Public Accounts Committee on Feb. 5th, 2007

[Sheila Fraser]

We are subject to the act. We have statistics on our managers. At the end of March 2006, we were at slightly over 60%. That is a 10% increase.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Was the increase in the bilingualism rate?

[Sheila Fraser]

It is the percentage of people in the management category who meet the language requirements. Obviously, if it is an anglophone who meets the French-language requirements... Only three of our regional offices are exempted, because most of our staff is here, in Ottawa, and they have to comply with the act.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Have many, or some, complaints been filed with the office of the Commissioner of Official Languages?

[Sheila Fraser]

To my knowledge, I think that there was once a complaint made against us, but that happens very rarely.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

That is therefore not a problem in your office.

We have already discussed the environment commissioner. Personally, I think that that position should be independent from your office. If discussions were held to make the commissioner an independent officer of Parliament, would you take part in the debate, or would you say that that was up to the government?

[Sheila Fraser]

Obviously, that is something the government decides.

There is one thing I wanted to underscore when I appeared before the committee last week, and today again I wrote to the Standing Committee on the Environment and Sustainable Development regarding the issue. The auditing role and the role of government advisor, whether it be regarding policies or other matter, are incompatible. We cannot give advice and opinions on policies and then audit them, because that could give the impression that we are not objective.

We never comment on policies; we simply review policies that have been implemented. We therefore cannot act as advisors, i.e., express our views on future policy direction.

Today, I indicated to the committee that it is up to the government and Parliament to decide whether the commissioner should be independent in terms of policies, etc. Given the work we have done over the past few years—going back even before the position of commissioner was created—I hope that environmental audits will continue to be part of our mandate. We find that it is an important part of our work and we included in almost all of our audits, when it is relevant. I hope that this part of the auditing process will not be removed from our office. I hope that we can keep doing environmental audits, but if someone wants to establish a commissioner's position for other work, we have no comments to make.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Rodriguez.

Thank you, Mrs. Fraser.

Mr. Fitzpatrick, six minutes, please.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

This may be an observation on the financial information that's provided to MPs. We're somehow supposed to be the marketplace for finding things out and so on, but quite honestly, I find it a daunting task to understand all the nuances of the financial statements. As far as public companies go, they provide fairly detailed quarterly reports, income statements, balance sheet updates—all the ratios that you could ever possibly require. Any person knowledgeable in finance could find a lot of use for that. The market generally, if the audits are accurate and the financial statements are accurate, reacts very quickly to major changes in the negative or on the upside in those financial statements, and any investor will tell you that they are hammered pretty hard when something unexpected occurs in the financial statements.

But we don't have that market mechanism here, I guess. Generally we have to rely on our auditors to wave the red flag if there's something seriously afoul in government operations. There may be people like Mr. Williams who stay up until three o'clock in the morning going through the details of these statements and can interpret them, but most of them, I think, are ill-equipped to do it.

I'll be honest with you, I'm not in a position to do that kind of homework. If there are other people here who are, good for them, but I'm not one of them.

On foundations and crown corporations, I know we had quite a battle here for a few years to try to make sure you could lift the veil of secrecy from these organizations and find out what's going on within them. Have they been fairly cooperative with you to this point, Madam Fraser?

[Sheila Fraser]

Yes, very cooperative. Because of the changes to the act in 2005, we are now auditing three crown corporations that we were not auditing previously. The largest is Canada Post, where we are joint auditors. As well, there's the Public Sector Pension Investment Board, and then there's a smaller organization, the Canadian Race Relations Foundation. In all three cases they have been extremely cooperative. We have now been into three foundations, and again we've had excellent cooperation.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

One that I'm particularly interested in, because I do compare it to public companies, where I can review the information on public companies and try to decipher it, is the Canadian Wheat Board. I have a lot of difficulty trying to get a handle on the finances of the Canadian Wheat Board. There are directors and so on who assure everybody that everything is being managed very well and tell us to trust them, have faith in them, that they're a good democratic organization and so on. But I've always been kind of a head-scratcher when we get to all the finances of this operation. Periodically they issue reports telling everybody what a wonderful job they're doing marketing grain, but most of the grain farmers I know basically have trouble keeping their heads above water and paying their bills, and it's been going on for a long time.

I'm certainly pleased that under the Accountability Act the veil of secrecy surrounding the Canadian Wheat Board is being lifted and Madam Fraser and the other people in your department will be able to have a look at the books of this organization.

