STANDING COMMITTEE ON PUBLIC
COMITÉ PERMANENT DES COMPTES PUBLICS
[Recorded by Electronic Apparatus]
Thursday, February 24, 2000
The Chairman (Mr. John Williams (St. Albert, Ref.)): Good
Today the orders of the day
are, pursuant to Standing Order 108(3)(e),
consideration of chapter 17 (Canada Infrastructure
Works Program: Phase II and Follow-Up of Phase I
Audit) of the September and November 1999 Report of the
Auditor General of Canada; pursuant to Standing
Order 108(3)(e), consideration of chapter 23 (Involving
Others in Governing: Accountability at Risk) of the
September and November 1999 Report of the Auditor
General of Canada; and pursuant to Standing Order
108(3)(e), consideration of chapter 24 (The Canadian
Adaptation and Rural Development Fund: An Example of
Involving Others in Governing) of the September and
November 1999 Report of the Auditor General of Canada.
Today the witnesses are, from the Office of the
Auditor General, Mr. Denis Desautels, the Auditor
General of Canada; Ms. Maria Barrados, the Assistant
Auditor General; and Mr. John Mayne, principal of the
audit operations branch. And from the Treasury Board of
Canada Secretariat, Mr. Richard Fadden—
Mr. Benoît Sauvageau (Repentigny, BQ): A point of order, Mr.
The Chairman: I beg your pardon?
Mr. Benoît Sauvageau: Good afternoon. How are you?
The Chairman: Yes, sir.
Mr. Benoît Sauvageau: If we do not have quorum, can we hear
The Committee Clerk: Yes, because there are five of you.
Mr. Benoît Sauvageau: Wasn't it nine? Does it change like the
The Clerk: That is the number needed to pass a motion. To hear
witnesses, it is different.
Mr. Benoît Sauvageau: Very well. I thought it was nine.
Yesterday, it was nine, but it changes like the value of the
dollar. So there is no problem.
The Chairman: There are six members; we have quorum.
Mr. Benoît Sauvageau: I did want these important witnesses to
be speaking in a vacuum.
The Chairman: No, and we wouldn't want to count them
in quorum either. But we're fine.
Continuing on, from the Treasury Board of Canada
Secretariat, we have Mr. Richard Fadden, the assistant
secretary of the government operations sector; Mr. Tom
Fitzpatrick, senior policy officer, service and
innovation; Mr. Ralph Heintzman, assistant secretary,
service and innovation; Mr. Toby Fyfe, director,
alternative service delivery, service and innovation;
and Dr. E.L. Shipley, director general, information
management and program operations. Welcome, all.
We'll start off with the opening statement by Mr.
Mr. L. Denis Desautels (Auditor General of Canada): Thank you,
Mr. Chairman, for
the opportunity to discuss our work
on the three chapters tabled last November.
As auditors on behalf of Parliament, an important part
of our role is to monitor areas of government where
there are threats to accountability or an erosion of
Parliament's ability to scrutinize federal public
policy. Some of our recent audits have raised concerns
about accountability in new program arrangements where
important aspects of the delivery of federal programs
have been shifted outside the federal government.
These new governance arrangements are growing in
number, and their magnitude is striking—over $5
billion in federal dollars is now spent annually
through these arrangements.
These arrangements call for new ways of holding the
federal government accountable. This issue may seem
theoretical, but it has important real consequences for
the way federal programs are managed and how Parliament
scrutinizes them. In my view, this is one of the most
important issues facing Parliament, and it needs to be
Over the last decade, the face of government has
changed substantially. The government is increasingly
partnering with other levels of government and with the
private and voluntary sectors to deliver its programs
and services. In the 1998 and 1999 budgets, the federal
government even created two independent, not-for-profit
partners mandated to pursue its objectives: the Canada
Foundation for Innovation, and the Canada Millennium
Scholarship Foundation. The social union framework
agreement signals an intent to enter into more
partnering arrangements with other levels of
What concerns me, Mr. Chairman, is not the fact that new
governance arrangements exist. On the contrary, many of them can be
highly beneficial, provided they are properly implemented. An
important aspect of this is ensuring appropriate accountability to
Parliament and to the Canadian public for the federal policy
purposes these arrangements pursue. It is not easy to arrive at an
appropriate, acceptable accountability regime when a joint program
is delivered under the separate authority of federal and provincial
partners. Nor is appropriate accountability obvious when a partner
operates beyond the public sector under the Canada Corporation Act
or the Canada Business Corporations Act.
