Public Accounts Committee on Nov. 16th, 2010

[John Forster]

That's a very good observation. As for what we did as part of our streamlining to accelerate...normally for a contribution program you'd wait until you signed a contribution agreement. By and large for almost all the projects, our money flowed through the provinces, which then did their agreements with municipalities. We agreed with the provinces that approvals would be given to proponents on the day of the announcement, rather than waiting.

We sent out communiqués through the Federation of Canadian Municipalities, and in Ontario through the Association of Municipalities of Ontario. The minister sent letters to reassure municipalities that if their project was announced, they were good to go. I think that by and large the vast majority did that. There may have been some locally that chose to wait a bit to do that, but the majority went ahead and proceeded. If their schedule wasn't quite as tight on a project, they may have waited for the certainty.

We tried to make sure that communication was clear: that when it was announced, they were good to go.

[Malcolm Allen, NDP, Welland, ON]

This leads me to the next point, which is also talked about in the report. It talks about deadlines given to some of this and criteria being laid out around it. One of the criteria was said ad nauseam by all folks, in all areas, including parliamentarians, and that was “shovel ready”, which really became.... If somebody would have hit somebody with that shovel, it might have been more appropriate to stop those shovel ready comments.

But what the Auditor General is saying is that indeed some weren't, but then they got approvals. So you can imagine someone like me, who was sitting as the chair of corporate services of a small municipality that had a major project it wanted to do and, because of the timelines, needed to accept the risk, but couldn't. Then we find out later through an audit that programs that weren't ready got accepted after the fact. You can imagine how that municipal council must feel. They would be asking why they didn't just throw theirs back in the mix as well, because they weren't really ready either, and now we have approval processes after the fact.

Again, do you have any sense of how many happened...? I'd expect that it's only a few, but nonetheless, that wasn't the criteria that were laid out and communicated across the country when the program was rolled out.

[Yaprak Baltacioglu]

Again, those are good points. The criteria for the program were pretty simple. I appreciate that it had to be ready, and the other one was that a municipality or whoever was working on it could finish that in two years. We had all our partners attest that they would be able to do that. We took the attestation by our partners, by the municipalities, as the proof that the project was ready.

I believe the Auditor General—and they can elaborate on that—did say that there were numerous reasons for delays. Sometimes projects were ready, but they had a contract issue, or they had a conversation with another partner, or it could have been the discussions between a provincial government and the municipality and certain arrangements between them. It could have been something that went off...they assumed that it was ready, but something wasn't really ready. These are individual projects. There are sewer projects and water projects. Anything can go wrong in some of these things and that explains the reason for the delay.

But as much as we know—and the Canadian Federation of Municipalities has said this to us over and over again—they very much appreciated the work that at least our department has done with the municipalities and with the provincial governments, in partnership ,in getting this off the ground. We actually have results that we are showing because a number of projects are already completed, and the majority are done, and we have a number of months to go. That's the best I can tell you.

If a municipality had attested that the project was ready but it turned out not to be, I don't have an example of that, but I would say that if there were cases like that, there would be fewer than five or 10 of them, because people took this seriously.

[Malcolm Allen, NDP, Welland, ON]

I understand and I heard what the Auditor General said about how there were different reasons why things happened. But I was really concentrating on the fact that there were some that weren't--quote, unquote--shovel ready. Because, knowing that world--because I came out of it--if a project is not scoped out, it should never have been presented. So if it isn't shovel ready, it's not scoped out.

But Mr. Smith, if I may, when we talk about jobs reporting, we've heard numerous times about all these numbers being bandied about. The Auditor General was quite clear in saying...I'll quote from point 1.64: “In their reports to the Treasury Board of Canada Secretariat, we found that, for the infrastructure programs we audited, departments used different units of measure and methodologies to estimate the number of jobs created...”.

So I guess my question is, how trustworthy were the numbers? Because at one point the word “anecdotal” was used in the Auditor General's report, which is not a very firm number, I might add, for those who work in the numbers area. That's more a politician's jargon when it becomes anecdotal, rather than your firm numbers.

