Public Accounts Committee on June 6th, 2019

[The Chair, Conservative, Kevin Sorenson]

Good morning, everyone. This is meeting number 142 of the Standing Committee on Public Accounts, for Thursday, June 6, 2019. We are here this morning in consideration of the main estimates 2019, vote 1, under the Office of the Auditor General of Canada.

Once we have finished our review of the main estimates, we will move in camera to discuss the legacy report. I hope that everyone brought a copy of their report with them. We want to get down to that more next week as well, but should we get to it before then, we do want to look at it. I know there are a few people who have said that they want a few minor things done.

Where we left off last week was with Mr. Christopherson and debate on his motion. He had introduced it and was speaking to it, so we cede the floor back to Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair. I appreciate that and I applaud your optimism about getting to reports.

If I recall correctly, when I left off I was trying to figure out, and think out loud, reasons the government would do what they've done. As a reminder, what they've done is unique in Canadian history in that we have never, ever had an Auditor General say to Parliament, “I do not have sufficient funds to carry out my work plan.” Those words have never been uttered before in Canadian history.

It's heartbreaking to see the minister try to make this about 2011, when 2011 at best is a talking point. At best, the argument the minister has is, “Wait a minute. You're accusing us of an awful thing, cutting the budget of the Auditor General. The Conservatives, when they were in power in 2011, were much worse.” That's their best argument, that “they did it too”, which, first of all, is not true and if I have any credibility in this place I'm willing to spend some of it, believe it or not, defending the Conservatives to the extent that what is going on now is completely apples and oranges from what went on in 2011. I know because, not only was I here, I was the chair of the committee.

It really is heartbreaking when you think about what's at stake here. This is not games. This is not bean counting. This is not boring accounting stuff that really doesn't matter to anybody or have any relevancy to the real world.

We're talking about, for instance, an audit that the Auditor General planned for next year on cybersecurity and has had to rip it out of the work plan because they don't have enough money. That has never happened in Canadian history.

For the minister to stand up and say that what this is really all about is whether the Liberals are as bad and evil from an auditing point of view as the Conservatives were, that's not the issue. Since I happen to have a bit of time, I thought what I might do is to help put this to bed, because again, it's heartbreaking, but we need to wrestle this false argument to the ground and get it out of the way so that we're actually talking about what matters, which is the Auditor General's work plan for next year, not what the previous government did eight years ago.

Since the Liberals seem to want to spend time there, I'll gladly spend some time explaining why I'm prepared to put my credibility on the line to say they are not comparable.

I'll say again how much I absolutely resent the minister, a federal minister of the Crown, standing up and attacking a member of the House. I stand here totally vulnerable and ready to be challenged, but I do not attack people personally. I didn't do it for the 15 years I was here, I didn't do it the 13 years I was at Queen's Park, and I didn't do it the five years I was sitting on city and regional councils in Hamilton. However, there I was, sitting listening to a minister attack me, and not only attack me on something that was made up out of thin air but attack me on my job, questioning my integrity on this committee when I was the chair.

Nothing matters more to me, other than my constituents, than the work of the Auditor General and proper oversight in this Parliament. That is where my passion is. That is where my heart is. It's really disappointing to see that the best the minister can do to defend against the indefensible is to attack another member of Parliament.

Quite frankly, I'm surprised because I know Joyce well. You and I have travelled with her, Chair. We have broken bread together. We've fought. We've had our arguments, but we've always kept it in the context of parliamentary collegiality, respect and an understanding that we're all here to do the same job. I thought that was the relationship that we had, so even on a personal level....

What it points to is the scarcity of a legitimate response. When you don't have an argument, you do two things. You get louder, which I know because I've done that—

[A voice]

I totally believe it.

[David Christopherson, NDP, Hamilton Centre, ON]

My colleagues can believe that. It's not hard to believe that I would be like that.

Listen. What I want to do is read into the record a letter addressed to me, as the chair, from Mr. Wiersema, who at the time was the interim Auditor General. That was between the era of Sheila Fraser and Michael Ferguson. Mr. Wiersema was the interim Auditor General. He was a great auditor and a great guy too, just for the record. He was just a real prince of an individual.

