Public Accounts Committee on March 11th, 2021

[Nicholas Swales]

I will just say that we didn't speak to maintenance. What we spoke to was life extensions and the need for those. Certainly, because ships are not being produced on one time frame, they need to extend the lives of existing ships so they can continue operating until the ships are replaced.

[Kody Blois, Liberal, Kings—Hants, NS]

I have about 30 seconds left according to my clock, Madam Chair.

Ms. Hogan, if I had more time, I would really like to get into the indigenous water advisories. I would agree with my colleagues that these are particularly concerning.

Whether or not you can answer it now, or maybe in future opportunities, it is around the capacity. It seems like, yes, we're dealing with funding, but there's a capacity issue in having trained operators and having communities themselves be able to maintain these types of assets such that we don't get into those situations.

I don't know if I have any time, but I would be interested if you could speak to that.

[The Chair, Conservative, Kelly Block]

It would need to be a very short answer.

[Karen Hogan]

I guess I would say that yes, I agree, that's part of the issue we're seeing. Whether that comes from solutions through the funding formula or not, having that expertise in those communities is needed.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Blois.

We will now move on to our two-and-a-half-minute round, starting with Mr. Blanchette-Joncas.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

Ms. Hogan, I will address Canada's National Shipbuilding Strategy.

You have literally pressed the alarm bells about the significant delays in getting Canadian Coast Guard and Royal Canadian Navy ships underway. These vessels are necessary if we are to ensure safety on the St. Lawrence Seaway, particularly.

Even the Parliamentary Budget Officer mentions that we could have saved tens of billions of dollars. Right now we have two suppliers: the Seaspan Shipyards in British Columbia and Irving Shipbuilding.

I don't want to drag you into the political arena, but can you tell us if more diversity in terms of contracting could have sped up the process that is underway, a process that we can hardly see ending?

[Karen Hogan]

I don't know if I have the answer, but I can tell you that during the audit, we found that the government had taken steps to try to get the strategy back on track. One of those steps was the addition of a third shipyard, Davie Shipbuilding, to build ships. The government found that this was a way to improve the strategy and get it back on track.

Time will tell if this is indeed the case.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Ms. Hogan, were you able to see that by choosing the Davie shipyard, there were savings and efficiencies to be had?

[Karen Hogan]

We did not consider this aspect. However, in a previous audit, we found that the yards were selected through an open process, and Davie was determined to be an eligible provider. I don't think I can answer the question further.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I would like to go back to the 2021-2022 main estimates. In your remarks, in item 10, you noted that you planned to provide an update on previous audits.

In the context of the COVID-19 pandemic, there is a lot of talk in the news about health transfers. Do you plan to provide a review soon of a 2008 update from the Office of the Auditor General of Canada? It was about federal transfer payments to the provinces. Perhaps a new analysis is needed.

Do you think that would be feasible?

[Karen Hogan]

Anything is possible, we just need to look into it.

I thank you for the suggestion. I don't know if it's included in the follow-up exercise we'll be doing soon, but I'll make a note of it and get back to you on it at a future meeting.

[The Chair, Conservative, Kelly Block]

Thank you very much.

Colleagues, our last questioner this hour will be Mr. Green for two and a half minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you. I will use the two and a half minutes to address the transportation issue.

When I return to my community of Hamilton Centre, my home is within 500 metres of a rail line. Again, as a city councillor, when the tragedy happened in Quebec, I tried to find information about what types of material were coming through and what the government was doing.

Yet, in this report the things that jump out at me is that the government allowed the safety management system to be developed by the corporations and it has all these policies and targets and risk assessments that are set by the companies and, if I'm to be clear, there is nothing in place to actually see whether their safety systems are resulting in greater safety.

Is that a fair assessment, Ms. Hogan?

[Karen Hogan]

In the audit, we did we sample audits of the safety management systems in the railway companies and saw that Transport Canada had increased the number of audits they were doing of those safety management systems. But, again, it's very similar to their own activities. They were not able to demonstrate that those safety management systems actually helped improve safety. They are missing that outcome step in all of their work to see if that's actually making a difference.

[Matthew Green, NDP, Hamilton Centre, ON]

It's a really important step, like the most important step. To be clear, you found that Transport Canada was not measuring whether these are actually effective in corrected these issues. So how can they address the actions for the risk of accidents? What happens after they do through the process?

[Karen Hogan]

I think that's why we've made the point that when you invest this amount of time and effort and individuals, you should be able to measure that effectiveness for a few reasons. One is to see the benefit of all that work, but also to know whether or not you're doing the right things you should be doing. While we are happy to see that they adjusted in response to some of our recommendations there is a lot left to do. That effectiveness piece, in my opinion, is one of the most important steps.

[Matthew Green, NDP, Hamilton Centre, ON]

I'm going to hope that we can get there and I'll end with this last question.

In your opinion, do you believe that your audit makes it clear that there needs to be a review of whether the safety management system is even appropriate or effective at keeping the railways safe and holding railway companies accountable?

