Proceedings of the Standing Committee on
Rules, Procedures and the Rights of Parliament
Issue 15 - Evidence - November 20, 2018
OTTAWA, Tuesday, November 20, 2018
The Standing Committee on Rules, Procedures and the Rights of Parliament met this day at 9:31 a.m. to develop and propose amendments to the Rules of the Senate to establish the Standing Committee on Audit and Oversight.
Senator Leo Housakos (Chair) in the chair.
[English]
The Chair: Good morning, colleagues. As we start this meeting of the Standing Committee on Rules, Procedures and the Rights of Parliament, I would like to have my colleagues introduce themselves.
Senator Sinclair: Murray Sinclair, Manitoba.
Senator Greene: Stephen Greene, Nova Scotia.
Senator Gold: Marc Gold, Quebec.
Senator McPhedran: Marilou McPhedran, Manitoba.
[Translation]
Senator Dalphond: Pierre Dalphond from Quebec.
Senator Joyal: Serge Joyal from Kennebec, Quebec.
[English]
Senator Woo: Yuen Pau Woo, British Columbia.
[Translation]
Senator Maltais: Ghislain Maltais from Quebec.
[English]
Senator Seidman: Judith Seidman, Montreal, Quebec.
Senator Batters: Denise Batters, Saskatchewan.
The Chair: I’m Senator Housakos from Quebec.
Colleagues, we have before us a draft document that has been provided to us. As we all know, we’ve had before us over the last few months a motion from the Senate so that the Rules Committee can review the motion and develop and propose amendments, if necessary, to the standing committee on audit and oversight. We have looked at it, discussed it and instructed as a committee at our last meeting the clerk and the researchers to do a thorough review and a double-check to make sure that the proposal and the motion that have come before us from the Senate fit into our current Rules and to highlight if there are any discrepancies or rules that need to be addressed.
The report has been circulated, and my strong recommendation, colleagues, is to go back to the chamber and file a report that the motion is compliant to the Rules and, if it’s the wish of the chamber to exercise the oversight body as per the recommendation of Internal Economy to the Senate, that this committee would have no problems with it. Of course I’m open to discussions, and first on the list is Senator Sinclair.
Senator Sinclair: Thank you.
I was a bit surprised, actually, at the instructions to draft a report for the committee to consider. I was not at the last meeting and I had medical reasons for not being there, but the discussion that went on at the last meeting, as I understood in review of the transcripts, does not show a decision having in fact been made by the committee not to proceed to look at the question of outside membership on the Audit Subcommittee. I do know it was raised and discussed, but I do want to recall as well that at our first meeting, when we met to discuss the reference from the chamber, I raised the question on April 17 that I thought that this committee should also consider the question of how other entities, in particular, the House of Lords, dealt with the question of outside membership on its audit committee. I thought that we should consider the question of looking at outside membership on the audit committee and what rules would be needed to change that. I also pointed out, of course, that the Newfoundland House of Assembly has such a committee with outside membership, so I thought there was some merit to looking at the question, and I indicated that as well.
For the record, Senator Wells and I did have a discussion about my desire to introduce an amendment to the reference motion to the Rules Committee, but I think we came to an agreement that we would leave this matter for the committee itself to debate — and if I’m misstating anything that you recall, Senator Wells, please feel free to speak up — so I did not introduce such a motion in the chamber.
But I would have, because I feel that the issue of the standing committee report from CIBA is not very clear at all, and I say this because the Estimates Subcommittee that issued the initial report to CIBA, and that’s a subcommittee that was chaired by Senator Wells, specifically called for the creation of an audit standing committee consisting only of senators. That question of only senators being on the committee is not contained in the CIBA report that was referred to this committee for consideration. It simply talks about five members, so I interpret that to mean that CIBA was unable to agree on there being only senators on this committee. I spoke to Senator Campbell, who was chair of CIBA during the debates at the committee level, and he indicates that CIBA committee membership were unable to come to agreement on the question of senators only being on the Audit Subcommittee or audit standing committee. I apologize for getting those two terms mixed up because they get mixed up in some of the documentation as well.
The bottom line is that I’m of the view that, regardless of any misunderstanding, we should probably continue to call witnesses and not file a report with the chamber at this time and that those witnesses should deal with two issues. One is outside membership on an audit committee, such as has been recommended by CIBA, and also the question of the implications of that for the issue of privilege. We have not had any witness with regard to that question as well. I know Senator Dalphond has some thoughts on the issue of privilege and the legal cases around that question that he would be more than willing to share, I hope.
I do want to say that I don’t think we’ve done our work yet. We have only had two witnesses that addressed this question, Senator Moncion and Senator Wells, who have made submissions to us, and I think we need to call upon more witnesses. In particular, I’d like to hear from the Auditor General to at least give the Auditor General an opportunity to address his recommendation and also to hear from people in the United Kingdom talk about their experience in dealing with an audit committee that does not include members of the House of Lords, and perhaps even to invite membership or a voice from those who are experienced with the audit committee that exists in Newfoundland and Labrador to see what their experience has been like and how they dealt with the question of privilege.
My thoughts are that I think it’s premature for us to be considering a report at this time and that we should continue to call witnesses.
Senator Wells: I want to address a couple of points that Senator Sinclair made.
One, I don’t recall coming to any agreement. I know we had a discussion, but I don’t think there was any agreement. You’re referencing a discussion we had and referencing a conclusion we came to. I don’t recall that at all. I remember a discussion, but not a conclusion.
Also, you referenced some comments from Senator Campbell, who is not here but was on the Audit Subcommittee and we had unanimous agreement there, which is what generated the report, that it may not have been unanimous at CIBA, and I believe it was unanimous to send it to the chamber. I wanted to point out that that did go there. Just because a vote may not have gone the way you had liked, it doesn’t mean we should revisit it at another time. Once a decision is made, that’s the decision.
