Public Accounts Committee on Feb. 27th, 2020

[The Chair, Conservative, Dean Allison]

Good morning, everyone. Thank you for coming to meeting number two. Pursuant to Standing Order 108(2), we are having a briefing from the Office of the Auditor General.

I want to welcome the office and the whole team here this morning. As we've mentioned before, we have a couple of returning members, and there are a bunch of new members. This is a great opportunity for us to meet you first-hand. You will give us a quick outline of what's going on, and then maybe we will do a little bit of questions and answers over the next hour or hour and a half.

I'm not going to do much talking; I'm going to leave that up to you. I will turn the floor over to you.

Mr. Ricard, perhaps you could introduce your team, and then we will move forward with your presentation.

[Sylvain Ricard, Interim Auditor General of Canada, Office of the Auditor General]

I have a very brief opening statement and a bit of a presentation. I think it was circulated. I think I can do it within about eight or 10 minutes.

Mr. Chair, we are pleased to have this opportunity to present an overview of the mandate of the Office of the Auditor General of Canada.

With me today are Andrew Hayes, deputy auditor general and interim commissioner of the environment and sustainable development; Karen Hogan, assistant auditor general responsible for financial audits; and Martin Dompierre, assistant auditor general responsible for performance audits.

The Office of the Auditor General of Canada supports Parliament and territorial legislatures by providing independent and objective information, advice and assurance about government financial statements and the management of government programs. The commissioner of the environment and sustainable development supports the Auditor General in carrying out the parts of our mandate that relate to the environment and sustainable development.

We conduct all of our audits in accordance with Canadian Auditing Standards. Our audits and our system of quality control are subject to internal practice reviews and to independent external reviews to provide assurance that you can rely on the quality of our work.

ln this regard, we have recently provided your committee with the results of an international peer review on the work of our office. That review was commissioned by the late auditor general, Michael Ferguson, and was led by the Office of the Auditor General of South Africa.

We are pleased to inform you that the review team found that our office adhered to relevant legislation and professional standards in the execution of its mandate and that our system of quality control was suitably designed and effectively implemented.

In addition, our office helps to advance legislative audit methodology and accounting and auditing standards, and we work nationally and internationally to build audit capacity and to promote better-managed and accountable public sector institutions.

Let me now turn to the presentation of our office's mandate and products. We provided you with a presentation for your reference, and I will now speak about some key elements.

Traditionally, the office submits four reports to Parliament annually. In the fall and spring, the Commissioner and the Auditor General each present a report.

The Auditor General's authority is granted by Parliament. Various pieces of legislation define our powers and responsibilities, including the Auditor General Act and the Financial Administration Act.

For the office's budget, the main estimates total $88.2 million for the current year, for 580 full-time equivalents. The office's staff includes accountants, engineers, lawyers, information technology professionals, environmental specialists, and economists. In addition to the Ottawa office, we also have an office in Vancouver, one in Edmonton, one in Montreal and one in Halifax.

On page 6, you can see that the Auditor General is appointed for 10 years and can be removed only for cause by the Governor in Council on address of the Senate and the House of Commons. The Auditor General chooses what, when and how to audit and has access to any government information required to do the job. All of those elements help to safeguard our independence.

On page 7, listed are our activities: doing financial audits, performance audits and special examinations of Crown corporations. We also review the government's sustainable development strategies and manage the environmental petitions process.

On page 8, in regard to the financial audits, they include the annual audits of the summary financial statements of the Government of Canada and the three territories. They also include annual audits of Crown corporations and other entities at the federal and territorial levels.

On page 9, regarding performance audits, in these audits we assess whether government programs are being managed with due regard to economy, efficiency and the environment and have measures in place to determine effectiveness. We examine management practices, controls and reporting systems and compare them to the government's own policies and best practices. We may comment on policy implementation but not on the policy itself.

On page 10, briefly, we list special exams. It's a type of performance audit. This is something that we do at least every 10 years for each parent Crown corporation.

