Finance Committee on June 22nd, 2020

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you very much.

[The Chair, Liberal, Wayne Easter]

That is added complexity, for sure.

Mr. Sorbara will be followed by Mr. Gabriel Ste-Marie.

Francesco.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you very much, Chair.

Welcome, Auditor General. It's great to chat with you again. As a member of the public accounts committee and a sometimes interim member here at the finance committee, it's great to welcome you again.

I want to say in starting off my comments that we did just finish the week where we celebrated our national public servants. It was National Public Service Week, and I do want to give a shout-out to all on your team over at the Auditor General's office. I think there are almost 600 employees who do a very important job in terms of upholding this and making sure that information flows to Canadians on how their monies are spent and on how there is transparency involved when they pay their taxes and it goes to government. Thank you very much for that.

For my first question, could we just get on record the three reports you mentioned that will be delivered in terms of the three topics at hand?

[Karen Hogan]

Do you mean the three reports that will be tabled in July?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Yes, the three reports to be tabled in July, please.

[Karen Hogan]

Supplying the Canadian Armed Forces, immigration removals, and student financial assistance are the three reports that are expected to be tabled in July.

As well, just for information, because they have already been made public, we will be tabling three special examinations: the Canadian Commercial Corporation, the Standards Council of Canada and the National Gallery of Canada. Those are three special exams that will also be made public.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Okay. Thank you very much for that work. We obviously look forward to receiving those reports in due time.

One of the things we spoke about on the public accounts committee, which I thought was great in terms of relations, was that first, obviously, you've worked with former auditors general Mr. Ferguson and Sheila Fraser, both people who many look up to, so I welcome that, and obviously there is your relationship in terms of your past history, both as an auditor and as a person responsible for preparing financial statements. At the same time, you recognized that the Auditor General's office may have to go through a period of digitization, if I remember your comments correctly.

In thinking about how COVID-19 has impacted, what are your thoughts on being able to proceed with some change management in terms of digitization and also on fulfilling the requirements in terms of the more onerous work schedule that may face the Auditor General's office?

[Karen Hogan]

What COVID has taught all of us is that both parties need to be willing to move into the digital age and to be able to work across a medium that's very different from just sitting in a boardroom together and exchanging paper, so it isn't just about the auditors. It's also about the department and the Crowns and the corporations that we audit having the same goal and wanting to be on the same path when it comes to moving in that direction.

We're definitely seeing that there were quite a few hiccups at the beginning of all of this. We were able to deliver on many financial audits for Crown corporations that were ongoing at the time, when everyone hunkered down into their homes. We saw some delays. We did see some difficulties. We did see us having to find more creative ways to come up with sufficient and appropriate audit evidence. It has actually forced both the auditors and the financial statement preparers to really be more in tune with what their financial or IT systems can do and can't do. I believe that everyone is learning that investing in technology and collaboration tools, like the one we're all using today, is important and needed moving forward.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Excellent.

I do know that when we came into office in 2015, there were various departments that had undergone very draconian spending cuts by the Conservative government. For example, we invested over a billion dollars into the Canada Revenue Agency. A lot of it went into technology. You see some of those investments paying off in the ability to undertake the Canada emergency response benefit, whereby Canadians applied on a Monday morning and received a direct deposit into their accounts sometimes within 24 or 36 hours. You heard that anecdotal evidence and, for that matter, the reality that it was.

We need to ensure that the Auditor General's office has the resources, and not only the human capital but also the technological wherewithal, to move within a more digitized period. For me, it's something that we need to do. Transparency and accountability are bedrock in my principles as a parliamentarian and as someone who sat on the Accounting Standards Board user advisory committee in Canada for almost a decade. Those are two things that have been drilled into me. It's very important.

In terms of the workflow or the workflow plan, you said that you were out hiring. I read this morning that there's an engineering firm in Montreal that's looking to hire as well, but they're having difficulty in hiring. We are seeing some green shoots in the economy, but because of the traditional way of hiring someone—screening them and meeting with them—it's not happening as quickly as possible. Can you give us some feedback in terms of your hiring process? Can we get the individuals in, interviewed and going through that process, or are you finding some difficulties there?

[Karen Hogan]

Prior to the pandemic, as most audit shops across the country will tell you, we were having difficulty attracting individuals. There's just a high demand for them.

In this context, we just launched our process on Friday in order to increase significantly our performance audit practice and some of our HR group and in order to be able to onboard all of these individuals. We're still working through the mechanics of what that might look like, but we know that it's absolutely going to be in a virtual forum, a virtual interview. Even recruiting events are now going to be virtual across our social media platforms. It's going to take a little time for everyone to get used to that.

Onboarding will be different for individuals, and we've also started to train our managers, given that managing a remote workforce brings a whole set of different challenges. We need our managers as well as our employees to be at ease with what that might look like. We're not the only ones living through this. The entire federal public service is living through this. The private sector is living through this. We've been talking with many people in order to learn about best practices and hopefully leverage that.

