Financial Procedures / Business of Supply

Legislative phase: supplementary estimates; admissibility of a Vote

November 22, 2001

Debates, pp. 7453-5

On November 1, 2001, John Williams (St. Albert) rose on a point of order with regard to two items in the Supplementary Estimates (A), 2001-02,^[1] which had been tabled in the House earlier that day: Vote 10 under Environment Canada and Vote 10 under Natural Resources Canada. Mr. Williams maintained that these items together constituted a $100 million grant to the Canada Foundation for Sustainable Development Technology, of which two amounts of $25 million corresponding to each Vote had already been transferred, in April 2001, from the Treasury Board contingencies fund and then paid out to a non-profit corporation called the Canada Foundation for Sustainable Development Technology. He pointed out that Bill C-4, Canada Foundation for Sustainable Development Technology Act, the legislation providing for the non-profit corporation to continue as the Foundation, had not received Royal Assent until June 2001. Mr. Williams objected to what he characterized as the Government’s apparent use of a multi-year appropriation as well at its use of estimates and appropriation acts as vehicles to fund programs that had not received legislative authority. He accordingly asked that the Chair rule out of order Vote 10 under Environment Canada and Vote 10 under Natural Resources Canada.^[2] After hearing from another Member, the Speaker took the matter under advisement.^[3]

The Speaker delivered his ruling on November 22, 2001. He ruled that there had been no multi-year appropriation in this case, nor had there been any attempt to legislate through the estimates. He stated that, although the legal authority existed for the grants, no concomitant authority under the supply process to make the payments had been sought from Parliament for the earlier grants totalling $50 million and that he did not consider that the notes in the Supplementary Estimates (A) respecting the disbursement of these earlier monies as sufficient to be considered as a request for approval of those grants. The Speaker expressed concern about the lack of clarity and transparency in this case but declined to rule the disputed Votes out of order, noting that there remained ample time for the Government to take corrective action by making the appropriation request of Parliament through the supplementary estimates process.

Decision of the Chair

The Speaker: I am now ready to rule on a point of order raised by the hon. Member for St. Albert on Thursday, November 1, 2001, relating to two items in the Supplementary Estimates: Vote 10 for $50 million for the Sustainable Development Technology Fund under Environment Canada and Vote 10 also for $50 million for the Sustainable Development Technology Fund under Natural Resources Canada.

In his submission the hon. Member for St. Albert argued that these votes should be ruled out of order for two reasons. First, in his view, the Government expenditures of $100 million funding related to the Canada Foundation for Sustainable Development Technology constituted a multi-year appropriation. Second, he contended that there had already been a transfer of money for these purposes without parliamentary approval.

In support of his position the Member referred to the Auditor General’s observations in the Public Accounts of Canada 2000-01 tabled in the House on September 27, 2001, in which she expressed serious concerns with the events surrounding these grants.

I wish to thank the hon. Member for St. Albert for raising this matter and I also want to acknowledge the contribution of the hon. Government House Leader on this subject.

At the outset, I want to draw the attention of the House not only to the seriousness of this question but also to its complexity. I ask the House to bear with me as I review the events which have led us to the current situation.

Let me begin with a chronology of events that may be helpful.

The initial announcement of funds to support sustainable development technology was made in the budget statement presented by the hon. Minister of Finance on February 28, 2000. The enabling legislation for that initiative, Bill C-46, An Act to establish a foundation to fund sustainable development, died on the Order paper at the dissolution of the Thirty-Sixth Parliament.

At the beginning of this Parliament on February 2, a new bill, Bill C-4 was introduced and given first reading.

Bill C-4 provides, in addition to the provisions of the original Bill C-46, that the Government may designate a corporation already incorporated under part two of the Canada Corporations Act to continue as the Canadian Foundation for Sustainable Development Technology. A not-for-profit corporation of this type was established in March of this year. In early April, Natural Resources Canada and Environment Canada each granted $25 million to this not-for-profit corporation using funds transferred from the Treasury Board contingencies Vote for this year.

On June 14 Bill C-4, An Act to establish a foundation to fund sustainable development technology, received Royal Assent. Thus Bill C-4 became law prior to the tabling of the Supplementary Estimates (A) so there need be no concern that an attempt is being made here to legislate through an appropriation.

The Chair can find no specific request under our supply process for authority to make the two payments for the corporation. In other words, neither the Main Estimates 2001-02 nor interim supply mention these particular grants. This is a significant fact and we will return to it later.

