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Standing Committee on Public Accounts



Thursday, April 22, 2010

[Recorded by Electronic Apparatus]



     I call the meeting to order.
    I extend to everyone here a very warm welcome.
    Colleagues, this meeting is to deal with the spring 2010 report of the Auditor General of Canada. Five chapters were tabled on Tuesday of this week, and there is one chapter dealing with special examinations.
    As has been our practice in the past, we have the Auditor General before us to deal with all five chapters--all six chapters, actually, if you want to. She is accompanied by Sylvain Ricard, assistant auditor general; Nancy Cheng, assistant auditor general; and Ronnie Campbell, assistant auditor general. On behalf of the committee, I want to extend to each of you a warm welcome.
    Before I ask the Auditor General for her opening remarks, I want to deal with a minor point of business. You have before you, colleagues, the minutes of the steering committee meeting that was held yesterday. I'd like to get those minutes approved, if possible.
    However, before we do so, the clerk has recommended an amendment on chapter 2, which is that after the word “That”, we're going to insert the words “in relation to the committee's study of Chapter 3: Income Tax Legislation of the Fall 2009 Report of the Auditor General, the chair be authorized”--and then I'm continuing--“to write to the government requesting an update”--
    Chair, could you tell us where you are?
    I'm on paragraph 2 of the minutes of the steering committee. They call it the fourth report.
    Yes, okay.
    On chapter 2, the clerk is recommending that these words be inserted after the word “That”: “in relation to the committee's study of Chapter 3: Income Tax Legislation of the Fall 2009 Report of the Auditor General”. Then we continue on with “the Chair be authorized to write to the department requesting an update on the Miscellaneous Statute Law Amendment Program”.
    This is not a major issue, colleagues, but we did find the actual wording of the program. Our report on that particular chapter has been tabled in Parliament, and we're just writing the department and pointing that out and perhaps asking for an explanation as to why they have never considered using that program.
    With that, we'll vote on the amendment moved by Mr. Dreeshen.
    (Amendment agreed to)
    The Chair: Next is the motion relating to the minutes, as circulated.
    (Motion agreed to)
    The Chair: Okay, thank you very much. Now we're going to go to the main business, which is to hear from the Auditor General.
    Ms. Fraser, the floor is yours. Thank you very much.


    We are pleased to be here today to present our spring 2010 report, which was tabled in the House of Commons on Tuesday, April 20. I am also presenting an overview report on the electronic health records initiative in Canada.
    As you mentioned, I am accompanied by Assistant Auditors General Ronnie Campbell, Nancy Cheng, and Sylvain Ricard.
    Several chapters of my report, along with the overview report on electronic health records, touch on government investments involving billions of dollars. To provide maximum benefits and to ensure that investments produce the anticipated results, I urge the government to plan and budget for them over the long term.
    The federal government relies on information technology systems to deliver programs and services to Canadians. Many of these systems are aging, and several are at risk of breaking down. Even if systems are currently working, a breakdown could have severe consequences. At worst, some government programs and services could no longer be delivered to Canadians.
    We found that the chief information officer branch of the Treasury Board of Canada Secretariat is aware that aging IT poses significant government-wide risks. However, it has not formally identified the issue as an area of importance for government. Furthermore, it has not established or implemented government-wide strategic directions to address this issue.
    The renewal and modernization of IT systems can take many years and require significant investments, which must be planned and budgeted for over the long term. The Treasury Board Secretariat should prepare a report on the state of aging IT systems across government and develop a plan to address it.


    My report addresses the government's implementation of key changes required under the 2003 Public Service Modernization Act. That act is a complex undertaking designed to transform the way in which the federal government recruits, manages and supports its employees. Progress has been achieved, but it is a process in transition and its effects are not yet apparent.
    We found that the key changes required by the legislation have been implemented, but there is limited information about the results they have produced. That information is needed in order to determine whether the results achieved come up to expectations. Judicious management of human resources is crucial to the effectiveness of the public service and the quality of services provided to Canadians. The government needs to ensure that this initiative is successful.


     We also looked at the rehabilitation of the buildings on Parliament Hill. Public Works and Government Services Canada has identified serious risks to key systems, risks that could affect Parliament's operations. These buildings are part of Canada's heritage and are critical to Parliament's operations. The governance arrangements are hindering rehabilitation work, while the buildings continue to deteriorate.
    Responsibility for the Parliament buildings is split among many organizations, decision-making and accountability are fragmented, and there is a lack of consensus on priorities. These weaknesses result in delayed decisions and projects, and they contribute to increased project costs and risks.
    The long-standing governance problem, which we and others have raised over many years, has to be resolved. In our view, responsibility for and accountability for the Parliament buildings should rest with the Senate and the House of Commons.


    I will now move on to the Northwest Territories, where sustainable and balanced development depend on the implementation of several key measures.
    The agreements finalized with aboriginal groups define governance structures and the ownership of land and resource rights, and are important for economic development and environmental protection. They help provide a level of certainty and predictability for business, industry, communities and governments.
    Our auditors found that Indian and Northern Affairs Canada has made real efforts to clarify these structures and rights in the negotiations that led to the settlement of certain land claims. However, in other regions where negotiations are ongoing, the Department has not put in place an adequate regulatory system to protect the environment.
    In addition, Indian and Northern Affairs Canada and Environment Canada have not met their responsibility to monitor the cumulative environmental impact of development. The federal government has specific obligations relating to effective governance, environmental protection and capacity building to provide for sustainable development in the Northwest Territories. Failure to meet these obligations could mean missed economic opportunities, environmental degradation and increased social problems in Northwest Territories communities.



    We also looked at whether Agriculture and Agri-Food Canada is managing its research activities to meet its goal of promoting excellence in research and increasing collaboration with other research organizations. The department has a history of successful collaboration on individual research projects with other organizations, but the more complex collaborations we looked at were not managed well, causing a significant loss of goodwill among key partners.
    In addition, the department has not identified the human and financial resources needed for a strategic direction, nor the equipment and facilities it requires. Much of its laboratory and agricultural equipment is past its useful life.
    The department's research is important to Canada's food production and to Canada's ability to compete internationally. We found serious problems in areas that are fundamental to conducting research, such as managing funding, capital assets, and human resources.


    My report reiterates the salient points in the special examinations of 11 Crown corporations done in 2009. It should be noted that the salient points do not reflect what may have happened since those reports were submitted to the boards of directors of the Crown corporations in question.
    In a special examination, significant deficiency is any major weakness that could prevent a Crown corporation from having reasonable assurance that its assets are safeguarded and controlled, its resources are managed economically and efficiently, and its operations are carried out effectively. In three Crown corporations, we found one or more significant deficiencies that we reported to the appropriate minister. The three corporations were the Canada Post Corporation, the Canada Science and Technology Museum Corporation and Marine Atlantic. In two of the three cases, Canada Post and Marine Atlantic, the deficiencies identified related to capital spending and the financing of that spending.


    Mr. Chair, my office and six provincial audit offices have carried out separate concurrent audits of the development and implementation of electronic health records. Electronic health records are expected to reduce costs and improve the quality of care, but this pan-Canadian initiative involves significant investments and challenges.
    My colleagues and I encourage stakeholders to report comprehensively on progress made and benefits achieved. We also encourage the committees of each legislature to continue monitoring this complex initiative.
    We thank you, Mr. Chair. This concludes my opening statement. We would be pleased to answer any questions that committee members may have.
    Thank you very much, Ms. Fraser.
    We are now going to the first round of questioning, which is a seven-minute round. The first questioner will be Mr. Lee.
    Mr. Lee, you have seven minutes.
    Thank you, Mr. Chairman.
    I want to thank the Auditor General and the many staff who work on these matters. I know hundreds or thousands of hours are synthesized into your seven or ten minutes of remarks. A lot of good work is being done, and I thank everyone in the Office of the Auditor General for that, as I'm sure all parliamentarians do.
    I want to focus my remarks first on the aging technology issue. I think you'll probably agree that this is an exercise in accident prevention, and were nothing to be done, at some point there would be risk of a catastrophic failure somewhere in the public service that would have huge financial and legal implications.
    You've only looked at about half a dozen departments. Are you looking at other departments generally, on the same set of issues? Are you looking at other departments beyond your spring report?


