Table of Content  

Section Two - Issue of Governor General Special Warrants in 2005-2006

Introduction

In 2005-2006, a total of three Special Warrants were issued, for a total of $4.2 billion.

This section provides an overview of the Special Warrants issued as well as a number of summary tables:

i.       A summary of Special Warrants issued in 2005-2006, by organization, by vote and by period;
 
ii.       A summary of Estimates to date for 2005-2006;
 
iii.       A summary of changes to voted appropriations which provides a synopsis of the total cash requirements for the period, including those addressed through existing appropriations, central votes, and, ultimately, Special Warrants;
 
iv.       A summary of the use of TB Vote 5;
 
v.       A summary of the use of TB Vote 10; and,
 
vi.       A summary of horizontal initiatives/issues for which organizations required supplementary funding.
 

This is followed by organizational information that provides the detail of the initiatives for which organizations required funding.

As noted in the previous section, the organizational detail does not identify the specific items for which funding was requested through Special Warrants but rather the supplementary items that gave rise to the need for Special Warrants. The reason for this approach is twofold:

For 2005-2006, Appropriation Act No. 2 was approved in June 2005 providing full supply consistent with the 2005-2006 Main Estimates tabled on February 25, 2005. Consequently, organizations had access to their entire base funding levels as well as the approval of the annual renewal of authorities provided through vote wording such as revenue-respending, recovery of expenditures, and grant (and CIDA's contribution) payments listed in the Estimates.

On October 27, 2005, the government tabled its 2005-2006 Supplementary Estimates (A). As noted earlier in Section One, $7 billion of spending authorities provided in these Estimates were subject to vote by Parliament. The dissolution of Parliament for the purposes of a general election precluded this from taking place. As a consequence, Special Warrants were required to provide for a significant portion of the items listed in those Supplementary Estimates as they were judged to be essential and urgent to the core operations of government.

This test also applied to a small number of additional items that would have been included in a subsequent Supplementary Estimate towards the end of the fiscal year * . These items included such issues as:

* It is customary to table a final Supplementary Estimates for the fiscal period in February.

24 2005-2006 Governor General Special Warrants 

Process

Given the timing in the year, organizations had most of the necessary spending authorities, approved through Appropriation Act No. 2 , to operate. However, as noted previously, a Special Warrant can only provide supply where an authority already exists to make an expenditure, it cannot provide the authority itself. Ergo, any new, or amendments to existing authorities were not possible through Special Warrants. As authorities are approved through an organization's vote wording, this meant that Special Warrants could not be used to:

establish new votes or amend vote wording, required to:
 
  make a transfer between votes;
 
  forgive or write-off debts;
 
  establish revenue respending or new revolving fund authorities; and,
 
  increase limits on the issuance of loans or guarantees (where a limit is specified in the vote).
 
establish new grants or increases to grants already listed in the 2005-2006 Main Estimates.
 

It should be emphasized that an organization does not need to have a vote to seek the issuance of a Special Warrant as long as the authority to make a payment exists elsewhere. This is particularly important for new organizations that are established under legislative authority but do not have a vote structure in place and approved through an

Appropriation Act .

As a result of the limitation on grants, one of the first steps carried out by the Treasury Board prior to the dissolution of Parliament was to fund certain new grants that would have been subject to Parliament's approval in the supply bill for the Supplementary Estimates (A). This approach was recommended given that:

The grants in question are listed in this report; both at a summary level and individually on the respective organizational pages.

Finally, with the requirement that no appropriation is available from which the payment could be made, any funds that were sequestered within an organization's funding levels had to be used before a Special Warrant was issued. Referred to as special or controlled allotments, the spending authority related to these funds is not available to organizations and is directed and controlled by the Treasury Board. An example of when such administrative controls would be used would be to freeze funding in respect of reductions to appropriations relating to expenditure review initiatives. This use of special or controlled allotments to offset supplementary funding requirements is consistent with how the Supplementary Estimates are prepared and presented to Parliament. If Treasury Board does not subsequently release these special or controlled allotments to departments, they lapse.

Similarly, funds available in TB Votes 5 and 10 were depleted, all in the initial Special Warrant period, on a first come, first served basis against organizational requests for funding.

The tables for each organization, therefore, reflect the complete story; providing detail on the gross organizational requirements by initiative as well as amounts that have been offset by the use of special or controlled allotments and central votes. The net result is what was issued as Special Warrants for the organization over the period.

Summary

There is an evident and normal trend in the use of Special Warrants. Since organizations are expected to cash manage their requirements before requesting the issuance of a Special Warrant, the trend starts small and culminates in a final Special Warrant for a given fiscal year that is significantly larger since less flexibility to cash manage is available in organizational budgets towards the end of the process. In addition, any "surplus" spending authorities tend to be exhausted earlier in the process, lessening the upfront amounts being requested through Special Warrants. This was certainly the experience with Special Warrants issued in 2005-2006. In fact, with the exception of National Defence, organizations generally cash managed the bulk of their requirements until the third Special Warrant period.

In addition, and contributing to the size of the third Special Warrant in 2005-2006, was the need for organizations to make a provision for all of their year-end payables. As a consequence, the third Special Warrant in 2005-2006 included estimates of what these costs would be including year-end salary adjustments.

A total of eleven organizations account for two-thirds of the funding issued through Special Warrants in 2005-2006; National Defence accounts for roughly half of this amount. The following provides an overview of the three Special Warrants by organization.

        $ millions          



    Period     Period     Period          
                                     Organization        One       Two     Three     Total       %  






National Defence     825.4         421.1     1,246.5     29.8  
Royal Canadian Mounted Police         60.2     181.9     242.1     5.8  
Public Works and Government Services         80.0     104.2     184.2     4.4  
Canada Border Services Agency             180.0     180.0     4.3  
Industry     5.0     77.1     91.4     173.5     4.2  
Canada Revenue Agency             149.4     149.4     3.6  
Canadian Heritage             146.9     146.9     3.5  
Fisheries and Oceans         118.9     11.7     130.6     3.1  
Canadian Food Inspection Agency         54.3     66.2     120.5     2.9  
Canadian Broadcasting Corporation         50.0     69.3     119.3     2.9  
Agriculture and Agri-Food     69.9         29.6     99.5     2.4  






                   Sub-total     900.3     440.5     1,451.7     2,792.5     66.9  






All Other     230.1     315.3     840.0     1,385.4     33.1  






                   Total     $1,130.4     $755.8     $2,291.7     $4,177.9     100.0  







The following pages provide more detail on the individual initiatives funded through Special Warrants.

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