HALIFAX, WEDNESDAY, MAY 5, 2004
STANDING COMMITTEE ON PUBLIC ACCOUNTS
8:00 A.M.
CHAIRMAN
Mr. Graham Steele
VICE-CHAIRMAN
Mr. James DeWolfe
MR. CHAIRMAN: Good morning, ladies and gentlemen, I would like to call to order this meeting of the Public Accounts Committee. We are very pleased to have with us today representatives of the Treasury and Policy Board to discuss the topic of user fees. I would like to welcome Mr. Howard Windsor, the Deputy Minister of the Treasury and Policy Board and I would now like to ask Mr. Windsor to introduce the people he has with him today.
MR. HOWARD WINDSOR: Mr. Chairman, to my left is David Perry. David is a Senior Corporate Financial Analyst at the Treasury and Policy Board. To my right is Margaret MacDonald, Executive Officer of the Treasury and Policy Board. To her right is John Traves, Director of Legal Services at the Department of Justice and Legal Advisor to the Department of Finance. To his right is Michael Ingram, Senior Financial Analyst at the Department of Finance.
MR. CHAIRMAN: Thank you very much, Mr. Windsor. I would now like to ask the members to introduce themselves, starting with the member for Halifax Chebucto.
[The committee members introduced themselves.]
MR. CHAIRMAN: At this point, Mr. Windsor, I would like to invite you to make opening remarks. I would like to ask you, as usual, to aim for 10 to 12 minutes and should you go 15 minutes, we will turn the floor over to the members. Mr. Windsor, you have the floor.
1
MR. WINDSOR: I am pleased to join the members of the Public Accounts Committee today to address the issue of user fees. Mr. Chairman, I would first like to express my thanks to you and the committee for rescheduling the original date of this visit to accommodate my schedule. It is a busy time of the year for us and we appreciate the flexibility on your part. How and when any government should charge user fees is an important public policy debate. I hope to be able to shed some light this morning on what user fees are, how they are part of the annual budget process, and the systems we have in place to ensure user fees are appropriate and in accordance with the law.
I will be drawing on the expertise of those with me today, some of whom you know from my last visit to the Public Accounts Committee. These individuals provide ongoing analysis of user fees from a legal, financial and policy perspective, and their work was important to the 2004-05 budget process.
As you know, user fees are a legitimate means for governments to generate revenues to cover the costs of programs and services. The laws of the province and the country give governments the authority to set fees either by regulation or through direct legislation. Charging fees not only helps to pay for government services but can also make government services more efficient. People may be less likely to use services inappropriately if they have to pay a fee that reflects the value of the services provided. At the same time, governments have a responsibility to consider and evaluate the fairness of charging for government services. This is fundamentally linked to who is using the service and what it is for.
It makes sense to use user fees rather than other sources of revenue to cover the cost of certain services. First, it is logical for citizens to pay directly for specialized services that are only used by a few people. It is appropriate for a business with the potential to pollute the environment to pay a fee for its own environmental assessment, for example. Some fees should be set at a level that will make needed government services affordable for those of modest means. Use of ambulance services is an example of this. The actual cost of the service is currently more than six times the current fee in place and if no fee were charged, extra demand for the service could jeopardize its availability.
Government makes some levies as taxes whose purpose is primarily to generate revenue. The best example of this is the tax to register an unlimited liability company. Last year this tax generated approximately $4.5 million and the increase proposed this year is expected to generate approximately $1.6 million more. A significant portion of these revenues helps pay for programs used by Nova Scotians.
Of course, most Canadians and Nova Scotians accept the premise that some services should be paid for from general revenues for the good of society. This is the case for essential health services. The public policy choice, both federally and provincially has been to cover the cost of these services without charging fees. The fact is, fees represent a relatively small portion of the revenues generated and used by the Government of Nova Scotia. In total,
central government agencies bring in approximately $190 million to $200 million per year in user fees. This represents about 3 per cent of the total revenue base of $5.4 million which comes primarily from provincial taxes and federal transfers.
The increases proposed in the budget this year amount to approximately $13 million in fee-based revenue. While the effect on each consumer will vary considerably with the type of services they use, it is safe to say that most families still consume considerably more in government services than they pay for in fees. One needs only to look at the cost of health care services which increased some $240 million this year alone.
Mr. Chairman, it is important to note the Nova Scotia Legislature provides the authority for government to set levies in accordance with the Constitution of Canada. These may be defined as either fees, taxes, deductions or charges. There are three methods the Legislature uses to set the amount of the levy. Number one, legislation can give the Governor in Council the authority to set fees by regulation; number two, fees can be specifically set within any piece of legislation; and three, the Legislature can give a minister the authority to set the fees.
While most citizens would not distinguish between user fees, service charges or any other kind of levy, there is a difference under the law. In general, fees that generate revenue beyond reasonable cost recovery, are deemed to be taxes. Under the Constitution they must be provided for in legislation. Two good examples are the unlimited liability companies, as mentioned above, and the taxes for probating estates. Both of these are very clearly taxes, as the cost of issuing the paperwork is well beyond the revenue brought in; that is why both are set in legislation. In order to charge the fees, the legislation must be amended, as is being done this Spring. Fees that are directly related to the cost of delivering the service may be set by regulation, and most legislation gives the Governor in Council the authority to make regulations.
It is important to note at this point that there is nothing to prevent government from setting a normal fee by legislation. This does not necessarily signify that a certain fee is a tax. The fact is, we have to be in a position to defend in court that these fees are legal. If there is any doubt, we make sure legislation is in place.
While the few revenue-generating fees may stand out, the vast majority of fees are, in fact, designed to break even, that is to approximate the cost of the service. Everyone is conscious of the need to set fees that are reasonable; in the Government of Nova Scotia, cost recovery is the norm for fee setting. Departments do an analysis to determine how much they will need to recover. In most cases, without the revenue from the fee, the service is not viable and cannot be offered. The process has been improving every year.
Since 1997, when a project was launched to look at the process to define licences and permits, departments had applied a formula to define new fees based on the various costs related to the service. Government officials are well aware of the importance of cost recovery when fees are set. A legal analysis is required before fees or fee changes are proposed to Cabinet. Fees come under additional scrutiny when they come into the Executive Council for approval. Treasury and Policy Board does a full analysis, including an assessment on the impact of the fee on individuals and businesses.
We believe there are effective processes in place now to give user fees the scrutiny they require, however, we continue to improve these processes. One area of improvement is to have a common approach for fee setting across government. While not required by any Statute or policy, there is a best practice that has many advantages. We have a project underway at Treasury and Policy Board to improve the framework for assessing user fees. This is not about trying to judge the validity of each individual fee, there are over 700 of those. It is about having systems in place to ensure fees are carefully and thoroughly considered, including the impact they have on Nova Scotians.
Our research in the first year of the project shows that Nova Scotia's user fee processes are comparable to those in other provinces. It is also clear that there is no easy answer in any province to the policy questions related to user fees. Not only are the issues technically complex, but there are many variations due to the differing policy choices made by legislators, and others, to suit the needs of the people in each province.
Government is very conscious about not placing an undue burden on any one group, sector or, indeed, the economy as a whole. But the bottom line is that there are only so many revenue sources and in the face of rapidly-increasing costs, government has to consider all of these sources.
A general assessment of program costs this year indicated an increase of 7.4 per cent between 2001 and 2003. Health alone has gone up by more than 14 per cent. A key cost-driver is wage and salary increases. Government acknowledges that we need well-qualified nurses and teachers and other government workers to make sure Nova Scotians get the good-quality services they need in a cost-efficient way. However, to meet increased demands and higher costs, we must find additional revenues.
The choice remains, either reduce or eliminate programs or services, or find revenue sources to pay for them. A discussion of user fees is part of every annual budget process, but particularly in a year when other revenue sources have declined. Every year our starting point is to assess what we are spending and look for opportunities to reduce expenditures. Where we can eliminate unnecessary spending or forego new spending, we do. However, in general, costs tend to increase every year and there are added pressures on virtually all budgets.
We identify the gap between the spending required and the revenue available, and then we consider options to make up the difference. This year, with the decline in federal revenue sources, we turned to other sources of revenue, like user fees or taxes. An increase of 6.5 per cent to 7 per cent was deemed to be appropriate, given the extent of cost increases over the last two years.
Without getting into detail, I can assure you that we do not take these decisions lightly, and a full process was undertaken to assess any potential changes to levies, including user fees and taxes. There was considerable back and forth between the departments and the Treasury and Policy Board, and Finance. Cabinet ultimately made the policy decision on whether to approve or reject proposed fee increases.
Most fees were increased to recover the rising cost of delivering those programs or services. A few of the taxes used for revenue generation were also increased and are now in the Financial Measures (2004) Bill. And it is important to point out that government also chose not to increase some fees. The process to change fees and taxes, is unfolding as planned, exactly as required on the government's authority, as required for the Legislature.
Last month Cabinet approved new regulations to set fees where required. All those levies that require specific legislative authority are before the House now in the Financial Measures (2004) Bill. If there is one thing we might have done better, it was to communicate this process better, to make it clear that all levies are set by regulation. That's a lesson learned.
Mr. Chairman, I would like to conclude this presentation by summarizing some key points on this issue. First, the Legislature provides the authority for government to set levies, including fees and taxes. Government has complied with this legislative authority in all cases this year. Fees and taxes are a legitimate means for governments to generate revenue. Given that other revenue sources decreased, it was normal for governments to consider increasing user fees and taxes this year, rather than reducing services.
Finally, we have good policies and procedures in place now for setting fees that help cover the costs of a program without placing an unfair burden on individuals or sectors. However, we are working on ways to improve these to make them more consistent and effective. Thank you, Mr. Chairman. That concludes my remarks.
