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March 27, 2009

Province's Receiving Federal Transfer Payments

Politics, →Federal Government Incompetence, →Provincial Government Incompetence

I recently watched a Public Accounts Committee meeting at the Federal Government Level on March 03, 2009 (don't worry, I'll return to provincial government soon) where they reviewed the Audit Report of the Federal Auditor General, Sheila Frazer for 2008.

Chapter 1 of that report is titled "A Study of Federal Transfers to Provinces and Territories" and it examined "the three main mechanisms used by the federal government to transfer funds to the provinces and territories"

According to the report, it also "looked at the nature and extent of conditions attached to these transfers". The purpose was to "inform parliamentarians about the federal government's transfers to the provinces and territories" but not to include recommendations as it was only a descriptive study as opposed to an audit.

I learned from that report and the committee meeting that Billions of Dollars are distributed to the provincial governments to assist them in providing services to their local jurisdictions, but that there are no conditions placed on those multi-billion dollar transfers.

So there is no accountability for the expenditure of those funds at the Federal Level, and to make things worse, as a citizen who wanted to know how much of those federal transfer payments went to a particular Ministry, it is virtually impossible to find out.

The reason being that the money is transfered into the province's CRF, which is a "Consolidated Revenue Fund" and once it goes into that fund, other funds are also deposited into that CRF from provincial sources such as licensing fees etc. and the provincial programs are funded from that fund, therefore breaking the trail of accountability back to the federal government in regard to how that money is being spent.

The federal government makes deals with the provinces regarding their transfer payments, and since both the federal and provincial governments are deemed "mature" governments, the Federal government does not ask for any conditions to be placed on the funds, leaving it up to the provincial auditors and legislature to hold the various ministries to account at the provincial level for the spending of tax-payers money.

I noticed a few federal members appeared not to be impressed that there are no lines of accountability at the federal level for the expenditure of those funds since they make up approximately 23% of the federal budget!

I think if people have issues with provincial and territorial waste and lack of accountability in regard to the use of tax-payers money, they should not only contact their local member of provincial parliament (MLA/MPP) but they should also contact the public accounts committee at the federal government and let them know that you support the federal government putting conditions on the use of transfer payment funds and why!

Maybe enough phone calls will inspire them to change the way they deal with the provinces in regard to the transfer payments.


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