Public Accounts Committee on Oct. 31st, 2011

[The Chair, NDP, David Christopherson]

I now call this eleventh meeting of the Standing Committee on Public Accounts to order. I would ask the camera people to conclude their...do they still use the term “filming”? You worry these days, as you get older.

I thank them for being so cooperative. I appreciate it.

We have two orders of business. The first one is committee business, and I'm seeing a hand from Monsieur Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I will speak after Mr. Saxton.

[The Chair, NDP, David Christopherson]

So you want to be on the speakers' list for that item? Very well.

Hearing no other concerns off the top, I will call item number one, which is indeed committee business. That would be the notice of motion submitted last Friday by Mr. Saxton.

Unless someone has objections, I would rule that this motion is in order and therefore would turn to Mr. Saxton to present his motion and offer opening comments.

Mr. Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Mr. Chair. All of my colleagues should by now have a copy of the motion in front of them. I will read it to them briefly.

The motion is:

That, on November 2nd, 2011, at 3:30 pm, the Standing Committee on Public Accounts hear from Tony Clement, President of the Treasury Board and Minister responsible for FedNor and John Baird, Minister of Foreign Affairs and the Deputy Ministers of Industry Canada, Transport and Infrastructure and Communities and the Secretary of the Treasury Board for two hours to answer questions on the spring, 2011 Auditor General’s Report on the G8 Legacy Fund.

I think all of my colleagues would welcome this opportunity, and I ask for your support in having this motion adopted. Thank you.

[The Chair, NDP, David Christopherson]

Thank you, Mr. Saxton.

Monsieur Caron, you asked to speak second to this. You have the floor now, sir.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

No, actually, it's on something different.

[The Chair, NDP, David Christopherson]

Oh, it's on something completely different? Very well.

Are there any other speakers?

Monsieur Bélanger.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Will that meeting be televised, Mr. Chairman?

[The Chair, NDP, David Christopherson]

Yes, my understanding is that it's going to be televised on Wednesday. If there is any change to that, I assume I would hear first and that the committee would hear immediately after. But my understanding is that it will be televised.

(Motion agreed to)

The next order of business....

Did you want the floor prior to our second order of business, Monsieur?

Okay, you have the floor now, sir.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

We received the motion we just voted on Friday afternoon. Mr. Kramp had notified us in advance. The situation is understandable. However, I am not happy about having received all of the supporting documentation for this meeting at 8:40 this morning. This gave us no time at all to absorb all of that information. Of course, we studied the file and prepared our questions, but we would have appreciated receiving that documentation long before 8:40 this morning on the very day of the hearing. I find it beyond the pale that we are being asked to do this so quickly. I'd like the government to explain to us why we received that documentation so late. In fact, those documents could easily have been made available to us last week.

I'd like to know first of all why we received these documents on the very morning of the hearing, that is my first question. I will have a second question afterwards.

[The Chair, NDP, David Christopherson]

I'll allow members of the government side to comment, if they wish.

Mr. Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Mr. Chair, and thank you, Mr. Caron, for asking the question.

First of all, we did not receive this information until Saturday, so we got it to you at the first possible opportunity. I understand it is very short notice, and we apologize for that. We ourselves didn't get it until Saturday, and I didn't get it until this morning because I wasn't here on Saturday either.

We apologize for the short notice.

[The Chair, NDP, David Christopherson]

Monsieur Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

At this time, the document is useless. Unless we consult it now, during the hearing, it won't be possible to use the information we have here. It is probable that the questions we wanted to ask are in it. We could have redirected our strategy.

There may have been confusion on the Conservative side, but today's meeting is important. And I think that in future, we'll have to proceed differently if we want this committee to be able to do its work in an appropriate way.

If possible, I'd like to move on to my second point, which is that I would like to table a notice of motion for Wednesday.

[The Chair, NDP, David Christopherson]

Let's make sure, on that item, there are no further comments, then? Okay, good, that's concluded.

You still have the floor.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I would like to table a notice of motion which I am going to read quickly. It is a notice of motion for Wednesday because we are going to be receiving Mr. Clement and Mr. Baird at our next meeting. I'd like this to be discussed immediately at the end of the meeting with the two Conservative ministers. I have copies of the notice of motion for our friends across the way and one for the clerk. It reads as follows:

That the following reports adopted and presented to the House in the 3rd Session of the Fortieth Parliament be adopted as reports of the committee in the present session; that the Chair present the reports to the House; and that, pursuant to Standing Order 109, the committee request that the government table a comprehensive response to each report:

The following chapters are mentioned: Chapter 3 of the Fall 2010 Report, Chapter 2 from the Spring 2010 Report, Chapter 1 from Spring 2010, Chapter 4, Spring 2010, Chapter 4, Fall 2009, and Chapter 1, from Fall 2010.

The work on those six chapters was completed during the previous session or when the Standing Committee on Public Accounts was struck during the last session. All that needs to be done is that they be tabled again with the government in order to obtain a reply. This also includes the report on expenditures from 2010-2011.

