PACC Committee Report

Pursuant to Standing Order 108(3)(e), the Standing Committee on Public Accounts has the honour to present its

SEVENTEENTH REPORT

The Standing Committee on Public Accounts has considered Chapter 26 of the December 2000 Report of the Auditor General of Canada (Health Canada: Regulatory Regime of Biologics)and Chapter 27 of the December 2000 Report of the Auditor General of Canada (Canadian Nuclear Safety Commission: Power Reactor Regulation) and has agreed to report the following:

INTRODUCTION

Federal health and safety regulatory programs have as their primary goal the protection of Canadians against risks to their health and safety. The aim is to identify the problems before they occur, or if they do occur, minimize their consequences.

The Canadian Food Inspection Agency, Health Canada, Environment Canada, Transport Canada, the Canadian Nuclear Safety Commission and the National Energy Board are federal departments and agencies involved in the administration of major health and safety regulatory programs. These organizations administer about 85 Acts and 250 regulations. In 1999-2000, they employed a total of approximately 12,000 people and spent about $1.2 billion.

The objective of the government’s regulatory policy is to promote the design and implementation of effective regulatory programs. Because performance measurement is weak in this area, there is insufficient information to assess the cost-effectiveness of health and safety regulatory programs.

The Office of the Auditor General of Canada, over the past decade, has examined several health and safety regulatory programs. The audits found instances where the regulatory authorities did not fulfill the expectations of the government’s own regulatory policy. Although effectiveness cannot be judged solely on the basis of the adherence or non-adherence to the policy, well-designed programs do increase cost-effectiveness and reduce the risk of regulatory failure.

Improvement to the structure and the implementation of the federal health and safety programs will require action on a government-wide basis and also by the responsible regulatory authorities. The Office of the Auditor General recommends that the government:

·        explain its priorities to Canadians and the balance it has struck between protecting Canadians and addressing budgetary and economic objectives;

·        ensure that reliable information on risk is available and that this information be used to determine priorities;

·        allocate sufficient resources based on risk; and

·        report annually to Parliament on the overall effectiveness of health and safety regulatory programs that require significant interdepartmental cooperation.

The Public Accounts Committee considers it important that the federal government take all necessary steps to ensure the health and safety of all Canadians. In its opinion, it is essential that regulatory programs be well designed and properly implemented by their respective regulatory authorities. The recent examination of federal health and safety programs by the Office of the Auditor General has identified shortcomings in certain specific areas such as in the assessment and communication of risk, the management of human resources and reporting to Parliament. As a result, on 31 May 2001, the Public Accounts Committee met to consider the testimony of witnesses on matters regarding the regulatory regime of biologics by Health Canada and of power reactors by the Canadian Nuclear Safety Commission.

Representing the Office of the Auditor General of Canada were Ms. Sheila Fraser (Auditor General of Canada), Ms. Crystal Pace (Principal, Audit Operations Branch), and Mr. Ronald Campbell (Principal, Audit Operations Branch). Dr. Robert Peterson (Director General, Therapeutics Products Directorate and Assistant Director General, Biologics and Genetic Therapies Directorate, Health Products and Food Branch) and Ms. Jean Peart (Senior Advisor, Quality System — Biologics and Genetic Therapies Directorate, Health
Products and Food Branch) were present for Health Canada. The Canadian Nuclear Safety Commission was represented by Ms. Linda J. Keen (President and Chief Executive Officer), Mr. Mike Taylor (Executive Director, Office of Regulatory Affairs), and Ms. Susan Clyne (Director, Human Resources Division).

OBSERVATIONS AND RECOMMENDATIONS

A.          THE CANADIAN NUCLEAR SAFETY COMMISSION

The power reactor business line of the Canadian Nuclear Safety Commission (CNSC) reviews operations of power reactors on a continuous basis. The Commission has staff at each power reactor site, along with specialists from Ottawa, to monitor compliance with regulations and licence conditions. The audit identified certain areas of the CNSC’s operations needing improvement in order to ensure that the Commission continues to protect the health and safety of Canadians.

The Canadian Nuclear Safety Commission’s regulatory approach relies heavily on the competence and professional judgment of its knowledgeable staff. Yet, the Commission has been experiencing difficulties in hiring enough scientific and technical personnel to effectively carry out its compliance, monitoring and licensing activities of power reactors. According to the Commission, the staffing problems are attributable to non-competitive salary structures, competition from the private sector and a limited pool of qualified candidates. Despite recent initiatives, vacancy rates remain high, and positions remain vacant for long periods of time. Furthermore, the Commission’s staff is aging and many are nearing retirement age; as a result, the CNSC risks suffering from a loss of leadership and experience.

