Public Accounts Committee on Nov. 23rd, 2011

[The Vice-Chair, Conservative, Daryl Kramp]

Thank you, Mr. Byrne.

We're well over time now, so we will suspend the meeting until immediately after the vote.

[The Vice-Chair, Conservative, Daryl Kramp]

Okay. We will commence.

We give our apologies to our guests, although I think they understand the realities of parliamentary process well enough that I suppose it's not necessary. We will get back to our line of questioning immediately in the hope that we can get through his and give everybody an opportunity to participate today.

The next line of questioning will be from Ms. Bateman, please.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Thank you very much, Mr. Chair.

What an honour it is to be at the last occasion when you're speaking in an official capacity and to thank you very much. As a public servant myself, I certainly took the role very seriously, and I still take very seriously this new role. I know you did the same for your entire career and je vous remercie.

There's another thing you've done incredibly well and I would like to hear a little bit about it. As you know, we have a deficit reduction action plan, and you have personally committed in your office to undergo a review of spending patterns and ensure that you're delivering on any efficiencies for taxpayers.

That is so much appreciated. I just want you to know that you're the only commission to do so—at least, that's what our information indicates. You told me the right name, sir: the servants of Parliament or the agents of Parliament. We're the servants to the people, but yes, the agents to Parliament, so....

Anyway, I just want to hear about your process and how you did it: what your intent was, what the reality was, and what you're doing on a go-forward basis.

[John Wiersema]

Thank you for the question, Mr. Chairman.

We have undertaken, as the member has indicated, a strategic and operating review of the Office of the Auditor General. I shouldn't speak for the other agents of Parliament, but my understanding is that the other agents of Parliament are undertaking similar reviews of their organizations.

We did this review over the course of the summer and the early fall, and I have written a letter to the chair of this committee outlining the results of our review. I would very much welcome--or my colleagues would very much welcome--an opportunity to discuss our thinking and to get the committee's reaction to what we're proposing as a result of our review.

In terms of the process, Mr. Chairman, essentially what we did was start with a basic question, which is was, where do we get the best value from our audit dollar and where do we invest our audit resources to make the most effective use of them and to best serve Parliament? The result of that exercise is outlined in the letter I have sent to the chair of the committee.

Basically, if you would like me to, at a very high level I can indicate what's included in that review, or we can leave it for a subsequent discussion.

[The Vice-Chair, Conservative, Daryl Kramp]

The chair is comfortable with that, as long as we have the consent of the committee, in that it falls outside the purview of our discussion today. With the indulgence of the committee.... The question is fine with the chair, but if anybody has an objection to it, then it will not go on. Are we comfortable...?

We're comfortable. Carry on, Mr. Wiersema.

[John Wiersema]

Very briefly, Mr. Chairman, I will try to go from memory of what's included in my letter.

With respect to the performance audit practice, the work we're discussing here today, we are proposing that we would continue at roughly the same level of activity we're presently doing. We reduced that practice a number of years ago in response to funding pressures we were facing at the time.

At that time, we were producing 35 or so of these reports a year for Parliament. We've since reduced that to between 25 and 30. We think that's a good number. We think that gives us an opportunity to effectively cover most areas of government operations over a 10-year period, and we think we can get an appropriate level of parliamentary engagement in our performance audit practice at that level.

The key areas of proposed cuts are in our financial audit practice. What we're proposing is to discontinue I think almost 20 of the annual financial audits we do of a number of smaller government organizations. Our thinking there was, if we're not auditing the annual financial statements of big government departments like the Department of National Defence or Public Works and Government Services, we weren't sure we were getting good value for money from auditing the very small boards and agencies or tribunals.

For the most part, we're required by legislation to do those audits so we will need legislative changes in order to be able to effect those changes.

We've also done a very careful review of our internal services, our corporate services, and are proposing some cuts in that area as well. This involves things like stretching out our computer replacement policy. Right now, we replace laptops over three years. We'll stretch it out to four years. Other changes like that will reduce internal corporate services in response to the current fiscal environment.

In total, Mr. Chairman, the proposed cuts we think we can implement, subject to the legislative change between now and the fiscal year 2014–15, are approximately $6 million or $6.5 million, or 8% of our current main estimates funding. This will also comprise some 8% to 10% of our staff. We will have to downsize the staff to implement that, and we're reasonably confident we can do it largely through attrition, through retraining, and through redeployment in the office.

