Public Accounts Committee on May 18th, 2006

[Sheila Fraser]

Essentially we're saying they need to have more sophisticated management over this very large sum of unpaid taxes. The people doing the collection need to have much better information available to them. They need to use more risk approaches earlier in identifying the accounts that are likely to be lost, and start the procedures earlier. They also have to have better information.

For example, we note in here that the tax debt is growing faster than total taxes, but the agency can't explain why. There is a very large component that is due to self-employed individuals. Why is this population not paying taxes more rapidly, and are there measures they should be taking?

Finally, they have various tax collection systems and practices. They need to evaluate which of those are working well in what cases, so when they have an account they can target better where it should be going.

[David Christopherson, NDP, Hamilton Centre, ON]

Is some of this a second go-round for you on that agency?

[Sheila Fraser]

We actually last audited the collection of tax debts in 1994, and many of the recommendations are the same as the ones in 1994.

[David Christopherson, NDP, Hamilton Centre, ON]

Really? Wow. So that might indeed be another problem. There's a lot of good stuff in here, but that might be another one. When you get over almost a decade and a half of things not happening.... That's why we're here--to kick-start those things.

Thanks, Chair.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Christopherson.

We'll move on now to Mr. Wrzesnewskyj, for four and a half minutes.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you, Chair.

A couple of days ago a decision was made for a major expansion of a military mission. We had a vote on that last night. We should call it what it is: we're engaged in a war in Afghanistan, a country that's--

[The Chair, Liberal, Shawn Murphy]

We have a point of order, Mr. Wrzesnewskyj. I have to acknowledge Mr. Williams.

[John Williams, Conservative, Edmonton—St. Albert, AB]

On a point of order, Mr. Chairman, I would not characterize the debate last night, or the vote last night...or our development in Afghanistan in any way, shape, or form as a war. I would ask that he retract that statement.

[The Chair, Liberal, Shawn Murphy]

Mr. Williams, that's not a point of order; that's a matter of debate.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

I hope that doesn't take up any of my time. You may deduct it from Mr. Williams, since that wasn't a point of order.

It's a country that's chewed through armies over the centuries, that has a history of it. We've upgraded equipment, especially for these sorts of missions in the recent past. But I'm more worried about our human resources and the issues you raised about recruitment. Equipment is only as good as the people who use it--we have now made a multi-year commitment--and a chain of command is only as good as all the links.

Now the mid levels within the armed forces are “hollowed out” and we have some real challenges there. I'd really like to talk about recruitment. You say that “The department has stated...”--and I'm quoting 2.45--“...the quality of recruits takes precedence over quantity.” The Department of National Defence does their own recruiting so they make this blanket statement, and then we go to 2.41, where it says, “However, we found that the assessment interview used to measure the nine personal attributes has not been validated.” The department is not able to demonstrate that its assessment interview adheres to generally recognized technical and professional standards.

The department could not provide evidence that the personal attributes they're measuring--to determine whether or not these are the people they want in the armed forces--were valid predictors of military suitability, nor that the interview was a valid assessment tool.

Then we take a look at the aptitude testing. You refer to that in 2.35. We lose about 28% of those recruits because forms get lost. In fact, it appears that only 50% of applicants are given an aptitude test in the first 21 days, as they should be. For the rest, it can take from 90 days to a year. In fact, we lose over a quarter and not quite a third of those applicants.

So you have the department making this blanket statement. They want “quality not quantity”. We're obviously going to put pressure on quantity. We have this new mission. We have a hollowing out of the mid levels. We're losing key individuals, people being trained as doctors and engineers. We seem to have a real problem with recruitment and with matching that to commitments that this government has now made--commitments to military intervention, to a war in Afghanistan.

[Sheila Fraser]

It is correct that we noted in the report that the assessments of the various attributes have not been done, and they haven't ensured that the attributes are appropriate or that they are good predictors of people. As well, another issue we raise is that for the increased number of recruits who have to come in, they don't know how many are just meeting the minimum standards. We would think that would be important information for them to have, so that they have a better sense of the quality of the recruits coming into the forces, and that they have better tracking over their career as well, to identify whether these are the right people they're bringing in and whether they need to change their selection criteria.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Wrzesnewskyj.

Thank you very much, Ms. Fraser.

Mr. Williams, you have four and a half minutes.

[John Williams, Conservative, Edmonton—St. Albert, AB]

Thank you, Mr. Chairman.

Of course, thank you, Madam Fraser for, unfortunately, another litany of problems under the Liberal government, but we'll let that comment stand on its own.

I want to talk about 800 Place Victoria in Montreal. This really concerns me, because we went through the sponsorship scandal in which we had ministerial involvement in the administration of the department--Public Works, no less--and here we have a letter from the secretary of state to a minister about getting involved in the administration and bypassing the low bid, the accepted bid, and staying where they are.

