Public Accounts Committee on May 17th, 2017

[Michael Ferguson]

I don't have the exact figure, but I know that is the case for most of them.

[Paul Lefebvre, Liberal, Sudbury, ON]

Are those airports entirely under Transport Canada's responsibility?

[Michael Ferguson]

Yes.

[Paul Lefebvre, Liberal, Sudbury, ON]

Once again, it would be worthwhile to continue on this topic during our consideration of those reports.

I am finished, thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Lefebvre.

We'll now move over to Mr. Jeneroux, please, for five minutes.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Auditor, and your team for doing all this great work for us and for Canadians.

I want to pick up on the line of questioning that my colleague Mr. Harvey had started around the temporary foreign worker program, particularly when it comes to unemployed skilled workers in my province of Alberta. Your findings were certainly of concern to me. I have it here, in fact, that you found in 40% of the cases, that program officers did not sufficiently question employers on whether they had made reasonable efforts to hire or train Canadians.

Given that in 2015, the temporary foreign worker program hired 90,211 temporary foreign workers, are you essentially saying that in your assessment there are 36,084 jobs that were given to temporary foreign workers that could have gone to Canadians first?

[Michael Ferguson]

The types of problems we found tended to be more focused in certain types of industries. We wouldn't be able to extrapolate that exactly the way you extrapolated it, because the problems we found tended to be clustered in certain types of industries, particularly the hiring of caregivers and people in fish-processing plants. There would have been some other cases, but they would have been more on an individual point.... Most of the issues had the tendency to be clustered so you couldn't just do a straight extrapolation of the 40%.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Did you find clear examples of employers who were abusing the program, whether in those industries or others?

[Michael Ferguson]

We found that when you looked at the application that was presented by the potential employer, the application contained information that we felt the department should have questioned before they approved the hiring of a temporary foreign worker.

For example, we talk about the fact that there were Canadians who were laid off from fish plants. We looked at about 500 records of employment of Canadians being laid off from fish plants, and 80% of those had claimed EI during the period of time when those fish plants were hiring temporary foreign workers. That should have been an indication to the department that perhaps there were Canadians available who had worked in that industry, who had experience in it, and who were collecting employment insurance at the same time that temporary foreign workers were being hired.

Similarly, we indicate a particular example that showed up in our sample of an employer who applied to hire a caregiver and said that they needed to hire a temporary foreign worker because they were looking for someone who was trustworthy and had the ability to work without supervision. The department didn't question that application and say that there were Canadians available who would fit that description. The issue we had was that the department wasn't challenging some of the requests, to make sure there truly was a labour shortage and that there were no Canadians available to fill those jobs.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

To be clear on the scope of your audit, did you speak directly to any employers throughout the audit?

[Michael Ferguson]

I don't believe we spoke to any employers. If I'm not right on that, I will provide a correction. I don't think we spoke directly to employers, but I'll check that.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Okay.

In the 30 seconds I have left, do you have any examples similar to the caregivers or the fisheries, with a more regional breakdown, perhaps, within the Alberta oil and gas sector?

[Michael Ferguson]

No, I don't have any of those examples.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

All right. Thank you.

[The Chair, Conservative, Kevin Sorenson]

We'll now move to Mr. Arya, please, for five minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Ferguson.

Mr. Christopherson made a very long statement. If I recall correctly, he said that all of the analysis and reports that go into the preparation of documents that are covered under cabinet confidentiality are “fair game”, and should be made accessible.

Is that correct?

[Michael Ferguson]

Our position is that according to the Auditor General Act, we have the right to access any information we need to do our work. That's clear in the Auditor General Act.

We acknowledge that we don't need access to the cabinet confidence information, the discussions in cabinet, the recommendations to cabinet. We certainly feel, and our position is, that with regard to any of the analysis that's been done by civil servants, we should be getting access to that information.

[Chandra Arya, Liberal, Nepean, ON]

I am a bit confused, because you said, in response to his question, that on what he mentioned he was “generally” correct. That seems to imply that any analysis and reports that went into making decisions for the cabinet should be made available to you.

[Michael Ferguson]

Yes, that's our position on anything that was an analysis, any reports that the department did, leading up to the recommendations. We don't want to see the recommendations, but for any of the analysis that they did, yes, we feel that we should be getting access to that, and we feel that our act requires that we get access to that information.

[Chandra Arya, Liberal, Nepean, ON]

He also talked about the right of Parliament, and seemed to imply that the right of the Office of the Auditor General is the same as the right of Parliament.

Is that correct?

[Michael Ferguson]

I can't comment on that. All I can comment on is the fact that according to the Auditor General Act, we are supposed to be provided any information we need to do our job. If we are not given that, we are to report it to Parliament.

Again, that's clear in the Auditor General Act. From there it's in the hands of Parliament to do whatever Parliament can do with the issue. I don't know all of the intricacies of the powers of Parliament in that instance. All I know is what our act tells us that we have access to.

[Chandra Arya, Liberal, Nepean, ON]

Once again, my confusion came because you started your reply by stating that what he mentioned was “generally” correct. It would be good if you could go through the statement by Mr. Christopherson and your response to that, and, if there's any ambiguity, clear that—at a later date, not now.

[Michael Ferguson]

I can do that. Certainly what I was responding to was his description of the situation we had, the fact that it was going before Parliament. Obviously I don't know the details, so when I said “generally” correct, it was because I was trying to acknowledge that I didn't know the details of what Parliament could do and that type of thing.

I'll go back through his statement, and if the committee wants me to provide clarification, I can do that.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Ferguson.

I'd like to go back to customs duties in paragraph 8. You state:

...the way Canada assesses customs duties and controls coming into the country is complex and difficult to administer, which means there is a different system on paper than in practice.

How prevalent is it, and how much will it affect the collection of the appropriate duties?

[Michael Ferguson]

In the chapter, in the audit, we say that the Canada Border Services Agency itself recognizes, through work it has done over the years, that about 20% of the goods that come into the country are misclassified. Not every case of misclassification results in the wrong amount of duty being paid. Something could be misclassified, but what it should have been classified as would carry the same level of duty as the original classification.

However, in the targeted investigations that the Canada Border Services Agency did over a certain period of time, they found that $42 million worth of duties should have been paid but were not paid, and they said that half of that was because of misclassification. They know that 20% of goods coming across the border are misclassified. They know that misclassifying goods does have a significant impact on revenue, but the agency itself has not estimated what the total value of uncollected or unassessed customs duties might be because of those misclassifications.

We had a number of other areas within the customs duties program that were difficult for them to administer, but again, overall the agency doesn't have an estimate of the total amount that those might be worth.