Public Accounts Committee on May 2nd, 2013

[Nancy Cheng]

Thank you, Mr. Chair.

First and foremost back in 2007, the RCMP was lacking in terms of its policies and procedures. They've done a fair bit on that. Mind you, in this particular status report they still haven't been able to move forward to produce and have approved a departmental security plan. That was something we definitely would have expected from RCMP. It was in draft form, and it has yet to be approved. That is one of the items they have to improve on.

In terms of improvements, one of the other things we have noticed is that they've instituted a quality assurance program. That was something suggested as a result of the 2009 change in terms of the policy on government security, and that's something the RCMP has done as well.

For the current audit and the follow-up, we looked at about 300 contracts, as the Auditor General has highlighted. By and large the results aren't bad, but there are still some shortcomings that the RCMP needs to address.

[The Chair, NDP, David Christopherson]

Thank you.

Sorry, Mr. Kramp, we're way over the time. Thank you.

Moving along, Madame Blanchette-Lamothe, you have the floor.

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

Thank you, Mr. Chair.

Mr. Ferguson, I would like to talk to you about chapter 6, which concerns the creation of a historical record of Indian residential schools.

We know that the commission had to go to court to get the documents it requested. We also know that the court ruled in favour of what the commission asked for. The department subsequently agreed to comply with the court's decision.

You say in your report that the department refused to hand over certain documents but that there was no analysis supporting that refusal. Do you have any indication of the basis for the department's judgment in refusing to provide such documents?

[Michael Ferguson]

I'm not sure exactly which documents you're referring to, but I think it was a difference of opinion over what constituted relevant documents. The commission was saying that everything, whether it touched directly or indirectly on residential schools, would be considered relevant. So they wanted every document, and I think what the government did was that they said, “We're going to define relevance”, and it was more specific. It was things relating to individual residential schools, or policy, or that type of thing. So I think that's probably where there were some documents that the government was saying they weren't going to provide, because they were deeming those not to be relevant.

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

What was the basis for the department's deeming that a document was not relevant? There does not appear to have been any cooperative agreement. What makes this document irrelevant in the department's view and justifies it in not providing it regardless of what the commission requests?

[Michael Ferguson]

Mr. Chair, I'm just trying to find the exact place where we talked about the relevant documents, but again in general the agreement called for the federal government to provide all relevant documents. But the agreement did not define “relevant”, and so the government itself made its own decision about what was relevant. As we noted in 6.21:

...the search focused on documents related to policies, operations, and funding for residential schools in general and on documents related to each of the schools named in the Agreement.

That was what the government finally decided was the definition of “relevant.” Now, we also go on to say in 6.23 that even though they had made that definition they did not share it with the commission until much later.

I think that's where there was probably a difference maybe between some of the documents expected and the documents provided.

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

This matter went to court, and the court compelled the department to provide the documents requested by the commission. The department's judgment was thus not very accurate, at least based on the court's decision.

In the response to your recommendation, the department stated that it would develop a plan to provide the necessary documents. Necessary documents according to whom?

Do you know whether the department intends to cooperate in establishing a plan? Can anyone ensure that the two parties agree on what constitutes necessary documents, or will the situation reoccur? If that is the case, there will be no agreement on what is necessary, and the department will have to take the commission to court again. That is somewhat my question.

[Michael Ferguson]

Mr. Chair, to also clarify this, I believe there was the issue of whether the department was going to go through some of the documents in Library and Archives Canada. Fundamentally, I believe that originally they said they weren't going to go through them, that it would be something that the commission would have to do. That's what the courts finally decided, that the government should be providing those documents. That was the specific example.

It's my understanding that the court has rendered a decision on that, and we would expect that the government would follow up on the decision of the court and comply with that.

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

Thank you.

I now have a brief question on chapter 7, on research and rescue activities.

The government was to develop a national search and rescue policy starting in 1986, but that was not done.

Why do you think it was not done? What are the consequences of the fact that we still do not have a legislative framework in this area?

[Michael Ferguson]

Mr. Chair, we do note in paragraph 7.93 that the government identified the need for a national SAR policy framework in 1976. There have been calls for it since then as well. We think that putting together that overall strategy would help to identify how the equipment links to the people and those types of things, what types of service standards people can expect, what level of response people can expect. Putting together that overall strategy is really that umbrella, and that's a starting point of operating the SAR activities in an effective and efficient manner.

[The Chair, NDP, David Christopherson]

Merci, madame. The time has expired.

We're moving over to Mr. Williamson. You have the floor again, sir.

[John Williamson, Conservative, New Brunswick Southwest, NB]

Thank you, Chair.

Thank you again, Auditor.

I will keep on with the same topic. In your report you reference the fact that the Truth and Reconciliation Commission and the Department of Aboriginal Affairs could not come to an agreement on the definition of relevant documents. My understanding of the settlement agreement is that the definition of relevance was to be agreed upon by all the parties to the agreement, since churches and perhaps other organizations had similar obligations to disclose documents. In the absence of such an agreement and in the interest of ensuring timely implementation of the residential school settlement agreement, the Government of Canada developed its own working definition so that it could begin to disclose documents. To date, as you are aware, Canada has disclosed almost 3.7 million documents to the Truth and Reconciliation Commission.

In your opinion, should Canada have instead waited for the churches, legal counsel for former students, the Assembly of First Nations, and Inuit representatives to come to an agreement before disclosing any documents? Was the government caught in a bind here? Were the steps they've taken appropriate?

