Briefing on the funding of the Office of the Auditor General of Canada and the effects of the recent strike

Opening Statement before the Standing Committee on Public Accounts

Briefing on the funding of the Office of the Auditor General of Canada and the effects of the recent strike

1 November 2022

Karen Hogan, Fellow Chartered Professional AccountantFCPA, Fellow Chartered AccountantFCA
Auditor General of Canada

Mr. Chair, thank you for this opportunity to update the committee on the funding of the Office of the Auditor General of Canada and the effects of the recent strike. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabe people. Joining me today is Andrew Hayes, who is the Deputy Auditor General.

In March 2021, our office received $25 million of additional permanent funding. With this new funding, we hired additional staff and now employ almost 800 employees. We also increased the number of performance audits we produce in a year from an average of 14 before receiving an increase in our funding to more than 20 in the 2022–23 fiscal year. We expect to be able to deliver even more audit work in the years to come.

Our current budget is enough for my office to operate at its present and planned levels. However, when new mandates are added without additional funding, it can eventually result in the situation our office experienced in the past, which contributed to the significant funding shortfall. For example, since receiving additional funding, the Commissioner of the Environment and Sustainable Development has been given the responsibility to report regularly under the Canadian Net-Zero Emissions Accountability Act. We also have new audit work to do for the Canada Enterprise Emergency Funding Corporation and the allocation of proceeds of Canada’s green bonds for the Department of Finance Canada. This is important work for us to do. In the future, we would ask that our funding be considered when new audit work is added.

In my view, it’s important that a long-term, stable funding mechanism is established to preserve our independence and our capacity to respond to an evolving environment. There are examples in other jurisdictions that may be helpful to explore, with the view of ensuring predictable funding for our office, given our role in supporting Parliament as it holds the government to account. It is problematic for us to have to request money from the Department of Finance Canada and the Treasury Board of Canada Secretariat, which are organizations we audit. In our view, a funding mechanism that includes parliamentary oversight would be preferable.

Turning now to the recent labour dispute, which included a 6 week general strike by about 165 of our employees in the Audit Services Group. As the committee may know, the President of the Treasury Board gives our office its mandate for collective bargaining. This mandate establishes the maximum amount of pay and specifies the other terms and conditions of employment that may be offered by our office during collective bargaining. At times, the mandate includes how our office is to approach negotiations. It is also important to note that the additional permanent funding we received in March 2021 could not be used to expand the collective bargaining mandate. In other words, we cannot use our annual budget as a source of funds for a collective agreement.

The strike had far-reaching effects. Internally, there was a significant effect on the mental health and wellness of all our employees. In addition, we have experienced an unusually high rate of departure in the Audit Services Group. While we have since hired new employees and continue our efforts to attract and recruit, this remains a challenge in the current environment, with the lingering effects of the labour conflict.

In addition to the effects on our staff, the response to the labour dispute resulted in delays in some of our audit work and operations. For example, we delayed the release of our spring 2022 reports. In addition, we temporarily slowed some large corporate initiatives, including our transformation. Our ability to spend our budget in the 2021–22 and 2022–23 fiscal years was also affected.

The effects of the strike on our people, culture, and working environment will be felt for some time. Moving forward, we will pursue our efforts and conversations with employees across our office to identify actions to renew the workplace and foster a healthy, safe, inclusive, and productive environment.

Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have. Thank you.