Public Accounts Committee on Nov. 23rd, 2009

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

Thank you very much, and thank you, witnesses.

I want to follow up on the comment that Mr. Ralston made—and this might also go to Mr. Rochon.

The accumulated deficit of $463 billion decreased by $100 billion from its peak of $562.9 billion in 1996-97. Your indication is that we have an accumulated deficit of $56 billion this year, and maybe $44 billion in the coming year, which might take us back. Thankfully, I think Canadians know and appreciate that actually $40 billion was paid off prior to this happening--the crunch, I think you said, in March.

Do you know when was the last recession of this magnitude? There are a lot of questions about where the money went. When we look at the current global recession, can either of you remember when we were in a global recession of the magnitude that we're in now?

[Paul Rochon]

In terms of global recession, this is the largest one since World War II, since the system's national counts were developed. You'd have to go back to the Great Depression. This isn't anywhere close to the Great Depression, but that would be the next most important event globally.

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

What were the numbers, in terms of a stimulus package in total, that have been committed to stimulating the economy? Would you have that number for us?

[Paul Rochon]

Sure. The total value of the government stimulus package over the two years, 2009-10 to 2010-11, is $46.5 billion. When combined with moneys from provinces that are there to be partnered with federal programs, the total is $61 billion over the two fiscal years.

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

I think that helps in terms of the net numbers that we're talking about, because that's one of the things I wasn't picking up out of this. I suspect it doesn't lay out the equalization that happened with the provinces. I think that was $23 billion. They're rebuilding the military, and there's the provincial equalization and the download of health. Actually, we've continued improvement in terms of health. I'm trying to get a full picture when the question is asked, “Do you know where the money has gone?” I think it's likely a combination of those areas.

I think the biggest part is respecting that we're in a global recession unseen since the Great Depression of 1933. When I look at our debt-to-GDP ratio, as has been mentioned before, I think we're pretty fortunate to be in Canada, and for what our banks and what governments in the past, and in fact now, are doing that has put us in a strong place.

There has been a change. When I look at the numbers, you talked about the lack of corporate revenues, and there seemed to be an increase in the personal tax. Has there been a change in the methodology? It just doesn't seem to ring true that there would be an increase in personal taxes. They've dropped on the corporate side. Has there been a change in the methodology in terms of determining personal tax?

[Paul Rochon]

There has been no change in the methodology.

Well, there have been some improvements.

Go ahead, Bill.

[Bill Matthews]

You may recall that in previous years the Auditor General has observed that we could improve our methodologies for estimating tax revenues. So we've continued to do that, and one of the changes that we implemented in the last fiscal year resulted in a catch-up adjustment on personal taxes. That's part of the reason you saw the increase in personal tax.

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

Okay.

Just for clarification—and this will be my last question for now—when we talk about the losses in public money, I think when we see that, the flags go up. I think you gave an example. You said there would be losses. Would those be computer losses or losses that go out of a department? Is that what those losses are?

What other countries disclose that, and how long have we been doing it? Are we the only country? Are we just tracking what every other country does, or is this something that's unique to Canada? Do you know?

[Bill Matthews]

I haven't done an official survey, but I do chat with my colleagues from other countries, and I can tell you our Australian colleagues think we're crazy to disclose this amount of information. So I haven't done a comparison across the board, but to my knowledge, no other country matches us on this level of disclosure.

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

Thank you very much.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Shipley.

Mr. Christopherson, five minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

In volume III, page 8.4, under Parks Canada Agency.... We're now into “Payments of Claims Against the Crown”. There's a number that stands out like a sore thumb, and I'm wondering if somebody can help me with it. It's $1,661,718, a claim against the crown for a contravened lease agreement, and that number is way out of line. Almost every number on the page is $2,000, $8,000, $13,000, but nothing like this $1.6 million. How did we lose $1.6 million in a lease agreement?

[Bill Matthews]

I can tell you that in this section we disclose claims that are judgments, but I'm not familiar with the details on this one. You'd have to follow up with the actual department that's responsible for this one to get details on that.

[David Christopherson, NDP, Hamilton Centre, ON]

I appreciate that. I understand you can't defend every line, but it stands out so big, and I already got a sense that you've gone through and looked for areas you thought you might get questions on. I'm a little surprised, but I accept that.

