Reports of the Auditor General of Canada—Spring 2015

Opening Statement to the Standing Committee on Public Accounts

Reports of the Auditor General of Canada—Spring 2015

29 April 2015

Michael Ferguson, CPA, CA
FCA (New Brunswick)
Auditor General of Canada

Mr. Chair, I am pleased to present my Spring 2015 reports, which were tabled in the House of Commons yesterday. I am accompanied by Nancy Cheng, Assistant Auditor General, Joe Martire and Frank Barrett, Principals, and André Côté, Director.

We have presented seven audits which we completed since last fall.

As you will see, some of these audits highlight government activities which are not delivering their intended results for Canadians, and where there is a risk that the underlying issues could get worse if they are not addressed quickly.

Report 1—Antimicrobial Resistance

First, let’s look at our audit of antimicrobial resistance. Data shows that some drug-resistant infections are on the rise in Canada. Already, in hospitals alone, about 18,000 Canadians contract resistant infections every year. We found that Health Canada and the Public Health Agency of Canada have not done enough to help contain the proliferation of drug-resistant organisms.

Health Canada has not taken some important steps to protect the effectiveness of antimicrobials used for treating serious infections in humans. Though the Department requires a prescription for the human use of these drugs, prescriptions are not always required for their use in food animals. The imprudent use of antimicrobials in food animals can lead to the spread of drug-resistant organisms through the food chain.

Health Canada is aware that there are gaps in the regulations that make it possible for farmers to import unlicensed antimicrobial drugs and active pharmaceutical ingredients for use in their own animals, but the Department has not acted to strengthen the control over their importation.

We also found that the Public Health Agency of Canada is not collecting all the surveillance information needed to understand the scope of antimicrobial resistance in Canada.

In 1997, the federal government first articulated the need for a pan-Canadian strategy to address antimicrobial resistance. This was reiterated in 2009, and the Agency acknowledged that stronger leadership was needed. However, there was no provincial or territorial consensus on what the Public Health Agency of Canada’s role should be. There is currently no national strategy in place and, in our view, it will likely be many years before there is one.

Report 4—Access to Health Services for Remote First Nations Communities

Continuing on the topic of health, we also looked at what Health Canada has done to support First Nations’ access to health services in remote communities.

Health Canada has an objective of providing First Nations individuals living in remote communities with access to health services that is comparable to that provided to other provincial residents living in similar locations. We found that the Department has not achieved this objective.

In most cases, access to health care in these communities is initially provided through nurses deployed in nursing stations. We found deficiencies in the way nursing staff and stations are managed. For example, only 1 of 45 nurses included in our sample had completed all of Health Canada’s mandatory training courses.

We also found that Health Canada had not addressed 26 of 30 health and safety or building code deficiencies present in the eight nursing stations we examined. Deficiencies ranged from malfunctioning heating and cooling systems to unsafe stairways, ramps and doors. Health specialists cancelled visits to one community because they could not stay in the residence intended for their use due to issues with the septic system dating back more than two years.

Report 5—Information Technology Investments—Canada Border Services Agency

In another audit, we focused on whether the Canada Border Services Agency has managed its information technology investments to ensure that their projects meet their objectives. The Agency’s current portfolio is made up of 30 information technology projects with a budget of more than $1 billion.

In December 2013, the Canada Border Services Agency put in place a portfolio approach to strengthen the management of its information technology investments. We found this approach was comprehensive. However, our review of five projects against the new framework showed that it was not being fully applied.

For example, the information provided to senior committees tasked with overseeing the information technology project portfolio did not contain accurate financial information, project status information, or timelines.

As a result, the Agency faces significant challenges in managing these projects, sometimes resulting in duplication of effort, or projects being delivered late.

Report 3—Tax-Based Expenditures

Let’s turn to our audit of tax-based expenditures. The total of tax-based expenditures accounts for billions of dollars annually. Though these expenditures are similar to direct program spending, we found that less information is provided to Parliament about tax-based expenditures than about direct program spending.

