Proceedings of the Standing Senate Committee on
National Security and Defence
Issue 2, Evidence - Meeting of February 22, 2016
OTTAWA, Monday, February 22, 2016
The Standing Senate Committee on National Security and Defence met this day at 1 p.m. to examine and report on Canada's national security and defence policies, practices, circumstances and capabilities.
Senator Joseph A. Day (Deputy Chair) in the chair.
[English]
The Deputy Chair: I call to order this meeting of the Standing Senate Committee on National Security and Defence. Honourable colleagues, we will hear from three panels over a period of three and a half hours today.
We will begin with an appearance by retired Lieutenant-Colonel John Selkirk. This is not his first appearance. We welcome you back, colonel.
Retired Lieutenant-Colonel John Selkirk is the Executive Director of Reserves 2000. We have invited the colonel to appear before the committee to provide an update on the state of Canada's reserve force. According to its website, Reserves 2000 is a coalition of Canadians who wish to preserve the militia as a viable option in Canadian defence capabilities.
This committee issued a report in December 2011 entitled Answering the Call: The Future Role of Canada's Primary Reserve, and that report is on our website for anyone who would like to see what our position was in December 2011.
We are very pleased to have Lieutenant-Colonel Selkirk with us this afternoon to update us on the reserves and to talk about emerging issues.
The floor is yours, sir.
Lieutenant-Colonel (Retired) John Selkirk, Executive Director, Reserves 2000: Thank you for this opportunity to share some thoughts on the current state of manning of the militia, or the Army Reserve; that is, the army portion of Canada's Primary Reserve. The Primary Reserve also consists of components from the navy, air force and some headquarters elements.
I am not here to talk about everything that Senator Day mentioned, because I prepared myself to comment in particular on the shortfall that was reported for 2015 of 5,293 Primary Reserve personnel. That was recently reported to the House of Commons. I am happy to talk about that in particular, then to take other questions you may have regarding any aspect of the militia, keeping in mind that I am not and have not been a serving officer for some period of time. But the coalition that Senator Day referred to is a wide one, all across this country, and I am in constant contact with our members who provide a good deal of information. I think I have a fairly accurate picture.
Apparently the whole Primary Reserve was at least 5,000 people short in 2015. Last week, the Canadian press reported that the shortfall of the Primary Reserve was now 7,000 people. Given the fact that these represent good, well- paying, part-time jobs, Canadians might well wonder why this should be. Reserves 2000 has been asking that question for a long time.
The last time I appeared before this committee in October 2010, I said that the method being used to issue recruiting quotas was flawed and that many militia units were not being allowed to recruit enough new soldiers to replace the losses they would have in the coming years. I also said that the Canadian Forces Recruiting Group was chronically failing to meet even these small quotas that were issued. I believe I also said that unless these two issues were resolved, militia strength was bound to fall.
In addition to those two fundamental failures at the front end of the strength equation, in the intervening five and a half years the loss rate of trained soldiers has increased, thereby making a bad situation even worse. Some of that increased attrition is due to the fact that reservists no longer have the opportunity to serve on extremely challenging missions like Afghanistan. Certainly there are a few missions outside of Canada, but they are very much diminished from those days. As well, thousands of full-time reserve positions were opened to support the Afghan mission. Those have now been closed off, and many reservists who were in those positions did not choose to return to part-time service. That is a one-off reason why attrition has increased.
It is the opinion of Reserves 2000 that another reason is a lack of exciting and interesting training within units and a lack of suitable summer employment of suitable duration to engage our young soldiers and allow them to make enough money with their reserve service that they don't have to take another job. I have identified this shortcoming by talking to our supporters across the country.
We feel that shortcoming is due, in large part, to a lack of training funding. This is not a lack of pay; there is pay money in the last two or three years. There seems to have been sufficient pay money for soldiers, but you can't have good and exciting training without actually incurring other costs, such as transportation costs to training areas, casual meals and other expenses of that nature. That money was severely restricted about three years ago, and the tap has not really been turned back on yet.
