Financial Management Essentials Series: Understanding the Expenditure Management Cycle (COR2-V06)

Transcript: Understanding the Expenditure Management Cycle

[00:00:00 The CSPS logo appears onscreen.]

[00:00:06 The screen fades to Jocelyne Charron in a video chat panel.]

Jocelyne Charron (Executive Director, Treasury Board of Canada Secretariat): Hello everyone and welcome to our first learning session to try to enhance your basic financial management knowledge.

So pleased to be here with you today. We're kicking off this foundation series designed to support public service. So, you might be from the financial management community, you might be from an audit community, business owner end of the department, a manager that is keen to learn about finance. And we are looking to develop key knowledge and skills related to financial management across the Government of Canada. So, the series is intended for everyone like I just mentioned, whether you're starting your career, maybe you're already an expert in your field. So, we're looking to refresh some core understanding. The context is designed to be practical. You're going to basically learn from one of the best in this trade, and I'll introduce her to you in a moment. We're meant to be accessible and really something that you can apply in your day-to-day work as well. So, our first series, we're very excited to partner with the Canada School of Public Service to basically develop these foundational series. And our first one is about understanding our expenditure management cycle, which is a cornerstone in bringing any money into the federal government.

So, we touch on planning, allocating, reporting on the public funds here all the way from the first time that you need money all the way to where we report it into the transparency for Canadians. So, the topic is very important as it touches every part of the planning cycle from budgeting. So, if you worked in the Treasury Board submission, if you've done memo to cabinet, if you worked on estimates all the way through reporting, in that true accountability and transparency, which is an important mechanism of our Parliament and how we tell the story to Canadians about how we spend the money to deliver some of the amazing services and programs that you are also invested in delivering. So, why does it matter? Because understanding the expenditure management cycle equips us to basically provide stronger advice, evidence, decision-making, and ultimately helps us being responsible stewards, which is really important as part of our role. And so, you might wonder who I am.

My name is Jocelyne Charron and I am the Executive Director of the Comptrollership Community Development and Oversight Function. So, I sit within the OCG and we've kind of partnered up with a couple of our learning experts across the public service to bring you these series essentials through the Canada School, which is really exciting for us today. So, we're going to be using the Wooclap. I'll explain to you in a moment what that is. We're going to have a Q&A segment as well. So, you have the opportunity through the session to basically ask some questions. And then, Karine, which I'll introduce to you in a second. Will, basically, hopefully be able to answer all of your questions. And there is some reference material that is available in both official languages. So, today our session is bilingual. So,

You can communicate with us in the language of your choice, and we will be happy to do so. We will also switch between French and English during the session. You'll see slides in French and slides in English. And we're also fortunate to have simultaneous translation to support you and guide the dialogue.

So, and in terms of the Wooclap, you can use the QR code. I think they're going to put it up on the screen. You can get your phones ready and the people are going to be basically using your QR code. You can take a picture and bring directly to your phone. And then, as well, the session, if you're not able to get the picture directly, you could go to wooclap.com. www.wooclap.com and our session code for today is JGKHMF.

JGKHMF is also on the screen. So you'll be able to type that into your phone and participate with us too. We can't wait to hear your questions and hope that this will be an enriching session for you and your learning.

So, I have Karine with us. I'll introduce you to her in a second. But as part of this, we also… some of you may have heard. We revisited the Competency Compass for our financial management community. And part of that here and you have it on the screen is we're looking through the session to bolster your knowledge on situational awareness, strategic thinking and really emphasizing financial literacy. I just explained to you the financial… the expenditure management cycle is a cornerstone, is how we bring any money and then all the way into how we report money to Canadians. So, it transpires in many, many of the different business processes we manage in finance. If you're a financial officer, it is so critical that you understand the foundations of it that you can imbed that in a strategic advice that you're going to give to, for example, if you're an FMA. So, to your program managers, maybe to your CFO, as your DCFO, engagement through central agencies, if you're involved in Treasure Board Submissions.

[00:06:05 A slide appears with the following headings:

• Financial Management Competency Compass
• Thinking things through
• Interpreting, linking, and analyzing information to understand issues and provide relevant insight.
• Situational Awareness
• Strategic Thinking
• Innovative Mindset

Working Effectively With Others

• Working collaboratively with others to effectively achieve common goals.
• Stakeholder-centric
• Communication
• Collaboration and Mobilization

Showing Initiative & Being Action-Oriented

• Focusing personal efforts on achieving results and making a difference.
• Digital Acumen
• Change Leadership
• Operational Agility

Functional Competencies

• Strengthening the foundation of comptrollership abilities.
• Financial Literacy
• Oversight and Risk Management
• Compliance

Demonstrating integrity and respect

• Developing and maintaining openness and transparency in establishing networks while demonstrating a high degree of integrity.]

So, it's a really… and will kind of always be there in behind because we need really important structures to guide basically how we manage the public funds. So, that's what you'll learn today, oversight and risk management, because sometimes and you hear from Karine, you know, you can have the best processes in the world, but when things like prorogation of government occurs, it can interject, you know, kind of like twists and turns. And that's where you kind of need to understand the basics, because sometimes the basics become very complicated when we choose to prorogue government, when we go into GG warrants, for example, and this is where you're going to really have to come back and really understand those basics and then, the intricacy of some of the processes. And Karine will help us understand that better today.

So, before introducing you, Karine, I just wanted to do a quick land acknowledgement and I know that… I don't know how many of us are online. We had over, I think at one point 3,000 registrants. So, this is a huge session which I'm very, very proud of. In my role, my ultimate goal is to make sure that our community is thriving, that you're loving your job, that you understand the importance of your job. And so, this is really exciting when we're thinking that potentially, we could have one of out of every two CT-FIN people across Canada joining us today. But you might be joining us from whatever ancestral homeland across Canada. So, I just wanted us to take a moment to basically acknowledge the land in which we are gathering virtually across Canada. So, I am sitting in the Anishinaabe unceded territory.

I'm joining you in the National Capital Region, so from the Ottawa region, and I am also very grateful for the land that was bequeathed to us. And I want to take a moment to pay my respects and also recognize the importance of reconciliation at the heart of our programs. And just how well we can work together.

So, Karine, you've kind of joined with me.

You're listening to me. You've been listening to me for a while. I want to take a moment to introduce you.

[00:08:31 Karine Paré appears in a separate video chat panel.]

So, Karine Paré is… she's actually a previous colleague of mine. So, doing this with her, it's actually quite a charm for me. It's a pleasure to do this with her. Karine and I were both Deputy Chief Financial Officers in the Innovation, Science and Economic Development portfolio, prior to joining… not planned at all, these two roles in central agencies. So, I sit in the OCG. She sits in the expenditure management sector and we end up here in Treasury Board. And then, we are doing this session together. Yes. So, she is the Executive Director of Expenditure Strategies and Estimate divisions in the Treasury Board. And so, when you're looking at the person, when you're asking for money, the person that will authorize your estimates, that will kind of help you do your main estimates, and your supplementaries, that all goes through her team. You know, when you have a problem with rounding in your department, they probably round, I'm going to say like a billion dollars because they look at the entire public purse.

So, very interesting position in government. So, Karine will walk us through key components of the cycle and share valuable insights from her experience, leading this work. So, Karine sat in departments and now with this new experience as well. So, it's really important. I'm sure you'll get to learn tons from her as well. And then, I mentioned Q&A at the end. So, please be ready for those. Before we begin, I'd like to remind you this session is bilingual, as I mentioned. So, please be ready and we're willing to pivot in the language of your choice in the simultaneous translation, hopefully as well. Hopefully, I'm not talking too quickly for them. The last thing I'll mention is about the resource section. So, on the event page, you have resource section and there you can get the presentation in either official language. You can follow on your own screen and we'll have it here as well. So, I think we're ready to begin.

Karine, are you ready too?

Karine Paré (Executive director of Expenditure Strategies and Estimate divisions in the Treasury Board): Yes.

Jocelyne Charron: Yes.

Karine Paré: Absolutely.

Jocelyne Charron: Thank you for being here with us.

Karine Paré: Thank you, Jocelyne. Thank you for the introduction. It's really a pleasure to be here today and to share a bit of my knowledge as best I can with you. So, the goal of today's presentation is really to give you a general overview of the decision-making processes linked to the expenditure management cycle.

[00:11:06 A slide is shown with the title: Understanding the Expenditure Management Cycle. June 2, 2025.]

