[Recorded by Electronic Apparatus]
Wednesday, June 7, 1995
.1745 
[English]
The Vice-Chairman (Mr. Shepherd): We're calling this meeting of the public accounts committee to order. We are currently starting without quorum, so we can't entertain any motions or votes, but we can continue the proceedings of the committee in public.
The order of the day is pursuant to Standing Order 108(3)(d), consideration of the draft report on chapters 16 and 18 (correctional services) of the 1994 report of the Auditor General.
Pursuant to our agreement yesterday with Mr. Laurin, at the first part of this meeting we will continue considering the witnesses and the information that was given to us yesterday concerning the national transportation authority. Members from the Auditor General's department have been good enough to come back for that portion of this meeting, if we want to use them for resource.
Mr. Laurin, you have the floor.
[Translation]
Mr. Laurin (Joliette): Mr. Chairman, the witnesses do not have to attend, but I have no objection to their being here. In light of the evidence we have heard, I would like to propose an outline for the committee's report. I would like to suggest this to the committee, but if a quorum is necessary in order to do so... I intended to present this suggestion orally, and then give my notes to the researchers who could use them in drafting the report.
[English]
The Vice-Chairman (Mr. Shepherd): I think it's appropriate. We can discuss it; we just won't vote on it. Do you have an outline?
[Translation]
Mr. Laurin: It had already been decided that a report would be drafted after hearing witnesses on Chapter 6.
.1750
Given the testimony we heard, I would like the working paper drafted by our researchers to contain the following points. I am making a suggestion here and I could give you a copy of what I'm going to propose.
There should be a first part, serving as a background to the event which led to the report of the Auditor General. What led the Auditor General to focus on this problem? The report could discuss the warnings given by the Auditor General in 1987 and deregulation in 1988. Subsequently, it was considered that the National Transportation Agency could not refuse the amounts proposed. There was a study by the National Transportation Agency on possibilities of abuse, a study by the Department on the same subject, and the NTA could have refused the amounts proposed. It was argued that the abolition of the program in the 1995 Budget... A new policy was implemented to control abuse, and the Report of the Auditor General was issued in May 1995.
This provides a brief background to what happened before the recommendations of the Auditor General and could constitute the first part of the report.
The second part would deal with the inaction of the National Transportation Agency from 1988 to 1992, and then its slowness in responding following the 1992 study. The report should also indicate the costs of such inaction for the Quebec and Canadian taxpayers.
A third part could emphasize the fact that no one seems to accept responsibility for such inaction. The National Transportation Agency refused such political responsibility on the ground that its role was to manage the program on the basis of pre-established rules. However, since it is in fact the NTA which manages the program, any potential problem should have been pointed out to the Department if they really wanted to carefully monitor the management of the program. This part could also consider the role of the Department which was responsible for the policy aspect of the program, and its slowness in responding to problems. The Department was responsible for supervising the NTA and ensuring that the latter was doing its job properly.
In a fourth part of our report, we could ask that a detailed report be tabled with the Committee by December 31, 1995, responding to the following questions.
How did the Agency assess the base amounts in deciding on the amounts allocated, in the case of the $30 million still to be distributed?
What was the value of the savings made following the implementation of new measures?
How was the money thus saved used? I put that in the past tense because at that time it will be December, and the Agency should have finished receiving claims from carriers connected with shippers.
Has the National Transportation Agency observed a drop in transportation rates of non-arm's length companies since it was announced in May 1995 that the Agency had been given new powers?
Of the 30% of non-arm's length businesses which receive subsidies, how many had overestimated the amounts required for transportation?
Following deregulation in 1988, how much does the Agency consider has been lost because of abuses by non-arm's length businesses, in view of the figures obtained in answer to questions asked earlier?
.1755
The last part of the report would state that the Committee it very much regrets the government's decision to abolish the program without studying the economic impact on the regions concerned.
