Public Accounts Committee on May 8th, 2008

[Sheila Fraser]

That's potentially so. We do make the point that these reports were to have been made public and tabled in Parliament, and the requirement has not been put into force. That is something the committee might wish to look at.

[David Christopherson, NDP, Hamilton Centre, ON]

Would the clerk be sure to bring that item back for us for discussion, please?

I know I'm going to run out of time soon, but I'll move on to Canada Post. You're doing an audit right now of Canada Post, but the government has announced that they're reviewing the entire mandate, and a report is to be tabled by the end of the year. As well, we have Bill C-14 currently in the House; it would have a major impact on the revenue sources of Canada Post. It really is starting to privatize it; it's watering down the exclusive privilege that exists right now for all mail so that Canada Post doesn't cost taxpayers any money.

With both of those things happening at the same time, will there be any significant impact on your audit and its relevance?

[Sheila Fraser]

On the financial audit, obviously not. On the special examination, it's potentially possible. We would potentially look at some of the same issues that a mandate review would look at, though, of course, our examination is done taking into account the mandate as it has been given to the crown corporation.

We have had many cases--one would be CATSA, for example--in which there was a mandate review while we conducted our audit at the same time. The two reports were complementary in a way, because the mandate review can go into much broader issues, and we would flag certain issues as well, and then government and Parliament could take all of that into consideration.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

I've run out of time--public health, air transit safety....

[The Chair, Liberal, Shawn Murphy]

Before we go to Mr. Lee, I just want to clarify something that arose during that question: with regard to the special examinations, did you indicate that in 2004 the government directive was that the crown corporations were to post the special examinations on the website?

[Sheila Fraser]

In the budget of 2004 there was an indication that government was going to bring in a requirement through, I believe, the Financial Administration Act that crown corporations would table their special exams in Parliament and would make them public. That particular requirement does not exist. There was never any follow-through on that, but the crowns are posting them on their websites voluntarily.

[The Chair, Liberal, Shawn Murphy]

So as far as you're concerned, all the crowns are putting them on their website, but they're not tabled in Parliament.

[Sheila Fraser]

That's correct.

[The Chair, Liberal, Shawn Murphy]

With your plan to do this annually, you will actually be reporting the summary of the special examinations to Parliament but not the actual special examinations themselves, which are available on the website.

[Sheila Fraser]

That's correct.

[The Chair, Liberal, Shawn Murphy]

Thank you very much.

Go ahead, Mr. Lee.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Thank you.

I noted your report, in chapter 1, on the management of fees. It's good; it reads well.

About 15 years ago, the Financial Administration Act opened up a new way of charging fees. This, for the bureaucracy of government, is of course a vehicle to charge fees and bring in revenues. At another committee of the House, the Standing Joint Committee on Scrutiny of Regulations, there's been an ongoing running battle over fees. As you point out, the revenue from fees is not supposed to exceed the costs of the program. One of the agencies we chased was Parks Canada. I note you gave them a reasonably good mark, even though they charge fees for entry when the statute that governs them says that Canadians have a right to use the parks; we can't figure out, if there's a right to use the park, why they feel they can charge a fee. But that's kind of a theoretical thing that goes on.

We may be looking for your guidance here. A recently decided Supreme Court of Canada case approved Parks Canada's charging a percentage on the alcohol sales in Banff National Park restaurants. The committee felt that was a tax. The Supreme Court of Canada accepted that it was a fee. The bureaucracy is pushing the envelope here.

There's another case now, which will probably go to the Supreme Court, involving the Broadcasting Act, the broadcasting licence fees. The committee found that millions of dollars of excess revenue over the costs of managing the licences constituted a tax. That will likely go to the Supreme Court now.

The committee has forced the agencies to give back fees or give credits where they've charged illegally in the past. The problem we're running into now is that whether this is a fee or a tax, how do we resolve this problem where the government wants to charge like a tax? For example, for the broadcasting licences, they charge the part II fees, or millions and millions of dollars, where it only costs them about one million dollars a year, or half a million, to run the thing.

How are we supposed to deal with that in Parliament? And how will you come to deal with it as you look at the appropriateness of a fee when it's not a tax? If it's a tax, Parliament will approve it. But a fee is not approved by Parliament; it's simply struck by the bureaucracy.

[Sheila Fraser]

As we point out in the report, there are two kinds of fees. One is based on the costs. For example, the consular fees, which we mentioned, shouldn't exceed the costs of providing those services. There are other fees, though, that are based on the value of the good or the opportunity that is being provided through, for example, a licence.

In the report, we mention licences that are provided to fishermen where the fee that is being charged takes into account the value of the catch. You're providing someone with an economic right, if you will. Those fees should be based not on the costs necessarily of the Department of Fisheries and Oceans to manage this process but on the value of the right you're giving to this individual or corporation.

What we're saying in the report is that for many of these fees, government doesn't know--hasn't updated or doesn't know--either the actual costs when it is a cost-based fee or the value of the right that is being conferred. For example, if we talk about catches, the values of catches have significantly changed from when the fee was originally established. That needs to be updated to see if it is still reasonable. In fact, the values of some catches may have gone down whereas others have gone up.

So there are the two kinds of fees. We've looked to try to see how the departments are establishing their costs and whether they have good management systems in place. Most of them in this audit did not. They didn't take into account the full cost of the services they were providing. It doesn't mean they necessarily have to charge the full costs of the services, but they should at least know. It should be an element that they consider.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Then it would be really helpful in our law if, when we passed it, we clarified the two different types of fees. I mean, in the absence of a really clear legislative base for this fee-charging, which is causing some confusion, and in an effort to protect the citizen from unjustified excessive fees....

Anyway, that would be a parliamentary approach, I think, but it would conflict with the administration where you have bureaucracies intent on raising revenues however they can get their hands on them.

[Sheila Fraser]

The other point I would add, too, is that we make note in the report of the User Fees Act and of the fact that there have been very few fees. Under that act, any new fee or modification to a fee goes through quite an extensive process, including a parliamentary process. There are very few fees that have gone through that process, and in fact all the fees that were in place at the time the act was passed are grandfathered, if you will, or not subject to it. So there may be something there as well.

We think there needs to be a review done of some of the issues around the act and consideration given perhaps to modification.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Yes, that was an initiative of a private member that actually worked out rather well. It was the member for Etobicoke North.

Thank you, Mr. Chairman.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Lee.

Mr. Williams, you have seven minutes.

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

Thank you very much, Mr. Chairman.

Before I ask my questions, Madam Auditor General, there is another question. A few weeks ago there was a little controversy over your being required to follow the communications programs of the Government of Canada. Mr. Wrzesnewskyj is going to be bringing forth a motion that you table these regulations. Do you think it's appropriate that you do that, rather than that we go directly to the PCO?

[Sheila Fraser]

Mr. Chair, there is a communications policy in force, and it is actually on the government website. I'd be quite glad to print it off and send it to you and tell you what I think are the problems with it.

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

Maybe Mr. Wrzesnewskyj should get that on his budget.

[Sheila Fraser]

There are conditions within that communications policy that apply to all officers of Parliament and that we think are not appropriate. I would be more than pleased to give my analysis of that to the committee.

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

So basically you're saying that if it's already on the website, a motion to produce it is a little bit moot?

[David Christopherson, NDP, Hamilton Centre, ON]

I have a point of order, Mr. Chair.

[The Chair, Liberal, Shawn Murphy]

Give us your point of order, Mr. Christopherson.