I'll also go into more detail about the federal budget. The process, how it works, what your role is in supporting that process. And then, we're also going to talk a little bit about the… What's the difference between a Memorandum to Cabinet and a submission to the Treasury Board. And, as much as possible, I'll try to give you concrete examples. Jocelyne talked about this a little in the introduction, but this year was really a different year in terms of the expenditure management cycle. So, I'll definitely explain the theory to you, of the normal expenditure management cycle, but this year was not a normal year.

So, I'm going to try to explain to you a little bit about what happened, what we had to adapt and then give you some concrete examples of that. Also my role, in my past roles in the departments, how I participated in these processes. So that's the goal of today's session. I hope you'll enjoy it and learn from it.

[00:12:05 A slide is shown with the title: Learning Objectives

Understand the government spending decision-making process and the key stakeholders.

Differentiate between a Memorandum to Cabinet and a submission to the Treasury Board.

Explore the expenditure management cycle and reporting requirements.]

Then, we'll have segments reserved for your questions. OK. So, let's move on. We want to know a bit about who we're talking to, get to know our audience a little. We have Wooclap for you. Before moving on to the next… with the next slide, so Jocelyne mentioned that you have Wooclap. I think the first question is… We want to know essentially what your role is in your organizations to get to know the audience a bit, as I was saying, to see who we are dealing with.

So, what role are you currently occupying? And so that we can understand a bit...

[00:12:50 The title "What is your current role?" appears above a Word Cloud of various job titles which changes as more participants submit their response to the question.]

Project leader…

Jocelyne Charron: FMA. FMAs often these often have to do so many of the various processes, right?

Karine Paré: Yeah.

Jocelyne Charron: So, you're the liaison between the client and the corporate people. So, sometimes it's hard to master all of the finesse of each process, but definitely a key enabler.

Karine Paré: It's really moving.

Jocelyne Charron: Yes, it is. We have a lot of people here. It looks like a lot of FMAs, who are essentially a key part of the audience. So…

Karine Paré: OK.

Jocelyne Charron: I think we have a really diverse group.

Karine Paré: I saw a whole range.

Jocelyne Charron: That's right.

Karine Paré: I saw (inaudible). I saw a lot of things. The fact is… We have a diverse group of people. OK, great, perfect. That's great.

[00:13:42 A slide is shown with the title: Public Spending: Decision-making Process

Ministers

Existing programs

Financial pressures

Cabinet

Budget

Treasury Board

Parliament

Committees

House of Commons

• Government operations and expenditure budgets
• Public accounts

Senate

• National finances

Agents

• Auditor General
• Parliamentary Budget Officer

Government spending decisions encompass both all existing programs and new funding initiatives.

Decisions made by ministers in Cabinet and the Treasury Board are recorded in documents that are studied by Parliament, with the support of the Auditor General and the Parliamentary Budget Officer.]

And now, a little in the same… in the same vein, we want to get a bit of an idea of how familiar you are with the expenditure management cycle. So, basically, what do you know? What comes to mind?

[00:14:01 A survey appears with the options, and the final tally for each listed.

"How familiar are you with the Expenditure Management Cycle?"

1 Not at all (14% 90)

2 Slightly (39% 251)

3 Moderately (36% 237)

4 Very (11% 72)

5 Expert (0% 2)]

Jocelyne Charron: Yeah. People are going to vote, not at all…

Karine Paré: Not at all.

Jocelyne Charron: Moderately, very… We want you to be experts by the time the session is over. That's our goal.

Karine Paré: If we have experts, we're going to get some tough questions. That's okay too.

Jocelyne Charron: Oh no. We don't want that.

Karine Paré: OK. OK, well, it's… we still have a range of… you know, it goes from… from not at all to very. OK, I see that. We don't have any experts. OK. Good, perfect. That's great. So, that gives us a good idea of the audience. So, I'm going to try to adapt, to put it in language… into perhaps simpler language to make sure that everyone understands. OK. And then, I think we just had one… We also wanted to know what…

[00:15:02 The title "When you hear Expenditure Management, what is the first word that comes to mind?" appears above a Word Cloud of responses.]

what comes to mind when you hear 'expenditure management cycle'? Announcement. Yes.

Jocelyne Charron: Budget. That's right.

Karine Paré: Budget. Yes.

Jocelyne Charron: Good idea.

Karine Paré: Responsible forecasting.

Jocelyne Charron: But it's not just the budget?

Karine Paré: No.

Jocelyne Charron: Maybe Karine will explain that to us. It's just in the end, related also to reporting on money.

Karine Paré: Yes. That's right.

Jocelyne Charron: There's more to it. Yes.

Karine Paré: I see value for money, accountability, tracking… OK, that's pretty good. OK, I think the last question is we want to know

Which part of the expenditure management cycle have you worked in?

[00:15:59 A survey appears with the options, and the final tally for each listed.

"Which parts of the Expenditure Management Cycle have you worked in? (Select all that apply.)":

1 Federal Budget (19% 109)

2 Memorandum to Cabinet (2% 12)

3 Treasury Board Submission (20% 115237)

4 Estimates and supply (20% 113)

5 None (39% 222)]

essentially, what sectors or activities you have participated in over the course of your career the most maybe? OK. That's good, let's see. Estimates… Treasury Board… Memorandum to Cabinet, a little less. Federal budget. OK, great.

Jocelyne Charron: What about you, Karine? Did you participate in all these stages?

Karine Paré: Pretty much.

Jocelyne Charron: Pretty much.

Karine Paré: Yes, I would say so. Yes.

Jocelyne Charron: We will be adding government experts to the cycle. There you go.

Karine Paré: Yeah. OK. OK, well, I think that gives us a good overview of the audience, your knowledge. So I think we can perhaps get into the heart of the matter with…

First, I'm going to talk to you basically about the decision-making cycle, the decision-making process within the government that is linked to expenditure management. So, basically, I'm going to start by explaining to you a little bit about the role of departments and ministers. In the case of budgets, for your departments, you have, basically, two types, I would say, of budgetary authorities. You have your budgetary authorities that you have had for several years for your existing programs, meaning to deliver your mandate. Then, there is also sometimes a component for new initiatives or new mandates that are assigned. For example, we just had a new government elected. All ministers received a mandate letter with their objectives. So, the ministers are responsible for ensuring that they work with the budgetary authorities assigned to them, to deliver the programs within their mandate, and they have to ensure that they remain within the budgetary authorities that they… that have been assigned to them.

So, usually, most organizations receive an annual budget between March 1 and March 31. There are some exceptions. There are two organizations that have two-year budgetary authorities, but for most departments, it's from April 1 to March 31. And the departments, the ministers are responsible for approving all the supplementary budget requests, whether it's done as part of the budget process or whether it's done as part of a request that we refer to as 'off-cycle' as I would call it. This is commonly referred to as an 'off-cycle request'. Each time, your minister has to prepare a letter and write to the Department of Finance to request additional funding. That's really when we do the budget processes. And when we have an off-cycle request… often, it's for situations that I would say are maybe more exceptional. For example, at the moment, we have fires in the Prairies. Perhaps some departments that have been asked to provide emergency aid would be a good example where a minister has to make an urgent request for funding in order to respond to a humanitarian crisis or something of that nature. So, it could always happen that there is an urgent request, but in the meantime, normally, requests for supplementary budgets are made through the federal budget. Now, the Cabinet, the role of the Cabinet, is really, for that, you'll hear me say this often, but it's easier to remember that way, at least for me. The Cabinet focuses on the 'what'.

The Cabinet is responsible for approving policy directions and priorities. Then, Cabinet committees carry out most of the day-to-day tasks of the Cabinet. They have their own members and areas of responsibility, which are determined by the Prime Minister. So, I don't know if you've had a chance to look, but the Prime Minister created these Cabinet committees, and they are available on the House of Commons website. And I can even name them for you. We have Priorities, Planning and Strategy; Operations and Parliamentary Affairs; Treasury Board. Something to note about the Treasury Board: it is a standing Cabinet committee, which is established by law. So, that committee is always there, the Treasury Board, and is not necessarily, I would say, according to the nature of the government's priorities. Because you're going to see that the committees that have been created represent a lot of the priorities that the government has recently announced. So, after the Treasury Board, there's the National Security Council, Build Canada, Government Transformation/Government Efficiency, Secure and Sovereign Canada, Quality of Life and Well-Being and the Incident Response Group. So, those are the Cabinet committees. And when we need to seek authorities, approvals for programs, new programs, policy authorities, we have to go to the Cabinet committee, and we will go in principle to the committee that represents the nature of our mandate or our initiative.

