Public Accounts Committee on Feb. 29th, 2024

[The Chair, Conservative, John Williamson]

Good afternoon, everyone. I call the meeting to order.

Welcome to meeting number 104 of the House of Commons Standing Committee on Public Accounts.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

I would remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(3)(g), the committee is meeting today for its study of the Public Accounts of Canada 2023, referred to the committee on Tuesday, October 24, 2023.

Before I welcome our guests, I want to inform members that I found it necessary to split this meeting in two because several witnesses were not available. On top of that, you can see that we have a full house of witnesses, and we didn't think we could fit more people around the table. We're going to do about an hour of hearings today on the Public Accounts 2023, and we'll reserve our second hour for a later date. I'll also have an update at the end of the meeting with respect to the Auditor General's upcoming tabling of reports to Parliament.

Without further ado, I'd like to welcome our witnesses.

From the Office of the Auditor General, we have Karen Hogan, Auditor General of Canada; Sana Garda, principal; and Etienne Matte, principal.

From the Treasury Board Secretariat, we have Monia Lahaie, assistant comptroller general, financial management sector; Blair Kennedy, executive director, government accounting policy and reporting; and Diane Peressini, former executive director, government accounting policy and reporting.

From the Department of Finance, we have Evelyn Dancey, assistant deputy minister, fiscal policy branch.

From Export Development Canada, we have Mairead Lavery, president and chief executive officer.

From Development Finance Institute Canada—FinDev Canada—we have Lori Kerr, chief executive officer, and David Bhamjee, vice-president and chief strategy and engagement officer.

I understand that just three of the five have opening remarks, which will go to a maximum of five minutes. After that, we'll proceed to a round of questions.

Members, I plan to do two rounds, which will give government members and the official opposition three spots and the NDP and the Bloc Québécois two spots each.

Without further ado, Ms. Hogan, you have the floor for up to five minutes, please. I understand your remarks are brief today. We'll go to you.

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

Thank you, Mr. Chair.

They're very brief, actually. In the interest of making sure that committee members have as much time as they'd like to ask questions, my opening remarks from our first hearing were distributed to all the members.

With that, I'll just tell you that we're happy to answer any questions members might have.

[The Chair, Conservative, John Williamson]

Thank you very much.

Next, from the EDC, we have Ms. Lavery.

You have the floor for up to five minutes, please.

[Mairead Lavery, President and Chief Executive Officer, Export Development Canada]

Mr. Chair, members of the committee, thank you for inviting me here today.

I'm looking forward to discussing with you Export Development Canada's contribution to the 2023 Public Accounts of Canada, one of the government's key accountability documents. For those less familiar, Export Development Canada is a Crown corporation that operates with a mandate to support and grow the country's export trade.

Canada is a trading nation. Together, imports and exports represent 68% of the country's GDP, with exports specifically accounting for 34% of GDP. EDC supports this critical driver of our economy through a suite of financial solutions to help mitigate risks for Canadian exporters and investors, as well as through our knowledge products like webinars and digital content. Together, these offerings give Canadian companies the tools they need to reduce financial risk and the capital to enter and invest in new markets with confidence and, ultimately, grow internationally.

As the committee may be aware, EDC has been consistently financially self-sustaining throughout our 80-year history and regularly pays a dividend to the Government of Canada. We operate on financially sustainable principles, always ensuring our work complements that of private market bankers and insurers.

Our mandate and strategy are helping Canadian companies. In fact, last year, our economics team enlisted the support of Statistics Canada to help us better understand the value we provide to our customers. This seminal study found that Canadian exporters receiving EDC support generated 22% more revenue and had 15% higher employment and 5% greater employee productivity than similar exporters that were not EDC customers.

Transparency and accountability are central to our values, principles and practices at EDC. As Canada’s export credit agency, we have a responsibility to the public. We disclose information about our business in a manner that balances the information interested Canadians seek with the confidentiality required by our customers.

This extends from reporting on sustainability targets to proactive disclosures on travel and hospitality expenses to individual financing transactions, and from reporting on environmental targets to publishing our integrated annual report, which includes the financial statements the Office of the Auditor General audits each year. Beyond facilitating accountability and oversight, these practices are fundamental to building trust with Canadians, our stakeholders and our shareholder, the Government of Canada.

