Public Accounts Committee on Nov. 4th, 2009

[Richard Flageole]

Thank you very much, Mr. Chair.

That was a question that we asked in 2000. We had raised some rather serious questions about whether applications were being processed efficiently. The department responded at the time that it was developing a new case management system. Clearly, a number of problems have arisen. The process has been under way for 10 years and costs have escalated from $195 million to $390 million. In 2006, we conducted an audit of major computerization projects and a number of problems were identified. They had to do with changes, the scope of the project and different kinds of management problems.

I do believe that we are finally seeing the light at the end of the tunnel. The system is expected to be in place by June 2010 in some initial sectors and it will then be extended to the full network. The point that we are making here is that technology use is really a key factor in helping the department reduce operational deficiencies.

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

My other question concerns DND contracts and the problems you identified with respect to one contract in particular. Would it be fair to say that when that contract was awarded, throughout the contracting process, information was provided or decisions were made that were not justified? Can you explain to us briefly how the competitive process works? It would seem that at some point, DND wanted to award the contract to a sole source supplier and that there was no justification for doing that. Public Works and Government Services Canada—it seems that the two departments were at odds, or could not agree—apparently wanted to put the contract out to tender, because there were several suppliers available to deliver the product.

Can you clarify what happened?

[Sheila Fraser]

Yes, there were several cases where the contracting process caused some problems. In one instance, DND wanted to award the contract to a sole source supplier. However, PWGSC demanded that the contract be put out to tender. After all of the work had been done, the contract was ultimately awarded to the first supplier, in part because of delivery lead times. The other suppliers were unable to meet the delivery deadlines. The request for proposal failed to make it sufficiently clear that the deadline was such a critical factor. It wasn't until the end of the process that the other suppliers realized that they would not be able to meet the deadlines.

We feel that PWGSC and DND wasted time. The requirements in terms of delivery deadlines should have been clearer from the outset.

Aside from that, the outcome in the case of the two contracts that were put out to tender was relatively positive. In the case of another contract, one that has been delayed, DND failed to provide the Treasury Board Secretariat with all of the information concerning the scope of the project when the initial request for funding was made. The cost for the vehicles alone was about $55 million and the total cost of the project was about double that amount.

[The Chair, Liberal, Shawn Murphy]

Thank you, Ms. Faille.

Monsieur Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, witnesses, for again being here.

I go, Madam Fraser, to paragraph 2 in your original statement. I mention it only because I think it's important: “The issues covered in this report are typical of the challenges facing government today.” And here is the important part: “Our findings underscore the importance of thinking through the implementation challenges when policies and programs are developed or changed.”

That really outlines what the purpose of your audit is. We recognize through this audit that there are some things to change. When I read through the audit, I didn't see that anybody would say, no, I don't think these are things we should be doing. That isn't what we heard.

What we have found is that many of these situations have been ongoing, some of them for 30 or 40 years. So I want to say to the general public that I think we as a government, regardless of what government it is, need to be professional in all aspects, and when we see weaknesses within our organization, recognizing the size of government, we need to take steps.

What we have found in this report, from my take anyway, is that we have aspects that are moving more quickly than others. I guess that's likely part of what life is, unfortunately or fortunately. I'm wondering, though, when you do such reports—and I think some people may have been thinking something huge would come out of this, because we've been doing a lot in four years, quite honestly—would you find any major irregularities through this audit? Is that what would show up? When doing an audit like this within a particular department, would a major irregularity show up if there were one?

[Sheila Fraser]

I would like to think that if there were a major irregularity, it would have been discovered by the audit. That is certainly not the case in these audits.

Many of our recommendations are, as you mentioned, trying to improve management processes, encouraging government officials to do more analysis. As Mr. Flageole mentioned, we saw an example of good analysis that was done that identified risks and possible changes, but we see in other decisions that are made that analysis is not there and strategies going forward are not in place. We think these things are important to ensure that the programs are being as effective as they can be.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I'll leave it at that, because I want to go on. One thing we find in procurements—we've had a number of them, and you've talked about procurement, and I may come back to the National Defence one, if I have time—is that there have not been irregularities on major issues; that's what we're finding.

Under Public Safety Canada, my understanding when I read this was that a federal emergency response plan has not been put in place. I'm thinking that in 2006, what we did as the government of the day was put moneys forward to start implementing a large-scale federal emergency response plan, which I understand has not been in place. Is that correct?

