Opening Statement to the Standing Committee on Fisheries and Oceans

Fisheries and Oceans — Fleet Management Contributing to Safe and Efficient Marine Navigation
(Chapter 2 - December 2003 Report of the Auditor General of Canada)

25 September, 2003

Ron Thompson, CA
Assistant Auditor General

Thank you, Mr. Chairman, for this opportunity to discuss the audit work we have carried out in the Canadian Coast Guard. In particular, I will highlight findings from Chapter 31 in our December 2000 Report and Chapter 2 of our December 2002 Report. Mr. Chairman, I am pleased that your Committee has decided to look at Coast Guard issues and I believe that our reports on fleet management and marine navigation should be useful to you.

Joining me at the table today are Bill Rafuse, Principal, and Kevin Potter, Director, of our regional office in Halifax. Mr. Rafuse has just taken responsibility for the Halifax-based audits of Fisheries and Oceans Canada, while Mr. Potter is the Director for both of the audits that we will discuss today.

In Chapters 2 and 31, we concluded that the Department was not managing the areas we examined—that is, fleet management and marine navigation—in a cost-effective manner. Further, we stated that changes should be made, in our view, to ensure that user needs would be met in the future.

We believe that these findings are relevant because the Department plays a major role in providing services that are important to many Canadians. These services include aids to navigation, icebreaking, the marine component of search and rescue, and marine pollution prevention and response. The fleet also supports the Department in conducting fisheries science and enforcement, hydrography, oceanography, and other marine sciences.

On 8 May 2001, I testified before your Committee on Chapter 31—Fleet Management. Our concerns were in three areas—organization and accountability, vessel life cycle management, and human resource management. In October 2001, the Public Accounts Committee also held a hearing on this Report. In December 2002, the Department reported on actions taken and planned in response to our observations in these areas. This report may help your Committee in its examination of the current status of Coast Guard issues.

Today, I would like to highlight Chapter 2 of the December 2002 Report that focussed on the management of navigational support services and boating safety activities. These are services designed to meet the preventive side of the Department's commitment to safe and efficient waterways. They include:

• marine communications and traffic services,
• aids to navigation,
• channel maintenance,
• navigable waters protection,
• navigational charts, and the
• regulation of recreational boats and boaters.

We did not examine the Department's response activities, such as search and rescue and environmental response.

In 2001-02, the preventive activities cost about $220 million. In addition, the Department recovered about $30 million during this same period from marine services fees.

The Department is facing new and changing service demands. Recreational boating is becoming increasingly important. Technological advances in the shipping industry and international obligations have an impact on service requirements. More recently security concerns are creating additional demands for service. Fiscal restraint is a continuing reality.

Marine services fees have encouraged industry to become more involved in determining the service levels it needs. However, some in the industry still believe that the fees are too high for the services the Department provides.

Although technology is advancing rapidly, there are users who prefer to use traditional services. Therefore, while the Department is putting new navigational support systems in place, it is difficult to eliminate all of the older systems.

The Department is aware of many of the issues we identified. It has initiatives planned or under way to deal with them. Yet there are barriers that prevent the Department from modernizing and delivering its navigational support services and boating safety activities cost-effectively.

The barriers include

• a failure to establish one national program;
• the absence of key elements to ensure accountability;
• inadequate integration of navigational support services;
• provision of a service that does not contribute to the Department's mandate for safety and efficiency; and
• the use of outdated legislation for unintended purposes.

I would like to briefly discuss each of these issues.

In 1996, the Coast Guard merged with Fisheries and Oceans Canada. Subsequently, the Coast Guard headquarters was reorganized. Some national standards are only now being developed or updated. There are limited means of ensuring that the existing national standards or targets are met. Without national targets, standards, and a monitoring capability, the Department cannot hold managers accountable for achieving program objectives.

We found that there are five regional coast guards—each with its own way of doing business. Yet, in the areas we examined, the Department must meet both international and national requirements. Departmental business lines and internal shared services must work together to deliver integrated navigational support services to users.

The Department has made considerable progress in developing frameworks for results-based management and accountability. A significant amount of work remains for the Department to make these frameworks operational. Until it does, the Department cannot show how its activities contribute to maritime safety and efficiency.

The Department made a commitment over five years ago to review the Navigable Waters Protection Act. This review has just begun.

In recent years, the Department has increased its emphasis on recreational boating safety. However, it does not have stable funding to meet this responsibility. The Department relies on other organizations to deliver most of these services and receives little information on what is being achieved.

In 1998, the government made a policy decision to maintain staff at certain light stations. The Department had recognized earlier that it would be feasible to automate most of these light stations. As part of the decision to provide the funding to maintain staff, the Treasury Board required the Department to conduct a review of this decision by 2003. We found that the Department has not tracked the cost of operating staffed light stations.

The Department has indicated that it generally agrees with our findings and recommendations. The Deputy Minister told your Committee in June that certain organizational changes regarding the Coast Guard were made in response to our findings. More importantly, we are encouraged that he has indicated that these changes are designed to deal with fundamental issues facing the Department.

Mr. Chairman, as part of your examination of Coast Guard issues, you may wish to ask officials to provide an action plan that outlines the specific steps the Department will take to address the concerns we have raised.

Mr. Chairman that concludes my opening statement. My colleagues and I would be happy to answer any questions from your committee.