Proceedings of the Standing Senate Committee on
National Finance

Issue 5 - Evidence

The Standing Senate Committee on National Finance met this day at 5:45 p.m. to study the expenditures set out in the Estimates for the fiscal year ending March 31, 2002.

Senator Lowell Murray (Chairman) is in the Chair.

[Translation]

The Chairman: We are very pleased to welcome this afternoon the Auditor General of Canada, Mr. Desautels, who is about to retire. Indeed, next Friday will be his last day in office.

Before turning to Mr. Desautels, I would like to mention that the Senate has agreed unanimously to the following resolution, moved our colleague the Honourable Jean-Robert Gauthier:

[English]

That, in the opinion of the Senate, Mr. Denis Desautels has been an excellent Auditor General of Canada -- scrupulously honest, professional, fair-minded, and a determined investigator. Mr. Desautels carried out his duties as Auditor General efficiently and effectively during his 10-year term. He not only verified the government's accounts but also was able, thanks to his leadership, to lead a team as professional and dedicated as himself. The Parliament of Canada thanks Mr. Desautels for his services, and recognizes the valuable work that he has done for his country.

As I said, the resolution was adopted unanimously by the Senate, and sent to the House of Commons today for their perusal. I cannot predict what its fate will be when it reaches the other place, but they have not said "no." We can be fairly confident that they will approve this resolution in the same spirit as we passed it.

It is a great pleasure now to call on the Auditor General, who is accompanied by Ms Maria Barrados, Assistant Auditor General, and by Mr. John Mayne, Principal, Audit Operations Branch.

Mr. Denis Desautels, Auditor General of Canada: Thank you, Mr. Chairman, for your kind words. I am indeed getting close to the end of my term, but I may have to go into the office on Saturday to tie up some loose ends.

I am happy to be here before you today with my colleagues to discuss the subject of accountability to Parliament and the business of supply, as you examine the expenditures set out in the Main Estimates for 2001-02. As you indicated, I am accompanied by Ms Barrados and Mr. Mayne, both of whom have worked closely with me on the issues that are of interest to you today.

Since this is my last appearance as Auditor General before your committee, it is fitting that the subject is accountability to Parliament. Over the 10 years of my mandate, one of my overriding goals has been to aid Parliament in being as effective as possible, not only by providing it with information directly through our reports and our testimony before committees but also by trying to ensure that the government provides Parliament with the right information.

I will speak about the need to improve accountability to Parliament from three perspectives. The first is the government's performance reporting in Estimates documents. These documents support Parliament's scrutiny of public expenditure and are essential to good accountability. Second, I will touch on the growing use of new governance arrangements that, in my view, place accountability to Parliament at unnecessary risk. Third, I will offer some reflections on Parliament's use of the Estimates documents and how to improve the business of supply.

Our office carried out audits in 1997 and again in 2000 to examine the government's performance reporting to Parliament. The 1997 audit looked at the early stages of reforms that the government had introduced to improve the performance information that departments provide to Parliament. These reforms split Part III of the Estimates into two documents. The first is the report on plans and priorities tabled in the spring, soon after the Main Estimates. This report establishes a department's performance targets and the general direction that it plans to take during the upcoming year and the next two fiscal years. The second is the performance report, which is tabled in the fall and indicates, therefore, the extent to which the results achieved by the department reflect those that were planned.

We were encouraged by what we saw in 1997. It was a good start toward more results-based reporting. When we audited again in 2000, we found that departments had made some progress, but at a pace that was disappointingly slow. As well, most departments had reported only the good news, and made little mention of performance that had not met expectations.

We recognize that reporting on performance is not easy, and takes time. We believe that the effort warrants more attention. In fact, it may be time for accountability legislation that would require government to report on its performance to Parliament. Legislation highlights the importance of good reporting and puts it on a more permanent and stable footing. It would give parliamentarians an opportunity to be involved in designing a regime that would suit their needs.

[Translation]

Mr. Chairman, another major weakness in accountability to Parliament relates to the government's growing use of delegated arrangements. The federal government uses these arrangements to replace departments with outside parties in delivering government programs and services. Examples include the billion dollar Canada Millennium Scholarship Foundation and the Canada Foundation for Innovation. Another arrangement of this type, the Sustainable Technology Development Fund, is proposed in Bill C-4, currently being considered by the House of Commons.

If implemented properly, delegated arrangements can improve programs and services. However, important accountability questions need to be addressed. An audit my office reported in November 1999 found that Parliament has limited means -- or, in some cases, no means -- of holding the government to account for the way these arrangements use federal tax dollars, assets and authorities, or for the objectives that they are supposed to achieved. In particular, Parliament is not getting enough information about the performance of these arrangements.

Delegated arrangements carry out public policy purposes, using public money, yet Parliament's auditor for the most part cannot audit their operations and access through the appointed auditors is limited. Experience in other jurisdictions, notably the recent Charmane Review in the United Kingdom, points to the principle of public audit of public money. In other words, when public money is spent, Parliament's auditor should be able to follow the dollars.

Another concern, over the last several years is the "year-end spending scramble" -- legislation rushed through at the end of the fiscal year, that "parks" significant sums of public money outside government. In some cases, the money is not spent until years later. I am concerned about this practice, which pays out significant amounts of public money in advance of need.

[English]

I turn now to my main topic: improving the business of supply. First, I will outline some related observations by my office, and parliamentarians own concerns. Second, I will offer some suggestions for improvement. Third, since these matters are not unique to Canada's federal Parliament, I will mention developments in other jurisdictions.

Our audits in 1997 and 2000 noted the limited review and use of the Estimates documents by House of Commons standing committees. Some committees had reviewed the Estimates documents, but most had not examined them. Our audits did not consider the work of the Senate or this committee. Our audit observations were consistent with concerns expressed by parliamentary committees that have examined reporting to Parliament. Since our 1997 report, the House of Commons Standing Committee on Procedure and House Affairs has tabled two reports on the subject, and made a number of recommendations for improving the business of supply, including the use of new structures, tools, and incentives.

Parliamentarians have called for standing committees to play a stronger role in the business of supply. Individual MPs have told us that the process for parliamentary review of the Estimates needs to change if it is to become more meaningful. The Procedure and House Affairs Committee tabled its 37th report in June 2000, endorsing the government's proposal that standing committees be encouraged to review reports on plans and priorities and departmental performance reports.

In my view, the key to strengthening parliamentary scrutiny is to make more effective use of the new Estimates documents. Committees could seek to influence the government's decisions on spending by examining information in the Estimates documents, especially the future spending and priorities set out in reports on plans and priorities. Review of these Estimates documents would also provide an opportunity to examine information about statutory expenditures, again with a view to influencing changes in the future.

