I call this meeting to order.
Welcome to meeting number 26 of the House of Commons Standing Committee on Government Operations and Estimates.
The committee is meeting today from 3:34 p.m. to 5:34 p.m. We will hear from the Auditor General and her colleagues as part of the committee's study on the government's response to the COVID-19 pandemic.
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I will now invite the Auditor General to make her opening statement.
Mr. Chair, thank you for this opportunity to discuss our recent reports on the government's response to the COVID-19 pandemic, which were tabled in the House of Commons on March 25.
Joining me today are Jo Ann Schwartz, Philippe Le Goff, Carol McCalla and Chantal Richard, the principals who were responsible for the audit.
The reports presented were the first of many audits on the government's response to the COVID-19 pandemic that my office will conduct. There is no doubt the COVID-19 pandemic was an all-hands-on-deck emergency the world over. Governments had to mobilize quickly to respond to the public health, social and economic effects of this pandemic. Canada was no exception.
While we found that the government was not as ready as it could have been for a pandemic of this magnitude, the public service mobilized, prioritized the needs of Canadians and quickly delivered support and services.
I am going to turn first to the Canada emergency response benefit. With this benefit, the government wanted to quickly deliver financial support to eligible individuals. We found that the Department of Finance Canada, Employment and Social Development Canada, and the Canada Revenue Agency rose to the challenge and quickly analyzed, designed and delivered the Canada emergency response benefit.
To simplify the process and get support to people quickly, Employment and Social Development Canada and the Canada Revenue Agency took the approach of relying on personal attestations and automated pre-payment controls to validate applicants’ eligibility. Once the benefit was launched, they introduced additional pre-payment controls to limit potential abuse.
With the decision to rely on personal attestations, post-payment verification becomes very important. Employment and Social Development Canada and the Canada Revenue Agency are working to start their post-payment verification efforts relating to the Canada emergency benefit later this year. Their work in this area will be the subject of a future audit.
Turning now to the Canada emergency wage subsidy, we observed a similar focus on getting help out quickly, in this case, to businesses. Once again, the Department of Finance Canada and the Canada Revenue Agency worked together within short time frames to support the development and implementation of the Canada emergency wage subsidy.
The design and rollout of the subsidy highlighted pre-existing weaknesses in the agency's system, approaches and data. These weaknesses will need to be addressed to improve the robustness of Canada's tax system.
To prioritize issuing payments, the Canada Revenue Agency chose to forego certain controls that it could have used to validate the reasonableness of subsidy applications. For example, the Agency decided that it would not ask for social insurance numbers, though this information could have helped prevent the doubling-up of applications for financial support. This decision limited the Agency’s ability to perform pre-payment validations, as did the absence of complete and up-to-date tax information that would have helped it efficiently assess applications.
I am going to now turn to our last audit, which focused on pandemic preparedness, surveillance, and border control measures. In this audit, we found that the Public Health Agency of Canada was not as well prepared as it could have been to respond to the COVID-19 pandemic. Not all emergency and response plans were up to date or tested, and data sharing agreements with the provinces and territories were not finalized.
The Public Health Agency relied on a risk assessment tool that was untested and not designed to consider pandemic risk. The agency continued to assess the risk as low despite growing numbers of COVID-19 cases in Canada and worldwide. In addition, the global public health intelligence network did not issue an alert about the virus that would become known as causing COVID-19.
I am discouraged that the Public Health Agency of Canada did not address long-standing issues, some of which were raised repeatedly for more than two decades. These issues negatively affected the sharing of surveillance data between the agency and the provinces and territories during the pandemic. While the agency took steps to address some of these problems during the pandemic, it has much more work to do on its data-sharing agreements and its information technology infrastructure to better support national disease surveillance in the future.
We also found that the Public Health Agency of Canada and the Canada Border Services Agency implemented restrictions at the border and quarantine measures. They provided guidance and tools to inform travellers and essential workers coming into the country of public health requirements.
