Public Accounts Committee on May 27th, 2008

[Rodney Monette]

No. In fact some of them welcomed it, because they felt there were some issues here that needed more visibility and reporting so that if things need a government decision or need to be cleared up, they can be cleared up.

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

Mr. Morgan, what about the Treasury Board? Are they going to police the rules that they are supposed to police as a central agency, or are they just going to throw these rules out there and say we hope you follow them?

[John Morgan, Assistant Comptroller General, Financial Management and Analysis Sector, Treasury Board Secretariat]

Clearly, we have to monitor for compliance with policies, and we do that through our management accountability framework. I believe Mr. Monette referred to that in his opening remarks, that we will be commenting on the degree to which departments have been complying with our guidance. One key thing we've issued just recently is the updated guide on costing, which outlines in detail the tools that can be used in costing the full cost of programs, and with that better information departments will then be able to set their user fees appropriately.

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

You use words like “we're going to monitor”, and Mr. Monette, you say you're going to have discussions and you're going to engage.... Where does the buck stop? Who is calling the shots to ensure that the rules are followed? Is it the department to the deputy minister? Is it the central agency? Is it the Comptroller General? Where do we go to press the button and say this is going to get fixed?

[Rodney Monette]

I guess, at the end of the day, Mr. Williams, every deputy minister and accounting officer has to make sure that they've put all the right policies and practices in place, and at the end of the day, if that isn't happening, it would be that accounting officer who would have the ultimate responsibility for the systems and so forth in their--

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

So you're saying it's not you.

[Rodney Monette]

Well, I have a pretty important role to make sure they have the tools and in getting the right people together and giving the issue visibility. And I feel accountable to this committee to come....

Honestly, I haven't spent a lot of time on this issue. I have since the Auditor General's report came out, but it is important for me to be able to come to this committee at some point down the road and say where we are in the action plans. If there's something across government that's preventing people from doing this right, what is that? If there's something that needs to be fixed.... We're going to report to the president in the fall if we find some more general, broader kinds of issues.

I have the responsibility to bring that forward and give it a profile.

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

Mr. Rigby, you mentioned that the consular service, in essence, is an insurance fee that you charge. Then you mentioned in your opening statement about the Lebanon situation. What did the Lebanon evacuation cost us?

[Stephen Rigby]

I would ask my colleague, Mr. Crosbie, to comment on that.

[William Crosbie, Assistant Deputy Minister, Consular Services and Emergency Management Branch, Department of Foreign Affairs and International Trade]

The overall amount for the Department of Foreign Affairs is approximately $65 million that we were reimbursed.

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

No, I asked what it cost you. I don't want to know how much you got reimbursed, because there seems to be a difference between how much you got reimbursed and what it cost you. My question is what it cost, within a few million. I don't need it down to the last nickel or dime.

[William Crosbie]

The cost was $65 million.

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

That was significant. That would have eaten a big chunk of the insurance surplus you had built up on the $25 per application.

The other thing, of course—and I'm trying to get my mind around this, Mr. Chair—is that you had a very large increase in volume because of the cross-border issue with the United States. I'm trying to figure out, if we have a rule saying you can't make a profit at this and the volume doubles, what they are supposed to do.

So I think we have an onus ourselves, Mr. Chairman, to try to answer that question and give some direction to departments if this type of situation happens again, because we can't just dump on them if all of a sudden revenues go up without any anticipation and the costs remain the same. They're going to move into a profitable situation, and I think we have a responsibility to meet that as well.

I'm concerned that some departments don't seem to care.

[The Chair, Liberal, Shawn Murphy]

You can ask one more question.

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

I remember a little while ago, a few years ago, Mr. Chair, I think it was the Department of Agriculture or CFIA that was charging fees according to the cost. This was for approvals to manufacture animal feed. If they had ten applications a year, then the cost was spread across ten applications, and if they had 150 applications, then they would spread the cost over 150.

Not knowing how many applications they would receive, not knowing how many passport applications you're going to receive, do you have a policy or any thought as to how to ensure you can capture the cost without making a profit? Do you have any policy on this issue, Mr. Rigby?

[Stephen Rigby]

There are a couple of things.

On the volume increases for passports, obviously as the number of passports in circulation goes up, the amount of revenue goes up, but so does the burden on the consular program, because while not everybody who gets a passport travels extensively, a lot more do, even under those who are getting them by dint of the western hemishere travel initiative.

We have a couple of challenges. Number one is that we have got to be able to clearly capture the increased burden on the consular program, and that is one of the things we're doing in response to the Auditor General's examination. We have a system today for time capturing, but as I've looked at this, I think there are improvements that can be made to make sure we're capturing all the costs.

What we have seen over the last few years—and this goes back to one of the questions I was asked earlier—is that increasingly the consular cases are getting much more complex. So it's not just a question of the consular officers who are being burdened with this, but there are other officials in the department who also have to work on consular cases.

One of our challenges is to make sure the data capture we have encompasses all of that.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Williams.

Thank you, Mr. Rigby.

Now Mr. Christopherson, then Mr. Cullen. Mr. Christopherson, you have seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Mr. Chair.

Thank you all for your attendance here today.

Mr. Monette, in your opening comments you said that on your return to the Office of Comptroller General after a few years, you noted the significant change in how user fees are managed. I assume from the way you worded this that you stumbled on this independently, not even being aware that the Auditor General's office was looking at this.

[Rodney Monette]

Mr. Christopherson, I think what I meant to say there is that the last time I was in the Comptroller General's office, which was 2001, there wasn't the same focus on service standards, and now 85% of the fees have service standards in performance information. There is more of a focus on costing and providing information, and so forth.

I have been on the job for about six months now. When this issue came up through this spring and I looked at it, it struck me—

[David Christopherson, NDP, Hamilton Centre, ON]

Sorry, when it came through this spring--that would be how?

[Rodney Monette]

That would be when we were preparing this spring for the Auditor General's report.

[David Christopherson, NDP, Hamilton Centre, ON]

You knew that the Auditor General was....

Here's my concern. I read this, and I thought that if this came in cold, if this is a guy who got into the department, started looking around, and is raising an issue.... It's a small matter, but it was the AG that raised this issue. You were responding to it. It wasn't your brilliant findings that suddenly brought this to light. That's my point, because this wording suggests that.

[Rodney Monette]

That's right.

I'm sorry, I didn't mean to suggest that.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you.

My second question is for the Auditor General's staff, for Mr. Timmins. Paragraph 1.15 on page 6 in chapter 1 of the Auditor General's report refers to the Supreme Court of Canada decision. Could you or somebody please outline, in layperson's terms, what that decision was and what the implications are for the matter we're dealing with here today?

[Clyde MacLellan]

Mr. Chair, that refers to a decision called the Connaught decision. It's a particular case that was recently ruled on by the Supreme Court of Canada. It's an obviously long decision, but to try to simplify, for any fees found to be part of a “regulatory scheme”--that is the phrasing used--the fees cannot exceed the cost of providing that regulatory scheme.

What does that mean in terms of implications for different departments? Generally, when we performed our audit, as Mr. Timmins indicated in his opening statement, we classified fees into two categories: those that were cost-based fees and those that were essentially value-based fees. This particular case could challenge that thought process by arguing that if any fee, regardless of whether it was cost-driven or value-driven, was found to be part of a regulatory scheme, the fee could not exceed the cost of providing that scheme.

We obviously did not have time to relook at all the fees, because this decision was very late in the performance of our audit. We simply raised it as being something that has recently happened and that must be considered by all departments and the central agencies in terms of their role in providing guidance.