First, let me focus on Chapter 23, which deals with these new
At the start of our audit, we discovered that the government
did not know how many of these arrangements exist, what form they
take or how much federal money they involve. Consequently, we
undertook a government-wide survey and found that 77 new
arrangements have been created since 1990. And this trend is on the
rise. As I have already said, they spend over $5 billion in federal
funds a year.
These arrangements take two forms. In delegated arrangements,
the federal government gives an outside organization discretionary
authority over program delivery, including key functions like
planning and decision-making. There is no direct accountability by
federal ministers and often there is little reporting back to
Parliament on the use of federal funds or federal authority.
Federal funding for delegated arrangements is usually provided
through grants with few or no strings attached, or through
contribution payments, which impose certain conditions on
Our audit found weaknesses in the governing frameworks of many
delegated arrangements. For example, performance expectations have
not been established for the Canada Foundation for Innovation, and
there is no requirement for reporting its performance to
The Canadian Adaptation and Rural Development Fund,
the subject of chapter 24, is another delegated
arrangement. For the most part, we found that
Agriculture and Agri-Food Canada had developed controls
for this arrangement that provide for appropriate
accountability. This shows that it is possible to
strike a reasonable balance between giving industry
councils freedom to make decisions and respecting the
need for accountability for public funds.
Collaborative arrangements are the second form of new
governance arrangements. The federal government shares
key functions with partners that may include
policy-making and planning, but a responsible federal
minister still oversees federal involvement in the
market development agreements between the federal
government and provincial governments are an example.
Federal funding of collaborative arrangements is
usually provided through contribution payments.
A collaborative arrangement that has given me some
concern is the Canada Infrastructure Works Program,
initially a temporary program by the federal government
to stimulate additional investment in local
infrastructure and direct job creation. In this case,
the federal government was responsible for approving
joint funding for the projects proposed by provinces.
Provincial governments were responsible for day-to-day
operations and program delivery.
In our view, the Canada Infrastructure Works Program
did not appropriately balance the need for initiative
flexibility with adequate accountability for the way
the money was spent and for the results the projects
achieved. As we state in chapter 17, our audit of
phase two of this program found that from an overall
federal perspective, the program was essentially
running on trust, with little accountability. Criteria
for project selection were not clearly defined, and
many of the files we reviewed lacked persuasive
evidence to justify claims by applicants that they met
Chapter 25 of our December 1998 Report on Transport Canada,
entitled "Investments in Highways", identified a number of similar
concerns about the department's collaborative agreements with the
provinces to help fund highway projects. Overall, we found that
Transport Canada administered its highway investment programs more
like grant programs than the contribution programs they are. We
also found that the department assigned too few resources to this
area and provided little or no support to guide and facilitate the
work. Not surprisingly, the department did not do much of what it
was required to do under the programs. The lessons learned from
these audits should be applied when government is designing future
program activities, to ensure that they will be well managed and
provide proper accountability.
Chapter 23 describes, based on our own work, essential
elements of an effective governing framework for all new governance
arrangements. Briefly, these include appropriate reporting to
Parliament and the public on the arrangement's spending and its
performance toward its objectives; effective accountability
mechanisms to ensure that adequate evaluation and audit regimes are
established; adequate transparency of important decisions; and
mechanisms to protect the public interest such as vehicles for
citizen complaints and redress.
The collaborative and delegated arrangements we
examined were not always created with these elements.
The committee might want to ask the Treasury Board
Secretariat about progress in developing a framework
for departments to use when they design new governance
arrangements. We believe that members of Parliament
should be consulted to ensure that their concerns about
accountability are addressed within the framework. The
committee might also consider asking departments to
review their existing arrangements, and where there are
gaps in the governing frameworks, provide plans for
We think it's important that Parliament insist on
proper accountability from new governance arrangements.
Parliament needs information to determine whether
these arrangements are working, whether public money
and resources are being used wisely, and whether the
public interest is being well served. Parliament needs
to be able to scrutinize the use of federal authority
and the spending of federal funds, whether the
decision-maker acting for the federal government is a federal
official, a provincial official, or a private or
Parliamentarians should be given the opportunity to
review accountability, transparency, and mechanisms for
protecting the public interest when considering
legislation to create new arrangements that are outside
the reach of traditional mechanisms like the Financial
Administration Act. It's equally important for
Parliament to regularly scrutinize whether these
arrangements are properly accountable. The committee
could play a pivotal role in encouraging the dialogue
with members of Parliament.
In conclusion, Mr. Chairman, the challenges raised in
these chapters are not insurmountable. I applaud the
important progress made in some of these areas,
although much work needs to be done.