I don’t want to get back into the testimony I have given twice to this committee — and indeed once to the ISG at their caucus meeting sometime last year or earlier this year, as well as to others in direct conversations — but from the discussions that I’ve had with those in charge of the U.K. parliamentary oversight committee, as well as the Newfoundland Minister of Finance who was minister during the time of the establishment of the committee, my comments on what other jurisdictions have done are actually supportive of the recommendations that were in the fifth report from the Audit Subcommittee and the twenty-first report from CIBA.
The Chair: Before I turn the floor over to the Leader of the ISG, Senator Woo, I want to point out a couple of things in response to Senator Sinclair. We have to not lose sight of the fact that the role of this committee is to review the motion that has come from the Senate to make sure it fits within the confines of the Rules of the Senate. It’s not incumbent on this committee to determine the nature of how that oversight body will work or the composition of that body. That work has already been done over a very long period of time by Internal Economy. It is clearly in the purview of Internal Economy. Most importantly, colleagues, it was debated thoroughly on the Senate floor. Of course, there were opinions to have outside representation and to have representation made up of only senators. It’s important and imperative that we understand the role of this committee vis-à-vis the motion and not try to sway into areas that are not really within our domain.
Senator Woo: Thank you, chair. To build on your comments, it’s quite right that this committee looks at the crafting of the rules, consistent with the motion that is put before us, but it is precisely the point that Senator Sinclair has made, that the motion leaves open the possibility, I believe, for non-senators to be on this committee. Therefore, it is incumbent on us, as you put it, to consider the possibility of drafting rules that precisely do include non-senators as part of that committee.
To Senator Wells’ point about the unanimity of CIBA approving the report, both from the Subcommittee on Estimates, CIBA as a whole, to the chamber, there is no doubt. But again, the question is that the composition of the committee that we are looking at, the committee on audit and oversight, has yet to be defined in terms of whether it consists solely of senators or a mix of senators and non-senators. That is within our purview to look at precisely, because the rules have to specify whether or not the membership of the standing committee consists of just senators or not senators.
So the work is unfinished. I do agree that we need to hear from other witnesses, and at the very least we need to put a pause on this draft report so that we can fully consider what, in fact, is the mandate given to us.
Senator Joyal: I think we should keep in mind the mandate of this committee. This committee has a specific order from the Senate, the way I understand it. It’s an order that the Rules Committee develop and propose amendments to the Rules of the Senate to establish the Standing Committee on Audit and Oversight. So it is a standing committee. It’s not another kind of committee than a standing committee, and a standing committee is defined in the Rules of the Senate. So we have to stick to that. We are not invited to form any kind of committee. We are invited to establish rules to establish a standing committee within the confines of the Rules of the Senate.
It seems to me that we cannot put ourselves in the position as if we would be the appeal board of a decision of CIBA. CIBA has taken a decision. It made a report to the chamber and, following that, the chamber adopted a motion to instruct us, to give us an order to establish a standing committee within the confines of the Rules of the Senate. Since, in my opinion, on a standing committee there is no outside membership whatsoever in the present Rules of the Senate, it is within those confines that we have to establish the standing committee, whatever I personally might think of outside or not outside membership. We are under instructions from the Senate. If we don’t want to accept the terms of reference that we have received from the Senate, then we have to go back to the Senate and ask for clarification; otherwise, we are usurping the mandate we have received from the Senate. We are not the appeal board of a decision taken by CIBA and instructions we have received from the chamber to establish a standing committee.
If you look, Senator Woo, at all the Rules of the Senate in relation to standing committees, a standing committee is very well defined in terms of the structure it has to satisfy within the Rules of the chamber. That’s the way I see the legality of the situation we are in. If we don’t want, as a committee, to act on the instructions we have received, then we have no other choice than to go back and say we don’t agree to establish a standing committee within the confines of the Rules of the chamber. That’s the way I see the situation.
Senator Batters: Senator Joyal did point this out midway through his intervention, but I wanted to highlight and bring to everyone’s attention that, yes, standing committee means senators only. There is no provision for outside membership. That was the decision of the chamber. It was thoroughly debated in many forums — at CIBA, when I was deputy chair, we dealt with that issue, and in the chamber itself. I agree with Senator Joyal’s comment that that issue has already been determined.
Senator Sinclair: I think what this debate points out is the very issue that I’ve raised, and that is that there is room for interpretation in the way this matter has evolved and what it is that this committee has been asked to do.
We must not forget that all this came about because of a recommendation from the Auditor General that an audit committee be established that is independent — and I emphasize the word “independent” — from the current process. An independent committee, by definition, means it has to have its own separate mandate, and it has to have independence as well, if it is to have any meaning, from control by senators within the chamber, or at least not undue influence.
I think that at this point in time there has been debate on the issue of membership that has existed at the Estimates Subcommittee, which referred the matter back to the CIBA committee, which referred the matter to the chamber, which referred the matter to us. We are inheriting a lengthy period of there being debate about the membership question.
If there is to be a report that goes back to the chamber, I think this committee’s report should probably contain two sets of options: one is rules changes that would have been necessitated if there were outside membership on the committee, and the other being that if there were rules changes necessitated because you can’t have or won’t have and don’t want to have membership outside of the Senate.
I think that we have to recognize that we are not here to determine which option CIBA itself has decided upon, because they have not made a decision. In fact, despite what you say, they were unable to decide the question and come to a consensus on the question of whether this committee should have outside membership. So I think they’ve given us the task of saying what are the rules changes that are necessitated if we are going to have an audit standing committee and, if it’s going to have outside membership, what are the rules changes needed? I think that’s for us to look at. If we are not going to have outside members, what are the rules changes needed? That’s incumbent upon us.
At the very least, if we’re going to make a report back to the chamber, our report has to contain those two sets of rule options for the chamber to debate and consider. At the very least, we need to continue to hear from witnesses about their experience with outside membership in their audit process.
Senator Woo: To pick up on this question of whether or not it’s legitimate for us to look at outside members, the very fact that the testimony discussed the question of outside members is proof to me that it was worthy of consideration and that it’s something that the Rules Committee should factor in when it’s redrafting the rules. If our job is to come up with the rule changes needed to accommodate this new committee, and if Senator Sinclair’s interpretation is correct that CIBA was ambiguous about whether or not there should be a committee of just senators or senators and outsiders, then the responsibility falls on us to look at those very rule changes that would accommodate either of the two options.
