Public Accounts Committee on Oct. 28th, 2010

[Sheila Fraser]

I'll ask Mr. Campbell to respond to that, Chair.

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

Thank you, Mr. Chair.

No. The projects that were put forward were approved. We didn't see any that came back. The public servants did the assessment as to whether or not they felt they met the eligibility criteria, and then ministers made the decisions.

The assessment on whether or not the projects were eligible was done within the bureaucracy, so only eligible projects went up.

[Terence Young, Conservative, Oakville, ON]

Thank you.

On the Chinook helicopters, your report basically says that Public Works and Government Services Canada disagrees with your conclusion. I'm trying to understand what it is about military spending that things can get out of control. Mr. Bachand's comments were very helpful, because things change in the field. If you order a helicopter, you might not get it for four or five years, so needs change in the field--distance flown, number of troops carried, meeting the demands of the weapons the enemies have. Surely it's wise to go back to the manufacturer if they have something that can address a current or new need and say we want to add that to the contract.

[The Chair, Liberal, Joe Volpe]

We are way over. You will have to be very brief, Madam Fraser.

[Sheila Fraser]

I have two quick comments. The disagreement is around the requirements of documentation and justification for using an advance contract award notice and our interpretation of the contract regulations versus what the department believes it's doing as a practice. I would be glad to explain to the committee, write to the committee, partly in response to Mr. Bachand, about our interpretation of what those requirements would be.

On the other issue we have, you can understand that there can be a few modifications, but these were very significant modifications to the helicopters. We believe it was not accurate to have presented it as being a purchase of an off-the-shelf helicopter. They knew at the time there would be significant modifications, and that should have been disclosed to the decision-makers at the time.

[The Chair, Liberal, Joe Volpe]

Thank you, Madam Fraser. Maybe you're right that you can expand on that in response to Mr. Bachand, because that's coming to everybody anyway. Thank you.

Mr. Shipley.

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

Thank you.

Thank you, Madam Fraser and your team, for coming back out again to go over and review nine chapters in this audit.

As you know, I always have concerns around agriculture. I would like to touch on one, because there are going to be some follow-up questions on that.

This report basically deals with the disease portion of CFIA and how they're managing particular aspects of it. The discussion in this report was around the avian flu in Saskatchewan and B.C.

On the preparations for what might or might not happen, I'm wondering if you can give me a bit of an opinion on whether it was well managed. I know that as far as the audits, the management looks basically at the plans and procedures. I wonder if you can give me a quick answer on that, please.

[Sheila Fraser]

Thank you, Chair.

Members may recall that there was an outbreak of avian influenza in 2004, and the agency at the time was quite severely criticized for how they dealt with it. We found in this audit that they had learned from that. They have improved their practices and policies. When there were subsequent outbreaks in 2007 and 2009, we looked at how they managed those outbreaks. We found they followed their policies and procedures. They do much better training and they do exercises. So we believe they have made significant progress over that five-year period.

Now they need to complete the same work for other diseases, but they have dealt with the diseases they believe are the highest risk.

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

Do you get the sense that because that template has been successful, they will follow it as they deal with other diseases?

[Sheila Fraser]

Yes. We believe that was appropriate. They have recognized the need to continue to do this work for other diseases. We're simply saying in this report that they should continue on with the plan, set their priorities, and get on with completing them.

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

I'm glad for those comments that you've made, and I'm also glad that they've picked up and have made significant improvements since the previous one.

I do want to go on to the acquisition of the military helicopters, though, and I find this discussion by some of the opposition a little interesting. I guess that's why the focus is on the F-35 and not the helicopters.

I'm trying to understand a little bit. This goes back actually for over a decade, the concern about the operational expenses, and I don't want to take away, quite honestly, Madam Fraser, any of the recommendations that you have, any of the concerns that you have, because those are the things that we need to learn from.

But I'm curious, quite honestly, when we talk about operational expenses. I don't know how this process for you works. Do you go back, because back over a decade ago the previous government decided to spend about a billion years to not buy anything, by cancelling a contract. So we actually didn't have helicopters.

