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1995 November Report of the Auditor General of Canada

Main Points

26.2 Department of Environment - The Control and Clean-up of Freshwater Pollution. The Interdepartmental Committee on Water is responsible for co-ordinating the Federal Water Policy, which requires the integration of river watershed management plans and objectives with those of other resource interests. However, Environment Canada has made little use of the Committee in the development of its ecosystem approach to renewable resource management.

26.3 Department of Fisheries and Oceans - Northern Cod Adjustment and Recovery Program. Reducing the dependency on the Atlantic groundfish industry continues to be a challenge. The final evaluation of the Northern Cod Adjustment and Recovery Program, completed in December 1994, estimated that approximately 3,100 of the 26,500 eligible program participants had actually left, or were on a path to exit the fishery. At the start of the Program in July 1992, the Department had expected that about 8,000 fishermen and plant workers would leave the fishery.

26.4 Department of National Health and Welfare - Programs for Seniors. Health Canada and Human Resources Development Canada (HRDC) have taken some action on our 1993 recommendations. However, significant work remains to be done in all of the areas identified. HRDC has yet to fully address the recommendations made by the Public Accounts Committee concerning the management of pension programs. Some steps have been taken by HRDC to respond to deficiencies noted that contributed to the overpayment problem. Health Canada has merged and created a focal point for those seniors programs under its responsibility. However, it has yet to complete the evaluation of the Seniors Strategy and provide information on the results of the programs in the Department's Estimates. An evaluation needs to be completed before the scheduled renewal of the Seniors Strategy in 1998.

Introduction

26.2 Observations and recommendations made in our annual Report are normally followed up and their status reported two years after publication of the original chapter. This year, five follow-ups are reported in other chapters of our Report, eight have been deferred, and three will not require a formal follow-up.

26.3 The first two recommendations that dealt with program evaluation and ongoing performance measurement in Chapter 9 of our 1992 Report, "Employment and Immigration Canada ' Employment ' Monitoring Performance Against Expectations", are being followed up in Chapter 22, "Human Resources Development Canada: Support for Training". The recommendation on project control focussed on programs that have been considerably modified since our audit. The funds allocated to these programs for 1995-96 represent about 30 percent of the amount audited in 1992. In light of this situation, we do not feel that follow-up of this recommendation is necessary at this time. If, however, the scope of these programs should increase over the next few years, we will consider re-examining the question in a broader context. The Community Futures program has been transferred and disseminated throughout four different government institutions (Western Economic Diversification Canada, the Federal Office of Regional Development ' Quebec, Industry Canada, and the Atlantic Canada Opportunities Agency). Therefore, no follow-up has been done on this recommendation.

26.4 Chapter 4, "Crown Corporations: Accountability for Performance", and Chapter 5, "Information for Parliament ' Understanding Deficits and Debt", from our 1993 Report, were followed up in Chapters 10 and 9 respectively, of our October 1995 Report, "Crown Corporations: Fulfilling Responsibilities for Governance", and "Information for Parliament ' Deficits and Debt: Understanding the Choices".

26.5 A three-phase follow-up on Chapter 12 in the 1993 Report, "Canadian International Development Agency ' Bilateral Economic and Social Development Programs", was started in Chapter 13 of our October 1995 Report, "Canadian International Development Agency: Phased Follow-up of the Auditor General's 1993 Report ' Phase 1".

26.6 Our follow-up audit of Chapter 21 in the 1993 Report, "Department of National Revenue ' Electronic Filing of Individual Income Tax Returns", was expanded to also consider the processing of paper returns and is reported in Chapter 25, "Revenue Canada: The New Regime for Processing Income Tax Returns".

26.7 Follow-up on four 1993 chapters, Chapter 7 on Internal Audit and chapters 8, 9 and 10 on Program Evaluation, has been deferred until 1996. This was to allow time for detailed work to be done in departments to address recent substantial changes in the area, and to assess the Treasury Board President's report on the performance of review functions, to be released in the fall of 1995.

26.8 Follow-up on Chapter 19 in the 1993 Report, "Department of National Health and Welfare ' Non-insured Health Benefits", has been deferred, as the Department's Internal Audit Directorate planned work of its own in this area. We plan to review this work and to rely on it, if appropriate to do so.

26.9 Chapter 20 in the 1993 Report, "Department of National Revenue ' Advance Income Tax Rulings ' Goods and Services Tax Rulings and Interpretations", will have its follow-up deferred until 1996 to allow the completion of audit work in other related areas.

26.10 Follow-up has been deferred on Chapter 22 in the 1993 Report, "Department of Transport ' Airport Transfers", as no further transfers have been made to airport authorities since the original audit. Follow-up will take place after additional transfers are made.

26.11 Follow-up on Chapter 27 in the 1993 Report, "Gun Control Program", has been deferred until Parliament deals with the gun control proposals currently before it. These proposals would fundamentally change the program we looked at in 1993.

26.12 Chapter 4 of our 1992 Report, "Change and Control in the Federal Government", pointed to the need for a control and accountability framework to serve parliamentary control while safely guiding public servants through a period of change. Follow-up work has been done with Treasury Board Secretariat on the issues raised in the study and an internal report is being prepared. These issues will also be subject to examination and reporting in more detail through future audits covering a number of related areas.

26.13 No formal follow-up is planned on Chapter 6 in the 1993 Report, a study entitled "Canada's Public Service Reform, and Lessons Learned from Selected Jurisdictions". The Office is continuing to examine important aspects of reform through its ongoing audit activities.

26.14 Chapter 24 in the 1993 Report, "Disclosure of the Cost of Using the Administrative Flight Service (VIP Fleet)", will not be formally followed up, as the issues identified were largely resolved after the chapter was published.

Department of National Revenue - Taxation - Resolving Disputes on Income Tax Assessments - 1992, Chapter 21

Background

26.16 Our 1992 audit focussed on two important aspects of this dispute resolution process - timeliness and fairness. We also reported on other relevant matters, that is, training of departmental staff, providing feedback to other areas of the Department and accounting to Parliament.

Conclusion

Observations

Timeliness

26.19 To assess whether it is processing taxpayers' disputes in a timely manner, the Department monitors the age of its inventory of objections. It aims to keep each field office's inventory of active objections that are over 120 days old below specified percentages based on the average complexity of the cases handled by the field office. We reported in 1992 that offices handling simpler cases had met their goals in four of the last six years, but that the Department had not met its goals in offices dealing with more complex cases. By 1995, the situation has deteriorated. For the last three years, the Department met none of its goals in the field offices. (A related measure shows that the Department now takes longer, 179 days in 1994-95 compared to 153 days in 1991-92, to process active objections.) Revenue Canada considers that the goals have become less realistic as the growth in the workloads has continued to outstrip the availability of resources. (Over the last three years, the resources handling objections dropped 5 percent while the number of new cases rose 7 percent.) In addition, it believes that, as a result of amendments to the Income Tax Act to allow more time to resolve disputes without recourse to the formal dispute resolution process, the average complexity of objections has increased. The Department intends to reconsider its goals as part of its development of client service standards.

