Public Accounts Committee on April 22nd, 2010

[Ronnie Campbell, Assistant Auditor General, Office of the Auditor General of Canada]

Thank you, Mr. Chair.

As we mentioned in the preamble to the audit report, there are three pillars that are necessary for sustained development in the Northwest Territories. We talk about the necessity to settle land claims and refer back to Justice Berger's report in the 1970s that called for a moratorium on development until land claims were settled. The building of a regulatory framework that would allow that development to happen in an organized manner that mitigates risk is another important element. The third element that we talk about is the need to ensure that the aboriginal people who live in that part of the country are able to build the expertise that's needed so they can take advantage and participate in development as and when it happens.

In that chapter, we talk about how the government is proceeding with the settlement of land claims and that of course they don't own all the turf. They need to get agreement with the first nations, and that's moving along. We talk about the process through which we think the government is making constructive efforts. They're at the table. When they run into an impasse, they try to find ways to resolve the issues. Nonetheless, as we speak, just now the National Energy Board is holding hearings on the Mackenzie Valley pipeline, and, depending on the timing of that, that could change the dynamic, with development potentially going ahead and some of those land claims still not being settled.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson.

Thank you, Mr. Campbell.

Mr. Saxton, you have seven minutes.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Mr. Chair.

Thank you, Auditor General, for coming in, and thank you for the report.

My first question is regarding chapter 6, “Special Examinations of Crown Corporations”, specifically the Canada Post examination. There's reference to a lack of funding for Canada Post's plan to replace outdated facilities and transform its operations. In December, Parliament raised the debt limit of Canada Post to $2.5 billion from $300 million, and of course we're all now paying 57 cents for a stamp instead of 52 cents. Do you have an opinion as to whether or not this addresses the issue of lack of funding for Canada Post?

[Sheila Fraser]

As we mentioned in that special examination, Canada Post has a modernization initiative that's estimated to cost some $3 billion. At the time we did the special examination, which was finished in about August of 2009, the funding for that or the financing of that project was uncertain. The corporation had made requests for increases in postage rates and to increase its borrowing powers, but we had not seen that actually approved at that point. We are of course aware that that has happened since.

The corporation has indicated that they are very pleased with the government's approval of those two mechanisms, and that will provide them with the necessary funding to complete the project. We have not looked at the actual plans ourselves to see how they will translate into Canada Post being able to actually realize the project. Certainly those were two major elements that the corporation itself had proposed to government, which have subsequently been approved.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

My next question is regarding chapter 2, “Modernizing Human Resource Management”. Could you briefly touch on this new approach of merit-based appointments, and does this approach make sound administrative sense?

[Sheila Fraser]

We looked at the act that was passed in 2003, and one of the main objectives was to provide more flexibility and to resolve many of the issues that existed under the previous human resource management regime.

Some members who have been around for quite a while will perhaps remember that our office did an audit in the late 1990s, I think, which indicated that in the human resource management system at that point there were something like 70,000 rules. The system was very cumbersome, very difficult, and there was a lot of concern around this merit principle, which at that time was interpreted to mean that you had to have the very best person from a competition.

The rules have changed now to say that you have to have someone who meets the criteria, who is qualified, and you can also look at the availability of people. I think that was one of the main issues, that the very best person may not have been immediately available to fill a position. Now there is more flexibility in that. You still have to ensure that people meet all the criteria, are meritorious in having that position, but you don't have to go the extra step to say this is the very best person coming out of a competition.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

Also in chapter 2 you identify a more integrated training approach brought on by the consolidation of training and development into the Canada School of Public Service. Could you say whether you think this was a wise decision and how things were done before?

[Sheila Fraser]

Previously training was divided up under many organizations--for example, I think language training, in part, was at the Public Service Commission. There may have been training as well at Treasury Board Secretariat or other organizations.

Now they have all been combined. On the face of it, it would appear to be logical to combine training. To my knowledge there has been no evaluation done, and one of the issues we raised in this report is the lack of good performance indicators to assess whether the initiatives put in place are actually attaining the objectives set out initially.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

Also in chapter 2, could you expand on the merits of having new mechanisms to manage workplace conflicts, including labour management consultation committees?

[Sheila Fraser]

Again, Chair, this was one of the major irritants in previous HR management regimes, that everything became a dispute and had to go through very formal, legalistic challenges to be resolved.

I think, generally, practices have evolved to try to do these dispute resolution mechanisms before having to turn to the legal avenues. This would appear to be a very logical thing to have done, and we would hope there would be some sort of performance information to indicate whether this is being used and how successful it is in reducing the more formal complaints in the system.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

My next questions are related to chapter 3, “Rehabilitating the Parliament Buildings”. In your opinion, does Public Works understand the severity of the problem?

[Sheila Fraser]

Absolutely. Public Works has done a number of studies. I think the most recent one we found on the overall project was about 2006, where they estimated the costs at that point were about $5 billion. This was obviously a very preliminary estimate.

I would say they are very aware of the deterioration of the buildings and the need to progress with the rehabilitation project.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

In your opinion, how well are they doing in managing the operational disruptions during these planned renovations?

[Sheila Fraser]

I'm sure there are people with many opinions on that.

We looked at their management of projects, and as we indicate in the report, once there is agreement on the project to be done, Public Works manages it well. They use all the management techniques that one would expect. They do good cost estimations, which are obviously very difficult when you're dealing with heritage buildings. They are concerned about the environmental impacts of the renovations.

The management of the projects is done well; the issue is the agreement on what has to be done.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

My last question is regarding the announcements made this week about the new buildings to be built on the precinct. Does this really address the concerns you had in your report?

[Sheila Fraser]

Our concerns are really about governance and ensuring that the delays that have occurred in the past, which have resulted in delays in the rehabilitation project going forward, hopefully will be minimized. As I indicated in my opening remarks as well, there is a concern too that the funding for this project has to be assured over the longer term, so that there aren't the kinds of stops and starts that have occurred in the past.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Saxton.

I have just a couple of points of clarification, Ms. Fraser. Are the special examinations on your website or would we go to the departmental or agency websites?

[Sheila Fraser]

They are on the websites of the corporations.

[The Chair, Liberal, Shawn Murphy]

They are not on the Auditor General's website.

[Sheila Fraser]

No.

[The Chair, Liberal, Shawn Murphy]

You would expect them to be up now.

[Sheila Fraser]

They are all available on the websites, and should the committee wish, we could certainly provide you with a copy of all the special examinations in detail.

[The Chair, Liberal, Shawn Murphy]

As you know, we started a process last year. We did take two of them in, and we'll probably do a couple again this year. That works well.

On the aging information technology systems, how does that fit into some of your previous reports? There is this program in Ottawa called the secure channel, and I believe you've done a number of studies on that, all unfavourable. Would that be classified as an aging information technology system or would that be a new one?