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Jerome Berthelette
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Jerome Berthelette
2015-03-30 15:35
Thank you, Mr. Chair.
I thank the committee for giving us this opportunity to discuss chapter 5 of our report, entitled “Support to the Automotive Sector”. It is in our 2014 Fall Report. Joining me at the table is Richard Domingue, Principal, who was responsible for the audit.
The global economic recession of 2008 negatively affected Canada's production and employment in the automotive industry. Vehicle sales declined sharply in the United States and Canada, and some companies, including Chrysler and General Motors, could not generate sufficient income to fund their operations.
In December 2008, the governments of Canada and Ontario joined the U.S. government and offered financial assistance to Chrysler Canada and GM Canada. In total, the federal government provided $9 billion of financial assistance to support the restructuring of Chrysler and GM, including their Canadian subsidiaries.
We looked at how Industry Canada, the Department of Finance Canada, and Export Development Canada managed this financial assistance. The assistance involved complex transactions, high uncertainty, and tight timeframes. These circumstances had an impact on what Industry Canada could do to manage the assistance.
We found that Industry Canada, the Department of Finance Canada, and Export Development Canada managed the financial support to the automotive sector in a way that contributed to the viability of the companies and the competitiveness of the sector in Canada over the short and medium terms.
Industry Canada adequately assessed the recovery prospects of Chrysler and GM. This helped the government decide whether to participate in the financing of the companies' restructuring. However, Industry Canada had limited information on required concessions from unionized labour and other stakeholders, and on GM Canada's pension liabilities. This lack of information made it difficult for the department to understand the impact of its assistance on the long-term viability of the companies.
Industry Canada's information on the use of funds was limited to broad categories. For example, Industry Canada had limited documentation on the actual use of a $2.8-billion loan made to GM Canada for capital expenditures, warranty claims, and other general corporate purposes. However, the department adequately monitored the companies' production commitments in Canada.
Mr. Chair, we also found that there was no comprehensive reporting to Parliament of information about the restructuring assistance. Based on the information publicly available, we found it impossible to gain a complete picture of the assistance provided and of the amounts recovered and lost.
In 2008, the federal government launched the automotive innovation fund program. The program's objective is to support automotive firms in their strategic, large-scale research and development projects to produce innovative, greener, and more fuel-efficient vehicles. In addition, the government expects the program to contribute to a more competitive Canadian automotive sector.
We looked at how Industry Canada managed this program. Overall we found that Industry Canada's assessment of each project proposal was consistent with the program's terms and conditions, but in our opinion its risk assessment framework was more comprehensive than required. The department could streamline its risk analysis, given that recipients assume all of the technical risks and most of the financial risks of their projects.
Industry Canada has adequate information coming from progress reports and site visits to allow the progress of each project to be tracked.
However, Industry Canada has not yet used this information to determine whether the program is achieving its objectives.
Industry Canada has agreed with our recommendations and set deadlines for their implementation. Last December the department met one of its deadlines by issuing a report entitled “Summary Report on Canada's Support for the Restructuring of General Motors and Chrysler in 2009”.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.
Thank you.
Philip Jennings
View Philip Jennings Profile
Philip Jennings
2015-03-30 15:42
With that, thank you, Mr. Chair and committee members, for allowing me to provide you with a brief overview of Industry Canada's response to the Auditor General's 2014 fall report on the restructuring assistance provided to General Motors and Chrysler during the economic crisis of 2009 as well as the automotive innovation fund.
As you are aware, Canada has a strong automotive sector, which generates $17 billion annually of value-added, or 10% of Canada's manufacturing GDP. With some 730 automotive suppliers supporting our 11 assembly lines and three engine plants, the industry employs some 117,000 Canadians directly, and another 377,000 Canadians indirectly. In fact, in 2014, Ontario was the largest automotive manufacturing jurisdiction in North America—larger even than Michigan.
The auto sector is also export orientated. There are 90% of Canadian-made vehicles sold abroad, the vast majority of these in the United States. The proximity to the U.S., one of the most profitable auto markets, is one of our competitive strengths. Our auto sector is truly part of an integrated North American market.
Industry Canada is always interested in views and ideas that will help us support and grow Canada's automotive sector. While we hope we will never face a situation like the crisis of 2009 again, we are also interested in learning from such circumstances and in continuously improving how we prepare and respond. In this light, we welcomed the Auditor General's four recommendations. In fact, Industry Canada has already acted upon two of them and plans to act on the other two recommendations in a timely fashion. I will discuss this later in my remarks.
As you know, Mr. Chair, late 2008 and early 2009 was a period of extreme uncertainty and volatility. Credit was tightening, consumers were scaling down and postponing their spending, and economies around the globe appeared to be heading into recession, if they weren't already. The auto sector was experiencing first-hand the impacts of consumers postponing major expenditures. Annual vehicle sales plummeted in the U.S. in 2009, from about 17 million vehicles per year to a little over 10 million.
With shrinking sales, the financial situation of all companies was becoming desperate, but for GM and Chrysler it was particularly bad, as it did not have access to capital like the others. In November 2008, GM announced it would run out of cash around mid-2009 without a combination of government funding, a merger, or sales of assets. No credit institution was in a position to help either GM or Chrysler.
While Canadian sales did not dip as much, Canadian assemblers were not sheltered by the events in the U.S., given that close to 90% of Canadian-made cars are exported to that country. Canadian subsidiaries were directly impacted by their parent companies' difficulties. There was a real risk that GM and Chrysler might shutter their Canadian operations in an attempt to restructure.
GM and Chrysler were at the time, and continue to be, the two largest carmakers in Canada, accounting for more than 55% of total production. Many of Canada's suppliers depended on contracts with GM and Chrysler. Without this work, many would not have survived, leading to a hollowing out of the suppliers and creating problems for the other original automotive equipment manufacturers.
That would have triggered a collapse of the entire Canadian automotive supply chain. The strong links and interdependencies between our supply chain and our assemblers were the key motivation for government action and support of GM and Chrysler. GM and Chrysler in Canada had to be protected from being collateral damage of the events in the U.S., not only for their sake but for the entire suppliers sector and ultimately the entire automotive industry in Canada.
Mr. Chair, as the Auditor General concluded, the Government of Canada did what it set out to do: prevent the disorderly collapse of the auto sector and ensure a viable automotive sector in Canada.
The clock was ticking. There was a very short timeframe to find a viable remedy for both GM and Chrysler. Both were in dire financial straits, and Chrysler needed to find a buyer. From the point that the crisis started and GM submitted high-level restructuring plans to the U.S. Congress in late 2008, governments had less than a month to decide whether to provide an initial set of loans. Again, once the company submitted more detailed plans, there was only about six weeks to assess their long-term viability.
As these events demonstrate, the restructuring of GM and Chrysler took place under intensely challenging circumstances. It required unprecedented collective action by the federal, Ontario, and U.S. governments.
While Charles and I at Industry Canada were not there at the time of the restructuring, the federal government did quickly organize an automotive response team. It was headed by Mr. Richard Dicerni and Mr. Paul Boothe, the deputy minister and associate deputy minister at Industry Canada at the time, and Mr. Ron Parker and Mr. David Moloney, who are my predecessors and who led a team of dedicated public servants who worked tirelessly and in unique ways to manage the government's response to the crisis. It supported a steering committee made up of deputy ministers from Industry Canada and Finance, as well as representatives from Export Development Canada, the Privy Council Office, and the Ontario Ministry of Finance and Ministry of Economic Development and Tourism, who all played important roles.
The team also reached out to stakeholders and experts to ensure it quickly had access to the necessary knowledge and expertise, whether on financial corporate restructuring from KPMG and Ernst and Young or on U.S. and Canadian insolvency law from Cassels Brock or on the automotive market from CSM Worldwide and Casesa Shapiro Group.
There were external discussions with those in the industry, including assemblers and suppliers, to gather essential information needed to assess and understand the risk. The government then made a responsible decision and took decisive action. Afterwards, my department monitored the two companies to ensure they fulfilled their end of the bargain and to ensure that the restructuring would deliver the desired results.
Mr. Chair, I am impressed by the work accomplished by my predecessors for the Canadian industry and its workers. Their work was the basis of the government actions and it paid off. It also proved to be pivotal in securing the immediate future of Canada's automotive industry and the economy at large. In early 2009, GM and Chrysler assembly plants directly employed an estimated 14,000 workers. Today both companies continue to be Canada's largest automotive manufacturers, employing about 19,000 Canadians, and the economic benefits extend far beyond the two companies. At the time of the crisis, the Department of Finance estimated that a total of 52,000 jobs were directly or indirectly tied to production at GM and Chrysler. Another study, by Leslie Shiell and Robin Somerville at the IRPP, estimated that in 2010 a total of 100,000 jobs, including jobs in the supplier sector, could have been lost without the restructuring. The study further suggested that in 2009 alone the economy could have suffered losses of $23 billion had GM and Chrysler not successfully restructured. The government's decisive actions ensured that there was business for hundreds of suppliers. The effects even spilled over into industries across the Canadian economy.
