Evidence of meeting #16 for Public Accounts in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was health.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

John Wiersema  Interim Auditor General, Office of the Auditor General of Canada
Neil Maxwell  Assistant Auditor General, Office of the Auditor General of Canada
Wendy Loschiuk  Assistant Auditor General, Office of the Auditor General of Canada

3:30 p.m.

Conservative

The Vice-Chair Conservative Daryl Kramp

We will now bring to order meeting number 16 of the Standing Committee on Public Accounts. I remind my colleagues that today's meeting is televised.

Before the committee today is the 2011 Fall Report of the Auditor General of Canada.

The witnesses we have before us today are no strangers to this committee. We have with us Interim Auditor General John Wiersema, Assistant Auditor General Wendy Loschiuk, and Assistant Auditor General Neil Maxwell.

Colleagues, I would draw to your attention the fact that we have visitors here today to observe the happenings of the public accounts committee. It's a parliamentary delegation from Bangladesh, composed of four committee chairs along with their officials and their staff, led by Dr. Mozammel Hossain, the chair of the committee on social welfare of the National Assembly of Bangladesh.

I believe we should welcome them.

[Applause]

There is a possibility--depending, of course, on the scheduling and the time change and the implications of such--that the members of this committee may have an opportunity to meet informally with the delegation tomorrow. That of course is still subject to change.

Before we begin our meeting today, if I may—and I believe it would certainly be in order—I want to thank Mr. Wiersema for what will be his last appearance before this committee serving in his capacity as Interim Auditor General. We thank him not only for serving as the Interim Auditor General, but for his service for the past 33 years.

John, if I may be casual, in my personal thoughts here, which certainly, I know, are shared by all members on this committee and, I can assure you, on behalf of Canadians, we thank you.

[Applause]

That having been stated, sir, the floor is yours for an opening statement.

3:30 p.m.

John Wiersema Interim Auditor General, Office of the Auditor General of Canada

Thank you, Mr. Chairman.

Thank you very much for those kind words. It has indeed been an honour to serve as the Interim Auditor General and to work with this committee over the years, but in particular it has been an honour to serve as Interim Auditor General as an officer of Parliament. I have done my best to meet the needs of this committee. Thank you for your kind words.

Good afternoon, Mr. Chair.

I am pleased to present my fall report, which was tabled in the House of Commons yesterday. As you mentioned, I am accompanied by Assistant Auditors General Neil Maxwell and Wendy Loschiuk.

The first chapter in this report contains the findings of our second audit of Canada's economic action plan. Our first audit, tabled a year ago, focused on the design and roll-out of the plan. The second audit looked at how three programs were implemented.

For the three specific programs we audited, the government was diligent in monitoring the progress of projects and their spending. It also took corrective action as required to ensure projects were completed as intended. The decision to extend the deadline was supported by appropriate analysis.

The government invested $37 billion in the economic action plan. It is important that the government report to Parliament on the overall economic impact of the plan and the jobs created, as it announced it would do by early 2012.

In our chapter on issuing visas, we report that Citizenship and Immigration Canada and the Canada Border Services Agency need to do a much better job of managing the health, safety, and security risks associated with issuing a visa.

Visa officers are responsible for deciding whether to grant or refuse a visa to enter Canada. The system lacks basic elements to ensure that they get the right information to make those decisions. We found that many of the indicators that visa officers use to identify high-risk applicants have not been reviewed in years. Medical screening for danger to public health has focused on the same two diseases--tuberculosis and syphilis--and this has not been updated for 50 years.

Quality assurance practices focus on decisions to refuse a visa. In cases where the applicants are found admissible, the quality of the decisions is rarely reviewed. This means that CIC and CBSA don't know if a visa was issued to someone who in fact was inadmissible.

We've been reporting some of these problems with visas for 20 years, and I find it disturbing that fundamental weaknesses still exist. It's time for CIC and CBSA to resolve them.

The third chapter in our report deals with income support programs for farmers. We note that Agriculture and Agri-food Canada has improved in some areas, such as the accuracy of payments, but that problems remain. Farmers can wait up to two years for payment and the amount of the payment is hard to predict.

The audit also looked at the $284 million program that provides funding to enable tobacco growers to leave the industry. The design of the tobacco transition program was rushed, making its delivery challenging. In some cases, recipients who received money for exiting the industry continued to produce tobacco, undermining one of the program's objectives. This underscores the importance of sound program design, including considering what could go wrong and how to prevent it.

I turn now to the fourth chapter in our report, which deals with Health Canada's role in regulating pharmaceutical drugs for use in Canada.

Canadians rely on Health Canada to ensure the safety and effectiveness of drugs. Health Canada has taken steps to ensure the quality of its drug reviews; however, we found that the department is struggling with timeliness and with transparency in some areas. In addition, it has not determined what measures are needed to address the potential for conflicts of interest in its reviews of drug submissions.

