Public Accounts Committee on April 7th, 2022

[Chris Padfield]

Far be it from us to tell a region what they need or don't need, but we do that regular analysis. That's part of our core business.

I want to delineate between the emergency relief program we're talking about here versus our ongoing efforts to develop economic opportunities for the future. Prior to the pandemic, we did 20 different round tables across the region and had deep communications. Linda and I were across the region with hundreds of different stakeholders, talking about what those regional needs were.

I don't know if you realize, but while we were a temporary agency created in 2009, in 2019 the current government made us a permanent agency. We were just launching ourselves off as a new permanent agency and not an ongoing running program. Those 20 round tables were meant to help us do exactly what you're talking about—build up that deep regional knowledge and understand what particular regions need going forward.

I think it's really important, and you're completely right about that kind of analysis. That's quite different, though, from an emergency relief project, which is what the RRRF was. It was based on needs from different organizations. We weren't being prescriptive about who we thought had needs and who didn't.

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

Thanks very much.

On that question, though, without that information, I'm just bothered a bit by procedural fairness. If it wasn't your organization, then perhaps the organization.... It doesn't say in the report which one it was. I'm wondering why certain organizations would have been invited and certain ones wouldn't have been.

[Chris Padfield]

Early on in the pandemic, as I think has been talked about, we initially thought this program was going to be three months and we had to get help out. Using that digital main street example, those organizations approached us and said, “We have the capacity here. We've been running a smaller version of this program. We think we could do some more good in this.”

Invest Ottawa and Communitech both approached us and said they had a number of students. We ended up using 1,400 different students to help us deliver digital advice to companies across the region. Those organizations approached us, and we went back to them and said, “Can you collaborate and pull something bigger together?” They produced the digital main street project, which ended up having four different organizations involved.

They went on to deliver support to over 30,000 organizations within the region, providing some of the necessary activities and support for companies that had never been digital before, or refining companies' digital presence so that they could move into international markets and refine and expand their coverage and business model.

That's a bit of the approach that happened in that case.

[The Vice-Chair, Liberal, Jean Yip]

Thank you. We will move to Mr. Patzer.

I would like to acknowledge that Ms. Shanahan has agreed to cede her time to Mr. Patzer for five minutes. Members have agreed to end the meeting at 12:30 p.m.

Thank you.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you once again—

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Chair, on a point of order.

I agreed to have my third round, but if you give five minutes to Mr. Patzer and then adjourn the meeting at 12:30 p.m. I won't be able to speak. We could end the meeting at 12:35 p.m. so that the NDP and the Bloc Québécois can have two and a half minutes each.

Thank you.

[The Vice-Chair, Liberal, Jean Yip]

Okay.

I think we have unanimous consent here. We can agree to have Mr. Lemire and Mr. Desjarlais finish the round.

Thank you.

Go ahead, please, Mr. Patzer.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you.

I'll start with the Auditor General. The report says, “Members of Parliament and the public should have access to transparent, clear, and useful information on the results achieved by federal departments and agencies.” The data collection process throughout the program went back to ISED. For that reason, I find it interesting that they're not here today, so that we can ask them.

Do you think it would be valuable to gather information from ISED that would be beneficial to this study?

[Karen Hogan]

I'm going to look to Philippe to see if I have this correct, but ISED was responsible for gathering all the data from the regional development agencies and then making a global picture. That is why we included them in the recommendation about gathering data and looking for consistency.

They can do only so much. It still comes back to the collection of that data and having it be more consistent across all the RDAs, so that you can roll it out properly. It includes having targets, if you want to actually be able to measure and determine whether or not outcomes have been achieved.

There are some gaps there, which is why the recommendation is addressed to both ISED and the regional development agencies.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Right, but they have all this data and information. Do you think it would be valuable to this committee if ISED were actually to come here and take questions from the committee?

[Karen Hogan]

I always believe that every entity included in one of our audits should be called to the committee in order to help determine the best way to improve a program and to improve program delivery for Canadians.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Right on.

