Public Accounts Committee on Feb. 12th, 2007

[Susan Fletcher]

I knew it was too good to be true.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

--with the number of recommendations in the report on performance monitoring, targets for programs, and lack of clearly established baseline funding, it wouldn't be difficult for someone to read the report--with the amount of agreement--and think something was radically amiss in the management systems at Health Canada.

I'm wondering if you can give us an idea of how it got this way.

[Morris Rosenberg]

As the Auditor General says, what we're talking about here are management frameworks. That's what she was looking at. I think this has been a slow process of evolution that continues within the government to get sound management practices into place, to be clearer on what priorities are--not only to be able to be clearer on a process for allocating resources internally and outside the department to those priorities, but also to be able to measure whether you're actually meeting your priorities, and then to do the whole thing again, because the environment we're in is a very quickly changing environment.

We accept the report, and this is actually very helpful to us because it focuses the mind in Health Canada, and not just in the three programs mentioned, but I think the lessons are there to be applied across the board in all the regulatory programs in Health Canada. It focuses the mind on this, and we are putting improvements in place.

But again, as I answered earlier in French, we're not starting from zero. We have started, over the past few years.... Certainly I can't personally answer on back before I was deputy, but I know, from having spoken to people, that there was a lot of work starting around the year 2000, and it has evolved slowly. Health Canada is a big, complicated enterprise. It's a bit like herding cats sometimes, and we're actually trying to develop a comprehensive department-wide framework.

So I think it started bottom-up, with work done in the individual branches. What we're doing now is trying to have a standardized operational planning framework and a standardized set of budgeting framework rules that apply to everybody, so that we can actually sit down as an executive committee, or as a senior management board, which is a subset of the most senior executives in the department, and ask ourselves on a regular basis: how are our priorities shifting, do we have the resources in the right place, and do we have the mechanisms in place to get more resources where we need them?

Frankly, the first thing you do...if I were to go downtown to the Department of Finance in the first instance, or the Treasury Board, and ask for help, they would say, we help those who help themselves, so have you looked inside your department? Are you sure that you're allocating your resources to your highest priorities? Should you be doing reallocation?

These are not easy things to do. It's easy to talk about reallocation. It's actually a very hard thing to do. There are some real entrenched interests inside and outside departments. So we need to work through that. And the best way to work through that is to make sure all the people on my team are pulling in the same direction, that they are not just preaching for their parish but are looking at the overall interests of the Canadian public in better health protection.

So these are the kinds of things we're doing. Frankly, what we're doing and putting into place now with an operational planning framework I think will make a big difference. Will it make it perfect? No, it will not make it perfect.

We had our first year under a department-wide operational planning framework this year. One of the things we did that I think was very helpful is that our chief financial officer branch called everybody together and said, having gone through this one year, let's do a post-mortem; let's do a lessons learned and start to apply that to what we're going to be doing next year. This is an interactive process. This is a learning process, and we are learning. I would say if we get better and better every year...and we can't afford to tarry; there's no question about that, given the interests at stake. But I think we're making progress.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

My good colleague Mr. Williams constantly reminds us that we're a committee of accountability not management. But I'm going to have to take a risk and climb into management here a bit. I hope you'll forgive me, Mr. Williams.

But I am concerned about the fees for cost recovery that you charge industry. They haven't been reviewed since 1990. And I can't imagine how much revenue is lost that the taxpayers had to make up for now because these have never been reviewed. I hope that in these analyses you're doing you're looking at a regularized review of these, so that as new products come on stream, and those kind of things, you'll be able to have these fees updated on a regular basis.

[Morris Rosenberg]

Mr. Chair, perhaps I could ask my colleague Mr. Yeates to answer that since it's his area that is most affected by the fee structure.

[Neil Yeates, Assistant Deputy Minister, Health Products and Food Branch, Department of Health]

Thank you, Chair.

Yes, I can update you on that.

