Evidence of meeting #38 for Natural Resources in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was crown.
A recording is available from Parliament.
12:15 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
It would have been after the fact, yes.
12:15 p.m.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
So we don't have an opportunity for someone like you to act as a second verifier of the process to ensure that all of the factors you mentioned are taken into account: public policy, the public good, and that prudent financial assumptions are made prior to the selling of an asset.
12:15 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
Yes. I know that in some cases, in contract awards, for example, there are fairness monitors or those kinds of experts involved. Potentially, I guess, that could work in this kind of transaction as well. But I think it really depends on the quality of the people who are put together. If there is a negotiating team, it's really the quality and the expertise and the knowledge of those people that are really crucial to the success of a transaction.
12:15 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Alghabra.
Madame DeBellefeuille, do you have questions? Take just about two minutes, as I'm going to leave two minutes for Mr. Allen.
12:15 p.m.
Bloc
Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC
Thank you, Mr. Chair.
I would like to continue to our earlier discussion, Mrs. Fraser. You said that you do not have the expertise required to pass judgment on the contracts signed by Atomic Energy of Canada Limited and MDS Nordion.
If you, the Auditor General, do not have the tools required to carry out an audit and have to rely on AECL to do this, is this not like asking the fox to mind the henhouse? The corporation asking money from the government and from the taxpayers to do the study would the one that said the projects are viable.
You said that, as the Auditor General, you do not have the expertise required to assess those contracts. That being so, would it not be wiser in the future to demand that projects of this scale, with financial risks, be assessed by independent experts so that the government and the Crown corporation be able to make their decisions in the interest of the taxpayers?
12:15 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
Allow me to clarify a few things. For example, at paragraph 6 of the special examination, we mention that we did not do any technical assessment of the safety and security of the facilities because that work is done by the regulatory Commission. Therefore, we rely on the assessment of a third-party that is independent from the corporation.
Those people have to be satisfied and we rely on their opinion. For example, on the issue of waste management, they had approved the plan of the corporation. We did not want to start verifying that because we are not experts in nuclear waste management. As far as the MAPLE project is concerned, they said that the corporation did not meet the requirements and that they were not satisfied. There again, we relied on them and, through discussions with the corporation, we tried to assess the seriousness of the situation. In any case, we do not carry out our own technical assessment of the facilities.
12:15 p.m.
Bloc
Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC
When you say that you rely on “them”, who are you referring to?
12:15 p.m.
Conservative
The Chair Conservative Leon Benoit
Merci, madame DeBellefeuille.
We just have two minutes for Mr. Allen.
June 12th, 2008 / 12:15 p.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Thank you, Mr. Chair, and thank you, Ms. Fraser, for being here today.
My question is going to be fairly quick, but I don't know if the answer is going to be quick.
From more of a broad policy standpoint, I want to ask my question. It relates to crown corporations and specifically the actions they take.
For AECL, we've seen at least two of these kinds of projects sort of get stuck in the mud, including the MAPLEs. Overall, what kind of risk management framework do we have or not have in these crown corporations so that we know...or what can we put in place to reduce the risk of entering into some of these contracts by crown corporations when we are involving new technology like this? What kinds of things should we be doing better?
12:15 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
I'm not sure there's a short and simple answer to that.
12:20 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
Obviously these are projects that do have a risk involved, and many crowns are involved in projects that do carry risk with them—in fact, government departments. That is the nature of doing business, and to say that you will only go into projects if there's no risk is not appropriate either.
Especially in the crown corporations, I would go back to basic principles, such as the composition of the boards, the expertise that's on the boards and are they able to bring in outside experts to help them assess what management is telling them, and what kind of oversight, the standard, really good management practices around construction or development projects, periodic independent reviews, which could be from internal audit—it doesn't necessarily have to be from the external audit—of the information that is being provided to the board and to government.
Those are some of the things that can be done--and, I think, just a good regular assessment of risk management. There are a lot of very standard processes, and in fact, government has itself a pretty good policy on risk management practices. That doesn't necessarily mean there aren't projects that will go astray and that people believe they will find solutions, which may not be possible.
12:20 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Ms. Fraser, and thank you, Mr. Allen.
Our time is up here. We have to get off to the votes. But thank you very much, Ms. Fraser and Mr. Plouffe, for coming today. We appreciate it very much. I apologize for the interruption. In this place, we really can't control that.
Again, thanks very much. I guess we really won't have time to come back afterwards. If anyone has any questions about the witnesses when the notices come out, just give the clerk or me a call and we'll certainly talk about that. I was hoping we would have time to discuss that today, but I guess that's not the case.
So the meeting is adjourned.