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Proceedings of the Standing Senate Committee on
National Finance

Issue 7 - Tenth Report of the Committee

Tuesday, March 11, 2008

The Standing Senate Committee on National Finance has the honour to present its

TENTH REPORT

Your Committee, to which were referred the 2007-2008 Estimates, has, in obedience to the Order of Reference of Tuesday, November 13, 2007, examined the said Estimates and herewith presents its final report.

Respectfully submitted,

JOSEPH A. DAY

Chair

FINAL REPORT ON THE 2007-2008 MAIN ESTIMATES

INTRODUCTION

As is customary, the Standing Senate Committee on National Finance held several meetings to examine various aspects of the Government's planned expenditures over the fiscal year 2007-2008. In all, twelve hearings were held, including eight for the 2007-2008 Estimates and two each for the Supplementary Estimates (A) 2007-2008 and Supplementary Estimates (B) 2007-2008. Senior officials from the Treasury Board Secretariat appeared before the Committee on all occasions. Appearing on 20 March 2007 was the Honourable Vic Toews, President of the Treasury Board. The Committee also heard from senior officials from the Office of the Commissioner of the Environment, and the President of the Public Service Commission.

PREVIOUS REPORTS

As a result of these meetings, the Committee submitted five reports to the Senate:

1. First Interim Report on the 2007-2008 Estimates (March 2007);

2. Second Interim Report on the 2007-2008 Estimates (June 2007);

3. Report on the Supplementary Estimates (A), 2007-2008 (November 2007);

4. Report on the Study of Financial Security for Seniors: Entitlements and Retroactivity Provisions under the Canada Pension Plan (March 2008);

5. Report on the Supplementary Estimates (B), 2007-2008 (March 2008).

OTHER INTERESTS

Several issues were discussed during the hearings on the 2007-2008 Estimates. While most are dealt with in the above mentioned reports, there remain some matters of continuing interest to the Committee. In particular the Committee has begun to examine the appropriations sought to support the operations of a number of positions created by the implementation of the Federal Accountability Act. It should be recalled that this Act, which received Royal Assent on 12 December 2006, creates or modifies a number of officer positions. Although they are intended to strengthen accountability of the government and the bureaucracy, to increase transparency of government activities, and to allow for additional oversight of government operations, these are not necessarily Officers or Agents of Parliament.(1) Specifically, the Act created or modified the following positions:

  • the Parliamentary Budget Officer,
  • the Commissioner of Lobbying,
  • the Public Appointments Commissioner,
  • the Public Sector Integrity Commissioner,
  • the Director of Public Prosecution,
  • the Conflict of Interest and Ethics Commissioner, and
  • the Procurement Ombudsman.

The Committee held two meetings on this matter during its examination of the 2007-2008 Estimates.

On 11 December 2007, the Committee heard evidence from Joe Wild, Executive Director, Strategic Policy, Corporate Priorities and Planning, Treasury Board of Canada Secretariat TBS, and from Marc O'Sullivan, Acting Assistant Secretary to the Cabinet, Senior Personnel and Special Projects, Privy Council Office (PCO), on aspects of the implementation of the Federal Accountability Act (FAA) and specifically on matters concerning positions and offices created or modified under the Act.

Mr. Wild provided a brief overview on the progress of the implementation of legislation. To date, 10 orders-in- council have brought into force all but two elements of the Federal Accountability Act. In the first 12 months since enactment, the government has also:

  • adopted three sets of regulations, with six more sets of regulations at various stages of development;
  • received the results of four major reviews of government policies and operation;
  • created or revised five policy instruments or guides with several more underway; and
  • made seven Governor-in-Council appointments and established two new oversight bodies; and ratified a major international treaty.

Mr. O'Sullivan provided the Committee with a quick update on a number of Governor-in-Council appointments for positions that were established by the Federal Accountability Act. In particular:

  • the Conflict of Interest and Ethics Commissioner, Mary Dawson, was appointed on 9 July 2007;
  • the Public Sector Integrity Commissioner, Christiane Ouimet, was appointed on 6 August 2007; and
  • on 10 September 2007 the government appointed the Procurement Ombudsman Designate, Shahid Minto.

