Public Accounts Committee on April 16th, 2013

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

On page 11, we can read the response of the Treasury Board Secretariat. It is stated that, in 2012 and 2013, a new tool will be introduced for assessing the impacts of the administrative reforms on recipients.

Could you tell us when our committee could expect to receive a first report on the implementation of those administrative reforms? Could you promise to send us that document as soon as you have it?

[Tom Scrimger]

Mr. Chair, if I understand the question, I believe it refers to the new performance reporting tool that we are in the process of putting in place in the next several weeks. We expect that if things go according to plan, we would be gathering the information from departments and agencies over the summer and early fall and then would be collating the report in the fall. We've already made, I believe, the commitment in our response to the Auditor General to make that report public once it is complete. Obviously, we'd be pleased to provide it to the attention of the committee.

[The Chair, NDP, David Christopherson]

Thank you. Yes, just make that one little detail to make sure that one does come to us and that it's available, and that puts it into our business work.

[Tom Scrimger]

Certainly.

[The Chair, NDP, David Christopherson]

Time has expired. Merci.

We move on to Mr. Hayes. You have the floor, sir.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you, Mr. Chair.

I just want to refer to number 9 in the Auditor General's statement, and this question is for the Auditor General. It says:

...that the Treasury Board Secretariat had not provided organizations with adequate guidance to ensure that risk ratings are accurate and remain current.... ... As such, we found that processes used by federal organizations we examined varied in rigor and depth.

As a result of that, you made your recommendation 2.46.

My question to you, sir, is this. Do you have any advice that you can provide to government officials to ensure that risk ratings are accurate? I think I'm going somewhere with this. What I'm finding on this committee is that we get recommendations from the Auditor General.... When I was on city council we'd have audited financial statements, we'd get recommendations from the auditors, and then city staff would have to go and source out the resources to figure out how to actually implement the recommendation of the auditors.

You have a lot of professional staff at your disposal. I guess my question is, are we as a committee or a government getting the best value for your professional services? You have given us the recommendation, but I don't often see advice in terms of how to do it. I think you and your group of people are probably the most qualified people, to not only make the recommendation, but to also provide assistance in terms of implementing that recommendation.

I'm just interested in your general comments on what I'm saying.

[Michael Ferguson]

Thank you.

Actually, what you've raised is something that we try to do internally when we make recommendations, that is, to challenge ourselves by asking, if you were on the receiving end of this recommendation, how would it be implemented? That is something we try to think about when we are making recommendations.

We don't go much further than the recommendation in terms of saying that you could implement it this way or you could implement it that way, because really it's up to the departments or organizations to determine the best way to actually make the implementation. But certainly when we are making that recommendation we do try to put that lens on it, to make sure we are making a recommendation that is reasonable and can be implemented.

In this particular case, when we're dealing with something like risk, for example, I think we are looking at things like the question of updating the risk assessment. So if a risk assessment was made originally and there was one level of risk assessed, if it's a longer-term project, then maybe the risk needs to be assessed later on as well throughout that same project. It's making sure that type of thing is done.

I don't think here we are looking at major changes in the approaches to risk. We are looking at some improvements that can be made to augment the practices that were already in place.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Mr. Scrimger, in terms of the recommendation in 2.46, and I'll read it to you:

The Treasury Board of Canada Secretariat should provide guidance to federal organizations on the need for a review and challenge function for initial risk assessments, as well as the need to periodically reassess the risk ratings of multi-year contribution agreements.

Where are you right now in your response to that recommendation, in terms of when you feel you will be in a position that you can clearly state that we have fulfilled our obligation to that recommendation?

[Tom Scrimger]

We are hopeful that in the upcoming weeks we will be able to begin our response to this recommendation through a revision to our guidelines on the directive of the transfer payment policy. We are looking at it in the sense that we have a risk-rating tool that is working in departments and agencies. The question is how frequently and when do you use it? We think as a first measure of simply bringing into the guidelines the requirement to re-rate risks and to look at the other aspect that Mr. Barrett brought up as well. We will also hold, obviously, the recommendation through our policy review process to determine if there is indeed further policy work required to respond effectively to the recommendation.

We would also look at whether any of the tools and instruments that have been developed over the last five years dealing with risk need to be updated in any way, to again reinforce where we want to go with this.