We would welcome, of course, the opportunity to answer
the committee's questions. Thank you.
The Chairman: Thank you, Mr. Desautels.
We'll now turn to Mr. Fadden for the opening remarks
of the Treasury Board.
Mr. Richard B. Fadden (Assistant Secretary, Government
Operations Sector, Secretariat of the Treasury Board of Canada): Thank
you, Mr. Chairman, and thank you for inviting us here today.
I am pleased to provide you with an overview of the Canada
Infrastructure Works Program and to answer any questions you may
Canada Infrastructure Works was at the leading
edge of intergovernmental collaboration in the
effective delivery of a trilateral program. Launched
in 1994 as a short-term solution to the pressing
problems of high unemployment during a period of quite
low economic growth, the partnership of the
federal government, provincial and territorial
governments, municipalities, and other local
participants has been, we believe, a great success.
The federal government's contribution of $2.4 billion has
leveraged more than $8.3 billion in investments in nearly 17,000
infrastructure projects across Canada.
CIWP has been praised by our provincial, territorial and
municipal partners as an effective and innovative program that has
addressed municipalities' need for assistance to upgrade local
As well, the Auditor General states in his report:
provincial and federal program officials in every province audited
declared the program a success in creating positive federal-
provincial relations and directing funds to needed infrastructure
Investments in core infrastructure—water, sewer, road,
bridges—accounted for about 62% of the funds spent,
leading the way in creating jobs in the construction
sector. Infrastructure investments in buildings
accounted for some 31% of eligible costs and included
educational, community, municipal, and other buildings,
such as health care facilities.
I'd like to give you some examples of the tangible
economic and social benefits the program has brought to
the citizens and communities across Canada.
The Annacis Island sewage treatment facility in British
Columbia, with total cost of $207 million, was the largest single
project funded under the program. This project has resulted in a
significant improvement to the environment by addressing wastewater
treatment on the Fraser River.
Under phase two of the program in Ontario, $135
million, with a one-third federal share, was allocated
to projects involving construction and renovation to
health care facilities, half of which are for the
long-term care of seniors.
CIWP projects have helped to make more Canadians computer
literate and improved their access to the Internet. In New
Brunswick, the program has allowed the implementation of a computer
network linking all of the provinces elementary schools. In
Manitoba, rural and urban libraries had been linked via a network
that allows broader access to information, particularly to those in
Much-needed recreational and community facilities and services
have been made possible, such as a new regional civic centre in
Cornerbrook and the renovated downtown Montreal YMCA. A shelter for
abused women and their children was renovated in the Northwest
Levered private sector investments have benefited
several sectors of the economy, including the tourism
industry, the manufacturing sector, and the cultural
and performing arts sectors. Both the Toronto
International Trade Centre and the Quebec City Congress
Centre were realized through federal
contributions under CIWP.
A project in P.E.I. gave citizens access to the 911
emergency system, and a telecommunications project
provided northern British Columbia communities with
Many facilities have been brought up to building code
standards, such that they now allow access to the
handicapped. In Saskatchewan, the program allowed the
construction and upgrading of 2,300 kilometres of rural
roads. In rural Newfoundland, many citizens now have a
safe and reliable water source.
The program's multilateral approach to public sector program
delivery is very much in the new alternative service delivery mode.
Each of the contributing orders of government involved has his own
unique role, responsibilities and competencies.
The program was therefore designed in such a way as to avoid
overlap, building on the expertise and know-how of each partner.
This resulted in efficient program delivery that is in keeping with
modern concept of risk management.
Our admittedly non-traditional approach took into
account that each of the three orders of government
involved had investments at stake, each was competent
to effect its part of the collaborative program
delivery, and each had audit and evaluation
capabilities, as well as political oversight.
As we said in the management response to the Auditor
General's report, the chapter does not reflect what a
highly successful program it was in terms of results
and how it made a positive contribution to
federal-provincial-municipal relations in Canada.
We note that most of the Auditor General's recommendations are
oriented towards "future programs of this type". The Speech from
the Throne announced that there will be a new physical
infrastructure program starting in 2001, although it will not be a
direct repeat of CIWP.
We will carefully consider the Auditor General's
recommendations in the design of the new program,
although its final form will, of necessity, also have
to reflect the views of our provincial and territorial
partners on all aspects of program design and delivery.
Thank you, Mr. Chairman.
The Chairman: Thank you, Mr. Fadden.
we also have an opening statement from Mr. Ralph
Heintzman from the Treasury Board Secretariat.
