Public Accounts Committee on March 13th, 2008

[Commr George Da Pont]

Mr. Chairman, I would say, first of all, that I wasn't intending to brag. It was announced that the coast guard would become a special operating agency in 2003. The authorities from Treasury Board to make that a reality came into effect in April 2005. The Auditor General's office was quite correct in saying that when they went back and looked, in the course of their work, at the implementation plan, there were a number of very significant things that had not yet been implemented. Those things are the key items that are referred to in our business plan as some of the key priorities, and we put focus and resources on completing those items to make the special operating agency a reality.

Regarding the specific things that were not completed when the Auditor General looked at them--and which are now completed--we have now set up the advisory boards with both internal and external clients. We have launched a comprehensive review of our levels of service involving the clients. We have worked with Treasury Board to get some of the additional authorities and flexibilities that were envisioned as being part of a special operating status. Two of the most significant that we've received are a grouping and a new authority for how we do our refit. I won't get into the details of that, but it is enormously significant. The second is a new capital carry-forward authority that gives us much more flexibility in managing multi-year capital projects. So that actually became very high priority, and we've actually completed the vast majority of those things that the Auditor General found were not in place when they conducted their study.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson.

Thank you, Mr. Da Pont.

With the last question, we'll have Mr. Williams, for three minutes.

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

Thank you, Mr. Chairman.

Mr. Da Pont, Mr. Stoffer asked you if you had developed a clear presentation to go to Treasury Board or whomever to say that in order to be a really functional organization through the mandate given to you, this is what you need, and this is what you're going for. You came back and said you were trying to figure out how to accommodate the increase in fuel prices, and you totally avoided Mr. Stoffer's question.

You now, according to the Auditor General and perhaps according to you, know what is required to run the coast guard to the standards determined by the Government of Canada. Have you made a submission to the Treasury Board or to the department--since you are an SOA--saying that this is what you need to do the job they expect of you?

[Commr George Da Pont]

As I mentioned, we have—

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

Is that a yes or a no?

[Commr George Da Pont]

Partly. We have submitted one submission. We're working on fuel. I'm sorry, Mr. Chairman, but that is the reality.

In terms of the larger issue, we are scheduled to go through a strategic review by the Treasury Board in 2009-10.

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

Yes, but let me take the onus away from the Treasury Board and put it right on your shoulders, Mr. Da Pont. As the commissioner for the coast guard, you know you don't have the resources, or you're saying you don't have the resources. A lot of them are wasted because of incompetent maintenance and so on, but nonetheless, you know you don't have the money. Why aren't you initiating to the Treasury Board, “I need x number of dollars or you can drop the standards; tell me which one it is”?

[Michelle d'Auray]

If I may, Mr. Chair, I think Mr. Da Pont did initiate such a request. Fisheries and Oceans and the coast guard received an amount of $99 million from the Treasury Board because we did put the business case to the board on capital. That was the core element, as indicated by the Auditor General. Part of that also went into maintenance.

As Mr. Da Pont also indicated, we did receive from the Treasury Board, because we had made the request, the capacity for us to be able to manage the capital budget as an entity, and re-profile, because—

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

What about the operating budget?

[Michelle d'Auray]

The operating budget is also being looked at, at the moment, and we're building a business case for that. We do not want to, as we have done in the past, go all out and do all kinds of business cases that are half-baked. We want to do solid cases and bring them when they're ready and present them to the board, and to work with the secretariat on those cases.

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

We can only hope that is not going to take too long, because the coast guard does perform a vital service to this country.

Mr. Da Pont, you mentioned, of course, that the maintenance is a problem because you may not have enough people. I was quite troubled by the word “may”, because you've been dealing with this problem for years and years, and you still haven't figured out if you have a shortage of manpower or if you don't have a shortage of manpower, or if they're just ill-trained and ill-equipped and in the wrong place at the wrong time. I don't know what the problem is.

But when are we going to get definitive statements from the coast guard of, yes, we see the problem, we have identified how to fix it, and we're going to get it fixed? When are we going to get that kind of language?

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Williams.

Go ahead, sir.

[Commr George Da Pont]

Mr. Chairman, I hope that we are providing that kind of language.

If I use the example of maintenance, I know it's a problem. I sat down at some length with the Office of the Auditor General to try to get a very solid understanding of what the underlying causes of that were. We concluded—

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

You're the manager.