However, the Public Health Agency of Canada had not contemplated or planned for a quarantine on a nationwide scale, from the collection of travelers’ information through to all enforcement activities, including following up on those identified to be at risk of non-compliance. As a result, the Agency doesn’t know if the majority of travelers properly quarantined.
These audits looked at programs that were rolled out in record time. Faced with a pandemic, the public service focused on the pressing outcome: helping Canadians.
In its first year, this pandemic has shown that when the public service must, the public service can. This crisis has highlighted the importance of dealing with known issues, whether it's agreeing on which organization has the lead, who will do what when and who will report what to whom, or replacing outdated systems or processes and addressing issues in data quality. These are not problems that you want to have to deal with at the same time as you are focusing on helping people, because this is not an efficient way of working, nor is it a productive way to serve Canadians.
Government organizations need to do collaboration better. We made recommendations to each audited organization. They agreed with all of them.
Mr. Chair, this concludes my opening statement. We would be pleased to answer any questions the committee may have.
I don't know where those 1,000 people who were hired by the Public Health Agency of Canada are working or exactly what they're doing.
We found during our audit that many processes had been performed manually at the start of pandemic. Here are two examples.
First, at the border, travellers' information was forwarded in paper format, and that's why the Public Health Agency of Canada experienced delays in monitoring travellers.
Second, health information was exchanged between the provinces and territories and the federal government. The process wasn't done manually, but rather electronically in various and incompatible formats. Agency employees had to do a lot of copying and pasting to gather all the information and establish an overview of the situation across the country.
Coordination between the Department of Health and the provinces was precisely the subject of my next question.
You say in your report, "Of the individuals considered to be at risk of non-compliance, the agency referred only 40% to law enforcement…"
Of the thousands or millions of individuals who received the order to quarantine for 14 days, we know, having verified it—you mention this in your report—that 46% didn't comply with it. We also recently learned that Quebec had not been informed of it. No one told Quebec authorities, "Here's the list of people to monitor, and you'll have to go and call on them if we call you."
Quebec's minister of public safety mentioned that her government was unaware of the order.
Are you confirming that there was no coordination on this during the audited period? Perhaps the provinces served by the Royal Canadian Mounted Police, the RCMP, operated differently, but we don't have the RCMP in Quebec.
So is that the case?
Thank you, Madam Hogan and your colleagues, first of all, for the testimony today as well as the great work you are doing.
Madam Hogan, you opened your testimony by saying that, in general, Canada didn't seem to be ready, or PHAC didn't seem to be ready, for the pandemic. Have you had an opportunity to look at other jurisdictions in the G7 or G20 to see how their performance has been as far as their readiness and whatever you put under the readiness column, whether it's surveillance or support mechanisms for the economy, individuals and businesses, as well as health and safety. How do we compare against them?
I'll give you a bit of a summary very quickly of the four areas where we felt that the Public Health Agency of Canada was not as prepared as it could have been to respond to a pandemic.
First would have been that emergency and health plans were outdated and, more importantly, the federal, provincial and territorial plan had not yet been tested.
Second, we noticed there was a long-standing agreement between the provinces and territories and the federal government about sharing health data surveillance. That agreement had not even been finalized, and in fact the infrastructure needed to handle the volume of all that had not yet been updated.
Third, we noticed that the agency was using a risk assessment tool that was not designed to be used to consider pandemic risk.
Finally, as we just mentioned, the agency had not planned nor contemplated enforcing a mandatory quarantine across the nation.
When it comes to the sharing of health data—and I might turn to Chantal Richard in case I miss something—what was needed in those annexes was getting a common understanding of the types of elements that would be shared and how and in what format they would be shared.
As you can imagine, every disease might have different peculiarities, but basic things like the timeline in which you report—in this case it was decided that reporting was needed every 24 hours—and agreeing on that...because we noted that provinces and territories likely were having difficulty meeting that because very few of the reports came in within that time frame.
We also found that only 10% of the files from the provinces and territories contained important information like symptoms. In an evolving disease, symptoms are needed to inform the response of the country and whether and not it needs to be adjusted.