    We are not planning to look further at other departments on this issue. That would be something the committee might wish to explore with government. The government has indicated that they will be asking all departments to do an assessment of the state of their IT systems and to develop a master plan to deal with the results. At some point in the future, obviously the audit office will go back to see if that has actually been done and to see the risk mitigation strategies that have been put in place, but we are not planning to go into more individual audits in departments at this time.
    I know you've quite properly looked to Treasury Board to provide appropriate cross-government and cross-departmental leadership, but in looking at your grading of the departments, I see that the circles and the half-moons seem to focus on Citizenship and Immigration and Public Works and Government Services. In relation to either of those departments, did your office uncover any accidents or minor failures related to the potential of a bigger failure in IT?
    I would say, Chair, that specifically we did not, although we do note in the report that the Department of Public Works and Government Services indicated that the pension and pay systems were rated as being at very high risk and that they were in the process of replacing those two systems. I think the pension system is now probably pretty well complete and running, but those two systems were indicated as being at very high risk.
    I should also mention to the committee that we are doing a follow-up to an audit that we did on the management of large IT projects. That follow-up will be coming this spring. Included in it is the global case management system at Citizenship and Immigration Canada.
     So there's progress going on out there, all the while looking at the potential for a failure. I know that if there is a failure with pension cheques, many of the recipients go right to the telephone to register their discontent.
     I will take a moment to focus on the Parliament buildings issue. As I walked up to the Hill this morning I said to my assistant that it must be tough finding stonemasons and materials to rehabilitate these buildings, because they were built 100 years ago and you can't get the stuff at Home Hardware.
    We've had a chance to discuss this in other locations, but it seems to be your view that Parliament itself should generate the leadership so there's no confusion later or during the process about who's really in charge. Parliament itself is a two-headed monster. It has the Senate and the House, and we're used to working together sometimes.
    As you looked at this, did you have the opportunity to scope out the possibility of the kind of mechanism where Parliament, the Senate, and the House, would say, “Okay, Public Works, Treasury Board, we're going to take over the management of all these projects”? Did you scope that out with any of the players?
    We recognize that there will have to be some organization or mechanism put in place by Parliament to manage and assume responsibility for the Parliament buildings. How precisely that is done will be up to the two houses of Parliament and Public Works to determine the models of that. Over the years different options have been developed and discussed, but we were not comfortable going to a recommendation on a specific model.
     We do note in the report how other countries are doing this--for example, the chief architect in the United States. I know that the two parliamentary bodies and Public Works are quite aware of how this is being managed in the U.S. and Great Britain. We expect that a proposal will be developed by them on how this organization would function.
     I was fortunate enough to have a tour of some of the rehabilitation work going on. Should the committee decide to look at this chapter, it might be worthwhile for members to actually see the rehabilitation work. We walk by these buildings every day, but I look at them quite differently now after having had that tour. It might be interesting for the committee to have a tour so that the project and the scope of the project could be explained to you. I think Public Works would probably welcome that.


    Thank you, Mr. Chair.
    Thank you very much, Mr. Lee.
    Madame Beaudin.


    Thank you, Mr. Chair.
    Good morning, Ms. Fraser.
    I would first like to address chapter 1, which deals with information technology. In fact, I would like confirmation from you. At page 19, it says that Public Works and Government Services Canada has been asked for a decade to do studies with definite timelines, estimated costs and measures to mitigate risks. And yet at page 18, it says: "PWGSC does not prepare a Department-wide IT investment plan beyond a one-year period." Nonetheless, we know that the Department has undertaken certain initiatives. Money has been allocated by Treasury Board to modernize systems. Money has been allocated by Treasury Board and Public Works.
    Could you give us some details about those projects and tell us whether they were carried out internally or were subcontracted?
    Unfortunately, Mr. Chair, I am not aware of those details. That question should be put to the department. In doing the audit, we simply considered existing risk analyses and planning on this subject. We noted that there was information at Public Works, but that it was located within each division of the department. That means there is no overall plan or replacement planning covering more than one year.
    Let's talk about the action plans. For all these departments you examined, particularly the three that present risks, have they established action plans?
    Yes, the three departments have system replacement plans and have evaluated the costs. As noted in the report, the total cost estimate is $4 to $5 billion. Using their parliamentary appropriations, they may have about $3 billion. There is therefore a $2 billion shortfall for the three departments in terms of funding.
    Does Treasury Board monitor these situations and implementation of the action plans?
    Some mechanisms exist for major projects in the government, but in terms of this audit, we criticize the fact that the Chief Information Officer Branch has no plan or comprehensive view of the status of information technology in the government, and no estimate of the costs to be planned for over the next few years. We can assume that there significant amounts will need to be invested that have to be spread over an appropriate period. Obviously this calls for planning and a comprehensive view. We hope the government is doing this—it has indicated its agreement—and is starting to get information from the departments.
    Knowing that it is urgent in terms of information technology and the aging of these systems, should they not be thinking about adopting a mechanism to ensure that projects are not overestimated?
    I would expect that in each department there is a rigorous cost estimation process. However, it goes beyond that. At the same time as the systems are replaced, there has to be a review of the way things are done. I think this opportunity has to be taken. Not just replace one computer with another, but also ask whether there are new work techniques. We would expect that each department will meet this challenge rigorously, but also that the Chief Information Officer Branch will do it as well.


    Do I have any time left?
    You have three minutes.
    Certainly money has been invested. Is there any idea of the costs invested in modernizing technology?
    We don't have precise figures, but I think $5 billion is spent per year on information technology. It may be on modernization, maintenance, and so on. We don't have the breakdown between modernization and the other costs.
    At page 17 of chapter 1, it refers to the Employment Insurance Program. It says that two major initiatives were developed to address these risks. It says that the second initiative, the Application Modernization Project, is only at the preliminary stage. On the first one, the Infrastructure Renewal Program, which comes to $214 million over five years, there is no information to say whether it has been completed. Has it been done?
    According to the most recent information we have, the investment plan did not set an order of priorities. Nor did it provide a comprehensive view. It has not been very long since we completed our work, so it would surprise me if there had been a lot of progress since then.
    Should we be concerned about the fact that the second project is only at the preliminary stage? You talk about the urgency and the really important situation that could affect people in terms of services. They give themselves five years. Should we be worried? What should be done in the next few years to ensure that this second initiative, the Application Modernization Project, is carried out?
    I don't want to start a panic and have people think that everything is going to break down tomorrow morning. But there absolutely does have to be planning to replace these systems in an orderly fashion and not wait for the situation to become critical. Making computer technology changes in the Employment Insurance Program isn't something that can be done overnight. It may take years to replace a system that complex. So it is important to have a good plan for modernizing or replacing it.
    So there have to be priorities set, in fact...
    Priorities have to be set for the entire government. It isn't a matter of one department's priorities compared to another's.
    So there really has to be a comprehensive view. As I understand it.
    Thank you.
    Thank you, Ms. Beaudin.


     Mr. Christopherson, you have seven minutes.
    Thank you very much, Chair.
    Thank you all for your attendance again today and for your thorough report. I would like to return to the Parliament buildings.
    Having served 13 years at Queen's Park, I'm no stranger to this issue. They're going through exactly the same thing. The buildings are of an age in the cycle of our country that these costs are coming up. Having served municipally and provincially, I know the easiest thing to do is push off maintenance costs when you're in a tight budget. It doesn't cause you an immediate crisis and problem. Of course, if you do that long enough you get into trouble, and this is the gold standard of trouble.
     I read your report, and in a number of places you go out of your way as much as possible to make the case that we need a new governance model. It was interesting to note that this isn't the first time, though. In 2005 there was a Public Works task force that reviewed this very same issue.
    If I'm reading this correctly, they came out with a recommendation half a decade ago that the governance model was problematic. Yet when I look on page 16 of your report and the response of Public Works, I don't see them agreeing with your recommendation and saying it's consistent with what they found five years ago. They say:
The Department acknowledges the recommendation, which is broader than PWGSC and in fact the Government, and will, within its mandate and authorities, work with other stakeholders to strengthen governance.
    It doesn't really mean much. And it certainly doesn't mean they agree there should be a new governance model. So help me understand it.
     I think the difficulty in the response to this recommendation is that we address the recommendation to the Minister of Public Works, who has the responsibility, and this is not a decision the minister can make alone. So the department responds. They have to be cautious in their response because they can't really speak for the minister. They also have to involve the two houses of Parliament.
    I admit that the response is a little cautious and probably not as precise as one would like, but we have had discussions with the three main players. Everyone appears to agree on this. It will be important as this develops to see the timelines, what will concretely be done, and who is actually going to hold the pen on trying to develop the governance arrangements for this.


