Evidence of meeting #144 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was program.
A video is available from Parliament.
Conservative
The Chair Conservative Kelly McCauley
What I'm getting at is this: We've seen these two audits done. I assume they're directed by the department itself. How many more should be done, considering the millions of grants being done? Heritage Canada has 40,000 or 50,000 grants a year.
Who is directing these audits to be performed?
Comptroller General of Canada, Treasury Board Secretariat
I can also direct audits to be performed, as—
Conservative
The Chair Conservative Kelly McCauley
Are you, then? Shouldn't you be directing every single department to be doing these audits? Every audit done seems to show a very disturbing lack of oversight, governance and rule following. That's what I'm getting at.
Comptroller General of Canada, Treasury Board Secretariat
Last year, my predecessor recommended that each chief audit executive put a procurement audit in their plan.
Yes, we do. We do it every time we feel there is a need to do something specific. I can give the instruction to departments to put something specific in their risk audit plan. It was done last year with my predecessor for procurement.
Conservative
The Chair Conservative Kelly McCauley
We'll suspend for five minutes to bring in the new witness.
Thank you very much.
Conservative
The Chair Conservative Kelly McCauley
I call the meeting back to order.
Good afternoon, everyone. We are back.
We welcome Mr. DeMarco and Mr. Blouin. Welcome to OGGO.
You have an opening statement, sir. You have five minutes. Go ahead, please.
Jerry V. DeMarco Commissioner of the Environment and Sustainable Development, Office of the Auditor General
Thank you, Mr. Chair, for inviting me to appear before your committee today.
I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinabe people.
I am accompanied today by Nicolas Blouin, a director in our office.
I understand that the committee has recently heard from Environment and Climate Change Canada officials on the grants and contributions process at that department. While I'm happy to answer questions and provide any insights I can in support of the committee's work, I want to be clear that the grants and contributions programs of Environment and Climate Change Canada have not been the focus of any recent audits.
As this is my first appearance before this committee, I would like to take this opportunity to provide an overview of the commissioner's role and mandate. On behalf of the Auditor General of Canada, the commissioner conducts performance audits of matters that relate to the environment and sustainable development, and reports to Parliament, typically, twice a year. These reports are referred to the Standing Committee on Environment and Sustainable Development but are often studied by a wide range of committees in the House of Commons and the Senate.
Like the Auditor General, the commissioner does not audit the policy decisions of Parliament and government. Our work examines whether government departments and agencies implement policy decisions with due regard to economy, efficiency, effectiveness and the environment.
I would like to note that the environment and sustainable development are a priority across the Office of the Auditor General of Canada.
Audits carried out by the Auditor General and the commissioner include, where appropriate, environmental and sustainable development issues. This includes taking into account the United Nations Sustainable Development Goals when selecting, designing and conducting all of our performance audits.
The commissioner also reviews and comments on the draft Federal Sustainable Development Strategy. Once the strategy has been implemented, we monitor and report on how federal departments and agencies are contributing to achieving the objectives set out in the federal strategy. We also assess and report on their progress in achieving the objectives of their own departmental strategies. We also review the accuracy of information in progress reports on the implementation of the overall federal strategy.
In addition, the commissioner manages the environmental petitions process on behalf of the Auditor General. This process enables Canadians to put questions directly to federal ministers on environmental and sustainable development issues under federal jurisdiction, and ensures that petitioners receive a response from the ministers concerned.
Finally, the Canadian Net-Zero Emissions Accountability Act requires that the commissioner review the implementation of measures taken by the Government of Canada to mitigate climate change, including those aimed at achieving the most recent greenhouse gas emissions target. He must also report on these measures and make recommendations. Our first report was tabled in 2023, a year earlier than required, and the second will be presented for tabling in November.
Mr. Chair, I would be happy to answer any questions the committee may have about my recent work. Thank you.
Conservative
The Chair Conservative Kelly McCauley
Thank you very much, Mr. DeMarco.
We'll start with Mr. Mazier for five minutes, please.
Conservative
Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB
Thank you, Chair.
Thank you, Commissioner. It's nice to see you again.
