Evidence of meeting #144 for Public Accounts in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was office.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Sylvain Ricard  Interim Auditor General of Canada, Office of the Auditor General
Nicholas Leswick  Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Andrew Hayes  Deputy Auditor General, Office of the Auditor General
Casey Thomas  Assistant Auditor General, Office of the Auditor General

9:20 a.m.

Conservative

The Chair Conservative Kevin Sorenson

There's a minute and a half.

Mr. Richards.

9:20 a.m.

Conservative

Blake Richards Conservative Banff—Airdrie, AB

Yes, thank you. I'm happy to take that time.

We have our officials from Finance. Mr. Leswick, given what you just heard about the business case, and everything else, is it possible to get the Office of the Auditor General their requested funding increase? If not, what's preventing that increase from being granted?

9:20 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Mr. Leswick.

9:20 a.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Nicholas Leswick

It's important for me to lead off and say that I don't want to sound dogmatic in any one approach—that we have it right and others have it wrong. I think that's the wrong perspective. Likewise, from a bureaucratic perspective, we clearly recognize the importance of a strong audit function. In my job, on a daily basis, we work with the Office of the Auditor General in the performance of the financial audit against the governments financial statements. We do that in partnership, and they are fantastic colleagues.

In the context of answering your question, I think it's important to recognize that the office was provided with a significant increase in resources. In fact, they did come to the government and ask for an increase of over 30% in their operating base—some approximately 150 new employees. Through our process, and through the budget process, the government did grant the office a 10% increase in resources, representing a 16% increase in their resource base, over the last four years. That does outpace government spending as a whole.

They weren't stonewalled. It's not as if they received nothing. I understand there's a gap. That gap is what's being argued and debated. I completely respect and understand that. Part of the job we do at the Department of Finance in providing our advice to the ministers is saying no a lot more than we say yes. That's not just picking on the Office of the Auditor General; it's managing government finances as a whole. The requests and proposals far exceed the fiscal capacity to respond.

As I said in my opening remarks, we consider these business cases from a vertical perspective, going line by line. We appreciate the information the Auditor General has provided in his business case. We challenge every line. We consider it from a horizontal perspective, against priorities and spending proposals from across government.

That's where we landed.

I'm happy to answer additional questions.

9:25 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Thank you, Mr. Leswick.

We'll now move to Mr. Christopherson, please.

9:25 a.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Thank you, Chair.

Thank you all for being here. I particularly want to thank you, Mr. Leswick. I don't know whether you drew the short straw or you did something wrong and somebody's punishing you, but they sure threw you to the wolves—potentially. Thank you for being here.

9:25 a.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

9:25 a.m.

NDP

David Christopherson NDP Hamilton Centre, ON

—in light of the fact that others aren't, but here you are facing the fire. But also, I thank you for your tone, your approach and your acknowledgement of the legitimacy, at least, of the issue here. I appreciate the way you're defending the job you did, and I compliment you. This could have gone sideways really quickly. I think you've done an excellent job, and I want to personally commend you. I hope you continue to provide the kind of contribution that you do.

Chair, I think the Auditor General has outlined the case as well as can be expected. What I'd like to do in my first round is just provide some context, and I'll reserve my right to shore up any arguments later, if that should be necessary. I'd like to put this in context.

Let's understand that in the world of democracies, and particularly accountability, Canada is a world leader. We fight for that in as many categories as we can. Given our size, we don't normally make number one or two in too many things; we're usually in the top six or 10 on things that matter. But I have to tell you, in terms of auditing and our Auditor General process and the work of the public accounts committee, we are world renowned. Particularly, this committee, in this Parliament, stands out so much. Again, I compliment the government members. It's a much more difficult decision for them than for us in opposition, yet you rose to the occasion. I can't praise and respect you enough for doing that, because without that, we're nowhere. Thank you.

Conversely, something like this jars the international community when they go, “Wait a minute. I'm hearing something about the Liberals. Trudeau, in Canada, is not giving the Auditor General the money they need. What's this all about?” It'll have an effect—a negative one. It breaks my heart. We're down to the last couple of meetings. I leave here so proud of the work we've done, yet here's this great big stain on the work of the public accounts committee.