    Thank you. I appreciate that it is complex. I just thought that having come up with a task force report themselves, they could have been a little clearer, at least in their view if not their actions.
    I'm curious about the governance model. I realize it's our decision to make as Parliament; however, what did you and your staff envision when you thought about it? Will it be an amendment to the Parliament Act to create a new entity, like a common BOIE with a sole purpose? How much of a legal mandate do we need? Will it take a legislative change? Can we do it through a cabinet regulation?
    Assuming we muster the political will and get our act together, what do you suggest would be the path of a united view if we all did agree? What direction should we be going in, as far as the shape of that model?
    My understanding--and I may have to be corrected--is that there will be a requirement for some legislation to actually transfer the responsibility to Parliament or some body of Parliament. In the current legislation the custodianship is given to Public Works, so that would have to be modified. Further changes or modifications and how they are done will depend on which mechanism is put in place--a single body like the chief architect in the United States, or a committee of senior officials, a board.
     You did point to other countries, I think at least three. You mentioned the U.S. just now. But there are at least two other parliamentary systems that have gone to the same thing. What model did they use? Do you recall?
    In the U.K., as we show in a table on page 9 of the report, the custodianship is transferred again from a government department to the House. There were organizations created within the Lords and the Commons administration to manage that. In Australia, they have what they call the Department of Parliamentary Services, which is a department of the federal Parliament. In those two cases, it would appear, it's not just one person who's been designated as the chief architect would be.
    My last question is on the governance model. I realize you can only suggest that there needs to be a better one as opposed to building it yourself. But is it purely parliamentarians? Would it be a combination of senior bureaucrats and parliamentarians?
    I think there are various models, various options that have been looked at over the years. One option that was certainly looked at was to have some sort of body in which there would be representation from government as well--Public Works, for example--that would obviously manage and oversee much of the rehabilitation work itself.
    I guess technically we're just tenants right now, the way this is structured.
    That's correct.
    I think that surprises people.
    Okay, great. Thank you for that one.
    You have one minute.
    I have one minute. See? I do talk too darned much.
    Quickly, Mr. Campbell, you and I had a chance to chat a little bit about the Northwest Territories and the importance of this report and the importance of some of the analysis that needs to be done that maybe isn't done. Could you just give us some further thoughts on that, on why this is such an important issue for the Northwest Territories?
    Thank you, Chair.
    As we mentioned in the preamble to the audit report, there are three pillars that are necessary for sustained development in the Northwest Territories. We talk about the necessity to settle land claims and refer back to Justice Berger's report in the 1970s that called for a moratorium on development until land claims were settled. The building of a regulatory framework that would allow that development to happen in an organized manner that mitigates risk is another important element. The third element that we talk about is the need to ensure that the aboriginal people who live in that part of the country are able to build the expertise that's needed so they can take advantage and participate in development as and when it happens.
    In that chapter, we talk about how the government is proceeding with the settlement of land claims and that of course they don't own all the turf. They need to get agreement with the first nations, and that's moving along. We talk about the process through which we think the government is making constructive efforts. They're at the table. When they run into an impasse, they try to find ways to resolve the issues. Nonetheless, as we speak, just now the National Energy Board is holding hearings on the Mackenzie Valley pipeline, and, depending on the timing of that, that could change the dynamic, with development potentially going ahead and some of those land claims still not being settled.


    Thank you.
    Thank you, Mr. Christopherson.
    Thank you, Mr. Campbell.
    Mr. Saxton, you have seven minutes.
    Thank you, Mr. Chair.
    Thank you, Auditor General, for coming in, and thank you for the report.
    My first question is regarding chapter 6, “Special Examinations of Crown Corporations”, specifically the Canada Post examination. There's reference to a lack of funding for Canada Post's plan to replace outdated facilities and transform its operations. In December, Parliament raised the debt limit of Canada Post to $2.5 billion from $300 million, and of course we're all now paying 57 cents for a stamp instead of 52 cents. Do you have an opinion as to whether or not this addresses the issue of lack of funding for Canada Post?
    As we mentioned in that special examination, Canada Post has a modernization initiative that's estimated to cost some $3 billion. At the time we did the special examination, which was finished in about August of 2009, the funding for that or the financing of that project was uncertain. The corporation had made requests for increases in postage rates and to increase its borrowing powers, but we had not seen that actually approved at that point. We are of course aware that that has happened since.
    The corporation has indicated that they are very pleased with the government's approval of those two mechanisms, and that will provide them with the necessary funding to complete the project. We have not looked at the actual plans ourselves to see how they will translate into Canada Post being able to actually realize the project. Certainly those were two major elements that the corporation itself had proposed to government, which have subsequently been approved.
     Thank you.
    My next question is regarding chapter 2, “Modernizing Human Resource Management”. Could you briefly touch on this new approach of merit-based appointments, and does this approach make sound administrative sense?
    We looked at the act that was passed in 2003, and one of the main objectives was to provide more flexibility and to resolve many of the issues that existed under the previous human resource management regime.
    Some members who have been around for quite a while will perhaps remember that our office did an audit in the late 1990s, I think, which indicated that in the human resource management system at that point there were something like 70,000 rules. The system was very cumbersome, very difficult, and there was a lot of concern around this merit principle, which at that time was interpreted to mean that you had to have the very best person from a competition.
    The rules have changed now to say that you have to have someone who meets the criteria, who is qualified, and you can also look at the availability of people. I think that was one of the main issues, that the very best person may not have been immediately available to fill a position. Now there is more flexibility in that. You still have to ensure that people meet all the criteria, are meritorious in having that position, but you don't have to go the extra step to say this is the very best person coming out of a competition.
    Thank you.
    Also in chapter 2 you identify a more integrated training approach brought on by the consolidation of training and development into the Canada School of Public Service. Could you say whether you think this was a wise decision and how things were done before?


    Previously training was divided up under many organizations--for example, I think language training, in part, was at the Public Service Commission. There may have been training as well at Treasury Board Secretariat or other organizations.
    Now they have all been combined. On the face of it, it would appear to be logical to combine training. To my knowledge there has been no evaluation done, and one of the issues we raised in this report is the lack of good performance indicators to assess whether the initiatives put in place are actually attaining the objectives set out initially.
    Thank you.
     Also in chapter 2, could you expand on the merits of having new mechanisms to manage workplace conflicts, including labour management consultation committees?
    Again, Chair, this was one of the major irritants in previous HR management regimes, that everything became a dispute and had to go through very formal, legalistic challenges to be resolved.
    I think, generally, practices have evolved to try to do these dispute resolution mechanisms before having to turn to the legal avenues. This would appear to be a very logical thing to have done, and we would hope there would be some sort of performance information to indicate whether this is being used and how successful it is in reducing the more formal complaints in the system.
    Thank you.
    My next questions are related to chapter 3, “Rehabilitating the Parliament Buildings”. In your opinion, does Public Works understand the severity of the problem?
    Absolutely. Public Works has done a number of studies. I think the most recent one we found on the overall project was about 2006, where they estimated the costs at that point were about $5 billion. This was obviously a very preliminary estimate.
     I would say they are very aware of the deterioration of the buildings and the need to progress with the rehabilitation project.
    Thank you.
    In your opinion, how well are they doing in managing the operational disruptions during these planned renovations?
    I'm sure there are people with many opinions on that.
    We looked at their management of projects, and as we indicate in the report, once there is agreement on the project to be done, Public Works manages it well. They use all the management techniques that one would expect. They do good cost estimations, which are obviously very difficult when you're dealing with heritage buildings. They are concerned about the environmental impacts of the renovations.
    The management of the projects is done well; the issue is the agreement on what has to be done.
     Thank you.
    My last question is regarding the announcements made this week about the new buildings to be built on the precinct. Does this really address the concerns you had in your report?
    Our concerns are really about governance and ensuring that the delays that have occurred in the past, which have resulted in delays in the rehabilitation project going forward, hopefully will be minimized. As I indicated in my opening remarks as well, there is a concern too that the funding for this project has to be assured over the longer term, so that there aren't the kinds of stops and starts that have occurred in the past.
    Thank you.
    Thank you very much, Mr. Saxton.
    I have just a couple of points of clarification, Ms. Fraser. Are the special examinations on your website or would we go to the departmental or agency websites?
    They are on the websites of the corporations.
    They are not on the Auditor General's website.
    You would expect them to be up now.
    They are all available on the websites, and should the committee wish, we could certainly provide you with a copy of all the special examinations in detail.
    As you know, we started a process last year. We did take two of them in, and we'll probably do a couple again this year. That works well.
    On the aging information technology systems, how does that fit into some of your previous reports? There is this program in Ottawa called the secure channel, and I believe you've done a number of studies on that, all unfavourable. Would that be classified as an aging information technology system or would that be a new one?


