Government Operations Committee on May 15th, 2008

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

That would reduce the demand a little, but if there is no passport office in a given region, there is an effect on the staff and the budget. I am specifically thinking of the MP in Sherbrooke who does 10,000 of them per year.

I would also like to bring up the subject of air safety at Transport Canada. In paragraph 19 of your presentation today, you say that 74 airline companies and aircraft maintenance companies were affected. You forecast that more than 2,000 small companies will also be affected.

That is a lot, I find; the impact to be huge. How did Transport Canada respond to you? Had it foreseen the effect? What will the consequences be?

[Sheila Fraser]

Our main observations were that Transport Canada did not consider all the risks and costs associated with the transition very well. At the outset, that affected the 74 airlines and larger aircraft maintenance companies. But, in the next phase, there will be 2,000 more. These are smaller companies. Of course, the volume is much greater.

We are concerned because the department has not evaluated the impact of reducing traditional inspection activities in making the transition. It has not allocated additional resources to the transition. Of course, traditional inspections have to continue during the transition.

We wanted to see whether it had thoroughly considered the risks and whether it had obtained assurances that inspection levels were appropriate. We are told that it will do so, but we are worried about the fact that, with 2,000 companies to handle, more resources will clearly be needed.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

I ask the question, Ms. Fraser, because I really want to understand. You are referring to the maintenance and the inspection of the aircraft itself. A number of companies, both small and medium-sized, wanted to do business with Air Canada, among others. Now Air Canada has its maintenance and its inspections done in China.

I imagine that is what you are referring to here. That has repercussions at Mirabel, for a start. There were some small inspection companies at Mirabel. This has negative consequences at Mirabel and Dorval, but it benefits the west, or China and India. Is that what you are referring to?

[Sheila Fraser]

Not really. We were talking about Transport Canada's inspection activities. It is changing the way in which it conducts inspections and ensures the safety of the air system.

Beforehand, inspectors checked aircraft tires and did all the tests themselves. Now, instead, they check which systems the companies have put in place to ensure the safety...

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Forgive me for interrupting you.

Air Canada has a lot of maintenance done in China. The department cannot go to China. What is it going to do?

[Sheila Fraser]

It will ask Air Canada how it makes sure that the maintenance is safe and, if it needs to, I assume that it will be able to go and see the companies doing the maintenance. Ultimately, the inspectors should always have access to the companies if they deem it necessary.

That is perhaps a question to discuss with them. We did not look into it in detail.

[The Chair, Liberal, Diane Marleau]

Thank you, Ms. Bourgeois.

Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

I just want to lay some of the groundwork in terms of some of the things we see in the field, as opposed to--as you referred to it--how the policy works.

I have a wonderful little community--one of my most isolated communities--Peawanuck. Being isolated, it relies on a diesel generator for electricity, and of course everybody knows that fuel prices have gone through the roof. They are paying probably two to three times the provincial average. So at any given time in that community, I have maybe 25% of the population faced with having their power cut off because they either don't turn the lights on or they can't pay.

At the federal level there would be money for a study, so we will get a study and it shows that wind power is actually phenomenally easy to access there. Then you put the proposal in to actually build wind power--so you could move this community out of something that is crippling it--but there is no money.

I worked in another community where we had a fire in February and three families were left homeless. Two of them moved in with relatives and one moved into a shed because there was no money; there was no housing built in 20-some years, and there was no plan for building housing.

My community of Attawapiskat has 400 children with no school and no money for a school.

Yet I look at the reports from last year that the federal government--the Department of Indian Affairs--returned $109 million from their capital budget back to Treasury Board. These same bureaucrats get paid bonuses for--it seems to me--not doing their job. There is such a dire need in these communities for funding. There are so many reports, they're stacked to the ceiling, and yet every year the bureaucrats send back phenomenal amounts of money that Canadians expect are being spent.

I know this wasn't in the purview of your study, but I don't know of anybody else who has the power to fix this. If you ask a minister, he'll shrug. If you ask a bureaucrat, they'll shrug. There seems to be an incredible inertia around the fact that money is being clawed back from these communities year after year and spent on anything from tax cuts to something else.