Committees could issue reports on their review of the Estimates that would then be considered during the period of pre-budget consultations. This committee's studies in relation to the Main Estimates would complement the role of House committees. It seems to me that parliamentary committees can make a real difference in the scrutiny of public expenditures. If committee hearings on the Estimates focus on calling departmental officials to account for public spending, in a public forum, and culminate in a committee report, officials will listen and act.

The tabling of substantive reports on Estimates by committees would lessen reliance on having Estimates "deemed" reported by the end of a supply period. Committee reports would provide a healthy challenge to departments. The involvement of parliamentarians in articulating expected performance would motivate departments to report performance information back to Parliament fairly and reliably. It would also be an incentive for parliamentarians to review and use the Estimates information more fully.

[Translation]

At present, committee consideration of the Estimates tends to focus on policy matters, largely because the votes and supporting information in the Estimates document is in aggregate form. To deal with this problem, departments could provide more information, or the material in Estimates documents could be presented in such a way that committees would have an agenda of items to consider and make decisions about. These would be "chewable chunks" for meaningful discussion and review.

Turning to practices in other jurisdictions, my office is following some interesting developments. In 1997, we noted that legislators in other jurisdictions in Canada and abroad were using performance information and had recognized the need to make the review of this information more meaningful. A number of these jurisdictions had enacted accountability legislation, notably the province of Alberta; since then, more have done so, including the provinces of British Columbia and Quebec.

[English]

Standing committee procedures and practices in other jurisdictions may demonstrate ways to strengthen our own committees. In New Zealand, for instance, committees examine most Estimates in detail and issue substantive reports on them. Their reports frequently discuss departmental performance and consider outcomes as a matter of course.

Experience in other jurisdictions suggests that in-depth studies, such as the review of emergency and disaster preparedness carried out by this committee in June 2000, make an important contribution to public policy. Our office has also made a number of suggestions about how standing committees can use their public meetings on Estimates to improve their scrutiny of public spending. Our suggestions are presented in a 1998 publication entitled, "Parliamentary Committee Review of the Revised Estimates Documents." We suggest therein techniques for more effective questioning of departmental officials who appear as witnesses, and also some questions that committees can productively ask those officials.

Mr. Chairman, as I reflect on my experience with accountability issues, it might be appropriate for me to suggest three matters that your committee may be interested in pursuing in the future. First, the committee could consider examining a particular government program of interest to this committee, making full use of the relevant reports on plans and priorities and departmental performance reports. Second, the committee could consider the need for accountability legislation. Third, the committee could pursue the review of accountability for delegated arrangements, including the practice of parking public money outside government in advance of need.

Mr. Chairman, this concludes my remarks. My colleagues and I would be happy to answer the committee's questions.

The Chairman: Thank you, Mr. Desautels. Yesterday, the members of this committee instructed me to try to organize the question period today by dividing it into themes. The members of the committee have assured me that they will respect the discipline, and they have urged me to be firm if they do not.

On that basis, let me remind you of the themes that you asked me to use. The first theme is Parliament's role in holding government to account, which took up a fair part of the Auditor General's opening statement today. The second theme is public service management issues. The third theme is program evaluation. The fourth theme is Crown corporations and special operating agencies, such as the Canadian Food Inspection Agency, Revenue Canada, Parks Canada, et cetera. The Auditor General referred to some of these agencies in his statement. The fifth theme, time permitting, is other issues.

I think that the Auditor General has covered thoroughly the issue of Parliament's role in holding government to account. I do not want to foreclose any questions in that area, however. I will ask him to elaborate a bit on what he means by "accountability legislation" that he thinks it is time that we consider here.

Mr. Desautels: Mr. Chairman, we think that if there were legislation that would set out some fundamental principles of reporting by departments to Parliament, it would put the obligation to report on a more solid footing. It would also ensure that there is continuity in the efforts that are presently in evidence, and that those efforts continue into the future.

We do not think that this should be legislation that is detailed. It should be written in a way that would allow for evolution of reporting standards. However, we feel that that kind of legislation would send a message of obligation upon people to report according to certain basic principles.

There is similar legislation in place in other jurisdictions, as I mentioned in my opening statement. Alberta was a pioneer in doing that in Canada. Other provinces are now following in that vein, namely, as we mentioned today, British Columbia, Quebec and Nova Scotia. Other countries have put in such legislation.

That simply reinforces the desire of Parliament to obtain that kind of information. Debating that kind of legislation, as I mentioned, would be an opportunity for parliamentarians to voice their interests in the kind of information that they would like to receive.

Senator Bolduc: In the Auditor General's Report, on page 39 and elsewhere, you refer to the management responsibility of Parliament. I address that because it is so basic, in my opinion.

I noticed that in your speech today you stressed the same points that appear in your report. You noted that people have made an effort since 1997, but you have realized that most of the ministries, in measuring the results, try to give only the good news. You also say that we have a process by which managers are mixed up in a phase of perpetual planning and elaboration of measures of results, but that the score is not there. They have worked hard, but the results are not there.

Is that not because, in one way, the civil servants have a kind of built-in interest in not necessarily giving the results? We know that sometimes the objectives are contradictory within an individual law.

The Chairman: Since we are discussing Parliament's role, your question will be: "What can we do to change that?"

Senator Bolduc: Of course, it is difficult to pinpoint the real target. If the objectives are contradictory, it is not easy, first of all, to realize the target, and then, how to quantify that target so that we have concrete results and a measurement thereof.

This problem has two aspects. I was very much involved in those kinds of issues for 40 years. I remember the Glassgo commission as if it were yesterday, and also the Lambert commission and others concerning public policy and public administration issues. What strikes me frequently is that the measurement of results in terms of effectiveness -- that is to say the impact of programs on society on the one hand, and the measurement of efficiency <#0107> in other words how you use minimal factors for a given result, which is a measure of sound management, on the other -- those two aspects are very rarely clearly established. We talk about performance reporting, but performance, in one sense, is sound management. However, the other aspect is effectiveness of the results. What are the impacts on society?

With that in mind, would you agree that, instead of having an internal process of evaluation and assessment inside the government, as we have now, we should also use the Auditor General, and perhaps a committee of the Senate, plus perhaps even an independent auditor to give us that measurement of results? I would like to have your views about that. You have been, I understand, a bit reticent to discuss the policies. My question concerns the amount of input that we have into the process, and the end results.

Mr. Desautels: Mr. Chairman, it is true that we, as auditors, do not want to get into policy discussions. However, I believe that program evaluation and discussions on effectiveness can be carried out objectively without necessarily questioning government decisions.

If I may just go back a bit to Senator Bolduc's accurate characterization of our report, we do say that government managers have a tendency to report only good news. In a sense, that is a protective reaction, not only for themselves but also for the ministers for whom they work. Managers seem to be in the perpetual planning stage. That is correct. There is a great deal of turnover in terms of deputy ministers and assistant deputy ministers. When a new one comes in, he or she wants to start from scratch. There is that kind of situation across government.

