FOPO Committee Meeting

STANDING COMMITTEE ON FISHERIES AND OCEANS

COMITÉ PERMANENT DES PÊCHES ET DES OCÉANS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 8, 2001

• 0901

[English]

The Chair (Mr. Wayne Easter (Malpeque, Lib.)): We will call the meeting to order and welcome the witnesses. As I think is known, the standing committee is doing an east coast tour mainly to continue our study into aquaculture, but during our stop in Halifax we're going to look at the Oceans Act as well and do a little further work on that. In addition, this morning's hearing is on the coast guard.

So I welcome the witnesses here, both from the department and from the Office of the Auditor General. I'd suggest that maybe we start with the Office of the Auditor General, Mr. Thompson, have a few questions, turn to Fisheries and Oceans, and open it up to questions from both groups.

As I think committee members know, we have copies of chapter 31 of the December 2000 report of the Auditor General on Fisheries and Oceans fleet management. So we'll start with our first witness.

Mr. Thompson, I believe you are going to lead off. Do you want to introduce the people with you? Welcome. The floor is yours.

Mr. Ron Thompson (Assistant Auditor General, International Affairs, Office of the Auditor General of Canada): Thank you very much, Mr. Chairman. It's a great pleasure for us to be here with the committee once again on a chapter that we think is quite an important one.

Joining me at the table today is John O'Brien and Kevin Potter. They're both out of our Halifax office. Mr. O'Brien and Mr. Potter really are the authors of this chapter we're looking at today, so they can bring to this consideration a depth of perspective that hopefully will be helpful to the committee as we get into looking at the details.

On chapter 31, the chapter on fleet management, we basically concluded at the time of doing the audit that the department was not managing its fleet in a cost-effective manner. This finding concerns us, because the fleet plays a major role in providing services that are important to many Canadians.

These services include aids to navigation, ice breaking, the marine component of search and rescue, and of course marine pollution prevention and response. The fleet also supports the department in conducting fisheries science and enforcement, hydrography, oceanography, and other marine sciences.

The fleet represents a significant portion of the department's ongoing operational costs. In 1999-2000, the department spent some $229 million on operations, maintenance, and capital replacement. In addition, it spent an estimated $52 million on shore-based support.

While the fleet consisted of 144 vessels on March 31, 2000, it had operated only 122 of them in 1999-2000. Our audit focused on the 47 large vessels run during this period, which regularly incur between 70% and 80% of the operating costs of the fleet.

The daunting list of problems presented in our report led us to conclude that the fleet is not managed, as I mentioned earlier, in a cost-effective manner.

We focused on three areas in our work: organization and accountability, vessel life cycle management, and human resource management.

If I may, Mr. Chairman, I'd like to highlight for the committee our main concerns in each of these areas. The fleet is not a stand-alone organization in the department. Reporting relationships indeed are quite complex. The Commissioner of the Coast Guard is responsible for establishing national objectives, policies, standards, and procedures for the operations of the fleet, for monitoring its performance, and making decisions on capital acquisition and major refits.

• 0905

Regional fleet managers on the other hand are responsible for vessel operations. They organize and manage the vessels to meet national and regional priorities.

The departmental programs that use the vessels also have a role to play in decision-making. In following the “client service provider” model to manage the fleet, users must specify their needs and pay their share of the direct operating costs of the vessels.

As you can see, there are many players at headquarters and in the regions, in the fleet, and in programs who influence decisions on fleet activities.

We found that important elements, which could make these organizational relationships work effectively, were either weak or missing altogether. Here are some examples.

Program performance expectations for the fleet are short term, unclear, or unrealistic. Secondly, the funding horizon has been established at the time of our work for only one year, even though the fleet is a capital-intensive activity with high fixed costs. In addition, it's difficult to determine how amounts budgeted for the fleet are actually used in the regions. There's also inadequate information, in our view, to monitor and account for fleet performance, and the current method of allocating costs to programs actually discourages vessel use.

Our report provides examples of the impact of some of these problems. A case in point is the refit of the CCGS Cygnus. In 1995, the fleet proposed a $10 million refit of this fisheries enforcement vessel. Because fisheries management confirmed that there was an ongoing need for this ship, the refit was completed at a cost of $11.3 million. However, when the vessel came back into service in 1999, priorities and funding commitments changed. The Cygnus is still in service today, but only because of temporary funding that was made available during the recent disputes over aboriginal fisheries issues on the east coast.

In the end, it is difficult to see how anyone in the department can be held accountable for the cost-effective delivery of the fleet's service. We observed a high degree of frustration by both fleet and program managers in their inability to make the existing arrangements work satisfactorily.

Let me now turn to highlight some concerns about life cycle management. In 1995, the Treasury Board Secretariat required that all departments manage their materiel resources, including vessels, by using what's called a life cycle approach. Essentially, life cycle management is used to manage the total cost of ownership of an asset over its lifetime.

We found that Fisheries and Oceans does not have a formal vessel life cycle policy—an approach to doing this—in place at the time of doing our work. Indeed it appears that full implementation of life cycle management for the fleet is several years away.

In the absence of a formal approach to life cycle management, we examined how the fleet manages key stages in the life of a vessel. We found a number of things. Let me indicate.

Number one, we found that there was a wide variation in management and operating practices among the five regions, which are responsible for operating vessels. Secondly, we found that the long-term capital plan does not represent a realistic or a true picture of the fleet's long-term needs. We also found that there's no national system to regularly monitor the efficiency and economy of vessel use or to determine the results achieved. In addition, we found that the fleet operates without timely, reliable, and integrated information. Finally, we found that there is a need for a national approach to vessel maintenance.

In our view, the department needs to address these problems if it is to successfully implement the government's standard of a life cycle management approach.

Let me elaborate for a minute, Mr. Chairman, on two of these issues. In 1999 the department estimated a cost of replacing all of its large vessels at $2.2 billion. We recognize that the department needs to develop a long-term strategy to renew its aging fleet. However, it is important that the department consider the changing nature of program requirements looking ahead—the impact of technological improvements, which can change dramatically over time, and an alternative means of acquiring the needed services when it develops this long-term strategy.

• 0910

Along with other departments, Fisheries and Oceans is implementing the government's financial information strategy or FIS project. This strategy is intended to provide relevant, reliable, and timely financial and performance information to those who actually manage programs. In our view, when FIS is fully implemented, it should help greatly the Department of Fisheries and Oceans address many of the management issues that we have raised in chapter 31 of this report.

Finally, Mr. Chairman, let me turn to our concerns about the management of the fleet's human resources. People are clearly the single largest operating expense of the fleet, representing about 79% of the operating costs allocated to programs.

Our key findings reveal a lack of management focus on human resources. Let me illustrate this. We found that there is no human resource plan, although the fleet has undergone major changes since 1995. In the absence of national guidance on human resource matters, we also found that there are variations in human resource practices among the regions. Thirdly, the implementation of collective agreements, when combined with the way in which funding is provided to the regions, constrains management's ability to operate in a cost-effective manner.

We also found that payroll costs such as overtime and sick leave are not regularly monitored or analysed. We found that the existing shore-based support, in our judgment, is too large given the current size of the fleet. For example, on the east coast there are three separate regional organizations to support a planned total of 26 large vessels. The same structure existed before the major reductions in the size of the fleet some years ago.

In summary, Mr. Chairman, the department has a great deal of work to do, though it cannot address all of these problems at once. We are pleased that the department has committed itself to developing an action plan with concrete timelines and accountability in seven major areas. We believe that these seven areas encompass the concerns we have addressed in the chapter.

Mr. Chairman, I'd like to make one last point before concluding. While in the chapter we concluded that the fleet is not managed cost-effectively, correcting this problem may not in fact result in major savings. As a matter of fact, the fleet, we found, was not meeting important program requirements. Therefore, I believe our recommendations will help the department to address the shortfalls of its programs and improve service to Canadians but not necessarily save money.

Mr. Chairman, that concludes my opening statement. My colleagues and I would be very happy to answer questions from your committee at this time or later. Thank you indeed.

The Chair: Thank you, Mr. Thompson. We'll turn to a few questions and then we'll get into the mix.

Mr. Lunney, do you want to start?

Mr. James Lunney (Nanaimo—Alberni, Canadian Alliance): Thank you. I was interested in the frustration you expressed. We had problems with different levels of management, and problems with.... I see, in point 15 here:

...it is difficult to see how anyone in the Department can be held accountable for the cost-effective delivery of the fleet service. We observed a high degree of frustration by both fleet and program managers in their inability to make the existing arrangements work satisfactorily.

Also, there was a comment about how the current allocation of costs discourages the use of the vessels by different departments. I'm wondering what solutions you might see or ways in which you can sort this kind of a problem out. Do you have something to offer in that department, Mr. Thompson?

Mr. Ron Thompson: Thank you very much for that question, sir. I'll draw on my colleagues to provide a little more support, but essentially, as we point out in the chapter, there is what's known as multi-tasking for the vessels being used. At any one time, depending on what needs arise, the department may have allocated, to solve a particular problem, a vessel that is frankly too large for the particular problem. Nonetheless, the problem gets addressed and addressed well.

The costing system, though, used within the fleet, allocates the costs of that large vessel to this problem that doesn't require a large vessel. So the people who look for the service don't want to pay that much money. That's what discourages the activities and it discourages the use of the fleet.

• 0915

We can identify problems, and it's really up to management to solve them in the appropriate way. But in terms of a suggestion, perhaps what fleet management might want to do, looking ahead, is establish some kind of a fee, just as you would in the business world for certain kinds of services, and have that fee assessed when the service is provided. If you've used too big a vessel, that's your problem, but over time at least you wouldn't be discouraging the use of vessels, and hopefully the overcapacity that exists from time to time will diminish. That's one way of getting at it.

I'm sure our colleagues from fleet would know better ways of doing it, but that's the issue, and it's one simple way in which perhaps it might be handled.

The Chair: Thank you.

Mr. O'Brien or Mr. Potter, is there anything you want to add?

Mr. John O'Brien (Principal, Audit Operations Branch, Office of the Auditor General of Canada): I think the other thing, Mr. Chairman, we have to consider is the poor information that exists. It's very difficult to get accurate, timely information on costs, on results, and this is part of the difficulty that exists in the relationship between programs that are receiving the service and the fleet. As we've pointed out in a number of cases, we found it difficult to get timely information. The fleet managers find it difficult to get timely information. If you don't have that information on what you are getting for what you are paying, it becomes very difficult to have a good relationship between the two parties.

So part of the solution is to get better information, to have a clear agreement between the two parties up front, the receiver of the service and the provider of the service, and then a reporting system that gives both parties the information they need to see that this service is being delivered at the cost that was agreed upon, or, if there are problems, to have this dealt with on a timely basis so that you can resolve it, instead of getting surprises, for example, months after year-end when a large charge might come through on your budget at the receiving end. So that is part of the solution, in addition to the issues Mr. Thompson raised.

Mr. James Lunney: Picking up on the issue of the fleet replacement here, you say there doesn't seem to be a plan for an ongoing, long-term strategy for maintaining the fleet and replacing equipment. Is that because of an absence of commitment to long-term funding, or what do you see as the problem there? How do we fix it?

Mr. Ron Thompson: I'm not quite sure what the cause of the problem might be. Perhaps we might ask our colleagues from fleet management as to what caused this to happen. This is a very complicated matter. We have an exhibit in the chapter that you may want to look at. On page 10 of the chapter, exhibit 31.3 shows the age of the fleet and the amount of money it would take to replace it, and so on.

This is a very complicated matter. There's a huge amount of money invested here, and these assets last a long time. I think some of them last 30 to 40 years. Nobody has a crystal ball, but nonetheless, to manage wisely in this kind of an environment you have to think ahead as to what kinds of services are going to be demanded of the fleet in future years, and they may change over time. Technology may change how you're going to make these services available to people and may as well create different demands for different services.

You may not necessarily want to just replace the existing vessels you have today with the same kinds of vessels, only newer models. There may be a need to have a different sort of vessel altogether. All of this is to say that it's a very complicated business trying to manage the turnover of the fleet and the renewal of the fleet, and it's one that needs a tremendous amount of study because of these various factors: technology, long-term lifespan, and changes in the demand for the services the fleet is there to provide.

That's where the need comes for careful study. Why there hasn't been careful study to date I can only guess—and maybe I'll turn it over to my colleague, Mr. O'Brien—but it seems to us that in the last five years the fleet management and that whole activity has really gone through a terribly difficult time. You've put two basically different cultures together. In 1995 there was a program review that resulted in downsizing, and people have been struggling to keep up, I think.

I think this is a good time, frankly, after all of that has happened and been going on for five years, for management to pause to reflect and say, let's get it right in looking ahead. I think that's what they're trying to do, very seriously, right now.

It could well be that all of the disruption in the last five years is what has caused that particular issue not to have been addressed the way we might like to have seen it addressed. I don't know.

• 0920

Mr. O'Brien, do you have another view of that?

Mr. John O'Brien: Mr. Chairman, I think the only thing I can add is, other than the replacement of the light boats, there has been no new construction. We have to appear to have fiscal constraint. It's clear the department, the coast guard, has not put a lot of effort into the plans they put forward.

We looked at the plans. They were clearly not realistic given the existing fleet and given the funds that appear to be available. It requires, as Mr. Thompson has said, more effort and more sitting down focusing, looking at the long term and what the expectations are going to be in ten, twenty, or even thirty years in terms of what services are going to be delivered by these vessels. It just hasn't happened yet.

It's going to have to happen. It's fairly clear that a one-on-one replacement is unlikely to be the best solution. Services that will be delivered twenty years from now are not going to be the services delivered today, or are unlikely to be, because of technological change among other things.

Mr. James Lunney: Do I have one more question?

The Chair: Sure, James, we have lots of time anyway.

Mr. James Lunney: We recognize, of course, that the coast guard has gone through a tremendous upheaval in the last five years with reorganization and by coming under the DFO. I imagine it must have been very difficult for everybody, and of course it leaves long-term planning a bit of a challenge.

I want to pick up on the comment you made where, if we're living with realities, changes have taken place. We're trying to make it more efficient.

Picking up on your comment where the existing shore-based support is too large given the size of the fleet, you're saying there are three separate regional organizations to support the planned total of 26 large vessels. Is that an area where, again, concentration or reorganization could limit it or make it more cost effective?

Mr. Ron Thompson: Mr. Chairman, I think so. Again, management would be best equipped to respond to it a little later this morning.

When the numbers of the fleet have gone down so dramatically, and yet you have the same number of people in the same areas on the shore, it does make you wonder whether or not that should be.

I think as part of the department's plan to look ahead, they're probably going to re-examine it. Technology will likely play a part here too. You can do a lot of things from one location now that you couldn't otherwise do some years ago. You don't necessarily need to have major installations in three or four different spots in geographical areas. You can do a lot from one spot and have help electronically to get things done and organized.

I think it could be an area where some savings and some optimization of resources perhaps could take place. It needn't be done in a way that leaves a lot of blood on the floor either, if I might use the expression. I think the department is going through the same kind of demographics the public service generally is, perhaps even more so.

In the fleet area, as I understand it, people start at a young age and retire at a relatively young age. If the fleet is similar to the public service, and I think it is, a lot of people are going to be leaving at the age of 55 years fairly soon. I gather here in the Halifax region there's a tremendous demand for people of a more junior level who are moving up.

The upshot is people are leaving all the time. It's a problem, on the one hand. On the other hand, it allows you to hire and reshape the fleet without necessarily having to fire a lot of people, I would think.

I think it's a good time to make significant changes in the area you've referred to. Although it's never easy, the timing is right.

Mr. O'Brien, would you like to add to that?

Mr. John O'Brien: No. I think you captured it.

The Chair: Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay (Rimouski-Neigette-et-la Mitis, BQ): Thank you, Mr. Chairman. Thank you, Sir, for your presentation.

At point 8, you mention that the fleet is not a stand-alone organization in the department, but that reporting relationships... [Editor's Note: Inaudible]. Do you believe that it would be wise to, for example, envisage the creation of a Crown corporation, an agency or some other structure in order for the fleet to be completely detached from the department? There could be a budget for two or three years. Parks Canada has been given two-year budgets so as to allow it to better plan its operations.

• 0925

We have seen a lot of cases where things were part of departments but when they were given a little bit of independence, they were much better managed. Do you think it would be a good idea to do this in the case of the fleet?

[English]

Mr. Ron Thompson: That's certainly an idea, Madam. However, from where I sit—and my colleagues who run the fleet would know better than I perhaps—just looking at it and thinking about changes, one way of looking at this would be to say, let's address the significant imperfections in the way the existing system is managed first and then get a sense of whether or not we need a whole new organization to do it. I think it might perhaps be a little early to throw out the existing organization because it isn't working, without trying to make it work. But that's a decision really that our colleagues in the fleet are going to have to make. That is another way of looking at the issue.

Certainly I think some of these agencies have worked. It's early days with them. We have the CCRA, of course, the Parks Canada Agency now, and the Food Inspection Agency. It's fairly early days on how well they're doing. I think they're doing reasonably well.

