Public Accounts Committee on April 13th, 2021

[The Chair, Conservative, Kelly Block]

The meeting will come to order.

Welcome to our public segment of meeting number 24 of the public accounts committee.

For those witnesses who have joined us, I'm sure you're all very much aware that when you're attending the meeting virtually, there are interpretation services available. At the bottom of your screen, you can choose “Floor”, “English” or “French”. The use of headsets with a boom microphone is mandatory for everyone participating remotely, unless there are exceptional circumstances. Let us know if you are experiencing any technical difficulties, and we will then suspend the meeting to make sure that everyone is able to participate fully.

That said, and so that we can get to our meeting as quickly as possible, I will turn the floor over to the Auditor General concerning the reports that were tabled on March 25.

Ms. Hogan, you have the floor.

[Karen Hogan, Auditor General of Canada, Office of the Auditor General]

Madam Chair, I am pleased to be here to discuss our audit reports, which were tabled in the House of Commons on March 25. I am accompanied by Carol McCalla, Philippe Le Goff, Chantal Richard, Jo Ann Schwartz and Nicholas Swales, the principals who were responsible for the audits.

The reports presented were the first of many audits that my office will conduct on the government's response to the COVID-19 pandemic. I also provided Parliament with our report on the Investing in Canada plan.

There is no doubt that the COVID-19 pandemic was an all-hands-on-deck emergency the world over. Governments had to mobilize quickly to respond to the public, health, social and economic effects of this pandemic. Canada was no exception.

While we found that the government was not as ready as it could have been for a pandemic of this magnitude, the public service mobilized, prioritized the needs of Canadians, and quickly delivered support and services. We did not observe the same service mindset and interdepartmental coordination in our audit of the investing in Canada plan, which I will turn to first.

The investing in Canada plan is important because the government is investing $188 billion to generate long-term economic growth, improve communities' resiliency, support the transition to a green economy, and improve social inclusion and socio-economic outcomes for all Canadians.

Infrastructure Canada is unable to present a full picture of results achieved and progress made under the investing in Canada plan. We found that the department's reporting excluded almost half of the government's investment because it did not capture more than $92 billion of funding that was committed before the plan's creation in 2016.

In addition, Infrastructure Canada's reporting captured only some programs each year, making it impossible to compare results year over year. The clarity of reporting was also impacted by inconsistent information received from federal partners in the plan. The absence of clear and complete reporting on the Investing in Canada plan makes it difficult for parliamentarians and Canadians to know whether progress is being made against the intended objectives.

The issues affecting the Investing in Canada plan are not new. We have seen similar problems in many past audits in areas that require cross-departmental or cross-jurisdictional collaboration, such as indigenous issues and climate change. This audit is yet another example of the need for the government to act on known issues—in this case, the need for broad collaboration and clear reporting on results for this large initiative.

In contrast, we observed nimbleness during our audits of the government's COVID-19 response.

I am going to turn first to the Canada emergency response benefit.

With this benefit, the government wanted to quickly deliver financial support to eligible individuals.

We found that the Department of Finance Canada, Employment and Social Development Canada, and the Canada Revenue Agency rose to the challenge and quickly analyzed, designed and delivered the Canada emergency response benefit.

To simplify the process and get support to people quickly, Employment and Social Development Canada and the Canada Revenue Agency took the approach of relying on personal attestations and automated prepayment controls to validate applicants' eligibility. Once the benefit was launched, they introduced additional prepayment controls to limit potential abuse.

With the decision to rely on personal attestations, host payment verification becomes very important. Employment and Social Development Canada and the Canada Revenue Agency are working to start their post-payment verification efforts related to the Canada emergency response benefit later this year. Their work in this area will be the subject of a future audit.

I will turn now to the Canada emergency wage subsidy. We observed a similar focus on getting help out quickly, in this case to businesses. Once again, the Department of Finance Canada and the Canada Revenue Agency worked together within short time frames to support the development and implementation of the Canada emergency wage subsidy.