Apart from all of that, there is the human factor. People tend to be reluctant, because of the political environment in which they are working, to be completely candid about their results. The outlining of some basic principles of reporting might be helpful in counteracting a bit of that reaction -- namely, overly protective, and reluctant to report in a completely balanced manner.

The government itself, if you review official publications, committed to reporting based on results. When we talk about efficiency and effectiveness of programs, the government's position is that reporting on performance should be focused on achievement of results for Canadians. There is not a contradiction between that basic, fundamental government objective and what we are all saying. Thus we are all in agreement, and the outstanding question is: How do we achieve that? Whether or not there is a need for more independent evaluation functions is a fundamental question. That question has been raised a number of times in the past, and in one of the Senate committees not too long ago.

Mr. Chairman, my personal view is that government managers, deputy ministers and assistant deputy ministers, in order to do their jobs well as managers, need an evaluation of their own programs. They need the feedback on how well their programs are working. There has to be an internal capability within each department, at least each major department, to do proper evaluation of programs and determine efficiency and effectiveness. Otherwise, people are managing by the seat of their pants.

Having said that, you then need to ensure that somewhere in the system there is a capability for evaluating programs that cut across different departments, including areas where there might be, from time to time, some basic questions asked about the effectiveness of a program and the continuing relevance of a program. There has to be a capability within government to have performance evaluations that cut across departmental structures, and can also address some fundamental questions when we are really examining the level of funding for certain programs, or the continuing relevance of such programs. You need both internal capabilities, and there has to be, somewhere in the system, a capacity to do the other kind of evaluation as well.

The Chairman: On the question of Parliament's role and holding the government to account, do you have a question, Senator Tunney?

Senator Tunney: In your proposition, part of this reporting would be factual and it would be easy to measure, and part of it would be judgmental. I cannot imagine legislation that would persuade those whom we want to measure and judge to do it for themselves. Certainly, if the news is good, that is fine. They will expand on that, and we need to hear about it. However, for the bad news, they will not reveal any more of it than they have to reveal. Therefore, I wonder if some branch of your operation, after you have done your job, would be more appropriate to provide us with the facts just as they are?

Mr. Desautels: We need to work towards a system in which organizations themselves would report on their performance according to certain standards. I would hope that, over time, we could evolve toward an environment in which reporting less than perfect news is not equivalent to suicide. I think there is a way of doing that; that it is possible to report less than satisfactory achievement provided you can explain what you are doing about it, and how you will correct the situation in the future. Given our political environment, most people would be a little sceptical about that. However, over time, and I do not mean in a couple of years but at least a decade, I think we can change the situation generally in our system so that being balanced and candid is seen as more of a virtue than the other way around.

In the meantime, to deal with the issue raised by Senator Tunney, it is possible for someone in the system to provide assurance on the reliability of the performance information that individual departments or agencies are putting forward. Examples of that already exist within the federal apparatus. The three new agencies that were created and remain within government -- the Canada Customs and Revenue Agency, the Food Inspection Agency and the Parks Agency -- have legislation with a requirement for them to report on their performance. The legislation also has a requirement for the Auditor General to provide assurance to Parliament that their reporting is reliable and reasonable. In a sense, that could address the concerns that have just been raised by Senator Tunney.

Senator Kinsella: Mr. Desautels, it is fortuitous for us in the Senate, I believe, that you raise this issue because we are examining for the first time in many years our complete committee structure. I would like you to reflect on the other side of the coin of reporting to Parliament.

What does Parliament need to do? What kind of machinery do we as parliamentarians -- and here I am speaking only for the Senate -- need to set in place in order for us to be able to study those reports? The reports are not very useful if we do not have an opportunity to look at them. What advice would you give us along the lines of the kinds of machinery necessary, given our Westminster model, and given that the Senate is principally a house of review?

In your introductory remarks you mentioned that you have looked at the procedures in the other place, but not how we have studied the Estimates here in the Senate. This discussion is fortuitous in terms of timing because we are taking a look at restructuring our entire committee system.

Mr. Desautels: Mr. Chairman, I will attempt to answer Senator Kinsella's question, and then my colleagues may help me out on this one.

I do not think that the system currently is functioning satisfactorily. There is some good information being put forward. The information could be much better, which is what we are pushing toward. However, in order for that to happen there must be sufficient demand for, and use made of, that information.

The standing committees in the House of Commons, in particular, do not spend enough time reviewing Estimates, and not enough of them report back to the House of Commons on their review of Estimates. Too many Estimates are just deemed approved, and that is not satisfactory given the fundamental importance of that function. There must be a clear expectation put on committees to review and report back explicitly on the Estimates of the departments for which they are responsible. At the same time, we must keep the members interested in that process by ensuring that the exercise is not futile. Different suggestions have been made to improve that particular aspect.

I said in my opening statement that, in a review of Estimates, it is virtually impossible to change the Estimates for the year that is being reviewed. However, if the timing of that review were well calculated, the review could be a pre-budget consultation leading to next year's Estimates. In my view, it would make the role of members of Parliament more meaningful if it could be demonstrated that parliamentarians could have an impact on next year's Estimates.

There should be some way of breaking up the presentation of the Estimates in a way that would produce more "chewable chunks." The voting structure currently is such that most of the votes are huge and general. That makes it difficult to get your mind around some of these Estimates. If somewhere in the system there were someone who could repackage that to make it more suitable for a parliamentary discussion, it would contribute to the quality of the discussion within the committees of the two Houses.

I will ask Ms Barrados if she has something to add to that.

Ms Maria Barrados, Assistant Auditor, Office of the Auditor General of Canada: I would suggest that, with the present structure of the Estimates containing separate reports on plans and priorities, there is an opportunity to have a discussion about what the expectations are. That would be a discussion on what you really expect to achieve, and how you would know whether you had arrived. That is very difficult for departments to do. If members of Parliament push on that aspect, I think it would make the entire reporting structure more meaningful. If there is clarity in those expectations, and discussion on those expectations, then you could rightfully expect that the report would be in line with those discussions.

Senator Kinsella: With regard to the point on votes, have you ever concluded as to what would be the optimum number of votes?

Mr. Desautels: No, we have not. I would observe that there could be quite a range in the number of votes when you compare one government with another. In my opening statement I noted the way in which New Zealand reviews votes. However, the votes in New Zealand are more precise than they are in Canada. They have proportionately quite a few more votes than we have in Canada.

I would not say that we should be moving to fewer votes. If anything, I would move in the other direction.

Senator Spivak: I want to come back to the question of outcomes raised by Senator Bolduc. My view is that it is the committees that need to evaluate. I do not know if I believe in outside consultants because when I was chair of the school board, I had a study done on professional development and outcomes in the classrooms, and I was practically lynched.

