IV. CANADA

3. Legal basis for the establishment and the powers of the actors in the budget system

3.1. The executive and the legislature

3.1.1. Overview

Canada is a constitutional monarchy, a federation and a democracy. The responsibility for governing at the federal level is shared by the legislative, executive and judicial branches. Constitutional conventions and Constitution Acts provide the principles for the relationship between the executive and the legislative branches at federal level.

●The executive branch comprises the Prime Minister, the Cabinet and the public service. It is responsible for proposing the budget and for the use of the public funds approved by the legislature. Some funds are approved on an ongoing basis by statute while others are voted annually in appropriation bills.

●The legislative branch consists of two houses of Parliament: the House of Commons and the Senate. Members of the House of Commons are elected at least every five years. Senators are appointed by the government and selected from across Canada. Constitutionally, the House of Commons enjoys pre-eminence in budgetary matters. The legislature exercises oversight of the budget process via parliamentary committees and the Auditor General, an officer of Parliament.

●The judicial branch, consisting of various federal courts culminating with the Supreme Court, is independent of the executive, and adjudicates cases dealing with financial laws.

3.1.2. Roles and responsibilities of the Cabinet and individual ministers

The roles and responsibilities of the Cabinet and ministers are governed by long established conventions. The Prime Minister is the head of government. The law does not specify his/her roles in detail. The major roles of the Prime Minister are to: i) appoint senators, members of Cabinet and other senior positions; ii) organise government and determine overall government priorities. The Prime Minister appoints the Cabinet from among members of his or her party. The Cabinet in 2004 was made up of 28 ministers (elected officials, with a few exceptions) whose work is assisted by 11 secretaries of State. Previous governments have had as many as 40 ministers in Cabinet, making decisions highly complex. The Privy Council Office supports the Prime Minister and, accordingly, acts both as advisor on major issues of interest to departments and as a secretariat to support decision making by Cabinet and Cabinet committees.

IV. CANADA

Cabinet ministers are selected by the Prime Minister on the basis of their experience but also with a view to ensuring diversity. Each Cabinet minister is given responsibility for a department (ministry in other countries) and may hold additional responsibilities for regional or provincial interests, or for Crown corporations. The Prime Minister and ministers in Cabinet make all major policy decisions.

Cabinet committees, whose number and type depends on the government in power, are established at the discretion of the Prime Minister, with the exception of the Treasury Board, which is established in the FAA. Cabinet committees review proposals from individual ministers and send written recommendations to Cabinet for ratification (Kelly, 2001). If proposals have expenditure implications that go beyond the approved budget allocations for the department, the proposal must also receive the approval of the Treasury Board.

3.1.3. Establishment of ministries and executive branch agencies

The central budget office function is divided between the Department of Finance and the Treasury Board. Both are established under the legal authority of the FAA.4 The Finance Minister is responsible for general economic affairs and for the fiscal policy framework including the preparation of the federal budget, tax and tariff legislation, and the management of federal borrowing on financial markets. In addition, the Finance Minister is directly responsible for the administration of several transfer programmes. The Finance Minister presents the budget to Parliament.

The Treasury Board manages the government’s financial, personnel, and administrative responsibilities. As expenditure manager, it is responsible for preparing the government’s expenditure budget (the main estimates) and monitoring programme spending in departments. It also provides the policy framework in areas such as accounting, audit and evaluation, contracting and financial management.

Other federal departments are generally created by separate acts of Parliament (for example, Department of Health Act, Department of Industry Act – see http://laws.justice.gc.ca), which specify the powers, duties and functions of individual ministers. Departments and agencies are listed as Schedule I.1 and II of the FAA. Departments are responsible for designing policies, delivering programmes to the public, and managing federal government regulations. In total, there are about 20 operating departments and more than 100 other organisational entities.

3.1.4. Responsibilities of senior civil servants

There are no specific legislative provisions concerning senior civil servants. The Public Service Modernisation Act 2003 (PSM) modernised conditions for