Today, all Canadian automakers, including GM and Chrysler, are investing in their operations. In the last two years in particular, each of Canada's five automotive assemblers has reinvested in Canada, and auto parts manufacturers have also invested in their operations. Another sign that the sector is doing well is that Canada's production increased to almost 2.4 million vehicles in 2014. The auto sector will continue to contribute significantly to the Canadian economy for many years to come.
All this work was and continues to be recognized, not only by the industry but also by third party analysis such as the IRPP study I mentioned, which concluded that the restructuring assistance was successful. Furthermore, Industry Canada received recognition for its accomplishments, including in the form of the Institute of Public Administration of Canada's 2010 innovative management award. I believe it is a remarkable success story that we were able to partner quickly and effectively with our counterparts at home and abroad, within and outside of government, to provide sound advice and ultimately save thousands of jobs and hundreds of businesses, and to secure a future for Canada's auto sector.
With respect to the automotive innovation fund, I am pleased that the report reflects a program that continues to be well managed. In many respects, it's still early days for the program. It was established in 2008 and seven projects have been supported. The initial projects are just now being completed, yet we know from the initial evaluation we did in 2012 that the program is meeting its short-term objectives. It has leveraged about $2.8 billion in investments since its inception, and as the Auditor General has recommended, we will continue to report against its longer-term objectives as projects are completed.
Mr. Chair, I want to conclude my remarks by noting that we have learned a great deal from these experiences, and the Auditor General's recommendations have helped embed these. The recommendations have highlighted that clear and comprehensive reporting on support provided and the management of that support contributes to the public understanding of the restructuring success. In order to increase the ease of access to the information, last December we published a single summary report on the restructuring support and recoveries. We've also committed to undertaking a review of the management of the restructuring assistance with a focus on identifying lessons learned. This work will be completed this year.
The Auditor General also recommended reviewing how we evaluate proposals for support from the automotive innovation fund, and monitoring the performance of the program.
We have updated the program's risk assessment framework and made explicit the manner in which risk profiles of applicants are assessed. We will also evaluate the program again in 2017-18 to determine to what extent it achieves its long-term objectives.
It is fair to say, just like all Canadians, we hope we never face such a challenge again, requiring us to use the lessons learned from the 2009 crisis.
Thank you, Mr. Chair and committee members. We will be pleased to respond to your questions.
View Judy A. Sgro Profile
Lib. (ON)
View Judy A. Sgro Profile
2015-03-30 17:15
Why do Parliament and Canadians have to wait until 2017 or 2018 to know whether the program achieved its goals? That's a long time.
Philip Jennings
View Philip Jennings Profile
Philip Jennings
2015-03-30 17:16
As I mentioned, in 2012 we conducted an evaluation of the automotive innovation fund. It found that it was on track to meet the objectives. However, it did conclude that it was too early to be able to have a full assessment of the impact of the program, given that it was four years into the program.
We have committed to another evaluation, so we're able to assess that it is meeting its long-term objectives. That date has been set for 2017.
Philip Jennings
View Philip Jennings Profile
Philip Jennings
2015-03-30 17:16
We know that the immediate and medium-term objectives of the program are being met, but to know if the long-term objectives are being met will be evaluated in 2017.
Barbara-Chiara Ubaldi
View Barbara-Chiara Ubaldi Profile
Barbara-Chiara Ubaldi
2014-04-10 9:07
Thank you very much.
I would like to start by giving you a very brief oversight of what we do at the OECD, what we've been doing with open data with the 34 member countries of the OECD and increasingly with the non-member countries. I would like to clarify that we work with governments for our open data project, which concerns the release of data in open formats by governments. So we don't work with the private sector.
Our project started about two years ago, and I think it's important to underline that we started the project at the request of the governments. We have a group of CIOs who represent the governments of the 34 member countries of the OECD, including Canada, who asked us to look a little more in-depth at the strategies, implementation efforts, and the impact of creation efforts that they were putting in place. We produced a working paper highlighting key issues, and we conducted a data collection in 2013 across the countries to be able to see in more detail what governments were doing in terms of being strategic, developing quotas, but also in trying to achieve the value they expect to get out of their open data strategies and initiatives, and to measure these impacts.
I think it's very important to underline that what we found out was that within the community of practitioners, both inside and outside the government, there was and there still is some confusion when it comes to definitions. This means there is much overlap with the activities, for instance, of the freedom of information movement vis-à-vis the open data movement, the discussion on access to information and open data, and how they complement each other. There is still some confusion between open data in the broader sense and open data applied within governments. There is still a little bit of confusion between open data and big data, and still some governments tend to confuse the discussion about data analytics and data mining and open data. We thought that it was extremely important, and still is extremely important, as governments progress in the implementation for open data strategies and initiatives, to work with them to clarify the definitions they refer to.
Briefly, I would like to share with you some of the outcomes of the 2013 data collection we ran that highlights some of the key challenges that governments still deal with. These challenges are of different natures. There are policy challenges when it comes to the strategy, for instance—what kind of strategy and how to make sure that the strategy for open data aligns or is better integrated with social and economic development strategies, open government strategies, public sector reform strategies, and digital agendas for governments, for instance. There are technical challenges—how to, for instance, enable interoperability and integration that didn't exist, how is it possible to foster the linkage of data sets to be released in open formats, and all the related technical issues that governments are still dealing with in many instances.
But there are also organizational challenges that, according to our survey, still remain some of the most important challenges that exist. For instance, administrations, unfortunately, are still very much silo-based in the way of functioning, meaning there is a strong sense of ownership that different public institutions associate with the fact that they are the ones responsible for producing, collecting, and distributing certain data sets. These represent a big challenge in some countries when they started thinking about the development of open data initiatives because they encounter a certain level of resistance within the public agencies.
Last but not least, there are challenges that are of a legal nature. The other witnesses, for instance, mentioned the relevance of privacy and security and how we deal with these issues. It is not only for these aspects that it is important to look at the legal constraints that exist in some legislations. For instance, I will provide two additional examples. First are access to information laws, or freedom of information acts, which were adopted by many OECD countries from decades ago. They are now going through revisions, for instance, to make sure that they also accommodate the need for open data, not just for access to information. There are also restrictions, legally speaking, that concern the sharing of data within the public sector. So at times, for instance, linked data sets can support their data analytics, which can help identify trends to improve policy-making and service delivery, but still some legal restrictions do not enable different parts of the administration to access the various data sets.
Now when it comes to value, we saw that there are three main sets of value that governments are trying to achieve. As an organization we do not advocate for any approach or for any value sets, but I think it's important to underline that there is economic value that can be achieved through open data in the wider economy.
The other witnesses mentioned for instance the ease with which business start-ups are created. I would like to add also the emergence of new private sector type businesses, for instance the so-called infomediaries that enable the relevance of the data being open to a wider group of citizens that, in many instances, would not know how to get the most value of the raw data sets being made available.
There is economic efficiency that can be gained within the public sector, improved service delivery, improved performance, and improved efficiency in the internal dynamics. There is also the social value, for instance in terms of empowering citizens to make more informed decisions on their own lives. It tends to do with a different type of engagement, for instance, and participation in policy-making and service delivery.
Last, but not least, there is a third sector value that has to do with what we call good governance value or political value. In other words, the fight for higher transparency, higher accountability, and higher responsibility of governments.
We at the OECD are now looking at the next step of what we would like accomplished in collaboration internationally with other organizations, with institutions like the ODI, and within contexts that are internationally collaborative like the OGP, the G-8, and the G-20. The big focus we have right now is on supporting the further strengthening of the strategic approach and implementation, but also focusing a lot on value creation impact assessment. Because we do believe that as investments keep being made by governments—and let's not forget that open data is not for free—there is a financial cost for governments.
It's important to keep an eye on the value being created and on the measure of this value. We are part of the working group on open data, part of the OGP, so we collaborate with other, not only international organizations, but governments and institutions to make sure that this effort moves ahead internationally, so not only working with individual governments.
So now I come to the questions that you asked. How does Canada stand in relation to other jurisdictions? Certainly we saw Canada being grouped among the countries of the OECD that we defined as quick followers, meaning there have been a group of countries that have been the pioneers, the U.K., the U.S. They have been excellent in being ambitious in this context right from the beginning.
Then we have other countries that have taken other approaches. We also have countries that have been, like I said, the quick followers. I can mention for instance France, Mexico, and Canada, which have caught up quite quickly, even if at different levels than the other countries, in following up what have been the good examples set by, for instance, the U.K. and the U.S.
In that sense, I think, an extremely positive value-add of Canada has been the one of linking open data with open government, the one of linking digital government strategy with the open data strategy, the effect of having adopted an approach that nurtures collaboration internally, the fact that a committee was created to gather various representatives from the various jurisdictions.
I think a big focus has been on improving the portal, the first version of the portal, to in June 2013 the release of a new version that increases not only the accessibility of the data sets but also the use of social media features that focus very much on increasing the engagement of the citizens.
Because when we come to value creation—I think this is one of your questions also—how do we make open data valuable for the Canadian community? I think that a key point where we see the need for strengthening the efforts of OECD member countries and maybe Canada could be strengthening the focus on knowing the demands of the data.