26.20 In 1992, we noted that the departmental measures of timeliness were incomplete - they did not cover the whole time period for processing active objections and did not include pending objections. We recommended that the Department ensure that management information contained in its quarterly reports cover the entire processing time for all types of objections - active, pending due to referrals internal to Revenue Canada and pending awaiting court decisions. Progress to date has been different for active and for pending objections. We found that for active objections, the Department now includes information on the whole processing period in a summary report for the Appeals Branch senior management in head office, and plans to add information on the whole processing period to its quarterly reports for field office managers. For pending objections, the Department intends to consider how to report to senior management in head office on processing time, as part of a review of its management information systems.

26.21 At the time of our 1992 audit, we observed that Revenue Canada had been developing a client questionnaire to survey taxpayers, but that it did not intend to use the questionnaire to collect information on timeliness. We recommended that the Department ensure that its survey questionnaire ask taxpayers for their perceptions of timeliness of the dispute resolution process. Our follow-up work found the Department surveyed taxpayers in November to December 1994. The survey was designed to gather replies from various categories of taxpayers who filed objections; however, it excluded taxpayers whose objections had been at any time in its pending inventory. (The pending inventory includes objections by taxpayers who choose to have their case dealt with as part of a group of similar cases rather than to pursue it to the courts on an individual basis.) The Department considers that by excluding taxpayers with pending objections from the sample, it prevented possible distortions in responses to questions dealing with timeliness. For the taxpayers surveyed, the Department has included a number of questions on timeliness. At the time of our follow-up work, the results of the survey were not yet available.

Fairness

Other matters

26.24 In order to provide parliamentarians with access to information on the dispute resolution program, we recommended that the Department ensure that more detailed and complete information on fairness and timeliness is compiled and referred to in Part III of the Estimates. Our follow-up found that the Department is now reporting in its Part III more complete information on the dispute resolution program. Part III now contains information that responds to six of the nine suggestions we made in the 1992 chapter, for example, the number of objections resolved in favour of the taxpayer, and the average lapsed time to resolve active objections.

26.25 A departmental study released in 1992 expressed concern about disparities between training needs and the training available to Appeals Branch staff. We reported that the study called for development of a training policy, training profiles outlining required courses, and national training courses. During our follow-up, we found that the Department has taken a number of steps to address these concerns. It is finalizing a national training course for new staff and expects the course to be ready for delivery in the fall of 1995. Further, Revenue Canada recently established a training and development operations committee, which will develop training profiles and identify training priorities.

Emergency Preparedness in the Federal Government - 1992 - Chapter 24

Background

26.27 In 1992 we reviewed the progress made in developing the Plan. We reported to Parliament that a framework for further planning had been developed but that an operational plan was still not available.

26.28 A National Earthquake Support Plan was updated in the weeks before the May 1994 CANATEX II exercise. It was specifically developed to "provide a co-ordinated national response to requests for assistance from British Columbia as a result of a catastrophic earthquake."

26.29 The first major test of the Plan occurred during the first two weeks of May 1994 in British Columbia. Participants included most major federal departments, most British Columbia and Alberta government ministries, most British Columbia Crown corporations, 14 municipalities of the lower mainland British Columbia, three non-governmental organizations, and the national headquarters and Region X of the United States Federal Emergency Management Agency.

26.30 Federal departments participated throughout the two-week exercise period. By prior agreement, British Columbia and Alberta ministries were each involved for different three-day periods.

26.31 The exercise was a test of procedures and systems. Emergency Preparedness Canada's evaluation reported the limitations of the exercise due to such constraints as:

• limiting the exercise to normal working hours;
• limiting the exercise to the Lower Mainland area of British Columbia despite the fact that Vancouver Island and the neighbouring Northwest areas of the United States would also be affected; and
• beginning the exercise with the British Columbia Response Centre in place, which in reality would have taken many hours and possibly days to assemble.

Objectives of CANATEX II

26.34 The emergency scenario used was intended to test the National Earthquake Support Plan and its links to the British Columbia Earthquake Response Plan by simulating a situation beyond the ability of the Province of British Columbia to manage without national support. Thus, the scenario hypothesized major devastation - over 4,000 dead, tens of thousands injured and hundreds of thousands homeless. Building destruction and damage were assumed to be widespread and comprehensive. Transportation and utility systems were expected to be almost totally destroyed. Health care facilities were significantly reduced.

26.35 The exercise also was designed to test certain generic functions - called "national objectives" - needed to deal with a crisis. The national objectives of the CANATEX II exercise were:

a) "to evaluate the federal Plan's effectiveness to assist British Columbia regarding the:

• effectiveness of the emergency structures and systems;
• consultative procedures associated with the activation, implementation and operation of the Plan;
• national crisis management operations and communications; and
• interfacing between the national plan and the earthquake arrangements of British Columbia and Alberta; and other emergency preparations.

b) to provide provincial and federal departments and agencies in British Columbia and Alberta an opportunity to evaluate their joint and several response and support arrangements and interfaces with the national structures, procedures and systems."

Conclusions

26.38 Emergency Preparedness Canada's report on the exercise concluded that CANATEX II "proved to be a useful test and evaluation vehicle for the National Earthquake Support Plan and its interfaces with the British Columbia and Alberta Plans. The [National Earthquake Support Plan] proved, subject to refinement, to be a viable concept and one that meshed well with the [British Columbia] Earthquake Response Plan."

26.39 Departmental assessments of the exercise showed that valuable lessons were learned. However, assessments from the British Columbia and Alberta regions of Emergency Preparedness Canada, and several federal departments, indicated that the exercise did not provide a fully adequate basis for evaluating the federal Plan's effectiveness to assist British Columbia, for testing national support systems, and for testing the links between the National Support Centre and provincial support centres or other elements of the national support system.

26.40 These assessments indicate that there were insufficient requests from the "affected areas" to test the national capabilities of federal departments under the National Earthquake Support Plan.

26.41 These assessments also suggest that national capabilities could be tested by significantly increasing the number and intensity of requests for assistance from affected areas.

26.42 Emergency Preparedness Canada plans to conduct CANATEX III in 1997. We strongly recommend that this exercise more fully test the capabilities of the federal and provincial governments to respond to a catastrophic national emergency.

