Is there anybody else?
Okay, no problems. So we'll wrap this up 15 minutes early and then go into a business session.
With that, if there are no further interventions we'll move forward and welcome all of our guests today. There is quite an array. Welcome, all.
Ronnie, I'll ask you to start with your delegation from the AG's office. Then, whoever is most senior, if you'd take responsibility for introducing your colleagues that would be much appreciated.
Mr. Chair, thank you for the opportunity to discuss chapter 1 of our report on Canada's economic action plan. I am accompanied today by John Affleck, the principal on this audit.
As you are aware, the economic action plan was launched in January 2009 in response to the global economic downturn. The plan was intended to stimulate the economy through measures that injected $47 billion in federal spending of public dollars into sectors of the economy and regions of the country in need. This is the second audit of the economic action plan carried out by our office.
Both audits examined programs largely related to infrastructure. In the first audit, tabled in October 2010, we found that the projects we tested met the eligibility criteria established by the terms and conditions of the different programs included in our audit. We also found that government departments and agencies expedited the implementation of economic action plan programs.
To speed up project approval, this department has relied on the attestations of organizations and provinces that projects were construction-ready.
At the time of our first audit we observed that some projects were not construction-ready, despite the attestations, and raised the concern that completion deadlines would not be met.
In the second audit we audited three programs that had been part of the first audit: the infrastructure stimulus fund, knowledge infrastructure program, and community adjustment fund. Together they provided stimulus funding totalling $7 billion.
We examined whether selected federal departments and agencies had monitored progress and federal spending, including whether projects were being completed as intended, had taken corrective action where necessary, and had reported monitoring information to Parliament through departmental performance reports.
We found that the federal entities monitored the progress and spending of projects, permitting them to take corrective action in a number of cases. And, despite deadline extensions, the three programs in our audit largely achieved the economic action plan objective to spend federal resources within the two-year time frame.
Departmental data we examined showed that some stimulus projects were progressing slower than expected and were at risk of missing the March 31, 2011 deadline. At the same time, the government was being pressured by municipalities, among others, to allow more time for projects to be completed.
Accordingly, the government reconsidered the deadline for selected economic action plan programs, and it announced the extension of the funding deadline to October 31, 2011 for four infrastructure programs. We found that extensions were supported by an analysis done by the Privy Council Office and the Department of Finance Canada.
Mr. Chair, many projects in both the infrastructure stimulus fund and the knowledge infrastructure program were extended. At the time of our audit, final claims and close-out reports had not yet been submitted. We believe that enough time has passed now for both Infrastructure Canada and Industry Canada to know the total federal spending and final results for these projects.
In the second audit we found that the presentation of the economic action plan performance information in departmental performance reports was fragmented. This made it difficult for parliamentarians and Canadians to obtain an overall picture of results achieved against performance expectations and public resources spent.
Mr. Chair, the significance of $47 billion in federal spending calls for transparent reporting to Parliament on overall stimulus effects. We recommended in our first audit that central agencies prepare a summary report to Parliament at the conclusion of the economic action plan that includes a detailed account of its impact on the economy. The Privy Council Office and the Department of Finance agreed.
Your committee may want to ask the Privy Council Office and the Department of Finance to elaborate on the plan and timeframe for reporting to Parliament on the delivery and economic impact of the economic action plan.
Mr. Chair, this concludes my opening statement. We'll be pleased to answer any questions your committee may have.
Okay. It has been the practice, though, even if that's all you said to provide some opening remarks so we have a balanced starting point. We're very straightforward folks; we like things nice and simple and straight.
In the future--and please pass this on to your colleagues--there is an expectation of at least some cursory remarks; usually it's in depth, but if not, at the very least, we'd appreciate some kind of presentation. We'll let it go this time, but I don't think it's right that we have all these folks and there's not one comment from the government side of things.
All right, that being the way it is, we will begin a rotation. Unless there's an intervention, we will begin with Mr. Saxton.
You have the floor, sir.
Thank you, Mr. Chair, and thanks to all our witnesses for being here this morning.
Canada's economic action plan was an enormous undertaking, as was mentioned, $47 billion worth of projects, over 20,000 projects, some have said as many as 26,000 projects across the country. It was unprecedented in size and scope, at least in peacetime Canada, and thousands of jobs were created in the process as well as thousands of projects, which will benefit Canadians for generations to come.
My first question is to the Treasury Board. Can you explain how Treasury Board prepared for this enormous undertaking, especially when it came to approvals of funding for these projects?
We had our unique challenges at Industry Canada, in that we had never run an infrastructure program before, so we had some basic set-up to do that others didn't. We got tremendous support from Infrastructure Canada, which took us through some of the unique requirements of running an infrastructure program. As the Auditor General noted, we also reached outside and hired expertise in monitoring construction activities and that kind of thing, which we didn't have internally. We also depended on our regional staff to follow individual projects and report back, as well as the engineering company that we had engaged.
Thank you for the question.
As you can appreciate, the Privy Council Office has a coordination role in working with departments and also plays an advisory role, both to the and in support of cabinet decision-making.
In the context of the economic action plan implementation, we had a regular process of receiving updated information from the project delivery departments, or those departments responsible for delivering the programs, and we had, working with our finance department colleagues, a process of regular monitoring of the progress in those projects, with a view to being able to assess the progress being achieved and to assess the completion prospects, if I can put it that way, and assess the likelihood of projects being able to be completed by the deadline. So it was on the basis of very detailed information that was provided by the program managing departments that we assessed that progress and provided an assessment to the government of the progress being achieved, and an assessment of prospects around potential deadline extensions.