Therefore, in my outline the plan would comprise five parts, the fourth of which would ask the department to present its own report by December 31. This is not necessarily exhaustive. I would like our researchers to look further at these points in their report. If they find something, that's fine, or if someone else wants to make suggestions or add anything to the report, that could be considered. When the working paper is produced, we will see if we are satisfied with it or not. I think that all the points I mentioned have been dealt with in Committee and I would like them to appear in our report.
That concludes what I wanted to say, Mr. Chairman.
Mr. Paradis (Brome - Missisquoi): Mr. Chairman, I may perhaps have some difficulty, particularly with the final point made by our colleague from the Bloc. I don't think that that was dealt with by the Committee, or that the Committee concluded that a major analysis had to be conducted before terminating this program. On the contrary, it came out clearly that this program is costing $100 million a year. Even following the questions by Mr. Laurin, we learned that people were being subsidized to relocalize. We saw how sloppily this money was being administered. There was certainly no thought about conducting a major socio-economic study before deciding to terminate the program. It should also be noted that this is part of an overall government policy to reduce the deficit, as evidenced by the budget of the Minister of Finance and the appropriations voted. In that regard, I don't think the Committee should conclude that further questions need to be asked before considering termination of the program.
Mr. Laurin: Mr. Chairman, I referred to and myself commented on a study conducted in 1983. I asked a witness if the 1983 study, which gave a possible scenario of 12,000 job losses, was still valid in 1995. Ms Greene answered that they did not know. I am referring to that. Therefore, it is not known whether a study going back to 1983 can or cannot be applied today. I asked whether other studies had been consulted before eliminating the program, so as to determine the impact on jobs. I was told that this had not been done. I would simply like that point to be mentioned in the report, since it was stated. We are not inventing anything in saying that.
Mr. Paradis: Many things were said and I do not think that the report should be a word-for-word account of everything said here. Mr. Laurin, I appreciate the first points made in your presentation, but in the final point you seem to want to reach a conclusion which I do not share. Some people argue and will continue to argue that three or four years of studies should be carried out before deciding whether to terminate a program or build another one if necessary. Society is moving more quickly than that, and we have to respect certain fiscal principles, we have a deficit and we do not have two years to carry out some studies. From what I heard here and the Auditor General's comments, I would conclude that the program should be eliminated, given that there are serious questions whether in the final years of its existence it did really serve the purposes for which it was initially established.
.1800
It was also stated that the program was changed over time and that in the end there was a list of products: transportation of just about everything in a given region was subsidized. This cost $100 million a year, and people asked why the program was established years earlier.
That is really how we should be looking at the situation. You may wonder whether government programs of this kind should be reviewed periodically, as socio-economic demands change over time. Perhaps they should. But if you conclude that we did not consider whether 12,000 jobs...
I do not think that was the spirit in which we addressed the issue. I agree that you asked the question, but the subject was not approached in that spirit.
Mr. Laurin: Excuse me. I would prefer it if we could focus on the sloppiness to which you referred.
[English]
The Vice-Chairman (Mr. Shepherd): I would like to draw your attention to the fact that our original agreement was that we were going to prepare a very brief report on this area. If you recall, we tried to squeeze this in on our last agenda before the end of the year. The agreement we had when we said we were going to do that was that we were going to keep the report very brief.
I think what we're doing here is giving general instructions to our researchers, but maybe we should let them try to come up with something more specific. Did you have some comments?
[Translation]
Mr. Laurin: That is not my intention. I am sorry, Mr. Chairman. I will give them this. It is more than two pages long. I will give it to them, they can do their work, and we will decide subsequently.
I'm sorry.
[English]
Ms Whelan (Essex - Windsor): Mr. Chairman, with all due respect, I think I was next.
I wanted to say that our goal at public accounts is not to determine job losses in different departments. In transport, there's a committee set up that can look at whether or not Transport made the right decision or the wrong decision with regard to job losses. We're supposed to be looking at how the government is being fiscally responsible. If anything, we should be commending them for being fiscally responsible with the cancellation of this program.
Those are my comments. I hope that the report would indicate what the role of this committee is and not delve into the role of other committees. There are other committees that will deal with different aspects of different departments.