The design and rollout of the subsidy highlighted pre-existing weaknesses in the agency's systems, approaches and data. These weaknesses will need to be addressed to improve the robustness of Canada's tax system.

To prioritize issuing payments, the Canada Revenue Agency made decisions about the information it would ask for and the prepayment controls it would use.

For example, the agency decided that it would not ask for social insurance numbers, though this information could have helped prevent the doubling up of applications for financial support. This decision limited the agency's ability to perform prepayment validations, as did the absence of complete and up-to-date tax information that would have helped it efficiently assess applications.

I am going to now turn to our last audit, which focused on pandemic preparedness, surveillance and border control measures.

In this audit, we found that the Public Health Agency of Canada was not as well-prepared as it could have been to respond to the COVID-19 pandemic. Not all emergency and response plans were up to date or tested, and data-sharing agreements with the provinces and territories were not finalized.

The Public Health Agency relied on a risk assessment tool that was untested and not designed to consider pandemic risk. The agency continued to assess the risk as low, despite growing numbers of COVID-19 cases in Canada and worldwide. In addition, the Global Public Health Intelligence Network did not issue an alert about the virus that would become known as causing COVID-19.

I am discouraged that the Public Health Agency of Canada did not address long-standing issues, some of which had been raised repeatedly for more than two decades. These issues negatively affected the sharing of surveillance data between the agency and the provinces and territories during the pandemic. While the agency took steps to address some of these problems during the pandemic, it has much more work to do on its data-sharing agreements and its information technology infrastructure to better support national disease surveillance in the future.

We also found that the Public Health Agency of Canada and the Canada Border Services Agency implemented restrictions at the border as well as quarantine measures. They provided guidance and tools to inform travellers and essential workers coming into the country of public health requirements.

However, the Public Health Agency of Canada had not contemplated or planned for a quarantine on a nationwide scale, from the collection of travellers' information through to all enforcement activities, including following up on those identified to be at risk of non-compliance. As a result, the agency does not know if the majority of travellers properly quarantined.

These audits looked at programs that were rolled out in record time. Faced with a pandemic, the public service focused on the pressing outcome: helping Canadians.

In its first year, the pandemic has shown that when the public service must, the public service can. This crisis has highlighted the importance of dealing with known issues, whether it's agreeing on which organization has the lead; who will do what, and when; who will report what, and to whom; or replacing outdated systems or processes and addressing issues in data quality.

These are not problems that you want to have to deal with at the same time that you are focusing on helping people, because this is not an efficient way of working, nor is it a productive way to serve Canadians. Government organizations need to do collaboration better.

Madam Chair, this concludes my opening statement. We are now pleased to answer questions that you may have.

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much, Ms. Hogan.

We will now go to our first round of questioning.

We will start with Mr. Lawrence for six minutes.

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

I'm going to hand it over to Mr. Webber for the first six minutes, Chair.

[The Chair, Conservative, Kelly Block]

Thank you very much.

[Len Webber, Conservative, Calgary Confederation, AB]

Thank you, Madam Chair.

Thank you, Ms. Hogan, for your wonderful work and thank you to your staff the good work they do.

I want to focus on a couple of comments you made in your opening remarks, particularly the remarks on the Investing in Canada plan and the $188 billion for that plan. You've indicated that you found that Infrastructure Canada's reporting was very poor and excluded “almost half” of the government's investment. You said that it did not capture “more than $92 billion” in funding.

The fact that it cannot report on these amounts I find incredible.

You mentioned that “the absence of clear and complete reporting on the Investing in Canada plan makes it difficult for parliamentarians and Canadians to know whether progress is being made against the intended objectives.” That is absolutely the case.

What reason did they give you for this “absence of clear and complete reporting” when you did the audit?

[Karen Hogan]

Thank you for the question.