Thank you, Mr. Chair. I would also like to take this opportunity to thank the witnesses appearing this morning.
Program administration has an accounting aspect and a performance evaluation aspect. The auditor's report indicated that, with respect to the economic action plan, the design of this program did not allow for proper assessment of the main objective, which was job creation.
Given the importance of this objective in the recession, could you tell us more about the problems encountered and indicate why no measures were in place? What was missing in the design of the program?
Comments about not being able to gather job information are in relation to one program, the community adjustment fund. I think it's important to separate that from the broader question of assessing the impact of the economic action plan on the Canadian economy. That broader analysis has yet to be done, and the government has said that they're going to do it. So that's important.
As to the community adjustment fund, that program was designed to generate and maintain jobs. We think it's a bit of a missed opportunity, in that they didn't gather the information necessary to do it right. But doing that for the program wouldn't have allowed the government to do the impact analysis on the overall economic action plan. That's still to come and it's an important part of this story.
Thank you for the clarification. However, as you said, the objective of the community adjustment fund was job creation.
In your opinion, and with these clarifications in mind, is it normal that a strategy to evaluate the objective or attainment of the objectives was not established first, not necessarily for this program, but in general?
As an auditor, do you believe that is the usual and standard practice?
Let me go back to the original question about assessment. While the Auditor General's office is correct that the final report on economic assessment is still to be drafted, I would point out that there have been a number of assessments done while the program has been in place. There have been seven reports that have looked at the economic action plan and its impact on jobs and projects. Three of those had an assessment of the job impact based on a macroeconomic model.
So while there was information gathered at the project level, which provided concrete examples of jobs in particular projects, we determined early in the process, similar to what was done in other jurisdictions such as the United States, that the model-based approach was the best way to look at the direct job impacts, the indirect job impacts associated with the project, and also the induced impacts.
I think it's also important to remember that the economic action plan wasn't entirely project-based. There were a number of significant measures, such as the home renovation tax credit, that were not part of a project-based approach but also contributed significant stimulus to the economy through job creation.
Thank you, Chair, and welcome to all of our guests here today.
I can recall sitting in the House, and the government certainly made a decision, and I might add that it was generally supported in Parliament as well. The bottom line was there was a designated need for speed, probably an unprecedented ask to the infrastructure, industry, and finance departments, certainly since the time I've been here.
At this point, I think a phenomenal number of kudos have to go out to everybody involved who made this such a tremendous success over a short period of time. The challenges were daunting, the scale and scope was absolutely aggressive. For all the departments to come through in such a manner, let me just say, on behalf of the Canadian people—I know I can speak on behalf of my riding—thank you very much for a job very well done.
My concern, of course, is are you now going to be a victim of your own success? Because you did such a great job on this, some people are saying why don't they do that all the time; why can't we just move at that speed and that rate of success when the normal sort of process of government sometimes appears to be a snail's pace?
There are lessons to be learned from this, hopefully, for all of us—parliamentarians, certainly. But I would also hope that departmental influences can take the positives from this and perhaps put that into some measure of definable policy going forward.
I want to speak briefly on the knowledge infrastructure program. I know my colleague Mr. Dreeshen, who has a strong background in that, will focus more clearly on that, because that's his field of expertise.
We've all had successes. I have Loyalist College in my riding, where for the first time we took applied research out of the university domain and dropped it down to another level. We did some announcements at Kingston too, where I saw a process as a result of this kind of stimulus.... As a matter of fact, the professor was Dr. Philip Jessop at Queen's at the Green Centre. The organization committed funds from the program. Even now they're in a pilot process in which they can potentially eliminate tailing ponds.
So I can assure you the reach goes beyond simply a significant number of jobs now.
I'm really looking forward to the long-term examination of the results of this, and so are the Canadian people. I think they're going to be absolutely delighted.
My question would go to the Auditor General at this point. Sir, obviously I hold the departments in high regard for their delivery of this program. I would like your evaluation as to why they were able to deliver the success of this program in such a short period of time.
Going back to our first audit on the economic action plan, we identified a number of success factors. I think a big part of that was senior management attention. I think the senior bureaucracy was seized with this initiative. Sometimes in government you see early attention and then senior folks go on to other things and sometimes the energy gets lost, but that wasn't the case here. We saw lots of evidence that deputies were actively involved as a group and within their own departments.
Departmental audit committees were seized with this as well. There was good governance around it, and I think when you've got that amount of sustained attention from senior folks, it flows right throughout the whole organization.
Maybe I'll start and then my colleague from Industry Canada will add to my comments.
From our perspective, there were two things that really made this work. First, internal to the civil service, as the Office of the Auditor General noted, there was a tremendous degree of focus, where everybody understood this and everybody knew that this was the number one priority. There was a lot of collaboration that went forward. Approvals that often take six to eight months we got in three to five weeks. So the compression of that time period was tremendously important.
Second, from the perspective of the broader parliamentary context, I think there was a real clear understanding that this was an economic emergency, that there was no time to play games, so to speak. The leadership was very focused on the fact that this had to get done one way or another. It wasn't just about announcing Canada's economic action plan; it was about implementing Canada's economic action plan. So there was a real focus all around at all levels.
