Thank you, Mr. Chair. We are very pleased to be here today to discuss our chapter on special examinations of crown corporations, particularly the examination of the Great Lakes Pilotage Authority. As you mentioned, I'm accompanied by Nancy Cheng, assistant auditor general.
Crown corporations report to Parliament through the minister responsible. Under part 10 of the Financial Administration Act, we conduct periodic special examinations of crown corporations. A special examination provides an independent opinion to determine if the corporation has reasonable assurance that its systems and practices allow it to safeguard and control its assets, manage its financial, human, and physical resources economically and efficiently, and carry out its operations effectively.
We note as a significant deficiency any weakness in the systems and practices of the corporation that could prevent it from reaching its objectives. Our special examination reports are thus a source of important information that parliamentarians can use to hold crown corporations to account.
For the first time, our May 2008 report included a chapter that, among other things, summarized eight special examination reports and gave an account of the progress of our special examinations of 46 crown corporations. We continued the practice this year and presented the main findings of our reports on eight other crown corporations. We are very pleased that the committee is interested in these reports.
Of the eight special examination reports summarized this year, five did not find any significant deficiency. We noted one or more significant deficiencies in our reports on three crown corporations: the Federal Bridge Corporation Limited, the Great Lakes Pilotage Authority and Via Rail Inc. In each of these three cases, we brought our report to the attention of the responsible minister.
I will now highlight the findings of our special examination of the Great Lakes Pilotage Authority, one of the two entities of particular interest to your committee today. This federal crown corporation reports to Parliament through the Minister of Transport, Infrastructure and Communities.
We conducted our special examination from February 2007 to January 2008. We found a significant deficiency in the current system of exempting Canadian ships from compulsory pilotage. The Authority does not have an effective mechanism for determining whether Canadian masters and deck watch officers have the competencies and qualifications needed to pilot their ships safely without the help of Authority pilots in compulsory pilotage areas. The Authority issues exemptions on the basis of annual declarations by shipping companies, stating that their officers meet the requirements set out in the Great Lakes Pilotage Regulations.
Pilotage contributes to the public safety by minimizing the risk of accidents and environmental damage. More than 60% of ships navigating on the Great Lakes are Canadian vessels exempted from compulsory pilotage. The Authority therefore needs to have assurance that Canadian masters and deck watch officers are competent. The current system of exemption dates from 1972. It was intended to be temporary but has remained in force despite many studies and recommendations calling for greater stringency.
In our special examination we have noted good practices, for example, the authority's regular discussions with various stakeholders from the shipping industry to ensure its service meets users' needs. We have also identified opportunities for improvement in other areas, notably the tariff-setting process.
I am pleased that the authority has accepted all of our recommendations.
Concerning the exemption system, the authority expected that amendments to the regulations would be published in 2008. I would note for the committee that we have not audited the measures taken by the authority since the end of our special examination in January 2008. The authority has informed us that it expects the Great Lakes pilotage regulations to be amended, and that once they are, a process for pilot certification will be fully operational within three years.
The committee may wish to request details from the authority on the measures taken since our special examination, including information on the interim measures put in place to ensure safe navigation.
Mr. Chair, this completes our opening statement. We would be pleased to respond to any questions that committee members may have.
Thank you.