When we look at the Investing in Canada plan, I think it's important to highlight that it includes three buckets of information: projects that were announced in the 2016 budget, those in the 2017 budget, and then a group of projects that we'll call “legacy projects”. These legacy projects represent half of the $92 billion you mentioned, and they occurred before and were announced before the Investing in Canada plan was launched.

On the horizontal initiative, which includes over 20 federal departments, because this initiative didn't include those legacy programs when it was designed, they were not conceived in order to be able to report against the objectives of the plan. It makes it difficult when half of the information isn't designed in such a way as to be able to demonstrate whether it's achieving the objectives.

What we then saw was that there was also inconsistent information coming from the federal partners. They weren't always reporting in the same fashion. In fact, Infrastructure Canada was not reporting year after year against the same programs and projects or against the same measures. Hence, it was confusing in trying to identify whether or not progress was being made.

That's why we have many recommendations in the report to highlight the importance of outlining the clear measures of progress and then ensuring that all the partners can report against those measures on a regular basis.

[Len Webber, Conservative, Calgary Confederation, AB]

With regard to some of these recommendations you come up with year after year, you indicate here that you've seen these “similar problems” occurring “in many past audits” as well. I guess my question is, has Infrastructure Canada come to the public accounts committee in the past to answer these questions as to why it's not following the recommendations of the Auditor General?

[Karen Hogan]

I'm not exactly sure if Infrastructure Canada has appeared before any of the committees to discuss the Investing in Canada plan. I encourage the public accounts committee, as well as any committee that might like to study the plan, to do so and to invite us as well as the department.

I guess what I'd like to highlight about what we've seen in prior audits relates to the fact of the horizontal initiative. It's an initiative that cuts across many federal departments that receive the same funding with a common objective, and then one department—in this case, it's Infrastructure Canada—is put in charge or is the lead. It's really difficult for that department to compel other deputies to do certain things. Hence, it underscores the importance at the beginning of a horizontal initiative to really have clear roles and responsibilities, good accountability and good reporting mechanisms in place so you can get meaningful information about a program that requires so many federal departments to be involved.

[Len Webber, Conservative, Calgary Confederation, AB]

I see. That could be a department that we may want to consider, colleagues, to bring in for some questioning.

With regard to your other audits and the record-keeping within this past year during this pandemic, we know that many public servants have been working from home. They, of course, try to play catch-up with these IT issues working from home and such. Do you see, Auditor General, that this has caused any record-keeping issues with regard to your other audits?

[Karen Hogan]

I believe every federal department and organization—and I think it would extend even beyond—struggled at the beginning of the pandemic to figure out what to do at home. Perhaps you had a hybrid workplace, with some folks in your office and some at home, changing the process, digitizing information and taking manual processes to electronic processes.

What we've seen is that we needed to be creative sometimes in gathering evidence or accepting evidence that we maybe didn't accept the year before, because it's in a different format and presented in a different way, but everyone works very hard at doing their job and documenting well what they do and being accountable and transparent.

While we've seen delays, we really haven't seen the inability to carry out any audit work.

[Len Webber, Conservative, Calgary Confederation, AB]

Did you uncover any privacy or information security issues at all?

[The Chair, Conservative, Kelly Block]

Give just a very short answer, please. We are past time.

[Karen Hogan]

Normally our audits have a very different focus, but when we do see that kind of potential violation, we would make any deputy head aware of it immediately.

[Len Webber, Conservative, Calgary Confederation, AB]

Great. Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Webber.

We will now turn to Ms. Yip for six minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Sorry. I was saying that she would fill in at the last slot. I'm going to go first, if that's okay.

[The Chair, Conservative, Kelly Block]

My apologies. Go ahead, Mr. Longfield.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Madam Chair.

Ms. Hogan, thank you, and thank you to all the staff who are here today. Thank you in particular for pointing out the amazing job that the civil servants have done throughout COVID. I look at it like the Apollo 13 movie. We really had to solve problems as we were flying the ship, using all the resources of bringing people out of retirement and working with external contractors to get us to the point where we needed to be to serve Canadians. Thank you for pointing that out.