Health Canada is slow to act on potential safety issues related to drugs already on the market. It needs to get safety information out to Canadians more quickly and address the potential for conflicts of interest.

Moving on now to the last chapter in our report. This audit looked at how National Defence manages the maintenance and repair of its military equipment.

DND has adopted new approaches to contracting for maintenance and repairs. These new approaches have the potential to help DND better manage maintenance and repair activities and realize cost savings.

However, because implementation has been slow and hampered by lack of concerted effort and follow-through, the department has missed out on some of these opportunities. I encourage DND to take the necessary steps to move ahead with these new approaches.

In closing, Mr. Chairman, I would like to share with you some reflections based on the many years I have spent as an auditor of the federal government.

In my experience, government programs require certain fundamental elements in order to be successful. These include clarity of purpose, committed and sustained leadership, predictable and stable funding, and sufficient and appropriate management information. Most of the problems found by our audits over the years can be attributed to weaknesses in one or more of these areas. I encourage the government, as it undertakes its current review of spending, to ensure that these core elements are in place to secure the success of continuing programs.

Thank you again, Mr. Chair. This concludes my opening statement. We would be pleased to answer the committee's questions.

3:35 p.m.

Conservative

The Vice-Chair Conservative Daryl Kramp

Thank you very much, Mr. Wiersema.

Now we will commence with our rounds of questioning. The rounds will be five minutes, as usual. We will be going through our normal routine schedule of questioning.

We will be starting with Mr. Saxton, please, for five minutes.

3:35 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Thank you, Mr. Chair.

Thank you, Auditor General and other witnesses, for being here today.

I'd like to begin by asking you, Auditor General, to confirm what you have been saying in regard to Health Canada's approval and review process for pharmaceutical drugs. Can you confirm for this committee that you found their process to have an end result of safe drugs for the market and that they do a good job of ensuring safety for drugs in the Canadian marketplace?

3:40 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

Yes, Mr. Chairman, I can confirm that Health Canada does a good job in reviewing its drug submissions. When Health Canada does approve a drug for use in Canada, it has a rigorous process behind it.

Nevertheless, Health Canada is struggling in two areas in particular.

It has service standards: timelines that it expects to meet with respect to its review and approval of drug submissions. For the most part, it is struggling with meeting those timelines. The review process takes longer than the standards that Health Canada has set for itself.

The other issue that I will flag, Mr. Chairman, has to do with monitoring of potential safety issues with respect to drugs that have been approved for use. The department actively monitors those safety issues, but in many cases the time it takes to conduct its review of a potential safety issue and to communicate the results of its review to Canadians is too long. In some cases, it can take up to two years to assess those safety issues and communicate the results to Canadians.

3:40 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Okay, but you do confirm that the end result is that we have safe drugs on the market...?

3:40 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

I confirm, Mr. Chairman, that Health Canada does a good review of the drug submissions it receives.

3:40 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Okay. Thank you.

Auditor General, as our chair mentioned, you've been serving the public for over 33 years. You have experienced a tremendous amount during that time. We'd like to thank you again for your many years of service to Canada.

I'd like to ask you now about what the highlights are--and perhaps some of the low lights--and what are some of the more memorable things that have happened to you in those 33 years, and what advice you might have for us going forward.

3:40 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

The highlights and lowlights...? Well, I got married--

3:40 p.m.

Some hon. members

Oh, oh!

3:40 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

No, no, that's in the former category, obviously. That clearly is in the former—

3:40 p.m.

An hon. member

Say grandkids.

3:40 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

As for the highlights, not to put too fine a point on it, Mr. Chairman, the highlights are my marriage and the births of my kids and my grandkids.

In terms of my career with the office, which is what I think the member was referring to, the highlights would be, most recently, my appointment as Deputy Auditor General. I have had the distinct pleasure and honour of serving Sheila Fraser, Auditor General of Canada, since March of 2004. The fact that she named me as her Deputy Auditor General and that I was able to work very closely with her as deputy for seven years towards the end of her mandate was a highlight. We obviously talked together about many auditing issues. The fact that I was able to advise her on positions she took on those issues was the highlight of my career.

3:40 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Do you have any advice going forward?

3:40 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

In terms of advice to put forward, I think I'll come back, Mr. Chairman, to my chapter on matters of special interest and importance.

As I indicated in my opening statement, I truly do believe that a great majority of the negative audit observations about which this office comes in front of this committee have to deal with one of those four key elements, where the objective of the program isn't clearly defined: what we're trying to achieve and over what time period, realistic objectives, and clear roles and responsibilities. I think a lot of our observations have to do with that area.

Committed and sustained leadership: in the report we tabled yesterday, you'll note a couple of areas where we've reported on these observations in the past. Government has indicated that it was going to address them but in fact has not. I think that's fundamentally a question of committed and sustained leadership.

