Public Accounts Committee on April 22nd, 2010

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

I want to turn to chapter 5, and notwithstanding that I'm about as urban a member as you're ever going to get, born and raised in downtown Hamilton.... It's not woodtown; it's steeltown.

[Terence Young, Conservative, Oakville, ON]

It's sulphur city.

[David Christopherson, NDP, Hamilton Centre, ON]

It's about agriculture. I'm going to ask these questions based on two things: one is the subject matter and the other is my own experience. The subject matter, of course, is food and a growing concern, particularly by parents, about the security of our food network.

In your news release the day you tabled you said:

“The Department’s research is important to Canada’s food production and its ability to compete internationally,”.... “We found serious problems in areas that are fundamental to conducting research, such as managing funding, capital assets, and human resources.”

My question stems from comments in your overview chapter, and I'm looking at page 5. From this I'm seeing that Agriculture and Agri-Food Canada introduced a science and innovation strategy in May 2006. They didn't even start the draft of the strategic action plan, which is what gives effect to these great ideas, until October 2008. Then--again if I'm following this correctly--at the end of your audit in September 2009 they still hadn't determined the human resources, equipment and facilities, and financial resources needed to carry out the action plan. Well, there's not much left after you do human resources, equipment and facilities, and financial resources. There is not much more to bring to the table to give effect to an implementation plan. So, again, the chronology is that they brought in the strategy in May 2006, they did't even start on a draft implementation plan until October 2008, and by September 2009 they still hadn't identified the key cost factors.

I've been around long enough to know this is very, very worrisome in terms of what it suggests about the long-range planning. Maybe day to day they're doing all right, but is somebody really sitting down and saying, “Where are we in two months, six months, five years?” That's what the plan was for. Did you get any reasonable explanation as to why they waited over two years to begin even drafting the implementation plan, and well over a year after that they don't seem to be too far down the road? What kinds of responses did you get, and how concerned about this are you, Madam Auditor?

[Sheila Fraser]

Chair, the member is correct on the timelines and the lack of progress in actually operationalizing a strategy.

This strategy, too, would have changed or certainly modified the way the department would do business--much more emphasis on collaboration with others. So it would be really important to look at issues like capital investment. Does the department keep all these things? Do they work with others? Can they minimize this?

At the time we did the audit there was some progress being made, but it was very limited in doing these detailed plans. We did not receive a really good explanation as to the delays.

That would be something the committee might wish to discuss with the department.

[David Christopherson, NDP, Hamilton Centre, ON]

We will, and I hope they're working on a good answer right now, because if you didn't get one, I have a sneaking suspicion there isn't one, which means they're either going to have to do some fessing up or they'll get very creative between now and when they finally meet with us.

I'm good. Thank you, Chair.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Christopherson. You ended early. That's new.

[David Christopherson, NDP, Hamilton Centre, ON]

It's to make up for my long-windedness earlier.

[The Chair, Liberal, Shawn Murphy]

Mr. Shipley, five minutes.

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

Thank you, Mr. Chair.

Thank you, Madam Auditor General and witnesses.

One follow-up—introduced in 2006, launched in 2007-08, framework completed in 2009. I'm reading, not just this report, other reports. There's a common thread that those day-to-day things actually seem to move along in some departments. We continually use—and this is a government issue, to be quite honest—the complex parts. We get into the complex issues. Government has a great way of making things complex.

We've now moved to.... You were substantially completed by September 2009. Could you tell me—and we've had this discussion before—what's happened since September 2009, in terms of a process of moving ahead?

[Sheila Fraser]

The government has indicated—I want to clarify that this is on agriculture.

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

Yes, this is on agriculture.

[Sheila Fraser]

The government has indicated to us that these more detailed operational plans will be completed this month. Should the committee decide to have a hearing, I would expect the department will be able to tell you that plans have now been completed.

There is a question, though. There are a couple of issues. One is the collaboration with others. We note three projects that were very badly managed, and it has created a loss of goodwill with other partners. The department needs to have a specific plan as to how it will re-establish these relationships with other universities and other governments.

There is a question as well about evaluations and feedback to the scientists on what they are actually doing. We were told they are not getting the kinds of performance reviews and information about their research that one would expect.