MR. CHAIRMAN: Thank you very much, Mr. Windsor, for those remarks and for keeping within your time. In the course of your remarks, we were joined by the member for Halifax Citadel, so we now have a full complement of committee members. We will start the questioning now with the NDP caucus.
The honourable member for Halifax Chebucto.
MR. HOWARD EPSTEIN: Mr. Windsor, thank you very much for your presentation. I found it very interesting. I'm not sure how much further ahead I am, however, as a result of hearing it. Although, I noticed that one of your phrases in passing was that, as you suggested, detail might not be necessary, I think there probably are a few things that we would like to hear about in a little more detail. I appreciate you suggesting that there's a how to the calculations, and I think that's where we'll get into a little detail. You also suggested that there's a when. The when is the policy decision and, I suppose, also the legal decision of when fees or taxes are going to be charged.
Just as a preliminary, I wonder if we can start with a little piece of the when. I want to confess to complete ignorance on one aspect of this, and it's the constitutional authority on user fees. In preparing for this, I went back and read re: Eurig Estate, the decision that seems to have had a lot of influence on the review of user fees throughout government. I don't think what I found there was the constitutional authority for setting user fees. It's clear that there's an authority for setting taxes and, indeed, that was the point about re: Eurig Estate, the decision of the Supreme Court of Canada that was drawing a distinction between user fees, on the one hand, what's a user fee and what's a tax, and when is the line crossed.
It seems to assume, of course, that there's a constitutional authority to set user fees. That seems to be part of the underlying assumption. I'm just wondering if you can help me
out by indicating where the authority is to be found for setting the user fees.
[8:15 a.m.]
MR. WINDSOR: Perhaps I could ask our solicitor to respond to that.
MR. CHAIRMAN: Mr. Traves.
MR. JOHN TRAVES: Mr. Epstein, there's no specific authority set out in the Constitution for user fees. It's implicit in the division of powers between the federal and the provincial Legislatures, in terms of the various authorities to conduct business in certain areas of jurisdiction. What the Constitution provides, in Section 53, is a prohibition against the charging, by other than a Legislature, of a tax, and then you get, through re: Eurig, the decision or the guidelines as to what is or is not a tax.
MR. EPSTEIN: I have to say that's how I read it. It seemed to be an implied power, although I raised it simply because it seemed a particularly interesting point, and I wasn't aware if it's actually been directly litigated. There's certainly a lot of opposition, in many quarters, to user fees at all. I just raised the question in case someday there might be a little litigation about this. It's not my main focus, so let's move off of that. It's an interesting point.
MR. TRAVES: There is a hierarchy through the Constitution that starts with the issue of whether a particular levy is a direct or indirect tax, in that it's only the Parliament of Canada that can impose an indirect tax. Legislatures have authority to impose direct taxes, and they also have authority, as we've discussed, to impose user fees or levies, charges, whatever you will, either directly through the Legislature in an Act or to authorize a minister or ultimately Governor in Council to impose those things.
There is also argument in Eurig, which was obiter, but basically laid open by the Supreme Court that there is clearly an argument that taxes could be set by Governor in Council, if specifically authorized by the Legislature.
MR. EPSTEIN: Yes, I noted that. I think we're ad idem on the issue of direct taxation by the province. I'm just going to leave that open, and hope not to further discuss the issue of the constitutionality of user fees. Okay, let's move along.
One of the things I noticed was that - something I had forgotten about re: Eurig Estate, it was actually decided in October 1998. So that's awhile ago now, and it's been six years since we've had this decision - it's very clear on what it is that provinces have to do in order to justify any fees that they do want to charge. It essentially gave direction to provinces and told all the provinces that if a line is crossed, then they had better bring in their fees in the form of taxes, clearly authorized by the Legislature.
So that means that there's been a legal framework for this for quite some time. What I'm wondering is how far along we are in implementing the legal framework that was set by the Supreme Court of Canada. So the first thing I wonder about this is whether there is any interprovincial agreement that's been worked out in order to discuss how, exactly, re: Eurig Estate should be put into force. I ask this because there are bound to be questions about how, exactly, you calculate the details of the fees in order to justify them.
What I'm wondering is whether, after re: Eurig was decided, the Finance Departments of the provinces got together to decide how they ought to proceed in terms of the details of the implementation?
MR. CHAIRMAN: Mr. Windsor.
MR. WINDSOR: I'll probably turn that one over, as well, to our solicitor, but in terms of my experience, at least, at the Treasury and Policy Board, and previously at the Department of Finance, I'm not aware of any of those interprovincial discussions between those types of agencies. But there may have been, between various Justice Departments. So perhaps I could also ask the Justice solicitor, to see whether or not there have been any of those kinds of interprovincial discussions, back and forth.
MR. EPSTEIN: That would be helpful.
MR. CHAIRMAN: Mr. Traves.
MR. TRAVES: You have to understand there's a division between the legal side of the House and the financial side of the House, and while there's a lot of work that goes on between, the responsibility for ensuring the affairs of the government are carried out in accordance with the law rests with the Attorney General of the province. What happened following Eurig was an analysis was done by our constitutional lawyers. The review is essentially one of ensuring that our client, the Province of Nova Scotia, is in accordance with the law. We're not particularly concerned with the efforts of other governments. Obviously, we're focused on our own.
A group of deputy ministers was established in October 1999. It was comprised of the Deputy Minister of Justice of the day, the Deputy Minister of Service Nova Scotia and the Deputy Minister of Finance. Essentially a staff report was prepared, that I had some hand in. It advised all government departments of the ramifications of the Eurig decision. There was significant briefing and training done with lawyers in the Department of Justice to ensure that they were in a position to advise their clients of the framework, as you've termed it, but really of the legal implications of the guidance from the Supreme Court. The Supreme Court doesn't tell the province what to do, what it does is give an indication of how they will view any future cases. So there are certain options that come out of Eurig as to how these sorts fees will go forward.
I am aware that Service Nova Scotia conducted a fairly significant project at the time that was referred to as the LPA, Licences, Permits and Approvals project. In that program, what they did was develop a financial model that departments would be able to use with certain modifications, depending on the particular program, to assess the appropriate cost of a particular program, vis-à-vis the revenues.
MR. EPSTEIN: Well thank you for that. I take it your reference to deputy ministers was of course Nova Scotia provincial deputy ministers.
MR. TRAVES: Yes.
MR. EPSTEIN: The absence of interprovincial discussions seems to me perhaps, just a little peculiar. The reason I say that is, clearly re: Eurig, didn't apply just to Nova Scotia. It wasn't even a Nova Scotia case. It clearly applied however, to all provinces equally, all provinces would be in exactly the same position in having to abide by what was said in re: Eurig. It seems to me it might be logical for the provinces to have talked amongst themselves a little bit as to what the details of implementation might be. Otherwise, each province would be left to making its own decisions about how exactly in detail they might interpret the case. That's just an observation about how it might have gone.
MR. TRAVES: I am sorry, Mr. Epstein, my comment shouldn't be taken to imply that that didn't take place. It's just that I'm not aware of the specifics of those discussions. There are ongoing discussions at the federal, provincial and territorial level in the various areas of jurisdiction, law, finance and others, where there are significant meetings that occur on a regular basis. The sorts of thing that came around Eurig in 1999, was a topic of considerable interest in all jurisdictions. I'd be very surprised if at all levels there hadn't been ongoing discussions.
But ultimately, it is the courts of each province which will determine, at first instance, whether or not a specific levy is a tax or not. Really, then it comes down to the individual provinces to determine in their own instances, based on their own programs, how those will be presented and how they will defend themselves in the event of a challenge.
MR. EPSTEIN: I think I understand that. What I'd like to know is, on the assumption that the user fees are going to be calculated to reflect what I think you referred to as actual costs. What elements are included inside that? The minimum legal requirement is that there be some form of accord with some flexibility according to re: Eurig built into the calculation. What I'm wondering is how the Finance Department either instructs other departments or guides other departments in telling them what ought to be included in their calculation of the actual costs when they are setting a fee.
MR. WINDSOR: I'll ask David Perry from Treasury Board to answer that question.
MR. DAVID PERRY: There is a formula that was recommended as part of the LPA study. It generally provides for - there's a formula, it's based on an average of three or four years. There's a provision for direct costs to be included in the calculation plus a percentage as an overhead provision. This is a general guideline, our experience since the formula was recommended, in April 1997, is that in particular circumstances it does tend to break down somewhat. The actual costing exercise needs to be tailored to the particular circumstances and costs, I should also point out, is a starting point for a pricing exercise. In many cases we do not charge full costs for the user fees that we use. It's discounted by some factor and, in some instances, there is a premium placed on a charge that is usually authorized through legislation rather than by regulation. There's a whole host of considerations that take place in order to arrive at a final pricing number.
MR. EPSTEIN: You dated this back to the LPA exercise. Did I understand correctly from one of the earlier answers that this would have been around 1997, even predating re: Eurig.
MR. PERRY: Yes, the report was issued in April 1997.
MR. EPSTEIN: Fine. What you said was that you would average it over a number of years, that seems to be entirely appropriate, but the core of it is, of course, what you were calling direct costs and it's that part of it that I'm really wondering if we can unbundle. Can you suggest to me what is legitimately part of direct costs and what wouldn't be part of direct costs? Just to give you an example, would capital items come into play?
MR. PERRY: Generally, no. It's things like salaries, direct administrative type costs, paperwork, travel, if we're talking about an inspection service, that sort of thing. There is a provision for what's called in the LPA an overhead provision and that would cover some of these other things like capital charges, departmental overhead, this sort of thing.
MR. EPSTEIN: So capital could be bundled into overhead?
MR. PERRY: That's right.
MR. EPSTEIN: So let's just think, for example, about say an ambulance fee. Would the price of an ambulance be included in the fee charged in any way?