    If I may, Chair, just correct you, not all those reports are favourable, but--
    No, I said they were not favourable.
    They were not favourable, correct. Those are systems under development, which is quite different from the aging IT systems. We were looking at the mechanisms that government had put in place for the development of new systems. The secure channel was one. The global case management was another, and there were some as well in Revenue Canada, but those would be systems in part to replace some of the aging systems. This is the first time, to my knowledge, that we have looked overall in government about how it is managing the risk of aging IT.
    You classify the secure channel as a system under development.
    How long has that been around? Has it been five or six years, seven years?
    It is probably close to 10 years.
    It is really not used that much in Ottawa by many departments or agencies.
    It has begun to be used, but I'm not sure what the state is currently, and I'm not sure if that's in our audit coming in the spring.
    It will be in the spring report follow-up of it.
    Thank you very much.
    Colleagues, we're now going to go to the second round of five minutes.
    Ms. Hall Findlay for five minutes.
    Thank you, Mr. Chair.
    Thank you all, of course, for being here.
    This has to do with the information technology piece. I'm a bit confused. There is a chief information officer branch of the Treasury Board of Canada Secretariat, but there is also a chief information officer responsible in each of the departments. Is that correct?
    That's correct.
    Needless to say, I'm a little taken aback by the commentary about the chief information officer branch of the Treasury Board being aware of these issues, not formally identifying an issue as an area of importance for the government, and who hasn't done really too much.
    I'm also concerned about the involvement of Public Works, and I'll express additional confusion because I hear “secure channel”, I hear “global case management”, and I hear “GENS”, the Government Enterprise Network Services project. We, in the government operations committee, have spent an awfully long time trying to get to the bottom of what's happening with GENS, for example, which seems to be an effort on the part of Public Works to establish a network system that will provide the opportunity for other departments to enhance their IM/IT processes. At least that is the impression I get.
    To be perfectly honest, I used to work in the business, and I'm still somewhat confused. I'm a bit surprised to now hear that Public Works itself is clearly having its own challenges in managing its own IT systems and its own planning for the future.
    Can you help a little bit in just clarifying this? Can you shed any light? Have you done any investigation of the GENS proposal?
     We have not looked at GENS, and I'm afraid I really can't talk to that. I don't even know what stage it's at.
     I was really hoping you were going to help my confusion.
    Needless to say, we continue to have more work to do at the government operations committee.
    What comfort do you have in some of the responses in your report? I see “we will do this now” and “we will proceed”. It seems that this happens every time there's a report, and this has been going on for some time. Is this enough? Is it enough to just say there are continuing problems and have departments respond by saying yes, thank you, we will do this? It seems very disjointed. I know that in other jurisdictions governments have gone in the direction of, for example, a chief information technology officer, a person in an office who can actually take charge. I guess it's similar to the governance challenges that we're seeing with the government buildings.
    Would that be something you would recommend, or recommend that it at least be considered?


    Mr. Chair, I think it would be interesting, should the committee decide to hold a hearing on this, to have a discussion about the philosophy of management would probably be the Secretary of the Treasury Board. The government is really taking an approach that the deputy ministers are accountable for the management and the operations of their department, be it human resources, information technology, or financial management. They are responsible for managing these risks. They are responsible for requesting the funding to deal with these projects, rather than having one person or one branch that would manage this across this government.
    I think it would be very difficult for one entity to try to manage all of these risks. We certainly recommend very strongly in this audit that the chief information officer, which exists currently in the Treasury Board Secretariat, needs to understand what the state of IT is across government, what the coming challenges are in that, what the risks are, and what the bill is coming down the road to replace all of this, and to give some coordination, and some challenges as well, to what departments are doing.
    If all of the departments say their systems can last another five years, and they all come in at the same time asking for the money to replace the systems, I think we can all probably guess that it would be very hard for government to fund all of that at once.
    What is the plan going forward? Maybe some have to start the replacement earlier than normal. It's like us in our own homes. You can't do the roof, the furnace, and everything all at once. There's the planning and coordination of that, and the relative prioritization. That, we really believe, should be led by the chief information officer with the coordination and collaboration of various deputy ministers.
    Thank you, Ms. Hall Findlay.
    Mr. Kramp, you have five minutes.
    Thank you, Mr. Chair.
    I'd like to start on the electronic health records. Obviously there is no topic of more importance to Canadians than issues relating to their health. The e-health file has been identified as a component in hopefully reducing costs, but also certainly in increasing effective care.
    With the recognition that we have an integrated solution here between the provinces, and the feds and even though the feds end up still supplying the dollars to the provinces, there are still inherent responsibilities for both.
    Given the initial reports that came out in a number of the provincial assessments of their progress today--and specifically I can mention the $700 million Ontario tobacco money that was spent to hire consultants, and we've all heard that--I'm wondering, how confident are you that the various provinces are going to be able to fulfill their responsibilities in this arrangement?
     That's a very difficult question.
    We note from the audit reports of our various colleagues who participated in this concurrent audit with us that there are several provinces that had, I would say, pretty major management issues, not only with the actual management of the implementation but also in the planning and the monitoring.
    However, I would say that when we did the audit of Infoway, we noted they were very rigorous, first of all, in the assessment of the projects that they would partially fund. They contribute only a portion of the costs. They were also monitoring those projects to ensure they were meeting the conditions that had been set out in these funding agreements. So we can only hope that the audit reports that have been produced will help to strengthen the management of the projects.
     But what we are really trying to focus on in this summary report is that there are some very significant challenges to the success of this initiative, including getting buy-in from various stakeholders, changing technologies, and ensuring compatibilities across the country.
    This is a very expensive project--some have estimated it at more than $10 billion across the country--and we would certainly encourage all the legislatures to continue to monitor this, to track the progress, and to see if these challenges are being met successfully.


    Fine. Partnerships can be difficult in many circumstances, as we've found out. In this particular case, though, recognizing that we have some impending deadlines or expectations--2010-11--for implementation of part of this, do you not think it would be a good idea to have before this committee a request for confirmation by the provinces of their status right now so we can have an idea of where the problems lie? Obviously this would be in addition to having an administrative role in overseeing a lot of this through our process.
    If we don't have problems clearly identified, then how can we move forward? Do you think it would be a good idea to request a status update from the provinces?
    Chair, I will leave up to you whether the federal committee can ask for that kind of information from the various provinces. Certainly, you should be able to get that information through Infoway.
    Infoway is tracking the progress in the various provinces. It should be giving detailed reports on that and should actually know where the various provinces are, who is on track and will meet the deadlines and who is perhaps a little further behind.
    Correspondingly, then, would Infoway be the source of some potential result, either anticipated savings and/or levels of efficiency expected? Could we expect they would be the source of that too?
    They should have some information on that, some studies that would be done. They would certainly be able to do that.
    Has your analysis shown that one reason we're having so much difficulty in this is that there is a technical problem with hardware, software, equipment, and so on, or is this an input and/or a political problem, or is it specifically a management problem? Where do the problems lie?
    I think there are problems at a number of levels. At the actual management of the initiative, we've seen there are just basic management problems. In many provinces, it is difficult even to know what has been spent to date on this initiative. The planning has not been as good as it could have been in certain provinces.
    But I think there's a more fundamental issue, which is that this is a significant change in the medical system. Many of us have only to think of doctors' offices where you walk in and there are huge filing cabinets full of paper. This would mean changing all of that. So it does require a very significant portion of change management. There are a number of factors like that, which have to be considered and dealt with to make sure this is successful.
    Thank you.
    Thank you very much, Mr. Kramp.
    Monsieur Plamondon, vous avez cinq minutes.


