Auditor General's and Commissioner of the Environment and Sustainable Development's opening statements

December 2008 Report Press Conference - 5 February 2009

Auditor General

Good afternoon. We are pleased to present our December 2008 Reports, which will be tabled in the House of Commons this afternoon. The tabling of these reports was delayed because Parliament was prorogued. Most of the audit work we are reporting today was completed in the spring of 2008. This is the first opportunity I have had to introduce you to Canada’s new Commissioner of the Environment and Sustainable Development, Scott Vaughan.

Scott has worked in the field of environmental economics for more than 20 years at the international level He brings a wealth of experience to the Office and we are excited to work with him and learn from him.

Together, our job is to provide parliamentarians with reliable and independent information on how well the federal government manages and spends taxpayers’ dollars and whether it keeps its environmental and sustainable development commitments. We are confident the audit work tabled today, and our on-going work, achieves that goal.

Commissioner

Thank you, Sheila. I am pleased to be here today to present my first report.

Let me begin with three general observations drawn from today’s report:

• First, the government cannot demonstrate that the money it is spending on some important environmental programs is making a difference.
• Second, the government is not ensuring that measures to limit harmful air emissions are working.
• Third, the government has not yet translated sustainable development into concrete practice.

Canadians expect the government to tackle environmental degradation. The government needs to know what works, what doesn’t, and why. However, our audit work for this Report found gaps in the information  needed for Parliament to know how well the programs we examined are working, or whether adjustments are needed.

Environmental programming at Agriculture and Agri-Food Canada

Let me begin with environmental programming at Agriculture and Agri-Food Canada. While agriculture generates billions of dollars for Canada’s economy, pollution from the farm sector also represents a significant environmentalburden. Public concern about its effects is growing. Agriculture and Agri-Food Canada has spent $370 million to encourage farm practices that protect the environment.

However after five years, the Department cannot show whether  these environmental programs are leading to improvements in environmental quality on the farm.

Severe weather

We also looked at Environment Canada’s management of severe weather warnings to Canadians. Severe weather events like tornadoes and blizzards can result in injury or loss of life and cause significant damage. Being able to issue advance warnings accurately allows Canadians to prepare.

We found that the Department lacks an effective national approach to verify the timeliness and accuracy of the 10,000 severe weather warnings it issues each year.  We also found that the assets of its weather observation network, including radar and surface stations, are not managed adequately  to ensure that the network  can continue providing the data needed by the Department to issue and verify severe weather warnings.

Environment Canada is considered a world leader in weather services. Each day, it provides a valuable service to Canadians. However, as severe weather events are expected to become even more severe and frequent due to climate change, the weather service faces fundamental challenges and risks to the durability of its systems. We recommend that it adopt a long-term strategy to guide its decisions.

Air emissions

Today’s Report also discusses examples of measures the government has used to reduce air pollution.  In order to be credible to Canadians and the rest of the world, the government’s programs for reducing air pollution must be able to produce measurable results. In that respect, most of what our audit found was disappointing.

For example, we looked at the regulations on gas pumps aimed at limiting the release of toxic vapors, such as benzene, when people refuel their cars and trucks. We found that Environment Canada has done almost no enforcement of these regulations. As a result, it does not know whether the regulations are working.

Another example is the Clean Air and Climate Change Trust Fund—1.5 billion dollars transferred to the provinces to reduce greenhouse gas emissions and air pollution. Although Environment Canada claims that certain reductions will be achieved, the trust fund has no conditions requiring provinces to report on how they use the money and what was achieved. This will make it difficult for Environment Canada to support its claims that greenhouse gases will be reduced by 16 megatons per  year between 2008 and 2012 as a result of the Fund.

We also looked at the Public Transit Tax Credit, a plan designed to encourage Canadians to switch to public transportation. Although this is a commendable goal, we found that actual reductions in greenhouse gas emissions were disappointing relative to the $635 million cost.

We looked at a pollution prevention plan, intended to lower the emissions of a harmful toxic substance, acrylonitrile. We found that since that substance was declared toxic almost eight years ago, total emissions have not been lowered but rather increased three-fold.

I am also presenting the annual reports on environmental petitions and sustainable development strategies.

In closing, the government has an important role to play in protecting the environment and the health of Canadians, and in moving toward sustainable development. Unfortunately, all too often the government  does not know the impact of its efforts.

I will be happy to answer any questions later, after the Auditor General presents her Report.

Auditor General

Thank you, Scott. Again this year, our Report to Parliament reflects the diversity and complexity of the issues on the federal government’s agenda. It is to be expected that an organization as large and complex as the federal government, with annual spending of around $230 billion, does some things very well and has difficulties in other areas. Our report shows this wide range of accomplishments and challenges.