[The Vice-Chair, Conservative, Daryl Kramp]

Thank you, Mr. Wiersema.

That is certainly a topic worthy of potential further discussion down the road, but our time is up now.

We will now go to Mr. Allen, please.

Excuse me. We have a point of order.

Yes?

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Mr. Chair, if my research was inaccurate in any way regarding the other agents of Parliament, I do apologize to this committee and to the Auditor General. We will be verifying that information, so I take full responsibility.

But thank you very much for this information.

[The Vice-Chair, Conservative, Daryl Kramp]

Point taken.

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Chair.

Thank you, Mr. Wiersema, for being here.

Let me say on the record from those of us on this side of the table—we are a few more than when you used to come to report to us when I was here last time—that we thank you for all your hard work over the past almost 34 years. Indeed, with you as the interim Auditor General this past while, we've had a great experience. It has been a great joy to be in this committee while you've been here reporting and a great pleasure. I certainly appreciate that. I know that the New Democrats on this side of the committee appreciate all your hard work.

Let me talk a little bit about AgriStability, because it was referenced earlier. You talked about this idea of this holistic program, a shared program with the provinces, provided of course, that the provinces—which I believe we talk about in the report—build a business case on how they intend to implement it, in which case the department then approves it. That's all well and good. That's a good thing.

That would imply to me at least the service standard delivery they expect in that business case, yet your report indicates—and I'm referencing paragraph 3.42 on page 15—a 75-day standard where we're actually trying to make payments, and it talks about processed and unprocessed applications. In other words, the report says that for the processed applications, 23% were processed and approved and met the 75-day standard. I'm quoting from the report: “However, when unprocessed applications already beyond the 75-day standard were included, only 11 percent met the 75-day service standard”.

So it seems to me there's a long way to go to come close to the standard if only 11%—and this was the most recent report, I believe, from the year 2009. It seems to me they have a long way to go to actually meet the standard where folks who are waiting for the cheque—the bankable piece is the hard part to figure out anyway—at least are getting it within a 75-day standard. There’s a long way to go if 11% are clearly meeting the standard and the rest are not.

[John Wiersema]

Thank you for the question, Mr. Chairman.

Thank you very sincerely for the kind comments.

I will ask Mr. Maxwell to comment on the specific question dealing with the AgriStability program.

[Neil Maxwell]

Thank you, Chair.

We did find, as the questioner mentioned, that the department fell short on the service standards it had set, only reaching 66%. In a sense, the picture gets worse when you start bringing in unprocessed files.

Our main concern was that from the time the application comes in to the time the cheque finally gets there, it can be as much as two years. Our concern, of course, is that this is a program designed to support revenue losses by agricultural producers, and two years is a long time to wait to get that financial aid.

[Malcolm Allen, NDP, Welland, ON]

Thank you for that.

Let me switch gears now to the tobacco piece.You reference in the report the previous program, what we called TTAP, which happened in 2005. In your most recent report, under TTP, you talk about how they “rushed” the program out the door.

What you do reference—and I'm not at the page actually, but I can probably find it if you need it—is 2005, when there was a smaller buyout program. It isn't in your report, but we certainly know there were articles written back in 2005, 2006, and 2007 that talked about folks who took the buyout.

In fact, there was a lineup. In other words, there were at least three to four times more people who wanted out than could actually get out, because the funding was small. I think it amounted to $50 million to farmers and $67 million in total. There was a provincial piece added into that. They got $2 and change instead of $1.05 in the later program, which was only federal--no provincial included.

In a buyout program that had just happened in 2005 for tobacco producers in that area and in Quebec, with the next program getting rolled out in 2008—the TTP—one would have thought that the lessons you've outlined in this report would have been learned from what happened in 2005, which was just three years before, not thirty.

I wonder if you had the ability to look at whether there was any relationship between the two or whether there should have been any relationship between the two as far as the department looking at it was concerned.

[Neil Maxwell]

Thank you, Chair.

Yes, indeed, we thought the program design was rushed in the case of the most recent program. We thought there were important lessons. In fact, one of the lessons from the program in 2005, TTAP, was the idea that you have to build a control into the design of the program to ensure there isn't a transfer of quota before the payment goes out, or else there's an easy means by which recipients can transfer quota, get the payment, and still be involved in tobacco production.

[The Vice-Chair, Conservative, Daryl Kramp]

Thank you.

