Government Operations Committee on Oct. 8th, 2024

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Mr. Chair.

Mr. DeMarco, you've been described as “a leading Canadian expert...in the field of environmental policy and law”. You have close to 30 years' experience in those fields. You also have a bachelor's degree from the University of Windsor. Is that correct?

[Jerry V. DeMarco]

That's an easy question.

Yes.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

That is the source of your superpower, sir, so I'm glad to hear you say this.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

These are tough questions. It's not fair.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

You did a report on ISED's net-zero accelerator and found that it took applicants 407 hours to complete an application. Oftentimes, it took 20 months from the time they applied to the time they signed a contribution agreement.

I want to ask you this: In your view, what are the consequences of such a long process?

[Jerry V. DeMarco]

This is set out in our report, starting at paragraph 4.21. “Long and difficult application review process” is the heading.

In this instance, one of the consequences of the cumbersome and lengthy process has been a failure to attract large emitters. Not many of those classified as large emitters in Canada—in terms of number of megatonnes of emissions per year—were attracted to the fund. Whether that was entirely due to the cumbersome process, I can't say exactly, but that is one of the potential concerns. If the application process is not user-friendly, and the fund has the objective of significant reductions in emissions.... If you're not attracting the large emitters, you're not going to get those large reductions.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

It serves as a barrier to some of the applicants.

[Jerry V. DeMarco]

Yes. It's probably a perceived barrier. Anyone can go through it if they have the will, but it might be a disincentive to those who want to put their time elsewhere.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Back in 2006, the previous administration called for a blue-ribbon panel on grants and contributions. One of the panel's recommendations was to “Dramatically simplify the reporting and accountability regime”.

Can you help us understand how we square wanting to reduce red tape on the application and reporting sites to simplify the process with, at the same time, strengthening accountability measures? What's the sweet spot, and how are the two related?

[Jerry V. DeMarco]

You're right to characterize the potential competing objectives of timeliness and efficiency on one side and thoroughness and due diligence on the other.

However, I'm of the view that those objectives aren't mutually exclusive. They don't necessarily run counter to one another. You can have an efficient and effective process that doesn't necessarily equate with years of review, so long as the criteria being used are transparent, defensible and in line with best practices. I would not say that a more effective and efficient review process—which is what we recommend in recommendation 4.29—necessarily correlates completely with time. We can be strategic about how we go through the review to ensure it is covering all the bases from a due diligence point of view but isn't cumbersome and lengthy for other reasons that are not contributing to the effectiveness of the review process.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Well, I appreciate that. Sometimes simplifying the process might make it easier for auditors and officials to make sure it is accountable. If it's simplified, as opposed to being convoluted....

We heard something similar in the conversation when the comptroller general was here. She made a remark that documentation is so rudimentary and basic, yet we've heard time and again from the Auditor General's office and other reporters about a pattern of lack of documentation.

Do we have a documentation problem? Can you explain why that might be the case? Why are we seeing, over and over again, documentation that's simply not up to snuff?

[Jerry V. DeMarco]

The process of documentation is an important part of any review of the effectiveness of a program such as a grants and contributions program.

I would say that the emphasis of this report from our office, though, is more on outcomes than process. We found that the main gaps, in this case, had to do with value for money, as we discussed earlier today, as well as the total amount of reductions expected from the large sum of money being expended. In this particular instance, the main problems we uncovered related to value for money and the lack of a horizontal industrial strategy to guide the use of that money.

Other than the efficiency of the current, cumbersome process, we didn't find a lot of other issues with respect to documentation in this particular audit.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

This audit that was done was an internal audit by ECCC. I want to ask you whether you feel that this is the right mechanism or venue to review internal processes at ECCC, or would your office be the one best positioned to do an audit? Are you satisfied with the work that was done internally by ECCC? Are they the right mechanism in this instance?

[Jerry V. DeMarco]

To clarify, when I said this audit, I was talking about the net-zero accelerator report from our office.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Pardon me, I wanted to shift back to—

[Jerry V. DeMarco]

Yes, you're shifting back to the internal audit that's been carried out by ECCC. I understand that you had the deputy minister speak to that last week.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Yes.

[Jerry V. DeMarco]

I haven't had a chance to review the transcript of that hearing yet. I'm not sure if it's been posted on the committee's website yet.

I'm not intimately familiar with all of the findings of that internal audit by ECCC regarding their grants and contributions.

In the ecosystem of auditing, both the internal audit, such as that example, and parliamentary officers, such as an Auditor General's office, including the Commissioner of the Environment and Sustainable Development, both have a role to play.

I would have to look carefully at the scope of their audit to determine whether it's something that was covered well or not, but I haven't audited their audit, if that's what your question is.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

And whether there's a value-added.... Okay, gotcha.

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks very much

Mrs. Vignola, go ahead, please, for six.

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

Thank you very much, Mr. Chair.

Mr. DeMarco and Mr. Blouin, thank you for joining us.

Mr. DeMarco, in your speech, you said that Environment and Climate Change Canada's grants and contributions programs had not been audited recently. Why is that? Is there a sequence that means it will soon be their turn?

[Jerry V. DeMarco]

There are a lot of grant and contribution programs across departments. We chose the ones that were aimed at big reductions in greenhouse gas emissions, and those were programs from other departments. We didn't ignore the Department of the Environment and Climate Change, since we do several audits within that department, but they are on programs other than its grants and contributions programs.

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

Thank you very much.

In your statement, you also said that you are reviewing the draft Federal Sustainable Development Strategy and making comments on it. Are these suggestions being implemented or taken into consideration?

[Jerry V. DeMarco]

In terms of our final comments on the new strategy, some of our recommendations have been implemented by the department, while others have not. So, they weren't all retained, but they weren't all rejected either. We're somewhere in between.

The problem that persists, even after our recommendations, is that this strategy continues to focus on the environment without taking into account the other two aspects of sustainable development, the economic and the social. I'd like to see a sustainable development strategy that integrates the three aspects of sustainable development more equally, rather than focusing on the environment and ignoring most of the economic and social aspects.

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

Thank you. Your answer allows me to move to my next question.

When you're planning something, in my opinion, it involves looking beyond the end of your nose and considering all the elements that will be affected, or as many factors as possible. In short, it's about having a global vision. Unfortunately, that's not what we're seeing, and that is what you're saying, to a degree. It's as if everything is done on an ad hoc basis, to look as good as possible and get the best flowers thrown at you. Perhaps my question will be more specific.

What are the consequences of the lack of coordination between programs and of working in a vacuum, without an overall picture of the situation? In my opinion, this means that we can give subsidies or tax credits to the oil industry, for example, while saying we're going to plant 2 billion trees, but without seeing how these two ideas can come together, move away from each other, or even interfere with each other.

What are the consequences of not having a program overview?