We are working very hard on getting prepared to begin the consultation process on a new cost recovery regime. You're quite right, they were set in 1993-94 or so, and they're significantly out of date. There are two respects: the impact of inflation on our current fee regime plus the regulatory regime continuing to develop over time. We need to think about areas where we're not currently charging fees.

As members know, this needs to take place under the auspices of the User Fees Act. It will have a very strong consultation process, and it will come back through Parliament.

It's interesting to note that for health products and food, the proportion of our budget from fees is around 25%. We're actually on the low end internationally. FDA is closer to 50%, the European Union is closer to 75%, and the Australians are at 100% fee recovery.

We think there is some room for us to grow there, but at the end of the day Parliament will decide.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Thank you.

Thank you, Mr. Chair.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Sweet.

Mr. Christopherson, eight minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair.

Thank you all very much.

I want to pick up where Mr. Sweet opened up, which is how we got here. I understand we don't want to spend too much time focusing on that, because that's not the real issue. But it is troubling.

If you look at the fourth paragraph of the Auditor General's statement this morning--I think this captures it nicely--the second sentence of that paragraph says: “Program managers have indicated to branch management that some core compliance and enforcement activities are insufficient to protect the health and safety of Canadians.” To the best of my knowledge, every government that has ever assumed power in Canada recognizes its first and top priority to be the protection of the safety and health of its citizens.

I'd like to know who these program managers reported to. Who received information that there was inadequate review going on to protect the safety and health of Canadians and made a management decision not to push it higher? At what point did the actions stop, and who is accountable?

[Morris Rosenberg]

I take it that one of the methodologies used in the audit was interviews with program managers. I think the Auditor General, at an appearance before the Standing Committee on Health, had some comment on this.

My sense is this. Program managers talk to senior managers within their branches. The question is whether the view of the program manager that there are inadequate resources is dispositive--that it's the final word on the issue. In other words, because a program manager says so, does it mean it's so?

I think the Auditor General pointed out that there's a tendency all over government, not just in regulatory programs, that if you ask a program manager whether they have enough resources, they might say, well, I could always use more resources. So I don't know. I think that's part of the Auditor General's point, that we should know better and that we need better information and planning systems to be able to assess this.

You can get into a debate, for example, on regulation. Let me give you a current example that we're grappling with now. There is a task force on trans fats. You can regulate trans fats, and it's a very legitimate thing to look at. I think it's something the government would consider: command and control regulations. The inspectors go in, and if they find a violation, they prosecute. But it's a very expensive way to do business.

On the other side, I was driving by a Kentucky Fried Chicken yesterday, and they have a sign that says, now with zero trans fats. Well, if fried chicken has zero trans fats, then maybe the marketplace is adjusting, maybe you don't need to go to full command and control regulation, and maybe there are other ways of regulating that.

The government will make a decision as to what the best thing is. But there are different ways of looking at this. A program manager may say, “I think I should be in there with all guns blazing”, so to speak. There may be other ways of looking at a problem. Education is a cheaper way of looking at a problem, and it may be fully effective in dealing with the regulatory problem at issue.

[David Christopherson, NDP, Hamilton Centre, ON]

I hear you, and I accept that, but I have to say that it's not much of an answer. I mean, really, what it suggests is that reports and concerns were going in, and they were either deemed to be not credible enough to act on or somebody still didn't act on information when they should have. At the end of the day, the Auditor General went in and found out that there wasn't proper compliance. There's some reporting going on. Somebody said, “We don't need to do anything”, and that's wrong. That's all I'm pointing out.

I want to ask about the chart on page 10 of the Auditor General's report, which points out the activities that are insufficient, and it is almost all of them. I'm wondering about products that are already out there now. I hear you have an action plan. I'm assuming we'll see that at some point, but I'd like to know about products that are out there now.

For instance, if I were thinking of conducting investigations of clinical trials, if there was insufficient activity being done to protect Canadians on that, it would mean there was a possibility that some drug products out there perhaps shouldn't be.

