Public Accounts Committee on May 13th, 2010

[Yaprak Baltacioglu]

Right.

[The Chair, Liberal, Shawn Murphy]

Okay, Monsieur Dion. Merci.

We'll hear from Mr. Kramp for five minutes.

After that, I am going to suspend for two minutes. Then, when the witnesses from Industry come in, Madame Faille, you'll be starting the first round of five minutes.

Mr. Kramp.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you.

My first question would be to the Auditor General's office.

We have a couple of reports here from Transport and Industry that are reasonably acceptable,for the most part, relative to some of the other information we have seen in other reports.

So to those two departments, congratulations. It's certainly not perfect, but I would have to say that your efforts have not gone unnoticed. We thank you for that.

To the Office of the Auditor General, obviously there are still some struggles to produce meaningful reports, particularly in some departments. With a very simple one-two-three, can you give us some really serious and practical advice that you could go public with, where you would say to those departments that if they did this, it would be most helpful and beneficial, not only to you for evaluation, but also meaningful to us as parliamentarians? What would a couple of those steps be?

[Neil Maxwell]

Thank you, Chair, for that question.

Again, as you said, we have not audited these specific reports, so the comment I will make is a much more general one.

I think I'd highlight two real challenges, both of which have been summarized already, including by the chair in his opening remarks.

The first is the importance of balance. This is a political milieu and we all know that very, very well.

I think the thing that we often find with departments is that there's an elephant in the room. Sometimes it's a major incident during the course of the year and sometimes it's a major report by a royal commission or an inquiry.

Often, reports don't talk about the elephant in the room, and often when we're talking to departments we say that if they don't address the elephant in the room, their report risks losing credibility. so I think that whole question of balance is the first one.

The second thing I would say—and again, there have been many examples here today—is just how important it is to have very clear expectations set out and, then, very clear measures against those. I think one of the ongoing challenges in performance reporting, and one of the many reasons why the reports are where they are right now after several decades of trying to improve them, is that it is often difficult to get really good indicators.

Nonetheless, there are indicators there and a lot of data that creative people within departments can find. Statistics Canada has lot of information and the OECD has information, and I think both of these reports show some use of those things. There are always ways to find things that shed light on these important questions. Greenhouse gas emissions are another example.

So I think I would mention those two things: the importance of balance, and clear measures and clear expectations, which those measures then report on.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you.

My next question is for Transport Canada.

Knowing what the expectations are, as just stated by the Auditor General's office, and what are, to them, a very, very clear set of parameters for you to report on, what is the biggest obstacle your department has in delivering the kinds of results we expect?

[Yaprak Baltacioglu]

I think that at the time of this particular report you're looking at, the biggest obstacle was that the department's choice for explaining its business was complicated. It had some 180 outcomes. It's really hard to make a frame out of 180-plus outcomes. I think that was a big obstacle.

The other obstacle, I would say, is the availability of good performance data in the information and being clear. That's something we're going to keep working on, but the challenges that we just discussed, for example, on the environment, are not simple ones. We have to find readily available information because we don't want to spend a whole bunch of capital using things that are not actually helpful. We have to be very deliberate in the way we choose the performance information. Some of it is not available.

Those would be the biggest obstacles.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you.

We all recognize the priority that has been and/or should be placed on environmental strategies in moving forward within your departments. Certainly, I know, from the inclusion of the eco-transport strategies you brought forward, that there has been some movement on that.

I know there's a tremendous amount of interest around the table in it. In particular, I know that my colleague, Mr. Dion, has made this a serious passion of his, and we can appreciate that. Could you elaborate a little on some of the focus that you've had in that direction?

[Yaprak Baltacioglu]

First of all, an environmentally responsible transportation system is a business line for our department. Our work mainly involves the policy work and some of the regulatory work.

We work with Environment Canada because sometimes they have legislative tools that we don't have. Our focus is on air and marine. On the road transportation, it is more of a deal with the automakers.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Harmonization of standards...?

[Yaprak Baltacioglu]

Harmonization of standards is a critical issue. This is not a simple thing for us, partly because.... For example, right now we seeing one state in the United States that is unilaterally trying to impose a standard in the Great Lakes. This is a serious problem because it has an impact on the Canadian marine industry, but also for the United States as well.

So how do we actually work with the United States so that the regulations that we pass--and that they pass--allow trade to happen? That is a critical part of our work.

We have a number of environmental programs, which are in our documents. For example, in the year this report was done, the department worked on the eco-auto rebate program. We spent $191 million, and there were purchases of 170,000 fuel-efficient cars. Canadians were helped with that.

