At the time this article was written the
Hon. Ron Huntington and Claude-André Lachance were members of the House of
Commons Special Committee on Standing Orders and Procedure.
It is the hallmark of democracy that the
government be accountable for its actions. In our system, this accountability
is exercised directly to the people through periodic elections and routinely to
Parliament on whose continuing support and confidence the government's
existence depends. Accountability in this case means the duty to answer for the
power conferred. It is the responsibility of Parliament to hold the government
to account just as it is the government's responsibility to make that
accounting. There are a number of vehicles through which Parliament holds the
government accountable, question period being one example and the process of
The history of parliamentary government
demonstrates that it is in matters of finance that the issues of power and
accountability crystalize. The government must seek approval from Parliament
for its spending program, and it should account to Parliament for its spending
performance. Members of Parliament must then fulfill responsibilities in the
following areas: the examination of the expenditure implications of proposed
legislation; the examination of the proposals for expenditure and when doing
so, not only establish the results to be expected but examine the effectiveness
of past expenditures against results achieved in the program and in the
envelope sectors; holding the government accountable for accomplishing what it
intended to accomplish with complete probity and with prudence in respect to
waste and inefficiency.
The purpose of this paper is to outline the
way the House of Commons should organize itself to fulfill its responsibilities
for scrutiny of both proposed and actual spending. It will be suggested that
these responsibilities can be better accomplished by restructuring standing
committees, clarifying and enhancing the powers of committees and providing
them with better support.
The Need For Reform
Between 1975/76 and 1981182 public
expenditures have grown from $38.2 billion to $65.5 billion. That is a growth
of $27.4 billion or 42% in six years. Of the $65.6 billion in 1981/82, $35.2
billion covered statutory items such as public debt, old age security, fiscal
transfer, family allowance, unemployment insurance, hospital insurance and
medicare. That leaves $30.4 billion in expenditures to be voted after scrutiny
of the estimates by Parliament. A modest 5 to 10 percent reduction in this
amount could yield a savings of from $1.5 to $3.0 billion.
There are 282 Members of Parliament in the
House of Commons and 104 Senators. It is their responsibility to scrutinize
these expenditures. The 386 representatives of the people have quite a job on
their hands but in reality only a few of them are actively engaged in the
standing committee scrutinizing proposed and past expenditures. Excluding the
Public Accounts Committee deliberations, approximately 400 hours were spent on
examination of the $65 billion total inclusive of the $35 billion of voted
expenditures. That is a rate of scrutiny of well over $150 million per hour!
When we add the deliberations of the Public Accounts Committee to the equation,
Parliament passes and examines the total expenditures at the average rate of
$100 million an hour or the voted expenditures at about $50 million per hour.
As spending has gone up, the amount of committee time has, if anything, gone
Parliamentary scrutiny has not been applied
in an effective manner and to the most significant areas. The $35 billion
dollars in statutory items are not regularly reviewed. There is no effective
mechanism for parliamentary committees to examine tax expenditures or loan
guarantees to crown corporations. In some cases, major departments receive
little or no scrutiny while smaller departments receive more than proportional
The standing committees that look at
departmental estimates seldom, if ever, examine past spending trends or compare
final spending with the original vote. The growth in government and the
staggering increase in expenditures has outpaced the growth in the resources of
Parliament to handle the increasing workload.
The research units, if any, of various
committees are small, and none of the three main parties retains a sufficiently
strong research support group to help the parliamentarians scrutinize expenditures.
The Research Branch of the Library of Parliament is not sufficiently large to
staff every committee on a permanent basis nor, in our opinion, would the rules
of the Library allow an enlarged Library research staff to serve the
investigative and advocacy needs of the parties and the member.
Given the current level of resources applied
to the scrutiny of expenditures by parliamentarians outside the government of
the day, the task seems to be, and is, impossible to do well. In the present
circumstances, parliamentarians cannot properly discharge their constitutional
responsibilities in this regard.
Several changes recently introduced by the
government have placed a strain on the committee system. For instance, the
policy and expenditure management system (the envelope system) has changed the
way the government packages its expenditures so that a parliamentary committee
could now find itself dealing with programs from different envelopes or even
two different policy sectors. No single committee today has enough resource to
organize the information to enquire why the government has allocated a
particular level of funding to a policy sector or an envelope.