Is there something you can do, as the Auditor General, to examine how money is being spent, and why it's not being spent?

[Sheila Fraser]

We haven't specifically looked at that in the Department of Indian Affairs. We have looked at what we call the expenditure management system across government, and there have been a number of studies. One of the main conclusions of several studies is that when it is very clear to everyone that government cannot go into a deficit--and you start off with that--you're always going to have a surplus. You are never going to manage so tight to the line that you might go into a deficit, so everyone ends up with a surplus in their budgets. It's kind of the reality of the way government has been operating for several years.

I think it also comes back to planning, to a number of factors. I know we did a housing audit; I suspect they probably don't plan for all of the risks that could be involved. Things can go wrong, and if one project doesn't work, have you sort of over-programmed enough so that if you don't spend the money there, you can spend it somewhere else rapidly? There are issues like that, I would believe, that are probably in there too, but I hesitate--

[Charlie Angus, NDP, Timmins—James Bay, ON]

Well, $109 million is a staggering amount of money not to spend. From my experience, we negotiate for these plans for years. Indian Affairs doesn't give out money; we have to jump through hoops. Our communities spend phenomenal amounts of money doing every possible evaluation study to get to the point of being told, “Sorry, there is no money.” I don't see those kinds of discrepancies in other departments to such a degree.

[Sheila Fraser]

There are a couple of things. I believe the budget in the Department of Indian Affairs is probably $4 billion or more, so $109 million on $4 billion is 2% or 3%. I suspect there are a lot of departments that have 2% or 3%.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I think with the capital, it's more than about a billion--

[Sheila Fraser]

I suspect too that because of the multitude of the numbers of programs, if you have each one that has a little surplus, at the end of the day it kind of all adds up to a lot of money too.

I really don't have a very good answer, and I don't know if the deputy minister and the officials would either.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I've never received a really good answer. To me, I find it bordering on criminal when we look at the poverty of these communities. In Attawapiskat, I'm told, there are no plans, period, to build a school; it just isn't going to happen, after eight years of negotiations. I mention that because just this May the Kawartha Pine Ridge District Public School Board and the Bluewater District School Board led an initiative all the way to the national school boards of Canada to call on the federal government to put in place a plan.

I don't know of another instance when provincial school boards across Canada say that the failure to service children is to such a degree that as provincial school boards in various provinces we have to write to the federal government to say we need a plan--you simply can't cancel schools like Attawapiskat on a whim. Children have a right to education. That's a fundamental right. And yet--as you said, Mr. Campbell--we deal in the area of policy at the federal level when it comes to first nations, and the provinces deliver services. Well, the federal government is obligated to deliver services to these communities, and they don't.

I just don't understand why, in 2008, we don't have standards that we can examine, transparencies that we can compare, and even basic goals, because any educational institution, any education system, has to have that. Why do we not have that at the federal government?

[Sheila Fraser]

I agree with you. And I don't have an answer for it, I'm afraid.

[The Chair, Liberal, Diane Marleau]

Thank you.

Mr. Albrecht.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Thank you, Madam Chair.

Thank you to Ms. Fraser. My apologies for missing the first part of your presentation; I had another commitment.

I thought we were going to be spending the bulk of our time today on the conservation of federal official residences, but I'm going to assume that my colleagues have covered all of those questions.

I'm going to move to chapter 4, regarding the child and family services at Indian and Northern Affairs Canada. In paragraph 23 you point out that the funding formula dates back to 1988, and I addressed this to Mr. Campbell the other day. It's a 20-year-old funding formula, and my understanding is the funding formula is based on the average usage rate of about 6%. And in the report--although it is not here in front of me right now--I understand there's a range of 0% to 28% in terms of actual experience that's needed here.

I think it's important that Canadians understand and have trust in the fact that your department and other departments are being wise in the way we use taxpayer dollars. That's one concern. But the other part that I think is missing here is the issue of trying to find a way we can replicate, as much as possible, those communities that are under 6% in terms of their experience, to not only save money, but improve the lives of children on reserves.