How can we obtain the proper information? What is the machinery for obtaining the proper information in order for committees to look at these outcomes?

You talked about not getting into policy issues, and you talked about effectiveness. However, for example, we discovered that effectiveness, perhaps, was exactly the wrong approach in looking at public interest outcomes. Since it should be the elected representatives or the parliamentarians who look at the question of the outcomes and how management is taking place, how do you separate effectiveness and public interest?

For instance, if you get information only from management, you may only get good news. Should we be seeking information from those lower down the scale? I understand the reporting issues. Is it your office, perhaps, that could be acting as ombudsman to that effect, or do you already do so?

Ms Barrados: Clearly, parliamentary committees are the main policy-setting committees where the political decisions are made about government activities and programs. The challenge is to get a flow of information that is meaningful and provides the kind of information that you need to make those kinds of decisions.

There are a number of ways to do this. Part of the challenge is to ensure that the information is provided in such a way that it is useful to you. As government is moving to managing for results, there is a great deal of measurement beginning to occur. That tends to be an ongoing measurement, and tends to be the kind of thing you need to ask for to get that kind of information.

Program evaluation has floundered in government. It has not been doing very well. There is now a new policy. There is a commitment to reinvest in that type of evaluation, and we should, therefore, be seeing improvements in program evaluation. Those mechanisms already exist in government; they need to be strengthened and encouraged.

On our side, we do value-for-money audits that examine the programs and the range of activities in a program. We will often deal with government-wide issues, and therefore we would look at reporting. As the Auditor General said, we will provide assurance on reports when we are asked.

These different vehicles exist. I do not think I have a neat and tidy solution.

Senator Spivak: Would you comment on the issue of whether information should comes only from management? Could it not also come from those lower down in the system, for example, scientists? How would you deal with that, and how would you suggest we deal with it?

Ms Barrados: In terms of managing for results, we expect that anyone who is working in an area would be inputting into those measurement systems. In the context of health protection, you may in fact be posing somewhat different questions. It may be more of a question on differing scientific opinions, where there is not a consensus. That would not be quite the same thing as a measurement system.

The performance measurement system of a program includes how much is accomplished. I would expect anyone delivering that program to input those things into a system, and I would expect those to be added up and you would receive the results. You then know how many cheques were delivered, or how many jobs were created.

I think your question relates more to situations where there exists a process of making judgments about determining approval or no approval, and you have someone who does not agree.

Mr. Desautels: I would like to add two comments, Mr. Chairman. I fully understand the concerns of Senator Spivak. It is important to have in the system strong and rigorous standards for evaluation of programs, even when management within a department conducts them. There must be some kind of monitoring of how well those standards are being followed.

That is the role of the Treasury Board secretariat. Their recently adopted policy is meant to do that. We will, as an organization, in the future be monitoring how well they are doing their central monitoring role. That will bring some equilibrium and objectivity into the system.

In addition, in our last report we talked a bit about our legislation. Our legislation, at this point, has some restrictions on what we can do on the effectiveness front. This reflects a concern that some people had when the legislation was drafted back in the 1970s about the danger of the Auditor General getting involved in policy.

As we said, with the experience that we have gained since then, we know how to navigate in that particular world. It is time to drop that particular restriction on our ability to conduct effectiveness audits in the future.

The Chairman: You have left us with a lot of food for thought, both in your opening statement and the dialogue so far as Parliament's role is concerned. Before I move on to the next theme, I would like to comment in regard to the Estimates and the supply process. One of the things that I like is your suggestion of forcing the Commons committees, although not necessarily only the Commons committees, to do more work on the Estimates, and come up with a real report based upon a real examination. That would reintroduce something into the system that has been missing for a long time, and that is, a certain amount of political tension, properly understood.

When the Estimates left the old Committee of the Whole 30-odd years ago, the tension went out of the system. We are aware of all of the flaws of the old system, but the problem with the present system is that it is programmed to the convenience of the executive, and to some extent the convenience of honourable members. Everything happens on a fixed day, no matter what.

I think your suggestion is good on, and we will be pursuing it also to see how we can help in that process.

I want now to move to the second theme, which is that of public service reform.

Senator Banks: Perhaps if we have some time left over at the end, it might be useful to us if the Auditor General could give us a quick précis of the nature of the Alberta legislation to which he referred.

I am from Alberta, sir, and I am delighted to hear that we are still regarded as pioneers, as we always have been.

I have a two-sided question to ask. A great amount of public service is provided to the workings of Parliament, not to parliamentary appropriations for other purposes, but to make Parliament work. I am hopeful that, in your time in office, you have had a chance to examine the delivery of that particular service. If so, perhaps you would comment on anything of interest that you have determined during that time.

Second, the current buzzword is "outsourcing." I know that on several occasions and in a few publications you have talked about your concern that when the delivery system of a government program is farmed out, or outsourced, or let out by contract to non-governmental agencies, that a moat is put into place in terms of accountability as between the delivery of the service and the people being served. In other words, there is a disconnect between the people on the ground who are actually delivering the service on the one hand, and the people who decide that the service ought to be delivered, on the other. Perhaps you would comment on that observation, please?

Mr. Desautels: The first question dealt with public servants working for parliamentary institutions and working to make Parliament work. Yes, in the past we have looked at that question. First, around 1990, we looked at the activities of the people who work for the House of Commons and then the people who work for the Senate. That examination was finished shortly after I arrived. Subsequently, we conducted a review of the joint services of the two houses, and we made a number of recommendations to increase efficiency in the delivery of these services to our parliamentary institutions. These were, on the whole, well accepted.

That series of audits was basically a follow-up from a much earlier audit, conducted in the 1980s, that had revealed some significant problems in the functioning of the House of Commons at the time. That audit led to a series of major reforms in the 1980s, and the second series came up with more positive conclusions on the running of the institution, but there were still some opportunities for real improvement.

The last audit was performed about eight years ago, so some time has elapsed, but we have no immediate plans to do it again. However, my successor may think differently.

In respect of your second question, outsourcing is a broad subject, Mr. Chairman, and there are many different forms. If we are implying the contracting out of certain services, that is a pretty straightforward mechanism or management issue. Whenever you contract out a service, there is still a link between the department that does the contracting out and the contractor. It does not matter how much the contract is for; the department is still, in my view, fully accountable for the performance of the contractor and the delivery of the service. Although at times there could be attempts to blur that relationship, in my book when you contract out you are still fully responsible.

Other situations are quite different. I mentioned in my opening remarks "new governance arrangements" or "delegated arrangements," whereby the government will transfer significant sums of money into what are called "arm's length organizations" and let them implement a program, whether it be scholarships or the funding of innovation projects or technology projects. However, the organization that receives the money is technically at arm's length from government, and has a great deal of latitude in terms of implementing the program. Those are the arrangements that cause us the most concern, because it is in those situations where, in my opinion, there is a break in the link between Parliament, which authorizes the spending of the public funds, and the ultimate delivery of the public service. I have spoken at length about that in my last report.