Furthermore no parliamentary committee has
the opportunity to scrutinize the totality of the estimates as they relate to
one another. This further breaks down in that there is no co-ordinating body
either from staff or from the political scene which is charged with the
responsibility of informing the existing standing committees as they deal with
particular estimates, of the consequential effect that approval or disapproval
of the estimates will have on either the totality of government policy and
programmes or simply the policy and programmes within the particular envelope.
In addition, there are many new documents
which are now, or soon will be, available to Parliament including: the medium
term economic forecast, part Ill of the main estimates, departmental
expenditure plans and evaluations, the auditor general's comprehensive audit
reports on departments and white and green budget papers.
The organization of the information now
available from these innovations is there to help parliamentarians understand
the manner in which the $65 billion is deployed. What remains to be done is to
motivate the parliamentarian and equip the parliamentary committees to use this
information productively and at the same time address the central question of
how to give committees the power and the rewards necessary for scrutinizing
expenditures without hamstringing the government's ability to govern. The
alternative to this challenge is to return to the pre1 968 rules and the threat
of filibuster delay over supply proceedings.
The Issues of Reform
In order to deal with the problems outlined
above the following four specific issues must be addressed. The accountability
of deputy heads and ministers to Parliament must be delineated. The standing
committee system must be restructured to reflect the revised government Policy
and Expenditure Management System, the new form of estimates, i.e. departmental
expenditure plans part Ill of the main estimates. A modest professional
research staff must be established to help parliamentarians to analyse the
available information or a budget be secured to contract for resources on an "as
required" basis, or a combination of the two. The necessary tripartite
agreement amongst political parties must be developed to divorce approval of
government estimates, which is a political process; from the scrutiny of
accounts which should be an apolitical process. This would ensure that the
party in power, instead of being defensive about the examination process,
participates in, aids and abets it.
It is crucial to the process of examination
of expenditures that as clear a distinction as possible to be made between
those items for which a minister has responsibility and those for which deputy
heads must answer. Those matters for which a minister is accountable will
always be subject to political, and partisan political examination. It is only
in the area for which public servants are responsible that parliamentarians can
fulfill their constitutional responsibility of holding the administration
accountable in a non partisan way. It is, after all, in every member's
interests, whether in the governing party or in opposition, to see that public
money achieves the best value possible for its expenditures. The government, as
much as the opposition, has a genuine interest in reducing waste and
eliminating poor administrative practices.
The size of the contemporary government of
Canada makes obsolete the old theory that a minister must be held accountable
not only for his own actions but also for every action of those who serve in
his portfolio of responsibilities. A minister, must, however, be held
accountable for the policy decisions within his area of responsibility, as
manifested in proposed legislation, policy announcements and spending plans. In
this regard he must be able to explain and defend the budgetary allocations
proposed for programs within his portfolio. Based on the best information that
can be obtained, he must justify to Parliament the policy decisions affecting
It is unreasonable to hold a minister
accountable for all the administrative acts and decisions that occur in the
course of running programs. He should, however, be answerable for seeing that
any authority he has delegated has been properly delegated and that appropriate
steps are taken to prevent the misuse of such delegated authority. Furthermore,
he should accept responsibility for any gross abuse of that delegated authority
and any mal administration by senior officials of his department that might
occur. A minister's resignation in such circumstances is not an admission of
personal guilt but an acknowledgement of the seriousness of an error and a form
of reproach to those responsible.
A minister should also be accountable for
any interventions he may make in the administrative process. The line of
demarcation between policy and administration is seldom clear cut and there
will always be instances where a minister will pre-empt a decision that would
otherwise have been made at the bureaucratic level. In instances where this
occurs, the minister is accountable to Parliament for the decision and its
The people who carry out government policy
are accountable to ministers for their actions, be they departmental civil
servants or officials of an agency, board, commission or crown corporation. In
addition, however, there is a constitutional need for an accounting to
Parliament for the manner in which government programs are administered. It is
unrealistic to expect that a minister could bear the burden of direct
responsibility for all the administrative acts that comprise the implementation
of government programs. It is necessary, therefore, that the officials
responsible for administration be accountable directly to Parliament for the
actions taken by them. It is not their job to justify ministerial or cabinet
decisions to Parliament, but it is their job to account for the way that they
have implemented those policies. To this end it is essential that no public
servant be prevented by ministerial intervention from appearing before a
committee which wishes to examine that person.
