Evidence of meeting #80 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 audit.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Michael Ferguson  Auditor General of Canada, Office of the Auditor General
Jean Goulet  Principal, Office of the Auditor General
Martin Dompierre  Principal, Office of the Auditor General
Casey Thomas  Principal, Office of the Auditor General
Carol McCalla  Principal, Office of the Auditor General

9:20 a.m.

Liberal

Chandra Arya Liberal Nepean, ON

We have very bright, very well-qualified public service employees here. They are very talented. Did you find, in solving this problem, that senior management did actually involve and consult these employees?

9:20 a.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

I would say that a lot of the departments and organizations had to try to problem-solve the issues that were specific to themselves. I think we probably did see a lot of creative brainpower brought to those issues, certainly at the individual department level, because they were dealing with the nuts and bolts of the issues. I think we saw a lot of them trying to find solutions, which was all good. It was in that vein of making sure that people are paid and paid on time.

All of those types of solutions may very well be things that are outside the system, things that later on need to be brought in more systematically so that they're actually part of the system.

9:20 a.m.

Liberal

Chandra Arya Liberal Nepean, ON

One of the underlying things I see through all of this process is the role of outside consultants. Some consultant goes to a minister to sell him or her a solution and says, “You can consolidate everything. You can have huge savings.” Then the process starts. Every step of the way, from conceptualization of the idea to implementing the idea, then solving the problems due to that implementation, then going back and saying that....

Through all of this process, it appears that the government was relying very exclusively on outside consultants instead of relying on public service employees. The difference is that the public service employees who are equally talented—probably more talented, more knowledgeable—don't have profit motive, unlike an outside consultant.

Do you think there was excessive reliance by the government on outside consultants?

9:25 a.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

Looking at that wasn't the objective of the audit. We'll be down into a bit more of some of those questions in the second audit.

However, I think it's a good question for the department to answer. Under what circumstances did they decide that they needed help from outside consultants? I understand that we can't expect all expertise to be within the federal public service and that from time to time we need to bring in outside consultants. The departments also need to make sure they are considering all of that expertise and advice in the right way and that they're only getting it when they need it.

I can't tell you the specifics of when they decided to bring in outside consultants.

9:25 a.m.

Liberal

Chandra Arya Liberal Nepean, ON

You said that we may not have internal expertise. I can understand that in terms of technology. However, when it comes to things like the design parameters, I think you mentioned that one of the design parameters was that every new employee who is hired has to be booked into the system the same day. If you talk with any HR expert in a big organization employing thousands and thousands of employees, that is not always going to be the case. That sort of design can only come from an IT guy, not from HR.

Anyway, going back, 1,200 pay advisers were eliminated in the process. The elimination started in early 2015 when the staff were hired at Miramichi. Do you think that eliminating these pay adviser positions, with an intention to show savings to try to balance the budget, contributed to the problem we have today?

9:25 a.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

Certainly what I can say on that is that in order to deal with the problems, the government has had to hire back those pay advisers, and in fact more. What happened was they reduced the number of pay advisers in the departments by 1,200, but they added about 550, I believe, in the Miramichi pay centre. Since then, they have hired back a number of other pay advisers, which has taken it up above the original 1,200.

9:25 a.m.

Liberal

Chandra Arya Liberal Nepean, ON

That's exactly my point.

The point was that the pay advisers were fired before the system could be stabilized, and that led to the problem we have today. Then we had to hire people back to take care of the problem.

9:25 a.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

Certainly when you apply hindsight to it, you see that part of the solution has been to bring back even more pay advisers. In hindsight, that has been part of the solution.

Again, I can't tell you exactly what happened in terms of the decision to start making the change and the reduction, because we haven't looked at that yet. That wasn't part of this audit.

When you just apply hindsight to what they have done, if they had still had those pay advisers, then they would have had those people in place right away to help deal with the problem. They had to try to bring them back in order to deal with the problem, and in fact brought back even more.

9:25 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Thank you very much, Mr. Ferguson.

We'll now move to Mr. Nuttall, please. We're in the second round, so you have five minutes.