What I can guarantee is that I think it will take some time, a little longer than we normally expect, which is why we decided to still launch our hiring process without the funding so that we could get the ball rolling.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Okay. Thank you, Auditor General.

Thank you, Wayne.

[The Chair, Liberal, Wayne Easter]

Thanks, all of you.

We'll go to Mr. Ste-Marie and then Mr. Julian for a couple of minutes each. Then we'll go to Mr. Cumming, Mr. Fragiskatos and possibly Ms. Koutrakis for about three minutes each.

Gabriel.

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

Thank you, Mr. Chair.

Ms. Hogan, right after your testimony, we will hear from the Canada Infrastructure Bank. You mentioned that you were currently studying the invest in Canada plan, an important infrastructure program that has some issues. For instance, money is not coming out or it is not coming out fast enough. Do you have the mandate to study and audit what the Infrastructure Bank is doing?

In that regard, are you worried that the information on the success or failure of infrastructure programs that are confined to a non-government entity, such as the Infrastructure Bank, is more difficult to obtain?

[Karen Hogan]

Yes, we have the mandate to study and audit what the Canada Infrastructure Bank does in two ways.

We just completed the third audit of the Infrastructure Bank's financial statements. I don't think that last year's financial statements have been made public yet, but I know that we approved the Auditor General's report a few days ago.

We also have the mandate to audit performance in terms of everything that goes through that entity.

I don't expect it to be difficult to obtain information, although it is always more complicated when money is transferred to another level of government. However, we expect the federal entity to keep its documentation and to at least have information to give us on the progress of all the investments, even if some of them occurred at the municipal or provincial level.

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

Okay, thank you.

Mr. Hayes, you also have the mandate to study what the Canada Infrastructure Bank does. Are things going well?

[Andrew Hayes]

Yes. As Ms. Hogan said, we have that mandate, but I would add that it is one of the mandates for which we have not received additional funding to carry out our audits.

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

It's been noted.

Thank you very much. That wraps up my questions.

[The Chair, Liberal, Wayne Easter]

Mr. Julian.

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

Thanks very much, Mr. Chair.

I have a brief comment replying to Ms. Dzerowicz. The Library of Parliament information that we've received, in terms of funding, clearly shows that the peak for funding for the Auditor General was 2011. It was a minority government going into a majority government. It was $95 million, and it's fallen to $87.9 million. You don't need to be an auditor general to know that $95 million is considerably more than $87.9 million. That's in current dollars. In constant dollars, the difference between what the Auditor General should be getting and what it is getting is even greater.

Again, Liberals and Conservatives have been finger-pointing. They've both been awful and they both should be ashamed of themselves, but a minority Parliament will restore the appropriate funding, and hopefully, Ms. Hogan will be able to get that independent funding mechanism. That's vitally important.

I have a couple of questions for Mr. Hayes, and one for you, Ms. Hogan.

The issues of the infrastructure bank, I assume, will include what has been flagged by a number of people, the executive bonuses that have been part of the infrastructure bank and the massive staff turnover. That's my question for you.

Mr. Hayes, in terms of the commissioner of the environment, when will a permanent person be chosen? As I understand it, you continue to be an interim commissioner. On July 8, will any reports be released by the commissioner of the environment and sustainable development?

Finally, on subsidies for oil and gas—

[The Chair, Liberal, Wayne Easter]

We're going to have to leave it there, Peter. You're pretty near your two minutes.

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

—what is the problem, in terms of being able to document and respond to that?

Thank you.

[The Chair, Liberal, Wayne Easter]

Ms. Hogan.

[Karen Hogan]

In the interest of time, I'll probably answer two of those and then I'll leave the last one for Andrew.

When it comes to executive compensation, that is absolutely one of the areas we look at during every financial audit, and if we had any concerns with executive compensation at the bank, we would have raised them with its board of directors throughout our financial audit.

When it comes to the interim commissioner and when there might be a permanent one, that is also something I am responsible for, which would be to appoint a permanent commissioner of the environment.

As Mr. Hayes mentioned earlier, there isn't a lot of room right now for the commissioner to do things that I'm sure a brand new commissioner would love to wrap his or her teeth around. I'm using the opportunity right now to get a process ready so that I can hire a permanent commissioner in the coming months, but it isn't much of a priority right now as we're all turning our minds and focusing on COVID-19. I would imagine that in a few months we'll get that launched so that we can find a permanent commissioner.

Andrew, I'll leave the last question to you.

[The Chair, Liberal, Wayne Easter]

Mr. Hayes.

[Andrew Hayes]

Thank you.

In terms of upcoming reports, we do have a report that was scheduled to be tabled in May of this year and that will be presented in the fall. It's on the transportation of dangerous goods. That will come along with my annual obligation of presenting my findings on sustainable development plans and petitions.

In terms of fossil fuel subsidies, I would guess, in terms of where your question was going, the challenge is to identify a clear definition on what is an inefficient fossil fuel subsidy in the context of Canada's national circumstances.