We found that Finance Canada does a good job of analyzing new tax measures and of monitoring existing ones. However, Finance Canada does not systematically evaluate tax-based expenditures to ensure that they continue to achieve the intended results.

We believe that Parliament needs comprehensive and consolidated information about tax-based expenditures to understand not only total government spending, but also what money spent through the tax system is accomplishing.

Report 6—Preparing Male Offenders for Release—Correctional Service Canada

In our audit focusing on how the Correctional Service of Canada prepares non-aboriginal male offenders for safe re-entry into the community, we found that offenders are serving more of their sentences in custody and spending less time under supervision in the community.

In 2013–2014, about 1,500 offenders were released directly into the community from medium or maximum security penitentiaries without the full benefit of a gradual re-entry into society.

Eighty percent of offenders were incarcerated beyond the time that they first became eligible for parole, even though many were considered to be low risk to re-offend.

We also found that in many cases, offenders were not receiving correctional and rehabilitation programs prior to becoming eligible for release. Many offenders were not assigned to these programs while in custody, despite having histories of criminal associations or substance abuse.

Report 2—Required Reporting by Federal Organizations

Let’s turn our attention now to our audit focusing on the recurring reports that are required of federal organizations by the Treasury Board of Canada Secretariat, the Public Service Commission, or legislation. We found that for the most part, reporting intended to support accountability and transparency was serving its intended purposes. However, in our view, the efficiency and value of government reporting should be improved.

We also found that some Treasury Board of Canada Secretariat reporting requirements applied equally to all organizations, regardless of their size or mandate. For example, the Canadian Polar Commission—a small organization with eleven staff members—was required to prepare 25 annual or quarterly reports.

We also found that about half of departmental security plans, which were due by June 2012, had not been finalized at the time of our audit.

Report 7—Office of the Ombudsman for the Department of National Defence and the Canadian Forces

Our audit of the Office of the Ombudsman for the Department of National Defence and the Canadian Forces covered the period of February 2009 to August 2014, coinciding with the terms of two different ombudsmen.

We found that during the tenure of the first of these two ombudsmen, the Office had in place inadequate controls for managing finances, contracts and human resources in compliance with government rules and policies, and that existing controls were overridden by management.

We also found that the first of the two ombudsmen and some senior managers did not respect the Values and Ethics Code. This resulted in grievances, complaints and high levels of sick leave and turnover. These issues, combined with a lack of standard procedures contributed to delays in processing investigations. After 2012, the workplace environment stabilized, and efforts to close long-standing files were successful.

National Defence’s monitoring was insufficient to ensure that government rules and policies were being followed in the Ombudsman’s Office, and the Department did not fully address employee complaints about workplace issues filed from 2009 to 2013. Since the Office’s investigations are carried out independently from National Defence but the Office’s staff and budget reside with the Department, the organizational relationship with National Defence is a complex one that needs to be better defined to ensure adequate monitoring in all areas.

Chapter 8—Special Examinations of Crown Corporations—2014

In 2014, our Office performed special examinations of the Canada Lands Company Limited and the Royal Canadian Mint. Though we did not identify any significant deficiencies, we did note some areas of concern relating to the Royal Canadian Mint’s contracting practices and management of travel and hospitality expenses.


Of the seven audits we have reported on, some highlight government activities which are not delivering their intended results for Canadians, and there is a risk that the results could get worse. The national strategy to address antimicrobial resistance is one example. Almost 20 years after the government identified antimicrobial resistance to be a public health priority, there is still no national strategy in place.

Our audit of the Correctional Service of Canada is another example where it is evident that fewer offenders are getting the benefit of a full gradual release back into society.

We are concerned that the issues we are seeing today may be the symptoms of bigger problems in the future if they are not resolved quickly. It is important for departments to focus on addressing these issues promptly, to avoid bigger problems which will cost more to fix down the road, in terms of time, money and effort.

Mr. Chair, that concludes my opening statement. We will be happy to answer any questions you may have.