Our reporting to our minister includes quarterly reporting on transactions broken down by province and territory, industry, customer segment and region, among other categories. We also provide regular reporting on the Canada emergency business account, or CEBA, a pandemic program, and require the minister’s approval of our capital and operating budgets, as well as our corporate plan, which details how we plan to execute against the minister’s statement of priorities and accountabilities.

Our shareholder appoints members to EDC’s board of directors, a deeply experienced group of business professionals who oversee our direction and management and who support the achievement of our organizational objectives.

Thank you for giving me the time to share some information about EDC.

As the committee is aware, I am also here with colleagues from FinDev Canada, which is a subsidiary of EDC and of which I am the chair. They are here to answer questions related to FinDev Canada.

I look forward to your questions and comments. Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much.

Now, from FinDev Canada, we have Ms. Kerr.

You have the floor for up to five minutes, please.

[David Bhamjee, Vice-President and Chief Strategy and Engagement Officer, Development Finance Institute Canada Inc.]

We haven't prepared any remarks.

[The Chair, Conservative, John Williamson]

That's okay. I caught that at the end, but I just wanted to double-check.

All right. We'll turn to our first round.

Mr. Genuis, you have the floor. I noticed that you might be splitting your time. I'll let you notify me if that's the case.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you very much, Mr. Chair.

This committee and Parliament in general have been seized for some time with the arrive scam app scandal. There have been many shocking revelations over the previous months. The latest is that one of the people at the centre of this scandal was both an external contractor receiving money on ArriveCAN and a government employee. At the same time as he was receiving millions of dollars supposedly as an external contractor—for what work we still do not know—he was a government employee. The government apparently doesn't know enough about who its employees are to have noticed this at some point earlier in the process.

With that in mind—and I hope this is a simple matter of housekeeping—I would like to see, before I move on to my questions, if we have the agreement of the committee to issue a summons for Mr. Yeo to appear before the committee within seven days and for at least two hours. I hope that's simply a matter we can have the agreement of the committee on so we can move on.

[The Chair, Conservative, John Williamson]

I've stopped the clock. I'll turn to members in a second.

I informed Mr. Genuis beforehand that this motion could be tabled today. It is not the business before the committee. He is seeking unanimous consent to move it.

I'll look to members. If there's a government member who wants to speak to it, you're welcome to. You can speak to it and you can accept it or reject it.

Yes, Mrs. Shanahan.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

As a member of this committee, I object to a motion of that nature being sprung on us in that way. No, I do not give unanimous consent.

[The Chair, Conservative, John Williamson]

All right.

Mr. Genuis, you have five minutes left. As you know, I give members discretion. You're welcome to speak to it in your time, but we will not move this motion. I can consider that you presented it so it can come up at another time during committee business, but it will not be dealt with here.

We're back to you for five minutes.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

I thought it would have been a matter of obvious and simple housekeeping that the committee, in part of its ArriveCAN work, would want to hear from Mr. David Yeo. I'm sorry to see the Liberals blocking us from moving forward on this in an expeditious manner, but Conservatives will bring it back to the committee at the earliest opportunity in order to proceed with a decision on summoning Mr. Yeo to appear before the committee. The fact that he was able to be both an arrive scam app contractor and a government employee—and supposedly nobody noticed—is really the height of absurdity.

Unfortunately, with the Liberals blocking this, it will be a notice of motion for the moment, but I will bring it back at the earliest opportunity. The motion on notice says:

That the committee issue a summons for Mr. David Yeo to appear before the committee within seven days and for at least two hours.

With that, I will share the rest of my time with Mr. Lawrence.

[The Chair, Conservative, John Williamson]

Mr. Lawrence, you have four minutes remaining on the clock.

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

Thank you. It's a pleasure to be back here at public accounts.

It's a pleasure to see you again, Ms. Hogan. My questions will be directed towards you. Thank you for your work with respect to the ArriveCAN application. I think it was a well-written and well-done report.

We are here today to discuss the public accounts, but to the broader context of that, after seeing what you saw in the ArriveCAN review and audit, you said—I believe I'm not misquoting—that it was some of the “worst” bookkeeping you've ever seen in your career. Are you concerned that this might exist in other departments if we take a deeper look into it? It certainly gives me pause to think about what else is going out in other government departments.