But to drastically reshape the fleet this way...my colleagues who run it would be better able to answer that question than I am, I'm afraid.

[Translation]

Ms. Suzanne Tremblay: Moving on to another area now, you stated earlier that your audit focussed on only 47 vessels. You stated that with the merger and the move from the Department of Transport to the Department of Fisheries and Oceans, two cultures had to merge together. What was the other culture that had to meld with that of the coast guard? What did it have to meld with?

[English]

Mr. Ron Thompson: Madam Tremblay, we had the coast guard culture on one hand and the fisheries department fleet on the other—to do fisheries enforcement activities. Those were the two cultures that were brought together, as I understand it.

Perhaps Mr. O'Brien or Mr. Potter might amplify on that a bit for you, because they were around when that was done and I wasn't.

Mr. John O'Brien: Mr. Thompson is right. The differences are fairly clear for anyone who has dealt with the two departments. The coast guard was a much more formal organization I think than the Fisheries and Oceans fleet. The Fisheries and Oceans fleet was primarily enforcement and science; the coast guard fleet primarily did marine search and rescue, ice breaking, buoy tending, aids to navigation. The services were different. The relationships within the departments were different. Their command and control systems were different. So they were very different organizations that came together, with very different ways of operating; the practices were significantly different and the management style was significantly different.

Again, I think the representatives from the department can probably elaborate on it more. But it's fairly clear, when you look at it, that these organizations, at least at first, had a lot of difficulty in reaching a common ground in common procedures, and there was a lot of time and effort spent making sure the practices between the two fleets that existed in 1995 were harmonized.

The Chair: Madam Tremblay.

[Translation]

Ms. Suzanne Tremblay: A little further down, you state:

In the end, it is difficult to see how anyone in the department can be held accountable for the cost-effective delivery of the fleet service.

What is this question based upon? If you are wondering how anyone could be held accountable, that means that there is no accountability anywhere. This comment strikes me as being somewhat strange. In any event, I do not understand.

[English]

Mr. Ron Thompson: We were trying with those words, Madam Tremblay, to empathize a bit with the department. It is a strange arrangement to us. You have a commissioner who has certain responsibilities, you have people who run the fleets in each of the regions who have certain responsibilities, and then you have people who actually operate in the regions who have other responsibilities.

• 0930

Let me give you one example of a concern we would see in this, one I suspect our colleagues from the fleet would share. As I understand it, when money is allocated to each of the fleets in the regions—and there are five of them—there's a quantum of money in the department's annual budget, and so much will go to a particular region. As the region moves ahead, that money may or may not be used for the fleet. The regional director general, as I understand it, who is responsible for all of the operations in that region, may well redeploy some of the money to other functions that the region is responsible for. That makes it pretty difficult, I would think, for a regional fleet manager to run the fleet, and it makes it a little difficult for the commissioner in Ottawa to say, what are we getting for the money we're spending? So that's one example.

It's not to say that can't work, but the other elements of the organization and the management that aren't working make it very difficult for that organization to work. For example, if there's not a good flow of information, it's very hard for people in Ottawa and very hard for people in the regions to get a sense of how well the fleets are doing in each of the regions day in and day out. A lot of the performance information doesn't come along until well after the end of the year. A lot of black book systems are being used. The information isn't integrated. There's no real way of knowing whether what you're looking at, which you think is performance information about your fleet, in fact shows the way things are being performed.

I think it's a complicated picture. The organization itself is complicated. If I were in the fleet, I'd have difficulty satisfying myself as to how well the fleet is doing. And if I were in Ottawa, I'd have difficulty satisfying myself as to how well the fleet overall is doing across the regions.

This comment in the chapters may seem a little strange, but we were trying to show some empathy for a very complicated and difficult organizational structure.

[Translation]

Ms. Suzanne Tremblay: Mr. Thompson, if it is difficult for the commissioner to know what is going on in the regions and if it is difficult for the regions to administer things, do you not believe, given that we are trying to meld together two new cultures, as you were saying, that before wasting a lot of time and money and all of the rest, it would be preferable to start from scratch, to find a completely different way of doing things? Over the course of six years, it is difficult for the commissioner to act. It is difficult, in Ottawa, to know what is going on, and it is difficult for the regions. In my view, therefore, this is not the solution.

[English]

Mr. Ron Thompson: Madam Tremblay, I'm really glad you put it that way, because I think our colleagues in the fleet will echo this a little bit later. What we would recommend is precisely what the fleet is doing. They're saying, let's sit back and have a look at all these issues, and let's develop a reasonable plan with reasonable priorities to address them.

I reacted a little to creating a new agency a little earlier. That may be one of the things they're thinking about or it may not, I don't know. But they certainly are well aware of the issues we're raising in the chapter, and they have a major planning exercise under way—a rethinking exercise, I guess I'd call it—to address these and other issues that are causing them concerns and that we're commenting on.

[Translation]

Ms. Suzanne Tremblay: I have one small question.

[English]

The Chair: Go ahead, Madam Tremblay, with a last question.

[Translation]

Ms. Suzanne Tremblay: With respect to rescue, does this involve helicopters as well or is this just boats?

[English]

Mr. Ron Thompson: With your permission, I would ask Mr. O'Brien or Mr. Potter to answer that question.

Mr. John O'Brien: Mr. Chairman, the coast guard is responsible for marine search and rescue, the vessels only. The air portion is delivered by the Department of National Defence and coordinated at the rescue coordination centres. It is led by National Defence, but has coast guard participation.

The Chair: Thank you.

Mr. Assadourian.

Mr. Sarkis Assadourian (Brampton Centre, Lib.): Thank you very much.

On page one, paragraph four, you speak about enforcement. Three or four weeks ago we had witnesses from this region—I believe they were from Nova Scotia—who mentioned that the vessels they have for enforcement of the Fisheries Act are either too large or too small—too large to chase a small boat or too small for chasing a large boat on open seas. They thought this was not an adequate way of doing it. And they mentioned that they have an SUV to do a small job that they don't need—they have purchased a $40,000 or $50,000 dollar SUV. They also mentioned that sometimes they use their personal vehicles while enforcing the regulations.

• 0935

I wonder if you could comment on the points these gentlemen made to us.

My second point is in your presentation you mentioned the shortfalls. What kind of impact did that have on the relationship between native and non-native fishers?

The Chair: If you care to answer, Mr. Thompson, go ahead. But it would probably be more appropriate to direct that question to DFO when they appear later on.

Mr. Ron Thompson: I was going to suggest that, Mr. Chairman, with your permission.

If you wouldn't mind, Mr. Assadourian, it might be more helpful to the committee if our colleagues from the fleet were to answer those questions. Would that be reasonable?

The Chair: Just hold that one in abeyance, then, until we get to the next witness.

Mr. Sarkis Assadourian: Do you mean the first one or the second one?

The Chair: Both.

Mr. Sarkis Assadourian: Okay.

The Chair: Mr. Keddy. Sorry, Mr. Stoffer is next. I wouldn't want to get out of line here and get in trouble with the NDP.

Some hon. members: Oh, oh!

Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern Shore, NDP): Let him go ahead. Go ahead, Gerald.

Mr. Gerald Keddy (South Shore, PC): First of all, I'd like to thank you gentlemen for coming today. I think this is an important hearing.

I tried to break down into very simplistic terms what was being said here, and I see three things coming out again and again. The first thing is the lack of a long-term strategy. The second thing is that there's no human resource plan, and you have perhaps a real crisis on your hands where a lot of people are approaching the 55-year mark and could get out if they chose to or they may have to, and you have a fair amount of younger people. I would like to know how many middle management people there are and how many people would be left in the fisheries portion of the coast guard who have some institutional memory and actually know how things are run. That's quite important. There's one thing that I put in brackets here, which is that the fleet does not meet program requirements. I think that's a significant statement.

As a member of the fisheries committee, I see one other thing I would like to have an answer to, if you can provide it today. I'm not trying to take away from those issues, but another issue that was just barely touched on is multi-tasking and the whole navigational aids issue. You mentioned technology. There's the issue of the lighthouses, which I'm sure Mr. O'Brien can comment on, with the lights, the navigational buoys, the channel markers, and a number of bells being removed, and that poses a significant navigational hazard. I think that at the end of the day we're going to make more work for Fisheries and Oceans and the coast guard portion of that. Do you have any idea at all of the cost involved in taking away the navigational aids? I'm looking at the inshore fishery and the pleasure boating community that depends significantly on them.

Mr. Ron Thompson: Mr. Chairman, through you to Mr. Keddy, I don't myself, but I wonder if my colleagues might have some sense of that. That may be something we should also turn over to our colleagues from the fleet—Mr. O'Brien or Mr. Potter.

Mr. John O'Brien: Mr. Chairman, our audit focused on the management of the vessels and not on the aids.

Obviously, one of the things we did look at was the relationship between the fleet and the programs it serves, including the aids to navigation. I have no information on the direct cost, but one of the things we did note, and which is noted in our report, is that the department had done some research on the reliability of its aids. We reviewed that and reported on it. Of the five different types of major aids, it reported that for two of them most regions did not meet the reliability standard the department had set for itself, which is based on the International Maritime Organization standards.

• 0940

So the comment we made about not meeting program requirements derived from the aids to navigation program. The issue is directly related to what Mr. Keddy brought up, which is that the aids tenders are there to make those aids reliable, and in certain cases, according to departmental information, those standards are not being adhered to.

Mr. Gerald Keddy: The other issue that of course comes out of that is the effect of downsizing your fleet. When you speak privately with officials, whether they're coast guard or fisheries officers, you find there is a lot of frustration within the group—and I'm hearing some of it in your voice—that due to a lack of planning and direction, it's very difficult to perform the service they want to perform.

I'd like to point out an example of the effect of the cutbacks. If you wish to make a bad analogy, the word in the bays and harbours and on the street was that had the crash of Swissair flight 111 not occurred, the fleet would have been out of the water. A significant cost was involved in cleaning up the wreckage and searching for bodies, but had that not happened, the majority of our boats would have been out of the water because a lot of people would be out of work due to cost-cutting measures.

Would you like to comment on that?

Mr. Ron Thompson: Mr. Keddy, I think that's really in the area of speculation, and I would prefer we not get into that, frankly. We all know what would have happened had that tragedy not unfolded. I don't have any indication myself that things would have turned out any differently.

Mr. Gerald Keddy: I respect your answer, but I'm pretty sure I'm right.

The other point is that in that long-term planning and long-term strategy, which it's our job to promote, you also need to consider the worst storm in 100 years, the Swissair 111s, and other natural catastrophes that can happen. It's quite obvious to me that we're running on a shoestring here, and that's not part of the equation.

Mr. Ron Thompson: Mr. Chairman, perhaps I can offer a comment to Mr. Keddy on that too. I think you'll hear a little later from our colleagues from the fleet that they want to continue to provide this vital service to Canadians that we've talked about. They're at a crucial point right now of saying, “we've gone through this merger”, through downsizing, and through program review, so now let's sit back and get it right. I think they really want to do that.

I would just make one other comment. I think it's incredibly important for this committee to show an interest in the work they're trying to do and to provide support and encouragement to the department in what they're trying to do.

As I said the last time we met, which I believe was on salmon farming, there is no shortage of priorities for busy departments to deal with, and they tend to deal with priorities where members of Parliament think there are really serious issues to address. To the extent that this committee and maybe other committees are looking at the fleet, I think that recognizing the difficulties it's having and saying we want a good fleet will make a big difference in encouraging the department to get on with the task they want to get on with.

The Chair: Thank you, Mr. Keddy. If there are other questions, we'll have time for them.

Mr. LeBlanc.

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.): Thank you, Mr. Chairman.

Welcome, gentlemen. We saw you briefly in Ottawa, Mr. Thompson, on another matter, but it's nice to be in Nova Scotia.

I share your view that the whole fleet management issue is of considerable concern. Certainly in my riding a lot of the inshore fishermen there, some of whom testified before this committee some weeks ago, were concerned about the presence of coast guard vessels, mainly on the enforcement side, but there's obviously a search and rescue component that's important to them.

• 0945

They like to see the red and white vessel. In many cases, these are a generation of people who don't have great faith in some technologies. They don't like the idea that their distress call is answered by some call centre somewhere else. They like the idea that there are people they can see at the wharf when they go out in the morning or when they come back in the afternoon who would come out and help them if they had a problem.

That's why I worried when in your report—you touched on it briefly—you made the statement that the current method of allocating costs discourages vessel usage. I had a chance a few weeks ago to see some managers of conservation and protection in the gulf region. They told me that the way some of the coast guard costs are allocated, it would be immensely cheaper and more cost-efficient and they would have more frequent resources if they could go with some sort of alternative service delivery. For example, they could charter a private vessel and put fisheries—this is from the enforcement side of it—conservation officers on the private vessels, because the cost of using a coast guard boat is so high, it empties out their budget. And sometimes the vessel doesn't fit the particular task.

Did you uncover a lot of examples of that particular problem?

Mr. Ron Thompson: Mr. LeBlanc, I'll get my colleagues to provide some details.

But you know, Mr. LeBlanc, I've been a chartered accountant for a very long time. I think it's possible here that the accountants are driving decisions and driving situations that shouldn't exist at all.

Accountants do some wonderful things in life. Sometimes they get it mixed up by getting separated a little bit from operations. I think in this particular case, probably for what initially was a very good reason, but when you look at it now the reason really isn't very good, cost accounting is driving decisions that are bad decisions. We think that should change.

Now as to more examples of what we're talking about, perhaps I could turn it over to my two other colleagues, who are also accountants, but they know a good deal about DFO.

The Chair: Mr. O'Brien, Mr. Potter.

Mr. John O'Brien: Thank you, Mr. Chairman. With that introduction as an accountant, I'm not sure exactly what I'm supposed to say here. To answer Mr. LeBlanc's question, yes, that's one of the things we did observe.

There are a couple of other things I'd point out. If you recall, back in April 1999 we reported a chapter and appeared before this committee on managing shellfish. One of the themes in that chapter back then was gaps in enforcement coverage. There were areas where there were no fishery officers out on the water because they didn't have vessels. So that is a consistent theme.

The other thing I would point out though, just to elaborate a little bit on what Mr. Thompson has said, is it's a bit of a false saving to charter a vessel or to use a private sector vessel if you have the other vessel that the department owns sitting there incurring a very high fixed cost. If the vessel is sitting at the wharf and the only thing you're saving is fuel, really it's a bit of a false saving to go out and charter a vessel and incur additional real cash costs, because you're also incurring real cash costs while that vessel's sitting at the wharf.

So part of the solution to this could be alternative service delivery or using another method. Part of it could be increasing the utilization of the departmental vessel, because if you have a high fixed cost, the more you utilize it actually the lower the individual hour-of-usage cost of usage becomes. So there are a number of different ways to help address that issue. But clearly that issue exists. Clearly we hear this consistently—not just from enforcement, but from other users—that the costs are discouraging the use of the vessel, the costs that are allocated.

The Chair: Mr. LeBlanc.

Mr. Dominic LeBlanc: Thank you, Mr. Chairman.

Mr. O'Brien, I'm very pleased to hear what you said. I personally think the move to alternative service delivery and privatization in a lot of fisheries issues is wrong, or perhaps inappropriate. I know the fishermen in my riding are happier to see a coast guard vessel with trained coast guard crew or a fisheries patrol vessel with conservation officers and a Government of Canada vessel. They have more confidence in that operation than in a private sector solution.

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But the manager of a particular conservation and protection budget in a region is able to say, well, if I have to pay this amount of money for this coast guard resource because of the cost allocation issues you've identified, it's easier to justify putting more fishery officers on the water, for example, by going to some alternative service delivery method. Yet they would see that as unfortunate to have to go there.

My question is, recognizing the value in what you said, Mr. O'Brien, what is a way—and I am not an accountant, and the whole cost allocation....

The Chair: He's a lawyer.

Mr. Dominic LeBlanc: I'm a lawyer, that's right.

The Chair: It's worse that you're a lawyer.

Mr. Dominic LeBlanc: We're used, Mr. Chairman, to the jealousy of those who aren't.

Some hon. members: Oh, oh!

Mr. Dominic LeBlanc: But perhaps as one professional to another, Mr. Thompson, I would be interested in hearing how you think the cost allocation structure could be done differently to maximize the use of the resources that are there now for enforcement and search and rescue. Something's wrong when managers are looking elsewhere and they have tied up at the wharf vessels and staff who are better trained and better able to provide a service.

These managers are telling me they're going to go outside because of this cost allocation. What suggestions do you have for the department to address this so we can provide a higher level of service to the client?

Mr. Ron Thompson: Mr. LeBlanc, I'll get my colleagues to jump in here too.

We were sitting around yesterday getting ready for this hearing and I said to John and Kevin, now what can you do? This is one way of allocating costs; how can it be done differently to guard against this distortion in the level of service? We quickly came to one suggestion, and again this depends on how the fleet wants to operate itself, looking ahead—they're not at all insensitive to this issue. They'll have to come up with a solution and we will come up with a solution to it.

