Opening Statement to the Standing Committee on Public Accounts

Canada’s Economic Action Plan

(Chapter 1—2011 Fall Report of the Auditor General)

13 March 2012

Ronnie Campbell
Assistant Auditor General

Mr. Chair, thank you for the opportunity to discuss Chapter 1 of our Fall 2011 Report, on Canada’s Economic Action Plan. With me today is John Affleck, the Principal responsible for this audit.

As you are aware, the Economic Action Plan was launched in January 2009 in response to the global economic downturn. The Plan was intended to stimulate the economy through measures that injected $47 billion in federal spending of public dollars into sectors of the economy and regions of the country in need. This is the second audit of the Economic Action Plan carried out by our Office.

Both audits examined programs largely related to infrastructure. In the first audit, tabled in October 2010, we found that the projects we tested met the eligibility criteria established by the terms and conditions of the different programs included in our audit. We also found that government departments and agencies expedited the implementation of Economic Action Plan programs.

To speed up project approvals, departments relied on the attestations of organizations and provinces that projects were construction-ready. At the time of our first audit, we observed that some projects were not construction-ready, despite the attestations, and raised the concern that completion deadlines would not be met.

In this second audit, we audited three programs that had been part of the first audit—the Infrastructure Stimulus Fund, Knowledge Infrastructure Program, and Community Adjustment Fund. Together they provided stimulus funding totalling $7 billion.

We examined whether selected federal departments and agencies had monitored progress and federal spending, including whether projects were being completed as intended; had taken corrective action where necessary; and had reported monitoring information to Parliament through departmental performance reports.

We found that the federal entities monitored the progress and spending of projects, permitting them to take corrective action in a number of cases. And, despite deadline extensions, the three programs in our audit largely achieved the Economic Action Plan objective to spend federal resources within the two-year time frame.

Departmental data we examined showed that some stimulus projects were progressing slower than expected and were at risk of missing the 31 March 2011 deadline. At the same time, the government was being pressured by municipalities, among others, to allow more time for projects to be completed.

Accordingly, the government reconsidered the deadline for selected Economic Action Plan programs, and it announced the extension of the funding deadline to 31 October 2011 for four infrastructure programs. We found that extensions were supported by an analysis done by the Privy Council Office and the Department of Finance Canada.

Mr. Chair, many projects in both the Infrastructure Stimulus Fund and the Knowledge Infrastructure Program were extended. At the time of our audit, final claims and close-out reports had not yet been submitted. We believe that enough time has passed now for both Infrastructure Canada and Industry Canada to know the total federal spending and final results for these projects.

In this second audit, we found that the presentation of the Economic Action Plan performance information in departmental performance reports was fragmented; this made it difficult for parliamentarians and Canadians to obtain an overall picture of results achieved against performance expectations and public resources spent.

The significance of $47 billion in federal spending calls for transparent reporting to Parliament on overall stimulus effects. We recommended in our first audit that central agencies prepare a summary report to Parliament at the conclusion of the Economic Action Plan that includes a detailed account of its impact on the economy. The Privy Council Office and the Department of Finance Canada agreed.

Mr. Chair, your committee may want to ask the Privy Council Office and the Department of Finance Canada to elaborate on the plan and time frame for reporting to Parliament on the delivery and economic impact of the Economic Action Plan.

Mr. Chair, this concludes my opening statement. We would be pleased to answer any questions the Committee may have. Thank you.