Mr. Ralph Heintzman (Assistant Secretary, Service
and Innovation, Secretariat of the Treasury Board
of Canada): Thank you, Mr. Chairman.
I too welcome
the opportunity to meet with the committee today to
discuss alternative program and service delivery
arrangements and to answer any questions the committee
New program and service delivery arrangements are
increasingly used as an effective alternative means of
meeting federal public policy objectives. Government
believes in proper accountability for the expenditure
of funds and is committed to developing the most
appropriate management framework for these
The Treasury Board Secretariat agrees with many of the
principles suggested by the Auditor General of Canada
concerning governance and accountability of these
Regardless of how government organizes to deliver programs and
services to Canadians, Parliament should be able to hold these
entities to account through the appropriate minister. It is
important to ensure: credible reporting that links objectives and
funding to measurable results; effective accountability mechanisms
that define clear roles, responsibilities, expectations, capacities
to deliver as well as the ability to monitor and review; adequate
transparency both to the public and Parliament and provision for
the protection of the public interest.
In building the most appropriate accountability framework for
new delivery arrangements, it is necessary to balance many factors
These arrangements cut across multiple jurisdictions, policy
and management frameworks and often extend beyond Treasury Board's
authorities. Many do not come before Treasury Board ministers for
review and approval.
New program and service delivery arrangements involve
a variety of non-federal stakeholders. For example, in
partnerships with the provinces, it's appropriate to
recognize the legitimate role they play as equals
in many of these arrangements. Any accountability
framework must be sensitive to and respect the
interests of all partners. It should also show respect
for the role of Parliament and ministers in determining
appropriate governance and accountability provisions.
What is needed is a renewed policy framework for
government officials and political decision-makers.
They can use such a framework as a guide to develop
appropriate governance and accountability provisions
for new service and program delivery arrangements. As
I've said, it's important that these arrangements are
accountable to the government, to Parliament, and
ultimately to the citizens of Canada.
So how will we achieve these objectives? In the
secretariat's response to chapter 23, we indicated that
we are in the process of renewing the alternative
service delivery policy framework. This framework will
outline the basic principles that should be followed in
implementing new service and program delivery
arrangements. As part of this exercise, we're also
developing a management practices guide and database
that will be available, among other things, on the
These two instruments will do a number of things.
They will set out the core public interest tests to
assist decision-makers in determining whether specific
initiatives are in the public interest. They will
integrate central agency policy guidance, and they will
also capture departmental best practice for a variety
of types of alternative service delivery initiatives,
including the new governance arrangements the
Auditor General has described.
The renewed framework will reflect the environment
I've described and will respect the government's
preference for a case-by-case approach to these
arrangements based on a broad set of principles.
The new framework and these tools will be evergreen.
They will evolve over time to reflect current issues
and experience across the wide range of public policy.
The secretariat is developing these products by
drawing on experience and information from across the
government and through extensive consultation.
Following this consultation, the framework will be
submitted to Treasury Board ministers, and if approved
will form government policy.
The secretariat will also continue to improve the
departmental performance reports to Parliament. Among
other things, they will integrate achievement of
measurable results through partnerships. Through these
and other initiatives we expect to develop and keep
current a modern, results-based accountability
framework for these kinds of arrangements.
One objective is to strengthen accountability for new
program delivery arrangements. Another is to preserve
the authority of Parliament and the government to
decide what is in the public interest. The framework
should help decision-makers to decide the merits of
each specific case under consideration.
These initiatives I've outlined will address the
concerns of the Auditor General, and once implemented
they will help to strengthen accountability for new
alternative program and service delivery arrangements.
The Chairman: Thank you very much. I was distracted
Thank you, gentlemen. If I may say so, I thought the
opening statements were a little fluffy and short on
specifics. Let's hear what the members of Parliament
have to say.
Mr. Mac Harb (Ottawa Centre, Lib.): What do you
mean? That was was excellent. You weren't listening.
The Chairman: I was listening and I was reading. I
was looking for some real specific answers to the
questions raised by the Auditor General.
Mr. Mac Harb: They answered every one of them.
The Chairman: I didn't find them, but I'm sure Mr.
Epp's questions will draw that out.
Mr. Ken Epp (Elk Island, Ref.): Thank you, Mr.
Chairman, and thank you all for appearing before the
First I would like to ask the Auditor General some
questions, and I'd like to start with a general
question. I'd like to ask you, sir, whether you
believe you have enough authority to actually enforce
the findings you make.
