Government Operations Committee on April 26th, 2021

[Karen Hogan]

The plan—

[Rachael Thomas, Conservative, Lethbridge, AB]

Why was the playbook shuttled?

[Karen Hogan]

The federal-provincial-territorial response plan was used to guide the response. It's that it had not yet been tested. We followed alerts.

[Rachael Thomas, Conservative, Lethbridge, AB]

We followed the guidebook. This is the guidebook.

[Karen Hogan]

We only stopped looking as of June 20, but as I said earlier, I don't believe any country was well prepared for a pandemic of this length.

[Rachael Thomas, Conservative, Lethbridge, AB]

From January to June 20, the guidebook was followed.

[Karen Hogan]

To some degree, yes. There were areas—

[Rachael Thomas, Conservative, Lethbridge, AB]

No, not to some degree. I'm asking you a very direct question. Your responsibility as Auditor General is to answer my question, not protect the government. Let's be very clear here.

[Karen Hogan]

I am being very clear that on January—

[Rachael Thomas, Conservative, Lethbridge, AB]

Was it followed, or was it not followed?

[Karen Hogan]

On January 15 the federal-provincial-territorial response plan was activated, and it guided the response that the government took.

There were weaknesses in that response, because there had not been agreements between the provinces, territories and federal government on how they might share information and how that information would be used. Hence, the response could have been faster, and that's what we noted in the audit. Yes, the plan was used.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Ms. Harder and Ms. Hogan.

We'll now go to Mr. MacKinnon for five minutes.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

I'd like to begin with a few words about what just happened. I feel that the member from the riding of Lethbridge was very rude. It's worth pausing to think about how she has just treated the Auditor General by accusing her of protecting the government. I want to condemn it.

Good afternoon, Auditor General. I'm pleased to see you again today. I'd particularly like to thank you for the work you've accomplished. We are going through a rather unusual series of events that governments around the world are having to deal with. It might be déjà vu, but it seems like a long time that we've been caught up in a series of events like this. The pressures on supply chains and on our health systems are only a few of the aspects involved.

It's important to find the weak points in the system, where we can make improvements and where we can focus our efforts to make these improvements. Your work serves us well in this regard. Needless to say, we can certainly learn from the problems that developed because of a shortage of personal protective equipment.

Earlier on, you mentioned the work that was in progress. This included a study to be published in May or June. I'm not asking you to reveal the outcome of your efforts to the committee today. However, comparing the previous efforts of the government of Canada to what we are now doing in terms of procurement, I was wondering how you approached the task.

How do you go about assessing financial value? Generally speaking, what targets or measures are covered by your evaluations?

[Karen Hogan]

I just want to make sure I've understood the question.

Are you talking about the procurement of goods or is it a general question?

[Steven MacKinnon, Liberal, Gatineau, QC]

It's about the context of the pandemic. You pointed out that you felt the government appeared to have taken rapid action to develop wage support programs and that it had perhaps been less concerned about getting it right and more concerned about doing it quickly.

How would you assess procurement efforts from this standpoint?

[Karen Hogan]

On the basis of our audit of the Canada emergency response benefit and the emergency wage subsidy, we determined that the government had indeed followed internationally recognized emergency situation best practices.

The emphasis was on post-payment controls rather than pre-payment controls with a view to striking a balance in being able to provide support to individuals and businesses. There were a few pre-payment controls, but the emphasis was really on post-payment controls, as was the case internationally.

For procurement, the purpose of the evaluations was primarily to review the criteria and requirements used by the government. Here again, we took into consideration the fact that it was a market where there were very few masks and where demand was much higher than…

[Steven MacKinnon, Liberal, Gatineau, QC]

So you take supply and demand into consideration.

[Karen Hogan]

Thank you. I was thinking of “supply and demand”.

As we saw during the pandemic, the price of some items, like masks and gloves, increased considerably. That all has to be factored into our procurement audit.

[Steven MacKinnon, Liberal, Gatineau, QC]

So you've been approaching your work in the same way. When a government finds itself required to act, whether to buy supplies for the health system or to give financial support to individuals, you take these into account. Right?

[The Chair, Conservative, Robert Gordon Kitchen]

I'm sorry Ms. Hogan, but we've run out of time.

[The Chair, Conservative, Robert Gordon Kitchen]

If you wouldn't mind providing that to the committee in writing I would appreciate that.

We'll now go to the third round and we'll start with Mr. Paul-Hus.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Ms. Hogan, I'd like to get back to the instances of fraud that were detected. There was fraud with the CERB, and there was probably fraud committed by businesses under the Canada emergency wage subsidy.

I understand that it was urgent to act at the time, even though the Conservatives had put forward a number of risk mitigation measures. These were not adopted by the government, but that's ancient history. What we need now is to find answers.

Last fall, the Minister of Finance took further action to obtain the tools needed to do just that.

Do you really think it will be possible to recover fraudulently obtained money?

Do we have the required resources?

[Karen Hogan]

I'd like to begin by saying that I always make an effort to determine whether there has been fraud and whether taxpayer money has been used inappropriately. That's why I'm going to place an emphasis on the two follow-up audits for the emergency wage subsidy and the Canada emergency response benefit to determine the effectiveness of the post-payment controls.

In this audit, we'll be able to determine whether we have the means and mechanisms required to verify these areas. At this point, however, we have only worked on the design and launch of the two programs.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

I assume that in the next audit, you're going to look into organized crime. After all, organized crime knows how to organize itself. It is responsible for all kinds of CERB fraud and business grant fraud. This needs to be monitored closely.

I'd also like to talk about your audits of Canada emergency wage subsidy grants to companies. In the world of business, people have been saying that some companies, even though they may not have committed fraud and have followed the rules, are taking advantage of the system. Some even adjusted dates to invoice services later in order to be able to apply for emergency wage subsidies for their employees. I am aware of some companies that made millions of dollars in profit at the end of last year. They say that it was their best year ever.

With hand on heart, we are always there to help people, but we mustn't become a laughing stock either.

Have you found anything like that? Are there mechanisms in place to check on these companies, which have not necessarily acted illegally?

[Karen Hogan]

When the emergency wage subsidy was being drawn up, there was no discrimination on the basis of business size. The goal was to encourage and maintain relations between employers and employees. All the situations you mentioned should be looked into by the government—I'm hoping—as part of the post-payment controls. We'll be checking on this in our follow-up audit.