Public Accounts Committee on Oct. 29th, 2018

[David Christopherson, NDP, Hamilton Centre, ON]

Thanks, Chair.

I have two questions. One, on page 12, paragraph 6.46 of the Auditor General's report says:

We found that Employment and Social Development Canada allocated funding to agreement holders under the Aboriginal Skills and Employment Training Strategy on the basis of 1996 population and socio-economic data that did not reflect the current needs of the populations served. Also, the Department had not updated the formula it used to allocate funding under the Strategy since the formula was established in 1999.

Now the last thing I am is a statistician, but I don't think you have to be all that bright to figure out that using information from the previous millennium is not going to give you the best outcome.

My question is this: How can something that obvious continue? With so many smart and caring people, how can stuff like this go on for decades, with people just saying, “Yes, that's just the way we've always done it.”? Help me understand how things like this can be.

[Graham Flack]

To be clear, they didn't say, “Let's just leave it the way it is.” There were two serious efforts made to update the formula, in 2003 and in 2014. As context for why that didn't succeed, let me give you two data points.

The first is that between 1999 and 2016, Parliament voted for the exact same level of funding for this program in every one of those years. There was no growth in the program funding over those almost 20 years. The need for those programs grew dramatically over that time. In an environment with no new funding, when we attempted to update the formula in 2003 and 2014, we worked with indigenous partners and were unable, not surprisingly, to reach agreement with them because, even though everyone's needs had grown, adjusting to the new formula and the new data would mean some would lose funding because that would be the only way to fund the others, whose needs had grown even greater.

The first barrier was that indigenous communities did not accept that there could be any change in the formula. They said there needed to be incremental funding, but for 20 years, Parliament did not vote for incremental funding.

The second challenge, as you are aware, is that decisions on grants and contributions of this order in departments are not delegated to people like me. Ministers make those decisions. I have seen this across a wide range of programs I've dealt with, such as the aboriginal policing program at Public Safety and the culture programs at Canadian Heritage, where you have no resource growth but a growth in the client communities. Not surprisingly—as political actors, I think you would all understand—ministers are reluctant to make changes to a program that will result in some recipients losing funding and others getting more, even though all of their needs have grown.

We did attempt to revise the formula—twice—and were unsuccessful, both with indigenous communities and ultimately with ministers in convincing them to do it, notwithstanding their efforts to do that.

How is that going to change? The new element is that we have $100 million in new funding. In my experience, that is what it takes to get movement on the new funding, so we are negotiating with indigenous partners on the criteria we are going to use for the new funding to ensure that, as the Auditor General indicates, these factors are taken into account.

I just want to be clear: It wasn't that officials were not trying to do this; it was that indigenous communities did not want to make those changes, given that the changes would involve cuts for them, and that political actors—in my view, not surprisingly, in an environment where they didn't have additional resources—were not willing to do that either. What has changed is the new resources, and that's what we're going to try to do.

[David Christopherson, NDP, Hamilton Centre, ON]

If the audit hadn't come out, would you have done that anyway, taken another stab at it?

[Graham Flack]

Yes.

[David Christopherson, NDP, Hamilton Centre, ON]

I have to tell you that the idea of saying,“Oh, we weren't able to do it,” and then just walking away and leaving it....

[Graham Flack]

In my experience, when new funding is injected into a program, that is the opportunity for the recipients and the political actors to be willing to consider changes in the allocation formula. Yes, we were going to do that anyway with the new money.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you.

I have one last quick question, and I'm asking you and the Auditor General to help us.

You've mentioned that you're entering into a pilot project. The Auditor General has confirmed your concern that it's complex and there's no guarantee of success. The one thing that would be horrible is for us to walk away from this, and then four years later the AG goes back in and finds out it didn't work.

Is there a way that at the end—I think you were doing four as a pilot—you could give us an update on that and share it with the AG so that we can be with you as you go through this process, providing whatever assistance we can, but more than anything to avoid, down the road, going through this all again?

This is just not fun for anybody.

[Graham Flack]

We'd be happy to do that. As I say, we are also continuing to look at alternative sources, but that area of localized, highly accurate data is a tough nut to crack. We would be happy to indicate where we are after we've done the pilot with the four and we'd be happy to share that with the Auditor General as well.

[David Christopherson, NDP, Hamilton Centre, ON]

That might be helpful.

Thank you so much, Chair.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

Do you have another one, Mr. Arya, a very quick one?

Go ahead, sir.

[Chandra Arya, Liberal, Nepean, ON]

Since 2010, 2011, $2.4 billion has been spent. How many indigenous people were served?

[Graham Flack]

There were 400,000 clients, with 140,000 finding jobs and 70,000 returning to school, but as the Auditor General indicated in his report, because we did point-in-time measurements, we are not able to give you data on the degree to which the employment was sustained.

That's the information we have.

[Chandra Arya, Liberal, Nepean, ON]

When we started this off, I did request the chair to consider halting this meeting so we could get the deputy minister who was in charge as your predecessor. We've had these issues on and off for quite some time. The Auditor General brought it to our attention and expressed his concern. We had the Clerk of the Privy Council before our committee defending the tenure of the deputy minister, saying it is not as bad as the Auditor General says, and I defended the Clerk of the Privy Council because he produced some numbers.

