Improving Budget Accountability and Transparency: Setting Limits on Budget Omnibus Bills

Everyone is waiting for the Government to table its second 2012 Budget Omnibus Bill.  The first bill, Bill C-38, “An Act to Implement Certain Provisions of the Budget Tabled in Parliament on March 29, 2012 and Other Measures” contained 425 pages. The first Omnibus bill engendered considerable discussion and hostility because, by including major policy changes in the Bill, it precluded substantive policy reviews by appropriate Parliamentary Committees, and indeed limited review by Parliament itself. The government in effect had circumvented the authority of Parliament. The second budget Omnibus Bill will likely do the same.

What is an Omnibus Bill?

Omnibus Bills are not new.  The first Omnibus Bill may have been introduced as early as 1888 .  However, it has only been in the last twenty years that the use of Omnibus Bills, most notably Budget Omnibus Bills, has become the norm. The practice increased significantly after 1993, with the election of the Liberal government and has continued to grow with the Conservative government.
An Omnibus Bill brings together in a single bill, “all legislative amendments resulting from a policy decision to facilitate parliamentary debate” .  Instead of introducing separate bills, all related amendments resulting from a proposed policy initiative are incorporated into a single bill for parliamentary debate and approval.  In recent history, most omnibus bills have been related to policy initiatives proposed in a budget and, therefore, have become known as Budget Omnibus Bills.  A Budget Omnibus Bill is, therefore, a “money bill”, and is subject to a vote of confidence.  Defeat of the bill implies a loss of confidence in and defeat of the government.

Why Budget Omnibus Bills?

A Budget Omnibus Bill allows the Government to include legislative amendments for a wide variety of activities in one Bill rather than having to introduce separate pieces of legislation. There are a number of reasons for doing this. First, it allows for all amendments related to a proposed policy initiative to be debated at once rather than introducing separate bills.  This saves legislative and administrative time. Second, it also allows the Government to include contentious policy initiatives, which have a better chance of being passed in Budget Bill than through separate legislation.  This is especially important in the case of a minority government.  The Opposition may support the Omnibus Bill, as they may not be ready to defeat the Government.


Linkage to the Budget

For a proposed policy initiative to be included in a Budget Omnibus Bill, there must be some reference to it in the Budget.  Without such a reference, it cannot be included in the Budget Omnibus Bill. The Budget must include some reference/language indicating that the Government is proposing a change to an existing piece of legislation or proposing a new initiative. Preferably, the language in the Budget should be quite explicit  in describing the proposed policy change(s).

This, however, has not been the case.. References in the Budget have become increasingly obtuse, and vague. Little information is provided, so it is very difficult in reading the budget documents to fully contemplate what the Government is actually proposing to do.  The details are not provided in the Budget, but only in the Budget Omnibus Bill, or in some cases in regulations following the passage of the Budget Omnibus Bill.

Budget Omnibus Bills are now more important than the Budget itself.  In an earlier blog  we warned that the “real” 2012 budget would be in the Budget Omnibus Bill and that it would have to be studied very carefully to ensure that everyone understood what the Government really wanted to do. 

One of the best examples of obtuse language occurred in the 2007 Budget. In that Budget, the Government decided to undertake borrowings for three of its Crown corporations. In Annex 3 of the Budget Plan in the section on the Debt Management Strategy for 2007-08, the Government proposed to amend the Financial Administration Act (FAA) to provide greater transparency and accountability regarding the Government’s borrowing activities and increase flexibility to meet future borrowing needs, particularly with respect to the consolidation of Crown borrowings. What did this really mean?

In the Budget Omnibus Bill, the Government interpreted this “reference” as allowing it to actually eliminate the FAA requirement to table a Borrowing Authority Bill whenever it needed to borrow “new” funds in the market. Under the Borrowing Authority Act, Parliamentary approval was required in order for the government to borrow new funds.  This aspect of legislative scrutiny and control over government finances was therefore removed. No reference to elimination of the Borrowing Authority Act was made in the 2007 Budget.  This change was completely missed by the House of Commons Standing Committee on Finance examining the Bill and in the House of Commons in its debate on the Bill. Senator Murray raised the issue during the Senate Finance Committee’s clause by clause review of the Bill.  By then, it was too late. In the interest of “transparency and accountability” the FAA was changed to allow the government to borrow whatever it wants, whenever it wants, however it wants, without the approval of Parliament.

Budget 2012 has taken Budget Omnibus Bills to new levels of obtuseness. In the 2012 Budget, Annex 3 provided some cursory information about the proposed cuts to the various departments.  Under the Human Resources and Skills Development Portfolio, it is noted that the Minister would introduce legislative amendments to eliminate administrative duplication in appeals and tribunals services. Although not explicitly stated, this meant the elimination of the Employment Insurance and Canada Pension Plan Tribunals. Nowhere was this explicitly mentioned in the Budget. And of course, there was little detail on the proposed changes to environmental regulations, among others.

The above examples clearly demonstrate how the use of Budget Omnibus Bills has grown to the point that they seriously undermine the credibility of the Budget process and the authority of Parliament. There is a clear lack of transparency and accountability in the Budget process. There is need to restore the role of Parliament and its committees in assessing and reviewing proposed legislation. Without sufficient information and a clear intention of the proposed initiatives, Parliament and its committees cannot properly assess the Budget. Parliamentary debate is stifled; public opinion is ignored; and, the implementation of good public policy prevented.

Restoring Accountability and Transparency

There are a number of changes that could be considered in improving the transparency and accountability with respect to Budget Omnibus Bills.

First, the Budget Plan needs to be much more explicit on the proposed policy initiatives. The Budget should provide sufficient details and background information on the proposed initiatives for Parliamentary assessment and for a better understanding by the public at large and other interested parties. The Auditor General should be asked to review the adequacy of the information to be provided.

Second, Budget Omnibus Bills should include only proposed tax/revenue changes and issues related to borrowings. The House of Commons Standing Committee on Finance and the Senate Finance Committee should consider these.

Third, all proposed spending initiatives should be presented either through the Main Estimates or through separate legislation and submitted to the applicable Parliamentary Committees for review.

Fourth, the Main Estimates process should be more closely aligned to the Budget – the Budget should be the anchor for the Main Estimates and tabled before the Estimates. This would require setting a budget date for no later than the end of February. This would provide the proper context for the Appropriation Bill, containing the proposed spending initiatives, contained in the Budget.

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