That, pursuant to Standing Order 108, the committee resume the following study undertaken during the 3rd Session of the 40th Parliament, that is Chapter 3 on rehabilitating the Parliament buildings, Chapter 4 on managing conflicts of interest, Chapter 5 on regulating and supervising large banks, following-up on recommendations made by the committee in the second session of the 40th Parliament, the Chapter on the acquisition of military helicopters, the Report of the Auditor General of Canada on the Public Sector Integrity Commissioner of Canada, Chapter 9...

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Chair, may I just interject for a moment? We have somebody here, a witness, and in the interest of time, perhaps this is something that could come up at the steering committee.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I'm almost finished.

[The Chair, NDP, David Christopherson]

I do believe he's just about done, and then I'll make a quick comment and we'll move on. But your point is taken.

Monsieur Caron, if you would, please.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I will pick up where I left off:

[...] the Report of the Auditor General of Canada on the Public Sector Integrity Commissioner of Canada, Chapter 9 on Pension and Insurance Administration of the Royal Canadian Mounted Police, as well as the Public Accounts of 2010. That the evidence heard and documentation received by the committee in relation to this study be taken into consideration by the committee in this session and that the committee schedule a meeting in November 2011 for the resumption of theses studies.

This motion will probably be familiar to the members of the committee. However, whereas the previous motion referred to beginning our study of these reports in October, this time we are talking about November. That is all.

[The Chair, NDP, David Christopherson]

Okay. We don't want to entertain any debate. In fact, no further action need be taken on this, up to and including my ruling as to whether it's in order. But I have allowed you an opportunity to place it. That notice of motion is now before us, and we'll deal with that going forward.

If there are no other further interjections then, I will move us to the main purpose of our meeting today. Hearing none, I will assume that I have the support of the committee to move forward.

Therefore, may I first of all welcome Mr. Michael Ferguson, who is the nominee for the position of Auditor General of Canada. Welcome to our committee, sir.

I did have a chance to have a couple of words with you ahead of time.

I want to let the committee members know that I expressed to Mr. Ferguson that while questioning may indeed be tense and tough from time to time, there are lines of fairness. If he's concerned those lines are being crossed, he can raise them as a concern with me, or he may look to me to get an indication of whether or not he has to comply with what's been put forward or whether he needs to continue in that particular vein. I just want to make sure that Mr. Ferguson understands that it's not the whole world against him here, and that he has rights too as a citizen. I wanted to say that publicly so if colleagues had any concerns about the way I was going to approach this, you can raise them with me now.

Hearing none, Mr. Ferguson, again, welcome, sir. I know you have opening comments, and I will turn the floor over to you to make those comments. You now have the floor, sir.

[Michael Ferguson, Nominee for the position of Auditor General of Canada, As an Individual]

Good afternoon and thank you, Mr. Chairman.

I am very honoured to be here today as the nominee to be the next Auditor General of Canada. The role of Auditor General of Canada is a very significant one in the accountability structure of Canadian democracy.

My name has been put before you after a lengthy selection process conducted by the government but I want to assure this committee that having been Auditor General in New Brunswick for five years, I fully understand that the position is that of an agent of Parliament. Despite the fact that the selection initiative legally lies with the Government of Canada, both Houses of Parliament must approve the appointment.

If my appointment is approved, my allegiance will be to Parliament and to the ethics required by my profession as a chartered accountant. I firmly believe that this position can only be performed in a completely independent and objective matter.

Parliament gives the government the authority to execute certain functions and provide the government with the budget appropriations to do so. The Auditor General's primary task is to provide Parliament with information that it can use in fulfilling its oversight responsibility.

Let me begin by saying that I am well aware of the importance of your committee as the primary interface between the Office of the Auditor General and the House of Commons.

Parliament established the office and position of the Auditor General in statute and has laid out in statute the Auditor General's powers, duties, and functions. Under the act, the Auditor General's primary task is to examine the financial accounts of the government, and through your committee, to provide Parliament with information it can use in fulfilling its responsibility to hold the government to account.

In the past I have attended joint national meetings of auditors general and public accounts committees. My impression from these meetings has always been that the federal Public Accounts Committee has been one of the most effective of public accounts committees in the country. It is very important for the Office of the Auditor General and the Public Accounts Committee to have an effective working relationship.

I hope that the discussion we will have today will help to establish your trust in me, a trust that we will jointly require in order that our work together can bring about the results Canadians expect from the Auditor General's Office and from this committee.

The Auditor General provides information, gathered through a rigorous and objective process, to Parliament so that Parliament in turn can hold government accountable for its delivery of services to Canadians. The Auditor General also provides insight into how the government can provide those services efficiently and with due regard to economy. The Auditor General helps to ensure that sound accounting practices are followed in the government's financial statements and that robust financial controls are in place across government to ensure the responsible use of public funds. It's important that the findings and recommendations of the Auditor General be evidence-based rather than expressive of opinions or emotions. It is not the auditor's function to debate policy.

My definition of the success of this role would be consistent with the strategic outcome and expected results that have been itemized in performance reports issued by the Office of the Auditor General of Canada in the past; that is, contributing to a well-managed and accountable government for Canadians by helping to keep Parliament well informed and engaged. This is achieved by performing work that is relevant to members of Parliament, the citizens of the country, and other stakeholders of the office.

