Opening Statement to the Standing Committee on Public Accounts

April 2000 Report of the Auditor General

Thank you, Mr. Chairman. We are pleased to have the opportunity to meet with the Committee to discuss the April Report and the priorities letter.

First, on the positive side, Chapters 1 and 2 note that we found some improvement in the quality of services delivered by the federal government to Canadians. And in Chapter 8 we report that, although future challenges exist in a post-deficit environment, Canada’s program of debt management is, overall, a well-run operation. This is good news, because debt service costs absorb about 25 cents of every dollar of government revenues, or roughly $42 billion a year.

But this Report also points to significant problems that we reported ten years ago. Immigration, RCMP services, the education of Indian children living on reserves and the management of people in the public service are areas that require Parliament’s urgent attention.

I know that the Committee cannot deal with all the subjects raised in the April Report so I have provided a list of proposed priorities, presented in the same order as in the Report. I hope this will be helpful to the Committee in preparing a plan for hearings.

Immigration

In Chapter 3, we conclude that there are serious deficiencies in the Canadian Immigration Program - specifically, in the economic component, which recruits skilled workers and business immigrants.

Immigration offices abroad are overtasked; controls to protect the health and safety of Canadians are deficient; and Citizenship and Immigration Canada is highly vulnerable to fraud and abuse. In addition, the quality and consistency of the Department's decisions leave it open to criticism.

The deficiencies we noted jeopardize the steady flow of talent and skills that immigrants bring to our labour force, as well as the economic and social benefits that immigration can offer. They also seriously weaken the level of protection for Canadians that was contemplated in the Immigration Act.

It is highly questionable whether Citizenship and Immigration Canada has the capacity it needs to meet the annual immigration levels set by the government.

Employees responsible for processing applications in offices abroad are deeply concerned about the present state of affairs. I share their concern.

Last Thursday, the Minister of Citizenship and Immigration tabled Bill C-31 to amend the Immigration Act and announced other measures to correct the deficiencies noted in our chapter. While the Bill responds to some of our concerns - for example, in providing better protection against fraudulent applications the majority of the problems we observed are not directly related to the Immigration Act. The Department still needs to resolutely address these longstanding issues.

Education of Indian Children Living on Reserves

In Chapter 4, I draw to your attention another important issue — the education of Indian children who live on reserves.

Indian and Northern Affairs Canada is responsible for ensuring that Indian children receive an education comparable with that of other Canadian children, and without neglecting their cultural needs. Unfortunately, the record of educational achievement of these children continues to lag far behind.

The Department also needs to resolve other major issues such as articulating its role in education, developing and using appropriate performance measures and improving operational performance.

The situation is complex and urgent, and the urgency will increase as more demands are placed on education as a result of an increasing population on reserves, and changes in technology and in provincial education programs upon which the Department relies.

Scientific Research and Experimental Development

Chapter 6 deals with significant problems in the handling of tax credit claims for scientific research and experimental development. This program, administered by Canada Customs and Revenue Agency, involves about $2 billion a year in tax credits claimed by corporations.

The lack of clarity about the eligibility of SR&ED projects has resulted in inconsistencies in assessing claims and unresolved claims dating back to 1985. The claims involved represent hundreds of millions of dollars in tax credits.

Since the creation of the SR&ED program, there have been disagreements between claimants and administrators and also among administrators. Clearer rules are urgently needed to deliver and administer the program effectively and efficiently.

We also found that the program is marginally cost-effective. According to an evaluation performed by the government, the economic benefits of the programs exceeded the costs by only $20 million to $55 million.

RCMP Services

Police across the country, courts, parole boards, customs and immigration officers and employers have a vital need for national services, such as laboratory services and criminal records, provided by the RCMP. The safety of all Canadians depends on the timeliness, accuracy and accessibility of these services. However, in Chapter 7 we conclude that the RCMP’s services do not always meet the needs of their users.

There are long delays in providing the results of DNA analysis, and there are backlogs of fingerprints and criminal history records waiting to be entered in the Canadian Police Information Centre . CPIC is the system that provides crucial on-line information 24 hours a day to Canada's law enforcement community. Last year, it was unavailable 11 percent of the time.

It is imperative that senior management at the RCMP follow through on commitments to eliminate backlogs in many of the services and to improve efficiency.

Streamlining the Human Resource Management Regime

In Chapter 9 we return to the long-standing issues surrounding human resource management in the public service. There is an urgent need to simplify, streamline and strengthen the current human resource management regime. It is also crucial roles and responsibilities be clarified in areas whose management is shared among deputy ministers, the Public Service Commission and the Treasury Board.

Many other studies over this period of more than 30 years have pointed to the need for administrative, legislative and structural changes, and yet some of the key issues remain unresolved.

The current framework governing human resource management in the "core" public service is unduly complex and outdated. Administrative systems are cumbersome, costly and outmoded. Public service staffing is a major source of frustration both to managers and to employees. The system is rule-bound and inefficient.

Fundamental changes are required. The government and the Public Service Commission need to pay attention to simplifying the current legislative and administrative framework for human resource management. They also need to engage Parliament in making these changes.

Human resource management in the federal public sector involves many players, a number of pieces of legislation and a range of complex issues. The PAC with its oversight responsibility for public administration in the federal government is well placed to examine the issues raised in Chapter 9. A review by this Committee would likely involve a number of hearings.

It is important to deal with these problems now, when the public service faces significant challenges within its work force and an increasingly competitive labour market.

I hope that all of the chapters in the April Report will be of interest to you. As always, we look forward to working with the Committee over the next few months. Thank you Mr. Chairman; that completes my opening statement. We would be happy to respond to questions.