Public Accounts Committee on Dec. 6th, 2022

[Karen Hogan]

We looked at the timelines for when all of this happened. The government waited for the vaccine task force to make a recommendation about which vaccine companies were more likely to have viable vaccines. That recommendation was made by the vaccine task force in late June, and the first agreement was signed in late July. The delay was mostly in waiting for the right recommendations. That is how it was explained to us by the department.

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

Global News had an article on August 27, 2020, with the headline, “China blamed for Canada's multimillion-dollar coronavirus vaccine deal collapse”.

I would like to read a couple of quick quotes from the article. It says, “This week Canada’s National Research Council (NRC) announced it has abandoned its partnership with Chinese company CanSino Biologics, because China’s government continues to block shipments of vaccine materials to Canada.” It then goes on to say:

The NRC—which is part of the Minister of Innovation, Science and Industry—has received about $44 million since late March to upgrade its production capacity in Montreal in preparation for materials expected from CanSino.... “With the funding received from the Government of Canada on March 23 and April 23 [2020], much work is under way at NRC”.

Are you able to offer any insight as to why, in the spring of 2020, this government seemed to be so exclusively focused on CanSino, while the U.S. government was signing deals with Johnson & Johnson, AstraZeneca and all the rest of them?

[The Chair, Conservative, John Williamson]

You have time for a brief answer.

[Karen Hogan]

We did not look at the deal with CanSino in our audit. We focused on the seven companies recommended by the vaccine task force as being the most likely to have viable vaccines. I can't comment on that any further, as we did not audit it.

[The Chair, Conservative, John Williamson]

Thank you.

Mr. Dong, you have the floor for approximately three minutes.

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

Thank you, Mr. Chair.

Hi, Auditor General. It's good to see you.

I didn't have time to read the report word for word, but I have a pretty good understanding of it. Thank you very much for it.

The section where you talk about this incentive takes me back to 2020. You know, I can't remember another time in Canada when Canadians profoundly understood that taking care of each other meant taking care of one's own family and neighbours. They would go the distance to deliver a mask, a free meal and even money to help one another. That was because people truly understood it was a matter of life and death. The government had to step up, and they themselves were stepping up to help one another.

Previous studies have shown that...international institutions said, had Canada not taken any measures against...or taken limited measures, like our allied countries did—the United States and so on—we would have seen a death rate at least triple what it is now. What it is now is close to.... I checked the fifth update. It's 48,000. That's 100,000 more, had Canada not taken any measures.

Looking back...people have to ask whether, had we known the information we have now, we had a choice between 100,000 randomly chosen Canadians' lives and billions of dollars. It's a tough decision, but I think we all know the answer. That's why the opposition and government members all came back, in an emergency meeting, and quickly passed legislation to allow the government to start spending some of the relief money. There was earlier testimony that it achieved its objective.

At a time when, as we knew, there were very limited tests for applicants for any relief packages, did you foresee how postpandemic or post-payment verification could be a problem, afterwards? Did you, at the time, think about how, if you give money so easily, it may create a problem later on?

[Karen Hogan]

I would even go back as early as my nomination hearings in May 2020. I was asked questions about the government's approach. At that point in time—and I continue to hold this view—the government took the steps it needed to take to support Canadians and businesses. However, decisions to limit prepayment controls need to come with rigorous post-payment work. That's just good, prudent use of public funds, in order to demonstrate that you vetted and made sure those who were eligible received the money.

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

Did you provide detailed how-to recommendations about what could be done ahead of time to ensure that post-payment verifications could be done—

[Karen Hogan]

I would point you to my first two audits in 2020, on the Canada emergency response benefit and the Canada emergency wage subsidy, in which we looked at the design and the rollout. We talked about the need for rigorous post-payment work because of how the programs had been designed and rolled out. Both of the departments at that time committed to completing their plans, and that they would be comprehensive. We're just not seeing that happen now.

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

I also remember you pointing out at the time that these were necessary for the unusual times.

You said earlier that high risk indicators were identified. Were these indicators set by CRA or by your office? When was that done?

[Karen Hogan]

This was during the work on the COVID relief programs. We took the entire database of individuals who received the Canada emergency response benefit and compared it with two years' worth of tax returns. Then we went through the eligibility criteria. When we found indicators that individuals were not eligible, we flagged those.

Those are the amounts that are accumulated here in our report. This is the work we did around the individual and business payments.

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

You set those indicators, not the CRA.

[Karen Hogan]

I didn't set the indicators. I held the government to the eligibility criteria that it established in the programs.

[The Chair, Conservative, John Williamson]

Very good. Thank you, Mr. Dong.

We're getting short on time. I'll try to get to a few more folks who have their hands up.

I'm going to jump to Madame Sinclair-Desgagné, who has been very patient, and then Mr. Genuis.

You have the floor for just two minutes, because time is flying.

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

Thank you, Mr. Chair. I will try to be brief.

Ms. Hogan, during your audit, discuss the underlying reasons for the overpayments with the Canada Revenue Agency? Was the agency able to assess how many people were overpaid in good faith, versus the number of people who knowingly took advantage of a loophole?

[Karen Hogan]

It's hard for the government or our office to come to any conclusions on those issues without doing post-payment audits. It's really those audits that will determine whether the payments were made in good faith and whether the individuals and businesses were indeed eligible.

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

In your opinion, at its current pace, will the government be able to do all the necessary follow‑up?

[Karen Hogan]

That's a lot of work. As we mentioned in our report, for the Canada emergency wage subsidy, audits take time and resources. That's why I recommended that the plan be comprehensive, so as to better estimate and determine the resources needed.

There is also a prescribed timeframe for conducting the audits, as the deadline under the law to notify individuals and businesses must be met.

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

That's right, they have 36 months.

Do you think the government will at least have time to go out and get that information, to understand the situation and analyze its performance?

[Karen Hogan]

It's hard for me to say how hopeful I am that they will manage. For some payments, the deadline is approaching. Now is the time for the government to step up the pace of what they're doing.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Genuis, you have the floor for two minutes.

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

Chair, on a point of order, I would like to move the session in camera, because there are some detailed questions I need to ask.

[The Chair, Conservative, John Williamson]

That will require a vote of the committee.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

On the same point of order, a member can't move a motion if they don't have the floor. You don't have the floor if you raise a point of order.

[The Chair, Conservative, John Williamson]

That's a very good point. Yes. Thank you very much.

You can't move a motion on a point of order. We can consider that in a few minutes, but first let's hear from Mr. Genuis. We can come back to you.