    Thank you for being here, Ms. Fraser.
    I have a question about a document I requested from the Library of Parliament. I was surprised at the answer and it confirmed, following up on the question by our government colleague and your answers, there is a mess at Public Works and Government Services Canada. I asked the Library to tell me what investments had been made to improve Parliament Hill since 1980 in various buildings: Centre Block, East Block, West Block, Confederation Block, the Justice Building and the Wellington Building. I also asked it to tell me what the annual maintenance costs have been for those buildings since 1980. I asked that the figures be broken down by year, preferably, if possible. I also added that I would like to know how much has been spent to improve the computer system in the parliamentary precinct since 1980. This is what the Library said:
    "According to Public Works and Government Services Canada, because of the complexity and scope of this request, the best option for the requester [referring to me] for getting an answer would be to make an access to information request."
    I was extremely surprised. I was skimming through a document from Public Works entitled Building on a Solid Foundation, written two or three years ago, which lays out projects that could take 25 years to complete. So how can there be projects spread out over 25 years when they can't tell me the amount of the maintenance costs for a building, year by year? That information has to be filed. There must be an annual budget for each building. There also has to be a budget for improvements. The slowness of the exterior renovation work on the East Block was why I asked for that information. The workers had not finished putting up the scaffolding. It took months to do that. So I decided something wasn't right. Is there an estimate and what will it cost?
    In the circumstances, would it be possible for you to get these kinds of documents? Do you have in hand, for example, information concerning the maintenance on each building and the work done each year? It shocked me, so I have not written to the Access to Information Commission. I made that request a year ago.


    In fact, there is a division at Public Works that specifically handles Parliament Hill and it is given certain budgets. So I am sure that if you asked what the budget is for this year, they could tell you. But when you go back 15 or 20 years, the way information is retained in the government, it is extremely difficult to find it.
    It isn't on computer.
    That is probably why you got that answer.
    We could look at what information we have received, but I think we started to take an interest in it maybe five years ago. We didn't go back further. I think there were some compilations about the condition of the buildings and renovation projects.
    In any event, we could see what information we were able to get from the department and perhaps encourage them to provide you with what they have.
    Thank you.
    I will give my colleague the floor.
    I have another question concerning chapter 2, which is about human resources. I have a comment and a concern to express about what is written at pages 18 and 19. You say that Parliament needs information to allow it to play its oversight role and review the law in terms of human resources. At page 18, you recommend that there be reporting. We have noticed that Treasury Board has been slow in producing its annual reports. We know that all departments submit an annual report to Parliament about human resources issues. But Treasury Board is slow in doing it.
    The recommendation made to Treasury Board is to inform Parliament with greater speed. Treasury Board accepts the recommendation and will act on it, and I quote part of its response, that will do it by "providing more timely information". First, it worries me quite a bit when they talk about "more timely", when it comes to speed. Second, it says at page 17 that there is a problem with measurement indicators. It is all very well to have reports, but if there are no indicators that allow us to evaluate expectations or objectives, that seems problematic to me. Unless I am not understanding this whole thing, that is the aspect that concerns me.
    So Treasury Board is prepared to provide us with speedier annual reports, but in a "more timely" manner. I would like to get an idea of what that means in terms of timelines. As well, does it call for a recommendation that specifies that there be clear indicators so the objectives can be evaluated?
    Yes, absolutely.
    Mr. Chair, information about performance and achieving objectives absolutely has to be improved. This is particularly important since there has to be a legislative review in one year. How will Parliament be able to determine whether the legislative changes have had the desired effects if you have no appropriate information about performance? The recommendation in paragraph 2.72 says:
The PSMA Legislative Review Team should ensure that information provided to support the legislative review will allow the report by the President of the Treasury Board to provide meaningful information to Parliament on the extent to which the expectations of the Public Service Labour Relations Act and the Public Service Employment Act have been met ...
    We think it is important that greater effort be made to provide parliamentarians with better information.



    Merci beaucoup, Madame Beaudin.
    Mr. Young, five minutes.
    Thank you, Chair.
    Thank you for being here today.
    Two key principles of the Canada Health Act are portability and accessibility, and the eHealth system is designed to address those and implement those. Of course, the goal is to make the records available anywhere, at any time, so if a Canadian travelling from Ontario to the west is skiing and has an accident, they can get their health care, and their health care records would be readily available. That's the dream. But we've had a huge problem in Ontario when it abandoned its own rules for procurement and hired consultants. We were hiring consultants and hundreds of millions of dollars were wasted, and then the director, who is a very good gentleman, decided to let somebody else take over in August. Dr. Alan Hudson is no longer there. So it's leaderless; it's a rudderless ship right now.
    But I understand that from the federal government viewpoint, Infoway is to set national priorities, national direction, and national standards, so I wanted to get your view on how well Infoway has done with regard to its leadership and coordination role.
    Thank you, Chair.
    Members may recall that we did a specific audit on Infoway, which was tabled last November. Our report was generally a positive report. We found that Infoway was managed well, that they had established what they call the “blueprint”, or the overall architecture, for these electronic health records, that they were assessing the projects well before they agreed for funding.
    We did have a couple of recommendations. One recommendation was that they needed to get better assurance that the provinces were actually conforming to the blueprint and that there needed to be better information provided on progress. But overall our report was a favourable report.
    Thank you.
    With regard to systems, we all know about the ill-fated long-gun registry. It was supposed to cost $2 million, I think, when the idea was first conceived, and it got up to somewhere around $2 billion. It was a black hole for money. But I think all large organizations have these problems, both in the private sector and in the public. You buy a system, and then you need customized software, and then you need updates. So they're ongoing--your software and hardware. And then there are huge training costs. As new people are hired, they have to be trained and retrained when there are upgrades, so the organizational commitment to the system becomes huge. There's a useful life and then systems become obsolete because somebody has a newer and better system. So you reach a point where you should have a new system despite the capital cost because the operations could be so much better and cheaper and the public could be better served. This is the struggle that all large organizations have.
    My concern is on the $2 billion figure you mentioned for three departments. Is that a figure you had time to develop yourself in the AG's office, or are those figures estimated costs for systems for those three departments? Did they actually come from the departments?
    Those numbers, Chair, actually come from the department, and that is the cost they are unable to fund out of their current appropriations.
    Okay, because I think automatically it's incumbent upon us to question those costs and to look to see if there's a better way or a cheaper way, etc.
    On the other hand, I'm concerned when I hear talk about government-wide solutions even to risk management. Wouldn't you have any concern, if there was a government-wide policy on purchasing or on risk management, that we end up putting too many eggs in one basket? If there was a software program or a system that was bought from a private sector company that wasn't the best or was expensive to operate or was prone to failure, we might have implemented it too widely in various departments and the mistake in going with that company or that organization or that equipment would end up being far bigger than it needed to be. My experience in the private sector is that sometimes you're better to let departments buy their own computers and software because they understand their front-line needs better.