Senior public servants have another
important duty besides implementing policy: the provision of policy advice to
ministers and cabinet. For this function they are primarily accountable to
ministers and cabinet. There is, however, a legitimate interest of
parliamentarians in the nature of the advice provided. Parliament should hold
public servants accountable for the cost effectiveness of their advice, at the
very least in terms of whether the proposed policy will accomplish the stated
objectives in the most economical, efficient and effective manner possible.
Public servants cannot be held accountable if their advice is not followed, but
they should be held accountable for the managerial content of that advice.
Agreement as to accountability must be
developed not in principle but in practice, by careful examination of each
program, and the issues within it, and by clearly defining instances where
direction flows from the top (political level) to the bureaucracy. In determining
the limit of accountability, there is no substitute for painstaking analysis of
programs and their elements, as defined in the revision of the main estimates
part Ill, by a parliamentary committee which sees its responsibilities as
cutting across the normal party divisions. Obviously there will be some general
across the board rules, but by and large the key areas of expenditures which
one would label discretionary or voted will fall into the grey zone, between
the political and non political. Accountability in those areas will have to be
negotiated in detail through the program analysis.
The resolution of this issue is essential.
If there is no agreement on accountability only trivial areas of expenditures
will be open to independent or non political scrutiny. The larger the area of
deputy head's accountability, the more freedom and room for non partisan
review, and consequently the greater probability of success of such a review.
Once the politics of a program or activity ceases to be an issue, the desire to
examine it objectively should not be impeded by the government of the day, on
the contrary it should be assisted.
steps would be appropriate to address this issue:Informal tripartite discussion, among the members of
the Public Accounts Committee, should take place to reach a conclusion that it
is desirable to approach the issues outlined above as a nonpartisan problem,
whose resolution will benefit the country.
agreed position should be formalized and cabinet approached for concurrence of
timetable for review of programs should be developed.
staff should prepare a timetable for the structure of the examination process,
using the "envelope system" and the new form of the estimates as the
base. Most likely, the first set of programs to be examined should include
those programs already revised as part of the revision of the main estimates
There are two different but related types of
committees at the present time dealing with financial accountability. In the
first place. the Public Accounts Committee does not enter the realm of policy
but rather deals with expended funds and examines the quality of management
within the programs and the effectiveness of the expenditures delivered to the
programs. Secondly, the other committees, being the standing committees, deal
in the political realm of policy.
There is a need to restructure the present
committee system in order to attain a greater measure of financial
accountability over government spending. These following changes are
present Public Accounts Committee be continued, but that its method of
operation be changed so that it will overview monies expended on the basis of
the envelope system;
Fiscal Policy Framework Committee be established dealing with pre and post
budget examination and the development of recommendations on revenue and
Proposed Expenditures Committee be established with overall responsibility for the
scrutiny of the estimates (proposals for expenditures);
Committee dealing solely with quasi-governmental bodies be established.
The Public Accounts Committee
This committee should continue to be the
focal point for the scrutiny of past expenditures and the attack on
administrative waste. The results of the expenditure probes of this committee
should be organized to provide inputs to the probes of the Fiscal Policy
Framework and Proposed Expenditures Committee.
To allow the Public Accounts Committee to
approach its immense task in an effective functional way it should be divided
into the following subcommittees: A subcommittee to deal with the systems and
accounting processes of government. (machinery); subcommittees to mirror and
examine the five envelopes: Regional and Economic Development, Social
Development, Foreign and Defence, Government Operations, and other ....
The purpose of these subcommittees would be
to conduct in-depth analysis of the economy and efficiency of expenditures and
to enquire whether programs were delivered as planned and if not, why not.
Source materials for their enquiries would be part Ill of the estimates and the
Auditor General's reports. To attempt to review all expenditures in a single
year would be an exercise in futility. Therefore, expenditure probes should be
on a four to five year cycle and preferably tied to the life of a Parliament.
The advice of the Auditor General being always available to guide priorities.
Two valuable by-products of this structure
would be that focussing on function rather than on a department and a minister
would tend to de-emphasize the narrow political aspect of the scrutiny of
expenditures. Through examination by way of the envelope system. a number of
departments would often be involved in any one function and therefore all
departments would constantly be on their toes.
An alternative would be to rotate the accent
of examination on one envelope per year in a Public Accounts subcommittee on
expenditures. This alternative would still require the subcommittee on
Thus, the alternatives are: either five
subcommittees reflecting the envelopes, devoted to audit and scrutiny of
expenditures plus a subcommittee on "machinery"; or two
subcommittees, one on expenditures and one on "machinery".
