Beyond the negative aspects, there is the other very practical question as to whether it is necessary. I suggest to hon. members that it is not. The government has mechanisms-they have been mentioned by others-and it has the authority, by virtue of its majority, to review any program or any project that it deems has outlived its usefulness. So where does this leave the proposed legislation? It leaves it in the position of being unworkable and undesirable.
I would like, Mr. Speaker, to add substance to these rather bald statements to show why this legislation is impractical for this nation at this time, even though the intent is laudable. Sunset legislation provides a predetermined termination date. In other words, before any project is ever launched, someone has planned its demise unless, of course, it can be demonstrated somewhere down the line that it should be kept alive. In isolation, that seems to me to be a fairly inflexible and somewhat illogical approach. In fairness, though, this proposal is not so much to eliminate programs but to evaluate them, and the termination date is simply a mechanism to force that into happening.
There are other problems with this legislation. This enforced evaluation system on a predetermined schedule is first cousin
February 16, 1979
to zero-base budgeting. Zero-base budgeting is the buzz word which came along with President Carter in the United States and which, if hon. members have been following its progression, has not been getting the attention it did only one or two years ago. I think this is because some people in the United States have recognized that this approach can only work under certain circumstances.
Zero-base budgeting means exactly what it says, that each year the manager goes back to zero and builds his program from there. It is a tool to analyse and evaluate project effectiveness, just as this sunset legislation is designed to force analysis and evaluation of projects in Canada. The projects then are ranked and fitted in with the money which is available.
In a Harvard Business Review article entitled "Where does zero-base budgeting work?", James D. Suver and Ray L. Brown quoted the following definition as the most concise:
Perhaps the essence of zero-base budgeting is simply that an agency provides a defence of its budget request that makes no reference to the level of previous appropriations.
They go on to say that all definitions of ZBB "express one common thought." The manager must be able to justify .each activity's projected level of expenditures in total, and no level is taken for granted. They went on to say:
In this light, zero-base budgeting becomes just another management tool, which can be used to review, analyse and evaluate budget requests.
What is really being discussed in this bill is the development of a management tool, but like zero-base budgeting, the overriding problem is the unwieldy and monumental task of reviewing thousands of what are described as decision packages each year.
Can you imagine the horrendous bottleneck that would be created for the parliamentary process in this country? Every program would have to be treated the same. Members could not simply pick and choose those that tickle their fancy because that, in my opinion, would be a dereliction of duty. Many uninteresting projects are vital to the well-being of our nation and need the same level of attention as the glamour issues. Members therefore would have a tremendous addition to their daily work load which, given the sheer volume, would undermine the fundamental objectives of the program.
But in addition to that criticism of overwhelming volume, there is the very real problem of passing judgment on a whole host of issues that are advanced by extremely talented specialists. I suggest to you, Mr. Speaker, that I would want to have a considerable amount of expertise if I were placed in the position of having to weigh the merits of a program geared to oil resource development or coal resource development, knowing only one of the two could be funded. This is only one example in an almost endless list of possibilities.
Add to that problem of acquiring basic knowledge the companion issue raised by my colleagues: the influence of pressure groups. Suppose that the coal industry had an exceedingly effective organization promoting its interest and that the
oil producers, being fragmented by a whole lot of internal bickering, had an ineffective voice. What would happen? Would the judgment of those conducting the reviews be impaired by the selective evidence they would be receiving? Maybe not, but I believe all members would agree that it is possible.
Put that in the context of social services. Would the services for the aged and the poor suffer because they are ill-equipped to mount the kind of pressure that a more wealthy segment of society could mount? Remember, Mr. Speaker, the process requires ranking of priorities to fit within a predetermined financial framework.
From an effectiveness standpoint, then, Mr. Speaker, there is room for concern. Let us look at the efficiency feature. Sunset legislation requires that a re-evaluation take place at a specific time. It does not matter that it is obvious to all concerned that the program is worth-while and should be continued-it must be evaluated. That opens the door to a host of problems, including grandstanding and electioneering on the thin pretext of examining proposed expenditures. It really is not a very efficient way of dealing with the intent of this legislation.
Because of the similarity between sunset legislation and the zero-based budgeting concept practised in the United States, I would like to borrow from their experience. While some find zero-based budgeting a good tool, there is also evidence that many programs receive routine endorsement because there is not time for appropriate evaluation. Some programs never are serious contenders for termination. In Canada, these could include national defence, family allowances and national revenue. No new evaluation system would reverse the perception of the timeliness of these programs, even if inefficiencies were revealed.