Unfortunately, it raised--and these are not my words--an incredible amount of frustration, not only within the aerospace industry, but within our Canadian Forces, and particularly National Defence. So what we have now is that to keep these Sea Kings safe, which were to be replaced, they fly 10% or less than 10% of their time, because actually they spend most of the time in the shop so that they can be made reliable--I'm not saying they aren't—and in fact can be used to take our troops, wherever they are, whether it's in Canada or afar, there and back.

Is there any consideration of how we use those dollars in calculating the cost of what it now would be to buy, over a decade later and with increased costs, as opposed to that operation having gone forward as it should have at the time it was cancelled?

I don't know how deep you go, or is it just strictly that this is the acquisition right now, not considering that actually there was almost an emergency to fix the problem that was out there when we came into government in 2006?

[Sheila Fraser]

I think--

[The Chair, Liberal, Joe Volpe]

Mr. Shipley, I'm going to have to direct Madam Fraser in the same way that I had to do with Monsieur Bachand. Again, you're well within your rights to use up all of your time. You've gone beyond the time. I wanted to let you at least finish what you had to say.

Madam Fraser, you can include that in a larger discussion, unless you want to answer in five seconds or less.

[Sheila Fraser]

I would just say that we did not look at that issue.

[The Chair, Liberal, Joe Volpe]

Thank you.

I'm going to go to Mr. Rafferty.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Thank you very much, Chair.

That was very brief, and feel free to be brief; I have a number of questions for you and only five minutes in which to ask these questions.

Infrastructure in Canada has really been failing for half a century now. There haven't been any real major investments in Canada's infrastructure, and municipalities right across this country put forward fabulous ideas on how they can fix their infrastructure, and of course not all of them could be chosen.

How fair and equitable was the distribution across Canada of this $47 billion?

[Sheila Fraser]

Chair, that is not really something we looked at in this particular audit. What we looked at was to make sure that the projects that were selected met the eligibility criteria.

We can look perhaps in a second audit at how the moneys were allocated. I know in some cases moneys were allocated on a per capita basis. We might be able to explain something like that simply factually in the next audit. We do not get into looking at how funds are allocated, but rather we look at whether the projects meet the eligibility criteria.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

It would be wonderful if you would do that. Thank you.

You indicated that 93% of the projects did not have any environmental assessment at all, and I've already said that the infrastructure work was important for many municipalities, but do you think that should have been done perhaps as quickly as it was done, at the expense, in some cases, I'm sure, of clean air and water?

[Sheila Fraser]

The issue we raised in this report is that the information that was obtained to be able to assess whether it was appropriate that there be no environmental assessment was inadequate, we believed, to justify that, and this is an issue we will be looking at in a further audit. The commissioner of the environment is going to look at the whole question of environmental assessment, and particularly environmental assessments as relates to the economic action plan, for a report to come in spring of 2012.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Okay. Thank you.

What value for Canadians was derived from the $80 million to $100 million in advertising that accompanied the rollout of the economic action plan?

[Sheila Fraser]

That's not something we looked at. I can't answer that.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

I'll ask it maybe in a different way. Do you think the expense for advertising was justified?

[Sheila Fraser]

Again, it's not an issue that we looked at, so I can't comment.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Okay.

Immigration is a big issue. I wanted to make sure we touched on all of these categories, and immigration hasn't been touched on yet. Citizenship and Immigration Canada came under particular fire, and I wonder if you could just briefly outline, perhaps in the time we have left, some of the most major issues you found.

[Sheila Fraser]

This is a department, as I think all members know, that deals with huge volumes of applications and files that have to be dealt with. In a department like that it's really important in order to manage service that there be standards set, that there be monitoring and then corrective action taken.

When we looked at the Canada Revenue Agency and HRSDC, we saw that those systems were in place and we saw evidence of where they were improving service through the monitoring they're doing.

In the case of Citizenship and Immigration Canada, we found there were only four of the major programs where they did have service standards. They have been working on this since 2007. They really need to complete that work, have the service standards across the department, do the monitoring, and then work to improve their services.