Thank you very much, Mr. Chair.
I would like to thank all our guests for being here. It is very much appreciated. I wish to congratulate you on your work. In general, the report is very positive. I wanted to point that out before asking questions.
In his introduction, Mr. Campbell mentioned that it may be pertinent to determine progress being made by departments in preparing their reports and when they believe they will be able to present their reports to the committee or to the Office of the Auditor General. I would like to give our witnesses an opportunity to tell us where they are on this.
I may have misunderstood the question, but if you're talking about reports to Canadians, as mentioned by Mr. Campbell, the government has committed to doing a final report on the economic impact of Canada's economic action plan. Once we had all the relevant information available for the four infrastructure programs that were extended to the end of October 2011, provincial partners had until the end of January to provide their final claims. It's my understanding that we have that information and we now have to verify it. Once those numbers are ready to go, the government will be in a position to determine when they will publish that final report they're committed to.
The final spending numbers will be available in the fall of 2012 for those four projects under the typical public accounts process.
We began to undertake a series of audits. In March 2009 the Auditor General wrote to the Secretary of Treasury Board outlining what we thought were the key issues public servants had to be concerned about, and they were the key issues we audited. So we started that process at that time. We did the first audit, followed through, and have now completed the second one.
The economic action plan was an enormous undertaking, with tens of thousands of projects. We felt that we could get the best leverage for Parliament by giving some assurance on how well they designed the program in the beginning, to make sure they met the issue of timeliness. I think it's important to recall that when the economic action plan was conceived, timeliness was the primary issue. There was a concern that if government were to stimulate the economy, they had to do it at the right time. If they were too late, there were concerns it wouldn't have the same effect. So that's the path we followed.
In addition, many of those projects were proposed by provinces and municipalities, and many of them were paid on a cost-sharing basis. The federal government didn't pay the whole amount. So there was a bit of sharing the risk, where the provinces, municipalities, and federal government each put in one-third.
In order to have the economic action plan launched in a timely fashion, the federal government had to find a way to rely on the provinces and municipalities to identify what was important to them. So that's what they did. But the key objective of the economic action plan was timely stimulus. Each province has an auditor general, and I believe they're doing some work in this area as well, so perhaps they'll get into more of the details.
Thank you to all the witnesses.
It sort of amazes me that we talked about a plan where there were 35 federal department agencies, many programs that were developed through this, and it would seem to me that since 2009 there have been more than 600,000 jobs created. If you look to industrialized countries, I'm not so sure there are any that can actually say that, where they've come above where they were at the start of the recession.
I want to go back to the comment about how we evaluate this on a project-by-project basis. I'm going to be honest with you that I hope we don't. I'll give you an example. Whether it was in my riding in Lambton—Kent—Middlesex or others, you might have a transportation infrastructure program that actually created jobs at that time within our community, within the industry of the construction, to develop that. But we are now continuing to move ahead with trade agreements with countries, which means we're developing an infrastructure that will continue to grow, to use the development of our county's infrastructure, our commodities, and our primary resources. Those actual job creations are not just the one time to develop that, but actually it is a continuum that will create jobs, because that project is done, because we are developing trade, because of a number of things that are good for our community. So I guess my comment would be that I really hope we don't spend a lot of time trying to pinhole the projects, but let's look at this in a bigger context. Even though this was a temporary infusion in cooperation with provinces and territories and in fact municipalities, it was a temporary infusion that gives a global perspective for Canada that has been very successful.
I wouldn't mind asking Industry Canada just to follow up on those comments, because we did work with provinces and territories and municipalities. I'm wondering just how this was accomplished. Canada is a big place with different views, but it got accomplished for an end purpose, and I'm wondering if you can touch on that, either Mr. Dunlop from the Department of Industry or Mr. Sarantakis from Infrastructure Canada.
With respect to your comment, I think it's very important, because it's not just the initial jobs that were created during the course of the construction period. That was obviously the impetus for the programs and the impetus for the economic action plan writ large. But as you note, those jobs actually created infrastructure projects. In our case, at Infrastructure Canada, there were some 6,500 infrastructure projects that were financed under the economic action plan that will continue to create jobs into the future, whether they're roads, waste water plants, recreational facilities, highways, or broadband. These are the types of projects that we hope will help improve Canada's competitiveness and Canada's productivity over time.
While we're very proud of the front end, we think also there's a back-end story to be told over time, which is about the effects of those projects on Canada's economy.
I would add a little bit, Mr. Chair.
Obviously building the capacity of universities and colleges has a tremendous potential impact in the future. Mr. Kramp mentioned Capilano University as an example of that.
The areas that KIP supported included repair and maintenance, which maybe doesn't get the credit it deserves. We've had a number of institutions that are looking at significant reductions in their energy costs going forward, at a time when their provincial funding may be affected. That allows them to keep their activities going at a time when otherwise they would have to cut back on the education that happens.
The other areas we supported were building the teaching capacity of the universities and colleges—and there's no need to elaborate on the impact of that—as well as research capacity.
We're doing our best now that the final reports are coming in to measure those impacts, so that we'll have a good record of the overall impact of the $2 billion investment the people of Canada made through the federal government, but also the $5 billion investment that was made in total in KIP projects.