We're starting to run a bit low on time. The chair is going to bring the questioning down for the remaining four questioners to roughly three minutes and 45 seconds for each questioner in order to allow us to finish on time and still have everybody complete a round.

Next is Mr. Aspin, please, followed by Mr. Byrne.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Thank you, Chair.

I would like to add my personal congratulations, Mr. Wiersema. Your contribution to Canada and to your department has been fantastic. I'm a new member and I've only had the pleasure to work with you for a few months, but I've very much enjoyed it.

My question zeroes in on DND. We're in North Bay. We're Canada's centre for security surveillance. We're also the headquarters of 22nd Wing. As you pointed out several times, DND has an enormous budget and is spending millions of dollars on our operations overseas and at home.

From your audit, what did you find that is a positive indication of how the Department of National Defence is spending the taxpayers' money?

[John Wiersema]

Well, as I indicated, Mr. Chairman, the Department of National Defence is exploring two new approaches to contracting for maintenance and repair of military equipment. I believe both of those approaches hold promise for improving the availability of the equipment and reducing costs. I believe the department in fact set itself a target of 15% reduction in costs through the optimized weapon management system.

Unfortunately, that initiative lost momentum, and the other initiative, the in-service contract support initiative, hasn't received the attention, the management priority and leadership it requires in the department.

The recommendation that we make in this audit is to encourage the department to provide the leadership necessary to move forward with those approaches. In our view, they do hold the potential for good things.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Thank you.

Chair, if I may, quickly, my second question relates to the recommendation on Canada's economic action plan. Other than the information collection systems for the community adjustment fund, did you find any other issues with the review of project submissions, the audit of individual projects, or the process used to dispense federal money to municipalities? Were those important processes done appropriately?

[John Wiersema]

Yes, Mr. Chairman, they were.

[The Vice-Chair, Conservative, Daryl Kramp]

That's fine. Thank you.

You can have about 30 seconds if you'd like, or we can transfer to the next person.

Okay, we will go to the next person.

Mr. Byrne, you have the luxury of maybe another 15 to 20 seconds, compliments of the folks across the street.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

You're very kind, all of you. Thank you.

I would like to address some of the issues regarding your chapter on the issuing of visas. It has not gone unnoticed by many of us that Parliament itself has been seized with providing the executive with new legislative tools to be able to manage Canada's immigration system for some pretty high-profile circumstances, particularly that of human smuggling.

It seems interesting to many of us that we have some serious issues, which you've pointed out, with the issuing of visas, which is a fairly standard practice. Your audit notes that of the 1.4 million visas that Canada processes, including the 317,000 visas for permanent resident status, you've identified some serious issues regarding quality and controls. From a security point of view that seems to be a very significant issue, and yet it's a circumstance that has been around for quite some time.

Mr. Wiersema, would you be able to elaborate for the committee some of the concerns you had about controls of visas and also about the quality assurance that Canadians should have that we're being properly protected?

[John Wiersema]

Thank you for the question, Mr. Chairman.

The first point I will make is that, as I think the member is alluding to, the Government of Canada has been in the business of issuing visas for a long time. This is an important function for the health, safety, and security of Canadians.

Frankly, at this point I would have expected that we would have better processes behind that than is currently the case, particularly in light of the fact that some of these matters have been raised in two previous audits, going back as far as 20 years, where the department indicated that it was going to undertake corrective measures.

Quite a number of areas of the system need strengthening. You've alluded to some of them and one in particular, which is the quality assurance process for decisions to issue visas in terms of a systematic process to do that. Are we making good decisions? Do we need to improve our processes? There is no quality assurance process in that systematic quality assurance process. I think that's an important matter that the department had previously indicated it would address and put in place.

On the issue of the diseases they focus on, we're focusing on the same two diseases we were focusing on 50 years ago. I think it's quite reasonable to expect the department to have considered the current context--where there are 56 reportable diseases in Canada--and what that might mean for the diseases where they focus their activities. That has yet to be done.

The Canada Border Services Agency staff who provide advice on security issues to the visa officers are not adequately trained. Their work is poorly documented. They don't always perform the mandatory checks. I think these are important matters that I would have expected to be addressed some time ago.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Particularly--

[The Vice-Chair, Conservative, Daryl Kramp]

Sorry, but you're well over your time now, Mr. Byrne.

[John Wiersema]

I apologize for the long answer.