Evidence of meeting #86 for Public Accounts in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was billion.
A video is available from Parliament.
1:05 p.m.
Deputy Minister, Department of Finance
I might ask Ms. Dancey if she has any specifics on that, but it looks like—
1:05 p.m.
Deputy Minister, Department of Finance
Yes. I'd be happy to share that with you.
1:05 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
The government has talked about putting a cap on oil and gas emissions. Has Finance looked at what the cost to the treasury and to the economy would be if the growth engine of our economy, which is our oil and gas sector, had a forced cap put upon it?
1:05 p.m.
Deputy Minister, Department of Finance
From an economic standpoint, the questions we would look at are what the nature of a cap is and what the time frame would be for putting it in. You could cap it at different levels.
1:05 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Has Finance done a study on what a cap would cost to...?
1:05 p.m.
Deputy Minister, Department of Finance
I don't have any specific studies. No.
1:05 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Okay.
AG Hogan, I'm going to zip over to you quickly. I want to follow up. There was a media report the other day entitled “CRA claws back $458 million in pandemic-era wage subsidies after partial audit”. This goes back to your report, in which you were showing.... I think it was on the low side. Your report said $27 billion in ineligible subsidies and payouts.
I'm wondering if you have reconciled this at all with CRA. Is CRA still sticking to its guns that it's a much smaller amount? Has it been reported, or do you still believe—as it has been told to this committee—that $27 billion in improper payments is on the low side?
1:05 p.m.
Auditor General, Office of the Auditor General
In our report on the COVID benefit programs, we identified that $4.6 billion had been paid to ineligible individuals, and that it should be followed up on. The $27.4 billion was potentially ineligible to both businesses and individuals. About $15 billion of that related to wage subsidies to businesses.
On the report that the Canada Revenue Agency recently released, following up on some of its postpayment work, as I mentioned previously, I really focused in on what was linked to our work. I felt it was potentially misleading for a reader. The Canada Revenue Agency commented that it followed up on 53% of the businesses that we had identified in our $15 billion of potentially ineligible payments, but the majority of those were not done through postpayment work.
My concern—
1:05 p.m.
Conservative
The Chair Conservative John Williamson
That is your time, Mr. McCauley, but I know I'll be back to you.
Turning now to Ms. Yip, you have the floor for five minutes, please.
1:05 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
Thank you.
This is a question for Mr. Huppé.
Last year, the public accounts were revised due to a court decision. Were there any large settlements to manage again this year?
1:05 p.m.
Comptroller General of Canada, Treasury Board Secretariat
The answer is no. The reopening was actually two years ago, in 2021, but there were none this year.
1:05 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
Ms. Hogan, I'm going to refer to your opening statement, in which you said that the auditor's report is now longer, as it's required to include key audit matters.
Can you expand a bit more on that in terms of what key audit matters are?
1:05 p.m.
Auditor General, Office of the Auditor General
This was a new auditing standard that was required for all listed entities. A listed entity in this case would be the Government of Canada, because the bonds of the Government of Canada are quoted on a stock exchange and publicly traded. We are required to now comply with this new standard.
It's meant to help the users of the financial statements. This committee and Canadians know where we focused our efforts.
What matters during the audit of the Government of Canada's financial statements do we think are of such importance that we spend a great deal of time looking at them? It could be for different reasons, including whether there are large estimations involved in it or lots of assumptions, or whether the use of an external expert is needed to assess the values.
Some of the examples that we would have raised as key audit matters are around the estimation of tax revenues or the estimation of long-term pension and employee future benefits liabilities. Asset retirement obligations are a brand new standard this year.
It really is just to raise awareness for the readers of where we focus our efforts around our work as we provide an opinion on the government's financial statements.
1:05 p.m.
Liberal
1:05 p.m.
Auditor General, Office of the Auditor General
Our commentary is an area where we either identify opportunities for improvement or want to help the users of the statements and this committee understand how to interpret the financial statements. We also talk about emerging issues that are coming—for example, the need to focus in on better and more comprehensive reporting around environment, social and governance matters—or we would highlight that there are weaknesses in internal controls around inventory management or pay.
The key audit matters in our audit report are just to show you where we focus our efforts and what are the most significant to our audit. It doesn't necessarily mean that all of those areas will have an observation or opportunity for improvement. The two documents serve two different purposes.
1:10 p.m.
Auditor General, Office of the Auditor General
There are so many standards emerging in Canada and internationally around reporting on climate-related matters and social governance. I think many Canadians would expect that corporations, Crown corporations, regular business and the government would start reporting on that.
Those standards are evolving. We highlighted some areas where we're seeing that Crown corporations, for example, this year—large ones—are starting to report on how they managed risks related to climate.
Do I think the government has an opportunity to be a leader in this space? Absolutely.
Standards are not out there yet, but there are examples to look at internationally that could be used as models. There are always opportunities for improvement to discuss how the operations of the government impact the climate, and how the government manages those risks and portrays them in their financial statements.
1:10 p.m.
Liberal
1:10 p.m.
Auditor General, Office of the Auditor General
I think countries that follow international public sector standards versus Canadian public sector standards have a requirement to start talking about the risk frameworks around climate risks and how they manage those climate risks. There are many countries out there that the federal government could look to, but as I say, Canadian standards are still in their infancy stage of being developed.
1:10 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
What's the difference between a “writeoff”, “forgiveness”, “remissions” and “waivers”?
1:10 p.m.
Auditor General, Office of the Auditor General
There are a lot of technical questions there, and I think I'm going to tell you that the comptroller general would be much better at explaining the nuances to you. Rest assured that we look at how they're estimated and whether they're properly recorded and reflected in the statements.
I think Mr. Huppé can help you to understand all of those terminologies.
1:10 p.m.
Comptroller General of Canada, Treasury Board Secretariat
Okay. Very high level, it has some complexities to it, but in a writeoff, you have the intention to collect. You had someone—your supplier—there's been an overpayment and you're looking for your money. For different reasons—the person is deceased, there's bankruptcy or you cannot locate the person who owes you money—you may want to do a writeoff. The writeoff doesn't extinguish the actual debt. If something changes, you may still be able to recover.
For forgiveness and remissions, those are areas where the criteria are for fairness perspective, and for compassionate reasons you may not want to collect something. If you want to remove that from your books, you're going to have to do a remission or forgiveness. In a nutshell, that extinguishes the debt officially.
1:10 p.m.
Conservative
The Chair Conservative John Williamson
Thank you very much.
Ms. Sinclair‑Desgagné, you have the floor for two and a half minutes.