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Speech in Senate Chamber: Appropriation Bill No. 5, 2016-17, Bill C-40, An Act for granting to Her Majesty certain sums of money for the federal public administration for the financial year ending March 31, 2017

Honourable senators, I speak to second reading of Bill C-40, Appropriation Act No.5, An Act For granting to Her Majesty certain sums of money for the federal public administration for the year ending March 31, 2017.   Bill C-40 is the last supply Bill of our now ending annual supply cycle that was April 1, 2016 to March 31, 2017.  This Bill requests a grand total of $2,472,238,717.  This Appropriation Bill sets out by vote, the many and large sums of money requested by Treasury Board and the government, for this last quarter of our annual supply cycle 2016 - 2017.  This Bill’s sums and votes were put before the Commons House and the Senate in the form of the Supplementary Estimates (C).  Our Standing Senate Committee on National Finance has studied these Estimates and heard witnesses.  Yesterday Committee Chairman Senator Larry Smith presented our Committee Report on these Estimates to the Senate.

Colleagues, many thinkers have long expressed concern about parliaments’ declining attention to the control of the public purse and the national finance.  One ancient warning came from the great British Liberal Leader, William Gladstone, the Great Commoner, known for his great work in the control of the public purse.  Four times Prime Minister, and four times Chancellor of the Exchequer, his labours shaped the British Commons House constitutional mastery in the control of the public purse.  This control insists that all appropriation and tax bills must begin by a crown minister’s motion in the Commons House, be considered and debated there in certain ways.   At Hastings, on March 17, 1891 in his famous speech on the control of the public purse, published in the 1892 book Speeches and Public Addresses of the Right Hon. W. E. Gladstone, by A. W. Hutton and H. J. Cohen, William Gladstone said, at page 343:

I must remind you of that which is apt to pass away from recollection, for the finance of the country is intimately associated with the liberties of the country.  It is a powerful leverage by which English liberty has been gradually acquired.  Running back into the depths of antiquities for many centuries, it lies at the root of English liberty, and if the House of Commons can by any possibility lose the power of the control of the grants of public money, depend upon it your very liberty will be worth very little in comparison.  That power can never be wrenched out of your hands.  That powerful leverage has been what is commonly known as the power of the purse – the control of the House of Commons over public expenditure – which not only is your main guarantee for purity, and which has been, certainly, in other times a very effective guarantee for economy, but which likewise lies at the root of English liberty, and if the House of Commons could by any possibility lose the power of controlling the granting of public money for carrying on the affairs of the Government, depend upon it your other liberties would be worth but very little in comparison.

 

William Gladstone’s cautions to members of parliament, which we senators are, were well known.  So were the labours of the British House of Commons legendary Public Accounts Committee.  At Hastings Gladstone also spoke to the parliamentary conditions required to maintain control of the public purse.  He said, at page 344:

I will tell you on what main conditions, in my opinion, it depends.  First of all, it depends on the right of the House of Commons to fix the expenditure of the country from year to year,  .  .  .   Next to that power of annual control which is necessary and essential, is that there should be unity in the public funds.  .  .  .   I must say, have had wonderful results, and I do not hesitate to say that for practical purposes there was nothing in the civilized world to compare with the efficiency of Parliamentary control such as it has been during the greater part of my public life, and such as it will continue, unless you, by acquiescence in an abuse, allow it to be undermined.  With this unity of system and simplicity of account, which has been built up by the skill of Ministers in the past to such a high degree of perfection, there is another condition which is even more important than those I have mentioned, and that is that there should be no concealment, and that everything which has been spent should be brought before the country from time to time.2  

 

William Gladstone, Britain’s foremost authority on the public finance and the control of the public purse, said that governments must conceal nothing, and should put all expenditures before the country.  We should accept no less.  He continued at page 345:     

