Evidence of meeting #23 for Public Accounts in the 39th Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farmers.
A recording is available from Parliament.
Liberal
Charles Hubbard Liberal Miramichi, NB
When you say you know they were charging fees, what sorts of fees were they charging? Was it significant or was it merely out-of-pocket expenses in helping farmers in rural areas?
Assistant Auditor General, Office of the Auditor General of Canada
We're not aware of the exact amount that was being charged. The department may be, but we are not.
Liberal
Charles Hubbard Liberal Miramichi, NB
Were the administrative costs acceptable to farmers in terms of what CAIS required with regard to accountability? In terms of your audit, was it an acceptable part of an overall farm expense to have to pay an auditor maybe 10% of your revenues to provide the information to the departments? Did you see any information, any evidence, on how much it was costing farmers to provide the information to this program?
Assistant Auditor General, Office of the Auditor General of Canada
Through our interviews with producers, we certainly heard that there was an expense, a fair amount of expense, with respect to that preparation. Given the fact that in some cases they may not get a payment, that would be an out-of-pocket cost just in the preparation. But in terms of the extent of that, I don't think we had a detailed handle on the exact amounts involved.
Liberal
Charles Hubbard Liberal Miramichi, NB
To the deputy now, on these changes that were made, I understand you are negotiating with other provinces to integrate some of the programs. Do you think...? But I suppose I know the answer before you give it. Hopefully it's in the best interests of our agricultural community.
I was taken a little bit aback with regard to the broadband and the access that farmers have. Many rural areas don't have high-speed Internet, and when you offer it, you know, it sounds very good.
I would ask you, where was the administrative centre for the CAIS program? Was it here in Ottawa or was it somewhere else?
Deputy Minister, Department of Agriculture and Agri-Food
No, the administrative centre of the CAIS program is in Winnipeg.
Deputy Minister, Department of Agriculture and Agri-Food
We have another office in Regina.
Mr. Chairman, perhaps I could explain one thing. I mentioned earlier the term “Internet-based”. Agreed, our client group, agricultural producers, are not using the Internet to an extent comparable to the rest of the Canadian public. Over the last number of years, we've been tracking the phone calls that come in to our call centres. Around 200,000 calls come in to us. So they do prefer to call in and ask what we're doing with their files instead of looking at the Internet, etc.
But we have to plan for the future. More and more young farmers are getting into the business, and they use all of the electronic media much more.
Liberal
The Chair Liberal Shawn Murphy
Before we go to Monsieur Laforest, I want to ask you, Ms. Baltacioglu, where do we stand now in the transfer? This audit is on the CAIS program, but I understand there are discussions to transfer it to Growing Together, AgriInvest, and AgriStability. I know there were negotiations all last year.
Has that been concluded? Has the new regime started, or are we still on the previous CAIS regime? If we are still on the previous CAIS regime, when do you see the transfer taking place? And I realize it involves discussions with provincial counterparts.
Deputy Minister, Department of Agriculture and Agri-Food
Absolutely. Actually, on the new business risk management suite, the federal-provincial-territorial ministers have agreed to a program suite of four elements, including AgriInvest, AgriStability, and AgriRecovery.
This actually has been agreed to. The program year for AgriStability is starting now--
Deputy Minister, Department of Agriculture and Agri-Food
April 1, and AgriInvest is going to start the payments this fall. It's a cycle.
However, our work is on both camps. We still have outstanding CAIS payments that we're processing from the previous years, and we will process the new programs. So this year we have both programs. We're going to do them both. They're not overlapping; this is just in processing the files.
Liberal
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Thank you, Mr. Chair.
Good day to all the witnesses.
Mr. Lennox, the Auditor General's report stressed the fact that the program is very complex, particularly with regard to managing applications from farmers. Out of 57,000 applicants, 25,000 got no payment despite making an application. Did you assess the program's effectiveness with regard to real problems experienced by farmers?
Some 32,000 farmers did receive compensation, but 25,000 others did not receive any. Is it because the program is too complex or were there administrative errors? Some of those 25,000 farmers did not get any compensation when they should have. Was the program too cumbersome to manage?
