March 2021 Reports of the Auditor General of Canada

Opening Statement to the Standing Committee on Public Accounts

March 2021 Reports of the Auditor General of Canada

13 April 2021

Karen Hogan, Chartered Professional AccountantCPA, Chartered AccountantCA
Auditor General of Canada

Madam Chair, I am pleased to discuss our audit reports, which were tabled in the House of Commons on 25 March. I am accompanied by Carol McCalla, Philippe Le Goff, Chantal Richard, Jo Ann Schwartz and Nicholas Swales, the principals who were responsible for the audits.

The reports presented were the first of many audits on the government’s response to the COVID‑19 pandemic that my office will conduct. I also provided Parliament with our report on the Investing in Canada Plan.

There is no doubt that the COVID‑19 pandemic was an all-hands-on-deck emergency the world over. Governments had to mobilize quickly to respond to the public health, social, and economic effects of this pandemic. Canada was no exception.

While we found that the government was not as ready as it could have been for a pandemic of this magnitude, the public service mobilized, prioritized the needs of Canadians and quickly delivered support and services. We did not observe the same service mindset and inter-departmental coordination in our audit of the Investing in Canada Plan, which I will turn to first.

The Investing in Canada Plan is important because the government is investing $188 billion to generate long-term economic growth, improve communities’ resiliency, support the transition to a green economy, and improve social inclusion and socio-economic outcomes for all Canadians.

Infrastructure Canada is unable to present a full picture of results achieved and progress made under the Investing in Canada Plan. We found that the Department’s reporting excluded almost half of the government’s investment because it did not capture more than $92 billion of funding that was committed before the Plan’s creation in 2016. In addition, Infrastructure Canada’s reporting captured only some programs each year, making it impossible to compare results year‑over‑year. The clarity of reporting was also impacted by inconsistent information received from federal partners in the Plan. The absence of clear and complete reporting on the Investing in Canada Plan makes it difficult for parliamentarians and Canadians to know whether progress is being made against the intended objectives.

The issues affecting the Investing in Canada Plan are not new. We have seen similar problems in many past audits in areas that require cross-departmental or cross-jurisdictional collaboration, such as Indigenous issues and climate change. This audit is yet another example of the need for the government to act on known issues, in this case the need for broad collaboration and clear reporting on results for this large initiative.

In contrast, we observed nimbleness during our audits of the government’s COVID‑19 response. I am going to turn first to the Canada Emergency Response Benefit. With this benefit, the government wanted to quickly deliver financial support to eligible individuals.

We found that the Department of Finance Canada, Employment and Social Development Canada, and the Canada Revenue Agency rose to the challenge and quickly analyzed, designed and delivered the Canada Emergency Response Benefit.

To simplify the process and get support to people quickly, Employment and Social Development Canada and the Canada Revenue Agency took the approach of relying on personal attestations and automated pre‑payment controls to validate applicants’ eligibility. Once the benefit was launched, they introduced additional pre‑payment controls to limit potential abuse.

With the decision to rely on personal attestations, post-payment verification becomes very important. Employment and Social Development Canada and the Canada Revenue Agency are working to start their post-payment verification efforts relating to the Canada Emergency Response Benefit later this year. Their work in this area will be the subject of a future audit.

Turning now to the Canada Emergency Wage Subsidy, we observed a similar focus on getting help out quickly, in this case to businesses. Once again, the Department of Finance Canada and the Canada Revenue Agency worked together within short timeframes to support the development and implementation of the Canada Emergency Wage Subsidy.

The design and rollout of the subsidy highlighted pre‑existing weaknesses in the Agency’s systems, approaches and data. These weaknesses will need to be addressed to improve the robustness of Canada’s tax system. To prioritize issuing payments, the Canada Revenue Agency chose to forego certain controls that it could have used to validate the reasonableness of subsidy applications. For example, the Agency decided that it would not ask for social insurance numbers, though this information could have helped prevent the doubling‑up of applications for financial support. This decision limited the Agency’s ability to perform pre-payment validations, as did the absence of complete and up‑to‑date tax information that would have helped it efficiently assess applications.

I am going to now turn to our last audit, which focused on pandemic preparedness, surveillance, and border control measures.

In this audit, we found that the Public Health Agency of Canada was not as well prepared as it could have been to respond to the COVID‑19 pandemic. Not all emergency and response plans were up to date or tested, and data sharing agreements with the provinces and territories were not finalized.

The Agency relied on a risk assessment tool that was untested and not designed to consider pandemic risk. The Agency continued to assess this risk as low despite growing numbers of COVID‑19 cases in Canada and worldwide. In addition, the Global Public Health Intelligence Network did not issue an alert about the virus that would become known as causing COVID‑19.

I am discouraged that the Public Health Agency of Canada did not address long-standing issues, some of which were raised repeatedly for more than two decades. These issues negatively affected the sharing of surveillance data between the Agency and the provinces and territories during the pandemic. While the Agency took steps to address some of these problems during the pandemic, it has much more work to do on its data sharing agreements and its information technology infrastructure to better support national disease surveillance in the future.

We also found that the Public Health Agency of Canada and the Canada Border Services Agency implemented restrictions at the border and quarantine measures. They provided guidance and tools to inform travelers and essential workers coming into the country of public health requirements. However, the Public Health Agency of Canada had not contemplated or planned for a quarantine on a nationwide scale, from the collection of travelers’ information through to all enforcement activities, including following up on those identified to be at risk of non-compliance. As a result, the Agency doesn’t know if the majority of travelers properly quarantined.

These audits looked at programs that were rolled out in record time. Faced with a pandemic, the public service focused on the pressing outcome: helping Canadians. In its first year, this pandemic has shown that when the public service must, the public service can.

This crisis has highlighted the importance of dealing with known issues, whether it’s agreeing on which organization has the lead, who will do what when, who will report what to whom, or replacing outdated systems or processes and addressing issues in data quality. These are not problems that you want to have to deal with at the same time that you are focusing on helping people, because this is not an efficient way of working, nor is it a productive way to serve Canadians. Government organizations need to do collaboration better.

Madam Chair, this concludes my opening statement. We are now pleased to answer questions, thank you.