PACC Committee Meeting

STANDING COMMITTEE ON PUBLIC ACCOUNTS

COMITÉ PERMANENT DES COMPTES PUBLICS

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, April 22, 1999

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[English]

The Vice-Chairman (Mr. Lynn Myers (Waterloo—Wellington, Lib.)): Ladies and gentlemen, I call this meeting of the public accounts committee to order. As you know, today we'll be discussing the priorities of the April 1999 report of the Auditor General of Canada.

As witnesses today, we have, from the Office of the Auditor General, Mr. Desautels, the Auditor General of Canada; Maria Barrados, Assistant Auditor General; and Sheila Fraser, Deputy Auditor General.

As well, I've asked Mr. Ray Dubois, who is Deputy Auditor General, to sit at the table.

I understand this is your last meeting here with the committee, so we appreciate that you would join us one more time. Thank you very much.

Mr. Desautels, would you lead off, please?

Mr. L. Denis Desautels (Auditor General of Canada): Thank you very much, Mr. Chairman.

My colleagues and I are pleased to have this opportunity to meet with the committee to discuss our April report. I have with me today a number of my colleagues who would be able to answer more detailed questions as well, if the committee wanted to go into some detail.

This report of April 20 covers a broad range of issues and programs of interest to parliamentarians.

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In last December's “Matters of Special Importance” chapter, I noted that in moving from a traditional bureaucratic model to more flexible forms of management, the government needed to keep its focus on serving the public interest, achieving objectives, ensuring accountability, and maintaining transparency. Directly or indirectly, the chapters in this volume touch on all of these issues.

We also provide follow-up reports on several issues covered in previous reports. In some cases, departments have taken action to continue to improve their performance; in other departments, progress has been slow.

First, on the positive side, Human Resources Development Canada has been innovative in its approach to implementing new programs in collaboration with the provinces, in particular the national child benefit program. Chapter 6 deals with that program along with another, both in the early stages of implementation. Reaching federal-provincial agreement on two major social programs and implementing them in less than two years is a significant achievement. I'll address that subject in more detail in a few minutes.

In chapter 1 we report that Correctional Service Canada has introduced several improvements since our previous audit: a major initiative to streamline its offender reintegration process, international accreditation of its offender rehabilitation programs, and better measurement of the results of its reintegration efforts. However, further improvement is needed in some key areas. Efforts by Correctional Service to address a number of our concerns have just begun and will need to be sustained in order to achieve lasting results.

On a less encouraging note, we're disappointed with the results of Revenue Canada's initiative to deal with the underground economy. The tax loss, estimated at $12 billion for all levels of government, is significant. The underground economy problem requires continuous attention and sustained efforts from Revenue Canada and all Canadians. Revenue Canada needs to do more to make the public aware of the societal costs of unpaid taxes. The department can improve its targeting of audits for the detection and reassessment of unreported income. Revenue Canada has agreed to take action to address our recommendations.

[Translation]

Moving now to the suggested priorities, as outlined in my letter of April 20, I am very concerned with Fisheries and Oceans Canada's slowness at developing a framework for sustainable fisheries management.

Chapter 4 on Atlantic shellfish management deals with problems with the management of lobster, scallop, snow crab and shrimp fisheries that are similar to those we observed two years ago in the management of groundfish fisheries. The Atlantic Region shellfish fisheries are a significant part of the overall fisheries, representing 81 per cent of the value of all fish landed in the region in 1997.

The audit raises concerns about decisions on the use of the shellfish resource that are not consistent with the fisheries management objectives reported to Parliament or with the Department's own Fishery of the Future strategy. We found other problems including dramatic increases in harvesting capacity, weaknesses in information needed to decide the use of shellfish resources and gaps in the monitoring and control of fishing activities.

The full impact of these problems is not obvious, as most shellfish fisheries are currently recording high landed values. However, as we reported in 1997 on the management of groundfish fisheries, these are significant concerns that must be addressed to ensure that the fisheries are managed in a sustainable manner.

[English]

Next, chapter 10 covers the issue of funding arrangements to first nations, last reported on in 1996. Indian and Northern Affairs Canada provides approximately $4 billion annually to first nations through various funding arrangements. The funds are for the delivery by first nations of several programs, including social assistance, education, infrastructure, and housing, in aboriginal communities across Canada.

