Public Accounts Committee on Nov. 4th, 2009

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Okay.

Was there some additional evidence from the additional witness?

[Sheila Fraser]

Do you want to add about the fourth vehicle?

[Hugh McRoberts, Assistant Auditor General, Office of the Auditor General of Canada]

Yes, just to clarify. The fourth vehicle, the one there has been some problems with, is the creation of a new variant of the standard LAV-3. The intent was to remove the turret, which is quite heavy with the 25-millimetre gun on it, and to replace it with a remote weapon system very much like that on the RG-31. This is a much lighter weapon system than the turret and 25-millimetre gun. That would produce a reduction in weight and would permit putting more anti-IED armour on the LAV-3. It sounded like a simple idea, but it turned out to be a little more complicated to do than it sounds.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Plus the men and women in these LAVs kind of like having that heavy gun on top when they need it.

In any event, I'm not a soldier. Thank you very much for that.

I want to turn to the Canada Revenue Agency/Department of Finance issue that came up at the briefings yesterday. I have to admit that 400 technical changes to the income tax will put most of us to sleep in five minutes, but Auditor General, you certainly point out that there are costs associated with the delay here, and there have been about eight years of technical changes built up. It's not just costs for the government and costs for the taxpayers and the taxpayers' accountants and the taxpayers' lawyers, but I think there are other indirect costs too, or potential costs. I call them...I guess they're just inefficiencies. As people struggle, they get comfort letters and get letters written that say, “You're not really going to tax me for this, are you, because you didn't tax my friend that way.” It breeds uncertainty and it breeds what I would call arbitrary decision-making within various tax offices.

Would you agree with that, that those are potential outcomes, even though it may not be happening in a really negative sense now?

[Sheila Fraser]

I certainly think there is a serious risk of uncertainty and confusion, and the fact that the delays are so long means the agency may not be able to go back and reassess corporations who may have filed in a more aggressive fashion than the policy would permit. Or vice versa: corporations may be actually paying more taxes than they should be. So it is important that these amendments be made.

I would also raise an issue that hasn't been brought up so far, that the Revenue Agency has guidance on its website that is not up to date and doesn't reflect changes. We give the example of scholarships for students; they are now completely tax exempt, while the guidance says it's only $3,000. They either need to modify these things and bring them up to date or, I would say, withdraw them, because taxpayers could be relying on incorrect information.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

The department has agreed with you on that, has it not?

[Sheila Fraser]

That's correct.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Lee, and thank you, Ms. Fraser.

Mr. Kramp, you have six minutes.

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

Thanks to all, and thanks for your diligence. Certainly, as we participate in this evaluation of the apparatus of government, your thoughts are not only important; they're crucial.

If I might, I've listened to a few of your reports now, and if I could just offer a quick little overview for a second, I'll use the analogy of a ground fire. We've all witnessed forest fires and raging fires and raging infernos, and quite frankly, I think this whole group of reports is not that. But I will say there are some brush fires. There are some issues we have to deal with—and we not only could deal with but we should deal with—in order to not only solve some of the existing problems you've identified but hopefully to prevent others from happening as well. So your efforts are extremely appreciated.

I have a couple of quick penetrating questions, I would hope, but before I ask them, I hope the opposition members will allow me to say this. It is rare when the Auditor General awards a “gold star”, and when I saw that I honestly said, hey, all news isn't bad. So thank you very kindly for recognizing the efforts of management on the Canada Health Infoway; and of course, particularly when you contrast that with the provincial auditor's response on that, which was literally damning, I'm pleased to see that.

It also opens up a very, very serious concern of mine on that, because although we have a system that apparently is working very well—we're getting it together on the Infoway—you state, “However, having a system available does not mean health care professionals are using it”. Well, what good is it having a system if people aren't going to use it effectively? Why aren't they using it effectively? Is it resources? Is it training? Is it regulatory approval? What is the problem?

[Sheila Fraser]

Thank you, Chair.

We were also very pleased to see that the management of Infoway was good and that our report was positive. We have recommended to Infoway that they include in their indicators the percentage of systems that are actually being used. They haven't tracked that to date, believing that it was really a provincial responsibility to make sure these systems were put in use. But we think they should be much clearer in their performance indicators, and they have agreed with that, and I'm hopeful they will start reporting that information soon.

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

On acquiring military vehicles, there is good news and bad news. Three of the projects are operational; the acquisitions were great. The other project, though, is two years behind schedule and running at double the projected cost, which is totally unacceptable. Can you tell us why that happened, or do we have to ask our DND officials under Public Works to come here to explain it?