Transfers study

In 2006-07, federal transfers amounted to about $50 billion, or just under 23 percent of federal spending.

We undertook a study to inform parliamentarians about the main mechanisms used to transfer funds to the provinces and territories. Members of Parliament have told us it is not always clear which transfers have conditions attached, and what the nature and extent of the conditions are.

The study explains that while some transfers involve conditions on the use of the funds, others do not. Where there are no conditions, the provinces and territories have no legal obligation to spend the funds for the purposes intended by the federal government.

Health indicators

This year we examined how Health Canada has responded to commitments made by First Ministers in the past to report on health indicators.

We found that while Health Canada has published health indicator reports, the reports do not fulfill the broader intent to report to Canadians regularly on the progress of health care renewal. The report Healthy Canadians has given statistics on indicators, such as wait times reported by patients for diagnostic services, but it does not give enough information to help readers understand what it means.

Reports on health indicators are meant to inform Canadians about progress being made on key priorities, such as quality of service. However, Health Canada’s report falls short.

Other national organizations publish similar reports. Health Canada needs to review its role and its approach to health indicator reporting.

Canadian Food Inspection Agency plant resources

Let me turn now to the Canadian Food Inspection Agency and its protection of Canada’s plant resources. That is, how it deals with the risk presented by invasive alien plants, seeds, plant pests and diseases.

The sheer volume of imports makes it impossible to inspect all shipments. Given that the volume has more than doubled in the last seven years, it is critical that the Agency focus on the greatest risks.

We found that the management has no systematic way of knowing if its procedures are adequately designed and operating effectively to keep invasive alien species from entering and becoming established in Canada.

Our audit findings are serious. The Agency needs to conduct a comprehensive assessment of the way it handles imports under its plant health program.

Canada Revenue Agency

Two chapters in today’s Report deal with management practices at the Canada Revenue Agency. The first one looks at how Canada Revenue Agency manages its Information Technology investments.

The Agency invests about $175 million a year in large, complex systems that affect Canadians. We found that it has developed a sound approach for choosing and managing its investments in the future. However, we found problems in most of the projects we looked at.

The Agency needs to ensure that its new approach to managing its investments is rigorously applied so they deliver the intended benefits.

In addition, The Agency faces the prospect of having to replace about one third of its national applications, and it has recognized that its current resources may not be sufficient. It needs to manage its Information Technology investments as a portfolio in order to make the difficult choices that lie ahead.

Our second chapter on the Agency looks at people management. 

We found that the Canada Revenue Agency has made major changes in people management and in some areas, it expects they will lead to reduced costs and more efficiency.

However, we found that the Agency has had difficulty with its new staffing process, which employees said was frustrating and confusing, partly because it continues to change.

An efficient staffing process is critical in light of the recruiting challenges the Agency expects to face in the coming years. It needs to reflect on its approach to staffing before pushing ahead.

Correctional Service Canada efficiencies

Turning to our chapter on Correctional Service Canada, we found that CSC has not been taking advantage of possible savings through more efficient deployment of its security staff. We found that overtime costs have risen, while the number of prisoners has remained relatively stable. Correctional Service has not analyzed the impact of overtime on salary costs or the potential advantages of hiring more staff.

Similarly, we found that the Agency could be missing out on savings in the way it purchases food, clothing, and cleaning services for its 58 institutions.

While we understand its focus on safety and security, Correctional Service needs to analyze what these goods and services are costing it and whether there are more economical and efficient alternatives.

Small Entities

We also looked at how the government oversees small government organizations.

Despite their size, small federal entities can have a significant impact on Canadians. We found that central agencies have not paid enough attention to the oversight of these organizations and the unique challenges they face, in particular their limited capacity.

Small entities don’t have the systems and resources of large departments and may have only a few key people responsible for several functions. Sometimes this can lead to problems, as we have found in previous audits.

Central agencies have been aware for several years of the problems facing small entities. Yet they have done very little to address the problems. It is time for concrete action.

Contracting for services

We looked at Public Works and Government Services Canada’s contracting for professional services to help it deliver its own programs. We found that the Department followed the government’s rules when awarding most contracts.  A fair, open, and transparent award process was a significant finding in a department that spends over $1 billion a year on contracts for professional services.

However, we found problems in the management of some contracts once they had been awarded.

While the Department has proper rules in place, it needs to do more to ensure that contracts are properly managed after they have been awarded. The Department has agreed with our recommendations and has taken steps to correct the problems we identified.

Conclusion

The Commissioner and I would now be happy to respond to your questions.