That being said, and this is a technical point but one of key importance, the money transferred to Natural Resources Canada and Environment Canada to make these payments was taken from the Treasury Board contingencies Vote for this year, so there is no question of a multi-year appropriation in the case before us. That answers the hon. Member for St. Albert’s first concern.

However, we are still left to deal with the allegation that no approval has been given for the original expenditures in this case. I said a moment ago that I could find no authority for the original grants totalling $50 million in either the Main Estimates 2001-02 or in interim supply.

Let us then return to what is being requested in the Supplementary Estimates (A) 2001-02 tabled in the House on November 1.

At page 58 of the Supplementary Estimates, Vote 10 under the Environment Department requests $50 million for the Sustainable Development Technology Fund. A note indicates that funds in the amount of $25 million were advanced from the Treasury Board contingencies Vote to provide temporary funding for this program. A similar entry for the same program is listed at page 115 under Vote 10 of the Natural Resources Department. A total of $100 million is therefore being sought for the Sustainable Development Technology Fund.

Two questions arise.

The first question is the confusion between the “Fund” as referred to in Supplementary Estimates and the “Foundation” created by Bill C-4.

Neither Bill C-4 nor its predecessor, Bill C-46, mentions “Sustainable Development Technology Fund”. Indeed, in speaking on second reading of Bill C-4, the hon. Minister of National Resources and Minister responsible for the Canada Wheat Board stated, and I quote the Debates of February 19th, 2001, page 852, said:

In Budget 2000, we first announced the government’s intention to establish a foundation with initial funding of $100 million to stimulate the development and demonstration of new environmental technologies, in particular climate change and clean air technologies. Bill C-4 delivers on that commitment from Budget 2000. It creates the organizational structure, the legal status and the modus operandi of the foundation.

On the basis of the Minister’s statement, I am led to conclude that what is being sought in the Supplementary Estimates (A) is funding for the Canada Sustainable Development Technology Foundation, established pursuant to Bill C-4. From a procedural point of view, such a request poses no difficulty.

However, the Supplementary Estimates do not identify the Foundation as the recipient. Instead, the estimates refer only to a Sustainable Development Technology Fund.

The second question is the crux of the matter: what is the link, if any, between the $100 million requested in Supplementary Estimates (A) for the Foundation/Fund and the $50 million already paid to the not-for-profit corporation in April of this year?

As I have already mentioned in the chronology, notes in the Supplementary Estimates list the Sustainable Development Technology Fund as the recipient of a total of $50 million in interim funding through the Treasury Board contingencies Vote. However, these funds were paid to the pre-existing not-for-profit corporation, established under an altogether different legal authority, namely, the Canada Corporations Act, and not under Bill C-4 creating the Foundation.

The Chair cannot see that the request for $100 million funding relates in any way to the original grants made to the corporation using the legal authority of the Energy Efficiency Act and the Department of the Environment Act. Simply put, the $100 million now being sought cannot be used both to fund the Foundation and to refund the Treasury Board contingencies Vote for $50 million paid out earlier to the corporation.

Bourinot 4th edition at page 416 has this to say on the subject of supplementary estimates: “All these estimates are divided into votes or resolutions, which appropriate specified sums for services specially defined. They are arranged under separate heads of expenditure, so as to give the full information upon all matters contained therein.”

The lack of clarity and transparency in this case must be of considerable concern to the Chair. Requests for funds in the estimates are tied to particular programs, previously approved by Parliament. I have noted, of course, the Auditor General’s comment that she is satisfied that legal authority existed for these grants under the Energy Efficiency Act and the Department of the Environment Act. However, the concomitant authority under the supply process to make these payments has never been sought from Parliament. That is the crux of the procedural difficulty raised by the hon. Member for St. Albert and I must conclude that he is correct in his assessment of the situation, if not perhaps in the remedy he suggests.

In summary, then, the Chair has concluded that no authority has ever been sought from Parliament for grants totalling $50 million made to the corporation in April of this year and does not consider that the notes in the Supplementary Estimates (A) concerning the disbursement of these earlier monies are sufficient to be considered as a request for approval of those grants. In other words, the approval that is being sought in Supplementary Estimates (A) cannot be deemed to include tacit approval for the earlier $50 million grant.

However, as there remains ample time for the Government to take corrective action by making the appropriate request of Parliament through the supplementary estimates process, the Chair need not comment further at this time. The Supplementary Estimates (A) for 2001-02 can therefore proceed.

I wish to thank the hon. Member for St. Albert for having drawn this matter to the attention of the House. I commend him for his vigilance in matters of supply. I especially appreciate his having raised it early enough to allow the Chair to examine closely a very complex issue and I hope my ruling has not confused hon. Members.