Parliamentary committee appearance binder for the Comptroller General of Canada before the Standing Committee on Public Accounts (PACP) on November 18 and 22nd, 2022 regarding the Public Accounts of Canada 2022

Issue / Question:

The Public Accounts of Canada for fiscal year 2021-2022 were tabled in Parliament by the President of the Treasury Board in October 2022.

Suggested Response:

• The Government of Canada is committed to responsible financial management and oversight.
• The Public Accounts include the audited consolidated financial statements of the Government.
• For the 24th year in a row, the Government of Canada received a clean audit opinion on its consolidated financial statements.
• This demonstrates the high quality of Canada's financial reporting.

Background:

• Production and finalization of the Public Accounts of Canada is a joint responsibility between the Receiver General, the Office of the Comptroller General and the Department of Finance.
• The Public Accounts reflect the Government’s audited consolidated financial statements and other detailed financial information for the fiscal year 2021-2022 that ended March 31, 2022.
  • Volume I – includes the audited consolidated financial statements of the Government; the unmodified audit report from the Auditor General; a financial statements discussion and analysis, which presents 10-year comparative financial information; as well as details on certain financial statement components.
  • Volume II – includes financial operations of the departments, including the reconciliations of authorities granted and spent.
  • Volume III – includes other supplementary information such as losses, claims against the Crown, ex gratia payments and Ministers’ Office expenditures.
• The Auditor General also simultaneously tables in Parliament, through the Speaker of the House, her observations on key financial audits. This year's observations focus on the pandemic measures enacted by the government, pay administration and National Defence's inventory and asset pooled items.
• The Public Accounts are tabled in the House of Commons and undergo a review by the Public Accounts Committee.
• The Public Accounts show a deficit of $90.2B compared to the projected $154.7B deficit in Budget 2021. To note, Budget 2022 revised the projection to $113.8B. 

Introduction

Thank you, Mr. Chair, and members of the Committee.

I’m pleased to have the opportunity to discuss the Public Accounts of Canada 2022.

Before I begin, I would like to acknowledge that I am speaking here today from the traditional unceded territory of the Algonquin Anishnaabeg People.

I am joined by two of my colleagues from the Treasury Board of Canada Secretariat:

• Monia Lahaie, Assistant Comptroller General of the Financial Management Sector; and
• Diane Peressini, Executive Director, Government Accounting Policy, and Reporting.
• As this committee knows, the Public Accounts include the audited consolidated financial statements for the 2021- 2022 fiscal year, which ended on March 31, 2022, in addition to other unaudited financial information.

I’m pleased to note that, for the 24th consecutive year, the Auditor General has issued an unmodified or “clean” audit opinion on these financial statements.

I would like to thank the financial management community of the Government of Canada, the Department of Finance and the Receiver General, and the Office of the Auditor General for helping prepare the Public Accounts.

Highlights

Let me now turn to some of the highlights in this year’s documents.

Total revenues in these Public Accounts amounted to $413.3 billion in 2022, which represents an increase of $96.8 billion, or 30.6%, from 2021.

Total expenses amounted to $503.5 billion in 2022, which is down $140.7 billion, or 21.8%, from 2021.

As expected, the pandemic continues to have a significant impact on the financial statements.

The total impact of the key COVID-19 response measures on fiscal year 2022 is estimated at over $70 billion.

These include:

• The Canada Emergency Wage Subsidy at $22.3 billion;
• The Canada Recovery Benefit, Canada Recovery Sickness Benefit, Canada Recovery Caregiving Benefit, and the Canada Worker Lockdown Benefit, totaling $16.5 billion; and
• The Canada Emergency Rent Subsidy, totaling $3.7 billion.

Tabling Date

Mr. Chair, one additional point which tends to come up that I would like to clarify is the timing of the tabling of the Public Accounts.

The Financial Administration Act requires the President of the Treasury Board to table the Public Accounts, while Parliament is sitting, each year by December 31.

While the end date is set by legislation, the actual tabling date will vary from year to year within this timeframe.

For instance, during fall election years, the tabling usually takes place closer to the end of the calendar year.

There are also other factors that impact the timeline.

After the Auditor General approves the Public Accounts, several weeks are required to prepare them for publication.

This includes an online version which is required by law to meet accessibility requirements.

Timing of tabling for this year was within typical timelines of mid to late October in a non-election year.

I want to assure this committee that we are looking for ways to help boost our efficiency throughout the production process to achieve the optimal timeline for the tabling of the Public Accounts of Canada.

Mr. Chair, I’d also like to acknowledge we are currently reviewing this committee’s recent report on the 2021 Public Accounts.

In particular, we are assessing the committee’s recommendations including the one recommendation concerning tabling timelines. .

Modernization

Mr. Chair, we are continuously looking for opportunities to improve how government operates, and this includes the modernization of the Public Accounts.

Based on recommendations of this committee, the government committed to study potential improvements, and I’m pleased to report that this work is underway.

To identify possible streamlining opportunities, we reviewed the existing content of the public accounts to identify information that is available through other means, not required by legislation and some with thresholds that have not changed for decades.

In addition, we have received feedback from the Library of Parliament on opportunities to improve the presentation and format of the Public Accounts of Canada.

At the same time, we have engaged key stakeholders on additional potential improvements through a survey.

The purpose of the survey is to better understand how the Public Accounts of Canada are being used, and to gather feedback on opportunities to improve and modernize them.  

This feedback is critical to ensure that any changes to the Public Accounts provides information that is relevant, timely, and useful for accountability purposes.

I would like to reiterate that any proposed changes will be carefully examined to ensure the government’s financial information continues to support transparency and accountability to parliamentarians and Canadians.

As this project advances, the government will continue to work closely with parliamentarians, stakeholders, and this committee, Mr. Chair.

Thank you for your attention.

This concludes my remarks.

Agenda

1. Background Information
   • Current Reporting Cycle for Government Expenditures
   • Public Accounts of Canada
   • Roles and Responsibilities
   • Accounting Standards
2. Financial Results
3. Appropriation Information
4. Observations
5. Annex - Definitions

Accounting

Accrual Accounting

Transactions are recognized when revenue is earned, rather than when cash is received, and expenses are recognized when they are incurred, rather than when they are paid.

Appropriation

Any authority of Parliament to pay money out of the Consolidated Revenue Fund.

Expenditure Basis of Accounting/Modified Cash Accounting (Appropriation Accounting)

Transactions are recognized when money is paid out of the Consolidated Revenue Fund (CRF), as well as a limited number of transactions which do not affect the CRF until a later date for goods and services received just prior to year-end. Non-cash transactions (e.g., amortization) are not recognized. This is also sometimes called modified cash accounting.