I would like to quote some of the comments from those who should know in the United States. Sunset laws, and the zero-based budgeting that it implies, are not magic wands that will solve problems overnight. No one claims that they are. James D. Suver and Ray L. Brown, whom I quoted a moment ago, had this to say:
But are users of the technique happy with it? Phyrr said that Texas Instruments was happy with it. .. The city of Wilmington, Delaware found it useful and intends to continue using it...
The experience of the Department of Agriculture with its ground-up budget in 1962 was also mixed. Interviews with every high-level person who was intimately involved with the effort revealed that few decisions were made and savings were insignificant. However, other benefits were reported by almost one half of those interviewed ... The experience of the state of Georgia seems similar. A survey of department heads and their budget analysts concluded that there were three primary advantages associated with that state's use of zero-base budgeting:
1. The establishment of a financial planning phase prior to budget preparation.
2. An improvement in the quality of management information.
3. An increase in the budget involvement of personnel at the activity level.
The survey cited three disadvantages as well.
1. An increase in time and effort, required for budget preparation-"This is a very serious problem.''
2. A contention that the new system had not significantly affected the allocation of funds ...
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3. An ineffectiveness of the decision-package ranking approach to meet changes in the level of funding.
Finally, Mr. Speaker, there is the implementation problem. This kind of legislation cannot be introduced overnight and the introduction process presents serious problems.
Senator Muskie, who proposed a sunset law in the United States, is quoted as saying that "pilot testing would inevitably require selecting out certain programs or agencies for the initial trial runs." This, Muskie believes, "would jeopardize the principle of neutrality, thereby conceivably making the process politically unworkable."
As hon. members know, this whole subject of sunset and similar legislation is being examined by the Royal Commission on Financial Management and Accountability. The government will examine closely the findings of that commission and consider carefully any recommendations that may be forthcoming.
I can assure hon. members, however, that this government is too concerned about expenditures and program effectiveness to sit on its collective hands, waiting for a commission report. Many initiatives have already been taken to meet the kind of objectives I believe the hon. member for Dartmouth-Halifax East (Mr. Forrestall) had in mind when he proposed this legislation. The roles of the Auditor General and the Comptroller General have been defined to ensure a measure of cost-effectiveness adjudication.
Performance measurement would quickly identify programs where the original goals were no longer being met. In the 1977 annual report on this continuing program it was stated that for project-type activities, the following certain basic steps are important:
the establishment of objectives for the project and for each component;
the selection of projects to be undertaken in light of priorities, objectives and
the development of plans and cost estimates for each project; the establishment of suitable means for regularly monitoring performance in key areas such as actual-to-estimated costs, actual-to-estimated schedule of completions and actual-to-planned results for each project; the review or evaluation of results after each project is completed.
That 1977 report goes on as follows:
It is essential that performance measurement be considered an inherent and indispensable part of the program management process, since it provides the feedback that all managers need to control program operations and to render a proper accounting for the public funds entrusted to them.
The regular monitoring of the ongoing performance of programs is an essential element in the government management process, but it is not the whole story. It is necessary to subject programs to periodic, objective evaluations with a view to:
changing and improving the ways in which programs are operated;
clarifying program objectives;
reducing or eliminating programs, or aspects of programs, which have become
redundant or of a low priority;
identifying programs, or aspects of programs, which may have increased in
Treasury Board has recently approved a policy requiring departments and agencies to conduct such evaluation of programs, with the results to be com-[Mr. Bdchard.)
municated directly to deputy heads of departments and heads of agencies and other appropriate levels of management.
In addition, the Treasury Board secretariat is actively encouraging departments to undertake A-Base reviews. These are internal reviews of the basic programs. The advantage of this system is that it is flexible and selective, overcoming the very serious problem of universality. This program does not, at the present time, provide for any parliamentary involvement but it does indicate the high priority given by the government to evaluation of its programs.
There are plans under way, as was indicated in the recent Speech from the Throne, for parliamentary involvement in program reviews. The government committed itself to providing members with an opportunity to become directly involved in the review process. Naturally, any review-and this includes sunset legislation-of federal programs would be restricted to those over which the federal government has total and exclusive control.
When you are examining federal government expenditures it must be recognized that only $14.3 billion spending estimates of $48.3 billion for 1978-79 are for the direct operations of the federal government. The biggest part of total spending-well over $20 billion-is in transfer payments to individuals and the provinces. Sunset legislation as now proposed could not touch these programs that cross jurisdictional boundaries. That would immediately diffuse any effectiveness that it may have had to offer.
So, in conclusion, Mr. Speaker, the government does have control mechanisms in place. It is awaiting additional information and recommendations from a royal commission. Sunset legislation hasn't been an unqualified success in other jurisdictions. For all these reasons, and more, I cannot support this legislation.
Topic: GOVERNMENT ORDERS
Subtopic: CANADA SUNSET ACT