It's from the Auditor General. It's on the office's letterhead. It's dated October 26, 2011, and addressed to me, as chair of the Standing Committee on Public Accounts. It reads:

Dear Mr. Christopherson,

In July 2011, Officers of Parliament received letters from their respective Ministers strongly encouraging them to adhere to the spirit and intent of the government's Strategic and Operating Review—one of the steps in the government's efforts to achieve fiscal savings of at least $4 billion by the 2014-15 fiscal year. My Office recognizes the seriousness of the current economic circumstances facing Canada and all Canadians. In my response to Minister Flaherty dated 2 August 2011, I committed to undertake a review of my Office and present my results to the Parliamentary Panel on the Funding and Oversight of Officers of Parliament and to the Standing Committee on Public Accounts.

I am writing to you in your capacity as the Chair of the Standing Committee on Public Accounts to advise you of our proposal that is the result of our Strategic and Operating Review, and to request a meeting with the Committee to discuss it at your earliest convenience. I am writing to the Chair of the Parliamentary Panel on the Funding and Oversight of Officers of Parliament with a similar request.

We have undertaken a thorough and comprehensive review of the Office of the Auditor General. The starting point of our review was strategic. We have analyzed all of our legislative audit practices with a view to concentrating our efforts where they will best serve Parliament and territorial legislatures. While we believe that all of our work is valuable, some is less critical than others. We have used this review as an opportunity to assess how our limited resources are best deployed, based on risk and value. We have also reviewed all of our internal processes and services to identify opportunities for operational efficiencies.

Our proposal, outlined below, would result in a reduction of approximately 10 percent from our current workforce. The impact will be felt across all levels of our organization. We expect to incur expenses for redeployments and retraining, which we have allowed for. We are committed to making these reductions in the most responsible and caring way we can.

In total, the reductions will approximate $6.7 million in 2014-15, or 8 percent of our 2011-12 Main Estimates of $84.4 million. We are able to implement about $5.3 million of these savings on our own, but will require legislative and executive action to realize about $1.4 million of the total. The proposed savings, including those arising from changes to our territorial work, are summarized in attachment 1 to this letter.

The proposed reductions in our audit work predominantly affect our financial audit practice. This practice has experienced a number of independent, ad-hoc and special mandate requests over the years. The legislative and other changes we are proposing will focus our financial audits on what we believe to be the most important accounting information and the areas of greatest risk.

Parenthetically, financial audits are the standard audits that most of us understand—where you go in and make sure that the bills are there and were paid on time, where the money is, just that basic auditing accounting function—versus performance audits, which used to be called “value for money” audits, which is the focus of our work.

We do not review financial audits. We accept them because we're part of the mandate, but the actual work that we do and the hearings that we have are on performance audits, which are different. For example, a financial audit says, you said you were going to spend $10 million on schools, so let's see the bills and see the cheques and see the bank balances and make sure everything is square. A performance audit says, you had $10 million to build schools, so did you do it efficiently or not?

The interim Auditor General is differentiating at this point in the letter between a financial audit and a performance audit.

I'll just continue:

The changes will also enable us to achieve greater consistency in our audit effort across federal organizations. For example, consistent with the government's decision not to proceed with audited departmental financial statements, we propose discontinuing our audits of the financial statements of department-like organizations. This will reduce the number of financial audits we conduct by 18. Those organizations with significant public funds would still be subject to examination as part of our annual audit of the Summary Financial Statements of the Government of Canada. In a few cases, the organizations may wish to continue receiving an audit. We would have no objection if they were to engage a private sector auditing firm to do so.

We propose to continue our work as the financial auditor of the majority of Crown corporations and of Agents of Parliament, recognizing their unique responsibilities and accountability relationships.

The one legislative change we propose outside our financial audit practice would discontinue our assessments of the performance reports of the Parks Canada Agency, Canadian Food Inspection Agency, and the Canadian Revenue Agency. When these agencies were created in the late 1990s-2003 as a new type of governmental organization, it was seen as valuable to have an independent review of the fairness and reliability of their performance information. Since then, however, we have not been asked to do similar work on performance reports of any other government organization, and we can see no reason to continue to single out the agencies for this type of assessment. We believe Parliament requires high-quality performance information from all federal organizations and therefore we will continue to include performance reporting as a topic for consideration in our performance audit practice.