Could I have your thoughts on that, sir?

[Morris Rosenberg]

Mr. Chair, I would defer to Mr. Yeates, who has more detailed knowledge on this than I do, if that's okay.

[Neil Yeates]

Thank you.

Since the audit was done for these years in question, there have been two tranches of investment in the health product and the food regulatory regime. One was in 2003, and it focused on improving product review times. Canada had fallen way behind international standards on realistic review times for new products. So there was an investment made in 2003.

In 2005 a second series of investments dealing with drug safety issues was made. As the deputy's mentioned, that was post-Vioxx. The concerns at that time were inspections, safety monitoring, and so on. So in fact there was considerable discussion within the department on the kinds of things we needed to move forward on in those two years. There were new investments that came forward that are actually multi-year in nature, so that funding for these areas increased this year, and it will increase again in 2007-08.

[David Christopherson, NDP, Hamilton Centre, ON]

Maybe the answer's in there and I just didn't hear it, but the question was whether there were possibly products that have gotten through because there were inadequate clinical trials. Are there drugs out there that we're going to find out a couple of years from now are problematic, because the department wasn't doing the kind of clinical trials that it should have been doing? That's what I'm asking.

[Neil Yeates]

Thank you for that clarification.

The reason I referred to the investment in performance review times is that we had developed a backlog in product reviews. The bottom line for us is that we never allow a product on the market without doing a thorough review. That's why a backlog was created. That's why the investment was made--so we had more capacity and stronger management systems to oversee this review process. So whenever we approve a product, we are confident that it meets the tests of the Food and Drugs Act for safety, efficacy, and quality, absolutely.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay. And you don't feel at any time that you're being unduly pressured by industry, who are constantly beating the drum that it takes them too long to get things through? You don't feel there's pressure there for you to deliver and maybe move a little more quickly than you should?

[Neil Yeates]

Absolutely not.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay, that's what I wanted to hear. I was hoping to hear that.

I want to ask about reallocation, as I have time. I did ask about the action plan. I gather, Deputy, that will be on its way?

[Morris Rosenberg]

We will be providing an action plan to the committee before the end of the month.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay.

And regarding reallocations, I just want to hear that you concentrated on that, and that there won't be any further diversion of money, especially to core programs. The Auditor General pointed out that she saw real problems with the way that was happening: it wasn't documented; it may or may not have been the right decision. Just give me some assurance, Deputy, that you're on that in a big way.

[Morris Rosenberg]

I can assure you that we are on that in a big way and in a number of ways.

First of all, with respect to the issue of documentation, it was raised in the report. One of the things the new budgeting framework will deal with will be rules around the documentation of decisions, allocation and reallocation decisions, including cases where we might have decided to allocate to a certain area and understand what the consequences might be for other areas. So we are very live to that.

Also, as part of the budgeting framework, we are going to be ensuring that our folks understand that they must adhere to the conditions of any special funding that is provided by the Treasury Board, and if there is an issue, we would expect that the department, in the first instance, would have discussion with the Treasury Board about that.

There are things that will arise in the course of the year. One of the dilemmas here, I guess, is trying to strike a balance between working within the rules, which we should always do, but also having enough flexibility to be able to actually react to real threats to the health and safety of Canadians. What we're trying to do in developing this framework--and I think this applies beyond Health Canada as well--is to have the appropriate loose-tight fit so that you can do both things, so that you're not pushed into a situation where you have to break the rules, but that you can actually put money where you need it when you need it.

We're working on all these things.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Christopherson.

Mr. Wrzesnewskyj, for eight minutes.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you, Mr. Chair, and thank you, Mr. Rosenberg.

In the Auditor General's conclusions, she wrote, “To have an effective resource allocation process, Health Canada needs to allocate funds based on plans, risks, and priorities; sources of funding and program costs; and program results.” Yet in her opening statement, in paragraph 4, she concludes by saying, “At the present time, the Department does not know whether they are above or below the minimum level of activity required in the three programs”, meaning the regulatory programs.