I think back, and for example, over the last couple of
years you have brought in qualified approvals on the
annual statements of the government's financial
affairs; they've been qualified. You've given some
specific recommendations. In most instances, the
finance minister and the Department of Finance have
just basically ignored you from one year to the next.
Then eventually—this year, I believe—you gave an
unqualified approval in your audit.
What do you see as a way of bringing accountability to
the Canadian people and strengthening your role without
eroding the so-called supremacy of Parliament?
Mr. Denis Desautels: Mr. Chairman, I'll try to
answer that, but as Mr. Epp said, this is a fairly
As Auditor General I do not have the authority to
enforce any of the findings or recommendations I
come up with. The tools that are given to me are
reporting tools to Parliament. Hopefully, we can make
jointly a good enough case for the things we bring up
that it will attract the attention of Parliament and
the support of members of Parliament when that is
needed. In some cases, I can tell you, we are able to
achieve certain answers or satisfactory reactions to
our recommendations even before the issue is put in
front of members of Parliament.
My authority is simply one of being able to report. I
have the ability to search as much as I want in
government departments and obtain all the information I
need, and I think that helps me present a picture to
members of Parliament that should be convincing.
In terms of being able to do the job you expect
of the Auditor General, it's always important to have
sufficient independence to do that job, but I'm not
looking for the kinds of powers you may have
referred to of being able to force people to do what I
suggest, because that would have me cross over the line
from the legislative to the executive.
Mr. Ken Epp: I'll just ask for a very short
response. If I were to ask you whether you wanted to
have any more authority than you presently have, would
your answer be yes or no?
Mr. Denis Desautels: In terms of authority to force
people to implement recommendations, the answer would
be no. I'm satisfied with the general framework of my
There are a
number of other individual things I would like to have
in due course, but the answer to your basic question
would be no.
Mr. Ken Epp: Before I leave you to go to some of
the others, I have a question with respect to audits.
I know you look at the big picture. If I read your
information correctly, you're bringing to our attention
as parliamentarians that there are two major flaws in
how government departments generally work. One is a
lack of a clear definition of what the requirements
are. We're talking now about grants and these types of
things. What are the actual requirements to be met in
order to be eligible for that funding?
As I see it, the second part is a lack of actual
accountability that the money achieved what it was
supposed to have been able to do. How is it possible
to fix that in an organization with the magnitude of
the Canadian government? This was brought to us
dramatically and graphically by the fact that in just
one department, it took 10,000 pages to list one part
of their funding process. How can we ever have
accountability when we have a problem of that
Mr. Denis Desautels: Mr. Chairman, I believe
accountability is possible in just about every
government program. In some programs it's more
difficult than others because of the nature of what a
government department might do, but certainly if you're
referring to programs of grants and contributions, I
think it is possible to administer such programs in
compliance with some basic rules and some basic
principles. There are examples of that being
accomplished around the federal government, so I think
it's possible to do that.
Although it's not often well done, I think it's also
possible in those programs to obtain a better
accountability for results. It's possible to determine
if those programs are working and achieving the
objectives for which they're being set up and for which
the money's being spent. So I think it's possible and
there are examples around government right now of this
Mr. Ken Epp: I need to move along. I'd like to
talk a little bit about the infrastructure works
program and accountability in that program.
I think we multiply our accountability challenge in
the area of these tripartite programs. When you have
three levels of government involved, you end up with
the ability to pass the buck in terms of
accountability. I just wonder how thorough, in your
infrastructure programs... I suppose I could ask this
question of Mr. Fadden or the Auditor General. When
you have a community, a municipality, deciding whether
to put in a requisition or an application for funding
under this program—and we anticipate there will be
The Chairman: It's almost time, Ken.
Mr. Ken Epp: I still have three minutes, according
to my watch.
The Chairman: You have one.
Mr. Ken Epp: Okay. Let me just quickly finish,
You have one taxpayer down here putting money to three
levels of government. Then you have these three levels
of government all funding one program. Do we expect
each one of those levels of government to have a full
auditing machinery in place to account for this at all
three levels? Is that not wasteful? Would there be a
better way of accommodating that?
Mr. Richard Fadden: We would argue that it would
not be effective and efficient to have three levels of
audit, three separate systems of evaluation. In fact,
the program we have administered takes into account the
fact that Parliament has set up a system of audit for
the federal government, the legislatures of the
provinces have set up a series of accountabilities and
audit for the provinces, and so have the
Parliament set out a series of particular
responsibilities for the minister for infrastructure
and for the implementing ministers. Mr. Desautels
comments on some of these in the context of his report.