The department's primary role is to design and manage funding arrangements that appropriately support program delivery in a manner consistent with devolution and to help first nations position themselves to assume greater self-government responsibility. I recognize that there are no quick or easy solutions to these significant management challenges faced by the department and by our first nations, but the problems are not insurmountable.

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Our 1996 audit revealed some serious deficiencies in funding arrangements and their implementation. In 1996 we reported that almost one-third of first nations and tribal councils were in financial difficulty. The 1999 follow-up concludes that despite departmental commitments to take remedial action, serious issues remain unresolved.

The department needs to ensure that self-assessments are completed, reviewed, and used to tailor funding arrangements, taking into account the capacity and willingness of first nations to assume full responsibility for those funds. In addition, the department needs assurance that fair and open mechanisms for addressing allegations of wrongdoing are operating effectively.

[Translation]

I would like to draw your attention now to two suggested priorities that are relatively positive stories. The observations and questions raised are fundamentally important to all Canadians. I believe that your Committee's review would improve the information provided to Parliament and the public.

First, Chapter 3, Statistics Canada - Managing the Quality of Statistics, deals with the Agency's systems and practices for managing the quality of statistics, and for reporting to users on the quality of those statistics and to Parliament and the public on its performance. Statistics play a key role in supporting informed decisions that affect all Canadians. The Agency is strongly committed to producing statistics of high quality and maintaining quality through continuing improvement. However, we concluded that the Agency needs to be more consistent in assessing and reporting the quality of statistics. Many of the necessary systems and practices for doing so are in place, but the Agency needs to integrate them better and adopt a more disciplined approach to documentation.

Although the Agency has responded positively to most of the recommendations, the Committee's review of the findings would reinforce its commitment to action and would enable the Committee to become more familiar with that organization, which has not had the opportunity for quite some time to explain its work to the committee.

Although this is not a suggested priority for your consideration, I would also like to draw the Committee's attention to the study presented in Chapter 5, Collaborative Arrangements: Issues for the Federal Government. Under such arrangements, the federal government, other levels of government and organizations in the private and voluntary sectors agree to share power and authority in decisions on programs and service delivery. Members of the committee may have a particular interest in reading this chapter together with a review of Chapter 6.

[English]

These kinds of partnering arrangements outside traditional departmental structures are increasingly being used in other jurisdictions. The U.K. is talking about “joined-up” government, and the OECD is looking for lessons in governance and accountability practices when different levels of government collaborate. I spoke this morning to several hundred people at a national conference here in Ottawa on collaborative government; it was entitled “Is There a Canadian Way?”

The study talks about the risks of federal participation in these arrangements and identifies attributes of good agreements and practices. Serving the public interest, effective accountability, and greater transparency are basic elements of a framework for these arrangements, and we suggest key questions that parliamentarians may wish to ask about particular collaborative arrangements when assessing them.

Essential for effective accountability in collaborative arrangements is clarity of roles and responsibilities. These relationships are sometimes referred to as shared accountability, because the partners work toward common objectives and are collectively accountable for the operations and results of the arrangement, as well as individually accountable for their own contributions. The key is that there should be more, not less, accountability in a collaborative arrangement.

Chapter 6 consists of two case studies that deal with issues of shared accountability for the first two programs of the social union: the national child benefit and employability assistance for people with disabilities. Both programs are managed by Human Resources Development Canada. These programs are aimed respectively at reducing the depth of poverty and helping people with disabilities overcome barriers in the workplace. All this represents new kinds of arrangements between the federal government and the territories and provinces.

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Your committee's review of that chapter and of the first progress report on the national child benefit, expected very soon, in May of this year, would help to ensure that accountability to Parliament remains an important part of the accountability arrangements for these programs and similar future programs.

I hope all of the chapters in our April report will be of interest to you. As usual, we look forward to working with the committee over the next few months. I thank you for your attention and would be pleased to answer questions from the committee.

The Vice-Chairman (Mr. Lynn Myers): Thank you very much, Mr. Desautels. We appreciate those opening comments.