We think there are a number of ways we'll be able to respond effectively to the Auditor General's recommendation in this regard.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you.

Thank you, Mr. Chair.

[The Chair, NDP, David Christopherson]

Your time has expired. We'll move now to Mr. Byrne.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you.

I'll follow up on my previous line of questioning, Mr. Scrimger. In answer to my question regarding whether or not funding agencies are somewhat captive to the usual suspects, as opposed to being open to new clients, you had indicated that one of the reasons why you can't draw that same conclusion at this point in time is because—and I'm now going to infer—it's not that the evidence doesn't necessarily exist in that regard, it's just that there has been no assessment of the evidence as to whether or not that actually may have been an unintended consequence of this reform. Would that be correct?

[Tom Scrimger]

Again, it's difficult for me to agree that an unintended consequence of the reform would be that it increased the difficulty of new clients, based on your assertion that the risk ranking or the risk rating and the familiarity is going to determine to such a dominant level who is going to receive funding.

I believe the answer is a lot more complex than that. I think there are so many other variables that come into the funding decision.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Understood, Mr. Scrimger, but the reality is that the answer to the question ultimately is not to be held by you or I as a personal opinion. It's to be done through analytical assessment. The fact is that one of the concerns of the Auditor General is that there was no post-program assessment of the consequences to clients from some of these reforms. Would that be fair to say? If there's a contradictory point of view to that, then I'll ask Mr. Ferguson to respond.

[Tom Scrimger]

I believe the Auditor General has indicated clearly that there was not a comprehensive instrument that allowed us to speak to the impact on recipients of the desired impact for improved administration and reduced burden. The question you're asking me is whether or not it impacted the funding decision itself, and I just don't feel capable of going there.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Right. You don't because there has been no post-assessment.

I will now move to the whole issue of grants versus contributions. One of the easiest ways to ease the burden on financial assistance recipients is to simply move to a total grant system as opposed to a contribution system. There are no terms and conditions associated with a grant. However, contributions, by their very nature, have terms and conditions and they're accessible and auditable. Why didn't you move strictly to a grant system as opposed to maintaining a contribution system as well?

[Tom Scrimger]

I don't think the intention of the reform was to move all of the Government of Canada to one versus the other. I believe the designed decision around whether a grant or a contribution is the more appropriate instrument is one that's made by the departmental teams, in working with their minister and through the decision-making process that provides the authority for those at the end of the day.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Scrimger, one of the concerns that was raised by the Office of the Auditor General in 2001 and 2006 was that the government was indeed moving more and more towards a granting system as opposed to the accountability of a contribution system. There was a criticism and a concern raised by the Office of the Auditor General at that time. In 2005, total votable grants and contributions totalled $27 billion. Now total grants and contributions, votable grants and contributions authorized by Parliament, are $37 billion per year. The Auditor General expressed the concern that the Government of Canada was moving more and more to the granting-based system as opposed to a contribution-based system. The concern was that grants do not have accountability built into them. Of the $37 billion now in grants and contributions, how much of that is grants and how much of that is contributions? Have we actually moved to limit the use of grants and moved more towards contribution agreements?

[Tom Scrimger]

I'm afraid I don't have the number in front of me of the split between grants and contributions, but I would comment on your comment that there is no accountability with grants. I would suggest that between a grant and a contribution there are different accountabilities that departments have between the two instruments. Certainly there is a larger accountability regime attached to most contribution agreements, but there is also the accountability that's required in departments when they're dealing with grants that very much focuses on ensuring the eligibility of the individual or the organization receiving that grant having been confirmed or verified.

When it comes to your other question, I really don't have an ability there.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Would you be able to provide it in a reasonable time period?

Mr. Chair, I'll leave that to you as to what the reasonable time period is, as based on our previous discussions.

But, Mr. Ferguson, would you...?

[The Chair, NDP, David Christopherson]

Move quickly, because you're over time.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Would you be able to comment on some of these aspects, or Mr. Barrett?

[The Chair, NDP, David Christopherson]

Thank you. This will be the final question for this rotation.

[Michael Ferguson]

We don't have the breakdown, either, of the amount between grants and contributions. I don't think there's much more I can add.

[The Chair, NDP, David Christopherson]

Thank you.

We'll move along to Mr. Williamson. You have the floor, sir.