Monitoring the money – Canadian Government Executive

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May 7, 2012

Monitoring the money

For the next few years, the federal government’s overarching agenda will be to find ways of balancing its budget. While there is no legal requirement for the government to pursue this objective, over the past 15 years Canadians have grown to view deficits as a sign of government mismanagement. As a consequence, the recently elected Harper government is now turning its attention to finding ways of bringing its expenditures more in line with revenues to maintain its reputation as a good economic manager.

Cost containment is going to be a difficult challenge. During the past five years of minority government, spending increased steadily each year in order to fund campaign promises. In addition, the government had to inject large infusions of cash into the economy for “shovel-ready” projects to mitigate the effects of the 2008 global recession. Coincidentally, as expenditures were increasing, full-time employment in the federal public service also grew by more than four percent a year to keep pace with program growth in priority areas. As well, the government is absorbing new and costly promises of purchasing new fighter aircraft, building larger prisons and revamping the criminal justice system. As a result, the financial picture is not a pretty one.

Given this scenario the focus of the government’s executives is now on trimming $11 billion over the next three years from federal expenditures rather than jettisoning the costly promises. While $11 billion may not look like a large number in comparison with the government’s $250 billion annual spending envelope, it will not be easy to make the cuts for two reasons.

First, the government has declared that the current spending reviews will exempt some very large program areas such as health, defence, transfer payments to the provinces and aboriginal affairs because of their importance to the government’s agenda. However, such exemptions effectively limit the review envelope to a program pool of $80 billion.

Second, over the past five years the government has been engaged in a variety of exercises to contain administrative and programs costs in every department and agency. As a result of these far reaching spending and operational reviews (SORs), the Treasury Board Secretariat has already picked the “low hanging fruit” and booked the savings from these efforts.

The government will therefore have some tough problems to solve. Their new concern provides an important opportunity for Parliament to look at the broader question of government spending as part of its responsibility to hold the government to account. Over the past years, concern has been expressed from many quarters that Parliament is not devoting enough attention on why, where and how public money is being allocated in the federal sphere. For example, most recently, Parliament gave only a cursory review of this year’s $250 billion spending before it approved it on June 23. In fact, only the Government Operations and Estimates Committee, which is one of 24 House of Commons Committees, spent any time looking at the government’s estimates. And to compound the casual nature of their work, the Committee members limited their examination to only three organizations (Defence, Health, and the Treasury Board Secretariat) from the more than 90 eligible departments and agencies.

Fortunately, over the summer months, the Parliamentary Budget Office (PBO) launched a new initiative consisting of a web-based system that tracks federal spending. Branded an “Integrated Monitoring Database,” it is an easy-to-use, searchable program that allows users to scan a structured database on budgeted and in-year expenditures listed by vote for each federal department and agency. It also provides quarterly results of all votes contained in the Government’s Estimates and comparative data from several previous years. This innovative product is just what is needed to help parliamentarians and the public scrutinize government spending on a micro level basis.

This new tool provides up-to-date information that was previously unavailable because of the slow reporting systems currently in place. According to Kevin Page, the head of the PBO, this information will provide an opportunity for a “real time discussion” around spending plans by presenting an analytical framework and plenty of data to anyone with an interest in public finance. This database should give members of parliament another way to fulfil Parliament’s purpose by holding the government to account.

Meanwhile, this unique tool is a perfect mechanism for all Canadians interested in knowing where their tax dollars are spent. For more information go to www.pbo-dpb.gc.ca.

 

David Zussman holds the Jarislowsky Chair in Public Sector Management in the Graduate School of Public and International at the University of Ottawa (dzussman@uottawa.ca).

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