So, for example, if you work at National Defence or the CBSA, you will likely go to the National Security Council for your policy or program authorization requests. As for the budget, it's another decision-making pillar, I would say, in the decision-making process, because the budget is one of the main means of communicating the government's political agenda, as well as changes in fiscal policies for the future and the present, and essentially looking ahead to the coming year. It also announces funding for new measures. So that will really be the document that we will use, that we will reference to seek additional authorities within the budget cycle, the expenditure management cycle. Then, there's the Treasury Board. So, I was saying earlier that the Cabinet's role is the 'what'. The role of the Treasury Board is the 'how'. It's really… It's your implementation plan. So, before, we received… if we're dealing with the federal budget, we have to go explain to the Treasury Board how we're going to implement that initiative. And at that point, we're going to be able to seek different authorities at the Treasury Board level. So, I think that's pretty much what I wanted to cover on this slide.

[00:22:47 A slide is shown with the title: Approval of Expenditures by Parliament

The Financial Administration Act stipulates that the government must obtain Parliament's authority to make payments.

Authority is given under a law:

Appropriation act:

• The appropriation act grants authorization for one fiscal year (two years in the case of two organizations).
• Sets a maximum amount but does not require spending.
• This authorization is called "voted authority."

Other laws:

• Other laws pertain to a particular type of payment and set out the amount, purpose and disbursement period of the payments.
• May require spending, such as payments to individuals.
• This authorization is called "legislative authority."]

Next, I think that now, we'll move on to the types of expenditure that are approved by Parliament. So, there are two different types of spending authority that are approved by Parliament; I'll simplify it like that. There's the appropriation act.

So, that's really… That's where you're going to look for your authorities at the Treasury Board, which are included, which are included in the estimates, or the supplies that are submitted to Parliament for approval. So, we call that the appropriation act. I'll talk about that in detail on my next slide, but that's the appropriation act. So, this is money that is voted through the appropriation act. There are other amounts that are granted for spending that are in fact statutory expenditures, so-called legislative authorities. These legislative authorities are approved in a law. This could be the enabling statute of the department or it could be another law like in the (inaudible) for example that was authorized. And then those are presented in our supply budget documents to Parliament, but they are presented for information purposes only. So when we table a supply bill, for example, the main estimates, we present the laws that must be approved by Parliament,

meaning the voted appropriations, but we also present the legislative authorities. So, that's it. I encourage you… I'll give you some examples of legislative authority. We have the payment of Old Age Security, for example, the Canada Health Transfers, the Guaranteed Income Supplement. For people who work in finance, the employee benefits plan is a legislative authority. So, as I was saying, they are presented for information purposes. I don't know if you've had the chance, but on May 27, we tabled essentially the main estimates in the House for consideration. And then, in the 2025–26 Main Estimates, we are submitting an amount of $222.9 billion for voted authorities, meaning those that have to be studied by Parliament. And we also have an amount of $264 billion that is intended for legislative authorities. That gives you an idea. That is more than half of the expenditures that are legislative authorities. In this, we also include the cost of the debt, which is also legislative. So, that's just for your information, but we always submit both when we introduce a supply bill for the budget.

Jocelyne Charron: Although we submit both, even though ultimately there is no decision to be made because it is legislated by law, we are doing it for the sake of transparency, I imagine, Karine?

Karine Paré: Exactly. That's exactly right. It's to be transparent, but that's… that's right. That's because those expenses have already been approved by a law other than the supply bill. It's a credit that is given over multiple years for a specific purpose. So, that's why it's… but it's important for parliamentarians to understand, to see a little bit, and for Canadians in general, to understand how much we plan to spend in total.

Jocelyne Charron: In total.

Karine Paré: Yes.

Jocelyne Charron: And it's almost half ultimately that is authorized by means other than parliamentary appropriations in the end; it's interesting, I didn't know that.

Karine Paré: Yes, it's more… that's it. It's… there are still big programs, all the… the big programs as I was saying, the old-age pension. These are big programs that cost a lot of money. So, that's definitely legislative. So, what…

[00:26:50 A slide is shown with the title: Supply and Reporting Cycle

From January to March

• Supplementary Estimates (C) (last estimates of the fiscal year)
• Main Estimates (tabling and interim supply)
• Federal Budget (possible)

From September to December

• Supplementary Estimates (B)
• Public accounts for the previous fiscal year
• Departmental Results Report for the previous fiscal year
• Fall Economic Statement (possible)

April 1: start of fiscal year

• The government begins the expenditure cycle

From April to June:

• Supplementary Estimates (A)
• Main Estimates (approval and granting of full supply).

The activities and documents of the reporting cycle enable parliamentarians to review and make decisions about the government's use of public funds.]

Now I'm going to move on… I think I forgot to do… I just realized I forgot to ask questions after a slide. OK, no big deal. I'm sorry. I'm too passionate.

Jocelyne Charron: You're too excited. Yes, exactly. That's exactly right.

Karine Paré: So, the next slide is the supply and reporting cycle. There are a lot of things on this slide. So, I'm going to try to simplify it as much as possible, but I have a lot to tell you. So, the business of supply in general is the process by which the government asks Parliament to appropriate the funds required to meet its financial obligations and to implement programs already approved by the Treasury Board and Cabinet. Earlier, I told you about the Cabinet, the 'what,' and the Treasury Board, the 'how'. So, that's… Both of those things have to happen before you can go get your spending authority. So, the authority to spend is obtained from Parliament through supply bills. Thus, it's really a legislative process to seek funds from Parliament. So, it's… we table a bill every time we submit something like the supplementary estimates or the main estimates. Parliament approves and controls spending authorities through individual votes. That's very important. That means it's approved by vote. So, your spending authority—I wanted to mention— this is a maximum you can spend that is authorized. And it's by vote.

So, that's not to say, I spent more in my operational vote than in my Division 6 vote, but my total is okay; that doesn't work. You must always remain within your voted budgetary authorities; that's very important. After the bill receives royal assent, that's when the departments can start spending. So, really, we have to wait until the bill has been studied and approved. Then, once it is approved, once it has received royal assent, then the departments can start spending. So, if we look, I'm going to tell you about the period from January to March to start. Because that period is critical. We're working on two things at once. We're working to close our fiscal year with the supplementary estimates, which is our last supply bill, the Supplementary Estimates C. And then, we're also working at the same time to start our new year on April 1. So, at that time, we're working on the main estimates. So, both of these things are happening from January to March. And I'm saying January. The departments will start much earlier. For your main estimates, you start when you do your annual baseline update, which essentially provides what we put in the main estimates. And then the interim supply is also submitted. OK.

So, if we look at that period, we table three bills: Supplementary Estimates C, the main supply bill and the interim supply bill. The interim supply is what is commonly called the 3/12ths, the first three months of the following year. We want to make sure that the departments, before the end of the fiscal year on March 31, have their budgetary authority to begin their year until the parliamentary committee has had the opportunity to study the main estimates. As you know, the main estimates are the largest supply bill that is tabled in the House. So we have to give parliamentarians more time to study that bill. That's why we give the 3/12ths. That gives them three months to study the main supply bill, with the goal of obtaining royal assent on the main estimates, commonly referred to as the 'full supply,' by the end of June. So, that's the normal cycle.

[00:34:40 A slide is shown with the title: Understanding Estimates Documents

Departmental Plans

• Present departmental priorities, expected results and resources required over a three-year period.

Main Estimates

• Ask Parliament to approve the funds needed to deliver programs and services in the coming year.

Supplementary Estimates A, B, C

• Request approval for additional expenditures during the fiscal year.

Public accounts:

• Audited consolidated financial statements containing details on expenditures and revenues.

Departmental Results Reports:

• Present actual results against the expectations established in the Departmental Plans.]

Then we have a federal budget from January to March. I'm going to… a federal budget in January, March. I don't remember when it happened in the last few years. We're now talking more about a federal budget that often takes place in April. And then, this year, it's going to be in the fall. So I'll talk about that a little bit later in my presentation, but, roughly speaking, it's the January to March cycle, that's what happens. From September to December is another very busy time. We have the… We table the Supplementary Estimates B, which is what we call the 'fall sups'.

