Public Accounts Committee on Nov. 18th, 2022

[The Chair, Conservative, John Williamson]

Good day, everyone, on a Friday on Parliament Hill.

I now call this meeting to order.

Welcome to meeting number 38 of the House of Commons Standing Committee on Public Accounts. Pursuant to Standing Order 108(3)(g), the committee is meeting today on its study of the Public Accounts of Canada 2022, referred to the committee on Thursday, October 27, 2022.

I would like to welcome all of our witnesses today.

From the Office of the Auditor General, we welcome Karen Hogan. It's nice to see you again. Seeing the Auditor General of Canada is becoming a frequent occurrence, and a nice one, of course. We also say hello to Etienne Matte, principal, and Chantale Perreault, principal.

From the Department of Finance, we have Evelyn Dancey, assistant deputy minister, economic policy branch. Hello. It's nice to see you.

We have Nicholas Leswick, associate deputy minister. It's good to see you again

From the Treasury Board Secretariat, we have Roch Huppé, comptroller general of Canada. It's good to see you again, sir. We have Monia Lahaie, assistant comptroller general, financial management sector; and Diane Peressini, executive director, government accounting policy and reporting. Hello.

I understand there are opening statements from the Treasury Board as well as the Auditor General.

Ms. Hogan, you have the floor for five minutes.

Go ahead, please.

[Karen Hogan, Auditor General of Canada, Office of the Auditor General]

Thank you.

Mr. Chair, thank you for this opportunity to discuss our audit of the Government of Canada’s consolidated financial statements for the 2021–22 fiscal year. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinabe people. With me today are Chantale Perreault and Etienne Matte, who are financial audit principals.

The government’s financial statements are one of its key accountability documents. Our audit of these statements provides information that helps Parliament exercise its oversight of the government, promotes transparency and encourages good financial management. Our audit of the government’s financial statements is the largest audit conducted by my office and involves the work of most of our 250 financial auditors. You will find our audit opinion on the government’s consolidated financial statements starting on page 54 of volume 1 of the Public Accounts of Canada 2022.

We have found that you can rely on the information contained in the financial statements. In all material respects, the information is presented fairly and conforms with generally accepted accounting principles for the public sector. In other words, we issued a clean opinion. Again this year, our opinion includes an “emphasis of matter” paragraph. It highlights the significant impact of the ongoing COVID-19 pandemic on certain amounts presented in the government’s consolidated financial statements and related notes.

Every year, we provide Parliament with a commentary report that highlights important information about the results of our federal financial audits. The commentary provides a summary of the government’s spending in response to the COVID‑19 pandemic and its effects on the government’s financial statements. The commentary also gives an overview of the government’s process for identifying overpayments or payments made to ineligible recipients of COVID-19 benefits, and its process for estimating recoverable amounts.

In December, we will provide a performance audit report to Parliament on specific COVID-19 benefit programs. That audit report will contain our findings about overpayments, amounts paid to ineligible individuals and businesses, and the government’s collection efforts.

We also noted that the outstanding pay action requests involving overpayments totalled over $500 million, which the government is at risk of not being able to recover. This indicates that more efforts are needed to process requests in a timely manner.

We have been reporting for nearly two decades on National Defence's difficulties in recording its inventory. While the department has completed most of the commitments in its 10‑year action plan, the commitment to implement a barcoding and scanning capability in its inventory management system is delayed. This means it will take longer before the inventory management is improved.

The commentary also provides information about some emerging requirements that will affect our future financial audit work. Specifically, we highlight new requirements in legislation and government policies to report on environmental, social and governance matters, and a new accounting standard for the government to record asset retirement obligations.

Mr. Chair, I would like to thank the senior officials and staff of the many departments, agencies and Crown corporations involved in preparing the government's financial statements. We appreciate their ongoing collaboration.

This concludes my opening remarks. We would be pleased to answer the committee's questions.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you, Ms. Hogan.