It's having that basic understanding of who has what role and responsibility, what information should be transmitted and how it should be transmitted, in a timely way.
What happened here is that we saw the Public Health Agency, with the provinces and the territories, adjusted throughout the pandemic to what they were capable of doing. The end result was that it delayed the federal government's ability to assess and better inform the response to the pandemic. It's not that they weren't able to eventually gather all the data. It's just that there were a lot of delays in putting it all together and seeing a global picture.
Thank you very much, Mr. Chair.
Thank you, Ms. Hogan, and thanks as well to the members of your team, for being with us again. Since I always read your reports with great interest, I hope to learn how the various systems that constitute our democracy can be improved.
According to your report, on May 11, the Canada Revenue Agency introduced an automated control to cross-check its information with employment insurance information, particularly regarding suspicious applicants. The agency told you it had previously been impossible to do that because it would have delayed the payment of benefits.
Did the agency tell you exactly to what extent it would have delayed the payment of benefits?
I'll welcome Ms. Hogan, whom I've had the privilege of working with quite closely on public accounts. I'm one of the few MPs who have the privilege of going back and forth between these two committees.
I want to open up my line of questioning in a way that is respectful. This is certainly not going to be any kind of “gotcha”, but I need to address some inconsistencies that I have experienced between the reporting and the testimony at public accounts and the reporting and the testimony we're having here. I'm going to try to do it in such a way that it's clear, to allow you and your staff to think about how this might be perceived in the public.
I think about the questions that are critical in any audit or in any reflection on work that is this serious: What did you know? When did you know it? Also then, what did you do about it?
You may recall that on April 13, in a line of questioning that I had to Ms. McCalla, we were talking about the ways in which both provincial and federal modelling and our surveillance systems quite frankly failed to identify through PHAC that there was an issue for the pandemic.
I asked whether there was international modelling based on experiences in places like China that would have predicted the outcome. Ms. Hogan put the question to Ms. McCalla, who stated that the risk assessment is called for in PHAC's pandemic plan and that the WHO did issue a pandemic risk announcement and called attention to the risk of COVID-19 for the global community. However, we found that, at that time, PHAC did not update its risk assessments and did so only in mid-March at the direction of the chief public health officer.
I responded, “Then there was an alert. We were alerted to this in advance.”
Ms. McCalla responded, “There was an alert by the WHO, yes.”
I then responded, “My God.”
I would like to ask Ms. McCalla, through you, Mr. Chair, when that initial World Health Organization alert came to PHAC.
Then it took us all of February and into March to move on it.
Through you, Mr. Chair, let me ask Ms. Hogan this. In doing your analysis, when you came before us both at the original committee meeting and today you stated that the agency relied on a risk assessment tool that was not tested and that the agency continued to assess the risk as “low”, despite the growing numbers of COVID cases in Canada and worldwide. You stated that in addition, the global public health intelligence network did not issue an alert about the virus that would become known as causing COVID-19.
Can you help me understand the timeline from January 30, when the WHO let us know that this is a significant problem, and how that alert would have differed or have been related to our systems that weren't tested and to the understanding that there was no global public health intelligence network alert? How does that global public health intelligence network alert differ from the WHO's alert in its seriousness?
I'm going to probably back you up a little bit in time, but I want to make sure that we understand what happened on January 30.
We have an exhibit in our report, exhibit 8.1, that outlines a whole bunch of steps. I think it's a really good place for you to see a bit of the timeline. There are a lot of moving parts.
At the end of December 2019, the global public health intelligence network issued a daily report. As you might recall—and only because the member sits on another committee—the global public health intelligence network issues two kinds of report: an alert and a daily report.
There was a daily report at the end of 2019 that contained a link to an article about a virus that would then become known as the virus causing COVID-19. That daily report alerted the chief public health officer of Canada that she needed to reach out to her provincial counterparts and tell them that there was something serious going on. She did it, based on that daily report, but also based on the knowledge she had of what was going on around the world.