Senator Seidman: If I think about this, what we’ve heard in testimony and specifically Senator Joyal’s presentation to us reading straight out of the twenty-first report from the Standing Committee on Internal Economy, the mandate to this committee is very clear in that report. It says:
That the Standing Committee on Rules, Procedures and the Rights of Parliament develop and propose amendments to the Rules of the Senate and any other necessary modifications to the Rules to establish the Standing Committee on Audit and Oversight, with five members . . . .
I apologize as I don’t have a copy of the rules sitting in front of me right now, but my understanding of the rules about the composition of a standing committee is that it is composed of senators.
Senator Dalphond: Except as otherwise provided.
Senator Seidman: Sorry?
Senator Dalphond: Rule 12-2(2) states:
Except as otherwise provided, the Committee of Selection shall present a report on its nomination of senators . . . .
So the rule is senators, “except as otherwise provided.”
Senator Seidman: It has not been “otherwise provided” as I can see in this instruction in the twenty-first report of Internal Economy as it was sent to us to look at our Rules and see how they would accommodate or not accommodate this particular request.
Senator Sinclair: If I understand that point, though —
The Chair: There is a list here, so I would like to keep some order.
Senator Sinclair: This is related to the point Senator Dalphond just made. I’d like to respond to it, if you don’t mind.
If the rule itself calls upon the membership committee to deal with the question and the membership committee has the authority to determine membership, then the membership committee has the authority to appoint non-members. That’s the point. The membership committee is not considered —
The Chair: Senator Sinclair, order. Nowhere in the Rules does it state that any membership committee in the Senate can appoint any membership on any standing Senate committee outside of senators. That’s not even open for discussion. I figured that out a long time ago when I came here. This is not applicable in the Rules as they currently stand.
Senator Sinclair: Thank you.
On another point of order, I want to go on the record as saying that the point Senator Dalphond has made is that the rule in question provides that the Selection Committee can determine membership from the senators or as otherwise provided. That’s what the rule says. If the membership committee is to determine that they want to have non-members on it, I think it’s within their purview to do so.
The Chair: Again, to that point, Senator Sinclair, I’ll read rule 12-2(2):
Except as otherwise provided, the Committee of Selection shall present a report on its nomination of Senators to serve on the standing committees and standing joint committees.
. . . Appointment of committee
12-2(3) Except as otherwise provided . . . .
My understanding from the clerk here is this is talking about the nomination of standing joint committee members specific to conflict of interest, not to standing committees of the Senate. That is the interpretation of the rule, and that’s exactly how the rule has been written and applied for years. Otherwise, if you start opening up standing Senate committees to non-senators, that’s where the question of privilege — as you appropriately pointed out earlier — comes into question. At that point, this committee would be obligated to look at the ramifications of such a change.
Clearly, the motion that came before this committee from the Senate, from Internal Economy — and at the time I was part and parcel of the debate that took place at Internal Economy — is that there would be an oversight committee of senators. That debate carried on to the Senate floor. Obviously, on the Senate floor you had a wide range of opinions of some senators that wanted outside representation and others that did not. However, the motion that was passed was clearly to look at setting up a standing committee of oversight of senators.
That is what is before this committee. We can continue to review this until the cows come home, but the motion that we received doesn’t change. If we want to change the motion — again, Senator Sinclair pointed out that there seems to be ambiguity in interpretation of what we received from the Senate floor — I think the responsible thing is to send it back to the Senate floor and to Internal Economy and get clarity. The way I read the motion before us, it’s pretty clear. The way I read the motion and the request from us, the Rules that we have before us right now are clear that they are quite applicable to this particular motion, as is this report that has come from the analysts and the clerks.
We can sign-off on this request from the chamber and say, “Your motion before us fits well within the rules” and go ahead. If we have any difference of opinion in regard to the motion itself, each and every one of us are free to rise up on the Senate floor and participate in the debate, as I have in the past. I don’t have any qualms about having outside representation, nor did I when I was chair of Internal Economy, but that’s not what the floor of the Senate sent to us. Let’s be clear on that and let’s not engage in work that does not belong within our purview.
Senator Gold: I appreciate the debate we are having and the importance of the issues that have been raised. As I mentioned at the last meeting, though, we have a responsibility to Canadians to do the right thing. With all respect, I don’t think it’s right for us to simply proceed on the basis of, dare I say, a formalistic interpretation of the mandate we received. I think Canadians have looked at the Senate for some time and are continuing to look at the Senate as we evolve and have an expectation — a legitimate expectation — that we do the right thing by displaying the greatest degree of transparency and accountability that’s appropriate to our role.
I would be uncomfortable, chair, not to take the opportunity to reflect a bit more as a committee on this. Maybe the answer is going back to the Senate and inviting the Senate to broaden our mandate so we could hear witnesses as to how a somewhat differently constituted committee might function. I think Canadians expect more of the Senate than simply — however much progress we have made — to continue to have senators just oversee the expenditures of senators. I think that would be a missed opportunity.
Whatever we decide to do, I’d push the pause button and see if we can find a way to respond to what I think Canadians expect of the Senate.
[Translation]
Senator Maltais: I don’t have a very complicated or legalistic understanding. It’s clear. We’ve received a mandate from the house. In a parliament, we must always look at how the mandates work. The Senate has given us the mandate to review the issue and make a recommendation. Period. The Senate didn’t ask us for anything else. If the senators aren’t satisfied with the recommendations that we’ll put forward in a report to the Senate, then the recommendations must be debated in the house. That’s how Parliament works. I didn’t invent it. That’s how Westminster works.
It’s important to distinguish here between Parliament, a court of justice or any other organization. I worked for a long time at the National Assembly of Quebec, and the administration — I think that it’s the same thing in other provinces — consists of the President of the National Assembly and the members of the National Assembly.