Mr. Huppé, you have the floor for five minutes.

[Roch Huppé, Comptroller General of Canada, Treasury Board Secretariat]

Thank you, Mr. Chair and members of the committee.

I appreciate the opportunity to discuss the Public Accounts of Canada 2022.

Before I begin, I'd like to point out that I am speaking today from the traditional unceded territory of the Algonquin Anishinaabe people.

As your committee knows, the public accounts include the audited consolidated financial statements for fiscal year 2021‑2022, which ended March 31, 2022, in addition to other unaudited financial information.

I'm pleased to report that, for the 24th consecutive year, the Office of the Auditor General has issued an unmodified or clean opinion on these financial statements.

I would like to thank the financial management community of the Government of Canada, the Department of Finance and the Receiver General, and the Office of the Auditor General for helping prepare the public accounts.

Let me now turn to some of the highlights in this year’s documents.

Total revenues in these public accounts amounted to $413.3 billion in 2022, which represents an increase of $96.8 billion, or 30.6%, from 2021.

Total expenses amounted to $503.5 billion in 2022, which is down $140.7 billion, or 21.8%, from 2021.

As expected, the pandemic continues to have a significant impact on the financial statements.

The total impact of the key COVID-19 response measures on fiscal year 2022 is estimated at over $70 billion.

These include the Canada emergency wage subsidy at $22.3 billion; the Canada recovery benefit, Canada recovery sickness benefit, Canada recovery caregiving benefit and Canada worker lockdown benefit, totalling $16.5 billion; and the Canada emergency rent subsidy, totalling $3.7 billion.

Mr. Chair, another point is often raised, and I'd like to clarify something. It's about when the public accounts are tabled.

The Financial Administration Act requires that the President of the Treasury Board table the public accounts each year while Parliament is sitting, by no later than December 31. Although the deadline is set out in the act, the actual tabling date varies from year to year during this period.

For example, in years when elections are held in the fall, tabling generally occurs closer to the end of the calendar year. Other factors also affect the timing. Once the Auditor General has approved the public accounts, it takes several weeks to prepare them for publication. This includes the creation of an online version which, by law, must meet accessibility requirements.

The timing of tabling for this year was within typical timelines of mid to late October in a non-election year. I want to assure this committee that we are looking for ways to help boost our efficiency throughout the production process to achieve the optimal timeline for the tabling of the Public Accounts of Canada.

Mr. Chair, I would also like to acknowledge that we are currently reviewing this committee's recent report on the 2021 public accounts. In particular, we are assessing the committee's recommendations, including the one concerning tabling timelines.

We are continually looking for opportunities to improve how our government operates. This includes the modernization of the public accounts. Based on the recommendations of this committee, the government committed to study potential improvements, and I am pleased to report that this work is under way. To identify possible streamlining opportunities, we reviewed the existing content of the public accounts to identify information that is available through other means not required by legislation, and some with thresholds that have not changed for decades.

In addition, we have received feedback from the Library of Parliament on opportunities to improve the presentation and format of the Public Accounts of Canada. At the same time, we have engaged key stakeholders on additional potential improvements through a survey. The purpose of the survey is to better understand how the Public Accounts of Canada are being used and to gather feedback on opportunities to improve and modernize them. The feedback is critical to ensure that any changes to the public accounts provide information that is relevant, timely and useful for accountability purposes.

I would like to reiterate that any proposed changes will be carefully examined to ensure that the government's financial information continues to support transparency and accountability to parliamentarians and Canadians.

As this project moves forward, the government will continue to work closely with parliamentarians, stakeholders, and this committee.

Thank you for your attention. We are now ready to take your questions.

[The Chair, Conservative, John Williamson]

Thank you for the update on the modernization and your response to our report on last year's public accounts.

Turning now to the first round of questioning, I have Mr. McCauley.

In part, I think Mr. Huppé might have pre-empted some of your questions, but we'll go over to you, sir.

