Opening Statement to the Standing Committee on Public Accounts

Fisheries and Oceans — Contributing to Safe and Efficient Marine Navigation
(Chapter 2 - December 2002 Report of the Auditor General of Canada)

19 February 2003

Sheila Fraser, FCA
Auditor General

Thank you, Mr. Chairman, for this opportunity to discuss Chapter 2 of my December 2002 Report. Joining me today are John O'Brien and Kevin Potter, Principal and Director, from our Halifax Office.

In this report, we concluded that Fisheries and Oceans Canada has not managed cost-effectively the activities we examined, and changes must be made to ensure that user needs are met in the future.

Focus of our audit

Canada's marine transportation system is an important part of our economy.

Our audit 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
• 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, preventive activities cost about $220 million. The Department also recovered about $30 million during this same period from marine services fees.

The changing marine navigation environment

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. Fiscal restraint is a continuing reality.

Charging marine services fees has encouraged industry to become more involved in determining the service levels it needs. However, some in the industry still appear to 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.

Barriers to change

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 ensure that there is 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. The Department has limited information on what is being achieved.

In 1998, the government made a policy decision to maintain staff at certain light stations. The Department recognized it was 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.

Conclusion

Fisheries and Oceans Canada has indicated that it generally agrees with our findings and recommendations. This Department faces a daunting list of challenges and demands. Your Committee might wish to ask officials for an action plan that outlines how the Department is going to address the concerns we have raised.

Mr. Chairman, that concludes my opening statement. We would be happy to answer any questions from your Committee.