Public Safety Committee on Oct. 19th, 2017

[The Chair, Liberal, John McKay]

I will call this meeting to order. This is meeting 78 of the Standing Committee on Public Safety and National Security and we're studying Bill C-21 pursuant to the order of reference dated Wednesday, September 27.

In the first hour, we have with us the Auditor General of Canada, Mr. Michael Ferguson.

Sir, I'll ask you to make your remarks and introduce your colleagues.

The floor is yours.

[Michael Ferguson, Auditor General of Canada, Office of the Auditor General]

Thank you.

Mr. Chair, thank you for this opportunity to discuss Bill C-21, pertaining to the Customs Act. Joining me at the table are Martin Dompierre and Nicholas Swales, the principals responsible for our two recent audits that touched on the subject matter of this bill.

In 2016, we issued a report on the Beyond the Border Action Plan, and in 2015, we issued a report on controlling exports at the border.

Mr. Chair, I'll summarize for the committee our relevant audit findings related to the Customs Act. However, it's important to note that our audit work on the Beyond the Border action plan was completed in September 2016 and our audit work on controlling exports was completed in August 2015. We haven't conducted further work on these topics since then.

In December 2011, Canada and the United States released the perimeter security and economic competitiveness action plan, better known as the Beyond the Border action plan. The action plan consisted of 34 initiatives aimed at establishing a long-term partnership between the two countries to enhance security and accelerate the legitimate flow of people, goods, and services across the border.

We estimated that these initiatives had a total planned spending of over $1.1 billion, of which approximately $585 million had been spent as of March 2016. The audit examined the progress made by departments and agencies in meeting the commitments set out in the action plan and in achieving results toward the intended benefits. We also looked at how Public Safety Canada reported on progress, performance, and costs in its annual reports.

The action plan had several initiatives that focused on enhancing security. Of the $700 million that departments and agencies had planned to spend on them, approximately $410 million was spent as of March 2016. However, departments and agencies faced challenges in completing a number of the initiatives and they couldn't demonstrate that they had improved security at Canada's borders. Even when departments and agencies met their commitments for certain initiatives under the action plan, they achieved limited results toward the intended benefits. They also had few performance indicators to use to assess results.

One of the security initiatives that wasn't completed was the entry-exit initiative. The initiative, which had a budget of $121 million, is intended to allow the Canada Border Services Agency to track who enters and leaves the country. It was initially planned to be completed by June 2014. As of March 2016, $53 million had been spent, but the initiative couldn't be fully implemented under current legislation that doesn't allow the exit information of Canadian citizens to be collected, used, or disclosed.

Without new legal authority, the Canada Border Services Agency cannot achieve the initiative's security benefits. For example, the ability of the agency and law enforcement to identify and prevent high risk travellers from leaving or attempting to leave Canada is currently limited.

Let me turn now to the issues of controlling exports.

Exports are vital to Canada's economy, but some are controlled to achieve a range of policy objectives, such as protecting Canadians' safety and security. Although several federal entities play a role in controlling exports, the Canada Border Services Agency is the last line of defence to prevent goods that contravene Canada's export laws from leaving the country.

Our audit focused on whether the agency had the necessary information, practices, and controls at the border to enable it to implement its enforcement priorities, prevent the export of goods that contravened Canada's export laws, and facilitate legitimate trade.

We found weaknesses in the information, practices, and authorities the agency applied to assess export risks, assign its resources, and act on its priorities. As a result, the agency missed opportunities to stop some goods that did not comply with Canada's export control laws from leaving the country.

Limitations on its authorities posed a particular challenge for the agency in examining shipments that were not reported on export declarations. The agency could not open such parcels at random as it could for imports or exports reported on declarations. Agency officials believed this reduced their effectiveness in preventing the export of illegal drugs. The inability to open shipments at random also meant the agency could not assess the level of compliance for non-reported shipments.

The bill before you today includes provisions about the two legislative limitations we raised in our reports.

Mr. Chair, this concludes my opening remarks.

I hope our audit findings will be of assistance to the committee in its current review.

We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Liberal, John McKay]

Thank you, Mr. Auditor General.

I will now give the floor to Mr. Picard for seven minutes.

[Michel Picard, Liberal, Montarville, QC]

Thank you, Mr. Chair.

Mr. Auditor General, thank you for being here. It's always a pleasure to have you here, and we look forward to your recommendations because your advice is always well targeted, and very well thought out.

Earlier, among other things, you mentioned an issue with the computer system that did not allow you to determine whether security had improved at the borders. What is the basis for your assessment of our current security? Can your examination provide us with an assessment of the current level of security? Is it so insufficient that we need to put in place a computerized system—which still seems to be deficient on performance indicators—to allow us to have adequate security? Is our security adequate, given that the initiatives taken here aim to improve what is considered to be a sufficient level of security at the borders?

[Michael Ferguson]

Thank you for your question.

I am going to answer one part of your question. Then I will ask Mr. Dompierre to add his comments.

First, the audit showed a possible deficiency regarding how performance was measured pertaining to security at the border. We noted that a $1.1-billion budget was allocated to all of these projects, and that it was important that there be some way of measuring the results and the performance. Moreover, we noted that there was a lack of information on this.

I will ask Mr. Dompierre to add some details in this regard.

[Martin Dompierre, Principal, Office of the Auditor General]

The purpose of the audit was not to examine the current state of security, nor to compare the before and after. As Mr. Ferguson said, our goal was to see how the departments and agencies implement performance measurements to show that they have achieved the objectives of the Beyond the Border Action Plan. There were 34 initiatives in total, a certain number of which concerned travellers, exports and imports, as well as security.

In the context of what you are studying today, entries and exits, this was an initiative pertaining to security, and we concluded that performance indicators were insufficient to allow the departments or agencies, among others the Canada Border Services Agency, to report on progress regarding that initiative.