The messaging on this particular program seems to be coming here to this committee as a bit of a moving feast. If specific, short-term, immediate-impact jobs were not necessarily the entire end goal, if there were other values that had been equated into the overall evaluation and assessment of projects.... I want to this to be very specific to you, Mr. Sarantakis. Why wasn't the G-8 legacy fund, the $50 million that was approved by Parliament through the border infrastructure fund, incorporated within the overall scope of the community infrastructure program? Would that have been a better program to fund that $50 million initiative?
You used the border infrastructure fund, which was part of the overall economic strategy, the economic action plan, but what you did not do is.... You're now creating an environment here for the committee that in addition to short-term jobs, there was also long-term value that was created. You have not defined for Parliament any of the assessment criteria you used for that overall assessment.
I'll bite now on what Mr. Campbell asked us; I'll get more directly to the suggestion that Mr. Campbell made. When are you going to provide Parliament with an overall evaluation of the jobs that were created and the economic impacts that were provided by this program?
Mr. Campbell, you had no opening comments whatsoever to make in rebuttal to the Office of the Auditor General, so you agreed with the Office of the Auditor General's comments, in everything they put in their report. You have not yet provided Parliament with a specific and descriptive analysis of what criteria you used to determine eligible projects and what criteria you have used to determine the number of jobs. The government continually suggests that thousands of jobs have been created here, using absolute figures, absolute certainty that the program met its key objectives.
When are you going to provide that analysis?
Perhaps I'll start and then I'll turn it over to my colleague at the Department of Finance.
The stimulus programs were designed, as we noted, to be timely, targeted, and temporary. So the primary objective of the program was to generate economic activity rapidly. That being said, it wasn't just money being thrown away; it was money that was spent on infrastructure. Ancillary benefits of that were to create longer-term jobs.
With respect to reporting, my colleague from the Department of Finance has already noted that there have been seven quarterly reports to Parliament, but there's additional.
Just to follow up on your question, as I mentioned, in terms of tabling to Parliament, both budget 2009 and budget 2010 had the methodology for the jobs estimate that I mentioned, using the macroeconomic model. That methodology has been presented to Parliament on two occasions. It's also been elaborated in the reports to Canadians that I mentioned.
Coming back to the Office of the Auditor General's recommendation, which the Department of Finance and the government agree with, once the information is in place that a final economic assessment can be undertaken, that will be tabled as well and it will use the same methodology that we've mentioned--a macroeconomic base so we can look at the entire range of job creation impacts, not just at the direct project level.
Thank you all for being here. I appreciate your perspectives. I so appreciate that this was a collaborative effort and that this was an investment in the future of Canadians and it was made possible through the elasticity—you spoke about how you merged the policy elements.
Everybody did extra, and the result is that Canadians were incredibly well served. I was on the outside looking in when this happened, unlike some of my colleagues who were members of Parliament at that time, and as Jane Q. Citizen, I was impressed with the bureaucracy and the alacrity they showed. That came out loud and clear in everything I heard about it.
There's something I heard today I'm really interested in. Well, there are a few things.
By the way, compliments also to working in partnership with your provincial and territorial colleagues. I may get to that question as well, but first I heard from Mr. Nevison about the macroeconomic models you're using; it's rare for a chartered accountant to be interested in macroeconomic models, especially when so much audit stuff is going on. Could you elaborate on that? I think that's really important for us to hear. It's a way of extrapolating the results, and you were only able to touch on that in your response to another colleague. If you could take a moment, I would appreciate that.
As I mentioned, even though data was gathered at the project level, there was a feeling early on, based on previous experience and experience in other jurisdictions as well, that it's very difficult to get consistent job numbers across such a wide range of projects and project proponents. As I mentioned, using that bottom-up information doesn't capture things such as the indirect job impacts from a particular project. That would be the suppliers that the project proponent is subcontracting to or buying supplies from. An economic impact and job impact goes along with that.
There are also the induced effects. As economic activity is elevated in a particular region, incomes go up, and that has a positive impact on economic activity in terms of income.
Finally, as I mentioned in my earlier comments, there is also the important fact that the economic action plan wasn't entirely project-based. There were some very important elements, particularly in employment insurance benefits, for example, tax reductions that spread to the entire economy, so they couldn't be measured on a project-level basis.
Based on those criteria, we determined that the best thing to do in terms of determining the job impact of the economic action plan was to use our macroeconomic model. It has multipliers in it for each individual element of the plan, whether it be infrastructure, EI measures, or tax reductions. This multiplier gives you a sense that every dollar invested or a reduction tax has a certain impact on the economy in terms of GDP. The model can then translate that into an employment impact.
As I mentioned, we've used that approach throughout the process. We've tabled three particular assessments on the job impact. Our most recent was in January 2011 in the seventh report, and it was determined that the economic action plan created or maintained 220,000 jobs.
Obviously the Canadian economy has created much more employment than that since the trough of the recession. I think somebody mentioned 610,000 jobs since July 2009.
This is a way of isolating the impact of the action plan itself. A similar approach was used in the U.S. by the U.S. Congressional Budget Office, based on similar findings from the U.S. Government Accountability Office. They said they had the same issues with the project-level job information they received through their American Recovery and Reinvestment Act.
Finally, it was also validated by three private sector economists here in Canada to make sure that our multipliers were on the prudent side, relative to other models that were being used in other jurisdictions.
In a nutshell, that's the way we've approached it to get a sense of the overall impact of the economic action plan, not just the bottom-up approach.
