November 28, 1983

POINT OF ORDER

MR. BLENKARN-SUGGESTED IRREGULARITY IN SUPPLEMENTARY ESTIMATES (B)-RULING BY MR. DEPUTY SPEAKER

LIB

Cyril Lloyd Francis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Perhaps 1 could deal with a point of order which was raised by the Hon. Member for Mississauga South (Mr. Blenkarn) on November 17. The Hon. Member raised a point of order with regard to procedural acceptability of Vote 6b under Consumer and Corporate Affairs in Supplementary Estimates (B) for the fiscal year ending March 31, 1984. I was unable to deal with this matter earlier because, as Hon. Members will recall, Supplementary Estimates (B) were referred to committees on November 3, 1983 and were not before the House.

As has been noted before, however, it is helpful to the Chair that there be adequate time to study points of order on the Estimates and the Chair appreciated the courtesy of the Hon. Member in raising the matter when he did. The House will also recall that the Chair wished to extend an opportunity to Hon. Members to rebut or add to the procedural argument. The President of the Treasury Board (Mr. Gray), on November 24, did make a further contribution. I wish to express my thanks to both Hon. Members who were most helpful to the Chair when considering this important matter.

In presenting his case, the Hon. Member for Mississauga South referred to Section 29 of the Canada Post Corporation Act. He submitted that no authority is given to the Government to seek an appropriation other than "an appropriation to pay losses" and that therefore no legislative authority exists for the appropriation expressed in Vote 6b.

In support of this submission the Hon. Member quotes from the Chair's decision of June 12, 1981, at page 10546 of Debates, stating, in part:

the Government may not, by the use of an Appropriation Act, obtain authority which it does not already have under existing legislation.

I have examined both the Supplementary Estimates (B) and the relevant legislation with respect to the Hon. Member's point of order. The Canada Post Corporation Act states, in part, in Subsection 29(1):

Where at any time the available revenues of the Corporation are insufficient to pay all the operating and income charges of the Corporation as and when due... The Minister of Finance may, with the approval of the Governor in Council, place at the disposal of the Corporation such amounts as may be required ... to meet all such charges.

Subsection 29(2) provides a mechanism for reimbursement of the Treasury for such sums and Subsection 29(3) provides as follows:

Where the annual revenues ... are insufficient for the purposes of Subsection (2) the Minister shall cause the amount of the insufficiency to be included, in the form of a deficit appropriation item, in the next Appropriation Act laid before Parliament thereafter.

Hon. Members will note that the Act refers to "operating and income charges" which the annual revenues are not adequate to cover.

1 would now invite the attention of Hon. Members to Vote 6b at pages 32 and 33 of the Supplementary Estimates (B) in which the "Objects of Expenditure" is described as being for "operating" the Corporation. Such a payment was specifically envisaged under Section 29 of the Act.

The Hon. Member for Mississauga South suggested in his submission that the Act did not give the Government the authority to make such a payment because it refers to "activities that have nothing to do with losses". However, the relevant section of the enabling legislation makes no mention of losses but deals only with the insufficiency of revenues to cover operating and income charges. Furthermore, Hon. Members will find that a payment to cover similar operating expenditures was made to the Canada Post Corporation under Consumer and Corporate Affairs Vote 6c in the Appropriation Act No. 4, 1982-83.

In the opinion of the Chair, the Government is seeking to make a payment which is specifically provided for in the Act, and in presenting such an appropriation the Government is not seeking to enlarge its legislative authority. I therefore find that the point of order raised by the Hon. Member for Mississauga South is not well taken and that Consumer and Corporate Affairs Vote 6b is procedurally in order.

In closing, I again wish to express my gratitude to both Members for their valuable assistance.

Topic:   POINT OF ORDER
Subtopic:   MR. BLENKARN-SUGGESTED IRREGULARITY IN SUPPLEMENTARY ESTIMATES (B)-RULING BY MR. DEPUTY SPEAKER
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GOVERNMENT ORDERS

BUSINESS OF SUPPLY

LIB

Cyril Lloyd Francis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Since today is the final allotted day, the House will go through the usual procedures to consider and dispose of the Supply Bill. In view of recent practices, do Hon. Members agree that the Supply Bill be distributed now?

November 28, 1983

Supply

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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?

Some Hon. Members:

Agreed.