Assistant Auditor General, Office of the Auditor General of Canada
While our main focus in our report was on processing of returns, we did not ourselves reprocess returns; we didn't take a sample and run through them to reprocess to see what should have been. We did look at the efficiency aspect with respect to the processing, and we mention in the report that we found that the processing, given the complexity of the program, was error-prone, especially in the upfront portion of the processing.
There's a second unit that checks the processing of the first unit, and we found that about 30% were sent back for reprocessing. So from a complexity and an error-processing perspective, we did find a fair amount of error. But we did not reprocess applications. If there's somebody who didn't receive a payment who maybe should have, we didn't reprocess it.
But we made reference and the deputy minister also made reference to the fact that they've changed that now. We suggested that in their sampling process they do some sampling of those non-payments to see whether there are errors in them as well as in the other ones. The deputy minister has now said that they are doing it.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Ms. Baltacioglu, did the department conduct similar audits, as Mr. Lennox said? You were asked to do sampling. I want to know whether the program really does meet the needs of farmers.
Deputy Minister, Department of Agriculture and Agri-Food
There are a number of answers to that one. The first is that the CAIS program is now being replaced with AgriStability, another margin-based program but with improvements. We heard from the producers that there were areas of this program that needed improvement. For example, if a producer got back-to-back bad years, the program didn't really help. With the changes, we're hoping that it's going to help those producers. So we're improving from the policy perspective.
The department has provided its processes. We are now not only looking to do the checks on the payments that are higher than a certain threshold, but we are also looking at zero payments, and also files that are under that threshold, because we can't really risk not paying a producer the right amount that he or she deserves to run his or her business.
That being said, it is normal, given that it's a margin-based program, that if a producer actually made money, and if you compared their current production-year margin to the average of the previous five years' margin and it was higher, they're not going to get any payment. It's a business risk management tool.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
On the issue of conflicts of interest, in point 4.97 of her report, the Auditor General refers to situations where employees were helping applicants fill out their applications. The report states: “When we brought these cases to Agriculture and Agri-Food Canada's attention, it began investigating them.”
What is happening with this investigation of employees who were using their skills and of the program's complexity?
Deputy Minister, Department of Agriculture and Agri-Food
First of all, it wasn't an audit, sir. What we did is.... The Auditor General's report identified a number of areas. I think this might be of interest to the whole committee's questions.
One thing is that some of our staff are employees of the department but are also farmers, so they fill out their own forms because they have a business. For those people, we have a special unit that processes those applications. I'm not a farmer, but if I were a farmer and filled out my form, it would be processed in a separate place where I would have no influence over it. That's one thing we did.
For those employees who have been filling—
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Why is the Auditor General saying that the department has started to investigate when you say that it hasn't done so?
Deputy Minister, Department of Agriculture and Agri-Food
Oh no, we did investigate. We wrote to the employees, to the people who were filling it out—as with your tax form, like an accountant—and we informed the staff. A number of them have confirmed that they were doing this. We got them to attest that they have ceased and desisted from this activity, and we have their signatures on file. We keep on reminding and providing training sessions so that everybody is aware of the fact that this is not acceptable under the code.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Have you attempted to find out more with regard to those employees who were helping farmers?
Later in the Auditor General's report, mention is made of the 18 out of 400 employees who received a notice. Were those individuals identified or had they reported what they had done? Did they derive financial benefits from their actions? Were they asked to return those financial benefits?
Deputy Minister, Department of Agriculture and Agri-Food
No, sir, we didn't ask for the money back, because in some cases some of these employees had declared this as an activity under the conflict of interest declaration, the confidential declaration, and they weren't notified that this wasn't an acceptable behaviour. What we did is say, “It's not acceptable. Stop.”
We didn't take disciplinary action; however, on a go-forward basis—this is very clear for our department—should there be allegations, we will take very strict disciplinary action. And if there's any criminal activity, as you know, we will go to the police.