One of the ways the federal government is “hurrying money” out the door is to fiddle with the normal process by which the government is legally allowed to spend money. The opposition in Parliament questioned why the Conservatives needed to do this fiddling and, yesterday during a committee meeting, I heard the best explanation yet of why this fiddling was important. And that explanation came from a bureaucrat, not a politician.
The key concept to understand here is that Parliament must authorize every nickel the government spends. Whether it's paperclips the taxman uses, salaries for Parks Canada employees, or foreign aid, all the spending must go through Parliament.
The legislation for spending authority are often known as “supply bills”. Each calendar year is roughly grouped into three “supply” periods. So while the federal budget and the government's annual expenditure plan are passed early in the year, the legislation that triggers actual spending is grouped around a series of documents and legislation tabled and voted on for each of the three supply periods.
What the Tories wanted to do to speed up some funding — and help fight the recession — was take money — about $3 billion worth — that would normally have been voted on in a future supply period this year and have Parliament vote on it right now. That legislation is, in fact, before the House right now and a vote is due before June 15. The key vote in this package of spending legislation is called “Vote 35” and it is that Vote 35 that contains the $3 billion number.
Here's the explanation that is contained in the latest “Estimates“
Given the current economic situation and the need to expedite the funding of programs in the Economic Action Plan, the Government sought Parliament’s approval for an appropriation of $3 billion in 2009-10 Main Estimates for a new central Vote for Budget Implementation Initiatives – Treasury Board Vote 35. As of April 1, 2009, this appropriation allows Treasury Board Ministers to allocate funds directly to departments for immediate requirements related to budget measures in advance of Parliament’s approval of Supply for Supplementary Estimates. The new Vote is an exceptional and time-limited mechanism, allowing for allocations up to June 30, 2009 as bridge funding in advance of Supplementary Estimates. Any unallocated funds remaining in the Vote after June 30 will lapse.
At yesterday's meeting of the House of Commons Standing Committee on Government Operations and Estimates, Daniel Watson, the associate deputy minister for Western Economic Diversification (the regional development agency for Western Canada), gave what I though was the best explanation yet for why the government needed to shovel these extra billions into this supply period as opposed to waiting for future supply periods.
Watson is responding here to a question from Chris Warkentin, the Conservative MP from Peace River, Alberta, who had asked: “Could [you] give me some information as it pertains to this and how jobs are created even possibly before the cheque is cut from the federal government.”
Here's Watson's response:
In the world of contribution programs generally – you think of people looking for work who are maybe unemployed or underemployed – there are four key conversations that happen. The first one is, “we'll see”. That conversation started on January 27 when people had heard about this program and said to themselves, “I wonder if this can work for me”. The question is “we'll see”, nobody sort of knew the specific answer. [Watson is speaking here about Recreational Infrastructure Canada or RINC, the program to help municipalities to build new hockey rinks, soccer fields, etc. Western Economic Diversification 'deliver's RINC funding in Western Canada – Akin]
But as people were able to get more details about it, as people sort of began to look at the criteria, people got further into the stage of applications, got into another conversation, which is “be ready”. Be ready goes in part to the idea, “Well if we're going to need to show people what we're going to do, you have to hire people to do blueprints, you have to hire engineers, you have to hire people to get ready with environmental assessments and to advise on those fronts.”
The next conversation though is quite critical which is one that we enter into and it's the “I promise” conversation. That's where we say “we've received your application, we've looked at it and I promise that we will reimburse this share of costs”. That's where Vote 35 was critical for us. Under the Financial Administration Act I cannot promise to pay for something that Parliament hasn't given me the money to pay for. So I can't say “I promise” unless Parliament says “here's the money to back that up”.
The conversation that follows immediately after “I promise” is the fourth one that we all look forward to, which is “you're hired”. So it's from “we see” to “be ready” to “I promise” to “you're hired”.
The final conversation .. is “here's your cheque”. That happens months after the fact because the way these programs are designed, we always for due diligence purposes, pay after. We check their bills. We check “did you do what you said you were going to do”. So they go out, they incur the costs, they get the credit that 's required to do this. This is a standard practice across the federal government grant contribution world and we pay if they did what they said.
The key one for us that was critical about Vote 35 is we would not have been able to say “I promise” had we not had the money out of Vote 35 in relation to RINC as we don't have that money available to us and so we can't sign on the dotted line.
