Public Accounts Committee on Feb. 10th, 2009

[Sheila Fraser]

We are aware of this situation because other parliamentary committees have looked into this. I know that internal audit services have conducted several audits. CRA is not alone in being affected by this problem. A number of other departments are also quite behind in issuing paycheques. I'm prepared to submit the letter to the committee, along with copies of the studies that have been carried out. We did not feel that it was necessary to do a specific audit in this case, since the problem is fairly well known. We are currently thinking about doing an audit of several rather outdated systems, including the remuneration system, and about examining the plans formulated to update these systems.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

My question ties in with a meeting attended by your officials and your report on conflicts of interests and the contracting process. What is your opinion of the Executive Interchange Program currently used in the field of IT management? One of the most lucrative IT contracts awarded by PWGSC totals between $400 million and $500 million. There is even talk now of awarding contracts valued at almost $1 billion. I'm a little concerned about the contracting process. There is an appearance of a conflict of interest.

Could you tell us more about how this program works?

[Sheila Fraser]

I'm not familiar with the full scope of this program, but I do know that it is important to the government. It involves exchanges of expertise with private industry, but it can also apply to other institutions. Some public employees have an opportunity to work in the private sector for a few years before coming back to government. I have not audited or analysed this program, but I do believe that it is a worthwhile initiative.

Having said that, it is important to make sure that there are no conflicts of interest, that the departments arrange it so that employees do not find themselves in a position where they head up contracts or select contracts that can affect their employer. We are mindful of conflicts of interest and next year, we will be undertaking an audit on the subject.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Thank you very much.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mrs. Fraser.

I want to mention to members that if there's anything in the examination that the Auditor General or the commissioner does not have the answer to right at their fingertips, I urge members to ask for an undertaking that the Auditor General provide the information to the clerk at the first opportunity. There's nothing wrong with that, and I encourage its use.

Mr. Christopherson, seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

Thank you again, and welcome back. Off the top, correct me if I'm wrong, but I think this is the first time we've had the Commissioner of the Environment and the Auditor General present both reports to us at the same time.

[Sheila Fraser]

That's possible. We have tabled the two reports together before, but I believe this is the first time we've both appeared at the public accounts committee together.

[David Christopherson, NDP, Hamilton Centre, ON]

I wonder if it was your intention to continue, and the reason I'm asking is that the environment is such a huge, overarching issue, and the concern is that it could swamp other issues that by comparison don't seem as important. But we know that within these audits are important safety issues and matters that relate to families and communities, etc. So I would ask you to give that some thought. It's hard enough to get attention to a lot of these issues without raining on your own parade, and it also makes sure there's proper attention being given to both.

I assume, Commissioner, your reports automatically go to the environment committee, and they would do the same as we do with the public accounts committee?

[Scott Vaughan]

That's absolutely correct.

[David Christopherson, NDP, Hamilton Centre, ON]

Great. Thank you.

My question is in regard to chapter 4, “Managing Risks to Canada's Plant Resources--Canadian Food Inspection Agency”.

Auditor, I know that you're not known for hyperbole, but you've written, “Our audit findings are serious.” My experience is that when you say that, it makes sense for us to be equally serious about it.

There's a question I asked when we had the briefing last Thursday. What I'm finding is that the government is spending more time, money, and effort on inspecting food that is leaving Canada to go to another country than we are on inspecting the food that's being imported into Canada and is finding its way to our dinner plates. Is that correct?

[Sheila Fraser]

Can I just make one clarification? This audit was not about food; it was about--

[David Christopherson, NDP, Hamilton Centre, ON]

Plants.

[Sheila Fraser]

--plants and the possibility of pests and diseases. One of the reasons we looked specifically at the plant program was our impression in interviews with agency officials that this program was getting actually less attention than food was. We thought that we should probably focus on one that may have a higher risk.

On the question of the exports, this was mentioned to us in the audit. We have a mention of that. The employees felt that when they had limited resources, they should focus on the export side rather than the import side, but we didn't go into an analysis of the effort that was being put into one or the other. These were simply things that were reported to us in interviews.

[David Christopherson, NDP, Hamilton Centre, ON]

Yes, I'm quoting from your report on page 2: “We were told that inspection of plant imports competes with pest surveys and export certification for inspectors' time and that exports are a higher priority.” I grant you that a plant is not necessarily food, but in many cases it becomes food.

I have a quick question. You also said in your news release from last Thursday: “At the time of the audit, the backlog of uncompleted assessments amounted to more than the agency can normally complete in a year.” Could you expand on that for me?