But one way might be to say that for certain kinds of service calls or certain kinds of services, we'll have a price. It's up to us to provide the service, and we'll exact the same price for similar kinds of service. We'll decide what vessel goes, and if we put a vessel that's too large and too costly for handling that particular service, that's our problem. We're not going to try to bill either explicitly or implicitly the people who are getting the service for us using a larger vessel. In other words, we'd run it in a little bit more of a business-like way, I guess.

If that were a viable option, at least you wouldn't have people saying, I'm not going to buy your service because you're going to give me too much of a vessel. So you might end up overall having the vessels used more. Now that's one simple solution that the accountants came up with; there may be others, I don't know.

Mr. O'Brien or Mr. Potter, could you amplify that a bit?

Mr. Kevin Potter (Director, Audit Operations Branch, Office of the Auditor General of Canada): I think, Mr. Chairman, the system Mr. Thompson just referred to is actually the approach that is used by the United States coast guard in allocating the costs. They don't charge back to users, they just allocate the cost to the various business lines they have. That approach is used in other jurisdictions.

Just to draw your attention to a case we referred to in the report, there is an innovative example in the region of Newfoundland where they multi-task offshore search and rescue and fisheries enforcement. The fisheries there have moved offshore away from the near shore areas out beyond 200 miles.

In some instances, the region was able to come up with an innovative approach, an agreement to multi-task both the search and rescue and the fisheries enforcement. They comingled in this instance. They had that arrangement set up with an associated cost that was reasonable and appropriate for the enforcement people, but because of the costing systems and approach that are in place currently, they ended up being charged the higher rate for that vessel, the higher rate that is charged for search and rescue.

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I think the types of approaches to which Mr. Thompson referred could deal with this type of situation.

Mr. Dominic LeBlanc: Thank you, Mr. Chairman.

The Chair: Thank you, gentlemen.

Before I turn to you, Peter, while we're still on the subject, I'd like to discuss the comment Mr. Thompson made earlier, about the accountant doing things that don't make sense on the ground, so to speak, or in the water, in this case. You may or may not want to comment on this.

I, and a lot of others, certainly have a concern about the overall system of management, at the top of a deputy minister and senior assistant deputy minister level, where people going to those positions are coming out of the Treasury Board, Finance, Agriculture, and the Privy Council Office, and are not coming up through the system. Fisheries doesn't seem to have a problem at the moment in that area, but certainly other departments do.

Agriculture is one where the senior manager, really the person in charge at the deputy minister level, doesn't know squat about the industry they're supposed to represent.

Have you done any investigation from the top down overall? It may not be related to this particular review, but it is a problem. We really see it in some departments.

Mr. Ron Thompson: Thank you, Mr. Chairman, for the question. We haven't done a review in that way. I can give you some observations though based on work we've been doing in the last little while.

We're pulling together what we call a long-range entity plan for our office for DFO, where we're trying to get a sense of what areas to look at that would be of most relevance to members of Parliament and to the department.

In doing so, we're going around meeting a lot of people, a lot of senior people in the department. I've been involved in seven or eight meetings in the last couple of weeks. I haven't known these people before. I certainly have been very impressed with the care they take in their work, in the sense that they want to get it right. They want to get it right, not from a PCO perspective necessarily or a TBS perspective, but from the perspective of DFO. They know the issues in these areas and want to do a good job.

There is another comment I'd put on the table. It would appear, with the new deputy, Mr. Waters, they're doing some interesting things trying to look ahead and strategize where the department should be. They put out a strategic plan that's very bold, I think. It doesn't pull any punches. It says very clearly where they've done well, where they haven't done well, and where they need to take action to do things better.

I'm not necessarily answering your question in quite that way. We don't have an audit underway, nor do we have one planned, to look at senior management within the department in the way you're suggesting. In an anecdotal manner, at least, over the last little while, we've been pretty impressed with the senior people we've run in to and dealt with.

The Chair: Thank you, Mr. Thompson.

Mr. Stoffer.

Mr. Peter Stoffer: Thank you, Mr. Chair. Thanks to everyone for being here today.

On your analysis of the concern of managing human resources, did your auditors speak to anyone within the union in the coast guard?

Mr. Ron Thompson: Mr. Chairman, if I may, I'd ask my colleagues to respond.

Mr. Kevin Potter: Mr. Chairman, we did not speak to someone who was designated to us as a union representative. Obviously some of the people, the crews and officers, we met would be members of unions. We did not meet directly with union officials.

Mr. Peter Stoffer: My question would be why not?

Mr. Ron Thompson: Mr. Chairman, I could take a cut at that, if you wish. We are auditing the management of DFO. In auditing a department, to the extent we can, we would tend to stay with the departmental officials who are running the programs we're auditing.

We sometimes bring in experts from other areas outside the departments. In a general sense, that's not at all unusual. We didn't feel it necessary to do it here. We wanted to stick with the people who are managing the program and stay at the management level.

Mr. Peter Stoffer: The reason I ask, sir, is, on page 3129 of your report, you talk about suffering stress, low morale, and low uncertainty about status. You directly refer to the employees. When you make a statement of this nature, which of course is very real and very true, did you speak to the representatives of those employees about the low morale, the uncertainty of their status, and their working conditions?

• 1000

Mr. John O'Brien: Mr. Chairman, the only answer we can give to that is we talked to a wide cross-section of employees within the department. We visited many of the vessels. We talked to people at all levels of the organization. This is based upon our personal observations as we went across the country and as we dealt with people in the fleet. It was fairly obvious, as you talked to people about the concerns they have, that these are situations that we see. So the answer I would give is that it's based upon our direct observation and our direct contact with a large number of people within the organization.

Mr. Peter Stoffer: The reason I say that, sir, is in other audits of other departments, I asked the same question and I received the same response. The answer is, no, we did not speak to the union officials; we spoke to some of the employees and got the feel for what they were doing. Yet you specifically speak to management about the various concerns of operation, fleet requirement, etc. It appears, at least to the union members and to their leaders, that when you do an audit of a department, you pay a lot of attention to the management side of it, but very little to the union side of it.

You mentioned human resources quite frequently throughout. My suggestion is that in the future, if you're doing audits of this nature, in order to follow up, involve the union leadership. They very much want to be part of the process of the reorganization and the future of the coast guard. They are very big players. As you say, 79% of the costs are human-related. My advice, then, would be to bring them into the equation, because many times when it comes to costs, to better efficiencies, and to delivery of those services, the people who work on those ships and who represent those people are the first ones who really can tell the management where we can save money. We've seen that time and time again. It appears that they are excluded from these types of conversations. So that's just my advice.

My other concern, sir, was you said when money is allocated to a particular area, it's up to the discretion of the regional manager or the director as to where that money can go. Is that correct?

Mr. Ron Thompson: Mr. Stoffer, that is my understanding, yes, that the regional director general can certainly redeploy money over a variety of priorities.

Mr. Peter Stoffer: Even though that money was specifically meant for a particular item?

Mr. Ron Thompson: As I understand it, yes.

Mr. Peter Stoffer: Okay. Do you feel that's appropriate, as a representative of the Auditor General?

Mr. Ron Thompson: Mr. Stoffer, I think that can be quite appropriate in certain circumstances. You can have emergencies come along where money needs to be redeployed. We do it in our own office as between product lines that we're working on. Some move ahead quicker than others and some are a bit slower. But you need good information in any organization to know the effects of doing that, so that the people who are responsible for one activity—for example, here, the fleet—will have a sense of “I'm able to do what I'm able to do with the money I've been given. The reason my performance is up or down is, among other things, because money was diverted over here when I thought I had it in the first instance.”

I think you can overcome these practical problems with a good management system—with a responsive management system. That's not what we've seen here.

Mr. Peter Stoffer: Sir, you also mentioned the fact that, quite possibly with new technologies and so on, we could centralize more of the facilities. Instead of having it in three different areas, you could more or less have it in one, possibly two. You may be aware that in Nova Scotia there's a lobby effort by the folks of Cape Breton in order to move some, or all, of the coast guard operations from here into Cape Breton. I've always said that would be done for political moves, not for any kind of an operational move. Would you see that as an effective cost...? You're indicating that it can be actually reduced into one and be handled quite efficiently from one area. By moving or expanding the fleet into another area as well, would that be a cost-effective measure? Or would that be a wise move?

Mr. Ron Thompson: Mr. Stoffer, I wouldn't want to talk about where that area could be located, and even whether or not that's something the department might like to do.

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I mention it as an option because when we look at the fleet operation here and when you look around the world to see who else is in this business exactly the way Canada is, there are very few people, if any. To a large extent coast guards take on a national defence kind of posture, and they're run that way. That's not the case here.

If you're looking for best practices in how to do this kind of thing and who else is doing it, I tend to look a bit at the private sector. If there are management lessons to be learned in approaches that are evolving there in delivering services that are not unlike some of the services the fleet is delivering here, that's perhaps where one would or could look. Clearly there, there are all kinds of examples where major private sector firms are delivering similar kinds of services. They're doing it with modern technology, by centralizing the coordination of the services, and all those sorts of thing.

I think that's probably something that should be looked at. I'm virtually certain the fleet is going to look at issues like that as it plans out how to solve some of these problems. That's an example of where I would look if I were running the fleet—and I'm not—to see what could be put in place to solve some of the problems everyone knows exist there.

The Chair: Thank you, Mr. Stoffer.

We'll have Madame Tremblay, and then we will go.... Did you have any other questions, Mr. Lunney? Okay. We'll have Mr. Lunney and then Madame Tremblay, and then we'll go to Fisheries, because we can combine the two anyway.

Mr. Lunney.

Mr. James Lunney: Thank you, Mr. Chairman.

With regard to the coast guard, it's clear that Canadians want to know that their coasts are patrolled and manned with adequate manpower and resources to make sure we maintain an effective presence on our coasts. I think for people using the coastal waters, for fishermen and just for national security, we need an adequate presence there.

Coming back to something we said earlier about it, there's a difference between enforcement with regard to fisheries and the search and rescue requirements of vessels, and perhaps a difference between inshore and offshore. This is something that came from the witnesses who went from the east coast here to the committee in Ottawa recently.

For example, if you're dealing with poachers out in the water, having red and white vessels heading out to check on illegal fishing is perhaps not good use of vessels. They used to have green or unmarked ones. Perhaps that's something Mr. LeBlanc was getting at with his comment that there may be a place for chartered vessels for some aspects of enforcement.

I just wonder if you'd like to comment on that, or perhaps that's a question better directed to our officials.

Mr. Ron Thompson: Mr. Chairman, through you, I think it is, actually. In terms of how to rejig the fleet and what the best way is to solve some of the problems that are around, I really do think our colleagues from the fleet are best equipped to handle that.

Mr. James Lunney: Okay. We'll address that question a little more appropriately later, then.

I just have a final one, Mr. Chairman.

Being a new member of the committee, and looking at 144 vessels—

The Chair: And a fine member at that.

Mr. James Lunney: Oh, thank you.

Of those, 122 are operational. When we talk about all these regional centres and coordinators, are they all on the east coast? How are the coast guards from the east and west coasts separated? Is this all under one umbrella? Are we talking about a completely separate division when we talk about the west coast?

Mr. Ron Thompson: It's a very good question, Mr. Chairman. Maybe I could impose on Mr. O'Brien or Mr. Potter to talk in a little more detail on how it's organized and what's where.

Mr. John O'Brien: Mr. Chairman, when we're talking here, we're talking about the whole fleet, including Pacific; Central and Arctic, which covers primarily the Great Lakes but also Arctic operations; Laurentian, headquartered in Quebec; Maritimes here in Halifax; and the Newfoundland region in St. John's. That covers the whole fleet.

The way the department is organized, we have a little exhibit in our report, exhibit 31.5, that shows a sort of scaled-down version of where the coast guard and fleet fits into the department. The way the department is organized is a matrix type of organization. There's the commissioner in Ottawa with his functional responsibility. Within each of the five regions the coast guard exists there's a regional director who's responsible for the operations of the fleet. He reports directly to the regional director general and reports functionally to the Commissioner of the Coast Guard. That's the organizational structure in which this program and all the other programs in the department operate.

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Mr. James Lunney: Thank you, Mr. Chairman.

The Chair: Thank you, Mr. Lunney. Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay: My question, Mr. Chairman, will go a little bit further in the same direction.

In point 22 of your presentation, you mention that shore-based support is too large and that on the Eastern coast there are three separate regional organizations, whereas in the beginning, you stated that there were five regions, and that the fleet, the coast guard, was divided up into five regions. Could you enlighten me in this regard? If there are five regions, there cannot be three on the East coast. These must be subregions, sub-organizations, because you state that there are three distinct organizations. You mention this in paragraph 22 of your brief.

[English]

Mr. Ron Thompson: Thank you, Madame Tremblay.

There are five regions for the fleet across the country. There's one here in Halifax, and maybe I'll get my colleagues to jump in and say exactly where they are. There's Halifax here, Newfoundland, Quebec, and then across to the west. But let me turn it over to Mr. O'Brien, who can tell you exactly where these offices are.

The Chair: Or Mr. Potter.

Mr. Kevin Potter: Mr. Chairman, on the east coast there are three of the five regions: Newfoundland region, Maritimes region, and Laurentian region. If you like, there is another region that is somewhat on the east coast but largely centred around the Great Lakes and the Arctic operations, and that's called Central and Arctic region. On the Pacific coast there is one region called the Pacific region. That totals five. Earlier references to three on the east coast concerned the three first mentioned.

[Translation]

Ms. Suzanne Tremblay: You said Newfoundland, the Maritimes and the Arctic. In the East, it is Newfoundland, the Maritimes, the Arctic or the Laurentian Region. You mentioned, in third place, the Arctic.

[English]

Mr. Kevin Potter: Mr. Chairman, the third is the Laurentian region.

[Translation]

Ms. Suzanne Tremblay: The Laurentian region. Very well. What territory does this region encompass? Newfoundland is not in the Maritimes. Where does the Laurentian region begin and where does it end?

[English]

Mr. Kevin Potter : Mr. Chairman, the Newfoundland region largely covers the areas surrounding the island of Newfoundland and the coast of Labrador. Some of that is obviously in the Gulf of St. Lawrence region, which is shared with both the Maritimes and the Laurentian regions. The demarcation is a little bit more complex, and I think the department could probably better describe the exact manner in which they do demarcate by program. They do it in different ways, depending on the program. Ice breaking is somewhat different from the fisheries issue. I think the department might be able to better respond to that question.

The Chair: Just on that point, Madame Tremblay, we'll ask Alan to make note of it. Both DFO and the coast guard have a good map of the various regions, marked in colour so the regions are easy to visualize. We'll get a copy of that for committee members.

Mr. Stoffer, you can ask a very short question.

Mr. Peter Stoffer: Thank you, Mr. Chairman.

Earlier I asked you a question regarding the regional director having authority to reallocate funds. Yet on page 31-17 it says:

...we found that it was not possible to trace budgetary amounts transferred to regions to ensure that they were, in fact, spent on fleet activities. This was because the regional directors general and Coast Guard regional directors have authority to reallocate funds intended for the fleet to other regional priorities.

So one minute you said that it was okay for them to have that authority in order to do that for their priorities, yet at the same time you state as auditors that it's not possible to trace budgetary amounts transferred to the regions. Can you explain that?

Mr. Ron Thompson: Yes, I can. Mr. Chairman, through you to Mr. Stoffer, our comment in here—and I mentioned it a little earlier in talking about this issue—relates to the need to have good information flows. I guess obviously any organization is going to have to change priorities from time to time. We do it; any organization does. But when the priorities are changed and moneys that have been dedicated to, let's say, activity A are redeployed to activity B, there should be a very clear flow of information about that so that people who are trying to manage the fleet will know what they end up with in the way of resources and what they then are going to be accountable for.

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The problem here is there isn't a good flow of information that we can see. It makes the situation that comes up, maybe for very practical reasons, very difficult to manage.

The Chair: Thank you, Mr. Stoffer.

Last question, Dominic.

Mr. Dominic LeBlanc: Thank you, Mr. Chairman. I'll ask this to Mr. Thompson and his colleagues, and then perhaps to the departmental officials after.

Mr. Thompson, in your audit, did you look at in any detail the cost or the nature of some of the collective agreements that the coast guard may have with its personnel as being a factor that makes, perhaps, some of the cost-sharing, cost allocation, and efficiency issues problematic? Anecdotally, you hear stories that some of the collective agreements mean that it's in fact less easy to allocate certain coast guard resources than it would be if you hooked up a dinghy to the back of a Suburban and put it in the water at a wharf. That's an obvious statement, but did anybody look at the costs of some of these collective agreements or the flexibility of some of the collective agreements?

Mr. Ron Thompson: Well, Mr. LeBlanc, I could start off with a comment and then turn it over to my colleagues perhaps.