I'd ask Mr. Mayfield to lead off the questioning, please.

Mr. Philip Mayfield (Cariboo—Chilcotin, Ref.): Thank you very much, Mr. Chairman. I would like to add to your comments in welcoming the Auditor General and his staff and officials as they come here to be with us today.

You noted in your press release that, as stated in chapter 3, the agency has to do more to assure itself that quality is achieved, and that Stats Can should be more consistent in reporting that quality to users. You went on to say they do not systematically assess whether systems and practices for managing quality are effective, and you mentioned that their performance to Parliament is limited. Are you satisfied with the agency's response to your recommendations? And could you please tell this committee what you feel they are doing, particularly with respect to reporting to Parliament?

Ms. Maria Barrados (Assistant Auditor General, Office of the Auditor General of Canada): As we noted in our report, we are satisfied with the responses the agency has given. There are two areas where there is not quite the specificity we sometimes expect, and one of them, as you point out, Mr. Mayfield, is with respect to reporting to Parliament. We had made some recommendations that they should improve it, they agreed that they should improve it, and they are examining how they are going to be improving it.

Mr. Philip Mayfield: So they are on record then as making improvements that we can ask about later? Is that a correct understanding?

Ms. Maria Barrados: Yes. I think that would be a very good discussion to have with the agency.

The whole notion of how you present quality and quality efforts is a complicated business for an agency like Statistics Canada, it being as diverse as it is, but it would be a very worthwhile discussion to have with the agency.

Mr. Philip Mayfield: As I'm sure other members of Parliament have, I've had several concerned constituents come to me to talk about Stats Can and their use of information that is demanded, even selling or leasing. I'm not sure what the financial arrangements are, but general information is provided to other clients. Their concern is first of all the demand that private information must be provided to Stats Can under statute, and that this information then can be made available in a general way to others.

Was the privacy issue for individuals discussed, and was the issue of the protection of this information in passing it on to other clients brought up in your audit? If so, could you please comment on that discussion for the committee?

Ms. Maria Barrados: This audit focused primarily on the issues associated with quality, so we did not do a detailed examination of privacy. But I can tell you the agency is very sensitive to that issue and does take a number of steps to protect the privacy of individuals.

Again, this would be a very good question to pursue with the agency, but in our report itself, we looked at the attributes of quality.

Mr. Philip Mayfield: In your report you also mention that in one case of the four self-assessments Stats Can carried out, the weaknesses identified and the recommendations made were more important than their self-assessment suggests, and therefore deserved the attention of senior management.

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In your opinion, is that part of the problem of the systematic weaknesses and the lack of transparency? By that I mean, does senior management not have a strong enough grasp on what's going on within their own department?

Ms. Maria Barrados: Our observation on Statistics Canada is that senior management is very close to what is going on in their department. The real thrust of the comments we were making was that they were not sufficiently systematic in using the various techniques they had at their disposal. That's what we are suggesting they do—be more systematic and more rigorous in consistently doing this.

Self-assessment, the one we cite in particular, is an example of where they found the material, but they weren't then systematic enough in raising the shortcomings and making sure that was formalized in the process.

Mr. Philip Mayfield: Thank you very much.

How much time do you want me to take on this, Mr. Chairman?

The Vice-Chairman (Mr. Lynn Myers): You have a few more minutes, Mr. Mayfield, if you want.

Mr. Philip Mayfield: Then I'll go on to one other issue, if I may.

In chapter 2 you raise what perhaps is startling, and that is the rapid growth of the underground economy. I think a number of us realized how quickly it was growing in the past. Perhaps we haven't talked about it enough more recently and are surprised a bit to hear that this growth is still taking place.

I was wondering why you didn't put this chapter in your list of priorities. I'm sure it's an important issue, because every time you speak about it, Mr. Desautels, you emphasize what a significant issue this is for Canada. Is it that you see other issues that perhaps need to be addressed with a greater priority at this time?

Mr. Denis Desautels: Mr. Chairman, Mr. Mayfield is right; I have always thought the protection of the tax base of our country is an extremely important thing. A lot of our work has been focused on doing just that. The issue in chapter 2, the underground economy, is of course directly related to protecting the tax base, so it is an extremely important issue.