MR. PERRY: I would have to go back to the details on how, there is a fairly detailed calculation that the Emergency Health Services' people go through when they're determining charges every year and I should add that in the case of ambulance fees, the cost of a transport is something over $700 a trip and the fee is $120.
MR. EPSTEIN: Do you know what, I'm not arguing about the dollar amount.
MR. PERRY: It's nowhere close to cost, okay.
MR. EPSTEIN: I'm not arguing about the dollar amount here. What I'm wondering are the principles according to which calculations are done? This is really the point. So you're saying capital could be included and often would, I suppose?
MR. PERRY: Again, I'm not sure about the particulars with respect to ambulance fees. I would have to go back to the details associated with that. I would be surprised if it's not included in some form or another.
MR. EPSTEIN: You see, you understand the problem here which is that unless there are principal parameters that tell us what is to be included in the calculations for a fee, then it's completely open and there's nothing much to distinguish a fee from a tax, particularly, because there's no dividing line. Do you understand the problem I'm pointing to?
MR. PERRY: Yes, but each fee has its peculiarities, costs that are associated with it that apply in some cases and ones that don't. So there has to be some flexibility in the model to take into account the particulars of the situation that you happen to be in.
MR. EPSTEIN: Mr. Windsor, can you tell me what happened this year with respect to fees a little bit. Did I understand you to be saying that there was essentially an inflationary increase that was calculated as part of the adjustment of fees?
[8:30 a.m.]
MR. WINDSOR: We took a look at how costs had basically increased in terms of program spending from 2001 to 2003-04, the end of 2004, which was I believe roughly in the neighbourhood of around 7.4 per cent, something of that nature, what the program costing increases were, and settled on an increase, then saying that over that period of time, since there had been a significant increase in fees, something in the neighbourhood of 6.5 per cent would have been an acceptable costing increase.
MR. EPSTEIN: So built into that was an assumption that the underlying fee was probably a reasonable fee and, therefore, an inflationary increase would be added to produce what would continue to be a reasonable fee?
MR. WINDSOR: That's correct.
MR. EPSTEIN: So it all depends on the reasonableness of the underlying model and how it's applied?
MR. WINDSOR: That's correct.
MR. EPSTEIN: And was the Department of Health treated differently? I noticed in your remarks that you said that inflation with respect to health matters, of course, had been greater than inflation with respect to other departments.
MR. WINDSOR: No, my point that I was trying to make in my remarks was that generally costs have increased over that time frame around 7.4 per cent.
MR. EPSTEIN: You said that was general in government, then you gave a different number for the Department of Health.
MR. WINDSOR: In the Department of Health cost increases were in the neighbourhood of 14.-something. So cost increases within the Department of Health have outpaced cost increases elsewhere within government. That's the point I was trying to make.
MR. EPSTEIN: So that would have suggested that if inflationary increases were a basis for fee changes, that they might have legitimately been greater inside the Department of Health? Is that how you take it, you take it department by department?
MR. WINDSOR: No, the general application was the 6.5 per cent.
MR. EPSTEIN: I see, you didn't distinguish among departments?
MR. WINDSOR: We didn't do something separate or different for the Department of Health.
MR. EPSTEIN: Okay, so you used that number. I wonder if, again, you can tell me something about the timetable for implementation of a review of the fees. I got the impression from your remarks and some of the written material that this is an ongoing effort to attempt to justify the accuracy of the fees. Is that an ongoing project?
MR. WINDSOR: We have a project underway at the Treasury and Policy Board that I referred to, actually it's a project between the Treasury and Policy Board and the Department of Finance, looking at user fees generally. One of the principal features is looking at what is done in other jurisdictions around practices for, what user fees are in place, what costs they include, what other features that they have built into their user fee processes. So we're looking at sort of the best practices and then we're going to take it into some secondary phases as well. In our business plan we refer to this as a project going out over two years.
MR. CHAIRMAN: We will now move on to the Liberal caucus.
The member for Halifax Clayton Park.
MS. DIANA WHALEN: Thank you very much, Mr. Chairman, and welcome this morning. I would like to actually continue the line of questioning about the user fee group that was to be studying an organized and proper approach to user fees. Could you tell me how long that group has been formed? Do you know when it was formed?
MR. WINDSOR: I'm not sure I can give you an exact date. I know that it was started sometime last Summer, late Spring, early last Summer the group was formed, and has been working since that point.
MS. WHALEN: So it's over a year that they've been working on this?
MR. WINDSOR: I think I've got that right, but I could be corrected.
MS. WHALEN: I thought it was even longer to be honest.
MR. WINDSOR: In terms of the specific group that I was referring to in my remarks.
MS. WHALEN: Is there another group that met earlier or has begun this because there has been a lot of user fee increases in the last four or five years?
MR. WINDSOR: Well, there have been various groups. John Traves referred to an interdepartmental group of several years back. The License, Permit and Approval Task Force, et cetera, has looked at the subject. Various other interdepartmental committees have looked at this subject, but the specific project that I referred to in my remarks began sometime late last Spring, early Summer.
MS. WHALEN: And could you tell us when it's expected to give us a definitive answer on what our approach is to user fees?
MR. WINDSOR: We're looking for a report from them in 2004-05 fiscal year. I would think it would be later this year.
MS. WHALEN: Is this considered a priority for the department?
MR. WINDSOR: We actually brought on a few additional resources last year when I was at the Department of Finance to help move the project along. I have to be perfectly honest with you, the work that I've seen thus far, I'm really quite pleased with what I see, so, yes, it's a priority for us.
MS. WHALEN: I was reading the accountability report from the Department of Finance for 2002-03 - there's no mention at all in that year of this project going on.
MR. WINDSOR: I think you'd want to look at the Treasury Board business plan. I think you'll find it in there.
MS. WHALEN: Okay, you indicated they overlapped, but I wondered why it wasn't shown as an activity for the Department of Finance. I would suggest it is a very important area, you say in your opening remarks, it represents about 3 per cent of our revenue. Perhaps you could outline what the increases have been in the last five years. Have you the figures on how many? This latest go-round is roughly $13 million you said - how about the earlier ones?
MR. WINDSOR: I believe the increase in 2000 in total dollars was approximately $20 million, but I should probably say that I will put a question mark around that figure.
MS. WHALEN: I have some figures, but I will confess they come from a newspaper article and not from your department, but I have 2000-01, $29 million; 2001-02, $35 million; 2002-03, $26.5 million; and 2003-04, an election year, no increases in user fees. Now we have a new year and we've $13 million this year so there has been a significant increase - that's over $100 million and you're saying that our total revenue from user fees is roughly $190 million to $200 million this morning.
MR. WINDSOR: Yes, that's correct.
MS. WHALEN: So that's really a 100 per cent increase in user fees then from 2000.
MR. WINDSOR: I think I would want to check where you're getting the numbers from.
MS. WHALEN: Okay. I think they're pretty accurate, but I confess, you may want to double check it, but I would surmise that there has been, just about, a 100 per cent increase in user fees. I think that is significant and it's a very important area to look at. Again, I'd like to press you a little bit on the working group because I think, given the fact that when the government has to evaluate options, which is where you've just been through an extensive exercise with this budget, you've had to look at all avenues for revenue in order to come out with a balanced budget. This becomes a very important option for the government - to look at different user fees and where you have some capacity, I guess, to increase them. I'm sure you're looking at what the impact is on the taxpayer and the end user of those services, but I would suggest that in doing that we need a proper framework. The public can't feel comfortable and neither can members of the Legislature if we don't know there's a proper framework and proper accountability. I would say that in this particular go-round on user fees, we haven't had that.
MR. WINDSOR: I think that we obviously recognize as well the necessity for having that formal framework in place. Having said that, I certainly wouldn't want to leave you with the impression that there is no framework currently in place and there is not an analysis that goes on user fees at the departmental level by the program managers and by the solicitors within the individual departments when the user fees are then submitted to the Treasury and Policy Board and then subsequently to the Executive Council.
So there is an analysis process that goes on around this. As I said as well, I believe the work that we've done already through our working group demonstrates that many of the processes that we already have in place in Nova Scotia are comparable to those practices that exist in other jurisdictions. I think we can build upon that with the work of our working group.
MS. WHALEN: When the 508 user fees were presented at the very end of last year, most of which came into effect April 1st - I think the announcement was March 31st - there were clearly some in there that were taxes. This analysis would have shown were taxes. The one that has been mentioned the most often, so it jumps out at us, is the unlimited liability companies where that was 100 per cent increase in the registration and fees for unlimited liability companies in Nova Scotia. So, why were they lumped into a press release and an announcement of 508 user fees? Why didn't you separately identify those that would soon appear in the Financial Measures (2004) Bill?
MR. WINDSOR: I think, as I said in my remarks, we probably could have done a better job around communicating that particular item, but perhaps I will also turn that over to our solicitor to see if he has some additional comments.
MR. TRAVES: Just to correct, there was clearly a separate strategy done in the case of most of these taxes. A tax bulletin was issued by the Registry of Joint Stock Companies on April 1st setting out the increases in the unlimited liability company taxes. This is consistent with government practice around all of these sorts of tax measures. You can see it when tobacco taxes go up. What happens is, to avoid a gold rush, if you will, or a rush of individuals trying to take advantage of a change in a tax law, they are dealt with very rigorously. There was a specific bulletin that was issued April 1st at midnight that set out that as of this particular moment in time, there is now a new tax in place. I can table that if you like.
If you look at the OIC issued, there is no measure in there with respect to the unlimited liability companies. I think in all, I may have missed one or two, I believe, out of the 580 where there was an overlap. The reason was that the particular fee was in the amount of $7.45 and it was very questionable, late at night, as to whether that equated to a tax or not. So, I brought it forward for consideration by Cabinet with a view of, well, it will have to be taken out. I think that when the communications strategy came out, it was not as clear as it could have been, in terms that there was this separation and that there were separate bulletins and announcements on the Web pages of various departments.