As to the issue we're raising in the chapter about the complex collective agreements, we've pointed out that it's really a statement of fact. We're not trying to be pejorative on that at all. We're just saying they are there; they are complex, and, given that that's so, there's a very careful bit of management that's needed within the department to manage the fleet given that they have these kinds of collective agreements. We didn't think the management was doing that particularly well given the complexity of the agreements.

Perhaps I might, Mr. Chairman, impose on Mr. O'Brien and Mr. Potter to add a little more to that.

Mr. John O'Brien: Maybe I could just follow up a little bit on that, Mr. Chairman.

Some of the issues that we've noted here are...collective agreements are negotiated. Those are the agreements that are in place. But the arrangements the department has in place at times to manage those agreements are somewhat cumbersome. If you look at, for example, the way that funds flow and that budgets are given, the operating assumption is that vessels operate on a cycle of ten, two, and one—ten working cycles, two cycles of downtime, one cycle of maintenance. If the vessel operates at any level that's higher than the budgeted ten operating cycles, it requires you to bring people back in and pay them overtime, naturally. The arrangement does not appear to allow sufficient flexibility to cover things like training, sick leave, and those types of things.

Part of this, we believe, is linked to the issue...is part of cost-reduction measures. The department got rid of the so-called replacement pools, casual workers that they could bring in to replace employees on an as-needed basis. What happens is that, by the elimination of the casual pool or the replacement pool, and by the restrictive funding that comes down, it can become very costly to operate a vessel for other than what is exactly planned and exactly funded.

What happens, of course, is that almost invariably you have to operate it more than exactly what is planned and exactly what is funded.

That becomes part of the issue there, and you can see what's happening. For example, we mentioned in our report that the liability that the department is incurring for overtime leave is growing at a fairly rapid rate. Well, that liability is growing because you're calling your employees back into work on their scheduled time off, either to sail or for training or for administrative matters. That is driving your costs up significantly. So it's not so much the collective agreements as such; it is the way the department is managing within the way those collective agreements are worded.

The Chair: Thank you.

I have just one point on that because it relates to an experience actually that Peter and I had in the Charlottetown Canadian Coast Guard two years ago. It was the end of the year. It was the last week in March, and there was not a lot going on in the shop. The reason there wasn't much going on in the shop was because it was the end of the year, and there was no money to get the material to do the boat repairs, etc. But the individuals there were complaining that, all right, in a couple of weeks' time, the money would come through. But, as a result, they were going to practically need these boats in the water. They were going to be forced to do overtime, which they didn't want to do. It could have been done in the slacker months, but they had to wait for the money to come through in order to do it. So there are going to be huge overtime costs because of the lack of expenditures, or the lack of money to expend at the end of the financial year.

• 1020

Do you find much of that? Is that prevalent throughout the system, or what? It may not even be managers' fault on the ground. It's just that the allocation isn't there at the end of the year for rollover.

Mr. Ron Thompson: Mr. Chairman, maybe I could have my colleague Mr. O'Brien respond to that. I could add a comment at the end of it, if you like.

Mr. John O'Brien: Mr. Chairman, what we found, again, is—looking strictly at the fleet, if that was the area you were looking on.... The issues we found are more or less the types of things I described. For example, you have to have certain employees on board the vessel in order for it to sail. Well, if an employee gets sick, you have to bring someone in to replace him or her. That employee is on their down cycle, so as soon as you bring that person back in, you're raising your costs quite significantly.

The other issue we observed is, I think, an issue that Mr. LeBlanc raised, which was that at certain times of the year the vessels are sitting at the wharf essentially because there's no money left in the fuel budget. You're incurring fairly significant costs because you have a high capital cost vessel, which costs quite a bit of money; you have employees, and, really, your savings are in the area of fuel. Again, it's the issue of, what are you really saving? You have to have the funding, which has to match the work that's being planned, basically.

The Chair: Thanks, Mr. O'Brien.

Mr. Stoffer, and then we're moving to DFO.

An hon. member: Keddy.

The Chair: You don't even look alike.

Mr. Gerald Keddy: I can't believe you'd say that.

The Chair: I'm sorry.

Mr. Peter Stoffer: That's all right.

Mr. Gerald Keddy: I'll try to be very, very quick.

There are quite a few comments made about the different background of coast guard and Fisheries and Oceans, and I think you said the coast guard was a more formal operation, more closely related or associated with the Department of National Defence, and you made the comparison to the U.S. Coast Guard. How many other countries in the world, that you're aware of at least, are headed in the direction that we've headed in Canada? The longest coastline of any country in the world, and we're moving towards almost...privatization is too strong, but certainly we've moved it towards a different type of authority and a slightly different mandate than coast guard appeared to have, or at least, I would think, had in the past, and with some cost recovery. How many other countries that you're aware of in the world are attempting to do that?

Mr. Ron Thompson: Mr. Chairman, through you to Mr. Keddy—

Mr. Gerald Keddy: That was short, now, Wayne.

Mr. Ron Thompson: It's a very good question, too. We were chatting about that just yesterday.

I don't know that myself, but maybe I could get my colleagues, Mr. Potter or Mr. O'Brien, to respond to that. I don't think there are very many, sir.

The Chair: Mr. Potter.

Mr. Kevin Potter: Mr. Chairman, we did not do a comparison with other jurisdictions, but I can relate some of the initial meetings we had with the Canadian Coast Guard. We were informed that this was a unique approach that they have undertaken. So I'm led to believe from that discussion that we are the sole model. We can refer that to the department to concur with that.

Mr. Gerald Keddy: Could you get back to us with some reassurance on that—if we are the sole model or if there are other countries that are...?

• 1025

Mr. Kevin Potter: I think, Mr. Chairman, that the department was who told us that they were the unique model, and probably it would be best for them to do that.

The Chair: We'll ask that of the department later.

Thank you then, gentlemen. I understand you will be around, so when we're dealing with DFO, we can also raise some questions with you.

We'll take a five-minute break and then come back—five minutes, though, not 15.

• 1026

• 1036

The Chair: Okay, let's get back to order.

I know John wants to get started. He's been waiting in anticipation all morning.

Peter, let's get at her.

We'll come to order. We have Mr. McCann, who has a few remarks to lead off with, I believe, and then we'll turn to questions.

Mr. McCann.

Mr. John McCann (Regional Director, Canadian Coast Guard, Maritimes Region, Department of Fisheries and Oceans): Thank you, Mr. Chairman. To preface my opening remarks, let me state that I'm not a lawyer, nor am I a chartered accountant, but I am a master mariner by profession—there may be a danger in that too.

Thank you for inviting me to appear before you. It is always a pleasure to meet with our elected representatives and share with the people of Canada our pride in the Canadian Coast Guard. If I may, Mr. Chairman, I would like to start by giving the committee members an overview of the coast guard, focusing particularly on its people, its priorities, and its long-term vision.

The Canadian Coast Guard is a proud and valued national institution comprising some 3,500 employees and supported by more than 5,000 auxiliary volunteers who together save lives and help protect the world's longest coastline. We are a proud team of highly trained and dedicated professionals. Although the title “Canadian Coast Guard” was introduced in 1962, it is interesting to note that some of the services we provide have been around since well before the days of Confederation.

Although the scope and the nature of those services may have changed in the intervening years by way of new technologies and new ways of doing business, this change has not altered our core mission. You only need to look out to the Halifax harbour and all along the coast of this beautiful sea-bound province. You will see the lighthouses on their promontories, buoy tenders marking hazards for others to avoid, and the ice breakers leading trade to Canada's ports through all four seasons. You will see a range of safety and rescue systems that provide the basis for the shore movement of traffic, the protection of lives, the health of our oceans, and the conservation protection of our marine resources.

At the dawn of this new millennium, our dedicated people continue to serve in the quiet tradition of their predecessors. They stand at the ready 24 hours a day, 365 days a year, serving Canadians and those mariners transiting our waters as we live by and are guided by our cherished motto, “Safety First, Service Always”.

I won't recount here today the various changes the organization has been through since Confederation, but as I'm sure you can appreciate, we have had many successes, and, like any longstanding institution, we have weathered some lean years as well.

Our history has not been without its share of challenges. These last few years have been years of change and challenge and of opportunity as well. Since 1995, we have returned to the Department of Fisheries and Oceans, realized a merger of Canada's two civilian fleets, survived harsh program review cuts, introduced cost recovery for commercial clients, and rationalized properties and services. These changes have affected us all—the Canadian Coast Guard, its clients, and our communities alike, in one way or another.

• 1040

In Atlantic Canada we are still adjusting and making changes. In this region, Mr. Larry Wilson, the incumbent regional director of the coast guard, has undertaken a renewal exercise called the Ledgehill project. During that period, Mr. Wilson gathered with him a number of people—his middle managers, union members. They sat down and looked at what the priorities were for the regions, how we could reallocate and renew resources to have them more focused on the needs of this region. This produced the Ledgehill document, which has been translated now into a 14-point plan to restore financial stability to this region.

Having acknowledged our past, I would like to turn to our future—one that I'm confident is bright and clear. The Commissioner of the Coast Guard, John Adams, recently convened all senior managers for a futures conference in Aylmer, Quebec. All regions and headquarters were involved in exploring what the coast guard would look like as a national institution in 2015. I can tell you today that it looks good.

While the discussions at the conference were far ranging, one important thing remained consistent: our mission will not change. We will still be here in 2015 to provide safe, efficient, and environmentally sound marine services, responsive to the needs of Canadians in a global economy; to facilitate marine trade and commerce; and to facilitate the use of our waterways for shipping, recreation, and fishing.

Focusing on our mission, truly recognizing it as both our future direction and destination, allowed us to recognize some of the emerging themes. First, leading in marine safety environmental protection is an enduring vision for the coast guard. The role will guide us for years and years to come.

The second theme that emerged as very important for us is that the coast guard will proceed to the new future as a balanced team of marine programs, fleet and technical support expertise. Simply said, we are, and will be, more than the sum of our parts.

Third, the coast guard will continue to play important and increasing roles in all aspects of policy development and standards setting, as well as management of information and knowledge for marine safety.

Finally, the coast guard's government civilian fleet, a proud and enduring symbol of Canada's identity as a major maritime nation, remains a cornerstone of this national institution that will continue to deliver a broad range of services to Canadians and to others who ply our waters.

I believe it is an important and clear vision, both a very strong identity and role for the Canadian Coast Guard.

To get there—to move from 2001 to 2015—we have developed and put in place a modernization plan. The plan is made of four equally important and interrelated planks. They are each vital to achieving our vision. The plan is crucial for ameliorating the problems of the present and finding the financial stability necessary to restore the health of the organization.

I would like to briefly describe to you each of the four planks of our modernization plan.

In no particular order, the first plank of the plan is integrated technical support service. It is our plan—and we are working on it now—to adopt as quickly as possibly modern technical asset management practices. We are introducing life cycle materiel management; technical business management; standardized methodologies for project, quality, and risk management; and lastly, ensuring a focus on knowledge management, which is core to the success of this strategy. A team of officials is working on a strategy at the headquarters; each region is fully involved in this initiative.

The second of the planks is known as aids modernization—vision 2001. Here, headquarters' staff are working with all regions to make sure that the coast guard has the right modern mix of electronic and conventional aids to navigation that meet established user needs; we are improving efficiency and modifying management practices. To do this right, we will consult fully and in meaningful ways with the end users—the clients, the communities, and those who rely on our services.

The third element of the plan is affectionately nicknamed “e-nav”, for electronic navigation. To develop and advance the strategy, we are aggressively investigating how the Internet, Intranet, or similar data utility can be used by our clients and the public to receive all business, administrative, regulatory, and safety management information required for their safe and environmentally sound sailing in our waters.

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More simply said, how can we use this “e-network” to get the right information to the right people at the right time?

One element of this is our work with our partners in the Canadian Hydrographic Service, Transport Canada, and the marine industry to provide the leadership necessary in both the development and implementation of electronic chart display systems aboard ships, as well as the development of the new marine information highway.

The fourth plank, fleet management improvement initiative, is a particularly interesting item for all my colleagues from the Auditor General's office, as they alluded to earlier today. As they will tell you, coast guard has some fleet management weaknesses.

As you already know, the Auditor General's annual report addressed coast guard fleet management. While the report was critical of the way we have been managing the fleet, its findings were not really a surprise to us. In fact, it served to validate our own findings from recent internal audits and, moreover, confirmed that our strategic directions are on track.

The Auditor General's report was important to the department. As the minister summarized in his response, Fisheries and Oceans accepted the Auditor General's findings and committed itself to finding solutions to the fleet's shortcomings. Towards this end, the Commissioner of the Coast Guard is seeking insight and recommendations on a number of issues considered as impediments to the effective management of this significant departmental asset. He has established a key project team devoted to building an effective plan to address the individual issues raised and to develop options for their resolution. A steering committee with members from Industry and Transport Canada has been put in place to assist in the direction of this study.

The study will cover such things as operational and service requirements; the types and levels of service; the mix and location of vessels; capital acquisition and funding strategies; crewing and shore support arrangements; and lastly, roles, responsibilities, relationships, and protocols for headquarters and regional staff.

Following completion of the study, its findings and recommendations will be reviewed and an action plan—with concrete timelines and accountabilities—will be developed to address the issues. Finally, the team will develop a longer-term vision for the fleet, and as part of that will build a fleet strategic plan. These elements of fleet improvements are the cornerstones of CCG modernization.

As the coast guard continues to adapt and modernize, we believe we will be able to address the concerns raised by the Auditor General in a meaningful way.

All of this—the CCG modernization plan—is about setting out a balanced program of planning, systems development, management practices, and organizational refinement, and seeking understanding and acceptance of a new and shared fleet management philosophy.

I should add that these improvements need to be put in some context. I should be clear that we are building on the excellent plans and initiatives that have already been started—such as establishing a base fleet, implementing an international safety management code, and developing much needed information systems.

Simply put, we are seeking and adopting more modern ways of doing our jobs. We are harnessing technological opportunities to provide efficient and affordable services that are relevant and timely to our users' needs.

We're also working to ensure that modern policies and mechanisms are in place to manage the gap between resources available, resources required, and results desired. These initiatives are seen as real opportunities—opportunities to continue to improve the coast guard—for all of us and for those we serve.

I think that focusing on our future by agreeing on our destination means we can set a sure course to getting there. Our future looks bright.

That, ladies and gentlemen, ends the overview portion of my presentation. Before we move on, I would ask the chairman if he might give us the opportunity to address a couple of questions that had arisen earlier in deliberations with my colleague, Mr. Chamut.

I am speaking of those questions members had that relate specifically to coast guard support of other programs in the department, particularly in the area of conservation enforcement. I realize the department has provided a written response, but if you don't mind, I'd like to take a few minutes of your time to elaborate on how the department manages costs related to the fleet.

Whereas we tend to think of it when speaking in budgetary terms how we manage this common platform for service delivery.... As parliamentarians, I realize you are no strangers to the budgetary process, its cycle, or its fundamental philosophy. Recognizing that I'd be preaching to the converted—and I'd likely make the accountant somewhat nervous with my seafaring perspective on this process—I'll skip immediately to the crux of the matter.

• 1050

As to the way the coast guard manages its programs, within the coast guard itself there are marine programs, and within the department there are a couple of other programs called science and C and P. In addition, as a common service provider, we also look at the other government departments, non-government departments, and the other users that may have a requirement for our platforms.

The fleet itself is managed through that program funding. So if a program has a requirement for the vessel and is looking to fund that vessel, that's when we start the negotiation process. They let us know how much they have and what they need, and we see if we can do it, if we have the right resources available at the right time, and from that we agree upon the number of sea days you'll get for the price you have.

In the case of C and P, also being a departmental program, that's how we manage, that same way. They indicate what their services are, what their needs are, what they're going to be doing, and as the experts in that service provider area, we indicate to them what we can provide and how much that costing will be. Hopefully we negotiate an opportunity.

I also understand you want to know how fleet support between regions is managed in coast guard. Coast guard vessel support for the gulf region, as has always been the case, is provided primarily by the Maritimes region as required. However, support is available from the Laurentian and Newfoundland region as well. This approach recognizes that fleet operations do not have borders and efficiencies can be achieved by managing limited resources on a zonal basis. It is this approach that is being applied with respect to gulf region support.

It is noteworthy that the recent AG's report expressed concerns that current levels of shore support may be excessive for the current coast guard fleet. This matter, among others, will be addressed in the coming months by the fleet management renewal initiative that I spoke about briefly. Accordingly, coast guard vessel support for the gulf region will be one issue considered in the course of this review.

Thank you for your time and this opportunity to address you regarding the subject dear to my heart. Should members like, I would be pleased to elaborate on any of these issues, Mr. Chairman.

The Chair: Thank you, Mr. McCann, and with you is Gary Walsh, who is the planning officer.

We go to Mr. Lunney first.

Mr. James Lunney: Thank you, Mr. Chairman. Thank you very much, gentlemen, for appearing today, and Mr. McCann for your report.