Then, as you understand— I already mentioned it— the federal budget arrives, as is often the case, in April. We've already tabled our main estimates before March 1. So, that means that most initiatives are announced in the federal budget, which is not included in the main estimates. They have to… We have to get our spending authorities from the supplementary estimates. So, we have the Supplementary Estimates A, which I didn't mention, from January to March, but often even the Supplementary Estimates A is too early to actually get our spending authorities for initiatives announced in a federal budget. It really depends on the timing, but it's… we don't have a lot, I would say, of budget measures that are included in the Supplementary Estimates A. The Supplementary Estimates A, I would say is typically the smallest supply bill that we're going to present in the House. That means the majority of initiatives are found in the Supplementary Estimates B, so in the fall, because then the departments have had the time to work on the Treasury Board submission to obtain their authorities. And then, they often get their funds from the Supplementary Estimates B or the Supplementary Estimates C. In the fall, we also submit… we close the previous year too. A lot of reporting happens at that time. So, we table the Departmental Results Report for the previous fiscal year.

There we will report on our results and how much we spent and for which initiatives and what outcomes we obtained. Then we table the public accounts, which are… which have been audited by the Auditor General. And then, according to our financial statements… our audited financial statements, all that happens in the fall. Sometimes we have an economic update too. So that's about it, for the cycle. What is important? It's that… you know, it's not just… Jocelyne was talking about it earlier. It's not just, basically, there's the cycle to get our funds, but the reports that we produce during that cycle are also very important because parliamentarians use all these elements to determine essentially how to evaluate our funding requests. They're going to look at what we… what we achieved the previous year with the results report. When we table the main estimates, we also table the plan, the departmental plans. Departmental plans are an opportunity to state what priorities we are going to work on. And we give a three-year plan. So, that gives… These are all things that are used by the various… by Parliament to then assess our budget requests. Now I'm going to talk to you a little bit about the impact of the election on the budget cycle. As I was saying, that is the normal cycle. This year was not a normal cycle. Far from it, we had a lot of things happen, which means that the dates, and everything you submitted is a little… is quite different this year.

So, on January 6, we had the prorogation announced. So, when there's a prorogation, that means all parliamentary committees fall. Bills that are in the House fall off the Order Paper, as they say… so, we have to reintroduce them if we want them to be reintroduced. And on January 6, you understand with the cycle I presented to you, we had not yet submitted our supply bill for the Supplementary Estimates C. So, that means that we weren't able to present it. There was the prorogation, and we hadn't tabled the main estimates and the interim supply bill for the first three months either. That's not done until March 1. We also hadn't submitted the departmental plans. Then March 23 came. An election was called. So, we also didn't have the opportunity to present these things before the end of the fiscal year. That has significantly changed the way we have essentially had to manage the expenditure management cycle. When there's an election, we have a mechanism that we can use to give money to the departments. These are called Governor General special warrants. So, that is under section 30 of the Financial Administration Act. We can issue… and that is for urgent cash flow needs.

So what we did when the election was called; we didn't have much time. It was March 23. We had to make sure that the departments had enough money to start their fiscal year on March 1. We checked in with your organizations to understand your budget and cash flow needs for the first 45 days. So, the warrants… the special warrants are usually issued for a period of 30 to 45 days. This year, we did two 45-day periods. One from April 1 to May 15. The other from May 16 to June 29. On June 29, you'll say, the government's back. That's true, but we need to make sure that the government is back and that there's enough time to vote on our bills, which are the main estimates that they are currently studying. The main estimates were tabled on May 27. So, that doesn't give parliamentarians much time to study the biggest money bill that we table. So, it was agreed that this will be studied with the plenary committee. I don't know whether you're familiar with that, but it's the 'Committee of the Whole' that will study the bill in four sessions that will take place.

Basically, it starts this week, on Thursday, and goes into next week. Four sessions of four hours to study this bill during the vote on the main estimates so that the departments can secure their funds for the rest of the year, by the end of June. So, there are a lot of changes. And we know that the budget will take place in the fall. So, that also changes the budget cycle a little because usually, as I was telling you, we don't have time to get our authorities from the Treasury Board. There's not enough time after the budget. Well, hopefully, with a budget in the fall, we might be able to get some budgetary authorities beforehand and include them in the main estimates, perhaps for the new year. So, the fact that the budget… and we could say that it's early or late, I would say that it's late because, basically, it should have taken place in April, but the fact that it's going to be in the fall might give us a chance to include a little more in our budget… in the main estimates. So, I know there's a lot of material on this slide, but I really wanted to go through each item.

Jocelyne Charron: Very interesting, Karine. When I listen to you, that's sort of why you saw earlier in the competency compass, we showed you the competency tile on risk management. And that's with respect to financial risk management. When the budget management cycle is disrupted, the departments end up getting caught up in cash flow management, perhaps having already started with that because you're going to find out if your programs, your ministers… they want to set up the programs as quickly as possible. So, sometimes, we will be aggressive in terms of hiring, in starting to structure the implementation of those programs, but that means that if the bills have not yet been tabled, basically, your department does not have the appropriations. They also don't have the authority to start spending. This is also where we saw the departments… needing emergency funds because we had risk management strategies that could be a bit aggressive in the departments. We also sometimes hire indeterminate employees with temporary funding sources, so sources of funds that will run out.

And that's where we see the budgets getting moved around. Sometimes you will be given special warrants, which means that, at that point, you need to have very rigorous financial management processes. You need to be able to work in concert with your programs, understand the impact over several years, perhaps understand your spending profiles, the nature of your spending. Do you have… a lot of contracts at the start of the year, contracts where we're going to get the funds out quickly within the 45-day period when we're talking about special warrants? So it's a lot of strategic analysis, understanding your department's mandates, understanding a little bit about the programs that are perhaps being set up. Then there might be other programs that are declining. So, really, it's like how you were explaining that it's a process that's in place, but in between all that, we have the human aspect, we have your expertise, we have the collaboration with the programs that essentially really bring all of this to life. And that's also where we see it taking shape a little. So, it's definitely super important. It's really the foundation as we explained earlier.

Karine Paré: Yes. Thank you, Jocelyne. That's a good point because, you know, basically, the more volatile the context, the more important it is to understand the issues, when are we getting the authorities, and why? Because our role as a financial officer or whatever the case may be, is really to give advice, guidance and to understand when we have the authorities versus when we don't, what risk we're taking, in what context and to what extent and what our mitigation strategies are. I think when you understand the process, when you understand exactly what's at stake, you can give advice and guidance that are perhaps more appropriate given the context And… So, I totally agree with everything you're saying. So, yeah… go ahead.

Jocelyne Charron: I'm going to ask you another question, Karine. I just wanted to let the participants know, we seem to be having issues with the chat. So the ability… your ability to ask questions in the chat seems to be having a technical issue. I know the specialists are working on this, but in the meantime, you can go and submit your questions in the Wooclap by using… by clicking the chat bubble icon in the right corner of your screen.

So, we have a Q&A session at the end of the session but we're currently experiencing difficulties with the chat function in the virtual session. So, please use the Wooclap to submit your questions that we're going to get to at the end of the segment. You can click on the chat bubble icon on the right corner of your screen and then submit your questions there. We just don't want to drop any of your questions, but just as a way to mitigate some of the technical difficulty we're having with the chat as part of the main session.

I wanted… Karine, I had a question for you. How does the prorogation of Parliament affect the expenditure management cycle? We touched on that a bit earlier. You can just wrap that up for us.

Karine Paré: Yes. So, the prorogation, unlike the election… with an election, it's very clear. In the Financial Administration Act, we have a tool, it is section 30 and the warrants… special warrants. And we all know what to do. A prorogation is more of a grey area because, you know, we're not in an election. So, we can't use special warrants. The only thing we can really use to help departments during a prorogation is the central votes we have at TBS. So, at TBS, we have central votes. We have the vote… The central vote… vote 5, which can be used for emergencies and to help departments. But it is limited. That vote has $1 billion. It's voted every year. So, when we had the prorogation, as you understand, we did not submit the Supplementary Estimates C. So, there, we really had to work with all the departments. We have 130 organizations, when we do the estimates.