If you consider the three sets of value mentioned, there are different data users in the community of users, which may have different needs. So knowing the demand is important. Nurturing the demand is important. Nurturing the engagement in the use of the data is essential to produce the value.
In that sense, I think it's important down the line. For instance, in the data collection we conducted last year, Canada ranked as one of the governments that had the highest number of data sets available. But as one of the witnesses mentioned as well, I think it's very important now to move ahead in the level of openness and the visibility of these data sets, which have an important impact on the value creation.
Last but not least, I would like to refer to the point on privacy that you were asking about. In addition to what the other witnesses mentioned, I think in order to protect privacy it is extremely important to have clear guidelines for the public servants. Remember that public servants are key actors in the ecosystem, and therefore, keeping the focus on training civil servants and raising their awareness of breaches of privacy that may emerge from a number of actions they can do in relation to open data is essential.
It is essential more and more as social media efforts are combined with open data efforts and mobile government-supported efforts such as, increasingly, the use of mobile technologies within government, because all of a sudden we start merging the value domains that are relevant to produce the value for open data. But I think it's very important to remember that civil servants need to be aware of the risks for security and privacy that emerge from the linkage of these three different domains.
Last but not least, yes, I agree with the previous witnesses, in the sense that I think governments are ahead of businesses in these aspects, in a sense. But I wouldn't be unfair and compare government with the private sector in terms of how much they are opening up, because I think there are important concerns in terms of privacy and security that relate to data sets owned by governments, which are very different from data sets owned by some entities in the private sector. I think comparing the two is important, but I think it's even more important to keep high the comparisons across governments in the world to make sure that the best practices are shared and replicated.
Thank you.
Michelle Doucet
View Michelle Doucet Profile
Michelle Doucet
2014-04-01 8:47
Thank you, Mr. Chair.
Good morning, everyone. Members of the committee, thank you for inviting us to speak to you today.
I am accompanied by two colleagues from the Privy Council Office—Mr. Ward Elcock and Ms. Karen Cahill. As you may know, Mr. Elcock is the special advisor on human smuggling and illegal migration. As such, he coordinates the Government of Canada strategy and response to migrant smuggling. Ms. Cahill is the executive director of the finance and corporate planning division of the corporate services branch in the Privy Council Office. In this capacity, she is also the deputy chief financial officer for the department.
My introductory comments are about the 2014-15 main estimates for the Privy Council Office (PCO) as well as its report on plans and priorities for the same year.
The PCO is seeking $118.8 million in the 2014-15 main estimates. This is an overall reduction of $4.6 million from the amount the PCO sought in last year's main estimates, which was $123.4 million.
The PCO's main estimates for this year are mainly related to the following.
A decrease of $4.4 million in savings was identified as part of the budget 2012 spending review. The PCO contribution to this exercise will total $9.2 million in savings, taking full effect today, in 2014-15. The PCO is one of many federal organizations that undertook this review with the goal of returning the government to balanced budgets, while at the same time improving the efficiency and effectiveness of government operations and programs.
To support these objectives, the PCO has undertaken several deficit reduction measures, including: transforming business processes across the department to achieve administrative efficiencies, further integrating the intergovernmental affairs function within the department, modernizing and streamlining the government communications function, and streamlining the cabinet system to improve the efficiency and effectiveness of decision-making.
The vast majority of PCO expenses consists of salaries and associated operational costs. As a result, most of the savings needed to be generated by having fewer employees within the department. These reductions were achieved through a fair and transparent workforce adjustment process where all affected employees were treated with respect and every possible effort was made to identify the best possible solution for each individual.
There is also a decrease of $1.4 million related to statutory authorities mostly related to contributions to employee benefit plans, which was made pursuant to Treasury Board Secretariat instructions.
In addition, there is a decrease of $0.3 million related to three efficiency exercises. The first one is the continuation of the consolidation of pay services to PWGSC's Centre of Expertise in Miramichi, New Brunswick. The two other efficiency exercises are for measures announced in Canada’s economic action plan 2013: namely, the consolidation of the procurement of workplace technology device software and the reduction of travel costs.
These decreases are partially offset by an increase of $1.2 million for activities related to the continued implementation of Canada's migrant smuggling prevention strategy, headed by Mr. Elcock. As mentioned earlier, Mr. Elcock's mandate is to coordinate the Government of Canada strategy and response to migrant smuggling.
In the last two years, Canada has successfully secured cooperation in transit countries in Southeast Asia and west Africa. The PCO works closely with four other federal agencies to further Canada's objectives on this important initiative. Approved funding of $1.2 million for 2013-14 was sought through the 2013-14 supplementary estimates (B) and presented to this committee during the PCO's last appearance. Funding for 2014-15 is now included in our main estimates.
An increase of $0.4 million represents the portion of wages and salary increases to be paid to employees during fiscal year 2014-15, in accordance with specific collective agreements that took effect last year.
This completes the explanation of PCO's 2014-15 main estimates.
I will turn now to PCO's report on plans and priorities for fiscal year 2014-15 to give you an overview of PCO's planning highlights.
To begin, it is important to note that the PCO's sole strategic outcome is to ensure that the government's agenda and decision-making are supported and implemented and that the institutions of government are supported and maintained.
In this regard, the PCO will continue to play a central coordination and advisory role within the public service to support the government in achieving its stated objectives for the year. The PCO plans to successfully meet this strategic outcome by focusing on four key operational priorities during the year. None of these are new priorities, but some of them have been updated recently to better highlight the importance of certain areas of the department's work. For example, you will note under priority one that the PCO is now reflecting its advisory and support role for portfolio ministers, in addition to the Prime Minister.
This role has always been done in the past and has always been reported under the plans for this priority, but the revised priority now accurately reflects that the PCO supports the Prime Minister and the portfolio ministers in exercising their overall leadership responsibilities by providing professional, non-partisan advice and support on the entire spectrum of the government's policy, legislative, and government administration priorities. This includes, among other things, advice on social and economic affairs, regional development, foreign affairs, national security, defence, Governor in Council appointments, intergovernmental relations, and the environment.
The second of PCO's priorities will be to support the deliberations of cabinet and its committees on key policy initiatives and coordinate medium-term policy planning. This priority has also been updated for this year to better reflect the importance of the advisory and support roles PCO has always played for cabinet and its committees.
What that looks like is that PCO manages the day-to-day activities that support the work of cabinet and its committees, such as scheduling and support services for meetings, as well as the distribution of cabinet documents.
PCO will work throughout the year to provide guidance and a rigorous challenge function to departments to advance policy, legislative and government administration proposals that are high quality, prepared in a timely manner and focused on addressing priority areas identified by the government.
The PCO's third priority is to enable the management and accountability of government. The PCO provides strategic advice on whole-of-government transformation initiatives, public service renewal, and other management reforms, which will ultimately contribute to sound government administration, enhanced productivity in the public service, and improved services to Canadians.
To this end, the PCO will support the Clerk of the Privy Council and the Deputy Minister Board of Management and Renewal in the identification of whole-of-government proposals to advance the government's priority for improved efficiency and effectiveness. In addition, the PCO will actively engage and collaborate with implicated departments and other central agencies in the implementation of these proposals.
In 2013, the Clerk of the Privy Council launched the Blueprint 2020 engagement process. As you may know, this process sought the input of all public servants on a clear vision for the future of the public service, and to determine what changes were necessary to make that future a reality. PCO will continue to support the clerk in order to achieve this vision, both across the public service and within PCO itself.
In addition, PCO will continue to provide advice and support to the Prime Minister and the Clerk of the Privy Council on the human resource management of senior leaders. This includes supporting the learning and development of senior leaders, undertaking succession planning and performance management, and supporting the Deputy Minister Committee of Senior Officials.
In keeping with the major transformational initiatives taking place across the public service, PCO's fourth and final priority is to strengthen the department’s own internal management practices.
During the year, the PCO will continue to support the Government of Canada's human resources modernization initiative, which aims to consolidate and enhance the delivery of human resource services across the government. This will be achieved in large part through the adoption of common human resource business processes and the implementation of further process improvements to deliver better human resource services to clients.
In addition, PCO will continue its efforts to implement the new directive on performance management to ensure that PCO has a high-performing and adaptable workforce. PCO will also support the Government of Canada's efforts to enhance information technology through the modernization of computer desktops, the implementation of the email transformation initiative, the establishment of government-wide secure network connectivity, and the consolidation of Government of Canada data centres. To that end, PCO will be working closely with its key IT business partner, Shared Services Canada.
Finally, PCO will implement the Government of Canada’s shared travel solutions initiative, as well as undertake a review of the department’s financial processes in order to align them with the Government of Canada’s financial business process modernization initiative.
In conclusion, it is through these initiatives and activities, done in support of PCO's four organizational priorities, that the department will be able to successfully fulfill its overall strategic outcome.
I would like to thank you for the opportunity to explain the initiatives related to PCO's 2014-15 main estimates and our report on plans and priorities. We would be pleased to address your questions.
View Peter Kent Profile
View Peter Kent Profile
2013-06-04 8:46
Thank you, Chair. It's always a pleasure to visit.