Observations

26.44 Although headway has been made, the pace of progress in the development of a viable National Earthquake Support Plan is slow. We first reported on the inadequacy of emergency preparedness for a catastrophic earthquake in 1987. While CANATEX II is a major step toward developing such a Plan, the detailed roles and responsibilities of some departments and agencies under the Plan are not yet sufficiently clear. For example, responsibility for the provision of temporary shelter, water, and transportation control into British Columbia needs to be clarified.

26.45 In 1992 we reported that the National Earthquake Support Plan does not assign responsibility for urban search and rescue in the event of a major earthquake. Emergency Preparedness Canada's responses to our follow-up audit have emphasized, "Urban Search and Rescue is a provincial responsibility that has not been adequately assumed by these jurisdictions." Emergency Preparedness Canada officials further explained, "In an effort to fill this critical deficiency, and in light of the findings of CANATEX II and subsequent real-life events, [Emergency Preparedness Canada] has initiated a project to develop a minimum federal urban search and rescue capability. Until such time as that project comes to fruition, a Memorandum of Understanding is being drafted between [Emergency Preparedness Canada] and the United States Federal Emergency Management Agency that would provide United States urban search and rescue assistance in the event of a major emergency."

26.46 We also noted in 1992 that a plan for recovery from catastrophic disasters needs to be developed. Emergency Preparedness Canada has informed us that it is not responsible for developing such a plan.

26.47 Emergency Preparedness Canada officials agree that progress has been slow. In response to our follow-up report observations, they explained that the pace of progress depends on the co-operation of British Columbia; the need to persuade over 20 federal departments and agencies to co-operate and to co-ordinate their efforts; and the need to liaise with and consider the inputs of other provinces and international organizations. They also noted that the emergency preparedness community has recently experienced significant reductions in resources.

26.48 Emergency Preparedness Canada officials also believe that "the planning process is as important as the resulting Plan [and that] the discussions, wrangling and consultations that have engaged all participants in the process of developing the Plan...will have contributed far more to earthquake preparedness in Canada than will a document that becomes obsolete almost as soon as it is published."

26.49 Officials also forwarded to us a draft generic emergency support plan dated 25 September 1995 and entitled "National Support Framework". This document is based on the National Earthquake Support Plan. At the time of writing, the document had not been discussed with federal departments and other organizations. It should also be noted that Emergency Preparedness Canada's assessment of CANATEX II reported, "a number of participants have expressed reservations with the development of a generic national support plan. It is their thought that each type of disaster carries with it different resource requirements, organizational structures and operating procedures."

Canadian Aboriginal Economic Development Strategy - 1993, Chapter 11

Background

26.51 In 1993, we observed that visible leadership for implementing the Strategy as a whole needed to be better established and that improvements were needed in seeking active participation and support from provincial or territorial governments. We also observed weaknesses in management practices, including the monitoring practices of Industry Canada, and a lack of appropriate performance and evaluation information on the implementation of the Strategy.

Conclusion

26.53 We also noted that the government is seeking to enhance the effectiveness of initiatives to improve the Aboriginal economic condition, taking into account the current Canadian economic environment. In these circumstances, and after five years of operation in implementing the CAED Strategy, changes to the framework for Aboriginal economic development are being contemplated. In proposing changes to the Strategy, it is essential, in our view, for the departments to take into consideration the lessons learned from the five-year experience in the CAED Strategy as well as input from Aboriginal peoples through the consultation process.

Observations

26.55 In addition, Indian and Northern Affairs Canada has commissioned a study to review and summarize the findings, conclusions and observations of various studies that relate to the Strategy. The Department anticipates the review initiative to be completed this fall. However, the CAED Strategy has not been sufficiently evaluated. Although the departments provide information on the program components in their respective Part IIIs of the Estimates, there is no comprehensive reporting to Parliament of the costs and performance of the Strategy.

26.56 With respect to Industry Canada, the Department reiterated its belief that the audit of the CAED Strategy obscured the significant accomplishments of Aboriginal Canadians and of its Aboriginal Economic Program. Consistent with its position in 1993, the Department did not respond to the specific recommendations made at that time, with the exception of its commitment to follow up on the performance of its client businesses and to make improvements in monitoring business investments. We found that the Department has adopted a new automated information system with the objective of serving and monitoring its Aboriginal clients and is making progress in obtaining information on the status of its client businesses.

26.57 The initial funding allocation of about $870 million for the first five years of implementing the CAED Strategy is now being considered for renewal. Funds allocated for the Pathways to Success initiative are planned to expire in March 1996. In addition, we noted that the government is seeking to enhance the effectiveness of initiatives to improve the Aboriginal economic condition, taking into account the current Canadian economic environment. Given these circumstances, changes to the framework for Aboriginal economic development are being contemplated.

26.58 We were advised by Indian and Northern Affairs Canada that an interdepartmental working group has been formed with the two other departments to examine the CAED Strategy. When we completed the follow-up in September 1995, terms of reference of the working group were being considered. Some of the evaluation reports and studies pointed to lessons learned, positive or otherwise, and offered recommendations. The Aboriginal consultation process commenced by Indian and Northern Affairs provided feedback and suggestions for improvement, including better co-ordination between departments and between governments. In our view, it is essential that the departments take into consideration the lessons learned from the CAED Strategy, as well as input from Aboriginal peoples, in proposing changes to improve the Aboriginal economic condition.

Department's comments: Indian and Northern Affairs Canada generally agrees with the follow-up report.

Regarding the concluding part of the report, departmental officials have recently completed a regional consultation process with First Nations and a review of the recommendations from all of the CAEDS evaluation reports. The results of the consultation process and the recommendations from the evaluations have been shared with the CAEDS partners. These will form a major input to other discussions and changes to future Aboriginal economic development programming.

Department of Agriculture - Agri-Food Policy Review - 1993, Chapter 13

Background

26.60 We focussed on six action areas related to market and trade development, research and technology transfer, environmental sustainability, farm management skills, regulatory review and pesticides registration review. In 1993, it was reported that progress had been made in each of these areas; however, much more remained to be achieved, as evidenced by the 24 "agreed-to next steps" incorporated in the 1993 chapter.

26.61 We also reported a number of overall observations on the challenges faced by the Department in responding to these action areas, namely: the visibility of change; the challenge of change in culture; the measurement of change; the need for a common understanding; and information: a key business for the Department.

26.62 Our follow-up involved discussion and review of documentation related to action taken to implement the "agreed-to next steps".