For the main estimates, we work with 130 organizations. For the supplementary estimates, it really depends on the number of initiatives. But we had to work with all the departments to try to see, okay, are you able to absorb those amounts? Can you defer your systems? Do you need funds urgently? If yes, how much and when? Then, we had to monitor that to ensure that we were within our available authorities. So, that is a process that was coordinated by the Treasury Board. Then, we gave central credits, funds for certain initiatives that were urgent, like, for example, there are departments that have… we'll say programs… domain-driven programs, let's say for veterans, those sort of things. So, if that happens, we have to pay; we have no choice. So, we really had to undertake a prioritization process, and make sure that we could meet the most critical needs, and that's what we did. But after, when March 23… when the election was called, there, we have other mechanisms. There, we can really use special warrants at that time.

Jocelyne Charron: Excellent. Karine, I know we're going to move on a little bit to the federal budget process, but first, I wanted to see, you said earlier, there were 130 organizations. In my role, I work with 105 departments and agencies. So, we work with, basically, mainly the departments that form the core, but I also know that you work, for example, with Crown corporations or, for example, Canada Post, or others. Can you explain that to us a little? They are some of the organizations that come to you to get the funds for…

Karine Paré: Well, it's because those organizations are often funded with two types… You know, they have revenue, they have authorized… there is the…. They can respend their revenue, but the authorization to respend revenue often, unless it's a revolving fund, is a legislative authority. But if it's an authority—I'm going to use an English term, a VNR, 'vote netted revenue organization,' we need to seek the approvals for the authorities through our supply bills. So, that's an example, but even if sometimes, they still have money that has to be voted for… They have a combination of funding, you know, have reference levels with revenues, so they have to be part of our process too. Then… that's all part of it. We really work with all the organizations, not just… it's all those who essentially need to work from the estimates, who need to seek funding or authorities. That's the nuance. I think, Jocelyne, it's really… it's not just the dollars, but it can also be other authorities that have to be voted through the supply bills.

Jocelyne Charron: Interesting. So, basically, it's the same process for everyone since we want to go to Parliament. So, all those who essentially need to access Parliament's approval will have to follow this process. Interesting. Great. Do you want to get into the federal budget a little or was there anything else you wanted to add to this first segment?

Karine Paré: Just one thing to maybe wrap up the segment. Maybe keep in mind when you're dealing with the expenditure management cycle that there are five bills in total for supplies, budget allocations. There's the main estimates, the interim supply for the first three months, the supplementary A, the supplementary B and the supplementary C. Normally, we would have five. Then, for the supplementary estimates, what's important to remember is that it's always optional. It's not mandatory. The main… the main estimates, yes. Interim supply, yes. Supplementary estimates, it depends. We can do it. We're not required to do all of them. So, just to conclude, that's how I would like to conclude this segment.

Jocelyne Charron: I agree with you. Then, also in the end, even if you've obtained approvals, for example in a budget proposal, but you don't need the funds, you don't have to bring the funds into your department. Don't come to get them, because I'm taking money out of the coffers to have it essentially sit idle in your department's coffers. It's better to leave them in the coffers for the… the official coffers of the public service purse, instead of bringing them into the departments. It makes for better cash flow management.

Karine Paré: That's right. There's no obligation. There's no obligation to collect the funds. Then, the CFOs, when they attest to their request in the estimates, they attest that they cannot manage the cash flow associated with those initiatives. So, in principle, if you have enough money to manage from your existing authorities, you shouldn't access it through supplementary ones.

Jocelyne Charron: Exactly. That's exactly right. Super interesting.

Karine Paré: Next segment. Federal budget.

[00:49:32 A slide is shown with the title: Federal Budget Process

The budget process is initiated by the Minister of Finance through an official call letter for potential budget items that are aligned with government priorities.

Aug/Sept:

• Requests funding proposals

Oct:

• Budget proposals submitted

Fall:

• Economic & fiscal updates

Feb – April:

• Announcement of accepted proposals

Call Letter-> Budget Proposals-> Economic Statement-> Budget Announcement]

Jocelyne Charron: OK, let's go. Federal budget.

Karine Paré: Yeah. So, I think this process… I'll go through the timelines a bit just to give you a bit of an overview of when it starts, when it ends. There's a lot of work associated with preparing a budget to be honest. And normally, the call letter from the Department of Finance will be issued around August or September-ish, I would say. And then, departments take that call letter from the Minister of Finance and they start working on preparing their budget proposals. And normally, they need to be submitted in end of October so that the Department of Finance actually has the time to review all the proposals, form their advice, and form the budget process so that the budget can be tabled sometime between February and April. We talked, more recently, it was more around April. What it means this year, well, this year, the budget will be in the fall. So, I'm not too sure when the call letter will be issued, how it will be managed, if it will be a targeted budget process, because this could happen as well, like they decide to target the seven priorities that were highlighted in the mandate letter. Maybe just a few organizations will be solicited. I'm not sure. We didn't get any information on that front yet, but we'll see.

Normally at the fall, there's also the fall economic update. And in normal circumstances, this is often also used for the announcement of new measures as well. So, sometimes departments are asked to prepare a proposal as part of this process as well. So, just so you know. So, on next slide, the various steps and the budget process. So, the budget, just to remind everybody, the federal budget is the main vehicle for the government to communicate its policy agenda, including changes to the tax policy for present and future years, and provides funding for new measures. So, in order to launch the annual process, the Minister of Finance engages with his colleagues through an official call letter for potential budget items. It does not provide… what's very important to remember is that the budget does not provide parliamentary expenditure authorities. We've talked about it, like it gives you… it's reserving funding in the fiscal framework. You need to go access it through your implementation plan after… through a Treasury Board submission. So, departments have the opportunity to submit their budget requests annually, so normally through the call letter.

[00:52:18 A slide is shown with the title: Federal Budget Cycle

Stage 1:

• The Government sets social and economic policies and priorities for the new fiscal year.

Stage 2:

• Minister of Finance sends call-out to Ministers requesting proposals to be considered for inclusion in next Budget

Stage 3:

• Departments' Ministers respond to the letter with fully costed Budget Proposals

Stage 4:

• Based on approved proposals, the Government announces its Expenditure Plan, by tabling the Federal Budget to Parliament

Stage 5:

• Departments prepare Memoranda to Cabinet and/or Treasury Board Submissions to seek policy, program and financial authorities

Stage 6:

• The Treasury Board (TB) approves the inclusion of new funding in a Department's reference levels

Departments can seek access to Budget funding through one of the Estimates Exercises]

But there are, as I said earlier, different scenarios that could be more relevant for an off-cycle request because sometimes it's difficult to keep only one opportunity for a year to secure new funding. So, there is the off-cycle process, but I would suggest if you think you want to do an off-cycle request, make sure that you engage with your counterpart in finance to make sure that it's something that's valid and that will be… that they will accept, and your minister needs to be on board because you will need to send a letter to the Minister of Finance asking for an off-cycle consideration as well. So, organizations really need to do their homework first, make sure they cannot manage within their authorities, and then we can proceed with an off-cycle request.

[00:53:14 A slide is shown with the title: Budget Proposals

• Aligns with specific criteria established by the Minister of Finance.
• Provides policy rationale, expected impacts, program results, implementation feasibility, stakeholder's considerations, legislative or regulatory changes required
• Costs & Scalability options
• Prepared in collaboration with the Department of Finance]

In terms of the budget proposal itself, it needs to align with specific criteria established by the Minister of Finance. So, normally in the call letter, and it depends on the year, but there are specific criteria that are sometimes included in the call letter directly. We've seen in the past, sometimes they were asking a limit of a number of proposals. For example, I think three years ago, it was five proposals max. They were asking for ability of the department to absorb a portion of their budget proposals. So, the Minister of Finance really decides what are the criteria you will want to put in terms of the budget, the proposal request from departments. Every time, you should always make sure that you've considered your existing resources as much as possible, and you should only ask what's really incremental, even though… like through the budget proposal process.

There is a way to indicate how much you're absorbing or using your reference levels for and what you're seeking in addition to that. And normally, it should form part of your proposal as well. Each minister should prioritize their funding ask. So, based on my experience, I know it's kind of a… sometimes it's an open discussion on how many proposals we're going to be doing, many proposals are being developed within the department, and then it goes up for advice to the minister and the minister will decide which proposal he wants to submit. Keep in mind, it always has to be aligned with the priorities of the government. So, the mandate letters, I'm not sure if you had the opportunity to… there's seven priorities that have been established in the mandate letters. I don't know all of them by heart but I know there's the priority of Canadian Armed Forces, housing, the relationship with the United States, all of that. So, I think this is always something that the minister needs to keep in mind, and they're going to choose the proposals that are best aligned with the priorities of the government.