I'm on the infrastructure question, like Mr. Webber but possibly on a different tack.

As a member of Parliament, one of my challenges has been to have my community aware of the infrastructure projects, have the city council approve use of land, have the province include our projects in their priorities. It's almost a balancing between getting our city council to apply for projects or our business community to apply for projects. Priorities then go to the province and those priorities then come to the federal government. Projects get approved, and the province has to provide matching funds and the city council has to provide matching funds. It's quite a job for a member of Parliament to try to track through the system to make sure that projects are on track through the different orders of government.

In your sixth paragraph, your sixth bullet point, you talk about the federal partners in the plan, and these are the partners that I'm working with on a cross-jurisdictional collaboration. A flow chart would be an amazing thing, or a spreadsheet, to say that this order of government has approved it, this order hasn't yet, this one hasn't. I think we've got some of these legacy projects stuck somewhere in the flow chart. Is this an accurate assessment, or is that something you're recommending—that we establish more stringent records between orders of government?

[Karen Hogan]

Your question highlights the importance of really working with cross-jurisdictional governments, and while there are 20 federal departments that are part of this horizontal initiative, as you correctly point out, there are many provincial and municipal governments that are actually carrying out the projects.

One of the things I would like to highlight is that not all of the Investing in Canada projects are infrastructure projects. Some are services as well, so you won't necessarily always see bricks and mortar.

We do believe that it was difficult to come up with a complete list and that better reporting to Canadians is absolutely needed. You will note on Infrastructure Canada's website that they have started a spending summary that highlights projects and when spending has been incurred. There are about 65,000 projects included there, and they are compared to a detailed list of projects that has different numbers. Again, it's confusing information. That's why we recommended that being able to ensure which programs and which projects are in the plan and then reporting consistently against them are definitely needed in order to have more clarity and visibility and in order to also measure whether or not this plan will meet its intended targets by the end, which is 2028.

[Lloyd Longfield, Liberal, Guelph, ON]

I meet regularly with our mayor and our member of the provincial Parliament. I have a riding where we all share the same boundaries, and not all members of Parliament have that benefit. When we're doing that, we can keep track of each other's activities quite easily—not easily, but we can do it.

When we're working across municipalities and provinces, are you working with the auditors general of the provinces to flag, as a concern, that we need better accountability between orders of government so that we can do a better job federally of keeping track of things? Is that something that auditors general discuss?

[Karen Hogan]

I meet very regularly with my provincial counterparts. We meet almost once a month, I would say, to discuss what our plans are and so on. In some instances, we do raise issues of common concern. The Investing in Canada plan is not one of the issues we have talked about. We have talked about pandemic preparedness, vaccines and so on.

I think what you're highlighting is the need to recognize that the federal government can only monitor what the provinces and municipalities are doing, but some of the responsibility on other levels of government is to report back, in a timely fashion, on whether or not they have spent funds. That is, I think, about clearly outlining accountabilities, roles and responsibilities at the start of a horizontal initiative.

[Lloyd Longfield, Liberal, Guelph, ON]

That's exactly what I'm highlighting. Vaccine accountability is about where we're shipping vaccines, how they are being delivered and how hot spots are being identified. There are other things outside this audit that really require accountability to the federal government so that we can do our job.

[Karen Hogan]

We saw a lot of that in our pandemic preparedness audit, and I alluded to the conversation that I've been having with the provincial auditors general about coordinating work around vaccines.

Our office is planning to begin a vaccine audit later this year, and I have been talking with the provincial auditors general about picking up the part of the vaccination audit under the provincial governments' responsibility, not so that we'll do our work together but so that we can coordinate the timing of when we release the reports in order to give Canadians, parliamentarians and provincial legislatures a really comprehensive picture, from vaccine approval all the way to the shots in the arm. It's something on which I would need to coordinate with the provincial auditors general.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

Thank you, Madam Chair, for the extra seconds. I appreciate that.