Public Accounts Committee on Dec. 4th, 2014

[The Acting Chair, Conservative, Bryan Hayes]

Before we proceed, at the beginning we went through the process to make sure it was okay that I'm sitting here as chair, but I don't know if there's a formal process. I just want to make sure that everybody's comfortable with my being here. No issues?

[Some hon. members]

Agreed.

[The Acting Chair, Conservative, Bryan Hayes]

Rightfully, this should be your position, but this is your report—

[Yvonne Jones, Liberal, Labrador, NL]

I'm happy you're doing it.

[The Acting Chair, Conservative, Bryan Hayes]

Okay, it's not a problem, then.

That being said, we'll move on to Mr. Woodworth.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Thank you, Mr. Chair.

I'll just return, again, to the historical approach that I began earlier. To recap, we picked up on the fact that there were 13 long years of Liberal inaction, and I understand that you didn't look for or really receive any information about the reason that the Liberals took no action. I understand also that within two years of taking office, the Conservative government came up with a plan, put it in the throne speech, and a few months after that came up with the budget, which dedicated the funds. Then, as quickly as August 2009, the agency was beginning to be established.

Did I understand you to say at that point, Mr. Ferguson, that your audit began at that same time, August 2009, when the agency was just beginning to be established?

[Michael Ferguson]

Well, the audit didn't begin then, but the period of time that we looked at over which grants were processed began then. The audit started probably in late 2012, or something like that, but it did cover back to the beginning of the agency.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Okay. I'm imagining in my mind's eye that at the very beginning of the establishment of any agency, there's going to be a period of rapid response which involves new procedures, new people, and the training and the experience of bringing new people and new procedures together. In other words, we're looking at the infancy of the agency at that point, are we not?

[Michael Ferguson]

I think it's maybe a few things. We cover some of that in paragraph 6.4, where we say that “...the Agency has faced a number of challenges related to employee recruitment and retention”, and they “inherited a number of economic development programs previously delivered by Aboriginal Affairs....” Certainly, when establishing these types of organizations, there are those initial challenges. I think that was probably one of the reasons that we decided it was important to go in and look at what the agency was doing, just to see whether they were able to establish themselves appropriately.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Can you comment, then, on whether there was a positive movement, if I can put it in that general way, on the issues that you've described from August 2009 through to the completion of the period you audited? Were things getting better, or not?

[Michael Ferguson]

It wasn't the focus of the audit to look at how things were progressing that way. There's one thing, though, that I can say. I think in paragraph 6.42 we say that:

Although we found that in 2010 three payments were signed off by officials who did not have an appropriate signature card documenting delegated authority, we noted no such cases in the following years.

That would be, in that particular instance, a case where the problems we identified were early on in the organization's life, rather than later. But I can't generalize to say that was the case in every situation.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Right. I think, actually, I wanted to take the opportunity to say that it's really quite helpful that you've performed this audit in the early stages, because it provides excellent guidance that wouldn't otherwise be available. I'm certain that your efforts will be well received, and it will result in a much stronger agency. If I haven't already said so, I want to say thank you for that.

I noticed also at paragraph 6.15 there are comments on the question of collaboration with territorial stakeholders. Could you just elaborate, first of all, on what you mean by “collaboration with territorial stakeholders”?

[Michael Ferguson]

I'll ask Mr. Wheeler to do that, because he can give you more details than I can on that.

[Glenn Wheeler]

For the targeted investment program, the agency worked with each of the territories and collaborated with territorial stakeholders to identify priorities for each territory. After that consultation, they put together a five-year plan for funding projects in each of the territories. This was helpful, because identifying the priorities in those plans helped the agency ensure that projects that would be of most assistance to each territory were funded.

[The Acting Chair, Conservative, Bryan Hayes]

Thank you, Mr. Woodworth. Your time is completed.

We'll go now to Madame Jones.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you. I have some more questions on section 6.53 regarding the ethics piece.

Mr. Ferguson, your report stated that a new values and ethics code of conduct had been developed. It also stated that this agency received application forms that were empty or missing lots of data, and that the agency determined those were acceptable and approved them. We know that now.

I also know, from information I've obtained through the House of Commons, that there were contracts with companies, the presidents of which were long-time donors to the Conservative Party. Under the values and ethics code of conduct, which you had reported on in this particular document, is this acceptable?

[Michael Ferguson]

Certainly we would expect the agency to follow the code of conduct and the rules on contracting. It's important to recognize as well that this audit was not an audit about the contracts that the organization put in place; it was an audit of the grants and contributions program.

In terms of the values and ethics code of conduct, through the audit we identified that in 2013 they were implementing this code of conduct. Certainly we identified what I would consider to be significant issues with the administration of some of the programs around grants and contributions, and we brought those forward. We also identified that in 2013 they started to put in place a management framework that included the values and ethics code of conduct. From that point of view, we were not satisfied with the way they were processing things, but we did find they were starting to make some steps towards improving that.

[Yvonne Jones, Liberal, Labrador, NL]

My question is for Mr. Bloor. When I was in Yukon, I met with a lot of community groups and organizations. They raised many concerns about this particular agency. It wasn't that they didn't agree with the scope or focus, in terms of meeting a mandate for economic development in the north. But they felt the agency itself had become a political agency and they did not feel there was fairness in the assessments and in the approval of applications.

I had a lot of complaints in that regard when I was there. That was why I started looking for where the money inside the agency was going.

Those comments came to me from Yukon, an area you're responsible for, so I wonder if you can tell me how applications from local service groups and organizations are assessed and approved, and who makes the final decision on the approval of those applications.

[Michael Bloor, Regional Director, Yukon Region, Canadian Northern Economic Development Agency]

Thank you.

I can just state that the applications come to my office for the initial assessments. We do due diligence on each one. Then the decision process begins with me as the regional director. I'll make a recommendation based on the assessment, and that moves up three more levels. First it goes to the director general for operations for all of the north. Then it goes to the deputy minister's office for review and recommendation to either move up or be rejected. From there it goes to the minister's office for a decision.

[Yvonne Jones, Liberal, Labrador, NL]

How many of the applications that are assessed through your office on an annual basis are being approved or rejected?

[Michael Bloor]

Rejection is very rare. I don't have the statistics, but I think one project in my region was rejected at the ministerial level.

[Yvonne Jones, Liberal, Labrador, NL]

I mean those that come through your office, that you are dealing with yourself. How many applications would you be looking at that you don't send forward and that get rejected at that level?

[Michael Bloor]

Most of the applications that come to us will move on into the decision queue, they're not rejected.

[Yvonne Jones, Liberal, Labrador, NL]

And of the ones—

[The Acting Chair, Conservative, Bryan Hayes]

Your time has expired, Madam Jones.

We'll move on to Mr. Falk for five minutes, please.