Evidence of meeting #9 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was system.
A recording is available from Parliament.
Auditor General of Canada, Office of the Auditor General of Canada
I think the agency focuses on stolen cars and the aspect of goods obtained by crime. The agency focuses on identifying circumstances in which vehicles are exploited. That’s its priority.
In the audit, we have also observed a lack of activity in identifying drug exports, perhaps because there are challenges with how to identify those types of exports. The agency has identified that type of risk as one of its priorities, but the bulk of its work was targeted toward identifying the cars.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
We can agree that there may be things other than cars to consider.
Liberal
The Chair Liberal Mark Eyking
You have such good questions and good answers, but there's going to be another round coming back probably to the Liberals.
We have Mr. Hoback.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, gentlemen, for being here this morning.
How did your audit compare to existing Canada Border Services' own internal audits as far as the process? Is it very similar or is it unique?
Does Canada Border Services actually do their own internal audits?
Principal, Office of the Auditor General of Canada
They certainly do. They have an internal audit and evaluation function and their reports are published publicly on their website.
Conservative
Randy Hoback Conservative Prince Albert, SK
How does your audit compare to their audit?
Did you identify things that weren't identified in their own audit?
Principal, Office of the Auditor General of Canada
I think they've done an evaluation relatively recently on exports, but not on export controls, but not an internal audit. I don't think there's a really a relevant comparison at this point.
Conservative
Randy Hoback Conservative Prince Albert, SK
Explain to me your comment about the agency's ability to continue the level of review with electronic declarations because of the risk of uncertainty of the future. To me that's like saying I'm not going to use Microsoft Word today because they might have a new version of Microsoft Word tomorrow.
Why wouldn't they be embracing the system that's there today until there actually is a new system in place?
Why would there be hesitancy because there's a possibility down the road that they might have a new system?
Auditor General of Canada, Office of the Auditor General of Canada
Again, the system was originally developed by Statistics Canada to collect statistical information about exports rather than being a system that was designed for the control of exports. I think the issue is about how long is that system going to exist, does CBSA need a system that will do other things beyond what that system is doing right now—
Conservative
Randy Hoback Conservative Prince Albert, SK
So they're looking for expansion based off what system they have in place? Do we expand off this system with new tech hardware, for example, or do we just go all brand new? Is that fair to say?
Auditor General of Canada, Office of the Auditor General of Canada
Well, in terms of all of those types of decisions, I think they would have to speak to what their options might be.
Auditor General of Canada, Office of the Auditor General of Canada
That's right.
Conservative
Randy Hoback Conservative Prince Albert, SK
Do you know if they made a budget request? I don't see anything in the budget for them to put new systems in place or to acquire the personnel they need or the adjustments and movement of personnel. Are you aware whether, after your audit and the recommendations that you've made and that they say they're accepting and working with, they actually made the physical ask for the money to make the changes?
Auditor General of Canada, Office of the Auditor General of Canada
We made a recommendation in paragraph 33 in the report that they should ensure that they can continue to receive the timely export declaration information that they need for export control and that system changes at least maintain the current level of review of declarations. Their response was that the Canada Border Services Agency will follow its project management and service life-cycle management frameworks.
The direct answer to your question is I don't know whether they have made an ask for more money. What they have said is that they're going to examine this issue through their project management for IT systems, and somewhere along the line in that project management framework would be the step of identifying how much it costs and where the money would come from.
Conservative
Randy Hoback Conservative Prince Albert, SK
So then you look at this and you've done a benchmark, one might say, right now with this audit, and we haven't seen anything in the budget for them to receive any funding specific to some of these issues that they've identified.
When will you follow up and actually see whether it's going to be next year they'll make changes, that based on your audit, they've actually been proactive and addressed the recommendations you made, they've put in changes to make sure there's a timeline in place, the software is going to be there, the hardware is going to be there, and the personnel is going to be there? When do you do a follow-up to make sure that those recommendations receive more than just lip service? They claim they'll do what you say. When are you going to check to see if they actually do what they say they'll do?
Auditor General of Canada, Office of the Auditor General of Canada
We do follow-up audits from time to time. When we do a follow-up audit though, what we do is we look at a number of audits we've done over a number of years, and select which ones we are going to follow up on. We can't follow up on each and every audit. We haven't yet decided whether this would be one that we would follow up on or not.
Now, again, the agency prepared an action plan in response to our recommendations. That action plan was tabled with the public accounts committee. So certainly we also look to these types of committees—committees of Parliament—to help make sure that the departments are doing what they say they are going to do when they respond to the recommendations and when they put an action plan in place.
For us to do a follow-up audit, we would have to give them a little bit of time, a couple of years, to actually implement the recommendations and then we would start up another audit. One of our audits usually takes about 18 months, so for something like this we're easily out four or five years before we would be coming back and reporting on it. That's why it needs to be essentially a partnership between what we do and what the committees do, to make sure that the departments are living up to what they say they're going to do.
Conservative
Auditor General of Canada, Office of the Auditor General of Canada
The average cost for an audit like this, I'm going to say, is over a million dollars, probably $1.2 million, something like that. That's an all-in cost, fixed costs, overhead costs, direct cost of auditors, everything. When we allocate all of our costs of what we do, it's probably about $1.2 million.
Liberal
The Chair Liberal Mark Eyking
Thank you.
We're going to move over to the Liberals now and we've got Ms. Ludwig for five minutes.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
Thank you for an excellent presentation, very very interesting.
How did you choose stolen cars as the focus of the audit?
Auditor General of Canada, Office of the Auditor General of Canada
Actually, the focus of the audit was on how Canada Border Services Agency manages export controls. We looked at what they say their priorities are. They had three priorities. They had targeting units. They had a targeting unit to identify shipments that they suspected might be exporting technologies that shouldn't be exported. They have another targeting unit that was looking at stolen goods, and they decided to put the emphasis on vehicles.
We didn't decide to go look at stolen vehicles. Our audit was about what they were doing, what they had decided were their priorities and what they had directed their targeting units to do. One of the things was to identify shipments of stolen cars.
Liberal
Karen Ludwig Liberal New Brunswick Southwest, NB
We have a company and we do a fair bit of exporting, and we do go through the United States to export to Bermuda. What types of tools or countervailing strategies or measures do you suggest are available that mitigate the risk of the two-hour time frame?