And each proposal needs to provide a rationale, high-quality costing information. So, this is where you're going to probably, as a finance professional, be asked to participate and make sure that you're involved in the costing assumptions and that the costing are reasonable and are strong enough that can… that your CFO will be able to sign off on that because that's important. Your CFO needs to attest to all the costing and the budget proposals, and the policy rationale should be there, stakeholders that are going to be impacted by your measure. The implementation feasibility as well should form part of your proposal, and this process will inform the decision-making by the Minister of Finance and the Prime Minister. This is important because funding decisions are not just the prerogative of the Minister of Finance. They also need to be approved by the Prime Minister. In most of the organizations, this process is often coordinated by the Strategic Policy Group and they manage the call later within the organization. But as finance officers, you're involved in terms of securing this CFO decision on the costing information of these proposals. Next. What is a memorandum to cabinet?

[00:56:56 A slide is shown with the title: What is a Memorandum to Cabinet?

• A formal document to seek Cabinet decisions on policy, program or legislation.
• Needed for: new programs, significant policy changes or legislative proposals.
• Includes policy rationale, financial projections (cash/accrual), FTEs, and GBA+.
• Prepared in collaboration with Privy Council Office, often post-Budget announcements.]

So, we've talked about the budget, and I want to talk about the MC because I said the Cabinet focuses on the 'what'. So, the MC is really about the 'what', and sometimes you will be able… you will have an MC prior the budget that will form… that will be in the budget queue and be announced as a budget measure in the federal budget. Sometimes you will have a measure that's announced in the budget but for which you need to do an MC after the budget to secure your authority policy… your policy authority. So, the MC can be done sometimes before the budget, sometimes after, and sometimes your funding decisions from the budget will give you your policy authority and you will not require an MC. So, there's really different... the MC can be done all year long but it provides the policy authority to advance a new initiative. And as I said, the timing of the MC can vary depending on how the initiative is announced. The MC will also be used when you require legislative change. So, you will be required to do an MC.

When we did the polling earlier, I saw less people are familiar with the MC because the MC is really a policy document. So, often, as finance professionals, we're less involved in developing an MC but we are involved from a costing perspective because there are… there is a costing included in the MC and there's an accrual profile, a cash profile. Keep in mind, the accrual profile, very important for our colleagues at Finance because that's how they manage the fiscal framework. They manage it on an accrual basis. So, it's important to make sure your accrual profile is not just something you do after, it's something you've thought about and that is accurate because they will be relying on that information in terms of budget planning, and the MC is supported normally… you will work in close collaboration with the Privy Council Office when you develop an MC because they are the ones supporting the Cabinet.

[00:59:17 A slide is shown with the title: What is a Treasury Board Submission?

• A document used to seek specific authorities from the Treasury Board.
• Includes implementation plans, timelines, performance indicators and expected results.
• Provides cost estimates, funding sources and identifies associated risks.]

For the Treasury Board Submission, well I talked about that a bit, but it's the 'how' as I said, and normally we seek specific authorities. For example, when I was at ISED, we had a lot of Gs and Cs, grants and contribution programs, and sometimes we had contribution agreements that were more than $50 million. We needed to see TB authority to sign these contribution agreements. Even though we were not seeking any additional funding, we needed to go to Treasury Board, do a Treasury Board submission to obtain that authority. So, keep in mind, it's normally… often it's to get access to your funding but there are other authorities that you will be seeking in our Treasury Board submission beyond the ones that you're seeking in terms of funding. So, it's an implementation plan. You might be required, for example, to see contracting authorities when they are over your delegated authorities or the PWGSC authority. So, there are different authorities you will be seeking, but the Treasury Board submission will focus on risks. It's important because that's really what TB ministers are looking at, the risk of implementing this new initiative, the risk of implementation, but also the risk in terms of stakeholders implications, provincial implications, all of that.

So, normally, your Treasury Board submission is really focusing on that, and the CFO needs to attest. Your minister needs to sign off on Treasury Board submissions and you would normally work in close collaboration with your program analyst at TBS when you develop a Treasury Board submission. And after it's approved, this is when you get access to your funds or the authority to proceed with the project, or with, as I said, a contribution agreement for example. There is another simplified way now to access funding. It's the CEA, consolidated estimates authorities, and I forget what the last… but it's a simplified Treasury Board submission when you're doing a low-risk initiative. You can use this simplified document to seek your authority through Treasury Board, and we have a specific criteria. For example, (inaudible) or things that you're basically… you've been managed before, you're just seeking the estimate authority through that process. You can use the simplified process.

[01:01:52 A slide is shown with the title: Role of Cabinet and Treasury Board

Cabinet (Policy authority):

• Defines policies, priorities and legislative changes
• Approves broad policy direction (Memorandums to Cabinet)
• Supported by the Privy Council Office

Treasury Board (Financial Authorities):

• Is a Cabinet Committee that focuses on finances and administration
• Approves government spending (Treasury Board Submission)
• Supported by the Treasury Board Secretariat]

So, to recapitulate, the role of Cabinet versus the Treasury Board. Cabinet, it's policy authority, defines policies, priorities, and legislative changes, approves the broad policy direction through MCs, and is supported by Privy Council Office. Treasury Board, mostly financial authorities but there are other authorities, administrative authorities you might require to go to Treasury Board. It's a permanent Cabinet committee and approves government's spending. So, it all goes to Treasury Board before it can be included in an estimate bill, and is supported the Treasury Board Secretariat.

Jocelyne Charron: Super interesting, Karine.

Karine Paré: Yes.

Jocelyne Charron: I was on mute. Sorry. Very interesting. This is even a refresher for myself. I've done many Treasury Board submissions, many federal budget asks, a few MCs, but they're always… the process is there but how it materializes inside your department might be different and you probably have many different stakeholders even inside your departments. I would say for financial officers or even for program managers, what's really important for me is working collaboratively, and you can't do these on a whim, right? So, having strong costing practices, understanding, for example, the cost of your internal services or having costing models, you know that you know how much it costs to deliver or to administer a grant or to initiate a new program or a new intake.

All of those things will help you so much when it comes down to coming up with these proposals at often the very last minute, and these go all the way to your ministers, right? These will receive the highest level of scrutiny and the highest level of visibility. So, I think that's where you can shine inside your department, is having those strong processes, those strong costing estimates, those strong business relationships, and understanding even how the processes are working inside your respective department so you can navigate that. And then, kind of to add to all of that, then you have to come into the central agencies, right? Either the PCO or the Treasury Board. So, those are often kind of… and to me, they're very complex but they're such enlightening… because that's where you see a program for a Canadian come to life. So, as well, often, you'll hear of it in the news or whatever like that. So, there's lot of proud moments related to that if you've had the opportunity to work on any of that.

We have a few questions and I'm happy that the questions are being put in the Wooclap. So, that's great. So, one of them was about reprofiles. So, can you tell us a little bit? So, you asked money this way but now you need it a different way. What does that look like? How does that come into play with what we talked about right now?

Karine Paré: Yes. There's so much things to say right now about reprofiles. But yeah, reprofiles, normally, just one basic thing to remember, reprofiles are approved by the Minister of Finance, like by the Department of Finance. So, it's not TBS prerogative to approve. Although records might be the exercise and your TBS analyst has a role to play in assessing the reprofile request, it's always approved by the Department of Finance because it has a fiscal implication, right? They're moving money from one way to the other. So, it has a fiscal implication. They need to agree to that reprofile. So, reprofile can be done off-cycle, a bit like the budget requests can be done off-cycle when it's an urgent request and you were not able to do it through the cycle. Or if you do it through the cycle, there's two opportunities to do your reprofile. So, there is an opportunity to do it at year-end, okay, when you finish your year and you know exactly how much you have not… you have in terms of unused authorities and you need to move this funding to the next fiscal year. We call it the supplementary estimate B reprofile. So, those are done normally… I think our deadline for these submissions are June 15th. So, if you had the reprofile money you have not used in '24-'25, you want to move to '25-'26, you would do it through the subsidy reprofile. TBS sends the call letter. We gather the information. We send it to finance. They assess it. If you're approved, it's going to be included normally in subsidy. That's why we call it supplementary estimate B reprofile.

Jocelyne Charron: And there's a call letter that's sent with that.