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Subtopic:   BUSINESS OF SUPPLY
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PC

Arthur Ronald Huntington

Progressive Conservative

Hon. Ron Huntington (Capilano) moved:

That this House agrees without reservation with the prediction of the Prime Minister made on August 13, 1969, in a nationally televised press conference when he said, "We'd soon be on the road to financial disaster if nothing were done to bring spending under control" and calls upon the Government to initiate policies which would avoid the Prime Minister's prediction.

He said: Mr. Speaker, this motion is an extremely serious one. It is really at the heart of our well being and that of our children tomorrow. It has to do with the last 14 years of extravagant and wasteful spending after the warnings given to the nation back in 1968-69 by the Prime Minister (Mr. Trudeau).

Before I belonged to a political party, I was most impressed with the words of the Prime Minister at that time. The words that really got to me are these, and I quote as follows:

This process of making choices among the myriad of claims and demands on our resources in the context of business enterprise and Government is often referred to as planning and priorities. It is not really very different than the process that each of us in our own lives, whether as individuals or as family units, have to go through. If an individual fails to plan in a coherent way he will soon find that he has run out of resources and has left many urgent things undone. He may find that his children's education is neglected or the medical bills are left unpaid because he has taken an expensive holiday or purchased a red convertible.

Governments are really no different than individuals in this respect and they too must engage in solid planning and to ensure that their scarce resources are being applied to the most urgent and useful purposes.

He went on to say, Mr. Speaker:

Perhaps the most startling fact to emerge from this review is that almost without exception this decade has been characterized by yearly budgetary deficits exceeding $4 billion in total and requiring upwards of $300 million per annum to service.

And he is speaking of the decade of the 1960s. It is easy to see from the sincerity and wisdom of those remarks back on August 13, 1969 that the Prime Minister was as aware then as some of us in this House are today of the seriousness of the behaviour of the Liberal Government over the last 14 years. Back in 1968-69, in the budget address, Mr. Edgar Benson said on October 22, 1968:

We intend to continue severe restraint upon those direct expenditure programs under the Government's control, eliminating what is obsolete, and permitting only the degree of growth that is essential.

At that time, Mr. Speaker, spending on a national accounts basis was $12.6 billion. The annual deficit was $491 million and net debt at the start of that fiscal year was $17.7 billion. On August 13, 1969 the Prime Minister said to the nation on a television broadcast, Mr. Speaker-which is the object of our motion today-and 1 quote:

We'd be on the road to financial disaster if nothing were done to bring spending under control.

That year our spending on a national accounts basis was $13.8 billion, and the Prime Minister bragged about that surplus of $493 million. The net debt was at $18 billion. That is the starting point of our debate today.

In 1970-71, at the Liberal policy convention on November 20, 1970, the same Prime Minister said:

You know, anyone can say, "why don't you do more? The answer is the same answer as always, there are competing claims on the economy.

In the meantime our spending had gone up $2 billion in that one year. There was no longer a surplus but a deficit of $372 million, and the net debt had slightly tapered down from $18 billion to $17.6 billion. Following that was the Benson budget speech of 1971-72, in which Mr. Benson said:

We have continuously appealed to Canadian governments, business and the labour movement to be modest in their demands and not demand more from the economy than is coming to them in increased productivity.

Every year I have been in this House, for the past nine and one half years, Sir, we have heard that the only way out of the spending and inflation dilemma is through improved national productivity. We were then still spending $18 billion. We then had doubled our annual deficit to $700 million and our net debt was up to $ 18 billion.

The year 1971-72, was the year of "a buck is a buck is a buck", that great promise of equity and distribution and equality for all. The Hon. John Turner in his budget address of 1972-73, said:

The bare fact of the matter is that we cannot do everything at once. We simply don't have the resources. There are limits to the scope of fiscal policy. There are limits to stimulus and readjustment.

We have now gone up $2.8 billion in spending. We have now moved from a $700 million to almost a $1 billion annual deficit, and our net debt has moved up $800 million.

Then we jump to 1973-74. We had the same Mr. Turner as Minister of Finance, and in his budget address of November 18, 1974, he said:

we must do all that we cun in these circumstances to restrain the growth ol go\ e r n me n t a 1 c x pc ml i t u res

We have sought and shall continued to seek to cut out waste, to place limits on the growth of the public service and to approve only the most essential new programs.