     Certainly, Chair, we are not recommending in any way that there be some overall government purchase of equipment that would apply to all departments. In fact many of these systems are developed in-house rather than being purchased. The systems are quite unique. And I would agree that each department has to determine what is the most appropriate for their operations.
    What we are trying to get at in this audit is that there needs to be an overall assessment of what the state of IT is and the planning going forward as to how this renewal is going to occur.
    Did you have a chance to look at the Canadian passport office? With the amount of security required in those documents, the complexity of those documents, they're now producing passports in two weeks. It's a tremendous record, and the other departments or agencies might be able to learn from what the Canadian passport agency has done.
    If memory serves me right, we looked at the passport office three times. We did a follow-up just before the last phase of the western hemisphere travel initiative came in and actually gave them a very favourable report. It said they had made very good progress and had addressed many of the issues that had occurred when the initiative first came in and had actually, in many ways, revamped the way they do things in their operations. So that was a good news story.
    And if my memory serves me right, I believe the committee had a hearing on that report--
    We did.
    --and again, it was very favourable to the passport office.
    Thank you, Mr. Young.
    Mr. Christopherson, five minutes.
    Thank you, Chair.
    I want to turn to chapter 5, and notwithstanding that I'm about as urban a member as you're ever going to get, born and raised in downtown Hamilton.... It's not woodtown; it's steeltown.
    It's sulphur city.
    It's about agriculture. I'm going to ask these questions based on two things: one is the subject matter and the other is my own experience. The subject matter, of course, is food and a growing concern, particularly by parents, about the security of our food network.
    In your news release the day you tabled you said:
“The Department’s research is important to Canada’s food production and its ability to compete internationally,”.... “We found serious problems in areas that are fundamental to conducting research, such as managing funding, capital assets, and human resources.”
    My question stems from comments in your overview chapter, and I'm looking at page 5. From this I'm seeing that Agriculture and Agri-Food Canada introduced a science and innovation strategy in May 2006. They didn't even start the draft of the strategic action plan, which is what gives effect to these great ideas, until October 2008. Then--again if I'm following this correctly--at the end of your audit in September 2009 they still hadn't determined the human resources, equipment and facilities, and financial resources needed to carry out the action plan. Well, there's not much left after you do human resources, equipment and facilities, and financial resources. There is not much more to bring to the table to give effect to an implementation plan. So, again, the chronology is that they brought in the strategy in May 2006, they did't even start on a draft implementation plan until October 2008, and by September 2009 they still hadn't identified the key cost factors.
    I've been around long enough to know this is very, very worrisome in terms of what it suggests about the long-range planning. Maybe day to day they're doing all right, but is somebody really sitting down and saying, “Where are we in two months, six months, five years?” That's what the plan was for. Did you get any reasonable explanation as to why they waited over two years to begin even drafting the implementation plan, and well over a year after that they don't seem to be too far down the road? What kinds of responses did you get, and how concerned about this are you, Madam Auditor?
    Chair, the member is correct on the timelines and the lack of progress in actually operationalizing a strategy.
    This strategy, too, would have changed or certainly modified the way the department would do business--much more emphasis on collaboration with others. So it would be really important to look at issues like capital investment. Does the department keep all these things? Do they work with others? Can they minimize this?
    At the time we did the audit there was some progress being made, but it was very limited in doing these detailed plans. We did not receive a really good explanation as to the delays.
    That would be something the committee might wish to discuss with the department.


     We will, and I hope they're working on a good answer right now, because if you didn't get one, I have a sneaking suspicion there isn't one, which means they're either going to have to do some fessing up or they'll get very creative between now and when they finally meet with us.
    I'm good. Thank you, Chair.
    Thank you very much, Mr. Christopherson. You ended early. That's new.
    It's to make up for my long-windedness earlier.
    Mr. Shipley, five minutes.
    Thank you, Mr. Chair.
    Thank you, Madam Auditor General and witnesses.
    One follow-up—introduced in 2006, launched in 2007-08, framework completed in 2009. I'm reading, not just this report, other reports. There's a common thread that those day-to-day things actually seem to move along in some departments. We continually use—and this is a government issue, to be quite honest—the complex parts. We get into the complex issues. Government has a great way of making things complex.
    We've now moved to.... You were substantially completed by September 2009. Could you tell me—and we've had this discussion before—what's happened since September 2009, in terms of a process of moving ahead?
    The government has indicated—I want to clarify that this is on agriculture.
    Yes, this is on agriculture.
    The government has indicated to us that these more detailed operational plans will be completed this month. Should the committee decide to have a hearing, I would expect the department will be able to tell you that plans have now been completed.
    There is a question, though. There are a couple of issues. One is the collaboration with others. We note three projects that were very badly managed, and it has created a loss of goodwill with other partners. The department needs to have a specific plan as to how it will re-establish these relationships with other universities and other governments.
    There is a question as well about evaluations and feedback to the scientists on what they are actually doing. We were told they are not getting the kinds of performance reviews and information about their research that one would expect.
    So over and above the actual detailed planning, there needs to be some specific action taken on those two issues.
    When we talk about agriculture, one of the things that has changed in the last while is doing research without having the development or the commercialization attached to it. We've always heard research is on the shelf unless something fantastic comes out of it, and there's no framework to take that research and commercialize it. That becomes a big problem.
    We're trying, I think, as a government to rectify that so there is a flow, understanding that most research sometimes goes here and something comes off the side. But there's no framework in which to deal with that. I suspect it has something to do with the complexities in terms of developing in a particular industry.
    Agriculture, Madam Auditor General, is one of the most complex.... It is one of the most intriguing industries. Not many years ago we grew crops for food. We're now growing crops for food, for energy, for the pharmaceuticals, and for industry. All of this started to develop over the past number of years, and we still grow them for food. So now we've been able to do further research to try to commercialize these products. We still end up with the food products because that's a significant part. It separates this industry from any other industry in Canada because it's one of sustaining humanity.
    So when I look at the scientific research—the 2010 strategic action plan, which you just mentioned, will come forward, and we'll have the opportunity.... Are you encouraged at least to see that, recognizing some of the things I just talked about in terms of an amazing industry? In terms of the steps forward, do you see those as positive, moving ahead in a timeline, at least following what Mr. Christopherson laid out? It's a frustrating process, quite honestly.


     We obviously think it's a good thing that these plans are being developed and put in place. The question that has to be asked is why it's taken four years to do it. A lack of communication and perhaps even confusion existed in the department, with the strategy that came out in 2006, and there was no actual on-the-ground implementation.
    Yes, it is a positive step that the plans are being produced. I think it will then be a question of how they are actually going to be put in place.
    Yes, and honestly, this is a committee that recognizes, as the people in agriculture have recognized, there have been some issues.
    For clarification, I know I asked you about this the other day, but you said that much of the laboratory and agriculture equipment is past its useful life. Is that the book value? Is that an operational value, where it's actually past its useful life and doesn't have any value? Has equipment been upgraded, even though some of the laboratory equipment is outdated?
    Yes. Chair, if you will, these are the accounting lives that are given to assets. It's five years, seven years, or whatever. It is perhaps, but not necessarily, an indication of value. Some equipment could last longer than the useful life that has been assigned to it and still be very useful to the department.
    As we note in the report, for example, on buildings, there has not been an assessment of the buildings as to their state and which buildings are needed and where. We know there are research facilities spread all over the country. Are those buildings needed? If they need to be upgraded or renovated, what again is the cost?
    Thank you.
    Thank you, Mr. Shipley.
    Ms. Hall Findlay for five minutes.
    Thank you, Mr. Chair.
    I want to pursue an earlier train of thought, and it may not actually be as much a question as a request.
    In regard to the IT challenges, I know your report focused on what could go wrong. One of my colleagues mentioned this was an exercise in accident prevention. I appreciate that. But personally, my focus is also on cost, waste, and the opportunities to find efficiencies in government operations. There's a concern in terms of waste.
    We actually looked at a number of department budgets that had risen significantly. For example, we found that a lot of dollars were being spent on IT consultants. We then get this relatively damning report. I'm a little concerned about the amount of money that's being spent. My colleague, Mr. Young, actually used the line that they were concerned about the hiring of consultants who then hire consultants. We know they're not particularly inexpensive.
    I then tie that to my concern, as I expressed earlier, about all of the different programs that have different names and IS/IT or IM/IT components, or that's what they're trying to do. I'm not a big fan of adding bureaucracy and levels of oversight. But I sense there is a lot of complexity and confusion, which may in fact be costing the government a great deal of money in terms of waste and the opportunity for certain industries to do a lot of work, when we get this rather damning report in terms of the IT situation.
    This is not so much a question. It's almost a request. Your office is looking at departments and at specific issues, but I think there's a need to look at some of the IT from a larger perspective to see what on earth we're doing and how we're coordinating this effectively. I leave that with you.
    I want to very quickly ask about chapter 4 and the environmental concern that you raised in terms of the Northwest Territories. You said that in regions where land claims are still under negotiation, Indian and Northern Affairs has not put an adequate regulatory system in place to protect the environment, nor have Environment Canada and Indian and Northern Affairs met the responsibility to monitor the cumulative impacts of development on the environment.
    My question is twofold. What has been the response, if any, from those entities? Do you have any suggestions or recommendations to improve the situation?


