I call this meeting to order. I want to welcome everyone to meeting number five of the House of Commons Standing Committee on Public Accounts. Pursuant to the order of reference of Monday, April 20, 2020, the committee is meeting to study the certificate of nomination of a permanent Auditor General of Canada, tabled in the House on Wednesday, May 13, 2020.
I remind you that all comments by members and the witness should be addressed through the chair. Before speaking, please wait until I recognize you by name. When you are ready to speak, you can either click on the microphone icon to activate your mike or you can hold down the space bar while you are speaking. I think you all know by know that when you release the bar your mike will mute itself, just like a walkie-talkie. It's preferable that you activate the microphone by clicking on the icon.
When speaking, please speak slowly and clearly. I'd also like to explain some guidelines regarding the interpretation channels to use during the video conference meeting. If you are speaking in English, please use the English channel. If you're speaking in French, please use the French channel. As you are speaking, if you plan to alternate from one language to the other, you will need to also switch the interpretation channel to the language you are speaking. You may also allow for a short pause when switching languages as I think that would be very helpful for the interpreters.
Before we get started, would everyone click on the screen in the top right-hand corner and ensure you're on gallery view. With this view, you'll be able to see in the grid everybody who is on the call, and you'll be able to see one another. I think most of you have probably already done that.
At the end of the meeting, we're going to take about 10 minutes to discuss the recommendation to the House.
I just want to mention, Ms. Hogan, that it's great to have you here today. This is probably a unique time in history. I believe you'd be the 13th permanent Auditor General in the country—now, that's according to Wikipedia, and I didn't get my analysts to verify that for me—and actually only the 16th person to sit in the role. This is a pretty significant meeting in terms of that, given the fact that we only see Auditors General come every 10 years.
This is a pretty significant meeting. I'm going to turn it over to you, Ms. Hogan. I want to welcome you. You will have your remarks, and then we'll have a chance to go around the room and ask some questions back and forth, just like we would in committee. We have until one o'clock. We'll move forward from here.
Welcome, Ms. Hogan. The floor is yours.
Thank you very much, Mr. Chair. Good morning to you and to all the committee members.
I am very honoured to stand before you today as the nominee selected to become Canada’s next Auditor General.
The role of the Auditor General is integral to the accountability portion of our democratic system of government. The Auditor General provides Parliament and the three territorial legislatures with independent, objective, credible information, advice and assurance regarding the stewardship of public funds. In other words, elected officials can rely on the Auditor General to bring them independent information that they can draw from to ask public servants important questions about how the organizations they lead are spending public funds. Canadians across the country look to the Auditor General as the voice they can rely on to cut to the heart of matters.
Having appeared before this committee on a number of occasions, I am appreciative of its great work and would like to recognize its legacy. The fabric of the relationship between the Auditor General and the Standing Committee on Public Accounts speaks directly to the depth of accountability in our federal system. It is also built on trust and confidence. I believe these flow out of ethics, integrity and independence. These values are the anchor points of my own value system, in addition to being central to the work of the Auditor General’s office. If I am appointed Auditor General, I will strive to continue in the distinguished tradition that has been established by past auditors general and work to the best of my abilities to serve this committee in fulfilling its mandate.
I was born in Montreal, and that’s where I began my career. I have been a chartered professional accountant for more than 25 years. My career has been almost evenly split between the private and public sectors. Most significantly, I have been with the office of the Auditor General for 14 years. I joined the OAG when Sheila Fraser was sitting in the Auditor General’s chair. I want to especially acknowledge the work of the previous Auditor General, the late Michael Ferguson, and the stewardship of the current interim Auditor General, Sylvain Ricard, who honoured Mike’s legacy by guiding the OAG along the path he defined.
Mike Ferguson was a devoted public servant, who simply wanted the public service to do service well. I look at the incredible impact that he and Sheila Fraser had on the public service and the country. Both were outstanding, inspiring leaders, and I was fortunate to learn from each of them. They were leaders who did not fear change, but rather recognized its strength and necessity and therefore welcomed it. It is a fine tradition that extends over a century and a half for the office of the Auditor General of Canada. It is one that I eagerly hope to continue to shape and transform with my own leadership. I am humbled to think that I might be given the opportunity to serve my fellow Canadians as Auditor General of Canada. I commit to upholding the same standards and tradition of excellence set by these outstanding public servants.