So over and above the actual detailed planning, there needs to be some specific action taken on those two issues.

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

When we talk about agriculture, one of the things that has changed in the last while is doing research without having the development or the commercialization attached to it. We've always heard research is on the shelf unless something fantastic comes out of it, and there's no framework to take that research and commercialize it. That becomes a big problem.

We're trying, I think, as a government to rectify that so there is a flow, understanding that most research sometimes goes here and something comes off the side. But there's no framework in which to deal with that. I suspect it has something to do with the complexities in terms of developing in a particular industry.

Agriculture, Madam Auditor General, is one of the most complex.... It is one of the most intriguing industries. Not many years ago we grew crops for food. We're now growing crops for food, for energy, for the pharmaceuticals, and for industry. All of this started to develop over the past number of years, and we still grow them for food. So now we've been able to do further research to try to commercialize these products. We still end up with the food products because that's a significant part. It separates this industry from any other industry in Canada because it's one of sustaining humanity.

So when I look at the scientific research—the 2010 strategic action plan, which you just mentioned, will come forward, and we'll have the opportunity.... Are you encouraged at least to see that, recognizing some of the things I just talked about in terms of an amazing industry? In terms of the steps forward, do you see those as positive, moving ahead in a timeline, at least following what Mr. Christopherson laid out? It's a frustrating process, quite honestly.

[Sheila Fraser]

We obviously think it's a good thing that these plans are being developed and put in place. The question that has to be asked is why it's taken four years to do it. A lack of communication and perhaps even confusion existed in the department, with the strategy that came out in 2006, and there was no actual on-the-ground implementation.

Yes, it is a positive step that the plans are being produced. I think it will then be a question of how they are actually going to be put in place.

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

Yes, and honestly, this is a committee that recognizes, as the people in agriculture have recognized, there have been some issues.

For clarification, I know I asked you about this the other day, but you said that much of the laboratory and agriculture equipment is past its useful life. Is that the book value? Is that an operational value, where it's actually past its useful life and doesn't have any value? Has equipment been upgraded, even though some of the laboratory equipment is outdated?

[Sheila Fraser]

Yes. Chair, if you will, these are the accounting lives that are given to assets. It's five years, seven years, or whatever. It is perhaps, but not necessarily, an indication of value. Some equipment could last longer than the useful life that has been assigned to it and still be very useful to the department.

As we note in the report, for example, on buildings, there has not been an assessment of the buildings as to their state and which buildings are needed and where. We know there are research facilities spread all over the country. Are those buildings needed? If they need to be upgraded or renovated, what again is the cost?

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

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Shipley.

Ms. Hall Findlay for five minutes.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you, Mr. Chair.

I want to pursue an earlier train of thought, and it may not actually be as much a question as a request.

In regard to the IT challenges, I know your report focused on what could go wrong. One of my colleagues mentioned this was an exercise in accident prevention. I appreciate that. But personally, my focus is also on cost, waste, and the opportunities to find efficiencies in government operations. There's a concern in terms of waste.

We actually looked at a number of department budgets that had risen significantly. For example, we found that a lot of dollars were being spent on IT consultants. We then get this relatively damning report. I'm a little concerned about the amount of money that's being spent. My colleague, Mr. Young, actually used the line that they were concerned about the hiring of consultants who then hire consultants. We know they're not particularly inexpensive.

I then tie that to my concern, as I expressed earlier, about all of the different programs that have different names and IS/IT or IM/IT components, or that's what they're trying to do. I'm not a big fan of adding bureaucracy and levels of oversight. But I sense there is a lot of complexity and confusion, which may in fact be costing the government a great deal of money in terms of waste and the opportunity for certain industries to do a lot of work, when we get this rather damning report in terms of the IT situation.

This is not so much a question. It's almost a request. Your office is looking at departments and at specific issues, but I think there's a need to look at some of the IT from a larger perspective to see what on earth we're doing and how we're coordinating this effectively. I leave that with you.

I want to very quickly ask about chapter 4 and the environmental concern that you raised in terms of the Northwest Territories. You said that in regions where land claims are still under negotiation, Indian and Northern Affairs has not put an adequate regulatory system in place to protect the environment, nor have Environment Canada and Indian and Northern Affairs met the responsibility to monitor the cumulative impacts of development on the environment.