November 23rd, 2017 / 9:25 a.m.

Conservative

Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON

Thank you, sir.

Thank you to the Auditor General for providing these reports to us. Certainly there are some great educational opportunities for governments, and not just for this government but for governments across the country.

I'd like to start by picking up where Mr. Christopherson finished and then delve directly into the CRA audit.

The message that I think comes through both your message and when looking at each individual report is that when it comes to Phoenix, we're failing our own employees. When it comes to a number of the other items, such as the CRA, we're failing the citizens of Canada. A client-centric approach does not seem to be in the mentality or culture of the Government of Canada, on the whole.

When we look specifically at the CRA, we have a reporting issue concerning the way they were reporting to the Auditor General—whether it was apples to apples, in the sense of the number of people as compared with volumes of calls. We have an issue with blocked calls, as you said. We have an issue with the type of information that's being given out to clients, who are the taxpayers of Canada, and with whether or not it's accurate. As much as 30% of the information that's given to citizens is inaccurate.

These are very major issues at the CRA, and we've seen other major issues out of CRA recently that I know are not in the scope of the report. There's certainly a theme here, however, with regard to what's happening with the CRA, and there obviously needs to be major work completed.

Just to add insult to injury, when you think about what the CRA is and compare it with the private sector, if you were calling to try to figure out what your payment was or the parameters within which your payment needed to be made, in the private sector—and let's just use a telecom company, because they're large companies—it is not very difficult to find out from them what you owe them and why you owe it to them. It is very easy to do; it doesn't require eight phone calls. They know right away.

This brings me to the issue. I was thinking about this last night. We had the opportunity to speak with you about this on a couple of occasions. Is the issue within the CRA that the employees don't have the training to answer the questions and that there is therefore an avoidance of answering those questions and a nervousness about giving information to citizens, or is it just mismanagement and bureaucracy gone wild?

9:30 a.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

The first thing I would like to say on that—and we identify it in the report—is that we made 250 calls anonymously to the call centres. For every single one of those calls, the agents were very attentive to the question we asked, they were very courteous, and they took their job very seriously. We didn't perceive any nervousness or anything else like that.

However, I think there obviously is a training issue. For 30% of the questions we asked, we got a wrong answer back, and our questions were of a general type. They were not specific questions about specific taxpayer issues; they were general questions.

The Canada Revenue Agency has a quality assurance mechanism in place whereby they try themselves to assess caller accuracy, which I believe they do for each person in their call centre every quarter. They try to track it, but they're not doing it in a way that actually gets to the accuracy. What they are doing isn't objective enough. They thus underestimate the level of errors and therefore only identified 3%, I believe it was, of their call centre agents as needing additional training, whereas based on our results, it looks as though more than that need training.

9:30 a.m.

Conservative

Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON

When you're looking at different departments for not irregularities but mistakes, you won't see a 30% number under normal circumstances. You're looking at a 5% or 6% contingency, whether it's monetary or otherwise. This is way out of the norm.

9:35 a.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

Yes, 30% is certainly an unacceptable error rate. I guess I'm venturing a little bit more into my own opinion, but I would even venture to say that even if the error rate was the 6% or 7% the CRA assessed it to be, in this world that would be too high as well—but again, that's my opinion. Maybe CRA would differ with me on that. Certainly there's no question that a 30% error rate is too high.

9:35 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Mr. Ferguson, with regard to the 30% error rate in the calls, were you ever told that CRA officials didn't know the answer to the question?

9:35 a.m.

Martin Dompierre Principal, Office of the Auditor General

Thank you, Mr. Chair.

In some cases, we did get referred. I recall that they brought a question to a second tier because they were not able to provide the answer. At that point we said thank you and stopped the call. We considered that to be a right answer.

9:35 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Not knowing the answer was not part of the 30% but part of the 70%. Is that correct?

9:35 a.m.

Principal, Office of the Auditor General

9:35 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Thank you very much.

Go ahead, Mrs. Shanahan.