[Karen Hogan]

I agree that it has caused me to reflect on bookkeeping more in general across the public service, but for several years, even before I was Auditor General, I have been involved with the audit of the Government of Canada's financial statements. We spend a large amount of time in many of the very large, significant departments, and bookkeeping and record-keeping are well done. There are thousands of employees across the public service who contribute to the Public Accounts of Canada, and it is usually very well done.

One of the comments I did make around ArriveCAN is that it was a bit of a “head-scratcher” for me as to why this all happened. I believe part of the pandemic contributed to it, with the need to move quickly to support Canadians and the flexibility the Secretary of the Treasury Board afforded the public service. However, I think it was forgotten that it came with a reminder that public servants should demonstrate due diligence and document their decisions. That's really what fell through here during the ArriveCAN development and implementation.

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

My concern is that—maybe you can rebut this, and that's fair—but for the audit requested by the Conservative Party, which your department willingly obliged, we may not have ever become aware of the terrible bookkeeping. I'm using that term very kindly, I think, and diplomatically. It could be far worse, and I think many commentators have pointed to that.

With respect, Ms. Hogan, how can you say with any type of confidence that this isn't going on in other government departments?

[Karen Hogan]

I'm not sure that I said I felt confident it wasn't happening in other departments. I feel that in the past, what I have seen is public servants who really care about making sure the books and records of Canada are well maintained.

This is a situation that I have not encountered before: to see such a glaring disregard for what I think are some of the most basic elements you would see in record-keeping in project management. There were failures at so many levels during ArriveCAN, and I think every layer of management within the Canada Border Services Agency should feel responsible and figure out what happened. I just caution that we shouldn't add more rules to complicate things as we try to address the weaknesses and failures that we found in ArriveCAN.

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

I completely agree with those comments. We need to hold people accountable.

With your considerable experience and expertise, is there any advice you can offer to this committee in sussing out if there is any? I agree with you. I think the vast majority of public servants are doing a great job, but if there's one more arrive scam out there, that's one more too many.

[The Chair, Conservative, John Williamson]

Ask the question, please.

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

What advice would you offer this committee?

[Karen Hogan]

I think the committee is doing what it's meant to do. It's trying to figure out what happened and what went wrong and then how the public service can do better. I think one of the amazing things about the federal public service here in Canada is that accountability and transparency are always at the forefront, even when something goes wrong, so we can all find the solution to move forward.

I think the committee has spent a lot of time studying this and hopefully will conclude with a report that will provide good recommendations to the government.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mrs. Shanahan, you have the floor for six minutes, please.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Chair.

I just want to put this on the record again so that my colleagues understand it. When members pull stunts such as we just saw from Mr. Genuis, who was trying to put a motion to us and get unanimous consent, it is disrespectful to members of this committee. We have discussed many matters here. We have been able to come to agreement on the study of a wide range of topics that quite frankly, in my experience, were not normally part of public accounts. However, with the consultation of all members, we have come to that conclusion.

I just want to put on the record that I'm disappointed with that stunt and we will see what comes of it.

I now turn to the Auditor General. I wish to thank her once again for the excellent work she has put forward. I was travelling overseas, as I mentioned, and I heard very good things. I had questions about public accounts and how we operate. The independence of our institutions is much admired, and I was asked many questions about it.

I'd like the Auditor General to tell this committee—and indeed Canadians and people around the world—once and for all whether there was any political interference with the Office of the Auditor General. I ask that because we had a suggestion that it was because members of Parliament from a certain political party demanded it that an audit was done. Is it not in the purview of the Auditor General's office to decide independently of Parliament what audits will be done?

[Karen Hogan]

It's very clear in the Auditor General Act that the decision to carry out our discretionary audit work, which is performance audits, is at my discretion. I should be able to choose who we audit, when we audit and how we audit.

Most of our financial audit work, however, is provided to us through legislation, whether it be through the Financial Administration Act, through the Auditor General Act or through enabling legislation of Crown corporations, as in the case of Export Development Canada. We would be named in their act as their auditor.

We always—because I am accountable to Parliament—take very careful reflection on motions passed in the House and motions passed in committee and weigh those with the lake of information we put together to determine what we audit next and where to go. It is foundational to our independence that we get to choose where we audit, who we audit and when we audit them.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I certainly don't want to put you on the spot in this way, but is it entirely possible that you would have conducted the audit of ArriveCAN, as you well and should do, without any call, necessarily, from this committee or from Parliament?