Public Accounts Committee on June 13th, 2019

[René Arseneault, Liberal, Madawaska—Restigouche, NB]

Okay.

[Sylvain Ricard]

It would not have been responsible for us to keep the funding for all those years. We should have rather asked for it in a timely manner.

[René Arseneault, Liberal, Madawaska—Restigouche, NB]

When the Office of the Auditor General voluntarily agreed to be subject to those cuts, had it predicted that, four or five years later, that would account for an optimal increase of 31% of its budget? Had it anticipated that figure?

[Sylvain Ricard]

I would say no. That was not really the amount we thought we would have to request. Technological equipment has a normal life cycle, but we are being asked to carry out additional mandates without additional funding being allocated to us. When it comes to the acceleration of technological needs, which I discussed in my presentation, when we compare ourselves to the rest of industry, we note that challenges exist. Despite the rapid technological advancements, the rest of industry has managed to invest in its audit methods.

[René Arseneault, Liberal, Madawaska—Restigouche, NB]

I understand the challenges and I know what has happened.

[The Chair, Conservative, Kevin Sorenson]

Be very quick.

[René Arseneault, Liberal, Madawaska—Restigouche, NB]

How much time do I have left?

[The Chair, Conservative, Kevin Sorenson]

You have 10 seconds.

[René Arseneault, Liberal, Madawaska—Restigouche, NB]

Thank you very much.

I hope I can come back to this.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Arseneault.

Mr. Davidson.

[Scot Davidson, Conservative, York—Simcoe, ON]

Good morning, and thank you for coming in on such short notice.

My line of questioning is actually in regard to a question of mine in question period. I asked the President of the Treasury Board to account for the refusal to fully fund the Office of the Auditor General. I asked that question on May 31.

I had asked about the Auditor General, yet the President of the Treasury Board responded, “I cannot believe that the member opposite has asked that question”—being me—“when the government cut the Auditor General's budget by 10% and then never built it back”. She said the Liberal government built the budget back because they are “committed to the...ongoing work of the Auditor General”. That was the Liberal government saying they're committed to your ongoing work.

Does the Office of the Auditor General agree with this assessment of the current funding support and the voluntary budget reduction in 2011?

[Sylvain Ricard]

If I understood your question correctly, we had done, on a voluntary basis, an exercise back in 2011 that led us to reduce our vote 1 by $6.7 million. Along with that, to be able to reduce the funding, we suggested that certain audit work was not needed anymore because it was the accumulation of a mandate that historically we have received.

[Scot Davidson, Conservative, York—Simcoe, ON]

Right. You voluntarily did that with other departments back then. We're trying to make this simple now, too, which has never happened before. We had concerning audits for this year coming up on cybersecurity and Arctic sovereignty that were cancelled.

[Sylvain Ricard]

Yes. With the challenges we're facing, we can't keep doing 24 to 25 audits a year. Those will be reduced to 14—

[Scot Davidson, Conservative, York—Simcoe, ON]

Right.

[Sylvain Ricard]

—for performance audits, because a significant part of our business is mandatory work. On the financial audit, the special exams, we have no choice. That's along with the fact, as we were talking earlier, that the IT aspect accelerated the challenge because of the new technology that came forward. The cloud business and all of that, that's where the suppliers are going. That was not there in 2011. But on top of the IT angle, we do refer in the opening statement to all of that complexity that happened in the industry over the last few years, both from the accounting and the auditing side of the business. That wasn't there in 2011. We could not foresee that, right?

[Scot Davidson, Conservative, York—Simcoe, ON]

Right.

[Sylvain Ricard]

We're now facing that. Our colleagues in the rest of the industry reinvest and add to all of that. We can't. We don't have the money, unless we reduce the performance audits.

[Scot Davidson, Conservative, York—Simcoe, ON]

Do you have any idea why the government would not...? At the end of the day, you're the taxpayer's stopgap. We look to you to audit these things. Do you know why the government would not want to increase your budget? It just doesn't make sense to me.

[Sylvain Ricard]

It's difficult for me to speak of why. Mr. Ferguson, the former Auditor General, put forward his fully detailed business case. I think it's 15 pages long, or something like that. All of the details are there; the breakdown is there. They speak of the additional mandates we have. It lists them and gives them the breakdown, in terms of their costs. It gives the example of the complexities of new investments that the pension plan invests in. They are not just T-bills, where you get the value of the day. It's complicated financial instruments.

[Scot Davidson, Conservative, York—Simcoe, ON]

As I said, especially now with global climate change, what's happening in the Arctic with Russia and China is important. Arctic sovereignty is an audit that taxpayers would want to see—and especially now of cybersecurity as well.

We're just back to.... I'm trying to wrap my head around why the government wouldn't increase your budget, so that taxpayers could actually have a look at those audits.

[Sylvain Ricard]

Again, I can't speak for others.

[Scot Davidson, Conservative, York—Simcoe, ON]

I'm dumbfounded about it too. It's frightening.

[Sylvain Ricard]

We filed a convincing case. We filed a business case that is fully aligned and structured. I was there many times when the Auditor General got a bunch of people in his boardroom to have a fulsome discussion, challenging us, the same way he is challenging departments. A very rigorous exercise was undertaken by him. Aside from that, speaking from our perspective, I can't explain why others don't agree with it.

[Scot Davidson, Conservative, York—Simcoe, ON]

That's what I can't figure out. We're all here challenging you again today. I think the former Auditor General has already been challenged. These are concerning audits to the Canadians and your office is very important to them. I'm still baffled about why the government will not answer that question. It makes no sense to me.

I'll turn it back, Mr. Chair.