We have now moved from $20.8 billion Government spending to $30.8 billion in two years. We moved from a $1 billion deficit to a $1.7 billion deficit and our net debt had moved from $18.8 billion to $21.2 billion. The rhetoric was there, Mr. Speaker. They knew exactly what was needed if this nation was to remain healthy and inflation did not reach excessive amounts which would harm the well-being of the elderly, the sick and the youth emerging from our educational system. 1 can remember Mr. Turner standing in the House and saying that the thing he was proudest of was the million jobs he created as Minister of Finance. Where are those jobs, Mr. Speaker? As we stand here today we have two million unemployed. Where are those jobs from "old blue eyes" which started us on this spending spiral?

Then we move into Mr. Macdonald's period of budgetary extravagances; he moved our annual deficit from $6 billion to $10.8 billion. Then we got that gem of them all, Mr. Mac-Eachen. He moved us from a deficit of $11.5 billion to $13.6

November 28, 1983

billion, and by the time we got to 1982-83 we had gone to a $24.6 billion deficit. Throughout this period of time we heard the rhetoric of these Ministers of Finance and the Prime Minister. They knew exactly what had to be done to manage the country's economy for the wellbeing of the people. But nowhere were they able to deliver what they said they would deliver. Instead we have the situation where today this institution is no longer relevant to two-thirds of the people in Canada because they can no longer trust us as politicians. They can no longer accept the political lies delivered over the past 14 years by this Government.

We come now to 1978-79. We had another Minister of Finance, the Hon. Jean Chretien, who followed the Hon. Donald Macdonald. In his budget address of November 16, 1978, he said:

There can be no weakening in our determination to keep expenditures under tight control.

By that time, Mr. Speaker, spending on a national accounts basis was at $43.9 billion, the deficit was $12.2 billion and the net debt was $44.9 billion. Again we see the evolution of political rhetoric in a direction exactly opposite to that of the reality of extravagance and irresponsible management of the public tax resource.

On January 12, 1980, the Prime Minister said: "We will hold the line of Government expenditure growth to under the rate of the Gross National Product". That was the first time we heard about this extravagant spending being now related to Gross National Product. He told the nation: "The deficit will be reduced in a phased and orderly fashion. Any new expenditure programs to meet evolving needs and requirements of Canadians will be financed by reallocating existing expenditures or by increases in revenues. We will not add to the deficit by adding new programs." At that time spending on a national accounts basis was at $54.4 billion, the annual deficit was $11.48 billion, going down slightly through the year of Mr. Chretien, and the net debt was $57 billion.

In Mr. MacEachen's period, spending rose to $89.5 billion when he was finally tossed out. The annual debt doubled from $12.6 billion to $25.25 billion and the net debt rose from $68.5 billion to $95 billion. Mr. MacEachen was the man who belittled the previous Minister of Finance in the Clark Government, the Hon. Member for St. John's West (Mr. Crosbie). He belittled him time after time in the House by saying he would never bring down a budget that would put 18 cents a gallon tax on gasoline. In this period of time there was the other massive mistruth or lie and 18 cents a gallon soon became 18 cents a litre under the next Government. Eighteen cents a gallon became 77 cents a gallon after belittling 18 cents.

It comes down to 15 years of rhetoric, Mr. Speaker, all of it misleading. The Liberal Government has known all through the last decade and a half the consequences of profligate spending and management of the federal tax resource. One can legitimately conclude that its attack on the free enterprise

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market economy has been deliberate. It has said one thing in support of it, it has espoused the rules of management which you need to espouse to remain healthy as a nation, and it has done exactly the opposite. The Government knew that if the nation continued to pay ourselves more than the value of what we produced we would create the high unemployment that we have today. Any thinking, average educated person knew that that was coming.

Did this so-called Liberal Government spend money advocating the need to reduce our anticipation levels? No, sir, they did not. That was probably the one thing we had to do above all others. We had to reduce the anticipation level of the nation as we came out of a period of affluence. Did the Government spend money advocating the need to improve our productivity? I do not remember seeing any advertisements in that regard. 1 heard a lot of talk in the House about the fact that if we did not improve our productivity we would not be able to reduce inflation. The Prime Minister used to tell us that time and time again. Instead of doing just those two things with the information through the advertising dollars that it had the power to spend, what did it do? The Government launched into an extravaganza of telling us the virtues of nationalization and the virtues of VIA Rail, that Crown corporation which has to draw $50 from the Consolidated Revenue Fund for every ticket it sells. There is no bottom line management there at all. They have put full and half page ads in the paper extolling the virtues of Canadair. Canadair is the Crown corporation which just had to write off $ 1.4 billion.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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PC