MS. WHALEN: I wonder if you could tell me how many tax bulletins were issued on April 1st?
MR. TRAVES: On April 1st, I think there was the unlimited liability company one I have in front of me. I'm not sure which other ones were issued because it was done at a departmental level, but departments, as I understand it, updated their Web pages at that particular time. There was a general update on the Finance Web page which also set out these matters.
You have to understand, the difficulty is that on some of these what has happened is not only was there an increase in taxes, which is a well recognized issue and it's dealt with through the tax bulletin, but there were new taxes created. In the circumstances, I'm not sure that all departments had a process to deal with the new ones in the same way because it becomes a new process. That's something that needs to be worked on, I think.
MS. WHALEN: I would like, just in finishing up on that thought, to make the point that it's not good enough I don't think to come out with a tax bulletin on April 1st in this case, particularly the unlimited liabilities companies. You're not going to have a rush or a stampede of registrations on the day before. I can certainly see it with tobacco taxes - you don't want to have a lot of chaos in the marketplace and you need . . .
MR. TRAVES: I beg to differ. I think that in particular unlimited liability companies, a large portion of these companies are dealt with by the same agent. It is with a very large law firm in town which has the significant resources available to them in their trust funds to walk down the street and update their registries on all of these companies in a matter of 20 minutes or less. Which essentially would mean that the tax increase that was to be implemented, in fact, it's registered electronically so it's a push of a button, you don't even have to walk anywhere. So you could, in essence, subvert the intention of this Legislature if it chooses to pass the legislation providing for a tax increase as of April 1st, through electronic means. Otherwise meaning that, ultimately, the taxpayers of the province are left with a shortfall of revenues that were not otherwise intended. So, if you are not very careful about the way in which you implement these measures and the way that they're announced, you will certainly see a significant hit to the taxpayers.
MS. WHALEN: In this case, careful almost looks like secretive though and I think it's important to balance that as well. Maybe it's a communications strategy that needs to be looked at in terms of how they're unveiled.
MR. TRAVES: It's very well thought out, it's carried out throughout all jurisdictions - federally and provincially - that tax bulletins are issued essentially at midnight of the day in which the measure is to be implemented. If it were not the case, then you would have efforts around tax avoidance or other items which border on all sorts of issues that you really don't want to get into. So, it's a carefully thought out strategy, it is consistent with all jurisdictions and, in fact, I think it goes into all countries that tax measures must be done in that way.
MS. WHALEN: Thank you very much, I appreciate your answer, it's very thorough. Mr. Windsor, just one last question on the amortization working group. When you were Deputy Minister of Finance, you would have been responsible for that. That group was to report, and actually in the accountability report it said it was to make recommendations that would apply in the 2004-05 year, but instead they made recommendations at the very last day or two of March in the 2003-04 year in which case it was applicable for that entire year and we're talking there about the way we amortize or depreciate our capital assets. Can you explain why that was done at the very last moment, when it was a working group, there should have been a structure to its reporting and an intent?
[8:45 a.m.]
MR. WINDSOR: I'm going to have to back off from that question, quite frankly, because my memory is not as good as perhaps it should be on that particular subject as to all the details around why the decision was made at that particular point in time. I think it would be probably better to put that question to the Deputy Minister of Finance.
MS. WHALEN: Well, you know I asked you because you were there at the time.
MR. WINDSOR: Yes.
MS. WHALEN: But I appreciate you don't have staff with you from the Department of Finance.
MR. WINDSOR: I don't have the staff with me and, quite frankly, I just have not refreshed my memory on the subject in the last few months.
MS. WHALEN: There is a parallel between the amortization and how that was done at the tail end of the year to provide revenue for last year and then again at the same time the announcements were made for new fees coming into the new year. So that's why I asked that. The $23 million that was realized by changing the way we depreciate our assets brings last year into a positive position and positive surplus. So, you know, I think it is quite critical since there was no change other than an accounting change. However, I would like to pass my time over to my colleague.
MR. CHAIRMAN: The member for Halifax Citadel with slightly more than six minutes remaining.
MR. DANIEL GRAHAM: I would like to thank you for coming and I would like to commend you for starting on some of the work that really was pointed out as required back in 1997. I would like a response to a suggestion that perhaps while we've incurred unprecedented increases in user fees in Nova Scotia, the process of reviewing or providing some objective standards for the setting of user fees has been sluggish and just to set the table for that, back in 1997 there were 36 policy recommendations by a task force with respect to the setting of user fees.
One of the goals of these recommendations included putting in place a policy framework for bringing this forward and making sure that this was an objective process. That was followed by the Eurig decision that my colleague, the member for Halifax Chebucto, had referenced. Then in the year 2000, the Auditor General made some pretty strong comments and I will just highlight a few of them with respect to the user fee process. He says, "There is no manual or other compilation of government-wide principles, policies, procedures or practices which departments can use as guidance in the setting and management of user fees. There is little support available to departments in determining other government costs which could be considered when assessing fees charged for various services. There is no consistency in how government departments and other entities determine the amount charged for their services and programs."
That was in 2000 and then you have put in place the business plan in 2003 eventually for Treasury and Policy Board which hasn't been completed as you acknowledged. Part of your business plan is to lead the development of a policy for levying of user fees by
government, et cetera, et cetera, and in March 2004 there was supposed to be a database for user fees by department.
I would ask you first to respond to the general assertion that this has been slow in coming and, as recently as the last month or so, we continue to increase user fees, but we don't put in place the policies that the task force called for, the Eurig decision clearly mandated, the Auditor General called for, and in 2003 there was a business plan that suggested something should eventually happen.
MR. WINDSOR: Well, first of all, as I responded to in regard to the last set of questions, there have been things that have been done within departments since the Eurig decision in terms of departments improving the ways in which they analyze their fees and the processes by which those fees for approval then move forward out of the departments into the Treasury and Policy Board. So it's not as if we have not done some things in terms of improving our internal culture and the working group that we have established within the Treasury and Policy Board, the plan was from the outset that this would be a project that would span over the two fiscal years, 2003-04 and 2004-05.
So my point is that I think we are making reasonably good progress in Nova Scotia. When we look at where we stand in Nova Scotia in comparison to other jurisdictions in the country, we compare reasonably favourably with those other departments and where they are proceeding on the same subject. So I think we are making some reasonably good progress in the province. Having said that, obviously, we know that we need to do more and I certainly want to give a lot of emphasis to the report of that working group that we have in the Treasury and Policy Board at the present time.
MR. GRAHAM: I have no doubt that there have been improvements since 1997. Clearly with all that has been said, there would need to be improvements. My concern is about the speed of those improvements. So I would turn to a question related to speed - and seeing the two fingers of the Chairman signifying that I only have two minutes left, I'm going to add to that the second line of questioning that I'm interested in.
The first, just picking up on what I asked before, is the database that was supposed to be ready in March 2004 of department user fees in place as of yet, is it on schedule? The second is somewhat related. It relates to a broader process that should be in place and whether or not you're considering, for example, an arm's-length authority through a regulatory process setting fees and the government being required to make its case to that arm's-length organization and whether or not an appeals process might be available for government, or perhaps through aggrieved parties who say that's not fair, rather than forcing individual Nova Scotians to perhaps take out a class action, which is the only potentially affordable way to do it, or perhaps sue in their own right out of a sense that this is a matter of principle. It seems to me that these are progressive suggestions that should be on the table for your organization and I'm wondering whether they are and, if so, where are they?
MR. WINDSOR: In responding quickly then to your two questions, first of all, we have a master list of fees, but we don't have it on a database yet. So we have the master list, but not on the database. In response to your second point, if I think I've understood all of what you're saying there, no, we are not considering that type of a framework. The ability to establish fees comes from the authority granted to the government by the Legislature. The Legislature passes the laws and elected officials review the fees. Part of that process is for the elected officials to determine the acceptability of those fees.
MR. CHAIRMAN: That concludes the time for the Liberal caucus, at least in this round. We will move on to the Progressive Conservative caucus.
The honourable member for Waverley-Fall River-Beaver Bank.
MR. GARY HINES: Thank you, ladies and gentlemen, for getting up early and coming in to be with us this morning. It might have been difficult seeing the demise of your Toronto Maple Leafs and maybe some were up all night, I don't know, but it's good to see you here this morning. What I would like to do first is I would like to go back to a little bit of history or background regarding the creation of the Treasury and Policy Board. How do the duties of the Treasury and Policy Board compare to the old Priorities and Planning Secretariat, what's different and why was it created?
MR. WINDSOR: I'm going to ask Margaret MacDonald, who has been at the Treasury and Policy Board longer than I, to respond to that specific question, but I do want to say something in response to your first remark - 8:00 a.m. is actually a late start in the day for me and most of the people here.
MS. MARGARET MACDONALD: I apologize, could you repeat the question?
MR. HINES: I would just like to have some reasoning for the creation of the Treasury and Policy Board and what it does differently than the old Priorities and Planning Secretariat?
MS. MARGARET MACDONALD: Well, my tenure with the Treasury and Policy Board, all of it has been while it was the Treasury and Policy Board, so I don't have experience with Priorities and Planning. But my understanding is that one of the major differences in the office has to do with contributing to the expenditure side of the budget and monitoring the expenditure side of the budget through the year.
We have a group of staff now who work very closely with the Department of Finance when the budget process starts. We have staff who have responsibility for understanding the various departments. They are assigned to individual departments, they work closely with those departments, and part of their work is to get familiar with what the departments do, where they spend their money, where the spending pressures are and that sort of thing, so that
when we start down the road on our budget process, we have staff in the room during the budget process who can contribute to that discussion and who can speak to the pressures that the departments may be experiencing and give us an evaluation of the expenditure requirements for those departments during the year. It's a significant contribution to the budget process. In addition to that, of course, we work closely with Finance in preparing and building the budget with respect to those issues.
