Public Accounts Committee on March 13th, 2008

[The Chair, Liberal, Shawn Murphy]

I think it's now appropriate to call the meeting to order.

I want to welcome everyone here and welcome the witnesses. This meeting is pursuant to Standing Order 108, dealing with chapter 4, “Managing the Coast Guard Fleet and Marine Navigational Services--Fisheries and Oceans Canada”. That's in the February 2007 Report of the Auditor General of Canada.

We have deputy auditor general John Wiersema with us from the Office of the Auditor General. Welcome, Mr. Wiersema. He is accompanied by John O'Brien, the principal.

From the Department of Fisheries and Oceans, we have the deputy minister and accounting officer, Michelle d'Auray. She is accompanied by George Da Pont, commissioner of the Canadian Coast Guard, and also Charles Gadula, the deputy commissioner.

I want to extend, on behalf of the committee, a warm welcome to each and every one of you.

What I plan to do is to take this meeting until 12:45 p.m., and then we're going to deal with Mr. Wrzesnewskyj's motion. We are now going to--

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

I have a point of order.

[The Chair, Liberal, Shawn Murphy]

Mr. Williams, go ahead with your point of order.

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

Thank you, Mr. Chairman.

I'm glad you pointed out that at 12:45 p.m. we're going to deal with Mr. Wrzesnewskyj's motion. At the last meeting, the clock ran over the normal adjournment time for the meeting, and yet you wanted to continue dealing with these motions.

Now, what is the policy of this committee? Do we go on until the business is finished, as you said at the last meeting? Or do we have a standard hour of adjournment so that we have to deal with these motions within a specified period of time? The only way we could get the meeting stopped was through a tabling motion by Mr. Sweet.

[The Chair, Liberal, Shawn Murphy]

Mr. Williams, the procedure is that the committee remains in session until we adjourn. I've allocated 15 minutes to deal with the motion. I think that's sufficient time. I'll limit the discussion. I think we can conclude by one o'clock, but if it goes over one o'clock by a minute or two, I don't think that's a major problem.

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

But it was 1:05 p.m. and you were just going to start entertaining debate.

[The Chair, Liberal, Shawn Murphy]

But it was a motion for adjournment, and it--

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

No, I'm talking about when you went into Mr. Wrzesnewskyj's motion. I pointed out that the clock was past the normal hour of adjournment, and you said the committee continues until the business is finished.

Now, as I've pointed out, I could have continued on with the witnesses forever because of the nature of the debate. So I think committees have a two-hour period, at which time is the normal hour of adjournment--we just had to wait until the previous committee exited the room--and I come here with specific intentions of being here for two hours; I've other commitments, and I can't juggle them at the last minute.

So I just want to know, Mr. Chairman, does the committee adjourn at the normal hour of adjournment or at some other time, at the chair's call?

[The Chair, Liberal, Shawn Murphy]

The committee is master of its own proceedings, so I'll be guided by the committee's decision. I think we should be able to get Mr. Wrzesnewskyj's motion in before the committee in 15 minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Mr. Chairman, on that point--just as an insurance policy--one of the reasons that might be getting clarified is a desire on the part of one caucus to run the clock. If that happens again, I would strongly suggest we need to put this at the beginning of the meeting. It may not happen.

I wouldn't want to cast aspersions, but based on what happened last time, it was all about using the clock as a tool, and that's fine. For the majority, let's recognize that and not allow that to derail the majority will of this committee.

[The Chair, Liberal, Shawn Murphy]

I plan to deal with the motion the same way as I dealt with the motion last time--

[David Christopherson, NDP, Hamilton Centre, ON]

That's what I'm concerned about, Chair. If they just start ragging the puck, then we never get to an end.

[The Chair, Liberal, Shawn Murphy]

I don't think that'll happen, Mr. Christopherson.

I'm going to call upon Mr. Wiersema. I believe you have an opening statement.

The floor is yours.

[John Wiersema, Deputy Auditor General, Office of the Auditor General of Canada]

Good morning, Mr. Chairman.