I don’t have any objection to an auditor coming in to verify our audit. However, if Senator Sinclair’s wish to bring in Mr. Ferguson is ever fulfilled, I’m not sure, Mr. Sinclair, that you’ll be pleased with my reaction. As stated by my colleague Senator Joyal, we must submit our report, and the Senate will make a decision. It will be accepted, or we’ll be given another mandate, or we’ll have to go back to the drawing board. That’s how a parliament works. That’s it.
[English]
Senator Batters: First of all, I want to point out that, contrary to what some in our institution currently think, we’re not a think tank where people other than senators are appointed to committees. Their role in coming to Senate committees would be to act as witnesses. This is a parliamentary institution, it’s a house of Parliament, and it’s time to act on this matter.
I also point to the membership of the committees portion of the Rules, which starts at rule 12-3(1). It says:
Except as provided in subsections (2) and (3), twelve members shall be appointed to each standing committee.
That particular part of it, talking about the actual membership of committees, limits that “except otherwise provided” as just to those two particular subsections. And what it says in those is the number of members appointed to those standing committees is, for example, Internal Economy, 15 senators; Rules, 15 senators; Official Languages, 9 senators; et cetera.
In subsection (3), it says:
In addition to the membership provided for in subsections (1) and (2), the Leader of the Government and the Leader of the Opposition or, in the absence of either, their respective Deputy Leaders are ex officio members of all committees except the Standing Committee on Ethics and Conflict of Interest for Senators and the joint committees.
12-4 says:
The number of Senators appointed to the following standing joint committees shall be recommended by the Committee of Selection:
(a) the Standing Joint Committee on the Library of Parliament; and
(b) the Standing Joint Committee for the Scrutiny of Regulations.
Nowhere in there does it talk about anything other than senators even being a possibility, so I would submit that rule 12-3(1) governs this.
Senator Joyal: I want to provide clarification to what Senator Sinclair mentioned about the Auditor General. If you recall, the report of the Auditor General was that the Auditor General wanted to keep himself to do the auditing. That was the first recommendation. He was not calling for an independent group outside of senators; he wanted himself to continue to audit. That was his recommendation.
We’re not acting on the recommendation here of the Auditor General. The Auditor General’s recommendations were studied through by Internal Economy. The report was referred to Internal Economy, and Internal Economy advised on the recommendation of the Auditor General and decided not to act on the recommendation of the Auditor General, which was to keep himself to do the auditing of the expenses and the budget of the Senate. When I say “we,” the Senate decided not to act on the recommendation of the Auditor General.
The second question came, if it’s not the Auditor General, who should be the body to do the audit of Senate expenses? Then there was a discussion between senators and non-senators. But as one would know, the Internal Economy Committee didn’t make a decision whereby they determined that the composition of an audit committee should be composed of members of the Senate and members outside of the Senate. Internal Economy never decided that, unless I did not read the right report. Show me the report of the Internal Economy Committee where the Internal Economy Committee made that decision. I’m not a member of the Internal Economy Committee, but I’ve never seen such a decision made by CIBA. There were discussions. There were pros and cons, I totally agree with that, but there was never a decision made by CIBA that that should be the way to compose the standing committee on audit. The committee wrestled with it and was unable to agree on any other way than on a standing committee within the Rules of the Senate.
So we can’t take ourselves as an appeal board on a decision that has been taken by the Internal Economy Committee and decide otherwise, unless we go back to the chamber, which has instructed us to define the committee within the Rules of the Senate as they stand now and change the nature of the committee that the Senate would want to put in place to do the audit of expenses of the Senate. That’s the way I see the situation. As I say, we cannot take it upon ourselves, Senator Gold, to change the rules and the decisions that have been taken by CIBA. We don’t have that capacity. The Senate has that capacity. The Senate as a whole has that capacity, but as a committee of the Senate that has been instructed to come back with proposals of rules to introduce within the list of standing committees a standing committee on audit, we are bound to act within those confines.
If we don’t like it and think it should be otherwise, there’s only one way to go, which is to go back to the chamber and ask the chamber to pronounce on it. That’s the way I see it. We are the Rules Committee. We’re not a committee to study an issue. We are the Rules Committee, which means we have the mandate to draft rules. That’s essentially what we are. We are a drafting committee of rules on the basis of instructions we have received from the chamber. That’s the way I see the situation. That’s why I think the only way to resolve this situation, in my opinion, is to go back to the chamber and ask the chamber to give us different instructions if we think we can’t act within the confines of the mandate we have received. That’s the way I see it.
There might be all kinds of reasons to contend that there should be outside members, but as I say, that was discussed by CIBA, not by us. We’re not competent to decide that. It’s not in our terms of reference. Individually, each of us might have opinions on this. I have an opinion on this. Senator Dalphond and Senator Wells have opinions on this. The chair has an opinion on this. But it’s not in the terms of reference of this committee to decide. It’s not on the agenda of this committee, as much as I would want to discuss it in another forum, the appropriate forum. Believe me, I have arguments on this and I have a view on this, but I don’t think this is the proper forum for me to argue on the basis of how a standing committee on audit should be composed.
We have instructions. We act on them. If we’re not satisfied with those instructions, we go back to the chamber to seek other instruction. I don’t see how we can act differently.
Senator Dalphond: I’m listening to everything that has been said. I just joined in June, as you know, and I think the rules that we have to identify have to be referred to the report of CIBA and the report as adopted by the Senate. Maybe some precision or clarification is needed, but I look at the report, which is dated November 28, 2017, and it says:
That the Standing Committee on Rules, Procedures and the Rights of Parliament develop and propose amendments to the Rules of the Senate and any other necessary modifications to the Rules to establish the Standing Committee on Audit and Oversight, with five members, and develop its general mandate consistent with the audit and oversight principles and best practices contained in the fifth report of the Subcommittee on the Senate Estimates . . . .
We’re asked to do a very special committee here. It will be five members, yes. It seems to me it should be five senators, but does that include having ad hoc members who have no voting rights on top or an obligation to have external auditors who have to report to the committee before the committee makes a decision? What kind of process can we go through before a committee comes to a decision, even a committee made only of senators? To me, it’s unclear.
