Public Accounts Committee on March 13th, 2008

[John Wiersema]

There is no doubt that funding is part of the issue. But I'm convinced that our report was fair. These are important management challenges. I'm also convinced that we now have the attention of the deputy minister and the commissioner, which we need to deal with these important management challenges in a thoughtful, strategic way, as outlined in their business plan.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Da Pont, have you been with the coast guard for a long time?

[Commr George Da Pont]

I've been with the coast guard since my appointment in 2006. I had been acting prior to that for several months. I've been with Fisheries since 2000. In my earlier jobs in Fisheries, I worked closely with the coast guard on a number of their key issues prior to my appointment.

[Charles Hubbard, Liberal, Miramichi, NB]

So in respect of the administration of the coast guard, we have not had administrators who have stood on the decks, travelled the ocean, been on the lakes. I think it's important to have people with some personal experience in what the coast guard does.

With people who come up through the ranks, who have started off in the training schools and come up through human resources, who have had their feet on the decks and have had experience at sea, what level have they attained in your administration?

[Commr George Da Pont]

Mr. Chairman, a great example is sitting right next to me. The deputy commissioner, Mr. Gadula, has spent 41 years in the coast guard.

[Charles Hubbard, Liberal, Miramichi, NB]

So for the best answers to some of these questions, we may have to turn to Mr. Gadula.

As you watch the coast guard being changed and you see these demands being met, these observations go back to 2000 and before, apparently. I suppose I can put you on the spot. You must feel very uncomfortable in participating and seeing an agency that you spent so long with....

When we go back to the clients—you mentioned clients in this—you probably have some desk that people complain to. I haven't seen a lot of that, but I hear people talking about aging vessels and so forth. Are the people out there being served by the coast guard? Do you get many complaints from the clients that have to be answered?

[Commr George Da Pont]

We don't get very many complaints. In fact, in this past year we've conducted what we've called a structured level of service review, where we've sat down with the users of our service—shipping industry, recreational boaters, fishers—in an organized fashion to get exactly their feedback on our performance, on our levels of service. There are issues that they raise. We get very few complaints about what we do. A lot of what has come out of those discussions have been requests for extended services, greater services, for the most part.

Of course, from time to time there are issues that come up, and hence we have our selected issues in terms of specific complaints. I find very few of those sorts of issues get to my desk. I think we have a good relationship with the users of our service and general satisfaction with what we deliver, obviously within the resources we have.

[Charles Hubbard, Liberal, Miramichi, NB]

So we get this cost-effectiveness. You're not offering a cost-effective operation. When you got that report from the Auditor General, what did you think had to be done to make things more cost-effective? You have great responsibility. You have foreign vessels approaching our coasts. You have fishermen out there who are hoping for your service. You have the Great Lakes. I was on one of your ships last summer, where I thought they were doing a very good job of monitoring between the American side and the Canadian side.

Where would this cost-effective thing be analyzed in terms of your receiving the report and trying to be more cost-effective? What would you have to do?

You mentioned LED lights. You mentioned different types of navigational devices. What else can you do to be more cost-effective?

[Commr George Da Pont]

I would say there are probably about three areas of significance.

One area is the one you mentioned in terms of implementing and taking advantage of new technologies that can allow you to do things in a different way and often with a lesser cost. For example, we know and we've seen that the technologies now in terms of global positioning and so forth have taken the search out of a lot of search and rescue cases. So there are a variety of areas like that where we can be more effective.

The second general area is probably the one noted in terms of how we do some of our crewing. One of the observations, which I do agree with, is that from one part of the country to another, for similar vessels, we have different crewing postures for different arrangements, with different cost structures. I think it is reasonable to look at those sorts of arrangements and look at the best efficiency.

The third area is, I think, extremely difficult for us. As the Auditor General has noted, we have more shore-based infrastructure than we actually need to support the operations. We've had a great deal of difficulty in terms of shedding the unnecessary infrastructure, for very legitimate reasons. Some things, like lighthouses, are seen as having very important heritage and local considerations. Others relate to jobs in small communities. Those are very legitimate reasons, but at the same time we have had to invest more in our shore infrastructure--not being able to rationalize some of these things--and that does affect our cost-effectiveness.

[The Chair, Liberal, Shawn Murphy]

Thank you.

Monsieur Laforest, sept minutes.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chairman.

My question is for Mr. Wiersema.

There is a rather harsh statement in the conclusion to the Auditor General's report. Please note that I am not saying that I do not agree with it. This is what you said:

In conclusion, the February 2006 Budget provided $39 million for the Coast Guard, but the organization's inability to understand and control its costs does not provide us with confidence that this is a permanent solution.

When you say « the organization's inability to understand and control its costs », that is a very strong statement. Are you wondering if something can be done? You say that the organization cannot understand and control its costs. Is that not like just throwing in the towel? What can the organization do better? Is this decision cast in stone? Can anything be done? Can the situation change?