On January 15, the federal, provincial and territorial public health response plan kicked in, which caused special committees to get together to start to talk about the response domestically across the country.
January 30, which is what Ms. McCalla was referring to, was when the World Health Organization declared this a public health emergency of international concern. That's when they said that everyone needed to pay attention internationally, that this was a really big deal.
At that point, in January, there started to be risk assessments done by the Public Health Agency. All of those risk assessments—from mid-January, when the response plan was kicked in, all the way until March—had the risk of COVID-19 to Canada set as “low”, until the chief public health officer stepped in and said that, based on what she was seeing going on around the world and her discussions with her counterparts, it really should be much higher.
This is where we say the risk assessment tool was not designed to consider pandemic risk.
Now, throughout all of this, the global public health intelligence network never issued an alert, which is the second type of report it could issue. An alert signals domestically and internationally that there's something for you to stop and pay attention to on a health matter across the world.
Thank you very much, Mr. Chair.
Thank you very much, Ms. Hogan, for your excellent work and your excellent response today. I think all of us are committed to strengthening our responses and are always looking to do better and to support Canadians better during these challenging times.
The central goal of the CERB was to get funding into the hands of Canadians as quickly as possible to help them through COVID and to allow them to be able to isolate at home, hence protecting their health and the health of their families, and also to reduce the stress on the health care system.
About eight million Canadians received the CERB, and most people received their payment within three to five days of applying. Was the federal government successful in its intended and central goal of getting funding into the hands of Canadians as quickly as possible?
I'm going to give you a partial answer and then ask Mr. Le Goff to supplement it.
When we reviewed our sample—you're referring to the table in our report—we found that not all grant applications had been disallowed as a result of insufficient information. There was indeed a lack of information, but something suspicious was usually involved. It wasn't necessarily because of the application.
Too much information was missing. To verify income, for example, the agency needed GST returns, but many businesses hadn't yet filed their GST returns. That's because they only had to do it once a year or else because their returns were late. Our audit showed that a lot of tax information was late or missing.
Mr. Le Goff, would you like to add to my answer?
Inadequate work was done, then.
You outline in your report that it had been shelved, that it needed to be regularly updated, that all of the plans that were put in place needed to be tested, that they needed to be looked at frequently and that this wasn't done. You go on to say that daily reports were issued, but no alert was given.
You talk about how, “Although the agency prepared rapid risk assessments, these did not consider the pandemic risk of this emerging infectious disease or its potential impact”, which is “information necessary to guide decision makers on the public health measures needed to control the spread of the virus.”
Why weren't these things done? They're a part of the plan. They're a part of the things that were discussed in 2019 in our response to H1N1. Why didn't it happen here? Whose orders were those, that this information be neglected?
I'd like to begin with a few words about what just happened. I feel that the member from the riding of Lethbridge was very rude. It's worth pausing to think about how she has just treated the Auditor General by accusing her of protecting the government. I want to condemn it.
Good afternoon, Auditor General. I'm pleased to see you again today. I'd particularly like to thank you for the work you've accomplished. We are going through a rather unusual series of events that governments around the world are having to deal with. It might be déjà vu, but it seems like a long time that we've been caught up in a series of events like this. The pressures on supply chains and on our health systems are only a few of the aspects involved.
It's important to find the weak points in the system, where we can make improvements and where we can focus our efforts to make these improvements. Your work serves us well in this regard. Needless to say, we can certainly learn from the problems that developed because of a shortage of personal protective equipment.
Earlier on, you mentioned the work that was in progress. This included a study to be published in May or June. I'm not asking you to reveal the outcome of your efforts to the committee today. However, comparing the previous efforts of the government of Canada to what we are now doing in terms of procurement, I was wondering how you approached the task.
How do you go about assessing financial value? Generally speaking, what targets or measures are covered by your evaluations?
Ms. Hogan, I'd like to get back to the instances of fraud that were detected. There was fraud with the CERB, and there was probably fraud committed by businesses under the Canada emergency wage subsidy.
