Finance Committee on May 12th, 2020

[Sylvain Ricard]

Actually, it depends. Obviously, we need transparency, responsibility and accountability. However, at this time, I don't know enough about the details of this initiative to go ahead and identify the appropriate controls that will be needed. Furthermore, the work we do is all about assessing how various programs are managed.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

Mr. Chair, I see I have a bit of time left, but my other question was a long one, so I'll hand it over to my colleague, Mr. Brunelle-Duceppe, so he can ask it in the next round.

[The Chair, Liberal, Wayne Easter]

Thank you, Gabriel.

We turn now to Mr. Julian, who will be followed by Mr. Cooper.

Peter.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thanks very much, Mr. Chair.

Monsieur Ricard and Mr. Hayes, thank you very much for being here today. We hope that your families as well as the entire team at the Auditor General's Office are safe and healthy.

I must say that what I think is very clear to the Canadian public and what I'm seeing is a lot of finger-pointing, the Conservatives pointing a finger at the Liberals and the Liberals pointing a finger at the Conservatives, for what has been dramatic underfinancing of the functions of the Auditor General. These are extremely important, and the fact that you've actually had to cut your performance audits in half is indicative of a real problem. Both governments, the previous Conservative government and the current Liberal government, share the blame on this. Instead of finger-pointing, they should just be acknowledging the errors that have been made in not providing the supports that are so important for your office. Canadians are definitely on your side. You perform an extremely important function, and you need to be financed adequately in order to do that. That's in the interests of all Canadians.

My first question will be around the issue of bailouts. We went through the economic crisis in 2008. Money was being given out. We've seen, subsequent to that, that a lot of loans were basically written off. At the beginning of this year, we had $200 million that was written off, a loan to a Canadian company that the government refused to disclose. The Liberals said that in the interests of commercial confidentiality they couldn't disclose it, but that all decisions made by cabinet are in the best interests of Canada. So $200 million just disappeared in a moment. We saw previously under the Conservative government similar monies just disappearing.

How do we make sure that we are not seeing corporate bailouts, corporate gifts, just disappearing when that happening is not in the public interest? When your office flags these very legitimate concerns about bailouts that are loans that become gifts, how do we ensure that we simply don't see this abuse of the Canadian taxpayer and that every dollar that's invested is actually used for its intended purposes, and that loans given to Canada's most profitable corporations are actually paid back?

[Sylvain Ricard]

One of the things we will look at is to make sure that, as I was mentioning earlier to your colleague, there is proper accountability, proper reporting and transparency. That's the key. If you don't provide transparent reporting on the initiatives, that's far from being the best practice.

You need to disclose your various investments, your various transactions. There are various means. Whether it be the COVID initiative; the infrastructure program; or the broader transactions of the government through the financial statements of the government, the various entities and the crown corporations, proper and transparent reporting is important.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

This is something that you're asking government to do. I think it would be important for us to follow the reports that have come out over the years from very respected people such as yourself who actually tell Canadians how government should be structured. Instead of the secrecy and these special closed-door agreements, often with lobbyists involved, we need to make sure that we're protecting the public purse and that every dollar actually counts.

Seniors who are struggling to put food on the tables, families who are struggling to keep a roof over their heads and Canadians who are struggling to keep their jobs should receive the best possible disclosure and transparency around every dollar that's spent. That wasn't the case under the previous government; it hasn't been the case under the current government; and it definitely needs to change.

I want to come to the issue of the use of the Canada account. Particularly, we've been told at the finance committee that coming out of COVID-19, coming out of the pandemic, that there will be a massive splurging of somewhere around $15 billion to $20 billion in construction for the Trans Mountain pipeline. That's in addition to the purchase of all of the assets, which was done, basically, with no due regard to the public purse.

I'm wondering to what extent you're concerned about the use of the Canada account in such an an egregious way, basically bypassing Parliament to spend tens of billions of dollars, potentially, in this case, for a project that the private sector walked away from because it's simply not a project that has any economic foundation.