Modified Equity Accounting

The cost of the Government’s equity is reduced by dividends received and adjusted to include the annual profits and losses of corporations, after elimination of unrealized inter-organizational gains and losses. Applies to Crown Corporations and other entities who can sustain their operations without government appropriations.

Unmodified Audit Opinion

Independent auditor's opinion that the financial statements are fairly presented, and in accordance with the accounting policies of the Government which conform with Canadian Public Sector Accounting Standards.

Government Concepts

Special Revenue Spending Authorities

Special revenue spending authorities from Parliament allows departments to use a certain amount of their revenues to finance their directly related expenditures. Those authorities include Revolving Funds and Net Voting and both of these reduce dependence on appropriations from general revenues.

Net Voting

Net voted operations may or may not be self-sustaining and usually the scale of operations is less significant than is the case for revolving funds. The aim of net voting provides that certain revenues offset related expenditures within a fiscal year (e.g., Shared Services Canada).

Revolving Funds

Generally appropriate for large, distinct, self-sustaining activities that provide client-oriented services. The aim of a revolving fund is to achieve self-sufficiency over its business cycle, therefore appropriations are non-lapsing (e.g., Passport Canada).

Specified Purpose Accounts (SPAs)

A broad classification of accounts established in the accounts of Canada and reported in the Public Accounts. SPAs, record transactions, and expenditures for money payable out of the Consolidated Revenue Fund (CRF) under statutory authorities established for specified purposes. For accounting purposes, SPAs are classified as either a consolidated SPA (Employment Insurance Operating Account), a non-consolidated SPA (Insurance and Death Benefit Accounts) or deferred revenue SPA (Spectrum Licence Fees).

Frozen Allotments

Used to prohibit the spending of funds previously appropriated by Parliament. There are two types of frozen allotments: permanent and temporary.

Permanent Frozen Allotments

Used where the Treasury Board has directed that funds lapse at the end of the fiscal year.

Temporary Frozen Allotments

Used where an appropriation is frozen until such time as a condition (conditions) has (have) been met.

Special Purpose Allotments (SPAs)

Used to set apart a portion of an organization’s voted appropriation for a specific initiative or item. Such an allotment is established when the Board wishes to impose special expenditure controls.

Mandate of the Committee

When the Speaker tables a report by the Auditor General in the House of Commons, it is automatically referred to the Public Accounts Committee. The Committee selects the chapters of the report it wants to study and calls the Auditor General and senior public servants from the audited organizations to appear before it to respond to the Office of the Auditor General’s findings. The Committee also reviews the federal government’s consolidated financial statements – the Public Accounts of Canada – and examines financial and/or accounting shortcomings raised by the Auditor General. At the conclusion of a study, the Committee may present a report to the House of Commons that includes recommendations to the government for improvements in administrative and financial practices and controls of federal departments and agencies.

Government policy, and the extent to which policy objectives are achieved, are generally not examined by the Public Accounts Committee. Instead, the Committee focuses on government administration – the economy and efficiency of program delivery as well as the adherence to government policies, directives and standards. The Committee seeks to hold the government to account for effective public administration and due regard for public funds.

Pursuant to Standing Order 108(3) of the House of Commons, the mandate of the Standing Committee on Public Accounts is to review and report on:

• The Public Accounts of Canada;
• All reports of the Auditor General of Canada;
• The Office of the Auditor General’s Departmental Plan and Departmental Results Report; and,
• Any other matter that the House of Commons shall, from time to time, refer to the Committee. 

Interest in TBS Portfolio

Conservative Party of Canada (CPC)

• Spending Oversight and Accountability
  • Conservative MPs consider the government is spending too much, and without proper oversight and accountability. This criticism amplified since the election of the CPC’s new leader, MP Pierre Poilievre. Since the return of Parliament in September, most of the party’s interventions during Question Period have been about government spending.
  • More broadly, Conservatives have been using the Public Accounts as an example of wasteful spending and government incompetence. MP Andrew Scheer (not a committee member) claimed that “we are constantly poring through Public Accounts to find wasteful spending and, lo and behold, we find them all the time.”
  • October 28, 2022, Debate on Bill C-9
    • MP Kelly McCauley recently presented the Conservatives' dissenting report on the 2021 Public Accounts report, in which the CPC claimed that should the government revise the public accounts after they are finalized, they recommend that the secretary of the Treasury Board and the comptroller general report their rationale for doing so to PACP, that the Auditor General present their views to the committee and that all three appear at PACP to discuss the matter.
  • October 20, 2022, Routine Proceedings
    • In the past, MPs Pat Kelly (not a committee member) and Kelly McCauley have criticized the way the government produced the 2021 Public Accounts, suggesting that the audited Public Accounts were re-opened for political gain; showed concerns that the late tabling made it impossible to hold the government accountable for “out of control spending”.
  • December 8, 2021, Committee of the Whole – Supplementary Estimates (B) 2021-22; December 10, 2021, Question Period; February 3, 2022, Debate on Bill C-8; March 1, 2022, OGGO – Supplementary Estimates (C) 2021-22
• Public Service and Public Servants
  • MP Philip Lawrence (no longer a committee member) claims that he is frustrated by the fact that when he was a member of PACP, the studies have always focused on the same topic ands reports that do not necessarily get implemented. He wants to focus more on improving the performance of the public sector.
    • May 5, 2022, PACP – Main Estimates 2022-23 (OAG)
• Diversity & Inclusion, GBA+
  • Conservative MPs have supported GBA+ in recent Parliaments, often criticizing the Government for claiming to be feminist while supposedly doing very little to enforce GBA+ practices. On multiple occasions, Conservative MPs have accused Government MPs and officials of not taking the GBA+ training that is offered to them seriously.
    • February 27, 2020, FEWO – Meeting #3; June 9, 2021, Private Member’s Business
  • Throughout the pandemic, Conservatives have been very vocal over the Government’s “failure to apply the GBA+ on all the COVID-19 programs”. During Question Period and in committees, several MPs, including Raquel Dancho, Jag Sahota and Karen Vecchio (not committee members) have asked questions about the lack of GBA+ analysis in COVID-related policies, claiming that it ended up isolating women and leaving them vulnerable during lockdowns.
    • May 25, 2020, Statement by Members; March 12, 2021, Question Period; June 15, 2021, FEWO – Meeting #42
  • More recently, in PACP meetings from the 44th Parliament, MPs Eric Duncan, Philip Lawrence and Jeremy Patzer (no longer committee members) again insisted on how quarantine measures disadvantaged women. They expressed to the Auditor General that they are “very surprised that this has not raised a red flag in any way as being worthy of an audit, particularly when it comes to a GBA+ lens”. They also asked questions to the Auditor General on ways to make National Defence more inclusive for women.
• April 5, 2022, PACP – Meeting #13; June 2, 2022, PACP – Meeting #22
• Environment and Greening Government
  • MP Philip Lawrence (no longer a committee member) believes that investments in many sectors of government need to be made, specifically about data management and climate change resilience. He mentioned that he would like more information on what the government is doing on that front.
    • March 3, 2022, PACP – Meeting #8
• Order Paper Questions
  • MPs Scott Aitchinson and Tom Kmiec (not committee members) respectively requested parliamentary returns on Expenditures on Transportation Machinery and Equipment listed in the 2021 Public Accounts (Q-297, January 2022) and on Losses of public money and property as listed in the 2021 Public Accounts (Q-323, February 2022)