Erik Nielsen (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Nielsen:

But it is ours.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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PC

Arthur Ronald Huntington

Progressive Conservative

Mr. Huntington:

They advertise it is ours. They advertise the virtues of our Petrocan. The national energy policy stopped, dead in the water, all of the small businesses, the steel fabricators and all of the feeder industries that go into what was a vibrant exploration industry for energy in western Canada. Look at the advertising and the millions of dollars that the Liberal Government can find to tell us that Petro-Canada is ours. We can see what has happened to well drilling in the Provinces of Alberta and Saskatchewan. While the Government will tell us about PIP grants and other programs, it has delivered a degree of intervention over the economy such that only those things which the bureaucrats and politicians in Ottawa want to go ahead will proceed. The innovation, exploration and risk-taking ability of the country has gone.

[DOT] (U30)

Just recently the Government spent $220,000 on a beautiful book extolling the virtues of our Constitution. But that legislation has moved us from the rule of law into some kind of a Napoleonic code whereby the rights we now have are the rights that are stated and not those unstated rights which we had under the former Constitution.

Let us examine the Supplementary Estimates (B) during this last supply period to see the increase in spending on information, advertising and advocacy by the Liberal Government throughout the period of six and five which was imposed

November 28, 1983

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on Crown employees and other sectors of the nation. During that period when everyone else was to hunker down in order to reduce the effects of inflation on our lives and our country, the Government went ahead with the most lavish and outlandish expenditure on advertising, advocacy and information that one could imagine.

During the six and five period in the last two years, according to information taken directly from the Supplementary Estimates (B), the Economic Development Department moved its advertising expenditure from $2,000 through to $575,000. That is a 28,000 per cent increase. The budget of the Department of Fisheries and Oceans for advertising and advocacy went from $1.5 million to $4 million. That is a 161 per cent increase. The information expenditure for the Department of Industry, Trade and Commerce had a 27 per cent increase while advertising had an 11 per cent increase. Where is the six and five program for this kind of expenditure? The Department of Labour saw an increase of 75 per cent in its expenditures for advertising and information.

There was a 35 per cent increase in this area for the Department of National Revenue. Why does that Department not tell the people of Canada that it now goes straight into their bank accounts without giving them the courtesy of a notice? Why has it not spent money on advertising that or advertising changes in interpretation bulletins and other matters? Instead, it does so by stealth. It will go into bank accounts before it tells owners.

For Science and Technology, the increase was 558 per cent. That sounds like a large increase, but the budget only moved from $73,000 to $481,000 although this is the most important area of our lives in Canada today. But Science and Technology has absolutely no priority at all.

The advertising and information budget for the Department of the Environment increased by 50 per cent. The increase for Communications was 126 per cent and Justice had an increase of 666 per cent. This all occurred during the six and five era. So much for saying one thing and doing another.

When one considers the Main Estimates and the Supplementary Estimates, there has been an increase in spending of 14 per cent through this six and five period. On August 13, 1969 the Prime Minister said:

We could not tolerate a 14 per cent increase in federal expenditures. If allowed to grow unchecked, eventually- our spending would become so scattered that the real needs of our society would be missed.

That is what he said. He continued:

And to spend vast sums on welfare, education and other programs while allowing inflation to continue would merely place hundreds of thousands of Canadians on a treadmill from which they could not escape.

We are on that treadmill today. The Minister of National Health and Welfare (Miss Begin) is in the House. She is in a struggle with some Provinces that are on this treadmill and do not know how to budget their affairs. That is what the Government has delivered as a result of saying one thing and doing exactly the opposite.

In March, 1976 the Auditor General's Report warned that if the Government continued to spend at its current rate, the nation would be out of control. He told us that it was out of control and spoke of the critically serious situation we faced in this country. But nothing has happened since that warning. The Government has continued its reckless spending and slothful, wasteful habits. We have not addressed old programs as the Prime Minister said we should. The old programs have just become a base upon which incremental increases are added.

It is obvious that between the bureaucracy and those elected to govern nothing will happen in this area unless it takes place in the House. The House has put a group of 20 of its Members to work in the Committee on Standing Orders and Procedure and the reorganization of rules in the House. Those of us on that Committee saw a need to move the influence of the House back into a stronger position over the habits of the bureaucracy and Governments in power. This problem will not be addressed until the House addresses it and until elected Members within it undertake the responsibility and recognize the seriousness of the extravaganza of the last 14 years to begin to bring it back under control.

