Thank you, Mr. Chairman. Our first area of concern was with regard to expenditures and budgeting. One concern in the Auditor General's Report was that many government programs had base deficiencies in their budgets, and needed regular supplementary appropriations. For these programs, not enough money was budgeted to cover their costs.
In his appearance before the committee, Mr. Voytilla first explained that changes introduced for the business plans and budgets this year should address these concerns. Departments have been instructed to draft their budgets assuming that they will not be able to get supplementary appropriations, except for emergencies.
The report also mentioned that supplementary reserves were often not large enough to cover the unpredictable events, such as bad forest fire seasons, that had arisen.
Many of the specific problems in this area related to the then-separate Departments of Health and Social Services. Mr. Ramsden responded to Members' questions on base deficiencies and budgeting problems in the Department of Health and Social Services. Over-expenditures in these areas are generally related. The difficulty is in projecting how much use our growing population makes of our health care system. Mr. Ramsden expressed optimism that the new business plan budget process would address many of these problems.
Future Liabilities, Pay Equity and Environmental Restoration
The report expressed concern that two large possible future liabilities -- the pay equity complaint by the UNW, and costs of environmental restoration at polluted sites, are not reflected on the government's books. If and when these costs ever have to be paid, they could seriously affect the government's financial position. Members worry that these issues could adversely affect planning for Division, as both the assets and the liabilities of the government must be divided between the two new territories in 1999.
Also, for a number of years now, there has been an outstanding complaint by the Union of Northern Workers regarding pay equity in the government. The UNW is seeking significant compensation for alleged inequity in pay between jobs primarily held by women, and jobs primarily held by men. If the UNW is successful in its complaint, the government could be faced with significant retroactive compensation payments, and possibly expensive changes to its pay scales.
The government had filed in federal court, seeking a judgement on the jurisdiction of the Canadian Human Rights Commission in the case. The court recently ruled that while the Commission did have jurisdiction, they had to reassess the latest findings due to a technicality. The government is appealing that decision.
In the meantime, as is noted in the 1993/94 report, the government has not recorded any amount for a liability on its books. Should an award of any amount ever be made in the UNW's favour, that amount will increase the government's deficit. Committee members are very concerned that an amount for this potential liability has not been entered into the Public Accounts.
The Comptroller-General explained that the government is confident that they will win their appeal of a recent court decision on the pay equity complaint. And that they therefore do not need to enter a liability on the books. Committee Members, however, expressed strong concern on these issues, but were unable to get the Controller-General to indicate an amount of potential liability for the pay equity complaint.
Mr. Voytilla noted that some preliminary work on identifying sites and costs had been done, but that much more work lay ahead. This work involves not only identifying sites, but also identifying liability and jurisdiction. Some sites may be the responsibility of the federal government for cleanup, or perhaps even of the US Armed Forces for some wartime and DEW line sites. The Auditor General's staff also reminded Members that the accounting issue was only a part of the problem, and that health and public safety issues were critical in considering the whole problem of environmental cleanup.
Committee Members agreed that the issue of potential liabilities was a serious one, and worthy of more decision action from the Government.
Mr. Chairman, I move that the Standing Committee recommends that the government determine amounts to be entered into the Public Accounts reflecting the potential liabilities surrounding the pay equity complaint and environmental restoration costs, and that they do so before March 31, 1997.