The first alternative is recommended, with
examination of the elements of an envelope cycled over a four-year period.
Each envelope is already broken down into
functional subdivisions. Expenditures thus grouped would serve as a basis of a
four-year plan of cyclical examination. Thus, one envelope would deal with such
topics as industrial development and programs supporting it, research and
development and programs supporting it, and so on. These subdivisions already
exist. By dealing with a collectivity of departments supporting, for example,
research and development, one does not focus on one minister but on the
function, thus rendering the scrutiny less personal.
The Public Accounts Committee will therefore
provide an historical data base which will be vital to the effective
performance of the Proposed Expenditures Committee which is designed to build
upon such information in order to formulate its own recommendations to the
House of Commons.
The Fiscal Framework Committee
It is proposed that this be a senior
permanent committee of the House of Commons and may indeed by a joint committee
with the Senate. This would enable it to draw upon the expertise which is so
readily apparent in the membership of both the Senate Finance Committee and
Senate Banking Committee.
The Fiscal Framework Committee would be
involved in the examination of macro-expenditures and revenues. As a basis for
its examination of the financial policy of the government it would have to take
cognizance of such matters as the Gross National Product and the effect of
policy on the social and cultural framework of the population. Demographic
factors such as population ageing, mobility and regional income distribution
would also fall within the purvue of this committee. The impact of tax policy changes
would be considered in relation to available revenues and expenditures
necessitated by unemployment and intergovernmental transfer payments.
The committee would enquire into and subject
to challenge the assumptions of the government which underpin its policy
objectives and projected fiscal balance. The committee would examine part I of
the estimates and take the lead in reporting its evaluations to Parliament. The
would ensure that Parliament had information from one of its own committees on
macroeconomic issues, the proposed objectives and policies of the government
relating to fiscal matters in order for it to efficiently and effectively deal
with the Budget of the government when it is presented
In order for such a committee to carry out
its mandate it would have to be empowered to call as witnesses Institutes and
professionals whom it feels can assist it in undertaking the tasks assigned.
The committee will require both a budget and a research centre. It is proposed
that its chairman be a member of the official opposition and its vice-chairman
be a member of the government.
Proposed Expenditures Committee
It is proposed that this committee will be
constituted as a permanent standing committee of the House. It will receive a
permanent reference of all spending proposals of the government and be
particularly responsible for a review of part 11 and part Ill of the Estimates.
The unique feature of the committee which is presently missing from the
scrutiny process is that it will be able to relate proposals for expenditure
one to the other and relate these proposals to the information provided by the
Public Accounts Committee dealing with past performance of these or similar
The committee will be divided into
subcommittees similar to those proposed for the Public Accounts Committee, that
is, reflecting the envelope structure, and will have the power to refer the
proposals for expenditure to the appropriate standing committees. It will then
receive from the standing committees reports and any recommendations to reduce
the expenditure vote. The committee will be empowered to review the
departmental policies which support the proposed expenditures and to recommend
to the House of Commons reductions of votes.
This committee because of its senior status
in relation to the estimates will have to be supported by an appropriate
research facility to enable it to dispurse to the standing committees
information provided by the Public Accounts Committee relating to similar
expenditure patterns in the past and an in-depth analysis of the information
provided by the government to support the present "proposal for
expenditure" (i.e. Part Ill of the estimates)
It is envisaged that the report to the House
of Commons from this committee would include a review and examination of past
program experience, a commentary on the effectiveness of the present proposal
and a recommendation which could take the form of a motion to increase or
reduce a vote.
Parliament and Crown Corporations
A standing committee of the House of Commons
should be established to deal solely with quasi-governmental agencies. It
should receive by automatic referral all annual reports of all
quasi-governmental bodies be they wholly owned, partially owned and controlled,
or partially owned and not controlled by the Government of Canada.
These reports would be examined by this
committee which would be responsible for research into the reports and could
possibly refer the annual reports to the appropriate standing committees for
scrutiny and possible recommendations.
This standing committee on
quasi-governmental bodies should have the power to order enquiries into the
mandates, objectives and conduct of these bodies and also be able to examine
their Chief Executive Officers and the Boards of Directors.