It's all there? That's fantastic.
I also want to ask a question that is perhaps for Treasury Board or PCO, but who knows, maybe it's for all of you. There were comments made about how public servants work together.
Mr. Dunlop, you commented on your colleagues in the provinces. You commented on merging two functions.
You're here representing results-based management. I'm just fascinated—this is for whichever one of you wants to leap in on this—with lessons learned and how this project, which made a difference to all Canadians, will actually make a difference to the public service of Canada in terms of their service to Canadians and their capacity to better serve and perhaps more effectively and efficiently serve.
That's fantastic. Thank you.
Perhaps I'll start first with some comments and then turn it over to my colleagues at the Treasury Board.
In terms of this kind of cross-ministry collaboration, I think we as public servants would say that we endeavour on an ongoing continual basis to ensure that effective coordination, integration, and collaborative work does take place in the discharge of all the business that we do on behalf of the Government of Canada. In the circumstances of the economic action plan, I think there were some unique features that perhaps brought that behind-the-scenes work into a kind of public spotlight, as it were.
My colleague mentioned the fact that during a crisis there's focused attention, and certainly that was the case. There was an urgent need to act, and to act in a concerted and collaborative way, with a clear objective of what we were trying to achieve. A crisis does focus attention, and it captured senior attention in order to achieve the objectives that we were after, so there was that focused prioritization in the context of a crisis.
Among some of the other lessons learned that came out of this, I think, was that one of the things that allowed us to move quickly—perhaps more quickly than what people traditionally view as being the case and the way that business rolls forward—is that we placed a heavy emphasis on using the existing tools and programs that we had, because we knew they worked, we knew what the risks associated with various tools and instruments were, and we had accountability mechanisms already in place for managing those programs.
Rather than reinventing the wheel or starting from scratch, the fact that we were able to use existing mechanisms that we understood well, and where partnerships were well established, was an added feature that allowed us to move more quickly. That in and of itself allowed us, I think, in the context of cabinet management, to consider similar projects in a more omnibus approach than perhaps is typically the case when we have new programs that need to be more fully examined and considered.
I'm going to back to Mr. Stewart.
Your colleague across the way—I believe it was Mr. Nevison—said that he didn't have a date for the suggestion by the Auditor General about when this next report would get done. Your department has also been named as agreeing with that.
Have you given any thought to an approximate date? We're hearing about approximate jobs created in the economic action plan. Do we now have an approximate date as to when we think it's going to get done, other than a report in the fall of 2012? Because if it's going to be 2012 to report it in, look at that report, and then do something else.... My arithmetic's not that bad: we're looking at the spring of 2013, which would be almost two years after the end of the 90% completion rate of your projects.
I guess my comment on it is that I think we have been completely transparent in our indication that our role is to support the government in its ability to publicly report to Canadians on the results of this action plan. I think that as bureaucrats it is not our prerogative to commit the government to a specific date. But what we are committed to is ensuring that the government has the information available: that we do a full assessment of the information coming in now that the projects are completed to ensure that we have an accurate judgment and assessment of the true costs entailed in this program. And we will do our utmost to support the government in reporting this information to Canadians at a specific date of its choosing.
I would note, as my colleague from the Department of Finance has already mentioned, that the government has already issued several reports to Canadians. I would further note that it has been a feature of past budgets to include updates on the progress being achieved in this program through the budget delivery process. In terms of a specific date, that is a date for the government yet to conclusively identify.
I'm talking specifically about the reports. I understand about the budget, sir.
Those are basically coming at us, albeit Canadians can read them. There is a good number of Canadians who do read the budget reports, I'm sure, but obviously the actual reports would be....
Since we were doing quarterly reports up until January 2011, and 90% of the projects ended at the end of March 2011, we didn't see any other quarterly reports coming after that, albeit the program continued until October 2011. In my humble opinion, it would have been helpful and prudent to continue to do the quarterly reports. Is there a sense of why we did not do them any more?
We got away from referring to them as quarterly reports. My understanding was that the obligation for a quarterly was within the first year of the program. I'm not an expert on what the parliamentary motion was in terms of the report, but my understanding was that the quarterly was only for the first year.
As I mentioned, there were seven, so they obviously went beyond the first four. The January 2011 report, given that most of the projects were done in March 2011, was the last one, with up to the end of December 2010 information.
As I mentioned, in the June 2011 budget there was a summary table on the EAP results that matched exactly what was in the reports to Canadians. The information was being conveyed through other vehicles. For example, the Fiscal Monitor showed what the spending impact was.
In terms of your question, part of the lag that we've seen has just reflected the fact that for the most part the action plan was done at March 31, 2011. As I mentioned, there were reports in the budget subsequently. There was also reporting on spending in the public accounts in October 2011.
Because there were really only the four infrastructure programs that were being extended, the decision was to wait until the four extensions ran their course and we had sufficient data to do a final report. As I mentioned, the commitment is there to do it, and once that information has been verified, as my colleague mentioned, the government will be in a position to make that decision.
I want to follow up on some comments made by Mr. Shipley, and his perspective on not applying a rigorous evaluation on a project-by-project basis. Not everybody on this committee would agree with that particular approach, especially since that was not the original design or intent of the program.
