Evidence of meeting #79 for Public Accounts in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A video is available from Parliament.
NDP
Malcolm Allen NDP Welland, ON
Actually, you were supposed to get it done by 2007, though. That's the problem.
NDP
The Chair NDP David Christopherson
That's all right. Thank you.
Thank you, Madam Morgan. Time has well expired.
We'll go over now to the government members.
Vice-Chair Kramp, you have the floor, sir.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Thank you, Chair. I'm probably going to help Mr. Allen out a little bit. I'm going to continue a little bit of his process of questioning on this.
As our guests do realize, this committee has a responsibility to seek the answers, and of course, to put in timelines to expect responses so that we can have a stick by which to measure whether or not success has taken place, and whether or not recommendations have been followed up.
Industry, you've mentioned the number of components of an action plan that appears to be in place. You've already undertaken the initiatives. Are you doing this as a one-off because these are issues you have to deal with, or is there a total, complete, strategic response to this audit? Is there a full action plan? Is it broken down? Is it compartmentalized? To what extent can we expect to see a full response to the audit?
Associate Deputy Minister, Department of Industry
Mr. Chair, as I noted in my remarks, we have fully agreed with the recommendations of the Auditor General. We've submitted an action plan to this committee, which details our actions in order to follow through on that.
I'd like to turn it over to Mitch Davies to walk you through the key elements of that plan.
Mitch Davies Associate Assistant Deputy Minister, Science and Innovation Sector, Department of Industry
Mr. Chair, I'd be pleased to speak to the action plan and our progress.
On the first item, in relation to monitoring and reporting requirements set on agreements being fully met and documented, in this case we have implemented an annual program benefits report, which is noted in the Auditor General's report. We're maintaining that practice and including our regular site visits to program participants. We have a new performance measurement strategy that has been posted on the Internet, which is quite comprehensive and it reflects how we'll report on the program's progress over time, to which we'll be held.
On item two, the recommendation was that we include the project's specific objectives and anticipated outcomes in the contribution agreements. In fact, the recommendation is that we would maintain that practice. We're doing so, and we'll continue to do so.
On item three, we were asked that we would follow up on the planned evaluations. As Madam Morgan has said, we will be following through on those, including the evaluation for TPC, which will be completed, and the Bombardier CSeries program evaluations, which we're moving up, in fact.
On item four in the action plan, we were asked to provide a comprehensive report on our program benefits, which we've now posted to our website, which essentially catches us up from the outset of the program to the end of last fiscal year, and we'll continue that on an annual basis. It provides comprehensive information on the clients, their program activities, and benefits realized by the specific recipients of the program.
Item five was asking us to improve our documentation around risk management. We've completed a new guideline on risk management and our approach so that in future, when an audit occurs, they'll be able to actually look at the guidelines we've applied and how our practice matches up with those guidelines.
Item six was about implementing documentation improvements around management controls across all transfer payment programs in the department. We're well under way. We did complete our plan by November, as promised. We'll be completing the work on all the documentation required, which is what's been asked for, by the end of the next fiscal year.
The last item was to improve our service standard approach. In fact, we implemented in December of last year a new method for capturing service standards and reporting on them. That's in line with the observations of the Auditor General.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Thank you very much. I think it's important to put some meat on that bone for us so we actually have a measuring stick by which we're able to check progress in the future as to whether or not you're following through with that.
Maybe I'll ask a second question. Canada traditionally has been pretty good in R and D. We fall off a little in incubation, and then for commercialization we've been notoriously not as effective as we should be as a nation.
Of course, now with this particular industry, you really have the whole ball of wax here. It's important to me that we have some indication of whether or not we are getting bang for the buck. In other words, if we spend $1 million, are we getting back $1 million in return? Are we leveraging other sources of funding? Are we able to maximize our investment? Can you give us some kind of indication as to leveraging of funds versus the spending that is going out?
Associate Deputy Minister, Department of Industry
Yes. Thank you for that question.
When we look at the SADI program, we look at whether we're getting bang for our buck on three fronts vis-à-vis the broad objectives of the program, which are innovation, collaboration, and competitiveness.
With respect to innovation, there are two measures, really. Are the companies conducting the R and D and completing the R and D projects that are the subject of their contribution agreements? To date we have 28 projects under the program, of which 20 have completed some or all of the R and D. We've also leveraged, for every dollar of SADI funding, $2 from other sources into those projects. So we are leveraging contributions from the private sector and others into those projects.