Parliamentarians and The Scrutiny Process
– Closing The Loop
The new process of dealing with the totality
of government finance as set above relies on the proper functioning of a number
of interdependent parts. In the first place the committee system as it relates
to scrutiny must be reorganized. The establishment of the four committees
outlined above is essential. The committee activities will have to be
co-ordinated and the information gleaned from one committee must be made
available to the other committees in a comprehensible form. The results of the
hearings of the Fiscal Framework Committee must be analysed and rendered to the
Proposed Expenditures Committee in order for it to more easily identify the
areas which should be probed when the government submits its estimates
(proposals for expenditure) for approval.
In addition, the results of the Public
Accounts Committee dealing with past expenditures, matching them against the
ends they were designed to achieve, must be brought to the attention of the proposed
Estimates Committee. With the knowledge obtained from both the Fiscal Framework
Committee and Public Accounts Committee, the Proposed Estimates Committee
through its subcommittees should be able to provide the relevant standing
committee with a comprehensive critique of the proposed expenditures when they
are referred to the standing committee.
Finally, the creation of a standing
committee dealing solely with quasi-governmental bodies fills a large void in
the accountability process which heretofore has not been addressed.
However, in order for this system to
function efficiently and effectively it is mandatory that the major scrutiny
committees be served by excellent research bases. The goal in the scrutiny
process is to attempt to match the expertise available to the government which
proposes the expenditures. The four research bases serving the Public Accounts
Committee, the Fiscal Policy Framework Committee, the Proposed Expenditures
Committee, and the Committee on Quasi-Governmental Bodies will each have a
director and staff and should be linked through a co-ordinating director whose
responsibility would be to ensure that information flowed in a usable fashion
through the entire process. This strengthening of the accountability procedure
should expose ad hoc spending programs imposed on the regular program planning
A criticism which might be levied against
the system set out above is that is will be difficult to find Members of
Parliament who are willing to spend the time that will be necessary in order to
make this proposal effective. It is obvious that these committees will become
the foundation of the financial operation of the government of Canada. We
therefore propose that because of the senior status of these important
committees that the committee chairmen be reimbursed for their efforts at the
same level as ministers of state and the vice-chairman receive the same pay as
a parliamentary secretary. We also anticipate that service on these committees
will become a training ground for senior political appointments.
However, all these proposed structural
changes and incentives for involvement of parliamentarians will be fruitless,
if members do not develop new attitudes. As parliamentarians, we in Canada are
not holding the system to account and the taxpayer is beginning to feel that he
is without representation. As we attempt to correct this trend in growth, we
must wrestle with two negative but very important realities. First, the status
and, therefore, the incentive for senior bureaucrats is measured in
person-years administered and the magnitude of departmental spending. Second.
and important to all of us, politicians are big spenders and survive on
promises, new programs and favours delivered. Parliamentarians will have to
accept the challenge and close the accountability loop.
Our Office of the Auditor General, our
Office of the Comptroller General, the Standing Committee on Public Accounts,
in company with a major effort from within the bureaucracy, have moved us well
into the world of comprehensive audit. The systems and value for money approach
for improved economy results in efficiency and effectiveness in our
accountability probes. Our spending policies are now in five envelopes that
allow a functional, rather than merely a departmental examination of
We have implemented a new Part Ill of our
Estimates that organizes the information within our system to a more useable
form for an improved accountability probe by the Member of Parliament. This
magnificent effort is all in place; now waiting for the parliamentarian, that
big spender, to play his part and close the accountability loop. The internal
apathy among both bureaucrats and politicians must come to an end for if it
continues it will pose a threat to our representative form of parliamentary
The problem which remains is how to apply
the principles stated above in terms of parliamentary procedure and practice.
Neither ministerial nor bureaucratic responsibility can be defined by standing
order. Neither can the standing orders provide for the appointment of a non
partisan committee. There are a number of things that can be done;
The necessary committees can be set up
by standing order and equipped with the power needed to fulfill the functions
described in this paper.
committees should be provided with a specific budget which would enable them to
set up a secretariat, hire staff both permanent and temporary, travel as
required, and commission independent projects and studies. They should have
unrestricted powers to summon witnesses and their power to call ministers and
public servants should not be subject to ministerial refusal.
documents relevant to the investigations of these committees should be
furnished automatically by standing order.
days in every calendar year should be set aside if required to debate the
reports of these committees. Such debates could be requisitioned by a minimum
of 25 members and take place on a votable motion if desired.
"proposed expenditures committee" should have the power to recommend
to the House that the vote on the estimates be reduced and this may be done in
the form of a debatable motion.