Public Accounts Committee on Nov. 4th, 2009

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

I'm going to move on to chapter 2, “Selecting Foreign Workers Under the Immigration Program”. Under the temporary foreign workers program, what is being done to curb abuses in the system against both employers and workers?

[Sheila Fraser]

We noted two issues in our audit with temporary foreign workers. One is the fact that there is no assessment of the genuineness of job offers. Labour market opinions are done, but they have more to do with the effect of having foreign workers take positions rather than assessing whether those jobs are valid.

The second issue is that very often conditions are placed upon the employer, such as salary or lodging. There is no follow-up done to ensure that these conditions are being respected.

I understand the government has recently introduced proposals to amend the regulations. I think that would address in large part the issues we raise in this audit.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Who is responsible for assessing whether job offers are bona fide for the temporary workers?

[Sheila Fraser]

It is the responsibility of Citizenship and Immigration Canada.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Do you think it's possible that work permits for foreign workers are issued for jobs that don't exist? How can this be stopped?

[Sheila Fraser]

I think there is a risk. There is always a possibility that work permits are issued for jobs that are not authentic. Much clearer guidance certainly needs to be given. We noted in the report that there was a fair bit of confusion about whose responsibility this actually was. Clear direction needs to be given to Citizenship and Immigration and HRSDC so they work out between themselves who will do this work and actually assess if the job appears to be valid.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Are follow-ups done on employers to ensure that they have complied with the terms and conditions?

[Sheila Fraser]

Certainly at the time we did the audit there was no follow-up, but as I mentioned, there are proposed new regulations that would address that issue.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

In your opinion, could the temporary foreign worker program be abused by Canadian employers using it as a ruse to bring in relatives, bypassing family reunification rules?

[Sheila Fraser]

That is certainly a possibility, given the very long delays under family reunification programs. People may attempt to bypass that and bring in family members under other programs.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Is there currently a strategy to address the backlog of applicants? You note that it's 600,000; we've heard that it's 800,000.

[Sheila Fraser]

The government recently introduced changes to the job categories under which people can be admitted into the country, reducing them from over 300 to 38. There was an expectation that that would reduce the number of applicants.

We note in the report that the backlog of applications prior to the introduction of these new categories has been reduced, but a backlog has been created under the new system. So there are currently close to 600,000 applications in total in the backlog.

The government expects that under the new system they will be able to deal with applications between six and 12 months. We have strongly encouraged the government to track that, because initial indications seem to indicate that the number of applications are still very high and very few are actually being refused. So quite rigorous tracking needs to be done to ensure that another backlog isn't being created and, if necessary, other measures are taken.

[The Chair, Liberal, Shawn Murphy]

Thank you, Ms. Crombie.

Madame Faille, s'il vous plaît.

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

Thank you, Ms. Fraser, for your report. Judging from its tone, you seem somewhat concerned about how departments are managing and assessing their programs. Specifically, of the 23 programs evaluated in chapter one, inadequate data was available in 17 cases.

As you also know, substantial sums of money have been invested in computer systems. Is there a disconnect of some kind between the needs defined in the systems and the way in which programs are designed? Is that possible, or is it that the groups within the departments responsible for designing or developing programs do not communicate with technology management officers in order to define needs and gather the required information?

You also concluded in chapter one that of the departments audited, several expressed some concern about not having the capability needed to evaluate direct program spending, as required by the act. Do all departments share this concern?

You also seem concerned about the fact that departments call on contractors to evaluate direct program spending. Can you explain the government's reasons for taking this approach and give us your assessment of the measures taken by the government to reduce this practice?

These are my questions concerning chapter 1.

I also have some questions about the Canada Revenue Agency. There is currently a significant backlog of necessary technical amendments and the last income tax technical bill was passed in 2001. Can you explain to us the reasons for this delay? What is preventing the department from tabling a technical bill?

You also gave us a specific example involving non-compete agreements. For one thing, the failure on the part of the Canada Revenue Agency to act on tax law changes deprives us of substantial tax revenues, which opens the door to possible abuse. You also note that the Minister of Finance has announced his plans to propose amendments to the Income Tax Act, to address the case of businesses that had signed non-compete agreements. I'm thinking here, among other things, about the case of Mr. Black. This amendment, along with 150 others, was never introduced and at this rate, many files will not be reviewed. Considering the delay in reviewing CRA files, the agency will not be able to recover the lost tax revenues.

Can you give us any other examples? I flagged this particular issue because substantial sums of money are involved, but I was also wondering if technical amendments of this nature would affect some of the dormant business accounts at CRA ?