If there's no training, reservists don't get paid. We now have the ironic situation that while pay money has lapsed, we have young soldiers leaving their units because they need more money to keep themselves going, usually through post-secondary education. In particular, the lack of summer jobs for these young Canadians is a cause of well-trained young reservists leaving the militia.
It is the view of Reserves 2000 that these problems could be solved by decentralizing the recruiting, enrolment and training processes. We feel these are best managed at the unit and sometimes at the brigade level. As we all know, Canada is an enormous country, and made-in-Ottawa solutions do not work everywhere. In fact, I dare say that these processes I just mentioned don't even work in Ottawa sometimes. If you want to find out, just go and talk to somebody in the National Capital Region who is serving in a local militia unit. They will tell you the same things.
It is not just Reserves 2000 that has raised flags about problems of this nature. In 2014, the quasi-independent Defence Science Advisory Board produced a particularly damning assessment of the Canadian Forces Recruiting Group. Among other very unfavourable observations, they reported that it took 165 days — that is almost six months — to enrol a reservist. Is it any wonder, then, that young Canadians lose interest in an organization that tolerates wait times like that for a part-time job? It is no wonder that in recent years less than 70 per cent of those already-too-small recruitment quotas I mentioned have been filled.
But a ray of hope did appear in October 2015. Just 10 days before the election, the new Chief of the Defence Staff signed an initiating directive titled "Strengthening the Primary Reserve.'' I sent a copy of that document to your clerk. If you haven't seen it, it is well worth looking at. In that document, General Vance issued direction to increase the size of the Primary Reserve by 1,500 positions. The Army Reserve's share of that, the militia share, is 950 positions. He wants this done by July 2019. The CDS clearly recognized that there are many factors in the decline of the part-time forces, including those Reserves 2000 has long pointed out, and called for solutions so growth can be achieved.
Given the fact that the whole Primary Reserve may be undermanned by as many as 7,000 today, reaching the goal that the CDS has laid out means an increase from today of 8,500 people in a little over three years.
Considering the failures of the last five years, one must question the ability of the system to shift from net losses of a 1,000 per year for the last five years to net gains of 2,800 per year for the next three and a half years.
As I think we are all aware, the Department of National Defence doesn't turn on a dime. It is our opinion in Reserves 2000 that the only solution is a major policy change, and that major policy change is to decentralize more of these issues and to put them on the armoury floor where they can be done.
However, we also wonder: Is it too late? Has the neglect of the past years doomed the militia? In Minister Sajjan's mandate letter from the Prime Minister, he has been told to "Conduct an open and transparent review process to create a new defence strategy for Canada, replacing the now-outdated Canada First Defence Strategy.'' He has said, since he was made minister, that the review will determine the future of the reserves. That review has to be finished by the end of this year, by the way, according to his mandate letter.
In the next few months, the future of the reserves is going to be determined. Reserves 2000 fears that given the current state of the militia, there is a real risk that low strength will be used as proof that reserve forces are a failure and therefore should not play a meaningful role in future defence policy.
But we are also ever-optimistic. If the review process is truly open and truly transparent, we are confident that the record of our reserve forces will speak for itself, and Canadians will demand policies that will strengthen the role of their units, in their communities, for the benefit of their country.
Reserves 2000 therefore urges this committee to convey to Minister Sajjan the need to have all stakeholders involved in the review process, including the drafting of terms of reference. We also hope that you will play a leading role in championing the cause of doing more with reserve forces in that review and that this will be reflected in your agenda in the months ahead. Needless to say, I, our small headquarters, and our supporters across the country stand ready to assist in any way possible.
Thank you. I'm pleased to take any questions that you may have.
The Deputy Chair: Thank you, Lieutenant-Colonel Selkirk. Can we take it your comments generally relate to all Primary Reserves, or are you speaking only about the militia, the Army Reserve?