.  .  .  There was extravagance because the people did not feel interest enough in the matter to stop it.  I can only tell you from my own part that, such is the importance I attach to the question of absolute publicity in the whole of the public expenditure, that I consider – though I am not a man to recommend waste at any time – the waste of five millions a much smaller evil than concealment of one million.  When there is waste, it remains to the nation to correct it.  When there is concealment, they are without redress.   .  .  .  .   I state – and you will agree with me – that the fixing of the expenditure from year to year by the vote of the House of Commons is the essential basis of our system.  .  .  .   In voting the estimates year after year, the House of Commons is able to discharge that function which belongs to it by the Constitution of itself, and to no other part of the Legislature.  The House of Commons is the body that has the right to extend if it thinks fit, or contract if it thinks fit, the expenditure of the country.3

Honourable senators, I cite Great Commoner William Gladstone on these national finance questions, because of his stupendous work on this subject.  On February 28 last, in our Senate National Finance Committee study of Supplementary Estimates (C) on which Appropriation Bill C-40 is founded, there was an interesting exchange between Treasury Board persons and senators on Vote 1c and its salary top-up payments to crown ministers.  I note that senators and M.P.’s are not paid salaries.  They are paid sessional allowances by the Parliament of Canada Act.   The issue was Vote 1c payments to crown ministers.  It says:

Vote 1c.   The payment to each member of the Queen’s Privy Council for Canada who is a minister without portfolio, or a minister of State who does not preside over a ministry of State, of a salary – paid annually or pro rata for any period less than a year – that does not exceed the salary paid under the Salaries Act, as adjusted under section 67 of the Parliament of Canada Act, to ministers of State who preside over ministries of State.

Now, Vote 1c and its explanation are repeated 17 times for 17 different departments.  I asked Treasury Board officials about the purpose of these identical votes in identical words for 17 different government departments.  Our exchange was:

The Chair:    Ms. Santiago, do you have a response?                                                                                        

Cools:    Perhaps somebody could help me because I am baffled.                                                   

Ms. Santiago:                                                                                                                              

The basic salary for members of Parliament is a statutory payment that is listed under the House of Commons.  However, these are additional allowances that are paid to ministers and ministers of state.  They happen to be voted through the supply bill.  The only difference is that the authorities are in separate places for the difference between the base salaries for ministers.  His or her salary for being a member of Parliament is paid out of one statutory authority.

Cools:     They are paid out by the Parliament of Canada Act, those salaries, aren’t they?

Ms. Santiago: 

Yes.  Then the increment happens to be voted because it isn’t provided for in the Salaries Act.

Cools:        The Salaries Act is the statute that pays ministers’ salaries,   .  .  .  .

Ms. Santiago:

Yes.  This happens to provide for any additional allowances that are not already covered by either the Parliament of Canada Act or the Salaries Act.

Cools:     Why is a payment coming out of so many departments?                                                               

Ms. Santiago:   

It is because it’s paid out of basically the lead department of their portfolio.

Cools:     I still do not understand.                                                                                                                                                  

Senator Marshall:

My question follows up from what Senator Cools was asking.  It is the end of the fiscal year, so has not the salary been paid out already?

Ms. Santiago:

It has.  We use the same wording.  The same wording appears in all of the estimates, unless something is added or changed.  We do not change the wording for vote 1c of Agriculture and Agri-food in every estimate.

Senator Marshall:

The impression that has left, now that Senator Cools mentions it, is that the salary has already been paid out.  Why is there provision in supplementary supply for salary if it has already been paid out?

Cools:

Perhaps you could help me again because it is not clear in the documentation.  What would be the sum for the total of the year that has been paid to members of the Privy Council?

 

Honourable senators, this exchange was not clear, because Crown ministers have their own Salaries Act that pays crown ministers salaries.  I said:

I am still very curious; you are awakening more curiosity as we go along.  I wonder why, for example, you are proceeding with these payments under the supply process rather than doing it by bill.  We have the Parliament of Canada Act for these kinds of things  .  .  .   Judges are the ones who set the standard many years ago when it was decided that their salaries would be paid pursuant to a statute.   The situation with members of the house and senators has been very similar in a way.  It is set out in their own statutes.  I am just wondering why you have gone to the supply process and not to the statutory process.  I am just curious.  I am not being suspicious.