[Sheila Fraser]

Thank you, Mr. Chair.

With respect to chapter one, we observed that the problem of not having relevant, complete data has existed for a very long time. We did not look at whether the problem had anything to do with information technology. Obviously, technology is one way of obtaining this information, but I believe that fundamentally, the problem is one of clearly identifying performance indicators and the data needed and, of course, of putting systems in place subsequently.

One also has to understand that in the case of a number of programs, it can be difficult to evaluate effects with specific figures. The evaluations may be more qualitative in nature. However, I think that objectives and performance indicators need to be more clearly defined so that subsequently, data can be obtained. This has been a long-standing problem, one that presents a challenge in terms of complying with the new policy whereby as of 2013, all direct spending programs must be evaluated every five years.

Departments also mentioned their evaluation capacity and the shortage of experienced evaluators. In the report, we also note the absence of standards and guidelines and the need for the Treasury Board Secretariat to do more to help departments in this regard.

If I could just draw a parallel with the internal audit function, several years ago, it was observed that internal audit services needed to become more professional. I think the same can be said for evaluation services. Some progress has been made with respect to internal audit services. In the years remaining, the government must address this problem.

Regarding the use of contractors by departments, the problem quite simply is one of resources, capacity and the knowledge to do the required work.

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

And that is the reason for your concern about the use of contractors?

[Sheila Fraser]

We are concerned about the departments' inability to retain this expertise and knowledge. We can understand that they may sometimes need to use the services of contractors to tap into their extensive expertise, but at the same time, it is important to train people in the department. If all of the work is contracted out, departments cannot retain any expertise.

With respect to chapter 3, exhibit 3.2. presents the chronology of legislation that was supposed to be adopted in 2002, but that because of elections, prorogations and other factors, had not yet been passed in 2008. There are several reasons for the delay, but with each passing year, the government has wanted to introduce technical amendments. As you mentioned, eight years have passed and it hasn't happened. This can create some confusion. In many ways, it also prevents the Department of Revenue from going back and demanding more money from taxpayers. We feel that it is important for the legislation to be clarified and for these technical amendments to be made to the Income Tax Act.

[The Chair, Liberal, Shawn Murphy]

Merci, madame Faille.

Mr. Christopherson is next for seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Mr. Chair, and thank you all again. It's the same old gang.

I'd like to begin with chapter 8, “Strengthening Aid Effectiveness--Canadian International Development Agency”.

I know from personal experience that in many countries around the world, and particularly in Africa, CIDA is the face of Canada, and where CIDA succeeds, Canada is appreciated and recognized. Where it fails, the whole country pays the price in terms of the perspective.

The text of your opening statement says that “donor partners, recipient governments, and program staff are unclear about the Agency's direction and long-term commitment”.

I'd also like to turn to page 6 of that chapter. The last half of paragraph 8.7 says:

On 23 February 2009, the Agency formally announced--with Cabinet approval--its intention to focus its aid on 20 countries.

I'm hoping you can help me here. I'm active on the Canada-Africa Parliamentary Association, and we recently had an unprecedented meeting with 10 or 12 ambassadors. It's not very often that you get a dozen ambassadors in one room with one message. Their message was about Canada's shift of priority from Africa to other parts of the world. I'm certainly not going to get into what that evaluation is, but they came to us, and their main argument was that given the close relationship Canada has had with Africa and all its 53 or 54 component countries, they've seen us as one of their strongest friends, one of their best friends, one of those on whom they could rely no matter what. Their main message to us came as a result of our shift in priorities, leaving them out in the cold. They said they didn't understand why it seemed as though we were throwing our old friends overboard to make new friends.

As a result, we had a follow-up meeting with CIDA to find out what's going on and why. It wasn't a very good meeting, and I have to say that your chapter helps me understand why we had so much trouble. We've had a follow-up meeting to that, and at one point we finally got down that some kind of analysis was supposedly done about the various countries and the effectiveness of the money. It was the exact thing you're talking about that isn't happening, that kind of evaluation.

What's interesting is what we were told. These were bureaucrats, so they were doing as much as they could do and no more, but their response was that they couldn't give us any of that information because it's contained in advice to the minister. So by virtue of wrapping it in “advice to minister”, it's out of bounds for us and possibly out of bounds for you. I'd leave that to you.

Anyway, my question is whether the lack of focus and analysis that you have found could apply to this whole issue of the refocus that's taking place. Is much of the analysis that we would expect to be done and that we're told is done maybe not as thorough and therefore not as easy to defend as we're led to believe?