In making recommendations to the committee as to what they ought to consider priorities, I took into account a number of factors. This committee, for one thing, has already had the occasion over the last three or four years to have people from Revenue Canada in front of the committee. You've had quite a few meetings with people from Revenue Canada.

When I look at the other chapters we have reported on, I note some other departments that you've never had the occasion to discuss things with, namely Stats Canada. So I was taking that into account, in addition to the fact that Revenue Canada is going to be going through a change to a new agency status, and it may be worth while to let that happen before we invite people here to this committee.

But as I say, these are sincere suggestions on my part. The committee could decide on a different order of priority.

Mr. Philip Mayfield: Also on this chapter, many of us are trying to figure out how to get our communications through the Internet via e-mail without other people having access to them, as well as how to perhaps use credit card numbers and still maintain their privacy. You raise the issue of encryption and the need perhaps for some people to be able to break those codes or to know what information is being passed. It raises in my mind an issue of conflict with privacy. There certainly is a need for privacy, but you raise another issue.

Do you have in mind any suggestions for how this might be legislated to maintain the privacy that's required and yet thwart those who would use this privacy for illegal purposes?

Mr. Denis Desautels: The whole issue of encryption and protection of privacy in electronic commerce has been raised in the very recent past. In fact we had a chapter on that in 1998, and some committees of the House have in fact been discussing those issues of protection of privacy in an electronic commerce world.

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I believe those issues have been quite well laid out. The technical mechanisms for protecting privacy seem to be adequate. The Canadian government in fact has been investing in this and showing leadership in encryption so that certain guarantees could be given in terms of protection of privacy.

It's a very delicate issue. Obviously different people have very different views on it. Some people have some very strong views on absolute protection of privacy. As far as I know, the process is engaged already in terms of coming up with legislation that would allow electronic commerce to go on while protecting privacy.

Mr. Philip Mayfield: If I'm not mistaken, other jurisdictions—and I'm thinking of the United States—have a requirement that with encryption codes, the encoders must leave a key with the government or officials or something like that. Have you discussed how this might be done, say, with the Privacy Commissioner's people? Have your people discussed with the Privacy Commissioner how this might be done, as we look to what may have been satisfactory solutions in other jurisdictions?

Mr. Denis Desautels: No, we have not, because I didn't consider that our responsibility yet. Other government department are leading the development of electronic commerce and encryption and protection of information. I believe those departments, Industry Canada being the main one, would have had those discussions with the Privacy Commissioner.

Mr. Philip Mayfield: Could I just ask one last brief question in this area?

The Vice-Chairman (Mr. Lynn Myers): Yes, absolutely. Go ahead, Mr. Mayfield.

Mr. Philip Mayfield: It's not to do with encryption, but with Revenue Canada.

There's quite a discrepancy between your observation that about $500 million is recovered by Revenue Canada from the illegal activity in the underground economy, and Revenue Canada's estimate that they have about $2.5 billion. Do you have any particular response to this discrepancy that exists between your observation and theirs?

Mr. Denis Desautels: I believe the report lays out the explanations for the difference between the estimate put out by Revenue Canada and our own estimate. The difference is essentially that Revenue Canada is including in its calculations tax recoveries from activities other than the underground initiative. So when we analyse how much is brought in by the underground economy initiative, we think it's at around $500 million at best.

It's important to have the right figure, because if we want to make the right decisions as to the level of effort that we're investing in that particular activity, it helps to have the right results, to be able to judge if we're making the right decisions in terms of investment.

I think the figure is closer to $500 million over a five-year period. I also think, as you can see from our chapter, that it's possible to do better. We make a number of number of recommendations to that effect.

Mr. Philip Mayfield: Thank you very much, sir.

Thank you, Mr. Chairman.

The Vice-Chairman (Mr. Lynn Myers): Thank you very much.

[Translation]

Mr. Perron.

Mr. Gilles-A. Perron (Rivière-des-Mille-Iles, BQ): Mr. Desautels, your report has provided me with some good bedtime reading material. Again, I have found it to be very interesting, but I would like to make several comments, particularly with regard to your letter, a little along the same lines at Mr. Mayfield. I find it rather regrettable that you failed to include Chapter 2 on Revenue Canada in your list of chapters that you suggest be reviewed by the committee.

