Environment Committee on Feb. 8th, 2007

[The Chair, Conservative, Bob Mills]

I call the meeting to order. We are waiting for a couple more members who did advise me that they would be a little bit late.

I welcome Ms. Fraser and Mr. Thompson to our committee.

I just want to note for the members—and I apologize for the scratchy voice, but that's how it is—that we do have a CBC camera here, which was requested. Of course, House procedures do allow us to bring that camera in. He will not roam around; he is in a fixed position. You'll see him behind us here.

Also, lunch will be brought in for the members around 12 o'clock.

I also want to let you know that we did contact Mr. Marleau, the Information Commissioner. He is very new to his job and feels that he hasn't met with his own committee yet. So he regrets not coming before us.

On Monday, which is our next meeting, we will have someone from the advisory panel to the environment commissioner; Denis Desautels, the former Auditor General, will possibly be a guest as well; and someone from the Privy Council Office will also appear. Of course, our attempt will be to take the last 15 or 20 minutes to actually look at the motion, make amendments, and vote on that motion next Monday. I think that was the intention agreed to by Mr. McGuinty, that this would be the process we would follow.

Mr. Warawa.

[Mark Warawa, Conservative, Langley, BC]

I have a question out of curiosity. I have no problem with the CBC being here, but you said it was a request.

[The Chair, Conservative, Bob Mills]

The CBC requested it, and under the regulations of a year or so ago they are allowed, through request. There are many rules that they must follow, but the clerk will keep that monitored.

[Mark Warawa, Conservative, Langley, BC]

That's fine. I was just curious whether the request came from the committee or from the CBC.

[The Chair, Conservative, Bob Mills]

No, it came from the CBC, from the press gallery.

[Mark Warawa, Conservative, Langley, BC]

Thank you.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

What is the process? Do we ever vote on these things when that comes forward?

[The Chair, Conservative, Bob Mills]

No. Under the new regulations, it is acceptable. We push very hard to allow cameras into committee meetings.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

So you're saying that's just the call of the chair?

[The Chair, Conservative, Bob Mills]

Yes.

Anyway, I just give you that as information, that they are here, in case you wondered why we have the camera in the room.

Are there any other questions?

We will begin, then, and I'll turn the floor over to Ms. Fraser.

Again, we welcome both of you here. We appreciate you coming on short notice and giving us so much time. We almost make you honorary members of our committee or something.

So, welcome.

[Sheila Fraser, Auditor General of Canada, Office of the Auditor General of Canada]

Thank you, Mr. Chair.

We are pleased to be here to meet with the committee members and to speak to the motion that is currently before the committee. As you mentioned, I am accompanied by Ron Thompson.

As I indicated in my letter to the committee on Monday, policy advocacy and legislative audit are incompatible. This is a recognized principle in the auditing profession, and it is based on the standard that governs all auditors in Canada. This principle is also widely observed by legislative audit offices in many other countries.

It is interesting that the same issue arose in 1994 and 1995 when discussions about the creation of a commissioner of the environment began. At that time, my predecessor, Denis Desautels, indicated to the environment and sustainable development committee:

ln Canada, it's generally accepted that legislative auditors avoid observing on high-level policy and they concentrate their comments on implementation of that policy. Therefore, responsibility for such matters as review of the appropriateness of policy and arbitrating environmental disputes should not be given to my office, as this could quickly and seriously jeopardize the Auditor General's traditional independence, objectivity, and credibility. There would be similar risks for a separate environmental auditor general if he or she were given audit responsibilities along with these other duties.

The then Auditor General also explained to the committee how the office had in fact been conducting environmental audits since the early 1990s using the same rigorous audit methodology that was being applied to all other work in the office.

Nonetheless, in its May 1994 report, the committee recommended that the Office of the Commissioner be established separate from the Office of Auditor General, with access powers similar to those of the Auditor General, but with broader responsibilities: specifically, policy evaluation, advocacy of sustainable development and the evaluation of sustainable development practices and technologies. The committee also encouraged the Office of the Auditor General to continue to expand on its environmental audit role.