Picking up here, we look back at the coast guard year. In your introductory remarks you talked about the review of some of the main functions, the lighthouses, the buoys, ice breakers, work in the range of safety and rescue systems, monitoring the movement of traffic, protecting lives. I think we all recognize the importance of the work the coast guard does for our country. I think you mentioned that it's a proud service, and the men and women who serve in this capacity are rightly proud of the service they provide. I certainly know from speaking to them on the west coast that the men and women who serve us there as well are very proud of the work they do. They've struggled through these years of reorganization since 1995, a very difficult time in transition and organization, as we've discussed in light of the Auditor General's remarks.

Looking at your strategic plan here and this “futures conference” that was just held in Aylmer, I see you've addressed a lot of the concerns, at least in respect of planning. We are very pleased to see it's progressing that way.

The first question I have, and I think it is a very important one, is, when do you see some of these changes being addressed in the strategic plan? Is this 2001 or 2015? When are we going to see some action on some of these things? Are there some targets?

Mr. John McCann: Yes. The fleet management renewal initiative has a timeline of 18 months. So that means the steering committee, which is being led by the associate deputy minister—it's a department steering committee—and the actual project manager, Mr. Bill Doering, and his team have an 18-month timeline to look at the AG's report, the Sussex Circle report, and to come up with some recommendations to the deputy minister and the management committee as to the future of the fleet management perspectives.

Mr. James Lunney: Thank you.

My first concern, of course, is that we hear here about a high level of frustration currently, especially in relation to vessel allocation and different requirements of taskings for vessels and for the supervisors. We're looking at 18 months to assess it, and then we'll try to implement things. Are we looking years down the line before we see changes? Is there something being done currently to try to address some of those concerns?

• 1055

Mr. John McCann: Yes, we have already introduced some changes.

Effective April 1, 2000, we moved to what we call “base fleet”. That was looking at the mix of vessels, program demands, and available funding for 2000 and 2001, and it was about a six-month process. At the end of that we introduced what we call base fleet, again, April 1, 2000. We're operating within that now.

So we have in this region nine major ships that we're operating, with a mixture of light boats and other small vessels, in support of program needs. That's basically funded out of the notionals now, so we're living within our budget somewhat right now, exclusive of maybe some inflationary factors, such as fuel increases.

We also moved to introduce, as agreed earlier, fleet management practices such as ten, two, and one, which the AG's representatives mentioned earlier. So we are into a ten, two, and one, which allows us to manage our salary dollars a little more effectively.

We're also moving to a safety management system called ISM, which is due for full implementation in July 2002.

Mr. James Lunney: With regard to your ten, two, and one program, a concern was expressed that if somebody is sick and you have to bring someone in on their overtime shifts and so on, is there some consideration being given to how you meet the staffing needs, to keep costs more manageable in that regard?

Mr. John McCann: Through the fleet management initiative, they're looking at all these aspects, they're looking at the collective agreements, they're looking at best practices. Obviously, we need to create a national HR strategy for the fleet. And there may be some recommendations out of that to lead us in a direction that will better address these.

As the AG's representatives mentioned earlier, we used to have a relief pool. That relief pool, through program review, was eliminated, and so we operate within the margins. We have a budget and that's how we operate, and we squeeze the most out of that. It doesn't allow us much flexibility when people do get sick or have other personal requirements that keep them ashore for a period of time. That's the balance we need, and when we can't fully crew our vessels with these people, we have to backfill with somebody. So we either hire casuals, terms, somebody from the union halls—in some cases we had to call back people who had retired, because they had the proper certification experience we needed for a short period of time.

All these things we're doing right now to try to make sure we get those ships to sea.

Mr. James Lunney: Did I hear you say you had a reserve crew there, perhaps the retired people, or something, that you could call upon to meet that need?

Mr. John McCann: No. The Canadian Coast Guard does not have a coast guard reserve. Some coast guards do, the U.S. Coast Guard in particular. But we used to have a relief pool. If you had 500 berths available, the total pool might be 550. So when you took people off the ship to put them on training development, to go on leave, or they were sick, or whatever, we had a pool, in this example, of maybe 50 people we could draw from to make sure the ships were fully crewed with the experience we need.

Mr. James Lunney: Is there some movement now to reactivate that kind of pool, or do you just draw from retired people and so on?

Mr. John McCann: We don't want to rely on our retired people, for obvious reasons—they're retired. But out of desperation, for a short period, maybe one or two weeks, with a critical shortage of the certificate primarily, or experience, to keep the ship operational, we have called some people back. But it's not an exercise we want to continue with. Through the national HR strategy I expect they'll be looking at whether a relief pool is the way to go again in the future. So I think all those elements will be looked at, but I don't want to presume that at this point.

Mr. James Lunney: I see.

I have one last question this round, to address the issue that came up earlier, enforcement for the fisheries component of duties, sending a red and white out to check on poachers, and so on. Is there some consideration of going back towards a more practical stealth mode, perhaps, of approaching poachers, rather than sending out a red and white that can be seen from a mile away?

Mr. John McCann: Not at this time, no.

The Chair: Thank you, Mr. Lunney.

Madame Tremblay.

• 1100

[Translation]

Ms. Suzanne Tremblay: Thank you, Mr. Chairman.

I would like to follow up on a question the Chairman asked earlier.

During the months of January, February and March, your vessels are not going out to sea because it is covered with ice. There are icebreakers out there but the other ships stay in. So if there is work to be done, like repainting and things of that nature, but no money left, you have to wait until April for new funding which means that you have people then working overtime.

If you tried to negotiate a multi-year budget with the government, don't you think this would enable you to make better use of the taxpayers' money, to better organize your fleet, to provide a better service and to avoid overtime costs, etc. Would this not allow you to better serve the interests of your “business”, as well as the Canadian taxpayers?

[English]

Mr. John McCann: I think the AG's report has alluded to the fact that because our budgets are annually based at coast guard, as fleet managers we can't do long-term planning for more than one year when we're talking about real money. We do do long-term planning when it comes to capital refits. This means we're going to take the ship and spend a significant amount of money on it to extend its life or make major changes to the ship. Also, within that ten, two, and one management philosophy we talked about, one cycle is used for refit, or maintenance or dry docking, whatever is required.

[Translation]

Ms. Suzanne Tremblay: Excuse me, but I could not hear the translation at the beginning.

[English]

The Chair: Can you run that by us again, John? The translation didn't come through.

Mr. John McCann: Certainly.

Again, we're alluding to the long-term planning for the vessels and whether we can better utilize our resources if we're planning over a three-year period per se. I think that's what you were alluding to. Again, the AG's report alluded to the fact that as a coast guard, as a government department, we operate on annual allocations, and as such when we're talking about real dollars, that's how we have to live within our budgets. We do try to do long-term planning when it comes to significant refits or maintenance of the ships where we have to spend a lot of capital money that is outside the annual budgetary purview.

We also do planning for minor capital. Say over a period of time we want to improve the technical resources, or upgrade the electronics on board a vessel, we do that long-term planning in three-, four-, or five-year horizons. We have a five-year electronics plan for our ships, for example—as new technologies evolve this is what we want to invest in. But when it comes to overtime, salary dollars, and those things, we have to live within an annual allocation of budgets and we don't have any provisions for carrying over significant dollars in that. So we can't, on the real money part, do the long-term planning.

The Chair: Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay: Do I understand that you would like to have multi-year budgets to better manage the fleet? Would this help you to improve fleet management?

[English]

Mr. John McCann: Yes. We are as a department moving in that direction. The department is undertaking multi-year business planning now, and through that multi-year business planning they're looking at three- to five-year horizons. And it's anticipated that through this process the long-term program needs for fleet support would be identified, so that as fleet managers we can then project that these are the three- and five-year needs for the fleet.

I think it would be a significant and a positive move forward to be able to do that, because once the program commits to the requirements to have that vessel for the next three to five years based on their business planning, then it makes our life easier to be able to plan in parallel with that based on our needs.

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The Chair: Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay: I asked a question earlier and I would like to return to it, even though you promised me a map. Could you explain to me the three regions in the Eastern part of the country, please?

[English]

Mr. John McCann: Certainly.

The three east coast regions are made up of, one, the Maritimes region, and that's the region you're visiting today. The Maritimes region is primarily made up of, for the coast guard, the three maritime provinces, that being New Brunswick, Nova Scotia, and Prince Edward Island. Again, that's for the coast guard sector. There are some departmental nuances in that that make them a little bit different from regional boundaries. The Newfoundland region is made up of Newfoundland and Labrador, in that zone. And the Laurentian region is made up of the province of Quebec, the St. Lawrence River, and the approaches to the St. Lawrence River.

[Translation]

Ms. Suzanne Tremblay: Meaning the gulf, the estuary? Does it mean that the Laurentian region covers the river, the estuary and the gulf?

[English]

Mr. John McCann: Yes. Not to complicate this too much, but there are operational considerations in there. For example, the Laurentian region manages the main shipping corridor of the Gulf of St. Lawrence for ice breaking. So from the Cabot Strait up into the St. Lawrence River we have an agreement between Newfoundland, Maritimes region, and Laurentian that they would manage the main shipping corridor. So all ships coming into and out of the Gulf of St. Lawrence will be cleared through Laurentian region, and if ice breaking assistance is required it will be tasked by that region.

In the case of the Magdalen Islands, for example, because of its close proximity to Prince Edward Island, the Maritimes region does the aids to navigation for the Magdalen Islands on a service level agreement with Laurentian region. But, conceptually, if you looked at a map, as you alluded to earlier, you would see the regions with boundaries, but when it comes to coast guard services and provision of services, especially with mobile assets such as ships and helicopters, there are just boundaries on a map at this point and we go where the operational priorities require us to go.

The Chair: Thank you.

Go ahead, Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay: Thank you.

Yesterday I met a researcher who told me that his work plan for the coming year has not yet been finalized because there are still question marks about the budget allocations of the Coast Guard. Is it possible that in mid-May the Coast Guard would still be waiting for confirmation of its funding level and not be in a position to tell scientists whether funds will be available or not?

[English]

Mr. John McCann: The budgetary process for the Canadian Coast Guard is obviously a departmental process, and as such I think we've seen marked progress and some headway in this area. As a coast guard service provider, I'm better able now to plan my activities because we are getting our notional budget—that's the paper budget—much earlier now. We actually got it in before the beginning of the fiscal year. So conceptually we're able to understand how much money we would have to operate the fleet, for example, for this year. And in terms of the coast guard fleet for the Maritimes region, it's been fully funded based on our requirements.

But when you talk about the translation of real dollars, it takes a little bit longer because there are some...obviously it's allocated from the deputy and through the ADMs, and as such by the time it gets down to us it probably is a little bit into the fiscal year. But in terms of the notional budgets, we know in advance now what we have to operate with. If there are problems, it gives us an opportunity now to identify what the problem areas are. I think we went through that exercise this year and were very successful in dealing with perceived shortfalls at the beginning of the year and having that resolved in a timely manner so that we could continue to operate.

I'd like to qualify this by saying that when you're talking about fleet management, and you alluded to the high fixed cost of the fleet, it's not an asset where on April 1 you can turn a tap on or off. Our collective agreements mean you have to give long-term notices to employees if you're going to change their schedules or if their work is going to be impacted to a point where it may be a workforce adjustment.

• 1110

It's very onerous and time consuming. Once you start on April 1, you pretty well have to know what you've got to operate to get through that year, because it's very difficult to make adjustments because of collective agreements and workforce adjustment policies and those things, especially for the fleet.

I think we have moved progressively in that area in terms of the notionals, the business planning of the department. It gives me as a service provide a better opportunity now to know what I have to work with from a macro level. But when the real money comes into the region, then again, that's where priorities and demands have to be resolved through the regional management committee, which I think in this region works fairly well.

The Chair: Thank you, Madame Tremblay.

Mr. McCann, you said something about what happens before the real dollars get down to you. Do you have any idea how many levels of management this has to go through before the money gets to the people who actually do the work?

Mr. John McCann: It would come from the deputy. In our case it would go to the RDGs. In headquarters it would go to ADMs. Then it's a regional allocation from the regional director general, through finance and administration, to us. It's a much more streamlined process now than it was years ago.

The Chair: God, I wouldn't want to have seen it before it was streamlined.

Mr. John McCann: Before we had to go through the Commissioner of the Coast Guard and reallocation.

These are all positive steps, from a service provider's perspective.

The Chair: Thanks.

Mr. Assadourian.

Mr. Sarkis Assadourian: Thank you very much.

I'll go back to the two questions I earlier. To refresh your memory, you responded to one of them already. This was about these huge red and white vessels used for a small case. The other one is we were told a month ago that you ordered SUVs, which are fancy and expensive—I'm just rephrasing what we were told by a witness—to do work that can be done by a regular car, and then at the end of the day they would claim there was no gas, that they had to provide the gas for your department so you could do the job. That was my first question. Is this accurate or not?

The second question is on the point Mr. Thompson made on the impact of those shortfalls on native and non-native fishers. Perhaps you can give us some feeling about that.

May I also add one question on number 6. It says, “the fleet consisted of 144 vessels on March 31 2000”. You only operated 122. So you're short 12. Can you give us the reason why the 12 were not operated? Is that a normal percentage of mechanically faulty vessels? Or is there some other reason for it?

Mr. John McCann: Sure.

To address your first question, if I understand it correctly, when you're talking about enforcement, the Canadian Coast Guard in itself is not an enforcement agency. Our role is to support the enforcement agencies, whether it's our departmental enforcement people who are named as fisheries officers under the Fisheries Act and are then given some police powers, or perhaps when you're talking about drug interdiction, where we may carry RCMP on board who are, under the Criminal Code, able to do the interdictions. So in terms of our enforcement role, we are not the actual enforcers. We're the facilitators for the people to get out on the water to do those interdictions.

In the case of C and P, conservation and protection, again as a program, and within their right to do so as an autonomous part of the organization, they can look at what their program demands are and how they want to ensure there's enforcement taking place, either on the shoreline or at sea. So this is a philosophical discussion that they have to have at the regional level as well as with their ADMs and headquarters staff.

Once they've come to some conclusions as to how they want to deliver that service, it could be either through the Canadian Coast Guard or some other alternative service delivery.

As part of the Canadian Coast Guard we've identified three main core activities for ourselves: Arctic ice breaking, search and rescue, and conservation and protection interdiction. So one core activity is the interdiction part. The reason for this is it's thought that if you're going to ensure the federal laws of the Government of Canada are being applied, it would be better to apply them with something that is owned by the federal government, such as a red and white.

There are two mixes of boats you're talking about here. The programs themselves, as one of their service delivery methods, decided in some cases that they didn't want crude vessels, such as coast guard vessels, to be doing that enforcement role. As such, they invested in small, fast Rosborough craft, rigid-hull inflatables that get them out on the water very, very quickly. They're very fast, and they can cover a lot of territory in a short period of time. As well, due to their size, those who operate those vessels don't require certification in terms of Transport Canada. It allows them a little bit of flexibility.

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In the last year, however, we've found that once they get on the water, especially if they have to remove, say, 1,000 lobster pots, those vessels are not equipped to do it, and neither do they have the infrastructure in place to do it. Therefore, they come back to the coast guard and ask for assistance and support. If you're doing a sweep where you have to get in and out very quickly, and you want to remove as many of those traps as quickly as possible, our vessel could typically carry 80 to 100 traps at a time, and go in and out very quickly. But then you're getting into the size of vessels, where you need people who are certified. In some cases they may have to be marine fisheries officers.

So that's a view of enforcement and of why the different ships. It's really the programs that define the need, and then we negotiate with them on whether we could provide that service based on the available resources they have and the available resources we have to be able to do that.

In terms of the SUVs, I don't think I can respond to that. I'm not fully cognizant of what that is. If C and P is buying sport-utility vehicles to support the programs, it's not for us in the coast guard to look at that. But I'm not sure whether or not you were speaking about a coast guard vehicle or the difference between an SUV and a car. I can't make the determination as to whether that's a good, appropriate use of resources.

Mr. Sarkis Assadourian: And my other question?

Mr. John McCann: In terms of program review and adjustments to service delivery, when they combined the two civilian fleets—for example, the Canadian Coast Guard fleet and the former DFO fleet—into one fleet, there was a surplus of hulls. We had looked at multi-tasking these vessels. Instead of having two or three vessels that were completely dedicated to a program, we looked at the opportunities for multi-tasking and the efficiencies in that. This was the genesis, essentially, of the whole merger between the two civilian fleets at the beginning.

At that time, the former Commissioner of the Coast Guard, John Thomas, was looking at an SOA as an alternative service delivery for the coast guard, and it was ruled out. The decision at that time was to merge coast guard with DFO and combine the two civilian fleets.

When we merged the two civilian fleets, you had a lot of assets in the water at the time, but through efficiencies and economies of scale we were able to reduce our reliance on all those vessels. As such, we had to make those adjustments. Again, it takes a long time to acquire a vessel and it takes a fair bit of time to surplus a vessel within the government. So we still had some vessels in reserve, or in lay-up, as one element. The other element was that there were still adjustments being made within the programs in program delivery.

