Public Accounts Committee on May 14th, 2014

[Tina Namiesniowski]

Yes, that implementation in relation to what we said we would do respective to that recommendation is complete.

[Malcolm Allen, NDP, Welland, ON]

So you are now able to track timeliness on a real-time basis. Is that true?

[Tina Namiesniowski]

Yes, that is true.

[Malcolm Allen, NDP, Welland, ON]

To be fair, you didn't quite say it in your timelines. You actually said something that approximated that, but I'm really happy to hear that you are. It's very important, obviously, to farmers.

Mr. Ferguson, I'll take you back to your report around timeliness issues, because that's really where this report strikes a chord with me.

There are two issues.

First, when it comes to producers, timeliness is an extremely important piece. I would draw your attention to your exhibit 8.4, which talked about farmers who suffered greatly because of the program's lack of timeliness.

The other piece, of course, is this. When we start to look at things we've done in the past, and for which the department is responsible, i.e., as mentioned in your report in 2011 about timeliness and another program falling under the department's domain, the department said that they would learn lessons from that previous report. Was that true?

[Michael Ferguson]

We did talk about the fact that the department has applied lessons learned to some parts of the overall programming, but we also found that there were problems with the timeliness of some of these payments, similar to some problems we have found with timeliness in the past. We did find that the department had made some improvements, based on their review of programming, but there were still some issues related to timeliness.

[Malcolm Allen, NDP, Welland, ON]

The biggest complaint of primary producers from the last report that you did was, indeed, the timeliness of the cheques they received. The department agreed, if my memory is correct, that they would learn from that, adjust it, and make it good. Here we are again, a couple of years later, with a report on another program under the auspices of the same department, under BRM—albeit AgriRecovery is kind of a subset thereof—and we're back to the same spot. One-third of those claims are not being paid in a timely manner.

According to the report, the obvious outcome is outlined on page 11 in the English, under exhibit 8.4. I don't expect you to respond to this, Mr. Ferguson, but In my view it's a really optimistic go-forward from the situation in 2011, when it was said that they were going to fix the timeliness of the programs. The biggest complaint of farmers across this country in BRM programming is timeliness. There's no sense in getting money the year after the year that you actually needed it to replant a crop that was devastated the year before.

I appreciate timeliness, and I'm probably out of time, Mr. Chair.

[The Chair, NDP, David Christopherson]

You are.

[Malcolm Allen, NDP, Welland, ON]

I thought so.

Thank you very much, Mr. Ferguson, for your report.

[The Chair, NDP, David Christopherson]

Very good.

Thank you.

According to my notes, we're back to Mr. Hayes. Is that correct?

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

Thank you, Mr. Chair, that's correct.

You've indicated that the department met its nine-month payment target for 84% of the initiatives. I'm looking at paragraph 8.34, where it appears that a survey was done, and only 2 of 29 rated payments are ranked as very timely. I'm having difficulty understanding how 84% of the payment initiatives were met within the nine-month timeline. I look at the excess moisture events, which accounted for 86 of total payments, or $434 million. Every one of those employers, so 14 of 28, were paid out 30% earlier than the deadline, yet in this survey, only 2 of 29 payments are rated as very timely.

I'm very confused when I see that at least half of the payments were made on time, yet recipients don't think they were timely. Is this because recipients don't understand what timeframe they should expect payment within? Can you elaborate on that a little bit, please?

[Michael Ferguson]

I think the obvious conclusion is that, as has been said, part of the important part of this program is the timeliness of the payments, getting the payments to the producers because the producers need the payments.

So certainly as we've said, in 84% of the cases, the payments were able to get out within that nine-month time period after the assessment. If there seems to be a difference of opinion on how many producers say that it's timely, I think the logical question is, do the producers believe that the nine-month timeframe is appropriate? We didn't ask that question specifically. What we asked them was, do you feel that the payments are timely? They said they do feel that, in general, they were satisfied with the amount of the payment, but 10 out of the 29 said they felt that the payments weren't timely.

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

This leads to the next question. Would it be appropriate it be appropriate to have different timelines for different types of events? They're very specific. Obviously with drought, that seems to be an issue. Excess moisture doesn't seem to be an issue. Disease seems to be an issue. Would it be appropriate to have different assessment timelines for different types of disasters, as well as different payment timelines depending upon the type of disaster? Would that make sense to you?

And, officials, that question will come to you next.

[Michael Ferguson]

I was going to suggest that the department is probably in a better position to answer that question. But certainly, what we've said is that they need to assess risk and determine the processes that need to be put in place. That's not necessarily just about big payments versus small payments. That could be based on type of event as well. But I'm sure the department could give you more specifics about the complications with processing certain types of events.

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

Thank you.

[Tina Namiesniowski]

Mr. Chairman, since I have not had direct experience in the assessment process, perhaps I'll ask my colleague, Rosser, to answer that question.