Then when I take a look at exhibit 8.4, the first column, “Protecting public from hazardous products and substances”, under the heading “Consumer Product Safety”, it indicates that there has been an insufficient level of activity; under “Cosmetics”, insufficient level of activity; under “Workplace Hazardous Materials Information Systems”, insufficient level of activity; under “Consumer and Clinical Radiation Protection”, insufficient level of activity; and under “New Substances Assessment and Control”, insufficient level of activity.

Boy, the average consumer, the average Canadian, if they saw this, would be very concerned. In most cases when we have reports come before us, we're concerned because tax dollars may be mismanaged, but in this particular case we're talking about the taxpayers' lives. I'm actually very glad that the Auditor General has red-flagged this situation for the government, because serious action needs to be taken on these files.

Cancer, in its various forms, is one of the leading killers of Canadians. Very specifically, in a lot of these categories of products that you have listed here, we have “insufficient level of activity”. I would certainly hope that as you review this Auditor General's report, when you go to Treasury Board you'll note to the government that we need to move seriously, because this isn't just a matter of tax dollars being wasted, but lives. In fact, this past fall a number of MPs had their blood tested, and they virtually had a chemical cocktail in their blood.

Besides just the pre-market and post-market analysis and regulatory work that you do, has your department ever looked at the idea of actually going out there and getting a handle on not just what Canadians across the country are potentially facing but what they actually have in their bodies, especially our schoolchildren, who would be most gravely affected by these chemical cocktails that we seem to have inside our bodies? Has Health Canada ever looked at that as part of its process? It doesn't seem to be mentioned anywhere in any of these recommendations.

[Morris Rosenberg]

Let me try to start, although I probably will ask my colleague Susan Fletcher to take some of it, especially the last part of your question.

We take exhibit 8.4 very seriously, but we also have to take it in its context. The title of exhibit 8.4 is “Examples of regulatory activities considered by Product Safety managers to be insufficient”. I would say that in the context of the planning process that we are undertaking, one of the elements is that there are many sources for determining what the priorities are and what the instruments are that should be used to deal with those priorities. One of the most important sources has to be dialogue with the product safety program managers themselves, so that we ascertain if we are ad idem.

This isn't a question of putting stuff under the rug or anything, but there is a legitimate discussion that needs to take place on the level of resources and the assessment of risk. You can take a zero-risk approach to life. Unfortunately, that's not life. You're always managing risk, and Health Canada is in the business of managing risk. Are we doing it appropriately? We have to have this dialogue with our managers about that.

Assuming there are things on which we feel we need to do a better job, we then ask a second order of question about how we do that. Do we do it through the primary instrument that we have, say, with the Hazardous Products Act, which is to schedule things under the Hazardous Products Act and regulate them? Or are there other equally effective or even more effective things that we can do?

If we find out, for example, that we're hearing from some of our counterparts in other countries that, through inspections, we may start to see lead in children's toys, maybe the most effective thing to do is to call up the toy manufacturers or importers and say this is a problem and they really don't want to have this stuff in their products. Maybe we should be telling them that if they are importing this stuff, they should stop importing it. If they don't stop importing it, we may have to use our more heavy-handed instrument, but let's start with something lighter. We could put advisories out to consumers. There is a whole range of things we can do.

When you look at this, it is actually not just a two-dimensional axis. This actually has a number of dimensions to it that have to be looked at. I don't discount it; I take it very seriously. But that's the discussion we have to have with our program managers.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Perhaps coming back to a question that I had, now that this has been red-flagged—we weren't aware of this—will you be approaching Treasury Board and requesting funding? You mentioned children and toys with lead in them. Why not actually do tests of the Canadian public, especially children across the country, to give us an indication of what potentially is out there? For instance, if the lead in the toys hadn't been flagged by another country, we would not be aware of it. Yet if we did testing of actual consumers, we might get the heads-up that there's something out there that we should be concerned about.