A list of the audits and review engagements that we are proposing to be discontinued is provided in attachment 2 to this letter.

In our special examination of Crown corporations (a type of performance audit), the government implemented a significant change in 2009 when it extended the period between examinations from five to ten years. Following the governments change, our costs for this work decreased noticeably. We are now focused on distributing the workload more evenly and operating this practice as efficiently as possible. We see no further opportunity to change the nature or extent of our audit effort in this area.

The majority of our interaction with Parliament is through our performance audit practice. We conduct audits that examine the efficiency, economy, and environmental impact of all major federal government departments, agencies, and other organizations, and annual government revenues of $237 billion and expenses of some $270 billion. In fiscal year 2008-09, we presented 32 performance audit reports to the House of Commons and territorial legislatures. This compares with the 26 performance audit reports we issued in our most recent fiscal year, after reducing our performance audit practice in response to previous funding pressures and Parliament's capacity to consider our work.

Again, parenthetically, the Auditor General came forward on his own and asked if it could be reduced from three reports to two. The main argument was in part the pressure on the office to deliver it but quite frankly, back in those days, we were having a heck of a time on the committee keeping up with the reports. I won't get into the politics, but the dynamics of this committee at that time were not the healthiest in terms of good practice for a public accounts committee, so that led to some of it.

I think history has shown, Chair, it was probably a wise decision because during this era I think, and I stand to be corrected by you, Chair, we've been able to do just about every chapter, certainly the overwhelming majority. I think on a number of reports, we did them all. That's night and day compared with the era we're talking about here when there were dysfunctional ingredients, let's just say, in the work of PACP.

I'll leave it at that. I have enough political fights on my hands without opening up another one, especially on an old battle.

Anyway, I just wanted to point out that did happen.

Again, there have been contractions in the work of the Auditor General, but as you can see, often it's driven by their own review of their workload, what they need to do and what can be most effective. They're also looking at the ability of the committee.

Quite frankly in my opinion, if this committee had been around at that time, that recommendation might not have been made.

I have to tell you, and Tyler can tell you—he was with me the whole time—we had a heck of a time trying to play catch-up with two tracks going. We were trying to play catch-up on the one track, consistently falling behind, and on the other track, we were trying to do the new ones as they were coming out and we were falling behind. It gets bad because you're reviewing reports that reflect a hearing that you did 10 months ago, and that hearing was six months after the report was tabled. You're a veteran now of PACP, Chair. You can appreciate that a lot of the effectiveness of this committee is lost.

I think the Auditor General of the day looked at that and, in combination with their own workload, made that recommendation. I think history has proven that, so far, this was a good decision, because what we've been doing is just about the right amount of workload.

By the way, I remind this committee that this average amount of workload is anywhere between six and 14 chapters within one report, and right now the Auditor General, I think, has at most three or four audits planned. That's out of two reports. Where there should be upwards of 20, there are going to be four and one that's going to be cut is cybersecurity. This is what blows my mind.

[Nick Whalen, Liberal, St. John's East, NL]

I have a point of order, Mr. Chair.

I was wondering if Mr. Christopherson would accept a question under the rules adopted at PROC where I might be able to make a quick interjection—

[David Christopherson, NDP, Hamilton Centre, ON]

The Simms protocol...?

[Nick Whalen, Liberal, St. John's East, NL]

The Simms, without surrendering the floor, so I could just...?

[David Christopherson, NDP, Hamilton Centre, ON]

By the way I was there. The Simms protocol, Chair—because I need you to make sure this works—is that if a member wants to comment or ask a question, not to engage in debate necessarily, although they can try, but more a matter of “hey, on that point”, then we'll have that little exchange. Then you make sure I get the floor back at the end of it, Chair, and it's usually about a minute or so. That's what we do at PROC.

[The Chair, Conservative, Kevin Sorenson]

We have not adopted the Simms protocol. However, I think we'd have to be unanimous in changing a protocol now, because, otherwise, one side could just make the ruling. However, if people have a consensus to go that way and give me the ability to give the floor back, if the speaker is open to that, then I think we can do that.

Thank you.