[The Chair, Conservative, Kelly Block]

You are muted.

[Karen Hogan]

Thank you.

I think it's a bit of a question of policy. It was written into the legislation that companies should develop these. What we looked at is whether or not Transport Canada was doing the proper oversight of that. I do believe that it is Transport Canada, as the expert in transportation, that should decide whether or not those mechanisms are the most effective. We were saying that they did not measure that the extra surveillance was making a difference.

[The Chair, Conservative, Kelly Block]

Thank you so much.

Thank you, colleagues, for your questions.

Thank you to our witnesses for joining us this morning.

I will suspend for a short period of time while they leave the meeting. Then the new witnesses will arrive and we will quickly do some sound checks.

[The Chair, Conservative, Kelly Block]

Thank you very much.

As I stated earlier, we will now begin our study of the departmental plans 2021-22 and the main estimates.

I will call Vote 1.

Ms. Hogan, you have five minutes for your opening remarks.

[Karen Hogan]

Thank you, Madam Chair.

We are pleased to have this opportunity to discuss the work of our office, including our most recent departmental reports.

With me today are Andrew Hayes, deputy auditor general; Hélène Haddad, principal responsible for financial management; and Kimberly Leblanc, principal responsible for human resources.

The Office of the Auditor General of Canada contributes to a well-managed and accountable government for Canadians. We do this by providing Parliament and territorial legislatures with 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 assists me by conducting reviews and audits that relate to the environment and sustainable development. I am pleased to inform the committee that on February 1, Jerry DeMarco was appointed the new commissioner for a seven-year term.

We also support the development of legislative audit methodology and accounting and auditing standards, and we work internationally to build audit capacity, and promote better-managed and more accountable international institutions.

Let me turn first to our 2019-20 departmental results report. We provided this report to Parliament in December 2020. As shown in our financial statements, our net operating cost was $102.4 million, and we employed the equivalent of 567 full-time employees.

With these resources, we completed 16 performance audits, including four led by the Commissioner of the Environment and Sustainable Development and three reported to the northern legislatures. In addition, we conducted three special examinations of Crown corporations.

In terms of our financial audit work, we issued clean opinions on 85 of the 88 financial statements we audited from the federal and territorial governments and Crown corporations. We also presented our annual commentary on our financial audit work.

Our departmental results reports include several indicators of the impact of our work, along with measures of our operational performance. One of the ways in which we assess the impact of our performance audit work is through the level of parliamentary engagement with our audit reports.

Parliamentary committees reviewed 26% of the reports we presented to Parliament in the 2019-20 fiscal year, compared with 58% in the prior year. This drop can be attributed to the lower number of sitting days during the year due to the fall 2019 federal election campaign and the temporary suspension of Parliament due to the pandemic. However, I'm pleased to say that with the hearings over the last few months, the Standing Committee on Public Accounts has been able to review all the performance audits referred to it during the 2019-20 fiscal year.

Let me turn now to our main estimates and our departmental plan for the upcoming 2021–22 fiscal year. Under vote 1 of the main estimates, our program expenditures for the 2021–2022 fiscal year are now set at $105 million, which include the entire $25 million of additional permanent funding we requested. With these resources, we plan to employ the equivalent of 737 full-time employees.

I would like to thank this committee because your unwavering support was instrumental in resolving our resourcing challenges.

With this increase in base funding, one of our main priorities for the upcoming year is to increase our capacity in the performance audit practice, which includes the audit reports that we present to Parliament and northern legislative assemblies. This year represents a step toward re-establishing a broader audit coverage of government programs and spending, including the environmental and sustainable development audits that are issued by the commissioner.

In addition to reports related to the COVID-19 response, we are auditing a range of topics, including those related to natural health products, water basins, and outreach to vulnerable populations, as well as updates on past audits.

Now that we have secured our permanent funding, we have been proactive in hiring the additional diverse and qualified professional and support staff we need. As you can imagine, onboarding and training newly hired employees will be critical for the coming years.

Another priority in the 2021–2022 fiscal year will be to continue modernizing our approaches, tools, and products.

I could not be prouder of everyone at the OAG. They are resilient, caring, and devoted to excellence.

We thank the committee for its ongoing support and use of our work. We would be pleased to answer the committee’s questions.

[The Chair, Conservative, Kelly Block]

Thank you very much, Ms. Hogan.

Colleagues, we will now go to our first six-minute round of questioning, starting with Mr. Lawrence.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

That's perfect. I have just a brief scheduling thing that hopefully won't take away from my time. I have some issues with scheduling that I want to raise.

I was hoping that perhaps we could schedule 15 minutes—with unanimous consent—for committee business at our next meeting. Is that okay with everyone?

[The Chair, Conservative, Kelly Block]

Yes, I'm seeing thumbs up. Nobody is raising any issues with that.

I will work with the clerk to make sure that happens.

Thank you, Mr. Lawrence.