[Michel Picard, Liberal, Montarville, QC]

For the moment, we do not have a base assessment that would allow us to establish that there has indeed been progress. If our security is extremely deficient, the smallest advantage would be progress. But our security is on par with that of most of our five allies, the Group of Five. Our security is more than adequate, it is even very good. Progress is small, but there nevertheless.

We do not have that assessment at this time. Moreover, from the time the computer system was installed, the absence of performance indicators, among other things, did not allow us to see whether there was any progress.

[Michael Ferguson]

Once again, the purpose of the audit was to establish whether these organizations had the capacity to measure the success of their measures in connection with these projects. So it was not our audit's goal to determine the level of security as such.

The purpose of these initiatives was to improve some aspects of security at the border. And so we wanted to determine whether the department or organizations concerned had ways of determining whether security had improved.

Mr. Dompierre could perhaps add a few words.

[Martin Dompierre]

What we wanted to point out is that the performance measures were not in place to demonstrate that results were achieved. That said, that does not necessarily mean that the agency is not aware of the security parameters that exist. We really focused on these particular initiatives.

[Michel Picard, Liberal, Montarville, QC]

So in establishing performance measures, the procedures were followed, and afterwards, people realized that the performance seemed deficient.

I expect that before the systems were put in place, there were specific objectives, so that after this system was implemented, they could assess whether those objectives had been reached. This would lead to the conclusion you have presented. However, it seems there is still work to do. Am I mistaken?

[Martin Dompierre]

Thirty-two performance indicators are indeed going to be put in place after the complete implementation of the initiative.

[Michel Picard, Liberal, Montarville, QC]

Very well.

[Martin Dompierre]

Afterwards, the agency will be able to gather the information and report on the results.

[Michel Picard, Liberal, Montarville, QC]

One last point concerns me regarding exports, and the fact that we may have let a certain number of products through, although their export may have been prohibited under some customs laws.

Is the inability to adequately verify shipments that leave Canada due to the entire implementation process or to information technologies? In his testimony, the union president talked about a lack of resources. Could that in part explain why we can't manage to search the shipments sufficiently?

[Michael Ferguson]

I will answer again, and ask Mr. Swales to add details.

We did note that there aren't many resources allocated to inspecting exports at the border, because this may not be a priority for the agency, since its priority is imports.

Mr. Swales can probably add some details.

[The Chair, Liberal, John McKay]

Please be very brief.

[Nicholas Swales, Principal, Office of the Auditor General]

In our 2015 report, we discussed two points related to what you've raised.

First, the computer systems were not very useful in targeting exports. That was certainly a problem.

Afterwards, we also noted that a significant percentage of targets, even when they were identified using the information systems, were not inspected by the field officers. That was partly due to the fact that there were not enough agents available when those exports were about to leave the country. The officers who were on holiday, for instance, were not replaced. That meant that even if a target was identified...

[The Chair, Liberal, John McKay]

You'll have to work those answers in when responding to another question.

Mr. Paul-Hus, you have seven minutes.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Good morning, gentlemen.

Mr. Ferguson, when I read your reports yesterday, my first reaction was to be somewhat scandalized at the waste of public funds, once again. Action plans like Beyond the Border were put in place to ensure extraordinary efficiency. Now we see that we are wasting more than $1.1 billion. According to what I understand, there is currently some waste going on.

I'd like to get to the root of the problem. We invest a billion dollars and at the end, things don't work, or not very well. Is this a structural problem having to do with the organization? Will Bill C-21 solve everything, as by magic, and make everything work well in the future?

I think that Bill C-21 is an important contribution to improving the system. However, is there something else causing the problems that we should be aware of?

[Michael Ferguson]

We did detect a few issues. For instance, we discovered that certain initiatives were lagging behind and that the deadlines were not being met. We also noted that it was necessary to complete all of these projects before obtaining all of the benefits and results expected from them.

Moreover, we discovered a few situations where the lack of authority prevented projects from being implemented.

Perhaps Mr. Dompierre could add to my answer.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

When you speak of a lack of authority, do you mean legal authority, or the authority of the personnel there?

[Martin Dompierre]

For instance, in the case of the Entry/Exit Initiative, we meant the legal authority to pursue phase III, the land phase, and phase IV, which concerns air carriers.

Remember that the Beyond the Border Action Plan is a partnership with the United States. And so it requires a lot of collaboration and discussions with our partners. It involves 18 departments in total, nine of whom played a leadership role in implementing initiatives.

As you mentioned, the total budget was $1.1 billion. However, in March 2016, the investment was $600 million. Of course, there were delays for various reasons. In the case of the Entry/Exit Initiative, these were mostly due to a lack of authority allowing people to communicate information to our partners.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Today, we are discussing Bill C-21.

Do you think that this bill, as it stands, will improve efficiency and allow several problems to be solved? In your opinion, are there elements in the bill that should be improved?

[Michael Ferguson]

I cannot make comments on details in the bill.

We identified a problem regarding the lack of authority pertaining to the Entry/Exit Initiative, for instance. And so we reported that problem in the audit. It is important that the agency have the necessary authority to communicate information in the context of that initiative.

Our role is to perform audits. Perhaps we could in future do a follow-up to our audit and determine whether the new act does indeed solve these problems. However, it is not really our role to give our opinion on bills.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Fine.

This year, you prepared a report on the prevention of corruption in immigration and border services. You spoke about a corruption issue, or about the risk of corruption. You mentioned that neither Canada Border Services Agency nor immigration services had adequately examined what could happen.

Based on your observations, is this a major concern? Could it have repercussions on the future legalization of marijuana? Is it possible that some Border Services Agency employees could collude with certain groups for the purpose of trafficking, for example?