Public Accounts Committee on Oct. 5th, 2011

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you.

First, I would like to commend Mr. Wiersema and his staff. This is my first Auditor General's report. It was a good read, and many people would say something like that isn't a good read, but with my CGA background, I found it was a really good read and the recommendations were excellent, and we're certainly going to be supporting those.

At this point, I'd like to say it's an honour to be on this committee as a first-time member of Parliament and it's an honour to be in your company.

I'm going to stick with a couple of questions specific to internal audit again.

Have the improvements you described in financial management and internal auditing contributed to strengthening accountability and transparency?

[John Wiersema]

Yes, Mr. Chair. Strong internal audit and strong financial management will contribute to improving financial management and transparency.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

In terms of financial management and internal audit, how favourably does Canada compare to other jurisdictions?

[John Wiersema]

That one's a little bit tougher, Mr. Chair. I don't know that we have systematically or rigorously compared the quality of financial management and internal audit in Canada with that in other sovereign governments. However, I've said this publicly before, and I'm prepared to say it again today: when it comes to the financial reporting, the quality of the financial reporting at the level of the whole of government that's done in Canada—I'm talking about the Minister of Finance's budget and the preparation of the public accounts of Canada—Canada is a world leader in the quality of its reporting to Parliament and to Canadians on the financial affairs and overall financial position of the Government of Canada.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

That's very nice to hear.

Are you seeing these positive results carrying over into other areas you have audited?

[John Wiersema]

That's a harder one. I'm not quite sure how to deal with that one, Mr. Chairman. I would have to think about every single one of the audits we've done in recent years, where the results were positive, and ask myself whether this was due to good financial management and internal audit.

Mr. Campbell has a really good example.

[Ronnie Campbell, Assistant Auditor General, Office of the Auditor General of Canada]

Thank you, Mr. Chair.

We appeared before your committee some months ago on the economic action plan, the first study we did of that, and one of our observations in that case was the fact that the government had done a good job of rolling out the program and doing the preparation it needed to do. We commented in that report that internal audit had played a very strong and important role in doing that.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

I don't have any further questions. I wanted to stick to internal audit, and those are my questions on internal audit, Mr. Chair.

[The Chair, NDP, David Christopherson]

Very good.

There are two minutes left, so are there any other members of the government who want them? If not, I'll move in rotation.

Mr. Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chair.

I may not take all the time, but I do want to return to my comments of a little earlier about the process. There were 14 different agencies. There was $1.1 billion that actually ended up to be $664 million, so 61% of the amount that was approved was actually spent.

My comment, though, is that you talk about the complexities of it—and don't ever take away from that, because it's a bit like the whole economic action plan, rolling out that much money so quickly that we wanted to make sure mistakes were not made. We now have an internal audit that talks about a financial management internal audit that helps bring about, I think in your words, accountability and transparency. So that is good.

But during this time, when it was actually approved by Parliament, all of us stood up to pass this—well, enough stood up, because we were in a minority government. Since then, if there was this big a concern, which has been going on now for weeks, was there communication at any time from the opposition to the Auditor General saying it didn't know the complexities, didn't understand them, and asking how it came about this way or if there was a procedural...? Did any of that ever come to you, to the Auditor General, raising those concerns, which have been on the table now every day since Parliament has resumed?

[John Wiersema]

Mr. Chairman, I have received letters from members of the opposition parties relating to the G-8 legacy fund. I have not received any letters from members of Parliament dealing with the broader question of the overall G-8/G-20 summits and the cost of those programs, the $1 billion of funding requested and the $664 million that was spent. No, I have not received letters from members of Parliament on the broader question. I have received some on the G-8 legacy fund.

[The Chair, NDP, David Christopherson]

Time has run out, Mr. Shipley. You took us right to the end and a little over, actually.

Over to the Liberal benches, and Mr. Byrne, you have the floor.

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

Thank you, Mr. Chair.

It would appear that communication highlights the role and the value of the committee process, especially the oversight capacity of the public accounts committee and the ability to look at each and every issue, hear witnesses, and review all reports.

Would you agree with that, Mr. Interim Auditor General?

[John Wiersema]

Mr. Chair, the public accounts committee, in my opinion, is essential for the success, or otherwise, of the work of the Office of the Auditor General. The public accounts committee provides a forum in which to have a public discussion of our findings. The public accounts committee itself is given an opportunity to weigh in on the Auditor General's findings, express its own views, issue its reports to the House of Commons, and request a government response. So the Office of the Auditor General would be significantly less effective without the work of this committee, which is why we value our relationship with this committee as much as we do.

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

Thank you very much.

Mr. Chair, I think the question was answered very well. Both questions were answered well.

Because all reports of the Auditor General are very important to us, let me ask something about the reserve force pension plan. Specifically, I want to relay a circumstance.

A hero from my riding, Corporal Brian Pinksen, who was asked to serve his country, and did so quite willingly, lost his life in Afghanistan. He was a reservist with the 2nd Battalion, Royal Newfoundland Regiment. One of the things I think we all owe all of our reservists is to allow them a certain amount of security. That's, I think, what your chapter on the reserve force pension plan was all about: making good on a promise. Yet your audit revealed some pretty startling, very stark details about not fulfilling that promise. Anyone who's looking for a basic transaction to occur related to their pension plan, as has been guaranteed or promised them, could wait up to seven years before a basic transaction occurs.

One of the things you mentioned was that staffing resources were critical and that staffing resources were not available to allow the reserve force pension plan to function appropriately. Yet retired General Leslie says that the headquarters at the Department of National Defence is bloated with staff.

