Public Accounts Committee on May 2nd, 2007

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

When you talk about not enough information on the billings, we find out that they're not even keeping track of their hours as they work each individual file. As a lawyer in the private sector--Mr. Chairman, I think you would know about these things--you have to keep track of your billable hours so that you can send a bill you can justify to your clients. It just doesn't seem to be on their radar screen to have a real charge-out rate and manage efficiencies so they are a productive law firm for the Government of Canada.

[Sheila Fraser]

To us it's a basic management tool that they should know the costs of the projects they are working on. For example, in our office, even though we don't bill for our services to the departments or crown corporations we audit, we keep time records and know what the costs of those audits are. We certainly expect that the justice lawyers would do the same thing.

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

But we do know—for example, going back to the gun registry—when they get a legal opinion they don't like, they just go back to get a second legal opinion.

The first legal opinion they got was about two or three paragraphs long—clear and succinct—and said they couldn't do what they wanted to do. They said that wasn't good enough. So they went back and got a 10- or 15-page legal opinion that was convoluted and twisted, to try to justify something that clearly was not appropriate, as the Auditor General pointed out. Maybe they don't want to get into the proper billing system and hours assigned to legal opinions because that's not always on the up and up, as we at the public accounts committee realize.

Moving on to the Department of Foreign Affairs, they are not just our window, they are our face to the world, and they have some problems there. I see that you said, “According to departmental information, 58% of its employees in the management category will be eligible for retirement by 2010.” That's only three years away. Almost 60% of the management cadre of Foreign Affairs could be gone in about three or four years, and our face to the world will become inexperienced at best.

What are they saying about this?

[Sheila Fraser]

They agree with that fact. Typically, Foreign Affairs have brought people in at an entry level, and they have sort of come up through the ranks. There was an effort about a year and a half ago to bring people in laterally. That was challenged and went to the Federal Court. There was a conclusion that they hadn't sufficiently consulted with the unions on this.

They are attempting these sort of ad hoc measures, but we're saying they really don't have the kind of strategic human resource planning to know how they are going to deal with this. As you mentioned, 58% of the management category is eligible to retire, but so is 26% of the whole department

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Williams.

Mr. Christopherson is next for seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Mr. Chair.

Thank you to all.

Here we go again.

I want to follow up on the same chapter that Mr. Williams introduced, which is chapter 3, for many of the same reasons.

I've had an opportunity to travel on a couple of occasions to other countries on behalf of Canada, and some of them were high security areas. Not only do I have a lot of sympathy, but I have a lot of positive things to say about virtually every person I've dealt with in every embassy and every consulate. Every staff person has been phenomenal.

Given that so much of our future is predicated on our ability to identify and bring immigrants to Canada to play a role in our society, this is a key piece. This has to work. If this doesn't work, nothing else can. Not only that, but a lot of our foreign policy is developed by virtue of the information that's received.

Mr. Williams has addressed it, and I won't go back to that issue, but there's the whole issue of compensation.

When you're travelling from meeting to meeting with officials, and you've all been through it, you're stuffed into vans and you move from place to place. You chat with these folks on a personal basis and not only about business; you ask them what's it like living there.

I won't mention the places, because I'm going to say they're not very desirable places to live.

It's fine for the professionals, and it's much like us in terms of the fact that we pick this role. However, our families get dragged along into it, and it's the same for these folks.

When we talk about security and the ability to make sure their children receive an adequate education, I notice there is a difference between the schooling they would get in the U.S. versus the schooling they would get elsewhere. In terms of the compensation they get, it's also different in the U.S.

I find it very strange. Normally, I would have thought, if you'd asked me, it was the other way around. If you were in Canada or the U.S., you'd be doing the best, and from there on it would be catch-as-catch-can. But it actually is not. When you go to further-flung places, more is provided. There's a real issue with that.

It's something that is really important. We need professional staff in these embassies and consulates who feel comfortable with their own personal lives. When they leave in the morning, they should know that everybody at home is safe and family life is going to continue. Without that, they can't do their jobs. None of us can.

To me, this is big. I realize that in the constellation of problems it's not as huge as a stand-alone, but think of the work being done, what it means to Canada, and how important it is.

Believe me, if you've ever been in any of these places when you have an emergency, you pick up the local phone to contact someone and you want to get hold of the embassy. It's no different from when you bring your baby to the hospital. You don't want to be told anything other than care is on its way right away.

When you're in a foreign place and one of your children goes missing or is hurt, or if something happens, you phone the Canadian embassy. It's the Canadian cavalry, and it's going to help. If they aren't operating in the way they need to, we're not taking care of Canadians who are across the world doing different things.

I feel very strongly about this. I have a lot of questions, but they're not really for you, Madam Auditor. You've done your job.

But I will say this to colleagues. This is one that I would like to bring in, and I will be voting for it.

Again, in the constellation of things, it's not a big scandal and it's not a big headline. But this is the kind of infrastructure we need to provide. It doesn't matter which party is in power. The future depends on our ability to communicate with the world effectively.