Let's move on then within the same volume to page 2.24, under the heading of “Losses of Public Property Due to an Offence or Other Illegal Act”. Under Fisheries and Oceans, there's the theft of computer equipment, as you said, but the number is so big compared to everything else. There are the 26 cases of computer equipment and--lest anyone think that includes everything--the next line is “Theft of electronic equipment”, which is an even bigger number, $63,000.

In almost all the other departments, there are some, and I accept that these things happen. But again, this number is so out of whack. Do we have a reason why? I wouldn't have thought it would be that ministry, of all of them, but I'm listening.

[Bill Matthews]

What you'll find is that the departments that are regionalized, with many small operations, are more susceptible to this sort of fraud. It's not like they have one building with commissionaires guarding the entrance. So in this case, you've got a fairly widely distributed organization with many access points, and that's typically the type of organization you'll see with more losses than others.

[David Christopherson, NDP, Hamilton Centre, ON]

Yes? Year over year?

[Bill Matthews]

Not always Fisheries, but it's those organizations that are regionalized. If you compare them to something like the Department of Finance or TBS, where we're all largely in the same building, you'll see the losses are less than in these departments where there are many regional centres.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay. I'll follow up on that. Thank you.

Assuming I have time, let's jump back a couple of pages, if you would. Under “Losses of Public Money Due to an Offence, Illegal Act or Accident”, under Foreign Affairs, CIDA, in the middle of the page, it lists “False or fraudulent claims for grants and contributions”. There are five cases at $2.991 million--almost $3 million, and all but half a million of it is gone. Again, any idea what the issue is here?

[Bill Matthews]

In this case, these were uncovered, I believe, as part of an internal audit. It's basically an audit of claims claimed under the agreement. They'll go through and audit the claims that are made and make sure the expenses are in accordance with the agreement.

I'm going from my memory here, but they found five cases where there were significant issues with the claims made. I don't have an answer on why they don't think these items are recoverable. Typically, it's because the organization no longer exists or is no longer solvent. That is often the reason.

[David Christopherson, NDP, Hamilton Centre, ON]

That's a big chunk of money.

Madam Auditor, do these come by you? I know you find these things when you do your reviews. Are there any other ways that things that jump out come to you, by exception? Would this cross your desk at all?

[Sheila Fraser]

The only way it would cross our desks is if it was the result of an internal audit, for example--we are aware of internal audit reports--or if it was something really significant. Generally the departments will advise us of these kinds of cases.

[David Christopherson, NDP, Hamilton Centre, ON]

Well, you might want to do a little follow-up.

I don't have a lot of time, Chair. One of the things I wanted to do, though, is to ask if you would be kind enough to put a review of the policy vis-a-vis the tabling of these documents on the next agenda of the steering committee, just going back to the $40 million error. I accept that it was an error. What I have problems with is that it was known before we sat here and met. This is where the rubber hits the road. There really needs to be some notification that hey, folks, there are some problems in there. Could you just have us discuss that at the steering committee? I'd appreciate it very much.

Thank you, Chair. Thank you all.

[The Chair, Liberal, Shawn Murphy]

We'll put it on tomorrow's agenda.

Thank you, Mr. Christopherson.

Mr. Weston, you have five minutes.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Mr. Chair.

I think as members of this committee we're all somewhere between sensing...Mr. Christopherson used the word “blessing”, of being in a country with the kind of record that you have outlined, and a sense of gratitude for the people who work hard to keep it that way.

Here is the question I'd like to pose to the panel. What do we do with this in terms of attracting investment to Canada, encouraging people to do business here? What is the message that you think we should be broadcasting as parliamentarians, particularly in this Olympics-Paralympics year? What are you wishing that we would get that we're not getting when we travel or when we're interfacing with people from abroad?

I would put the question to you, Ms. Fraser and Ms. Cheng, as well as to Mr. Rochon and Mr. Matthews, if you have thoughts on that.

What should be in our press releases?

[Sheila Fraser]

Mr. Chair, I'm not sure I can respond to the question of investment in Canada, because I think it goes far beyond the transparency of the public accounts and the accountability to a parliamentary committee. But certainly the fact that the Government of Canada produces these financial statements that receive clean audit opinions and give this level of detail and transparency around our finances is I think a credit to the country and an indication of the accountability and transparency that exists here.