We are dealing with human nature and the House is full of that emotion. However, I say that if we do not begin now to apply ourselves to a corrective pattern over the slothful extravagance of expenditure, we are doing a total disservice to our children and those who follow. We are threatening the survival of this democratic system and we are putting their freedom on the platter.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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LIB

Cyril Lloyd Francis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

1 hesitate to interrupt the Hon. Member but the time allotted to him has expired. He may continue with the unanimous consent of the House. Is there unanimous consent?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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?

Some Hon. Members:

Agreed.

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Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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PC

Arthur Ronald Huntington

Progressive Conservative

Mr. Huntington:

I appreciate the courtesy of the House very much. I will not take too long.

Sixty-five per cent of the people in this country now consider this institution to be irrelevant. Today we were handed the Votes and Proceedings for Friday, November 25, with Ways and Means motions and amendments to the Income Tax Act. It comprises some 226 pages. It could be that this is just a compilation of all the Ways and Means motions that have been on the Order Paper, but nobody in the House today knows or comprehends what is in that volume. I use this as an example of taxation without representation. We, as Members of the House from all Parties and all stripes-it does not matter from where-somehow fail the people who elected us when we allow this rate of expenditure to continue.

If we had had a gold standard form of monetary system back in 1969, our spending today in terms of constant dollars would have moved from $15 billion to $26 billion. This treadmill which the Prime Minister warned us about in August of 1969 would not exist today. It would not have been half as complicated for Canadians to understand the fundamentals of

November 28, 1983

what we are talking about here today. Political rhetoric is meaningless to the people of Canada as a result of the past 14 years of hearing the Government saying one thing and allowing something else to happen.

My plea to the House today is that rather than continuing to continue to reject the ten reports of the Special Committee on Standing Orders and Procedure, it should somehow force the Government to allow those reports to come in for full debate and inquiry in order to move more influence and strength into the House so that we as elected Members can say we did our part; that the House of Commons did its part in trying to bring a system that is truly out of control back under control. I suppose the blame for this is at the root of human nature but somehow the irresponsibility of the Government over the past 14 years is a root cause for the two million unemployed today.

Before they stand and say this is worldwide-

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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?

Some Hon. Members:

Oh, oh!

Topic:   GOVERNMENT ORDERS
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PC

Arthur Ronald Huntington

Progressive Conservative

Mr. Huntington:

Let me say that no country in the world had a better opportunity than Canada. We had the chance to be energy self-sufficient within five years. We had the chance to build pipelines. We had the chance to build a pipeline from Prudhoe Bay across our land to deliver energy into the midwestern United States, but that opportunity was wasted absolutely. No, Sir, the socialists would not allow that to happen. We had the opportunity to put infrastructures in place and phase them in so that in becoming energy self-sufficient we could deliver ourselves to a condition of health and wealth and improve the sharing of that health and wealth with others in the world. But no, Sir, that was denied to us. We have been mismanaged and our opportunities have been blown by this Liberal Government.

My plea to Members in all Parties is to do something about this condition. I think the opportunity to do something will be found in report No. 7 which is lying buried and smothered by this Liberal Government.

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Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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LIB

Cyril Lloyd Francis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Are there any comments or questions?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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LIB

Herbert Eser (Herb) Gray (President of the Treasury Board)

Liberal

Hon. Herb Gray (President of the Treasury Board):

Mr. Speaker, in the motion before us presented by the Hon. Member for Capilano (Mr. Huntington) is quoted a remark made by the Prime Minister (Mr. Trudeau) in 1969. Contrary to what is implied in the motion, this Government has in fact since that date implemented a whole range of policies to improve the management and control of its expenditures.

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Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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?

Some Hon. Members:

Oh, oh!

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LIB

Herbert Eser (Herb) Gray (President of the Treasury Board)

Liberal

Mr. Gray:

I want to give some concrete examples of this. For that purpose, I want to discuss first the Government's policy on its spending. The Government's white paper of October 14, 1975, contained the following statement of policy:

The federal Government shares the view that the trend of total spending by all Governments should not rise more quickly than the trend of the Gross National Product.