Mr. O'Sullivan added that the selection processes are currently underway with respect to the Director of Public Prosecutions and the Parliamentary Budget Officer. In the interim, Mr. Brian Saunders (recently nominated to fill the position) the Acting Director of Public Prosecutions and is assuming responsibility for this office while the selection process, which is being managed by the Department of Justice, is underway. With respect to the Parliamentary Budget officer, Mr. O'Sullivan informed the Committee that a selection process was underway and that the Parliamentary Librarian was being assisted in the recruitment of the first Parliamentary Budget Officer by an executive search firm.

The Federal Accountability Act also established the position of Commissioner of Lobbying to oversee the new Lobbying Act. As Mr. Wild indicated earlier, the required regulations are currently being developed. Mr. O'Sullivan explained that the government intends to launch an open and public selection process shortly so that it may identify a highly qualified candidate to be considered for appointment to this position.

As to the appointment of a Commissioner of Lobbying, Mr. O'Sullivan noted that it will be made once the regulatory process has been completed and the legislation has been brought into force.

Finally, with respect to the Public Appointments Commission, the Federal Accountability Act provides that the government may establish a public appointments commission to oversee and report on the selection processes for appointments by the Governor-in-Council to agencies, boards, commissions and Crown corporations. A commission was established administratively by order-in-council on 21 April 2006, prior to the passage and coming into force of the Federal Accountability Act, to ensure full implementation at the earliest opportunity. The government appointed persons, Hassan Khasrowshahi, the Honourable Roy McLaren, and Jacqueline Boutet as members of the commission, and nominated Gwyn Morgan to be chairperson. On 16 May 2006 the Standing Committee on Government Operations and Estimates of the House of Commons rejected Mr. Morgan's nomination, following which the three members of the commission tendered their resignation. He added that as part of the government's initial attempt to establish the commission, a secretariat was created to support the work of the commission and it has continued to do so. To this end, it has run over 80 open selection processes to fill key positions.

To examine further the process of establishing these new positions the Committee on 12 February 2008, heard from Mr. William R. Young, Parliamentary Librarian, Library of Parliament on the progress towards establishing the position of the Parliamentary Budget Officer and from Mr. Shahid Minto, the Procurement Ombudsman Designate, Office of the Procurement Ombudsman of Canada.

A. The Parliamentary Budget Officer

Mr. Young reviewed the role and mandate of the Parliamentary Budget Officer (PBO) as laid out in the Act. He then outlined to the Committee the steps taken to-date in creating the position of the Parliamentary Budget Officer (PBO) including the wide ranging consultation with the public service community that will have to work closely with the PBO. Once the job description was completed, the classification was determined by the Privy Council Office and the commensurate salary level was set by that decision. On that basis a cross country search for suitable candidates was begun with the intent of providing the names of three candidates that could be recommended to the Leader of the Government in the House of Commons, as required by the Act.

After an exhaustive search, some 14 highly competent individuals were identified and approached for interviews by a selection committee formed and chaired by the Parliamentary Librarian. Although the selection committee was able to identify suitable candidates for recommendation to the Leader of the Government, no candidate was willing to accept the position at the then current level of classification and salary.

Mr. Young explained that after canvassing of past and present senior level public servant, there was a sense that the position was under classified and that any individual holding such a position would not be able to interact effectively with the administrators of the various departments whose cooperation would be required to carry out the function of the PBO. Consequently, candidates were reluctant to put their names forward for the position.

Mr. Young explained that the matter is now under consideration by the government and he awaits the decision.

The Committee is concerned about the delay in filling this position which is of great importance in facilitating the work done by parliamentarians. The Committee therefore recommends that:

Recommendation 1:

The classification of the Parliamentary Budget Officer position should be raised.

B. The Procurement Ombudsman

Mr. Shahid Minto, the Procurement Ombudsman Designate explained that following a nationally advertised selection process, he was appointed in September 2007, through an order-in-council, to the position of Procurement Ombudsman Designate. The appointment is on a designate basis because the regulations that fully prescribe the duties and functions of the ombudsman have not yet been issued. He explained that the Federal Accountability Act provides for the appointment of a procurement ombudsman who will operate at arm's length from government departments to promote fairness, openness and transparency in federal procurement processes. The office's mandate, which ultimately depends on the final form of the regulations, is four-fold:

1. To conduct reviews of the procurement practices of departments and agencies and to develop detailed recommendations designed to strengthen fairness, openness and transparency of government procurement.

