Public Accounts Committee on Dec. 1st, 2016

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you, Mr. Chair.

Mr. Ferguson, I would like to thank you and your whole team for being here this afternoon. The reports you present are a tremendous help to us in our work.

I would like to congratulate you, sir. I liked what you said to the media. We have the same objective of improving systems. You help us move forward. I have been a member of Parliament for just over a year and I could use the help.

Let me explain. We have noticed certain things. As the Radio-Canada headline said, the Auditor General is tired of repeating himself and is demanding results. I feel the same way. You are no doubt familiar with my usual rants.

When I meet new witnesses who appear to talk about certain reports, I always say that we see problems. If the Auditor General does not pay them a visit, they are lucky not to be audited that year. Time will pass and they will probably hope that they are forgotten.

In my opinion, there is a philosophical or existential problem. You stated that the departments must understand that their services must be structured to serve citizens and not structured around processes. You, my colleague and I mentioned this earlier. These are not attacks on public servants because individuals are in good faith. We should in fact tip our hats to federal public servants for their excellent work.

Beyond that, we need to eliminate the model that is structured around processes but forgets citizens. We have the Canada Revenue Agency report in front of us. What do you think? Is it a philosophical problem?

[Michael Ferguson]

This problem has probably existed for many years. It is nothing new.

This is common to all government programs nowadays. So it is probably not a philosophical issue. It is part of the fabric of government programs. I also think it is possible for all departments to improve their services if they focus on the citizens' experience.

To my mind, that is the reason behind our message. It is possible for departments to change their practices and improve their performance, provided that they find a better way of reviewing their processes and programs. The citizen must become the focal point.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Do you have any potential solutions or tools to suggest? I am not an expert on procedure. As members of Parliament serving on the Standing Committee on Public Accounts, can we do more, can we ask the departments to be accountable in order to improve results?

[Michael Ferguson]

I think so.

We have found for instance that the departments' public reports contained a few problems. When we see these reports, we understand how important it is for members of this committee and of other departments to ask questions to make sure the information is complete and accurate. That is probably one way.

In addition, we have to ask questions about action plans. When a department puts forward an action plan to resolve the problems we identified, I think the members of this committee should ask direct questions to the departmental officials to find out if it is really possible to implement everything in their action plan and if these measures will produce the desired results.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

As you said, as members of Parliament, we ask questions, but could we do something more to demand results?

[Michael Ferguson]

In my opinion, it is simply a question of exerting pressure. We must continue to ensure that the departments understand that they have to change the process and the way they offer services to citizens. I think it is simply a question of continuing to ask questions and having expectations. I think it is possible to improve results that way.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you, Mr. Ferguson.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

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

[Shaun Chen, Liberal, Scarborough North, ON]

Thank you to the Auditor General and to his departmental officials for being here today and speaking to our committee.

I want to talk about the income tax objections and your report on the Canada Revenue Agency. I want to highlight some of the things that I found and then ask a question about what you looked into in the process of objections.

I know how challenging it is for people. There are constituents who have come to my office saying that they have had to wait for months, but in your report, you highlight that some Canadians are waiting not just months but years or over a decade for a particular objection to be resolved. It's quite disheartening to hear of that lack of service being provided to our taxpayers, particularly when we have a Taxpayer Bill of Rights that specifically gives Canadians 16 rights that are centred around accuracy, professionalism, courtesy, and fairness.

When a taxpayer files an objection and then perhaps is not successful, they potentially end up having to pay interest, sometimes hundreds of dollars. Over the past decade we've seen that these objections have more than doubled and almost tripled.

In your report, you say that objections were not being processed in a timely way. You specifically say that the CRA didn't “adequately analyze or review decisions” and at the same time, “there was insufficient sharing of the results of these objections and court decisions within the Agency”.

In any department, of course there is policy, procedure, and practice. At the beginning of your report where you outlined the objections process on page 1 of report 2, you talk about how CRA manages its process through the appeals branch of the department.

