Public Accounts Committee on Nov. 16th, 2010

[Ronnie Campbell]

Thank you, Mr. Chair.

I'll ask Mr. Stock to give more detail, but I will just say that the projects we audited met the eligibility criteria.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

You didn't find any that didn't meet the eligibility requirement? Did you find any at all among the ones you sampled that did not meet that requirement?

[Ronnie Campbell]

No, we did not.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Okay. Excellent.

I have another question for the Department of Transport. I understand that the internal and external audit committee helped you with getting management controls in place. Could you explain that process a little more?

[Yaprak Baltacioglu]

In terms of our internal audit shop, they did four things. One was the readiness assessment, which I mentioned earlier, which basically was, “Are you ready with your programs?”

The second thing they did is something called process mapping. It sounds technical, but basically it asks, from the application to the money going out, what process is followed and where the gates of control are. So when you chart it out, you look at the chart and you know that you have no controls at that particular moment, so therefore you have to fix that. This helps you. But it also helps you to remove the duplicative actions. Because sometimes when we're trying to be really, really careful with money, we put too many levels of control in, and then the system blocks. So it has helped our efficiency, but also the process.

The other thing they have done is something called continuous auditing. Basically, they're looking at the programs on a continuous basis, which is a best practice, because with an audit that comes after the fact, the program is gone, and what are you going to fix? Yes, it's a good lesson for the future, but in this case, we had the auditors watching the program design and delivery as it was happening.

In some ways, it's the same thing with the Auditor General. The moment they were there, it actually focused our minds further on the controls.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Would you say--

[The Chair, Liberal, Joe Volpe]

Thank you, Mr. Dechert and Ms. Baltacioglu.

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Mr. Chair.

I appreciate, Chair, that you asked Mr. Rochon to finish off the piece about the macro job numbers, although I have to be candid: I'm not overly pleased, in a sense, that we're looking at the macro. I understand the difficulties of a macro look at what five weeks of additional unemployment means to an economy. It gives you a macro number, but I can tell you that in my riding of Welland, five weeks did mean a heck of a lot.

It meant something to those individuals, but that economy is still almost stagnant, and it has been for 13 years, though, so I can't blame it on this past 18 months. We have seen manufacturing malaise there for the last 13 years. It has simply accelerated over the last 18 months. It is simply a different indicator.

In the Auditor General's report, Mr. Campbell, you actually talked about the sense that you did get some decent hard numbers from certain projects, and then you got unreliable stuff from other projects. I guess my question is, would it not seem appropriate, since you can do it in some projects, specifically when you're counting the numbers of jobs...? A lot of it would come out of infrastructure, to be quite frank.

If you decide, as in one of my municipalities, to redo the streets, including sidewalks, sewers, curbing, and all the rest of it, you hire a contractor. The report from the contractor can be that they put x number of hours on the street, and that breaks down to the great FTE, which I find really difficult to explain to real people in regard to what that means in the sense of how it impacts upon them.

I guess this question is for you, Mr. Campbell. Is this not hard data that we really should get in the sense of making it a real number rather than the sort of big picture from 10,000 feet?

[Ronnie Campbell]

Thank you, Mr. Chair.

I'll start off with a disclaimer. I'm not an economist and I won't ever be one--

[Voices]

Oh, oh!

[Ronnie Campbell]

--and I understand that this stuff is frightfully complex and difficult.

Your question is a good one. There were some hard numbers that the government was able to get from some programs in some departments. As to why they didn't go further with this, I think one of the witnesses already answered that, or answered part of that in terms of the complexity and timing that was needed.

There are economists who think that the macroeconomic approach can yield some good information. There may be other types of information that can be put together with it. Our recommendation is that the government do an assessment of the impact of the economic action plan. I think it's up to the government to decide how they're going to go about doing it.

[Malcolm Allen, NDP, Welland, ON]

I appreciate the comment.

Let me go quickly, because I know time is limited. Part of the criteria, and perhaps infrastructure, or Transport, wants to sort of take on this piece. The federal environmental assessment piece was suspended, if you will, if I can use that term, in the sense that it wasn't required on these projects. Environmental assessments were relied upon if they were done municipally, or on a project level, or a provincial level, or whatever the case may be. That information was relied upon.

The auditor's report has suggested that in some cases.... They actually said that of their “sample of 52 approved projects”, they found that for the assessments under the new regulations, 35 “lacked sufficient information”. The department's response was to go back out and say that they talked to those 35 folks, that they didn't do site visits, but they talked to them and relied upon them saying they were compliant.

So I guess the question is, did we get any follow-up hard information that says they were compliant, so that we actually know? Because that's a significant number for a sample size: 35 of 52. That's very, very large and it's actually beyond what it should be. For the sample size, it should be less than 10%. Of the sample size, it should have been 5.2%, to be honest, where the information was lacking. To have 35 of 52, we're talking about a magnitude of over 70-odd per cent. That's a huge number.

Did that not raise an alarm bell and close one of your gates in that timeline process, where folks maybe should have gone out--at least of a sample of 35--and should have said that they ought to site visit at least 10% of them? That would have meant 3.5--let's call it 4. I wonder if you have any sense of that.

[Yaprak Baltacioglu]

First, I just want to make a comment. The Environmental Assessment Act was not suspended. Let me just park that, because you didn't ask that, but with that comment I had to clarify.