Let me start off by expressing my sincere appreciation for the opportunity to discuss the 2013-2016 draft federal sustainable development strategy.
As you said, I'll begin with a brief statement. I'd like to better introduce to the committee Andrea Lyon, who is my associate deputy minister, and with her is Tony Young, director general of the sustainability directorate and head of the sustainable development office.
We'll be pleased to answer questions after these opening remarks.
Mr. Chair, I'll begin by reflecting for a moment on the origins and evolution of the Federal Sustainable Development Act, back to when the office of the Commissioner of the Environment and Sustainable Development was created in 1995 and amendments to the Auditor General Act required the federal government to prepare and to table individual departmental sustainable development strategies. The first system did not work. It did not deliver the intended results. Successive audits between 1997 and 2008 examined various strategies and their outcomes, but without a government-wide strategy, environmental sustainability issues were often pushed to the margins of federal planning and reporting. There were no common goals or targets and no way to measure federal accomplishments.
Our government took action in 2008, and with all-party support the Federal Sustainable Development Act was passed. Two years later we delivered the federal sustainable development strategy. The FSDS, which today remains very much a work in progress, is achieving the original intent: a strategy that makes environmental decision-making both more transparent and accountable. The FSDS provided Canadians for the first time with a comprehensive picture of actions right across government that contribute to environmental sustainability. This integrated whole-of-government picture was provided, as you know, under four key themes: climate change and air quality, water, nature, and of course, greening our government operations.
The FSDS improves the way the federal government plans for sustainable development, and it addresses weaknesses of the old system that had been noted a number of times by the Commissioner of the Environment and Sustainable Development. The strategy ensures that environmental objectives are a foundational piece in the government's decision-making processes. It does so by incorporating sustainable development planning and reporting into the government's core expenditure planning and reporting system, as well as integrating it into the strategic environmental assessment process.
Effective measurement, monitoring and reporting are crucial not only to track our progress but also to ensure that Canadians can follow and watch these changes. The federal sustainable development strategy has been well received by the Commissioner of the Environment and Sustainable Development, by the environmental organizations, and by the business community. I'm pleased to report that significant progress has been observed in the three-year interval between 2010 to 2013. Departments and agencies now produce annual departmental sustainable development strategies that are integrated into their core planning and reporting processes and are linked to the overarching federal strategy. As part of our ongoing commitment to measurement, monitoring, and reporting, we have issued two progress reports, as you know, and have expanded our suite of environmental indicators that support federal sustainable development strategy reporting.
I'll detail some of the areas in which the 2012 progress report itemizes what I believe is impressive progress. We are reducing greenhouse gas emissions, conserving our natural environment, and ensuring the quality of our air and water. As you know, we have an effective sector-by-sector regulatory approach to reducing greenhouse gas emissions, and we've already taken action on two of Canada's largest sources of emissions: transportation and electricity. By the time 2025-model-year cars hit our roads, it's estimated that vehicles will be consuming 50% less fuel and producing 50% fewer emissions compared to 2008 models.
In the coal-fired electricity sector, Canada is the first country in the world to ban construction of traditional technology coal plants. Emissions from the electricity sector are projected to decline by one-third by 2020, compared to 2005 levels. Fully three-quarters of our electricity is now generated without the emission of greenhouse gases. Canada has an electricity system that is one of the cleanest in the world, and it will get even cleaner.
Our government has also shown that economic growth and environmental stewardship can go hand in hand and are not mutually exclusive. Our 2012 progress report also shows we're making progress with the Great Lakes contaminated sites, the areas of concern, and with protected areas, both terrestrial and marine, across Canada. This brings the total protected areas in Canada to about 10%, or the equivalent of a territory the size of France, Germany, and Austria combined.
These are only some of our achievements to date. I'd now like to turn to the steps we'll be taking to move environmental sustainability forward as indicated in the draft 2013-2016 federal sustainable development strategy, which we released for public consultations in February.
The new strategy outlines an improved framework of sustainable development planning and reporting. It builds on key improvements that we introduced in our 2010 federal sustainable development strategy, but moreover, it underscores our continuing commitment to transparency. Building on the goals and the targets already in place, this new version expands the whole-of-government picture of federal activities aimed at achieving environmental sustainability.
We've expanded the scope of federal actions to include new targets and implementation strategies on climate change adaptation. Great progress has been made in strengthening existing targets, particularly in terms of nutrient loading in the Great Lakes, Lake Simcoe, and Lake Winnipeg, and with actions in regard to marine pollution.
At the same time, it's important to note that new and more specific targets will be added to reflect decisions made since the draft strategy was released in February. For example, the new Canadian ambient air quality standards published by Environment Canada and Health Canada are more stringent than current U.S. standards for particulate matter and ground-level ozone, two pollutants of concern to human health and of course the major components of smog.
We'll turn next in the clean air area to development of new industrial emissions regulations of pollutants such as nitrogen and sulphur oxides along with the provinces and territories as part of the new air quality management system. Of course data generated through our partnership with Alberta on oil sands monitoring will continue to be collected and posted on our new Web portal.
We've also expanded the range of indicators to track progress on the strategies, goals, and targets. As a matter of fact, since our first strategy, we have increased the number of indicators to some 36 targets in the 2012 progress report. Work is now under way to increase the number of indicators to more than 40 for better measurement and reporting under the 2013-2016 strategy. Furthermore, it aligns with sustainable development commitments with various departmental performance reporting.
In addition, it builds on the progress we've made in the greening government operations in the areas of real property, fleet, procurement, and general office operations. This new strategy has also been expanded to include clean air agenda reporting commitments, water agreements with Ontario and Manitoba, the Great Lakes Water Quality Agreement, of course, our commitment to a national conservation plan, and Canada's domestic response to the Convention on Biological Diversity.
At the same time it continues to support the integration of sustainable development into our decision-making process through strategic environmental assessments and green procurement.
Now we're asking for the people's input, including from this committee.
As you know, the public consultations process on the draft federal sustainable development strategy is currently under way. We are also engaging a wide range of stakeholders including the Sustainable Development Advisory Council and the interim Commissioner of the Environment, who will be speaking to you about some of his observations on the draft strategy a little later this morning. As with the case with the 2010 strategy, the commissioner's comments will contribute along with input from other consultations into the final strategy to be released this fall.
In response we've received over 40,000 visits to the FSDS website, and we expect substantial input from Canadians as the consultation period draws to a close in mid-June. The final strategy, as you know, will be tabled in Parliament in the fall, greatly informed by the feedback we receive from this committee and from other interventions.
Mr. Chair, I'd like to close by emphasizing that Canada has a very good story to tell regarding our efforts to promote sustainable development at both the domestic and international levels.
We are making concrete progress across the full range of environmental priorities identified in the strategy. The federal government's innovative approach is bringing more transparency and more accountability to environmental decision-making. We are also strengthening sustainable development, which will benefit Canadians today and well into the future.
Mr. Chair, I thank you for this opportunity to speak, and I'd be delighted to field questions.
Neil Maxwell
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Neil Maxwell
2013-06-04 9:51
Thank you, Mr. Chair.
It's a pleasure to share our views on the draft federal sustainable development strategy. I'm joined today by Jim McKenzie, a senior colleague in the office.
Under the Federal Sustainable Development Act, I'm required to review the draft strategy and provide comments to the Minister of the Environment by June 14. We are still finalizing our review. Today I am providing our initial findings.
We are strong proponents of the requirement for a federal sustainable development strategy. It responds to concerns we expressed numerous times, as the minister noted, culminating in our 2007 report when we concluded that the existing process was not working. We recommended that the government establish overall federal goals for sustainable development.
We believe the strategy is essential as a means for the government to explain its environmental and sustainable development plan. We have found to date that the strategy addresses environmental issues that are indeed relevant and important to Canadians. A number of improvements are needed, however, for it to achieve its full potential. The strategy needs to be more complete and clear.
The strategy's intent is to build a whole-of-government picture by ensuring that it addresses important challenges and problems. However, we found it to be incomplete in some respects. First, some key initiatives are missing, such as the government's responsible resource development agenda and plans to monitor water, land and biodiversity in the oil sands region.
As well, the strategy does not include an indication of the resources that will be allocated to deliver on the targets and implementation strategies.
For the strategy to be clear, its targets and implementation strategies must also be clear and measurable. They provide the basis for assessing and reporting on the strategy's goals. They are also an important part of good accountability and transparency. In this regard, most of the 34 targets lack sufficient clarity, which will make it difficult to assess progress over the short and long term.
David Sawyer
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David Sawyer
2013-06-04 9:56
Thank you, Mr. Chair.
Members of the committee, ladies and gentlemen, it's my pleasure to be here today to reflect on the draft federal SDS. Our CEO, Scott Vaughan, extends his regrets. He's in China working with decision-makers on new programs basically to help China improve its SD management practices.
The International Institute for Sustainable Development has been facilitating the transition to development futures that are more sustainable for about 20 years now. We've been working actively at home from our base in Canada and abroad as a non-partisan thought leader building partnerships and engaging policy-makers in government, business, and civil society.