I agree with you that once again, this is a case of the government creating an agency in order not to have to make decisions, or to be accountable. However, it will have to account for its decisions. If we agree to review this chapter immediately, perhaps this would send the right kind of message to Revenue Canada or to the agency.

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What disturbs me the most is the $12 billion shortfall in tax revenues, assuming I've read your report correctly. That's a substantial sum of money. If we had this money, maybe then we could stop dipping into the PS pension fund surplus.

The other thing that struck me was the finding that 73 per cent of Canadian workers, when polled, said they would accept an offer to evade taxes if the opportunity arose. Maybe it's time we stopped them and let them know that the government plans to take action to deal with this problem.

Mr. Denis Desautels: Mr. Chairman, I agree with Mr. Perron that this is a very important question.

Further to my response to Mr. Mayfield's question, I would just like to add that there is no disagreement between the department and my office. The department said it agrees with our recommendations and undertook to follow up on them.

Obviously, it wouldn't be a bad idea to discuss this at a meeting of the Public Accounts Committee. It might heighten people's awareness of the extent of the problem. Revenue losses are estimated at $12 billion. Let's be clear about this. Federal, provincial and municipal governments are all affected by this. We're talking about a substantial sum of money, and the disturbing thing is that according to the polls, the attitude of Canadian doesn't seemed to have changed for the better. We need to make people aware of the situation and anything we can do to achieve this goal would be a sound investment.

I have no objections whatsoever to the committee reviewing this chapter. I've recommended somewhat different choices, but the final decision is yours to make.

Mr. Gilles Perron: I agree with your other choices, but I would have preferred to see chapter 10, which focuses on aboriginal affairs, given a higher priority.

Again, I'd like to thank Mr. Desautels and his team. Keep up the good work. It's a pleasure working with you.

Mr. Denis Desautels: Thank you.

[English]

The Vice-Chairman (Mr. Lynn Myers): Thank you very much.

[Translation]

Thank you very much, Mr. Perron.

[English]

Mr. Harb, please.

Mr. Mac Harb (Ottawa Centre, Lib.): Thank you very much. I have a very small comment and a question.

Throughout your report this time around you seem to have found a number of positive things that different departments are doing. Just in passing I mention Human Resources Development as one example. You indicate that they are doing a good job. Is it your view that the various government department are doing a better job now in responding to some of the concerns you have raised in the past? Is it a sign of the times that finally transparency, efficiency, and doing a good job have hit home? Is that your opinion?

Mr. Denis Desautels: I'm often asked a question along those lines. Are things generally improving? Are we managing public affairs better than we once were? It's not an easy question to answer, because the government is so large, but I would say that over the time I've been here, things are being managed better than before.

One of the reasons for that of course is we went through a financial crisis. We had to find ways of saving whatever could be saved in public administration. That financial crunch and that duty to review everything that was being done brought in a certain wisdom generally on how spending decisions are being made.

It's been quite salutary, and I think we're all better off for it. I would say in general there's been some streamlining, there's been elimination of things that are less essential, and we're concentrating more on the core responsibilities of departments. So there are a number of positive signs, in my view.

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To be balanced, though, I have to say there's obviously been some cost, and we see some of this in a few of the chapters in this report. There's been a loss of certain capabilities. For instance, we talk about science and technology. There's a challenge now to rebuild our capability in that area. The chapter we have on the shellfish fishery also indicates that the information on the science isn't quite as good as the department needs, and I think the minister would tell you the same thing. So there's been some weakening because of the downsizing of certain functions that need to be rebuilt to make sure we're moving ahead in the right direction.

If I just might add one last comment, while I say the financial pressures have brought about a certain amount of wisdom in how we spend public funds, I'm concerned that as our situation improves and maybe that pressure is let up a bit, we may not have the same rigour we've had in the last few years. We have to find ways of replacing that incentive we had with a new incentive to make sure we keep that same momentum.

Mr. Mac Harb: Thank you very much.