The government, in its response to the committee's report, explained that not all functions as proposed by the committee could be undertaken by a single body, and that the various roles, as envisioned by the committee, could be "undertaken more effectively and efficiently by working through existing institutions and mechanisms, new government initiatives, and the proposed new commissioner." It added that it was more efficient to have the Auditor General continue to play its audit role and that integrating the audit of environmental issues with the audit of economic and social issues would in fact reinforce sustainable development.

I believe that we have fulfilled that role. In fact, environmental aspects are considered in all of our work by all audit teams throughout the office. For example, in our review of financial statements, we audit the government's liability for contaminated sites. When we audit crown corporations like Atomic Energy of Canada, the audit scope includes the environmental aspects. The office has become a world leader in environmental auditing. Auditors from around the world have requested our advice and many of them have taken courses on environmental auditing that we developed here in Canada.

Should Parliament decide to establish a new office outside the Office of the Auditor General, with a focus on advocacy and providing advice to government, it is my view that environmental auditing should remain with my office.

The issue is about expectations that are being placed on us that we cannot fulfill. I mentioned Bill C-288 last week. In that case we were able to resolve the matter, and the policy advisory role was transferred to another body. In fact, it was transferred to the national round table. Bill C-377 is a more recent example, and that is the reason I have brought all of this forward for the consideration of the committee.

That concludes my opening remarks, Mr. Chair. We will be pleased to answer any questions committee members may have.

Thank you.

[The Chair, Conservative, Bob Mills]

Mr. Rota.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Thank you, Mr. Chair.

Thank you for being here, Ms. Fraser.

Under the current structure, the environment commissioner is appointed by the Auditor General and reports to Parliament on behalf of the Auditor General. Given the rising importance of the environment, would you agree that we now require a totally independent office of Parliament—someone who reports directly to Parliament, as opposed to reporting through the Auditor General's office? Are we getting direct input? Would it be any more efficient?

[Sheila Fraser]

I think the real issue is about the mandate and responsibilities that would be given to a distinct office. Would it go beyond auditing to policy advice, evaluation of policy, and assessment of programs the government puts forward? Those are the kinds of issues that seem to be coming up more frequently, certainly in some of the draft legislation that is being put forward. That is not a role that the Office of the Auditor General or a legislative auditor can fulfill.

I think the issue is what role that independent office would be given. If it is a role of audit, I see no advantage in creating a separate organization. I would be quite concerned, because, as I was trying to point out in the opening statement, environmental auditing is incorporated into many of our audits. It's not simply the work of the commissioner's group. The commissioner's group also works with all the other audit teams within the office to bring forward environmental audits. Audits that could be classified as environmental in nature are not all reported in the commissioner's report. We have done a lot of work on the test ranges in national defence, fisheries, and a number of other areas that are not reported through the commissioner's work but are reported in the Auditor General reports.

So we would have to continue to do environmental auditing, and I don't see that there would necessarily be an advantage in establishing a separate office to do environmental auditing. If there were to be a separate office to do the policy advice, that of course is a mandate we could not fulfill.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

It's been said in the past that the Auditor General's office has an audit function, definitely, but it has a bit of an advocate's position as well, advocating for policy in different areas. Could you clarify for us how you would differentiate between what you do in the Auditor General's office as, say, an advocate for the environment, and how that would fit together, and how you could see that working?

[Sheila Fraser]

Advocacy—I'm not sure this is the right term. We certainly try to promote good management practices, be it financial management, human resource management, environmental management. We certainly have a role, I think, in education on issues, but all the work we do is based on the audit work we do. We will not comment on government policies.