I'm now going to go to page 13, which is about the external oversight of the office. Obviously there is this committee, which holds hearings on our departmental plan and our departmental results reports. There's an external auditor appointed by the Treasury Board to audit our financial statements, and that report is tabled in the House of Commons. We have an audit committee, and all voting members are external, including the chair.

The OAG is subject to external reviews by provincial accounting institutes. As I mentioned in the opening statement, every 10 years there is an international peer review conducted at the request of the Auditor General.

In conclusion, Mr. Chair, we are looking forward to working with your committee, and we are happy to answer any questions you may have.

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you very much. We'll get started.

As we would in a normal meeting, we'll go through the normal rounds. I have a list here. If we get through it and there are still more questions, we can move forward.

We'll start the first round with the opposition.

Mr. Kelly, you have six minutes, sir.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you, Mr. Chair.

Thank you, Mr. Ricard. It's so good to see you and your staff again. For me, it feels like picking up where we left off in the spring.

Perhaps you could walk us through your immediate work plan and what we can expect to have from your office in the next short while.

[Sylvain Ricard]

Maybe I'll mention the fact that we tabled a report last week on a respectful workplace. There are three other reports coming in March, on supply of the forces for DND.... The others are student financial assistance and immigration removals. I'm sorry. I don't know why I blanked out on those, because I have been working so hard on them these days.

I'm going to offer that as a starting point. I don't know if you were looking for more details.

There are also the public accounts, which were tabled in the House just before Christmas. Normally, the public accounts committee holds a hearing on that too. That's obviously a decision of the committee.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Yes, okay.

How about future reports?

Nothing has really changed since last spring. As far as I know, the concern that you brought to this committee was over your ability to perform all the audits that you wanted to do and thought should be done. You were going to be faced with the decision then of which audits to perform and which ones not to perform. There were a number of audits: cybersecurity was one, and Arctic sovereignty. Off the top of my head, I don't even remember the entire list.

Can you tell us what's going to become of these subject areas? Are we going to have audits? Are there ones that you've had to make a decision not to perform?

[Sylvain Ricard]

Maybe for the benefit of all members, I'll just refer to what we brought forward last year to the committee. Historically, we've been conducting about 25 performance audits a year. Given the challenges and priorities we have to manage, we had signalled to the committee that we would deliver more or less 14 audits a year. It's along those lines that there was a discussion about cybersecurity, and protecting the north or northern sovereignty, which we had to delay.

I don't know if that's answering your questions.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Okay.

So the ones that you haven't been able to perform because of budget constraints have been delayed. You're keeping a queue now of what audits you're going to be able to perform.

[Sylvain Ricard]

Martin, did you want to help me in terms of the sequence?

[Martin Dompierre, Assistant Auditor General, Office of the Auditor General]

Yes. With respect to cybersecurity, this is an audit that's still on our radar, which we will perform soon. The other one, on sovereignty, is another audit that we are still looking into specifically to take on. At this point in time, the two you referred to are audits that will be considered and either launched soon.... They may not be launched in the near future, but they're definitely going to be something that the office will consider.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Okay.

Is the audit that was requested by Parliament for the infrastructure plan going to go ahead before then?

[Sylvain Ricard]

Yes.

On that one, we wrote to the Speaker saying that indeed we will conduct that audit. Obviously, given the significance of the program, that is something we have on our radar. It's something we would have to look at, at some point.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Part of the point of going from, as you said, normally 25 audits down to 14 is that you are auditing, for example, the new Crown corporations that now fall under your responsibility to audit, like the Infrastructure Bank and the Trans Mountain Corporation.

You are fulfilling your responsibilities to audit these new Crown corporations. That's what's cutting into your ability, in part, to do performance audits.

[Sylvain Ricard]

Yes. I guess there are a number of drivers there. Yes, there's mandatory work that we have to do when it comes to financial audits. We have no choice but to do that, including new mandates, some of which you mentioned. One thing we mentioned last year is that for those new mandates there was no additional funding given to us. That's, in part, what was causing some pressure on our workload and our capacity to do everything. Changing the focus or the number of performance audits, including the increase in overall government spending, had a direct impact on our workload.