Are you concerned about the use of the Canada account in this secretive way?

[Sylvain Ricard]

Again, as I mentioned earlier, it's too early to comment on specific transactions; I'm not familiar enough with all of the various elements.

What I can say about the Trans Mountain component is that last year we issued our first audit report on their financial statements. We will do that again this year. I would say, probably in the early fall, or something like that. Beyond that, at this point, I cannot make any further comments because I don't have all the details of all of those transactions.

[The Chair, Liberal, Wayne Easter]

I'm sorry. We'll have to end it there.

Thank you both very much.

Next is Mr. Cooper followed by Ms. Koutrakis for the five-minute round

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you, Mr. Chair.

Thank you, Mr. Ricard, for being here.

Let me say that in terms of funding for the Auditor General, my questions and comments are in the spirit of seeing that the Auditor General has the full resources that are required, especially in light of the fact that we have a government that in the last two months has spent more than Canada spent during the Second World War, adjusted for inflation. When we speak about a $10.8-million increase, that is a rounding error in terms of the federal budget.

Mr. Ricard, you talked about $10.8 million. The context in which that request was made was after your office had its mandate expanded. In other words, you were pre-COVID, doing more work yet had no additional resources. Isn't that correct?

[Sylvain Ricard]

Yes. Over the years, between 2011 and 2017, when the former auditor general asked for the additional funding, we had a number of new mandates given to us. These included the Canada Infrastructure Bank, Trans Mountain Corporation, some museums and some work in the territories.

We can't forget that we're doing audit work, whether it be performance audits or financial statements. We're doing that for the three territories as well; it isn't just the federal government. There was also the Federal Sustainable Development Act, which meant that we went from 26 entities to review up to 90.

Those are just examples of the mandate component, but we have other pressure points, and it's becoming concerning.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Right. Exactly. Other than the three motions put before Parliament, you stated that all other audits are delayed. You said in your testimony that you don't know when your office will have the capacity to undertake work on those audits to complete them.

Would it be fair to say that it could be as long as past June 2021 when you're due to report on the COVID spending initiatives?

[Sylvain Ricard]

There was obviously some work. For example, we have three reports that were due for tabling in late March, but with what happened in mid-March with the pandemic, we've put that aside. So those three are ready to be given to the House. But we had to delay all other work that was being done. Some would have been for this coming fall; at a minimum, it will be spring 2021.

Beyond that, we had to stop everything else because we simply don't have the capacity. Even with COVID, there's probably enough there for another year's worth of relevant work. It's early in our planning, but the way we look at this, there's a lot here, and we need to look at it.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

So there is a significant delay. There's a large amount of work for your office.

One of the audits that was in one of the three motions passed by Parliament this year concerns the $187-billion infrastructure program. Do you anticipate that audit being completed and reported by January 2021 in light of the limited resources your office now has, and despite the fact that you are prioritizing the mandate provided by way of the three motions, or rather the audits that have been requested?

[Sylvain Ricard]

I'm going to asked Mr. Hayes to speak to that.

[Andrew Hayes]

We are working diligently on the infrastructure audit right now. As Mr. Ricard mentioned, we have prioritized the investing in Canada plan audit and the COVID audit, and that is the reason we delayed all the other work we had on the forward audit plan.

At this point we are accepting the fact that departments are dealing with the pandemic crisis and that in some cases, whether it be our own ability to have staff available because of physical distancing and IT resources, or the actual department's ability to respond to our audit request, we could see some delays. But we are working diligently to meet the deadline as much as we can.

If there are delays to our tabling plan, we will let Parliament know in due course.

[The Chair, Liberal, Wayne Easter]

Thank you, we'll have to end that round there.

Ms. Koutrakis, you're next, followed by Mr. Cumming.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Thank you for your testimony today, Mr. Ricard.

I think we'll all agree that during this unprecedented time, many of my constituents and Canadians are reflecting on their personal finances and well-being, as well as the economic future of our country.

