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 chapter.

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

10 a.m.

NDP

The Chair NDP David Christopherson

Very good. That's as brief as it gets.

Thank you both very much.

We'll go over to Mr. Kellway, who has the floor, and we welcome him to our committee today also.

10 a.m.

NDP

Matthew Kellway NDP Beaches—East York, ON

Thank you very much, Mr. Chair.

Through you, thanks to the Auditor General and his team for being here today.

I want to pick up where my colleague, Madame Blanchette-Lamothe, left off, talking a bit about the helicopters. I went back to the 2010 AG's report, chapter 6, about the acquisition of the military helicopters, because I wasn't around at the time and I understand you weren't, Mr. Ferguson. However, it set off lots of bells in my head when I was reading your report.

Without delving too deeply into that report, I want to read out some of the chapter subheadings to you. The subheadings deal with changes in contract provisions not consistent with this procurement strategy; the developmental nature of the helicopter being underestimated; the full life cycle costs, including in-service support not being determined; and management oversight and approval of senior boards missing at key decisions in the project. All of this, I'm sure, sounds very familiar to you from your own report. I think that most of the findings from your own report could fit quite comfortably under those chapter subheadings.

Yet what troubles me about your report, Mr. Ferguson, is that there is a disconnect between your conclusions and the recommendations, I believe, in that they don't address many of the issues and conclusions that you've come up with in the chapter. It doesn't deal with risks associated with the developmental nature of the F-35, with the absence of cost mitigation strategies, and—most fundamentally, I think—with the absence of adherence to what you call “legislation, policy, and departmental guidance” related to the procurement process.

All your conclusion really tells us is that the government has to refine its costing, which I find to be a curious word in light of your findings here that $10 billion, or 40%, was left out of cost estimates by the department.There is no connection between those conclusions and the findings here.

I wonder why you didn't address the glaring issues and the conclusions that you found in the report in your recommendation.

10:05 a.m.

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

Michael Ferguson

Again, in the process the important thing for us to identify was where there were weaknesses and where there were problems. We concluded that National Defence did not apply sufficient due diligence and that Public Works didn't provide the necessary oversight.

I think the conclusions are very clear, and I think that the conclusions would lead one to understand that as this process moves forward, or in any other process, what's critical is to have a process that has due diligence that people will be confident in. We didn't make any specific recommendation, but I think that such an understanding does come out of those conclusions.

10:05 a.m.

NDP

Matthew Kellway NDP Beaches—East York, ON

Can I suggest to you, Mr. Ferguson, that it really doesn't? My colleague Mr. Byrne has been on this issue of the departments not accepting these conclusions. In fact, what I find is that the recommendation only perpetuates what I believe to be a fiction. We actually don't already know what the appropriate life cycle cost estimates are. I mean, it perpetuates the fiction that the information is not already readily available.

When the government promises to table reports coming out of the United States and the Department of Defense, those things are already publicly available. If you do a little Google alert on your BlackBerry for F-35, you will be swamped with information and life cycle costs coming out of very reliable U.S. government departments that are doing these things constantly.

Why, in light of the department's refusal to accept the conclusions, doesn't the Auditor General take that one step further and make recommendations based on the conclusions you found?

10:05 a.m.

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

Michael Ferguson

With regard to the recommendation we made on the costing, we identified that there were components of the financial information that should have been included in National Defence's costing. We would expect National Defence to come forward with a costing based on everything they know, including not only the information that comes from the U.S. but also the Canadian-specific items that need to be added in. That all needed to be part of the information they brought forward. That's why there was a specific recommendation on the financial information.

In terms of the rest of the chapter, I can only repeat that we felt the conclusions were strongly worded. They were clear in terms of what we found and the problems we found. We think that anybody reading the report would understand that what has to happen in these types of things is that there has to be due diligence so that people have confidence in these types of decisions.

10:10 a.m.

NDP

The Chair NDP David Christopherson

Thank you both very much. Time has expired.

Our last speaker in the rotation is Mr. Dreeshen.

You now have the floor, sir.

10:10 a.m.

Conservative

Earl Dreeshen Conservative Red Deer, AB

Thank you very much. Thanks to our witnesses for coming here today.

Your report addresses the wide range of issues that illustrate how complicated it is and the challenges that governments face. It's great that you're here to be able to bring this into focus.

I'm going to be speaking about chapter 1, and I'll give you a heads-up that I'll be looking at 1.29 and 1.53, as far as recommendations are concerned.

For the border controls and commercial imports, a diverse range of imported products had their safety regimes analyzed, including fertilizers, health products, pest control products, consumer products, and vehicles, just to name a few things. You also examined how CBSA, CFIA, Health Canada, Natural Resources Canada, and Transport Canada work together to ensure that products comply with the applicable legislations when they enter Canada. The audit showed that adequate controlled inspections take place and that the departments work closely together to ensure we do have product safety.