[Sheila Fraser]

Let me clarify, Mr. Chair. We are not the auditors of the Wheat Board. The Wheat Board is not considered a crown corporation; it's what they call, I think, a “shared governance”.

We did do an audit when the status of the Wheat Board changed. There was a provision in the act that we could do a one-time audit of the Wheat Board, which we did, if memory serves me right, in 2002. We obviously had some recommendations, but it was a pretty favourable report on the Wheat Board.

It is the private sector that audits the Wheat Board.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

So it's not a like a foundation or a crown corporation.

[Sheila Fraser]

I'm not sure, with the recent changes. With contributions and grants of over $1 million a year, we could probably see the use of the funds, but it is not a crown corporation.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

It is one of these organizations that presumably is carrying out a government mandate with a government legislative focus, but it's been created as its own entity, free and clear of the checks and balances of government, has it?

[Sheila Fraser]

In part, I hesitate to comment on it because I don't know. I know a lot of the directors are elected by the producers, and so it has a different governance structure than a crown corporation has.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

It's a hybrid of some sort, and an interesting creature.

Those are all the questions I have. Thank you very much.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Fitzpatrick.

Here are just a couple of things. We have a bite to eat back there, if anyone is interested. The bells will go, I understand, at 6:30. Before we go to the second round, I have a couple of areas I want to pursue.

The first item, Mrs. Fraser, in your report.... In both your reports you talk about a new funding and oversight mechanism that was started, I believe, in 2004. It seems to have dropped off the table. Are you having discussions with Treasury Board, and can you tell the committee how those discussions are going?

[Sheila Fraser]

The panel was reconstituted this past fall. It had been established for the first time in the fall of 2005. We were supposed to appear, but then with Parliament dissolving for the election, we didn't appear. It was reconstituted this past fall, and we met with them in November. I believe we were the first parliamentary officer to appear before them.

What is interesting about the process is that we present our funding request to them, and the Treasury Board Secretariat also presents its analysis, which is very unusual in the government system. The committee then makes a recommendation. It's an advisory committee to the Speaker of the House. They make a recommendation to the Speaker, who then transmits it to the President of the Treasury Board.

In this case we obviously still work with the Treasury Board Secretariat, who review our funding requests as they would for any government department. They agreed with the funding request we put in.

[The Chair, Liberal, Shawn Murphy]

The recommendation coming from the Speaker would still be a recommendation only.

[Sheila Fraser]

It would still be a recommendation; that's right.

[The Chair, Liberal, Shawn Murphy]

The second question I have is, do you feel right now that you have sufficient resources to fulfill your mandate?

[Sheila Fraser]

Yes, we are fine. Obviously, if we hadn't received the increase in the funding we had asked for, it would have been difficult for us. I'm very pleased that it was approved.

[The Chair, Liberal, Shawn Murphy]

The third area, Mrs. Fraser, that I want to explore is this. We have a number of agents of Parliament in some quasi-independent areas, and there are more being created. Some of the biggest problems—in fact, I would suggest the biggest problems we've seen on this committee—involve some of these agencies. We all remember the Radwanski affair; we have the Ron Stewart affair coming before us in another month; there's the whole issue of the RCMP pension, which is run by a somewhat quasi-independent agency of government. These are all extremely disturbing situations that beg the question, who is auditing these?

Albeit some of them are very small, the Stewart thing went on for 14 years. Who is watching these agencies? Where is Treasury Board? Where is the internal audit? Where is the chief financial officer? Where is the Office of the Auditor General?

[Sheila Fraser]

It is an excellent question. After our audit of the Privacy Commissioner, we established a group specifically devoted to what we call the smaller agencies. One of the first audits we did with it was to audit Elections Canada, for example, on their management of the election. We have another audit coming this fall that will look more at the administrative practices of a number of these small agencies.

But I've also asked the team to begin planning an audit, and maybe even a series of audits, around, I guess you could say, the governance of these organizations. They are listed in many different schedules in various acts. They're subject to different requirements.

The central agencies will tell you they're very hesitant to get involved or be seen to be interfering in their management, because of the professional independence they require. But at the same time, they should be accountable for their financial management and their human resource management. There's no framework that exists for these organizations such as you find, for example, for crown corporations. We're going to start looking at this situation.

There is a sort of network of small agencies, and we have met with them. They are very keen to work with us on this, as the Treasury Board Secretariat has indicated it would be also. I hope we will be able to answer some of the questions about what regime should be in place and what is appropriate oversight by the central agencies for these small agencies.