The Committee’s enquiries focused on the Canadian Nuclear Safety Commission’s efforts at resolving the outstanding staffing issues. To address certain remuneration issues, the Commission has already secured resources from Treasury Board; it has also implemented succession planning for all levels of management and it is currently exploring innovative methods to address human resource challenges, such as a pilot internship program for regulation of power reactors. Finally, to generate renewed interest in nuclear science and to offset the shrinking pool of qualified workers, the Commission is currently seeking and leveraging partnerships with Canadian universities and the nuclear industry in order to support strengthening nuclear education programs.

Although the Committee commends the ongoing efforts by the CNSC to resolve the outstanding human resource issues, it notes that the Commission does not seem to have developed any short-term recruitment strategy to immediately staff the outstanding vacancies in its power reactor business line. The Committee thus proposes the following recommendations:

RECOMMENDATION 1

That the Canadian Nuclear Safety Commission develop a formal recruitment strategy and action plan to fill the outstanding scientific and technical staff vacancies in its power reactor business line and table the strategy and action plan to the Public Accounts Committee no later than 30 June 2002.

RECOMMENDATION 2

That the Canadian Nuclear Safety Commission include in its annual performance report the number of technical and scientific vacancies at each year end, and the length of time each position has been vacant.

To compensate for an aging and shrinking workforce in the nuclear industry, it was suggested that ways be explored to encourage more young people to consider a career in the natural and physical sciences. The Committee enquired if the CNSC ever considered the possibility of developing or promoting science education programs at the grade school and high school level, or even perhaps developing and sponsoring a special scholarship program for university students in the nuclear sciences. Ms. Keen thought that the idea of special university scholarships had interesting potential, and remarked that within its limited resources, the Commission was developing a similar approach through a network of Ontario universities. Ms. Keen was hopeful that this approach could be expanded to include Quebec universities in the near future, but added that pursuing such a scheme would commit considerably more resources than the Commission could afford to provide given its current level of funding. The Committee believes it is worthwhile that the Commission explore innovative means to encourage education and research in nuclear science so as to ensure an adequate supply of qualified and knowledgeable people in the nuclear industry and thus makes the following recommendations:

RECOMMENDATION 3

That the Canadian Nuclear Safety Commission investigate the feasibility of developing a university scholarship program in the nuclear sciences and that it report the results of its findings to the Public Accounts Committee no later than 31 March 2003.

RECOMMENDATION 4

That the Canadian Nuclear Safety Commission investigate the feasibility of developing in conjunction with the Canadian Foundation for Innovation a science education promotion program targeted at grade school and high school level students to encourage them to consider pursuing a career in the physical and natural sciences and that it report the results of its investigation to the Public Accounts Committee no later than 31 March 2003.

The Canadian Nuclear Safety Commission recovers a portion of its operating and administrative costs from fees charged for licences and permits. In 1999-2000, the CNSC recovered 77.5% of its $48.6 million recoverable licensing costs. The Committee wondered if the Commission’s difficulties to provide its employees with a compensation package comparable to that of the private sector were not partly attributable to its own cost recovery policy. In fact, cost recovery policy does not directly affect the employee remuneration since all funds recovered are returned to the federal government’s general revenues. Nonetheless, Ms. Keen acknowledged that there was a need for the Commission to update its cost recovery regime and that it could do a better job at identifying and allocating costs against the specific dollar value of the services it rendered. The CNSC will investigate its cost recovery rate structure to determine if it is adequate, efficient and effective. The Committee believes a review of the Commission’s cost recovery policy is warranted and thus proposes the following:

RECOMMENDATION 5

That the Canadian Nuclear Safety Commission undertake a thorough review of its Cost Recovery and Charging Policy in order to update its user fee structure and report the results of its review to the Public Accounts Committee no later than 31 March 2003.

The Committee was concerned, upon learning from recent media reports, that the Commission had let an unproven nuclear reactor operate unsafely for several months because it had uncritically accepted the assurances of Atomic Energy of Canada Limited (AECL), the builder of the reactor and a federal crown corporation, that earlier problems with its safety systems had been remedied. According to the testimony and media reports, AECL did not inform the Commission in a timely manner, of several incidents of test failures of the reactor emergency shutdown system, nor did AECL corroborate the design of the safety system with independent outside experts. Under normal procedure, when an incident occurs, the licensee is required to promptly report it to the Commission,  who then undertakes an investigation to identify the causes of the incident.

Once the Commission was informed of the test failure incidents, it immediately issued an order to shut down the AECL reactor; which has not been restarted. However, approximately five months had elapsed between the occurrence of the test failure incidents and the issuance of the reactor shutdown order by the CNSC. As a result of the incident, the Commission reviewed its procedures and identified three areas of weaknesses. First, the Commission relied on the written assurances from the licensee without carrying out independent verifications. Second, difficulties in integrating and coordinating the various regulatory divisions within the CNSC delayed any prompt action. Third, there were too few staff on project sites to ensure proper regulation and surveillance of nuclear reactor safety. The Committee requested from the Commission a copy of its study and the set of procedures it intends to develop to prevent any such re-occurrences. The Commission agreed to provide the documents. In light of the observations, the Committee makes the following recommendations:

RECOMMENDATION 6

That the Canadian Nuclear Safety Commission submit as soon as possible to the Public Accounts Committee a copy of its lessons learned report on the incident involving an unsafe nuclear reactor and that it table the document with the Committee no later than 30 June 2002.