[David Christopherson, NDP, Hamilton Centre, ON]

Yes. It works well for us at PROC, so please, go ahead, Mr. Whalen.

[Nick Whalen, Liberal, St. John's East, NL]

First, I'd like to thank Mr. Christopherson for bringing this letter. It points to a situation that happened earlier in this Parliament when there were some questions about whistle-blower protections and the Public Servants Disclosure Protection Act and the regime there, and I think an audit was referred to the operations and estimates committee. I had an opportunity to sit on this committee as a substitute in that transition.

I'd also like to thank Mr. Christopherson for all the great work he's done in his time in Parliament. My understanding is that you're not reoffering this time. Is that correct?

[David Christopherson, NDP, Hamilton Centre, ON]

Yes.

[Nick Whalen, Liberal, St. John's East, NL]

Even right to the bitter end, you're taking the bull by the horns on something that's important to you. I think that's wonderful.

One of the things I'm trying to wrap my head around as you point to this letter is that I agree that the Auditor General manages their workload and the ability of committees to deal with their information very well. I also agree that cybersecurity is an extremely important topic, but it seems to me there's interplay among the budgets of the various officers of Parliament, and it seems a greater reliance or burden has been shifted to the Auditor General.

I'm wondering what your views are on any legislative changes that might be necessary for future Parliaments to make sure the right balance between the budgets is allocated to the different officers of Parliament. Maybe the Auditor General could be allocated more or maybe they wouldn't have to have some type of a matching, and maybe there could be a very quick recommendation to the next Parliament to introduce some legislation to make sure that this gets funded.

[The Chair, Conservative, Kevin Sorenson]

I want to thank Mr. Whalen. I think that was a response to exactly what Mr. Christopherson was speaking about. Sometimes when we have points of order they aren't really points of order and they take us away from the discussion that is going on.

Thank you, Mr. Whalen. That was actually right down the line of speaking that Mr. Christopherson had.

I'll turn the floor back to Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

Thanks, Chair.

As I have thought this through, I suppose the safety net that I'm looking at has been that surely to goodness the next Parliament will come in and when the PACP meets and looks at their workload—which is nothing—they will ask the question: Why do we exist? Hopefully that would draw some attention to it.

Here is my problem, Mr. Whalen.... Thank you very much for your kind remarks. It's surprising. At the end of three and a half decades, it's nice to hear. I appreciate it, especially from colleagues and especially colleagues I respect.

To me, that's kind of the safety net. I'm going to be completely honest with you. This has just destroyed my pre-retirement time. I made some reference to this at the last meeting, so I won't go on too long. Every since I announced last July, one thing I thoroughly enjoyed.... Something that I used to think about during my career was that I hoped to get a chance to spend close to a year being an elected person and never have to worry about being re-elected. It's a little like being a senator.

I looked forward to that, thinking I could get these parting shots on the way out the door. Since last July, I've really enjoyed being more non-partisan than I've ever been. I've never been overly partisan. Given certain incidents, some would argue that may not be true, but in the main I don't think I'm a fire-breathing partisan, at least not in the latter part of my career.

In my riding people were saying that I look so calm. You, Chair, apparently said.... I wasn't here then, so I'm paraphrasing your words. When you announced that you weren't going to run again—having changed your mind originally, thinking that you were good for another term—one of the things you said at this committee was that Christopherson was looking way too relaxed, as if to say there's a life out there that you don't want to miss.

I was enjoying it. In fact, people in my riding would come up and say that I looked so calm and so relaxed. To me, it was NSD, “new serene Dave”. For a year I've been relatively serene, calm and enjoying it. I wasn't seeing partisan lines, only seeing parliamentary colleagues—and then this.

I have to tell you, if this is still the way it is when we rise, I'm not going to leave here with the same bounce in my step. I'm going to feel like I failed because I'm the most senior member of this committee. I know, as well as anyone—if not better—the importance of this work to Parliament and to our reputation in the world as one of the best.

When word gets out—I mean internationally—that the Liberal government.... We don't see it, because they're like librarians. They don't make a lot of noise, but there's a lot of them and they know a lot. There is a whole auditing community and a whole oversight, accountability and transparency community, internationally, that pay attention to these things.