Lt.-Col. Selkirk: No, the strength, recruiting, and enrollment problems are problems across army and navy, and the air force, to a lesser degree, because they generally speaking just accept into the Air Reserve people who have come from the regular air force. That all has to do with training. Certainly, for the army, the navy and the Health Reserve, the comments on recruiting — because they do recruit directly from the population — are all equally valid. They're in the same boat.
As far as what other condition the Navy Reserve, Health Reserve and Air Reserve are in, I don't have that information. I don't have the details on that. I do know, however, the condition that the militia — the Army Reserve — is in.
The Deputy Chair: The figure you gave us today of 7,000 below strength, is that militia or is that all Primary Reserves?
Lt.-Col. Selkirk: That is everything. I took that figure from a report in the Canadian press by Murray Brewster, and he specifically broke out that the Primary Reserve was short 7,000 and the Regular Force was short another 2,000 or 3,000. I have forgotten the exact number for the Regular Force.
That to me rings true because in 2015 they were 5,000-plus short, and nothing has really improved since then in terms of recruiting and enrolment, and I think attrition is just as bad. That could be a very accurate figure, I think.
The Deputy Chair: What figure is the authorized strength for reserves?
Lt.-Col. Selkirk: Twenty-seven thousand is the authorized strength of the Primary Reserve.
The Deputy Chair: And Mr. Brewster believes, and you accepted his figure, that the reserves are 7,000 below that?
Lt.-Col. Selkirk: That's what he's saying it is today. I don't know what his sources are.
The Deputy Chair: Did you take the Chief of Defence Staff statement just before the election of 1,500 more as 1,500 more on top of 27,000?
Lt.-Col. Selkirk: Yes. He wants it to be 28,500 by 2019.
The Deputy Chair: That's helpful. It clarifies your comments.
Senator White: Thank you very much for being here today.
In 2010-11, this committee's study looked at reserves and the trend among other countries — not only Canada — to have reservists working primarily in the domestic domain. Can you tell us why you think that might have started? Can you give us a little bit about whether we moved directly behind this model, and that's why we had a diminishing number of reservists?
Lt.-Col. Selkirk: I'm not sure I understand your question exactly.
Senator White: In 2010-11 the committee did research on a number of countries, including Canada, which looked at reservists, primarily focusing on domestic operations: emergencies, ice storms, et cetera.
Lt.-Col. Selkirk: You are asking me if I think that's a factor in why —
Senator White: What caused the trend? Is that part of the impact on us going from 27,000 to 20,000 and the concerns you are raising now?
Lt.-Col. Selkirk: I don't think it would have a large impact if everything else was working correctly. I said that I believe that leaving Afghanistan has been a factor here, and it certainly is directly a factor in this sense: During Afghanistan, the Armed Forces at one point called up 12,000 part-time reservists to full-time duty. When those full- time jobs went away — by the way, the number now is 4,500 across all services — they didn't all go at once. It was a gradual drawdown.
Senator White: Yes.
Lt.-Col. Selkirk: When that happened, a number of those people chose not to go back to part-time service and just left, but they were still counted as reservists, so that was attrition. That factor was there as a direct result of leaving Afghanistan.
There are probably some reservists who, without the opportunity to deploy overseas, might have tried it for a couple of years and said, "I'm going,'' but quite frankly I do not believe that the majority of reservists see domestic employment as any less important than overseas employment.
Senator White: The participation in domestic international operations in recent years has been diminished partially by demand. What impact is that having directly on things like morale within the units? Seven thousand is a lot of people to be short. What impact is it having, from your perspective?
Lt.-Col. Selkirk: I don't think the fact that we are not deploying in large numbers overseas really is affecting morale in the units very much. What I believe does affect morale is a lack of resources to do interesting, exciting training during the winter months and if there are not sufficient resources to do interesting and exciting training during the summer months.
Now that interesting and exciting training may be individuals getting courses to improve their individual skills. It could involve working on ranges and other things that need to be done to support training, and it certainly involves what the militia historically did in the order of two to three weeks each summer, which was to bring units together to practise working as larger formations and teams together.