The Office of the Auditor General of Canada has experienced many well-noted achievements in the past. I especially want to acknowledge the superb work accomplished by Ms. Sheila Fraser during her term as Auditor General. It is not easy to follow someone of her standing in this role. She conducted herself with dignity, integrity, professionalism, and excellence. My goal will be to build on her excellent work, just as Ms. Fraser was able to build on the exemplary contribution made in the position by Monsieur Denis Desautels. There is a tradition of excellence in the office, and I commit to striving to uphold the standards set by these two remarkable public servants.

As far as my personal experience is concerned, I served five years as comptroller and the past year as Deputy Minister of Finance and secretary to the Board of Management inside the New Brunswick government. I also served five years, between 2005 and 2010, as the auditor general for the province, reporting to the New Brunswick legislature. I believe this experience gives me insight into how government operates from the inside, as well as experience in objectively auditing government. I am not new to the government auditing world.

In order for this committee to be comfortable with how I will approach the role, I am fortunate to have been the auditor general of New Brunswick for five years, so my approach and performance is a matter of public record. I am also in my third term serving on the Public Sector Accounting Board, the organization that establishes accounting standards for Canadian governments. And I served one year as president of the New Brunswick Institute of Chartered Accountants.

I am not unknown to the Office of the Auditor General of Canada. I have worked with some of the staff of the Office in the past when I was Auditor General of New Brunswick. I have also worked with the current interim Auditor General, John Wiersema, in other professional capacities in particular on the Public Sector Accounting Board.

I am confident that if appointed I will have the good fortune of joining an organization that is widely respected, and that from my vantage point appears to be very well run. I would not expect to have to make significant changes to the operations of the office. In fact from an operational perspective I believe that my main task will simply be to stay the course.

I have already referred to two of the most important values for the Office of the Auditor General, which are independence and objectivity. The Auditor General must act with independence and objectivity through the protections and mechanisms provided for in the Auditor General Act.

As a chartered accountant, integrity, due care, objectivity and independence are also expected of me as professional requirements in the execution of any work I perform.

I now want to recognize one challenge that my candidacy presents—which is that I am not yet bilingual. I am from a bilingual province where the equality of both official languages is always a top of mind consideration in policy making. However, I have not yet personally attained proficiency in the French language. I understand that in order to be properly respectful of Parliament and the citizens of Canada that I will need to improve my French language capability. I am committed to doing so, I already have been assessed and I am already in the process of upgrading my skills in the language.

I would like to close my comments by simply reiterating that as Auditor General one must be diligent in the protection of the independence and objectivity of the position, and I completely understand that the position is an agent of Parliament.

I am here today to answer your questions. I want to provide you with the information that you need about me to properly consider my nomination. I sincerely hope that when we are finished, you will be in a position to approve my appointment.

Thank you, Chair, I am now ready to take your questions.

[The Chair, NDP, David Christopherson]

Thank you very much, Mr. Ferguson. We appreciate your opening remarks.

I'll remind the committee of a couple of things. One is that we will commence comments and questions as per our usual rotation. But I'll give another reminder that this meeting itself was optional. We didn't have to hold it; the committee decided to hold the meeting. Likewise, there is no obligation on the committee to act upon any result of this meeting; however, we have the option of reporting to the House, and within that we can acknowledge that we had this hearing and indicate whether or not there is a recommendation yea or nay. All of those matters are optional and are up to the committee. They will be decided by the majority at the appropriate time.

Is that all clear?

Good. With that, we will begin the rotation.

Mr. Saxton, you, sir, have the floor.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Mr. Chair.

And thank you, Mr. Ferguson, for coming here today. As you can see, there is no shortage of interest in your nomination and your presence here today.

Mr. Ferguson, Canadians expect their Auditor General to be the most qualified individual for the job, someone who has a proven track record of independence, merit, fiscal responsibility, and fortitude. We know that you are well respected in New Brunswick for your abilities, but the Auditor General of Canada has a much bigger role.

Quite simply, why do you believe you were nominated for this important position?

[Michael Ferguson]

Thank you, Mr. Chair, for that question.

Fundamentally I think what I bring to the table is a well-rounded set of experiences. In the human resource world there is a concept referred to as 360-degree feedback. If you look at my history in the province of New Brunswick you will see that I went from a position of being a comptroller in the province of New Brunswick, which is a position that receives recommendations from the auditor general's office and has to implement them, to then being the auditor general for five years and having to be in a position to make recommendations that I felt would be and could be implemented, to now the position of Deputy Minister of Finance, whereby I am in the position of having to try to implement some of the recommendations that I myself made.

So my experience is broad. I spent five years as auditor general of New Brunswick, and as I said in my opening comments, my performance in that role is a matter of public record.

I do not have a lot of experience with the federal government or with federal departments from the inside, but in New Brunswick there are many points of contact with the federal government. The perspective that I bring to the federal government is that of a stakeholder and of having observed many topics and many points of interest between one of the federal government's main stakeholders, that being a province, and the federal government itself.