Evidence of meeting #37 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 report.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Michael Ferguson  Auditor General of Canada, Office of the Auditor General of Canada
  • Jerome Berthelette  Assistant Auditor General, Office of the Auditor General of Canada
  • Wendy Loschiuk  Assistant Auditor General, Office of the Auditor General of Canada

9:15 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

We made one very specific recommendation about preparing and presenting the full costing information, and they accepted that. On our assessment of whether due diligence was applied, we felt that National Defence did not apply sufficient due diligence and that Public Works should have provided more oversight. Those were the conclusions they disagreed with.

We put the statement in the report that the departments disagreed with our conclusions because it was out of the ordinary to have that type of response from departments. We felt it was important to make it clear to people that we looked at the evidence, came up with our conclusions, published our conclusions, and the departments disagreed with the conclusions.

9:15 a.m.

NDP

Matthew Dubé Chambly—Borduas, QC

Thank you; I am going to rely on your knowledge and your expertise in this area.

There is one thing that I have a really hard time understanding. If I am not mistaken, your recommendations are probably entirely based on your conclusions. Is that correct?

9:15 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

Thank you, Mr. Chair.

In this particular instance, the only recommendation we made in the chapter itself was around the costing information and providing that full information. The department agreed with that.

In this particular instance, because our recommendation was so focused, the position they took was not totally inconsistent. However, we feel very strongly that our conclusions are right, based on the objective and criteria we set and the evidence we looked at.

9:20 a.m.

NDP

The Chair David Christopherson

I'm sorry; your time has expired.

9:20 a.m.

NDP

Matthew Dubé Chambly—Borduas, QC

Thank you.

9:20 a.m.

NDP

The Chair David Christopherson

You're right on the nose.

Thank you both very much.

Mr. Shipley, you have the floor, sir.

April 5th, 2012 / 9:20 a.m.

Conservative

Bev Shipley Lambton—Kent—Middlesex, ON

Thank you.

Thank you, Mr. Auditor General, for your report.

Just off the top, you've done a number of them here, and we'll obviously focus on one or two. On the crown corporations, I think these are huge dollar amounts that have an impact on the economy of Canada—up to $375 billion in assets. It's worth noting the ones that have been audited: the Dairy Commission, the Race Relations Foundation, the Public Sector Pension Investment Board. Those are large dollars, and there were no significant deficiencies. I just wanted to highlight that before I move to my questions and comments.

I want to go first to the report on Canada's civil aviation industry. My colleague brought up the point that many of us fly all the time. We consider this to be a safe industry when we get on a plane. My understanding is that somewhere between 2000 and 2010, the accident rate actually decreased by about 25%, while air travel has increased significantly. There are around 5,000 companies operating 34,000 aircraft in Canada.

I think there were nine recommendations in total. Do you think it is reasonable that they would deal with these recommendations by 2013?

9:20 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

Certainly we made a number of recommendations in this chapter, and the department agreed with them. They have put timelines on many of their responses. Those are the timelines that the department has committed to, so we would expect that they have put the necessary thought into setting those timelines.

I certainly expect that if they have set a completion date on something, they will make every effort to meet that date.

9:20 a.m.

Conservative

Bev Shipley Lambton—Kent—Middlesex, ON

Yes, and I'm just trying to remember the number of flights. In Canada there are three million flights, I think, and 75 million passengers or cargoes that travel each year. Obviously the industry has grown rapidly, so I appreciate the fact that those recommendations will be coming forward.

I wonder if I could just trip forward now to border controls on commercial imports. On one of the issues that has come forward on it, your comment was that the volume of imports into Canada is so large that it is not practical to apply controls on every shipment that enters. We—I think all of us—understand that.

It seems to me that the CBSA released 13 million shipments of commercial products in the last year, between 2010 and 2011. That's just to give the people who perhaps won't read this report, or the few who may listen to this, an understanding of the volume that we deal with.

One of the concerns raised is that there may be high-risk products coming through the border into Canada that will not get looked at. In my riding of Lambton—Kent—Middlesex, we have a lot of agriculture. If a product were to come in through the horticulture or the agriculture industry....

I'll use the example of some apple trees, let's say, that are used for little sprigs. When they leave the original country, they are to have no dirt on them so that when they get through the border.... They are checked, actually, in the original country.

I can tell you that well over 50,000 of those little trees came in, and they got turned around once they landed. I saw these. You can—

9:25 a.m.

NDP

The Chair David Christopherson

Get to a question quickly, sir. You're running out of time.

9:25 a.m.

Conservative

Bev Shipley Lambton—Kent—Middlesex, ON

Okay.

On a good day, you could maybe find less than a teaspoon of dirt if you scraped them off. Is that considered a high risk because they may contain some nematode? Is that a product that would be considered a high risk?

9:25 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

I can't remember each and every item. Certainly what this chapter was about was how well the Canada Border Services Agency was enforcing controls at the border for products that have been identified as needing controls at the border.

I can't speak to any specific product. This chapter was about how Canada Border Services Agency conducts that control at the border.

9:25 a.m.

NDP

The Chair David Christopherson

Very good.

Thank you both very much.

Mr. Byrne, you have the floor, sir.

9:25 a.m.

Liberal

Gerry Byrne Humber—St. Barbe—Baie Verte, NL

Thank you very much, Mr. Chair.

Thank you to our witnesses and to the Auditor General.

You conducted a performance audit on the fifth-generation stealth fighter jet acquisition process. The scope of the audit was to determine if due diligence was applied to this process. You have informed us again today that was one of the primary objectives of the audit itself.

You, sir, accomplished what others could not. Through the integrity of your office and your own personal integrity, you successfully focused attention on a serious issue that had been repeatedly reported by the Parliamentary Budget Officer, who could not break through to frame attention on this serious issue.

Advice from foreign governments could not capture the attention of the government on this issue. Parliament could not attract the attention of the government on this issue. In fact, those who spoke out were virtually vilified for suggesting that things could be awry. The Liberal Party of Canada has spoken out about this issue since 2010, but you were able to focus attention to this issue, and successfully so.

You raised one recommendation and one recommendation only, but really what you did was focus attention on the process. You said that DND did not perform basic due diligence on this acquisition, which could turn out to be a deal valued at more than $25 billion. You said DND failed to engage Public Works on basic contracting requirements arising out of the 2006 MOU.

You told us that serious problems had not been communicated to Parliament, and potentially to cabinet, and that the risks were understated for this project. You said that the full life cycle costs of the F-35 were deliberately understated to both Parliament and to cabinet, that Public Works didn't fulfill its responsibilities as the government's procurement authority, and that there was no documentation on any of this. Public Works failed its responsibilities when it accepted National Defence's word that the aircraft had to be sole-sourced.

To put this in plain speak, which is what I think we really need right now, isn't moving this now to Public Works simply rearranging the deck chairs on the Titanic while the band plays on?

How can we have any confidence whatsoever that the government is accepting any of these things? What they are saying, sir, is that DND did indeed perform basic due diligence.

9:25 a.m.

Conservative

Andrew Saxton North Vancouver, BC

I'd like to raise a point of order, Mr. Chair.

The government has repeatedly said that it accepts the recommendation of the Auditor General. My colleague over there continues to misrepresent what the government has said. We accept the recommendation of the Auditor General.