Bloc Québécois (BQ)

• Spending Oversight and Accountability
  • MP Sinclair-Desgagné criticized on multiple occasions the ‘’fiscal imbalance’’ in the Public Accounts, particularly when it comes to healthcare transfers to Quebec and other provinces from the federal government.
    • October 27, 2022, Debate on Bill C-31
  • MP Sinclair-Desgagné suggested that the President of the Treasury Board is happy that workers from the Office of the Auditor General are on strike because it means they are no longer able to produce reports that “embarrass the government” and that they can no longer ensure accountability. 
    • March 31, 2022, Statement by Members
  • MP Sinclair-Desgagné showed concerns that Crown corporations make it impossible to correctly track government spending. With Crown corporations, “it is impossible to know how much money is being handed over”. She believes that the current situation is unacceptable. More recently, in a PACP meeting, she asked a TBS official what legislative changes would be needed for crown corporations to disclose information the same way departments do.
    • November 1, 2022, PACP – Meeting #36 (Briefing on the Office of the Auditor General); May 9, 2022, Debate on Budget 2022
• Public Service and Public Servants
  • MP Sinclair-Desgagné showed support for employees working at the Office of the Auditor General that are on strike, saying they deserve better pay equity.
    • March 31, 2022, Statement by Members
• Diversity & Inclusion, GBA+
  • Bloc MPs have been historically in favor of GBA+ while being repeatedly critical over the lack of results and the lack of data indicating its effectiveness. MP Andréanne Larouche (not a committee member) has been the most vocal Bloc MP on this issue, claiming on multiple occasions that GBA+ must be considered in every department and in government economic responses, with better outcomes.
    • June 15, 2020, HUMA – Meeting #19; February 25, 2021, FEWO – Meeting #18
  • More recently, in PACP meetings, MP Sinclair-Desgagné was interested in the Auditor General's findings on the shortcomings of the government's implementation of GBA+. She also reiterated her concern about the lack of focus on outcomes, saying that there is a lack of information to determine whether concrete improvements are being made to reduce barriers. She wonders if the problem is “with the data or the process”.
    • June 2, 2022, PACP – Meeting #22
• Environment and Greening Government
  • MP Sinclair-Desgagné criticizes the fact that, regarding greening government, Crown corporations are held to lower environmental standards. More notably, she criticized some of the Public Sector Pension Investment Board’s environmental practices.
    • February 15, 2022, PACP – Meeting #6
  • MP Sinclair-Desgagné believes Government funding should be cut off to sectors where positive environmental results are lacking, such as the oil sector
    • February 8, 2022, PACP – Meeting #4

New Democratic Party (NDP)

• Spending Oversight and Accountability
  • MP Daniel Blaikie (not a committee member) reminded the House several times about the Parliamentary Budget Officer’s remarks about how the government has been filing the Public Accounts too late. He and the NDP believes that “…additional financial reporting (is) warranted…” and that “normally, in the countries of most of our allies and trading partners, that happens on a six-month timetable after the end of the fiscal year, so tabling them in December was very late. I think it is true, especially when the government is spending large sums of money, that accountability and transparency become that much more important”.
    • February 2, 2022, March 23, 2022 & March 28, 2022, Debate on the Economic and Fiscal Update Implementation Act, 2021
• Public Service and Public Servants
  • MP Blake Desjarlais criticized the Pheonix Pay System, saying that the Treasury Board not consulting with public servants resulted in a direct impact on workers. He claims that years later, the Government continues to fail with Phoenix.
    • May 3, 2022, PACP – Meeting #17
• Diversity and Inclusion, GBA+
  • The NDP has been one of the most vocal parties about the importance of GBA+. They believe that GBA+ analyses should be applied systematically to the “development, implementation or oversight” of every government program. NDP MPs have been particularly critical about the Government for allegedly breaking its commitment to make GBA+ an indispensable tool. They partially attribute the non-compliance of recruitment and retention targets for underrepresented groups as a result of the “failure” to implement GBA+.
    • May 27, 2021, PACP – Meeting #34; June 9, 2021, Private Member’s Business
  • In PACP meetings, MP Desjarlais has been a strong advocate for GBA+. He believes that shortcomings in the government's implementation of GBA+ constitute an “extreme situation” that undermines the confidence of people in marginalized communities, such as Indigenous women, in their government.
    • June 2, 2022, PACP – Meeting #22
  • MP Desjarlais believes more work needs to be done in the public sector and with Crown corporations when it comes to ensuring diversity inclusion and equity. He believes stronger targets and indicators should be put in place so we can see the tangible results and progress.
    • February 15, 2022, PACP – Meeting #6; March 31, 2022, PACP – Meeting #12; March 31, 2022, Debate on Bill S-214
• Environment and Greening Government
  • MP Desjarlais often criticizes the lack of “real climate action” by the Government. He believes the government should be held accountable on the lack of progress on that front. He believes climate actions should play an integral part in the action plans of Government departments.
    • December 1, 2021, Reply to the Speech of the Throne; March 1, 2022, PACP – Meeting #7; April 7, 2022, Statement by Members
  • Other NDP MPs, like Laurel Collins (not a committee member) showed concerns over the fact that when it comes to the greening government, Crown corporations are not required to report on their emissions.
    • May 3, 2022, ENVI – Meeting #15

Relevant Meeting Summaries

Highlights

The meeting began late, due to votes in the House of Commons. The Committee moved to in camera at the end of the meeting to consider drafting instructions for a report not related to TBS.