That's a national overview of why we had so many additional vessels in the system and why we couldn't get them out of the system as quickly as we would have liked to. Even today, I don't think we're up to 144, but we still have some vessels that are.... For example, in this region, the Parizeau was deemed not required for operations and is in lay-up now. We are doing a review as to what our long-term requirements are.

As I mentioned earlier, this region went through base fleet in April 2000. Nationally, every region went through base fleet. When you looked at the envelope, the money you had, and the mix of vessels you had, there was another adjustment made there. When we got into base fleet there was also that adjustment in terms of the merger of the two fleets and less program demand for some specific vessels. It's an eclectic range of vessels we're talking about here, large vessels to small vessels.

The Chair: Mr. Assadourian, last question.

Mr. Sarkis Assadourian: There's also the point I made with regard to the impact of Mr. Thompson's presentation on the issue of Métis and non-Métis fishers. Do you see any impact there?

Mr. John McCann: It hasn't had a direct impact on the coast guard. Again, we're a common service provider, so when you're looking at enforcement, it's the conservation and protection people who are on the water doing the enforcement action. As the coast guard, we basically support from the background, if I could call it that.

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One of the critical elements for the coast guard in the last year or so has been the second version of the Canada Labour Code, which clearly states in terms of due diligence that if we don't train our coast guard people as enforcement officers, we can't put them into high-risk situations. That doesn't allow the coast guard to get on the water to do that direct interdiction with natives and non-natives in terms of the fisheries. That precludes us from being in those types of high-risk situations. We're a service provider and a facilitator. It allows us to be seen as members of the enforcement group.

Mr. Sarkis Assadourian: Last year I saw on TV the situation in Burnt Church when the natives were going around and then a boat would come around. Was that a coast guard boat? What was it?

Mr. John McCann: Those are the smaller vessels I alluded to earlier. They're fast. They're crewed by conservation and protection officers, who are trained enforcement officers and who have police officer authorities under the Fisheries Act. So they're able to get in there and do the interdiction. They have the legal right to ensure that the Fisheries Act is being complied with.

You may have seen in the background some smaller coast guard vessels. They were only going in there to pick up the traps once the area was deemed to be safe.

I must point out that prior to the merger, DFO had what they called marine fisheries officers. They were actually small boat operators who were trained as marine fisheries officers. The coast guard has not continued that practice, but we still have some of those officers. They've been trained, and they are now coast guard officers. They're considered to be marine fisheries officers, and they carry a handgun. But they wear a blue uniform. We're able to put those people on a boat and allow them to get in there and support the RCMP in those close tactical areas, such as Burnt Church. But the coast guard philosophy is that we're not involved in any enforcement role. We're there to support the enforcement agencies.

The Chair: Thank you, Mr. Assadourian.

Mr. Stoffer.

Mr. Peter Stoffer: Thank you, Mr. Chairman, and thank you, gentlemen.

First of all, many groups who wish to have access to the lighthouses are very concerned about the environmental contamination of them. What is the coast guard or DFO doing in order to clean up those sites? Indeed, are they doing that?

Mr. John McCann: Yes, we are doing it. There is a rigorous regime for doing that. Obviously, there are federal regulations that talk about the maintenance and disposal of the sites. We cannot dispose of government-owned facilities or holdings unless an environmental assessment is done. Either you restore it to its pristine nature or as close to it as you can and still be within the environmental guidelines or, as part of the divestiture, you point out to the people who want to take over that facility that there are these potential environmental hazards and as such they're taking on the liability for these things.

Mr. Peter Stoffer: Do you have the resources to clean up those sites?

Mr. John McCann: Again, just another nuance and not to complicate things too much, Mr. Stoffer, for many years the Canadian Coast Guard was not just a service provider but was also a landlord. As such we owned the properties, and we had people who looked after them and things like that.

Under the new regime we have what we call the real properties and asset management section. They are now the custodians of these properties. As a user of that service, we identify what properties or holdings we may be looking at divesting. We look at them as being the custodians who are able to dispose of that property according to federal rules and regulations. So I think you would have to ask the corporate services people if they have the appropriate resources to do that.

Mr. Peter Stoffer: Paragraph 31 of the Auditor General's report is on fleet management. In your report you say there are 3,500 employees. That is not all that big compared with government departments such as Revenue Canada or Transport. When you look at that, you would think that if an employee of the coast guard wanted to speak to, say, the regional director, it wouldn't be all that difficult to get something passed up the chain. But I couldn't help but notice in your reorganization that if a navigational aid worker wanted to address something, he'd go to a supervisor. The supervisor would go to the facility superintendent—or supervisor—and then to the director of marine programs, and then to the regional director, and then to the regional director general in that regard. That's a huge.... You're just strung on a bunch of ladders in order to get something done.

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Has there been anything to address...? The reason I say this is the airline SAS years ago was in serious trouble. The new owner and manager of the SAS went down to the employees and asked “How quickly does it take for you to send me one of your ideas?” They said “Well, we send them, but we never hear back from you.” So he completely reorganized everything and it was a huge success. If an employee at the front line came up with an idea, the top boss would know about it fairly quickly.

Is there anything to reorganize the flow of information? It seems that you're very top heavy in the middle in top managers in this reorganized DFO coast guard.

Mr. John McCann: Mr. Chairman, there are a couple of things. As part of the renewal of DFO proper in strategic planning, as well as the public service employee survey that was done a little over a year and a half ago, the department, through the deputy, has undertaken a number of initiatives. One of them was called the internal communications initiative. That was to look at those types of things that you brought up, as well as others, and how we can improve the flow of relevant information, and also improve the quality of that information and the quality of the dialogue for the employees.

The deputy has put in place a regime to make people more accountable for ensuring that this information flows and that there's greater exposure by senior management to the front-line people. There are many examples of that. Starting at the top, the ADMs now are clustered on the 13th or 14th floor of 200 Kent, for example, in headquarters. All the ADMs now are housed with their respective sectors. In our case, the commissioner now is on the seventh floor of the building, with the coast guard people, as an example.

The deputy has also made it mandatory that all executives now will have an accountability accord—clearly how they're going to improve internal communications within their area of responsibility. On top of that, we're also taking advantage of leveraging technologies especially within the fleet. It's obviously a challenge, because these ships are mobile and operate in remote areas. So we're actually looking at how to increase the flow of information to our employees and the backflow of that information up the line.

I understand the organizational structure you've mentioned. Every organization has a structure that tells you what the skeleton looks like. My sense, especially in the job I'm in right now, as acting RD of coast guard, is that I don't see any bottlenecks in terms of information, especially with e-mail today. I get on average dozens of e-mails from employees voicing their concerns or ideas, or expressing whatever they want to in this day and age without any retribution whatsoever. The question of relevant and quality of information I think may be the important feature.

Again, we are investing a lot of money into middle management training. We have three levels of middle managers now—one, two, and three—where there's an increasing level of responsibilities. Helping our middle managers, our front-line supervisors, deal with their employees one on one...early conflict resolution. So there are a number of initiatives going on with the department to try to instil that.

In terms of best practices, I think I alluded earlier to the fact that Mr. Larry Wilson, who is the incumbent regional director of coast guard, did have the meeting where he brought in the unions, different members of the organization, as well as directors, to look at the areas where they could best build on in the future, which established the 14-point plan to restore financial stability. I also know that Mr. Larry Wilson spends a lot of time at staff meetings in St. John's, Charlottetown, and Dartmouth basin, in terms of exposure and trying to solicit feedback.

There are a number of initiatives going on now being led by the regional director general, Mr. Neil Bellefontaine, in terms of health and wellness of the organization. They're looking at mapping processes where they bring in employees who actually do the job and allow them to do the process mapping of say staffing, for example. They ask these employees, how can we streamline that or improve the flow? So they're actually bringing front-line information in and allowing them to process it out. It's really taking ownership themselves of improving the systems and making recommendations where we can improve. Again, that's being led by the....

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The Chair: Thank you, Mr. McCann. We'll turn to Mr. LeBlanc.

Mr. Dominic LeBlanc: Thank you, Mr. Chairman.

Thank you, Mr. McCann. Your presentation was interesting. I'm learning about the coast guard organization. It was an interesting presentation and I thank you.

I'd like to pursue an issue that is of considerable importance to my constituents and to those of the chairman as well. It's the issue of coast guard services in the gulf region. I know the minister made a decision with respect to, I believe, three vessels that had been based in the gulf—midshore vessels. That was announced a month or a month and a half ago. Operationally what does that mean for you? When the minister makes a decision that these vessels are based in the gulf, as I understood the decision, what does that mean to fishermen in my riding or in the chairman's riding?

Mr. John McCann: To put it into context, there are other vessels that are in the gulf region for coast guard programs and activities as well as departmental programs and activities. These are our search and rescue vessels.

The three vessels that were put into the gulf are in support of the aboriginal fisheries and to ensure there was an orderly fisheries this year. What this means to us is, again, conservation and protection in the gulf region. And we've met with them a number of times. I was out there in January and met with them so that they could articulate to us what their requirements and their needs were. In the case of Marshall, funding was not necessarily the priority of the day at that time. We asked, what are your demands? What are your requirements? Are we in the best position to service all those demands? In this case, with those three vessels, yes, we were.

But keep in mind that those three vessels were surplus to operational requirements. They were basically surplus vessels. Again, it goes back to the AG's report in terms of how we manage our human resources, for example. These vessels have been in and out for the last three or four years. They're in, they're out, and they're funded from this perspective, from that perspective. Meanwhile we keep these crews on pins and needles as to whether they're going to be around next year.

In the case of these three vessels, that's been the case for the last two years. And we've been very fortunate to have highly trained individuals who are former Fisheries and Oceans marine fisheries officers, who are able to carry weapons and are trained to enforce the act, available to be put on these vessels to be put in those high-risk situations. But this is not a program we're investing in and continuing. So as these people get older and leave the department, we're not backfilling with certified mariners who are fisheries officers.

Mr. Dominic LeBlanc: I don't want to cut you off, but if I understand what you're saying, you've tied these three vessels to the conservation protection mandate and to the aboriginal fisheries issues. So in your mind, is their being based in the gulf a temporary measure or a permanent decision?

Mr. John McCann: That's a temporary decision from the coast guard's perspective. I'll qualify this by saying that when we met with the program in January, there was a minister's letter instructing them to do a levels of service review of what their long-term requirements are, and as a service provider we've helped them with that. We've given them some costing; we've given them some formulas: if you use it for six months or you use it for nine months, this is the costing; if you crew it this way or that way, this may be more cost-effective. Those are the floating assets, and there were helicopter requirements in that too. So we gave that to them as a package, and it was up to them as the programs, through their ADM, to find long-term solutions and resourcing of that requirement.

Mr. Dominic LeBlanc: I have one final question. On the search and rescue aspect, you said these three vessels were mainly focusing on conservation and protection. For a small community, which in fact is right near Big Cove, there was a small search and rescue vessel that had been based in Richibucto, and there was considerable unhappiness from commercial fishermen and pleasure boat users that this vessel was being taken out, or removed or reduced. I understand that the decision was made that this small vessel would also stay in that particular area. Is that right?

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Mr. John McCann: The vessels are usually put in the area where the program says the demand will be, and in this case it was C and P's request to have these vessels put in those areas, to support their activities.

Now, I have to also preface the fact that any coast guard vessel—any vessel at all in the water—is secondary search and rescue, and in the case of some of the larger vessels, they're primary search and rescue. They're out there for offshore search and rescue. But any coast guard vessel in the water is a search and rescue and can be tasked as such. And, as such, any Government of Canada vessel that's on the water, which could include DND or others, is also secondary search and rescue. So in terms of the safety-net system—the net itself—it's fairly wide-ranging; plus, you look at our coast guard auxiliaries in support of that program also.

Mr. Dominic LeBlanc: I have a final point, Mr. Chairman, on the search and rescue component. At a little harbour not far from where I live, in the summer you hire students, who have a little inflatable rigid hull, or whatever you call it, and they provide sort of a search and rescue service in the peak summer months. I know that fishermen and pleasure boaters were very happy with that service. But in recent years there was a lot of unhappiness locally that the process to hire those students....

I think it was a similar situation in Charlottetown; the chairman will correct me if I'm wrong. The students who had previously been hired to operate these vessels were not hired locally. Some of them came from other provinces and other regions, and local students who wanted a chance to get these jobs and go to the coast guard college and be trained.... In previous years you had local students, and in the last couple of years, I'm told—now, this is anecdotal—that the students in Charlottetown and in Shediac came from other provinces, and there was a lot of local unhappiness that nobody had a chance, that students—

A voice: From what area did they bring them?

Mr. Dominic LeBlanc: They were from Nova Scotia, and New Brunswick and P.E.I. students didn't have a chance to....

How do you hire those students? Who makes the decision to hire those students and train them to operate that summer search and rescue program?

Mr. John McCann: The search and rescue program is called the rescue, safety, and environmental response in this region, and it comes under marine programs. I'd like just to note that it is a very successful program. It is what they call the IRB, the inshore rescue boat program. It is where the coast guard hires university students, gives them six weeks of training at the coast guard college, and then allows them to operate those vessels on the water in support of high-density recreational activities and those such things, like in Charlottetown and other places.

When we talk about the hiring of that, there are criteria, and I believe they say they have to be within the first year of university, have to have some sailing experience, and have to have, I believe, rescue swimmer qualifications. So there are some criteria, and whether those criteria can be met within a local geographical area or whether they have to go to an area competition.... That allows for broader exposure, and a lot of the universities are in the major metropolitan centres.

Mr. Dominic LeBlanc: But specifically, Mr. McCann, to answer my question, would you find it surprising that in Prince Edward Island or in New Brunswick you couldn't find any students who met those criteria?

Mr. John McCann: I can't speak to that directly, Mr. LeBlanc, because I haven't been involved with that, so I don't know.

Mr. Dominic LeBlanc: Could I ask you to look into it and perhaps get back to us? I'd be curious to know, maybe in the last five years, the summer students who were hired. The area, obviously, that I'm interested in is Shediac, but I know the chairman and I have talked about Charlottetown. I don't want to speak for him, but I'd be curious to see a profile of the students over the last five years and where they're from. I'd be curious to see if in fact the students working in Shediac are all from Dartmouth and if the students working in Prince Edward Island are from Nova Scotia, and perhaps to see how the net was cast, if you wouldn't look at saying, “Well, if we could find students in New Brunswick who might be able to work in those programs...”. I'd be curious to see if, Mr. Chairman, that's a reasonable request.

The Chair: Yes, I'd appreciate it if you could provide us with that information, because Mr. LeBlanc is right. It's the same situation in Charlottetown, and I'm sure there are students available in Prince Edward Island, if we look.

Mr. John McCann: Could I just add a comment to that, Mr. Chairman?

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As I mentioned earlier, the new Canada Labour Code that came out in September of last year tightens up certain aspects of our operations, and I spoke about the enforcement part of it. But also, it precludes us now from using the small portable trailers that we traditionally used in support of the IRB program. That is, when we hire the students we provide them with a little trailer at these sites, and that's where they live. Because of the new regulations, we won't be able to engage in that any longer, and we can't afford to hire people and pay them room and board in these local areas. So it may be possible that we will be looking at local hirings just out of necessity now.

Mr. Dominic LeBlanc: Thank you.

The Chair: Thank you, Mr. McCann.

Mr. Keddy.

Mr. Gerald Keddy: I just want to pick up on that last comment from Mr. LeBlanc. There are a couple of issues at stake here, and I think it's obviously a funding issue, and you put your finger directly on it.

The other question I would have is...there's certainly a site in Chester as well where students are hired, and I'm not sure that they don't deliberately take students from out of province in order just to give them the opportunity to travel and work in a different environment. So I don't know if that's the policy, but I suspect it could be or maybe perhaps should be—that they would hire New Brunswick students to work in Nova Scotia, Nova Scotia students to work in P.E.I., and vice versa. It may in fact be the case.

The issue that I'd like to have some discussion on is the liability issue of navigational aids. We talked a bit about lighthouses, but the government and many of us have been very much in disagreement with the policy of divesting the federal interest in lighthouses, especially, and other navigational aids, understanding that there were probably some out there that could be divested.

But for the lighthouses, the lights have been taken out of them, and these lights.... I don't know if there's a market for them; I assume not. Most of them are in there. They're not cheap to remove. They've been set up to operate basically by themselves or with solar battery packs.

A lot of the groups who have actually taken over responsibility for the lights under the divestiture project wanted to keep the lights there. The argument from the coast guard has been that the light is a liability—that, if the light remains, then there could be some liability upon the people taking over the light to maintain it and to make sure that it was lit at all times.

My argument against that—and it's only my argument; I'm not a lawyer—is that I suspect there'd be no more liability to that than the roof of my barn. Actually, I'm a bad example, but there are lots of people who live on the coast—I don't—and people would see the steel roof from a long ways away, and they would use that as a navigational aid. With technology today, the whole point of keeping the lights and of having the divestiture and encouraging community groups to buy them is to keep them lit, and, if they're not able to keep them lit, they're quite simply not as interested in the light, and we'd lose part of our heritage and part of our culture along the coast. I think there are 26 lights in the South Shore riding. A number of them have been divested so far, and a number of the rest of them are slated for divestiture, including the second oldest light in Canada.

