Public Accounts Committee on Nov. 1st, 2022

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I want to thank the witnesses for being present with us today, especially our Auditor General, Ms. Hogan.

Thank you very much for your testimony this afternoon. I think it's important that we look at the conditions that took place in your office last year. I believe what we've seen and witnessed with the strike at the Auditor General's office is of concern and should be of concern to the government and to all Canadians.

The efficiency and efficacy of our public service, in particular the independent bodies of our public service and their credibility, really matter when we're talking about what my previous colleague mentioned, which was the fragility of trust between Canadians and our institutions. We need to actually do the work of making sure these institutions can in fact have the funding and the resources to do the jobs that Canadians want them to do.

Many of these supports were not just in the Auditor General's office, but right across the public service. We've seen Canadians rely on public servants, whether that was getting CERB cheques out or making sure that other aspects of the public social safety net were actually being utilized. There were real people behind that, real Canadian public servants.

Simultaneous to the thank yous we heard across the country from regular Canadians and even from elected officials, what happened was this unfortunate reality of seeing that work not get the same level of credit. It's incumbent on me, being a labour representative in some ways, that we look at the conditions that gave rise to that.

I think what we witnessed in the Auditor General's strike last year is something we should all take as a fair warning as to what could continue to take place in and around our public service across Canada.

In your comments, Ms. Hogan, you mentioned that the President of the Treasury Board gives your office its mandate for collective bargaining. This mandate establishes the maximum amount of pay and specifies the other terms and conditions of employment that may be offered by your office during collective bargaining. At times, the mandate includes how your office is to approach negotiations.

You said it was also important to note that the additional permanent funding you received in March 2021 could not be used to expand the collective bargaining mandate. You can see, when approaching the collective bargaining process, how difficult that could be—not only for the Auditor General's office—given the fact that the Auditor General had to operate within what she called “a fence” and corral decisions, which made it difficult for the public service to actually get what it needed in a responsible way.

We've seen evidence of this. For example, we saw complaints given to the Auditor General's office throughout that time. I'm sure many, Ms. Hogan—we don't have to go through them today—were about certain aspects of the work, particularly within wage increases and the lack thereof, but we at times also saw a request for arbitration to deal with the items that could in some ways not be reasonably dealt with at bargaining.

I think the question I have is this: When the employer—which in this case was your office—consistently refused arbitration, who made the decision to decline arbitration at that time?

[Karen Hogan]

It was my first foray into a labour dispute, so I'm going to turn to Andrew in case he wants to add anything to make sure that I got it right.

At the beginning of a negotiation process, the union must decide on one of two routes. One is the conciliation strike route and the other is an arbitration route. Those are the two terms. The union chose the conciliation strike route. That was set out at the beginning. If an impasse is reached, then that's the road we go down versus going to arbitration.

I believe that at some point during the labour dispute there was a request to change that, but it was a little out of our hands to do that because that route had been chosen. When we discussed it with Treasury Board, we were to respect the choices the union had made at the outset.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

That's interesting. You can see the perspective of the workers in your office, given that unique decision, in the sense that you approached Treasury Board for a decision relative to a decision you may have had the power to make.

For Canadians' sake, we have to know exactly who the decision-makers are in advance of collective bargaining. In this case it's important that workers know exactly who is making the decisions in relation to their wages. That's a fairness principle in Canada.

Given the fact that you just testified that you approached Treasury Board on this, would you say that there was interference from Treasury Board in the decision related to arbitration?

[Karen Hogan]

I know that you want to add, but if the outcome would have exceeded the mandate that we had been given, it was an outcome that we couldn't put forward for approval, so I think that really is what hampered our decision—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

You knew you weren't going to get approval.

[Karen Hogan]

It's not that I didn't know that I wasn't going to get approval about arbitration; it's just that if the result had been outside of the mandate that had been given to our organization and I had put that forward eventually for approval by the President of the Treasury Board.... It was clear that we had to stay within the mandate, so I couldn't guarantee that arbitration would have gone there, and that's what we were trying to understand when we approached Treasury Board.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

It sounds like your hands were tied in some way by Treasury Board, in the sense that even if you wanted to take the arbitration route, you couldn't.

[Andrew Hayes, Deputy Auditor General, Office of the Auditor General]

I might just add a little bit here to help get to the end of this.

The challenge with the process is that negotiations happen with a particular framework in place, and at the beginning of our process, we have a mandate. As we get towards the end and many of the issues at play have been resolved on one side but there is a remainder.... At that point in time, we checked with the Treasury Board about the process that had been used across the government in the past, because it creates a difficult situation to arbitrate after a lot has already been set apart because it's been sorted out.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

But it's not impossible.

[The Chair, Conservative, John Williamson]

Thank you very much, Mr. Hayes. I'm going to have to end it there, Mr. Desjarlais. You'll have another round coming up shortly. Thank you very much.

We will turn now to our second full round. Mr. Kram, you have the floor for five minutes, please.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here today.

Ms. Hogan, in your opening statement you talked about exploring funding mechanisms in other jurisdictions. Do you have any in mind that would be of particular value for the committee to investigate or look at?

[Karen Hogan]

I think I'll give some high-level remarks, and if you want specifics, I think Andrew could probably propose them.

As I said earlier, at a high level, a central agency should still play a role, given that central agencies have a very important role in budgeting expenditures, but Parliament as well needs to play a role to ensure independence. Setting the levels should come from a parliamentary committee, whether it be this committee for my office, another committee for other agents of Parliament or a general committee for all of us, however the structure happens.

