Thank you, Mr. Chair.
We thank you for this opportunity to discuss chapter 4 of our February 2007 report.
As you mentioned, I am joined today by John O'Brien and Kevin Potter, principal and director respectively from our Halifax office, who are responsible for this audit.
In this chapter we concluded that Fisheries and Oceans Canada, more particularly the Canadian Coast Guard, has not made satisfactory progress over the last four to six years in implementing recommendations made in chapter 31, “Fleet Management”, of our December 2000 report, and in chapter 2, “Contributing to Safe and Efficient Marine Navigation”, of our December 2002 report.
The coast guard plays a number of important roles. It provides marine navigation services, such as aids to navigation and marine communications, to mariners in Canadian waters.
The coast guard uses its fleet of large vessels to deliver its own programs, such as icebreaking and offshore search and rescue. These vessels also support other departmental programs, such as science and fisheries management. In addition, the fleet assists other government departments when requested to do so.
In the 2005-06 fiscal year, the cost of fleet services totalled about $344 million. The cost of marine navigational services was about $245 million, including costs allocated from the fleet.
In our earlier reports, we concluded that Fisheries and Oceans Canada had not managed its fleet and marine navigational services cost-effectively. In response to the problems we noted in 2000 and 2002, we made 13 recommendations for improvement, 12 of which remain the department's responsibility.
The department accepted all of these recommendations and made a commitment to take action.
After concluding that progress was unsatisfactory, we focused our attention on identifying the underlying causes.
We found that the coast guard started a number of initiatives, many of which were designed to address issues that we previously raised. However, the coast guard has not been able to complete these initiatives. We believe that there are three fundamental reasons for this lack of progress.
First, the coast guard accepted assigned duties even when there was no realistic way that it could successfully deliver. For example, it proceeded with implementing the coast guard as a special operating agency. With an already stretched management team, the coast guard developed an implementation plan without having the resources needed to support its completion. Not surprisingly, we found that many elements of this plan were unfinished well after the expected completion date.
Second, the coast guard did not prioritize its actions. For example, the coast guard attempted to address all of our recommendations to improve management of its fleet at once. These initiatives stalled at various stages of completion.
Finally, while the coast guard made commitments to resolve management problems and complete initiatives, both organizational and individual accountability for achieving results were lacking.
On April 1, 2005, the coast guard became a special operating agency within Fisheries and Oceans Canada. The decision to establish the agency was done with a view to affirming the coast guard as a strong national institution ensuring that its fleet provide services to the government and to providing the coast guard more operating flexibility.
In the chapter, we raised several issues that will be important for successfully implementing the special operating agency.
The coast guard has had limited success in developing a national approach to managing its operations. It has yet to strike the right balance between appropriate national direction and guidance, and responsive, accountable delivery.
In addition, the modernization of the coast guard's marine navigational services has been slow. New technologies are expected to improve the effectiveness of marine navigation while reducing the coast guard's costs. However, until it can shed the old technology and associated infrastructure, these cost reductions will be difficult to attain.
Furthermore, the fleet is aging. Reliability and rising operating costs are significant issues. While the government has approved funding for new vessels, we are concerned that the most recent plan for replacing vessels is already out of date.
You will note that we have made only one recommendation in this chapter. If little has changed, why then would we not repeat our past recommendations?
Like any other organization, the coast guard has limited resources and must focus on the key issues it faces. Therefore, we have recommended that it establish its priorities for improvement, setting clear achievable goals for each priority. Sufficient and appropriate resources should be allocated to each priority. The coast guard should plan and implement the changes required by holding managers and organizational units accountable for the identified results.
I am satisfied that the department's response to our recommendation recognizes the need for realistic planning and implementation.
I believe that your committee can play a valuable role by asking the coast guard to identify its priorities for improvement and to provide regular updates on the results that are achieved.
Mr. Chairman, this concludes my opening statement. We would be pleased to answer your committee's questions. Thank you.