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Ceilings on total outlays in the ensuing years have been established in general accordance with this statement. The record of expenditures itself reflects the general success of the Government in holding the growth rate of total outlays below the rate of growth of the Gross National Product. Although the recession has understandably resulted in expenditure growth in excess of Gross National Product growth for the last two years, this principle outlined in 1975 continues to govern the determination of our over-all, multi-year expenditure plan. Of course, as I have said, the Government's expenditures in the past two years have gone up to offset the effects of the recent recession by providing further resources for direct job-creation, supporting investment by the private sector, the Government's own Special Recovery Projects, and more support for housing, all to create more jobs as well as protecting the unemployed through more expenditures on programs like unemployment insurance.

Last April the Minister of Finance (Mr. Lalonde) confirmed the commitment of the Government to the principle that the growth rate of total outlays should be in line with the rate of growth of the Gross National Product. He said:

This commitment was met until the recession last year. I am reaffirming this commitment tonight. The fiscal plan 1 will be tabling with this budget shows that total outlays as a share of GNP will fall steadily from this year to 1986-1987. By that year, federal spending will be virtually the same size relative to the economy as in 1981-1982, before the worst of the recession. To achieve this outcome will demand continuing diligence in restraining expenditure growth.

One year after the announcement in 1975 of its policy on over-all expenditures, the Government further made manifest its intent to improve the management and control of its expenditures, and of Government more broadly, for that matter, by establishing the Royal Commission on Financial Management and Accountability, the Lambert Commission.

The terms of reference by the Commission as set out by the Government clearly reflect its concerns. These terms referred to unprecedented demands placed on government by the growth requested by the public in its responsibilities and programs, a desire to ensure efficiency and probity in the Public Service of Canada, a serious concern about the adequacy of financial administration in government for establishing effective control over, and accountability for, public funds, and the need to use resources effectively, avoid waste and increase productivity in Government.

Even before the Commission began its deliberations and up until the present, the Government has been taking a range of steps to respond to these concerns and thereby strengthen management and accountability throughout Government. I would like at this time to touch briefly on some of the major initiatives in the last six or seven years.

In conjunction with, and in support of, the general policy to hold spending generally in line with the rate of growth of the GNP, the growth in the size of the Public Service has been tightly constrained. Growth in person-years under Treasury Board control has been explicitly limited as a matter of policy to no more than 1 per cent annually in the last several years and, despite heavy pressures on government programs, the size

November 28, 1983

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of the Public Service under Treasury Board control is almost the same today as it was in 1976-1977.

There has been the introduction of the Policy and Expenditure Management System, the envelope system. This was another major step forward. It provides an expenditure management framework that sets multi-year levels for both total outlays and for various envelopes or policy sectors. It establishes policy committees within cabinet to undertake policy development and decision making within the discipline of the envelope system. While the previous Conservative Government introduced key portions of this system, the current Government has provided its consolidation and final implementation.

I would also remind Hon. Members that the key developmental work on the envelope system was undertaken before the previous Conservative Government was in office.

A key elaboration of PEMS, another way of describing the envelope system, has been the introduction by the Treasury Board of the Multi-year Operational Planning System. This system is aimed at fostering more integrated resource planning, budgeting and management throughout the Government. Two key concepts, budgeting to results and budgeting for management, underlie the Multi-Year Operational Plans submitted to the Treasury Board. The first concept is designed to facilitate practical but systematic budgetary analysis based on concrete program outputs and inputs. The second is aimed at providing a clear understanding throughout the Government of the responsibilities of Public Service managers and how these responsibilities translate into budgetary requirements.

The office of the Comptroller General, created in 1978 in response to a central recommendation of the Lambert Commission, assists in the establishment of sound management practices in the federal Government by developing policies and standards and by promoting and monitoring improvements in financial and operational management. Over the last four years 30 or so key departments have participated in one of the Comptroller General's key initiatives called Improvement in Management Practices and Controls, or IMPAC, which is directed at the internal management process of individual departments. IMPAC has resulted in the establishment of action plans for over 100 major projects to improve organization, planning, internal and external reporting, automation, program delivery procedures, audit and program evaluation. Almost 80 per cent of the work on these projects has now been completed, and there is clear evidence of the ongoing yields that are the result. The IMPAC program has identified a total of more than $250 million in annual recurring benefits, of which more than $122 million in annual recurring savings have already been realized.

Substantial progress has been made in implementing the revised form of the Estimates, extending significantly the information made available to Parliament. The Government now presents in the form of Part I a summary of its spending plans in straightforward language and numbers. I am sure the Hon. Member for Capilano will recall his own role with respect to the creation of this document. In the Part III volumes detailed information is being made available on the

individual programs in each Department and agency with the express intention of improving the accountability to Parliament by the Government. All of these major initiatives, along with numerous others, have been in the spirit of the recommendations of the Lambert Commission and have contributed to a new framework for management in the Public Service, one which is comprehensive and coherent, yet is also flexible and adaptable and which facilitates accountability.