We have demonstration programs for clean energy for vehicles. We have done 57 demonstration programs that are simply showing people that there are alternatives out there. Some of it this only a matter of acceptance and understanding.

We have an eco-freight program, in which we are moving on sustainable transportation for smaller-scale projects.

Can we do more? Probably. A lot more can be done on the environmental issues in transport, but we keep on working at it.

For example, on the marines issues, oil spills are a big deal for us. We have upgraded our Dash 7 airplanes—I think that's what they are—and basically we fly patrols over Canada's oceans to determine where the oil spills are and where they are coming from. We actually have an inspection and overview function in Transport Canada, which is critical.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Kramp.

That concludes the first session.

Madam Baltacioglu and Mr. Morency will now be leaving and will be replaced by the Department of Industry.

I'm going to suspend for one minute, but before I do I'm going to ask you, Deputy Minister, if you have any closing remarks at this time.

[Yaprak Baltacioglu]

Let me repeat what I said at the outset. I know that when I said it everybody looked at me, but I really appreciate the fact that the committee is showing interest in these reports.

I appreciate that it gives us further energy to actually improve the way we're reporting, because it is not a small thing. It's extremely important that we use the taxpayers' money properly, that we achieve the results, and that we're clear as to what we're trying to do.

If you call on us again next year, hopefully we will be much better.

[The Chair, Liberal, Shawn Murphy]

Thank you very much.

On behalf of the committee, I want to thank both of you.

I'll suspend for one minute to allow the industry representatives to come to the table.

I'll call the meeting back to order.

I welcome Kelly Gillis, chief financial officer, comptrollership and administration sector, Department of Industry, who is accompanied by Mr. Ron Parker, assistant deputy minister, industry sector.

The deputy minister is not available as there is another committee meeting going on at present.

I'm going to turn it over to you, Ms. Gillis, for your opening comments.

We will not take another round of opening comments from either Mr. Maxwell or Mr. Smith. We'll go right to questions. In the next round, we'll be starting with Madam Faille for five minutes, and then it will be Mr. Young for five minutes.

Ms. Gillis, the floor is yours.

[Kelly Gillis, Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry]

Thank you very much, Mr. Chair.

Thank you for the opportunity to be here with the members of the Standing Committee on Public Accounts to discuss Industry Canada's 2008-09 departmental performance report.

Although my deputy minister, Richard Dicerni, does apologize for not being here because he is appearing before the Standing Committee on Industry, Science and Technology on our main estimates right now, he will try to join us a little later in the meeting, because it is very important. He would like to be here if he can, so it is possible that we might see him around 10:30 this morning.

Before I begin, I would like to introduce the departmental official accompanying me, Ron Parker, Senior Assistant Deputy Minister, Industry Sector. He is available to answer questions as well.

The 2008-09 departmental performance report details Industry Canada's achievements and shortcomings against the objectives set out in the 2008-09 report on plans and priorities.

In the 2008-2009 report on plans and priorities, Industry Canada set commitments against three strategic outcomes, which are outlined in the report.

Changes to Treasury Board Secretariat's guidelines for the development of DPRs over the past few years have aligned themselves with the recommended five criteria for rating departmental performance reports as set out by the Office of the Auditor General.

Industry Canada's reporting has evolved along with Treasury Board Secretariat guidelines. In 2006-2007, Industry Canada's departmental performance report was over 150 pages long. So it was not very concise, and results information was in the infant stages. Since that time, the 2008-2009 departmental performance report has gone to a concise report of 40 pages with further information available online.

In developing the concise format for the DPR, Industry Canada has continued to evolve performance reporting by including more credible and reliable links to sources of information to demonstrate more balanced reporting and accountability, including additions of trends. The departmental performance report also links resources to results and details lessons learned.

Improvements continue to be made. This year, for the first time, Industry Canada's 2009-10 departmental performance report will include performance results that report against program targets. We'll also include more information against evaluation findings and the work the department has undertaken to address these findings. Finally, for more balance, we will include more lessons learned in the printed document.

In closing, I would like to thank the committee members for their time and interest in Industry Canada's 2008-09 departmental performance report. We welcome any comments and questions you may have.

Industry Canada continues to adapt and improve its reporting in an effort to better outline our performance results and demonstrate value for money.

At this point, I am pleased to answer any questions the committee may have. Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Ms. Gillis.