Conclusions

26.64 The 1989 Agri-Food Policy Review left the Department of Agriculture and Agri-Food with a formidable agenda of policy directives to implement in the market and trade and environmental sustainability areas. The Policy Review acknowledged that "state of the art" farm business management skills should remain a priority in the 1990s and beyond if producers were to obtain current information necessary to adapt and become more competitive. Consequently, we recognize that considerably more time is required to achieve significant progress in these areas. Our follow-up confirmed this to be the case. Progress since 1993 for each of the "agreed-to next steps" for these action areas is reported in Exhibit 26.1 .

Observations

26.66 The challenge of change in culture. It was clear that if significant change were to occur, a change in culture (behaviours, expectations and attitudes) would have to be made. Initiatives that address our observation have been undertaken by the Department. Emphasis is being placed on rewarding research scientists who respond to changed priorities. Federal-provincial agri-food marketing and inspection partnership bodies have been created to co-ordinate and strengthen the two levels of government activities in marketing and food inspection. An industry-federal government committee has been established to select and develop agri-environmental indicators.

26.67 The measurement of change. In 1993 we found that in most areas management had not developed the indicators or measurement procedures necessary to determine the precise nature and magnitude of problems in their area of responsibility, or to enable tracking their outcomes. However, we observed that in most areas management had action plans in place to develop indicators of effectiveness and to gather the necessary data to measure them. Since 1993, the publication of The health of our soils - Towards sustainable agriculture in Canada indicates what has been done to protect soils, as well as how much remains to be done. In addition, a performance indicator - increasing exports to $20 billion by the year 2000 - has been set. Otherwise, the main focus of measurement initiatives has centred around developing evaluation frameworks.

26.68 The need for a common understanding. While the Department is continuing to work on evaluation frameworks for many of the action areas, we are not aware of any department-wide initiatives to clearly define what is meant by terms such as "market strategy", "value-added", and "market-oriented versus production-oriented". If effectiveness measurement is to be developed successfully and if the right data are to be collected, it is essential that such concepts be clearly defined.

26.69 Information: a key business for the Department. Since 1993, we have observed that the Department has started to specify what the industry expects from the Department in terms of more and better market information/intelligence. It is essential that the Department continue to work with potential customers to ensure that information is consistent with user needs and can be readily accessed.

Department's comments: While many elements of the Agri-Food Policy Review are still significant in today's policy environment, federal priorities and the policy agenda for agriculture and agri-food have evolved. Since the Auditor General's 1993 Report, the federal government has presented a Vision for Canada's agriculture and agri-food sector that is built on a balance between economic growth and security, while recognizing the need for fiscal restraint. The Vision and extensive discussions with the sector went a long way toward setting the stage for the 1995 Budget decisions, which set in motion far-reaching changes in the sector, resulting in significant variations from the Agri-Food Policy Review directions.

For example, in the area of market and trade development, new government priorities as well as Program Review have resulted in a different approach than that taken in the Agri-Food Policy Review. This approach has focussed on greater clarity in the roles and responsibilities of the different players, and a reduction in overlap and duplication. Federal and provincial Ministers of Agriculture have agreed that domestic market development is primarily a provincial responsibility. As well, the Agri-Food Trade Service, announced by the Minister in June 1995, established a commitment to an enhanced working partnership between Agriculture and Agri-Food Canada and the Department of Foreign Affairs and International Trade. This has been supplemented by better co-ordination of all federal programs and services, providing a prominent focal point for the delivery of trade programs and services to Canadian agri-food exporters. The new partnership with industry is reflected in the new Canadian Agri-Food Marketing Council (CAMC).

On environmental issues, federal policy, previously based on significant specialized funding through the Green Plan, has been replaced by a new federal framework for sustainable development - A Guide to Green Government. This framework involves a broader set of instruments, with funding being a less important component of the approach. Agriculture and Agri-Food Canada is currently developing a sustainable development strategy that will be completed by 1997. Proposed legislation indicates that it will be monitored and reported upon by the Commissioner of the Environment and Sustainable Development, who will report to the Auditor General.

Department of the Environment - The Control and Clean-up of Freshwater Pollution - 1993, Chapter 14

Background

26.71 We noted that in spite of its broad mandate and its membership of nine major water-related departments plus observers from Treasury Board, the Privy Council Office and Emergency Preparedness Canada, the ICW had not taken an active role in the development and implementation of the action plan process for the clean-up of water quality, except for the Great Lakes Action Plan. Nor had it provided strategic planning advice to the Minister of Environment on the overall process, despite the importance the Department attaches to these major ecosystem initiatives.

26.72 Our 1993 audit of the St. Lawrence River Action Plan revealed the absence of long-range strategic planning. We noted the delay in producing a state-of-the-environment report from which to determine the magnitude of the problems yet to be faced and the scope and total costs of measures needed to rehabilitate the St. Lawrence River basin fully. We considered such information, expressed in simple terms and related to water use demands, to be especially important as the Action Plan moved from phase 1 to phase 2 in 1993.

26.73 The more recent Fraser River Action Plan is being jointly implemented by Environment Canada and Fisheries and Oceans Canada. We reviewed Environment Canada's participation in the Plan and also commented on the multistakeholder Fraser Basin Management Program to which the Action Plan contributes. We noted co-ordination problems between the two departments and the need for stakeholders to be better informed to facilitate their participation in the clean-up. While the Plan's objectives were clearly defined, we noted the need for specific benchmarks against which existing water quality and subsequent improvements could be assessed. We also noted the need to ensure that the Plan was fully integrated with the larger Fraser Basin Management Program.

Conclusion

Observations

The Interdepartmental Committee on Water (ICW)

26.76 In January 1994, the Committee published its second report on the implementation of the Federal Water Policy, covering the period April 1990 to March 1992. However, the Committee did not take that opportunity to re-examine its role in the action plan process, which remains passive and limited. This is surprising given its potential contribution to the Department's ecosystem approach in support of sustainable development, as stated in its program review documentation in February 1995. The Department's approach is based in large measure on the river basin action plans currently in place.

26.77 In its recently published (1995 ) action plan for 1995-96 to 1997-98, the Department responded to our concern regarding a lack of federal long-range strategic planning for the water quality action plan process by promising a long-term strategic plan for ecosystem initiatives for 1997. However, to date there has been no indication that the Interdepartmental Committee on Water will be involved, in spite of the Department's emphasis on the need for partnerships and co-ordinated action to achieve its goals.

26.78 As we noted in our 1993 Report, the Committee is the focal point for co-ordinating the Federal Water Policy among federal departments and agencies. This involves the use of five strategies, including scientific leadership and integrated planning. The latter requires the integration of water management plans and objectives of a river watershed, or another appropriate unit, with those of other natural resource interests - fisheries, forestry, wildlife, mining, hydro-electric power and agriculture - to reflect the unity of natural processes and the interdependence of users and uses in that unit.

