Public Accounts Committee on March 6th, 2024

[Roch Huppé]

To my knowledge, direct involvement in the actual creation of the app was under the authorities of the department.

Again, our role was to ensure that the rules were there. We have procurement policies. At the beginning of the pandemic, the Auditor General mentioned a note issued to all departments from the secretary of the Treasury Board. I also told you that I had discussions with the then interim Auditor General, because we knew that the processes may not be followed as usual.

Again, our role was to make sure people understood that should they forgo the normal processes or control, documentation was the key. I also own the internal audit function. I asked deputy ministers to use their internal auditors at the maximum to make sure that the documentation was going to be there and be sound in case of an audit.

We knew there were going to be audits on this. You have to prepare yourself for these audits.

[The Chair, Conservative, John Williamson]

Thank you very much.

Ms. Sinclair‑Desgagné, you have the floor for six minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here. We've heard some interesting things so far.

I would like to remind you of what it says on the Government of Canada's website:

The Treasury Board of Canada Secretariat provides advice and makes recommendations to the Treasury Board committee of ministers on how the government spends money on programs and services, how it regulates and how it is managed.

Mr. Huppé, do you feel that the Treasury Board's recommendations and advice were dutifully followed in the case of ArriveCAN?

[Roch Huppé]

Based on the Auditor General's observations, the answer is obviously no. She wrote in black and white that the policies had not been followed. As I explained earlier, in exceptional circumstances, such as during the pandemic, the directive is to ensure that there is proper documentation.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Okay.

What is the point of making recommendations and giving advice if they are not being followed?

[Roch Huppé]

If there had been no directives or policies, the Auditor General would have pointed that out. There probably would have been a recommendation concerning me about the fact that rules were not in place. Accountability is important. There has to be a basis, a foundation, in the form of sound guidelines and policies that people must follow. If they don't follow them, there have to be corrective measures. As we see here, an audit contains observations. We really have to manage the shortcomings that have been identified and do everything in our power to ensure that these things do not happen again.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

In your opinion, Treasury Board has done its job. It issued a policy. Whether it is followed or not, they wash their hands of the matter. Is that correct?

[Roch Huppé]

Honestly, yes, we did our job. That said, we are always open to recommendations. Obviously, when we see audit findings of this significance, we take them very seriously. As the Auditor General said, this is not one of our finest audits.

We are now in the process of determining whether we need to augment or strengthen our policies and directives. There have been a number of recent audits. We have issued additional guidelines, for example, regarding the use of professional services, to try to direct people toward making the right decisions. We are looking at the existing training for the people who have been delegated these responsibilities. There have to be rules, and they have to be followed, absolutely.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Who is responsible for ensuring that the rules are followed? Who has that responsibility?

[Roch Huppé]

Accountability rests with various entities. We have a responsibility to set strict rules. Whether people like it or not, we currently have a decentralized model of accountability in government. As I explained earlier, that means that responsibilities are delegated to the departments. The Financial Administration Act specifies a detail that is very important: deputy ministers are accounting officers. It is written in black and white in the act. Deputy ministers must therefore ensure that the control systems are in place so that their programs can be delivered in accordance with government policies.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

For example, in the case of the Canada Border Services Agency, or CBSA, the president of the agency is the equivalent of a deputy minister. Is that correct?

[Roch Huppé]

Absolutely.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

As I understand, it was up to him to ensure that Treasury Board recommendations and advice were followed.

[Roch Huppé]

It's a system. The deputy minister obviously can't look at every contract or every detail. However, they must see to it that someone is responsible for ensuring that controls are in place, that governance systems are in place, and that those controls are checked on a regular basis to make sure that they are working. A control never works 100%. Good controls will eventually uncover weaknesses. That is what good controls are about. They are there to ensure that departmental programs or initiatives are delivered in accordance with rules, policies and legislation.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

That's perfect.

Yesterday, the representative of the Association of Canadian Financial Officers told us that financial officers at the Canada Border Services Agency had witnessed things they disagreed with, that they sounded the alarm, but that there was no follow‑up. So, even when there are financial officers within departments and agencies, they are not listened to.

How is it possible that there are controls, advice and recommendations, in addition to financial officers, whose job it is to enforce those processes, but that ultimately they are not respected? I imagine that controls are working somewhere, but right now, what we are seeing is that ArriveCAN is probably the tip of the iceberg. Companies like GC Strategies received so much money precisely because internal controls are not conducted in a number of places. How do you think that's possible?

[Roch Huppé]

I listened to Mr. Richard's testimony yesterday. I know him well; I've had many meetings with him. I don't know the nature of the complaints. He didn't want to disclose it either. If that's what happened, I find it deplorable.

I was chief financial officer for eight years in major departments, and I can assure you that if someone sounded the alarm about a particular transaction, action was taken to remedy the situation. I can assure you that the managers, the supervisors of these people, would have taken charge of the file.

I think we have a strong financial function within the federal government. Just look at the financial statements, which have been unqualified for 25 years. It's unfortunate that, in this case, controls don't seem to have been followed and well documented.

[The Chair, Conservative, John Williamson]

Thank you very much.

Next we have Ms. McPherson joining us virtually.

You have the floor for six minutes. Go ahead, please.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much, Mr. Chair.

It's nice to be on this committee with everyone today. This is not my normal committee, so I'm eager to be able to participate.