I understand that it was urgent to act at the time, even though the Conservatives had put forward a number of risk mitigation measures. These were not adopted by the government, but that's ancient history. What we need now is to find answers.
Last fall, the Minister of Finance took further action to obtain the tools needed to do just that.
Do you really think it will be possible to recover fraudulently obtained money?
Do we have the required resources?
I assume that in the next audit, you're going to look into organized crime. After all, organized crime knows how to organize itself. It is responsible for all kinds of CERB fraud and business grant fraud. This needs to be monitored closely.
I'd also like to talk about your audits of Canada emergency wage subsidy grants to companies. In the world of business, people have been saying that some companies, even though they may not have committed fraud and have followed the rules, are taking advantage of the system. Some even adjusted dates to invoice services later in order to be able to apply for emergency wage subsidies for their employees. I am aware of some companies that made millions of dollars in profit at the end of last year. They say that it was their best year ever.
With hand on heart, we are always there to help people, but we mustn't become a laughing stock either.
Have you found anything like that? Are there mechanisms in place to check on these companies, which have not necessarily acted illegally?
I'd also like to thank the witnesses, Ms. Hogan, Ms. Richard, Ms. Schwartz and Ms. McCalla, for joining our committee today and for the excellent reports and recommendations you provided on the response to the pandemic from January to June of last year.
There has been a lot of discussion already today about the CERB and about potential abuse of the CERB.
Ms. Hogan, you mentioned a couple of the controls, the ESDC and CRA non-doubling and the student benefit and CERB non-doubling controls.
Would the attestation form not also count as a control to be considered as part of this as well?
Last month at this committee on March 22, I asked Cindy Evans, the acting vice-president for the emergency management branch at the Public Health Agency of Canada, whether, if Canada's pandemic warning system had been fully operational, the government would have heightened the threat level of the pandemic at an earlier date and therefore increased safety measures such as closing the border. She responded by saying:
The number of alerts did decrease over the past number of years. However, GPHIN continued to operate without reductions in that time.
She continued to say:
The GPHIN system did exactly what it needed to do and the issuance of an alert to international partners would have in no way impacted the domestic activity that took place.
Again, she repeated:
The GPHIN system did exactly as it needed to do in providing the signal that was detected of the unusual cases of pneumonia in Wuhan, China.
Ms. Hogan, in your findings you state that PHAC's global health intelligence network—the GPHIN, of course—did not issue an alert to provide early warning about the virus that would become known as the cause of COVID-19 just a little while later. Instead, the network shared daily reports only, as we have discussed with Canadian subscribers, including federal, provincial and territorial public health officials.
PHAC prepared five rapid risk assessments of the virus outbreak but did not prepare a forward-looking assessment. You've talked about all of that.
Based on your audit and your findings, if the system had been fully functional, fully operational, can you tell us how things may have transpired differently? I recognize that an earlier statement you made to a colleague who asked a question was that you couldn't speculate. However, I would propose that part of the audit you've done, in your capacity as Auditor General, is to say that these are the things that weren't done well and perhaps these are the differences that could have been made in the lives of Canadians had they been done well. If we were fully operational, what would the difference have been?
I can offer a few things.
The Public Health Agency of Canada has criteria that would have called for an alert to be issued in this instance. There were alerts issued in the past. There was an alert issued for H1N1 and for SARS. It's not clear why an alert was not issued this time.
You correctly identified that there was a significant decrease in the number of alerts issued. However, I will note that throughout the pandemic two alerts were issued. One was for, I think, a virus from a tick bite coming out of China, so clearly alerts were still being issued.
The alert is not just domestic, but it's also to alert our international counterparts. I think this is where I don't think anyone could speculate what might have been different if our international counterparts had received the alert from GPHIN earlier on. Would their response have been different? Would then our response or the spread of the virus be different?
Those are all speculative, and I don't think anyone could really say for certain. That is why I think it's important that the Public Health Agency decide what it expects from the global public health intelligence network, make it very clear when and how it should be used and then use it as intended. In our view it was not used as intended, and I just alluded to all the reasons.
