Public Accounts Committee on May 23rd, 2024

[Stephanie Hébert]

To date, we've only had eight project proponents withdraw. Oftentimes, when they withdraw, it could be a variety of factors. Sometimes the scope of the project has changed or project financing has changed. There may be cost escalations that they are no longer able to bear. There are different circumstances that are brought to bear.

Ultimately, if there is a challenge that a project proponent is facing, we really try to work proactively with them to look at whether there are solutions that we can help broker and that we can help find. In the case of cost escalations, for instance, that have been caused by the pandemic and by different supply chain constraints, we've often tried to do two things. One is that we look at whether we can amend the scope of the projects. Also, can we help them find other funding partners who can come so that the project is able to continue? If not, if we are in a situation where we maybe have to look at providing increased funding, then we really need to make sure that we have a very robust justification for any increased costs for the project and to support a decision of why we would provide increased funding.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Pipelines seem to be a major factor in getting our products to market, yet I didn't notice anything in.... Is that because pipelines are regulated or organized by somebody else rather than the Department of Transport?

[Stephanie Hébert]

Generally speaking, it's the Department of Natural Resources that would be responsible for pipelines, working in collaboration with others. We've never had an application related to pipelines, so I think it's something that folks have generally seen as falling out of the scope.

That said though, as I mentioned earlier, because we recognize the interconnectivity of the transportation system, we do really try to foster the multimodal projects where you have those connections and where you have those efficient and effective hand-offs, be it between rail and a port or rail and road. We do try to foster those types of connections through multimodal projects.

[The Chair, Conservative, John Williamson]

Thank you very much. That is your time.

Next up is Ms. Shanahan.

You have the floor for five minutes, please.

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

Thank you very much, Chair.

I, too, would like to thank the witnesses for appearing here today.

I'd like to get back to the report, actually, so I have a couple of questions for Mr. Hayes.

In the overall message, the first line is, “Overall Transport Canada did a good job of designing and implementing the National Trade Corridors Fund but did not track and report on its results well.” Then it goes on to talk about some of the strengths and weaknesses that the Auditor General's Office found.

Could you expand a little on what you found?

[Andrew Hayes]

Yes, thank you.

This was a good-news story from the perspective of using information to inform decision-making. We saw that the fund was designed using an evidence-based approach. Likewise, the calls for proposal were based on evidence that the department had gathered.

I would point to some examples. Along the way, for example, the department had information about regional transportation assessments that helped them to highlight opportunities for improvement in transportation infrastructure, monthly economic dashboards that showed where there might be opportunities to improve performance, and some research that showed where digital investment can help to make the whole system more efficient. We saw that the calls for proposals and the proposals received were treated in a very transparent way. The criteria were established at the outset and they were followed. There were evaluation grids.

We did identify an opportunity to improve the documentation in the assessment process because, as my colleague has mentioned, there were two stages to that process. The first one was well documented, the first stage when eligibility and initial assessment were done. When it gets to the committee stage, and there are a number of committees that look at these proposals, there were a few cases where the documentation did not exist where we could see where a recommendation or an assessment differed from a previous position on a proposal. That's a documentation issue that would support transparency and accountability.

Where we would say the biggest opportunity for improvement is, it's in the reporting, in the performance measurements and reporting. Why is this important? At the outset, if you can establish measurable performance indicators, you will be able to identify whether your program and the projects under it are contributing to the objectives you want to achieve. In this case, the initial program measurement framework was a little too general to be able to attribute progress to projects. The department has taken some of that criticism and tried to make some improvements, which hopefully can be implemented into the existing and upcoming agreements.

Ultimately, what you want to see from that is attribution for the results that are being attained by the projects that are being funded by the government.

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

Thank you for that, Mr. Hayes.

It seems to me it's kind of the classic situation, isn't it? A program is created, funded, and I can appreciate it's a substantial amount of money. It's very complicated, as the variety of projects are literally all over the map, and yet there has to be some kind of evaluation criterion and so on. There's something to be learned here, and I dare say some best practices that can be applied to other departments doing similar type work.

Talking about the indicators, and I know that Madam Hébert touched on that before, what were some of the improvements you saw? Maybe we can go back to Madam Hébert on that?

[Andrew Hayes]

Yes. I would say that making the indicators more specific, measurable, attributable, relevant and time-bound would be something where we saw some improvement over the course of time. I'll give you an example.

Instead of saying that there should be an increase in efficiency in the transportation system, what we saw in some examples would be that the number of cars or the volume of materials that pass through will increase from x to y over the course of a year. It's that kind of thing. There would be a specific and measurable element to the target or the indicator. In our view, that's an improvement.