I want to thank all of the witnesses for being here with us today.

Like many of the members of Parliament who have spoken before me, I'm quite horrified by the report. On behalf of the constituents I represent in Edmonton Strathcona, I want to express my thanks to you, Ms. Hogan, for this comprehensive report. It's shocking, but you've provided important information for parliamentarians, so I'm very grateful.

When I look at the report, however, I'm alarmed, frankly, that we have a procurement system in this country that is so vulnerable and that has been taken such advantage of. I can't help but think of some of the organizations I've worked with in my riding of Edmonton Strathcona that have had to go through incredible hoops just to get funding—funding significantly less than $60 million. I think of things like the Flying Canoë Volant festival, the biggest French festival in Edmonton. I think about the Edmonton Ski Club and the Ritchie Community League. None of them was able to access the funds that were able to be accessed in this case, the $60 million. What organizations across this country could do with that money is frankly what I'm thinking of when I think about this waste.

I have a question for you, Ms. Hogan. What do I say to the people and organizations in my riding that are trying to get funding from this government, when they see this incredibly unfair process? Would you agree that it seems as though a system like this is in fact very much stacked against them?

[Karen Hogan]

The procurement system in the federal public service is complex. There are so many rules. I agree that at times the complexity of trying to compete to get a contract makes it difficult for smaller vendors, which is why I am concerned that the reaction to the findings around ArriveCAN would be to layer on more controls or to make it even slower. That would discourage competition. The whole point of having competitive contracts versus non-competitive contracts is to encourage competition to ensure that the public service gets the best value it can for taxpayer money.

I'm just concerned that there might be a requirement for the rules to be made tighter or stricter, or for another layer to be added, which will limit that competition. I believe the deputy auditor general has said before—and I've said it before in testimony in front of this committee—that the business of government needs to keep moving forward. The rules, however, need to be respected in order to ensure that happens, and that just didn't happen in this case.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

From my perspective, adding more rules when the rules aren't being followed is counterproductive, of course. I also look at this issue of fairness and the idea that for smaller organizations it's almost impossible to meet the obligations of the federal government.

I've worked in international development for most of my career. It's almost impossible for small organizations to access funding, for example through Global Affairs Canada, so how do we make sure that people are following the rules and equally make sure there is fairness? It's extremely important that people who are trying to access benefits or services from the government and who have repeatedly faced barriers are able to access those services.

I think about veterans. I think about people living with disabilities and about indigenous communities that are repeatedly told, no, they are not able to get that funding; they need to resubmit forms; they need to go to court, and all of those things. However, we see this government hand out seemingly open-ended contracts that the eventual winners actually help to write.

Ms. Hogan, you talked about not wanting to add more barriers. You talked about not wanting to make it harder, but do you see any hope for everyday, normal Canadians who are just trying to get services from this government? It seems as though every day we are getting closer to a privatized government.

[Karen Hogan]

I think I would point to some of the work that my office has previously done, some of which was on access of vulnerable populations to programs. We identified the need for the government to really understand the barriers that certain populations face, whether they be remote or indigenous, for example. There are so many different barriers that need to be addressed, and that's very different, I think, from just procurement.

I would separate the two and say that different recommendations and different approaches are needed when it comes to ensuring that Canadians can access benefits the federal government is providing, and more needs to be done there to identify who isn't accessing them and then how to remove those barriers.

When it comes to contracting, however, there's a different set of rules, and I think it still comes down to access. You don't want to make it so complicated that smaller vendors may not be able to participate in federal government procurement, because everyone can add to the public service and make it better.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Wonderful. Thank you very much.

Thank you, Mr. Chair.

[The Chair, Conservative, John Williamson]

Thank you very much.

We'll begin our second round.

Ms. Block, you have the floor for five minutes. Go ahead, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

Thank you to all of our witnesses for joining us here today.

Of course, we've had the opportunity to hear from the Auditor General on a number of occasions. I think it is quite right that you appear before a number of committees, given the seriousness of your last report tabled in the House of Commons. However, I am going to aim my questions at the Treasury Board Secretariat or the Treasury Board.

Given what we have learned over the past 18 months and certainly more recently through the procurement ombud's report, the Auditor General's report and actual testimony from witnesses, there appears to be a lack of oversight across government departments. One of the main reasons for this, as we heard yesterday, is the lack of enforcement of the Financial Administration Act across departments.

My question is for you, Mr. Huppé, or for whoever would like to answer it. Is your department responsible for ensuring that other departments comply with this act, or is it up to departments to police themselves?

[Roch Huppé]

That's a very good question. I would say there is dual accountability. As I explained, departments operate within a set of authorities that have been delegated to them. The expectation is that when they operate within these authorities, they have the measures in place to ensure compliance with the different rules and legislation, and they have to abide by the Financial Administration Act.

At Treasury Board, when a transaction or a project, for example, is above the departmental delegation, it has to go through the Treasury Board minister for the authority to, for example, enter into a contract or to launch a project that's not within its set of accountabilities, so there is some oversight there.

There is general oversight. I know, for example, the internal audit community, and every year I have a role to play in delivering some horizontal audits across government. We try to line up our work between what the Auditor General is doing and what the other bodies are doing, to make sure we don't duplicate, so, yes, there are measures being taken to ensure compliance, but, again, non-compliance will, sadly, be found in some of these reviews.