The President of the Treasury Board tabled the Main Estimates for 2012-13 on February 28, 2012, approximately one month in advance of the tabling of 2012 Budget scheduled for March 29th.  The President of the Treasury Board indicated that, given that the Main Estimates are being tabled before the Budget, the Main Estimates for 2012-13 would not include the impact of any of the upcoming proposed spending reductions . This would mean that Parliament would be asked to approve the Main Estimates without any detailed information on the expenditure cuts.

The Minister of Finance announced shortly thereafter that the upcoming Budget also would not include details of the proposed spending cuts. The budget would only provide very general information on the expenditure cuts.. This would mean that Parliament would be asked to approve a budget without any detailed information on the expenditure cuts and government spending.
Details of the expenditure cuts would be included in the Reports on Plans and Priorities (RPPs), scheduled for release in late May. This delay would provide Parliament with less than a month to scrutinize the detailed spending plans of all government departments and agencies. It is very difficult, if not impossible, to reconcile spending in the Main Estimates with spending in the budget. Allowing only three weeks to review departmental spending seriously undermines the responsibility and ability of Parliament to properly assess the Government’s spending plans. 


What are the Main Estimates?

Under the Financial Administration Act, no spending can be undertaken without approval by Parliament. Main Estimates provide detailed information on the amounts to be included in subsequent “appropriation acts” to be tabled in Parliament.

There are two types of spending in the Main Estimates: first, there are “voted” expenditures that require annual approval from Parliament; and second, there are “statutory” expenditures (e.g., major transfers to the provinces and individuals) for which legislation was previously approved setting out the specific terms and conditions under which payments can be made.
In the Main Estimates, Parliament only considers “voted” expenditures for approval.  The “statutory” expenditures are provided for information only.  Statutory expenditures currently amount for about 60% of total Main Estimates.

Main Estimates for the upcoming fiscal year are usually tabled on or before March 1st. This automatically gives the government interim spending authority, for the period April to June, to undertake spending on “voted” items, prior to approval by Parliament.  That approval is usually given by June 23rd, after examination by Parliamentary committees.
If the government fails to table Main Estimates on or prior to March 1st, it would not be able to undertake spending on any of the “voted “items until Parliamentary approval were granted. In other words Department would have to stop spending. This is why the government had to table Main Estimates before March 1st.

The Main Estimates consist of three components: Part I, which provides an overview of federal spending for the upcoming fiscal year; Part II which supports the Appropriation Act and provides details of the spending to be included in the Appropriation Act; and Part III which includes Reports on Plans and Priorities (RPPs), which provide details on the spending plans for all departments and agencies.

Link to the Budget

The Main Estimates require an economic and fiscal context.  To be relevant, this should be the most current Budget economic and fiscal forecast for the upcoming fiscal year.  Traditionally, the Budget was tabled before the Main Estimates, so that the Main Estimates could be based on the Budget economic and spending projections.  However, since 2006, the Budget has been tabled after the Main Estimates in every year except 2008 and 2009.
As a result, in most years since 2006, the Main Estimates have been out of step with the Budget projections.  These Main Estimates were based on the Economic and Fiscal Update projections provided four months earlier and which are now out of date. The current government has provided few reconciliations between the Budget spending projections and Main Estimates and none between the fall update projections and the Main Estimates..

The Proposed Spending Cuts

In Budget 2011, the Government announced a one-year Strategic and Operating Review, with the aim of securing $4 billion in annual savings, once fully implemented.  The focus of this review was to be on improving the efficiency and effectiveness of government operations and programs.  This review was to focus on the approximately  $80 billion of direct program spending – total program spending less major transfers to individuals and to other levels of government.  The savings would represent about 5 per cent of direct program spending.Since that announcement, the Government has directed departments and agencies to find savings amounting to $8 billion or 10 per cent of direct program spending.

Traditionally, the details of such spending reductions were fully articulated in a budget.  This was the case during the Mulroney and Chretien expending reduction exercises. However, Mr. Flaherty has stated that the details of Strategic and Operating Review would not be included in the upcoming budget, but instead only presented in the RPPs. 

The tabling of these RPPs has been delayed until the end of May. The budget is to include only a broad outline of the spending cuts. Mr. Flaherty stated that the budget was not the proper vehicle to detail these cuts.  This is surprising, given that the Strategic Reviews savings to date were detailed in the 2009 and 2010 budgets.  In addition, the details of the Economic Action Plan stimulus measures were detailed in the budgets.  It is inconsistent with past practices, not to mention undermining the credibility of the budget and the spending cuts.



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