One of the questions I asked.... I tried to blend in a question about the G-8 legacy infrastructure fund. Mr. Campbell, you'll understand that the majority on this committee decided not to call back the Office of the Auditor General to hear specific testimony on the G-8 legacy infrastructure fund. One of the things we're always concerned about is whether the specific lessons of that particular initiative were learned. We would like to know whether other things could have been blended in through the economic action plan that would not necessarily have met the criteria.
Hon. Gerry Byrne: It's not?
The Chair: I'm hearing it's not.
Anyway, here's what we're going to do. I'm going to ask you to take into account.... I don't think the line has been crossed yet, but I accept that we're snuggling up pretty close to it.
So Mr. Byrne, I'd ask you to keep that in mind. Please continue.
The border infrastructure fund was not part of the economic action plan.
I'm curious about the G-8 legacy fund. It was incorporated in the border infrastructure fund when it could have been incorporated in the economic action plan, but it was not. There was a statement by officials from the Government of Canada that there was no appropriate mechanism for funding the G-8 legacy, so they decided to put it through the border infrastructure fund.
What I'm hearing this morning is that the rules for what could or could not be done with the economic action plan were fairly loose. I'm curious about why there was not a decision taken to put the G-8 legacy fund through some aspect of the economic action plan.
Maybe I can offer a few clarifications.
First, the border infrastructure fund was announced in budget 2001. That's over a decade ago, so it would be difficult for the government to claim a program created 11 years ago to be part of a budget 2009 economic action plan.
Second, the G-8 legacy fund was the subject of a separate audit that is not within today's discussion. Still, recommendations were made in the G-8 audit from the Office of the Auditor General, which the government accepted. There have also been a number of witnesses who testified on the G-8 infrastructure fund, and the government has accepted the report of the Auditor General on the matter.
But what you're describing to the committee, sir, is that the economic action plan had some values that were not as tight—
The Chair: You'll have to wrap it up.
Hon. Gerry Byrne: —as what the border infrastructure fund would have been. The economic action plan, because of the need for speed, the need for movement on projects very quickly, the community adjustment initiative or others, could have been a potential source of funding. Is that not the case?
The Chair: Be very quick.
The knowledge infrastructure program was great for Sault Ste. Marie. We got a new wing for Sault College. The federal government normally isn't responsible for education; we got a new health services wing, and Algoma University got a Biosciences and Technology Convergence Centre. At both institutions, their registration is up at least 15%. I would suggest that the future impact in terms of job creation is there. The benefits of colleges and universities to a community are well known.
As well, my small community of Sault Ste. Marie, a northern Ontario community, was really happy to be eligible for the community adjustment fund. I can read the criteria for the community adjustment fund:
||...support activities such as community transition plans that fostered economic development, science and technology initiatives, and other short-term measures promoting economic diversification. Funding targeted communities that had fewer than 250,000 residents, had suffered major layoffs, and lacked alternative employment opportunities or had experienced a year-over-year increase of 20 percent or more in Employment Insurance claimants.
The primary objective was to maintain existing jobs. What were some of the alternative objectives? We understand the primary objective, but there must have been other objectives within that fund.
I don't know who would best answer that question.
Perhaps I can answer that question, or at least give you some perspectives on it.
As you mentioned, the broad objective for the community adjustment fund was to target smaller communities that were facing particular economic difficulties due to the economic recession. The intent was to have a program that could be delivered at the regional or the community level and have a lot of flexibility built into it so that communities could see that only the best-suited projects were supported.
There was no desire to create a program that would dictate to communities what they should be pursuing as their economic objectives. It was more intended to make sure that there was a reasonably flexible tool focused on those communities so that the project would be supported as one that the community themselves saw as worth pursuing in order to meet the economic objectives.
I think there clearly was an emphasis placed in the way that the overall Canadian economic action plan proceeded to be able to measure what the outcomes were in terms of job creation as well as broad economic impact.
To the extent that there is a difference with the community adjustment fund.... As you mentioned, it was delivered by the regional development agencies, compared to most of the other programs, which were delivered by a single department or agency. There is potentially more variety in how the regional entities go about their business. They understand the region in which they operate.
The sheer diversity of projects that were pursued for that program potentially made it more difficult to have standard measurements, in terms of whether a community action plan or a community economic transition plan would have an impact with the direct job creation relative to some of the other projects that were pursued for that initiative.
I am going to go with the same questions Mr. Hayes just asked.
Mr. Nevison, you spoke about how the data was collected with respect to the job creation objective. You were rather positive with regard to the data collection.
I would like to know if, like the OAG, you are of the opinion that we cannot rely on the job data because different means were used to collect it.
We agree that because of the diverse projects and proponents, it's very challenging to get consistent project-level data across that board. As I mentioned, even if you were able to get that completely consistent across 20,000-something projects, there still is a missing element in terms of job impact. That was the reason.
We weren't saying that the bottom-up job state isn't helpful; that obviously is important. But in terms of assessing the overall impact of the economic action plan on the economy and jobs, we believe the model-based approach we used was the appropriate way to go. As I mentioned, that has been validated by other private sector economists in other countries.
If I have understood correctly, Mr. Chair,
I think the comment on the community adjustment fund is in relation to the inability to gather information on that program to determine whether that program made its objective. We think that's a concern. You're talking about billions of dollars, and that's important.