Thank you for this opportunity to discuss chapter 4 of our February 2007 report. As you indicated, joining me today is John O'Brien, the principal responsible for our office in Halifax.

In this status report, Mr. Chairman, we concluded that Fisheries and Oceans Canada, in particular the Canadian Coast Guard, had not made satisfactory progress in implementing recommendations from two of our previous audits. Those audits were chapter 31, on fleet management, of our December 2000 report, and chapter 2 of our December 2002 report, on contributing to safe and efficient marine navigation.

Mr. Chairman, I should point out we completed our detailed audit work for this chapter in 2006. As a result, our ability to comment on developments in the coast guard since then is somewhat limited.

The coast guard plays a number of important roles. It provides marine navigation services, such as aids to navigation and marine communications, to mariners in Canadian waters. The coast guard also uses its fleet of large vessels to deliver its own programs, such as icebreaking and offshore search and rescue. These vessels also support other programs within Fisheries and Oceans Canada, such as science and fisheries management, and provide assistance to other government departments.

In our earlier reports, we concluded that Fisheries and Oceans Canada had not managed its fleet and its marine navigation services cost-effectively. We made 13 recommendations in our 2000 and 2002 reports, 12 of which remained the department's responsibility. The department accepted all our recommendations and made a commitment to take action.

The following are our key findings from our February 2007 report. First, the coast guard was having limited success in developing a national approach to managing its operations. Modernization of marine navigation services was proceeding slowly and the fleet was aging, and reliability and rising operating costs were going to continue to be issues.

After concluding that progress in implementing our recommendations was unsatisfactory, we focused our attention on identifying the underlying causes.

We found that the coast guard started, but did not complete initiatives, many of which were designed to address issues that we previously raised. We identified three reasons for the coast guard's lack of progress. First of all, the coast guard accepted assigned duties even when there was no realistic way for it to fulfill them. For example, the coast guard developed a plan for a special operating agency, even though it did not have the resources it needed to implement a plan. Not surprisingly, we found that many elements of this plan were unfinished well after the expected completion date.

Secondly, the coast guard did not prioritize its actions. For example, the coast guard attempted to address all of our recommendations to improve management of its fleet at once. These initiatives stalled at various stages of completion. Finally, while the coast guard made commitments to resolve management problems and complete initiatives, it lacked both the organizational and individual accountability needed to achieve them.

You will note that we have made only one recommendation in this chapter. We did this because the coast guard has limited resources and must focus those it has on key issues, including those we have previously reported. Therefore, we recommend that it establish its priorities for improvement, set clear achievable goals for each priority, allocate sufficient and appropriate resources to each priority, and ensure that managers and organizational units are accountable for achieving expected results.

Shortly after we completed our audit, the coast guard developed its first three-year business plan. The plan included a long-term approach to address the challenges, including those we reported. It established priorities, allocated resources to these priorities, and identified accountable managers and organizational units.

Subsequently, the coast guard provided your committee with a copy of its mid-year review of its business plan. We are pleased to see the coast guard is monitoring and reporting its progress and that it has shared its plans and progress reports with your committee and other interested parties.

We have reviewed the coast guard's plans and progress reports. However, as I indicated previously, we have not done audit work in this area since 2006, so our ability to comment on the plans and the results achieved is limited.

In conclusion, Mr. Chairman, I encourage the committee to review the coast guard's business plan and mid-year review and inquire about its future plans to address the issues we have identified.

Mr. Chairman, this concludes my opening statement. Mr. O'Brien and I would be pleased to answer your questions.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Wiersema.

Madame d'Auray.

[Michelle d'Auray, Deputy Minister, Department of Fisheries and Oceans]

Thank you, Mr. Chair and members of the committee.

I appreciate this opportunity to come before you today to answer questions and address the issues raised in the Auditor General's report of February 2007.

You have introduced my colleagues, but with me are commissioner George Da Pont, and la sous-commissaire, Monsieur Charles Gadula.