    I'll start with the issue of monitoring cumulative impact. The departments have a clear responsibility to do this monitoring. It was done partially, for a period of time. We were told that it was eliminated because of funding issues. The departments, though, have agreed that they should be doing this and have indicated that they will. But again, how they are going to fund all of this is an issue the committee might want to look at.
    That is particularly important as the co-management boards, which exist in areas where there are settled agreements, approve development projects so that they will have a sense of the effect these projects may have on the environment. It's really to provide good information from board decision-making.
    Where there aren't settled land claims, the issue is really consultation with and involvement of first nations in making these decisions. We note in the report that their involvement comes in very late in the process, currently. There have been a few cases--I think we mentioned two or three in the report--where development projects have gone quite a long way, and then there have been legal challenges, which ended up causing further delays or actually limiting the project--not allowing the project to proceed--because of that lack of involvement.
    One of the main issues, when they have settled the land claims, is the existence of co-management boards, which would appear to make the process more efficient. Then development projects are more aware up front of what the likely outcome will be.
    Okay. That's great. Thank you.
    I'm done, Mr. Chair.
    Thank you very much, Ms. Hall Findlay.
    Mr. Dreeshen, you have five minutes.
    Thank you very much, Mr. Chair. Thank you for your presentation today, Madam Fraser.
    I'd like to also focus my questions on chapter 4, as Martha has just done.
    Madam Fraser, you noted that INAC has made some constructive efforts to negotiate these comprehensive land claim agreements as well as self-government agreements and that it has been following some established procedures for those negotiations.
    I might add that I'm also on the Standing Committee on Aboriginal Affairs and Northern Development. Last November, as members, we met with the stakeholders in each of the territories, and we saw first-hand how the people of the north are positioning themselves to take advantage of all these new opportunities. We met with many native business leaders, and I was truly impressed with their insight, their determination, and their management abilities as well. In my mind, that bodes well for some wise, practical, and environmentally sustainable development throughout the entire region.
    I'm wondering perhaps if you could touch upon the importance of these land claim agreements, particularly in relation to the topics that have been raised in the audit, namely environmental protection, economic development, and improved governance. As far as human resources are concerned, did you, in your research, observe some of those same skill sets I spoke of when you met with key personnel?
    Thank you, Mr. Chair.
    I'll begin, and then I'll let Mr. Campbell complete with more information.
    I would say that the main benefit that comes from a settled land claim is certainty. The whole question of uncertainty about who owns the land, who owns the resources, and what structures are in place to actually approve development is clarified for all. People kind of know the rules of the game, if you will. Things can then proceed much more smoothly rather than there being legal challenges. I mean, obviously, that can still happen, but I think everyone would agree that business likes to have certainty. It certainly helps to facilitate development projects.
    I'll let Mr. Campbell talk about the human resources issue.


     Thank you, Mr. Chair.
    I would certainly agree with the member that in the Northwest Territories a great number of aboriginal groups, organizations, companies, and people have developed expertise in a variety of areas. I think that stems from at least since the settlement of the first land claim agreement in the Northwest Territories, the Inuvialuit Final Agreement, in 1984. Nonetheless, there appear to be gaps and there are concerns certainly in some areas. We do know in the report that the federal government has programs in place to continue to build capacity and expertise. Their issue with those programs was that they hadn't been evaluated and there wasn't good information on the results.
    I would make one other comment. The member had mentioned the constructive efforts. We certainly got that from the first nations organizations that we talked to. We've looked at land claims negotiation processes in the past, and sometimes there was nobody at the table; either party, including the federal government in many cases, had just walked away. Sometimes the federal government prioritizes its cases and says, “There's not much prospect of success, so we won't even go to the table.” We did not find that in the Northwest Territories. People say that all parties seem to be motivated towards getting agreements. So there are constructive efforts.
    I would also just add the caution that there is still the spectre or the prospect of a major development in the Northwest Territories, which raises a concern about, what if that happens when the expertise isn't fully in place and if land claims are not fully settled? So that's part of the risk.
    Thank you.
    In 2005, your office conducted an audit on co-management. You were speaking of that earlier on these co-management boards. You identified weaknesses that were related to the department's support thereof. As part of this current audit, you noted that satisfactory progress has been made in addressing the weaknesses that were identified in 2005. Could you expand, for my benefit, upon what those weaknesses were and how these things have been addressed?
    Mr. Chair, I'll ask Mr. Campbell to respond.
    Thank you, Mr. Chair.
    We did note that the department had made satisfactory progress in that regard. It was largely around providing guidance and ensuring that the boards had the capacity to deliver on their obligations. We've noted improvements in that area.
    Thank you.
    Another thing that we heard a lot of when we were there was about the Canadian Northern Economic Development Agency. Although your audit didn't specifically cover this, I know that a lot of economic development programs and functions have been transferred to this agency. No doubt they will be the ones responsible for implementing many of your recommendations.
    Do you have an opinion as to how this new agency is going to fit in and whether its stated priorities make sound administrative sense? What are your thoughts in that area?
    Thank you, Mr. Chair.
    The member points out the interesting thing about that part of the chapter, that the weaknesses we saw were in relation to how the Department of Indian and Northern Affairs had managed some of those programs. But the solutions, as the member correctly points out, need to come from CanNor, because during the course of our audit that transfer had taken place.
     We haven't done any audit work on CanNor. We've had some discussions with officials. I know they're motivated and driven to take on the new responsibilities. I think they're still sort of working with the rest of the government to figure out how they would do that. But to the extent that we would come back and follow up on those recommendations, we would be following up on what CanNor might have done by then.
     You're out of time. Thank you very much, Mr. Dreeshen.
    I want to come back to just one issue, Madam Auditor. I did raise it, I believe, on Tuesday, and that is this whole issue of human resources that was brought out in your audit, and thank you very much. When you look back at legislation that was passed in 2003 and implemented in 2005, I believe it was a step in the right direction. It certainly made a lot of sense to decentralize some of the human resources decisions, to put it more in the hands of the people who were...and of course do away with the concept that you had to have the best person in Canada for a good job, which was totally inconceivable.
    But there's still a problem, Madam Auditor. I want to get your comment, not only from doing this audit but also as the manager of a mid-size agency here in Ottawa with 500 or 600 employees. There doesn't seem to be the planning in HR in Ottawa that I would like to see. We have an awful lot of consulting shops in Ottawa that hire out people to the government. It's very expensive for the government to operate that way. We have a tremendous number of former civil servants working as consultants, and who do they consult? You know who they consult. They consult with the federal government.
    We have an awful lot of situations where civil servants retire, and you meet them on the street the next month and you ask them what they're doing: they're back working for the same department for another six months or a couple of years. We have the temp agencies. We have situations where people are employed in either term or contract jobs, which does not necessarily get you the right person. We have close associates. We have nepotism. The whole thing, in my opinion, is very inefficient and ineffectual.
    I certainly like the concept of pre-qualification, not only in skill set but in language skills. Kevin Lynch, a former clerk of the Privy Council, has certainly identified this issue. I think he did a lot of work on it. Certainly, the recruitment that was done is a step in the right direction, but still we have this major problem out there. I think we're being unfair to younger Canadians who want to make a career in the public service, who are educated, and a lot of the time bilingual.
    Do you have any...? I'm going to get your comments not only from preparing and supervising this audit, but also as the accounting officer of a mid-size Ottawa agency.


