Fisheries Committee on Oct. 31st, 2017

[Clyde MacLellan]

It's certainly disturbing to see the lack of progress for that length of time. It would be incorrect of me, Mr. Chair, to characterize all other corporations as having responded and fixed every recommendation we have found, but the one we're talking about today is extremely disappointing.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

When you have audited other crown corporations—and again, we'll just refer to the previous audits in 2005, 2010, and 2017, where you have repeatedly reported problems, yet nothing has been done—what recourse does your agency have when crown corporations do not follow your recommendations?

[Clyde MacLellan]

Essentially the recourse is to go in and audit it, and repeat.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Will it say stop again? Is that the thing?

[Clyde MacLellan]

Under our legislation, we have no ability to sanction, to place fines, or to terminate positions.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Okay.

[Clyde MacLellan]

We're an audit office, so essentially we go in and report what we find.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Your written brief today included the comment:

As a result of the pervasiveness of these significant deficiencies, [you] concluded that the Corporation had not maintained its systems and practices in a manner that provided reasonable assurance that its assets were safeguarded and controlled, its resources were managed economically and efficiently, and its operations were carried out effectively.

In any other industry or business, wouldn't that be serious grounds for legal action?

[Clyde MacLellan]

Certainly, I think it's fair to say that a negative opinion, whether it be in a case like this or in a financial audit—if you were to receive an opinion that your financial results were not fairly presented—would be seen very much as a serious consequence in the private sector.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

What's the legal responsibility that this crown corporation has to the Government of Canada?

[Clyde MacLellan]

There are many responsibilities it has under each of the acts that administer it. It has to obviously follow the requirements of the Freshwater Fish Marketing Act. It has to follow the Financial Administration Act. There would be other pieces of legislation, including everything from health and safety—

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Is it safe to say that it has put the Government of Canada in a potentially litigious area in terms of its health and safety record with its plant workers and the failure to do safety training and hazard prevention programs?

[Clyde MacLellan]

I'm not a lawyer, so I cannot comment on whether it would be in a litigious situation as a result of that. What I can tell you is that it has a responsibility to manage and protect its employees, and that what we identified in our report was that there was a risk to the corporation both in terms of incidents and accidents that could occur and the consequences those could have on the business. Therefore, yes, it was something that we felt needed to be fixed.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

There were a number of serious deficiencies in terms of hiring practices. There was no accountability. There were long terms when positions on the board were vacant. The audits have pointed out serious deficiencies in the governance structure of the corporation. We talked about that. What can the government do to fix these deficiencies and ensure that the new board is free of conflicts of interest and that it properly manages its resources?

[Clyde MacLellan]

I think that's the basis behind many of the recommendations we made in the report. I think, first off, we encourage the corporation to work with the government to fill the vacant positions, very much with the idea that, if you start at the top and provide the right oversight and direction, you will get the improvements.

The second thing, I think, that's most important is to encourage the government to work with the corporation on strategic planning and identifying certain key future directions for the organization. I think, very much, what the government can do is engage with the corporation, not just to fix what is currently here, but to have that ongoing dialogue, because it is an ever-changing business, and to facilitate how it exercises its responsibilities.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Thank you.

[The Chair, Liberal, Scott Simms]

Thank you, Mr. Doherty.

Mr. Donnelly, you have seven minutes, please.

[Fin Donnelly, NDP, Port Moody—Coquitlam, BC]

Thank you, Mr. Chair.

Thank you to our witnesses for being here this morning. Thank you for your report. This report is quite damning. It is alarming to the government and obviously to this committee. Thanks for answering many of the questions I have. You've provided some insight.

I was going to start off by asking about how many reviews have ever come up with an adverse opinion from your audits. I think you answered and said very few, but is there a percentage that you could give us on that?

[Clyde MacLellan]

Unfortunately, I don't have a statistic that I can give you in terms of the number of reports, but I'll try to answer that if I can on a relative basis.

There are roughly 45 crown corporations that are subject to a special examination such as the one performed here. Those crown corporations are required to have an exam done once every 10 years. Over a 10-year period there might be 45, in total, that are done. Over the last 20 years, let's say, the period that I've been actively involved in this, that would mean 90 exams. This is not a precise number. I'm thinking that you need an order of magnitude. If you need a precise number, we can always provide that to you, but I think there is less than a handful, so, less than five have had an adverse opinion.

[Heather McManaman]

I can think of five.

[Fin Donnelly, NDP, Port Moody—Coquitlam, BC]

That's a pretty significant few that have had this kind of opinion.

[Clyde MacLellan]

That is correct.

[Fin Donnelly, NDP, Port Moody—Coquitlam, BC]

Your report today talks about essentially wasted money in purchasing equipment and putting workers at risk. I think you commented enough about the equipment that wasn't used.

You allude to worker safety. Could you talk a little more about what risks there are with potential worker safety?

[Heather McManaman]

You can appreciate these people work in a fish processing plant. There's a lot of activity. There are sharp tools, lots of equipment. It can be very busy, so there is a lot of risk. If the proper policies aren't in place, if staff don't have the proper training, if the proper equipment's not there, you're putting at risk the health and safety of the employees, which then can result in extra expenses to a corporation if there were to be accidents. So your workers' compensation costs could increase.

[Fin Donnelly, NDP, Port Moody—Coquitlam, BC]

Okay. The practices haven't been followed or put in place, that you've observed.