Thank you very much, Mr. Chair.
I'd like to thank the witnesses here today.
And I'd like to welcome Ms. Hogan and the members of her team.
One advantage of working for the Auditor General is that you don't have to worry about the April 30 deadline. I have spoken to a number of accountants over the past few days and I congratulate you on your work. More seriously, I believe the work you do as a third party to correct any errors is very important.
I'd like to talk about border control. You made recommendations and the department responded. Many ministerial orders were issued because certain changes were needed. I remember that in April 2020, the issue was foreign workers and determining whether or not they could come to Canada. The rule had to be changed and it was our Canada Border Services Agency employees who had to enforce them. The agency reacted by saying that more training would be required if new ministerial orders were issued.
Have you come across other examples elsewhere, in which ministerial orders were being issued every month? I'm trying to put myself in the shoes of the people who issue them, and then of those who have to act upon them. Is it realistic to say that it's possible to train people when there are so many new rules coming into play over such a short time?
Your audit began on March 25 and ended in June 2020. That's the period when Canadians were returning home en masse. I remember that most of my colleagues and I were busy repatriating Canadians from around the world.
You mentioned quarantine monitoring. Should there be closer cooperation between public health officers and the provincial forces, as Mr. Paul-Hus mentioned earlier? In Ontario, it would be the Ontario Provincial Police, the OPP, in Quebec the Sûreté du Québec , the SQ, and in the other provinces, the Royal Canadian Mounted Police, the RCMP. In the latter instance, it was a separate contract that was not with the department.
How could your recommendation fix the problem? I can't imagine hiring 3,000 full-time public health officers. I'm simply trying to understand this recommendation and figure out how we might improve the situation.
Our recommendation was focused on enhanced preparation, which does not necessarily mean hiring 3,000 people, as you suggested, just waiting for a mandatory quarantine to be ordered so that they can monitor it.
It really means having a plan in order to be ready in case it becomes necessary to increase capacity. In our audit, we found that the Canada Public Health Agency had not done this kind of planning and was not ready to administer a national quarantine. It realized that it did not have the required resources and therefore asked for assistance from other agencies to monitor travellers by phone and other methods. In only 40% of cases, when it had established that certain high-risk people were not complying with the requirements, did it call upon law enforcement agencies.
That's why it's important to be better prepared and to have a plan in place so that capacity can be increased if required.
However, in English it would be “to deal with surge capacity”.
In other words, it's important to be able to react when there is a rapid and significant increase in needs, followed eventually by a decrease. It means being better prepared and doing a better job of planning.
When COVID-19 started to appear in Canada, we saw, and we've discussed today, how the federal government worked very quickly to protect Canadians and roll out a number of the programs we've been talking about here. The reports you've put together, of course, focus specifically on the first wave of COVID-19 in Canada. I understand that there's a lot of significant work that's been done to scale since then, particularly with PHAC's capacity. We can see that some of the responses from the government to the recommendations you've mentioned here speak directly to that.
My question to you, through the chair, Ms. Hogan, is this: Do you agree that PHAC's response has evolved since the first wave?
Unfortunately, I'm not sure that I can absolutely comment on that. I see what you see in the media, but I haven't done any audit work to tell you whether or not PHAC's response has evolved.
What we saw during the audit period, and we demonstrated it through the pandemic preparedness audit, was that they were adapting and evolving at those early stages. I assume they would continue to adapt and evolve as the virus does.
We saw them not have an agreement with provincial-territorial partners, but even though that agreement wasn't there, it didn't stop them from discussing it with them and making sure they received the information they received. When they saw it was too much for provinces and territories to respond, they adjusted again to try to make it more manageable.
We definitely saw them reacting throughout the early stages. I just assume that they would continue to do so during [Technical difficulty—Editor].
There are two discussions here.
