Public Accounts Committee on Feb. 14th, 2007

[Sheila Fraser]

I believe they did tell us. Ms. Cheng could perhaps respond to that.

[Nancy Cheng]

Mr. Chairman, I believe at the time they were addressing the implications of the Patriot Act in the United States. They felt that was a priority and that took away the staff, the same staff who had to look at identity management issues.

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

So their efforts to find out how the Patriot Act would affect us here in Canada was entirely different from a sustained effort in controlling the quality of data for the SIN numbers?

[Nancy Cheng]

What they did was a comprehensive review. They identified that there was a lack of clarity being given by various departments and agencies. They felt that work needed to be done, and they'd done consultation. At the time, when they shifted the effort to look at the Patriot Act, the resources went the other way. Currently they are going through a policy suite renewal initiative at Treasury Board Secretariat. So they wanted to take on a larger initiative. According to their plans they are going to be dealing with that in fiscal year 2007-08, to come up with better clarity on the issues.

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

I said that was my final question, but I'd like to squeeze another one in here.

In the recommendations you made, I noticed there were a lot of instances where they said they would comply within 2007-08. I understand you wouldn't know all of the management aspects, but were they reasonable targets?

[Sheila Fraser]

Yes, we believe they're reasonable. Obviously the department is putting them forward. We would expect them to be able to comply within those deadlines.

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

Thank you very much.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Sweet.

Mr. Christopherson, seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

Thank you again for your presentation. I'll start with the coast guard, chapter 4. I'm sure it's purely coincidental that neither the current nor previous governing parties have raised this. I'm sure it's just because they were preoccupied with other things.

In the context of your overall report, there are five that are good. This is a good sign. It's clear what we do when we don't like reports. There's no happy face system. We're really hard on them when they don't do the right job. When they do something right, there should be some recognition of that because they won't get a lot of attention on that. But kudos to the deputies and staff who are making that happen.

However, our job is to work on the areas that are not yet up to a standard that's acceptable for the Canadian people. Certainly this is one of the most scathing reports that I've seen, and it sets a new low, as far as I'm concerned. I now see a report on page 7 of this chapter that talks about a 1983 Auditor General's report raising issues that were raised again in the reports of 2000 and 2002. It's coming back again in 2007, and it's still not done.

So where are we, Auditor General, on this one? What are the key concerns you're finding, and why is this happening over decades?

[Sheila Fraser]

We've tried to identify some of the reasons. We indicate that it is our opinion that the coast guard has this attitude that they can do everything, and they take on way too much. So in response to all of these audits, there have been action plans and promises to fix everything, except it wasn't realistic to try to do everything at once, and the effort could not be sustained over time.

We are strongly encouraging the coast guard to focus on a few priorities that they will of course determine, move forward on those, get those done, and then pick some more.

We have to recognize, too, that the coast guard has undergone a lot of organizational change. It was part of the Department of Transport, then part of the Department of Fisheries and Oceans, and now is a separate special operating agency. The organization in the Department of Fisheries up until two years ago was regional in nature, so it's not perhaps surprising that two years later it is still operating regionally.

One of the major challenges of the coast guard is the aging fleet and the increasing unreliability of that fleet. It is spending more time being serviced, and the costs of repairs and maintenance are going up.

[David Christopherson, NDP, Hamilton Centre, ON]

I have to say that I was really surprised to see this, given the fact that everything—security, military—has had lots of attention and lots of money over the last few years, and this is being treated almost like a poor cousin.

And yet we have huge coastal waters. I think we have the longest coastal line possibly in the world if you take in all our inland waters on the Great Lakes. I mean, that's part of their responsibility.

I want to put this on the record so people can understand at a practical level what this means for Canadians, as some people see it. David Walsh, who is the president of the Dartmouth local of the Union of Canadian Transportation Employees, said this yesterday:

It's the union's opinion that if something like the Swiss Air disaster happened again, we wouldn't be able to answer the call, because we have less vessels right now.

I don't know what kind of labour relations are currently going on, and I'm sure some might suggest there's something there, but that's a pretty stark assessment from the very people whom we call on to go out and respond.

Definitely, Chair, given that there are only two out of all of these that are unsatisfactory, I would assume that this would be one. Certainly I would hope we're making that argument, because there's a lot there.

On social insurance—and it's already been raised a couple of times—I want to come back again to this issue of things that have been raised before and not done. I'm looking specifically at page 16, where you say in 6.37,

The Department has had access to immigration data since 1996. In 2004 the Department—reported that obtaining electronic access to citizenship data was delayed pending a major systems upgrade by Citizenship and Immigration Canada, expected at that time to be complete in 2006. The Department informed us that it had begun discussions with Citizenship and Immigration Canada in August 2006—

Now, I don't know how you can do a whole system by a target deadline of the end of 2006 when you don't even start talking to the people who you're going to reconfigure your computer system for until August of 2006. Did they give you any satisfactory explanation?

