Public Accounts Committee on Feb. 26th, 2007

[Sheila Fraser]

That's correct. There was a new order in council issued that makes it clear that we have access to the kind of information that we had been refused.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

The area of concern, I guess, is that if you tried to pursue matters that involve previous administrations, this protocol does not apply to that. Do you see any way that Parliament or our committee or somebody could find a way to allow you to use the protocol you have with the current government to deal with previous administrations?

[Sheila Fraser]

Quite honestly, Mr. Chair, I think that could be difficult, because it really is a determination by government of what is cabinet confidence and how the original order in council, which dates back to, I believe, 1983, is to be interpreted. There is a new order in council in which the interpretation is much clearer, but it would still be an interpretation by lawyers of government as to how the previous one would be applied.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Am I mistaken to think that the previous prime ministers or their cabinet ministers could waive this matter?

[Sheila Fraser]

It is my understanding that they could waive it. That is correct.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

So they still have some power, even though they're not in office.

Thank you.

The other area I want to deal with is misconduct. This has been a troubling area. We seem to have programs in place in Ottawa so that when we find people who are ethically challenged and have done things that are not right, we send them off on a course to teach them ethics and values and so on. I have a lot of problems with that, because these are well-educated people and they're probably parents, in some cases grandparents. It seems to me if they didn't get that when they got out of high school, we probably have serious problems.

The vast majority, I agree with the Auditor General, are good, honest, trustworthy public servants, and there's always a bad apple in there. But I have difficulties trying to figure out the value of that kind of program.

On the other hand, I certainly do understand the value of deterrence. If people know with a high probability that they're going to get caught, and secondly, that when they get caught there are going to be some very serious consequences, I think the element that doesn't really have good ethics and value can understand that approach. Do we have that sort of system in place in our public service to deal with the bad apples who want to get into a misconduct situation?

[Sheila Fraser]

I can begin to answer, and then Mr. Wouters can perhaps complete it.

The government has had a number of initiatives on values and ethics over the last four or five years, even. I think it is important that there be these programs in place, that people are aware of the values and ethics in government, especially when you have a lot of people coming in, say, from the private sector or from other organizations. It is different in the public sector, and they need to understand what the rules and the procedures are within the federal government.

So the training aspect is important, as well as to say to people that these are important things, and if they should see any cases of suspected wrongdoing, they will know where to turn to and how to report them.

There is an obligation under the Financial Administration Act for any public servant who suspects cases of wrongdoing to report it to the proper authorities. It is my understanding as well that the government has also developed new policies around the question of sanctions.

Perhaps Mr. Wouters could speak to that.

[Wayne Wouters]

There are different ways to look at sanctions. They can be institutional--how do departments comply with our policies and what occurs when they don't—versus individual sanctions, what happens if there is a wrongdoing by an individual. Under the FAA, I think it's quite fair to say that we have all the tools at our disposal in terms of dealing with discipline, and the appropriate sanctions, from having a written reprimand to actual outright dismissal.

I would indicate to the honourable member that all of those various tools have been used in departments. As a deputy, I have used all the tools, including dismissal. What we don't do is disclose personal information. When these decisions are made we are not in any way making information available about what type of reprimand we may undertake with a certain public servant.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Thank you, sir.

I have another area I want to pursue, but I can't leave this alone. By keeping it private and confidential you lose a lot of the deterrent value of the information to this age of privacy. I understand that's what we're into, but if you want people to understand there are consequences, having it known to other people in the system that Joe Smith or whoever has received his walking papers may make them think twice about doing this sort of thing themselves.

To the Auditor General, I've always assumed that in every department somebody's monitoring the continuing programs to see what's working and what's not working. If they find things they're administering that aren't working, they take corrective action to see if they can overcome those problems and get on with things. If they take corrective action, I assume they have some sort of evaluation process in place to determine whether that action really improved the situation.

To me this just sounds like good public administration and common-sense management. But I assume from your report that for me to assume that's going on with existing programs could be a very weak assumption.

[Sheila Fraser]

As our audit notes, that sort of ongoing evaluation is not being done on a systematic basis, on a regular recurring basis. It tends to be done more when government wants to reallocate, and then it tends to be more a one-time or periodic measure rather than a continuous process. As we also said, there's more scrutiny attached to new spending than ongoing spending, so there needs to be more work done on assessing the two together.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Does Mr. Wouters have any comment on that?