[Rosser Lloyd, Director General, Business Risk Management Program Directorate, Agriculture and Agri-Food Canada]

I think it speaks to one of the first steps that we have outlined in our response, which is to go and verify, with the provinces and in discussions with producer organizations, what our time commitments should be to the industry with respect to the evaluation of the assessment processes.

You raised a good issue. There are different challenges in assessing a flood situation, where it's clear that the producer is not going to be able to get on that land for the year and is not going to get a crop out of that land, as opposed to a drought situation, where as you go through the year, the situation changes. The crop got in the ground, it hasn't rained for a little while, but then it starts raining and the prospects start to improve. Those drought situations change through the cycle, which makes them very difficult to assess, to know exactly what that producer needs to recover from the situation, because we haven't nailed down what the end of the situation is.

So I think this is one of the issues that we will be discussing with the provinces and engaging the industry on as well.

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

Thank you.

Auditor General, you mentioned in paragraph 8.27 in terms of the assessment period that the average was 126 days versus the target of 45 days.

Would it be reasonable to say in determining that average of 126 that, although it is theoretically and mathematically an average, it would be heavily weighted towards the drought-type issues in that assessment period?

[Michael Ferguson]

I don't have all of the details of what went into that calculation. It is an average, and the average came out to be 126 days. As I said, when we looked at the issue, the average of all of them ended up as 126 days, I just don't have the details at the level you're asking for.

[The Chair, NDP, David Christopherson]

Okay. I'm sorry, but the time has expired. Thank you.

Moving now over to Monsieur Giguère. You have the floor, sir.

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

Thank you very much, Mr. Chair.

Mr. Ferguson, you gave us several statistics. However, I would like us to try to put ourselves in the shoes of growers and producers, especially those who were victims of the 2010 drought.

It should be pointed out that the financial assistance that they received in response to the 2010 event arrived in the spring of 2011. Yet that assistance was essential for them to get through the winter so that they would not have to sell their livestock to cover their financial losses. They received the financial assistance in the spring of 2011. They did not wait for more than the nine months but it was too late. By the time the financial assistance had been sent, they had already had to sell their livestock.

Could one say, therefore, that the AgriRecovery program was unable to help these producers because they had to sell their livestock in the end?

[Michael Ferguson]

These were responses that we got from the producer organizations talking about some of the potential impacts if payments were not received when needed. Certainly, as part of that survey they were raising their concerns about payments not being received as quickly as needed. Again, only 2 of the 29 surveys indicated that they felt the payments were very timely, and 10 felt they weren't timely at all.

So I think it's very much important for the department to understand the position of the producers on having a timely payment and what helps them recover from these types of events.

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

If I have understood correctly, under this program the 9-month timeline and the 45 days for assessment start when the province makes a request and not when the producer realizes that the harvest has been lost. That represents an additional delay.

You stated that in some cases, responses had been extremely quick and well under the nine-month timeline. I believe you even referred to a 120-day timeline.

Why is there a nine-month timeline? If it is sometimes possible to work within a four-month period, then why is the standard not four months rather than nine? Nine months is a very long time. If it is possible to work within four months, then why should that not become the standard?

[Michael Ferguson]

Again, I think that the department would have to speak on why the standard was set where it was set. What we looked at was the fact that there were the two. There was the 45 days after the request came in to make the assessment, and there was the nine months to make the payment. Those were the standards that were established. As to why those standards were established where they were, the department would have to speak to that.

[Tina Namiesniowski]

Mr. Chairman, perhaps I can start and then turn it over to my colleague.

I think the comment made relates very much to a previous question about whether or not we need different timelines for different types of events. I think as Rosser had indicated, that is part of the discussions we're having with our provincial and territorial colleagues.

At the end of the day, the standards that are established are not set exclusively by the federal government. This is a program that's delivered together with provinces and territories. They also have a view on what the standard should be, since they are very much implicated in the delivery of these initiatives that are approved in the context of the AgriRecovery program.

Rosser, do you have anything you want to add to that?

[Rosser Lloyd]

Yes. The nine months includes all of the time from when you announce the program to putting the applications out and seeking to have the producer make application, to then making the payment. The nine months is not simply the “make the payment” portion.

To take your example of a flood or a drought situation, we often find that we can respond to the immediate impacts of not having the crop through our normal programs. With AgriInsurance, producers have insurance for forage needs for their cattle for the year. Those programs are available.

What we end up doing is offering transportation. We realize that extra feed needs to come in and that producers need to have some assistance with the extra transportation cost. We would have to announce the program so that producers know it is in place; then they can take they actions to make the transportation arrangements, have the feed transported, and then make the application to us. All of that has to occur within the nine-month period.

We are often asked to extend the application period to make sure it's covering a long enough period for producers to actually take the actions and make the applications to us.