Public Accounts Committee on May 2nd, 2013

[The Chair, NDP, David Christopherson]

I'm afraid it'll have to be brief, sir.

[Michael Ferguson]

It can be brief, Mr. Chair. I can't comment on what the government has said it is about to do, so I can't answer the question.

[The Chair, NDP, David Christopherson]

Very good, thank you.

The time has well expired.

It's over now to Mr. Aspin. You have the floor, sir.

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

Thank you, Chair.

Welcome, Mr. Ferguson, and your officials. Welcome back.

My questioning is on chapter 9, the EI chapter, but before I get into that chapter I'd just like to quote something you said regarding your report, sir. This is a direct quote from you. It reads: “We didn't find anything that gave us cause for concern that the money...was used in any way that it should not have been”. That indicates to me that no money was lost or missing.

Can you confirm that, sir? Can you agree with that statement?

[Michael Ferguson]

Mr. Chair, as was commented, what I said was that we didn't see anything that gave us cause for concern. That doesn't mean I can give an audit level assurance that there was nothing; it means we didn't see anything in what we were looking at that put any red flags in front of us that said we would need to do a lot more work on this. But I cannot comment unequivocally on what the money was spent for.

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

Thank you, sir.

On chapter 9, the EI chapter, there is some good news. Generally speaking, your audit on employment insurance overpayments identified some good practices.

But I'd like to zero in on this with respect to a loss question. Would you be able to answer this for me, sir? How much money from the ineligible claims is not recovered by Service Canada each year? In other words, what I'm getting at is what percentage of total claims this represents.

[Michael Ferguson]

I believe the amount cited in the chapter for the total claims is $16.1 billion in income benefits paid every year. I believe the amount of identified overpayments each year is around $300 million—that's identified—with roughly another $560 million estimated for the unidentified. I'm not exactly sure which two numbers you want me to compare.

Also, at the end of this particular fiscal year there was in total $660-million worth of overpayments outstanding, of which the department had estimated that two-thirds would not be collected.

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

Okay. Are there any comparators that could be used as a benchmark on how we do relative to any other jurisdictions? Have you taken a look at the broader scope of things?

[Michael Ferguson]

Mr. Chair, to the best of my recollection, that was not part of the audit.

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

Thank you.

I'm wondering if you can briefly comment on the importance of measures such as the recent EI stewardship review that was conducted as an audit for the EI program to obtain better data on the number of ineligible claims.

[Michael Ferguson]

Mr. Chair, that's something that was not part of the focus of our audit. So again, it's not something that I can comment on.

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

Okay. The government is committed to making sure that Canadians who have paid into the system and lose their jobs through no fault of their own can have access to EI when they need it. We all know that's the general objective. Would you be able to comment on how ensuring the integrity of the EI system is helping to ensure that the money is there for Canadians when they need it?

[Michael Ferguson]

Certainly, Mr. Chair, in the report we do identify that it is important to maintain the integrity of the EI system, and one function of doing that is to make sure that the overpayments that are identified are recovered. It's important for people to understand that benefits will be paid and they will obtain the benefits that they are due, but also that the department will identify overpayments and recover them. That's important to the integrity of this system.

[The Chair, NDP, David Christopherson]

The time has expired, sir.

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

Thank you, Chair.

[The Chair, NDP, David Christopherson]

Thank you.

Monsieur Giguère, you have the floor, sir.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Thank you very much, Mr. Chair.

Thanks to the Auditor General's staff for taking part in this exercise.

We are going to talk about chapter 11 concerning the Old Port of Montréal Corporation. My first question is mainly about travel expenses. Some expenses are paid twice. Some trips paid for have nothing to do with the corporation's mission. We note some very lavish reception expenses.

Is this the result of a flagrant lack of respect for taxpayers' money, or does this constitute grounds for a police investigation?

[Michael Ferguson]

Mr. Chair, I have asked Mr. René Béliveau, who is responsible for this work, to join us at the table.

In general, what we did was that we looked at the policies in place for travel and hospitality at the Old Port of Montreal. We identified that there were some weaknesses in those policies and that they need to be improved.

At this point, it's really information that has been turned over to the board now responsible for the Old Port. It's really for them to determine what to do in terms of the items that we found, but specifically our recommendation was for them to improve their policies and put in place better controls over the spending.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Very well.

It is also stated, with regard to its practices, that there was no documentation on lease negotiations with certain concession holders. Is it not dangerous to open the door to this kind of nepotism? Do we not run the risk of undermining the financing of this corporation if we do not have, as it were, a memory of leases assigned, since there is no documentation to support the valuation of the price that must be charged to these partners?

[René Béliveau, Principal, Office of the Auditor General of Canada]

There is no documentation in the files, but that does not mean that the corporation had no control over concession needs. However, we found that the lack of documentation might cause a corporate memory problem in future.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

That corporate memory problem is quite well underscored on page 39. You note problems with documentation on risk management, performance, human resources, assets, communications and travel expenses. Those deficiencies are relatively major for a crown corporation that has the same ethical standards as the entire public service, as all crown corporations.

That makes us asks ourselves a quite crucial question: what was management doing? Did it have the qualifications to handle relatively simple day-to-day management problems?

[René Béliveau]

That is a very good question. In fact, documentation is not everything. We cannot say that the corporation was unaware of the problems or that management did not do any follow-up or take minutes for the board of directors. Rather it did not take the time to properly document the key decisions and actions it had to take. Once again, this means that corporate memory could be jeopardized in future.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

The corporation responded to your recommendations by saying that it would correct the situation starting March 31, 2014, that it would update its rules of ethics.

Isn't that an unacceptable timeframe, given that the problem never should have arisen?

[René Béliveau]

Management issued that response, and the timeframe does seem long. However, we have to consider the fact that the corporation must now merge with the Canada Lands Company. Consequently, management has already taken measures to correct everything. However, before the entire situation is resolved, those measures must be reviewed by the parent corporation to ensure they meet its standards.

[The Chair, NDP, David Christopherson]

We're moving along.

Mr. Williamson, you have the floor now, sir.