We've encouraged collaboration, because we believe collaboration is a key to encouraging commercialization and closer links between research institutes and the private sector and universities. Twenty-three of our 28 projects currently involve collaborations with universities and colleges.
The third is competitiveness and the impact of these R and D projects on the competitiveness of the companies. That takes longer to determine, because it needs for the R and D to be complete and for that R and D to be then commercialized, either as part of the production process or the products.
What we're seeing now, five years into the program, is that about half of the projects are commercializing or putting this technology into place.
NDP
NDP
Lysane Blanchette-Lamothe NDP Pierrefonds—Dollard, QC
Thank you, Mr. Chair.
I thank all the witnesses for being here with us today.
I want to congratulate the department for the positive elements that are to be found in the report of the Auditor General. However, since this is the Standing Committee on Public Accounts, I would like to obtain some further information on the follow-up to the Auditor General's recommendations.
First, I would like to go back to what my colleague Mr. Allen was saying about measuring the progress made with regard to program objectives.
You explained why you had not begun, at first, to produce these reports. However, I did not quite understand why you will only be producing a report in 2015-2016. What is preventing you from producing one next year?
Associate Deputy Minister, Department of Industry
Thank you very much.
We have already produced a report on the program. We published it on our website in February. We are now reaching a point where we are able to produce a report regarding the program objectives, since it has been ongoing for five years.
From the outset, we have collected information on these program objectives through quarterly progress reports and annual site visits. Since the companies were in the early stages of doing their R and D, the information that they had to share with us was on how far along they were in completing the activities that they agreed to do as part of their statement of work, and who they were collaborating with. Now, over time, as these R and D projects become complete, we will be more in a position to report publicly on issues around competitiveness.
NDP
Lysane Blanchette-Lamothe NDP Pierrefonds—Dollard, QC
Mr. Campbell, do you think the information that has been collected from the beginning is sufficient to prepare a report that will show us clearly that the program objectives have been met?
Assistant Auditor General, Office of the Auditor General of Canada
Thank you.
Mr. Wheeler is going to answer that question.
Glenn Wheeler Principal, Office of the Auditor General of Canada
Mr. Chair, as we note in our audit report, in the period up until 2010, the department was not collecting sufficient performance information to report on SADI's objectives and whether they were being achieved. Since 2010, yes, the department is now collecting sufficient information to report on performance.
However, the fact of the matter remains that when SADI was introduced in 2007, there was a commitment to increase transparency. If you compare SADI with its predecessor, TPC, we didn't see that annual public reporting for the first number of years that the program was operational. We were happy to see that recently the department published a report on program highlights.
NDP
Lysane Blanchette-Lamothe NDP Pierrefonds—Dollard, QC
Thank you very much.
In another connection, in response to one of the recommendations in the report, Industry Canada replies that it accepts the recommendation and that it will continue the exemplary practice it implemented in 2010, which consists in including in its contribution agreements specific project objectives as well as the expected benefit outcomes.
I wonder why they reply that they accept that recommendation, but specify that they will continue to do what they have been doing since 2010. Does that reply really cover everything you had included in the recommendation?
Principal, Office of the Auditor General of Canada
Mr. Chair, starting in 2010-11 the department was collecting more of that performance information and including it in annual project benefits reports. Before that point in time, a lot of the information that was being collected wasn't getting at anticipated outcomes and benefits, so the department was not in a position to report fully on that.
We have noted a big difference in the period since 2010. They included in contribution agreements specific requirements for reporting on outcomes and benefits. We are quite happy that that improvement has been made. But in the period before 2010, the information was much more sporadic.
NDP
The Chair NDP David Christopherson
The time has expired.
We'll move over to Mr. Shipley. You have the floor, sir.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Thank you very much, Mr. Chair, and thank you to our witnesses.
I wouldn't mind following up a little bit, Ms. Morgan, on some of the things you were talking about, such as the number of projects that are already under way. You talked about the leverage and the value of the two for one. All of those are good.
I'm just wondering what sort of value we're talking about in terms of dollars. Would you have some indication of what that would be, of the 28 projects?
Associate Deputy Minister, Department of Industry
The government has invested thus far about $880 million through SADI, although only about half of that has been disbursed at this point. That's the total amount in commitments. We would expect, based on our current track record with what's been disbursed, that we would be able to leverage about another $1.7 billion of investment on top of that.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
To help us, you say about half of that has been disbursed. Is that normal in terms of that 50% disbursement at this stage? I go back to a comment you made earlier about when the recession hit and there was a slowdown. Is there any connection?