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

That sounds like an ideal, but sometimes it's easier to say than to do. Am I correct, Madam Hébert? What are some of the challenges that the department has found in putting into place indicators? Or is it coming along? It's an evolving science, I would say, if not an art.

[Stephanie Hébert]

I would say that we have learned with time. That is noted in the audit results of how we had started improving it. It didn't quite hit the mark, but we did keep at it. We have now come with our five themes: economic impacts, capacity, efficiency, environmental and technology and then supporting subindicators.

I think we are getting much better into the space of having specific, measurable, attributable and time-based indicators that are going to allow us, across all of these projects, to be able to roll it up and tell that story.

The other thing that I didn't mention in one of my previous responses was—

[The Chair, Conservative, John Williamson]

I'm going to have to stop you right there, because you're over the time.

[Stephanie Hébert]

I'm sorry.

[The Chair, Conservative, John Williamson]

We'll come back to that, I'm sure.

Ms. Sinclair‑Desgagné, you have two and a half minutes.

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

I'm going to discuss a topic that is diametrically opposed to that of my colleagues here on the right, no pun intended.

Mr. Hayes, you mention in paragraph 4.42 of your report that the department “had not reported any concrete results on the contribution of the fund to achieving the sustainable development targets”.

Can you confirm or deny that none of the $711 million invested in this fund between 2017 and 2023 helped meet the United Nations goal 13 on combatting climate change?

[Andrew Hayes]

As I was saying to Ms. Shanahan, without performance measurement, it is impossible to attribute progress on sustainable development goals to funded projects and to report on them.

Therefore, the findings in this part of our report are related to the other findings I mentioned.

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

But can you confirm that this was one of the original goals of the fund in question?

[Andrew Hayes]

Yes. I would say that the department uses sustainable development goals, as all departments must.

Having said that, I would like to clarify something.

In our audit, we found that there were gaps in performance measurement. I hope that, with the improvements that have been made, it will be possible in the future to attribute progress toward achieving sustainable development goals to funded projects.

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

Okay.

Mr. Hayes, what should be done, apart from establishing performance indicators and follow-up measures, to ensure that the fight against climate change will be a priority and that the projects funded will really contribute to it, since several billion dollars are being invested in transportation?

[Andrew Hayes]

Performance indicators are important and should be part of any agreement with a company that receives public funds.

It is also important to mention that, when projects are completed, the department must be able to gather information on the progress made.

In the case of the 30 projects that had been carried out at the time of our audit, we found that there was no plan to do that follow-up. That's an important element.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Desjarlais, you have the floor for two and half minutes.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I want to turn my attention to the grave risks of climate change as another motivator to the potential disruption in our supply chains.

We often hear as a matter of debate that climate change on one hand is this massive threat of which we see the impacts. When I was first elected, not that long ago in British Columbia we were faced with a massive flood that destroyed parts of the interior of British Columbia. The following year we saw massive wildfires.

It seems to me that in addition to the incredible challenges of labour disruption and the incredible challenges that climate change presents Canada, your jobs at Transport Canada are immensely difficult. I want to sympathize with the challenges of a changing environment.

This year in Alberta, for example, we've already seen wildfires during the rainy season in Fort McMurray, forcing thousands to evacuate. I had to house my friends last year during the very devastating wildfires that threatened Yellowknife.

The crisis of climate change is getting more deadly. It's getting more serious. I fear that my generation and the ones to follow may suffer a weakened economy, continually weakened by the fact that our supply chains are becoming more diminished.

Deputy Auditor General Hayes, why didn't you include recommendations about climate resiliency, or a review of some of the funds in terms of whether or not they hit the sustainable objectives that Canada has put forward?

[Andrew Hayes]

My answer to that would be that this is baked into our recommendation on having strengthened project level performance evaluation and monitoring. To your point about climate resilience, identifying the measures that should be in all of these agreements, or that should be standard for a subset of projects, is important. Likewise, identifying where measures can be specific to the amount of greenhouse gases that are being reduced should be part of strengthening the performance measurement framework. That's baked into our recommendation.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Officials, with the time I have, could you provide some evidence on how you wish to improve that information?

[Stephanie Hébert]

Absolutely.

As I indicated, we definitely accept the recommendation that was put forward. I wish to assure the committee that when we do project evaluations.... One of the findings was that the evaluations were merit-based. They were very transparent with clear evaluation criteria. We do consider the impacts of climate change, when we look at project proposals and assess them. We do look at how some of these projects will help ensure climate change resiliency and whether the project will result in a reduction of GHG emissions.

If time permits, I can turn to my colleague to give one or two examples of projects we are funding that directly target this.

[The Chair, Conservative, John Williamson]

Pardon me, but I'm afraid we'll have to come back to that.

Mr. Nater, you have the floor for five minutes, please.