[Sheila Fraser]

I think Mr. McRoberts mentioned part of the reason, and I'll ask him to elaborate. It would appear that the department underestimated the complexity of the project.

[Hugh McRoberts]

I think it's a question you should ask the department. But if you look at it in terms of complexity and certainty, there's a scale that starts with the RG-31, where we in effect went into the dealership and bought it off the showroom floor, and goes down to the LAV-3, where instead of just popping the turret off and putting on an RWS, we had to do substantially more development work. As you move from off-the-shelf acquisitions to designing, building, and acquiring, the risks go up, particularly the cost and schedule risks.

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

In evaluating the effectiveness of programs, the Auditor General said that the departments she audited were concerned about whether they could meet expanded requirements. Why can they not meet the expanded requirements? Is it due to a lack of manpower? Is it due to lack of expertise? Is it due to budget? Why can we have the programs in place but then have the people not deliver it? Why?

[Sheila Fraser]

As the committee knows, the policy has changed. Starting in 2013, all direct program spending will have to be evaluated over a five-year period. In the departments we looked at, the percentage of coverage was between 7% and 13%. None of the departments we looked at was actually evaluating 20% each year, which is the minimum they would have to do. They're very concerned about the lack of experienced evaluators. We know that much of the evaluation work has been given to contractors. We think it's important that some of that expertise be brought in-house, within government, and that this function be strengthened across government. There is still time, but they mentioned a concern about whether they'd be able to build up the capacity to do this within three years.

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

On the Health Infoway, it's a significant budget—$1.5 billion to date. From the invoices and billing that just went through, have you been able to ascertain whether or not there has been value for money? Has there been transparency in the payment of invoices?

[Sheila Fraser]

Infoway has a rigorous process of managing the projects that they fund. They ensure that there is a good strategic plan and that the projects meet their standards for compatibility. They also protect themselves. They agree to fund 75% of the projects, but any cost overruns are assumed by the provinces. So it all depends upon the overall implementation within a particular province. They often fund projects in hospitals or elsewhere. Much of the success of this project will rely upon the provinces to bring these whole systems into operation.

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

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Kramp.

Monsieur Plamondon.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

I will be asking the questions, Mr. Chair.

My questions will centre on chapter 2 and the selection of foreign workers. You observe in chapter 1 that in coming up with solutions to problems, the government runs the risk of finding itself in situations where the measures it advocates lead to unexpected problems. The result could be some confusion with programs. You go on to discuss in chapter 2 the program under which foreign workers are selected.

Has the government placed itself in a vulnerable position with respect to the Immigration Act? Does it currently find itself in a position where it must reimburse certain immigration applicants? Have the measures that have been put in place enabled some immigration applicants to by-pass the family reunification program?

[Sheila Fraser]

I will answer the first question, Mr. Chair, then let Mr. Flageole take the other two.

We did not encounter any situations that were in violation of the Immigration and Refugee Protection Act. If we had, we would have mentioned it in the report.

I will ask Mr. Flageole to confirm that.

[Richard Flageole]

Thank you, Mr. Chair.

No, we really did not observe any instances of non-compliance with the legislation.

Regarding your question about refunds, if applications are deemed ineligible, refunds will be provided. Earlier, the Auditor General stated that from February to December of 2008, some 300 applications were deemed to be eligible. The overall number of eligible applications was reduced to 38 retroactively. So then, many people submit applications, but will be declared ineligible subsequently. Approximately 60,000 applications were submitted during this nine-month period, and the department estimated that it had to award 45,000 refunds.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Are refunds limited to the amounts requested for opening the file, that is to the amount remitted to the government, or are the fees charged for processing files, either by a lawyer or by persons helping with the immigration process, refunded as well?

[Richard Flageole]

Mr. Chair, any charges incurred for hiring immigration consultants or other persons are not refunded. When prospective immigrants submit an application, they are charged an application processing fee. If their application is deemed ineligible, the fees will be reimbursed.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Currently, the immigration system is dealing with a backlog of about one million cases. The government has spent over $300 million over the last ten years to set up and modernize its computer system. The system is still not fully in place and we regularly receive requests for changes. I know that the Standing Committee on Citizenship and Immigration reviews requests for additional funds for immigration computer systems. This hasn't resolved the problem in departments where officers are currently drowning in paperwork.

Have you been given any explanations for this state of affairs and do you have any reason to believe that the department will turn the corner and that the situation will improve?