Mr. Leswick went out of his way to point out the processes involved. Again, I have great respect for what he said, and particularly how he said it. But understand, that's the problem. It shouldn't be looked at the way every other department is. Right now part of the argument being put forward by the government is that they didn't treat the Auditor General any differently from other departments. Well, that's a red light; there's a problem and a flag on the field. It isn't other departments, regardless of how we structured it. Keep in mind, this was recognized by the government and personally by the Prime Minister, who gave a mandate to his House leader to stop this way of funding it because this is how you end up in crisis—exactly this.

Had the House leader done her job and put that mechanism in place, we wouldn't be here. In fact, I would be complimenting the government on making a significant advancement in protecting the independence of Parliament's officers. Let's remember, these are not just any bureaucrats. They answer to Parliament. Parliament hires the Auditor General. Parliament fires the Auditor General—not the government. Yet it's the government process that decides funding.

To get into a little bit of the politics of this, I am, very much like my friend, Mr. Davidson, at a complete loss— and have been from the beginning—as to why the heck this is happening at all, given that it's never happened before. I can come up with only three potential motivating reasons, and I haven't heard a single one from the government. I don't mean the government members here; I mean the government in the House of Commons. You've done your job, and now it's for us to put the pressure on the government through the House. That's how this works.

If the Auditor General had a process, an independent way of getting its funding, I wouldn't need to raise this. But we don't, even though they were supposed to do it.

First, it was specifically to avoid the cybersecurity issue. The political calculation is that it's better to take the hit now for underfunding the Auditor General, especially when nobody in the media's paying any attention—except Andrew Coyne and Postmedia. I give them full marks.

I wish it were somebody else driving this than I, because for us it often looks like we're trying to generate a headline. I'm trying to do the opposite: to fade away and disappear. This is not the way I wanted things to be. But I have to tell you, I just wish the national media would pay a little more attention to this. With the greatest of respect, this bloody well matters.

Anyway, was the political calculation to avoid the cybersecurity issue because it would be so devastating? I was here for the first cybersecurity audit and it was devastating. It shook me to the core. Is that why they're underfunding the office? Is it to make sure that that particular audit doesn't come forward because they're arrogant enough to believe they're going to get re-elected and they know the damage this might do to them in the second mandate? That's one possibility. Is another—and with the greatest of respect, I don't you mean you personally, Mr. Leswick—that it is retaliation and revenge on the part of the bureaucracy who ended up having a rather negative audit?

The Auditor General audited the very people who help decide whether or not they get full funding. So was it revenge or retaliation? I want to say that I find it hard to believe it's either one of those two, particularly given that I know the individual members of this government. I find that really hard to believe.

But I'm at a loss. The last one seems to me to be the most likely, and it's also the one that we can fix the quickest. It looks to me like there was a mistake, that this slipped through and now they've doubled down because they don't want the embarrassment of having to change their mind. If anyone can offer me any motivation beyond that, I'm willing to listen, because I really can't think of any other reason why the government would do this except for those three reasons.

Thanks, Chair.

9:30 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Thank you, Mr. Christopherson.

Madame Mendès.

9:30 a.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

Thank you, Mr. Chair.

Thank you all for being here.

Mr. Ricard, Mr. Hayes, Ms. Thomas and, especially, Mr. Leswick, thank you very much for accepting our last minute invitation.

I will use a bit of my time to ensure that the record clearly shows the government members' position. We all agree with the necessity of an independent mechanism to determine the budget of agents of Parliament. We hold strongly to that.

That said, I thank the Leader of the Government in the House of Commons for beginning the review process of the funding mechanism for those agents and for having thought about our next steps. This is a long-term undertaking, which is not done as quickly as we wish, but we recognize that the leader is also responsible for moving forward all the bills that come before the House.