I guess that would include the Privy Council Office as well, because they're quoted in 14.57 as having received information and data too. Do you think it would be beneficial to have the Privy Council come?

[Karen Hogan]

I would leave it up to the chair and the membership to decide who best to invite as witnesses.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Good answer.

Elaborating on the point made by Mr. Lawrence to the different RDAs here, what were the specific criteria—I know Mr. Padfield alluded to it a little—you guys looked at when you were inviting specific non-profits to apply versus others who were not reached out to?

[Dylan Jones]

Maybe I'll take a stab and hope the connection works on this one.

There is one thing I want to flag for the committee, which is that we often think about procurement as a comparison for what fairness looks like. The thing with a standard procurement process is that businesses, when they're doing competitive bidding, lose money on the bids that fail, but they recoup it by charging more for bids that succeed.

When you're working with non-profits, that doesn't apply. If they're in a competitive process and they spend $20,000 on a bid, if you will, or on an application and it fails, they're out-of-pocket. We don't actually get the same kind of demand from non-profits for competitive processes.

I'm not making an argument against fairness or transparency. I'm just saying that it's actually not the way it works. It's not really what people want, necessarily. They want to know what's going on. They want to be able to knock on our door and say, “Hey, I've got an idea.”

On this one, we talked to basically everyone who might be able to help. We sort of know who they are, the people who work in these spaces. We reached out to them—and remember, we were in a massive rush—and said, “Do you have something that you have to offer?” The word was out quite broadly on the non-profit side.

I take the point that's been raised here, but it wasn't that we decided who we weren't going to talk to. We basically reached out to everyone we thought might possibly be able to help. People like that process, because they know they're not wasting their time trying to put in a bid and then having to eat the cost if it's unsuccessful.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

I appreciate that. That definitely helps.

Lastly, we're talking about the number of people who applied to this program, particularly in western Canada. This was kind of a last resort program, but there were so many applicants. I'm just wondering, because there were so many applicants.... Was it also a contributing factor that they just didn't qualify for other programs, or maybe the other programs weren't targeted specifically for organizations in western Canada? Do you think there was a discrepancy between the east and the west on which programs worked and which ones didn't?

[The Vice-Chair, Liberal, Jean Yip]

Give a short answer, please.

[Dylan Jones]

It's likely a combination of the amount of need.... The vulnerability of people's books also made them less likely to be able to get loans elsewhere, because of their financial state. I also think legitimate questions can be asked about the availability of programs in the west and just the quality of the outreach in general.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

We now go to Monsieur Lemire for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

My question is for the Auditor General, Ms. Hogan.

The regional economic development agencies have only partially agreed to the recommendation made in paragraph 14.55 of your report. How do you respond to that?

[Karen Hogan]

Give me a moment to look at the recommendation you just mentioned.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

According to your report, they do not agree “that common delivery of funding programs is appropriate in all instances.” Of course, there are provincial and other programs that can address needs. In the end, it comes back to intended results versus regional objectives.

[Karen Hogan]

As I said, the program was designed during the pandemic with very clear criteria. When a decision is made on a policy, the government is expected to adhere to that policy in implementing the program. In this case, there were very clear eligibility criteria. However, we found that these criteria were not consistently applied by all regional development agencies.

Later, the focus can shift to the priorities and realities that are specific to each region.

This is the aspect of the policy that was not followed, which led to our recommendation, but the regional development agencies don't fully agree with us.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I understand. At the same time, it's interesting to see how they were able to meet the spirit of their own mission.

I would like to ask you another question about the agencies.

In your opinion, did the agencies take a risk by providing funding to businesses that weren't financially viable? In some cases, certain companies apparently even used the funding to repay shareholder loans, provide financial support to family members or purchase a vehicle. I'm referring to paragraphs 14.50 and 14.51 in your report.

Do you think the agencies might have taken risks that were a bit too high?

[Karen Hogan]

Again, the criteria for eligible expenses were clearly established when the program was designed. However, the agencies didn't apply them consistently. That does increase risk, and, in our view, it contravenes both the policy and the program as designed.