The other significant area I think that the Treasury and Policy Board has assumed is with respect to the capital budget. We also manage a committee of government that evaluates the capital spending requests from the department, works very closely with departments to determine the priorities, where the money can best be spent, and makes recommendations to the Cabinet on that. As we go through the year, again, the staff work very closely in monitoring those expenditures and providing that information to Finance for budget purposes. That's one of the big areas of differences, I think, over the Priorities and Planning process.
MR. HINES: So would you say that the Treasury and Policy Board was applauded by the Auditor General, in fact, the Auditor General probably could speak for himself in that matter. Was it recognized and one of those changes in governance that the Auditor General applauded?
MS. MARGARET MACDONALD: I'm afraid I can't speak to that. I would hope so.
MR. HINES: Okay. I guess we all know the problems that we've run into in this province and I guess it goes back months and perhaps even years with the Premier's campaign for fairness. We get constantly criticized, I guess, for passing the buck on the federal government in the fact that there's not enough money for health care and so on from transfer payments, down to the provincial level from the federal government. I wonder, just for clarity and so that it can be better understood by the people who maybe condemn us or criticize us for using this as a scapegoat, could you explain how the health care contribution, which I believe was $67 million in new health care contributions, really wasn't a windfall or didn't really contribute a whole lot to the economics of the province. Can you do a comparison between equalization versus health care contribution and perhaps explain the equalization?
MR. CHAIRMAN: Mr. Windsor.
MR. WINDSOR: This is a long and complicated subject.
MR. HINES: I realize that.
MR. WINDSOR: Health care spending at the present time within the Province of Nova Scotia represents a little over 40 per cent of our total expenditures as a province. It's
now standing at about $2.2 billion, on total program spending of just slightly over $5 million. So it's obviously a very significant item.
I believe this year the total increase in terms of health care expenditure, year over year from 2003-04 to 2004-05, is something in the neighborhood of $240 million. I think I have that number right, so by far it is the most significant item that we have as an expenditure within the provincial government.
At the present time the federal government's contribution to health care is probably a little bit open to debate, at least on the federal side, their contribution is something in the neighborhood of 16 per cent to the total of health care expenditures. As you can see the province is obviously carrying the lion's share of the burden on health care expenditures and we can anticipate, I think, that demand for health care services will obviously continue to grow in the years ahead and it will continue to put significant pressure on our provincial budgets.
MR. HINES: Thank you. In my notes here I have a statement from the Toronto Dominion Bank which had an article entitled Surprising Drop in Federal Equalization a Major Blow to the Provincial Budget. Can you explain that statement?
[9:00 a.m.]
MR. WINDSOR: We had a hit of approximately $200 million, something of that magnitude, in terms of the impact of equalization on the province. As a consequence of that obviously, we, as a province, have to look at all revenue sources and all other opportunities that we have for being able to make up that sum of money. One of the things I have always tried to emphasize, when I've come before the Public Accounts Committee to discuss the budgeting process, is that it is very much a balancing act between the expenditures and the revenue side of the equation. Really, if you have a shortfall in revenue then you have to make it up on the expenditure side, or you have to enhance your revenues from another perspective. I think we have done a reasonably good job in the Province of Nova Scotia in terms of that balance.
MR. HINES: Because of the underfunding of health and social transfers by the federal government, I read a statement that suggests that perhaps we should move back to the 10-province standard of fiscal capacity.
MR. WINDSOR: The provinces have put forward, over the last several years, a number of recommendations to the federal government with respect to improvements to equalization. One is to move back to the 10-province standard, now it's based upon five provinces, so basically, Alberta is taken out of the mix, in terms of being able to assess the disparity between the provinces. Another item is treatment of various other taxation revenue sources.
I think it is fair to say that in terms of equalization and CHST, et cetera, the province has taken a very significant hit in terms of equalization, and that has a very real impact on our ability to be able to provide services and to see those services continue to grow.
MR. HINES: Because we are a province that has an aging population, there seems to be a greater strain on the province in the need for health care, I suppose, as opposed to others. The aging population and those problems that it creates for government in generating revenue to support programs that they may need, do you see that there should be, perhaps, a mechanism that would recognize that, in terms of the population and federal government support?
MR. WINDSOR: One of the arguments we have made to the federal government over the last several years is that some of the calculations for the transfers to the province should be based upon need. For example, we, in Nova Scotia, have - as you said - an aging population and at the aging population is when you put, obviously, the greatest pressure on your health care expenditures. Other provinces have other needs, their demographic situation is different than Nova Scotia, and maybe they have a very large younger population under 16 years of age or something like that.
We put that argument forward that there needs to be some consideration given to the varying differences across the country, in terms of where you stand, if we are really going to be able to make some headway on some of these challenges that we face as a province. That's particularly important in the area where you have programs that are funded, based upon a percentage of the population. If you have a population that is aging and declining, and funding from Ottawa happens to be based upon per capita distribution, then obviously Nova Scotia could be adversely impacted in those situations.
So that's the argument that we have put forward to the federal government on that particular issue. We have had some support from other provinces on that particular matter, but not unanimity, obviously, on the subject. The point that we're trying to make is not to take a cookie-cutter approach to the management of national affairs.
MR. HINES: User fees generate 3 per cent in the Province of Nova Scotia. How does that compare to the other provinces? Do you have a comparison?
MR. WINDSOR: I don't have a comparison for other provinces. We tried to actually collect some of that information over the last little while, but it's been a little bit hard to get our hands on. What we do have are numbers from the federal government and theirs is roughly in the 3 per cent category as well.
MR. HINES: I'm going to go to the user fees side of the conversation now that we've indicated the need for greater revenues, and the shortfalls coming from the federal government. Let's talk about the process which led to user fee increases. Some would insist
that it may have been a knee-jerk reaction to a need to balance a budget. Is this process ongoing?
MR. WINDSOR: Our budgeting process in Nova Scotia - I guess from various angles now that I have been involved probably in three different ways over time, and it is to a certain extent an evolving process that we have within the province and to some extent, as well, I think the process continues to improve. One of the things, where we started the budget process this year, I think it's really important to understand that we didn't start the process off by simply saying we need money and pull a number out of the air. We started the process looking at the programming side of the business first. To look at what programs could we modify, change, reduce. In other words, where could we generated some savings? What were we prepared to forgo?
So we started on the expenditure side of the equation first. Then we moved over onto the revenues side. So we dealt with the expenditure side first, then we dealt with the revenue side. I think that produced for us, a very well-informed budget process. The other point I guess I want to make around user fees is that in addition to it being a very thorough process within the individual departments, as I've said, with staff analysis and the department solicitors involved in it as well. It was a very detailed process as well at the Treasury and Policy Board and Cabinet levels but as well in terms of having each department, not only go through their program expenditures, but they went through their various fees, with the Treasury Board and with the Cabinet to discuss those individual fees. This was, I think, a very thorough process at the Treasury Board level this year.
MR. HINES: In the creation of new user fees, or in the increases of user fees, do you take into consideration the lower income individuals who might be affected by them? Is there a process whereby that . . .
MR. WINDSOR: Departments are expected to look at the impacts of their fees and their fee increases on all stakeholders, and that would include low-income individuals. As well, if you look at the way in which the tax arrangements this year were structured the tax provisions left in place for the lowest tax bracket was in part a recognition of the necessity to minimize the impact of low-income Nova Scotians.
MR. HINES: Our Party is an open Party, and we'd like to take into consideration the opinions of individuals in terms of governance. This morning, and because you were all up early, I read an article by Brian Lee Crowley in the Herald regarding user fees. I wonder if anybody studied that to the point where they could make some comments and some suggestions on what he actually said and if it's making sense? I think Mr. Traves might have read that article and would want to comment, I don't know that, but I would invite him to, if he would like to comment.
MR. CHAIRMAN: Mr. Windsor or Mr. Traves.
MR. WINDSOR: I haven't read the article. I was listening to CBC Radio. Mr. Traves may have a comment.
MR. CHAIRMAN: Mr. Traves, do you care to make a comment on that?
MR. TRAVES: Mr. Chairman, I would be pleased to. I read the article very briefly this morning. There wasn't a lot of time, obviously. It builds on and asserts the points that were raised by Mr. Graham in his questioning earlier, and is really focused around the federal legislation, recently passed, on user fees and I think on the bill that's currently in the House. The difficulty, from my perspective, and I think this is something that is broader, is really a question and concern that these sorts of matters are being brought forward in sort of a policy vacuum or in a lack of informed analysis. Ultimately, it leads to poor debate in this House.
The difficulty, I think, is that they can be argued, but these types of legislation actually reduce proper accountability by causing a decline in executive responsibility. I think the House should be very cautious about their consideration to deliberations around these sorts of bills, in the absence of anything other than what may be seen as special interest groups bringing it forward. I would be very interested to see what happens federally over the next period of time with respect to this legislation. I have a sense that the amount of and the ability to deal with user fees will be severely circumscribed.
What you have to understand is that the budget is the central vehicle for expressing a government's fiscal policy. Budgets project a level of public expenditure for the coming year, as well as the mixture of taxation, borrowing and other revenue measures that will be used to finance the expenditures. The laws, in my view, attempt to move power and responsibility for fiscal decisions further away from the elected government of the day, thereby altering a key aspect of the relationship between the executive, the legislative and the judicial branches of government.
Both federally and provincially, Canada has traditionally adhered strongly to a principle of executive responsibility for fiscal policy choices, not legislative. That's really where you get into a problem.
MR. HINES: I will pass to Mr. DeWolfe, because he has a question related to . . .
