Thank you very much.
Good morning, Mr. Chairman.
Good morning, Committee members.
I want to thank you, once again, for inviting us to appear before the Committee. This time, I would like to discuss the issue of accountability and climate change.
I am accompanied today by Neil Maxwell, whom you now know well, and my other colleagues here are available to answer some of your questions as well.
As you know, all five chapters in our September 2006 report addressed climate change. I have outlined many of our findings at previous hearings, including the need for the government to develop and implement a clear, realistic, and comprehensive action plan that addresses both greenhouse gas mitigation and adaptation to climate change. But I am here today to talk about one critical issue: ensuring good governance and accountability on climate change.
Planning, management and performance go hand in hand. A good plan is important, but so is taking action and achieving results. Good governance and accountability are essential to the proper functioning of government. These mechanisms must operate properly to ensure that policies and programs are translated into results for Canadians. Through our audit of federal performance on climate change, we found that the government has built a foundation for future action but that there are serious deficiencies in the mechanisms required to put these ideas into action.
With an issue as complex as climate change, ensuring that theses mechanisms operate properly is particularly challenging and important. Climate change is a horizontal issue—that is, one whose management cuts across multiple departments, mandates, and jurisdictions. No single department, agency, or government has all the levers, resources, and expertise to manage this issue adequately. Our audits show that the government's response to climate change needs to pay more attention to several key areas.
First, clear roles, responsibilities, and authorities need to be established for all federal departments and agencies. The roles of key departments have shifted over time. While we have been told that Environment Canada is currently the lead on climate change, what this means in practice is not entirely clear.
For example, Natural Resources Canada is responsible for most large-budget climate change programs, but Environment Canada does not have authority over the activities of NRCan or of any other department and cannot compel others to act. This means that Environment Canada's policy lead will not necessarily translate into leadership at the operational level unless mechanisms are developed to ensure coordination across government.
In addition, the transition of responsibility for climate change among federal departments has not always been well managed. This has been an obstacle to progress.
For example, our audit found that the design and implementation of the large final emitter system was hampered by shifting responsibilities, by the turnover of key personnel, and by changes made from plan to plan. Similarly, we found that Environment Canada and Natural Resources Canada have made limited progress in developing a federal adaptation strategy. Neither department was assigned the lead role, and each had a different interpretation of its responsibilities.
Broadly speaking, the current transition between ongoing climate change programs and new approaches being considered by the current government also needs to be managed so that there is strong governance and accountability. There is a clear need for the government to design and put in place mechanisms to coordinate climate change activities across federal departments and agencies.
In 2001, in chapter 6, “Climate Change and Energy Efficiency”, we noted that the federal government had made some progress in developing a coordination mechanism. The Climate Change Secretariat provided a forum for interdepartmental coordination and integration, as well as for coordination with provinces and stakeholders on a national strategy. The secretariat prepared reports to Parliament on federal climate change activities and their results. Despite filling this critical gap, the secretariat was phased out in 2004 and has not been replaced.
Tracking expenditures and performances against agreed-upon targets and reporting this information to Parliament and Canadians are actions critical to ensuring results. This requires that the federal government assign responsibilities for monitoring on an ongoing basis the performance of all policies and programs. Our audit of energy production and consumption found that for the three programs, each worth over $100 million, performance targets were unclear. We also found that information on performance and expenditures was not being reported consistently.
Program-level performance evaluation must also be used to support monitoring and reporting against broader objectives. The federal government has made some progress in this area. By October 2005, the Treasury Board Secretariat had completed a comprehensive review of climate change programs to assess the relative success of existing programs and to develop options for the allocation of resources. This review was also supposed to initiate an ongoing cycle of performance assessment and expenditure review. The anticipated result was to have fewer climate change programs, but more information on their performance. The committee may want to ask Treasury Board Secretariat what progress has been made in putting into place an ongoing performance assessment and review process.
The large number of departments and agencies involved in climate change activities increases the complexity, and the importance, of effective performance management. However, our audit found that the framework for climate change performance management had not yet been completed. This framework should define performance expectations for climate change policies and programs, as well as indicators against which to measure progress. The Treasury Board Secretariat indicated that it intended to update the performance management framework during the 2006-2007 fiscal year, but that the framework cannot be implemented until the federal government finalizes its roles and responsibilities. The Committee may want to ask the agency for an update on the status of the performance management framework.
We found that the government also needs to improve its tracking of expenditures. The Treasury Board Secretariat is developing an electronic system to capture financial information on climate change programs. But, at the time of our audit, the information contained in the system was neither current nor verified. Until this system is improved, it cannot be considered adequate for management and reporting. The Committee may want to ask the Treasury Board Secretariat if the update of financial data, which it indicated was planned for the summer of 2006, has in fact been carried out. The Committee may also want to ask when they can expect a more robust and comprehensive reporting system to be put in place.
Tracking must be complemented by improved reporting to Parliament and the public. Reporting must be comprehensive so that spending and results can be fully scrutinized. Although the Treasury Board Secretariat reported summary information on expenditures in response to a parliamentarian's question in 2005, there has been no comprehensive report on climate change spending and results since 2003.
In its 2005 plan, the government committed to reporting on climate change annually, starting in 2008. The committee may want to ask Environment Canada for an update on when Parliament and Canadians can expect the next comprehensive report. The committee could also play an important role in identifying the information that Parliament requires for its assessment of federal performance on climate change.
Central agencies need to play a key role. Our audit found that considerable work remains to complete, update, and maintain the system that monitors and reports on climate change spending and performance. Although the Treasury Board Secretariat has undertaken initiatives in these areas, the central agencies have yet to assign final responsibility for these processes. To ensure authority for action, the central agencies will need to be involved in the development, implementation, and funding of critical interdepartmental coordination mechanisms.
In my 2006 report, I recommended that Environment Canada, the Treasury Board, and the Privy Council Office work together to develop the governance and accountability mechanism discussed here today. The government agreed with this recommendation but has yet to specify how it will be considered in its new climate change approach and to inform Parliament and Canadians to that effect. In short, while the government works to finalize its climate change approach, it is also urgent and essential that it work to put in place the mechanisms that will allow for the effective implementation of both ongoing climate change programs and new policies and plans.
Mr. Chair, this concludes my opening statement. I will be pleased to answer any of your questions. Thank you.