I think one of the critical points is their coordination, cooperation, and communication so that each group knows what the other is doing. In part of the recommendations, you talk about a process-monitoring framework. I'm wondering if perhaps you can expand upon that so that we could see the level of cooperation. Perhaps they can then be looking at ways of further expanding how they communicate with each other in order to know what is taking place.

10:10 a.m.

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

Michael Ferguson

When we tested to see whether the controls on commercial imports were working at the border, we found we were not able to rely on the actual monitoring of the organizations themselves. That meant we had to go in and do the testing of the controls ourselves to gather the information about how well they were working.

We fundamentally believe that it's critical for those organizations to do that monitoring themselves so that they will have the information that can feed back into a continuous improvement process. Monitoring information will provide the organizations with the feedback they need to make the necessary improvements. While we found that the controls were generally working at the border, we did find some things that got through.

We also identified, for example, that CBSA and Health Canada need to finalize the agreement they've been working on for some years to define roles and responsibilities. If those things are done, we think it will help to improve the controls of commercial imports at the border.

10:10 a.m.

Conservative

Earl Dreeshen Conservative Red Deer, AB

The other part is that there's a discussion with CFIA and CBSA of working together as far as product safety is concerned. It's important that Canadian families recognize and can be assured that the government takes Canadian food safety very seriously. Whether domestically produced or imported, it's subject to rigorous food safety regulations.

To emphasize the point, we know that in the last budget $100 million was put into that particular programming, and in this new budget an additional $50 million has been pledged for food safety, building on that pledge from last year. I think it's important, because sometimes people get caught up in this and think there is an issue in that particular area, comparing management decisions on efficiencies that you would have within a department with actual boots on the ground and doing the work that is necessary.

Could you talk a little more about the referrals that come from CBSA to CFIA and demonstrate how CFIA is indeed doing the job it is supposed to be doing, as far as protecting Canadians is concerned?

10:10 a.m.

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

Michael Ferguson

Mr. Chair, if I could, I'll ask Wendy to answer that question.

10:10 a.m.

NDP

The Chair NDP David Christopherson

Sure.

10:10 a.m.

Wendy Loschiuk Assistant Auditor General, Office of the Auditor General of Canada

Thank you very much, Mr. Chair.

With regard to the referrals that you're speaking about, that's a process whereby CFIA and border services officers ask the other departments what they should do. They have something there at the border and they I need to know what to do with it.

We looked at those and we found that because they weren't monitoring them.... Going back to the overall message in the chapter, there needs to be better monitoring. Because they weren't doing that, we weren't able to conclude how well border services officers were doing the jobs that were being asked of them.

We say in the chapter that, for example, that it wasn't clear they had done the right thing with some shipments, so we go back to our conclusion that this needs to be strengthened, especially with Health Canada.

10:15 a.m.

NDP

The Chair NDP David Christopherson

Thank you.

I'm sorry, Mr. Dreeshen. Time has expired.

Colleagues, that completes the rotation. Unless there's a motion to continue, I suggest we now conclude the receiving of Mr. Ferguson's report and thank his assistant auditors, Mr. Berthelette and Ms. Loschiuk. Thank you all very much. We look forward to seeing you in the future.

With that, unless there are any other interventions, I will excuse our witnesses and assure them that they have the thanks of this committee and Canadians for the job that you're doing. We appreciate it. Good luck going forward.

10:15 a.m.

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

Michael Ferguson

Thank you very much, Mr. Chair.

10:15 a.m.

NDP

The Chair NDP David Christopherson

Thank you.

Go ahead, Mr. Saxton.

10:15 a.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Thank you, Mr. Chair.

I understand, as we agreed previously, that we will now be discussing committee business, scheduling of witnesses, and our upcoming schedule for the next few weeks after the break week. Therefore, as per normal procedure when we discuss these routine agenda items, we should go in camera.

10:15 a.m.

NDP

The Chair NDP David Christopherson

A motion to go in camera is in order. There's no debate.

10:15 a.m.

Liberal

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

I have a point of order.

10:15 a.m.

NDP

The Chair NDP David Christopherson

I'll take a point of order, but it had better be a point of order.

10:15 a.m.

Liberal

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

I believe it's in keeping with the practices of the committee to request a recorded vote of this motion.

10:15 a.m.

NDP

The Chair NDP David Christopherson

No problem. If you wish to have a recorded vote, that's fine. Therefore we will place the motion now, and I'll ask the clerk to do a recorded vote.

(Motion agreed to: yeas 7; nays 4)

Thank you, colleagues. This committee will move in camera.

I will suspend the meeting for a moment to allow for technical adjustment and to allow guests who need to leave to do so.

[Proceedings continue in camera]