Public Accounts Committee on April 1st, 2008

[David Christopherson, NDP, Hamilton Centre, ON]

No, no, I'm sorry, I wasn't going down that road. I was just curious if you looked at the agricultural business in Canada and what you deal with. I'm just trying to get a thumbnail sketch of how much of it is big, big business, a big corporation almost, versus a small family farm.

[Yaprak Baltacioglu]

The large businesses would be about 15% to 20%.

[David Christopherson, NDP, Hamilton Centre, ON]

So that takes me back to the original point. My concern and why I asked the question wasn't just that you were only looking at possible overpayments, it was the mindset that led you there. The whole program is to help farmers. Eighty percent, or close to it, are family farms, and yet the mindset is, let's make sure we don't give away too much money. What happened to the mindset that we're here to help the farmers, and that's our top priority? If that happened, the first thing you would do is capture underpayments, and somebody else in the bean-counting department would say they wanted you to do the same thing on the overpayments. Instead, the mindset was the other way around: let's make sure we don't give away too much money. If a few of the family farms get hurt along the way, well, we have to protect this money; that's a bigger priority.

[Yaprak Baltacioglu]

I think that was the sentiment expressed by the Auditor General's office, and we accepted the recommendations.

[David Christopherson, NDP, Hamilton Centre, ON]

You said you'd been in that department a long time. Help me understand the thinking of a department that would look at it that way. I know you did wrong; I want to know why. What's the culture there? Do you understand? The culture of the department should be to help the family farms. If anything, we should have an audit report here that tells us that you're not being strict enough or you're not doing enough to watch the treasury. In this case, the treasury concerns, the dollar concerns, seem to be more important than family farms, and that's what I'm trying to get at.

[Yaprak Baltacioglu]

Sir, with respect to the culture of the department, it is very committed to agriculture and the agrifood sector. We're quite proud of the way we do our jobs.

[David Christopherson, NDP, Hamilton Centre, ON]

Please don't get defensive. Answer the question.

[Yaprak Baltacioglu]

I'm not. All I'm saying is that sometimes there's a balance between helping family farms, making sure the money goes out at the same time, and making sure the public administration is not faltering. The department at that time chose the sample on the overpayments. Now we've fixed it. We have accepted the recommendations, and that's the way we're doing it.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Deputy.

[The Chair, Liberal, Shawn Murphy]

Mr. Wrzesnewskyj.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you, Chair.

Ms. Baltacioglu, when did you become aware of a conflict of interest involving your department staff?

[Yaprak Baltacioglu]

I started at the beginning of March 2007 as the deputy minister. I think the Auditor General's team briefed me a couple of weeks after that, so that's when I read the initial draft report and that's when we started taking action.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

It appears it was the Auditor General who flagged this situation. Do you know if the previous deputy minister was aware that there was a conflict of interest involving departmental employees?

[Yaprak Baltacioglu]

As the audit was happening and the Auditor General had been giving input to the department, I'm sure the previous deputy was aware and had taken some action.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

I'm also sure that it was probably quite a concern for you.

Do we know how many employees were involved? Do you have a list of employees who would have been in a conflict of interest?

[Nada Semaan]

There were actually 18 identified as potentially in a conflict of interest. At that point, we sent out letters to all 18, saying they could not do this, and that if they were doing such a thing they would have to disclose. Five employees had disclosed that they were filling out forms. They were told to cease and desist. After that, we sent them back a response asking them to confirm that they had stopped. This was done right after we were first told of the potential conflict of interest. At the time, we were already strengthening our values and ethics on this point. We were consulting with CRA and other people who process information, just to make sure we were consistent.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

So there are another 13 who have not responded?

[Nada Semaan]

They did respond. It was sent out to all 18 of them, and they were told that if they were in that situation, they'd have to fill it out. Only five said they were in this situation. The other 13 were not.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Do you know what sort of monetary benefits they received as a result of this?

[Yaprak Baltacioglu]

No, the service we understood they were providing was similar to what accountants do when they fill out a tax form, and it was done for a similar fee. So we're not aware of what money they made.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

What is the cost of running the CAIS program per year?

[Yaprak Baltacioglu]

It's $107 million across Canada, five administrations.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

So it costs $107 million to run this program. I understand that in one of the years, although it's difficult to figure out which one, as much as a billion dollars was paid out.

We're heading into a year of record prices for agricultural commodities. What would be your estimate of payouts for this coming year, if any? For instance, wheat prices more than doubled in February after a year of increases.

[Nada Semaan]

I believe our current forecast spending is still over a billion dollars. I don't have it offhand, but I know it's over a billion dollars.

You're right, the wheat and grain prices are going up, but unfortunately our livestock sector is facing a downward twist, so they will be getting higher payments. Usually, when one sector is doing well, the other isn't. It is quite cyclical.

In addition, as the deputy said, because it's the four different types of programs, they are affected not just by price but also by disease, drought, and weather conditions. So it depends on the weather and on what happens—God forbid any disease outbreak. The programs can end up responding to any of these situations.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

You say there will be $1 billion in payouts in the year that's referenced and potentially in the coming year. How many recipients are there, approximately?