Public Accounts Committee on Nov. 29th, 2012

[Randy Williamson]

Yes, it's the judgment of the three board members.

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

You have no criteria to evaluate whether the collective competence is sufficient or not? What is your judgment based on, exactly?

[Randy Williamson]

I think our criterion is our experience. I would use the example of the conversion to IFR standards.

Speaking personally, my background experience includes the managing of a very large dairy organization in Canada as chief operating officer and president. I'm very familiar with the management of reviews of budgets and financial statements and so forth, but I have absolutely no expertise related to the conversion of systems within an organization. Hence we determined that all three board members felt themselves to be exactly in the same position and that we needed support, and we sought that support.

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

Thank you.

You say that you get external support when it is needed. How often do you feel the need for external expertise?

[Randy Williamson]

It's very infrequently. I believe that we have a skill set relative to the ongoing review of the financial administration of the organization that is adequate. Notwithstanding this, we are in agreement with the OAG that an opportunity to add an individual with a financial designation would be a benefit. We are in agreement.

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

My next question is for either Mr. Shier or Mr. Ferguson.

In light of what was done with respect to the first recommendation you made, do you think that the actions taken are in line with your recommendation? In your opinion, should anything more be done to comply with the first recommendation?

[Michael Ferguson]

Mr. Chair, I think that fundamentally, the first thing to recognize is that there is a challenge when you're dealing with a three-member board. That's something that needs to be well considered.

In terms of the specific question, it's good that the board is assessing each situation to determine whether they have the skills. We haven't audited what they have done, but I think, sir, that what we would like to see is probably something that indicates that there's a bit of a process in advance, saying that these are the types of skill sets that the board should have in total, and then assessing which ones they have and which ones they don't have, and then, for those gaps, those are the ones they would have to get help for from the outside.

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

I understand that you are expecting something a little more structured, something that is somewhat less dependent on the good judgment of the three members? Is that what you meant?

[Michael Ferguson]

That would certainly be best practice. If there were a bit of an inventory of what skill sets were required, and then an assessment of what the existing members have against that sort of inventory, the gaps would be the areas in which you would get outside assistance.

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

So you feel that the actions that were explained to us today were a step in the right direction, but still seem to fall short of a rigorous follow-up to the recommendation?

[Michael Ferguson]

Again, without having actually gone in and audited what they're doing, I think you've probably characterized it fairly well. It sounds as though they are being proactive, that they've made a step in the right direction. Maybe something a little more formal would be the best practice.

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

Thank you, Mr. Ferguson.

Mr. Williamson, the Auditor General has just reiterated that he feels that three members are not sufficient. You said a little earlier that you might indeed consider adding a fourth person.

Could you clarify your position in that respect, because I see a certain contradiction with regard to this concern expressed by the Auditor General, which is perhaps not being taken seriously enough.

[Randy Williamson]

First of all, we take the Auditor General's recommendations very seriously. The constraint comes from the CDC Act. The CDC Act stipulates three commissioners.

We are in complete agreement with the Auditor General if he is suggesting that it would be better served with a larger contingent on the commission. We are in complete agreement with that. We are currently constrained by the CDC Act.

[The Chair, NDP, David Christopherson]

Thank you very much. Time has expired.

We now go over to Mr. Kramp.

You have the floor, sir.

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

Thank you, Chair.

Welcome, gentlemen.

My first question is for Mr. Shier.

Obviously, there has been extensive involvement with the CDC on this. I am wondering, Mr. Shier, was any time spent on farms or in industry in order to either validate or corroborate the information you have from CDC?

[Dale Shier, Principal, Office of the Auditor General of Canada]

Thank you, Mr. Chair.

On farms, no, but as part of our process, we have what are called advisory committees. We had representatives to guide us in our work, both at the planning stage and the reporting stage. As part of that process, we had representatives from consumers, industry, and producers on the advisory committee internally. We consulted stakeholders during the examination as well.

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

Okay, so you did have some broad-based information together. That's the point I wanted to inquire about. Thank you very much.

Gentlemen, I am very fortunate in one way. I am very, very proud. I come from a very strong dairy area in eastern Ontario. Growing up, I can recall on every concession road there were milk stands and a huge number of award-winning cheese factories. Of course, as Bob Dylan said, “the times they are a-changin'”.

We still have a number of award-winning cheese factories, but of course, significantly fewer and in higher volume. It's the same thing with our farms. We have some phenomenal dairy operations involving hundreds of cows instead of just the 15 or 20 cows that a person would make a living with. It is dramatic evolution. In order to succeed.... I have been in a number of these operations where now there's the prevalence of a methane digester, and in the various large plants, whether it's Gay Lea, Parmalat, or others, I see the technology they have embraced in order to be competitive. It is quite outstanding.

The key question I have is for Mr. Williamson. Mr. Williamson, in order to compete, we have to evolve, but of course we have to innovate. Innovation is absolutely critical. What role would your agency play in the promotion of innovation? Could you give us some examples?

[Randy Williamson]

I am in complete agreement. It's a very important component of the CDC. We go back to our mandate and, within the mandate, it makes reference to ensuring that there is an adequate and continuous supply of high-quality dairy products. We read into it that innovation and new opportunities are an important part of that. We have a dairy product innovation program whereby individual processors or manufacturers across Canada can approach us with an innovative product. Should that pass the test of a particular committee in terms of innovation, we provide milk for that. There is no issue. It adds to the milk supply within Canada, which gives them an opportunity to ensure they are not moving ahead simply because there is no milk available.

We provide other opportunities, as I mentioned earlier, relative to a marketing program, matching investment funds and such.

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

How about our young people? Are you able to work with them to help innovate and train?

[Randy Williamson]

We have a scholarship program. That scholarship program has been very successful. It has been in place for about nine or ten years.

Over the course of those nine or ten years, we have supported 57 master's projects and 20 Ph.D. projects. They are dairy-focused projects. They are projects for which the intent is that on a long-term basis, by investing in education and young people in terms of their interest in the dairy industry, and by investing in master's and Ph.D. projects, we will create an opportunity, a road map, if you like, for innovation.

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

Going forward, once again, we have to be competitive or we don't survive. In our effort to be competitive, we really need to know how we get there, and our performance has to be validated, audited, and/or examined to some extent.

Obviously, I am assuming you have some form of performance indicators. I would like you to elaborate on that. I would like you to tell us not only what you are doing, but I am hoping you are taking some steps to improve the performance indicators so that you can evolve as the industry is evolving. Could you give us a little bit of background there and take us through that step?

[Randy Williamson]

It's a very good point.

Recently, and I'm going to suggest it was in the last three or four years, part of our annual report included an indication of our objectives. We link our objectives in a given three-year period back to our mandate. Our high-reaching goals are basically the two components of our mandate. Within that, and on an annual basis, we identify what our objectives are and the strategies within those objectives.

Within those strategies, we ensure those objectives and strategies are measurable. We ensure they are very specific. We ensure they're achievable, resourced, and time sensitive. We ensure we have a timeline we can measure against and a number we can measure against, in terms of whether we have achieved the objectives.

It is in our annual report. It is a new approach. It's four or five years old, and it's having a very positive effect.

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

Great.

Sometimes the old story is still good. I would note that we still have a number of our cheese producers using the old-fashioned consistent way, without input and certainly without derivatives of other products. It's great to see that some of those standards are still there as well.

[The Chair, NDP, David Christopherson]

Thank you very much.

I'm sorry. Were you done?

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

I'm done, sir.

If you gave me the time—