MR. CHAIRMAN: The honourable member to Pictou East.
MR. JAMES DEWOLFE: I will continue with Mr. Traves on the Crawley article. I noticed a couple of good points, like he endorses the usage of user fees and he endorses lower taxes. Also, he talks about going to an arm's-length body, and government would have to make a case for each user fee and the user fees collected in excess of the cost of that service should be returned to the customers. I don't believe for a minute that the user fees are in excess of the service provided. But by going through this bureaucracy, my concern is that
by adding more bureaucracy, user fees will become pointless, because they become too expensive, to assess the process would make it more costly, probably, than they're worth. Would that be a fair statement?
MR. TRAVES: I think you can state it stronger than that. I think that there is a question of constitutional validity around a measure of creating an independent tribunal to discuss or deal with user fees. Essentially, the argument will be that you are intruding on the powers of the Supreme Court of Nova Scotia, which, constitutionally, you are forbidden from doing.
For the Legislature to draw explicit boundaries around Cabinet's budgetary domain represents a major shift, in my view, in the distribution of powers within our system of constitutional government. It means, in essence, that the elected government's range of policies, whichever government is elected, is circumscribed by a prior action of the legislative branch, as well as by the judiciary's authority to then interpret or apply those statutory limits.
Essentially, what you have is the opportunity for special interest groups to bring forward challenges to a government's lawful exercise of its budget authority, and tie up the ability of a government to implement its policies. Essentially, there is a wide-ranging discretion. It is subject to challenge at the polls, but basically user fee legislation, in my view, substitutes this sort of a new and less fluid set of parameters within which the fiscal choices have to be made by the Finance Minister.
[9:15 a.m.]
Those are issues which really come down to matters for the government of the day, which is why when a budget is tabled and when you have financial measures legislation, the failure to pass that legislation results in a vote of non-confidence. If you're going to tie the government's hands - and I'm not suggesting that you shouldn't. I'm saying you should be very careful that those efforts are done with full recognition of the House of the impact that it will have on future governments and the ability to implement sound fiscal policy in an effective and efficient manner. In order to make changes in light of those efforts, what you will have to is come back - in a majority government it's not an issue; in a minority government it's not always simple, either deals must be struck or there is ultimately a long delay in how you can deal with these things.
It is well understood that in order for a fee to be lawfully authorized it has to equate to the cost of delivering a service. Ultimately the trier of that issue is not going to be the House, or an independent tribunal or something else, it's going to be the judiciary - the Supreme Court of Canada ultimately, which is why Eurig is a decision of the Supreme Court of Canada; they provide guidelines.
MR. CHAIRMAN: Mr. Traves, you've given a three-minute answer to a pretty straightforward question. I'm going to ask you to cut it off. I'm going to turn the floor back over to the NDP caucus for the next round, which will be 12 minutes.
The honourable member for Dartmouth South-Portland Valley.
MS. MARILYN MORE: Mr. Chairman. I just have a few quick questions then I'm going to share my time with my colleague, so I'd really appreciate as brief an answer as practical.
I'm wondering about the intent of the money raised by the user fees. I understand that non-regulatory user fees can be kept by the departments. I'm wondering, have you worked out what percentage of the revenue from user fees goes back to the departments, or how much of it goes into general revenue?
MR. WINDSOR: Mr. Chairman, perhaps David could try to find that number. Could we perhaps go through out binders and see if we have the number and get back to that question?
MS. MORE: Sure. Shall I continue with my questions?
MR. WINDSOR: Yes.
MS. MORE: Okay. The other question is about the cost of collecting user fees. Is that worked into the original formula?
MR. WINDSOR: I'm sorry, could you repeat your question?
MS. MORE: The cost of collecting the user fees, is that worked into the original formula that you're starting to apply?
MR. WINDSOR: David, can you respond to that.
MR. PERRY: I'm sorry, I was looking for the percentage. So I have an answer to your first question.
MR. CHAIRMAN: Excuse me for a second. There is a little bit too much noise in the Chamber and, Ms. More, even I'm having a great deal of difficulty hearing your questions, so if I could ask the members if they have a conversation to take them outside because we're now going to have this question repeated for the third time. Ms. More you have the floor.
MS. MORE: I'm waiting for the answer to the first question, I believe.
MR. PERRY: Question number one - okay, I don't have a percentage calculator, but there's $13.8 million worth of incremental revenue in total, of which $2 million, almost $3 million, were in fees that would be - they form a net budget, an expenditure budget for the department and another $10.8 million considered to be more revenues that would be going to general government coffers.
MS. MORE: Okay, the figure I have is from, actually way back in 1999-2000. It said the non-regulatory user fees totalled $51.2 million, so that was the potential that could have gone back directly to the departments.
MR. PERRY: I'm just dealing with the incremental that was recently approved as opposed to across the board. No, I don't have a breakdown of the that, I'm sorry.
MS. MORE: Okay, so do you track every year how much?
MR. PERRY: Yes, we can give you that number - I just don't happen to have it at my fingertips.
MS. MORE: Sure. I'd appreciate that, if you wouldn't mind.
MR. PERRY: Okay.
MS. MORE: My second question is around the cost of collecting the user fees. Is that taken into account?
MR. PERRY: The answer to that is yes. I don't have a figure as far as what is the cost of collecting user fees, it's a very distributed sort of an exercise of various departments, but it would be considered.
MS. MORE: Right, and do user fees include fines and penalties?
MR. PERRY: No, not in our calculations here.
MS. MORE: I'm just wondering about the rationale for the new homemaker visit cancellation fee. How do you define the difference then between user fees and penalties? It was listed as a user fee, that's why I'm asking the question.
MR. WINDSOR: I think the definition distinction might take a little while to get into the answer to that. Perhaps John could respond to it, but I think the essence of the question that you're really asking is, what was the rationale behind that particular increase.
MS. MORE: Yes, it just seems out of sync with everything else that's listed. It seems to be more a penalty than a user fee.
MR. WINDSOR: Although there were obviously a good number of fees that were increased, I do happen to recall some of the discussion around that one particular item because there was a great deal of discussion around that one particular item and it related really to demand management. That there were very significant number of cancellations that were occurring in a period of time of less than 24 hours which made management of your work flow considerably more difficult. I think the number that I recall from those discussions was something in the neighbourhood of 30,000 cancellations. I could be wrong on that number by some magnitude, but I know that the . . .
MS. MORE: Yes, it's 37,869.
MR. WINDSOR: So I was in the ballpark at least. That's what it was. It was really a sort of management fee that was put in place to ensure that work flow could be better managed.
MS. MORE: Are you satisfied it's in the right category though? Do you consider that a user fee?
MR. WINDSOR: Well, there're costs associated with providing that service, so yes, I'm satisfied that we're in the right category.
MS. MORE: But it's only being applied to those where there's a missed visit so they actually didn't get the service.
MR. WINDSOR: But they were scheduled for the service and then subsequently cancelled it so that there is a cost to government as a result of the missed service because of that inability to be able to manage their work flow as well as they could otherwise.
MS. MORE: Interesting. I'm going to, because of the time, pass it over to my colleague for Halifax Chebucto.
MR. EPSTEIN: Mr. Windsor, user fees, it seems to me, are very regressive. That is to say, they have the potential and generally hit people harder if they haven't so much cash flow, that is to say they're unequal in their impact. Let me illustrate. If someone is extremely wealthy and has a heart attack and has to use an ambulance, they pay the same fee as someone who's poorer and has a heart attack and has to use the ambulance - same for driver's licenses, same for hunting licenses, registering your deed at the Registry of Deeds. If you buy a house for $50,000, it still costs you $50 to register your deed and that same $50 is paid by someone who is wealthy enough to be able to buy a $500,000 home. So what I'm wondering is whether you have done any analysis of how regressive the user fees are in Nova Scotia? That is, how unequal they are in their impact on people. Was that part of the discussion or the analysis that was done by your department at all?
MR. WINDSOR: We didn't do at Treasury and Policy Board a detailed analysis I think of the nature that you're suggesting, whether on a specific user fee or/and a group of user fees. I guess what I would say in response, however, is that the onus is on the individual departments to look at their fees and the implications of those fees for various groups of people and there is a discussion of that through the Treasury Board and Cabinet processes.
MR. EPSTEIN: Well, I think this is one of the central problems with user fees is that they're a regressive tax, they're not a revenue-producing device. They hit people unequally and it's not tied to ability to pay. Let me just tell you what seems to be the bottom line here.
As I'm looking at your introductory remarks, you suggest that the choice for when user fees are appropriate starts with a recognition of something you called a specialized service that's only used by a few people. But, if you think about those examples I gave you a moment ago, about ambulances and driving licenses and property registration and so on, there's clearly a significant subset of the user fees that aren't specialized only for a few people, they, in fact, apply to quite a large number of the population.
What this means is that you've offered us no rationale for when a user fee is appropriate and when it isn't that you could really point to and say, here's the dividing line. In fact, based on the examples used so far, there's no limit. The whole of government could be run through user fees instead of taxation because you haven't set out a rationale that sets a limit.
The way to say that is to say you can really charge for any item and because we heard as well that overhead is included, that capital is included, that a whole variety of costs can be included, there's no defined limit on what amount can be calculated as part of the user fee. So we're in a position where you could charge a user fee for anything, you could charge any amount because there's no limit that you've offered us and furthermore, they're going to hit the poorest hardest. That is, people regardless of their ability to pay. Now, that's really what emerges here. I know that when user fees are only 3 per cent of the revenue of the province and I know that when you look at some of the user fees you can say, they are specialized and so on. The trouble is that in the absence of a rationale that really nails down where you're going to limit user fees and how exactly you're going to calculate the amounts that go into them and if you're not doing a detailed impact analysis of how you can make them more progressive than they are, then it's entirely amorphous and entirely - I have to say to you - inappropriate. I wonder if you see it differently?
