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

March 2009 Report Press Conference - 31 March 2009

Auditor General

Good afternoon. We are pleased to present our 2009 Status Report, which will be tabled in the House of Commons this afternoon. The Report revisits seven issues that have been discussed in my recent reports or those of the Commissioner.

Status Reports are particularly important because they show what departments and agencies have done to address recommendations from a selection of our past audits.  In determining whether progress is satisfactory or unsatisfactory, we take into account the complexity and significance of the issues and the amount of time that has passed since the original audit.

I am pleased to say that of the seven topics revisited this year, the Commissioner and I found satisfactory progress in five. The Commissioner will first tell you about the findings of his audits.

Commissioner

Thank you, Sheila. The two environmental issues that we cover in this Report are fundamental to life: the safety of the water we drink and the quality of the air we breathe.

Safety of drinking water

In the area of drinking water, federal guidelines establish the maximum acceptable concentration of contaminants in tap water in order to protect human health. Developing guidelines for the safety of the water we drink is an important federal activity.

In 2005, we reported that Health Canada was slow to develop and review its guidelines. At the time, there was a backlog of about 50 that needed to be reviewed and, if necessary, updated to reflect current science. Since then, the Department has largely cleared the backlog. I am pleased that Health Canada has also set up a process to update the guidelines regularly on the basis of scientific information and produce new ones as needed.

Health Canada has also made progress toward verifying that drinking water on airplanes is safe. However, it still needs to close some gaps before it can assure Canadians that drinking water is safe on all common carriers under federal responsibility.

Air Quality Health Index

Turning now to the Air Quality Health Index (AQHI). The AQHI, as it is commonly called, is a snapshot of air quality at a given location. It combines three key pollutants that affect human health and need to be monitored across Canada. Like the Ultraviolet Index, the AQHI will help individual Canadians make informed decisions about outdoor activity.

We found that Environment Canada and Health Canada have made satisfactory progress in developing the AQHI, a commitment that was cited in their responses to petitions submitted by the public in 2002 and 2003. At the time of our audit, the Index had been piloted at several locations across Canada.

Our audit found that Health Canada and Environment Canada consulted widely with stakeholders at every stage of the Initiative. In fact, the government’s approach to consultation in this case is a good example for other programs.

Commissioner’s Conclusion

In conclusion, the elements of success that we identified in the areas of drinking water safety and the development of an Air Quality Health Index include public consultation and a strong scientific foundation.

I will be pleased to answer your questions after the Auditor General presents her findings.

Auditor General

Thank you, Scott. Let me begin with other areas in our Report where progress has been satisfactory

Passport Services

First, Passport Services.

In 2007, with the first phase of the United States Western Hemisphere Travel Initiative, Passport Canada found itself unprepared for the overwhelming number of passport applications from Canadians wanting to fly to the United States.   

Our follow-up audit focused on Passport Canada’s progress in preparing for a rise in the volume of passport applications leading up to June 2009, when Canadians will need a passport to enter the United States by land or sea.

We are pleased at the extensive action Passport Canada has taken to fix the problems it had and to be better prepared this time. It conducted lessons learned exercises to identify the causes of the problem. It built and equipped a new processing and printing centre for mail-in applications, took steps to streamline the processing of walk-in applications, and hired more staff.

It also opened passport clinics in selected communities, revamped its website, and launched a major communication campaign encouraging Canadians to apply for passports well ahead of the June 2009 deadline.

Passport Canada has put a lot of effort into correcting the problems it had with a sudden increase in demand for passports. Time will tell whether Canadians heed its advice to act early.

National Security: Intelligence and Information Sharing

Turning now to the issue of National Security. In 2004, we reported that intelligence management across the government was deficient in many areas, from setting priorities to coordinating and sharing information between departments and agencies.

This time, we found satisfactory progress in managing security intelligence. For example, the government has taken measures to improve the reliability of watch lists of individuals considered of interest to intelligence organizations. It reduced its fingerprint backlog and is progressing in its development of a computerized system to analyze digitized fingerprints.