[Sheila Fraser]

Sure. I think the backlog was around 45 risk assessments. They do about 25 in a year. These are assessments that the people within the agency are asking be done so that they can better assess the risks going forward, be it new diseases or new pests coming into the country, and how serious those are. Some that have been requested actually go back several years.

Mr. Maxwell might want to elaborate.

[Neil Maxwell, Assistant Auditor General, Office of the Auditor General of Canada]

Yes. Thank you, Chair.

One of our concerns is that it's not just a backlog but a growing backlog, so they can't deal with the assessments as quickly as requests come in. The nature of the concern is simply that these are new pests--new plants, pests, and illnesses--and obviously there's a risk there. The longer you wait for the assessment, the more time elapses in which that action isn't actually happening.

[David Christopherson, NDP, Hamilton Centre, ON]

What happens when it gets to a ridiculous point? Obviously, if you can think that through exponentially, you're going to reach a certain point where you couldn't catch up in five years. Have they had a habit of just sort of hitting the reset button or do they ignore 50% of them? Or is your concern that you're not sure what they do and these things remain unexamined?

[Sheila Fraser]

Yes. I don't believe we've gone back in time to see how this has been built up and if at one point they just kind of cleared the board. I don't think that has happened, but again, if it's an increasing number, it means they don't have that information base to be able to adequately assess risk.

[David Christopherson, NDP, Hamilton Centre, ON]

Just before I leave this, for the edification of colleagues on committee, the departmental performance report of 2007-08 provides a chart on page 18. It goes through all their previous performance and what they had hoped to achieve in 2007-08, and in at least half of them they did not meet their goal.

Some of them are very disconcerting: for instance, things like the extent to which the agency data indicate the entry of new regulated diseases and pests into Canada. The target was no entry of new regulated diseases and pests through regulated pathways. In 2007-08, there were three; in 2006-07, there were two entries; and in 2005-06 there were four entries. So four, two, three...at best they're holding. They don't seem to be getting far on that one.

With regard to change in the presence of plant diseases or pests beyond the regulated area, in 2005-06 there was some increase, in 2006-07 there was some increase, and in 2007-08 there was increase. Performance met? No, it hasn't been met for the last year.

Now these—and I'll just do it quickly, Chair—are a number that talk about the compliance rate they expect from industries that are regulated; for instance, “Extent to which bulk-blend fertilizers comply with efficacy standards and fertilizer-pesticide samples tested, comply with safety standards (non-biotechnology product)”. I don't pretend to understand that, but I'm assuming it's important or they wouldn't be measuring it. And it's in the category of “Industry complies with federal acts and regulations concerning Canada's crops and forests”. Again, in 2005-06, 82%, then 78%, and now 83%. Their target was 95%.

Am I done completely?

[The Chair, Liberal, Shawn Murphy]

No, if there's a question in there.

[David Christopherson, NDP, Hamilton Centre, ON]

I would just emphasize this category. There are a number of them that are the same way, where they're just not meeting their own planned expectations, and somebody has to do something.

Thanks, Chair.

[The Chair, Liberal, Shawn Murphy]

Do you have a comment, Ms. Fraser or Mr. Vaughan, any comment?

Okay. Thank you very much, Mr. Christopherson.

Mr. Saxton, you have seven minutes.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Mr. Chair.

First I want to commend you, Auditor General, for this very thorough and insightful report. It rightfully points out the accomplishments of government as well as areas in need of improvement.

The report points out that transfers to provinces and territories represent a significant portion of federal government spending. I think 23% is what you said in the report. You also point out that moneys transferred to other levels of government depend on existing accountability mechanisms to ensure they get to the right place. Can you describe how provinces and territories are held accountable for the use of these funds?

[Sheila Fraser]

Thank you, Chair.

As we mentioned in the report, there are certain programs of specific ministers and departments where there are accountability and conditions attached to them: labour market agreements, for example. That's about $5 billion, so in those programs, the provinces and territories would report back to the federal government.

For the bulk of the other programs, though, and the very large transfers—like equalization, health, the health transfer, the social transfer, and these trust funds—the moneys would go into the revenue funds or general funds of the provinces, which would be subject to audit by their legislative auditors and would of course be subject to the spending decisions of their legislatures and accountable back to their populations. So we have been told that the federal government in many cases has moved to these trust funds and assumed that that accountability to their own populations would suffice.

[Andrew Saxton, Conservative, North Vancouver, BC]

Before money is transferred to other levels of government, there are usually expectations or conditions placed on that money. Can you describe how this is usually done?