Finance Committee on May 16th, 2012

[Hoang Mai, NDP, Brossard—La Prairie, QC]

A quick question regarding CRA. Now that you can issue demands to file the return online, how will we be sure who receives the demand? There are two questions. There is the question of making sure that the person who receives it is the right person, and the second is regarding requiring personal information in the online demand.

[Brian McCauley]

I believe that's in reference to the demand to file the.... We would only be sending something online if already met our existing security requirements for providing information online. In those circumstances, I believe what we do is post it to a “My account”, and the person is allowed to view it there. So we have fairly strict protocols within the agency about when we can and can't communicate online, and those would be respected.

In reference to an earlier question, online isn't the only way we are going to be reaching out to people. There will still be regular mail; there will still be some registered mail. It would only be removing the absolute requirement to keep pumping out 250,000 registered letters a year, for which we have certainly determined is not money well spent and we can do as good a job at a lower cost.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

In terms of regular mail, what security do we have that the person who receives it is the right person, whereas registered mail has the...?

[Brian McCauley]

As you know, most of our mail does go by regular mail—your tax returns and other things—so that security system would still be in place.

[The Chair, Conservative, James Rajotte]

Thank you.

I have no further members on the list at this point, so I will thank our officials. Thank you so much for being with us to give us an overview of part 2.

We will now bring the next set of officials forward.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Chair, perhaps Mr. Brison wants to say something now and see how many people Tweet him at a particular address or send an e-mail.

You can ask people to send you an e-mail—

[The Chair, Conservative, James Rajotte]

I guess this is why I should suspend meetings when witnesses are coming forward.

We will suspend for one minute.

[The Chair, Conservative, James Rajotte]

We'll turn to part 3—just kidding. It's to see if you're paying attention.

We will turn to part 4.

Part 4 is a much larger section than parts 1 and 2, so we will deal with them in divisions, and we will start with division 1 of part 4. This is with respect to measures with respect to the Auditor General of Canada.

We have Mr. Boissonneault.

Welcome to this committee.

Would you like to give an overview of this section for us?

[Gordon Boissonneault, Senior Advisor, Economic Analysis and Forecasting Division, Demand and Labour Analysis, Economic and Fiscal Policy Branch, Department of Finance]

Sure. This division has two groups of clauses. The first section of clauses, from 170 to 192, amends a number of acts to eliminate the requirement for the Auditor General of Canada to undertake annual financial audits of certain entities and to assess the performance reports of two agencies.

The government is making these changes at the request of the Auditor General of Canada. The AG proposed these amendments as cost-saving measures that will result in a more consistent treatment of all federal entities. They will allow the Office of the Auditor General to reallocate resources to core priorities.

There are 12 legislative amendments in this section. The majority remove the requirement for the AG to undertake annual financial audits of certain federal entities from their enabling legislation. This will result in a treatment of these organizations that is consistent with that of other federal departments. This is because the government had previously decided not to require audited financial statements of individual departments.

Departments and department-like organizations are of course still subject to scrutiny as part of the annual audit of the summary financial statements of the Government of Canada.

As well, these organizations will still be subject to periodic performance audits by the Auditor General, as in the past.

The set of amendments in this part of the bill also removes the requirement for the Auditor General to conduct assessments of performance reports of two agencies, the Canadian Food Inspection Agency and the Canada Revenue Agency. These assessments—and again, they are not performance reports of themselves, they are assessments of performance reports—have been deemed to be unnecessary and inconsistent with the treatment of other similar federal agencies.

Changes to this effect are also going to be made for the Parks Canada agency, but that is not part of this division. It will be addressed in division 9.

The Auditor General will also eliminate financial audits of five other organizations on the basis of his own authority, so they are not addressed in this bill.

All of the affected organizations have been consulted about these changes.

The remaining clauses in this division, clauses 193 to 204, indicate the year in which the audits will end for each case. These changes are going to be phased in over a two-year period.

[The Chair, Conservative, James Rajotte]

Thank you for that overview.

We will start with Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you very much, and good evening.

You've said that the reason for restricting the Auditor General's oversight in these 12 affected agencies is that there is another oversight that they are subject to. Could you go into a little more detail about that? In the past, when the Auditor General gave reports on these agencies, presumably they would go to the respective committees of Parliament. Would you describe in a little more detail how that process would take place and contrast it to what will happen under this proposed change?

[Gordon Boissonneault]

Currently, these organizations receive a financial audit on an annual basis by the Auditor General. They are also captured by the Auditor General's audit of the government as a whole through the summary financial statements. To that extent, there is some duplication happening.

The obligation to conduct a financial audit is required by legislation. This is something that's not done with other similar organizations that do not have that requirement in their legislation, so there's also an inconsistency.

In the Auditor General's view it's unnecessary, and the implication is there's minimal risk because they will continue to have their financial statements audited. Moreover, the performance audits that happen on a regular cycle are unaffected.

[Peggy Nash, NDP, Parkdale—High Park, ON]

What information is captured, or has been captured, in these other audits that would not be captured in the financial audit, or the audit of the government as a whole?

[Gordon Boissonneault]

I suppose you have a more detailed set of audits. The level of detail of the financial audits would be probably more in-depth currently. However, when the Auditor General audits the statements of the government as a whole, they look at all organizations and look at the risk parameters of each organization to determine whether or not an in-depth treatment is required. Essentially the same information will be captured.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Or it could be captured if the decision were taken to have the in-depth audit, whereas under the current system, if I understand you correctly, it happens automatically. Is that the case?

[Gordon Boissonneault]

That's correct.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Okay.

Can you tell us the reason for making this change? You said the Auditor General has said that it's because of this other oversight that he has agreed to this. Did the Auditor General himself initiate this change? Or where did the proposal come from?

[Gordon Boissonneault]

Yes, the Auditor General did initiate this change. He proposed it to the Standing Committee on Public Accounts back in October.

Again, it's consistent with a directive from Treasury Board that department-by-department financial audits are not required. It was deemed that this is an unnecessary exercise given the audit of the government as a whole.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Was this in the spirit that the government is making some changes and some cost-saving measures in a variety of government departments? Did the Auditor General in effect look internally and ask where the areas are where we can make some savings so that we're keeping up with the spirit of these other changes and cuts that are taking place in other departments?

Was that part of the motivation?

[Gordon Boissonneault]

That is exactly correct. He did propose these changes in the context of adhering to the spirit of the government review. It constitutes part of a broader set of cost-saving measures that they are putting forward on their own initiative, to be consistent.

[The Chair, Conservative, James Rajotte]

You have time for a very brief question.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Okay.

These are made in terms of...if there have to be cost savings, the Auditor General kind of looked around and said, okay, let's do it here as opposed to over there. Is that kind of how these changes took place?

[Gordon Boissonneault]

That's correct.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Okay.

Thanks very much.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

Ms. McLeod, please.