Opening Statement to the Committee on Public Accounts

September 1998 Report

Thank you Mr. Chairman. We are pleased to have the opportunity to meet with the Committee to discuss the Report tabled on Tuesday. I have with me today Deputy Auditor General Michael McLaughlin, Assistant Auditor General David Rattray and Grant Wilson, Principal in our Audit Operations Branch.

The Report alerts Parliament not only to the urgency for the government to adjust to certain new realities but also to the necessity to revisit some programs that have been taken for granted for some time.

Tuesday, I gave a brief overview of the entire Report to your Committee, but today I would like to concentrate my comments on the chapters that I consider to be higher priority for hearings. I will speak very briefly on each of the topics suggested in the order they appear in the Report.

Chapter 10 deals with the Canadian Human Rights Commission and the Human Rights Tribunal Panel. These institutions are crucial in defending key values of our society. But over the years, they have evolved into what we think is cumbersome, time-consuming and expensive system.

The audit found that the Commission faces major delays in dealing with complaints. On average, it takes about two years for the Commission to review complaints. The Tribunal hearings are also lengthy. The impact of this on thousands of Canadians who seek redress for alleged causes of discrimination can be devastating.

A fundamental review of the roles of the Commission and the Tribunal is necessary.

Chapter 14 focusses on the role of Indian and Northern Affairs Canada in reaching and implementing comprehensive land claims related to Aboriginal title to land and rights that have not been dealt with by treaties or law.

Twelve settlements have been finalized, as of July 1997. They encompass the transfer of a half-million square kilometres of land and $2 billion in capital. There are at least 70 additional claims throughout Canada in various stages of negotiation, involving potentially up to 200 First Nations.

We noted problems in a number of areas that need to be taken into account in the settlement of remaining claims and in the ongoing implementation of previous settlements. Settlements take a long time to conclude and agreements are still accompanied by a great deal of uncertainty.

The audit found a lack of rigour in determining the amounts of cash and the value of the land and other resources to be covered by final settlements. It also identified deficiencies in the implementation of these agreements, such as the lack of implementation plans, incomplete reporting of costs and inadequate monitoring and evaluation.

I am concerned with the Department’s response to the audit. The Department has not responded to the specific recommendations either positively or negatively. For example, with respect to several reported issues of reaching and implementing settlements, the response suggests that the audit observations apply to claims that were settled under policies that have been superseded. That is not the case.

I believe a hearing by your Committee would help clarify what corrective measures the Department intends to implement.

Moving to Chapter 16, we noted that the Social Insurance Number (SIN) has, over the years, become the key to accessing a wide variety of social programs. Its use has spread not only in the federal government but also the provincial and municipal levels of government and even the private sector. Yet it was never intended for such a broad range of purposes.

The audit identified a number of weaknesses in the management of the SIN. The information on individuals, particularly on births and deaths, is not always complete or accurate. Also, valid SINs are held by thousands of individuals who have no legal status in Canada.

The audit found that there are 11.8 million uncertified accounts in the Social Insurance Register. These represent SINs that were issued to individuals without asking them for identification documents and that were never subsequently validated.

Potential repercussions of these weaknesses include SIN errors, abuse and fraud affecting many federal programs, provinces and the private sector. Social programs are particularly vulnerable and the collective impact could be significant.

The wide use now being made of the Social Insurance Number concerns me, as it has serious implications for the protection of privacy, to which all Canadian citizens have a right. When the SIN was introduced, Parliament and the Government were clear that privacy was of primary concern. To protect public funds and taxpayers, it is crucial that the government determine the role it wants the Social Insurance Number to play. It is essential that Parliament be actively involved in discussing these issues, raising public awareness and seeking a satisfactory solution.

Your Committee may wish to discuss with the Department of Human Resources Development how it intends to ensure the integrity of the SIN database.

Finally Chapter 18 deals with the government's Financial Information Strategy (FIS) initiative. It is a topic that I personally consider crucial to the health of our finances. There are three key components to FIS: a move to full accrual accounting (similar to that used in the private sector), implementation of new financial systems, and integration of financial information into day to day management decision making.

FIS is important because it will provide the financial information the government needs to make informed decisions in the years ahead. More precisely, through this strategy, the government is replacing its rather archaic accounting systems and introducing more modern and useful accounting practices.

FIS was approved 10 years ago. And until recently, the pace of implementation had been too slow. Further delay is no longer, in my view, an acceptable option. The government needs information that at present it does not have in order to properly manage its activities.

This committee’s review of the progress in implementing FIS could help provide the necessary push to implement FIS on schedule.

Thank you Mr. Chairman, we would be pleased to answer questions on any matters raised in the Report.