26.79 The Committee's mandate, therefore, is sufficiently broad to accommodate the Department's new ecosystem approach and sufficiently flexible, given that the Federal Water Policy recognizes the need to adapt to changing circumstances. We recognize that there have been cutbacks to the water program arising from program review; however, in the absence of government direction to the contrary, the Committee, through the Federal Water Policy, continues to be one of the main instruments in the management of renewable resources and needs to be used more extensively.

The St. Lawrence River Action Plan

26.81 Although some information on water quality has been published by the Quebec Government in collaboration with Environment Canada, the Department has not yet published its state-of-the-environment report for the entire St. Lawrence River basin ecosystem. This report, which was due in 1993, was to have been the baseline against which water quality improvements could be measured.

26.82 The report is now expected to be completed by the end of 1995, and is expected to present information on water quality in terms of its suitability for such uses as fishing, swimming or drinking. This is important if the public is to understand pollution problems and contribute to their resolution.

26.83 Progress reports to Parliament need to be improved - to include information on the various obstacles to achieving water quality objectives, and the estimated long-term costs for the restoration of the river basin ecosystem.

The Fraser River Action Plan

26.85 The Department has implemented an environmental quality program to ascertain the health of the river by providing baseline information on water quality and ecosystem conditions within the Fraser River Basin. It has recently published a status report on the program's preliminary findings against which further improvements can be measured. This information will be used, for example, to set water quality targets to protect or enhance the designated uses of a water body, and report on their status. A final report will be published following completion of the Fraser River Action Plan in 1998.

26.86 Stakeholders are being kept informed of progress through the annual reports of the Fraser River Action Plan and the complementary reports of the Fraser Basin Management Board. However, neither the Part IIIs of the Estimates of the Department, nor the annual reports of the Plan, have commented on the budgetary constraints and the effects of these on the achievement of the Plan's objectives. Finally, we noted that interdepartmental co-ordination, while improved, still needs attention, especially in the enforcement of pollution control legislation.

Department of Fisheries and Oceans - Northern Cod Adjustment and Recovery Program - 1993, Chapter 15

Background

26.88 We examined the Program in 1993 and reported the lack of an economic assessment of the decline in fish stocks, the lack of a clear substantive legislative authority for the Program, and a lower than expected adjustment of fishermen and plant workers out of the fishery. We also observed weaknesses in financial management and control, and the Department's difficulty in targeting payments to those clearly affected by the moratorium.

26.89 The Northern Cod Adjustment and Recovery Program ended in May 1994, along with the Atlantic Groundfish Adjustment Program, a program established in April 1993 to assist the fishermen and plant workers affected by the extension of area closures and quota reductions to include all Atlantic groundfish. The programs were replaced by a strategy that addresses the situation of fishery workers dependent on Atlantic groundfish. The Atlantic Groundfish Strategy (TAGS) is a five-year strategy involving expenditures of $1.9 billion. The Strategy is administered primarily by Human Resources Development Canada for income support, labour adjustment and early retirement for plant workers, and by Fisheries and Oceans Canada for capacity reduction in the harvesting sector through licence retirement and early retirement for fishermen.

26.90 Given the termination of the Northern Cod Adjustment and Recovery Program, our follow-up focussed on certain aspects of our 1993 recommendations and observations and provided an update of action taken on them. We have not undertaken an audit of the replacement strategy, TAGS.

Conclusion

Observations

26.93 Further to two hearings held in 1994, the Standing Committee on Public Accounts recommended that the government develop a position on the issue of when to use grants listed in the Estimates to introduce a new expenditure item, where the legislative authority is not clear. The government responded with a commitment that, in the absence of a clear legislated mandate, it would present to Parliament for approval programs similar in size and scope to the Northern Cod Adjustment and Recovery Program. The government emphasized that in emergency situations, and in the absence of a clear legislated mandate, the use of the Royal Prerogative in the form of grant payments to respond to the emergency must continue, and Parliament will continue to be asked to approve these through an appropriation act. The government also provided assurance that in such cases, when expenditures are forecast to exceed $200 million, specific legislation will be tabled in Parliament at the earliest opportunity.

26.94 During our follow-up, the Department advised us that the Atlantic Fisheries Restructuring Act provides sufficient authority for its capacity reduction component of The Atlantic Groundfish Strategy, as it did for similar components of the Northern Cod Adjustment and Recovery Program. We noted that the Department obtained approval from Treasury Board for its capacity reduction component of the Strategy in the amount of $80 million.

26.95 In addressing the issue of financial management and control, the Public Accounts Committee strongly recommended that the senior financial officer be involved in developing and implementing all new programs, and that the relationship between senior financial officers and the Comptroller General be strengthened. These recommendations received general endorsement in the government's response.

26.96 In our 1993 audit we also observed the preliminary results of the Northern Cod Adjustment and Recovery Program, which indicated that the capacity of, and dependence on, the fishery remained high. The Department had expected at the start of the Program in July 1992 that some 8,000 fishermen and plant workers would leave the fishery. The final evaluation of the Program completed in December 1994 estimated that approximately 3,100 of the 26,500 eligible program participants had actually left or were on a path to exit the fishery, leaving some 23,400 participants in the Northern cod fishery. Reducing the dependency on the Atlantic groundfish industry continues to be a challenge.

Department of Forestry - 1993, Chapter 16

Background

26.98 The Department of Natural Resources was created on 25 June 1993 by merging the Department of Energy, Mines and Resources and the Department of Forestry. The forest program is now delivered by the Canadian Forest Service within Natural Resources Canada.

Scope

Conclusion

Observations

Understanding forests: the Canadian Forest Service's research programs

• define clearly at the outset the expected results for research programs and ensure that they support attainable goals;
• review research projects regularly for relevance and cost-justification;
• assess how well it is communicating its results to clients; and
• report results and related costs fully and accurately to Parliament.

26.103 Guided by the results of program review, the Canadian Forest Service is now restructuring its research efforts. It intends to direct research increasingly to strategic science and technology, with a national and an international focus. As part of this restructuring, it is reviewing its peer review and advisory processes to ensure that its research is relevant and focussed. It is also developing a new liaison and technology transfer role within each regional establishment to provide improved communications and marketing of research results. In addition, the Canadian Forest Service is establishing corporate systems for planning and tracking the costs of science and technology activities to provide more accurate reporting of this information. We note that it still needs to report more fully to Parliament the results of its research and the related costs.

