Mr. Chair, I am pleased to be here today to discuss my fall reports, which were tabled in the House of Commons.
I would like to begin by acknowledging that we are gathered on the traditional, unceded territory of the Algonquin Anishinabe people.
My office delivered five performance audit reports and a special examination report to Parliament today. The performance audit reports touch on whether government organizations are delivering expected results for Canadians.
Whether managing programs for seniors or youth, or supporting the economy through benefits or loan programs, or improving access to secure online services for everyone, government organizations should be diligent and transparent in their management of tax dollars.
In our first audit, we looked at whether Innovation, Science and Economic Development Canada implemented the Industrial and Technological Benefits Policy so that its objectives were met.
The policy requires that companies who are awarded defence contracts also invest in Canada for an equal amount. During the period we audited, it applied to 99 procurements totalling at least $39 billion.
Overall, we found that the department could not demonstrate that the policy met its objectives. The department had not established clear rules and guidance for applying the policy, which led to inconsistencies. Of eligible procurements over $100 million, we found two in which the contractor's commitments were below 100% of the contract value, and eight that included no obligations at all.
We also found that the department lacked effective ways to measure the policy's economic benefits and the creation of jobs, and that it did not track the potential impacts of the policy on defence procurement.
Given the extent of obligations for contractors under the Industrial and Technological Benefits Policy, it is important that Innovation, Science and Economic Development Canada has effective ways to show whether the policy contributes to jobs, innovation, and economic growth.
Our next audit examined the Treasury Board of Canada Secretariat’s efforts to lead the development of a national approach for digitally validating a person’s identity. A national approach is important to ensure seamless and secure access to online services in the public and private sectors for Canadians across the country.
We found that the secretariat had delayed work on a national approach because of a lack of funding. However, it had worked with Employment and Social Development Canada and with Shared Services Canada on a needed component of a national approach, which was a one-stop online sign-in system that validates a person's identity to access federal services. This would replace the almost 90 separate sign-in portals currently managed by individual federal departments.
Some provinces and territories have begun implementing their own identity and access management programs. This means that digital access across levels of government is evolving without common parameters or guidance. A national approach would ensure the interoperability of secure and reliable identity validation systems across public and private sectors.
As we concluded our audit, it was unclear whether the development of a national approach would proceed and whether the transition to a new federal sign-in system could be funded without presenting an unmanageable financial burden on federal organizations.
Our other 3 audits examined programs and services that directly support people and businesses in Canada. The first of these, the Canada Summer Jobs program, provides subsidies to eligible employers to create jobs for youth aged 15 to 30.
We worked with Statistics Canada to analyze available data and found that youth benefit from this program. While many factors influence long-term employment results, our analysis shows that after 9 years, participants in the Canada Summer Jobs program earned on average almost $6,000 more per year than non‑participants. We also found that since 2008, youth facing barriers have not been well represented in the program, which is concerning because the program is meant to prioritize work opportunities for this group.
We found that Employment and Social Development Canada did not collect or analyze data to know how many summer jobs the funding created or to report on long-term outcomes for participants in the program. Given the benefits that this program delivers, the department needs to use data to improve the success of all youth in the labour market, including priority groups.
Our next audit examined programs to support seniors. In 2023, there were 7.5 million people over the age of 65 in Canada, a total that could almost double within 20 years.
In 2018, Employment and Social Development Canada was tasked with supporting the Minister of Seniors to better understand and to meet the needs of seniors. We found that the department did not have a complete picture of the issues faced by seniors or of the programs in place across Canada to serve them.
The Old Age Security program is meant to strengthen seniors’ income security. We found that the department could not show whether the basic level of payment under the program was sufficient to support seniors’ financial needs. Although Old Age Security payments are regularly adjusted for inflation by using the Consumer Price Index, the department could not show whether seniors faced a different level of inflation than Canadians in general.
We also found that the department had not set itself up to successfully measure outcomes under the New Horizons for Seniors Program. The department relied on information in applications to measure the impact of the program without knowing if funded projects delivered the intended results.
As the population of seniors in Canada continues to grow, Employment and Social Development Canada needs to strengthen its analysis to ensure that support programs are meeting the evolving needs of seniors.
Our final audit examined the Canada Emergency Business Account Program, or CEBA. This program was put in place during the COVID‑19 pandemic to help small Canadian businesses cover expenses they could not defer.
We found that Export Development Canada, EDC, acted quickly to provide $49.1 billion in loans to help almost 900,000 small businesses across Canada. However, the program was not managed with due regard for value for money.
We found significant weaknesses in EDC's contract management. It relied on a single vendor, Accenture, to deliver the program. The non-competitive contracts awarded to Accenture represented 92% of the total value of $342 million in contracts related to the CEBA program.
EDC gave too much control to Accenture over key aspects of contracts, such as the scope of work and pricing. EDC failed to exercise basic controls in contract management, such as monitoring whether amounts paid aligned with the work performed. Since ongoing program delivery uses Accenture's proprietary IT systems, EDC will have to rely on these non-competitive contracts until at least 2028.
We also found that neither the Department of Finance nor Global Affairs Canada provided effective oversight of value for money. There was an accountability void that resulted in basic program elements, including measuring outcomes, being delayed or not completed. Finance Canada did not challenge EDC’s administrative spending, or provide an overall spending limit.
As of March 31, 2024, that spending totalled $853 million.
While 91% of loans were issued to eligible businesses, we estimated that about $3.5 billion went to ineligible recipients.
I am concerned that EDC only partially agreed with our recommendation that it should carry out additional work to identify all ineligible recipients and recover the amounts involved.
Unlike other COVID-19 programs, CEBA is a loan program with repayments that will be ongoing for several years, while action on defaulted loans is just beginning. Value for money will be further compromised without better monitoring and improved plans to recover on defaulted loans.
Mr. Chair, this concludes my opening remarks. We are now pleased to answer any questions committee members may have.
Thank you.
