Public Accounts Committee on May 8th, 2008

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, and thank you, Chair.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson, Ms. Fraser.

Mr. Holland, you have five minutes.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Thank you, Mr. Chair. Thank you, Madam Fraser.

I'm going to start, if I can, with chapter 5, “Surveillance of Infectious Diseases”, because we haven't had an opportunity to touch upon it.

One of the concerns coming out of SARS in 2002 was about the sharing of information and having formal protocols between the provinces and the federal government to ensure that if there is an infectious disease, we have a rapid response and that information is shared instantaneously. I was disappointed to see that there continue to be weaknesses there.

Can you expand upon those and maybe tell us what response you've received from the government concerning what plans there are to move the formal agreement beyond just an Ontario agreement?

[Sheila Fraser]

As I was mentioning earlier, the agency has surveillance systems in place and is receiving most of the information it needs, but it's really on a voluntary basis or at the goodwill of the provinces.

We believe it really needs to have those formal agreements in place, so that it's very clear what information should be shared with the agency, They should address privacy concerns, detail the level of information that's required, and define what standards should be used to provide that information, so that the agency will get the correct and accurate information on a timely basis from the provinces.

As well, we would have expected to see in place protocols with the provinces about rules and responsibilities in case of a major outbreak: who does what and who calls whom and when. Those too have not been formalized.

[Mark Holland, Liberal, Ajax—Pickering, ON]

And that could have a serious detrimental impact on response time and the ability of our nation to respond to a major infectious disease.

What response has the government given to these concerns, because it's something that rather jumps out at me?

[Sheila Fraser]

The agency has agreed to work on this and is doing so. They talk about the obvious complexities of working in a federal-provincial area and the time it takes to put all these agreements in place. We recognize that, but we certainly would have expected that since 2003 there would have been more than one.

[Mark Holland, Liberal, Ajax—Pickering, ON]

And they don't have an end date, a timeframe they're working towards?

[Sheila Fraser]

They have really not indicated to us an end date.

A new thing, too, is the requirement now of the World Health Organization to provide information on a more timely basis. I believe this comes in, in 2012 or 2013. Canada will have an obligation to provide health information on a very timely basis to the World Health Organization, and if our national reporting isn't efficient, we might not be able to meet those requirements.

[Mark Holland, Liberal, Ajax—Pickering, ON]

That's something we may want to come back to.

Because it hasn't come up as well, I wanted to talk about some of the official residences, namely, 24 Sussex. You mentioned in the report that it's in a terrible state. This is a symbol of Canada, if you will, and it's owned by the people of Canada.

I know the Prime Minister issued a statement immediately after your report that he would not be moving out of 24 Sussex. I'm concerned about that, because you mentioned in your report that if there isn't a period of time--12 months or 15 months--that 24 Sussex is not occupied and given over to repairs, it is going to become increasingly costly, that the deterioration will accelerate and we'll be into an even larger problem.

Can you talk to us a little bit about the consequences of not taking action, how much more we may have to pay the longer we put this off, and how grave the situation is?

[Sheila Fraser]

Obviously, these are estimates and reviews that have been done by the National Capital Commission. They have actually done quite an extensive study of the residence and the repairs that are required there. They are significant. As we mentioned, there have been no major repairs to 24 Sussex for 50 years, and most of the systems are very old and are at full capacity. As well, certain of the areas that are needed for functions, like the kitchens and the laundry as well, are no longer efficient and really need to be updated.

There are costs, of course, associated with the state of the residence right now. The windows, the heating bill--there are air conditioners in the windows that weaken the frames even further and there is a great loss of heat during the winter. There is no immediate danger or questions of safety for the Prime Minister and his family--that, the National Capital Commission ensures--and the Prime Minister indicated that he had no intention of moving before the next election.

It is really up to the commission and the Prime Minister's representatives to determine a timing that would be appropriate. Given the nature of the repairs that have to be carried out, though, it is quite clear that for their own safety it would be preferable to have the family relocated to another residence for a number of reasons. To live in a house that is undergoing repairs is never fun, but when you have issues like asbestos and all the rest of it, there can be health issues as well.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Holland.

The last question will go to Mr. Wallace for five minutes.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

It is my pleasure to be here. I'm not normally part of this committee.

Ms. Fraser, it's nice seeing you again. The last time we talked we were talking about accrual accounting or something very exciting.