You have the floor for six minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, everyone, for being here. I'm afraid I cannot be there in person today.

Auditor General Hogan, I want to start with you on issues around transparency.

This year's public accounts were seven months after year-end. IMF guidelines are six months.

What would it take for us to get to six months for tabling?

[Karen Hogan]

It's an excellent question, which I know the Office of the Comptroller General and my office are constantly discussing.

With regard to advancing the publication timelines for the public accounts, I think Mr. Huppé mentioned a few elements that impact that. I guess the statement I would make is that it needs to be a joint effort between both the auditors and the financial statement preparers, so we both become more efficient and effective. It means that deadlines all across the government need to move up, or that efficiencies need to be found in publications.

[Kelly McCauley, Conservative, Edmonton West, AB]

Barring an election year, is it doable by September 30?

[Karen Hogan]

I'm going to look to Mr. Huppé.... I believe it's doable if we both work hard at it, yes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Huppé, then why did it take five weeks—35 days—between the Auditor General's finishing on September 12 and its being finalized by the Receiver General?

[Roch Huppé]

We obviously have to produce the e-document that is e-tabled. We have to produce what we call an html. Really, that is the five weeks it takes right now to make every table, and we have close to 2,000 tables that are fully accessible.

We've already started to work with some key stakeholders to try to find efficiencies within that five-week period. That will be helpful in enabling us to bring that date back.... However, sadly, right now those are the time limits.

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay. It seems like an excessive amount of time, 35 days, in this digital world. Then there were another 10 days before it was tabled in the House, so that's 45 days for finishing.

Mr. Huppé, just on the transparency bit, we still have not seen the departmental results. I consider them almost part and parcel of public accounts. When will we see those?

[Roch Huppé]

I don't have an exact date for that, to be honest with you. That's not part of my office.

What I can tell you is that they're being worked on right now.

[Kelly McCauley, Conservative, Edmonton West, AB]

Is it a political decision or a bureaucratic decision to release them?

[Roch Huppé]

I'm sorry?

[Kelly McCauley, Conservative, Edmonton West, AB]

Is it a political decision—when they're released—or is it one within TBS?

[Roch Huppé]

I think there are multiple aspects to that.

Obviously, they need to be ready, quality reviewed, etc., and gathered and produced. As I said, there is no legislative requirement as to a date of release, compared to the public accounts, which have a specific date.

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes, that's interesting. It's disappointing that we would fall back on, “Well, it's not required,” as opposed to doing it automatically for transparency.

I just want to switch topics over to.... I know we have a report coming out in a couple of weeks regarding CERB, CEWS, overpayments and payments to those ineligible. What is the government's exposure there, for these overpayments for the CEWS and other COVID payments?

[The Chair, Conservative, John Williamson]

Mr. McCauley, who is that directed to?

[Kelly McCauley, Conservative, Edmonton West, AB]

That is directed to Mr. Huppé, if he has that, and if not, to Attorney General Hogan or to the Department of Finance.

[Roch Huppé]

Madam Hogan is actually in charge of that audit, which will be tabled shortly.

What I can tell you is that if you take a look in the public accounts right now, at the registered receivables for overpayments as they relate to the support measures, you would see there is $5.1 billion.

That said, I want to make the point that this number is obviously not the final number. There is a lot of work being done more specifically by ESDC and the CRA to get to that.

[Kelly McCauley, Conservative, Edmonton West, AB]

Right, recouping...so it could be considerably lower, but could it be higher?

[Roch Huppé]

Yes, I would say that it will be higher than $5.1 billion, to be honest with you.

[Kelly McCauley, Conservative, Edmonton West, AB]

Will it be materially higher, or just a bit higher? I realize—

[Roch Huppé]

The CRA and ESDC are doing that work. As I said, our job at the OCG is to prepare the books. This year, based on the information that was out there, what needed to be recognized—and what was identified by these two organizations—was $5.1 billion at the moment.