The Vice-Chairman (Mr. Shepherd): I think from the testimony we've heard that the question really is why we didn't cancel this program a long time ago, rather than why we did cancel it.
I would like to ask you two gentlemen, or maybe read this into testimony.... You were telling me something I thought very interesting about how these things are linked together. At the Department of National Defence some of these subsidies were actually being paid to Transport military personnel. Is that -
[Translation]
Mr. Laurin: Point of Order. Mr. Chairman, I do not want us to take up any more time to hear the witnesses again. Nor do I want to do the work of our researchers. I have given them a working paper which I think could be helpful in drafting the report. They can do their work, and then we can decide if we should keep a particular paragraph or delete it. If we were to do that today, we would be prejudging the work of our researchers. I would leave that task to them. They have heard the discussions and have the Minutes or Proceedings and Evidence. I trust them. I am ready to give them my notes. Let them do their work.
When we have their working paper, if it contains anything which Mr. Paradis doesn't like, then he can say so and we can vote to decide whether it should be kept in or deleted.
[English]
Mr. Paradis: Mr. Chairman, point of order.
The Vice-Chairman (Mr. Shepherd): I think realistically the format would be to take in the views of all the members of the committee and implement them into a report as efficiently as possible.
Mr. Paradis: Mr. Chairman, on the point of order. It's not up to Mr. Fillion to draft this report. We had an understanding last night that we were to meet here today and try to find a kind of canvas for the projected report. So I've just intervened to say to Mr. Fillion that I don't agree, and I don't think this side here agrees on the job losses. It's not a point there. Why are we asking the clerks to make a draft report with that in if we don't agree from the start? I think that's an important point. It's not Mr. Fillion's report; it's going to be the committee report. Why are we asking them to write something that we find out here doesn't apply?
.1805
The Vice-Chairman (Mr. Shepherd): It's a matter of procedure. I think we're asking our researchers to write the report so the general consensus here...I don't think you have a consensus for your point at this time. If you want to move an amendment to the report at a subsequent time, that's probably more appropriate.
[Translation]
Mr. Laurin: That is right. Mr. Chairman, I do not move any amendments now since I do not know what is going to be in the report. If we are not satisfied with what the report will say, we will move amendments. If they are not accepted, we will request permission to table a dissenting report, and that is all.
At this point, what we have here is a working paper to help our researchers draft the report. If the information I am providing them today finds its way into the draft report, we will have nothing else to add. If it is not, we will revisit the issue.
[English]
The Vice-Chairman (Mr. Shepherd): There is one comment I found rather interesting, and I guess it's only interesting because we're also dealing with a report for the Department of National Defence. I think you made the comment somewhere along the line, and maybe we could read it in as testimony, that some of these subsidies were in fact paid to companies the primary purpose of which was to move military personnel around. So in a sense, the government of Canada may well have paid more than once - once through a generous subsidy system and once to the actual cost of transporting the personnel. Could you make some comments on that?
Mr. Hugh McRoberts (Assistant Auditor General, Audit Operations, Office of the Auditor General): Certainly, Mr. Chairman.
Very simply, you recall that Ms Greene, in her testimony yesterday, indicated that in the information paper they had found the database. They had found that used household goods were amongst the commodities transported. She also indicated quite correctly that it was only up until 1992. In 1992, as a result of budgetary changes, that commodity was taken out of the westbound program. Prior to 1992 we did observe in some of the work we did studying the database, looking at the NTA's record, that movements of goods for DND were in fact receiving subsidy. This is probably not surprising in that if the subsidy is available it will certainly be claimed, and DND is certainly one of the larger single movers of people to and from maritime Canada.
The Vice-Chairman (Mr. Shepherd): So have we dealt with the basic framework of this report? Is the committee happy with the framework of the report to do with the National Transportation Agency?
Then we'll move on to the order of business, which is basically to discuss the report on correctional services. We had the meeting in public, which was our agreement from yesterday, and we're now going to meet in camera. The basic effect of that, of course, is that the proceedings will not be transcribed and therefore we'll save the government some money. Do we agree on that?
[Proceedings continue in camera]