The Auditor General provided the Committee with an overview of her resources and the requests in the Main Estimates 2022-23 and the steps the office is taking to digitize their office, she also emphasized the efforts the Office of the Auditor General has taken after the strike.

Members were focused on the repetitive nature of the reports and wanted to understand how resources in the Office of the Auditor General to follow-up on its recommendations. CPC Members brought forward the examples of the multiple follow-ups needed with the clean drinking water and the National shipbuilding reports. MP Nathalie Sinclair-Desgagné (BQ) was concerned with overall oversight on crown corporations, which the Auditor General agreed with.

MP Blake Desjarlais (NDP) passionately questioned the Auditor General on improvements being made to the culture within the work environment after the strike and expressed concern that employees may be facing disciplinary action. The Auditor General assured the Member that she had not been made aware of any disciplinary actions and reiterated the importance of the Code of Conduct that employees must follow.

MP Jeremy Patzer (CPC) asked if there were plans to conduct an audit on the overall productivity of public servants working from home, and in response, the Auditor General confirmed that it was not in the current plans.

The Committee adopted the referred votes of the Main Estimates 2022-23 for the Office of the Auditor General (on division).

Witnesses

Office of the Auditor General

• Karen Hogan, Auditor General of Canada
• Carey Agnew, Principal
• Carol McCalla, Principal
• Nicholas Swales, Principal

Highlights

The Auditor General appeared before the Committee to brief members on the four audit reports tabled earlier this week. In her opening remarks, she provided an overview of the reports’ findings, including on Report 3: Follow-up on Gender-Based Analysis Plus (GBA+). She indicated that while GBA+ analyses are completed, there has not been an observable impact on outcomes. She said that the Privy Council Office (PCO), Treasury Board Secretariat (TBS) and Women and Gender Equality (WAGE) need to better collaborate and ensure organizations fully integrate GBA+ in a way that produces real results.

During questioning, Brenda Shanahan (LPC) asked how departments were doing with regards to implementing GBA+. Ms. Hogan said that it was a mixed bag, with some departments using GBA+ usefully and improving outcomes, while others see it as more of an obligation. Ms. Shanahan later gave examples of improvements in gender equality in Canada, and asked Ms. Hogan to comment. Ms. Hogan repeated that results were mixed, as reporting and measuring are inconsistent across government.

Valerie Bradford (LPC) asked about the OAG process for following up with departments after audits. In her response, Ms. Hogan referenced TBS requirements that departmental audit committees to follow up on any recommendations their organizations receive.

Blake Desjarlais (NDP) said that shortcomings with the government’s implementation of GBA+ is hurting the confidence of people in marginalized communities in their government. Ms. Hogan replied that the Government seems to be more focused on process rather than outcomes.

Nathalie Sinclair-Desgagné (BQ) asked Ms. Hogan to elaborate on her findings on the shortcomings of the government’s implementation of GBA+. The Auditor General said that there was a lack of capacity, skills and data to do the analysis. She also repeated her concern about a lack of focus on outcomes, saying a lot of information was missing to determine whether concrete improvements are being made to reduce barriers.

Ziad Aboultaif (CPC) said that while the federal public service had expanded, productivity was down and outcomes are not being achieved. He asked if there needs to be a restructuring of the public service. Ms. Hogan noted her concern that the government was focused on process rather than outcomes, but said there needed to be a balance, as some controls and vetting are needed to ensure accountability.

Witnesses

Canada Mortgage and Housing Corporation

• Romy Bowers, President and Chief Executive Officer
• Nadine Leblanc, Senior Vice President, Policy

Department of Indigenous Services

• Christiane Fox, Deputy Minister
• Rory O'Connor, Director General

Office of Infrastructure of Canada

• Kelly Gillis, Deputy Minister
• Gerard Peets, Assistant Deputy Minister
• Sean Keenan, Director General

Office of the Auditor General

• Karen Hogan, Auditor General of Canada
• Gabriel Lombardi, Director

Privy Council Office

• Laurie Goldmann, Director of Operations

Treasury Board Secretariat

• Ritu Banerjee, Executive Director, Results Division, Expenditure Management Sector

Highlights

Note: The Secretary of the Treasury Board previously appeared on this subject on May 11, 2021. He did not receive any questions.

The Auditor General confirmed that no new audit work has been completed since March 2021. She stressed the importance of clear and meaningful reporting for success, especially with so many departments involved in the Plan. In her opening remarks, the Deputy Minister from Infrastructure Canada explained the improvements the department has made in reporting requirements and working collaboratively with their partners on the Investing in Canada Plan. Ms. Gillis also pointed to the fact that Infrastructure Canada works very closely with TBS and PCO on reporting requirements.

The TBS official did not respond to any questions.

MP Eric Duncan (CPC) expressed concerns about the issuing of performance pay to CMHC employees, Ms. Bowers (CMHC) explained the compensation structure as a crown corporation.

MP Alain Therrien (BQ) moved two motions unrelated to TBS.

Witnesses

Treasury Board Secretariat

•  Graham Flack, Secretary of the Treasury Board of Canada
•  Jane Keenan, Acting Executive Director, Centre for Greening Government
•  Malcolm Edwards, Senior Engineer, Centre for Greening Government

Office of the Auditor General

•  Jerry V. DeMarco, Commissioner of the Environment and Sustainable Development
•  Milan Duvnjak, Principal

Department of National Defence

• Bill Matthews, Deputy Minister 
• Nancy Tremblay, Associate Assistant Deputy Minister, Material
• Saleem Sattar, Director General, Environment and Sustainable Management

Department of Transport

• Michael Keenan, Deputy Minister
• Ross Ezzeddin, Director General, Air, Marine and Environmental Programs

Highlights

The meeting was delayed by votes in the House.

In his opening remarks, Commissioner of the Environment and Sustainable Development, Jerry DeMarco outlined the history of the Greening Government Strategy and the targets that were set and revised since the launch in 2017. He told the Committee that the audit focused on TBS’s leadership in supporting departmental progress; as well as how DND and Transport implemented controls to reduce GHG emissions. He concluded that TBS’s efforts to reduce emissions are not as complete as they could be, and that important information on greening government was hard to find, unclear or insufficient – including a lack of detail on costs and savings. He cited concerns that indirect emissions have not been reported, and that Crown corporations were outside the reach of the strategy. He said that neither DND nor Transport made it clear how they would meet the 2050 target. He concluded that the lack of info makes it difficult to track targets, and to determine if Canada is being the global leader it has set out to be. He told the Committee that of the five recommendations for TBS in the report, only one wasn’t fully agreed with. Finally, the Commissioner noted that he tabled a fall report on October 4 on the 2021 progress report on the Federal Sustainable Development Strategy.

