Public Accounts Committee on March 13th, 2012

[Robert Dunlop]

In the case of KIP, the knowledge infrastructure program, where we had partnerships with the provinces and territories, we depended on their reports, which we had monitored by the outside expertise in engineering as well, so we received reports from both.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

My next question is for Privy Council and finance department officials. The government decided to extend the deadline for applications for some of the programs. Can you comment on the type of analysis that went into making that decision?

[Rick Stewart]

Thank you for the question.

As you can appreciate, the Privy Council Office has a coordination role in working with departments and also plays an advisory role, both to the Prime Minister and in support of cabinet decision-making.

In the context of the economic action plan implementation, we had a regular process of receiving updated information from the project delivery departments, or those departments responsible for delivering the programs, and we had, working with our finance department colleagues, a process of regular monitoring of the progress in those projects, with a view to being able to assess the progress being achieved and to assess the completion prospects, if I can put it that way, and assess the likelihood of projects being able to be completed by the deadline. So it was on the basis of very detailed information that was provided by the program managing departments that we assessed that progress and provided an assessment to the government of the progress being achieved, and an assessment of prospects around potential deadline extensions.

[The Chair, NDP, David Christopherson]

Thank you. Your time has expired.

Moving now to monsieur Dubé, you have the floor, sir.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Thank you, Mr. Chair. I would also like to take this opportunity to thank the witnesses appearing this morning.

Program administration has an accounting aspect and a performance evaluation aspect. The auditor's report indicated that, with respect to the economic action plan, the design of this program did not allow for proper assessment of the main objective, which was job creation.

Given the importance of this objective in the recession, could you tell us more about the problems encountered and indicate why no measures were in place? What was missing in the design of the program?

[Ronnie Campbell]

Thank you, Mr. Chair.

Comments about not being able to gather job information are in relation to one program, the community adjustment fund. I think it's important to separate that from the broader question of assessing the impact of the economic action plan on the Canadian economy. That broader analysis has yet to be done, and the government has said that they're going to do it. So that's important.

As to the community adjustment fund, that program was designed to generate and maintain jobs. We think it's a bit of a missed opportunity, in that they didn't gather the information necessary to do it right. But doing that for the program wouldn't have allowed the government to do the impact analysis on the overall economic action plan. That's still to come and it's an important part of this story.

Thank you.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Thank you for the clarification. However, as you said, the objective of the community adjustment fund was job creation.

In your opinion, and with these clarifications in mind, is it normal that a strategy to evaluate the objective or attainment of the objectives was not established first, not necessarily for this program, but in general?

As an auditor, do you believe that is the usual and standard practice?

[Ronnie Campbell]

For this program, I would agree with the member that you would expect the design to be done in a way that would allow for measurement. You would also expect the information to be gathered in that way. A lot of the economic thinking out there suggests that the impact should be calculated in a much broader way than by just looking at the program. But yes, we would have expected the specific programs to have gathered the information in a way that would allow them to assess the program's impact.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

I have a question for the representatives of the various departments and the Treasury Board. Recommendation 1.71 of the Auditor General's report states:...the sponsoring departments, in consultation with the Treasury Board of Canada Secretariat, should ensure that programs are designed to allow for reliable performance measurement and reporting on overall impact and effectiveness.

What do you think of this recommendation? What lesson do you take away? In light of these suggestions, how will you proceed in future?

[David Enns]

We agree with the recommendations of the audit, and we are taking steps to improve the quality of the advice we provide to departments. Through the course of the year, we engage in a range of outreach activities with them. We issue best practices. We talk to them in one-to-one meetings. We have a GC forum site that allows for interaction as departments develop their initiatives. We are trying to help them improve their performance measurement and reporting.

We also monitor this on an annual basis through the management accountability framework, which has a specific line of evidence that addresses the quality of both performance measurement and reporting. We report back to them on that, and we will continue to address these issues. In addition, we will continue to update annually the guidance we provide on departmental performance reports.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Was there something missing in the programs in the past? Is this the first time that there have not been measures that take into account the objectives, or has this always been the case?

[David Enns]

I think I'll let my colleague from the Department of Finance address that.

[Douglas Nevison]

Let me go back to the original question about assessment. While the Auditor General's office is correct that the final report on economic assessment is still to be drafted, I would point out that there have been a number of assessments done while the program has been in place. There have been seven reports that have looked at the economic action plan and its impact on jobs and projects. Three of those had an assessment of the job impact based on a macroeconomic model.

So while there was information gathered at the project level, which provided concrete examples of jobs in particular projects, we determined early in the process, similar to what was done in other jurisdictions such as the United States, that the model-based approach was the best way to look at the direct job impacts, the indirect job impacts associated with the project, and also the induced impacts.

I think it's also important to remember that the economic action plan wasn't entirely project-based. There were a number of significant measures, such as the home renovation tax credit, that were not part of a project-based approach but also contributed significant stimulus to the economy through job creation.

[The Chair, NDP, David Christopherson]

Very good. Thank you very much.

Moving on, Mr. Kramp, you have the floor, sir.

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

Thank you, Chair, and welcome to all of our guests here today.

I can recall sitting in the House, and the government certainly made a decision, and I might add that it was generally supported in Parliament as well. The bottom line was there was a designated need for speed, probably an unprecedented ask to the infrastructure, industry, and finance departments, certainly since the time I've been here.