We see that in other jurisdictions. Some of the provinces have that model. Ontario is an example. Some of the other agents of Parliament have that, and then internationally, I would point to the United Kingdom.

I don't know if you want more specifics. I'll ask Andrew to maybe give you more specifics, if you're interested.

[Andrew Hayes]

Thank you.

Yes, the United Kingdom has a model that is interesting. It has a public accounts commission that is similar in principle to what we have here with this committee, and that commission reviews the estimates and lays them before the House of Commons with any modifications that the commission considers to be appropriate. At the end of the day, I would bring us back to the legacy report of the previous public accounts committee that talked about a permanent, stable, sustainable funding model that gives predictability.

[Michael Kram, Conservative, Regina—Wascana, SK]

Ms. Hogan, I believe you mentioned a while ago that you currently have about 14 performance audits a year and that you want to increase that until it levels off at about 25. I can't help but conclude that there must be some blind spots right now that the Auditor General's office is not auditing.

Can you shed some light on what these new 11 audits per year will be looking at?

[Karen Hogan]

We averaged about 14 a year. That would have been in the three years prior to our receiving the funding, which was less than we normally used to do.

Yes, we do see a gradual increase this coming year and hopefully again next year. Calling them “blind spots” is a weird way to describe it. It depends on what we prioritize in a given year. For example, we received a motion from the House to look at all COVID programs, so we had to pause other work to do that, and now we can sort of return to that work.

I think that when we look ahead as to the kinds of skills we might need, cyber will come up as an area that we need to really focus on going forward, as well as equity, diversity and inclusion, but as soon as you pick one element over another, something is falling off the table. It really is about having a plan for the next two or three years, but a plan that is fluid enough to deal with emerging issues or a request that we would like to prioritize.

[Michael Kram, Conservative, Regina—Wascana, SK]

Very good.

I think your answer touches on my next question. You mentioned that a performance audit is not one size fits all. I'm assuming that has to do with some of the skill sets involved in the different areas of government. Can you elaborate on why an audit is not one size fits all? What are some of the skill sets that may be lacking and may need to be increased?

[Karen Hogan]

An audit isn't one size fits all for many reasons. It could be the subject matter, but it could also be the scope that we chose to look at in the audit.

For example, we looked at CERB at the beginning of the pandemic. We just looked at the design and implementation of it. Now we're looking at it post payment. The post-payment side is much larger than the upfront side. It just takes more time. The scope is much larger. That could be a reason that makes one audit different from another.

You asked about skill sets. I'll turn again to IT being an area that's really important. It isn't just about our skill sets; it's also about our ability to report on certain things. There might be elements that are difficult to report because of national security or the sensitive nature of the information. There are many reasons that might cause one audit to take a little bit longer than another audit. It's not necessarily the skill sets that were missing.

When we hired 150 individuals, we tried very hard to target some of the skill sets we thought we would need. We added a lot of expertise in the environment and sustainable development area. We hired a lot on the IT front and cyber front. We knew where we wanted to go, so we were targeting some of our hires at that time.

[The Chair, Conservative, John Williamson]

Thank you.

I am afraid that is the time, Mr. Kram. I'll turn now to Mr. Dong.

You have the floor for five minutes, please.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much, Chair.

AG, it's very good to see you again, and Mr. Hayes as well.

My colleague MP Bradford mentioned that between 2005 and 2015, about 10 years, your office received only a 1% increase on your budget. I'm just thinking that given that the average Canadian inflation per year is around 1.9% to 2%, that's like taking roughly 19% of your budget away within that 10 years if you add it up that way.

I also heard you mention that your office added a 150 people. Now it has 800.

Did you have to fire people during that 10 years with a 1% increase?

[Karen Hogan]

I'm not sure that I know where the percentage increase came from, but I can tell you that over that time period that we never terminated anyone's employment because of funding issues. We just didn't replace people. There's normal attrition that happens in any organization every year. We just did not replace those individuals. Sometimes we were losing individuals in areas we didn't need to, but that was the best way for us to deal with not having the funding we needed to keep up the staffing levels.

[Han Dong, Liberal, Don Valley North, ON]

Do you remember how many staff you had in 2005 and how many staff you had in 2015?

[Karen Hogan]

No, I'm sorry. I don't have that information.

[Han Dong, Liberal, Don Valley North, ON]

Okay. If you can give me the numbers afterwards, that would be good.

I want to follow up on what MP Desjarlais was asking about.

You talked about how you received a mandate before negotiating. If you had received a mandate to increase pay to your workers more in the previous bargaining round, they would have been paid better than other federal organizations. What impact would that have on other federal organizations?

[Andrew Hayes]

I think it's important to position where the bargaining happened vis-à-vis the rest of the public service. Because of where we were in the time frame, many of the other organizations had already settled their collective agreements. I believe in December, when we wrote to the public accounts committee, almost 99% of represented public servants had already reached a collective agreement according to a particular pattern.

The difficulty for us at that point in time was that there was an established pattern. Even if we wanted to be able to deal with our employees with the same wage increase and to solve the wage grid, which was important to us because of the statements that we made in the past about the importance of accurate pay and timely pay in the context of the Phoenix system, we didn't have the mandate to be able to do that in this round. We worked with Treasury Board Secretariat officials to seek a mandate to increase pay that still respected the pattern that the government had to deal with.

[Han Dong, Liberal, Don Valley North, ON]

Let me understand this correctly. If PSAC had a massive salary increase for your office, which represents maybe 0.2% of the overall administration, they could, or more likely they would, go back to insist on the same increase for other bargaining units that have perhaps already signed a deal.

What kind of impact would that have? What would that look like?