Opening Statement to the Standing Committee on Public Accounts

Management of Programs for First Nations
(Chapter 5 - May 2006 Status Report of the Auditor General)

1 June 2006

Sheila Fraser, FCA
Auditor General of Canada

Mr. Chairman, thank you for this opportunity to present the results of our audit on the management of programs for First Nations, included in my Status Report. With me are Ronnie Campbell, Assistant Auditor General, and Glenn Wheeler, Principal.

Once a year, I prepare a report for Parliament called the Status Report. This report focuses on what the government has done to address recommendations made in a selection of previous performance audits, and assists parliamentarians to hold the government accountable for its stewardship of public funds.

Since 2000, I have issued several chapters on programs and services for First Nations. We conducted this follow-up audit to provide a comprehensive assessment of the government's overall progress in responding to our previous audits, but also to identify reasons for progress on some recommendations and a lack of progress on others.

We followed up on seven audits completed between 2000 and 2003—audits that examined housing on reserves, health care, comprehensive land claims, economic development, third party intervention, the food mail program, and reporting requirements for First Nations. Federal organizations had agreed with most of our recommendations and had committed to taking action.

Overall, we found that the federal government's progress has been unsatisfactory.

Today, I would like to focus on three issues that are important to the health and well-being of First Nations people, and that require particular attention:

• mould contamination in houses on reserves,
• monitoring of prescription drug use, and
• review of major entry points for the food mail program.

Mould

Problems with mould exist in many on-reserve houses, and mould contamination has been identified as a serious and growing health and safety problem.

In our initial 2003 audit we noted that the three responsible organizations—Indian and Northern Affairs Canada, Canada Mortgage and Housing Corporation, and Health Canada—established a committee to address the problem.

In this audit, we found that despite the activities of the committee, no federal organization has taken responsibility for assessing the full extent of mould contamination and developing a strategy or action plan for addressing the problem.

Mr. Chairman, you may wish to ask the government to identify a lead organization to take responsibility for addressing the problem of mould in on-reserve houses, and to provide your Committee with an action plan and timetable, and then regular progress reports.

Prescription Drugs

Through its Non-Insured Health Benefits program, Health Canada funds prescription drugs for First Nations people and for Inuit. First Nations are concerned about the misuse of prescription drugs. The problem is magnified by significant differences in health status between First Nations people and the rest of Canadians.

In audits as far back as 1997, we reported that the Department was slow to intervene where potentially inappropriate use of prescription drugs was observed. In our 2000 audit, we found that Health Canada had updated its review protocol for drug use to better identify and follow up on cases that suggested misuse of prescription drugs. This protocol involved following up with clients, physicians, pharmacists, and professional bodies, and had some positive impact.

But the Department stopped this protocol because management was unsure of the appropriateness of gathering this information without either a legislative mandate that would explicitly allow for this type of analysis, or client consent, which would grant permission to the Department to analyze private health information. In 2001 departmental officials informed the Public Accounts Committee that, within the year, they expected to resume this analysis for 70 percent of clients after it had received their consent. The Department was able to obtain consent for only 25 percent of clients before stopping this effort in 2004. That same year, we reported that the number of clients obtaining more than 50 prescriptions over a three-month period had almost tripled, compared with what we found in our 2000 audit.

In this audit, we found that after five and one half years Health Canada finally resumed its detailed analysis of prescription drug use but is unable to identify reductions in inappropriate use that are the result of its intervention.

The audit also found that the Department still has not sought legislation for its Non-Insured Health Benefits program. If consent has not already been obtained, the Department's approach is to seek consent case by case before informing health providers or pharmacists of concerns about possible misuse of prescription drugs.

Mr. Chairman, you may wish to ask the Department to provide your Committee with a detailed report setting out its current approach to address this serious issue and progress reports identifying reductions in inappropriate use that are the result of the Department's intervention.

Food Mail Program

The federal government's food mail program subsidizes the costs of sending nutritious perishable food by air to Canada 's North in an effort to increase the level of nutrition in the diets of northerners. In 2002 we reported that 140 communities were eligible for this program in the three territories and in parts of northern Labrador, Quebec, Ontario, Manitoba, Saskatchewan, and Alberta.

Program users in these communities must arrange with wholesalers to send eligible food to Canada Post facilities at one of the 20 designated entry points. Canada Post then assumes responsibility for flying the perishable food to the community within 48 hours.

In our 2002 audit we found that departmental officials, northern merchants, and consumers have suggested that access to more southerly entry points would have a positive impact on both the quality and choice of food and on the time it takes to transport it. However, at that time, no systematic review had ever been done by Indian and Northern Affairs Canada to assess the locations of entry points. We recommended that the Department undertake such a review to determine whether changing entry points would make the program more effective.

In this audit, we report that still no comprehensive review has been done. Instead, the Department reviewed only one of the program's entry points and it has no immediate plans to review any others.

Mr. Chairman, you may wish to ask the Department what actions it has planned.

Critical Factors

Mr. Chairman, as part of this audit we identified seven factors that appear to have favoured the implementation of recommendations. Absence of these factors seems to have hindered their implementation and impeded significant change in the lives of First Nations people. We would be happy to answer any questions you may have regarding these factors.

Mr. Chairman, that concludes my opening statement. We would be pleased to answer your Committee's questions.