In terms of the overall impact of the economic action plan, the assessment that is yet to come, I think the government has a point that you would go about such a broad assessment in a different way. However, it was mentioned earlier in the evening that a variety of tools were used: existing programs, new programs, tax measures, and the like. It would be useful in any overall assessment for the government to get a sense of which ones really worked and which ones worked a little less, so in the future they could learn from that as a basket of tools. I'm sure the whole $47 billion had an impact, but to what extent each of the tools helped would be a good question.
I would add one thing to my previous comments. If you look at the challenges that Canadians and the country face when they look to government for activities or efforts to address some of these, those issues do not live within one specific ministry. Increasingly, they are issues that transcend multiple ministries and multiple lines of business. Clearly, if the government is going to be able to respond to these challenges that we face in a comprehensive fashion, out of necessity it will need to involve the engagement of multiple departments.
In a sense, many of the issues and programs the government is dealing with today depend on close inter-ministerial collaboration and the development of appropriate and effective responses and on the delivery of those programs once the government makes decisions.
To go a little further than that, you just mentioned the engagement of multiple departments, but we also had the engagements of provinces and territories and municipalities. We're also looking at the impact that was associated with them and realizing that they were also having to incur more debt in Alberta, going into their sustainability fund in order to match what was happening. As were the municipalities, they were also recognizing the significance of what was going on at the time. And to be able to get everyone to commit to this, it was a case of looking at everybody's tax dollars, because the dollars were coming, but the projects were being done sometimes at thirty cents on the dollar, because the bids that were coming in on particular projects allowed us to get so much more done than we traditionally could have. I think it's significant that we looked at the departments and the flexibility they had to work together as well as looking at what was done by the provinces and the municipalities to tie that in.
I'm wondering if people have a quick comment on our ability to work with those other entities.
Now I'd like to come back to one of the areas I'm especially concerned about and interested in. I've had the opportunity over the last couple of years to travel to many universities and colleges across Canada. Every institution has expressed their gratitude for the knowledge infrastructure fund, how timely it was, how it was targeted to the needs of the institutions, and how it allowed them to play a critical role in enhancing a training opportunity for students.
As Mr. Dunlop mentioned, you have also tied in things such as energy efficiencies, the teaching capacities, and research capacities, and I've been able to measure the impact that's associated with that. As a matter of fact, last Friday I was with a group of MPs who went to Alberta. We went to Red Deer College and University of Calgary. We were able to take a look at some of the innovation that had taken place, and how they look at positioning themselves for the future. So they've been able to take that information as well.
As we take a look at this major input into universities, which isn't traditionally something that is done by the federal government, I wonder if perhaps you could outline for the committee what measures the government put in place to ensure that taxpayers' money was indeed spent not just wisely, but appropriately.
If I understand the question correctly, the way the government ran this program was that applications were received either by the institutions themselves or, in the case of Quebec, through the Quebec government, with the provinces indicating which projects they would support, because they were in for an equal amount.
After that time, we basically followed the regular kinds of requirements for the utility of the project that a normal project would follow. The fundamental difference was that they also had a requirement to be able to complete the project within the two-year stimulus period. So there wasn't a lowering of eligibility criteria in any way. There was, in fact, the addition of another eligibility criterion, which meant that although an institution might have had an idea for a better or more interesting project, if they couldn't demonstrate to officials that it could be delivered within the two-year stimulus period, it wasn't eligible.
Thank you. We're well over time.
Colleagues, thank you. That ends our first round in totality. We have some time. I understand there may be some appetite to continue until 10:30, at which time I would ask the committee to turn to committee business to deal with a couple of things.
Is there agreement to do that? We'll just continue in rotation until we're at 10:30, and then we'll stop and move to business.
I just want to ask one question, if I may, before we go to the second round.
Mr. Campbell, you mentioned early on that one of the things that made this most effective was the ability of senior players, in particular deputies—I see Mr. Affleck nodding his head—to be hands-on involved, which made a world of difference in terms of the outcome. I don't think that's surprising, given that it's obviously the best talent in the department, and that having their eyes on these things is the best circumstance, because they can make anything happen as they need to.
However, it's obviously not sustainable. There are only so many files that can be super-files in front of a deputy, given all the other things they have to be responsible for. Yet I've been on this committee enough to know—and recently we had it with the reserve pension plan—that one of the reasons the work didn't get done was because senior management wasn't given the responsibility to manage these things in a timely way.
Therefore, in an ideal world, Mr. Campbell, what kinds of systems work best for deputies who want to be as hands-on as possible, but can't with every file? What kinds of systems should they be looking at, and why do some seem to be more successful than others at being able to be where they need to be to avoid discrepancies and gaps?
I'm glad you mentioned sustainability, because I think it would be a mistake to believe that all government programs and initiatives could be managed in this way. I think we mentioned in testimony when we did the first audit that a lot of that was unsustainable and a lot of people worked a lot of long nights within the bureaucracy to do that. So I'm glad you mentioned that.
I think the answer to your question depends on the department and the nature of the issues. If it's a department that gets one big file once in a while, I think it's easy for a deputy to deal with it. I think deputies who have a lot of big files on an ongoing basis need to use their senior management structure. They need to make sure that they get good reporting within the department, and use their internal audit and their department audit committee as a good sounding board to give the deputy advice whether you have to stay on this one and stick with it.