If you don't have that, I think that does affect morale. This summer, for example, in Ontario, units will be concentrated together, but not for a very long period of time. It is my understanding that rather than militia officers and militia NCOs commanding their own soldiers, basically the officers and NCOs have been told, for want of better words, "Really, we don't have anything for you guys to do. We want your privates and corporals to flesh out regular units for that period of training.'' I can tell you I don't think that's good for morale.
[Translation]
Senator Dagenais: Thank you very much for your testimony, Mr. Selkirk. For your information, I was a reservist at the Royal Canadian Hussars and at the 2nd Field Artillery Regiment. Training was for two and a half months during the summer, which was very good, and it was either at Farnham or Gagetown. Then we had training every weekend. It was a very good experience. That may be how I became disciplined enough for the Senate. Maybe my colleagues would like me to go back for more training!
If I understood your presentation correctly, there were problems with recruitment or attracting candidates. A study was done in 2010-11 on the current and future state of the Canadian reserves. I would like you to elaborate on the ongoing problems you are dealing with, either with attracting new people or retaining them. What do you believe could be done to improve the situation?
[English]
Lt.-Col. Selkirk: From the point of view of attraction, I don't believe that there is a great problem out there, especially given the fact that we are not calling for large numbers. The whole militia now is only between 16,000 and 17,000 people, across 120 units. So every unit is not calling for hundreds of people to appear at the armoury door.
Attraction seems not to be the problem, and attraction is a unit responsibility. A little bit of advertising occurs on a central basis, but for the most part, units are attractive to young Canadians.
The problem is with the process thereafter. As I said, a report from 2014 said it took, on average, 160-plus days after the attraction has occurred, once somebody expresses an interest, until that individual is enrolled and can actually start training. That is a very serious problem.
The Chief of the Defence Staff recognizes that. In his directive, he has directed that that period must be shortened. I think he's calling for 90 days, but even 90 days is an awfully long time when you consider that the competition for these bright young Canadians who want to join can sign them up and have them working somewhere else within a week or two weeks, perhaps.
There is a very serious problem with the young Canadian who is interested and attracted. He or she looks at this will go somewhere else after a while. They're not going to wait. This is a part-time job, after all. People that want to join the Regular Force, who are going to get a pension at the end of it and all that stability and everything that entails, will wait 160 days. I'm not too sure that this appeals very much to a high school kid that we are trying to attract.
Therein lies a very serious problem. This problem has been pointed out and talked about and talked about, and nothing ever really seems to get done.
Within those 160 days, many steps could be taken back into the armoury so that the process can be sped up. For example, the Canadian Forces Recruiting Group insists that a lot of the actual processing has to happen in their offices. Well, take the case of the 49th Field Regiment, Royal Canadian Artillery, in Sault Ste. Marie. The recruiting office in Sault Ste. Marie was closed in about 2012, I believe. Since then, they have had to take their young recruits, high school students who have to go to school the next day, and bus them or drive them all the way to Sudbury to fill out a whole bunch of stuff and do a bunch of stuff. That might happen two or three times before those kids are enrolled.
Well, if I were a parent of those kids and they had to go to school — that's about a five-hour drive by the way — I wouldn't want them doing that. There are impediments such as that that are just outrageous as far as I'm concerned.
[Translation]
Senator Dagenais: So if I understand correctly, Mr. Selkirk, the problem may be in the structure, in how to manage enrolment or transportation. I understand that you talked about this with the people in charge, but have you found ways to address the lengthy enrolment period, which sometimes discourages candidates from joining the reserves?
[English]
Lt.-Col. Selkirk: Senator, since I have been involved in this, and it has been a long, long time, the problem became worse as the process was more and more centralized. However, since it got to this point of 160 days or so, I don't believe there has been any dramatic improvement. I don't think it has improved in the last four or five years.
Indeed, the Canadian Forces Recruiting Group has actually closed more recruiting offices in that period of time. It closed the recruiting office in Oshawa or at least reduced the hours. It closed the recruiting office in Cape Breton. I guess that was Sydney. And it closed one in Corner Brook. I can't see that any of that is helping this problem.