The Vice-Chairman (Mr. Lynn Myers): Thank you very much.

Are there any other questions at this point?

Mr. Mayfield.

Mr. Philip Mayfield: Yes, please, if I may, Mr. Chairman.

Mr. Desautels, I'd like to refer to chapter 10. This is always problematic for me, because it seems the performance by the department that is required for the well-being of so many people simply is not there. As I'm one who deals on a regular basis with many of these people, it's very touching for me personally to feel so helpless in light of what people are suffering and the deprivation they experience.

I find it disturbing that after the very critical and much-needed audit you provided previously, and with your recommendations on how better management of funds for first nations must be implemented, there still is so much to be desired.

In your statement, following the main points in your forward and other points, you note:

The Department believes that with respect to redress, the follow-up extends beyond the issues raised in 1996.

I wonder if you could explain to me, on behalf of the department, how they see this. What are the issues that are so extensive? Are you able to help me with that?

Mr. Mac Harb: I think that's a question for Indian and Northern Affairs. I think it's fair game to invite the department to ask them. I don't think it's fair to put the Auditor General—

Mr. Philip Mayfield: Before I ask the department, I would like to know what the Auditor General sees as he comes back to this issue once again.

This is not a partisan issue. This is an issue that came from my dealing over the telephone with someone on a reserve in my constituency.

Mr. Mac Harb: Yes, but he can't speak on behalf of the department, can he?

The Vice-Chairman (Mr. Lynn Myers): Well, if we could, let's ask the Auditor General to respond.

Mr. Denis Desautels: If you look at the main points on page 10-5 of chapter 10, you'll see they indicate the department believes that with respect to redress, our follow-up went beyond the initial audit of 1996.

In 1996 we looked at the funding arrangements, which do make reference to redress mechanisms, but we did not emphasize that in any way. While we were looking at doing our follow-up, we did in fact, for a number of reasons, decide to ask a few more questions about the redress mechanisms or the mechanisms to handle complaints, and how that was going.

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This is an element of the funding arrangements, and it's also an element of accountability. So we did in fact ask further questions on what the department was doing on that particular question. Simply, the department feels that was not really raised in the first audit, and therefore perhaps we should not have raised that in a follow-up of those initial issues.

Mr. Philip Mayfield: Sir, let me ask a supplementary question. We saw in the department's response to your previous audit differences of opinion, not only with your recommendations, but with your observations in general.

So I would like to ask, in your opinion, what is the problem? Why are you and perhaps others like you, perhaps including me, not able to see eye to eye with the Department of Indian Affairs on what the problems are and how to resolve them? What is the difficulty here? Why is there this ongoing sense of lack of agreement on how to deal with these serious problems?

Mr. Denis Desautels: I think the basic problem is an implementation problem. If I analyse our recommendations made to that department within the last five or six years, I can say they agree with over 90% of the recommendations we make. The problem has been in getting around to correcting, in a fairly short period of time, the problems we've raised. So the problem has been an implementation issue. There's an implementation gap of some form, which is fairly serious.

Again, when you focus on this particular chapter, you'll see we're saying they haven't made much progress in implementing the new transfer agreements. When we did the audit in 1996, the department was starting to put in place these new funding mechanisms, and they were supposed to have that done within about two years. As we see in the chapter now, it will take another 10 years at this pace to get the job done.

The funding arrangements are an important piece in the whole management of transfers to first nations, because they specify the obligations of each party under these agreements. If you want to move towards self-government and if you want to devolve as much of the responsibility to the first nations as possible, you need to have in place a funding mechanism and funding arrangements that everybody agrees to and that are workable. That's taking a long time to do.

I know it is a tough job. I said that in my opening statement. We have 600 first nations with varying capabilities and also varying degrees of willingness to sign those agreements. So the department has a job on its hands. I'm pointing out to members of this committee and to Parliament that it's taking much longer than what the department itself had estimated it would take in 1996.

The Vice-Chairman (Mr. Lynn Myers): Thank you very much, Mr. Mayfield.

Monsieur Perron. No?

Mr. Desautels, if I might ask two questions, I was interested in chapter 9, on the management of science and technology personnel. I was a little disturbed with your final comment on the government's science and technology capability and it being seriously compromised as a result of not bringing on the personnel required or the mentoring systems or whatever is needed in this very important area.