Let me start by indicating that both the commissioner and I fully accept the findings of the Auditor General. I will also state that Minister Hearn has given us clear direction to deal with these issues. He has asked that we develop a realistic plan for responding, assign clear responsibilities and timeframes for the follow-up actions, and that we provide him with regular progress reports. The coast guard has done this through the development of an integrated and comprehensive business plan that establishes the priorities, sets clear accountabilities and timeframes, and allocates the resources required to ensure the commitments can be implemented, not just for dealing with the issues raised by the Auditor General, which are important, but also for the full range of its programs and services.

In addition, the coast guard will provide the minister with a detailed progress report on its business plan twice a year, one in the fall as part of the mid-year review, and one in the spring after the close of the fiscal year.

Mr. Chairman, as Mr. Wiersema has said, the coast guard business plan and its first mid-year review from last fall have been tabled with this committee. They have also been shared with the Standing Committee on Fisheries and Oceans, the Office of the Auditor General, the Treasury Board Secretariat and the main users of coast guard programs and services. In addition, both are available to the general public on the coast guard website.

The minister, the department and the coast guard are all committed to full transparency and accountability both for the programs and services that the coast guard delivers and for addressing effectively the issues raised by the Auditor General. The general feedback that we have received so far indicates that we are on the right track and that the plan provides a good framework for responding to the Auditor General's findings, within a reasonable timeframe.

This is clearly indicated in the overview that is provided in the status report. What has been done is in green, what is to be done is in yellow, and the deadlines or outcomes that have only been partially completed are identified in red. We are, in fact, very transparent.

Addressing the findings of the Auditor General will take time, as many of the management measures, especially those relating to the standardization of business practices, will require, and are requiring, significant cultural change within the agency. In fact, we anticipate that it will take three to four years to fully address all the issues that have been raised. However, progress has been made on a number of fronts, and the commissioner and his management team and I are committed to the coast guard becoming the strong national institution that Canadians deserve.

Commissioner Da Pont will now briefly set out some of the key initiatives that are under way to respond to the Auditor General's report.

[Commr George Da Pont, Commissioner, Canadian Coast Guard, Department of Fisheries and Oceans]

Thank you, Deputy Minister. I appreciate the opportunity to address the committee briefly.

Naturally, I was disappointed with the findings of the Auditor General. I wish that we had done better. However, I was not surprised. The findings fairly closely resemble some of the main conclusions that had arisen from an A-base review that we conducted in 2006, and we had already started to act on some of the key issues. I would like to comment briefly on four areas.

First, one of the most important challenges is to come to grips with the observation that we operate as five coast guards rather than one. I do not dispute the finding. In almost every area of activity we do seem to do things differently from one part of the country to another.

A significant first step was taken in 2003 when it was announced that the coast guard would become a special operating agency within DFO. This put in place the framework for the coast guard to operate as a client-focused national institution. Our business plan sets out a number of specific measures tied to this objective. Specifically, we have begun an engagement with our clients to ensure consistent application of our levels of service. We have set up structured advisory bodies to get feedback and establish accountability for our service delivery. We have begun to standardize our organizational and service delivery structure, the management of our fleet, our business practices, and our administrative procedures.

In each of these areas we have identified specific yearly commitments and we are tracking and monitoring progress against those commitments. We are at the start of these processes, and as the deputy minister had noted, it will take us several years to complete all of them.

Second, we have also made progress on the renewal of our fleet. In the last three years we have seen investments of well over $1 billion to acquire 17 new vessels, including the announcement in the recent budget of the replacement of the Louis S. St-Laurent, our largest and most capable icebreaker.

While this is very welcome news, it will be several years before the first of these new vessels arrive. In the meantime, we recognize, as the Auditor General has noted, that we have to improve the maintenance of our existing fleet. We have started by putting better planning and money into this activity, including conducting structured vessel condition surveys, and we have launched a maintenance review to recommend how best to deal with the maintenance issues raised by the Auditor General. I expect the results of that review by the end of the month. In taking this approach, I sought the comment of the Office of the Auditor General before I established the terms of reference for that review.