    Thank you, Chair.
    We haven't looked specifically at planning of human resources in this audit, but as you well know, in past audits we've certainly looked at that issue and found, I think in all the audits we did, that the planning was inadequate, that even things like succession planning was done poorly. You are right in that many people come in on a temporary basis, which I'm not convinced is the best way to get the best people to come into the public service. The change that occurred with the legislation to transfer responsibilities to deputy ministers, I personally think, is a step in the right direction. They are the best place to understand the particular needs of their departments and to hopefully put more priority on human resource management. I just don't think it ever got the attention from senior managers that it requires.
    From my perspective in my office, we have the status of a separate employer, which means that we do our own hiring. We have our own classification system and we are able to be very efficient in hiring. We noted in the report we tabled on Tuesday that the average time to hire--this is from a Public Service Commission report--is more than two years.
    It's longer.
     Anyway, it's a very long period, and it has actually gotten longer. If you're taking months and months, let alone years, to hire someone, the chance that they will find a job somewhere else is pretty high.
     If the systems can't be more efficient and you can't hire people quickly, I think you're going to lose the best. That is why there is a lot of use of term positions, to get people in to do the job because the hiring process is so long and complex.
    As well, there's a question about the uncertainty of funding in many cases. It's difficult to bring in people to full-time positions for a program if you don't think you will have the funding for that program next year.
    There is a real need to focus on the time it takes to actually hire people. It's twenty-three and a half weeks, so it's over six months to hire. That is the average, so you can be sure there are some that are longer than that. People will turn to these other mechanisms to get the people in that they need.
    I agree that there is still an issue. I do hope, though, that these changes that have been introduced by this legislation will put more focus on this and will improve some of those systems. As we point out in the report, there certainly needs to be better information on whether these objectives are actually being accomplished or not.


    Madam Auditor, you see an awful lot of people who are retired, and then automatically, or within a month, they are back, either consulting to the previous department or on a six-month contract. Do you use that procedure in your office? If someone retires, are they back doing basically the same work six months later?
     When people are retired, for the first year, I believe, there's a clawback, so quite honestly it doesn't make a lot of economic sense for people to do that, at least for the first year--
    I think they just set up and work as a consultant--
    --unless they set up as a company.
    We do occasionally have former people come back for very short, temporary assignments, but they would not be a large proportion of the consultants we use in our office.
    I assume we're going to have a hearing on that anyway. I imagine we can explore that further.
    We have a few minutes. I'm going to adjourn at 9:50, because the finance committee is coming in later and I want to make a clean transition.
    Madame Beaudin, do you have a couple of questions? You have three minutes.


    Thank you, Mr. Chair.


    Don't we have committee work to do?
    No, we passed--
    Oh, you did that at the beginning.
    Yes. I have an announcement, but there is no other business.
    Let's say it's two minutes, Madame Beaudin, two minutes for Mr. Young, and two minutes for Mr. Shipley.


    Thank you, Mr. Chair.
    Ms. Fraser, I have one more question to ask you about information technology.
    You have submitted several reports in recent years. Annual spending amounting to billions of dollars is in issue. The people at Public Works and Government Services Canada respond to you and agree with you. That's the good news. The bad news is that in spite of that, virtually nothing happens over the years. First, I wondered whether you were discouraged. Reading the report, I really wondered what the solution was. Are we going to have to call in experts and get outside advice? How can we hope that by four or five years from now things are going to get resolved?
    An auditor never gets discouraged.
    So much the better.
    We will be submitting a follow-up report in the spring on the development of technology systems. I am eager to see whether progress will be satisfactory. In the case of a majority of the follow-ups we do, we find that the government has made satisfactory progress. Some things change and some things improve. For this chapter, the government has said very clearly that it was going to get information and create a strategy within two years. We, and perhaps the committee as well, will have to follow up to find out whether a strategy has been prepared, and if so, what the nature of the strategy is. As I said earlier, I am hopeful that things will change.
    Thank you.
    Thank you, Ms. Beaudin.
    Mr. Young.


     Thank you, Mr. Chair.
    Madam Fraser, adverse drug reactions are the fourth leading cause of death in our society today. I'm talking about adverse drug reactions that occur in hospital with the drug given as prescribed, rather than in error, which is what the drug companies like to talk about when doctors make errors that are overdoses. A common reason that happens is that a patient is given a drug that is contraindicated for use with another drug they're already on, and someone doesn't know that it's contraindicated or they don't know that they're on that. For example, Lipitor, the world's largest selling drug, the top selling drug in Canada, is now contraindicated with Plavix, which is I think number five. They can be life-threatening if taken together.
    Those of us who work in prescription drug safety were hoping that eHealth records would help prevent those deaths and injuries, but you're reporting here that there's a risk that the electronic health records systems will not be compatible across the country, so when a patient goes into hospital in another province, in an emergency, even if their record was available in one format, it would not be able to be understood in another format. As well, barriers to computerizing doctors' records may exist as well, so even if they were in hospital in an emergency situation and they got their medical record from their doctor, it wouldn't have all the information. That's a very serious problem, and it's a great risk to Canadian patients.
    What should we do to help coordinate and make sure these systems can talk to one another, and that we get the best out of the system?


    The member is certainly correct that one of the major benefits foreseen from having these electronic health records is the prevention of these adverse drug reactions. Medical professionals will be able to know what the person is taking and will be able, hopefully, to have all the information needed as well to, for example, prevent duplication of very expensive testing.
    There is agreement among the provinces on this blueprint that Infoway has put in place. The responsibility, of course, to meet that is up to each provincial authority. There are some provinces, Prince Edward Island being a good example, that actually do have electronic health records, but those may not be completely compatible with the blueprint that has been developed. So one of the questions is how that gap will be closed and how these records will be compatible so that there is a pan-Canadian solution to this.
    So we have a question, but we don't have the answer?
    We have a question. I think a lot of it is going to come down to funding of these projects across the country. Should the committee decide to look at this in more detail, that would certainly be one of the questions to ask Infoway.
    Mr. Shipley, you have three minutes.
    Thank you.
    I have just a quick one, and it is on chapter 3.
    One of the things you don't talk about--or I'm missing it--is the ineffective oversight we have on projects. In 3.79, you give the example of West Block. There's partial funding allocated for a total project, yet that building is going to be closed down, whereas a project could actually start; we could bring in the required people, complete it, and get it done.
    Second, before paragraph 3.58, you say “Project management practices are generally sound”, and yet I think for those of us who have actually been out in the real world, these sorts of ineffective, inefficient practices we have for doing the work are almost intolerable. Scaffolding goes up around a building, it sits there for two years, and nobody goes in it. I don't know how that project management can be seen as sound.
    We have a building behind the Justice building. I don't know how many hundreds of thousands we spent to paint it--extraordinary means--and now, three years later, it's back to almost the condition it was in. I don't see that as good, sound project management.
    You don't tend to make comments about this, and yet I think it is something all of us see every day. We see it as very frustrating, and I'm wondering if there's a course of action you could talk to us about for that.
     Mr. Chair, as we note in the report, we looked at the project management for certain buildings on Parliament Hill: the West Block and the Library of Parliament.
    We didn't look at all the project management activities of Public Works. Should there be a hearing, those would be the kinds of issues you might want to discuss with them.
    One of the big issues, though--and we have raised this on other occasions--is the way funding is given to projects. If it goes year by year, there are stops and starts. Certain members will know we have had very interesting and long discussions with other committees about accrual appropriations, multi-year appropriations, to ensure that when a project starts, be it the construction of a building or an IT project, all the costs are known to parliamentarians at the beginning, that they are approved, and then the project proceeds.
    The way it is now, they essentially get the money perhaps for the scaffolding, but then they don't get the money to actually do the repairs. I don't know if that is applicable in that case, but they can get funds to dig a hole and then they don't get the funds to build the building.
    We believe there is a real need to look at these large projects that extend over many years and resolve how the appropriations are dealt with in that case. I know there have been recommendations from other committees that this be done, and that might be an issue. I would encourage the committee to look at that with government again. I think that is also one of the reasons for many of these delays they're incurring.


    Thank you.
    Thank you very much, Mr. Shipley.
    Before we adjourn, do you have any concluding comments, Ms. Fraser?
    Thank you, Mr. Chair, for your interest in the report. It is very important to us that parliamentarians engage with us in the discussion on these audits. We do very much appreciate your interest and look forward to future hearings with the committee.
    Thank you.
    On behalf of all members of Parliament, I want to thank you for your excellent work.
    Before I adjourn, I want to announce that on Tuesday of next week we did originally have the Auditor General scheduled to appear before us to talk about her agency's estimates and her departmental performance reports in addition to her departmental report on plans and priorities. Because of an issue, she's not able to do that at that time. She's asked that it be rescheduled for two weeks later. The steering committee agreed to that.
    It is too late now to schedule another performance report, and we do not have any ongoing reports that we're writing up. Therefore, the chair will not be calling the meeting on Tuesday of next week. Our next meeting is a week from today.
    The meeting is adjourned.
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