Is that an issue? I guess I'm asking you a legal question, but the liability part of that.... Why couldn't we simply allow the lights to go with the lighthouses if you have community groups that could afford to keep them lit? Allow them to keep them lit. Quite frankly, you have navigational aids. You have new technology that is allowing the government to divest itself. But if the light was lit or not, it's still going to be on probably half the charts in the country for the next 10 or 15 years showing a lighthouse. A lot of the boaters will have older charts, and they quite honestly won't be renewed that quickly. So why couldn't we divest the light apparatus with the lighthouse?

The Chair: Mr. McCann.

Mr. John McCann: It is complicated when you talk about legal liabilities, but Mr. Stoffer alluded to the environmental concerns also.

When you're talking about a major light that's no longer required for the coast guard in terms of aids to navigation, there is a process that we go through, through consultations and levels of service. Once it's deemed surplus to requirements, we notify mariners who know ships. We give notice to mariners that this is no longer a navigational aid and should not be used as such. It may remain on a chart as a prominent mark.

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When you're talking about the light itself, if we're not going to use it for a navigational aids fixture, then usually the people who require it, a non-profit organization or whatever, don't want the added cost of maintaining the light.

In the case of a lot of our older lights, they were always housed in what they call mercury baths. Mercury, as we are all aware, is an environmental concern. It's in our best interest, in terms of environmental cleanup, to remove the light and the mercury baths associated with it.

The other concern is the non-profit organizations do not want the liability nor the cost of maintaining the light.

The Chair: Go ahead.

Mr. Gerald Keddy: The cost of the light wasn't the case. With the Sandy Point light and a number of the other lights, that's not the case. People would be willing to assume the cost of the light.

I don't understand the technology behind the mercury bath, but certainly all mercury is not dangerous.

There is another question I want to ask. You touched on it a little bit. There's quite a split here between your role as an enforcement provider, which I found quite interesting, and your role really not as enforcement. With the added cost, significant added costs fall upon your shoulders as an enforcement provider, I guess, under the Marshall decision—with “Marshall I” and later with “Marshall II”, if you want to use those terms.

To my knowledge, I'm not sure the government has directly accessed the talent pool at DFO or at the coast guard with the new negotiations.

If you're pulling up traps, what are you finding in those traps? Are there undersized lobsters stuck in the bait bags?

The rumour on the street is the new agreements will allow divers. If the new agreements allow divers, you're probably going to have war in the waters here.

As someone who is at least partially involved in the enforcement side, I wonder if you've been advised and if your knowledge has been considered. Has MacKenzie or anyone else through government really spoken to the people who are trying to do enforcement about some of the issues and the difficulty of it?

We talk all the time about how much more our trap will fish in the summertime than it will fish in the wintertime.

Mrs. Suzanne Tremblay: What is the question?

The Chair: Is there a question in this, Gerald?

Mr. Gerald Keddy: There's a bit of a prelude. I have to get it all out.

The Chair: You're soon going to run out of time here.

Mr. Gerald Keddy: There's a lot to say.

The Chair: If you don't get to the question, you won't get the answer.

Mr. Sarkis Assadourian: Gerald, this is an equal opportunity. You don't want to miss this opportunity.

The Chair: We'll give you another 30 seconds, Gerald, starting now.

Mr. Gerald Keddy: Have you been in contact with any of the negotiators? Have they been in contact with you? Have they asked you about what you're seeing and hearing on the water? You're certainly a front-line person. Have they talked to DFO, to your knowledge?

The Chair: Mr. McCann.

Mr. John McCann: Mr. Chairman, no, we haven't been engaged in the discussions with the federal negotiators.

Mr. Gerald Keddy: Thank you.

The Chair: Thank you, Mr. McCann.

We will go to a quick second round. We do have another witness who will come in and give ten or fifteen minutes.

Before we go to Mr. Lunney, if I were to talk to employees in the St. John's coast guard and the Charlottetown coast guard, and I have, they would tell me that every time they lose someone by attrition, in effect, there is a downsizing to Dartmouth's advantage. In the coast guard centralized in Dartmouth in this region, one way or another, a downsizing is happening. We're losing the bases in St. John's and Charlottetown in reality. It is increasingly managed and operated out of Dartmouth. What's your point of view on that?

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Mr. John McCann: There are no plans to divest the Charlottetown base. However, it's a coast guard base. Its focus is clearly to become a stronger DFO focus. The St. John's base has been named as a divestiture. But as I alluded to earlier in my opening remarks, part of the coast guard modernization is the age of modernization.

Many of these bases were built in support of the age of navigation. As we move forward in the age of modernization...if you look at the technologies we're investing in and some of the maintenance practices we're going to undertake, there is going to be less demand for waterfront industrial complexes to support that program. I think there's some wisdom in that, because when you talk about capital infrastucture, the bases are again a major capital infrastructure. When we're using that capital money, we have less capital money for future fleet requirements.

So I think it is incumbent upon us to look at the rationalization of our major infrastructure holdings. In a sense, the determination was made that...as we look at alternative service delivery, for example, for the Saint John River and others, we don't need a big industrial complex such as at St. John's, nor will we need the industrial mine power internally to continue with those programs in the future.

As we make those adjustments, fewer people will be involved in some of those activities, and as part of our HR planning, we're asking, if these people are affected over here, what are the other opportunities within the coast guard and DFO to deal with that in the future?

The Chair: One of the other areas related to Charlottetown. At one point in time the federal government, whether it was supplying ships with food, fuel, or whatever, used to be seen to be part of the community. The local community supplied them.

It's not unusual to drive into Charlottetown now and see a fleet of fuel trucks lined up the street fueling a Canadian Coast Guard vessel. That fuel is coming from off the island. What's the reason for that? The optics are not good, I tell you. Every time that happens I get calls and get my ears burned pretty good. Are there not suppliers of fuel in P.E.I.?

Mr. John McCann: Yes, absolutely. I can tell you categorically that the Earl Grey, when it requires fuel in Charlottetown, will take fuel in Charlottetown.

When you're talking about the heavy ice breakers that use Charlottetown as a staging area in the wintertime.... The Terry Fox uses a blended fuel because of its engine type. Both her and the Louis St. Laurent take what they call an arctic blended fuel, and that fuel has to be blended right at the pipeline at the Imperial Dartmouth refinery. So for those two ships alone, that's the only place we can take that fuel from.

Mr. Gerald Keddy: That's just winter fuel, just like for a tractor.

The Chair: Another question I have relates to at least what I'm told at Charlottetown base. I want to know how you determine ship allocation. Last fall I'm told they didn't put the ship out—and I forget the name of the ship—to remove the buoys soon enough. I don't even think it was allocated somewhere; I just don't think it was crewed. They were a month late getting out to get the buoys. As a result there are buoys all around that have not been taken in. They've been out there in the ice. God knows where they are now. Why did that happen?

Mr. John McCann: As I mentioned earlier, in April 2000 we introduced the base fleet within the maritime region, and some vessels came in and some went out. The other thing alluded to earlier was our funding at year-end. Some of these vessels we're putting back into service we couldn't have refitted until April 1 or shortly thereafter.

In the case of Charlottetown, we actually reinstated one of the vessels over there, the Île des Barques. That took us about four or five weeks to get fully functional because it had lain dormant for a couple of years. As a result of that, there was a time lag in getting the right mix of ships back in service, getting them refitted, and getting them back so that they were programmed to use.

In the case of the navigational aids program, in this region there are some gaps within the navaids program because of a number of factors. Through program review there was probably close to $7 million removed from the program in this region. Technologies weren't far advanced at that time. The program didn't implement that plan quickly enough, so we still have a lot of aids in the water that we're not funded to service.

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In addition to that, this region has dealt with a number of mini and major crises over the last few years: the Irving Whale, for example, Swissair, Marshall, Y2K. All those things have caused us to slip a little bit in the navaids program primarily. The cumulative effect is that we're managing a lot of risk in that program right now, and in managing those risks we're taking maybe a little bit more time, saying well....

The global warming thing has especially given us a false sense of security in this. For example, on Cape Breton Island, we were saying, well, maybe we can get them done next month. This year we didn't manage that risk well because the ice came into Chedabucto Bay a lot sooner than we thought it would. Ice locked the buoys and moved buoys off position. In the case of the gulf and some of the seasonal buoys, we couldn't get to them quickly enough. If you can't get them back in, you can't get them serviced and maintained so that they're ready to go back in the spring.

So the cumulative effect of some slippages within the program gap, our base fleet.... Even when we built base fleet, we knew there were still going to be navaids gaps in the delivery of that program. The cumulative effect is that any slippage in ship time right now—if there's an unfortunate breakdown, a main engine goes down, or whatever, the cumulative effect is that we're slipping on the navaids program in the region.

The Chair: Thank you.

Mr. Lunney, three quick questions.

Mr. James Lunney: Because of the time, I'll skip right to the e-nav program. In developing this strategy—safe, environmentally sound sailing in our water—you're asking how we can use the e-network to get the right information to the right people.

I'm wondering about Marine Communication and Traffic Services, which went through a big refit on the west coast—I presume you did on the east coast as well—downsizing and conforming to one facility.

Marine radio broadcasts—in looking at this e-network, are we talking about changes to the marine radio program, or is that going to be maintained as well? A lot of people depend on those broadcasts.

Mr. John McCann: For sure. What we're hoping to do with e-nav is make it more effective and efficient to get that information out on a more timely basis using the Internet, Intranet, and other data flows.

The MCTS component of the coast guard, as you mentioned earlier, went through an amalgamation. There used to be traffic services and coast guard radio stations combined, and cross training took place in what we now call Marine Communication and Traffic Services.

When it comes to vessel traffic services, that's a public good, and we see it as a public good. But also, under the Canada Marine Act, it allows in that act, for example, the Port of Halifax to establish its own vessel traffic services now, if they want to, and at this stage nobody has indicated they do. But it allows them to do that if they see a benefit in it, as long as they comply with national standards.

In terms of the safety net aspect of that, the Government of Canada is signatory to an international convention that we will continue to have listening capability and broadcasting along our coasts. But you have to balance that with the new technologies that are coming into place, what they call GMDSS, which is a global maritime distress safety system, a satellite-based system. Ships can now press a button if they're in a distress situation and they can be pinpointed in a matter of seconds. You don't need a person necessarily ashore listening for that, but it's always a good backup.

As well there is what they call automated information systems, which is a black box technology that will be introduced on board vessels transiting certain areas, especially VTS areas, where now, as a regulatory regime, it's a passive system. You can look on a radar scope and know exactly where those vessels are at all times, in real time, instead of the system now, where they call in and say “I'll be at checkpoint three in five minutes.” It allows the navigator on the bridge to focus on the navigation of that ship and not worry about calling in at all these points. It's also a system where it can be retransmitted back to other ships, so other ships don't have to wonder what's coming around the bend when they're making that turn. They just look on the radar and see that there are three ships downbound and two ships upbound and this is who they are—all that information layered on the new electronic chart and display system. It's really a combination of technologies. I think the coast guard role is still going to be monitoring to ensure there's compliance with all these different things, but I think in future it's going to be a much more passive system.

• 1200

Mr. James Lunney: I have just one last comment here.

On the west coast, we're in an earthquake zone. It was recently demonstrated with Seattle, when that quake hit there. They shut down in Seattle, but our ears and eyes on the west coast—MCTS Tofino—were monitoring everything at that point. I think we certainly want to be careful we don't put all our eggs in the electronic basket. Computers are great when they're working. It's just a comment.

The Chair: It's a valid point.

Suzanne.

[Translation]

Ms. Suzanne Tremblay: You write on page 4 of your brief that you returned in 1995 to the Department of Fisheries and Oceans. For how long had you been exiled to the Department of Transport? Did you get the feeling when you returned to Fisheries and Oceans they would slaughter a fatted calf to celebrate the return of the prodigal child?

[English]

Mr. John McCann: The honeymoon's not over yet, so....

Some hon. members: Oh, oh!

Mr. John McCann: Mr. Chairman, the coast guard has gone through a number of iterations. There used to be the government marine organization services, and it was part of the railway at one time—that agency—and then it went into the fisheries part at one time. It was taken out—I think it was 1967—and it became a sector of Transport Canada known as the Canadian Coast Guard. In 1995, when we did the merger, there was the creation of the Oceans Act, which is really the first piece of legislation that names the coast guard as an entity of the Government of Canada. So since 1995, we've really known full well that part of our government regime—where we stand—states that basically the minister shall have a marine organization called the coast guard. We are the marine operation arm of the Government of Canada, managed under the auspices of the Department of Fisheries and Oceans.

So it's gone through a number of iterations in terms of what its government service has been over the years, but it was just about 25 years in transport, focused on multimodal, and now it's focused on oceans, marine-protected areas, and integrated oceans management.

The Chair: Thank you, Suzanne.

Mr. Stoffer.

Mr. Peter Stoffer: I have a couple of quick statements and a question for you, sir.

In your organization plan, my recommendation to you would be to include—I won't say the word “union”; it makes my colleagues down the other way nervous—employees representatives as part of that modernization plan, not as an afterthought, but as a full partner at the table when it comes to the reorganization and modernization.

As well, sir, if it's at all possible, a lot of groups would like to have access to those lighthouses but they're being charged user fees. There are environmental concerns to be dealt with. If you can get the resources to clean up those sites as soon as possible, those community groups can then turn them over, because we're losing an awful lot of our ability to turn them into tourism sites. Cape Forchu is a great example of where tourist dollars help a coastal community. As soon as you can pass it up the line.... I notice Mr. Bellefontaine is here and he's listening, so if you could reiterate to him and to the department how important it is to get these sites cleaned up, then community groups can have access to them.

The last thing for you, sir, is that the chairman and I visited Prince Edward Island a year and a half back and we went to the building that was there. The only person in the entire building that day—and we just showed up—was the commissionaire at the front door. Everybody else in that building was gone. They'd gone to Summerside for a meeting. The entire population of that building was gone.

Plus, we heard stories about last year in Newfoundland when a coast guard vessel was used as a cruise ship for a party for some Correctional Service people, I believe. Another one was used in L'Anse aux Meadows to cruise around for awhile.

I would just say that's the negative aspect of it, because the coast guard does fabulous work. Almost every week in the paper you read about another rescue of a fisherman, and you should be congratulated for those efforts. But when you get stories in the press regarding using coast guard vessels as cruise lines, no one being in the building—nobody—on a day we just showed up...those types of things have to cease.

My question is, the Auditor General's department said, in line 3 of their brief, that the department is not managing its fleet cost-effectively. You appreciate that and you accept that. How soon will we be before another committee in which the Auditor General can say the department is managing their fleet cost-effectively? How soon do you think that will be?

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Mr. John McCann: The commitment by the minister was that the fleet renewal initiative would be undertaken over a period of 18 months. At the end of that 18 months, they have to have a set of options in terms of improving the way the department manages the fleet, and as such, we would expect that the minister, the deputy, and the departmental management committee would say this is the direction we're taking the fleet. Out of that recommendation would come an implementation strategy. The horizon for that right now, sir, is about 18 months.

Mr. Peter Stoffer: Thank you.

The Chair: Do you have any other questions?

[Translation]

Ms. Suzanne Tremblay: Mr. Chairman, I would like to follow up on the big issue raised both by Gerald and Peter, that of the lighthouses.

Could Sheila Copps not do something? She is the one who could do something. She did something for Pier 21. Maybe she could do something for lighthouses because she has the responsibility for historic sites. It seems to me you would be much more successful negotiating something with her rather than with Fisheries and Oceans, don't you think?

[English]

The Chair: Maybe the member for the Bloc might raise that question in the House and see where that leads.

Voices: Oh, oh!

The Chair: Thank you, gentlemen.

I had just one last question.

I guess the Canadian Coast Guard is responsible for the enforcement platforms, rescue, and so on, and I'm told by fishermen that sometimes when an incident happens, as happened at Burnt Church last year, some vessels move out of the area where they're being used for enforcement. As a result, the enforcement isn't taking place while the other event is on, and that's known within about 10 minutes. The poaching and everything else starts.

Another example is the Swissair disaster.

In these extenuating circumstances, do you have the capability to do your job and responsibilities under the current budgetary allocations, or does this committee need to be looking at saying there need to be more resources put in for the Canadian Coast Guard to do its job effectively, as it's mandated to do?

Mr. John McCann: Sounds like a career-ending opportunity here, but....

Voices: Oh, oh!

Mr. John McCann: I'd have to refer to my opening remarks that the Commissioner of the Coast Guard had a futures conference, and out of that conference will come a number of recommendations. Any one of those recommendations is going to have to be supported by a policy statement of some sort, and some, I think, consideration for or recognition of what the Canadian citizens really want out of the Canadian Coast Guard of the future. I think we're still at that turning point as to what the Canadian Coast Guard is and how it's going to be supported by a policy statement of some shape or form.