So I'm wondering if you would have the freedom within your mandate to recommend those kinds of follow-ups to the department and say they could change their funding formula, but perhaps even more foundational than that is the issue of trying to find ways we can reproduce the positive experiences of those first nations communities that are closer to zero, and not up near 27% and 28%. Do you have that kind of freedom within your mandate?

[Sheila Fraser]

Absolutely. While we didn't specifically make that recommendation, we did make recommendations to the department about having better information on what these programs were actually accomplishing. So I think that would be the avenue where they could go and see that if certain communities were having more success, what are some of the elements of success there? Can they be replicated? Obviously it's not simply the program itself; there are many, many factors that come into this, as we point out in the report.

I think if the department got better information about what was being accomplished with these programs, it could go a long way to resolving this.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

I applaud the fact that you've brought this to our attention, because I think it's understandable that different first nations agencies will not have a lot of the same percentage needs, obviously, in terms of the children that will need that kind of service.

I just want to follow up on a statement that Mr. Silva made earlier regarding the removal of Canadians who are here illegally and who possibly pose a threat to Canadians. I think we've been clear--at least the reports I've read have been clear--that we have acknowledged that we have removed more in the last couple of years. It's not a matter of getting rid of Canadians; it's a matter of improving the safety and security of all Canadians. The resources, as you point out, are focused on those who are posing a higher risk. There are those at both ends of that spectrum. So I just wanted to clarify that point and thank you for raising it.

I'll share the rest of my time with Mr. Kramp. I'm sure there are about four minutes left.

[The Chair, Liberal, Diane Marleau]

Mr. Kramp.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I have just a couple of quick questions.

Going back to the issue of health and infectious diseases, SARS, etc., what we're talking about--and it's very important--is $10 million for the residents, etc. They sort of grab the attention of the public. I am really deeply concerned. I mentioned it briefly, and Mr. Merrifield entered his comments on this adequately as well. This is a major issue, not just from the position of Health Canada, but also as regards public safety, whether it's something like SARS occurring naturally, or a viral agent as a terrorist threat.

I'm wondering if there is an effective level of communication between the Department of Public Safety and the Department of Health. Are you aware of that?

[Sheila Fraser]

That is not something we looked at in this audit, so I really can't comment on it.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Might I make a suggestion regarding your future endeavours? This to me is an issue that is of major concern. The last thing we would want to say is “Oh, well, we just didn't get around to it.” As Mr. Merrifield said, this is extremely important to the Canadian public. We have no greater service as parliamentarians than towards the health, safety, and protection of our citizens.

In this particular case, we want to be more than adequately assured that our different departments cooperate and have an effective plan to be able to deal with this, rather than working simply in isolation. We have seen instances in which the cooperation between the different departments hasn't been extended. That just might be something that you consider for evaluation.

The second point is in regard to the transportation of military goods. I'm very fortunate, in that I live right beside Trenton, which of course is now the air transport capital of Canada. Therefore, I've seen not only our new aircraft in operation, but also the enormous plans for warehousing, for shipping, for storage, for inventory control, for management, and for staffing. While we have some inadequacies in inventory control, overall it's very good, but everything is being shipped out of the country. I think domestically we're doing a pretty good job.

You mentioned that most of our problem appears to be at the point of destination, rather than at the point of origin. But if that's the case, as we move to this much more expanded and capable role of core centralization so that we can have better control, if we've been able to extend that level of efficiency out, I'd like to be able to see us down the road say that we have a benchmark now, and ask whether we have made significant improvement. I really believe our infrastructure spending now will help accommodate that, but it would be good to see that we have some form of documentation on that as well.

Thank you.

[The Chair, Liberal, Diane Marleau]

Thank you, Mr. Kramp.

Before we go on to Madame Faille, I wanted to ask one question of you.

We've been looking at the high turnover of federal employees in certain parts of the country where there is very low unemployment, such as Ottawa, Montreal, and so on. I'm wondering if in any of your plans you have any thought to looking at the impact of the high turnovers in the cost of training and retraining employees, and the impact that it has overall.

[Sheila Fraser]

That is not currently in the plans. We do have an audit coming on the whole modernization of the human resource system—that is for 2010—and we are doing some work as well in human resource management at the Canada Revenue Agency, which will be coming this fall.