Clearly, to refer to general accounting and audit principles, I’m not a specialist in audit principles, and I don’t know if any of us are. I think we need some people to assist with what general audit principles are. The rules, as drafted, which I have not had much time to read because we only got them yesterday, don’t seem to address that issue.
I think it’s premature to go to the report and try to finalize this thing today. I guess we should either go back to the house and ask the house to define exactly what they want to hear from us, or we should at least suspend our considerations and try to get more information as to how we will implement the guiding principles of the other principles that we are asked to comply with.
The issue of privilege is one that I share with the chair and I share with Senator Joyal. I’ve said it at previous meetings. I think it’s very important that before we set up the committee, we are conscious of what would be the impact, content and composition of the committee. It will have an impact on privilege. On that very issue, we know what’s happening in the House of Commons.
I was told that 10 days ago, the Federal Court of Appeal heard the appeal in the Boulerice case, and this case was taken under advisement. There were many questions from the panel, I’m told, and maybe we should wait to get the judgment from the Court of Appeal to say yes, there’s privilege here or there’s no privilege. The trial judge concluded there was none, but there were many questions from the panel about that. Maybe the Court of Appeal will say, yes, you can have some outsiders. If it’s a minority or majority, it doesn’t matter. It’s still a parliamentary committee not subject to judicial review.
I think there are many issues that remain to be considered. I certainly welcome more time to consider these issues and to hear witnesses on that or to get back to the house or get more clarification. Both options should be considered. To me, with the report that is coming this morning, I’m not ready to vote on this today, at least. I need more information. Sorry about that, but I’m not ready to go forward this morning. Thank you.
Senator Lankin: I’m subbed in today, just so people know I’m here officially as part of the committee. I’m a former member of this committee and a former member of CIBA, so I’ve been around this issue a little bit.
I reached out to Senator Wells on the weekend —and we haven’t had a chance to talk yet — to understand more of the rationale. That’s not what we’re talking about here, but I gave him fair disclosure that I tend to support involvement of independent senators in some fashion.
Senator Dalphond, to your point, both in corporate publicly traded and in Crown corporations, I’ve been on audit committees, and it’s slightly different in the private sector than it is in the public sector. The public sector and the large charitable sector tend to have external independent people on their audit committees, whereas in the private sector not so often and the audit committee is comprised of directors.
As to how we got to this point and where we go forward, one of the things I agree with Senator Batters and Senator Maltais is that we should get on with it, and I think we need to find the appropriate but expeditious path forward. For a lot of reasons, this has been around a long time.
Second, there has been some debate here about what the Rules actually say, and I think we need clarity on that. I think you’ve tried to give us that. If in fact that’s correct, those interpretations and Senator Joyal’s interpretation, then I think we’ve got ourselves in a problem, and I’ll suggest that maybe in part naiveté or trust in discussions that took place in and around the debate in the Senate, because there was much concern that we hadn’t really crystallized this issue and were we going to take it to a vote there. I know I was urged by colleagues to support getting this to committee and that it could be discussed there. I probably should have been more clear myself about the rules, as you’re interpreting them here, but the understanding that many of us had who tend to support the inclusion of independence is that there would be an opportunity for this committee to examine that. That might be a completely false assumption that was made or incorrect assumption, but it’s got us to this point.
What’s the reparation to that situation? Some would say, “buyer beware” or “you weren’t quick enough on your feet,” but I heard over and over again in this committee when I was here that we don’t tend to force things to a vote. We try to work towards a consensus. It’s important because it governs all of us.
I think if the only route is to go back to the Senate to determine whether the Senate wants either the subcommittee of CIBA or this committee to explore the alternative of how independence could or should or should not be included, then we should seek that mandate. I don’t know what form that would take. I would ask the clerks and the chair to bring us back an option to that end.
Senator Gold: As is so often the case, Senator Lankin put my point elegantly. That’s what I was getting at when I was saying it would be a missed opportunity. I wasn’t trying to take a position on the interpretation of the Rules one way or the other. I was simply trying to respond to what I think is legitimate expectations of not only Canadians but of many senators: that this is not an issue that had been put to bed and resolved and that we were simply involved in a technical exercise. It would just be a shame, though it has been a while, if we didn’t take the opportunity, and Senator Joyal offered us the opportunity to go back and have the Senate give us an interpretation of our mandate or a broader mandate. Again, I turn to the clerks. I think that’s the right route to go. I think Canadians deserve that from us. If we do get that, we will then have the benefit of some witnesses who will benefit us in understanding whether to go that route or not or how to go the best route. I would support a motion to bring it back to the Senate for clarification of our mandate. Thank you.
Senator Sinclair: I was just going to respond to Senator Joyal’s point. I think he’s probably brought the issues to us as clearly as possible. I think we need to consider asking the clerks to draft a document that allows us to refer this matter back to the chamber so that we can ask the chamber for direction on the question of whether the chamber wishes us to look at rule changes that include membership on this standing committee from outside of the Senate. I’m not as elegant with the wording as I think we need to be, but that is essentially what I think we would be looking for, some suggestion along those lines or some document that the committee can consider and approve and send back to the chamber. I would support the suggestion that at this point in time we ask the Senate Chamber for more clarification, at least for a mandate to be able to consider the question.
Senator Wells: I just wanted to make a couple of points on some of the points that have been made around here and just to bring some clarity. Perhaps no senator has been looking at this for as long or as closely as I have.
Senator Joyal: You were a member of Internal, weren’t you?
Senator Wells: I was a member of Internal, and I was on steering while this was being considered, and chaired Estimates, which offered the fifth report.
I want to make just a quick point on one of the comments Senator Gold made regarding the whole concept of senators checking their own expenses. There’s no suggestion that this committee would do that. In fact, the committee would not do that very specifically. The committee would be established to ensure there was sufficient oversight in our systems with respect to senators’ expenses. I would propose the committee does something that is not done now, and that’s random blind audits. Had they been done prior to the Auditor General coming in four years ago, we probably wouldn’t have gone down that path.