I'd leave it to probably Mr. Adams to elaborate on that and the future direction of the coast guard as a whole, because it is a national organization.

I thank you. There were a number of interesting questions brought up here today, and I think the AG's office certainly highlighted a number of them.

One of the difficulties for a service provider is the yearly budget, obviously, and the other thing is the long-term commitment to the fleet. On top of that, when you talk about program funding and you say, well, there is no program funding required for this vessel, then what am I going to do with that vessel in the short term? Meanwhile, while you're discussing this, I think—and I've had some experience with this in the last few months when I've been acting in a position to deal with other people—there's a high expectation that you just pick up the phone and the Canadian Coast Guard is going to be there. There's probably going to be a turning point where that may be true or not. I think we need to look at that very closely.

I think it comes down to the basic concept of operations. What is the operational arm of the Canadian Coast Guard going to be for the department? You say there's an operational requirement. What is the operational readiness of that organization going to be? When you talk about organizational readiness, you're talking about something that isn't linked to a program.

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So if you want the Canadian Coast Guard to be the eyes and ears of the Government of Canada on the water and do the bidding of the Government of Canada, managed by the Department of Fisheries and Oceans, I would suggest that, under the current regime of program funding, it's going to be very, very difficult.

The Chair: Okay.

I have just one other spin-off of that. We don't have just domestic obligations here in terms of the Canadian Coast Guard. We have pretty strong international obligations. Correct?

Mr. John McCann: That's correct. We're a signatory to a number of international conventions under the International Maritime Organization, IMO. We're also a signatory to the International Association of Lighthouse Authorities. That gives us the international standard that we establish our aids to navigation under. We also have international obligations under our SAR regime—this is what Canada has to have available to do search and rescue in Canada. Now that is a DND mandate because they're the lead agency on search and rescue, but as a main provider of that, we're also implicated in that.

So there are a number of international, mandatory things that we have to comply with, as a minimum standard. Whether we exceed those standards or live within those standards...

The Chair: Thank you, Mr. McCann.

Now, if either DFO or the Auditor General's office has a summary statement they'd like to make...and then we will conclude and go to another witness for 10 minutes, and then we'll adjourn till the next meeting.

So, Mr. McCann or Mr. Thompson, do you have a summary statement you want to make?

Mr. John McCann: No. I just want to say that I do want to thank the committee for allowing us the opportunity to represent the coast guard, certainly in the maritime regions here today, and, as such, I do thank everybody for the opportunity.

The Chair: Thank you for appearing.

Mr. Thompson.

Mr. Ron Thompson: Thank you, Mr. Chairman. I would like to say thank you as well to you and the committee. I think this has been an incredibly important hearing.

As we've talked about this morning, the fleet has certainly been under stress for five years, if not more, and they're at a point now in providing these fundamentally important services to Canadians of sitting back and asking, now, how do we get it right? We know what the problems are. Let's get on with this CCG modernization plan and fix the problems that are concerning us.

I really do think the committee has helped that process this morning by offering political support to what the department is trying to do. The only suggestion I might have, and I may be a little out of balance here perhaps, Mr. Chairman, is that if the committee could see its way clear to keep an eye on this modernization plan that's unfolding in DFO and maybe at some point in the not-too-distant future have Mr. Adams and his colleagues come back and give you a status report on how they're doing, I think that would be very helpful to the process too. These problems that we've identified in the chapter and that the department knows about must be fixed. They can be fixed. Your support's going to be instrumental in helping bring that about.

Thank you, sir.

The Chair: Thank you very much, Mr. Thompson.

I might say as well, Mr. McCann, that you mentioned a document with 14 points in it at some point in time. Is it possible for us to get a copy of that?

Mr. John McCann: Yes, sir.

The Chair: Could you get it to the clerk of the committee?

Okay, thank you very much, gentlemen, for this morning's discussion and for coming. Thank you once again.

I'll call forward, then, John Fox, who's the local vice president with the Union of Canadian Transport Employees. We'll take 10 minutes if we could, John, and then we'll break.

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• 1214

The Chair: If the meeting could come to order again then, folks.... We'll take ten minutes or so and....

• 1215

Mr. John Fox is the local vice-president with the Union of Canadian Transport Employees.

Go ahead, Mr. Fox.

Mr. John Fox (Regional Vice-President, Union of Canadian Transport Employees): Good morning, and thank you for the opportunity to come and speak to your committee.

Listening to the conversations this morning and the previous testimony, I guess the first thing I'd like to say is that we certainly welcome the Auditor General's report, and it points out some significant problems with the Canadian Coast Guard.

The problems, we believe, stem back from the initial merger with the Department of Fisheries and Oceans. At that time the coast guard was going through program review, as were all federal departments, and had a number of pressures put on it at that time. We don't feel that, throughout that whole process, there was a clear plan or objective to take the coast guard into the future, to look at adequate funding, or to look at the way its programs were delivered. Today we still see the residual effect of that lack of planning.

A previous speaker spoke about risk management, and we believe that has been the process for the last six years, at least, within the Canadian Coast Guard. Programs such as the navigational aids program are, we believe, severely underfunded, both in human resources and finances. Our studies indicate, as an example, that as of April 30 of this year, the fiscal year-end, we estimate that approximately 44% of the navigational aids in this region were not properly serviced or were left unserviced.

That relates to the comment by Mr. Easter about the number of buoys that were left in the water, as an example, around Cape Breton and Prince Edward Island. Our observation on that was that the coast guard could not get one of its own ships at the time to pull those buoys out. We didn't have enough ships available, and ships that were in active service were conducting other programs, whether it was fisheries surveillance or whatever. So, as a consequence, the buoys did not get brought in.

We also look at the move towards alternate service delivery. It is being constantly promoted within the department and by the deputy minister that DFO is looking to divest itself of services where possible.

The navigational aids program, we're being told, is a target for ASD. We are concerned that there is not a cost-benefit analysis being done effectively on this type of initiative. We're closing our facilities. We've announced the closure of St. John's base. We've announced the closure of the Mulgrave Marine Emergency Services facility. We've announced the move of Dartmouth base. But none of those have been fully researched as to how the navigational aids program will continue to be delivered. What we're led to believe is that we're going to get rid of it; that's it, and we don't need the facilities. We haven't seen anything that would support how that's going to be contracted out, what the cost will be to the taxpayer, if in fact the coast guard is the best department to deliver that service, whether it should be privatized, etc.

We suspect there will be a loss of services and a loss of response time on outages. Buoy outages in this region have been significant over the last few years. Major lights, buoys, lighthouses, whatever—we believe those have a serious impact on the safety of mariners. These outages, according to the ISO standard...we're not meeting the ISO standard, and we suspect that, as the department continues to go down the road with privatization and eliminating buoys, search and rescue costs, in fact, will go up as a result of this.

So overall we're quite concerned. We would like to see an independent study into the coast guard, into its future direction, into its current programs, and how it intends to deliver them. We just don't see a clear future or plan. It's had a major impact on the morale of employees in the department—all employees.

I think the regional managers in this region have done the best they can with what they've had over the last five years, and I think it's placed a significant amount of stress on some of those managers, supervisors, and employees, even to the point where the department has undertaken internal measures to try to improve the workplace—wellness initiatives, looking at workload levels, things like that. But again, these are all, in our opinion, a result of not having strategic objectives as we went through program reviews, as we went into the merger, etc.—what should the coast guard be?

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So basically that's what I have to say. As I said, the Auditor General's report outlines a number of concerns. I didn't hear the conversations this morning, but I if there are any questions you might have for us, as employee representatives, we'd be more than willing to answer them.

The Chair: Thank you, Mr. Fox, for appearing and providing the information you have.

Mr. Lunney.

Mr. James Lunney: Thank you for appearing on behalf of employees.

With this traumatic reorganization that has gone on since 1995, fitting the two departments together, coming out from Transport and coming together with DFO for coast guard, are you representing all employees or just coast guard? Can you clarify that?

Mr. John Fox: We represent employees in the Union of Canadian Transport Employees, which is under the umbrella of the Public Service Alliance. So we have members on the vessels and the bases throughout the maritime region.

Mr. James Lunney: We understand that this has been a very stressful reorganization for everybody. But of course, as it's the essential services we're talking about with the coast guard, there are certain things that we recognize. We have to see dedication of resources to make sure the tasks are accomplished. They're essential for navigation, and so on. That's obviously a need the Auditor General has exposed and you're confirming. The effect of that on morale and stress has to be very real. Is there a sense amongst coast guard employees that their programs are being sacrificed in favour of the fisheries branch, for example?

Mr. John Fox: There's some concern. There has been a fair amount of renewal in fisheries management, as an example, resources to buy smaller vessels, changing programs. I think some employees do see that the coast guard appears to be neglected in some ways. Personally, in meeting with management, I don't really see evidence of that. I think there are still some animosities in different levels of management throughout the department, coast guard versus DFO. With a department that, we're told, allowed $110 million to lapse this year and a significant amount of funding last year, we still can't understand why the coast guard is faced with a $10 million deficit and is forced to limp along, when the department is actually turning back money. It doesn't make sense to us.

Mr. James Lunney: Is there adequate funding available for training of coast guard staff?

Mr. John Fox: I don't believe so. The former speaker alluded to changes in the Canada Labour Code. A lot of training has been done, but there's still a lot of training to do. I'll use the term “succession planning” as an example. We have a number of highly technical positions in the fleet where we need to train people and develop them to move into those positions. I think that training is lacking in many ways. Training is certainly a priority, but it lacks significant funding to carry it forward.

The Chair: Thank you, Mr. Lunney.

Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay: Thank you, Mr. Chairman.

Thank you for appearing before us, Mr. Fox. You heard the presentations of the previous witnesses, especially that of the representative of the Coast Guard who told us that there had been a big conference in Hull. Mr. John Adams brought together all executives to discuss future directions up to 2015. They came up with a number of emerging themes and he mentioned four. He also talked about a modernization plan made up of four planks.

Were you aware of this? Have you been consulted or is it your intention to ask to meet with Mr. Adams in order to have your say before all these documents are finalized? You know it is easier to intervene in a process at the beginning rather than when all is said and done and has received the imprimatur of the Minister.

[English]

Mr. John Fox: No. Typically that would have been done at the headquarters level by our national representative, and my conversations with him indicate that the department has a poor rapport at the national level with the unions. When these initiatives are brought forward it's like, here it is, thank you very much. In this region we do have better union-management relations in some areas, and we've worked hard at improving those relations, but I think at the national level there's a poorer rapport and limited involvement on those directions.

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[Translation]

Ms. Suzanne Tremblay: How is your union structured across Canada? There are Coast Guard vessels not far from where I live. I am the MP for the riding of Rimouski-Neigette-et-la Mitis. We have Coast Guard vessels close by. We also have in my riding a Fisheries and Oceans research institute. Do you also cover this area or is there a union representative in my area I could contact to get information?

[English]

Mr. John Fox: Our component has five regional vice-presidents and we have local presidents, based at Rimouski or on the ships. The regional vice-president for that area would be able to assist you and provide you with any information you need.

The Chair: Thank you, Madam Tremblay.

Mr. Stoffer.

Mr. Peter Stoffer: Thank you very much, Mr. Chairman. Thank you, John, for appearing today.

To follow up on Madam Tremblay's question on the futures conference in Aylmer, Quebec, in his report he says “all regions and headquarters were involved in exploring, all senior managers.” Are you saying, then, nobody from the highest level of the union was invited to this conference?

Mr. John Fox: Not that I'm aware of, no.

Mr. Peter Stoffer: Mr. Chairman, as I have been stating time and again, as we did with the DND dockyard workers, with the ND employees, as we're doing now with the coast guard employees, it's a typical thing for DFO, coast guard, or basically any federal government that has unionized employees to always come up with a plan and then give it to the employees afterwards and say here it is. That's consistent throughout these departments, and all they're asking for—correct me if I'm wrong, John—is to be a player. You understand the merger took place. Nobody liked it at first, but you're not going to unscramble the omelette now. You want to be part of the modernization plan, but you're still being excluded from the beginning process. This, Mr. Chairman, is something we as a committee need to look at.

If the government is serious about meeting its international and domestic obligations on search and rescue, enforcement, navigational aids, etc., they have to include the employees as a full partner, not as an afterthought. It bugs me no end that for four years now I've been asking this kind of question and stating these things, and it still happens. The question is, as you are the union representative, why are they so ignorant towards the needs and concerns, and why will they not include the union people? At this level Mary Wilson and yourself have a good rapport—I know that, because I speak to both on a regular basis, and there are good relations. But as you go up the ladder, that relationship deteriorates, which is simple nonsense in this day and age. Why do you think they consistently exclude you from the process?

Mr. John Fox: From what I understand, it's not through a lack of trying. I was in Ottawa about three weeks ago and met with one of the directors general for the department, and we did talk about some initiatives that were underway there. But in trying to deal with the bigger problems of the coast guard, when I spoke to my national president, it was very hard to get meetings even at the ADM level, commissioner level, certainly deputy minister level, to talk about these initiatives. There didn't appear to be a clear structure that brought these new intentions forward to where they could be discussed, and it seemed to be more after the fact.

The Chair: John, for your information, we are holding the hearing on the coast guard today, and the committee will have to sit and determine what it does from here on the coast guard, whether or not we want to go to more extensive hearings on the coast guard itself. We're basically looking at the Auditor General's report, but whether that evolves into more extensive hearings into the coast guard will be up to the committee to decide, or whether we call John Adams and raise some of these questions with him. The committee will have to make a decision on that. This is a preliminary hearing at this point related to the Auditor General. We'll go through the evidence. We'll sit as a committee in camera some day and make a decision on where we go from here.

Last question, Peter.

Mr. Peter Stoffer: I was again quite pleased with the fact that the union is asking for an independent cost analysis of the reorganization and the plans. Again—and I just want to say this for my colleagues, who sometimes think the unions are just out for themselves—the reality is the unions also want the government to be fiscally responsible within their departments. They want to ensure that their departments are successful in terms of handling the resources so there is long-term employment and gainful employment for their members.

• 1230

I'll ask again, why would your organization ask for an independent cost analysis?

Mr. John Fox: What we're seeing, first of all, is that there's no consistency in the delivery of the programs across the country. Recently we talked about the 14-point initiative. We sat down with the employer and looked at ways to improve the department, to make efficiencies. We all knew there were ways that, yes, the coast guard could save money.

One of the things we looked at was the Mulgrave Marine Emergency Services Centre, a small vessel repair and storage program. We agreed that it should be looked at. What happened was that the department undertook an independent audit, a copy of which I have here. It actually proves that our own people save approximately $26,000 per vessel on refit and over $300,000 a year, yet the department has closed that facility and chosen not to do the work. Newfoundland has chosen to keep this work because it is of value to the department. It's not only of value to the coast guard, it's of value to fisheries management. Other marine users have boats that need repairs and the like. I'll leave this document with you.

Our question is, why? Who makes those arbitrary decisions to contract out or to drop services that are of proven value—actually, value added. We're concerned right now that with a number of the other initiatives—as I said, closing the St. John's base, contracting out buoy services—we'll lose, and the Canadian taxpayers will lose through these initiatives. We'd like to see a better process for contracting out.

The Chair: I have just one question.

On the alternate service delivery, contracting out buoy services, I know that's being done in some cases. Do you know of any analysis that's been done on that, any written analysis, to look at it to see whether it's doing what it's intended to do and is saving money?

Mr. John Fox: Well, there is a Treasury Board policy document that outlines how departments are to proceed with these kinds of initiatives. It asks a number of questions departments are expected to consider to see if these programs can be targeted out. I actually have a copy of that in my briefcase.

What we did at our last regional union-management meeting here was to examine the fact that, yes, the department was going down this road. There had been a commitment to do a cost-benefit analysis of these things before we went that way. Was it better for us to deliver it or not? It is our understanding now that some of these projects are being reviewed. However, some of the decisions have already been made to close, to move, or to get out of something, and we're told point blank by some of the managers that it doesn't matter, we're going this way no matter what, that's it. This is of great concern to us and our members.

A number of our sites right now, Charlottetown, St. John's, and Dartmouth, do not have enough people to adequately meet the program requirements. Many employees feel they are being set up to fail and that by not having enough people, through attrition or whatever, we're setting up the coast guard to be contracted out. That would be the only alternative. That's how employees feel about it. They don't see any strong direction or any clear goal down the road and are unable to say, this is where we're heading, this is where I'm going to be, and this is what's going to happen.

The Chair: Okay, thank you, John. I know it's been a short hearing, but you've provided us with some good information and some ideas on where we may proceed. I thank you once again for coming.

We will adjourn until the afternoon session at the Westin Hotel, and that starts at two o'clock. This evening at seven we reconvene here for hearings on the Oceans Act, so everybody can make their own way back here for seven o'clock. We'll start at seven o'clock sharp.

With that, the meeting is adjourned until 2 p.m.