Third, with respect to our modernization initiatives, we have grouped them under one umbrella, which we call aids to navigation for the 21st century. We have made some progress in this area. For example, we have converted close to 90% of our lighted floating aids to light-emitting diode technology, up from 34% in 2002. We have also converted nearly 75% of our buoys from steel to plastic, up from 51% in 2002, thereby greatly reducing handling and maintenance costs in both areas.

Our business plan sets out specific and measurable initiatives to ensure that we continue to make steady progress. A key piece of the AToN21 initiative is to develop the vision for e-navigation in consultation with our clients. A draft has been completed, and we intend to consult industry on it in the coming year.

Finally, we have put a very concerted effort into how we manage our human resources. The strength of the coast guard is its dedicated and professional workforce. We have made this a key priority in our business plan. The most significant commitment is to develop, for the first time, a strategic human resources plan for the agency that will help us focus on effective management of our people, on their training and career development, and on meeting the significant recruitment challenges we will face over the next few years.

Some of the most challenging human resource issues raised by the Auditor General concern the management of our sea-going personnel. Our ships officers and ships crew are represented by two bargaining agents with different philosophies, priorities, and goals. We are working with the Treasury Board, through the collective bargaining process, to get common language for similar provisions of their respective collective agreements and to work toward equal application to both groups working on the same vessels.

In addition, the coast guard will finalize a standard regional organization by the end of the month and will implement that standard model in the coming years.

Before I conclude, I would like to note the pride that I have in all of the employees of the coast guard who serve Canadians. We deliver essential services on all coasts, often in challenging conditions and in remote areas. Many of those services are delivered 24 hours a day, seven days a week. Most of the observations noted by the Auditor General relate to our internal management and administrative practices. I would hope they are not taken to reflect on the professional and dedicated men and women who work in the field and who have established our proud tradition of service excellence.

Mr. Chairman, this concludes our prepared remarks. We would be pleased to answer any questions that you or the members of the committee might have.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Da Pont. Merci beaucoup, Madame d'Auray.

Mr. Hubbard.

[Charles Hubbard, Liberal, Miramichi, NB]

Thank you, Mr. Chair.

I was taken aback when I read the Auditor General's report on the coast guard. It casts some troubling doubts on a proud agency. When you follow the history, you find long-standing differences between what the Auditor General expects the agency to be and what it actually is.

The change from Transport to Fisheries was significant in the administration of the coast guard. Are some of these problems reflective of the change from one department to another? Has Fisheries not been able to cope with the coast guard? That was a major change that the government made. Do you think this is part of the problem? Is Fisheries and Oceans just too involved with other issues to be able to cope with the coast guard?

[John Wiersema]

No, I don't think that is a big cause of the problem. Many of these issues are long-standing. I'm not sure they're related to which government department the coast guard is with.

The issues are serious. They are long-standing. I think the coast guard has a good business plan for addressing these issues on a strategic basis. It will take time to deal with the issues.

[Charles Hubbard, Liberal, Miramichi, NB]

On the second point that Mr. Da Pont made, resources were a major factor. You can't maintain a good fleet if you don't have the money. You can't buy new vessels if you don't have the money. Did they have sufficient resources to realize your vision of what the coast guard should be. Was the money available for them?

[John Wiersema]

We did an audit on whether the government and Parliament had voted sufficient resources to the coast guard. We note in our report that the coast guard is facing funding challenges—particularly with regard to replacement vehicles for its fleet.

[Charles Hubbard, Liberal, Miramichi, NB]

Do you think such drastic conclusions were fair to them? There's hardly a good paragraph in your report. If there's a good one, there's a bad one following it. Do you think it's fair to them to make these critical observations without recognizing that it was a money problem? Do you think that was fair?

[John Wiersema]

I'm absolutely convinced our report was fair.

[Charles Hubbard, Liberal, Miramichi, NB]

I'm not asking about your report but the observations. How big a factor was money in the difficulties the coast guard is having?