Financial Procedures / Business of Supply

Legislative phase: supplementary estimates; allegedly misleading statements

October 7, 2003

Debates, pp. 8241-3

On September 24, 2003, Garry Breitkreuz (Yorkton–Melville) rose on a question of privilege charging Wayne Easter (Minister of Justice and Solicitor General of Canada) with misleading the House and thereby impeding his ability to function as a Member of Parliament.^[1] The Minister had stated earlier in a reply during Oral Questions that funds relating to the Canadian Firearms Program in the Supplementary Estimates (A) 2003-04 were not new funds, and that they had already been approved by Parliament.^[2] Since the funds in question were listed in the Supplementary Estimates as a new appropriation, Mr. Breitkreuz argued that either they were listed erroneously, or the Minister’s statement had been incorrect. On September 25, 2003, Don Boudria (Leader of the Government in the House of Commons) rose in response to Mr. Breitkreuz’ question of privilege. He declared that the funds had been approved, but not spent, during a previous fiscal year, and were thus being carried forward in the Supplementary Estimates. He pointed out that operating budget carry forwards are an accepted part of Government financial management practices. The Speaker took the matter under advisement.^[3]

On October 7, 2003, the Speaker delivered his ruling. He explained that only a portion of the funds approved by Parliament to finance the Canadian Firearms Centre had been spent in the original fiscal year, and that the approval of the funds had lapsed at the end of that fiscal year. The funds were listed in the Supplementary Estimates as a new appropriation because Parliament had to approve the carry forward from the last fiscal year in order to reapprove the spending authority. Carry forwards simply facilitate the transfer of funds from one fiscal year to the next. The Speaker stated that, although the wording in the Supplementary Estimates had proved unclear to some Members, the Minister had not misled the House when he had stated that there was no increase in the overall funding of the Program in question over the two fiscal years.

Decision of the Chair

The Speaker: On Wednesday, September 24, the hon. Member for Yorkton–Melville rose on a question of privilege arising out of the previous day’s Question Period, charging that the Solicitor General had misled the House, thus impeding his ability to function as a Member of Parliament.

I would like to thank the hon. Member for Yorkton–Melville for having raised a matter of considerable importance. That he was not deterred by the financial complexities of the question is to his credit. That he was driven to raise a question of privilege in the House in order to obtain the kind of information that should be readily available to all Members of Parliament is most unfortunate.

In his presentation the hon. Member referred to the Supplementary Estimates (A) tabled in the House on September 23, pointing out that on pages 13 and 88 for Vote 7a it is stated, “Canadian Firearms Program New Appropriation $10,000,000”, and “Canadian Firearms Centre—Operating expenditures… to provide a further amount of $10,000,000”.

The hon. Member then proceeded to contrast the wording used in the Supplementary Estimates documents with the Solicitor General’s response to a question during Question Period in which the hon. Minister had stated that the Government was not asking for any new money for the Firearms Registry and that the money had been previously approved by Parliament.

The hon. Member for Yorkton–Melville noted that if the Solicitor General was right, then the Supplementary Estimates were wrong, and Parliament would be voting for the same money twice. He maintained that this could not possibly be the case.

Describing the history of the House’s actions concerning the Estimates of the Canadian Firearms Program, the hon. Member pointed out that Vote 7a was not a one dollar item, the usual means of transferring funds from one program to another in the Estimates, but was listed as a new appropriation. He further stated that the House had been assured that the $113.1 million approved in the Main Estimates for 2003-04 was the entire budget for the Program. He argued that the Solicitor General’s claim that this was not new money defied common sense.

In conclusion, the hon. Member said that an attempt “to fool Members” into believing that the 10 million dollars in Vote 7a were not new funds and thus somehow not subject to scrutiny or reduction was an affront to the dignity of the House and disrespectful of its role as “the grand inquest of the nation”. The House needs accurate and truthful information to perform its functions and, therefore, the making of misleading statements in the House must be treated as contempt. In the opinion of the hon. Member for Yorkton–Melville, the Solicitor General clearly misled the House and he stated that he was prepared to move the appropriate motion should the Speaker rule that the matter is a prima facie case of privilege.

The hon. Government House Leader addressed the matter on behalf of the Solicitor General describing for the House the use of one dollar items in the Estimates, indicating that the Solicitor General had not misled the House and promising to return to the House with additional information.

The hon. Member for Pictou–Antigonish–Guysborough and the hon. Member for St. Albert also contributed to the discussion of one dollar items and what constitutes a new appropriation.

On September 25, the Government House Leader provided additional information concerning the nature of the request for $10 million. He pointed out that operating budget carry forwards are an accepted part of Government financial management practices. He stated that the Supplementary Estimates for the last fiscal year 2002-03 contained requests for the approval of a total of $629 million in carry forward funding for 87 departments and agencies. The Government House Leader also underlined the fact that the $10 million in question is money that had been previously approved by Parliament, to which point I will return.

It is understandable that the hon. Member for Yorkton–Melville finds the presentation of this item in the Supplementary Estimates (A) somewhat confusing. The funds in question are certainly presented in the document as a new appropriation.

As hon. Members know, Parliament provides the Government with funds by giving it the authority to withdraw specific amounts of money from the Consolidated Revenue Fund for specified purposes. In granting funds to the Government, Parliament sets an upper limit on the amount that may be spent on a program or activity. The Government may not exceed that limit without seeking additional funds from Parliament, which is done by way of supplementary estimates.