Predictable and stable funding: the government's funding cycle is short-term in its nature. It basically looks out five years and a lot of programs receive what's called sunsetted funding. I think it puts senior managers in the public service in a very, very difficult position for planning strategically for the long term if they don't have security of their funding, in some cases for the short term and in almost all cases beyond the five-year timeframe.

The fourth comment, Mr. Chairman, has to do with sufficiency and appropriateness of management information. I truly believe this is a chronic problem in government; it's fairly widespread. Government managers do not have the information I think they should have to manage well: information on their objectives, on the results they're trying to achieve, on service levels, and on costs to deliver services. I think you'll see quite a number of audit reports pointing to deficiencies in these areas.

3:45 p.m.

Conservative

The Vice-Chair Conservative Daryl Kramp

Thank you.

Perhaps in closing remarks you can elaborate further, should you have the time, but we're out of time here.

Now we'll go to Mr. Dubé, s'il vous plaît.

3:45 p.m.

NDP

Matthew Dubé NDP Chambly—Borduas, QC

Thank you, Mr. Chair.

I would like to echo the chair's comments by thanking you for your work and for joining us today.

I would like to focus on chapter 5, which deals with the situation at National Defence. It seems it leaves quite a lot to be desired. For several weeks, not to say several months, this department seems to be having a fair number of problems. I think, for example, about the F-35 issue, which was brought up in the House. It seems to be clear that the problem is one of management.

Several times, you mentioned management in the short term and lack of management in the long term. Going by the comments you made in response to a question from my colleague, I would have to say that stable long-term funding is one of the chronic problems that affects the department as a whole.

What, in your view, are the impacts of this department's short-term vision, specifically on the maintenance and repair of its equipment? How could this hurt, with particular reference to the effectiveness and the safety of our military forces?

3:45 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

Thank you, Mr. Chair.

First of all, I would say that the situation is perhaps even worse than you described it.

The department has been able to keep its equipment maintained and operational in the short term, but even there, with respect to the short-term situation, in my view it doesn't have proper information systems on its equipment and the costs to maintain that equipment.

Right now, the department is not in a situation to be able to allocate its own staff costs that it incurs, the costs of its own infrastructure, its maintenance and repairs, and its activities. That situation exists even today. The department has indicated, in response to our chapter, that it intends to have that information system in place by 2013.

With respect to going forward, the department is exploring what I believe to be some innovative and potentially quite productive approaches to arranging for the maintenance and repair of its equipment. In my view, those approaches have lost momentum. They haven't received the attention they deserve within the department, and I encourage the department to get on with exploring those approaches further, in particular because there are also opportunities for cost savings there, I believe.

With respect to the question on the financing, here again, particularly as the department moves to long-term and fewer contracts for maintaining its equipment, there will be challenges with financing, because the department only has stability and security of funding for the short-term but in some cases will be entering into contracts for repairs and maintenance of its equipment that will extend long beyond the funding horizon.

3:45 p.m.

NDP

Matthew Dubé NDP Chambly—Borduas, QC

Thank you. This is a department that spends huge sums of money and that negotiates for the purchase or maintenance of equipment that is used in some pretty difficult situations, like wars or peacekeeping missions. I can't see how, in 2011, these information systems are not being used.

How long has your office been making these recommendations for? Do you have any indication that things will be different this time, and that your recommendations will be taken into account?

3:45 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

I hope that it will be different this time. That is a good question to ask the department.

I think this is.... Forgive me, Mr. Chair, I probably shouldn't be giving advice to this committee, but I think this points to the important role that this committee can play in the accountability process. In recent years when the public accounts committee had hearings with departments, it asked for action plans with details on who was going to do it and when it was going to be done. That wasn't in place in 2004 when we last reported on this issue.

So I believe there's an important role for the committee to play here in asking the department for action plans. The committee could satisfy itself as to the sufficiency of those action plans and the committee could also use those action plans as the basis for subsequent follow-up.

Forgive me, Mr. Chair, but I think the committee can help us here.

3:50 p.m.

Conservative

The Vice-Chair Conservative Daryl Kramp

I think you've earned that right, sir.

3:50 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

Thank you.

3:50 p.m.

Conservative

The Vice-Chair Conservative Daryl Kramp

You have 20 seconds, Mr. Dubé.

3:50 p.m.

NDP

Matthew Dubé NDP Chambly—Borduas, QC

I would like to come back to the matter briefly. Because these transactions involve such large sums of money, is it your experience as an auditor that it is normal that such systems are not already in place at the Department of National Defence?

3:50 p.m.

Interim Auditor General, Office of the Auditor General of Canada

John Wiersema

No, Mr. Chair, it is not normal, and we said exactly the same thing several years ago. So the department has to deal with the issue.