Second, recognizing the parliamentary privilege that senators enjoy and the makeup of standing committees of the Senate, as well as the sensitivity around wanting some independence on this committee — and that was heard very clearly; I won’t say loudly, but it was heard clearly — the recommendation that I have made a number of times, in testimony twice at this committee and in public comments I’ve made, is to have two independent, permanent advisers to the committee, and they would be an internal auditor and an external auditor. Of course, our external auditor has always been a retained person from one of the major auditing houses, so they would come in with the integrity their job entails. An internal auditor, which was one of the recommendations of the Auditor General, is something we don’t have now. Of course, all hires within the Senate administration are based on merit, skills, qualification and experience. That person would also be a permanent adviser rather than a permanent member, so we can respect the Rules that we currently have.
We would have two permanent external advisers to the committee, which was in my proposal, and those meetings would be held in public. They would be held on camera, not in camera. I don’t know how much more transparent and accountable we could be for Canadians in having a system that not just respects the rules but respects best practices, which is what we were charged to discover, and we did. I searched far and wide. I had discussions with the U.K. folks and with the Minister of Finance in Newfoundland when their committee was set up. All of these committees, whether they have non-members on them or not, report to the highest governing authority. In this case, we would do the same thing, and that is report to the Senate. What I tried to do is cover all the bases, respect the rules, break new ground, and do what we’re expected to do on behalf of the taxpayers of Canada.
The other thing, colleagues — we sometimes miss this as we get entrenched in our smaller discussions and arguments and we lose sight of the bigger picture — is that the monies that senators expend on travel and living while we have to be here — I think we would all prefer to be at our homes, but we have to be here for work and that’s the way it goes — represents such a small part of what the committee would look at. What we’re currently not looking at now is the other 95 per cent of the $100 million-plus that the Senate expends of taxpayers’ money, and there is no oversight at all, and there never has been oversight. There’s a budget of this is what we plan to do, and the money is expended, and then there’s nothing, and then we go to the next year.
Colleagues, I just want to make very clear that I think the work that’s been done on this has been well thought out by all colleagues and all advisers to this subcommittee and the committees. I think moving it forward would be a positive thing. Continuing to debate what’s been debated — and I think has a reasonable solution, a good solution — would be a step backwards.
Senator Lankin: I’m going to resist, except for one small comment, getting into the discussion of the content. I do want to say I think the committee did a phenomenal job and brought in a lot of good, recommended structural changes. The one thing I would disagree with is that an internal auditor is an external independent. They’re not. They report to an audit committee. They’re external and independent of management, not of the committee, and that’s very different. They’re an employee of the organization.
I’ll point out that at CIBA, I asked very clearly about the existence of internal audit and was assured by the then-chair of CIBA that there was a robust internal audit function, and there wasn’t. That was not correct. I think our understanding of what goes on inside the controls is exactly what you’re getting at with the structure that you’ve proposed. It’s innovative in the sense that for the Senate it’s new; it’s not in terms of how others operate.
I would say that maybe with a little bit of thought, there’s another innovation that could be made where there is a role where there is true independence, and maybe not as a member of a standing committee. I don’t think that has been explored. Again, that is something that could be explored, but I don’t think this committee is willing to take the leap that that would occur in an appropriate way and past this point in time.
I’m in agreement with sending it back to the Senate to get clarity about whether they would like to see this option explored.
Senator Batters: I briefly wanted to say that I don’t support sending it back to the Senate, us as the Rules Committee going back to the Senate and saying, “Please make our mandate more clear,” when I view this mandate as a very clear mandate that the Senate as a whole has given to us. They’ve said, “Provide us with the rule changes necessary to construct this standing committee.” Given the clear provisions of the Senate Rules specifically dealing with membership of committees that I read out earlier, I think the mandate is clear. For us to go back and request further information, as the Rules Committee, is not advisable.
The Chair: We’re going to wrap this up, Senator McPhedran.
Senator McPhedran: Why would one more comment not be allowed?
The Chair: I will allow you the last comment.
Senator McPhedran: Thank you. I appreciate that. I too am subbing today. I would like to have on the record a clarification that the Senate that made the reference to this committee has substantially changed in terms of its membership. We have a significant number of new members in the Senate who were not part of this process, and a referral back to the Senate would actually allow for a more representative engagement of what is the current membership of the Senate.
The Chair: Thank you, colleagues. I also want to weigh in and provide my comments and try to interpret what I think is the mindset of this committee. I also have the privileged position of having been a former chair of Internal Economy. I was Chair of Internal Economy during some tumultuous times. Half of us around this table were not there during that period of time, and the other half were. The half that were there have a clear understanding of the context.
It’s important for everyone to understand, and I want to highlight that the process we went through was a difficult one but a healthy one for this institution. It was painful, but I think by and large we understood at that particular point in time that we had to do better. We had to be more accountable and transparent, even though we’re an appointed body, and the fact that we’re an appointed body made it evidently clear that we needed to be more accountable and transparent than any other parliamentary body in this country.
I’m proud to say that through the collective work of all our colleagues in 2014 and 2015, and in a short period of time, radical administrative changes were made to this place. I’m proud to say that we led the way in terms of reforms and changes that the House of Commons emulated and continues to emulate. I think we are in a much better place today than we were back then.
We must also keep in mind that this institution is not a government agency. We’re a parliamentary body. Parliamentary privilege, as many of you have pointed out, remains with the institution at the end of the day. The transparency and accountability is incumbent on us to make sure we provide that in a fundamental way.
It’s imperative to highlight that a lot of work has been done over a couple years on these recommendations made by Internal Economy. I also want to point out that the recommendation was one of many that the Auditor General made. However, back in 2015, Internal Economy did not wait for the Auditor General’s report that came out sometime in June of 2015. We started months in advance to put in place our transparency procedures. We put in place an independent arbitrator in Judge Binnie at the time, who would arbitrate conflicts between the administration and particular senators. I think that’s one of the objectives of this oversight body, to take away from Internal Economy the position of being an arbitrator between senators and the institution in conflicts involving financial situations and expenses.