In the Supplementary Estimates (A) 2003-04, under Solicitor General, Vote 7a, Canadian Firearms Centre—Operating Expenditures (page 88) there is a request to Parliament for two amounts: a transfer of $84,840,694 and a “new appropriation” of $10,000,000.

With respect to the amount of the transfer, the Supplementary Estimates explain that the Government is requesting Parliament:

To authorize the transfer of $84,840,694 from Justice Vote 1, Appropriation Act, No. 2, 2003-2004 for the purposes of this Vote….

This is a transfer of funds already approved by the House on June 12, 2003, as part of the current fiscal year’s Main Estimates.

Under Explanation of Requirement, the new appropriation of $10 million is described as “Operating budget carry forward”. A note explains this item as follows:

This amount represents the operating budget carry forward for Justice for the Canadian Firearms Centre.

A further note states:

Effective April 14, 2003, Orders in Council P.C. 2003-555 and 2003-556 established the Canadian Firearms Centre as a separate department and transferred from the Minister of Justice to the Solicitor General of Canada the control and supervision of the Canadian Firearms Centre.

It is important at this point that hon. Members clearly understand what is meant by an operating budget carry forward. The main features of a carry forward can be identified as: first, carry forward is from one fiscal year to the next; second, carry forward of an operating budget is limited to 5% of that operating budget in the main estimates for the original fiscal year; and carry forwards are done individually by program and not for the main estimates Vote 1 (operating expenditures) overall.

Before proceeding further, it may also be useful to make clear the distinction between carry forwards and dollar items, since the matter of dollar items was raised during the initial discussion of this question of privilege. House of Commons Procedure and Practice at page 733 describes dollar items as follows:

Supplementary Estimates often include what are known as “one dollar items”, which seek an alteration in the existing allocation of funds as authorized in the Main Estimates. The purpose of a dollar item is not to seek new or additional money, but rather to spend money already authorized for a different purpose.

Dollar items deal with the transfer between votes of funds approved during the current fiscal year. A transfer of this kind permits the funds to be used for a purpose other than that for which they were originally approved. Dollar items cannot be used for a transfer from one Government department to another. Honourable Members will note that in the transfer of funds mentioned earlier, from the Justice Department to the Solicitor General, the specific amount of the transfer is indicated rather than a nominal one dollar figure.

Carry forwards, on the other hand, deal with the transfer of funds from one fiscal year to the next. The money to be carried forward was money approved by Parliament in the original fiscal year, but not spent in that year. Since the approval of the funds lapses at the end of the original fiscal year, Parliament must authorize the carry forward in order to reapprove the spending authority. There is no change in the purpose for which the funds are requested.

As carry forwards are done on a program basis, the Justice operating budget carry forward is properly listed under Solicitor General. As I mentioned earlier, the Program, Canadian Firearms Centre, was transferred on April 14, 2003. Therefore, it would no longer be permissible to have the carry forward listed under Justice, because the Justice Minister no longer has authority for the Program.

The situation before the House can be summarized as follows. In the preceding fiscal year, 2002-03, the Government sought and received spending authority to finance the Canadian Firearms Centre. Over the course of that fiscal year, it apparently made use of only a part of the funds that Parliament had granted for that purpose. The unused funds lapsed at the end of the fiscal year. The money remains in the Consolidated Revenue Fund, but the Government now lacks the authority to spend it.

Through the Supplementary Estimates (A), 2003-04, the Government is seeking new authority to spend a part of the previous fiscal year’s allocation, which it did not use during that year.

In a manner of speaking, therefore, the House is indeed being asked to vote on the same thing twice. Authority was sought and granted to spend the $10 million on the Firearms Centre during fiscal year 2002-03. However, the money was not spent and that authority has lapsed.

The Government is now seeking fresh authorization to spend that sum on the Firearms Centre during fiscal year 2003-04. The decision as to whether that authority should be granted is obviously one that the House itself must make. As with any request in the estimates, the House has the right to reduce the amount requested or to refuse it entirely.

In light of these facts, I cannot agree that the remarks of the hon. Solicitor General are misleading. As is true of any large and diverse organization, the Government of Canada makes use of many technical accounting devices that may be unfamiliar to those of us who are not specialists in the field of public finance. However, the fact that the $10 million is a carry forward is set out in the Supplementary Estimates (A), while the wording is not as clear as it might be. While it is true that this represents a new appropriation in the current fiscal year, there is no evidence to suggest that the hon. Solicitor General is incorrect when he asserts that it does not represent over the two fiscal years any increase in the overall funding for this Program.

It should be noted that the actual amount of funds which have lapsed will only be known when the Public Accounts are tabled. It is only then that Members will be able to determine if the carry forward respects Treasury Board guidelines. This ruling should not be taken as passing judgment on the availability of the $10 million amount in the carry forward. I am sure the hon. Member for Yorkton–Melville will follow the Public Accounts with great care on this point.

I wish to thank all hon. Members for their patience in dealing with this matter, which has touched on some relatively technical explanations of the workings of our financial procedures. The issue underscores the need for Parliament to be presented with clear and complete information in order to fulfill its responsibilities. And once again, I wish to commend the hon. Member for Yorkton–Melville for raising this important question, and I trust that the matter has been clarified to everyone’s satisfaction.