I would now like to say something about the nature of the Government's current expenditure plan, using it to illustrate the key forces at play in trying to maintain over-all expenditures roughly constant in relation to GNP over the longer term, while responding as effectively and as efficiently as possible to the very real needs of the people of this country.

First, I would like to review briefly the important role in total spending played by statutory expenditure items and other programs providing automatic stabilizers designed to offer Canadians some measure of social and economic shelter in turbulent economic times. Second, I want to comment on that relatively small portion of total spending attributable to the operating costs of all Government Departments.

As the Minister of Finance has indicated, the worst of the very difficult economic climate is behind us. Canadians are regaining their confidence, growth is resuming, inflation is down dramatically, as are interest rates. Unemployment has also decreased but remains distressingly high. Job creation, therefore, continues to be a major Government priority.

The 1983-84 expenditure plan calls for total spending of $90.7 billion, an increase of 12.7 per cent or $10.2 billion over 1982-83. Of this increase, a little over $1 billion is attributable to the rise in public debt charges, almost $1 billion to increased defence costs and over $1.5 billion is directly due to new spending initiatives announced in the budget, including over $500 million for the Special Recovery Capital Projects which are aimed at encouraging and facilitating economic recovery in Canada.

Of the remaining spending increase of about $6.8 billion spread over hundreds of Government activities, fully one-half is entirely due to increases in only four major programs Government contributions to unemployment insurance, the Old Age Security, the guaranteed income supplement and spouse's allowances programs, and payments to the Provinces under the Established Programs Financing, that is to say, post-secondary education, medicare and the Canada Assistance Plan.

These programs are, of course, the core of our social and economic security system. They provide enhanced and extended benefits to the unemployed throughout Canada, particularly in the regions hardest hit by the recession. They offer basic income support to the aged, particularly those with lower incomes. They support the financing of at least 50 per cent of the cost of hospital insurance, medicare, extended health care, post-secondary education and social assistance payments, welfare services, child support services such as foster care and

November 28, 1983

daycare, and a broad range of other family and social support services.

I have highlighted these large elements in our expenditure plan because of the special importance such programs take on the tough economic times as automatic stabilizers against some of the worst effects of a recession and the gradual, fragile recovery period we have just entered.

I do not think we should overestimate the scope for changing some of our most basic programs since what Government does reflects society's views of its goals and how Government can assist in achieving them. We must, after all, face some fairly definite facts. For example, there are historic costs associated with the attainment of interprovincial and inter-regional equity in Canada. There are also the costs of achieving a standard of interpersonal equity in Canada.

Successive generations have shared a view of social equity and have succeeded in having it reflected in laws which for many people are tantamount to being the social as well as the legal definition of what it means to be Canadian. While we may consider changing some of those laws, I doubt that Canadians would want us to put at risk fundamental values and goals in pursuit of arbitrary approaches to limiting Government spending.

Of course, in what I have said 1 have not intended to imply that there is no room at all for streamlining and repriorizing federal activities, and consequently spending, while still effectively meeting the demands on Government posed in a changing environment. 1 believe we have demonstrated the ability, through processes like the envelope system, to make increasingly tough decisions about programs and policy trade-offs. For example, in his economic statement in the House of Commons last fall, the Minister of Finance cited the reallocation of $1.1 billion from existing programs to new ones, primarily to stimulate job creation at a time of unacceptably high levels of unemployment. However, 1 must add that this reallocation did not reflect a judgment that this money was being wasted in its previous application, but rather a judgment of priorities.

In the crucible of difficult economic times, it is a transfer of Government support from some very worthy purposes to others which are currently more urgent. However, as I have pointed out, and as I will illustrate further in a few minutes, the room we have to do this, without making fundamental changes in the transfer programs for which the largest portion of federal expenditures are made, is much more limited than most people realize.

One of the major challenges to all Canadians is the need to improve the productivity and competitiveness of our economy. Of course, achieving productivity gains across all sectors of the national economy is beyond the single-handed ability of the federal Government. It requires a co-operative and joint effort by business, labour and Government-in short, by all Canadians.