In his opening remarks, Deputy Minister of Transport Canada, Michael Keenan, told the Committee that Transport Canada fully accepted the Commissioners recommendation and is fully committed to the GHG reduction targets. He said that Transport Canada’s emission largely result from its fleet, rather than from buildings, so its implementation plan is somewhat unique. He said that TC’s roadmap will continue to evolve and be updated, and that mechanisms would be put in place to assess risks and track reductions of emissions.

In his opening remarks, the Secretary of the Treasury Board, Graham Flack, outlined how the Government is greening its activities with a target of net-zero GHG emission by 2050, and an interim target of 40% reduction by 2025 for the conventional fleet of vehicles and federal facilities. He also reviewed the leadership role of the Centre for Greening Government (CGG) at TBS, in terms of the strategy to green buildings, vehicles and procurement by the government. This includes developing low-carbon real property portfolio plans; building new zero-carbon buildings; retrofitting existing buildings to be energy efficient and low-carbon; including environmental factors in their procurement; buying hybrid or zero-emission vehicles and clean electricity; and adopting clean technologies, such as smart building technologies, clean fuels, and renewable electricity. After touching on the top lines of the Commissioners report, the Secretary said that TBS agrees with all the recommendations of the report, other than the notion that TBS has not developed an approach to tracking costs and savings. He told the Committee that CGG uses life-cycle costing analysis and total cost of ownership methodologies to inform decision makers on the best value options to decarbonize government operations. He also said that other governments have reached out to ours on implementing a costing methodology. Finally, he said that TBS would do more to communicate the cost-effective approach to accounting for costs and emissions to Parliamentarians and Canadians.

In his remarks, DND deputy minister, Bill Matthews outlined the size and scale of DND’s operating environment. He said the department is making progress, meeting shorter term targets, but that there remains a great deal of work to achieve the Government’s long-term net-zero targets. He said that DND accepted the recommendations of the Commissioner.

Following opening statements, the Committee suspended proceedings due to additional votes in the House. The witnesses were released but are expected to be recalled for questioning at a subsequent date.

The Committee returned to meet in camera on Committee Business following the votes in the House.

Witnesses

Treasury Board Secretariat

• Graham Flack, Secretary of the Treasury Board of Canada
• Malcolm Edwards, Senior Engineer, Centre for Greening Government

Office of the Auditor General

• Jerry V. DeMarco, Commissioner of the Environment and Sustainable Development
• Milan Duvnjak, Principal

Department of National Defence

• Bill Matthews, Deputy Minister 
• Nancy Tremblay, Associate Assistant Deputy Minister, Material
• Saleem Sattar, Director General, Environment and Sustainable Management

Department of Transport

• Michael Keenan, Deputy Minister
• Ross Ezzeddin, Director General, Air, Marine and Environmental Programs

Highlights

The Committee met to study Report 2, Greening Government Strategy, of the 2022 Reports 1 to 5 of the Commissioner of the Environment and Sustainable Development, and to question witnesses. Officials did not make opening statements as they had already done so during the meeting on October 18, which was interrupted due to votes in the House of Commons.

Today’s meeting was largely polite and cordial. Topics of discussion of interest to TBS included:

• TBS’s role in the Greening Government Strategy, including reporting, enforcement, and international cooperation.
• Costs associated with achieving the government’s greenhouse gas (GHG) emissions reduction goals.
• The government’s ability to provide comprehensive reporting on its GHG emissions.
• The impact of the COVID-19 pandemic on government GHG emissions
• The OAG’s recommendation that Crown corporations also report their progress, and TBS’s consultations with Crown corporations.
• Any current and future plans to purchase carbon offsets by the government.
• GHG emissions produced by ministerial travel.

The officials from DND and Transport also responded to questions regarding their own plans and progress in reducing their departments’ emissions. Mr. Matthews, from DND, made reference to tools and guidance provided to them by TBS. After the conclusion of witness testimony, the Committee met in camera to discuss committee business.

Witnesses

Treasury Board Secretariat (TBS)

• Stephen Diotte, Executive Director, Employment Relations and Total Compensation, Strategic Compensation Management, Office of the Chief Human Resources Officer

Office of the Auditor General (OAG)

• Karen Hogan, Auditor General of Canada
• Andrew Hayes, Deputy Auditor General

Department of Finance (FIN)

• Nicholas Leswick, Associate Deputy Minister

Highlights

Pursuant to the motion adopted on October 21, 2022, the Committee received a briefing on the Office of the Auditor General.

In her opening remarks, the Auditor General (AG) emphasized the importance of considering the workload in proportion with the amount of funding the OAG receives when requesting additional audits. The AG considers the current funding model problematic due to the fact that the Department of Finance (FIN) and Treasury Board Secretariat (TBS) are organizations audited by the OAG and presents challenges to maintain independence from the Government. The AG addressed the previous strike and the resulting challenges in attracting and maintaining personnel. The AG concluded by assuring the Committee that they will continue to pursue conversations with employees to foster a better working environment.

Members showed considerable concern with the independence of the OAG in the current funding model and questioned whether or not they were appropriately resourced. All Members pointed out the increasing expression of mistrust in Government institutions and emphasized the importance of the role of the OAG in maintaining that trust. MP Blake Desjarlais (NDP) questioned all witnesses on the roles of each organization in the events during the OAG employee strike last Fall. Government Members clarified how collective bargaining mandates work and asked TBS to identify the risk in expanding the mandate in terms of the existing agreements.

Follow-Ups

• What legislative changes would be needed for crown corporations to disclose information the same way departments do? – MP Nathalie Sinclair-Desgagné

Next Steps

The Committee is expected to meet next on Friday, November 4, 2022 to discuss Committee Business. The Chair also indicated that the Committee will have a briefing with the Auditor General on the upcoming performance reports on November 15th (in camera). The Chair also indicated that the Committee will invite officials to appear on the Public Accounts 2022 on November 18th.

Issue / Question:

The Public Accounts of Canada for fiscal year 2021-2022 were tabled in Parliament by the President of the Treasury Board in October 2022.

Suggested Response:

• The Government of Canada is committed to responsible financial management and oversight.
• The Public Accounts include the audited consolidated financial statements of the Government.
• For the 24th year in a row, the Government of Canada received a clean audit opinion on its consolidated financial statements.
• This demonstrates the high quality of Canada's financial reporting.