In my closing comments, I would encourage this committee, or other committees, to focus on that particular phenomenon because it is still continuing. As we speak, there are more and more such organizations being proposed, and they must be looked at very carefully because, down the road, we may find that there are large sums of public funds being spent in that fashion with very little oversight by Parliament.

Senator Bolduc: Would you rate the CPP Investment Board in that group?

Mr. Desautels: The CPP Investment Board is, in my view, in that category. It is a slightly different kind of organization, but the concerns that I have raised would apply to them. When that legislation was passed, we made representations to the Finance Committee of the House of Commons at the time, that we should have the right of oversight on that board. As a result of that, we have been given a right of access to the records of the board and the files of the auditor of the board. However, we are not the auditors of that board. The arrangement is acceptable, but the board holds a different status from the foundations that I have talked about. Those foundations are at arm's length, whereas the CPP Investment Board is more in the nature of a Crown corporation within government.

Senator Bolduc: There will be billions of dollars there in a few years.

Senator Banks: Let us assume that it is desirable to have, for varying purposes and in some cases at arm's length, institutions that receive parliamentary appropriations, and that they ought to be of some intrinsic value. Do you believe it is possible for such an institution to be at arm's length if it is subject to audit by the Auditor General of Canada, in the same sense that a government department might be? Failing that, what kind connections do you envision that would permit that agency to be at arm's length, on the one hand, and audited by the Auditor General at the same time?

Mr. Desautels: Mr. Chairman, I can conceive that there could be situations where it would be desirable to have an arm's length organization, particularly if you are attempting to set up a partnership with other levels of government or other private sector institutions. That would also apply if you were attempting to lever the government contribution by bringing in contributions from other participants. My point is that you must be careful when you set up those kinds of organizations. In certain circumstances, of course, they could be quite appropriate. When they are appropriate, though, we have to ensure that we set them up properly so that accountability to Parliament is well served.

It is possible to have arrangements like that with a number of partners that are structured such that you have even better accountability than in the traditional form of delivery by government departments. You must think about that up front when you enter into those arrangements.

However, you must also be careful not to justify that concept all of the time. There are certain foundations that exist for a single purpose: to spend the particular amount of money that the government has set aside for them to spend on a particular program. In those situations, you must think through the link that should exist between that organization, the sponsoring department and Parliament itself.

I might add that in answering this question, I was reminded of one thing that I mentioned in my opening statement. In the United Kingdom, the Sharman committee looked into this matter and created certain basic rules. These rules specified that where public funds are being approved by Parliament, they should be subject to public accountability and public audit. I would commend this particular report to the committee if you wish to refer to it when you are considering this matter further.

Senator Banks: Perhaps I might ask a specific question about some of the traditional institutions that receive parliamentary appropriations, and which, I think, are not subject to audit in the normal course of events by the Auditor General.

For example, I refer to the Canada Council which was audited by the Auditor General at its request. The Canada Council reports to Parliament through a minister, and their accounts are public. The reports are tabled annually. I believe that is correct for the Canada Council, and also for the CBC and the Social Sciences and Humanities Research Council. Am I correct that those organizations, in the normal course of events, are not subject to audit by the Auditor General of Canada?

Mr. Desautels: All the granting councils are subject to audit by the Auditor General.

Senator Banks: The Canada Council believes that it is not.

The Chairman: Senator Banks is a former member of that Council. You can confirm that they are, Mr. Desautels.

Mr. Desautels: The granting councils, Mr. Chairman, are all subject to audit by our office.

Senator Gustafson: Chapters 24 and 25 of your report dealt extensively with the provision of service for the federal health and safety regime and food inspection. You also indicated quite clearly that the Canadian Food Inspection Agency has a responsibility which combines that of four other agencies that existed formerly.

As Chairman of the Standing Senate Committee on Agriculture and Forestry, I would say that the bulk of our mail is from people who are concerned about mad cow Disease, hoof and mouth disease, and these other serious things that are threatening Europe at the moment. Thank goodness we have not had any outbreaks here.

Are you satisfied that our health inspection agencies are doing all that can be done? That is a serious question.

The Chairman: I know it is a serious question. Before Mr. Desautels answers, let me say that, from a procedural point of view, I am hereby declaring an end to the theme approach. I knew when I agreed to do it that it would not work. I told you that you cannot teach old dogs new tricks, honourable senators. From now on, I will take names and you are free, as indeed you have indulged yourselves so far, to ask questions on any of the themes that I have mentioned or none of them at all.

Senator Gustafson, you have put a question to the Auditor General. If he feels that it is within his purview, I invite him to answer it.

Mr. Desautels: Mr. Chairman, as Senator Gustafson said, we looked at a number of regulatory programs in our last report, and the Canadian Food Inspection Agency was one of those programs. We made a number of comments about their practices. We looked at the food inspection activities as opposed to the issues dealing with health of animals and plants, which is also an important part of their mandate. Disease in certain animal groups was not part of that particular audit. We were looking at the food being consumed by Canadian consumers.

Nevertheless, we raised a number of issues as to how the agency was carrying out its work, and the extent to which it was using proper risk analysis by applying its resources in those areas with the most risk. We also had concerns on how the agency was dealing with what is called the "non-registered federal sector," which is the dry stuff that you buy in your grocery store, and is an important part of what we consume. We had concerns about that as well.

On the whole, we said that our food inspection practices compare well with the rest of the world. Our food products are accepted by other countries without further inspection in a majority of cases. Despite the fact that we raised concerns about certain significant problems, we think that the practices of the food agency compare quite well with what we know in the rest of the world.

I should also add that the Food Inspection Agency is one of those organizations that are required by legislation to report on its performance. We have also been critical of the quality of the agency's report on its performance. We have been at them now for about three years trying to get them to improve their reporting on their own performance. At last news, they have accepted to work with us to further improve their reports.

Senator Stratton: Since we now have poetic licence, courtesy of Senator Gustafson, I would like to return to the questions asked by Senator Banks regarding Crown corporations. Before I get into that, sir, I want to thank you for your participation with this committee on various issues throughout your mandate. It has been most appreciated, and valuable.

With respect to Crown corporations, what do you think is the appropriate relationship with a Crown corporation? We are constantly dealing with relationships between the minister and the Crown corporation for which that minister is responsible. Is there an appropriate relationship that should exist, in your view?

Mr. Desautels: Mr. Chairman, the regime that was put in place within the federal government back in 1983 or 1984 is generally quite sound. It defines the relationship between Crown corporations and the government, and how corporate plans and budgets for Crown corporations are to be approved, et cetera. There is a fairly sounds regime in place for the management of the entire Crown corporation portfolio.