Commissioner, an internal audit of grants and contributions programs revealed that Minister Guilbeault's department was not monitoring 10% of the projects and not reviewing a further 27%. In fact, Minister Guilbeault's management of taxpayer dollars was so bad that, according to the report, it represented “potential legal and reputational damage”.
Throughout all your audits, have you ever noticed similar findings when the current government has failed to monitor taxpayer-funded programs?
Commissioner of the Environment and Sustainable Development, Office of the Auditor General
As I mentioned in my opening statement, we haven't had a deep dive into any of Environment and Climate Change Canada's grants and contributions programs in the last couple of years, but we have looked at several other departments' programs. One example from last year would be the net-zero accelerator fund from ISED. We did have concerns regarding that fund. In 2021, we had the emissions reduction fund from NRCan, and we had concerns there as well. These are some of the examples of large grants and contributions programs that we have audited and had concerns with.
Conservative
Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB
Do you recall how many dollars that involved?
Commissioner of the Environment and Sustainable Development, Office of the Auditor General
The net-zero accelerator fund was $8 billion. For the emissions reduction fund—the onshore program that we audited—it was between $600 million and $700 million.
Conservative
Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB
That's a lot of money; that's a lot of taxpayers' dollars that are not accounted for; that's for sure.
Commissioner, have you ever conducted an audit that revealed the current government was not publicly measuring the value for money of taxpayer-funded programs?
Commissioner of the Environment and Sustainable Development, Office of the Auditor General
Yes. Value for money is an important aspect. In fact, sometimes one calls a performance audit a value-for-money audit. That surfaced quite clearly in our most recent report from 2024, the “Strategic Innovation Fund's Net Zero Accelerator Initiative”. We have concerns about the failure to properly track value for money. We touch on it in other reports as well.
It's something that we're also looking at in our next audit, regarding the Canadian Net-Zero Emissions Accountability Act, as opposed to the net-zero accelerator initiative. It is something that we're quite concerned about. We have some calculations in here about value for money in the net-zero accelerator initiative, and I could get into that in more detail if you wish.
Conservative
Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB
Commissioner, have you ever found any evidence to suggest that the current government is inflating or inaccurately reporting the emissions it claims to be reducing?
Commissioner of the Environment and Sustainable Development, Office of the Auditor General
Is that regarding the emissions that have been reduced to date or the claims regarding future emissions reduction?
Conservative
Commissioner of the Environment and Sustainable Development, Office of the Auditor General
We have a range of audits where we find that the expected reductions have been overestimated or that they have been the subject of overly optimistic assumptions. If you call those “claims” or “projections”, then we do have examples of that in a wide variety of reports.
It's actually disappointing. That's something that's come up in reports for many years, and we've had to say somewhat the same thing in different reports over the years, in terms of overly optimistic assumptions. Probably the two that come to mind most recently would be the hydrogen audit, as well as the emissions reduction fund. In both of those cases, we found that the expected reductions were overly optimistic. Then, in our first Canadian Net-Zero Emissions Accountability Act report from last year, we also reported on some examples, for example, in the area of public transit.
October 8th, 2024 / 12:20 p.m.
Conservative
Dan Mazier Conservative Dauphin—Swan River—Neepawa, MB
What are the implications of this? You're reporting this. You're telling the government that it's double counting, that it's inflating the numbers and that it's basically not telling the truth to Canadians about how these programs are functioning. What are the implications of that? What are the results? What happens?
Commissioner of the Environment and Sustainable Development, Office of the Auditor General
As indicated in our 2021 report on lessons learned in climate change, for the failure to execute plans because of double counting, as you mentioned, because of overly optimistic assumptions or because of policy decisions that may undermine initiatives—a whole range of things—the net effect of that has been a series of failures to meet targets over the last three decades. It's not just an academic question about a program not meeting its objective or an overly optimistic objective. All of that has added up over the years to a net failure to meet any of these targets to mitigate climate change through emissions reductions.
Conservative
The Chair Conservative Kelly McCauley
Thank you, gentlemen.
Mr. Kusmierczyk, welcome back. I'm glad you're feeling better.