At this point, I think a phenomenal number of kudos have to go out to everybody involved who made this such a tremendous success over a short period of time. The challenges were daunting, the scale and scope was absolutely aggressive. For all the departments to come through in such a manner, let me just say, on behalf of the Canadian people—I know I can speak on behalf of my riding—thank you very much for a job very well done.

My concern, of course, is are you now going to be a victim of your own success? Because you did such a great job on this, some people are saying why don't they do that all the time; why can't we just move at that speed and that rate of success when the normal sort of process of government sometimes appears to be a snail's pace?

There are lessons to be learned from this, hopefully, for all of us—parliamentarians, certainly. But I would also hope that departmental influences can take the positives from this and perhaps put that into some measure of definable policy going forward.

I want to speak briefly on the knowledge infrastructure program. I know my colleague Mr. Dreeshen, who has a strong background in that, will focus more clearly on that, because that's his field of expertise.

We've all had successes. I have Loyalist College in my riding, where for the first time we took applied research out of the university domain and dropped it down to another level. We did some announcements at Kingston too, where I saw a process as a result of this kind of stimulus.... As a matter of fact, the professor was Dr. Philip Jessop at Queen's at the Green Centre. The organization committed funds from the program. Even now they're in a pilot process in which they can potentially eliminate tailing ponds.

So I can assure you the reach goes beyond simply a significant number of jobs now.

I'm really looking forward to the long-term examination of the results of this, and so are the Canadian people. I think they're going to be absolutely delighted.

My question would go to the Auditor General at this point. Sir, obviously I hold the departments in high regard for their delivery of this program. I would like your evaluation as to why they were able to deliver the success of this program in such a short period of time.

[Ronnie Campbell]

Thank you.

Going back to our first audit on the economic action plan, we identified a number of success factors. I think a big part of that was senior management attention. I think the senior bureaucracy was seized with this initiative. Sometimes in government you see early attention and then senior folks go on to other things and sometimes the energy gets lost, but that wasn't the case here. We saw lots of evidence that deputies were actively involved as a group and within their own departments.

Departmental audit committees were seized with this as well. There was good governance around it, and I think when you've got that amount of sustained attention from senior folks, it flows right throughout the whole organization.

Thank you.

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

Thank you.

For infrastructure and industry, then, whoever would like to offer a comment on this.... As I mentioned, obviously there have been lessons learned for all of us. Could you give me an example of some of the lessons you have learned from this process that hopefully we can take forward and make that a modus operandi in the future? Is there something definitive that stands out that either we can give you in the sense of commitment or direction from Parliament or that as a result of everything that's taken place you have found it to be so successful you may be planning on adapting this in the future?

[Taki Sarantakis]

Maybe I'll start and then my colleague from Industry Canada will add to my comments.

From our perspective, there were two things that really made this work. First, internal to the civil service, as the Office of the Auditor General noted, there was a tremendous degree of focus, where everybody understood this and everybody knew that this was the number one priority. There was a lot of collaboration that went forward. Approvals that often take six to eight months we got in three to five weeks. So the compression of that time period was tremendously important.

Second, from the perspective of the broader parliamentary context, I think there was a real clear understanding that this was an economic emergency, that there was no time to play games, so to speak. The leadership was very focused on the fact that this had to get done one way or another. It wasn't just about announcing Canada's economic action plan; it was about implementing Canada's economic action plan. So there was a real focus all around at all levels.

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

Is there any further comment on that?

Mr. Dunlop.

[Robert Dunlop]

We haven't mentioned our partners in the provinces and territories very much. Obviously, in the case of KIP, almost all of our projects were shared fifty-fifty on eligible costs. They mobilized very quickly, and we were able to engage with them to make the choice of the final projects in a matter of months—a process that would often take much longer. It wasn't just inside the federal public service; the provinces also made these programs a success.

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

So we were able to operate as a really successful team on this—great teamwork by all involved.

Thank you very much.

[The Chair, NDP, David Christopherson]

Thank you very much.

Madame Blanchette-Lamothe, you have the floor.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Thank you very much, Mr. Chair.

I would like to thank all our guests for being here. It is very much appreciated. I wish to congratulate you on your work. In general, the report is very positive. I wanted to point that out before asking questions.

In his introduction, Mr. Campbell mentioned that it may be pertinent to determine progress being made by departments in preparing their reports and when they believe they will be able to present their reports to the committee or to the Office of the Auditor General. I would like to give our witnesses an opportunity to tell us where they are on this.

[Douglas Nevison]

Thank you, Mr. Chair.

I may have misunderstood the question, but if you're talking about reports to Canadians, as mentioned by Mr. Campbell, the government has committed to doing a final report on the economic impact of Canada's economic action plan. Once we had all the relevant information available for the four infrastructure programs that were extended to the end of October 2011, provincial partners had until the end of January to provide their final claims. It's my understanding that we have that information and we now have to verify it. Once those numbers are ready to go, the government will be in a position to determine when they will publish that final report they're committed to.

The final spending numbers will be available in the fall of 2012 for those four projects under the typical public accounts process.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Thank you very much.

Mr. Campbell, in its December 2010 report on the same matter, the committee made the following recommendation:

That in its second audit of Canada’s Economic Action Plan, the Office of the Auditor General consider examining whether funds were spent with due regard to economy and efficiency.

Why did the Office of the Auditor General decide not to examine whether funds were spent with due regard to economy and efficiency? Why not follow up on this recommendation?