I spoke to a very senior person in the recruiting group and talked to him about this issue. I said to him, "Look, you seem to be able to meet the Regular Force recruitment quotas you have given every year, but for years they have only managed to reach about 70 per cent of the reserve quotas. Why is that? Do you need more people? What is it?'' Basically, the answer was, "Well, we have to do the Regular Force. We look after that first. If we have got time and resources left over, then we apply it to the reserve quotas.''
There is another part of the problem. This over-centralization, one-size-fits-all, really doesn't fit all. It is our opinion that the reserve part of all that should be given back to reservists to do as close as possible to the actual unit.
[Translation]
Senator Carignan: I have a few questions. I will close on the issue of recruitment, but then I will come back to the recruitment strategy, something that I find very interesting.
Is there not a problem related to targeting potential clients or young people who might want to apply to be a reservist? I will give you an example. Senator Dagenais said he became a reservist, but why was that? Maybe he wanted to be involved in the field of security. Maybe he was having a hard time finding a job in the field, decided to start this way, and wanted to gain this experience.
This is not uncommon among young people working in security, just like young volunteer firefighters who have part-time jobs and want to complete their training or fill their available time with a job like this. The problem is that no one is recruiting them.
Are there any real strategies? What happens with young cadets in high school? Back home there were Kiwanis air cadets, but they seem to have vanished because no one followed up to recruit them. Is anyone really making an effort to target candidates in this recruitment strategy?
[English]
Lt.-Col. Selkirk: That's an interesting question, senator.
You're familiar with a Kiwanis Club sponsoring a cadet core. I'd say that every militia unit sponsors their own cadet corps, yet the uptake of cadets into the Primary Reserve is not that great. Why is that? I believe some of it is the very keenness of the cadets. The age that an individual can be enrolled in the militia or the Primary Reserve starts at 17. The keenest cadets can stay with their cadet corps until they are 18 or maybe 19. They are the ones you think might want to come, but they're now big wheels in the cadet corps, and perhaps they don't want to go from being a fish in a small pond to being a little fish in a big pond.
Interestingly enough, a lot of those senior cadets go to RMC. Perhaps even Senator Day was a senior cadet at one time. They will go directly into the Regular Force and skip the reserve part of it. I believe it's got something to do with the age you can get them at, but that's only part of the answer.
Do we target those folks? Any smart unit does, but the success I've seen is certainly not 100 per cent, not even 50 per cent. It's an interesting phenomenon. I don't know why there is a disconnect, but there seems to be.
[Translation]
Senator Carignan: I would like to further explore the numbers because we are talking about 28,500 reservists, if the targets are met. In your view, what would be the ideal number for a fully effective and efficient reserve?
[English]
Lt.-Col. Selkirk: Senator, the number that we have put forward for a long time is 45,000. In fact, Senator Segal, one of your retired colleagues, is involved with the North Atlantic Council that has produced a paper in which he uses that same number. We did a study years ago and felt that 45,000 were required primarily to support the size of the expeditionary force being studied at the time. Since then, we've revised our thought to some degree and feel that rather than expeditionary, the real need would be here in Canada.
When we first started producing these numbers, it was before 9/11. Today, we feel that the real threat to our way of life is domestic, and that the disruption caused would require a tremendous amount of consequence management. Although we have large security forces, they are nowhere near large enough to provide that consequence management on a 24/7 basis that might be required.
Our feeling still is that 45,000 army reservists. I don't know what the figure might be for the navy, the air force or health care, but that is our number. If that were to be the case, then those 120 militia units could be of sufficient mass that they could be much more efficient than they are today.
They're too small today. There just isn't enough mass to actually do everything. One reason I suspect that perhaps there is not as much interesting training going on at the armoury level is the fact that we do not have enough officers or NCOs. There're many reasons that is true, but we just have not recruited enough young officers at this level to have, 20 years later, enough majors and lieutenant-colonels to organize and control some of the more interesting things that could be done. It's the same, to some degree, with non-commissioned officers.