However, what I've started noticing is that there are some problem departments that the Auditor General has gone back to again and again, seeing no improvements from audit to audit, and it is in those departments that the deputy ministers also keep changing.

Is it that the departments are a problem because the deputy ministers keep changing, or is it that there are problems in the department and that is why the deputy ministers keep changing? I don't know.

This is a major concern to us. Chair, I think we have to consider, going forward, that whenever we invite a deputy minister, we find out how long he or she has been in the position. If the deputy minister has been around for a short period of time, say less than one year, maybe we should also simultaneously invite the previous deputy minister.

[The Chair, Conservative, Kevin Sorenson]

In answer to your question, when I look at the dates, it's my understanding that the previous deputy minister was in the position for two years. I think that's what somebody showed me here. Ms. Levonian was there from May 16, 2016, to October 8, 2018—a little over two years.

[Graham Flack]

Mr. Chair, I had over four happy years at Canadian Heritage. I believe in long tenure. I think it's critical to an organization, and although I don't—

[Chandra Arya, Liberal, Nepean, ON]

I'm sorry, Mr. Flack; we are not saying that it happens at every single department, but in some of the departments where the Auditor General has found problems over a period of time.

Mr. Chair, I'd like to ask the Auditor General whether it is because there are problems in a department that the deputy minister keeps changing or it is because the deputy minister keeps changing that problems exist in the department.

[Michael Ferguson]

That's a question I can't answer. I don't know the reason that deputy ministers in some departments change often. My concern, as I've said before, is that we often see deputies changing in key departments like procurement and national defence. In some of those very large departments, we've seen them change quite often.

I don't know the answer to your question.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Arya.

Go ahead, Mr. Massé, quickly.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

Deputy minister, I would like to congratulate the team that prepared you for this meeting on their work. Our committee often meets with deputy ministers from various departments who come here and answer difficult questions. I can assure you that the questions we asked you were particularly difficult.

I would also like to say that all of my colleagues and myself greatly appreciated the answers we got, which were often precise and directly related to our questions. I want to emphasize that, since it is to your credit after only three weeks in this position. I think that you were well-briefed on your new files and that you have mastered them well.

I wanted to point that out because from my perspective, you did excellent work. You still have work to do of course, and some sizeable challenges await you. However, I am certain that with the help of your team, the department will be able to meet those challenges. I am sure we will have the opportunity of inviting you again, so that you can update us on the programs you manage.

Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Massé.

Since I don't see any other questions, I do want to go back to Mr. Christopherson's question. I was kind of trying to direct our analysts to check an action plan, because Mr. Christopherson asked a question with regard to local data.

I do see that in the action plan that has been brought forward by the department, it has really committed to “improved and tailored labour market information”. It looks like that is maybe “in up to 17 ASETS Indigenous organizations and 60 First Nations”. Is that the pilot project, then?

You're saying it is. That's the pilot project.

With regard to data, it has been addressed in the department's action plan, so I'm hoping that we can maybe have an update on that action plan. I know that sometimes on pilot projects you have to wait until the entirety of the pilot project is finished, but I'm hoping that maybe we can get some measured, achievable goals so that we can see whether there has been achievement or not.

Maybe for the Canadians who are watching out there it sounds as though we've been fairly tough on our witnesses, but when I went through this report, there was a recurring theme, and the recurring theme was the two words “did not”. I went my staff and said, “Listen, count the occurrences of 'did not'.” In every paragraph, the department “did not”: the department “did not collect the data or define”, “the Department did not have information about the nature of those jobs”, “the Department did not fulfill either of these commitments”, “the Department did not establish targets”, “it did not revisit the targets”. It's just in every paragraph: the department did not, the department did not.

In the meantime, we have a government that has, and rightly so, made a commitment. The Auditor General quoted in his report that the government made a commitment three years ago “to reconciliation and a renewed relationship with Indigenous peoples”. When a department “does not” or “did not”, it really takes away from a government direction.

Sometimes you wonder how you gauge a government. Well, you gauge a government on results, and sometimes the departments are the ones that carry out the government's mandate. An announcement by the government of its intentions doesn't matter. When you have 43 instances of “did not” in the report, then yes, I think we can expect another meeting back here at the public accounts committee.

Anyway, I want to thank you for coming.

I agree with Mr. Massé. Mr. Flack, you really seem to have a good understanding of the problems that have happened before your tenure. You were there four years. Some of the other deputy ministers were there two years. I'm of the opinion that when there are that many occurrences of “did not”, maybe that's part of the reason a deputy minister is changed out.

We like it when there's success in every department, and I've told other people this. If an opposition is going to hold a government to account, I think every political party expects that the departments are at least going to be able to carry out the government's mandates. Politically I can question their mandate, but boy, when a department is not really carrying out some of what a government wants, that's not good.

Thank you for coming. Thank you for being up to date on the issue. I can tell you with all sincerity that I hope your action plan works and that we can see the success, the measured success. I know you have good people in your department, and hopefully we'll see some marked progress moving forward.

Thank you very much, committee, on a very tough report, and we wish all the best to the department in seeing a solution to some of this.

The meeting is adjourned.