At the same time, I am aware that taxpayers can also file complaints about service, and they can do that first through the CRA, and then if they are not satisfied with the result of that complaint, they can go to the taxpayers' ombudsman.

Did you have a chance to review with the taxpayers' ombudsman what happens at that level, and how effective they were or were not in helping taxpayers get their issues resolved in a timely, fair, and accurate way? I know there's been a conversation. I previously sat on the immigration committee, and in speaking to colleagues, I know that people have talked about the idea of an immigration ombudsman. I wonder if you had a chance to look at how it's working within CRA and whether or not it's helping.

I suspect many of the objectives of an ombudsman would be similar to the types of inquiries you are making into how effectively the department is running and how well it is serving Canadians.

[Michael Ferguson]

No, we did not look at the role of the ombudsman. When we scope these audits, we scope into them whatever we feel we can get done in the time frame, but certainly, we looked at things such as the Taxpayer Bill of Rights that you mentioned. We identified that and particularly the right to receive timely information, but we identified that the Canada Revenue Agency hadn't really defined what “timely information” would be.

I think you also referred to the policies, procedures, and practices, but one thing that's missing, which you referenced in your comments, is the continuous improvement side of it for the Canada Revenue Agency: learning from the decisions—these may be decisions coming out of the ombudsman's office, decisions coming out of the Tax Court, or decisions coming out of overturning decisions through the objections process—and using that information to go back and improve the policies, procedures, practices, and all of what is involved in getting to a decision.

The direct answer concerning the ombudsman role, then, is that we didn't look at it, but we have lots of other opportunities to go into Canada Revenue Agency.

[Shaun Chen, Liberal, Scarborough North, ON]

Knowing what you know and what you found concerning cases not being processed in a timely way, were you able to look at any data that examined how some taxpayers might have resorted to the ombudsman and whether or not that resort was effective in getting their case resolved in a more timely fashion? Was there any consideration of what the current avenues are for Canadians to have their cases processed in a more timely way?

[Michael Ferguson]

Mr. Chair, no. The process we looked at is a well-defined process, in terms of how people get into that objection stream and what happens. That was the focus of this particular audit, and we didn't go beyond that into what might be happening through the ombudsman's office, because this was a well-defined process that we could look at, and it is what we focused on.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Ferguson and Mr. Chen.

We go back to Mr. McColeman, please, for five minutes.

We're on the second round, so it's a little shorter round. Take five minutes, please.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you, Chair.

Earlier in the week I was making notes based on your comments, Auditor General. I'm going to read some of the notes from what I believe you said. They're a little bit scattered, but bear with me.

There was a “struggle in each of the seven audits”, meaning that data integrity and information was not good. “Services take too long.” That's a recurring theme, which we've talked about today. Then there are these: problems with “training in departments getting worse”; “armed forces—the same issues as 2006, problems getting worse”; departments with “no performance indicators”.

As my colleague Mr. Christopherson said earlier, when you read these reports, they're pretty scathing in many ways. Can you take just one of those items—and I'll suggest “no performance indicators”, meaning no measures of how performance was carried out within the organization—and further to that perhaps give us your thoughts on this subject as we move forward?

We're going to address some of these with specific departments when we get them here, but as we get into that process, how can we liaise with you so that you can show us, if you can—I'm not sure you can or whether it's within your mandate to do it—some of the best practices of performance indicators that you may have run across in your role as Auditor General?

[Michael Ferguson]

If your notes were scattered, it was probably because my comments were scattered.

In terms of the performance indicators, I think what I would do is look at the audit we did on the beyond the border action plan, in which there was a series of 34 initiatives.

Government departments have spent $600 million, and the total amount they have dedicated to the action plan is more than $1 billion. What they were reporting on, though, was whether they had completed something. Did they build a system?

The action plan was all about improving security at the border and speeding up travel and trade at the border. For a department to say that they built a new system doesn't tell you whether the security is any better at the border, and it doesn't tell you whether people and goods are moving faster across the border.

