Good afternoon. I appreciate the opportunity to speak to you today.
I represent 43,000 Canadians. They are financial officers. With the exception of 20, the balance are employed in the federal government.
These financial officers see themselves as more than just employees: they see themselves as stakeholders. They are purpose-driven, they want to make a difference, and they are members of the Association of Canadian Financial Officers, or ACFO.
ACFO is a bargaining agent and ACFO is an advocate. We are advocates for sound financial management. As advocates, we've published various studies on financial management. As advocates, we submitted a brief to the Gomery inquiry. As advocates, we are problem-solvers. I'm proud to be the president of the ACFO.
My members understand the importance of controlling expenditures, and that is what this new budget is trying to do. However, we have concerns with this budget. Our main concern is the possible impact of the freeze on operating budgets. The impact that concerns us most is that oversight will become an afterthought.
Oversight is making sure that rules and regulations are followed. By the way, these are your rules and regulations.
Financial officers provide advice. They provide options within the rules. They are responsible for financial oversight. They understand the crucial role that oversight plays in the delivery of programs, while departments may not; a department's main focus is the delivery of programs, and usually oversight is secondary.
What happens when operating budgets are frozen? Well, departments are faced with options and choices: program or oversight? Program wins. For example, when a financial officer's position becomes vacant, it could get absorbed into programs; when that happens, you've weakened oversight. You've lost your financial road map.
A big part of that road map is the Federal Accountability Act. Financial officers are already struggling to implement the act. We are seeing greater levels of stress within the financial community. Now comes the frozen operating budget. We're living with the act, but now we have a budget that potentially conflicts with the implementation of the act. Both the budget and the act need financial capacity. That means people.
What happens if you don't have people to provide oversight? Not too long ago there were cuts in the Canadian Food Inspection Agency. They proved to be disastrous: we had a listeriosis outbreak in which 22 Canadians died and 57 were gravely ill, so we can see how a lack of oversight had a profound impact.
A lack of financial oversight also has impacts. Remember the Ponzi schemes? Many Canadians lost hundreds of millions of dollars because of Ponzi schemes. In Alberta, Canadians lost over $160 million; in Toronto, Canadians lost $60 million; in Quebec, Canadians lost tens of millions of dollars. Many of these people lost everything--their homes, their retirement nest egg, and their dignity. Most of these people do not have the years to recover. I would suggest that investment in oversight could have saved these Canadians hundreds of millions of dollars.
What happens when oversight does exist? Remember the banking crisis? In Canada, we have rules and regulations for banks. They are enforceable. They protected us from the meltdown. This is not the case in the United States. In the last quarter of 2008, U.S. banks lost $26 billion. Canadian banks earned $2.5 billion.
Now, if we didn't have rules in place, and if we didn't have public servants to enforce them, the story might be different. The President of France, Nicolas Sarkozy, agrees. He said recently, “We can no longer accept a capitalist system without rules, organization, regulation.” And he's a right-wing thinker in France. Wow, have times changed.
Rules by themselves have no teeth. We need to make sure they're enforced. That's one of the jobs of a financial officer. Financial officers need to be seen as an investment, not a cost.
You need to ensure rules are in place. You need to ensure they're clear. You need to ensure they're enforced. Why? Because Canadians expect it, and because you are accountable to Canadians. We would like to help.
Thank you.