We're now going to continue the round. We'll be starting with Madam Faille for cinq minutes. Then we're going to go to Mr. Young.

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

Thank you, Mr. Chair.

Ms. Gillis, I want to ask you about something very specific. Page 11 of your report compares planning spending with actual spending. Pages 14 and 18 include tables. They show planned spending as compared with actual spending. There are huge gaps. Nowhere in your report does it explain those gaps, be it in the introduction, the conclusion or the main points of the report. According to page 11, the department's planned spending was $653.8 million, and total actual spending was $3,451.8 million.

Then on page 14, it says that in 2002, Canada ranked 9th out of 154 countries and today ranks 19th. Why does Canada continue to lag behind in terms of its level of advancement in the use of information and communications technology? How did money spent in 2008-2009 improve that situation?

[Kelly Gillis]

Merci.

If we look at page 8, at planned spending, we can see that planned spending is done when we do the departmental performance report; it's based on the RPP. We do the report on plans and priorities and the cut-off at that particular point in time of what's known, based on main estimates and the supplementary estimates at that time.

As you can see, the bottom line shows the budgetary main estimates in planned spending for 2008-09 of just over $1 billion, and then the total authorities that were received. During the year, we would have received additional funding, either through the supplementary estimates or through budgetary transfers such as collective bargaining agreements, or for such things that the Treasury Board Secretariat has held centrally, like maternity and severance payments that are received from the departments in year. That's where you see the main differences.

For Industry Canada, we also receive payments for repayable contributions that help support funding for contribution payments in future years. That's why you see a big difference between the planned spending and the total authorities available.

Now, if we go to the actual spending, comparing the total authorities that we had available to spend versus what was actually spent, yes, we did spend less than what our authorities were. If you go up to the line where you see the “Canadian Intellectual Property Office Revolving Fund”, we see total authorities of $140 million, yet in the actuals you see a negative bracket of almost $13 million. It's because of the estimates process and how we disclose this.

Within the estimates, for the total authorities, the Canadian Intellectual Properties Office has a revolving fund and this is what they have available to them to spend. Yet when you see what you actually spend, because of the way the accounting is done, it's on a net basis. So automatically there, you have a difference of $150 million. You're right: it is not well presented here. We could do better in describing the actual variances between those amounts.

Another example of where there was a difference between what was available to us to spend and not to spend was in some of the contribution programs such as the Ontario potable waters program. We had a lapse of about $19 million, but we did ask to re-profile it, meaning that we asked to carry it forward from 2008-09 to a future year, when those expenditures would come in.

The same thing is true for our strategic aerospace defence initiative, for which we had a $24 million lapse. Again, we requested and have an automatic re-profile of 20% for that particular program, so it was available for a future year to be able to cover off contribution programs for those future years.

So for each case within the department, we do analyze what we're planning on spending, why we're spending it, and what's happening within those expenditures.

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

My second question had to do with page 14. I wanted to know why Canada continues to lag behind in terms of the use of information technologies.

[Kelly Gillis]

Ron Parker will answer.

[Ron Parker, Assistant Deputy Minister, Industry Sector, Department of Industry]

In terms of the specific indicator, I will have to get back to you on the factors that led to the drop from ninth to nineteenth place.

In terms of the areas that we spend on related to investment and communications technologies in this area, they're principally in the spectrum of the information technologies area and how we manage spectrum. These involve representing Canada at the world telecommunications forum to make sure that our spectrum is well managed on an international basis and that we reflect Canadian business priorities, as well as a number of initiatives that we bring in this area.

More broadly, there are a number of initiatives under way that we've looked at in response to these indicators and that I think are important as an example of how the feedback is feeding in, in terms of the declining trend. For instance, the minister has just launched a consultation on the digital economy. This is an example of where the trend is worrisome, and there is a response to the indicators that we're monitoring.

[The Chair, Liberal, Shawn Murphy]

Thank you.

Before going to Mr. Young, I want to announce that the Deputy Minister of Industry, Mr. Richard Dicerni, has joined us.

On behalf of all committee members, I want to welcome you to the committee.

Mr. Young, you have five minutes.

[Terence Young, Conservative, Oakville, ON]

Thank you.

I'll address my question to Mr. Dicerni.

Welcome to the committee.

[Richard Dicerni, Deputy Minister, Department of Industry]

Thank you.

I'm sorry. I hope somebody mentioned that I was at the industry committee.

[Terence Young, Conservative, Oakville, ON]

Yes. You wowed them there, so now you're here.

[Voices]

Oh, oh!