Public Accounts Committee on April 3rd, 2017

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

Okay.

When you read the Auditor General's report....

It's nice to come to committee, as we typically do in following up Auditor General's reports at committee, and to be able to talk in a soft way that you agree with. You're taking all of this forward, but why wasn't this recognized sooner in this department when you talked to the senior management people? This is the reason, in many ways, that people like me, who came from the private sector and who ran our own businesses, have such a skewed view of how departments run. This is complete mismanagement.

Would you agree or disagree with that?

[Michael Keenan]

I would agree that there are significant problems here and that they need to be rectified. The department has undertaken to rectify them and is carefully managing a program to deliver on the plans to which we committed to the Auditor General. Across the entire 5,034 people who work at Transport Canada, at any point in time there are parts of the department and programs that are working excellently, and there are programs that are not working so well. Our internal audit function and the function of the Auditor General is to find the problems, to zero-in, to describe them, to bring transparency to them, and to improve them. We are absolutely committed to doing better and we could have done better in the past. I can't speak to what happened here more than twelve and a half months ago, but I can tell you that we are committed to delivering the highest level of performance possible, and when we find problems like this, we take them very seriously.

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

I don't have a long time left, but as I look around at my fellow committee members—and maybe I'm being like David Christopherson today in his absence—the reality is that it is hugely concerning when an Auditor General discovers that organizations to which taxpayers' dollars go are performing so poorly.

This is not a question, but I'm talking to committee members now while I have time. I think that one thing the committee should do is commit ourselves to another scheduled follow-up on this issue with this deputy minister and his key people here. They've come here and and said yes to all of these recommendations, let's put these down and let's get them dealt with. However, we need a performance review of this later on.

Perhaps my question for Mr. Keenan is whether he would agree to come back for a performance review by this committee. This is the function of this committee. We are tasked with making sure that taxpayers' dollars are being spent efficiently in government, and as I said, this is what makes people cynical in the public eye, when they see this kind of report coming out. I know I'm being harsh. I understand that. It's worth getting you on the record, sir, to agree to or say yes to that.

Would you agree to it?

[Michael Keenan]

Yes.

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

Thank you. I'm finished.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much. That is what this committee does, and I think all of us understand that when we see these strategies to comply with Auditors General reports, we very often follow up with either a letter, a survey, or an invitation to come back.

Thank you for your willingness to come back.

Mr. Harvey, please. You have five minutes.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

I'm going to start by asking a few questions concerning paragraph 9 in the Auditor General's speaking notes from today. He highlights the deficiencies around long-term planning at Transport Canada, which was what led to the result that Mr. Masse had referred to earlier with the 24 vehicles being carried over in December 2015.

I am wondering if you could elaborate a bit. Can you qualify some of those deficiencies that he's referring to there, and what is the path forward from them?

[Michael Keenan]

Yes, I'd be happy to. It's a great question because it cuts to the heart of our plan for future work in motor vehicle safety. As indicated by the Auditor General at the time he was looking at this program, there was a reduction in the funds available for the research program, so we were sitting on 24 cars. Since then, a couple of things have happened. There has been an increase in resources in the area and the 24 cars that were waiting to be evaluated have been completely evaluated, and most of them crashed. This led him to say there is not a sufficiently clear, multi-year plan for the research here. We have accepted that and are now working on a multi-year research plan.

I should add by way of context that when the Auditor General is looking at this function, the Department of Transport was going through some acute financial challenges. In that period of time, there were a number of areas in the department where we had to make reductions in planned spending in order to align the resources available for the department with the actual spending of the department. We worked our way through those financial challenges and are bringing greater stability back to this area of the department, as well as many others.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

I don't know very much about this area of expertise, so my next question is really just for my own personal interest. Why does Transport Canada buy vehicles to test?

[Michael Keenan]

Our view is that we could compel the manufacturer to submit vehicles to us, but—

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

I think that's what taxpayers would think should be happening.

[Michael Keenan]

—the challenge is that if a manufacturer knows it's going to send its Volkswagen to Transport Canada to test, they might make sure there's nothing wrong with it. Appropriate testing is blind testing. We go in as a mystery shopper. We buy the car off a lot, and nobody has any idea that it's going for testing at Transport Canada. There's no opportunity for manufacturers to play any games and give us a tuned-up car to test.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

Why would Transport Canada not come after the manufacturers to reimburse the government for the cost of those vehicles?

[Michael Keenan]

You put an interesting question out there. One of the key things Transport Canada is looking at is to charge businesses when we provide them services in a number of areas.

I'm not sure it occurred to us to charge them for the cars we buy.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

I'm guessing that Transport Canada doesn't generate any revenue from this, but the manufacturers that you're doing the testing for are going to generate revenue whether you test their vehicles or not. They're the ones receiving the revenue from it.

That's why I'm asking that question.

[Michael Keenan]

We hadn't thought of that, simply because the connection between our buying the car off the lot and the service to the manufacturer is not so immediate, but now that you raise it, I think we should go back and look at it as a possible area in our future cost-recovery plan.

I would submit that you are absolutely correct. When you take a new car off the lot, after you finish evaluating it and crashing it, it's not worth that much.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

It's usually about $2,300 to $5,000 on GCSurplus.ca. I see them on there quite often.

[Some hon. members]

Oh, oh!

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

That's it for my questions.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

We'll now move back to Ms. Block, please, for five minutes.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

I'm going to go back to some of the questions I had identified from the report. I'm turning to page 16, paragraph 4.47, where the Auditor General said, “We found that Transport Canada developed some standards with little data to support them.”

The office goes on to give an example:

For instance, rear-view (or back-up) cameras will become mandatory in the United States in 2018 following a US Congress request to protect pedestrians. Transport Canada officials told us they will follow suit, even with limited data and safety benefits.

Who makes the final decision on the introduction of a regulation such as making reverse cameras mandatory, and why would a decision like this be made without the evidence to support it?

[Michael Keenan]

Mr. Chair, that's a great question.

I'm going to turn that one over to my colleague, Ms. Benjamin, to go through the details. I think that's one where there is evidence, but we didn't actually present the evidence, which speaks to one of the key recommendations of the Auditor General.

I'll turn it over to Ms. Benjamin to give additional background on that case.

[Kim Benjamin, Director General, Road Safety and Motor Vehicle Regulation, Department of Transport]

At that point in time, when the audit was being done, we were still gathering data. It is difficult when it comes to rear-view cameras, because collision data is gathered for vehicles on the road, and not for vehicles in parking lots or in driveways, which is where most of these collisions occur.

However, after that point in time the department did receive more data. The cost of the cameras went down, so it started to shift the cost-benefit analysis, and it was appropriate to then put forward in regulation.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I noted that the recommendation made by the Auditor General was that Transport Canada should clearly disclose how it used evidence and scientific research to inform its development or modification of motor vehicle safety standards. The department agreed, and it had a target completion date of January 2017.

Can you give us an update, given that you had that target date?

[Michael Keenan]

On that particular recommendation to implement our commitment, we've changed our regulatory process. Any proposed regulation that we put forward, we articulate clearly in the impact statement the research and the data that we use to inform our proposal to proceed with that.

Kim, what was the first one we've done this on, do you recall offhand?