Government Operations Committee on Oct. 1st, 2024

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Mr. Chair, do I have five minutes or six minutes?

[The Chair, Conservative, Kelly McCauley]

You had five minutes, but you now have 12 seconds.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Okay.

Thank you very much for your testimony.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Sousa.

We'll go back to Mrs. Block, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you, Chair.

My question is for Ms. Drainville.

The departmental plan for fiscal year 2023-24 shows you have a main estimates budgeted spend of $242 million, and this number could possibly be higher, closer to $300 million, with supplementary estimates (A) and supplementary estimates (B), for internal services. For a department with a budgeted departmental spend of $876 million, that's 28% on internal services, which is, in my estimation, way too inefficient and, subsequently, a waste of tax dollars. I know that internal services consist of not only finance but also HR, ATIP, communications, etc.

With all that funding and FTEs, it is shocking that your internal controls, governance, and risk management are loose, risking taxpayers' monies. How many people do you have working in the finance function?

[Linda Drainville]

Very quickly, in finance per se we are roughly 200 individuals.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

As CFO, how do you manage a grants and contributions program with what, based on this audit, I will continue to call loose financial practices—processes and internal controls around cash flow, claims reviews, use of advances and, on top of that, missing project files, which were also noted in the audit? Loose internal controls are a gateway to fraud and obfuscation. What is the scope of financial mismanagement and resultant risks that this committee should be made aware of?

[Linda Drainville]

Thank you for your question. I'll try to give you an answer that will address all of your points.

In my role as CFO, I take very seriously the importance of sound management of public funds. That is why we—including my financial adviser and Marie-Claude, who is here today—are looking into how we make sure that we have proper controls in place for oversight financial reporting. Not only do internal controls work from a system perspective, but there's also all the governance that we have around that. We have all the training, which was mentioned previously, and all the checks and balances.

To go back to the report, the report is very clear that there's inconsistency in the way we are doing things. They didn't say that the controls were ineffective, but they said that, when they looked for information, they could not find the information. The controls are currently being reviewed, as we mentioned previously. We want to make sure that we foster an approach in which people understand their roles and responsibilities through training, and they use the tools and mechanisms available to them to take the proper actions in due time.

I have great confidence that we have the right controls in place right now.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

You've just said you have great confidence that you have the right controls in place right now. One of the five recommendations made in this audit is directed towards you as the CFO. The audit recommends that the CFO, “in collaboration with program branches, should review, update as required, and communicate the departmental governance and oversight functions, accountabilities, roles, and responsibilities that enable an effective enterprise approach to G&C program delivery.” This is a recommendation within the audit.

It's my understanding that you've been the CFO for three and a half years. Is that correct?

[Linda Drainville]

That's correct.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Were you never made aware or were you not aware of all the inefficiencies in this area of grants and contributions? How could that be?

[Linda Drainville]

I was aware of inconsistencies in our system, not necessarily inefficiencies. There are inconsistencies in the way we approach the management of Gs and Cs and how we document files. Those are different things. That's what we've been doing, addressing those.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I will weigh in here and say that inconsistencies—and I think it's stated in the report—can result in inefficiencies, so to try to separate those two things, in my mind, doesn't make sense. When there are inconsistencies when people are trying to access funding or understand a program, that results in inefficiencies. Therefore, while you may not make that correlation, I think it's one that the auditors absolutely did.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mrs. Atwin, go ahead, please.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much, Mr. Chair.

Thank you very much to our witnesses for being with us today.

Last week, I had the absolute pleasure of attending the Wolastoq water summit. It's the second year that we've had that, and we were actually hosting it in the Fredericton area. For me, it was the culmination of a lot of work that I've done over my lifetime, being involved in environmental movements. To share a room with folks who are working on invasive species or endangered species or watershed protection, the Maliseet Nation Conservation Council, the Nature Conservancy, the Nature Trust.... It was just incredible to see how much more support they have been receiving as of late. I would say that even in the last three years or so I've noticed such an increase, so it really felt like this is the work and this is how we bring together those experts on the ground and pull in that local expertise as well.

Can you just speak a little bit more about who these recipients are? What kind of work are they doing?