26.104 Changes in the Canadian Forest Service have contributed to a delay in improvements in its strategic planning and project management. Therefore, it has not addressed our recommendations fully. The Canadian Forest Service expects to develop a new strategic plan by the next fiscal year. It also expects to have most of its revised research program operational during 1996.

Improving forest management practices: Forest Resource Development Agreements

26.106 Although the 1995 Budget confirmed that the present Forest Resource Development Agreements would not be renewed, we note that the Canadian Forest Service has worked with the provinces and territories to define a new co-operative framework. The framework was developed to provide direction on priorities for future federal-provincial/territorial co-operation in forestry and was endorsed by the Canadian Council of Forest Ministers in January 1995. The Canadian Forest Service is continuing to encourage the provinces and territories to finalize their long-term plans as required under the existing agreements. Of the seven plans required, three have been completed and three are near completion.

26.107 The Canadian Forest Service is working with the provinces and territories to improve the information available on the forest resource and to improve the reporting of this information. It intends to use its new management information system to continue to track and report the results achieved under the Forest Resource Development Agreements until they expire. However, improvements are still needed in the performance-related information that is provided to Parliament in Part III of the Estimates.

Measuring progress: National Database and indicators of sustainable development

26.109 The National Forestry Database Program relies on the co-operation of all members of the Canadian Council of Forest Ministers. In 1995 the Canadian Council of Forest Ministers approved the Canadian framework of criteria and indicators of sustainable development that will guide the National Forestry Database Program in both improving existing data and developing new data. An implementation plan is being developed to identify gaps in the data and to set priorities for data collection. Thus, the National Forestry Database has not yet been expanded to include the non-timber information required to mark progress toward sustainable development.

26.110 While the report The State of Canada's Forests 1994 reflects the approved Canadian framework of criteria and indicators, it also states that it is not possible at present to report on all of the indicators because the data for some do not yet exist. We note that the report shows improvement in the matching of conclusions, indicators and supporting information.

Making sustainable development operative: the Model Forest Network

26.112 The Canadian Forest Service has organized two workshops for the development of indicators of sustainable development. The results of these workshops are currently being applied at each of the model forest sites as each develops its own indicators of sustainable development.

26.113 The Canadian Forest Service has ensured that the annual report from each model forest includes information on financial and other support provided by the model forest partners. This information is summarized in a report from the Canadian Forest Service entitled Model Forest Program, Year in Review 1993-1994.

Department of Justice - Legal Advisory and Litigation Services - 1993, Chapter 17

Background

26.115 We found that basic management control information on workload and costs was lacking and that insufficient systematic processes were in place to manage or measure the timeliness of service provided to federal government departments. We also found that Parliament received little information on workload and performance. We recommended that the Department define, collect and report the needed information for managing litigation and legal services and improve its accountability to Parliament by providing broad-based indicators of workload and performance.

26.116 We noted that divided responsibility and accountability for legal advisory and litigation resources between the Department and client departments had negative consequences. We recommended that the Department seek full responsibility for the resources it uses to deliver these services. We also recommended that the Department strengthen its management of Crown agents. We concluded that information technology plans were ambitious and that their development and management needed to be improved.

Scope

Conclusion

Observations

26.120 To strengthen its management of Crown agents, the Department has prepared a mandatory training session for newly appointed agents and has conducted several sessions. New terms and conditions of appointment have been prepared for standing agents that include supervision, training and reporting requirements.

26.121 To improve the management of information technology, a project to standardize the departmental infrastructure has been implemented. An Information Management Plan has been designed and approved by Treasury Board. Individual projects have been prioritized and will be managed within that plan. Strategies to manage the transition's potential impact on people have been developed and work has started.

26.122 The Department has recently completed an extensive reorganization, which it believes will enhance the efficiency and effectiveness of operations, increase its client service orientation and promote important organizational values.

Department of National Health and Welfare - Programs for Seniors - 1993, Chapter 18

Background

26.124 In 1993 we reported that the overall planning and co-ordination of programs for seniors was weak. The Seniors Strategy was renewed in 1993 without reliable, complete and timely information on the results of the first five years' spending of $144 million. Our recommendations focussed on the need for fundamental improvements in three areas:

• overall planning and co-ordination, accountability and reporting for the Seniors Strategy (Health Canada);
• public understanding of pension programs (HRDC); and
• overall management of the pension programs (HRDC).

Conclusions

Observations

Initial steps at Health Canada in improving the overall planning and the co-ordination, accountability and reporting for the Seniors Strategy

26.128 In 1993, the Office concluded that within the Department of National Health and Welfare there was a lack of co-ordination for seniors policy and program development and communications. The Office also reported that the Department had made little effort at consultation and needs analysis prior to launching the Strategy. Objectives were not set for the Strategy as a whole or for any of the components. The Strategy was renewed without an accounting of the results of the first five years.

26.129 The Office's recommendations relative to the Seniors Strategy had three components. First, there was a need for co-ordination of pension and other seniors programs, and for the development of the federal policy on aging. Second, there was a need to improve accountability by carrying out an evaluation of the Seniors Strategy. Third, there was a need to improve the reporting of results information in the Estimates.

26.130 Focal point for seniors programs in Health Canada. In April 1994, Health Canada created the Seniors Directorate. The Department consolidated the majority of seniors programs into a single organization responsible for advisory, policy, research, consultation and administrative functions. The purpose of this merger was to strengthen the co-ordination of the various elements of the Seniors Strategy. In July 1994, Cabinet approved merging three existing senior community programs into a new, reoriented program called New Horizons: Partners in Aging. The objective of this amalgamation was to better target resources toward meeting the needs of seniors in situations of risk. An Interdepartmental Committee on Seniors Issues was started and new mechanisms for federal-provincial co-operation were established to strengthen co-ordination across the federal government and across jurisdictions. Currently, the Seniors Directorate provides a focal point for seniors issues in Health Canada and other government departments.

26.131 A federal policy on aging is an important component of improved overall planning for seniors programs. It should provide a blueprint for promoting an integrated approach to the delivery of government programs for seniors and an aging population. There is an interdepartmental working group, under the auspices of the Interdepartmental Committee on Seniors Issues, whose mandate is to develop the federal policy on aging. This policy is being developed concurrently with the review of the retirement income system referred to in the February 1995 Budget. The effectiveness of the Seniors Directorate in co-ordinating the federal policy on aging will not be clear until the policy and the review of the retirement income system have been completed.

