Canada is facing a huge financial challenge brought on by massive stimulus spending that will be paid for by deficit financing. Under the best of circumstances, government is big business. For example, during the fiscal year 2008-2009, the federal government spent approximately $240 billion on a wide range of programs and services in the following areas:
Spending Area Actual Spending ($)
Economic Affairs 105.4 billion
Social Affairs 48.8 billion
International Affairs 8.3 billion
Government Affairs 11.7 billion
Public debt servicing 31.0 billion
Accrual and other adjustments 2.8 billion
Tax credits and repayments 9.4 billion
Consolidated specified purpose
accounts (excluding Employment Insurance) 1.5 billion
Total Expenses 238.8 billion
Aside from the $31 billion that was spent on servicing the debt load, more than $180 billion was disbursed through more than 130 federal departments and agencies to improve the quality of life and economic conditions of Canadians.
To keep track of the spending, the Treasury Board Secretariat (TBS) has over the past decade developed a very sophisticated government-wide system for allocating and approving expenditures within all federal departments and agencies. At the heart of the Treasury Board system are the Reports on Priorities and Planning (RPPs) followed by Departmental Performance Reports (DPRs) that collectively provide a framework for a whole-of-government perspective on planned and actual spending.
This complex and very time-consuming exercise ensures that each department and agency has a coherent spending plan that, each year, is approved by Parliament in advance of actual spending.
To further explain the purpose of the spending, all of the government’s expenditures are grouped around 15 strategic outcomes that in turn are related back to the strategic outcomes of each department, and to more than 400 individual program activities. Within this complex matrix, Treasury Board ministers, parliamentarians and the public can monitor the spending intentions of the government and subsequently link outcomes to program inputs.
To limit the natural tendency to increase the size of the federal government and to validate current expenditures, the Treasury Board recently initiated a process for systematically reviewing all departmental spending. This effort, known as the Strategic Review, promises to review all spending on a four-year cycle by examining one quarter of the departments each year. Through a comprehensive review of programming, the government can identify opportunities to redirect funding to areas of higher priority that better meet the needs of Canadians.
Most recently, in 2008, 21 departments and agencies that represent approximately 27 percent of total government program spending completed a strategic review for Cabinet consideration. As a result, reallocations identified in the 2008 reviews were $349 million slated for 2009–10, $449 million for 2010–11, and $586 million for 2011–12.
Additionally, TBS is currently leading several other initiatives intended to develop excellence across the public service in the management of and accountability for government resources. Wayne Wouters spearheaded one very crucial initiative while he was the Secretary of the Treasury Board, namely the Web of Rules Action Plan for 2008-2009. The purpose of this effort has been to unburden public service employees from complex rules, reporting requirements, and administrative process that were developed as a result of the Gomery Commission and other administrative responses to the occasional administrative lapses in the federal government. The Web of Rules Action Plan for 2008–09 included “over 60 coordinated measures undertaken by different departments to improve how business is done and make government more efficient and effective, while safeguarding transparency and accountability.”
As a result, achievements in 2008–09 included reducing the reporting requirements of Treasury Board policies by 25 percent, of online human resources reporting across government by 85 percent, and Management Accountability Framework assessments by 50 percent. The Secretariat also rescinded almost 60 percent of its policies (80 out of the 136 targeted).
The continuing implementation of the web of rules initiative is intended to improve the government’s capacity to enhance management performance, deliver value while minimizing inefficiency, protect against key risks, and preserve accountability.
At this point, it would appear that TBS is to be commended for developing a sophisticated system of managing federal government spending. Moreover, the use of strategic reviews has been a most welcome addition to the budgetary process as it removes “low hanging fruit” from each department’s budget. As well, the attack on the web of rules is a most important recent initiative since it will eliminate costs that only add to the outlay of government without providing any value added services.
However, there is one further component in the budgetary cycle that appears to have been dropped from the carefully crafted budgetary framework that is currently in use. I am referring t