[Jean-François Tremblay]

There are a lot of different recipients. As I mentioned, a significant percentage is provinces and territories, as is the case in many departments. A significant percentage is indigenous organizations. After that, you have organizations like Nature Conservancy Canada and Ducks Unlimited, organizations like that, which have been in the business of protecting areas for years and decades and which are also major recipients for us.

It's a variety of people and recipients, and it also depends on the files. If you have scientists, it would be universities. It would be students or the researchers themselves. It really depends on the topic and what you are trying to address. That's why, for any Gs and Cs programs or initiatives that you manage as a manager, you have to think about the objective you're looking for, the result that you're looking for and the best strategy to get as close as you can to the ideal situation. That's how you do it.

There are actually good organizations on water. There's a long tradition of programming and work done on water in Canada on the St. Lawrence and the Great Lakes. Those are, of course, very important elements, but we also do a lot of research on water that is not necessarily managing a geographic area and pollution in one place, but it's more research about what it means, about the situation with water in general.

For example, we have researchers who are working on the solidity of the snow, to give us a sense of whether the snow contains more water this year than last year, which has a huge impact on flooding. We're probably the top country doing that work. It will need satellites in the future if we want to do it, but it will be very useful in terms of capacity to forecast the impact of the weather and the seasons on the dam in Quebec, for example, for Hydro-Québec, versus potential floods or even potential fires, because if you have less water you have potentially a higher risk of fires. We saw that last summer and the summer before in the Northwest Territories.

Even in water, there are different kinds of expertise, roles and responsibilities, and we do adapt. We try to adapt as much as possible the contribution agreements and the programs to actually capture those priorities.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much.

We're looking at numbers on a page, and I just think it's so important to see what that looks like on the ground. I live in a community right on a river, and we're very much watching the floods every freshet, so we're grateful for that kind of insight.

My time is winding down, but I do want to focus again on this. The audit found that grants and contributions funding requirements may be restrictive, burdensome, not timely, and costly for indigenous recipients specifically, and this is even more the case for indigenous recipients who may have limited capacity or who have multiple agreements in place to fund their activities.

We know that the proposed pathfinder service has not yet been implemented. Do you know when that might come online?

[Jean-François Tremblay]

We hope soon. We thought we had a potential draft that would go ahead, but we still need to do some work. I hope that will happen in the next few months.

[Jenica Atwin, Liberal, Fredericton, NB]

What actions are being taken to improve access to grants and contributions programs for indigenous recipients?

[Jean-François Tremblay]

I think the next step for us is strategic discussion with the organizations. There are so many programs, and there are so many people. It's not only us, but other departments that are working in the same areas or in areas that are connected. I started doing this, and I need to be doing it more regularly. It's important to actually have a discussion with the organizations on what exactly the offer is that we have in terms of programs and where they have a better chance to actually maximize their interest and advance their files.

It is that strategic discussion that we're still missing with first nation, Inuit, and Métis organizations. There is a lot that is being done at the national tables and all that, but I think we need to do it more at the level of the ECCC relationship with first nation organizations, with Métis and with Inuit.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mrs. Vignola, go ahead, please.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair.

Mr. Tremblay, I'm going to go back to the question I asked earlier.

I can understand, as you explained, that you don't ask a company what it is going to do with the money it receives. That money is financial support to be used towards achieving a goal.

That said, the audit says that recipients “[h]owever … may be required to report on results achieved”.

Why is it not a requirement? Companies have to show us the results achieved, because what they are going to do will possibly be applied across Quebec or Canada. That may be useful later on. Why is it not a requirement? Why is it only a possibility? Why isn't it mandatory to report on results, even if those results are negative, which could happen?

[Jean-François Tremblay]

I will ask Ms. Drainville to help me answer your question.

[Linda Drainville]

Thank you very much for the question.

It really boils down to the difference between a contribution agreement and a grant agreement.

According to the terms of a grant agreement, companies are not required to submit a report. That's how it's done, by definition. There is no obligation on their part to submit a report. They can if they want to. Of course, if they do, we'll just accept it. However, in the majority of cases, no report is submitted. That's really the difference between contribution and grant agreements.