MR. WINDSOR: You've covered a number of points. Hopefully, I can address most of them. I think a lot of what you're talking about and what you're looking for, we will see with the working group that Treasury and Policy Board has underway in terms of ensuring that we have the appropriate frameworks in place for the assessment of user fees.
The rationale - to suggest that there is no rationale for the establishment of the fee I think the rationale - is cost recovery. I think we've made that reasonably clear. In fact, some of the fees that are currently in place are not full cost recovery and the ambulance fee, I think, is a very good example of that. The actual cost of providing the service is something in the magnitude of six times the total cost of providing that service.
I guess the other point that I would make is that I think you have to look at not only the fees, but I think you have to look at the total provincial budget in terms of what it does for all kinds of groups in our society. Whether it's through the individual provision of services and the collection of revenues from those particular fees or additional money that has gone into health care, et cetera, et cetera. I think you have to look at the total budget.
MR. EPSTEIN: I think we have quite a different view. Thank you.
MR. CHAIRMAN: Thank you. We'll move onto the Liberal caucus for the next round of 12. I recognize the member for Halifax Citadel.
MR. DANNY GRAHAM: I'd like to distribute to the members of the committee and our guests a few documents that I'll make some quick enquiries about with respect to freedom of information. While that's happening, I would just like to associate myself and, frankly, our Party, with the points that Mr. Epstein, the member for Halifax Chebucto was just making about the regressive nature of user fees. In fact, it was an issue in the last provincial election and there was one Party for precisely those reasons that made a commitment not to increase user fees at all in this fiscal year. Consistent with what the Canadian Centre for Policy Alternatives has been advocating as well.
[9:30 a.m.]
In any event, I would turn your attention to the Nova Scotia Freedom of Information and Protection of Privacy Review Office Annual Report for this past year, for the period January 1st 2003 to December 31st 2003 tabled in this Legislature on March 10th 2004. I'll draw your attention specifically to the first page after the introduction, this is from Darce Fardy, the Review Officer. He says, "The FOIPOP Act, described by the Supreme Court of Nova Scotia as an important part of the democratic process, is in poor health in Nova Scotia and this is unfortunate. It is, in my view, a direct result of the new fees for applications and appeals set in 2002." He goes on to point out, the decline, which I think is reflected in the separate chart that has been created and distributed to you.
The chart sets out - it's a separate piece of paper - it sets out the FOIPOP requests for the period 1994 - 2003. In that it shows a steady incline between 1994-2001. Then the fees were introduced, and you'll recall how notorious those fees were, for example, the $5 fee for a request was increased to $25. The reviews went from being free to $25, and, perhaps not
coincidentally, we see a steady decline in FOIPOP requests after the increased fees. This led of course to a dubious distinction being awarded to the Government of Nova Scotia.
I would just ask, especially in light of the comments that are contained on the first page of your report, whether or not you think that user fees can be used as a deterrent for people from actually using government services that should otherwise be available? That's a general question, and then, in the specific, could you comment on the FOIPOP situation, and what appears to be a decline in request for government information as a result of increased user fees?
MR. WINDSOR: If I can begin first with the user fee question. Not having had an opportunity to review his report and what he concludes from it, I guess what I would be interested in knowing is whether or not there are other factors that may also be at work here, over and above the fees that might be influencing those numbers. Whether or not the routine access policy that we've put in place over the last little while within the provincial government, or just better training of our FOIPOP officers in the individual departments and sort of managing some of these issues before they ever get to that particular stage.
That's just to name a couple, and there may be some other factors out there as well, and without having the opportunity to have reviewed his report, I really can't comment on the specifics here.
MR. GRAHAM: I'll pass the floor over to Mr. Wilson, the member for Glace Bay, but before I do, I would just comment that you've been the Deputy Minister of Finance, you are now the Deputy Minister responsible for the Treasury and Policy Board, and frankly with this having been as notorious an issue as it is around user fees, and to appear before this committee and not be able to provide us with even some theory as to why this happened, other than suggesting that it may be the result of some other reasons, is just unfortunate at least.
MR. CHAIRMAN: Were you looking for a comment . . .
MR. GRAHAM: Mr. Windsor appears to be interested in responding . . .
MR. WINDSOR: I would like to respond to that. I have offered in my explanation a couple of suggestions as to why that might be going on. There are a lot of issues that the Deputy Minister of Treasury Board and the Deputy Minister of Finance have to be involved in, FOIPOP fees is but one of them. I guess I will leave it at that.
MR. CHAIRMAN: With just a little under seven minutes left, the honourable member for Glace Bay.
MR. DAVID WILSON (Glace Bay): Mr. Chairman, I will make a couple quick observations and then we'll get right to work with my seven minutes that I have left. One observation is that in your opening statement, Mr. Windsor, you took great pains to point out a decline in federal revenue sources, that you had to turn to other sources of revenues like user fees or taxes. It's rather peculiar that you didn't mention a certain tax rebate, sir. I would throw out there that there's no mention of that whatsoever in this case, point number one.
Point number two, in reference to questions from my colleague, the member for Halifax Clayton Park, you said you can't tell us about increases from 1999 to 2004 in user fees and I would suggest that if you're sitting here with four members of your senior staff, you should be able to tell us about user fees from 1999 on and exactly how much they've totalled. If, in our estimation, you've got $100 million in user fees with 100 per cent increase in user fees since 1999, you should be able to account for that.
Let me also point to one reference you have made on Page 6 of your opening remarks, that there's one thing you might have done better, was to communicate the process, to make it clearer that all levies are not set by regulation. Well, communications may be one aspect that I want to concentrate on here in the short time that I have left and let me start by asking you exactly how many political staff are currently employed in your department?
MR. WINDSOR: I'm sorry.
MR. DAVID WILSON (Glace Bay): Political staff employed in your department?
MR. WINDSOR: We have a number of staff people within the Treasury and Policy Board who provide a variety of functions to the Treasury and Policy Board and to the Executive Council. Some of them also provide communications advice and political advice to the Executive Council and to the Treasury and Policy Board.
MR. DAVID WILSON (Glace Bay): I think you have 28 in total?
MR. WINDSOR: Yes, 28 staff in total.
MR. DAVID WILSON (Glace Bay): You have 28 staff, there are eight what I would call - and you can call them what you wish - full-time political staff attached to your office, is that correct?
MR. WINDSOR: Yes.
MR. DAVID WILSON (Glace Bay): With a combined cost to the taxpayers of just over $380,000 per year approximately. So can you explain why it's necessary to have so many political assistants in one office?
MR. WINDSOR: The Treasury and Policy Board provides support to the Executive Council, the Treasury and Policy Board, and the other various committees of the Executive Council - the legislation committee, the social committee and the economic committee. They provide a variety of supports to the Executive Council and those various other committees. Some of it is financial analysis. Some of it's policy analysis. Some of it is communications advice and some of it is, as well, political advice.
MR. DAVID WILSON (Glace Bay): So have there been any changes or additions to your political staff since last September let's say?
MR. WINDSOR: I took over in January, Mr. Wilson. So I would have to look at the numbers in September and I just simply don't have those numbers here with me.
MR. DAVID WILSON (Glace Bay): No one else knows? I will throw the question out.
MR. WINDSOR: We can get you that number.
MR. DAVID WILSON (Glace Bay): I would appreciate that. I would suggest it should be something though that should be at your fingertips. I understand the previous administrations hired one executive assistant per minister regardless of the number of departments or agencies that they were responsible for, but it appears that this government is assigning executive assistants to each department and agency. I would suggest that what has happened here is that once you go through your analysis process, whatever that process may be, you're turning things over for spin to the political assistants in this case and they're saying how do we put out that we have 508 user fees now that we're going to justify to the general public of Nova Scotia?
I would also be interested in knowing, Mr. Windsor, just how many political staff there are across government these days. Would you have access to that number?
MR. WINDSOR: Are you looking for the number of executive assistants, is that what you're asking?
MR. DAVID WILSON (Glace Bay): What we would term as political staff, what you would term as political staff, right across government?
MR. WINDSOR: I'm sorry, are you talking about executive assistants or is there another category that you're also referring to?
MR. DAVID WILSON (Glace Bay): Well, I would generally term it as political staff. If executive assistants in your opinion are political staff, then I would be looking for a number right across government of how many would be termed political staff. You didn't
correct me when I said there were eight political staff attached to your office, so I would be looking for that sort of individual across government these days and just how many there are. Would you be able to access that information?
MR. WINDSOR: I will see what I can get for you.
MR. DAVID WILSON (Glace Bay): I would appreciate it and I'm sure my colleagues on the committee would as well, if we could in somewhat of a timely manner. I don't mean to put pressure on the Treasury and Policy Board, but within a matter of maybe a week or two, if we could have that number supplied to this committee, I certainly would appreciate it.
Having said that, I have a short period of time left. So I would say, Mr. Chairman, that in this case, again, I find it very unusual that some of the information that we've been looking for here, and I understand, Mr. Windsor, how busy - this is the most powerful department in government, I don't have to tell you that - is Treasury and Policy Board. When you appear before the Public Accounts Committee, and I'm not here to lecture you, sir, but when we ask questions like how much of an increase there was in user fees last year, the year before that, or the year before that, I would expect, no matter how new you are to your department, that you or your officials would have those answers.
MR. WINDSOR: And if I could respond to that, what I did ask is if the member who used those numbers could make them available to me so that I could see what numbers she was using because they are not ringing a bell with us over here at all.
MR. DAVID WILSON (Glace Bay): I would suggest just in closing that if you take exception with them, then give us the numbers that you think are right and we will make the distinction from thereon. Thank you very much for your time.