[Michael Ferguson]

Mr. Chair, fundamentally the issue we're raising is that the commission had a five-year mandate. This was a very large task. As we say in the chapter, Archives Canada estimated that there are at least 20 kilometres of documents to be searched. In order for this to happen over that five-year time period, we wanted to see both parties start out with a project-management approach and define what needed to be done, where they needed to search for documents, and what the timeframes were. That didn't happen.

We do state that many documents have been provided. We are concerned, though, about whether the quality of some of those documents is sufficient. On the other hand the Truth and Reconciliation Commission has accepted those documents and put them in their database without there being an agreement on quality. Our concern is with what's going to be accomplished over this five-year period, whether at the end of it the relevant documents of the appropriate quality are going to be there, and whether everyone can agree that this does represent the historical record of what occurred at the Indian residential schools.

[John Williamson, Conservative, New Brunswick Southwest, NB]

I think for the record—and I know it's in your report—you talk about this 20 kilometres of documents, which represents some 69,000 boxes. According to this report, it could cost $40 million to digitize and safeguard these. There is a considerable amount of money being spent on this project.

Indeed I would argue the government's made considerable progress implementing the various components of the settlement agreement to date. We see that 97% of eligible recipients of the common experience payments have been paid. Almost $2 billion has been paid out to over 18,000 claimants through the independent assessment process. Important commemoration projects are taking place across the country. In addition Canada has gone further, through various gestures of reconciliation, including the Prime Minister's historic apology.

While we recognize that the provision of these documents to the Truth and Reconciliation Commission is important so that future generations will have access to them, we do not agree that Canada has indeed made considerable progress towards achieving a fair, comprehensive, and lasting resolution of the legacy of residential schools.

[Michael Ferguson]

Mr. Chair, our audit looked at only one aspect of the settlement agreement, which was related to the work on preparing the historical record. That's the only thing I can speak to.

It's not possible for us to say how far along this task is, because there was no project plan in the first place. There's nothing for us to measure against. We don't know whether they're 20% complete, 50% complete, or 70% complete, because there's nothing for us to measure against. I can't speak to everything that might have been in the settlement agreement or to all the other activities. The audit focused only on the one activity of capturing information related to the historical record.

[John Williamson, Conservative, New Brunswick Southwest, NB]

But on that, you're talking about a plan and about being able to get a sense of what was required, when in fact at the outset that was largely unknown.

[Michael Ferguson]

I agree, Mr. Chair, but that's why it would have been important to put together a plan with all of the required steps, so we could identify what needed to be done, and so there was some way upfront to say how we would prioritize things if we ran into issues. I would say, particularly when it's difficult to estimate the size of a task, that planning and understanding all of those risks are very important so that when you come across something that is going to be troublesome, there are ways and procedures for reacting. Again, in this type of situation, given the size of the task, it would have been important to have that type of plan in place in the first place.

[John Williamson, Conservative, New Brunswick Southwest, NB]

Thank you.

[The Chair, NDP, David Christopherson]

Thank you.

Thank you, Mr. Williamson.

We will go over now to Monsieur Giguère.

You have the floor, sir.

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

Thank you very much, Mr. Chair.

I am going to speak essentially about the tax debt, which, I remind you, consists of $29 billion in undisputed unpaid taxes and $11 billion in disputed taxes, for a total of $40 billion. That is enormous.

This is my first question. In paragraph 3.32, you noted that in 17 of 39 recovery cases involving a value greater than $10 million, the agency did not meet its analysis targets or was not adequately documented. Does that kind of deficiency risk exacerbating recovery problems?

[Michael Ferguson]

Mr. Chair, that refers to the fact that for large accounts, as part of the agency's policies and procedures, it conducts “danger of loss” reviews. We identified that they were missing or weren't adequately documented in 17 of the 39 accounts. Their service standard would have required that these danger of loss reviews be done and documented in all 39 of these cases. In 17 that didn't happen, so they weren't meeting their own level of service.

Now we can't say specifically what the impact would have been on collections had they done that or had they documented it. But it's something that, under their own procedures, they're supposed to do, and we would have expected that they would have completed all of these “danger of loss” reviews.

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

I am referring to paragraph 3.42. What are the risks of not determining which taxpayers the agency should pursue first?

[Michael Ferguson]

Mr. Chair, having appropriate risk-scoring models in place is a prime factor in helping the organization determine which accounts to pursue first and in ordering which accounts they are going to pursue for collection. We did note that the agency has made progress in this area, particularly on risk scoring for individuals, but on risk scoring for corporations they have deferred that work. They haven't done that piece of it, so there's still more they need to do to improve on risk scoring. The better they get at risk scoring, the better they will be able to focus in on which accounts are the highest priority to be pursued.

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

I have another brief question.

Risk scores were not calculated for businesses, but were for individuals. Does knowing that you are doing a slightly better job of overseeing individual taxpayers' work than that of corporations not pose a problem from a fairness standpoint?

[Michael Ferguson]

Again, our last recommendation to them was to look at their risk-scoring approaches for both. I think they stated that the cost of doing so on the business side was such that they couldn't do it right now, so they deferred it. But we feel that they need to improve their risk-scoring methodologies both on the individual side and on the corporate side, to make sure that all of the taxpayers who should be in the priority list are in the priority list.