Ms. Santiago:   To be honest, we are too.

Cools:    You have awakened my curiosity.

She said:    I think part of this is just historical habit.

I said:    I do not think so.

The Chair:   Is this something for Ms. Santiago to research so that we can get some answers?

Cools:

Yes, perhaps she could give us   .  .  .  some answers   .  .  .   I find it very baffling.  The system has gone to a lot of trouble to pay members of Parliament and senators out of a particular statute.  Judges have their Judges Act.  .  .  .  if you  know these statutes you can .  .  .   locate   .  .  .   the exact clause that says such-and such moneys would be paid to the judges or paid to whomever.  They have been very careful about this because, especially with the judges, there are constitutional requirements that judges salaries be fixed and provided by Parliament.  That set the standard many years ago  .  .  .  .  I find this odd.  I could be perhaps having a poor reaction to something I thought was novel, but you are telling me it is not novel.   You are telling me that this is customary,   .  .  .  so that really awakens even more curiosity, because it is standard to set these individuals apart and pay them by statute.  Ministers and other senior positions have their own statute called the Salaries Act.  I am just curious.

Ms. Santiago:    We will consult the Privy Council Office.

 

Colleagues, I shall read from our Senate National Finance Committee Report on Supplementary Estimates (C) 2016-2017.  Headed Treasury Board Secretariat, section 9 reads:

Senators and Treasury Board officials also discussed the larger issues of parliamentary authorities and approval, and the proper usage of the supply process.  The Supplementary Estimates are the means by which previously planned Government initiatives are funded, when such initiatives were at the time insufficiently developed for inclusion in the Main Estimates.   On occasion, the Supplementary Estimates have also included urgent and unforeseeable expenditures, such as the instance of health-related pandemics.  However, the Supplementary Estimates are not intended to be a convenient mechanism for the temporary funding of needs that were foreseeable and could have been planned, particularly in the case where such needs have their own source of authority in an Act of Parliament.  The Salaries Act for ministers, like the Parliament of Canada Act for MPs and Senators, authorizes the payment of ministers’ salaries out of the Consolidated Revenue Fund and also fixes the amounts of those salaries.  The Government has a bill in the House to amend the Salaries Act which on adoption will provide for the salaries of an additional group of ministers. Our committee is concerned about the recurrent practice of using supplementary estimates to pay certain ministers' salaries prior to the enactment of amendments to the Salaries Act, and raises this question in the context of Bill C-24.                                                                                             At the request of our committee, Treasury Board Secretariat provided clarifications, on this matter .  .  . and explained that, in its opinion, this practice, which has been in place since at least 1995, respects the budgetary process.  According to Treasury Board Secretariat, so long as Bill C-24, An Act to amend the Salaries Act and to make a consequential amendment to the Financial Administration Act does not receive Royal Assent, Ministers of State without a department of State will continue to receive their salaries pursuant to an appropriation act since the Salaries Act and the Parliament of Canada Act do not address the question of salaries owed to these ministers.  Our committee strongly encourages the adoption of a practice that more closely follows Beauchesne’s Parliamentary Rules and Forms, which at pages 258 and 259 states .  .  .                                                                                   Paragraph 935:  A supply item ought not to be used to obtain authority which is the subject of legislation.                                                            Paragraph 937:  The government may not by use of an Appropriation Act obtain authority it does not have under existing legislation.          Paragraph 941:  If a Vote in the Estimates relates to a bill not yet passed by Parliament, then the authorizing bill must become law before the authorization of the relevant Vote in the Estimates by an Appropriation Act.

 

I thank colleagues for their attention.