If I can take an example, which I think is an example we use quite frequently when we explain that we don't have a policy—we can't comment on policy. When we did our audits on the firearms registry, we never commented about the policy of having a registry. We talked about the management and the implementation of that policy. To us, there's a very clear distinction. When we talk about, for example, Kyoto, it is because government has signed, there is a commitment in place, and we audit to that commitment, but we would not go out and make a comment as to whether that commitment is appropriate or not. So we start with the establishment of policy by government and then look to see, are commitments being met, and is policy being implemented as was intended by Parliament?

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Since the news broke regarding the dismissal of the Commissioner of the Environment, questions have surfaced with respect to the independence enjoyed by officers of Parliament. How do you view this dismissal with this in mind, and what measures are you going to put in place in your office to ensure that objective, frank, and independent analysis of government continues?

[Sheila Fraser]

I obviously cannot comment on the circumstances surrounding Madame Gelinas, and I would take some exception to the word “dismissal”, but I obviously can't go much further than that.

As the legislation is established, the Commissioner of the Environment is an employee within the Office of the Auditor General, has the same status as any other assistant auditor general, such as Mr. Thompson and others. So the decisions over hiring and all the rest of it, and the naming of the commissioner, are ones for the Auditor General.

Agents of Parliament or officers of Parliament have a different regime. We are Governor-in-Council appointees and have certain protections, if you will, within our act about how Governor-in-Council appointees—the Auditor General and others—can be dismissed. The Auditor General can be dismissed, but only after a vote of the House of Commons and the Senate.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

How did offices in other jurisdictions, such as the United States and the Government Accountability Office, have the mandate of providing priority environmental policy expertise? That's clearly taken out of our mandate here in Canada. Is the mandate for Canada's Office of the Auditor General set by legislation, or is it policy that is running it? You are commenting on policy to a certain extent. I know you've mentioned you are dividing the two, but there is comment on policy just by the fact you are auditing it.

[Sheila Fraser]

I can begin by saying that the mandate of the Government Accountability Office of the U.S. and the Auditor General of Canada are very different. The GAO in the U.S. does work conducted on behalf of Congress, and 90% or more of their work is directed by Congress. In some ways, I think you could say they're almost like a research branch for Congress. So they provide information that Congress asks of them, whereas under the Auditor General Act it is the Auditor General who decides what audits to do. Obviously, we take requests from parliamentary committees into consideration, but we are not required to do the audits that parliamentary committees will ask us to do.

We base all our work on the standards for audit and insurance that govern auditors in Canada and are in fact even part of the international standards. It is very clear in those standards that there are two standards that affect how we deal with policy. One is what is called self-review: you can't conduct work and then audit it because you would be in a conflict. The other is what is called the advocacy threat: that you cannot advocate a policy or a principle and then audit it. So we follow those standards very rigorously, and I think they have served us very well. And that is why we are credible in our work: we are seen as being objective as to the policy. We obviously audit the implementation, and I think it's true to say that at times when you see very poor implementation it can call the policy into question, but we would not as an office comment on the policy itself.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

It's a chicken and egg situation. You're looking at the policy and you're commenting on it, yet your comments are going to influence the policy.

In the past, has the Auditor General's office, even under your supervision, ever provided priority expertise to the Government of Canada, even if it has been asked for?

[Sheila Fraser]

We have, at times, given comments to government when they are considering a policy. I can think of a couple of cases. But it has always been based on audit work. We basically say that in this audit we found issues around XYZ, and you should probably consider that in developing this policy. I can think of one example when they did the internal audit policy. We had done an audit just before that. We said we think you should consider this, this, and this.

Of course it's up to government to decide how they want to address that.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

You're saying you can give prior advice based on past experience. It's advice that is based more on the process, as opposed to what will actually happen in the country or in the actual implementation if this policy takes place. It's going to be more the process you are commenting on.

[Sheila Fraser]

That's right. Our work is really limited to the management of a policy, not the decision to implement a policy or not.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

How am I doing for time?