[Sheila Fraser]

Mr. Chair, I would respond by saying that the focus, be it either priority areas or the countries of focus, is really a decision of policy. Those would not be areas that we would challenge. We would accept them as policy and then see how the policy is being implemented.

What we note in the report, though, is that international development often involves very long-term projects. It takes a while before you see results. There have been, as we note in the report in exhibit 8.4, a number of different priority focus areas. There have been a lot of changes, and I think that has created a certain confusion, both within the agency and outside the agency, as to where the focus really is. Government as well agreed with the principle that they needed to reduce the number of focus areas and reduce the number of countries to be more effective. They came up with a list of 20 countries. They currently still have projects in at least 60 countries, so we do not see the narrowing of focus that has been agreed to as being essential for effectiveness.

As well, there were planning documents, by country, as to what CIDA would do and what was expected. All of those planning documents have expired; we are told there are other documents in process, but they have not been approved and communicated more broadly to provide information as to what the objectives are.

[David Christopherson, NDP, Hamilton Centre, ON]

Before I move on to my next chapter, I'll say that reading your report in terms of some of that analysis and the country analysis led me to believe that.... When you're being denied information that seems fairly reasonable, what was the evaluation? Not the advice to the minister. Fair enough, that's out of bounds. The advice that came to me at the time? Okay, cool. But when I read your report, I'm thinking, well, maybe it's because the information isn't there. Maybe the analysis isn't being done. If they're not doing updated country-by-country analysis, then how can you determine whether a continuation of x million dollars is going to give you what you need, or not, and therefore justify a shift to another country or another part of the world?

We're going to call them in on that one and we'll do some follow-up there.

The next one, as time permits, is on chapter 6, “Land Management and Environmental Protection on Reserves”. It's very disturbing to read this. Almost every time we touch this file, it's disturbing. If I can quote you from today, you said:

We found that most landfills on reserves operate without permits, monitoring, or enforcement by Indian and Northern Affairs, as do sewage treatment and disposal. We also found that despite the Department's commitment to transfer more control to First Nations over the management of their lands and resources, access to land management programs and training is limited.

Now, in your report, under the “Conclusion”, on page 27, paragraph 6.93:

INAC and Environment Canada have not addressed significant gaps in the regulatory framework that protects reserve lands from environmental threats. Provincial and municipal environmental regulations and zoning laws that protect communities off reserves do not apply to reserve lands.

On page 16, paragraph 6.49, again I am quoting:It has--meaning the government--

power and authority under the Indian Act, the Canadian Environmental Assessment Act, the Canadian Environmental Protection Act, 1999, and the Fisheries Act....

In the next paragraph it says:

In 1996, the parties who signed the Framework Agreement on First Nation Land Management identified four...environmental threats.... In a 2007 study, Environment Canada also identified significant risks on reserves that required priority attention, including landfill, solid waste, and hazardous waste...

This is going to come as a shock to a lot of Canadians that the federal government is responsible for all these environmental protections at a time when environment is, arguably, the first or second biggest issue facing us immediately right now. I'm trying to get a sense of why this has been allowed. And I know you can't answer a why--that's what I really want to know is why--but I can only go so far in getting information from you.

How serious is the abdication of responsible regulation in this area? Is it as bad as it seems? In other words, are there landfill sites or water treatment exposures into the air that would never be allowed anywhere else in Canada but are happening there?

[Sheila Fraser]

Chair, we have not identified specific cases, but I think we have to say that the risk is certainly there. The department has the responsibility to provide licences for landfill sites. As we note in the report a very, very small number have been issued. There is no assurance that those sites are not situated next to water sources or others. We talk about septic systems. There is absolutely no regulation for septic systems. So there is a very significant gap in the fact that provincial and municipal regulations do not apply on reserve, and the federal government has not addressed that gap.

It is, I think, interesting to note in the report that as we did our audit, the departments were quite clear with us that there was a question of funding. Should the committee ever decide to hold a hearing on this, that is certainly an issue to explore with them, because that came up as a reason quite frequently, and it is actually within our report that they commented about their difficulty in meeting all of their requirements because of a lack of funding.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson.

Thank you, Ms. Fraser.

Mr. Saxton, seven minutes.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Mr. Chair.

I'd first of all like to welcome the Auditor General back, and the environment commissioner as well. Welcome back.

And to the other witnesses, thank you for being here today.

I'd like to begin with chapter 1, “Evaluating the Effectiveness of Programs”. In that chapter, the Auditor General states: “...Environment Canada, which has processes in place to identify needed improvements...”.

Could you kindly explain what those processes are? It's on page 10.

[Sheila Fraser]

I may have to ask Mr. Maxwell, if he's here, to join us at the table, Chair.