Karine Paré: There's a call letter, yes. It's called… it's part of the year-end instruction. It's from my team actually. We send the year-end instruction and the subsidy reprofiles are part of that. The other option is the ARLU reprofile which is normally done in the summer. Normally, they are due by, I would say, mid-August and it's coordinated by my team again. We gather all the information and then we submit it to Finance, but this is when you want to move money to future years. So, you do it through the ARLU and then it gets sent to the Department of Finance for approval. And if it's approved, then it's going to be included in your main estimate of the following year or for the future years, depending on the profile you've chosen. So, this is the process for the reprofiles.

Jocelyne Charron: Interesting. So, it requires strong cash management as well, and you might have multiple financial funding strategies that are assigned to that as well. So, that just…

Karine Paré: Well, the timing.

Jocelyne Charron: That's right. Exactly.

Karine Paré: So, you might… so, two things, cash management, risk management, not the same thing. So, if you're waiting for your decision, I think you should not start spending on a reprofile before you have a reprofile decision. Once you have your decision and you're waiting for the estimates to actually get the cash, then it's cash management. That's a bit different. But keep in mind that when we have a minority government or things like that, you never know. The government can fall. And then, if you don't have access to the cash, well, it's going to be difficult to manage, right? So, it's all part of the decision process, I think, and the recommendation you would do within your organization.

Jocelyne Charron: I agree. There's a question in the chat, Karine. Is there a logic? You know when you see vote 1, vote 5, vote 10, what's the difference as to why they name it the way that they do?

Karine Paré: So, normally, we do it in order so that they're (inaudible). So, if you have a vote 1, vote 1 is everybody has a vote 1 normally, so it's operating. If you don't have a capital vote but you have Gs and Cs, it will be vote 5 normally. And if you want to add… if you don't have a capital vote, vote 5 will be Gs and Cs, but if you have a capital vote, it will be a vote 5 normally, but it's really an order. So, vote 1, pretty standard I would say, and the risks, it depends when you request the authority and that one vote number you're at. I don't know if it's clear.

Jocelyne Charron: Yeah, yes. No, that makes sense. That makes sense. Where could we see what votes departments have? I think it would be in your departmental… the main estimates definitely once they're approved.

Karine Paré: Definitely, main estimates for sure. You have the detail by votes because that's the authority, the spending authority you're getting, right? Once it's approved. So, it's… I said at the beginning, it's a maximum authority and it's important to respect your authority at the vote level. So, when you see you're going to be… you don't have enough money in your vote, you have the ability to do a vote transfer but this needs to be done through the estimates and it needs to be voted by Parliament. So, it's very important to understand the limit of the vote level. So, yes, if you go on, I think it's probably in our reference material, but the main estimates have been posted, the '24/'26 main estimates, and we can see all organizations and you can see all their votes, and you can see the legislative authorities as well as part of that. If you have legislative authorities within your department, you will see them as well.

Jocelyne Charron: I think for me, the one thing that's important is because this is how you're telling Canadians through the parliamentary approvals that you sought, and the story of how you mentioned you were going to spend your money. So, once it's inside your department, you can't just decide to shuffle around all of this money. So, that's why you have to go back into the centre and have to get approval to say, this money, I can't use the way I said I would in my Treasury Board submission or in my Memorandum to Cabinet, and therefore, I'm going to have to ask for a new approval on how I need to now use it differently, but you want to have that transparency and you want to be able to follow the trace of the money. As well, you can't really use grants and contribution money for capital money or for operating money. Again, those are very different colours of money in which we are allowed to execute the budget, the parliamentary… the programs we set to Canadians or through the budget process. So, that's kind of why you have to kind of always go back into those mechanisms and that's why you need the strong kind of cash management. Even, we saw a lot of departments come in and they have… sometimes they'll have a grant ceiling, which means it is a specific grant wording and you're given an approval to a max, and if you exceed that max, then that's really not a good idea, and we see…

Karine Paré: We cannot.

Jocelyne Charron: Yes. Exactly. You cannot. So, we've seen those issues as well. And to me, it speaks to a lack of oversight in the department, and you need to have kind of those financial officers looking at all of those pockets of money and having the financial reporting and monitoring that goes with each of the pockets of money because you can't cross over it. It will kind of not be helpful and it might be frowned upon when you come back into the central agencies.

Karine Paré: Yeah, I agree.

Jocelyne Charron: There's one question here and then we can move on to…

Karine Paré: Okay.

Jocelyne Charron: It's asking, what is a program authority? And I do think that that's an important question because we look…if you're from the financial world in terms of this audience, that's easy. Like, you're looking for the authorities, maybe you're looking by vote, but what do we mean by program authority?

Karine Paré: Well, it's the authority to initiate something new, or I would say, each department has their programs that they've been assigned or that they have obtained through authorities. It's just, it's not visible because it's probably programs that have been approved a long time ago and the departments are just spending on those programs, but when you have… I don't know. I can give an example, perhaps when we were… as I said just then, we had a new program that was announced in the budget. It was called the Canada Digital Adoption Program, and we sought the authority through the budget process. So, in that time, when we received the funding decision, we got our authority to initiate that new program. So, when I say… so, not every minister can decide I'm initiating a new program, like a new initiative. They need to go to Cabinet. There needs to be a discussion on, is this a priority? Do we want to initiate this new thing? So, it can be a Gs and Cs program, it can be different things, but it's really important. That's why I would say it's the 'what'. What are you doing? So, I'm creating a program for housing. We're going to have probably a new program for housing now with this new government. So, we will need… probably these organizations will need to go to Cabinet and present how they want to initiate this new program, and they will need to get that authority from Cabinet. And after that, we can get the funding and the authorities to implement the program. I don't know if it's clear, but it's…

Jocelyne Charron: Yes. Absolutely, because we have to, I guess, seek the approval of what we're going to spend on, not just spend money on whatever, right?

Karine Paré: Exactly.

Jocelyne Charron: So, you want to make sure that we agree as Canadians and through the parliamentary and the voting system and the democratic system that we have, that this is a program that is required for Canadian businesses or Canadian citizens. I agree with you. So, you can't go decide to spend unless you've received the okay to spend on the 'what', right?

Karine Paré: That's right.

Jocelyne Charron: And then, you get into the 'how' through the Treasury Board submission, yeah. We have a couple more slides and then we can open up to some of the broader questions.

Karine Paré: Yeah.

Jocelyne Charron: But we have been answering the questions through the session as well.

But go ahead Karine, for a little bit…

Karine Paré: Yes.

Jocelyne Charron: I'm going to…

[01:15:21 A slide is shown with the title: Role of Finance Professionals

Financial integrity:

• Ensure the accuracy of financial records and reports in accordance with the Financial Administration Act.

Strategic support:

• Support programs with needs estimates, budgeting, financial forecasting and risk analysis.

Contributions to policies and funding:

• Contribute to budget proposals, Treasury Board submissions and Memoranda to Cabinet.

Governance and compliance:

• Support the attestation of the Chief Financial Officer (CFO), committee appearances and ensure compliance with financial policies.]

Karine Paré: Yes. You know, we talk about how you can… What is the role of finance professionals? Well, you have key roles throughout these processes. It's going to be hard to name them all, but really, you're involved in the cost estimates, making sure they're realistic, that the assumptions are documented, that your CFO feels comfortable signing off, that you have sound financial strategies, your financial forecasts, as Jocelyne mentioned, by vote. If you have grants, you have the controls in place to ensure that you have a good… good monitoring of the situation and provide advice or guidance at the right time. The accuracy of our… of how we record things is very important. You saw that when we talked about the various reports we submit. All those reports are going to Parliament. It's extremely important to have good controls. Since our… what we record as expenditures, and the accounting principles we use are the right ones to present the correct financial situation. Then, compliance, you know, that's really important too. So I think we all have a role to play in this. When you're not sure—the expenditure management cycle is still complicated—

if you're not sure, go check who your analysts are at the Treasury Board and don't hesitate to ask questions of… if you're not sure. I think the last thing I'll mention—I wanted to mention it, but I didn't mention it throughout the presentation—but our chief financial officers often appear before committees as well. So we also have a role in preparing them and documenting everything we're requesting in the supply bill so that they're ready, they're well prepared to answer questions at the parliamentary committee. That's not easy. It's never easy for chief financial officers to go to the parliamentary committee. Usually, it's your parliamentary committee of your organization that will… like, when I was at ISED, it was INDU, at TBS, it's OGGO, there are different parliamentary committees. And the CFOs are asked a lot of questions about spending plans. So, they have to be ready, and you play a key role in preparing them for that as well. So keep that in mind. Then, Jocelyne, she has already spoken about a lot of things, I think. It's like… these are official documents signed by the minister.