Currently we're working in about 45 countries. Recently we reviewed 15 global sustainable development strategies. This work basically informs some of our input and thinking today which we share with you.
While IISD has witnessed the rise of sustainable development as a unifying concept, we have also witnessed its calcification under the environment pillar alone, where SD now essentially equals environment. This has raised the risk that SD as a unifying frame could be perhaps passé, with a limited ability to help achieve national development aspirations. But a renewed shift in the SD landscape has recently emerged where there's an increasing recognition that environmental, economic, and social linkages need to be more tightly bundled and thought of in policy development.
In Canada, for example, we are seeing an interesting trend towards revealing the economic value of ecosystem goods and services that is strengthening on-the-ground efforts to manage wetlands, grasslands, and watersheds, helping farming communities, ecosystem users, and conservationists alike. In a sense, we're starting to come full circle where SD as practised is starting to better align with SD as originally conceived under the Brundtland commission over 25 years ago.
The federal government is in good company with the hundred or so countries that have published national sustainable development strategies globally. SD strategies are clearly the vehicle of choice for governments around the world to translate SD policy into practice. In 2012, as I indicated, we reviewed about 32 of these hundred or so global SD strategies to look for lessons learned and to assess the global state of play. Again, our findings are informative and influence our thinking and our presentation here today.
While we found that success hinges on many things—SD is a complex issue—two elements are worth noting within the context of the draft federal SDS. First, an ideal SDS emphasizes good governance and enables implementation, so SD strategies are both governance reform agendas and a north star to signal expectations within and outside government. Successful SD strategies build on elements of good governance, including transparency, accountability, evaluation, and performance reporting. They then commit resources to the SDS agenda in an open and transparent manner, signalling priorities, while implementation road maps make clear the actions that are to come to support the aspirations contained in the SD strategies.
Success hinges on horizontal integration and a dynamic forward-looking view. This is important. I'll pick this up later. There is no doubt that ineffective integration between institutions within and outside government and a myopic focus on environment alone impede SDS success. Integration needs to move beyond the environment pillar, truly enabling horizontal implementation to broaden the SD constituency, both within and outside government. Core central agencies are key to poking and prodding for more horizontal integration and coordination, and for achieving success.
Related is a more forward-looking and strategic view that goes beyond short-term departmental plans and priorities, and addresses long-term uncertainties and risks. Basically, what are we doing? Where are we going? What risks do we need to identify?
With those general observations, I'll now jump more specifically into six recommendations or observations on the draft SDS.
Not surprisingly, we see the federal SDS as currently constructed as a clearinghouse for environment programs. There are long lists in the back of the SDS. There's a need to rethink the singular pillar in the SDS and broaden the focus to more closely align with the balanced view of SDS, the original intent of SD, sustainable development.
While housing the SDS in Environment Canada makes sense, consolidating and centralizing what has been a diffuse function in the past across many departments, it also reinforces the stereotype that SD is an environment issue alone, which we think is a significant risk.
As an environmental clearinghouse, this SDS is less useful as a strategic forward-looking SD document. Our observation is that the draft SDS at best provides a snapshot in time with a limited strategic view and road map for success. A longer term and more integrated view would strengthen this SDS.
We think there's a need to communicate SDS linkages more clearly. Priority areas in the draft SDS have large economic and social consequences and have positive environmental outcomes.
We know, for example, that climate long ago moved from an environmental issue to an economic issue. That explains why we haven't moved on the file. Recently, the head of the IMF concurred in Davos this year and said that climate is the single biggest issue facing economies in the 21st century. This is certainly the case in Canada where the government's sector-based GHG regulations will likely pose costs. These costs are published in the Canada Gazette, part II, and are in the order of $30 billion between now and 2030.
These aren't our estimates. They come right out of the regulatory impact analysis statements. Clearly, these have significant impacts on consumers and households for an environmental outcome. We need to better translate and talk about these linkages and better communicate and articulate the trade-offs of federal policy.
The SDS could be more transparent. There's a deluge of priority indicators and implementation strategies in the back of the document that are confusing to parliamentarians, the public, and certainly to us. There's a need to simplify priority indicators under a few key areas and go deep on those, as well as outline implementation road maps, articulate financial disbursements, and indicate performance reporting in these priority areas.
I have two more quick points.
One is the need to improve financial reporting. It's hard to understand priorities and disbursements in the current document; in fact, it's almost impossible. You have to dig into plans and priorities and other documents to understand what is being allocated to these programs, what the priorities are, and the size of activities. We think improved financial performance reporting would strengthen the document and be more realistic.
Two, there's always a gap in plans between aspirations and actions. We see it in everything we do. Being more realistic and not so aspirational would realign and fix more realistic expectations. We think a more realistic accounting of what we want to do and where we want to go would help.
For these reasons we think some additional effort is required to make the draft FSDS more transparent, more strategic, and perhaps more balanced to reflect the core elements of SD.
Thank you for your time. I would be happy to answer your questions and explore these issues.
Neil Maxwell
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Neil Maxwell
2013-06-04 10:35
Some of them I've already shared in the opening statement.
There's another thing—and perhaps this gets to the governance issue that David raised as well—we think should be done, which could be an important improvement, Rather than simply doing a lot of bottom-up collection—and a lot of this exercise having to do with this strategy has been essentially Environment Canada going to all the other departments and asking them what they're doing about air and water—
View Charmaine Borg Profile
Thank you, Mr. Chair.
Thank you, Ms. Legault, for being with us today. Your comments were very informative, and I am certain your answers will be just as helpful.
In your report, you state that only 20% of access to information requests were answered in full, and that is a pretty troubling statistic from Canadians' standpoint. You also said, in an interview, that wait times for access to information requests had never been so long. I would like you to elaborate a bit more on that and speak to its impact on government transparency.
Suzanne Legault
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Suzanne Legault
2013-04-24 15:45
I am using statistics released by the government. Usually, the delay is over a year. The most recent statistics are from 2011-12.
The two major performance measures are response time and the quantity of information disclosed. Over the past 10 years, the best rate of performance has been 69% for cases processed within 30 days. That figure is now 55.5%. What that means is 7 out of 10 people used to receive the information requested within 30 days. Today, that number is 5.5 people out of 10.
The percentage for disclosure was as follows. Basically, in 40% of cases, all the documentation was disclosed. Now that figure stands at around 20%. That means, then, that 4 out of 10 pages used to be received, whereas today, it is 2 out of 10.
Tom Scrimger
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Tom Scrimger
2013-04-16 15:39
Thank you, Mr. Chair.
If you would permit a suggestion, we were going to make opening remarks on behalf of all departments, and I will do this in a few moments. I would be pleased to introduce the delegation of the departments, and perhaps that will save us a few moments. Then we can move from there.
Assisting me today, Mr. Chair, is Sue Stimpson, the chief financial officer of the Canadian International Development Agency. From Human Resources and Skills Development Canada is Ms. Nancy Gardiner, director general of program operations management and accountability. From the Public Health Agency of Canada is Carlo Beaudoin, acting chief financial officer. And from Western Economic Diversification Canada is Donald MacDonald, director general of operations.
Mr. Chair, thank you for the opportunity to speak about Chapter 2 of the fall 2012 report regarding the federal government's grant and contribution program reforms.
In addition to considering the role played by the Treasury Board Secretariat in the reforms, the Auditor General of Canada also examined selected activities undertaken by the five federal organizations I just mentioned. I would like to start by thanking the Auditor General for his work in this file.
As the report notes, the Auditor General last looked at how the federal government managed grant and contribution programs in 2006. At that time, concern was expressed about the heavy financial and administrative burden associated with applying for funding programs and with meeting the various requirements of these programs.
In June 2006, the President of the Treasury Board commissioned an independent blue ribbon panel on grant and contribution programs to recommend measures to make the delivery of grant and contribution programs more efficient while ensuring greater accountability.
In its report “From Red Tape to Clear Results”, published in December 2006, the panel provided recommendations aimed at simplifying the administration of grants and contributions, while at the same time strengthening accountability and risk-based approaches for managing programs.
The Government of Canada' s action plan to reform the administration of grant and contribution programs, announced by the President of the Treasury Board in 2008, outlined how the government would improve the management of grants and contributions as well as the expected results.
The plan consisted of three elements.
First, to build the right foundation, the new policy on transfer payments was introduced. This new policy and its supporting directive and guidelines have clarified accountabilities and simplified administration. The policy reform also established a new regime that is more sensitive to risks and is citizen and recipient focused.
Second, departments developed their individual plans to fundamentally improve their delivery of grants and contributions.
Third was sustained leadership to help guide reform across government. New approaches were developed, shared, and implemented throughout government, such as risk-based management and oversight, simplified approval and claims processing, service delivery standards for recipients, consolidated multi-year agreements, and coordinated recipient audit approaches.
The Auditor General's report has recognized the progress made in implementing the action plan. The Treasury Board Secretariat actively led the policy reform, supported the implementation of departmental action plans and fostered coordinated activities across federal organizations.
Federal organizations are increasingly using recipient monitoring and reporting requirements focused on risks. They are also consulting applicants and recipients on program changes and establishing service standards.