Over time we've heard about the laboratory in Winnipeg, for example, and the Food Inspection Agency and others. It worried me a little bit that some of those agencies and departments would be affected. I want to hear just very briefly if that in fact is the case and what we need to do.

I know this is not being looked at in depth, but it is a concern certainly to me, and I'd like at least a brief response on that.

Ms. Maria Barrados: We raised it in this follow-up because of that very concern.

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We have a situation where, as part of program review, a large number of people went out, as in other parts of government. This was not unique to the scientific and technology area. But we also have a situation where, as part of that departure, you had both ends of the age distribution going out and an aging group of people going out.

So the best estimate the government can make is that there will be a requirement for 3,000 people in the short term to try to shore this up. The only way this work can be done to the quality and to make the contribution that is expected is to have the qualified people there.

The chapter does talk quite a bit about the strategies in place and the steps that are being taken, but the real question now is to actually start moving on some of these things.

Another part of this is that bringing people into government then gets you into all the issues associated with staffing and all the requirements you have with government. It might be an area of interest to the committee to explore the kinds of exceptions and initiatives that have been tried on a smaller scale and how this can be brought to a larger scale. There's a lot of interest and concern, and this particular group is leading in the human resource management area.

The Vice-Chairman (Mr. Lynn Myers): It seems to me it's a very important area and something we as a government would want to monitor—indeed, something I think everyone would want to monitor—on behalf of Canadians, because of its importance and the key role technology plays in all of our lives. It's very important.

My second question is with respect to chapter 5, the collaborative arrangements. I'm very interested in the partnerships between the federal government, the provincial government, the private sector, and such. I wonder if you have any concerns about our ability to audit these arrangements and report the results to Parliament. Is that an ongoing concern? Are there things we should know, as a committee or as Parliament?

Ms. Maria Barrados: In this chapter we speak about a number of these issues, and there are concerns. I'll just describe them briefly.

The first set of concerns relates with the ability to audit. There is a requirement for both the financial audit and some form of performance audit. That's not to say necessarily our office would be doing all these things, but when agreements are set up, it is important that these considerations are part of those agreements and that there is a vigilance in making sure these things occur. That's one area we raise.

The other area we raise is how we work this notion of accountability when it isn't just a straight, traditional line. It isn't the traditional relationship between a department and a minister and then the minister reporting to Parliament; now we're talking about different levels of government. We're talking about different forms of relationships and different types of accountabilities, which we've tried to explore in these.

These are very important issues that we all have to watch.

The Vice-Chairman (Mr. Lynn Myers): Thank you very much. I appreciate that update.

Mr. Desautels, please.

Mr. Denis Desautels: Mr. Chairman, as I indicated in my opening statement, this morning I participated in a panel discussion on that very issue, and one of the provincial representatives indicated that governments, when they're negotiating these agreements among themselves, spend a lot of time discussing who does what and who pays for what. Most of the discussion is on those issues. There's not that much discussion on defining what they will need to do to be successful, how they will define success, and how they will measure that success.

So in these arrangements, a lot more effort has to be invested in developing indicators of performance that everybody will work to in a fairly consistent way, as opposed to everybody just developing their own system.

The government has indicated that for health in particular, it's ready to invest in developing indicators that will be pretty standard across the country, which will enable people to tell whether or not the programs or collaborative arrangements are working as they were intended.

The Vice-Chairman (Mr. Lynn Myers): Can we be updated on that as well? That's important for us as a committee.

We'll have two final questions from Ms. Phinney and Mr. Mayfield.

Ms. Beth Phinney (Hamilton Mountain, Lib.): Mr. Chairman, I was wondering if you could ask the Auditor General, since he mentioned this speech, if we could all have a copy of it.

The Vice-Chairman (Mr. Lynn Myers): Yes, okay. If we could have a copy of that, it would be excellent.

Mr. Denis Desautels: Okay.

The Vice-Chairman (Mr. Lynn Myers): Thank you very much.

Mr. Mayfield, last question.