I won't name them, but I've had responses. We sent out the article that was published in the Hill Times to a few people. You'd be surprised who is really concerned about this—starting with business. The government is going to start hearing from business on this.

Do you want to know why? It's because it's not only social democrats like me who believe strongly in transparency, accountability and oversight. When the business community—which sees itself as having to carry the burden of taxation—sees government waste, smoke comes out of its ears. It's the one time that I and that business community are totally united in conflict.

I say to my fellow leadership colleagues especially—the chair and the vice-chair because we've travelled internationally and you two know exactly what I'm talking about—that when word gets out internationally that the Liberal government, under the fair-haired Prime Minister who the world adores, slashed the work plan budget of the Auditor General, it's going to leave a whole lot of people wondering what is going on in Canada.

I guess my answer to my colleague, the direct answer, is yes, this is fixable, but a lot of damage is going to be done. If it's going to get fixed by the next government, this is the part.... I will come back to that. I do know where I am, even though I go for a walk around the park. It's like that cartoon where the kid goes out to do a quick thing and ends up going all over. That's the beauty of the committee talking. You don't have to worry about time. As long as the chair is okay with where you are, you're good.

I'll come back to that.

My point on this is—since I was asked the question—why would the government allow this to potentially become an election issue? Of course, the Conservatives, the NDP, the Greens and I suspect even the Bloc are all going to put in their platforms that they will adequately, properly and sufficiently fund the Auditor General. From a political point of view, just looking at it as an observer, I don't understand why the Liberals would give the opposition parties this gift.

[Nick Whalen, Liberal, St. John's East, NL]

That might be a great segue for me to make another point of order under the Simms protocol, if it's permitted, Mr. Chair.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay, but don't interrupt me. I'm in the middle of a good rant.

[Some hon. members]

Oh, oh!

[Nick Whalen, Liberal, St. John's East, NL]

I thought it was like a—

[David Christopherson, NDP, Hamilton Centre, ON]

Then we'll have a different exchange.

[Nick Whalen, Liberal, St. John's East, NL]

You got us good there, so I thought that was a good climax.

[The Chair, Conservative, Kevin Sorenson]

Mr. Christopherson has just moved to the point where he says that now he wants to more closely address the fix that Mr. Whalen suggested in his question. I hate to take a back and forth when he's just getting to that.

Can I hold off on that, Mr. Whalen? It's your point of order.

[Nick Whalen, Liberal, St. John's East, NL]

Sure. My point of order is just that I provided some more precise language that I wanted Mr. Christopherson to refresh his mind with, if he could just take five or 10 seconds to read or—

[David Christopherson, NDP, Hamilton Centre, ON]

Sure. Let me just finish this thought, because I'm just not smart enough to hold it for long, and then I'll have a quick consultation and I'd be glad to do that.

This is the thing. Again, I'm picking up where I left off yesterday, trying to figure out why the government is doing this. This is what throws me. It's not as though you need the $10.8 million. Come on—in this place, where we deal with billions? Remember, I used to be the parliamentary assistant to the minister of finance in Ontario, so I know a little bit about these things.

If it's not for the money and the politics suck, there has to be another reason. I won't review these in detail again today. I may need a refresher down the road, but today we're okay. I pointed out that I thought one motivator might be that the government was really worried about what a cybersecurity audit would show, especially since I was here the last time we had one, and it was scary.

Is the government of the day, first of all, arrogant enough to believe that they're going to be the government and therefore they should axe this now because it's going to give them all kinds of pain? Is the political calculation that it will be such a horrific audit, of the dimensions of the sponsorship scandal or the F-35 debacle—or worse, because it deals with security? Would it be so bad that it was worth paying this price?

There is a price to be paid. I and the other opposition members are doing everything we can to try to get some attention to this. At the end of the day—I mean, I've been around long enough—the only time this is really going to change is when emails and texts and phone calls start coming in to individual Liberal members' offices. Then they're going to be saying at their next caucus meeting, why do I have this problem for $10.8 million on the Mother Teresa department of Parliament? “Why do I have this problem?” is what Liberal backbenchers will be asking.