In your opinion, how will an audit of the government's measures help to address some of these concerns or uncertainties and make Canadians feel confident about the future of our economy?

[Sylvain Ricard]

As I mentioned in the opening statement, we planned this audit work. We want to look at it from two perspectives. If I refer to the COVID-19 audit, there are various elements. Some of the audit is to support individuals and some of it is to support businesses. It's important that those various programs, to have their impact, be well managed, well planned and well delivered, and that somebody is monitoring and adjusting as they are being delivered and as we report on them.

At the same time, we want to have enough audit areas from the perspective of what can be learned from that, from various perspectives, in case it happens again and what economic impact it has. To have the biggest or the best impact, you need to learn from the past. I guess I'm speaking that way because I'm an auditor, but I like to think that an audit is a great vehicle to allow organizations to learn and improve. We'd like to think that, with the work we will do, we will do exactly that, help the government improve, and that it will have a better impact on Canadians in the future and in the short term by learning through the audit work we do.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you for your answer and thank you for your work.

I have one question for Mr. Hayes. With infrastructure projects being considered as a post-crisis economic stimulus, can you offer some recommendations around which types of projects would offer the greatest boost to the economy, while we're working toward our government's goals of sustainable development and the protection of the environment? I know you don't have details, but I'm sure you must have done some analysis, and perhaps you can recommend some projects.

[Andrew Hayes]

At this point, it would be too early for me to comment on that. Typically, with the audit work we do, we look at the projects the government has chosen to fund. We would end up looking at whether the funding has been provided to the recipients that should have gotten it and in the time frames that it should have been issued.

You mentioned sustainable development. I would like to mention, as interim commissioner of the environment and sustainable development, that sustainable development goals form part of our audit planning work. There are a number of sustainable development goals that are at issue when we're looking at the COVID response. Of course, with sustainable development, we have to remember that's always a balancing of economic, social and environmental considerations, but we are planning this work in a sustainable development context.

[Annie Koutrakis, Liberal, Vimy, QC]

Has any analysis been done on the federal government's initiative to clean or reclaim orphaned oil wells? Can you comment on how this program will work to promote environmental sustainability while providing support to the furloughed workers in the oil and gas sector?

[Andrew Hayes]

We do know about the recent investments that have been announced. That will most likely be a portion of the work that we will look to be doing in this audit.

[The Chair, Liberal, Wayne Easter]

Thank you all.

We'll turn, then, to Mr. Cumming next followed by Mr. Fragiskatos.

Mr. Cumming, go ahead.

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you, Mr. Chair.

Mr. Ricard, thank you for the work that you do.

I'm new to Parliament and spent my career in the private sector. I think the role of auditor is misunderstood, particularly with performance audits. We would welcome performance audits as a source of improving operations and trying to get better as a company, and I think the same thing should happen with government.

My concern here, and it's head-scratching to me, is that we're undertaking this volume of program spending and we haven't included sufficient capital for the auditors to do their jobs and make sure taxpayers' dollars have been well spent. This is a concern particularly to your comments about ensuring that, if we got into a situation like this again, we would understand better whether these programs work or not.

For you, as a career auditor, it must strike you that.... As someone said, it's a rounding error. For the life of me, I can't understand it. Forget about the past; we're in it today. With $200-billion worth of spending, surely we should have more comprehensive audits at this time.

[Sylvain Ricard]

I guess all I can say is that I have been attending public accounts committees with the former auditor general, Mr. Ferguson, and then by myself, with other colleagues, as an interim, and have been loud and clear. The former public accounts committee, in its legacy report and as a letter to some key players in the federal system, had a unanimous position on the fact that we should get the additional funding.

I don't know what more I can say about that, aside from saying that for the institution, the important institution that the Office of the Auditor General is, it's concerning. We're even these days having challenges to deliver our financial statement audit work. Again, the specific context makes it so. It just demonstrates the challenges we've been facing for years, and that we have no flexibility, no leeway, and as soon as something happens, we have to make difficult choices.