Mr. Philip Mayfield: Thank you, Mr. Chairman. It is a short but important question.

In recent years the Department of Indian Affairs has been, quite appropriately, seeking to have bands administer their own funds. That's really necessary. But there's been a lot of disappointment in how those funds have been administered in certain instances. It's not surprising that there's some disappointment, because managing relatively large sums of money is not an easy thing if you don't have experience or an understanding from the past to do that.

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I'm wondering, sir, if in your examination of this department, you see evidence of a department working to facilitate local groups being able to capably administer their funds using normal accounting practices, or whatever the jargon is. I'm looking for evidence that there is assistance or a means being found by which these local people can properly administer their funds. Do you see signs of that happening and the department facilitating that?

Mr. Denis Desautels: There are signs that tools are being developed or put in place or suggested that our first nations can use to manage the activities they've been transferred, but there's still a lot more that could be done. I have a lot of sympathy for many of our first nations, which, in a relatively short period of time, have been given responsibility for administering not only big sums of money, but social programs, education programs, housing programs, and welfare programs. Those are all fields that are not easy to handle.

So it's not just a question of being money managers. In these first nations, there have to be enough people who have a background in these particular areas. Some good work has been done, but there's still room for a lot more to build capacity in all of our first nations and try to focus on those that need the most help.

Some of our first nations are doing this very well and can even serve as models for others.

The Vice-Chairman (Mr. Lynn Myers): Thank you very much.

Mr. Philip Mayfield: Thank you, sir.

The Vice-Chairman (Mr. Lynn Myers): Monsieur Perron.

[Translation]

Mr. Gilles Perron: I'd just like to say one more thing, further to Mr. Desautels' remarks. We received a report, either yesterday or this morning, that the CGA, the Certified General Accountants, has agreed to provide management and accounting training to young aboriginals, working in cooperation with the University of Calgary and the federal government.

[English]

The Vice-Chairman (Mr. Lynn Myers): Thank you very much, Monsieur Perron. We'll try to get a look at that as well. It might be useful.

Certainly the steering committee will meet at the appropriate time. We have the recommendations of the Auditor General in terms of which chapters we should pursue, and we'll take that under advisement.

Before we go to the final few comments with respect to Mr. Dubois, Mr. Desautels, do you have any final comments?

Mr. Denis Desautels: No, Mr. Chairman, I have no further comments.

The Vice-Chairman (Mr. Lynn Myers): Ladies and gentlemen, I have a very pleasant task today, and that is to introduce Mr. Ray Dubois, who is attending the meeting for the last time. After 20 years of dedicated service, I think it's appropriate that we give him an opportunity to speak briefly. As you know, Mr. Dubois has been a great professional who, with great dedication and commitment, has provided service not only to Parliament but to the people of Canada, and we're certainly grateful for that.

Mr. Dubois, I don't know a great deal about your habits and such, but I'm told you play a little bit of golf and that you're a great carver—a wood carver and a limestone carver. That's very interesting. Certainly we wish you health, prosperity, and happiness in this next phase of your life. We're very grateful for everything you've done, not only for us as a committee, which has been of great value, but for Parliament and for the people of Canada. We're very grateful to you.

Voices: Hear, hear!

The Vice-Chairman (Mr. Lynn Myers): Perhaps the last word could be yours.

Mr. Ray Dubois (Deputy Auditor General, Office of the Auditor General of Canada): Thank you, Mr. Chairman.

We in the office consider this committee the representative of its main client. We see this committee as the audit committee of the House of Commons.

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[Translation]

The Public Accounts Committee and the AG's Office have always worked closely together, at least over the past twenty-five years and ever since I've been coming here. I'm very proud to have been associated with its efforts.

[English]

I'd like to thank the committee for its continued support of the office—and I was part of that, so I thank the committee for supporting me. It has been both an honour and a pleasure to serve the Standing Committee on Public Accounts.

I want to say, Mr. Chairman, that I intend to enjoy my retirement to its utmost, in the same way that I have worked hard in the office. I want to thank you for your very kind words and wish you the best of luck in the future.

Voices: Hear, hear!

The Vice-Chairman (Mr. Lynn Myers): Thank you very much.

This meeting is adjourned.