My first question is whether it is acceptable for the secretary of state and the minister to get involved in directing contracts.

[Sheila Fraser]

I find that a very broad question. In directing contracts--

[John Williams, Conservative, Edmonton—St. Albert, AB]

The question is whether you consider the ministerial decision to award a contract to the current landlord when the bureaucracy had already accepted a lower bid to go somewhere else to be an appropriate use of political and ministerial authority.

[Sheila Fraser]

We see no justification in the files as to why the lowest bid would not have been accepted in this case.

[John Williams, Conservative, Edmonton—St. Albert, AB]

And you don't know who owns 800 Place Victoria.

[Sheila Fraser]

No.

[John Williams, Conservative, Edmonton—St. Albert, AB]

You mentioned that Mr. Goodale was the minister at the time, after the short tenure of Mr. Boudria, who unfortunately left under a cloud from the Ministry of Public Works. I seem to recall that Mr. Goodale was in the House of Commons saying that everything would be run by the book and done by the book, and it would be clean as a whistle and nothing would be untoward under his administration.

Do you think that this type of administration and involvement by the politicians, for no documented reason whatsoever, in overturning a decision by the bureaucracy is an appropriate use of ministerial authority?

[Sheila Fraser]

I believe that Mr. Goodale signed on the recommendation of his deputy minister. The senior bureaucrat of Public Works did make a recommendation that the lease be continued, but we don't know the rationale behind that and the department might want to be asked why that occurred.

[John Williams, Conservative, Edmonton—St. Albert, AB]

It sounds as if we're back to Mr. Ran Quail and Mr. Alfonso Gagliano all over again. While they were talking about everything being squeaky clean from that point forward, they were still doing the same old stuff under the table, just as we find in the gun registry.

It is quite shocking that the Canadian government would say one thing to the Canadian public--yes, don't worry, we're cleaning up our act--as they continue with Public Works and the gun registry and who knows where else to keep Parliament in the dark, to take taxpayers' money and then misuse taxpayers' money for their own benefits.

We will have to find out who owns 800 Place Victoria in Montreal and we will have to ask the deputy minister why, with no justification, he overrode the recommendations of his own bureaucracy to tell the minister, “Why don't they stay where they are? Don't worry, the taxpayer isn't getting hosed and they're going to pick up the tab.” But somebody is going to come out of this with a lot of money.

I also noticed in another place, one of the other buildings, the same thing--was it Centennial Towers in Ottawa? No, it was Jean Edmonds Tower in Ottawa, where we have been a tenant since 1974--the sole tenant--and we haven't bought the place. We could have bought it for a song in 1974 and yet we're still paying rent because we passed over lease purchase options.

Would you agree that the whole leasing issue and ownership and management of property in Public Works needs a serious look by the public accounts committee?

[Sheila Fraser]

I'm not sure that Mr. Williams really expects an answer to all of that, but I would say it would be probably very worthwhile to have a hearing on this chapter, yes.

[The Chair, Liberal, Shawn Murphy]

That decision will of course be made by the steering committee.

I thank you very much, Mr. Williams.

I have a few areas, Ms. Fraser, that I want to cover. I want to ask you about your supplemental report, which deals with government allocations, Parliament oversight. This of course is the very heart of why we're here. If we are getting inaccurate information presented to us, that really is a very, very serious situation.

I have read your report. I have read the response from the Treasury Board Secretariat. It seems to me we're dealing with a difference of interpretation. I see three possible scenarios. If you're right, we're dealing with a situation about which the Treasury Board Secretariat, the Canada Firearms Centre, and the Comptroller General are wrong and they are in violation of the Financial Administration Act and Treasury Board guidelines. It has always been my position that if any public service in Ottawa violates some of these acts on purpose, they should be fired. That's been my view, and I hold that strongly.

The second possible scenario could be that we are dealing with an honest dispute as to the actual interpretation of how the financing is handled. I would never want to see a situation in which a departmental accountant deals with an issue in a certain way and then it's subsequently overruled by your department and that accountant's career is compromised or terminated because of that. We wouldn't want to see that situation. You know that even in private practice and as the Auditor General, there are disputes as to interpretation.

Of course, the third scenario--I dread to suggest it--is they could be right and you could be wrong, but I don't think that's the case, because you put a lot of work and effort into your report, obviously, after the fact.

Do you have anything to add as to what exactly we're dealing with here?

[Sheila Fraser]

I would agree with you. We obviously believe this is a very significant issue, or we wouldn't have issued this report.

[The Chair, Liberal, Shawn Murphy]

It is a significant issue.