That's the type of thing we mean when we are looking at the performance indicators. If you are going to put $1 billion into building a number of systems and a number of initiatives and you have a direct objective of increasing security at the border or speeding up travel and trade at the border, then how can you tell whether those initiatives have actually done those things?

I get that it's hard. We struggle in our own office with how to measure the value of an audit. It's not easy to measure the value of an audit. I think we need to at least keep going back to look at an audit to see whether we think we have provided value to Parliament and to the government from doing the audit, rather than just say that we'll measure how long it took or how much it cost to do an audit and then say that we have a measure. That measure doesn't get at what is important, which is the value coming out of the audit.

Similarly, in this type of thing it's not good enough just to say that they'll measure whether they have completed something or not. They have to find ways of saying that they spent $80 million on a new single-window system to track what's coming into the country and what goods are being imported into the country but that fewer than 1% of importers are actually using it.

What the department has said is that they're going to improve that rate, because they're going to shut down all of the systems and make this one mandatory. Well, making a system mandatory will increase the number of importers who are using it, but it doesn't necessarily mean you're going to have importers who are happy that they are going to have to use it. How are you going to know that this is the right step to take because it is a good system?

It's all of those types of things that are our frustration when we look at the performance measurement.

[The Chair, Conservative, Kevin Sorenson]

Go very quickly.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I'll yield.

[The Chair, Conservative, Kevin Sorenson]

Thank you. You had 15 seconds left.

Mr. Arya, you have five minutes.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Auditor General, you mentioned that it is critical for government departments and you suggest to them that they work to implement your recommendations, and you encourage them to take a step back and focus on how they can deliver services that work for Canadians, which is quite important. Do you think that the bureaucracy has the culture to actually do this?

[Michael Ferguson]

Well, I think some things have crept into the way government departments deliver the programs. As I said, sometimes they measure what's easy to measure rather than find out what it is, really, that they are trying to achieve.

I think there has been a lot of emphasis on individual steps in procedures rather than the end results. We can even see it with such things as action plans. The way departments respond to our recommendations is that they will say they're going to do this and they're going to do that, and then what they track is whether they have done it, without standing back once they have done all of that to see whether they have actually made the end result any better.

Some things have crept into the way departments have run the programs, but I think that if they take that step back, they will be capable of doing a better job at these things.

[Chandra Arya, Liberal, Nepean, ON]

I understand what you are suggesting to them. That's very clear to me, but do they understand? I'm sure they understand—they are quite smart—but do they have the culture to actually do what you are suggesting they do?

[Michael Ferguson]

Once they take that step back and see that they need to look at this in a different way.... There are many very competent people working in government departments. Once they understand that their mission is to look at these not as programs centred around process but as programs centred around people, the skill set is there, I think. It's now just a matter of realizing that they need to change the way they're looking at these programs.

[Chandra Arya, Liberal, Nepean, ON]

What is it that we can do to help them do what you are suggesting they do?

[Michael Ferguson]

Well, as I've said, I think this committee in particular has really started to step up to the plate and is doing a good job of sending the message to departments that you expect them to get to better results.

Again, when they're in front of you, look at their action plan. Look at what they're going to do. I suppose get them to talk about how, when they've done all of this, it is actually going to result in better service and how they are going to be able to show that it will result in better service.

I know we just landed seven audits on you and some special exams and it's going to take a lot of time for you to get through them, but if you can within your schedule find time to bring a department back a year later or whatever so that the message is out there that, as was mentioned before, it isn't going to be a “one and done” situation, all of those things will help.

[Chandra Arya, Liberal, Nepean, ON]

Coming back to your remark that there's nothing new about the issues you have found, because you have seen these problems before and they are getting worse, and given that many times the deputy minister who comes in here says, “Oh, I wasn't there when that happened”, will it be a good practice for us, in relation to calling the current deputy minister, also to call in the deputy minister who was in charge at the time when you did your previous audit and identified something like that?