To the arguments Mr. Christopherson—whom I respect tremendously and admire deeply as a committee colleague—presented related to the rejection of the Office of the Auditor General's request, I would add a fourth reason, which I think is a good one based on what Mr. Leswick just told us. Taking into account the government's financial capacity, it was not possible to provide the office with the additional funding it wanted. That had nothing to do with a desire for vengeance or a fear of what the office could do. Simply put, it was a matter of financial capacity.

Mr. Leswick, do you want to comment?

9:30 a.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Nicholas Leswick

As I suggested in my opening remarks, the request, the business case presented by the Office of the Auditor General, was duly considered. Due diligence was performed on each of the elements of the business case. Without providing too many specifics of the advice we provided to the Minister of Finance, there was a view that the office was on a growth track, that it had been growing around 15% since, I would say, the trough in its finding in 2015, and that it had been provided with a 10% increase in its resource base in budget 2018 and that it had some time to implement that increase. In a future period, additional funding requirements would be considered at that time.

9:35 a.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

Additional funding over the five years that you've put...?

9:35 a.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Nicholas Leswick

No, sorry, just to be specific, I meant that there was an allocation approved in budget 2018 and that we would continue to work with the office to consider risks and pressures the organization would face in the future.

9:35 a.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

So in 2018-19, that did not come into account when you studied the credits that would be given to the office?

9:35 a.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Nicholas Leswick

Sorry. They were granted a 10% increase in their resource base in budget 2018.

9:35 a.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

Yes.

9:35 a.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Nicholas Leswick

In 2019, we continue to engage with the office. They presented the same business case. We have heard the chronology of how they presented their funding proposal. They weren't granted additional funds in budget 2019, but it wasn't as though their business case was dismissed. It's just that they were on a growth track and that we would continue to re-engage with the office in future budget periods to understand the elements of their pressures and resource needs going forward.

9:35 a.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

Mr. Ricard, if I have understood correctly, the issue of human resources is one of your challenges. You have to meet the contractual obligations you have had since 2014-15, I believe. There have been salary increases. I think that is in your presentation.

9:35 a.m.

Interim Auditor General of Canada, Office of the Auditor General

Sylvain Ricard

We are talking about the economic increases of the past few years.

9:35 a.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

Okay. You also alluded to your computing capacity. That issue is not new. A few years ago, you realized that you would potentially need to modernize and increase your computing capacity.

Over the years, have you created a fund to improve your computing capacity, so that you could eventually make the necessary changes, or do you operate on a year-by-year basis?

9:35 a.m.

Interim Auditor General of Canada, Office of the Auditor General

Sylvain Ricard

I mentioned that, in 2011, when we reduced our budget, our computer platforms and tools were stable. However, since that time, the entire industry and all the suppliers' ways of doing things have evolved exponentially. For example, cloud computing did not exist in 2011. We could not predict that.

All those things are changing. So we are facing new policies concerning, among other things, data integrity, automation and information technology security. We have to adapt to that. Those new developments have all appeared over the past few years. In the presentation, we pointed out that the increase in government spending was increasing our challenges. The complexity of business models and financial tools used by the entities subject to our financial audits is a phenomenon that has been around since 2011 and that is changing the environment. In 2017, the Auditor General said that the breaking point had occurred and that, if no measures were implemented, performance audits would need to be reduced.

9:35 a.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

Is that because you will no longer have the tools you need?

9:35 a.m.

Interim Auditor General of Canada, Office of the Auditor General

Sylvain Ricard

We needed to invest in all this. We have no choice but to carry out financial audits or mandates. The legislation requires us to do so. We don't have any flexibility in this area.

9:35 a.m.

Liberal

Alexandra Mendes Liberal Brossard—Saint-Lambert, QC

Thank you.

9:35 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Thank you, Mr. Ricard.

Before we go back to the opposition, I have a question for M. Ricard. Mr. Leswick, in his comments, talked about the Auditor General Act; that the Auditor General has the ability to make a special report to the House of Commons in the event that the amounts provided for his office in the estimates submitted to Parliament are, in his opinion, inadequate.

Part of my question is this. Will the AG's office consider making that special report to Parliament. Has he done so in times past? Will he consider so at this time or in the future?