Two provincial auditors have reviewed the provincial
component of this program in the provinces and they've
done the same thing. A variety of municipalities have
also done audits. I guess I would be remiss if I
didn't point out that all of this auditing activity has
not pointed out one instance of financial
We've tried to the greatest extent possible to
minimize overlap and duplication by ensuring that each
order of government does what it is most qualified to
do. We don't think Ottawa, for example, is best
qualified to tell Rimouski whether it needs a new sewer
or whether it needs a new fire hall. It's the same
thing in Manitoba or any other province. That's just
one small example. We believe specialization in these
programs is the best path to follow.
Mr. Ken Epp: Mr. Chairman, I regret that my time
The Chairman: Thank you, Mr. Epp.
Mr. Denis Desautels: If I may, I have a quick
follow-up on the question of Mr. Epp.
We're not advocating either that there should be
audits at all three levels and any duplication of
effort. We just feel it has to happen at one level or
another and it has to be clear who's going to do what
and who's relying on whom for what. I wouldn't want to
leave the impression that we're arguing for a
multiplicity of audit regimes.
Mr. Ken Epp: I need to ask you one quick question.
Are you satisfied that all of the provinces—
The Chairman: We'll come back, Mr. Epp.
By the way, the bells are going. The motion is that
the House now adjourn. It's a 30-minute bell, so we'll
continue on for a few more minutes before we suspend
the meeting. Then I think we'll come back, and if
there is agreement, we may extend the meeting beyond
the normal adjournment time of 5:30.
Mr. Sauvageau, you have eight minutes.
Mr. Benoît Sauvageau: I could ask a question for you, Mr. Epp,
but you know that I have too much respect for you. I can say
facetiously that, in order to solve your problem, we would have to
eliminate municipal governments, provincial governments and the
Liberals, and put the Reform Party in office. Then there would be
no more audit problems. But I think that is not a suitable answer.
Let us be serious. Mr. Desautels, can I ask you if you are
somewhat, quite or extremely satisfied with Mr. Heintzman's
response on accountability? Given the recommendations in your
report, does Mr. Heintzman's response increase accountability,
satisfy Parliament, parliamentarians and the public, or is it too
Mr. Denis Desautels: Mr. Chairman, from what I have understood
of Mr. Heintzman's response to chapter 23 on partnership
governance, the Treasury Board Secretariat took our findings
seriously and undertook in particular to update its guidelines and
establish a framework, as we suggested. I therefore support the
Treasury Board Secretariat's intentions. What remains to be seen is
the result of these efforts, which I am looking forward to in the
coming months. So the proof of the pudding is in the eating, and we
Mr. Benoît Sauvageau: It is being said that departments and
agencies need to implement the FIS, the Financial Information
Strategy, to facilitate public access to the accounts and programs,
and improve accountability in general. Are you concerned—and I
think this comes back to what Ms. Jennings was saying—when you see
that the officials are showing little interest?
On another point, in the organizations that are being created,
and the report indicates that there are 77 new governance
arrangements and that accountability mechanisms should be
implemented very soon—maybe we will see that some day. Does it
bother you that in the departments, agencies, governance
arrangements and other entities, people are concerned only about
justifying the requests for new directives, when there is never
really any accountability, from a practical point of view? Does
that concern you at all?
Mr. Denis Desautels: I am very concerned about accountability,
and that is why we wrote chapter 23, in particular. We believe that
there is a risk that accountability will be eroded as these types
of partnerships proliferate. I am not saying, however, that these
partnerships are bad; I think that if they are done properly,
accountability can be enhanced in the end.
So yes, accountability is an important concern to us. That is
why we think that a framework should be established to set the
parameters for new arrangements that will be developed in the
months and years to come and possibly, when there is an
opportunity, as it says in the chapter, some of the arrangements
already in place can be improved.
On the one hand, then, I would like the framework to be
updated and the guidelines made more clear, which would amount to
revamping the arrangements already in place, and on the other hand,
I would like to see a good discussion using those guidelines when
new arrangements are proposed.
Mr. Benoît Sauvageau: All right.
I will now turn to Mr. Heintzman, if I may. Good afternoon,
Mr. Heintzman. In Mr. Desautels' presentation, he states in
The Canadian Adaptation and Rural Development Fund, the subject of
Chapter 24, is another delegated arrangement. For the most part, we
found that Agriculture and Agrifood Canada had developed controls
for this arrangement that provide for appropriate accountability.