We were planning to start some other audits related to the pandemic that would have included the Public Health Agency of Canada, Employment and Social Development Canada and the Canada Revenue Agency. They've asked us to delay some of them, given the pressures on their people and the fact that we're in another wave now and are still dealing with and responding to the pandemic. We've agreed to delay some of the audits. We were going to replace them with other audit work.
In terms of pandemic work, as I mentioned, in May we'll have two reports, one on procuring personal protective equipment and medical devices, and one on support to indigenous communities, including personal protective equipment, access to nurses and so on. There will likely be some other pandemic reports in November that will include temporary foreign workers and protecting Canada's food supply.
You can access all of our upcoming audits on our OAG website. There's a planned audits section. You can see both COVID and non-COVID audits as well as commissioner of the environment and sustainable development audit work. They've all been posted there now for a couple of years.
You pointed out that the Canada Public Health Agency had signed an agreement with Public Services and Procurement Canada to digitize traveller information recorded on paper.
As for immigrant files—I know I'm going off topic, but as you will see, I'll return afterwards to the subject at hand—at the beginning, we were getting paper versions of the records. It was then decided to use digital records because there was no access to the paper versions. When the digital records could not be found, a paper version was eventually sent.
Aren't we back with the same mess in terms of document digitization?
Does this process properly protect traveller information?
Are there other methods that have been used elsewhere in the world that might perhaps be more effective?
I don't really know if the two situations can be compared.
In our situation, traveller data was obtained in a timely manner. Digitizing the paper records required up to six days or more, as we mentioned in our report. When a quarantine lasts for 14 days and we need to follow up as quickly as possible to make sure travellers are actually complying with the quarantine requirements, we need the information as rapidly as possible.
An app was developed, but it wasn't used at the beginning. It became compulsory later on during the pandemic. During the period when we were conducting the audit, we found that for one out of every five traveller files, information needed for monitoring was missing.
This is an example of how, because of a lack of planning, the agency wasn't prepared to manage the situation. It's one of the challenges that it has to deal with to be prepared in the event of a future crisis that might require a national quarantine.
I wish I could share my time with you, Mr. Green, because I enjoy where you're going.
I want to get back to the wage subsidy. Somewhere in the report here it is said that the Department of Finance did a full and complete analysis, which the department acted upon, but it sounds like only an analysis of how to give out the subsidy and not whether it's targeted.
I was talking about some of the market capitalizations. A perfect example is Lululemon, who saw their market capitalization go up $15 billion last year, yet were still accessing the subsidy.
I'm going to skip over that, please.
On page 13 of your report for the wage subsidy, paragraph 7.61 says:
With the limited data it had, the agency conducted a business intelligence exercise in June 2020—that is, the agency analyzed data....
Then it says:
In 35% of subsidy applications, the GST/HST collected in 2020 was 35% higher than the employer’s gross revenue as reported on its latest income tax return filed.
Am I reading that right, that the people self-attesting to claim the wage subsidy were claiming a higher GST collected than they actually had in entire revenue the previous year?
I can't compel a department to change its approach. I just want to be clear that I am always concerned when there's the potential that public funds have been misused. That is my job. I worry about the prudent use of public funds.
In this instance, yes, I believe they should have used this information to do targeted audits. The Canada Revenue Agency made the decision not to, but to focus on post-payment work. This was one of the instances that we alerted to them, and we put in our report that they should have used this information to include extra controls while the program was running.
As we mentioned earlier, it doesn't mean that they had to stop the payments, but this information indicates that there's further investigation needed. It doesn't indicate that there is a problem. That's why I said the “might”, because it doesn't mean that there is a problem. It just means they should take a better look at it.
Thank you, Mr. Kusmierczyk.
With that, I'd like to thank the Auditor General for her presentation today.
Ms. Hogan, Ms. Richard, Ms. Schwartz, Ms. McCalla and Mr. Le Goff, I thank you for being here and for providing us with some answers. Where possible, if you have further additions to the answers that you've given, if you would forward them to the clerk, that would be greatly appreciated. The clerk would dispense that to the whole committee.
The meeting is adjourned.