MR. CHAIRMAN: We will move on to the Progressive Conservative caucus.
The honourable member for Pictou East.
MR. JAMES DEWOLFE: Good morning. Just very quickly before I pass my time, I would like to talk about the jurisdictional comparisons of ground ambulance service fees in the country. My colleague, the member for Halifax Chebucto, touched on the ambulance service as it relates to user fees. I just wanted to mention that in Manitoba the cost of an ambulance fee varies from $190 plus $2.50 a kilometre in rural Manitoba, to a base fee in Winnipeg of $260 plus the mileage fee of $2.50 per kilometre. In Saskatchewan the base fee is $275 plus $1.45 to $2 per kilometre for mileage. Then we look to Nova Scotia and the rate is $120, tied with New Brunswick at $120, and no mileage charge. P.E.I., in fact, is more at $130; again, they do have some additional charges. So it looks very much like the ambulance
service in Nova Scotia is among the best and has the lowest fees in the country and certainly in the Maritimes.
Also I would like to say that 90 per cent of the patients either pay nothing in Nova Scotia, pay nothing for their ambulance fee or they pay $120, which is about 20 per cent of the cost to the health care system. In fact, government subsidizes the ambulance fees to the tune of 91.5 per cent in Nova Scotia. So just really a quick comment on that, I think we're getting good value for the user fee in this province as compared to other areas and other jurisdictions, Mr. Windsor.
MR. WINDSOR: Well, I think, you know, the numbers that you quote are accurate coming out of the Department of Health. Obviously, the department feels that those are reasonable fees that should be set in terms of the clientele that they are serving. It's obviously a very costly operation to run, they are significantly subsidized, and if those fees weren't available from ambulance users then we would have to generate the revenues from some other source. I also suspect that there might be, as well, a rather significant impact on demand that would have to be managed.
[9:45 a.m.]
MR. DEWOLFE: Thank you. I would like to give my time now to the honourable member for Chester-St. Margaret's.
MR. CHAIRMAN: The honourable member for Chester-St. Margaret's.
MR. JOHN CHATAWAY: Mr. Chairman, certainly it's a great honour to sit on this committee because inevitably every week we investigate some part of Nova Scotia that is very important. We're talking about user fees, and user fees are very important to a specific group of people, not all Nova Scotians, but it's very important that that service be given and we're investigating on how to improve. I certainly would like to - I mean basically we have over 700 user fees. They are there because they give Nova Scotians services and it's very important. I know my past has been equated with seasonal work and my goodness, sometimes you have to take half a year to get all the permits in place and all that to do something. Certainly, it's very important that we give good user service, and we indeed have.
Basically, the fees have to be enough to make sure the service given is in adequate time, because inevitably - well, you hear various stories, oh well, we had to wait at least six weeks before we got an answer to that, can't do that either, and we certainly have to give service. Certainly the service is so important that it be run well and things like that, we have to do it on time, as well as the best time we can, good services at the time they're needed.
Of course, I think we're very proud in Nova Scotia that they're adjusting fees and things like this. We have not had to roll back many employees. Newfoundland and B.C. have had to quite severely restrict some people giving government services. Mercifully we have not had that trail to follow and I think it's very much with your doing a good job.
I very much appreciate getting Mr. Windsor's comments . I just go back to where you said that fees and taxes are a legitimate means for governments to generate revenue, given that other revenue sources decreased - and we went into equalization, they certainly did decrease, about $200 million starting - and that it was normal for government to consider increasing user fees and taxes this year rather than just reducing services. That's right, made a very good decision. To do services they just have to get an adequate pay.
Of course you've also mentioned we have good policies and procedures in place for setting fees that help cover the cost of a program without placing an unfair burden on individuals or sectors. You mentioned too that you are improving in that regard, but that's fine, that's a very good goal to have.
I know my time is running out. If you could possibly review - of course, this committee very much talks at various times about accountability. What accountability measures are in place for user fees?
MR. CHAIRMAN: Mr. Windsor.
MR. WINDSOR: The accountability measures are the ones that I've already referred to in terms of the processes that we go through in terms of the individual departments, as well as the review of these measures through our legal staff, and then on into the Treasury and Policy Board.
One of the points I think I've tried to emphasize here today, as well, is that while I think we've made good progress, I think we also know at the Treasury and Policy Board and the Department of Finance that more can be done in terms of our user fees and the way in which we manage our user fees. That's why the working group that I referred to is so important. I'm looking forward to having the first phase of that report out in the next few months and I think it will add a great deal to the discussion around user fees - how others are doing it elsewhere in Canada and elsewhere in North America and throughout the world, the OECD countries. And, it'll point some directions for us as well in terms of the future.
MR. CHATAWAY: I very much appreciate that. I think everybody would certainly endorse that project you have. What processes do you have to ensure fees get proper scrutiny? I guess maybe that's the same answer.
MR. WINDSOR: I think it's the same. It's the same process that I just referred to previously.
MR. CHATAWAY: Okay. I know time is running short. I understand that the poor and working people are still safeguarded by this budget in that they are keeping their tax reduction - 95 per cent of all Nova Scotians paid less personal income tax provincially than they did the year before. Although some members of the Legislature suggest that the tax reduction should be removed from low-income Nova Scotians, we believe that low-income Nova Scotians should remain off the tax rolls and should pay minimal or no taxes. Do some fees make exceptions for low-income Nova Scotians?
MR. WINDSOR: As I said on previous questioning, departments are asked to examine in their review of their various user fees, impacts on various groups and individuals. There is as well an analysis of that at the Treasury and Policy Board and at the Cabinet level as the fees are moving through.
MR. CHATAWAY: Okay, so that is being investigated and there will be an answer sooner rather than later in that regard?
MR. WINDSOR: That will be one of the things that we will be addressing in our report.
MR. CHATAWAY: This has been a very interesting year, 2003, especially in Nova Scotia. What extraordinary pressures has strained the province's finances during the past year? I can think of Hurricane Juan, white Juan, floods.
MR. WINDSOR: Obviously, you've mentioned a good many of them as well as the impact on the province's transfer payments from the federal government. At the same time, as I mentioned in my previous remarks, Nova Scotia, like every other jurisdiction, is also under considerable pressure as a result of its rising health care costs. That will continue to challenge this government and every government across the country.
MR. CHATAWAY: I certainly appreciate that the government looked at expenses and revenues and this is not a necessarily a revenue cost but the service is so important it has to be maintained and I think it's very adequate what you've done. Thank you.
MR. CHAIRMAN: Thank you. That brings to an end the question and answer part of the proceedings this morning. In the course of the proceeding, Mr. Traves, you referred to a tax bulletin which I would like to ask you to leave a copy of with the clerk before you leave today for distribution to the members. In the course of questioning by the member for Glace Bay, Mr. Windsor you undertook to obtain certain information and I'm sure you're aware the convention of the committee is that even though the information is requested by an individual member, it is provided to the clerk for distribution to all the members.
At this point, I would like to invite you, Mr. Windsor, to make a closing statement of up to five minutes if you wish.
MR. WINDSOR: I won't take five minutes. At the outset, I want to say that I personally and the members who are here with me today take coming to this committee very seriously. We spend weeks getting ready to come to these sessions in order to ensure that the information we put in front of you is as clear and as precise as we can make it. I must say that I believe that the Public Accounts Committee is working hard to ensure that it plays a useful role in terms of government accountability and I should applaud you for that. At the same time, as I said, we as department officials take coming here very seriously and we work very hard to get ready for these sessions.
The Legislature provides the authority for government to set levies including fees and taxes. Government has complied with this legislative authority in all cases this year. Fees and taxes are a legitimate means for governments to generate revenue. Given that other revenue sources decreased, it was normal for government to consider increasing user fees and taxes this year rather than reducing services. I believe we have good policies and procedures in place now for setting fees that help cover the costs of a program without placing an unfair burden on individuals or sectors.
In closing, thank you very much for this time today.
MR. CHAIRMAN: Thank you Mr. Windsor. There is one item of business that I wanted to raise with the committee. Let me say first that our meeting next week is with the Nova Scotia Gaming Corporation on the subject of video lottery terminals. We will be joined next week by Ms. Marie Mullally, the President and Chief Executive Officer and other representatives of the Gaming Corporation on that topic. Two weeks from today, the topic is federal-provincial agreements and the clerk has asked me to consult with the committee. The clerk has made the point that there are over 100 federal-provincial agreements and in order to prepare the briefing book for the committee members, she needs some guidance about what exactly it is that the committee members wish to focus on. Clearly, she can't be expected to gather information on over 100 separate agreements.
I had indicated to the clerk that I felt that the principle focus of the committee was likely to be on equalization - which is itself a very complicated topic, including such things as, for example, offshore revenue, and the Canada Health and Social Transfer which are the two major transfers of the government as well as - I think it's two - special health-related contributions that have been negotiated over the past year or two. Those I felt would likely be the principal focus of the committee. If a committee member has a different focus and wishes the clerk of committees to gather information on one or more other aspects of federal-provincial agreements, I would simply ask you to relay that to the clerk before you leave today so that she can prepare.
MR. HINES: Mr. Chairman, what is the second item you have on the list that you suggested?
MR. CHAIRMAN: What I had suggested was the focus would be on equalization and the Canada Health and Social Transfer. Does anybody have any questions or comments on that point before we move on? I just ask you - we don't need to take up the time of the committee now to actually tell the clerk any additional information we have, but do let her know as soon as possible.
Do members of the committee have any other items requiring the attention of the full committee before we adjourn today? If not, a motion to adjourn?
MR. HINES: So moved.
MR. CHAIRMAN: Would all those in favour of the motion please say Aye. Contrary minded, Nay.
This meeting of the Public Accounts Committee is adjourned.
[The committee adjourned at 9:59 a.m.]