RECOMMENDATION 7

That the Canadian Nuclear Safety Commission develop a new set of improved procedures to strengthen nuclear reactor safety regulations based on the findings of the lessons learned report.

RECOMMENDATION 8

That the Canadian Nuclear Safety Commission develop an action plan together with a timetable of implementation to establish these new procedures and that a copy of all these documents be submitted to the Public Accounts Committee no later than 30 June 2002.

RECOMMENDATION 9

That the Canadian Nuclear Safety Commission undertake a review of its investigative practices to ensure that its investigations are independent. For greater certainty, the Commission’s investigations must ensure that they do not simply rely on third party information in order to support their findings.

RECOMMENDATION 10

That Atomic Energy of Canada Ltd. (AECL) be listed in Schedule One of the Access to Information Act so that the public and the Canadian Nuclear Safety Commission have independent access to those documents that would reveal future failures by AECL to report safety related incidents to the Commission in a timely manner.

B.          HEALTH CANADA

Health Canada is responsible for regulating biologics that include biological products such as blood and blood products, cells, tissues, organs of human or animal origin, vaccines, hormones, recombinant DNA products and other biologic drugs. In 2000, Health Canada created the new Directorate of Biologics and Genetic Therapies in order to focus resources and efforts in the area of regulating biologics. According to the Auditor General’s report, the Department is taking a reasonable approach in developing and implementing regulatory frameworks and methodology for regulating different biologic products. Health Canada relies on internal and external expertise to guide its regulatory activities. However, the Department does need to further develop guidelines to help it determine the appropriate regulatory approach to use when regulating different biological products. The audit also observed that Health Canada is having difficulties in staffing important scientific positions, and in developing and implementing sufficient databases to adequately process, analyze and disseminate information on adverse reactions and events.

The Department lacked sufficient personnel to carry out its various monitoring and assessment activities. Key positions remained vacant in the areas of compliance and enforcement investigations, pre- and post-market reviews and surveillance, and in the regulatory research and policy development areas. According to the Department, the outstanding vacancies were attributed to the lengthy staffing process and procedures and the unavailability of qualified candidates. Other reasons invoked were non-competitive salary structures, management’s reticence to initiate staffing actions due to the time and effort required to hire and train new recruits, and the difficulties involved in finding candidates willing to work in the field of biologics in a post-Krever environment.

In response, Health Canada has already taken certain corrective measures to deal with these issues. Regarding the staffing of outstanding vacancies, the Department has already received new funding from Treasury Board to address certain compensation issues. The Department is also seeking to improve its recruitment and training strategies through better coordination and cooperation between its human resource officers, departmental scientists and managers. There is also greater use of outsourcing of expertise through expert advisory panels and secondments from industry and academia. Health Canada is also enhancing in-house opportunities for its staff so they may keep abreast of new developments and maintain their competency.

Regarding the question of surveillance and inspection programs, particularly the post-market surveillance of biologics for adverse reactions and events, Health Canada told the Committee that it is currently developing a partnership with the United States Food and Drug Administration (FDA) to strengthen surveillance capabilities through the combining of Canadian and U.S. databases on adverse events reports.

The Committee is encouraged by the Department’s efforts at redressing the observed shortcomings, especially in the area of its human resources. The Committee believes that in order to properly carry out its mandated regulatory responsibilities, Health Canada must take all required steps to ensure that all outstanding vacancies are filled, and thus recommends:

RECOMMENDATION 11

That Health Canada undertake all the necessary measures to fill outstanding vacancies in its regulatory and surveillance programs for related biologics and report the progress of these initiatives in its annual Performance Report to Parliament for the period ending 31 March 2003.

RECOMMENDATION 12

That Health Canada include in its annual performance report a section containing the number of technical and scientific vacancies in its regulatory and surveillance programs at each year end with the length of time each position has been vacant.

CONCLUSION

The Committee acknowledges the efforts by both Health Canada and the Canadian Nuclear Safety Commission to resolve their outstanding problems in their respective health and safety regulatory programs. It is essential that both organizations resolve their outstanding staffing issues, as quickly as possible, otherwise each organization’s capacity to carry out its mandated regulatory responsibilities will be compromised. The Committee fully expects that Health Canada and the Canadian Nuclear Safety Commission will implement their action plans, in a timely fashion, and anticipates that they will both report the progress of their initiatives to Parliament.

Pursuant to Standing Order 109, the Committee requests that the Government table a comprehensive response to this Report.

A copy of the relevant Minutes of Proceedings (Meeting Nos.19, 38 and 42) is tabled.

Respectfully submitted,

JOHN WILLIAMS, M.P.

Chair