In our last report, we raised certain issues about the governance of Crown corporations. The issues revolved around the appointment of members to the boards of Crown corporations, and the role of boards in the appointment of the CEOs of Crown corporations, and also how government was equipped to play the role that was anticipated in the legislation vis-à-vis Crown corporations. We had some serious concerns about all three issues.

In respect of appointments to boards, we felt that not enough consideration was being given to the needs of the boards for the different kinds of talent that were on their boards. We felt that there should be better consultation between those who make the appointments to boards and the Crown corporations themselves, to ensure the right balance of talent on the boards.

Similarly, with the appointment of CEOs, many Crown corporations do this without reference to the boards. Therefore, the boards do not take ownership of that particular function. That method also creates an awkward relationship between the CEO and the board afterwards. Thus we recommend a more proactive role by the boards in the selection of CEOs to Crown corporations.

In terms of the role of government in monitoring Crown corporations, we felt that they had lost some capacity in that area, and that they needed to rebuild that capacity.

Senator Stratton: This leads to my other questions. In respect of the spin-off for new corporations, Parks Canada, Canada Customs and Revenue Agency and the Canadian Food Inspection Agency, do you believe that was done in part to get out of the quagmire of dealing with the civil service regulations? I am concerned that while they have undertaken this change, at the same time the government does not seem to have dealt with the fundamental problem of restructuring the civil service. If you recall, we did a report in February of 1999, entitled "Retention and Compensation Issues in the Public Service." Your capstone report mentioned the failed attempts to reform the public service, such as PS2000 and the more recent Rélève. Paragraph 304 on page 85 of your capstone report states:

I believe the time has come for the government to consider establishing an independent review aimed at producing reform proposals and the accompanying draft legislation.

Would you care to comment on those two issues?

Mr. Desautels: The first issue is one of spin-off of new agencies and why it was done. Was it done to get out from under the rigidity of the public service regulations? Officially, that was not the reason. However, I believe in one case, in particular the Canada Customs and Revenue Agency, that was a major factor. They were having serious problems with hiring and keeping the people that they needed to get the job done. The constraints of the public service rules were preventing them, according to them, from doing their jobs correctly. That was, at least in their case, a definite factor in pushing for a status other than "department."

In the case of the Canadian Food Inspection Agency, I believe the situation was somewhat different. We were putting together activities that belonged in different departments into a single agency, so the considerations were a little different. In any case, in all of those instances, because the status was changed for that purpose, we should ensure that they make full use of this new status.

However, it begs the question: If that is the reason, why not do it for everybody or, conversely, instead of doing that, why not fix the system so that it is workable? One way or the other it seems to be happening piece by piece, as we say in our report, as opposed to happening as a result of a well-thought-through policy.

In my view, this is something to look at. I hope that the recommendations that we make will lead to that result. In fact, Senator Stratton, when our task force recommends to the government an action-oriented plan in proposed legislation, we think that that speaks to fixing the system as quickly as possible. In that way, there is less need for people to want release from the system in the future. At the same time, attempting to learn from our experience in relation to the success of the revenue agency and the food inspection agency could provide direction in respect of the kind of reform that should be brought about for the rest of the public service.

Senator Stratton: A few days after your report was tabled, the President of the Treasury Board announced a time frame of one and a half years to bring forward major changes in the laws governing the public service. How realistic do you think that time frame is? That is not to suggest that they should take a longer period of time, but you would not want to give them a deadline that would ensure failure because of lack of time. Do you think that one and a half years is a realistic time frame?

Mr. Desautels: It is a tight time frame, but the process has to be done that way. There has been enough study of the issues; there is no need for much more study. When we talk about an action-oriented task force, it is not to do more studies but, rather, to propose a plan of action to the government. That could be done reasonably quickly. From there, it would go to Parliament, where a little more time would be required because there are many considerations: Union issues and collective bargaining issues are involved. This is not done lightly. One and a half years seems like a short time, but I would not want to see it take much longer than that. There is a window of opportunity now that should be utilised.

The Chairman: I voted against both the Parks Canada and the Canada Customs and Revenue Agency bills partly because I felt that they were slipping away from Parliament. That may still be a problem, although I was quite encouraged to hear what you said in one of your reports on that subject. Also, I felt that it was so obvious -- and they did not make too many bones about it in both cases -- that they were trying to get out from under the relevant legislation governing the public service.

In that we are talking about an enormous number of civil servants who are now out from under that legislation, I was quite bemused when, in one case, a public service union supported the initiative. It is the first time that a public service union has ever called me to support a government bill; it was quite an event. I do not know what this will do for public service cohesion and morale, or does it matter?

Mr. Desautels: Mr. Chairman, in my capstone report I talk a bit about that. I said that in the past, the approach of the Canadian federal government has been to have in place a fairly uniform public service with the same rules of entry, promotion, classification and remuneration. That, in itself, has made the system difficult to manage because to maintain that uniform approach has not been easy. I encourage the government to consider, without getting into policy but as a reminder only, other models from around the world that are more decentralized and seem to be working not that badly.

By decentralized, I mean that more authority is given to individual departments to manage human resources, to classify positions, and to put in place remuneration schemes that can vary to some degree from one department to another. Therefore, you could have a system whereby there would be more delegation to departments, but you would still maintain some fundamental principles of the public service so that you do not have 25 public services. While you can recognize differences from one department to another, there would still be some cohesion within the public service.

[Translation]

Senator Ferretti Barth: I would like to thank you for your remarkable work on the past few years. I wish you a very happy and sunny retirement.

When I arrived in the Senate, I had some concerns which I still have today. When you are auditing accounts, if you see every year the same request under an older convention, for instance the 1944 Civil Aviation Convention which means a financial burden for the taxpayers, is it your responsibility to draw the government's attention to the fact that the time has come to review that Convention and possibly to make the appropriate recommendations to make sure that Canadian taxpayers will not be adversely affected by a Convention which went unnoticed for such a long time? I am mentioning just one case, but there are others. Would you suggest the appointment of a committee outside the parliamentary system, or a parliamentary committee or even a committee within the department itself?

Mr. Desautels: You mentioned older conventions, but we could even mention on a broader scale the many legislations which are becoming obsolete. The answer to your question is yes. Occasionally, during our audits, when we find that legislation is ambiguous or difficult to enforce, we mention them to Parliament in our reports. However, we do this carefully because we respect the laws which are passed by Parliament. But occasionally, Members of Parliament have been grateful to us when we identified pieces of legislation which were becoming obsolete or needed to be amended. We have not commented in the past few years on the 1944 Convention on International Civil Aviation, but we did so in several other cases.