[Wayne Wouters]

I agree with the Auditor General that new spending is not necessarily aligned with existing spending when new spending proposals come forward. There is also a need to put a system in place that systematically reviews existing spending each year.

I don't think it's possible to review all existing spending every year. The British, for example, review 20% of their spending in-depth to ensure it's aligned to priorities and that they're achieving value for money, and the like. So those are the kinds of proposals we're currently looking at.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Fitzpatrick.

That concludes round one. Before I go to round two, I have a couple of questions. I'm going to use the chair's prerogative here and ask Mr. Wouters a question on the protocol we're developing on the appearance of accounting officers before this committee.

As you know, we've had Dr. Frank here. We've discussed it for about four months. We've had feedback from many organizations and parties around Ottawa. The steering committee dealt with it on Monday and instructed this committee to put it to a motion on March 19, which won't happen because of the federal budget, but it will be shortly after that.

One organization we haven't heard from is the Treasury Board Secretariat. As chair, can I construe your silence as agreement to what is in the protocol?

[Wayne Wouters]

I've had some discussions with Mr. Franks, and I know that this committee is working to develop that protocol. We thank the committee for working this through. Because deputy ministers are now accounting officers under the legislation, it is critical that we get this right. As a result of that, based on the Federal Accountability Act, I've had discussions with the president, who's having discussions with his cabinet colleagues on the government's view of the accounting officer model and how it would work. I think it is incumbent upon us to make sure those views are available to this committee.

Subject to my minister's agreement, we would like to be able to ensure that the committee is aware of—

[The Chair, Liberal, Shawn Murphy]

Will we hear back from you before March 21?

[Wayne Wouters]

I wasn't aware of your timing, so I will take that back and I will advise the president accordingly, and hopefully we can be back to you prior to that period of time.

[The Chair, Liberal, Shawn Murphy]

There's still one other issue on which I want to get the opinion of Mrs. Fraser and perhaps you, Mr. Wouters, and that is this development of what I call “conditional” programs.

We saw it arise first perhaps before that, but in the budget of May 2005 there was a $4.6 billion amount allocated. It was all preconditioned upon the Government of Canada having a surplus of at least $3 billion for the fiscal period ending March 31, 2006. It had regard to public transit, post-secondary education, and affordable housing. The surplus did materialize and the funds were spent.

Last week, or the week before last, we had the announcement of the $1.5 billion for environmental programs for the provinces, again conditional upon there being a surplus for the fiscal year ending March 31, 2007.

These programs don't go through the budget process, they don't go through the main estimates, they don't go through the Budget Implementation Act, but I assume they go through the supplementary estimates. They're really outside what I consider the scope of any normal parliamentary oversight. It's kind of spending the loot at the end of the year. We used to complain that departments did the same thing. Now we're seeing governments doing it, instead of paying down the debt and passing the benefits on to future generations.

Do either of you have any comment or opinion on those developments?

[Sheila Fraser]

I would just add, on the $4.6 billion in 2005-06—

[The Chair, Liberal, Shawn Murphy]

I guess that was the actual budget.

[Sheila Fraser]

—that was subject to a special bill, Bill C-48, which received parliamentary approval. Those expenses were recorded in the Public Accounts of Canada—once we knew what the surplus was, of course, and then it was recorded. But there was parliamentary approval. We would not have permitted the recognition of an expenditure if Parliament hadn't given approval.

And we'll have to see, with the latest announcement, if approval is given before the end of the year or before we sign off on the financial statement.

[The Chair, Liberal, Shawn Murphy]

Is this a new development, and does this development have any troubling consequences in the long term?

[Sheila Fraser]

As a personal opinion, I would say we saw government in certain years transferring very large sums of money to foundations and others, over which we raised several concerns. I guess in some sense this might be an improvement, because Parliament actually votes on it and Parliament has actually approved that expenditure. Certainly the $4.6 billion was subject to a specific bill and a specific vote by Parliament, so the expenditures were authorized.

[The Chair, Liberal, Shawn Murphy]

Mr. Wouters, will the $1.5 billion from last week be in the supplementary estimates, or how will that be done?

[Wayne Wouters]

I'm sorry, I'm not aware of the details of that particular announcement. We'd have to get back to you on that.

[The Chair, Liberal, Shawn Murphy]

If you could, we'd appreciate that.

I'm going to go to the second round. Mr. Williams, you had a very quick comment on the issue I raised. I'll allow you to speak very briefly, please.