However, the report has also highlighted the need for additional work in two areas.
First we need to better assess the impact of efforts on departmental and recipients' administrative burden. In response, we are undertaking an assessment of the impact of our collective reform efforts, as measured against the expected results in this regard, which were outlined in the action plan.
In collaboration with federal organizations, an assessment will be completed by fall 2013, with a final report made publicly available thereafter. The timing of this assessment aligns with the five-year administrative review of the policy on transfer payments to commence in spring 2013. The results of the assessment will be used to inform this policy review and to identify opportunities to further strengthen the policy.
Secondly, we need to provide additional guidance to federal organizations to ensure that the risk ratings they apply in the ongoing management of their programs and agreements are appropriate and current. We are now working with departments to strengthen the policy guidance related to risk management. The new guidance will provide clearer direction on the need to review and validate risk assessments throughout the life cycle of grants and contributions. We are looking to implement this in spring 2013.
In closing, I would like to acknowledge the ongoing efforts of my colleagues in departments in implementing the action plan.
Mr. Chairman, we look forward to answering your questions, as well as those of the committee members.
Michael Ferguson
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Michael Ferguson
2012-10-25 11:37
Thank you, Mr. Chair.
Mr. Chair, I am pleased to present my report, which was tabled in the House of Commons last Tuesday.
I am accompanied by Assistant Auditors General Jerome Berthelette and Wendy Loschiuk, as well as by Glenn Wheeler, the principal responsible for the audit of transfer payments to the aerospace sector.
The report contains the results of that audit. In the first chapter, we looked at how Public Works and Government Services Canada, Health Canada, and Human Resources and Skills Development Canada plan their use of professional service contractors. We found that the departments plan their needs for employees and contractors separately. This hampers their ability to assess whether they have the best mix of employees and contractors to meet their objectives.
Departments need to consider the full range of options that will enable them to most effectively deliver programs and services to Canadians.
I'll move now to our report about grant and contribution program reforms. In May 2008 the government announced an action plan to reform the administration of grant and contribution programs and to streamline the administrative and reporting burden on recipients. Our audit looked at whether the government has adequately implemented this action plan. We found that the government has in fact focused its actions where they're most important. Treasury Board Secretariat has provided leadership and guidance to federal organizations to make the necessary changes, and these organizations have acted on most of their obligations. The government has made good progress in implementing the 2008 action plan. Now it needs to determine if the actions taken have made a difference for recipients.
Let's turn now to our audit about what government is doing to help protect Canadian infrastructure against cyber threats. Critical infrastructure includes the power grid, banking and telephone systems, and the government's own information systems. The government has a leadership role to play in ensuring that information about threats is shared, and it has to improve the way it does this. This is important because officials are concerned that cyber threats are evolving faster than the government can keep pace.
In 2001 the government committed to building partnerships with the owners and operators of critical infrastructure systems to share information and provide technical support. We found that 11 years later, those arrangements are not fully operational. Similarly, the Canadian Cyber Incident Response Centre has only been operating eight hours a day, five days a week. It's not the 24/7 information hub it was designed to be in 2005. Furthermore, it's not being kept abreast of cyber security incidents in a timely manner.
Since 2010, the government has made some progress in protecting its own systems and building partnerships to secure Canada's infrastructure. The government must now ensure that the sector networks are in place and working with the Cyber Incident Response Centre.
We are also reporting on how National Defence and Veterans Affairs Canada manage selected programs, benefits, and services to support eligible ill and injured Canadian Forces members and veterans in the transition to civilian life.
There are many support programs, benefits, and services in place to help ill and injured members of the military make the transition to civilian life. However, we found that understanding and accessing these supports is often complex, lengthy, and challenging. The lack of clear information about programs and services, the complexity of eligibility criteria, and the dependence on paper-based systems are some of the difficulties for both clients and departmental staff.
We also found inconsistencies in how individual cases are managed and problem-sharing information between the two departments. As a result, forces members and veterans did not always receive services and benefits in a timely manner or at all.
National Defence and Veterans Affairs recognize they need to work together on solutions. I'm pleased they've accepted our recommendations, including to streamline their processes to make programs more accessible for ill and injured forces members and veterans.
The next report also concerns National Defence—specifically, how the department is managing its real property at 21 main bases across Canada. The Canadian Forces rely on real property such as buildings, airfields and training facilities to carry out missions. These assets are valued at $22 billion. I am concerned that the department is not yet adequately maintaining and renewing its assets.
We found several weaknesses in the department’s management practices. For example, the approval process for construction projects is cumbersome and slow. It takes an average of 6 years to approve projects over $5 million.
We also found that National Defence is behind in its spending targets for maintenance and repair, and recapitalization. As such, weaknesses in National Defence’s management of real property could jeopardize the Canadian Forces’ ability to carry out its missions. National Defence recognizes it needs to improve and change its approach to managing real property.
We also looked at two programs that provide repayable assistance to support industrial research and development in Canada’s aerospace sector. Since 2007, Industry Canada has authorized almost $1.2 billion in assistance to 23 Canadian aerospace companies through the Strategic Aerospace and Defence Initiative and the Bombardier CSeries Program. Industry Canada has done a good job of managing most of the administrative aspects of the two transfer payment programs. However, we found that the department has been slow to measure progress against program objectives and report results publicly. Repayable support to the aerospace sector represents a significant investment on behalf of Canadians. Industry Canada has a responsibility to ensure that funding contributes to meeting the government’s objectives in this area.
Finally, in our audit focusing on long-term fiscal sustainability, we found that Finance Canada analyzes and considers the long-term fiscal impact of the policy measures it recommends. However, at the time of the audit, the government had yet to make public its reports on long-term fiscal sustainability. Analysis that provides a long-term budgetary perspective would help parliamentarians and Canadians better understand the fiscal challenges facing the federal government.
The department has accepted our recommendations. Following the tabling of my report in Parliament, the department issued its first long-term analysis for the federal government. We also recommended that the department publish, from time to time, an analysis for all governments combined—federal, provincial, and territorial—to give a total Canadian perspective.
Mr. Chair, that concludes my opening statement.
We will be happy to answer any questions you may have.
Marie-France Kenny
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Marie-France Kenny
2012-05-01 8:46
Good morning. Thank you, Mr. Chair and members of the committee. First of all, I would like to thank you for inviting the Fédération des communautés francophones et acadienne to appear once again before you as part of your study on the Roadmap for Linguistic Duality.
My name is Marie-France Kenny and I am the president of the federation. Today, I am accompanied by our director general, Suzanne Bossé. We are privileged to be the last to appear of the francophone and Acadian community organizations that have appeared before you. This provides us with a wonderful opportunity to draw from everything that has been said to look towards the future and set the foundations for the next initiative, an initiative which, as Senator Comeau put it, is not a new roadmap but rather a GPS to update everything that will follow the roadmap as of 2013.
The participation of all Canadians in our linguistic duality and community support for official language minority communities are the two main pillars of the Roadmap for Linguistic Duality. Initiatives and projects that resulted from the roadmap were aimed at meeting these objectives. The community organizations that appeared before you described, in quite eloquent terms, the results that have been achieved. They have mentioned the challenges, but also the successes, the obstacles met along the way, and also the opportunities that have been found.
The mid-term report published by Canadian Heritage a few weeks ago also makes mention of certain successes and progress, but was somewhat laconic when it came to challenges. The testimony provided to this committee regarding the mid-term report shows us that, in looking towards the future, the two objectives of the roadmap remain quite relevant. We are therefore recommending that the government initiative, which will follow the roadmap starting in 2013, should also strive to ensure the participation of all Canadians in linguistic duality and support official language minority communities.
Let us now take a look at the substance of this next government initiative. Francophone and Acadian communities set development priorities in the Strategic Community Plan that resulted from the broad consultative process which took place during the Sommet des communautés francophones et acadienne in 2007. The community representatives who appeared before you are all members of the Leaders' Forum, a group of some 43 organizations and institutions involved in the implementation of this plan. Several of them have, moreover, talked to you about this issue.
Given the objectives that we have just recommended, it would be quite logical and natural that the initiative following the roadmap be aligned closely with this Strategic Community Plan. After all, the government and the communities are both seeking the same result: communities or individuals that have everything they need to be successful and to contribute to the development of our country. The Strategic Community Plan includes five major themes, three of which show the way with respect to the priorities that the post-roadmap initiative will be focusing on; mainly, our population, our space and our development. They too align closely with the priorities of the government.
When we talk about our population, we are talking about strengthening the demographic weight of our communities. We are talking about supporting youths and families so that they will be able to pass on the French language and strengthen their sense of identity through greater access to cultural and heritage activities and child development support programs. We are also talking about strategies to welcome, integrate and retain migrants and immigrants who settle in our regions so that they can be successful and contribute to the development of our communities and regions. Mention, moreover, should be made of roadmap investments that enabled the Department of Citizenship and Immigration to provide better support to our communities in reaching the Strategic Community Plan objectives to promote immigration within the francophone minority communities.