[Commr George Da Pont]

They took a look at us, and having an independent observer giving us their advice was very helpful.

What came out of it—and I know you probably won't like this answer—was a need to actually do a structured review of how we do our maintenance. We have been doing that for the past year, in-house, involving mostly our people in the field and the experts on the vessels. I expect to have the result of that by the end of the month.

My view is that I need to understand very clearly to develop the type of business case that the deputy minister was talking about. I need to be able to substantiate it by having gone through a very structured process. As the Auditor General noted, one of our failures has often been that we haven't actually taken the time to do our homework on some of these things, and as a result, we perhaps have not been as successful in dealing with central agents as we should.

What I do want to say is that I'm very committed to dealing with these issues. We have a plan. We are being very transparent. We are reporting consistently against this plan. I do take full accountability for it.

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

Well, that's a start.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Da Pont.

Just before we ask for closing remarks, Mr. Da Pont, this movement of the icebreakers from Dartmouth to St. John's and Argentia is a big issue. Can you file with the committee, so we can use it in writing a report, all documentation, memoranda, and analysis that was done in these particular moves that were made?

[Commr George Da Pont]

Yes, we can.

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

Mr. Chairman, be careful. Do you know what you're asking for? You're likely asking for a stack 10 feet high.

[The Chair, Liberal, Shawn Murphy]

No, I don't think so. There may not be anything.

We'd like that in two weeks, Mr. Da Pont.

[Commr George Da Pont]

We've already filed it, actually, some months ago with the Standing Committee on Fisheries and Oceans, so we will be able to provide it quite quickly.

[The Chair, Liberal, Shawn Murphy]

Okay.

On behalf of the committee, thank you very much.

Mr. Wiersema, do you have any closing comments?

[John Wiersema]

I will be very brief, Mr. Chairman. I think a number of committee members have pointed to the important services provided by the coast guard and the front-line people out there who are providing those services, and to the importance of recognizing that. I think that's entirely appropriate. Notwithstanding that, there are some long-standing management issues the committee has been quite correct in asking about--being assured about what's different now and why are these going to be fixed.

Just to summarize what I said earlier on that, Mr. Chairman, I do believe that the commissioner and the deputy minister have produced a sensible business plan, have been more strategic about this, and have established priorities. Mr. Da Pont has indicated his personal commitment to the delivery of that business plan. There's good transparency and reporting to the minister and to the committees on that business plan.

I think the one remaining issue the committee has touched on—and I believe it needs to be fully addressed—is the security and stability of the funding required to provide these services in order for the coast guard to move forward. We all have to have a clear picture of the funding that's required to deliver the services that are expected.

That's it, Mr. Chairman.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Wiersema.

Ms. d'Auray, do you have any closing remarks?

[Michelle d'Auray]

I will be very brief, Mr. Chair. I have two comments before I go into the closing remarks.

The first is that one of the members requested the regional breakdown in the business plan, and it is actually on page 66, so that the costs, the regional spread, are there.

With regard to the lighthouses and their divestiture, I believe there is a bill that will be going to the Standing Committee on Fisheries and Oceans with regard to lighthouse divestitures and heritage protection as well.

In closing, I think a number of members have rightly asked us if we are accountable, and the answer is yes. Will we take the responsibility? We do. Do we take it seriously? Absolutely. Is it easy? No. Are the changes that have been identified to be made significant, to use that term? Yes, they are. Are we making progress? Yes.

Is it satisfactory according to the report of the Auditor General, which was done in 2006 and reported in 2007? No. Have we made progress since then? I would absolutely say yes. Do you have our commitment for that progress to continue? Yes. What are the changes we have seen? We have seen the organization become a special operating agency. Yes, it is within the department, but with its own fenced-in budget.

We have seen changes in terms of our ability to move capital money forward and re-profile as necessary. We've seen changes in terms of the maintenance capacity and understanding of the issues. We have a more focused mandate; a lot of the policy issues have been transferred to Transport Canada. We are now clearly focused on the key operational elements.

We have line reporting, which we did not have before. We now have the capacity to replace 17 of the 40 vessels, again a major issue that had been identified. And we are actually at the point of reporting on a regular basis, in a very transparent fashion, on the goals we have set ourselves, the results we seek to achieve, and whether or not we're making them.