My question is twofold. What has been the response, if any, from those entities? Do you have any suggestions or recommendations to improve the situation?

[Sheila Fraser]

I'll start with the issue of monitoring cumulative impact. The departments have a clear responsibility to do this monitoring. It was done partially, for a period of time. We were told that it was eliminated because of funding issues. The departments, though, have agreed that they should be doing this and have indicated that they will. But again, how they are going to fund all of this is an issue the committee might want to look at.

That is particularly important as the co-management boards, which exist in areas where there are settled agreements, approve development projects so that they will have a sense of the effect these projects may have on the environment. It's really to provide good information from board decision-making.

Where there aren't settled land claims, the issue is really consultation with and involvement of first nations in making these decisions. We note in the report that their involvement comes in very late in the process, currently. There have been a few cases--I think we mentioned two or three in the report--where development projects have gone quite a long way, and then there have been legal challenges, which ended up causing further delays or actually limiting the project--not allowing the project to proceed--because of that lack of involvement.

One of the main issues, when they have settled the land claims, is the existence of co-management boards, which would appear to make the process more efficient. Then development projects are more aware up front of what the likely outcome will be.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Okay. That's great. Thank you.

I'm done, Mr. Chair.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Ms. Hall Findlay.

Mr. Dreeshen, you have five minutes.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much, Mr. Chair. Thank you for your presentation today, Madam Fraser.

I'd like to also focus my questions on chapter 4, as Martha has just done.

Madam Fraser, you noted that INAC has made some constructive efforts to negotiate these comprehensive land claim agreements as well as self-government agreements and that it has been following some established procedures for those negotiations.

I might add that I'm also on the Standing Committee on Aboriginal Affairs and Northern Development. Last November, as members, we met with the stakeholders in each of the territories, and we saw first-hand how the people of the north are positioning themselves to take advantage of all these new opportunities. We met with many native business leaders, and I was truly impressed with their insight, their determination, and their management abilities as well. In my mind, that bodes well for some wise, practical, and environmentally sustainable development throughout the entire region.

I'm wondering perhaps if you could touch upon the importance of these land claim agreements, particularly in relation to the topics that have been raised in the audit, namely environmental protection, economic development, and improved governance. As far as human resources are concerned, did you, in your research, observe some of those same skill sets I spoke of when you met with key personnel?

[Sheila Fraser]

Thank you, Mr. Chair.

I'll begin, and then I'll let Mr. Campbell complete with more information.

I would say that the main benefit that comes from a settled land claim is certainty. The whole question of uncertainty about who owns the land, who owns the resources, and what structures are in place to actually approve development is clarified for all. People kind of know the rules of the game, if you will. Things can then proceed much more smoothly rather than there being legal challenges. I mean, obviously, that can still happen, but I think everyone would agree that business likes to have certainty. It certainly helps to facilitate development projects.

I'll let Mr. Campbell talk about the human resources issue.

[Ronnie Campbell]

Thank you, Mr. Chair.

I would certainly agree with the member that in the Northwest Territories a great number of aboriginal groups, organizations, companies, and people have developed expertise in a variety of areas. I think that stems from at least since the settlement of the first land claim agreement in the Northwest Territories, the Inuvialuit Final Agreement, in 1984. Nonetheless, there appear to be gaps and there are concerns certainly in some areas. We do know in the report that the federal government has programs in place to continue to build capacity and expertise. Their issue with those programs was that they hadn't been evaluated and there wasn't good information on the results.

I would make one other comment. The member had mentioned the constructive efforts. We certainly got that from the first nations organizations that we talked to. We've looked at land claims negotiation processes in the past, and sometimes there was nobody at the table; either party, including the federal government in many cases, had just walked away. Sometimes the federal government prioritizes its cases and says, “There's not much prospect of success, so we won't even go to the table.” We did not find that in the Northwest Territories. People say that all parties seem to be motivated towards getting agreements. So there are constructive efforts.

I would also just add the caution that there is still the spectre or the prospect of a major development in the Northwest Territories, which raises a concern about, what if that happens when the expertise isn't fully in place and if land claims are not fully settled? So that's part of the risk.