[Sheila Fraser]

The federal emergency response plan is at this point still not approved.

I can ask Ms. Loschiuk, but my understanding is that the department started to work on it soon after its creation. The act may have been modified, but there was a previous act.

Ms. Loschiuk, perhaps, could confirm this.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

What I understand of the national emergency program is that it's not just a national emergency program. I've been involved municipally before. It not only involves the federal government, but it involves the coordination of all the provincial and territorial organizations. It comes down to the municipal level, because we've had the opportunity for input into it. When a national emergency happens, every time it affects the local people; every time it affects the provincial people. I don't want the impression to be left that nothing is happening.

But could you help us identify what stage it's at, recognizing the complexity of bringing together a full national emergency plan? We have had a couple of pilot projects, unfortunately, such as during he floods in Manitoba, whereby continually, when you go out after these things, you do lessons learned. I know there have been lessons learned. I'm just wondering whether you can help us with the status, if you know where it may have reached in coming to its final form.

[Sheila Fraser]

I'll ask Ms. Loschiuk to respond.

[Wendy Loschiuk, Assistant Auditor General, Office of the Auditor General of Canada]

Thank you, Chair.

I believe we are talking about two things. When you talk about the national plan, you are talking mainly about how the federal government is working with the provinces and territories and municipalities. That's something we didn't particularly address in this audit. We stayed at the federal level.

Our interest was in how all the different departments are working together when they have to start to coordinate their activities, when they have to be clear on what their different roles and responsibilities are going to be and on who's in charge. That is moving forward in some cases, as you've seen in the report, but there are pockets or areas where progress has been very slow; for example, in cyber-security or critical infrastructure. Some things are not moving along as quickly as we had hoped they might.

[The Chair, Liberal, Shawn Murphy]

Mr. Christopherson, you have six minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair. Did you say six minutes?

[The Chair, Liberal, Shawn Murphy]

Yes, you get a bonus today, Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

I would just, in a very friendly manner, say to my friend Mr. Kramp, while he's busy bragging about their single gold star, that you get your gold star, but keep in mind that a broken clock is right twice a day too.

[Some hon. members]

Oh, oh!

[David Christopherson, NDP, Hamilton Centre, ON]

I'd like to turn to chapter 7, on cyber-security.

You speak here to the lack of a strategy and say that there was a commitment made originally in 2004 on the national security policy, so there's lots of blame to go around for both of the two largest parties.

I've been wracking my brain before my turn to speak, trying to remember which country it was, but I can't; the best I can come up with is Estonia, but I don't think it was that. There is a country that was recently the focus of a serious cyber-attack that was reported around the world. Does anybody remember what country that was?

[Scott Vaughan]

I think it was Australia.

[David Christopherson, NDP, Hamilton Centre, ON]

Anyway, the point is that we've seen some examples of it. I'm no expert in this field, but I don't think one needs to be to understand the threat to our energy grid systems, our defence systems, out intelligence systems—all the things we need to have working.

This leads me to one side question: does DND have a separate, secure, stand-alone system? If we were under a cyber-attack and everything else went down, do they have a stand-alone system, or are they part of a network-wide threat?

[Hugh McRoberts]

This is based on just general background, but yes, they have at least a limited ability to stand alone. They have separate power generation for emergencies; they have their own military communication systems, which are not entirely network-dependent. So they have some capability to function.

[David Christopherson, NDP, Hamilton Centre, ON]

I've read—and I mentioned the power grid—that there are entities in the world that are either trying to get the ability or have it, that if they concentrated that kind...they could literally shut down the energy system. Do you have any sense of how close we are to that kind of real threat as a result of not having the security system we need in place?

[Sheila Fraser]

Chair, we certainly can't respond to that. I don't even know if the department actually could respond to that.

[David Christopherson, NDP, Hamilton Centre, ON]

That's what is scarier.

[Sheila Fraser]

I presume that those kinds of assessments would be classified information, but certainly there is a real need to have this cyber-security strategy worked out, and as we mentioned in the report, there has been very little progress made on what is a really key element of the overall strategy.

[David Christopherson, NDP, Hamilton Centre, ON]

Were you given any answers that carry some weight with you as to why ?