[01:17:46 A slide is shown with the title: Key Points

Key points:

• Federal budget process
• Submissions to Cabinet and the Treasury Board
• Expenditure cycle
• Finance professionals

Why it's important:

• Defines government priorities
• Ensures responsible budget management
• Facilitates final approval of expenditures
• Supports compliance and budgeting.]

So, it's important to make sure it's done right. It's going to be looked at by several… by your minister, it's going to go to the Treasury Board, to other ministers who are going to look at your plans for implementation. So, really always make sure it's accurate, and then have a good understanding of the authorities you're seeking in these documents. So, the key points to conclude. The budget process defines government priorities and its reserve fund within a financial framework so you can seek funding. The submission to Cabinet, well that's really the program authorities, the strategic orientations. The Treasury Board is the 'how'. What are you going to do? The risks. How are you going to implement your initiative? The expenditure cycle gives you the final approval to spend. And then, well, you, as finance professionals, well, you support this whole process and you make sure to give your CFOs the confidence also to sign off on all these documents. Then, ultimately, we need to ensure that we have the budgetary authorities to undertake the initiative that has been entrusted to us. So, I'll stop there.

Jocelyne Charron: Interesting, Karine. Thank you. You have done a wonderful job of really sharing your knowledge and making it tangible honestly, because it's true that it's complicated. It's complex, especially when things go off the rails a bit because we decided to prorogue government or we added special warrants. So, things have shifted, we see that the budget will… the federal budget will be tabled in the fall. So, once again, this sometimes changes financial strategies. Then, also, we have to keep in mind that we're working with programs. So, often, maybe they will just make a submission to the Treasury Board every two or three years. So, trying to support them in that, or even trying to go through a Memorandum to Cabinet. If your department doesn't do a lot of that, it's really something that is quite difficult in terms of strategic positioning, how do you write the narrative so that you answer all those questions? Because the narrative needs to strike the balance between the level of detail and also the government's strategic priorities. So that's never easy. Then, we go to the central agencies, which will ask lots of questions to try to ensure that due diligence is carried out before the minister comes for questions. So, really these are fundamental processes, but not easy, they are often horizontal and often we don't do much of them either. So that kind of explains the complexity of it. Just a question for you, Karine, when you look at the expenditure cycle, which part do you find the most rewarding to work with?

Karine Paré: I really, really enjoyed working on the federal budget personally because I found it somewhat brings our work to life. You know, when… it's a lot, a lot of work; we don't have a lot of time. Then you think, but after that, when you know, like a new program where you worked on the budget proposal, then after that, it ends up in the budget. It's like, wow. Then, you know, the evening of the federal budget, we stayed and everyone… there were two or three of us on standby looking at what's in the budget? Were the items we proposed chosen and funded? So, I really liked that aspect because it made the work concrete. Then, it continues after because, basically, when you make your submission to the Treasury Board, well, that's really how it is going to be implemented. I would say that, for me, the whole aspect of costing up to the budget, and then afterwards, it was my… what I liked the most because it really brings things back to a more concrete level. You see the fruit of your effort, you know.

Jocelyne Charron: Yes. And it's fun to work in partnership with the programs because money is involved in everything we do ultimately. But really, the beauty is often in an enabling function; we're not directly involved with programs or services to Canadians. So, it's really a great opportunity to deal with something directly that will have an impact on the end client. So, I find that that's always very rewarding too.

Karine Paré: Yes.

Jocelyne Charron: Yes, there was one question, Karine, that I'd like to touch on a little. You know, earlier you talked about cash accrual, you talked about it in the budget proposal. We really need to make the distinction. We know we have a… This is more for the accountants in the group. You know, when we go… when we learn our accounting, it's really the accounting of… 'accrual' in a sense. But the government always works with cash accounting, but in the tax framework, we work with accounting, accrual accounting. So, I just wanted to… if you can touch on it a little bit, what are those nuances? And why is it important?

Karine Paré: Well, basically, I think that's it… The government, they do their planning, as I said, on essentially an 'accrual' basis, it's the… we take into account assets and all that. So, it's not something we're used to, as you were saying, because all the… what we… The supply bills are all in cash. I don't think it comes naturally to us—

Jocelyne Charron: All right.

Karine Paré: To work in accrual accounting essentially. But I will say, since I've been in my role, I'm realizing this aspect more… because even when I was in a department, yes, we did the accrual tables, but I hadn't realized that the Department of Finance really used that information in the financial framework. Then, I often have questions in my role, you know, because they always send me the cash then accrual, then, I do the estimates, make it cash; I just wanted to look at the cash. But it's really accrual, the way it's going to be presented in the budget, in all the official documents, it will be in accrual. So that's the importance… We present the cash in the estimates, but… Then, we also do a reconciliation there. So, this is also important, but it should not be taken lightly. It may be less visible to most of you—

Jocelyne Charron: Yes.

Karine Paré: Because you're not necessarily in the Department of Finance, but it's something that's extremely important. And, it can cause problems if we haven't done things properly in the public accounts. That too is really important, so— Yes, I think… There might be a little more awareness about this. I think we might have some work to do on that aspect. Because, really, we have both, you know, the cash aspect, then we have the accrual aspect, but we work a lot in cash too. It's like we get a bit disconnected from the accrual aspect. But it is critical and it is very important.

Jocelyne Charron: Yes. I agree with you. That's also kind of how we're going to look at it, maybe it's an expenditure because the funds will come out, but ultimately, at the end of the… maybe it will be recorded as an asset, not an expenditure. So, the way we're going to tell the story to Canadians regarding the financial statements of the Government of Canada, we're going to want to record an asset and not an expenditure. Or even then, sometimes, it will be a liability, a contingent liability. So, it's really at the level of accounting entries that we're going to do it. Then, sometimes, it's the accounting entry, it's done differently and often it's just us, the accounting experts, who will be able to come and give a little bit of that nuance. And that is really something that is very, very important for Finance Canada and for the Government of Canada's financial statements. Because we don't want to record expenditures when it's an asset, and we want to account for it, perhaps with depreciation or perhaps record liabilities that will materialize in several years to come. So, these are things that are very, very, very important. It's a bit like, when you talk about 'foundational', a bit like, when we talk about the session on improving the foundation of your technical knowledge in finance and including another one here, so it's very important to master. Go ahead, Karine.

Karine Paré: No, I agree.

Jocelyne Charron: You agree. Good. That's great.

So, I was answering some of the questions in the chat as they were popping up. So, thank you very much for those and hopefully… and Karine was able to answer most of them, which is fantastic as well. I had no doubt because she's a tremendous colleague as well as expert in this field. So, I could not thank you enough for having done this session. It's our first session. We have four more planned with the Canada School of Public Service. They've been gracious enough to accept our learning series. And so, we have other ones that are going to be coming. We're trying to make sure that you're aware of them by sharing them with your CFOs and your DCFOs. So, others to come include costing. We're going to be talking about… procurement is another one, the reporting, the public accounts reporting as well. So, please stay tuned, and hopefully you've enjoyed your session today. I had fun and it was kind of even nice for me to learn and refresh my basic knowledge about the expenditure management cycle.

So, just a reminder, you can access these resources in the resource tab again. And as well, we have lots of resources on the GC info base which has a lot of information about public spending. They have, as well, the estimates template and the guide. So, you can all access there, that we talked today, and we hope that you have enjoyed today's session and that we have equipped you with foundational knowledge and practices to better support you in your role, or even if you're in a program area, how to demystify that so you can support your enterprise in seeking funding or preparing Treasury Board submissions. So, I'd like to close on, please share your feedback with us, and that's really an opportunity for us to learn from this session, make sure that it was relevant to you. And if there's anything that you can point out in terms of improvement as well, that's an opportunity for us to get some of that information over to our teams. Thank you so very much for attending. Thank you for our team as well for preparing today. It was not an easy task. So, I would like to extend a special thank you to them.

Then, a very, very big thank you for your wonderful participation too and thank you again, Karine.

Karine Paré: Thank you.

Jocelyne Charron: We look forward to seeing you again in the next sessions.

Karine Paré: Yes. Thanks, everyone.

Jocelyne Charron: Bye everyone. Thanks again.

[01:28:44 The CSPS logo appears onscreen.]

[01:28:50 The Government of Canada logo appears onscreen.]