2. To respond to complaints from suppliers related to contract award and contract administration. For complaints regarding the awarding of contracts, the mandate is limited to contracts worth up to $25,000 for goods and up to $100,000 for services. There are no dollar value restrictions on the office's ability to address complaints about contract administration.

3. To establish an alternative dispute resolution process that can enable the government and suppliers to avoid costly litigation when disputes arise.

4. To perform, as directed by the Minister of Public Works and Government Services Canada, any other duties or functions relating to the procurement practices of government departments.

He noted that the Federal Accountability Act does not give the office the authority to review procurement of accommodations through leasing, lease purchase or outright purchase. The mandate is focused on reviewing procurement of goods and services, including construction contracts. The Procurement Ombudsman will not make policy, and it will be the responsibility of deputy heads to implement the POC's recommendations.

Since his appointment he has worked to ensure that the office is up and running as soon as the regulations come into effect. He has also sought to develop draft standards, criteria and procedures for various aspects of the mandate. His staff has developed website content as well as communication tools and outreach programs to make their services known and easily accessible. They are working closely with Department of Justice officials to design the alternative dispute resolution process. Finally, they have reviewed the proposed Procurement Ombudsman regulations and have provided detailed analyses and comments to the government.

He felt it important to highlight what he believed to be a key issue: How do we ensure that the Office of the Procurement Ombudsman operates, and is seen to operate, in an independent and neutral manner?

The government has taken a number of steps to ensure the independence and viability of the office — such as selecting the Ombudsman through a nationally advertised competitive process, making the appointment through an order-in-council, and providing a reasonable start-up and ongoing operational budget. Nonetheless, the Federal Accountability Act clearly stipulates that the ombudsman will submit an annual report to the Minister of Public Works and Government Services (PWGSC) who, in turn, is required to table the report in Parliament. Furthermore, the Ombudsman is not set up as a separate entity under the Financial Administration Act. The Office of the Procurement Ombudsman receives its funding through a PWGSC appropriation. As a result, the deputy minister's accountability for the management of public funds, property and human resources, as well as his role as chief accounting officer, extend to this office.

Mr. Minto explained that discussions are currently under way to ensure that the specific roles and accountability of both the deputy minister and the Procurement Ombudsman are respected. A Memorandum of Understanding is to be signed shortly between the two organizations. To further ensure the Ombudsman's independence, the office will use its own resources to develop its communications products and reports. They are consulting with the Department of Justice to develop the best way for the office to obtain independent legal support.

Senators were interested in several aspects of the mandate and role of the Procurement Ombudsman. Mr. Minto provided further elaboration and clarifications in response to Senators' questions. In particular Senators were concerned that the ceilings of $25,000 for goods and up to $100,000 for services for complaints regarding the awarding of contracts were not adequate. Mr. Minto explained that this ceiling was set because the Act appeared to try and avoid overlap with the mandate of the Canadian International Trade Tribunal (CITT), which has the mandate to look at complaints pertaining to awards of contracts over these limits. His understanding is that it was felt that there was a gap because no one was reviewing complaints regarding the awarding of contracts below the CITT limits. Senators observed that the CITT has an international role, not a domestic role. Since there does not seem to be any opportunity for domestic firms to complain about contracts awarded above the existing ceiling the Committee recommends that:

Recommendation 2:

The government should increase the ceilings on the value of contracts subject to review by the Procurement Ombudsman.

Senators were also concerned that the Federal Accountability Act does not give the office of the Procurement Ombudsman the authority to review procurement of accommodations through leasing, lease purchase or outright purchase. These are significant transactions of the federal government that are often enough contentious. Therefore, the Committee recommends that:

Recommendation 3:

The Procurement Ombudsman be given the power to review procurement of federal accommodations obtained through leasing, lease purchase or outright purchase.

CONCLUSION

During its meetings on the 2007-2008 Estimates, the Committee deliberated on these and other matters. The Standing Senate Committee on National Finance respectfully presents its final report on the 2007-2008 Estimates.

(1) There is no hard and fast definition of the term "officer of Parliament.'' Traditionally, in Canada, it has referred to a group of independent, accountability agencies created to assist Parliament in holding ministers and the bureaucracy accountable and to protect various kinds of rights of individual Canadians, or to carry out certain functions independent of the executive. They are responsible to Parliament and both their appointment and removal involve Parliament in some capacity.

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