Background:

• Production and finalization of the Public Accounts of Canada is a joint responsibility between the Receiver General, the Office of the Comptroller General and the Department of Finance.
• The Public Accounts reflect the Government’s audited consolidated financial statements and other detailed financial information for the fiscal year 2021-2022 that ended March 31, 2022.
  • Volume I – includes the audited consolidated financial statements of the Government; the unmodified audit report from the Auditor General; a financial statements discussion and analysis, which presents 10-year comparative financial information; as well as details on certain financial statement components.
  • Volume II – includes financial operations of the departments, including the reconciliations of authorities granted and spent.
  • Volume III – includes other supplementary information such as losses, claims against the Crown, ex gratia payments and Ministers’ Office expenditures.
• The Auditor General also simultaneously tables in Parliament, through the Speaker of the House, her observations on key financial audits. This year's observations focus on the pandemic measures enacted by the government, pay administration and National Defence's inventory and asset pooled items.
• The Public Accounts are tabled in the House of Commons and undergo a review by the Public Accounts Committee.
• The Public Accounts show a deficit of $90.2B compared to the projected $154.7B deficit in Budget 2021. To note, Budget 2022 revised the projection to $113.8B. 

Issue / Question:

Why has the Government of Canada's provision for contingent liabilities increased in the year?

Suggested Response:

• The Government of Canada is committed to honouring its obligations and settling claims which impacts the contingent liability balance.
• The contingent liabilities amount changes annually as estimates are revised for existing liabilities, new claims are filed against the Crown, and settlements are reached.
• This year's increase is mainly due to efforts to advance reconciliation with Indigenous People.
• The Government of Canada's contingent liabilities are reviewed on a quarterly basis as required by Treasury Board's Directive on Accounting Standards to ensure that they fairly represent the financial position of Canada.

Background:

• The agreement-in-principle ($20B) was reached in December 2021 on a global resolution related to compensation for those harmed by underfunding of the First Nations Child and Family Services program and Jordan's Principle. This resulted in an increase to the pending and threatened litigation and other claims balance of $4B during the year. This amount was offset by a decrease of $2B for the settlement of Safe Drinking Water. 
• Pending and threatened litigation and other claims has also increased by an additional $2,705M due to claims reassessed as likely or for reassessments of existing accrued contingent liabilities. [This information has been redacted]

In any given year, factors that could increase the provision include:

• Recent Court and Tribunal rulings and precedent setting outcomes from settlements of past grievances and claims with the Government can influence others to bring claims forward against the Government of Canada.
• Social activism such as the “Me too” movement against discrimination, sexual harassment and assault can influence individuals to bring forward claims against the Government of Canada for past injustices.
• A provision is also made when it is likely that a payment will be made to honour a guarantee and when the amount of the anticipated loss can be reasonably estimated. The way the Government structures future funding arrangements with third parties which include a Government guarantee also has the potential to increase the liability.

Issue / Question:

Why are there significant increases in the liabilities for 'other employee and veteran future benefits' on a year over year basis?

Suggested Response :

• Each year, adjustments are made to the liabilities for other employee and veteran future benefits to:
  • add the costs of benefits earned by employees during the year and the accrued interest; and
  • deduct benefit payments made to employees, retirees and veterans.
  • In the 2021-22 FY, these adjustments resulted in a net increase in the liabilities of $8.4B.
• In addition, a portion of previously unrecognized net actuarial losses were expensed this fiscal year, increasing the liabilities by $7.1B.

Background:

• Other employee and veteran future benefit liabilities include:
  • Veterans and Royal Canadian Mounted Police disability and other future benefits
  • Pensioners’ health care and dental benefits
  • Severance and other benefits
  • Accumulated sick leave entitlements
  • Workers' compensation
  • Significant other future benefits sponsored by consolidated Crown corporations and other entities.
• The liabilities are adjusted to record:
  • Any plan amendments, curtailments or settlements – In 2022, an amendment was made to introduce new mental health benefits providing immediate coverage to veterans for treatment of certain mental health conditions. The goal is to support veterans’ mental health while their disability benefits application is being processed. This amendment resulted in a one-time past service cost of $102M.
  • Recognition of actuarial gains and losses – Consistent with the accounting standards, gains and losses related to experience and changes in actuarial assumptions used to estimate the liabilities are not recorded immediately, rather they are recognized over the average remaining service life of the employee group or the average remaining life expectancy of the benefit recipients under wartime veteran plans.
  • Recognition of interest expense – Consistent with the accounting for other long-term liabilities, the Government uses a present value technique to estimate the current value of all future payments to be made under the benefit plans. The interest expense reflects the time value of money and the fact that we are one year closer to making these payments.
• The liabilities for other employee and veteran future benefits are subject to significant volatility. The payments for these benefit plans are made many years into the future and are dependent upon the evolution of factors such as wage increases, workforce composition, retirement rates and mortality rates. The Government estimates these liabilities based upon its historical experience, current facts and circumstances, and expected future developments. Annual changes to the estimates, and changes to the discount rates used to present value the liabilities result in unrealized gains and losses that are recorded as an expense over the average remaining service life of the employee group or the average remaining life expectancy of the benefit recipients under wartime veteran plans.

Issue / Question:

What is the cause of the increase in our investment in enterprise Crown corporations (ECC) and other government business enterprises' (GBE)?

Suggested Response:

• This amount represents both the Government's investment in share capital for these entities, as well as loans receivable. In fiscal 2021/22 the balance increased by $23.7B, this increase related primarily to:
  • The total net income and other comprehensive income of ECC and GBE excluding adjustments increased the investment by $15.1B.
  • An increase of $13.1B in loans and advances issues to GBEs. The majority of loans were issued to Canada Development Investment Corporation (CDEV), Farm Credit Canada (FCC), Canada Mortgage Housing Corporation (CMHC) and Business Development Bank of Canada (BDC).
  •  Equity adjustments of $0.9B related primarily to the adjusting entries surrounding the Bank of Canada's (BoC) Government Bond Purchase Program (GBPP).
  • The government acquired shares in Business Development Bank of Canada (BDC) totalling $0.4B to support Canadian businesses though the pandemic for programs primarily involving loan guarantees and direct financing.
  • These increases were offset by a return of equity in the form of dividends of $6.0B, mainly from the BoC, CMHC, BDC and FCC.