I want to ask you a really technical question. It's nothing political, in a sense. It's simply for my edification on the fees and how it operates and how your audit works. If I understand what you've written for us here correctly, there is a User Fees Act that came in during 2004. Regarding the fees that you analyzed from the 13 different departments that are in here, you seem to be quite satisfied with six. With others, you thought there could be improvement.

Are you evaluating them on that act, or are you evaluating fees in comparison to that act? My understanding is if there were fees implemented prior to that act, the act does not apply. Am I accurate on that? Can you tell me how you analyzed the fees in relation to that act?

[Sheila Fraser]

You are correct that the fees that were in place at the time the act was introduced are not subject to the act. It is only if there is a new fee or a modification to a fee that it would then become subject to the User Fees Act.

[Mike Wallace, Conservative, Burlington, ON]

The audits you did here are related to new fees, or are they also related to older fees?

[Sheila Fraser]

Some are new fees as well, and there is actually one in there that is not technically a fee, that is a contract base. That is the charge for medical marijuana.

[Mike Wallace, Conservative, Burlington, ON]

When you were doing your analysis, because the User Fees Act dictates that it has to be cost recovery and no more than cost recovery, can there be some margin in there? How much overhead can be applied? What overheads can be applied?

[Sheila Fraser]

In fact, it is not only from the act. I believe it is as well from government policies, but also from court decisions where fees have been challenged and the court has indicated that there has to be a reasonable relationship between the costs incurred and the fee. If not, if the fee is much higher than the costs, it can then be deemed a tax, and only Parliament can impose a tax.

[Mike Wallace, Conservative, Burlington, ON]

But do fixed overheads get applied to the fees?

[Sheila Fraser]

Absolutely. We talk about full costs. Not all departments are calculating their costs, nor their full costs. Parks Canada would, for example, so overheads would be allocated to their costs of service.

[Mike Wallace, Conservative, Burlington, ON]

Just for my understanding, then, let's take the passport office and consular fees, or whatever you call them. I think an adult application these days is 90 bucks, or something like that. I don't even know the amount, but it's in that range.

[Sheila Fraser]

It's $87.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

There's been pressure by people to get their passports, so revenues have increased over the last couple of years. On the revenue side of the equation, there's obviously an influx of cash, and we have increased the overhead somewhat, but overall, the influx of cash may be rising faster than the overhead costs. So when I see your analysis of what the passport office is doing—and they're one of the ones who you think need to do work in terms of evaluating what fees they should charge—does your audit take into account what's happening in the marketplace, in terms of the revenue side being slightly skewed just because there's been a run on passports?

[Sheila Fraser]

Let me explain those particular consular fees. The fee was approved in 1995. It was for $25, which was included in the cost of the passport. When the fee was approved, it was very clearly laid out what activities would be included or could be charged for by this fee. To be quite honest, it really doesn't have a whole lot to do with the passport; it is for services provided to Canadians when they travel abroad. For example, I guess the most serious costs that have been incurred lately were for the evacuation from Lebanon and for aid that may have been given to Canadians during the tsunami. So in the fee approval, it listed the kinds of costs and said that Foreign Affairs could not charge for costs incurred on behalf of other departments; it had to be for their own consular costs. What we did was to look at what those costs of services are now, and we found that in fact the revenues from that $25 fee exceeded those costs.

What probably happened is that when they initially calculated it, they said that the costs of consular services were about $37 million, and as they were issuing about 1.5 million passports at the time, they came up with a $25 fee. Obviously, the number of passports that have been issued has gone up a lot. They're still collecting that $25 fee, but the moneys allocated to cover the costs of the consular services have not increased at the same rhythm. That's why they need to go back and look, I would think, first of all, at the basis of the costs that should be covered by that fee, and then redo the estimates of passports that will be issued, given the new volume.

[Mike Wallace, Conservative, Burlington, ON]

I see.

My final question, if I have 30 seconds, is that in each section of your report you have the response from the department, which you've printed in your report.

Can I conclude thereby that you accept their answer and agree with the approach they're going to be taking, or are you just reprinting what they said?

[Sheila Fraser]

We basically print what they say, unless we know there is something inaccurate in what they're saying. Then we indicate to them quite strongly that we would like them to change their response, or we would have to put a rebuttal or rejoinder in the report to indicate that.

What we really look for is this committee, of course, to ensure that they produce detailed action plans laying out how they are going to address this. Because their responses are very succinct, the detailed action plans are very helpful to see how they are actually going to address this.