This Web page has been archived on the Web.

Opening Statement to the Standing Senate Committee on National Security and Defence

Air Travel Security

Mr. Chairman, I would like to thank you for the opportunity to appear before your Committee to discuss my Office's work related to air travel security. With me is Shahid Minto, the Assistant Auditor General currently responsible for Citizenship and Immigration, who was responsible for both our audits of the Canada Customs and Revenue Agency and of airport transfers; and Peter Kasurak, the Principal responsible for the Solicitor General portfolio and national security audits.

First I will briefly review reports already published that touched on air travel security, and then give an overview of relevant current projects.

Completed audits

The work we have done related to air travel is not recent, and pre-dates the 9/11 attacks. Nor has our Office audited air travel security directly. Our most recent Transport audit--published in October 2000--focussed on ownership transfer of airports in the National Airports System. The audit centered on the financial and oversight aspects of the transfer, not on air travel security and safety.

However, we have completed several audits of the control of Canada's border that are directly related to security.

People

In April 2000 we published two reports that dealt with the movement of people. The first looked at how the Canada Customs and Revenue Agency manages risks at ports of entry, including airports. We found that Customs officers did not have adequate information to assess the risk that travellers pose to Canada and that many long-service officers had not received necessary refresher training.

Some of our findings were specific to air travel security:

• The Primary Automated Lookout System used to screen travellers was outdated, and Customs inspectors used it infrequently.
• Further, the information for targeting air passengers was poor. Customs had a limited capacity to receive advance information on travellers from airlines and depended on data provided at the discretion of the airlines.

In the same report we also presented our audit findings on the economic component of the Immigration program, managed by Citizenship and Immigration Canada. We found that visa officers had little information and support to ensure that applicants were unlikely to engage in criminal activities or endanger the safety of Canadians. There were no effective measures in place to discourage people from submitting fraudulent applications, and visa officers often resorted to costly detection methods. We also found inadequate control over revenues, visa forms, and computer systems. As in our Customs audit, we found that the training of visa officers was inadequate.

Goods

In addition to auditing the people side of border control, we have also audited the control of commercial shipments entering Canada. In December 2001 we reported on an audit that included 13 major airports. We raised questions about the effectiveness of efforts to target high risk shipments. At the time of our audit, the Canada Customs and Revenue Agency was not collecting the information it needed to tell whether its targeting activities were leading to more enforcement actions. In other words, it did not know whether its approach to risk management was working.

Current Status

We follow up on all our recommendations a year later by asking departments and agencies to tell us what they have accomplished. According to the information we have received, most of the recommendations we made in the audits I have mentioned are being dealt with satisfactorily. An exception related to air travel security is training--neither Canada Customs and Revenue Agency nor Citizenship and Immigration Canada has reported much progress.

Future Work

Let me now turn to work in progress on which we have not yet reported.

Air Travel Security

As this Committee is aware, the government decided to fund the $2.2 billion in air travel security improvements contained in the 2001 Budget through a $12 Air Travellers Security Charge. Air carriers are to remit the charge each month to the Canada Customs and Revenue Agency, who in turn deposit it in the Consolidated Revenue Fund of the government.

Budget 2001 provided additional funding to Transport Canada to strengthen its capacity to set regulations, review standards, and monitor and inspect air security services. A number of key air travel security activities are provided by the Canadian Air Transport Security Authority (CATSA), also created by the 2001 Budget. CATSA may provide services directly or may pay other agencies such as the RCMP, airport authorities or the private sector to perform security services.

Revenues thus end up in the Consolidated Revenue Fund while most expenditures (but not all) are made by CATSA.

The Department of Finance is now engaged in a number of studies to review and update its original expenditure and revenue estimates. The Department of Finance, in consultation with the departments and agencies concerned, is also preparing a separate financial statement for the proceeds of the air travellers security charge and of expenditures for enhanced air travel security.

At the request of the Minister of Finance we have begun a financial audit of this financial statement aimed at providing assurance that both revenues and expenses have been correctly stated. We expect to complete this audit soon.

We believe that a separate annual financial statement for this program is a good idea and should the Department of Finance decide to continue to prepare it, we would be pleased to continue to audit it.

CATSA

As required by the Crown Corporations section of the Financial Administration Act in future years we will perform annual financial audits of the Canadian Air Travel Security Authority as well as a special examination every five years.

Border Security Follow-ups

In addition to our routine annual monitoring of progress on our recommendations, we also do in-depth follow-ups where we believe it is warranted. We will report on our follow-up of the Customs audits and the audit of Immigration enforcement in the Spring of 2003.

The audits focus on activities related to control and enforcement, including:

• the update of the memorandum of understanding between Citizenship and Immigration Canada and the Canada Customs and Revenue Agency to co-ordinate their work;
• immigration training for both Customs and Immigration officers;
• quality control of screening travellers at ports of entry;
• computer support for the Primary Inspection Line at ports of entry;
• improvements made in the provision of advance data on passengers; and,
• the progress of the Canada-U.S. 30 Point Action Plan.

The audit will cover these activities at four major airports as well as land ports of entry.

The Budget 2001 National Security Enhancement Initiative

We are working on a government-wide audit of the $7.7 billion initiative announced in the 2001 Budget to improve national security. As you know, $2.2 billion of this funding was directed specifically at air travel security. Other funding intended to improve intelligence and "Smart Border" initiatives will also affect air travel.

This audit is still in the early planning stage and it is difficult to say to what extent any particular subject will be discussed in the final report. However, air travel security is one of six top-level issues the audit is pursuing. The other issues are strategic resource allocation decisions (where is the money going and why?); human resource capacity; information technology and physical infrastructure; consequence management; and reporting to Parliament on the use of new powers.

With regard to air travel, the audit will likely focus Transport Canada's role in managing air security overall. We note that the government's response to the Public Accounts Committee report on airport transfers referred to interim improvements of airport security before the establishment of CATSA. We will review these improvements in the planning phase of our audit.

Conclusion

Mr. Chairman, that completes my opening statement. I would be pleased to answer the Committee's questions. I would be particularly appreciative of any comments on areas of interest or concern that we might include in future work.