Background:

• Net income and other comprehensive income from ECCs has increased when compared to last year primarily due to reversals of provisions for expected credit losses and unrealized gains on financial instruments carried at fair value. Most ECCs experienced greater returns when compared to prior year as a result of more optimistic financial market conditions.
• To fund ongoing operations, loans and advances were issued to the following GBEs:
  • CDEV - $6.2B
  • FCC - $3.1B
  • CMHC - $2.0B
  • BDC - $1.8B
• The largest drivers of the variance is due to a significant equity adjustment in prior year, that was much smaller in PA 2022. In PA 2021 the Government of Canada (GC) recorded a $18,428M Equity Adjustment primarily due to the “Constructive Loss” which effectively represents the up-front expensing of premiums paid by the BoC on its secondary market purchases of GC Bonds through the GBPP. The vast majority of the GC bonds were purchased in fiscal 2020/21, which triggered the recording of the constructive loss.
• The equity adjustment recorded in PA 2021 was significantly higher than the $666M equity adjustment recorded in PA 2022. The $666M equity adjustment in PA 2022 is primarily attributable to a $2,369M reversal of the premium amortization (expense) recorded by the BoC. Given that the BoC purchased the GC Bonds at a very high premium throughout the GBPP, the BoC will amortize the premiums into expense until maturity of the bonds. In fiscal year 2020/21 a significant number of bonds were purchased through this program and were deemed “Constructively Retired” from a Government Reporting Entity (GRE) perspective; therefore, in PA 2021 we recognized up front the cumulative effect of this "Premium Amortization.” As a result, we recorded a $19,000M constructive loss in fiscal year 2020/21.
• Now in year 2 of the GBPP, the BoC has recorded 1 year’s worth (April 1, 2021 - March 31, 2022) of Premium Amortization (expense) in their books. It would be inappropriate to include this loss in PA 2022 because we have already recorded its impact in the 2021 constructive loss (in the year it was purchased); therefore, in fiscal year 2021/22 we reversed their loss, which results in a Gain. This is reason why this year’s equity adjustment is positive in PA 2022; we are reversing a loss. This gain is slightly offset by a -$1,216M Constructive Loss recorded on Bonds purchased through the GBPP in F2022.

Issue / Question:

How much in Phoenix overpayments have been written-off? 

Suggested Response:

• The Government of Canada is committed to resolving public service pay issues as quickly as possible and supporting employees.
• Write-offs are reported at an aggregate level in the Public Accounts. This amount reported is not broken down specifically for Phoenix overpayments. 
• Write-offs for 2022 totaled $3.1B. ($2.3B in 2021). 
• The 2022 Public Accounts does not include any Phoenix overpayments written off as a result of being statute-barred. 

Background:

• In accordance with the Financial Administration Act and the Debt Write-Off Regulations, departments are responsible for ensuring that debts, obligations and claims written-off or forgiven are accurately reported and that the appropriate approval process has been followed. 
• When a debt is written-off, it is removed from the Accounts of Canada. However, the Government maintains its legal right to recover the debt if it becomes possible to do so in the future. 
• Debts, obligations and claims written off or forgiven during the fiscal year are listed in the Public Accounts of Canada, Volume III, Section 2. 
• In 2018, measures for more flexible repayment options were provided to employees who received overpayments as a result of Phoenix pay issues, including emergency salary advances and priority payments. The Crown Liability and Proceedings Act (1985) places a statutory restriction of six-years on the recovery of salary overpayments. This means that salary overpayments from 2016 could become statute barred in 2022. 
• Phoenix-related salary overpayments and recoveries pose a risk to the GC given the size of the outstanding amount owed; and the 6-year statutory time limit on recovery, which would bar the recovery of some amounts as of February 2022.
• The Crown has an obligation, as per the Directive on Terms and Conditions of Employment, to recover overpayments, including those relating to salary. This is built on the principles of fairness to taxpayers and the sound stewardship of public funds. Allowing a large number of cases to go unresolved could set a precedent for debtors to ignore a request to acknowledge their debt. 
• To support the Government of Canada (GC) in its efforts to recover these outstanding overpayments, and in light of this statutory restriction, the recovery procedures have been modified to include a step for employees to acknowledge their debt or enter into a recovery agreement. Acknowledgement of the debt would then restart the clock on the six-year limitation period. An HR information bulletin providing additional information on this process was shared with heads of human resources and bargaining agents for consultation on August 10, 2021 and was posted on Canada.ca on October 12, 2021
• The GC has adopted the modified direction going forward for the recovery of overpayments that balances flexibilities for employees, sound stewardship of public funds, time required to review the caseload, and the relationship with Bargaining Agents.
• Current guidance states that recovery of overpayments can begin only once an employee’s outstanding transactions have been addressed, the employee has received 3 consecutive correct pay cheques and they have confirmed a recovery agreement. 
• According to section 4.2 of TB’ Policy on People Management, through delegated authority by the Treasury Board, Treasury Board Secretariat’s Office of the Chief Human Resources Officer (OCHRO) is responsible for the provision of direction, feedback, and functional leadership to deputy heads and heads of human resources regarding human resources management matters, and any associated tools, systems, and oversight. OCHRO is also responsible for the oversight of the overall performance, compliance, and integrity of people management practices for the Core Public Administration. The recovery of overpayments is outlined in the Directive on Terms and Conditions of Employment.

Issue / Question:

What is TBS' role in addressing the pay issues?

Suggested Response:

• The Government of Canada recognizes that the implementation of the Phoenix pay system has had an impact, directly or indirectly, on employees.
• The ongoing stabilization of the Phoenix Pay System is being pursued while the government experiments with options for a next generation system.
• This system is currently being tested. It will be a digital solution that is mobile and accessible, designed for users and based on modern people management processes.

Background:

• Treasury Board of Canada Secretariat is responsible for:
  • mandatory training related to HR to Pay Stabilization and
  • leading on the implementation of the Phoenix damages agreements, negotiated with bargaining agents, to compensate federal employees impacted by the Phoenix pay system.
  • The Office of the Chief Human Resources Officer within TBS also performs the business owner role for people management and design authority for the NextGen HR and Pay initiative, working closely with Shared Services Canada (SSC) who is the technical and initiative authority.
• The NextGen HR and Pay team is using an agile approach throughout the initiative and is taking the time necessary to let each step in the process inform the next.
• SSC is testing HR and pay systems to replace 34 HR systems across government and the current pay system. This high-profile initiative will produce options and recommendations for a future enterprise-wide NextGen HR and Pay system for the Government of Canada.
• Public Services and Procurement Canada is responsible for the operations of the Phoenix pay system and addressing the backlog of employee pay files.

Issue / Question:

How has the agreement for damages caused by the Phoenix pay system been incorporated into the Public Accounts of Canada? What is the "Settlement of Phoenix-related damages"?