Would it appear to you that maybe there's a sign or a signal here that resources are not being used effectively by the Department of National Defence? If one side, your office, sir, is saying that there just weren't enough staff, and yet a senior member of our military, someone who has experience in this as well, is saying that in some sectors there are too many staff that are not functioning correctly, is that a misallocation of resources? Would you categorize it that way?

[John Wiersema]

Thank you for the question, Mr. Chair.

Frankly, I share the member's deep concern with the way reservists have been treated here. Parliament authorized the creation of this plan in 1999. It came into force in 2007. In 2010, they'd only processed 400 out of 9,000 applications. I think reservists have been treated extremely poorly. Even by 2012 they will still not have cleared the full backlog. If I were a reservist, I would be outraged by this.

Now, why did it happen? It was extremely poorly planned. There was not clear accountability and leadership for it. The responsibility for this program was initially shared between two assistant deputy ministers, and they didn't plan for it properly. They've known this was coming since 1999, and in 2010 they're not ready to roll it out.

In my view, it's fundamentally a question of planning and leadership.

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

Thank you.

It may be valuable, Mr. Chair, for this committee to ask General Leslie to appear before us on this particular issue, because it is unacceptable.

Also very unacceptable are the circumstances facing aboriginal peoples on reserve. You've mentioned in your audits--you didn't mention, you really laid the groundwork--that structural impediments are really hurting the quality of life, the standard of life, and the ability of our first nations, those on reserve, to be able to raise their standard of living.

Would you be able to express to the committee some of those structural impediments and whether there seems to be, and appears to be, sufficient progress by the government to address them?

[John Wiersema]

Thank you for the question, Mr. Chair.

I will turn in a moment to Mr. Campbell to help me with this because Mr. Campbell has been responsible for a lot of the work we've done on aboriginal issues in the office. He's intimately familiar with them.

Our report identified four structural impediments. The first one is that most of the services the federal government provides on reserves do not have a basis in legislation. They're not a statutory service. It's not like the Government of Ontario, which has a statutory requirement to provide education services. That does not exist with respect to the services provided on reserve. They have no basis in legislation, for the most part.

The second impediment is the absence of service standards. For most of the programs, what level of service the federal government tends to provide on the reserves is not clearly defined.

The third impediment has to do with the way the programs are funded. Most of the programs are subject to annual contribution agreement funding, which requires that new agreements be prepared and negotiated every year to provide those services on the reserves. By the time they get the money, a big part of the year may have already elapsed.

The last impediment is the capacity of first nations to actually provide those services on reserve. Again, I'll use the example of education. The provincial governments have school boards that work to ensure the education services are provided to all residents of the province. That capacity doesn't exist for the programs on reserves.

If the chairman would allow, I'm sure Mr. Campbell could elaborate, if you would like.

[The Chair, NDP, David Christopherson]

We're way over, but this is really important. Please do, but be very, very brief.

[Ronnie Campbell]

I'll give a bit of context; I've heard comments about there being new members.

This piece of work was a follow-up to a number of audits that we've done over the years. At about the midway point of Madam Fraser's term, we did a similar follow-up on aboriginal issues, so we've done one at the end.

Basically what we're saying is that the things that need to be fixed are huge. It's not only a case of fixing what we're already doing, such as reducing the reporting burden and such; there are fundamental structural questions about how we actually fund those things and whether we're going to do them by policy or by legislation.

It's almost a decade's worth of work on our part.

[The Chair, NDP, David Christopherson]

Thank you very much. That is well over the time.

Going back to the government benches, Mr. Aspin, you have the floor, sir.

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

Thank you, Mr. Chair.

As with my two colleagues to the left of me, this is the first time I've appeared before this committee as a newly elected member of Parliament. I would like to congratulate your team, and particularly you, Mr. Wiersema, for your long and distinguished career. Obviously that's the case.

The G-8 and G-20, as my colleague Mr. Shipley has pointed out, was a tremendous undertaking. I mean, it had never been done before. This was big and this was new.

You've obviously done a careful audit. I congratulate you. You picked up some things we can improve on, and the government has agreed to do that.

Could you speak to what you found during the course of this audit on this huge project that had never been done in the world before, the G-8 and the G-20 together? Could you speak to a few things that impressed you?

[John Wiersema]

Those are tough questions to prepare for, Mr. Chairman. I'll ask Wendy to bail me out on this.

The member points out, correctly, that this was a huge undertaking. There were a number of different summits, and the planning took place over a very, very short period of time. Public servants and others had to do a great deal of work to get ready for these summits. They successfully did so, including requesting the necessary funding over a very short period of time.

We were impressed with how quickly the public servants, once the decisions were made to have the summits and where they were to be held, were able to put the necessary items in place.

Wendy, go ahead.

[Wendy Loschiuk]

One of the things that really stood out for us was how quickly everyone responded and that the departments were able to work within an extremely short amount of time with very limited information to put together very well-developed plans and budgets. While they were very high and overestimated the costs, given the circumstances of what they had, we felt they were able to come up with workable options and able to keep things moving forward.

They were very focused on what had to get done, and as a result, there was nothing we could see that was not covered off. Perhaps in hindsight more things were covered off than they needed, and they did correct for that as they went along, but certainly they put a lot of emphasis into the areas that they knew from their own experience were going to be the important key areas, especially security.

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

From your observations of the huge audit you conducted—the fact that documentation was not available to determine how the projects were selected, and which the government has agreed to correct—you would agree, should Canada hold one in the next five to ten years, we're in good shape to do it again.