In your opinion, is this a good example of what should be
applied to the 76 other arrangements that have been created? Can it
be applied that way or is it on a case-by-case basis? That is my
My second question is on the FIS. I do not know if there is
any link, but in any case I make one. Implementation is scheduled
to be completed by April 2001. The deadline may be met or not, but
it exists. Would it not have been a good idea to provide a
timetable for your response?
So I would ask you, in response to my first question, to give
me a concrete example that could be applicable and, to my second
question, by explaining whether or not a timetable would be useful.
Mr. Ralph Heintzman: Regarding the example given by the
Auditor General, without going into details, I believe, as he said,
that it is an example that could be used in other cases. I referred
earlier to the database on best practises that we want to develop
in the secretariat. That is a type of best practice that we would
like to include, cite and promote in this tool designed for use by
the departments and agencies.
As for the timetable, were you talking about the timetable for
updating the framework?
Mr. Benoît Sauvageau: The FIS has a timetable, with a deadline
of April 2001, for all departments and agencies. To launch new
accountability programs or ensure better monitoring, would it not
be a good idea to apply a timetable and ask the 76 organizations to
implement them for, let us say, January 1st, 2002? There could also
be a follow-up committee. Would it not be a good idea to have a
Mr. Ralph Heintzman: The framework should be updated by the
end of the upcoming fiscal year. So we hope to have a proposal to
submit to government by spring.
The timetable for implementing or updating the various
arrangements will be decided by the government. We have to take
advantage of any opportunities that arise, as was suggested by the
Auditor General, in order to improve the existing arrangements.
When the time comes to update legislation already passed by
Parliament, parliamentarians and the ministers will want to use
such a framework and the Auditor General's comments to review the
arrangements that exist.
Mr. Benoît Sauvageau: Thank you very much.
The Chairman: Thank you, Mr. Sauvageau.
Mr. Harb, we will have about seven minutes from you,
and then we will suspend the meeting.
Mr. Mac Harb: I'll probably take only four and my
colleague will take four. I only have a small
statement and a question to the Auditor General, with a
response from Treasury Board. Those I hope will be
brief, and I will try to be brief myself.
Because this is a joint program, that is, it is
actually tripartite—federal, provincial, and
municipal—I suppose we are dealing here with three
levels of government, so we're not dealing with a third
sector such as the private sector.
I came to the conclusion that there are absolute
philosophical differences here between what you, Mr.
Desautels, have formulated in your mind, that this
program is pure and simple, that it can't be measured,
therefore, I have negative views of it... Did I sort
of smell that somewhere? I don't know.
At the end of your presentation, you talked about how
this program was essentially running on trust, with
little confirmation that performance conditions were
being met. So it's your gut feeling, basically, that
tells you that probably this program did not meet its
objective. On the other hand, Treasury Board is
telling us that over 100,000 jobs have been created as
a result of those programs, and many of the provinces
and municipalities have said some wonderful stuff about
I know you did an audit with the Province of Nova
Scotia, I think. Was it with the auditor of Nova
A voice: It was Vancouver.
Mr. Mac Harb: And Saskatchewan... Was it both of
them? I wanted your views in terms of their responses
to that audit. Did they share your views on that?
I also wanted to hear from the Treasury Board about
what their views would be on what things out of what
the Auditor General said could be implemented in future
Mr. Denis Desautels: Mr. Chairman, I'm glad to be
able to answer those questions, because there may be a
philosophical difference between ourselves and
government representatives on how to run joint
programs, even tripartite programs, and what the
federal government is to do when they're in a
partnership arrangement with a province or
We believe that the federal government still has to do
a certain number of things. It cannot run totally on
trust. I think it has to carry out certain of the
things that government itself, in some cases, has
clearly said it was going to do.
We gave an example in my opening statement of the
highways program, where there were structured
agreements between the federal government and the
provincial government saying what each government was
going to do, but the feds actually didn't do what the
agreement called for and relied totally on the
province. So even though there was a structured
agreement calling for each party to do certain things,
it wasn't actually carried out that way. The officials
in question argue, well, there's no point in doing
that, we trust our provincial colleagues, and that's
We do have, to that extent, a certain philosophical
difference when it comes to that kind of program, and I
think it would be healthy to argue it out.
Back to the more specific issue of the infrastructure
program, I realize full well that this is quite a
popular program. Everybody seems to love this program.
The municipalities are among those who love it most. It
is a popular program and it generally ran quite well in
terms of the mechanics and getting the projects carried
out and approved without too many big difficulties.
But on the other hand, that doesn't mean it's perfect.
Being a popular program doesn't mean that you've really
achieved all of the objectives for which the money has
been authorized by Parliament.