26.132 Initial steps taken to improve accountability for the Seniors Strategy program. Health Canada provided us with a draft evaluation framework that it plans to use in the evaluation of the newly established Seniors Directorate and the Seniors Strategy. The evaluation is scheduled to be completed by October 1996. As part of our follow-up work, we reviewed the framework. Our objective was to assess whether the proposed evaluation could provide an appropriate accounting for results. We expected that the evaluation would deal with four fundamental questions that would help Health Canada ensure accountability, achieve better value for money and increase flexibility of its health strategies for groups at risk:

• Rationale. What particular needs do seniors have that this program continues to address? What are the nature and extent of these needs?
• Alternatives. Who else is involved in the seniors programming area and is there an alternative to federal involvement in programs for seniors?
• Program success. What effects has the Seniors Strategy had on the independence, health and well-being of seniors? Has the Strategy met its objectives, without significant unwanted outcomes?
• Cost effectiveness. Is the Strategy the most cost-effective means for achieving the desired results, or are there other intervention strategies that would be more cost-effective?

26.134 In our opinion, there are significant omissions in the draft evaluation design - particularly with respect to examining the achievement of all program objectives and potential unwanted side effects. In addition, the indicators proposed are sometimes tangential to, and insufficient to answer, the evaluation questions that will be addressed. Our review of the draft methodology raises further concerns about the objectivity of some of the data to be used in the evaluation and, therefore, the potential validity of evaluation findings.

26.135 In summary, the design proposed in the draft framework will need to be made more rigorous if the evaluation is to provide the evidence necessary for strategic decisions about continuing, discontinuing or revamping the Seniors Strategy. We will be following up on the evaluation after it is completed, focussing on the extent to which it has provided that evidence.

26.136 Some changes in reporting on the Seniors Strategy in Part III of the Estimates. The Office recommended that the Seniors Strategy be identified as a distinct initiative in the Estimates, presenting current and future financial data as well as information on the performance of the Strategy programs and components. In the 1995-96 Estimates, the Seniors Strategy initiatives are discussed as a distinct entity. Financial information is provided for 1993-94 and 1994-95. However, there is no performance information and, because no evaluation had been done, no information on outcomes.

Efforts at HRDC to improve the public understanding and management of pension programs

26.138 As well, Human Resources Development Canada (HRDC) has launched a five-year communications strategy for improving public understanding of the Canada Pension Plan. The Public Accounts Committee (PAC) has recommended that, by 31 January 1996, the Department inform the Committee of the cost and progress made in implementing its communication strategy. The PAC also recommends the Department set up mechanisms in order to evaluate and be accountable for the results of the strategy.

26.139 Efforts to improve the management of pension programs. Human Resources Development Canada has produced a financial management accountability framework for the Canada Pension Plan. The framework defines the distribution of HRDC responsibilities between Income Security Programs and Financial and Administration Services and clarifies their respective responsibilities.

26.140 The Department has developed a draft business plan but so far the plan is not sufficiently comprehensive, nor has it been given the degree of prominence that we would expect for such a crucial management tool. For example, the business plan needs to be broadened to bring together in one document the responsibilities of the ministers of National Revenue, Finance and Human Resources Development.

26.141 In 1993 we observed significant deficiencies in the management of the pension programs, identifying overpayments ranging from $120 million to $200 million each year. In response to our observation that the systems and procedures in place for recording and collecting overpayments were completely inadequate, the Department embarked on a three-year project to implement an accounts receivable and collection system. In 1995-96, the yearly increase in collections is estimated to be $4.5 million.

26.142 During 1995, Human Resources Development Canada took a number of steps to address the program and systems deficiencies that contributed to the overpayment problem. Included are steps aimed at preventing overpayments from occurring in the first place.

26.143 The Public Accounts Committee has recommended that, by 31 January 1996 at the latest, Human Resources Development Canada report on the overpayment situation as at 31 December 1995. We will follow this situation very closely.

Merchandise Trade Statistics - 1993, Chapter 23

Background

Conclusion

Observations

Revenue Canada's verification of commercial entries

26.147 In 1992-93, Revenue Canada conducted pilot audits of importers to explore periodic verification of compliance as an alternative to ongoing examination of individual commercial entries for verification of import data. Based on the results of these pilot audits, Revenue Canada has decided to adopt this approach for medium-sized and large importers, which collectively account for approximately 90 percent of the value of import trade.

26.148 Statistics Canada is analyzing the results of the 1992-93 pilot audits to determine if they satisfy its needs in respect of merchandise trade data. Statistics Canada has helped design sampling methodology to be used in periodic verification to ensure that the results would be valid for testing the quality of merchandise trade data. The Department has also provided Revenue Canada officers with training in that area.

26.149 Revenue Canada is pilot-testing an automated system to generate the reports required to support periodic verification. Nation-wide implementation of the system is expected by the spring of 1996. According to the Department, indicators of both effectiveness and workload will be an integral part of the new system.

26.150 Transactions that originate from importers not covered by periodic verification still account for a large proportion of the commercial entries. As a result, Revenue Canada continues to perform manual review and adjustment procedures on selected individual entries. Statistics Canada receives some reports on these verifications but the reports do not provide sufficient information to meet its requirements. Discussions between the two organizations are ongoing to resolve the problem.

Statistics Canada's verification and imputation procedures

Operating relationships: Revenue Canada and Statistics Canada

Merchandise trade data on exports

26.154 Efforts are continuing between the two organizations and their U.S. counterparts to address deficiencies in the recording of these in-transit trade data. They include carrying out joint operational reviews and making arrangements with U.S. agencies to ensure Revenue Canada's access to information regarding importation and goods in transit. Revenue Canada is also implementing, in stages, a program of measures to address the non-reporting of exports by exporters. It is proposed that one element of this program consists of sanctions for non-compliance, to be introduced in or around April 1996.

Alternative data sources

Regulatory Review: Parliamentary Control over the Raising of Revenues by Fees - 1993, Chapter 25

Background

• review and report to Parliament on the adequacy of the current legislative and administrative framework for establishing user fees;
• review and report to Parliament on alternative procedures that could be established to ensure that Parliament has appropriate opportunity and information to decide which user fees to review, regardless of how they are established;
• provide Parliament with government-wide summary information on fees being charged; and
• ensure that the fees are developed in accordance with the principles of the regulatory process if other statutory authority is being used to establish fees.

Conclusion

26.158 It is thus too early to assess the initiatives started by Treasury Board.

Observations

26.160 User fees are established pursuant to departmental legislation and the Financial Administration Act (FAA) , and by contracts with users.

26.161 Fees established by contracts and other non-regulatory means are not subject to the regulatory process. The regulatory process seeks to ensure adherence to such principles as providing a full opportunity for public consultation and an assessment of proposals to ensure that benefits clearly exceed costs.