The other thing I thought was, is this retaliation? When we're going to talk about this big-time...and to her credit, Vice-Chair Mendès has been strong about looking at the long term to make sure we change the process of funding, so that we don't have what we have right now. What we have right now is that the very people whom the Auditor General audits—we recently came out with a couple of reports that didn't make these folks look very good—are the same folks they have to negotiate with.

Is this retaliation? It would be horrifically unacceptable from any government, but I have to tell you, there would be an added sting coming from one that got elected on a mandate of respecting Parliament.

Is that what this is, retaliation? Are we that kind of banana republic, such that when an oversight body makes the powerful government of the day look bad, they're going to pay a price? Is that what happened?

Again, I find it mind-boggling that either of these things could happen: cutting the budget of the Auditor General so that a specific audit or other audits don't happen because of the political fallout; or retaliation led by bureaucrats who felt that they took a whacking from the AG and now they have a chance to return the favour. Again, I find this really hard to believe.

I find this whole thing hard to believe. That's why I say I'm trying to understand the motivation. If we can understand the motivation, then maybe we can help unpack it. The problem is that, even after 34 years in politics, I can't figure out what the motivation is, unless this is just in the same category as the stupidity of giving millions of dollars to the Westons for nothing. Is it the same crowd of people with absolutely no political gut who let this get through? Is it incompetence?

I have yet to have anybody give me a satisfactory understanding of what motivated the government to do this, on the brink of an election, no less. The best I have right now....

The part that I still don't understand—there's a part of it I'm hoping someday I will because it totally perplexes me—is that, if a mistake was made, which happens.... We've all been in government—I'm looking at my colleagues—and mistakes happen. Then you run the biggest political mistake of doubling down on a losing hand, and that's what I see the government doing. We made a mistake. Rather than pay the political price of acknowledging we made a mistake and having to put our tail between our legs, we're going to double down. That's what I'm seeing when I hear the minister responsible for this budget stand up in the House and want to talk about 2011 rather than a single justification for this.

What's the justification for causing the Auditor General of Canada, for the first time in history, to tell Parliament.... Remember they're our employees, not cabinet's employees, our employees, and our employee is telling us, Parliament, for the first time in our history, that we don't have enough money in the Auditor General's budget to carry out its work plan.

You can slice and dice the letters, the issues and the way the minister is responding in the House, and you can parse that all you want. It does not change the fact that the Office of the Auditor General of Canada does not have enough money to do its work. Colleagues know, because I told you that at the end of every estimates meeting of this public accounts committee. The chair of the committee ends the process. I did it. This chair does it, as did all the chair's predecessors and my predecessors. The last question you ask the Auditor General is, “Do you have sufficient money to carry out your work plan?”

Why do we ask that question that way? It is because we're not part of the negotiations, because it's not independent, because we can't necessarily as Parliament trust the process explicitly because we're not part of it. It's more this ridiculous business of the executive council and the cabinet usurping the power of Parliament over the years. This is no different from the cabinet deciding how much money the clerk at the Supreme Court is going to get, because they're completely different branches of government and they're all equal.

We have two big issues; one is the micro and one is the macro. Macro, I suspect, may not get changed now, although I'm going to get into it because there was a mandate to do it, and there was pressure from the agents of Parliament as long ago as January, and this government has just ignored that and done nothing. Do you know what? It wouldn't have been an issue. It's just not big enough to be an issue had this not happened. Then they could have got away with ignoring their promise in that area. They probably would have. Who would have brought that up in the context of all the things that are going on that are going to be part of the next election, which you're all welcome to?

I remain trying to answer the question of funding in the next Parliament, which was, to me, the most important part of that question. Yes, I hope that happens, but I have to tell you, if this government is there, you're going to look bad, and if you're in opposition, you're going to look even worse, because the government of the day will make sure you do. They're going to ride in on their white steed and save the day from a horrible scenario that this government created for no good reason, which is the essence of my point.

Now, I was asked, Chair, by Mr. Whalen if I would consider some language. Do I have a moment?

[The Chair, Conservative, Kevin Sorenson]

Yes, you do. That's exactly what I was going to ask. I appreciate the goodwill amongst the members of this committee to find a solution to this. I think we all realize that we aren't the ones drawing up the budgets but we are here to help to find solutions, so maybe we can suspend just for a few moments and I'll give you an opportunity to look at that.