[The Chair, Conservative, Dean Allison]

Thank you very much, Mr. Kelly.

Let's move over to the government side. Mr. Longfield, you have the floor for six minutes, please.

[Lloyd Longfield, Liberal, Guelph, ON]

Great.

Thank you for the presentation. It must have been a really tough year personally and through your department, so congratulations on the great work that you continue to do, faced with the challenges you've been faced with.

[Sylvain Ricard]

Thank you.

[Lloyd Longfield, Liberal, Guelph, ON]

I'm really interested in the role of the commissioner of the environment and sustainable development, and the history of that role and how it interacts with the department.

I sit on the environment committee as well. There's a cross between these two committees for me. Also, Guelph is very interested in environment and sustainable development and auditing our progress in that area.

Could you maybe just speak to the history of that role and the importance of the role to the OAG?

[Sylvain Ricard]

I'll go very briefly, and then I'll maybe turn to Mr. Hayes to expand on it.

As I mentioned in the opening statement, the commissioner is there to support the AG in delivering the part of the mandate that has to do with environment and sustainable development. Mr. Hayes may expand on that, but we're in fact expanding on the sustainable development work in regard to existing international goals, and we're making sure that in any audit we do—the commissioner report, the financial audits, the special exam, the Auditor General performance audit—we cover those international goals.

[Andrew Hayes, Deputy Auditor General and Interim Commissioner of the Environment and Sustainable Development, Office of the Auditor General]

Thank you.

The commissioner role was established in the Auditor General Act in 1995. Since that time, I would say that we have regularly presented reports to Parliament on environmental and sustainable development matters. In the early years, the reports were largely about environmental matters. Recently, we have shifted our focus to the sustainable development area, and that is in part because of the richness of the criteria that the sustainable development goals, the 2030 agenda for sustainable development, provide to us and the departments for action.

As the interim commissioner, my reports are referred automatically to the environment committee, which, I think, you're also on. But there will be topics that we will bring forward in the context of sustainable development that may be of interest to this committee as well.

We have a report coming out in May, where we are going to be looking at the transportation of dangerous goods. Obviously, that is a significant area, considering Canada's history. There have been some horrible disasters, Lac-Mégantic, for example. There have been some recent rail spills.

I would say, as we get into the sustainable development aspect, which focuses on the economy, environment and social elements together, there may be topics of interest for this committee.

[Lloyd Longfield, Liberal, Guelph, ON]

As a quick follow-up on that, I'm thinking of the United Nations sustainable development goals and, in view of international audits being done, whether we have a requirement to audit against the SDGs.

[Andrew Hayes]

We don't have a requirement to audit against them. However, our office has been a leader with the international supreme audit institutions in building capacity to audit against the sustainable development goals.

Our former commissioner, Julie Gelfand, led some work internationally on how to audit preparedness. In fact, we presented an audit in 2018 on the government's preparedness in implementing the SDGs.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

There was a change in the mandate following the repeal of the Kyoto protocol in 2007. Have there been further changes? Are we trying to restore some of the mandate?

[Andrew Hayes]

There was what we would consider to be a significant change in the last Parliament. There were amendments made to the Federal Sustainable Development Act that expanded the requirement of departments and agencies to prepare sustainable development strategies in support of the federal sustainable development strategy.

Before those amendments were made, there were 26 departments and agencies that had to prepare sustainable development strategies; now there are 96. There is an opportunity for the government to add to that list, including Crown corporations.

I would say that the integration of the broader public service has been expanded, and this has also expanded our role. We did not get additional funding for that work, but it's important work for us to do.

[Lloyd Longfield, Liberal, Guelph, ON]

There was a major drop in funding in 2011. We have been working to restore that, going forward. I know it's not your role to tell us how much money you need, but it sounds like you have a lot of stress on your organization in terms of some of these additional requirements.