I was attracted to the OAG because of its leaders, its people and its work. I firmly believe in the importance of the institution and in the value of its work. That work touches virtually every area of government programs, services and spending and, as a result, most if not all the groups that make up this great country of ours. In the past, our office has focused on issues that matter to parliamentarians and Canadians, whether economic, environmental or social. For example, we looked at Phoenix, defence spending and the economic action plan. Some concerns cut so deep that we audit them repeatedly, such as indigenous issues and climate change.
If I am appointed Auditor General, I would focus on issues of national importance that are facing us right now, such as the government's infrastructure investments and COVID-19 and also on issues of regional impact, such as fisheries and the oil and gas sector. The audits I would choose to do would focus on supporting the work of the public accounts committee and all MPs.
I led government-wide performance audits for several years before shifting mostly to financial audit work. For almost seven years, I was responsible for the overall audit of the consolidated financial statements of the Government of Canada. Leading the country’s largest financial audit allowed me to work closely with senior officials in Crown corporations, departments and agencies as we focused on sensitive and complex audit issues.
Having been fortunate through my career to experience the audit relationship both as the auditor and as the person responsible for preparing financial statements, I believe I was uniquely positioned to understand the challenges these entities faced. Though we did not always necessarily agree—for example on the government’s approach to estimating its long-term liabilities—I believe my analysis was fair and sound. Following several years of discussions with senior public servants, changes ultimately came that I believe enhance public transparency and accountability on pension obligations.
Having spent the last 14 years with the OAG, first as a director, then a principal and most recently as Assistant Auditor General, I have been and continue to be inspired by the people who work in our office. They are caring, creative, skilled, incredibly intelligent and professional, and always focused on upholding high standards while contributing to a well-managed and accountable government. It has been my privilege to work alongside these individuals and to have played a part in shaping the strategic direction of the office and leading organizational change. It would be an even greater honour to now have the opportunity to continue this work of guiding the organization to become an even better version of itself.
If I am appointed to the position of Auditor General, I will focus on achieving success in two key respects. As deputy head and accounting officer for the OAG, success to me will mean leading the organization of approximately 575 people with empathy and compassion, being concerned about their well-being, mental health and professional growth, while inspiring and empowering them to be dedicated to deliver on the mission and vision of the office. Success will also mean modernizing how the office does its work so it is positioned to keep pace with significant shifts in the auditing world and in the government landscape, such as digital transformation.
As Auditor General who supports Parliament, success to me will mean keeping the trust of Canadians, parliamentarians and the public servants whom we audit and supporting Parliament in being well informed and engaged so we can all work together for better outcomes and a better Canada.
Finally, I would like to take a moment to recognize the efforts of so many front-line workers and thank them for their dedication to Canadians during this global crisis.
I also want to recognize the work of countless public servants and their continued devotion to supporting the country through these trying times.
That concludes my opening remarks. I'd be very pleased to take any questions from the committee members about my candidacy.
Thank you very much, Ms. Hogan.
We're now going to have our first round, which typically is six minutes. The lineup was sent to Angela ahead of time, so we have that.
We're going to start with Mr. Kelly for six minutes, then go to Mr. Blois, Mr. Blanchette-Joncas and Mr. Green, in that order. I'm going to time you on my trusty iPhone, and I'll break in as we get down to a minute just to let you know that your time is almost up. Of course, if you have an iPhone or any other phone and you want to time yourself, by all means you can do that as well.
Mr. Kelly, the floor is yours for six minutes.
Before I begin my questions, I would like to once again recognize the legacy of Michael Ferguson and recall his enormous contribution to his office and his service to Canadians. His motto was “Do service well”, and our committee chose that as its motto for the legacy report that we prepared in the last Parliament.
I would like to thank Sylvain Ricard for his work as interim Auditor General for the past year and a half. He's done great work during his limited time in that role. It's difficult to be an interim office-holder, but he did so with courage and professionalism, and ensured that Michael Ferguson's legacy continued.
With that, congratulations to you, Ms. Hogan, on your nomination as Auditor General. You've been with the office for many years. You have served during the tenure of different governments, different Auditors General.
During this current time of crisis of funding for your office, what is your experience from your past service with different Auditors General under different governments? How does that inform you in how you're going to deal with the budget issue?
Thank you very much, Mr. Chair.
Ms. Hogan, congratulations on your nomination.
I would like to echo the remarks of my colleague Mr. Kelly in relation to Mr. Ferguson and his great work.
I've had the chance to review your CV and resumé. You have a very impressive body of work and background. You touched generally in your opening remarks on the broad themes of leading the organization and modernizing.
Could you drill down on some specific outcomes you might have in mind, given, hopefully, your new role here as Auditor General?
