Government Operations Committee on Dec. 5th, 2006

[Sheila Fraser]

That is correct.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

If people do not have faith in the system and do not buy into it, enacting C-2 will not change anything. The work has to be done on the inside; we have to look at values and how we can make people feel like an essential part of our larger whole.

My last question is as follows: are internal audits still carried out in the majority of agencies and departments?

[Sheila Fraser]

Yes.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

That in no way detracts from your work; we fully understand the difference between what you do and what they do. There is a role for them. Is it part of their responsibilities to disclose such matters a little before you disclose them in your annual reports? I find that very surprising.

[Sheila Fraser]

Yes, normally it is. A number of small agencies do not have an internal auditing service because they are too small. However, the Comptroller General formed an internal auditing group, which I believe is now up and running.

All other departments must have an internal auditing service. I would add that in a number of cases, often those with the highest profile, internal audits had reported on the same problems we raised before we did.

[The Chair, Liberal, Diane Marleau]

Thank you.

Ms. Nash.

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

Thank you, Madam Chair.

Ms. Fraser, I'd like to move on to chapter 8, allocations to Health Canada.

The review of the enforcement responsibilities of Health Canada is an area of interest to Canadians. Health Canada is responsible for overseeing the enforcement of a number of products and devices that Canadians depend on to be reliable. You talk about blood monitoring equipment, cribs, pharmaceuticals, and a variety of things.

One of your concerns was that there may not have been sufficient funding to the regulatory arm of Health Canada in order to adequately perform its regulatory enforcement functions. I did note in chapter 8 that there were cuts to spending. There was less funding for core activities in this responsibility in the budget year 2005-06 than there was in 2003-04.

What assurance can you give Canadians that in spite of the less than adequate funding, Health Canada is performing the enforcement of its regulatory responsibilities in a way that fully ensures the protection of Canadians?

[Sheila Fraser]

All I can really do, Madam Chair, is repeat what the department told us. If the committee is interested, I think that would be a question the department itself should elaborate on. What they indicated to us was that they focus their efforts on the areas of highest risk. So obviously they believe they are covering the greatest risks.

You will note in the report that we had interviews with program managers who are concerned about the lack of funding, though, as I said, I presume every program manager will tell you they need more money. It is a little troubling I think in the regulatory programs.

We would have expected Health Canada to have clearly articulated what level of activity was required for each one of the regulatory programs and that the resources would be determined based on that. They do not have that information, though they indicated to us they will begin to do that in their operational plans for the next year.

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

You do indicate that the complexity and growing demands on the regulatory arm of Health Canada indicate a need for greater funding, not less. In spite of the propensity of many managers to want to have greater spending, because there are always additional needs they would like to fulfill, it does seem that our funding decisions have moved us in the opposite direction to the needs of Canadians.

While I appreciate that the programs would want to focus on the areas of greatest risk, surely there are other regulated areas where there is risk, although perhaps not the greatest risk. I wonder how we can be assured that the risks are not of a nature that Canadians should be concerned about.

[Sheila Fraser]

I would also like to point out that it's not just a question of additional funding, but it could also be changing the way they carry out their regulatory activities. We didn't look at it specifically in this report, but we did an audit of the regulation of medical devices about two years ago. One of the recommendations we made was that they might want to do more work in harmonizing with other countries, rather than Canada always conducting all of the reviews. Perhaps they could rely on reviews done by others and focus more on the post-market activities, which is the testing and the reporting. So there could be ways that they change how they carry out regulatory activities.

But again it comes back to knowing what the department feels they should be doing in order to meet those regulatory responsibilities. Then the funding is obviously a consequence of that.

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

I notice there are a number of areas where information seemed to be lacking, such as having the baseline information, as you described, and having clear plans going forward. There were a number of areas where they needed to get greater information in order to really understand how much funding they actually needed.

I notice the commitment of the federal government is to get this all in place by the 2007-08 budget year. I guess my question to you is, is that the most reasonably expeditious timeframe possible? Again, are there assurances that in the meantime Canadians will be protected and Health Canada will be fulfilling its responsibilities?

[Sheila Fraser]

I think that's a very reasonable response. In fact, a lot of the funding submissions are going in now. So they will have to get this done very soon. We're only three or four months away from the beginning of the 2007-08 year. So they've indicated that they want to move in that direction, and I think this is actually a very good target for them to meet.

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

All right. Thank you.

[The Chair, Liberal, Diane Marleau]

Mr. Kramp, two minutes, and then Mr. Albrecht for the balance.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you.

Madam Fraser, many departments, agencies, and ministries actually sort of...not live in fear, but there's a lot of trepidation when they hear they might have an external audit done by the AG's department. But on the other side of the coin, there is a positive because a lot of times your investigations don't just reveal wrongdoing, but actually identify positives, so that we can carry forward.

In that vein, do you see any merit in not just expanding your scope and departmental purview across the board...? But there are many agencies and/or areas that could be affected that will never see the light of day or even fret about it, since the scope is so broad. Do you see a possibility of not a lottery process, but almost a SWAT approach on a random...? If there are 34 areas of investigation, one year we're going to pull out this one and the next year another one. This would be totally at random, so that departments could not plan on necessarily being audited, and/or not, and/or agencies audited, and/or not. Some of them might get audited twice in a row.

This might put the entire structure of bureaucracy on notice that potentially they could be held accountable at any particular time. Do you see any merit in that, almost like a SWAT approach?

[Sheila Fraser]

I wouldn't say we would use a SWAT approach, but I think all the departments, agencies, and the government know that they could become the subject of audit. Obviously there are certain areas that we will probably never get to, certainly not within five or ten years. But all the larger departments are audited on a regular basis, and we're starting to do more work in the smaller agencies as well.

Of course, as in the case here with the correctional investigator, we get complaints, and when we analyze them and think they merit having a look, we will go in.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

But even from a deterrence factor...oh, on January 15 we're going to pull the new one for next year; it is this little department here. That could make the rounds of the system and sort of put everybody on notice. It's just a thought. I realize it might appear to be.... It's a little side point.

[The Chair, Liberal, Diane Marleau]

Mr. Albrecht.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

It's such an interesting topic, Madam Chair, that I almost hesitate to go into my question.

Very briefly, and I know we don't have time to delve into it deeply, but in chapter 7 you talk about the B.C. treaty process, and the statement you make is: “The government needs to rethink its strategies based on a realistic timeline.” Are you implying that they have an overly optimistic view of what could be done? Are their resources stretched beyond anything we could possibly manage? Maybe you could give us some comments on what you see as a realistic timeline.

[Sheila Fraser]

When the treaty process was established in 1993, the expectation was that all the treaties would be signed by the year 2000. We are in 2006; one has been initialled. In fact, I was in B.C. and met with some of the B.C. chiefs just this past Friday. They indicated that many of the treaties that have been signed took anywhere from 20 to 25 years. I think we have to recognize that it is a complicated, complex issue. It will take time, and the department has to change their management structure to manage according to a much longer timeframe than was initially expected.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

You don't have any specific recommendations to make, Mrs. Fraser.

[Sheila Fraser]

I have no specific recommendation, no.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Thank you very much.

[The Chair, Liberal, Diane Marleau]

Mr. Alghabra, for a final question.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

I will follow up on my previous line of thinking.

There are I think processes of internal audits. Is that correct? How effective are those internal audits? Do you have any thoughts on the effectiveness and how we can make them strong?