I would add that the Canadian government, when it reviewed programs in 1995 -- it was a thorough and exhaustive review of the various governmental programs -- questioned most of the government activities. At that time, and even before under the previous government, a number of agencies were terminated because they no longer met today's requirements. Those periodic reviews are very healthy and provide a means of questioning conventions or even agencies which are no longer meaningful.

In our report, we wrote that even though the government now has a surplus in its annual budget, it should nevertheless stick with the same discipline as when we reviewed programs in 1995 so that all programs will be reviewed on a regular, cyclical basis, and will be consistently questioned as a result of close reviews like the 1995 reviews.

The 1995 review was a good exercise, but it was a one-time review. We should make sure that such controls are applied on an ongoing basis for all programs, maybe not necessarily every year, but on some cyclical basis.

Senator Ferretti Barth: Do you think, as the Auditor General overseeing all the government's accounts, that it is important to sound the alarm with respect to those old conventions? If it is within your mandate, maybe you should be making recommendations in this respect.

According to your report, the Swiss Air crash, off Peggy's Cove in Nova Scotia, has been costing us $53 million. Those figures have not been made public, but if people hear about it, it will certainly create quite a stir.

The review of conventions every five years is a well-founded process, whether it deals with the International Civil Aviation Convention or other conventions.

[English]

The Chairman: The problem seems to be that the country where the air crash occurs must pay the costs that follow. Canada is particularly vulnerable so it seems, in the financial sense, because of the expanse of our territory and the great number of international flights that overfly our territory.

Mr. Desautels: Mr. Chairman, I do not know what more I can add. We have not looked at this specific convention, but there are other examples where we have made recommendations that government reconsider legislation in certain areas. We recently did work on immigration and refugee status and, as a result of that work, I believe there has been reconsideration of certain pieces of governing legislation. However, we have not considered the particular convention mentioned.

There must be sufficient transparency in government reporting so that the cost of being part of a certain convention comes through in the public reporting and is clearly visible to everyone concerned. If we judge that it is too expensive, there might be a debate around it, but at least we would know.

Senator Finnerty: In your final report, you talked about the poor quality of record keeping in some of the departments caused by their fear of access to information requests. Could you elaborate on the nature and extent of the poor quality of record keeping? Is the problem recent, and are measures being implemented to correct the situation?

Mr. Desautels: This issue has been raised by both the Information Commissioner and ourselves. The problem is due not only to concerns that public servants may have about access to information, but it is also due in part as well to cut backs in certain functions in the 1990s, so that there are now fewer people responsible for maintaining proper records in government departments.

The use of electronic mail and other electronic devices has also posed new challenges. While these electronic means of communication offer a great deal of potential, they have resulted in much correspondence previously captured on paper being captured only electronically. There is not that much assurance that those records are being saved for future reference. While this has been an opportunity, it has also brought about certain risks.

Those two factors are at the top of the list of concerns that some people may have about documenting information because it would be accessible under access to information. That is an unfortunate reaction. This makes it difficult sometimes to reconstruct government decisions. It is difficult to capture how previous decisions were made so that one can learn from history when making future decisions. It is something that we think must be addressed. There are some technological solutions, but there must be a desire or commitment to maintain good records. It is a problem. We have not made a detailed study of that, but we have expressed a concern. We hope that those who have the responsibility for maintaining proper archives in departments will react. I feel that our office should revisit this item in future years to determine whether there has been an improvement.

The Chairman: Colleagues, we have already gone somewhat beyond our normal 90 minute time span, and I do not want to keep the witnesses and senators too long. I do have Senators Kinsella, Spivak, Bolduc and Banks on my list for some short second-round questions.

Senator Kinsella: Mr. Chairman, I would to refer to your December report, in particular chapters 24 and 25, which were mentioned by Senator Gustafson. You discuss several issues related to our federal health and safety regime and our food inspection system.

Chapter 24.107 states:

The public confidence in government's use of science and technology to protect the health and safety of Canadians has been shaken by recent crisis. The continued lack of sound impact assessments of proposed and existing regulations also undermines the credibility of government science. Without credible science, health and safety regulatory programs can be challenged as untrustworthy sources of information and subservient to political policy or special interests.

Would you explicate the issue of the public losing confidence and the credibility of science? It is of great concern to many honourable senators.

Mr. Desautels: In a number of the regulatory programs at which we looked as part of this effort, and also in other work of the office, for instance in the fishery, we noted, in certain departments, a loss of capacity to carry out the scientific work needed to buttress the mandate of that department or those departments concerned. When that happens, of course, the department is more vulnerable to pressure from different lobby groups. We believe it is important to ensure that departments that have clear responsibilities in the development and implementation of regulatory programs also have the capacity to deliver on those mandates.

Among other issues, there is a shortage of scientific personnel in a number of these departments. There must to be a real push to recruit and fill the vacancies. In these reports we talked about vacancies in the biologics area in Health Canada. Similarly, there are many openings in the area of nuclear safety. Filling positions would help alleviate this problem and make the departments less vulnerable to the kind of risks about which we are talking.

Senator Kinsella: Do you think that the Senate should carry out an inquiry into that area?

Mr. Desautels: I would welcome that. We have invested a lot of effort in this. The whole area of regulation -- setting regulations, overseeing the implementation and enforcement -- is a tremendously important area. It does not always involve the spending of huge public funds, but it has a huge impact on people.

It can have an impact on the health and safety of Canadians. It also has an impact on costs of different organizations and businesses. It is a tremendously important subject.

Senator Gustafson: The major problem seems to be independence from government. Government tends to protect their own programs and their own assessment of situations. How do we achieve independence?

Perhaps a Senate committee would be the best independent means available. Having sat in both the Houses, I consider the Senate to be quite independent.

Ms Barrados: Mr. Chairman, it is a difficult issue because scientists in government are not scientists in an academic area. Scientists are there to support the policies that the government has in place. However, it is a good to ask about the standards, and how their work is reviewed.

Senator Kinsella: There are two levels of science -- government science and academic science.

Senator Gustafson: That is the problem..

Ms Barrados: I would not say there are two levels of science; but scientists are working in different environments, and a common debate among scientists is who determines what they should do. If you are an academic, you have a different degree of freedom than you do if you are working in government.

Senator Spivak: This issue of scientists and scientific credibility is important. For example, the Royal Society of Canada recently came out with a bald statement that the substantial equivalence notion that is being used in looking at genetically modified food has absolutely no scientific basis whatsoever. There are many other areas where that applies.

My question comes back to the issue of public confidence, which was by Senator Kinsella. You mention the new food hazards in chapter 25. We have talked about antibiotics, food allergies and diseases. You talk about residue testing that has become a routine part of inspection. It may seem like a small issue, but it is not.

