The furor over the $300,000 that Karlheniz Schreiber allegedly gave to former Prime Minister Brian Mulroney has captivated the media’s interest and focused our attention on the less noble elements of politics. While the debate about the appropriateness and legality of offering and accepting cash gifts while serving as an elected official rages on the front pages of most Canadian newspapers, the business of government continues.
One area where government activity progresses unabated is in the area of spending. For example, during the day that Karlheinz Schreiber appeared before the House of Commons Ethics committee, the federal government spent $427 million of public funds to meet the needs of Canadians and to further the government’s agenda. By the end of the fiscal year in March 2008, the government will have spent $210 billion on a wide range of activities. In the Clerk of the Privy Council’s Annual Report to the Prime Minster, Kevin Lynch noted that the government would spend almost $50 billion in transfers to individuals and $40 billion to other levels of government. As well, almost 17% of the total spending will be used to service the federal debt.
These numbers are large and they also represent a steady increase of overall spending that appears to have had equal support from both the Martin and Harper governments. Overall, Canada has been increasing spending since the expenditure reductions of the late 1990s. For example, since 2000, the government has increased its overall spending by an annual average of 3.8%.
Without offering any comment on the effectiveness of some of these expenditures, given their large dollar value, it is always surprising to note how little public and media interest there is in the general area of government spending.
One reason for the general public lack of interest is the relatively little time that Parliament spends on this topic. If we take the approval of the 2006-2007 estimates as an example, there is very little activity related to the estimates in the Chamber proper. In general, the business of examining expenditures is primarily comprised of opposition days, appropriations bills and special Committee of the Whole examinations. For the 2006-2007 estimates, four appropriations bills were debated and passed and only two departments appeared before Committee of the Whole on their estimates (Human Resources and Skills Development and National Defence).
Since neither the four bills nor the two committee appearances took a full sitting day, the Chamber examined estimates-specific issues for a total of 6 days out of a possible 128 of House of Commons business. With regard to the 24 House Standing Committees, my estimate is that the committees spent 54 of their total 1092 meetings studying estimates (not including budget bills and related legislation). That means only 5% of House of Commons committee time was spent on examining and considering the $210 billion worth of expenditures. Whatever time has been spent over the past year on financial matters, it appears that Parliament has tended to concentrate its efforts on more accountability and financial management.
On the basis of his experience as minister of finance, Mr. Chrétien has often remarked that he found it easier to get approval for billion dollar expenditures than for one million dollars. Why this might be is unclear. Perhaps the scale of the spending intimidates the overseers or the spending is so large that it has little political appeal to members of parliament who are interested in benefits in their own ridings or areas of influence. Or perhaps it is easier to understand smaller amounts of spending.
This issue has not escaped the notice of some political leaders. Senator Hugh Segal, for one, has expressed his concern about the lack of attention paid by Parliament to spending priorities and decisions. In his recent book, he noted: “The core dynamic and symbolic role of Parliament, as agreed to in the Magna Carta in 1215, was the approval of funds and taxation before the king could spend and tax. The Parliament of Canada has not done this in any effective way since the late 1960s. Essentially, when all parties agreed that program and departmental estimates of spending would be deemed to have been reported back from committee to the House by a certain date, whether they were actually approved or not, the control was lost.”
Imbedded deep in the 2007 federal budget, the minister of finance announced his government’s intention to remedy its own decision-making process in order to limit the growth in spending. In short, Mr. Flaherty announced that, in the future, the federal cabinet would look at all government spending before it is put before the House of Commons for approval. He also promised to provide Cabinet with a rigorous analysis of all new spending, something that was common practice in the 1980s but has not been done since the government moved into a surplus situation.
In November’s Canadian Government Executive, David Good, a former senior public official and now a professor at the University of Victoria, commented on some of the work he has done on the “politics of public money.” In the course of his analysis, he has drawn some interesting conclusions about the dynamics around decisions to expend public money. For example, he makes the observation that, over the past two decades, Canadian governments have been centralizing power into the offices of the prime minister.
Previously there was a built in tension between the departments that needed funds to spend on their existing and new programs and those that acted as guardians of the public interest, such as Finance and Treasury Board. The challenge function provided by one set of actors to the other guaranteed that the government would have the benefit of strong analysis and debate among the spenders and guardians. Good notes that, under the current system, the traditional players have been joined by two sets of new players. The first are the priority setters from the Prime Minister’s Office and the second are watchdogs such as the Auditor General and the new agencies recently created under the Federal Accountability Act. He is concerned that additional inclusion of the priority setters and watchdogs will not improve the current system at all.
It is obvious that there are two areas that need immediate attention in order to bring the issue of government expenditures to the attention of decision makers and to the public. First, the announced improvements at the Cabinet level need to be implemented, possibly by creating a Cabinet Committee on Expenditure Review as recommended by Good. Second, it is obvious that Parliament might benefit from taking a more measured look at government spending intentions as well as program outcomes by linking government priorities to spending and then to performance.
Once Cabinet and Parliament become more committed to rationalizing the system, perhaps the media and the public will pay more attention to how their tax dollars are being spent.
David Zussman holds the Jarislowsky Chair in Public Sector Management in the School of Public and International Affairs and the Telfer School of Management at the University of Ottawa (firstname.lastname@example.org).