Tuesday.

The Chair: That's impossible for me. I have to prepare for Question Period.

Mr. Arseneault: Tuesday morning, 9 a.m., 8:30 a.m.?

The Chair: Not that particular Tuesday. I'm speaking out in the riding.

Are you around on Monday?

Mr. Williams: I intend to be around next Monday. At this point I expect to be here on Monday.

Mr. Arseneault: I expect to be here on Monday.

The Chair: Morning or afternoon?

Mr. Arseneault: Monday is Monday.

The Chair: So you're here all day?

Mr. Arseneault: Yes.

Mr. Williams: I expect to come in Sunday night, so I would be here on Monday morning.

The Chair: We could set something up, then, for maybe around 11 a.m. on Monday.

Mr. Williams: I don't have my calendar with me, but that would likely be okay.

The Chair: We'll get the clerk to check with you. We'll say tentatively 11 a.m. on Monday. If not, we'll try to work around the other times you've indicated. You'll get a notice.

This meeting is adjourned.