In our first audit we raised a concern about “construction-ready”, about the fact that the government quite understandably was relying on other parties to state that projects were ready to go. We raised the risk that some weren't, and there could be delays. So the government in all of those programs undertook timely monitoring, good reporting, and in many cases, when projects appeared to be slipping, they took corrective action. In some cases they took the money and put it into other projects that could be completed in time.
I have one other quick question on infrastructure.
Mr. Sarantakis, you had mentioned in excess of 4,500 projects, rather significant just with infrastructure. I made it a point to personally monitor and visit every project in my riding a number of times. I felt that was our responsibility as members of Parliament, and I expect most of my colleagues either did the same or should have.
Of the thousands of projects, there are obviously a few that did not meet every criterion at the end for completion date. Could you put this into perspective? How many would not have been able to meet the final deadline that was imposed upon them? What was the percentage? Can you give us a ballpark figure, so I know what we're talking about? Are we talking about thousands here, or tens or hundreds? Give us a guesstimate.
Mr. Nevison, I just want to clear up in my head the piece about the reports you did last time. I think I was in the committee when you were here a year and a half ago or so, and we talked about these particular reports you had done, the macro reports talking about job numbers. I believe at the time you said that it was difficult to quantify, that it was hard pulling that information together and that it wasn't wholly accurate.
I think that's what you're saying to me again today, in the sense that you've changed the modelling, so we're looking at perhaps more than just counting the projects, because that might have been hard, but what the spins are.
The difficulty of that for me, sir--and I think the Auditor General speaks to that--is that sense that these were specific projects. Some of them were very large. So some sense of knowing exactly what we get out of that is really important.
From your perspective, do you think there's a way, or will there be an opportunity for you and your department, obviously--I don't mean you personally, Mr. Nevison--to try to find a way to give us an accurate piece on how many jobs were created? We hear these numbers that get bandied around. I heard you say again this morning 200,000 and 210,000. The government continually says 600,000. Those two numbers don't come close, so that's not a rounding error.
I'll allow you to go there, because I do have to split my time.
We are talking about the famous report that we would like the government to present to follow up on the program objectives. This has brought another question to mind. Should the OAG also follow up?
I have to politely disagree with what Mr. Shipley said because there are many small projects, and the machine cannot be evaluated without the evaluation of its various components.
In this regard, Mr. Campbell indicated at the outset that when discussing the objectives attained or the overall assessment, a problem was noted with one program in particular. Therefore, it is important to really evaluate all the different programs. Some were successful, whereas others had problems.
With that in mind, would you agree that there should be follow-up, once it is all behind us, in order to truly assess the different projects or to carry out a detailed audit?
I'll just point out that there have been three things the Office of the Auditor General has done to date on this. One was laying out our expectations and our criteria to the government in advance of the audit. The second was undertaking the first audit of the economic action plan to be able to comment on how the overall program was designed. The third was to complete the audit we've just done, which was done when the majority of the projects were completed.
The fourth thing that has to come is what committee members are asking from the government. What we've recommended from the government is a credible assessment of the extent to which that variety of tools helped the Canadian economy. Once that's done, we will look at all the other things we have to do, take the members' comments into account, and determine, among the list of many other things on our plate, whether at that time there would be value in doing a follow-up.
Thank you for appearing before the committee. It's indeed a pleasure to have such a team as yours. In my opinion, this is a real success story.
As my colleague Mrs. Bateman has indicated, to have such a cross-ministerial initiative is incredible within the time period. The results are incredible: 600,000 jobs; number one in the world in terms of economic recovery. I realize my colleagues across the road want more detail. That will probably come, as you've indicated, Mr. Campbell. I'm looking forward to that. On first blush, I think Canadians across the country should be very pleased at your results.
As Mr. Dreeshen has already indicated, I'm a member of the parliamentary post-secondary education caucus as well. I’ve travelled on a couple of trips to look at the various good results of the KIP program. The universities and colleges have indicated to us what a great program that was, and you've indicated in your remarks the good results from the program.
Mr. Dunlop, is there some indication that there will be a recommendation forthcoming, that possibly we can direct our future efforts for some of this funding? Because not all of the needs, as you can appreciate, and you know far better than I, were accommodated during that program. As knowledge and innovation are key to our future growth potential, is there some mechanism in place to further encourage the government to invest in this type of activity?
Very good. That does expire the time.
Thank you to all our witnesses.
I just have a special word for Mr. Campbell and for the Auditor General's department. I was around when all this was launched back in the day, and there were commitments looked for by members, especially opposition members, about the involvement of the Auditor General's office. There were great assurances given that you would be on top of it, that your shop would cover this no matter what.
I want to say, from my point of view, you have absolutely done that. Everyone will appreciate the political tensions at the time and your willingness to step in and say “We will be there at these junctures”, and then honour that, provide the reports. I just want to give you some feedback, as someone who was there from the beginning to the end. Once again, the Auditor General's office has risen to the occasion, made very broad, sweeping commitments at the time, and then followed up and honoured them. And today is the second part of that.
So thank you again to the Office of the Auditor General for your professionalism and your assistance to all of us as we grapple with these issues.
If there's no further intervention, I will also extend a thank you to all of the staff who attended today. It was an excellent meeting. We appreciate your participation and look forward to your being here next time, probably much more than you look forward to it.
With that, we will excuse our witnesses and thank them again for their testimony today.
Members, we are ready to move into business. I will give a quick 15 seconds for our guests to vacate and allow us to begin our deliberations.