Such support should also be renewed and expanded so as to strengthen, as well, community capacity in this area. The initiative that follows the roadmap should also include the Department of Foreign Affairs and International Trade so that it can equip communities and embassies to engage in promotion activities abroad. The theme Our Space is about access of francophone citizens to a wide range of activities and services in French delivered effectively, enabling them to participate actively in the growth of their community. It is also about providing a continuum of services that deal with every aspect of daily life, from education to health, from justice to culture, from youths to seniors.
This theme also deals with empowerment, ensuring that citizens themselves become involved in the growth and economic and social well-being of their communities. This leads me to the important consideration of priorities that should be in the initiative following the roadmap.
The implementation of the roadmap was undertaken by a well-coordinated and committed network working on behalf of francophones. The roadmap emphasized services to citizens, but it was the organizations and institutions in the communities that delivered the services.
They did this without any significant strengthening of their capacity. However, it seems to us that the more you invest in the capacity of the service delivery agency, the greater yield you get from the investment in terms of effectiveness, results and client satisfaction. Hence it is important that the initiative following the roadmap focus on service delivery and on strengthening this network of associations and organizations which, from one end of the country to the next, focus on the citizen and are best able to provide services at the least cost.
Let us now examine the theme of development. Francophone and Acadian communities have given themselves the objective of dealing with the aging population and rural exodus, stimulating jobs and economic growth. They want to achieve this by relying on the vitality of their network, on both private and community entrepreneurship, on innovative local development strategies, on the strengthening of human capital, on the acquisition of those skills required to ensure that everyone is successful and on the recognition of foreign credentials.
It is essential, to do this, that the initiative following the roadmap include, in particular, investments in manpower training, either through the development of essential skills such as literacy or through post-secondary education. Supporting entrepreneurship and cultural and heritage tourism initiatives is also important.
I have provided you with a few brushstrokes to give you a general overview of the objectives of the Strategic Community Plan and what will become the next Roadmap for Linguistic Duality. Moreover, I would really like to emphasize the importance of making sure that the primary initiatives of the current roadmap not come to an end on March 31, 2013. These initiatives will create momentum that must not be halted at a time when the benefits are starting to be felt.
I would also like to say a few words about the participation of Canadians in this linguistic duality. In this respect, the current roadmap rolled out certain initiatives which included the implementation of Canada's language portal and universal access to the Termium software.
Although these initiatives are commendable, it is important that we make a distinction between the strengthening of linguistic duality in the public service and in Canadian society. Since the initiative that follows the roadmap will bring us to 2017 and the 150th anniversary of Canada, we would look favourably on any initiatives that would create opportunities for dialogue and exchange amongst Canadians, leading to a better understanding and interest in this linguistic duality.
To conclude, I would like to provide you with a few key concepts regarding the governance of the next Roadmap for Linguistic Duality. We feel that the success of this initiative will depend on the extent to which we define the roles and responsibilities of those called upon to implement it. I am referring here not only to federal institutions but also to provincial, territorial and community governments.
We need to create a management and accountability framework, and our communities need to participate in defining objectives, indicators and timelines. Moreover, community organizations and institutions will no doubt be called upon to play a lead role in implementing this new roadmap, as they were in the case of the current roadmap.
In planning services and in ensuring a positive outcome for such an initiative, it is essential that we all have a good idea of how it is to be implemented along the way. We are recommending that the next roadmap include a monitoring tool that will enable us to follow investments as they are made, by department, by year and by program.
To conclude, I would like to leave you with some more general thoughts. The Minister of Canadian Heritage and Official Languages, the Hon. James Moore, asked us, last fall, which story francophone and Acadian communities would like to tell in the next roadmap in 2017-2018, as part Canada's 150th anniversary celebrations. We would like to be able to say that the support of the federal government has enabled francophone and Acadian communities to make giant strides in achieving substantive equality, that we have stopped being looked at solely as minorities, but rather as fully-fledged citizens who, shored up by this substantive equality, contribute fully to development and economic prosperity, and that we are more confident than ever that our children and grandchildren will, after us, be able to continue building this country in both official languages.
And finally, we hope that more than ever before, Canadians will have had the opportunity to talk to each other, to understand each other, and to appreciate all of the richness of our linguistic duality.
Thank you.
I am ready to answer your questions.
John G. Williams
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John G. Williams
2012-04-02 16:36
Mr. Chairman, I thank you for the invitation to appear before the Standing Committee on Government Operations and Estimates today to present on the estimates process by which Parliament reviews the estimates, or funds, requested by the government.
It is an honour for me to be here. This is the nation’s House, where the nation’s business is transacted, and it is a pleasure to be invited to appear before you.
In a democracy, the people have every right to expect that their taxes are used in a manner that is acceptable to the people. The House of Commons has the responsibility to represent the wishes and desires of the people and to ensure, by way of approval of the estimates, that government spending is prudent and in the best interests of the people. Since nothing happens without spending, it makes the approval of the business of supply the most important role of the House of Commons.
Control of the public purse by Parliament has its origins in the Magna Carta signed by King John in 1215, when the king agreed to accept the “common counsel of our realm” when levying and assessing an aid or a scutage—scutage being what we call taxes today. Parliament has had control of the public purse down through the ages, and it's still very much at the core of our democratic government.
Today, Standing Order 80 clearly indicates that the House of Commons still retains that authority by stating: “All aids and supplies granted to the Sovereign by the Parliament of Canada are the sole gift of the House of Commons”.
That puts it in perspective, Mr. Chairman. The government has no money except that which is given by the House of Commons.
For the fiscal year ended March 31, 2011, according to the financial statements audited by the Auditor General, the government spent $270.5 billion dollars, granted by the House of Commons by way of approval of supply.
That volume of spending poses a quandary for the members of Parliament. Given that amount and the complexity of proposed spending by the government, how are members supposed to be able to scrutinize it properly? If you want to look at the detail, the mountain of paper would be so big that you would not know where to start. If you want a manageable amount of paper, the overview contains so little detail that there are no apparent questions to ask.
In addition to that, of course, the government considers the estimates to be a matter of confidence. What backbencher wants to carry the responsibility of triggering an election?
It doesn't stop there. Let us suppose that a parliamentary committee recommended a reduction in the estimates. First, it can only be debated and voted on a supply day. Should it pass and the estimates be reduced, the government could consider it a loss of confidence and trigger an election.
However, even without a supply day vote, a reduction recommended by a committee would cause the President of the Treasury Board to introduce a motion to restore or reinstate the original amount if the proposed reduction was not acceptable to the government. The vote on the motion to restore or reinstate the government’s request for funds is a vote on an opposed item, and the adoption of this motion overrides the committee’s recommended reduction, which means nothing will happen.
In June 1995, the Standing Committee on Procedure and House Affairs created a subcommittee on the business of supply, and I was privileged to sit on that committee. The report, of which I believe you all have copies, is I think the best and most comprehensive report on the business of supply in Canada in modern times.
I would like, Mr. Chairman, to acknowledge Mr. Brian O’Neal of the Library of Parliament, who was the principal researcher for the subcommittee and whose great work contributed immensely to the quality of the report.
In addition to placing the business of supply in an historical perspective, the recommendations of the report can be broken down into six areas: one, the creation of an estimates committee with overarching authority on the business of supply; two, the confidence convention and the business of supply; three, granting committees the capacity to reallocate up to 5% within the department under review; four, long-term cyclical reviews of statutory spending, which we call program spending; five, review of crown corporations that do not report through a minister; and six, a review of tax expenditures and loan guarantees.
The subcommittee, Mr. Chairman, reported back to the Standing Committee on Procedure and House Affairs with this report, which was adopted by the Standing Committee on Procedure and House Affairs in late 1996 or early 1997. The report was subsequently tabled in the House of Commons, but the House was dissolved for an election in April 1997 and the report died on the order paper. I was unable to have it resurrected by the Standing Committee on Procedure and House Affairs in the subsequent Parliament, therefore I tabled a private member’s motion to adopt the report.
The private member’s motion was adopted by the House, but since the subcommittee report had not been tabled in that Parliament, the motion was advisory rather than an order of the House, and no action was taken.
However, if you look at Standing Order 108(3)(c), you will see that the first recommendation of the subcommittee—that there be an estimates committee—has already taken place. That is why you are here today sitting as the government operations and estimates committee.
I believe it was in 2002 when I became aware there were to be changes to the committee mandates. I therefore lobbied for the creation of the estimates committee with a mandate according to the subcommittee report, and here you are.
If you study the mandate of the estimates committee in Standing Order 108(3)(c), you will see that it is virtually identical to recommendations of the subcommittee, so that part of the work has been done. As far as I am aware, however, the estimates committee has yet to make full use of the mandate in the Standing Orders to pick up on the business of supply or examine government spending that is outside the estimates. I believe that approximately 30% of total government spending is voted on through the estimates. The rest is statutory expenditures authorized as program spending in legislation by the House of Commons.
With the new mandate, the estimates committee can now look and examine spending right across government. You will find in the subcommittee report—recommendations 35 to 39—a proposal for the estimates committee to examine statutory spending on a cyclical basis using the concept of program evaluation. All government programs should be evaluated at least once every ten years to: one, articulate the public policy objectives of the statutory program; two, decide whether or not these objectives are being met; three, whether or not the program is being effectively managed; and four, whether there are alternative means of meeting the same policy objectives.