9:35 a.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Thank you, Chair, and thank you very much again to the Auditor General and his team.

I know when you're choosing your audit schedule—and maybe you can talk to us a little bit about how you do that—there's a certain amount of priority but also a certain amount of randomness too, yet we're still able to see the themes overriding each set of reports. This is my fourth round, and I'm certainly noticing that.

When we're talking about these reports, we're really looking at the performance of the individual departments. We're looking at the value for taxpayers' money. I have a set of measures that I use. Of course, I'm looking at the cost of the programs, but I'm also looking at things like public security and citizen health, which has been a theme that you have referred to in the past as well as Auditor General.

We see that in the oral health programs for first nations, where we're looking at the health of our most vulnerable citizens. Another theme that is arising, and one that is quite surprising—because I do believe we've always had great pride in the quality of our public service and the services the government provides its citizens—is that quality now appears to be an issue. That is what I'm seeing.

Phoenix is a huge concern for us, and we're going to have the opportunity to delve deeply into that at a later date. When we're talking about the CRA call centres, it looks as though they're responding to your questions, but they really are not at all. Even when we do something urgent, do the best job in getting money out to the Syrian refugee settlement agencies, there was a problem getting the money on the ground. There is also the issue with our vulnerable populations, women offenders in correctional institutions, and a simple quality issue about how we're educating our future officers.

When you do these reviews, you're making recommendations. Are there any cases of the agencies or departments having difficulty with your recommendations? What was the kind of response you were getting? Can you talk to us a little bit about where you see future action plans going?

9:35 a.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

Thank you, Mr. Chair.

Mr. Chair, I probably should have asked the member to do a summary of all the audits, because I think she just summarized the issues we see better than I did in the opening statement.

In the course of an audit, we have a lot of back-and-forth with the departments. I think maybe I will use the audit we did on first nations and Inuit oral health as an example. We had a lot of conversations with the department about what that program is and what it is supposed to do. I think there was a lot of emphasis within the program about paying for the services, and we felt there should be more emphasis on their overall objective of improving the oral health of the population. They needed to put more focus on those overall global outcomes, and not just on the day-to-day transaction processing.

That is an example of having a number of conversations back and forth with the department to try to get to the right place. A lot goes into those conversations and into making the recommendations. I think that's why you see, in just about all cases, that departments will agree with our recommendations.

However, to get them to have any real action plan that is going to solve the problems is the work that has to happen after the audit. This committee is very important in helping to ask questions of the department about their action plan and how you are going to know that action plan is implemented. We can only take it so far, and then we need the help of this committee to make sure those action plans are real, robust, and can realistically be put in place.

9:40 a.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Thank you, Auditor General.

9:40 a.m.

Conservative

The Chair Conservative Kevin Sorenson

Thank you very much.

Your time is up. Now we'll go back to Mr. Nuttall.

9:40 a.m.

Conservative

Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON

Thank you, Mr. Chair.

I want to thank my colleague Mr. Deltell for allowing me to continue on this front.

When you look at the questions on the tables within the CRA report, you mention that a correct response is to refer to somebody else, as Mr. Dompierre did. I agree with that. The last thing we want as a government is the incorrect information going out. It is correct to say you don't know and that you'll get the right information or the right person to give you that information. I understand that completely.

What was the correct response rate on the first try? If my tax return were reassessed and I owed an amount, when should I expect collection action to begin if I'm objecting to a reassessment?

9:40 a.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

I'll start, and then I'll ask Monsieur Dompierre to give the details.

Remember, as he said, that we would ask the question, and if the agent said she was going to have to pass you on to somebody else, we stopped the call at that point. We didn't go further to see whether or not we would get the right answer from the second individual. We assumed that we would, because we were going to be passed on to somebody who had more expertise.

In terms of the percentage of the 70% of correct answers, we awarded a correct answer because they referred us to somebody else. We didn't put that in the report, and I'm not sure if we have that information.

9:40 a.m.

Principal, Office of the Auditor General

Martin Dompierre

We do have that information, but it's not with me right now. I could go back to see if we could provide you with that information.