26.162 A program review was announced in the 1994 Budget "to ensure that the government's diminished resources are directed to the highest priority requirements and to those areas where the federal government is best placed to deliver services." Its main objective was to review all federal programs in order to bring about the most effective and cost-efficient way of delivering programs and services that are appropriate to the federal government's role in the Canadian federation.

26.163 Over the fall of 1994, departments prepared action plans outlining their strategic priorities and proposals.

26.164 On 27 February 1995, the federal Budget Plan described the key actions planned by departments following the program review. Among those actions were plans to introduce new cost-recovery initiatives or increases to existing fees to cover a greater proportion of the costs of certain programs. Examples include fees for food and meat inspection, immigration and citizenship applications, drug approvals and fisheries inspection.

26.165 In the spring of 1995, Parliament approved amendments to the legislation relating to the departments of Industry and Canadian Heritage. Among the amendments was a delegation of authority to the respective ministers to fix user fees for departmental services, facilities, product, rights and privileges.

26.166 Provisions covering consultation, publication and reference to the Standing Joint Committee for the Scrutiny of Regulations for review were also included. Public Works and Government Services Canada is seeking similar ministerial powers. The bill introduced in the fall of 1994 is still before the House of Commons. Although these acts do not describe the method by which the ministers may exercise their authority, they do allow these fees to be established by contract.

Adequacy of the current legislative and administrative framework

26.168 The results of the review were not available during our follow-up and officials told us that it was difficult to set a date for the review's completion.

Alternative procedures to ensure that Parliament has appropriate opportunity and information to decide which user fees to review

26.170 The new Regulations Act , like the Act it may replace, states the procedures to be followed for creating federal regulations. It seeks to ensure that regulations are legal, enforceable and accessible to the public and that the government departments that prepare regulations remain accountable to Parliament.

26.171 At the time of writing this follow-up report, the Regulations Act was still before Parliament for consideration.

Government-wide summary information on fees being charged

26.173 The Board is also reviewing Part III of the Estimates, which provides year-to-year changes in revenue forecasts, to determine what improvements could be made in presentation and disclosure of revenue information.

Development of fees in accordance with the principles of the regulatory process

• clear accountability of ministers and officials;
• full opportunity for public consultation and participation in the regulatory process;
• an assessment of proposed regulations to ensure that benefits clearly exceed costs;
• clear and reliable public information on the need for regulations;
• an evaluation of the effectiveness of regulatory programs; and
• a secure foundation in law for actions of regulatory authorities.

• plans to update the Treasury Board policy on external user charges and the related guide to user fees;
• reiteration of the basic principles of the external user charge policy through departmental papers, for example, clarification of the policy application; and
• provision of additional guidance to departments on prescribing user fees and charges under the Financial Administration Act , for example, publication of fees, costing principles and the use of price adjustments.

Regulatory Review: Pulp and Paper Regulations - 1993, Chapter 26

Background

26.177 We reported that parliamentarians and stakeholders were not comprehensively and equally informed about key issues affecting the effectiveness and cost of the pulp and paper regulations.

26.178 These key issues included:

• alternative and possibly more efficient or more environmentally sensitive solutions;
• potential overlaps with provincial pulp and paper regulations;
• industry and environmentalist concerns about the effectiveness of the effluent regulations;
• the advantages and disadvantages of using site-specific pollution control standards based on the assimilative capacity of a watershed; and
• the absence of an assessment of the effects of pulp and paper regulations on human health.

Conclusion

26.180 Also, the Department has not yet addressed the matter of assessing the effects of the regulations on human health and the environment in general.

Observations

26.182 The regulations also require the industry to establish the Environmental Effects Monitoring Program. On a three-year cycle, each mill is required to provide local information on whether deposits of deleterious substances in waters inhabited by fish have altered, disrupted or destroyed fish habitat. The information will be used to evaluate the effectiveness of existing control measures and the need for further measures.

26.183 The Pulp and Paper Mill Effluent Chlorinated Dioxins and Furans Regulations and the Pulp and Paper Mill Defoamer and Wood Chip Regulations also came into effect 7 May 1992. They were promulgated under the authority of the Canadian Environmental Protection Act . The regulations control two members of the family of chlorinated dioxins and furans. The first regulation is directed solely at the use of chlorine bleaching.

Overlap with provincial regulations

26.185 The Department's bilateral efforts have resulted in signed "one window" agreements with four provinces and one territory. Although the nature and scope of these agreements vary, they generally provide for co-ordinated compliance and enforcement activities or for provincial officials to act on behalf of the federal government in these areas. The agreements do not change federal or provincial jurisdictions and the federal government must continue to report to Parliament on how it has fulfilled its obligations. The Department is continuing negotiations with other provinces to reach additional agreements.

Pulp and paper regulations implementation

26.187 Departmental reports also indicate that the industry has reduced discharges of total suspended solids, on aggregate, to below regulatory limits. Deposits of biochemical oxygen- demanding materials and acutely lethal effluents are currently controlled under higher, interim limits contained in transitional authorization extensions. The Department approved these extensions on the basis of requests from mills to allow time to install the necessary controls. All mills will be subject to the full provision of the regulations on 1 January 1996.

Environmental Effects Monitoring Program

26.189 Our 1993 Report noted that the Program's guidelines had not been finalized on time and that consultation on the guidelines was not satisfactory. To address these matters, officials and scientists from other government departments, industry and consulting firms were invited to workshops and symposiums to advance scientific knowledge and share technical information about pulp and paper and other environmental effects monitoring programs in Canada.

26.190 In early 1995 the Department distributed further technical guidance, and made available to industry for the first cycle of reports a recommended outline for reporting of data. The first reports under the Program are due 1 April 1996.

26.191 The Department plans to use the first reports as baseline data to compare with at least two other reporting cycles over a nine-year period. In making such comparisons, the Department will have to take into account the fact that 78 out of 156 mills were allowed by transitional authorization extensions to continue discharges at the preregulation levels until the end of 1995. The Department states that the impact of the extensions will be clearly recognized when comparing the first reports to the long-term effects.

26.192 The Department plans to modify the Environmental Effects Monitoring Program to increase its capacity for site-specific assessment of pollution problems. For the next monitoring cycle, it plans to use a multistakeholder consultation approach to improve the Program and identify gaps in research.

Other initiatives

• implementing a Strategic Options Process, based on the principles of public participation, openness and transparency, to identify and evaluate with key partners and stakeholders a range of tools for meeting environmental objectives;
• revising the Canadian Environmental Protection Act to allow the increased use of alternatives to regulations; and
• formulating a departmental policy on the assessment of the economic impact of proposed environmental measures.