[John Wiersema]

Yes, Mr. Chairman, I think so.

Fundamentally, the coast guard needs to have the accounting systems to understand and analyze its costs and to be able to make the convincing business case to the Treasury Board Secretariat, and ultimately the Treasury Board and Parliament, to secure the funding it needs. It needs the information, on a national basis, to really understand the costs, the drivers of those costs, and how they change in response to change of circumstances.

For example, I have no doubt that right now the coast guard is facing significant challenges dealing with increased fuel prices. The recent spike in fuel prices is going to have a significant impact on the coast guard's ability to keep its fleet operational and at sea. The coast guard needs to understand those costs, what's driving those costs, the impact they will have on its operations, and where it has flexibility to curtail operations in order to live within its budget.

It is a harsh judgment, but we think it's particularly important for an operational department like the coast guard to really have an understanding of its costs and to explain how they change in response to a change in circumstances.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

You also say that the coast guard has to better understand and control its operating costs, because there could be possible overruns. You mentioned the cost of fuel. Does that not simply mean that they are underfunded? The government is not providing enough funding for a coast guard operation. That is what I read between the lines of your answer.

[John Wiersema]

I don't know that it's for me to determine whether the coast guard is properly funded. The point we're making in our report is that the coast guard itself has to understand its costs, the cost drivers, the impact of changes in those drivers of costs on its operations and mandate, and to identify the need to seek supplementary funding if and when that's necessary.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Da Pont, you also said in your opening statement: “I wish that we had done better. However, I was not surprised.”

What does that mean? Does that mean that you were aware that problems existed and that your organization would be underfunded?

[Commr George Da Pont]

Yes. After I was appointed, I began a review of coastal services in order to get a clearer picture of our current management process and our financial situation. The review ended in 2006 and was made available to the Office of the Auditor General. What was found through this review is identical to the observations in the Auditor General's report. That is why I was not surprised.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Do you think that your organization will require extra funding?

[Michelle d'Auray]

Mr. Chairman, Mr. Da Pont explained that the coast guard and department undertook quite an in-depth review of budgets and expenditures in light of priorities. It was this business case that in fact convinced Treasury Board that the extra funds that we were allocated in 2006 did indeed compensate, for the shortfall, particularly as concerns the management of what I would call fixed assets, both for the Department of Fisheries and Oceans as well as for the Coast Guard. The bulk of the increased funding—the $99 million— was allocated for infrastructure, whether it be for the fleet, maintenance or the department's capital assets, because the gap had been pointed out in our own work plan. This largely echoed the points that were raised by the Office of the Auditor General. We were therefore in agreement.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Before the meeting, you were telling me that you had not been the deputy minister responsible for the coast guard at fisheries and oceans for very long. As the report had already been tabled, did you have the feeling that you were getting on board a ship that was taking on water?

[Michelle d'Auray]

No, but I realized that there were significant challenges that needed to be faced. Having said that, the efforts that my predecessor and Mr. Da Pont have made to restructure the coast guard have been significant. We are carrying on with the work and will ensure there is extensive follow-up, given the specific objectives and deadlines. These were established before I arrived, but we are carrying on with them because it is the only way to deal with and chip away at the challenges that were identified over several years.

[The Chair, Liberal, Shawn Murphy]

Merci beaucoup, Monsieur Laforest.

Mr. Williams, seven minutes.

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

Thank you, Mr. Chairman.

In going through this report, it saddens me to think the senior administration at coast guard seems to be sitting there looking out the window rather than doing what they were supposed to do over the last number of years. This is a serious condemnation for the third time, fourth time, that you still aren't serious about getting the job done, and I'm getting a little bit upset about this.

I happened to read in the Auditor General's report, in paragraph 4.19, where it said, “A 1983”--25 years ago--“Auditor General's report raised a number of the same issues we raised in our 2000 and 2002 reports.” Here we are in 2008, and you can't get the job done. What's going on over there? Who's taking this job seriously?

[Commr George Da Pont]

Mr. Chairman, we are taking the job very seriously. I accept your comments. I have some of the same reaction in terms of disappointment.

But I would like to underline one very important thing. As I said in my opening statement, a great majority of the issues noted by the Auditor General go to our internal management and administrative practices--

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

And that's your responsibility.

[Commr George Da Pont]

It's certainly my responsibility. They're very serious issues. I accept that. But I would hope there's recognition that we are doing, in my view, an excellent job with service delivery in the field. Our service is one of the best in the world. Our icebreaking service is effective.

The point I want to make, without diminishing the seriousness of what was noted--and I fully accept those issues and the responsibility to deal with them, but I would take issue that we're not.... I think the men and women in the coast guard are doing the job. I think there are management issues--