In my mind, this report is our warning that it's in jeopardy.

[Sheila Fraser]

Mr. Chair, if I may, I would like to point out one issue that we think is particularly important.

Obviously, there's the whole question of the coming retirements and the acting positions, but there's the whole question of foreign service directives. This is what establishes compensation and benefits for people working abroad.

They are deemed to be part of collective agreements. It must be co-developed with the National Joint Council, which involves, as we mentioned in paragraph 3.76, 18 bargaining agents, the Treasury Board Secretariat, and three separate federal agencies. As you can imagine, the complexity of that process gives the department absolutely no flexibility to be able to deal rapidly with situations.

We mentioned the question of insurance for high-risk areas. It took the government over a year to be able to put insurance in place for people going to Afghanistan.

There's a real issue on how this process works. Should the committee decide to look at this, I would strongly encourage you to bring in the Treasury Board Secretariat as well, because they are the employer, to really look at this whole issue with them.

[David Christopherson, NDP, Hamilton Centre, ON]

That's great.

[Sheila Fraser]

We first mentioned this, I'll just add, as far back as 1987.

[David Christopherson, NDP, Hamilton Centre, ON]

Yes. I forgot that part of my rant. I didn't see that. You know how that drives me crazy? It's one thing when things happen and you find about them, but, boy, when they've already been identified, and well-paid professionals are giving commitments to do these things and they don't do them, that's not acceptable.

If I still have time, I'd like to turn a bit to NORAD.

[The Chair, Liberal, Shawn Murphy]

You have a minute and a half, Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you.

I was following the money, and if I'm understanding this correctly, they started one project and spent umpteen million on it. That didn't work, and then they started—Actually, it was the U.S. that cancelled that one—and I'd be curious to hear how that worked. But they cancelled it, and we lost all that money and moved to another program. That wasn't going to be the final one. Then they moved on to what was going to be the final one, kept doing the second one as a backup, spent money on that and eventually dropped it.

Then, eventually, as I understand it now, things are working the way they should, but it looks to me as if there was upwards of $60 million or $70 million of Canadian money that just went out the window, and somebody should be explaining to us why.

[Sheila Fraser]

That is essentially correct. The first project was system development with the United States, in which Canada was assuming 50% of the costs. That project ran into a number of difficulties. As we mention here, it was pretty clear fairly early on that there were problems, that costs were going up and delays were being encountered.

[David Christopherson, NDP, Hamilton Centre, ON]

There were indications.

[Sheila Fraser]

There were indications all the way along.

[David Christopherson, NDP, Hamilton Centre, ON]

There were reports coming in saying this was a problem, yes.

[Sheila Fraser]

The department estimates it had spent about $65 million on that initial systems development by the time the project was cancelled, and the department also estimates that it got very little value for that.

[David Christopherson, NDP, Hamilton Centre, ON]

If I can, it was cancelled by the U.S. because they didn't believe the Canadians could deliver.

[Sheila Fraser]

Well, it wasn't actually the Canadians. It was a U.S. contractor, a U.S. corporation, that was doing the project. It was a joint decision I think, but it was largely the U.S. that led that, which raises a whole other question about when we're in these joint—

[David Christopherson, NDP, Hamilton Centre, ON]

I know you're going to add some clarifications, so let me throw in my other questions, if I may.

You state in your report that, “In October 1999, despite assurances from the Department that increased funding would enable the modernization project to succeed, the contract for developing a new system was cancelled by the US Department of Defense”.

[Sheila Fraser]

Yes.

[David Christopherson, NDP, Hamilton Centre, ON]

So what part am I not understanding?

I know my time's up.

Thanks, Chair.

[Sheila Fraser]

No, that is correct. We noted all along, actually, that the department kept getting approval for additional funds and kept giving assurances that the project would work.

It was a U.S. decision, which leads to a whole other question: when we're in these joint projects and paying half the costs, do we really have half of the decision-making authority in them?

Then they went to the third system, which was actually acquired from the U.S. for $13 million and is operating. But we mentioned in the report that the whole statement of needs or requirements was developed at the beginning of the project, which was 12 years ago, and has not been not updated since then. We all know that security issues have changed significantly over that period of time, so there's the question, does the system now operating actually meet today's requirements?

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson.

Thank you, Ms. Fraser.

Ms. Sgro, for seven minutes.

[Judy Sgro, Liberal, York West, ON]

Thank you very much.

Ms. Fraser, it's nice to see you back with us again. I gather you're here on a regular basis at the public accounts committee, so for the next while I guess we're going to see you on a regular basis.

We initially had this RCMP issue in 1990, and then we had it 10 years later in 2000, and now we're into 2007 and we're still having the same issues. It goes back to a concern I have about follow-up to these audits. You and your department do all the work and point it out, spending the time and the money to do so.

Is there a system in place today, in 2007, that wasn't in place previously that would monitor the recommendations you put forward?