The other issue with the oversight body is to serve as an audit, making sure the auditing procedures that are required to audit the whole institution are also conducted, as Senator Wells appropriately pointed out. When the Auditor General came here, 90 per cent of the actual expenses of the Senate were not audited. I highlight that it was a healthy exercise we went through, but we also have a responsibility to taxpayers to highlight that we spent $27 million to audit an institution to recoup about $200,000 — $186,000, as Senator Joyal said. From a management, administrative point of view, completely irresponsible, so when we continue to pursue the need to achieve accountability and transparency, we have to do it in a responsible fashion.
We have before us a request from the chamber. It’s unfortunate that the debate we all want to engage in today, many of us did not engage in that debate when it was on the Senate floor a number of months ago. Some of us did, but most of us didn’t. I have no problems with going back to the Senate Chamber and saying, “Let’s have a further debate; let’s try to strengthen this proposal,” but I think it’s also irresponsible because if we do that, we will be allowing status quo to reign for a number of months and maybe even a number of years. We know what’s around the corner sometime in the summer or the fall, and we know that change takes time.
I hear loud and clear that we need clarity, and there isn’t consensus on how exactly this body should work. I might be in the minority, but my recommendation to the committee is that we adopt this oversight standing committee as is, start moving the ball forward and the yardsticks to make sure that proper audits will be conducted on an annual basis and making sure that the administration is being audited and so on and so forth. Let this work of oversight begin and, furthermore, send a request to Internal Economy to strengthen the nuts and bolts of this committee and even have the additional debates that are required. That is my recommendation to you, colleagues, because I’m very fearful that if we just send it back as is, we’re going to be surfing on a status quo situation, which is Internal Economy still being the oversight body of sitting in judgment of senators’ expenses, and I think that is not appropriate. That’s my recommendation, colleagues.
Senator Lankin: A question to your recommendation: I think that is one plausible way to go forward. I wonder whether you could take the time to write that up, because I think the request that goes along with it — it’s like observations or whatever — needs to highlight that this issue is not resolved about the involvement of independent oversight and how it could mesh in. Maybe some more work and discussion can happen. Is there a way? That needs to be clear. So I’m wondering if that can be written up and brought back to us. It may not satisfy those of us who are still of the opinion that we need independent involvement, respectful of the privilege and the other things that have been said. But is that possible that that could be brought back to us next week?
The Chair: Again, I want to stay within the parameter of giving a decision on the request we have from the floor on the framework of this motion in saying it is applicable to the current Rules and we can go forward with the oversight committee. If the committee wants to have an observation to that report, saying, “Look, there seems not to be clarity, and there seems to be a continuous discussion on the nuts and bolts of how oversight bodies should work in the future,” we can certainly add that. I’ve heard loud and clear around the table there is a hunger and a desire to get into that debate, but clearly we are not the committee and we are not the forum for that debate. It’s the chamber, and more specifically its Internal Economy Committee.
Senator Lankin: I understand that. I’m just saying, can you bring that back to us so we can see the wording? For me, it would have to be robust enough.
The Chair: Absolutely. I put this recommendation on the floor, and it will be put on paper in writing and provided to committee members before we even consider taking it to the floor of the Senate.
Senator Sinclair: I will remind you, chair, that a number of senators just got the document literally yesterday and have not had a chance to consider the implications of the proposal with regard to the rule changes, so I think there is probably a need for some time in any event for senators to take a look at the document that you have suggested that we support. But I agree with Senator Lankin. I think we probably need a motion to do whatever it is that you think we need to do, and we’ll vote on it. And I would like to point out that you’re quite right, that we don’t have consensus, and I think that lack of consensus has to be part of what we report back to the Senate on as well.
The Chair: Would there be consensus, though, for us to draft a motion and bring it to the committee next week — we’ll actually send it out to committee members in advance — that, on my suggestion, we approve the current recommendation of the Senate, proceed with the oversight body with clear indication that there are discrepancies in terms of how this body should work in the future and request Internal Economy Committee and the Senate committee, based on those observations, to come back to the Senate floor with more clarity. Do we agree that we should go forward with an oversight body as it is and build from there?
Senator Sinclair: No, we do not have agreement on that. I think that our view is, first of all, we’d like to look at these rule changes and look at them in more detail when we’ve had an opportunity to do that.
The Chair: But, Senator Sinclair, there are no rule changes. You keep referring to rule changes in this report, but there are no rule changes.
Senator Sinclair: I have a document that has proposed rule changes.
The Chair: On this motion?
Senator Sinclair: The document that has been shared with us prior to today. That’s the document that I understood we were considering —
The Chair: Possible amendments, but to my understanding also, the motion we have as is, the current Rules wouldn’t require amendments. That’s my understanding.
Senator Sinclair: No. Either way, if we go with the standing committee on audit and oversight, we need rule changes. Whether or not we have outside members or only senators requires rule changes. So we need to change the Rules. That’s the mandate we’ve been given. The point that we have not developed consensus on is whether the rule changes need to deal with outside members or non-senators sitting on this audit subcommittee — audit standing committee. My apologies for the wording again.
The Chair: So basically I don’t see any consensus here, then, to go forward on this oversight body as we speak. Now, again, I understand we need to establish the committee and there are some rule changes in establishing the committee but, again, I believe, based on the report we’ve received, that that can be done very easily without much debate, without study.
Again I highlight, colleagues, if we don’t agree to move forward with this oversight body, the Senate — I guarantee you — will have no oversight body for a number of months, if not the next couple of years. We are going back to the chamber floor for a prolonged discussion on the model, so keep that in mind.
Senator Lankin: I’m just procedurally trying to understand how we move forward. I think that the point of dissension is what you are saying, are we prepared to endorse this oversight body essentially now, and no, because the other proviso that you’re talking about and how we would deal with the ongoing issue of whether or not we have a consensus or where it should be explored, whether there should be some independent involvement or not, those words need to be part of what we decide together. You can’t ask us on a sort of hope and whim.