These points are virtually identical to a private member’s bill that I had on the order paper for a number of years, which never made it to the House for debate. The point is that the estimates committee now has the authority under Standing Order 108(3)(c)(x) to examine statutory expenditures. To do so, it can ask the House to request that the government conduct program evaluations as outlined above to assist the committee in its work.
The estimates committee can also look at loan guarantees and tax expenditures that do not show up anywhere in the financial statements, and crown corporations that do not report to any other committee. These can represent huge sums of money and important public policy; therefore, the House needs some way to scrutinize them. That is the role of the estimates committee. The Public Service Commission, which is independent of government and therefore cannot report to the House through a minister, now reports directly to the House and is referred to the estimates committee.
The big item is the consideration of the estimates by Parliament. The most important function of Parliament—control of the public purse—is not even given a perfunctory examination. Many members of Parliament don’t understand the process, and therefore stay with more politically rewarding agendas. The big problems are how do you understand this mountain of paper; and if you did understand the paperwork and wanted to make a change, the Standing Orders and the confidence convention prevent you from doing so. Based on the premise that there is no gain for the pain, the estimates are left untouched and a mystery to many. Supply days are for political football with never a mention of supply.
When I arrived here in 1993, the last supply day in June used to be a full-day debate on the estimates, but even that was changed so that the debate on the estimates does not start until 6:30 p.m. and finishes at 10 o'clock. That's $270.5 billion dollars fully considered in three and a half hours. Pretty soon the House will be examining the estimates at the rate of $100 billion per hour, which really is a sad reflection on the state of our democracy.
If you read the report carefully, you will find that the subcommittee suggests a methodology by which House of Commons committees can recommend a reallocation of up to 5% within a department, and even reductions in the estimates without triggering the confidence convention. The report sets out a clear timetable for consideration of the estimates by the committees, and if a House committee recommends a change or a reduction, they must give their reasons for doing so. In response, the President of the Treasury Board can either accept or reject the committee's proposals.
If the Treasury Board accepts the committee's proposals, a modified royal recommendation can be tabled. However, if the committee recommendation is rejected, reasons must be given. This should lead to a reasoned debate in the House when the estimates are debated. It would be nice, of course, Mr. Chairman, if the Standing Orders were changed to allow more than three and a half hours of debate in the House.
Regardless of the issue, if you change the motivators, you will change the results. Supply days have become political, because MPs cannot change the endgame. If you allowed a process whereby estimates could be reduced, then I would hope that MPs would take the estimates more seriously and would hold a number of serious meetings on the issue with senior department officials.
Now, Mr. Chair, if I can change the topic slightly, I will talk about the plans and priorities documents themselves.
I sat on a committee that revamped the old part III documents into the plans and priorities documents, which presented the proposed spending for the coming year within future projections going out three years. This was something new.
The committee also recommended the introduction of departmental performance reports, tabled by the government in the fall. These two documents, plans and priorities in the spring, which are forward-looking, and the departmental performance reports, the DPRs, in the fall, which report past experience, should present the information in a similar manner, the plans and priorities having three years going forward and the DPRs having three years of historical information.
Unfortunately, Mr. Chairman, I saw these DPRs being what I called self-serving fluff, without real substance. I therefore wanted two DPRs selected at random each year for audit by the Auditor General. This way, we would know if the DPRs were really telling the story within the departments.
The Auditor General tabled a report in Parliament in 2007, I believe, explaining the methodology by which DPRs could be audited. Since I have been gone for a few years, I am not sure if the Auditor General has, in fact, audited some of these DPRs.
Mr. Chairman, the government operations and estimates committee has a wide-ranging mandate, and I hope this committee will utilize that mandate fully to make the examination of the estimates by Parliament a meaningful exercise.
It is why Parliament came into being, and control of the public purse remains its most important function.
I thank you, Mr. Chair.
John G. Williams
View John G. Williams Profile
John G. Williams
2012-04-02 16:52
I would like to see the estimates committee, first of all, collectively study the mandate you now have in the Standing Orders under 108(3)(c), which is wide-ranging and virtually limitless. You can look at everything the government spends. You do not really need a change in the Standing Orders.
Then don't get caught up in this confidence convention. Program spending is now within your mandate.
Mr. Marleau, the previous witness, said to set out a five-year plan. The business of supply report said not a five-year plan but decide if you're going to look at any specific program of spending the government does. Then you can ask through the House that an evaluation be done by the experts. The Parliamentary Budget Office has now appeared on the scene since this report was written.
There is a discipline called program evaluation that can give you a report of something of this magnitude on a particular program, asking four questions. One, what is the mission this program is designed to achieve within the country? Two, is it performing and fulfilling that mandate? Three, it is doing it efficiently and well? Four, is there a better way to do the same things? These are simple, fundamental questions that are long ranging in their application and do not invoke confidence. If you can get the professionals, the program evaluators, to give you a report of this magnitude on a program, you as a Parliament can now become engaged and make recommendations to the government that it would listen to going forward. Therefore, you can be very effective, in my opinion, if you act as a collegial committee moving forward in examining pieces of government spending in detail.
John G. Williams
View John G. Williams Profile
John G. Williams
2012-04-02 17:02
I would start, Mr. Chairman, by having an in camera meeting of the members to look at your standing order mandate.
It is broad. It is wide-ranging. It covers all parts of government. You need to decide how you're going to examine government spending beyond just the estimates that are tabled at the beginning of March, which have to be voted on and confidence is attached.
You should move away from there. Don't leave it behind, but don't make it your primary focus. Consider how the estimates committee could look at government spending, loan guarantees, tax expenditures. By virtue of the fact that tax expenditures are deducted from people's income tax means there's no revenue, no expenditure, no program. There's nothing. There's nothing that comes before Parliament on tax expenditures that gives you information. Yet, they can be huge public policies—RRSP contributions being one of the major tax deductions and tax expenditures that doesn't show up anywhere.
These are the things you can look at, and then you can table a report in the House asking the government to provide evaluations of this magnitude that give you detailed managerial information on how this program is doing, and then go forward from there. This is where I think you can make the greatest impact and influence government spending down the road.
Now if you take a look at the 52 recommendations, program evaluation is a big one. Reallocation within a department of up to 5% gives you the potential tool to say, “not there, but there”, without invoking confidence that the government would agree.
That's provided you put forth reasonable rational reasons for your proposal. The government would then have to respond. It would have to accept or not accept, and provide its reasons for doing so. That allows a reasoned and intelligent debate in the House.
When you have that kind of attitude, it reduces the partisanship and makes it much more meaningful. You represent the wishes of your constituents rather than just throwing political barbs across the table, and therefore they have more confidence in the work you do.
View John McCallum Profile
Lib. (ON)
Having spent some time in government and on the expenditure review committee, I don't remember this species of person called a neutral program evaluator. I'm not saying you're wrong, but I would have thought that even if you have that person, the committee will get what the government wants it to get.
Why not use the Parliamentary Budget Officer or some other independent body that works for the committee—not for the government—to spearhead this thing, possibly in conjunction with these people you've described? I don't think you want all the determination of the reports to be put into the hands of the people running the program or even of the government.
John G. Williams
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John G. Williams
2012-04-02 17:15
I agree, Mr. McCallum, and I'll say that when we wrote this report the PBO did not exist. I made my point that I think the Parliamentary Budget Officer should be an officer of Parliament serving this committee, very much like the Auditor General serves the public accounts committee.
Therefore, it would have the staff and the resources to do that program evaluation and also have the access to the documentation too. That would require legislation. The act for the Auditor General gives the Auditor General access to the documentation. The PBO would need that same kind of legislation.
View John McCallum Profile
Lib. (ON)
I think we agree so far. I now come to some of the issues that my NDP colleagues have been raising. Why would the government want this committee to have that information in the first place?
The government would generally prefer to feed us stuff that it wants us to have, not give us a capacity to dig out stuff that they may not want us to have. They're doing expenditure reviews. If they want to get rid of a program or cut it, they can cut it without having some nagging little parliamentary committee telling it what to do and digging up dirty things that they might not want us to know about.
Why would the government want to cooperate with us on this?
View Mauril Bélanger Profile
Lib. (ON)
I'm going to put the same question to everyone. If I ask you for documents and you are unable to provide them to me, or you are unable to answer the questions I ask you, I would like to know. You'll be able to provide the committee with the requested information once you have it.
May we know who in your organization is conducting this summative evaluation? May we know who you have consulted for this summative evaluation, when you did so, where you did it and how you did it—that is to say by telephone, email or in person? Can we know the questions that are asked and the answers you receive?
Is there any of that information that you are unable to give us?
Stephen Johnson
View Stephen Johnson Profile
Stephen Johnson
2012-03-01 9:33
That's definitely inconsistent with the practices we have adopted, even though we occasionally use private businesses to gather the information, and we even state in the contracts that the link between specific answers and individuals will not be disclosed to the department in order to keep their opinions confidential.
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