Suggested Response:

• Costs related to the agreements are captured in the Public Accounts in two ways:
  • Within the financial statements, the estimated amount is accrued as a contingent liability and recorded as an expense. As the agreements are reached the liability is reclassified to amounts payable and the expense adjusted, if required, to reflect the actual settlement.
  • As payments are made, the amounts are reflected in the Claims against the Crown in Volume 3 of Public Accounts. The disclosures in 2022 primarily relate to payments for the 2020 agreement with the Public Service Alliance of Canada (PSAC) for the 2017 to 2020 period, which includes amounts for general damages and for late implementation of 2014 collective agreements.
  • Any cash amounts paid to current or former employees by departments are also presented in this section.

Background:

• In May 2019, the Government of Canada reached a tentative agreement with members of the Senior Level Phoenix Union-Management sub-committee on damages for compensation for employees impacted by the implementation of the Phoenix Pay system. This agreement was ratified in June 2019 by all federal government bargaining agents, except for PSAC. Separate agencies have signed similar agreements covering their employees (except those represented by PSAC). The agreement allowed for up to 5 days of leave for eligible employees.
• In October 2020, PSAC signed a damages agreement similar to the June 2019 agreement with the exception of the general damages provided to employees which consist of cash payments of up to $2,500 instead of leave credits. This includes $1,000 for the late implementation of the 2014 collective agreements.
• Following the signing of the PSAC damages agreement, the negotiation of a catch-up agreement was ratified on March 3, 2021 with the bargaining agents who signed the initial agreement in 2019. The purpose was to align compensation for both parties, since some elements of the 2020 PSAC agreement differed from the agreement negotiated with other bargaining agents in 2019.
• Claims against the Crown in Volume 3 of Public Accounts 2022, shows Settlement of Phoenix-related damages for $125M. This largely represents payments to current and former employees under the PSAC and catch-up clause agreements. $47.5M million of the 2021 amount of $401M related to the final day granted to employees in lieu of cash associated with the non-PSAC agreement of 2019. 
• The TBS Claims Office has provided guidance to departments on end-to-end business processes for resolving claims associated with a payment equivalent to leave for damages caused by the Phoenix pay system.
• The OCG provided financial coding instructions to departments for payments to former employees.

Issue / Question:

What does it mean to lapse money? What is a lapse? What is a net lapse?

Suggested Response:

• For Public Accounts, the term lapse represents voted funds approved but unspent at the end of the fiscal year.
• At the beginning of each year, the Government presents a plan to spend money and the amounts that are unspent at the end form the lapse.
• Lapsing funds is a normal and expected part of the Government budgetary process.
• With a few exceptions, voted authorities lapse at the end of each fiscal year if not used and statutory authorities are carried forward to future years.
• Unlike the lapse amount, the 'net' lapse is calculated by subtracting from the lapse amount those items not directly under the control of departments such as frozen and special purpose allotments.
• The 'net' lapse provides a better indication of departmental day-to-day financial planning. 

Background:

• For further details on frozen allotment, please refer to the related tab.

Issue / Question:

What are the top lapses for 2022?

Suggested Response:

• The total voted budgetary expenditures authorized by Parliament in fiscal year 2021-2022 for the Government was $188.8B.
  • Of that amount, $149.7B was used during the year and $892M was available for use in subsequent years, resulting in a lapse of $38.2B ($32.3B in 2021).
• This represents a total lapse percentage of 20.2% for 2022 (compared to 19.4% in 2021).
• The following table identifies the significant (above $1 B) voted budgetary authorities lapsed by Ministry as per 2022 Public Accounts:

Background:

• These figures were reported in Public Accounts, Volume II, Section 1, Table 7.

Issue / Question:

What is a carry-forward?

Suggested Response:

• A carry-forward refers to funding that has lapsed in the previous year and is carried forward to the current fiscal year.
• Generally, departments can carry-forward a maximum of 5% of their operating budget and 20% of their capital budget from one fiscal year to the following fiscal year.
• Operating and capital budget carry-forward amounts must be submitted to Treasury Board for approval prior to including an amount in the estimates of the subsequent year.

Background:

NA

Issue / Question:

What are frozen allotments?

Suggested Response:

• Frozen allotments refer to funds that have been approved by Parliament but that are restricted internally by the Treasury Board. This can occur for various reasons, such as in response to an adjusted priority.
• There are two types of frozen allotments:
  • Permanent - where Treasury Board has directed that funds lapse at the end of the fiscal year; and
  • Temporary - where an appropriation is frozen until such time as the condition(s) has/have been met.

Background:

• During the fiscal year, the Government can take decisions to adjust priorities or the implementation of individual initiatives. These decisions are implemented by using frozen allotments to constrain appropriated authorities where necessary. At the end of the fiscal year, these frozen allotments are included in the lapse shown in Public Accounts.
• Categories of Frozen Allotments:
  • Reprofiled: Reprofiling provides for unused authorities from one fiscal year to be made available in subsequent fiscal years, to reflect changes in the expected timing of program implementation. Unused funds in the current fiscal year are put into a frozen allotment. New Parliamentary authority is required for each future year of planned spending.
  • Transferred or reallocated: Throughout a fiscal year, organizations may transfer or reallocate funds between votes within their organization and to other organizations. Such adjustments may be affected through frozen allotments.
  • Reduction: An organization’s authorities are reduced when the funds are no longer available for the original purpose. This could happen because an initiative or program is canceled, or savings are identified to be returned to the fiscal framework.
  • Other: Other forecasted lapses are largely related to uncommitted authorities in the Treasury Board central votes.
  • For more details regarding frozen allotments by department please refer to the following link:
• Frozen Allotments in Voted Authorities, Supplementary Estimates (C), 2021-22 - Canada.ca
• Please note that Public Accounts reflect other adjustments to frozen allotments which were made subsequent to the Supplementary Estimates C.

Issue / Question:

What are the impacts of overspent authorities?

Suggested Response:

• Overspending on authorities means that more money was spent than authorized. It is the opposite of lapsing authorities.
• As per the Financial Administration Act (FAA), departments are required to avoid spending in excess of their authorities.
• When there is a chance of over expenditures, the departmental Chief Financial Officer (CFO) must notify the Treasury Board of Canada Secretariat as soon as possible.
• For annual voted appropriations, the departmental CFO and Treasury Board Secretariat work to ensure all possible action is taken to prevent over expenditures. Should this be unavoidable, the available spending authority of the next fiscal year is reduced by the excess to reimburse the fiscal framework.
• There were no over expenditures reported in the 2022 Public Accounts.

Background:

• NA