For example, we note in the chapter that there are
certain shortcomings in terms of meeting the job
creation targets, so there are some differences of view
as to whether or not these were achieved, and in terms
of whether or not there was substitution in the
spending. I think the intent of the program is that it
be new spending, but our work shows that there is some
likelihood of substitution of provincial spending by
the federal contribution.
We know there are other things as well, like the
federal government approving a number of the
projects—most of the projects—without really looking
at much, if any, documentation, at least from what we
could see in the file.
It's a popular program and there weren't too many
evident glitches in the program, but did it achieve all
of the objectives that it was meant to achieve? That's
not as clear.
It might be possible to gain greater assurance
in the future, with such programs, that you would
achieve the objectives you set out to achieve.
The Chairman: We still have twelve minutes before the
Mr. Mac Harb: I don't have any further questions.
The Chairman: Do you want to take a couple of
minutes, Ms. Jennings? Then we'll suspend the meeting
and go to vote.
Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine,
Lib.): Thank you, Mr. Chair. I'll try to be brief in
my question. Hopefully the answers will be brief as
My first question is for the Auditor General and it deals with
something that we have heard a great deal about, which is that
there is another infrastructure program in the cards. Do you think
that the guidelines for renewing the strategic framework for
alternative service delivery, established by Treasury Board, will
correct the deficiencies that you found in the other infrastructure
Second, do you believe that the Financial Information
Management Program, if it is properly implemented and used to its
full capacity, will provide tools to enable both parliamentarians
and officials to assess whether, in fact, the government should use
an alternative service delivery mode for a service or product in a
given circumstance rather than providing that service or product
Mr. Fadden, I will ask you the same two questions.
The Chairman: We'll ask for the responses to be
reasonably brief if you can, please.
Ms. Marlene Jennings: I didn't ask why.
Mr. Denis Desautels: I will try to be very brief,
First, will the framework that we were talking about correct
the deficiencies in the infrastructure program? It can correct some
of the deficiencies, but there are problems that are more specific
to the infrastructure program and that we raised, which will not
necessarily be covered by the framework. So, to answer your
question, the framework will correct only some of the deficiencies.
Second, will the Financial Information Strategy provide the
tools needed to help make good decisions in the future with respect
to the delivery mechanism or the decisions to be made in such a
context? I think so. It will help a lot and in many ways, I
believe. The more we move into the development of joint programs,
the more necessary it is for everyone to have an adequate
information base. The federal government therefore needs to develop
adequate information tools in order to have all the information at
its disposal to be able to report on program results and be
accountable to its partners.
So I think that the Financial Information Strategy can be a
very important tool.
The Chairman: Briefly, Mr. Fadden.
Mr. Richard Fadden: While we have to admit that no
program is perfect, including this one, we do not agree
with the underlying premise that there are a great many
shortcomings in this program. With our provincial and
territorial partners, and taking into account the views
of this committee and the Auditor General, we'll try to
formulate changes to the program. But we believe the
arrangements that were used earlier resulted in the
Canadian public getting good value for its money,
without any financial mismanagement.
In terms of the financial information systems, we
believe the potential size of the new program is such
that it would warrant a special financial information
system that would provide the same database to
provinces, municipalities, and the federal government.
We hope to be able to meet some of the requirements for
the baseline information of which the Auditor General
Ms. Marlene Jennings: I just want to make a point.
I did not hear anything that was based on the premise
that the programs, including the infrastructure
program, were not good—not from myself nor the
Auditor General. The point was made
that there were some problems. I think Treasury Board
agreed there were some problems, but not that the
premise of the program was a bad one or that most of
the objectives were not achieved. So I just want that
to be clear, because I like the program.
The Chairman: We will suspend the meeting and ask
everybody to return as quickly as possible after the
The Chairman: Ladies and gentlemen, we are resuming the
meeting after it was suspended. Due to lack of
quorum, the meeting will be adjourned to the call of the
chair. Hopefully we can bring this subject back on
the agenda at another date.
Mr. Ken Epp: On a point of order, Mr.
Chairman, since I don't always attend this particular
group, do you have in your standing orders for this
committee a provision to hear witnesses with only the
chairman present, as we have in other committees?
The Chairman: No. We require five members. That also
includes members from the government in order—
Mr. Ken Epp: Even just to hear witnesses?
The Chairman: Yes.
Mr. Ken Epp: Okay, so this committee's different.
I regret that.
My apologies to the witnesses who have
come here. I really think we should have been here to
listen to you. I guess you can see who's absent.
The Chairman: The meeting stands adjourned.