However, there are ways in which the Government can act and is acting concurrently and supportively. One way is to

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demonstrate that we intend to and can enhance the productivity of the Government's own operations. As I indicated when I tabled the current year's Main Estimates, as President of the Treasury Board I have set as a major priority continuing this Government's policy of improving the federal Government's management and the efficiency and effectiveness of its programs.

Perhaps I should clarify my definitions of efficiency and effectiveness in Government. Efficiency refers to the way we manage our resources in order to minimize the cost of delivery of Government programs. Effectiveness, on the other hand, refers to the range and the quality of the services that Government delivers to the Canadian people, as well as the extent to which these services meet the objectives expected of them.

As we seek to improve the efficiency of Government as I have defined this concept, it is important to understand the scale of the Government costs involved, since one frequently has the impression of a misinformed, exaggerated view on the part of some that somehow the bulk of the $90 billion federal budget is being squandered on Public Service salaries and perks. The truth of the matter is, of course, that about three-quarters, or about $68 billion of the $90 billion, consists of payments we make to Provinces, businesses, groups and individuals in Canada, as well as for external aid purposes, and from which the recipients benefit directly. The actual cost of developing, administering and delivering these programs is of the order of $12 billion for all Departments and agencies, leaving aside the $8 billion for national defence and the $2 billion for capital projects. Of this $12 billion, about $8 billion is for wages, salaries and employee benefits.

Therefore, while I am confident the federal Government can demonstrate commitment to obtaining efficiencies in administration, I must stress that any such administrative savings obviously will not produce any drastic reductions in the deficit, nor in the size and role of government.

When every Canadian shares a role with every other Canadian in making our national economy more competitively productive, it becomes important for government administration to establish and maintain a high standard of efficient and effective operations. The Government has in the recent past taken a number of steps further to improve the efficiency and effectiveness of its operations, initiatives such as IMPAC and the multi-year operational planning process that I have already mentioned.

These kinds of initiatives seek to compensate for the multiple goals often found in the public sector and the lack of an automatic, profit-based bottom line as is available in the private sector, by emphasizing the need for a formal and clear definition and articulation of the results which each program of the Government is expected to achieve. They also involve the development of systems and procedures to allow for measurement of the extent to which the results promised are in fact realized.

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To conclude, Mr. Speaker, I wish to say that I think the two aspects of our current expenditure plan which I have touched upon illustrate clearly the forces and the constraints within which expenditure and its management must proceed. However, there is no doubt in my mind that a strong framework for controlling expenditures and managing within these constraints has been put into place.

The Auditor General, who is often critical of aspects of government management, has, I think, recognized improvement in the Government's management of its expenditures, because in his last report he said:

I identify the gradual but unmistakable emergence of a new determination in Government and in Parliament toward improved management and more stringent accountability.

He went on to say:

-the political will is now present, and a number of senior managers in the Public Service are responding with a degree of firmness and courage that has not been seen for some time.

Finally, he said:

-I sense a new attitude with respect to improved financial control and a renewed interest in accountability.

1 believe, Mr. Speaker, that the words of the Auditor General help to confirm why the House should reject the motion which is before it. Contrary to the suggestion made by the Hon. Member who presented the motion, we have been working toward progress in the Government's management of its expenditures. We have been making progress and we will continue to do so in the interests of the Canadian people and in the interests of the sound management of our economy. Again, for that reason I urge the rejection of this motion.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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PC

Arthur Ronald Huntington

Progressive Conservative

Mr. Huntington:

Mr. Speaker, 1 would like to ask the President of the Treasury Board (Mr. Gray) a question. At the beginning of his speech, he spoke quite correctly about the tremendous amount of work that has been done within the bureaucracy and within the Treasury Board in terms of the Comptroller General's progress toward putting in place internal audit and evaluation systems. He spoke quite correctly in terms of the new form of the Estimates as being a reorganization of information for better disclosure. He is aware, however, of the 1976 warning by the Auditor General. At that time spending was $40 billion; today it is $100 billion. The deficit and spending as a percentage of the GNP has risen from 21 per cent to 25.7 per cent in 1983-84. Something is basically wrong.

The missing equation can be found within report No. 7 of the Special Committee on Standing Orders and Procedure. Why does the Government continue to sit on that report? Why does it not approve it and restructure the committee system so that the work being done by the Comptroller General can finally get to the House and its proper disclosure and exposure can take place? Why does the Government continue to refuse to allow parliamentary participation in the whole matter of accountability to come to pass?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY-S.O. 62-GOVERNMENT SPENDING
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November 28, 1983