We also found progress in the organization and coordination of priorities among federal departments and agencies involved in security. For example, the government made progress on developing an integrated secure system that allows the sharing of intelligence information among federal organizations.

We recognize the efforts made so far to resolve the problems we found in previous audits, but there are still important areas where concrete action and leadership are needed.

Transport Canada and the RCMP are still not sharing criminal intelligence information effectively. In granting security clearances to individuals working at airports, Transport Canada does not check all criminal intelligence data banks. It could still be granting clearances to high-risk individuals for access to restricted areas at airports. Furthermore, a number of departments and agencies have cited legal barriers to sharing information with each other.

In the world of security intelligence, information sharing is critical. Where there are legal constraints, the government needs to find a way of resolving them.

Treaty Land Entitlement Obligations

Today’s Report also looked at whether Indian and Northern Affairs Canada made progress since our 2005 audit in converting lands to reserves for First Nations in Manitoba and Saskatchewan. Conversions of land are part of fulfilling Canada’s century-old obligations to provide land owed to First Nations under treaties.

First Nations in Manitoba and Saskatchewan are among the most impoverished in Canada, and acquiring land could serve as a means of improving their standard of living. In the last three years, the Department has converted more than 315,000 acres of land to reserves in those provinces: a 42 percent increase since our audit in 2005. It also increased its efforts to coordinate environmental assessments and surveys of selected land.

Meeting Canada’s obligations to provide lands owed to First Nations will require a significant, ongoing effort. The Department will need to resolve the management weaknesses we identified in order to sustain the progress of the last three years and meet a 2006 government commitment.

Now, let me turn to the areas where we found unsatisfactory progress in implementing recommendations from previous reports. In those two areas, the problems are long-standing.

Governor in Council Appointments Process

The first is the process for making GIC, or Governor in Council, appointments to federal organizations. A GIC appointment is made by the Cabinet and formally signed by the Governor General following the recommendation of the minister responsible for the organization. The Privy Council Office oversees the administration of the GIC appointment process.

We found that there are still long delays in making GIC appointments to Crown corporations, small federal entities, and the Immigration and Refugee Board. The high number of continuing vacancies on the Immigration and Refugee Board has contributed significantly to the backlog of refugee claims waiting to be heard.

Delays in making appointments can compromise an organization’s ability to function effectively. I am especially concerned about the consequences for the Immigration and Refugee Board, given the high financial, social, and human costs resulting from the Board’s backlog of unresolved claims.

We also found serious communication problems about appointments and reappointments. Some chairs and CEOs learned of their appointments through the media. In some cases, directors learned at a board meeting that they had been replaced days earlier.

Poor communication shows a lack of respect for the individuals involved. These are important positions, and the problems we identified could discourage qualified people from accepting them.

Auditing Small and Medium Enterprises—Canada Revenue Agency

The second area of unsatisfactory progress concerns the way the Canada Revenue Agency deals with the risk that some small and medium enterprises might not comply with tax laws.

Businesses that don’t report all their income deprive the government of revenues to fund programs for all Canadians. The Canada Revenue Agency has an important role of ensuring fairness by identifying those with unreported income.

We found that the Canada Revenue Agency needs to do a better job of targeting businesses to audit for unreported income. For example, the Agency audited a far higher proportion of low-risk tax returns than those rated as high-risk by its computerized risk assessment system; about half of its underground economy audits over the past five years did not detect any unreported income. 

On a more positive note, though, the Canada Revenue Agency conducted a major review to identify all threats to the tax base, and it has increased its outreach activities to promote compliance and taxpayer awareness of what the underground economy costs society.

The Canada Revenue Agency has taken some important steps forward, but it needs to resolve the long-standing weaknesses we point out in our Report.

Conclusion

In conclusion, you will note two areas where the government disagrees with us. The Canada Revenue Agency does not agree with our overall conclusion. The Privy Council Office believes that our audit report on GIC appointments goes beyond the Auditor General’s mandate. I am confident that our position is sound on both counts.

Audits by nature focus on areas that need improvement. I am very pleased that the government has made progress in most of the areas we revisited this year.

The Commissioner and I are now ready to answer your questions.