Thank you very much, Mr. Chair.
Congratulations on your nomination, Ms. Hogan. I read your resumé and, as my colleagues noted, I see that you have extensive and impressive professional experience. Some of your predecessors, such as Ms. Fraser and Mr. Desautels, have had an impact on recent political history.
The Office of the Auditor General operates resolutely at arm's length from the government, and that will never change. Under the circumstances, there is enormous pressure related to auditing government activities. Mr. Ricard, your acting predecessor, identified problems with your organization's funding, especially relating to IT equipment.
Have you already taken steps to enhance the means at your disposal?
Thank you very much, Mr. Chair.
Certainly this committee plays an integral role in the work throughout the House of Commons. I have the privilege of also being a member of the government operations committee, so I can definitely appreciate the historic nature of this and the importance of this particular proceeding.
Given the nature and context of this proceeding, Mr. Chair, my statements will probably be longer than my questions. In that regard, I'd like to begin by thanking our past interim Auditor General, Sylvain Ricard, for all of his work and for stepping into the role after the loss of Mr. Ferguson.
I certainly look forward to working with Ms. Hogan here in the months and years to come on our public accounts committee. As noted, her CV and work have already been well established in this committee for her significant contribution to our public service and future vision for the role of the office of the Auditor General.
Members of this committee may know that earlier this month in the media I called on the government to make sure that her office had all the resources it needed to do its job to help keep the government accountable to Canadians. Whether it was the former AG Michael Ferguson or Mr. Ricard, the AG has spoken very publicly for years that this office did not have the adequate resources it needed to do its work properly. The OAG has warned that this funding shortfall would leave it without the capacity, the personnel and the technology to maintain its level of performance audits and that it had already begun to cut back on the number of audits it conducted.
Now, as has been noted, on top of what they have been mandated to do, we have also added responsibilities such as oversight for projects like Trans Mountain and the Canada Infrastructure Bank without increasing its resources.
I know this was referenced earlier by Mr. Blois, but I'm going to continue down this line. Parliament once again has thrown more work at the OAG by asking it to examine the federal government's $187-billion infrastructure plan, the audit on COVID-19 and warrants issued under the Financial Administration Act, which is an audit on Ottawa's pandemic emergency response. These are massive audits and they're going to take tremendous amounts of staffing to go through with all these details.
Mr. Chair, the House passed a motion on April 11 that called on the government to take such measures as necessary to ensure that the Auditor General has sufficient resources to conduct their work.
My predecessor, Mr. David Christopherson, as you know, was very vocal about the need to ensure proper funding for the Auditor General. We believe the AG should have the additional $10.8 million in funding requested provided to their office immediately. This was last year, before the pandemic.
What would you consider are needs to be assured that your office has the sufficient resources it needs to do all its work?
I want to congratulate Ms. Hogan on her appointment.
Ms. Hogan, you're coming in during a particularly difficult time, but I think it's necessary. We need an Auditor General for the long term. I wish you well in your term, if your appointment is confirmed. We'll be here to work with you.
I'd like to ask a quick question, out of sheer curiosity.
Did you apply for the position of Auditor General on your own, or were you asked to apply?
Good morning to everyone. It's great to see so many of my colleagues doing well and making their way through this very unique and extraordinary time.
Congratulations, Ms. Hogan, on your appointment. It's very well deserved. I read through your biography, and as someone who sat on the user advisory committee of the Canadian Accounting Standards Board for about 10 years, I well understand the importance of financial statements, of ensuring their integrity and transparency, and of using them from a multiple-stakeholder standpoint.
I want to focus this morning on some of your remarks that you provided in your opening remarks. First of all—about the sixth paragraph in—you make a comment: “Having been fortunate [enough] through my career to experience the audit relationship both as the auditor and as the person responsible for preparing financial statements, I believe I was uniquely positioned to understand the challenges these entities faced.”
Can you quickly elaborate on that? I think that is a very nuanced point. It's very important to your job as the Auditor General in terms of the team that you'll manage going forward.
I do agree that it is a unique and privileged position to have seen both sides of that audit relationship and what it might bring.
What I've learned as someone being audited is that you need to honestly approach the audit relationship with the desire to learn. It's not personal. If the end game is to improve outcomes, transparency and accountability, working with your auditor is a great way to get there.
As an auditor, what I've learned to appreciate is that the folks whom we come in to audit have very busy lives at work, and we're adding to that work, so preparing, planning and agreeing with them well in advance is essential to the delivery of a good audit. But also, then, it drags to the results. The recommendations should be focused on results and not just adding process or change for the sake of changing.