First of all, I think for the sample size, yes, it looks like a big number. The Auditor General pointed to the fact that in the application form we asked if a project was near a federal environmentally sensitive area. What we didn't ask was if it was near a provincially designated or a municipally designated environmentally sensitive area. That is what they were pointing to.

So when we did the assessment—and our colleague who did the assessment is in this room—they basically had to look at the location of the project and whether it was 250 metres away from a park or an environmentally sensitive location. This is easily determinable in terms of where the location is, so when we confirmed that, all that sample came out that no, they did not need an environmental assessment, and our colleagues from the Auditor General's office found our analysis and our reaction to that to be satisfactory.

That being said--

[The Chair, Liberal, Joe Volpe]

I'm sorry. I was about to signal.

Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chair.

I'd like to thank the witnesses for coming today.

Canada's economic action plan was huge for my riding. I had the opportunity to talk to all the mayors and the reeves throughout our riding. Medicine Hat is a fairly large riding in the southeast corner of Alberta and is about the same size as the island of Taiwan. I can tell you that throughout the whole riding we saw numerous projects, whether it was roads or work on bridges, infrastructure, the RInC program, community adjustment funding, or knowledge infrastructure, there was money there.

What I saw was the huge acceptance by the municipalities, as well as our other partner, the province, to fund these projects. As a result of that, we have numerous projects that were approved and are well under way. In fact, I have been able to attend a number of the projects that have been completed.

I have never seen so many happy mayors and reeves throughout our riding. The individuals and community members were totally supportive of all of these projects. We had small RInC programs in very small communities. People were just delighted to get their baseball diamond fixed up and repaired and to get new diamonds. From that standpoint, it was absolutely great.

I understand that there may be one project within our group, by the City of Medicine Hat, on water treatment, and they're saying that it may be delayed slightly. It could still come in on time, but part of that was because of the massive floods throughout southeast Alberta this last June. From that standpoint, there was a bit of an impact.

I didn't go around and count the number of people who were working, but I talked to people on most of projects and they told me that they were hiring local contractors. A number of organizations were hiring local people to get these jobs done, and the communities said these projects needed to be done. From that standpoint, I was absolutely delighted that in fact the program has been so successful.

One of the things we did talk about was the accountability. One of the questions I would have for the Transport Canada folks is, in terms of the accountability and the speed, how do you balance being able to get that done?

I have to appreciate all the civil servants who worked on these projects, all the hours and everything. I think they did an absolutely fabulous job.

[Yaprak Baltacioglu]

I see a number of things. I think that Infrastructure Canada very much appreciated the fact that all of the approvals by the central agencies were expedited. They may want to comment on that. There were policy approvals and approvals through Treasury Board.

The Auditor General has that chart that shows what the normal process was and what the expedited process was. That definitely was a big deal for us. It allowed us to really push for the right timelines in terms of delivery.

The other issue is being very aware of the fact that you're under a crunch timeline and being aware of the risks involved. We put in the absolute and necessary accountability elements, stayed true to the Financial Administration Act, and made sure all the rules were followed.

It took a lot of hard work, but we had Infrastructure Canada. We worked quickly with our minister and his office in terms of making sure that the political interface with our officials was carried out effectively so that paper moved back and forth effectively, and people worked really hard.

Our minister was respectful in terms of all of our concerns around accountability. We put all of our controls in, which included me as the accounting officer and my colleague as the associate deputy. That was actually a big success factor.

[The Chair, Liberal, Joe Volpe]

I have to go on to Monsieur D'Amours.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Thank you, Mr. Chair.

I would like to come back to Mr. Rochon.

If you are unable to answer, please let me know so that I can question someone else.

Earlier you said that a first analysis had been done, which was then followed by a second. Based on the latter, are you able to state how many jobs would be created by the economic action plan? I do not know if your data represent full-time jobs, but I would appreciate your giving me that information.

[Paul Rochon]

Up until September 2010, it was estimated that the plan created or preserved some 200,000 jobs.

[The Chair, Liberal, Joe Volpe]

I am sorry, Mr. Rochon, did you say 100,000?

[Paul Rochon]

Two hundred thousand.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

I would like to get some clarity in that regard. I would like to know how many jobs were maintained.

You have conducted a comprehensive analysis, with comprehensive figures on the number of jobs that were maintained and created. What is important or what would be interesting to know is how many jobs were maintained and how many were actually created.

We all want taxpayers to get their money's worth. I would like to return to what Mr. Nadeau touched on earlier. Approximately one sixth of the Canadian budget has been allocated to the economic stimulus plan: we would therefore expect to get our money's worth.

Are we talking about jobs that were maintained? Are there actually people who lost their jobs and for whom new ones were created, or are these people who were already in the construction industry and who, from one year to the next, worked on one project or another? Do you have such figures?

[Paul Rochon]

Clearly, it is very difficult to make such an accurate distinction in times of recession. However, we can give you a very general estimate of the number of jobs related to employment insurance measures, which were jobs that were maintained rather than created, and the number of jobs related to the infrastructure program, which would be a mix of the two types of jobs. However, I would say that...

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Mr. Rochon, you understand the important issue raised by my question. We want to make sure that Canadian taxpayers get their money's worth, both now and in the future. We need to know how many unemployed workers benefited from jobs created as a result of the economic action plan.

We can talk about EI, but that is not what I am getting at. We need to know the number of people who had left the labour force and were able to return thanks to that program.

[Paul Rochon]

I would respond by saying that there would be an additional 200,000 unemployed workers in Canada today if the government had not implemented the economic action plan.