[Sheila Fraser]

Well, we know from other audit work that we've done—this is the global case management system in Citizenship and Immigration Canada, which we mentioned in the IT system audit that we tabled in November—that it has experienced its share of problems and delays. The target initially of 2006 is not going to be met, and I don't think the system is even—is it running now? I don't even think it's up and running yet.

[David Christopherson, NDP, Hamilton Centre, ON]

It's still not running.

[Sheila Fraser]

That is what is delaying this project with Human Resources and—

[David Christopherson, NDP, Hamilton Centre, ON]

Do they have an adequate reason why it's not up? Do they offer any reason for the delay?

[Sheila Fraser]

I'm sorry, I would have to go back to the November audit, but I know we had criticisms then about project management planning and those kinds of issues.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay. Well, there's another one that screams for some answers.

And I just want to push a little on the heritage issue. How serious is it?

I notice that under “others”, the historical sites they control are greater than the ministry of defence, for instance. What is the threat to our heritage buildings in these other non-primary government agencies?

[Sheila Fraser]

One of the major issues is that they are only governed by a Treasury Board policy that only covers buildings. Other sites are not covered by the policy. The other major issue for government is that there are groups that designate these sites and buildings as heritage properties, but there is no link with the conservation activities, requirements to do conservation activities, or, of course, the related funding.

We're suggesting that there really needs to be much more priority-setting about which sites do need to be protected. We have examples in the report. For example, the armoury in Halifax requires major repairs, yet the Department of National Defence is wondering if they put the money into other operations or into conservation of the armoury.

The same example will come up when we look at the coast guard, which has a number of lighthouses that are no longer needed for coast guard operations, yet I think many people would say that, yes, some of those lighthouses have to be conserved as historic properties. The coast guard is stretched for funds.

So there's a real issue around designating which properties absolutely have to be protected, and then there must be a plan for funding that protection.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Christopherson.

Thank you, Mrs. Fraser.

Mr. Wrzesnewskyj, for seven minutes.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you, Mr. Chair.

Madam Fraser, in your report, you've noted that identity theft has increased significantly since 2002. We also have 2.9 million more social insurance numbers than we have population. You've noted that 2.1 million of those are inactive. What that is in fact telling us is that there are 800,000 that are potentially active.

What kind of potential cost to the treasury might we be facing as a result of this situation, especially when the programs that do federal payouts using the social insurance number amount to about $70 billion annually?

[Sheila Fraser]

Just as one precision, 2.1 million cards are classified as dormant, but they can be used. They have not been deactivated. A flag will go up when they're used, but not all departments are treating those warnings consistently.

As for the question on the potential misuse, we can't estimate that, and I don't believe the department has estimated that. It has to be recognized that for any of the programs where the social insurance number is used, other documents also have to be provided. It's not simply the social insurance number that would give someone a right to benefits.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

It's actually pretty stunning that the department wouldn't try to work through this, especially knowing that even though 2.1 million of the 2.9 million are inactive, that means 800,000 are active.

If the payouts are $70 billion, what that tells me is that if you match that with approximately 5% of your social insurance numbers that may in fact be fraudulent based on those numbers, should even 10% of these fraudulent inactive social insurance numbers be accessing government programs, that adds up to a cost to the treasury of about $300 million. That's assuming it's only 10%. If it's 50%, it's $1.5 billion. Are these the potential levels of costs that we may be facing?

[Sheila Fraser]

I wouldn't want to try to make those kinds of conclusions, because we can't know if those cards are actually being used to access benefit programs or not.

It clearly does point to a risk in that population, in that the quality is not at the levels it should be at. The department should be doing more to ensure that the quality is at an appropriate level and that they're systematically looking at that over time.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

But even if the vast majority of the 800,000 active social insurance numbers that should not be out there are not being used to access government programs—that's basically what those cards are used for—if 10% are being used, we're talking about hundreds of millions of dollars, and potentially billions. You're telling us the department has not done an analysis to try to arrive at a number in terms of what this is costing the Canadian government and, fundamentally, the Canadian taxpayer.

Have they at least even done an actual sampling of their files to try to establish what is in fact going on with a percentage of those social insurance numbers? Have they even bothered to do that?

[Sheila Fraser]

To the best of my knowledge, they have not, and that would be the kind of process that we would expect to see put in place in an effort to improve the quality in the registry.