I would absolutely agree with that.
One of the things is that when you have an audit done in the private sector, from whichever accounting firm, usually they'll give some language at the end when signing off on the audit; they don't provide a glowing recommendation. That would be great, I think, when the AG's reports are issued and where the government has done well, without giving them a pat on the back but at the same time recognizing the extraordinary efforts of our public officials, our public servants, in delivering programs.
For example, we put together the Canada emergency response benefit. It's being delivered to over eight million Canadians. Canadians can receive those funds in three days. When an audit takes place of such a program, where the AG is not seen as cheerleading—because we don't want that—we want to say, hey, the AG reports that it's been a transparent and effective program. Is there room in the AG's work for that type of verbiage to be utilized?
You commented about the two key areas or aspects you would focus on in your position as the Auditor General. In one of them, you spoke to the modernization of the office. In the government currently, we have a minister of digital transformation. We know that new technologies are being utilized across the world; here we are, in a virtual Zoom committee meeting.
I'd love to hear your thoughts on that, because change management is very difficult to do, and change management in a hierarchal organization is even more difficult to do, especially with so many stakeholders involved. I would love to hear your idea of what modernization may look like from a high-level standpoint. You've been in the organization for many years and have worked with some great Auditors General in the past, and I look forward to seeing you in that role, but if you can comment on that, it would be wonderful.
Thank you very much for that.
One of my follow-up questions was very similar to Mr. Sorbara's. Your answer was pleasant to hear, that you will report the good, the bad and the ugly. I think that's very important for your office, to maintain that independence.
Moving forward, I believe Canadians are going to want to see exactly how the COVID-19 pandemic was handled. The exact way the money rolled out is important, I think, having had questions from my constituents about the application process, especially around CEBA. Have you thought about this? Would you audit each program on its own, or would it be a full audit through all departments? Going forward, Canadians are really going to want to see how that money was rolled out and whether it was the most efficient and effective rollout of programs possible.
Have you had an idea or any thoughts around how you will start to audit the COVID-19 program response that the government has had?
Speaking of delays, there's one file that's been dragging on for a long time and that should be considered very important. I'm talking about the Phoenix pay system. There have already been investigations.
Do you think it's crucial to have very strict oversight of all processes involving the system, including procurement, tendering and development, or other oversight that has never been done?
Even our own committee has tried prodding the various departments to give us the facts, but with no success so far.
Thank you very much, Mr. Chair.
I want to set aside the incredible resumé and the extensive public service that Ms. Hogan has provided us and raise the concern that the NDP has raised in the past about the process for hiring officers of Parliament. I want to go on the record. Let's remember that officers of Parliament are independent and work on behalf of Parliament. They're hired by Parliament and accountable to all parliamentarians, and essentially they can be fired only by Parliament, but this is certainly not how it works.
If we look at the current hiring process, it technically meets the law, in that the House must give final approval with a vote. However, it's ultimately the government that does the entire hiring process, only letting other leaders know what its intentions are. This means that the government ultimately chooses who our officers of Parliament will be. In the immediate case, we're certainly confident in the abilities of the candidate for Auditor General, but in the recent past, we have seen some botched appointments and attempts at partisan appointments, all of which could have been avoided with real, meaningful consultation with parliamentarians.
Other jurisdictions in Canada and within the Commonwealth select their officers of Parliament through a special or standing committee. They set the hiring criteria, review the resumés, conduct the interviews and submit a recommendation for nomination. This process recognizes the independence of Parliament and the need for a non-partisan process for selecting independent, non-partisan officers of Parliament.
We've already had an issue where the Auditor General must go hat in hand to the government departments it has to audit. We need to fix this, but we also need to have a serious conversation about the role or lack of role that Parliament has in selecting its own officers of Parliament, and not just leave it up to the government of the day.
Ms. Hogan, are you aware of any consultations that happened with other parties in Parliament about your selection process? Did you have any conversations with members of other parties in Parliament during this process?
Sorry, I was on the floor feed. You're correct. There are a lot of buttons to push before I begin to speak. I unmuted and hadn't returned to the English feed.
I applied through the Governor in Council website and then was invited to an interview. The panel was made up of six individuals. I provided references. Then I was informed that I would pass to the next stage of this process, which was psychometric testing, and I went through all of that.
This is an important role, and when I applied for this position, I expected that the process would be a demanding one. After going through all of that, I felt that it was. It was demanding. I answered and interacted in any step of the process when I was asked to do so.