You’re looking puzzled. I thought that when you and I spoke a few minutes ago, that you agreed you would bring it back to us, give people a chance to look at the report, to be fair, and that you would bring back to us suggested wording about endorsing, move ahead, get this going, but understanding this issue where there is not a consensus, a suggested way forward of dealing with that and that we see that together. And if that’s another week, then let’s see that together before we throw the baby out with the bathwater right now and test whether there is a consensus or not.
The Chair: It seems to me some of us are reluctant to appreciate that this committee’s role is not to discuss if there can be outside representation on an oversight body or not. That’s where there’s this resistance. We’re having a debate here, and there are those here who are trying to make the point that that debate will not be had here. As a chair, I won’t allow it to be had here because that’s not the role of this committee.
Senator Lankin: You yourself said that that was a possibility, so let’s see the words and then maybe we can resolve this.
The Chair: No, what I said is that if we agree to the presentation today that the rule changes are not by any means significant enough to prolong the putting into place of the current oversight body as sent to us and recommended by the Senate, that we can put observations that the Senate wants to continue to build upon that foundation that we’re going to say works based on the recommendation of the Senate.
What I think is frivolous at this particular point is if there is not a consensus to do that, we have to go back to the Senate and say, “We’ve looked at this; there’s no consensus amongst senators that this thing will work; review it.” That’s what I’m hearing, colleagues.
Senator Lankin: Let me speak for myself because there are many opinions around the table. If the wording of the observations is strong enough to highlight the issue in dissent and suggest to the Senate whatever possible routes there are, and those can be pursued, then I probably would be fine in supporting it, but I can’t do that today.
The Chair: I agree.
Senator Lankin: You seem to be pushing to get us to say up front we are going to support this report as is and then we’ll do the observations after. I’m saying, let’s write the observations, bring it before us and let us deal with the package. That might resolve my concerns.
The Chair: That is where our disagreement is. There is no point in writing the observations at this particular point because the critical question is the motion we received from the Senate. Do we agree to go forward with it. It seems a number of senators around the table, a majority, it seems, are not in agreement with that motion that came to us before here, that was sent to us by the Senate.
Senator Lankin: If you have a consensus that we all would like to see that package and then take the decision next week, can you live with that, chair?
The Chair: Sure. If there is a consensus to do that, absolutely.
Senator Joyal: I just want to —
Senator Dalphond: I raised my hand before. Just to come to your point, I think there are two issues here. It’s about the composition, and maybe the Rules have directed us to have an answer to that, senators only. But in the proposals that we are looking at, there is also the definition of the mandate. The point my colleague was addressing before, Senator Lankin, is about the mandate, including the auditors. Are they part of it or not? What is their role? Here is defined what is the role of the auditors. We are asked to make a finding about what would be the relationship between the committee and the external and internal auditor. This came only yesterday, and I think we need some time to consider that. That’s why I think we should not proceed with this without further debate and further discussions between ourselves and looking at, if we agree on the composition, do we also agree on the mandate? We have two issues here.
Senator Joyal: It’s just that whatever decision we take here on the substance of the report, we report to the chamber. The chamber has the total privilege to amend the report of this committee and add whatever it wants to add. There will be a debate on the floor of the chamber. So whatever we decide as a report is amendable in the house to adjust to whatever will be the will of the majority in the house. That’s why I don’t think that we should take as being the last word whatever we might decide and recommend as a committee. I think we should keep that in mind also. It helps to give us a perspective on how we want to see this situation evolve.
Senator Gold: Just building on these last comments, I think we are all mindful of the fact that we do want to move forward and improve our system of oversight. Nobody is interested in dragging things on for the sake of dragging them on.
I think that attaching helpful language to the report — call it an observation, call it something else — would satisfy those of us around the table who would be reluctant to simply go forward and then have it sort of lost in the ether. In a year, it’s going to be pretty charged in the chamber. So I would ask you, chair, with the help of the clerks, to be responsive to the desire of those of us to make sure that the issue is discussed and structured in an effective and efficient way in the chamber, whatever the next steps may be, so that it doesn’t get lost and that we can, in fact, move forward. I think for that, I would be open to look at some language next week, and if we need a little time to talk about it, we’ll take the time and then be able to move forward.
Senator Sinclair: I was going to suggest the point that has been made by others again. I think it’s all the more important. You will take some time and draft a document in keeping, I assume, with what Senator Lankin has raised, and I think that calls for us to also take advantage of that time to look seriously at the implications of these particular draft changes that have been contained in the report that has come to us.
Given all of that, I think we are probably wise, then, to adjourn with those two roles or two undertakings in mind. One is for senators to take a look closely at the document that we have been given, and for the chair and others to look at the drafting of a document that reflects the issue that we’re asking the Senate itself to understand is still a live question.
The Chair: I’ll try once again to see if we have consensus based on what I have heard. I will instruct the analyst and the clerk to come back next week, in addition to the proposed rule document changes that we have before us, with a recommendation to proceed with the adoption of the current oversight body as it has been provided to this committee, with clear observations that the Senate and Internal Economy has to reconsider membership of this committee. Is that a fair assessment? Because the whole debate here, from what I understand, colleagues, is a number of us now want to have outside representation, and that’s what this whole discussion around this table is about. Is it fair to say that the observation we send back to the chamber is to pursue the debate about outside representation?
Senator Lankin: You said two different things. You said, “Outside membership of the committee,” and then you said, “Outside participation.” And one or the other might be a more viable route.
The Chair: I’m not trying to forecast what the Senate will determine.
Senator Lankin: Let me finish my statement. I was not being critical. My observation was going to be that the way you said it first might be too narrow, so a little bit of the flavour of the issue of the role of independent oversight and if and how it should be accommodated is what we are referring back.
The Chair: Fair enough. Are we good, colleagues?
Hon. Senators: Agreed.
The Chair: Clerk, are we clear?
Adam Thompson, Clerk of the Committee: I believe so, and if not, I will seek guidance from the steering committee to ensure that we have the necessary documentation for our meeting next week.
The Chair: Thank you, colleagues.
(The committee adjourned.)