The subsequent question is—because I know my time is going to be up, Chair—are the numbers firmer now in the sense that the methodology is more precise?

[The Chair, Liberal, Joe Volpe]

I want to give Mr. Smith an opportunity to give a very brief answer.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Mr. Chair, for your indulgence.

[Alister Smith]

Very briefly, I'll turn quickly to the Department of Finance on this. We did provide some early guidance to departments on collecting job information, and it was quickly pointed out by departments that it would be very difficult to collect the kind of precise information we would want in order to aggregate to good job impacts.

I'll just turn to my colleagues of the Department of Finance here. We decided fairly early on that a better method would be to use a modern econometric model to do this kind of assessment.

[The Chair, Liberal, Joe Volpe]

He's going to have to elaborate, perhaps at the next question—

[Alister Smith]

Sure.

[The Chair, Liberal, Joe Volpe]

—because we're well over. I thank you for that, though.

Mr. Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Mr. Chair.

Thanks to our witnesses for being here today.

My first questions are for the Office of the Auditor General.

In the OAG news release on chapter 1, there is a quote that says: “The Economic Action Plan is a huge undertaking, involving some $47 billion in federal money and a further $14 billion from the provinces and territories, within a two-year time frame”.

Now, is it fair to say that this is one of the largest--if not the largest--undertakings by the federal government on infrastructure spending?

[Ronnie Campbell]

Mr. Chairman, I am not aware of any undertaking that was of this magnitude.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

Now, timeliness, of course, was of the essence as well when it came to executing the action plan. On page 8, in exhibit 1.2, there is a comparison between the policy and financial approvals during the regular process versus during the expedited or accelerated process of EAP. Can you walk us through these processes and perhaps highlight the differences?

Maybe Mr. Stock...?

[Gordon Stock]

Thank you, Mr. Chair.

This process was something that was put in place for certain programs--not all programs, but where it made sense, where there was already knowledge of the background of the program. The policy approval process was done in a similar timeframe, as well as the Treasury Board financial approval. That allowed them to really reduce the amount of time considerably.

My colleagues from the central agencies may want to comment further on how that was done.

[The Chair, Liberal, Joe Volpe]

Mr. Smith.

[Alister Smith]

Sure.

Well, I think the diagram on page 8 that Mr. Saxton is referring to and Mr. Stock discussed is quite revealing. A lot of the work had to go on in parallel between Treasury Board and PCO, and with a lot of coordination, in order to make this work in this way. Normally it's a linear process, where we require policy approvals before we take submissions into Treasury Board for funding approval, and we were able to work in a much more parallel fashion in these circumstances.

[Andrew Saxton, Conservative, North Vancouver, BC]

Would you say that these processes were successful, that they achieved what they intended to achieve?

[Alister Smith]

Yes, I think they did. They shortened the timeframes for approvals quite dramatically--from six months to two months--without sacrificing the due diligence. So I think they were quite successful.

[Andrew Saxton, Conservative, North Vancouver, BC]

Okay. Thank you.

My next question is regarding the new central vote 35, the Treasury Board vote 35, which was included in the 2009-10 main estimates. Can you explain the impact that this vote had on getting money out the door more quickly?

Perhaps Mr. Stock could start.

[The Chair, Liberal, Joe Volpe]

Mr. Campbell or Mr. Stock?

Mr. Stock? Great.

[Gordon Stock]

Thank you, Mr. Chair.

Vote 35 could be seen as something like a financing mechanism to be able to make the funding available to programs earlier than waiting for the supplementary estimates process. The ability to deliver that through a delegated authority sped the process again, in being able to make that available and make the authorities in place at an earlier time. Again, the representative from the Treasury Board Secretariat may want to comment further, as that was under their responsibility.

[The Chair, Liberal, Joe Volpe]

Mr. Smith.

[Alister Smith]

Thank you, Chair.

I think that's accurate. I don't have anything to add.

[The Chair, Liberal, Joe Volpe]

Mr. Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

This was a very controversial vote 35. I know, because I defended it many times on panels. Would you say that in hindsight it was a success and it did achieve what it intended to achieve?