I only ever spoke with individuals from the Privy Council Office until I received a call from the minister informing me that I would be the candidate. He then let me know that the consultation process would take place. Unfortunately, I did not know the magnitude or what that would entail until I was informed that the certificate of nomination was being tabled in the House.
I can't really comment on the process, but I can comment on what I lived through, and that was my experience.
I would also like to congratulate you, Ms. Hogan, for being considered for this very important position.
In answering a number of questions today, you mentioned, several times, resource constraints. You said that you don't have the numbers right now of what you would need and what you would like for additional funding. Considering that you or at least your office has made requests for funding at least a few times and those requests were not fully agreed upon or provided, can you, with the current funding you have, do the fulsome audit of the COVID spending and the investing in Canada spending that you've been asked to do?
I know that a lot has been talked about on budgets and stuff, and I know that it's almost unfair that you come in here trying to be confirmed as the new AG and hear, “What's your plan for the budget?”
Should you be confirmed, and as we move forward, I guess my question, which maybe a lot of the committee is wondering about, is this. You probably wouldn't have a problem putting together budgetary requirements, given the fact that's been mentioned by a number of members, which is that we have all the performance audits and then a number of audits that Parliament has asked for, and now, on top of that, we have this COVID response. Before now, we heard you guys were already short $10 million or $11 million. I'm hoping that in the coming days and weeks—because I think it has been alluded to by a number of members—you wouldn't be opposed to putting together a number again to say, “Listen, we were short $10 million before, and with these huge responsibilities we have coming this year, we think we may need to look at that.” Obviously, you'll need some time to reflect upon that.
I'm going to guess that maybe our committee would be able to have a meeting again later to bring you back when you've had a chance to look at what's going on in the department. I know you are familiar with it, but now, if you should get the role of the AG, you will have new responsibilities. It may be unfair that we've asked you questions about budgetary things, but at the same time, you've been well aware of them just by being in the department.
Would you be willing to come back to committee in the coming weeks and months to talk about the challenges you see with all the additional things that have been asked of you, including performance audits, as has been mentioned by a number of members here throughout this committee?
Thank you for your question. As I said earlier, it's important for Canadians to receive the money they're entitled to on time.
In any audit, we need to examine the risk of fraud. If we suspect or know that fraud has occurred, that increases the risk, which means we need to expand our sampling or the work we'll have to do.
I'm fully aware that many organizations have had to make decisions on the fly. When that happens, it raises the possibility of errors. When we audit the programs, we would expect to see a mechanism in place for detecting errors. If errors have indeed been made, we would expect to see a process for fixing them, including repaying the full amount that was paid out if necessary.
Okay. I was hoping we could get in a couple of extra minutes because we were about 10 minutes late to start, but Angela has informed me that we have to be done by one o'clock. That's why we wrapped up some of the questions.
Greg, I know you had your hand up again. I apologize for that. We will try to get started on time next time, and that will leave a little bit more time.
My question is to everyone: Does the committee wish to report to the House that it has considered the certificate of nomination of Karen Hogan for the permanent position of Auditor General of Canada and reports its recommendation that she be confirmed by the House of Commons as Canada's 16th Auditor General?
Is there any discussion on this? We still have about five minutes. I see a thumbs-up from Mr. Longfield and Mr. Sorbara.
Mr. Green, did you want to comment?
Chair, thank you very much, and good afternoon to the committee members.
I only wanted to confirm. We have been messaging the chair throughout the meeting with the limited means available to try to communicate the number. If there is a formal statement that the committee makes to the House, we will just confirm that number with you. We told you that if Ms. Hogan is appointed, she would be the 16th Auditor General. However, she would be the 13th permanently appointed Auditor General.
Maybe Angela can look into the specific technicalities of what that statement you read needs to say. We would be happy to provide the research we gave to you, if Angela needs it as well.
André and I were it looking up. We've contacted the OAG and were using the library's database throughout the meeting, to make sure that the statement you refer to the House, Chair, reflects the technical statement.
Perfect. Thank you very much.
We will report back to the House with that additional correction, if need be, on the numbers.
Are there any other thoughts or discussion right now?
I would suggest that once Ms. Hogan has been confirmed into the position, we look at possibly having another meeting to talk about her plans around financing and the thought process, and that we give her a little bit of time to think about what that may look like so that she can get back to us. We may ask her some more questions. There's a lot of information that's required of her and her department at this point in time.
Greg, did you have a comment or question?