I have been trying, through the Library of Parliament, to obtain basic information about drugs that are given to farm animals and the allowable residues in foods. I also want to know about the legal status of many such drugs that have received notices of compliance, but have not been listed under table 3 of the food and drug regulations. Some years ago, the CFIA received a legal opinion that the way in which Health Canada was proceeding -- not publishing residue limits for these drugs -- was untenable under the law. There are hundreds of drugs for which there are no maximum residue limits by law. That is a major health question.

My attempts to obtain information have met with some evasion. Have you investigated that specific matter of delays in setting drug residue limits? This is a very important question, as we found when we did the rBST study. Do you think it would be helpful for a Senate committee to study that issue in relation to public confidence in food safety? As I am sure you are aware, concerns about this issue are growing.

Mr. Desautels: Mr. Chairman, with your permission I would ask Mr. Neil Maxwell from our office, who carried out the work in the food inspection agency, to answer Senator Spivak's question.

Mr. Neil Maxwell, Principal, Sectoral Audits, Office of the Commissioner of the Environment and Sustainable Development: The issue that the senator raises is an important one. It has received much public attention, and has been discussed at length publicly by experts in the field of food safety. It is also an issue that has been the subject of review by the European Community; several aspects of the Canadian Food Inspection Agency's programs in an audit done over the course of the last year; and a report that was finalized in the last few months.

Senator Spivak: "Administration active," I believe is the term for those drugs. Am I correct?

Mr. Maxwell: I would not pretend to talk with a great deal of technical authority about that. It is an important area of their work. In a sense, it probably illustrates how important this agency's work is because it is just one of many different programs that they are responsible for administering. Beyond the question of monitoring for antibiotic residue, they do residue testing of pesticides, in terms of import programs; they have extensive domestic responsibilities, in terms of domestically produced food; and they have responsibilities within the food industry itself, where the majority of their inspectors are active. During the course of our audit, we did not look at that extensively. Certainly, based on what I have heard food experts say, it is important.

Senator Spivak: To clarify, because the question is rather esoteric, is there no legal requirement for drug manufacturers to provide official laboratories with reference standards to detect residue, a legal provision which has proved to be essential for efficient residue control in the European Union? Those standards are not in place and the Canadian Food Inspection Agency has hundreds of drugs that have no maximum residue levels. For example, some time ago they had to recall tonnes of pork because it was discovered that a certain carcinogenic drug could not be administered after a specified time before animals went to slaughter.

We receive a terrific amount of mail on this issue, some as a result of the work done by the Standing Senate Committee on Agriculture and Forestry in its study of rBST. Do you think food safety and public credibility in this area is an appropriate field of study for a Senate committee?

Mr. Desautels: Mr. Chairman, my quick answer would be yes, because as a result of our work in the audit of the Food Inspection Agency, we noted that the public is sensitive and interested in those issues. Anything that can be done to properly inform the public is important. A review by a committee of Parliament helps to clarify certain facts and, perhaps, could be helpful to the agency itself. It is one thing if they say it themselves, but if someone else confirms it, that is even better. A good airing of these issues in a committee could be quite useful.

Senator Banks: Referring to an earlier question about the public service, the word that was used was "quagmire" to describe the reason that the government decided to privatize the delivery of some of its services. From another angle, would you please tell us briefly about the competitiveness of the cost of our public service relative to the private world? Does the Government of Canada, with respect to the public service and the labour agreements that attend to the provision of those services, operate in a reasonable and competitive regime, and are we getting our money's worth?

Mr. Desautels: Mr. Chairman, that is a tough question. I will try to be brief. There are certain aspects of human resources management in the public service that are much more expensive than in the private sector. For instance, the whole infrastructure to support human resources management in the public service -- personnel officers, payroll officers, et cetera -- would be about three times the cost of doing the same work in the private sector. This has been confirmed to me by a number of people who have seen both situations. That is only a small part of the whole public service, of course.

For the rest, the salaries paid in the public sector, on the whole, are quite competitive with the private sector, particularly up to the medium-management level. When you move up the management ranks, the competitiveness of salaries is a problem. However, below that, public service salaries are competitive. In my view, public servants, on the whole, work quite hard. If you are asking me whether we are receiving a day's work for a day's pay, yes, we are. In fact, there has been much stress on the system as a result of cutbacks, such that people at different levels are asked to do much of the same work that had to be done before by more people. People do work hard. There would be an opportunity to get more value if you could simplify work processes and make the working environment more efficient. The example I gave earlier of human resources management and how long it takes to hire staff, to deal with promotions, and to transfer staff, consumes a great deal of time. If we could streamline some of the processes in government, and if people worked as hard, production would increase.

Senator Banks: Do the labour agreements permit the streamlining to which you have just referred, or would we have to go to the Labour Relations Board and get things straightened out?

Mr. Desautels: As we stated in this report and other studies we have done, there has been a collection of measures put in place over the last 30 or 40 years, including certain legislation, jurisprudence, and different conventions, that, over time, have made the system heavy. Therefore, it is not a question of merely changing a collective agreement. It is a question of looking at the entire structure that has been put in place.

Senator Banks: Would you describe our personnel management regime -- I cannot bring myself to say "human resources" -- as inefficient?

Mr. Desautels: Yes, the entire system is inefficient.

The Chairman: Thank you, very much.

You and your colleagues have been patient. I want to give you an opportunity, if you wish, to address stronger protection of the independence of your office. In a nutshell you tell us that your budget at present is negotiated with the Treasury Board officials, and although this has not yet done any harm, it is an uncomfortable arrangement for reasons that I do not think that I need spell out to senators.

You went on to tell us that the UK has a better system of funding that sets the audit office's budget by recommendations after an all-party committee of members of Parliament to the government. This puts the budgetary decision where it rightfully belongs, with the members of Parliament to whom the Auditor General is responsible, rather than with public servants. You say that we could follow the British example within the constraints of the Canadian Constitution for the audit office, and perhaps for other officers of Parliament as well.

I wanted to put that on the record and give you an opportunity, if you wish, to elaborate on it before we wind up this meeting.

Mr. Desautels: Mr. Chairman, your summary of our position has been accurate. It is uncomfortable to negotiate with certain public servants for the funding for our office when in fact we do have, by the very nature of our work, some very serious confrontations with the same people. I must say that, in the past, they have acted quite professionally and things have worked out.

However, I do not think it is an ideal situation. A better situation would be for Parliament itself, because we work for Parliament, to have a more direct say in the level of funding of our office.

As I said, it does not apply only to our office. There are other officers of Parliament who find themselves in the same situation. It has not caused too many problems so far, but it is uncomfortable. If our legislation were to be updated, that is one area that I would like to see changed.

The Chairman: Let us leave it at that. Once again, thank you very much, Mr. Desautels. Let me wish you a happy and interesting retirement, which you have well earned. Parliament and the country are in your debt.

The committee adjourned.

if