We need a larger militia in order to have a centre of gravity that is big enough, and if you have that, you can do a lot more.
Senator Beyak: Thank you, Lieutenant-Colonel Selkirk. Your presentation was excellent.
My question is on major personnel pressures linked to retention and attrition. You answered that in the presentation. You also identified the decentralization to the unit, even to the brigade. When you answered Senator Dagenais, you mentioned the 165 days again and that General Vance wants 90 days. Until we identify why that's happening, it won't be solved.
Can you tell me if there've been any studies or audits that show why it takes 165 days? And 90 is too long as well.
Lt.-Col. Selkirk: Senator, the study I quoted, and I have not read it for quite a while, contains a lot of detail. That would be useful if you want to understand what was going on and, as far as I know, is still going on. There's a lot of file shuffling and people can be away. The Canadian Forces recruiting offices have a full-time mentality and work five days a week, yet the reservists are not available during working hours five days a week. There are long delays between files getting the right boxes ticked off and that sort of thing because the reservist just isn't available.
At one point, and I think this still exists, every medical for every reservist who joined was signed off by a medical officer in one office in Camp Borden. I have no way of proving this, but I've been told when that guy went on leave in the summertime, nothing happened for his period of leave; things like that. It just seems incredible that this is the way it operates, but that seems to be the case.
All that said, I know that some units have really good working relationships with the local recruiting office. Fortunately, the office in Oshawa was one of those. They had a really good relationship there, and that office would stay open or open up on a Saturday for them. For every one good story like that there are five or six horror stories about how the recruiting group does not look after our part-time service.
Senator Beyak: Thank you very much for that very good answer. It seems like that's the problem we have to address.
Lt.-Col. Selkirk: It certainly is a very large problem. Coupled with that, as I said in my opening remarks, is the setting of recruitment quotas. Before it was totally centralized, and it has been totally centralized for about five years, quotas were set out there. They weren't necessarily set right at the unit level, but brigade and areas would decide more. Now the process has been so centralized that it doesn't take into account a lot of factors, and that's why those numbers are so low. Again, General Vance recognizes that there is a problem. How they're going to fix it I don't know, because the desire to centralize everything is still there, as far as I'm concerned.
What we are advocating is a culture shift that recognizes that centralization, while it has some benefits, does not serve a big country like Canada particularly well sometimes and this is a particular case.
Senator Beyak: Thank you very much.
Senator Mitchell: I'm interested in the point you made about decentralizing training. At face value that sounds like a good idea. Does it not, however, run into a contradiction when you say one of the problems now is that there are insufficient officers and NCOs in various depots to really provide the training? How would you accommodate that and make it work?
Lt.-Col. Selkirk: That's the real question, and the more that the militia has lacked officers and NCOs, the more the absolute requirement to centralize has been there. However, the more training that can actually be done at the unit for these part-time young Canadians is absolutely the best.
If you're in downtown Toronto and there are armouries there that have four or five units, centralizing some things and using everyone to work together makes a lot of sense because the young soldiers that are being trained are coming in from a vast surrounding area, but they also have access to good public transportation and it's not too much of a problem.
But take a more isolated unit such as Sault Ste. Marie. How will you centralize in Sault Ste. Marie? Those are in areas that really require new solutions to this problem. And, if we look across this country, units in large urban areas are not faring as badly as units in rural areas. In fact, it's the rural units that we fear for because they are the ones that are more under strength than anyone else. The constant, "Oh, we have to have economies of scale,'' could mean that a large number of rural units, if you carry on with the notion that economies of scale are the answer to everything, could disappear. I don't think that would be politically palatable across this country.
Senator Mitchell: To some extent it's not a coincidence or you might argue it's not a coincidence that the number of reservists has dropped off as we've gotten out of Afghanistan. Deploying a large number of people to a war creates a real sense of urgency. No matter what we do, there is not that sense of urgency when we're not doing that. It is a question of what you do to occupy people.
Our committee did a report in 2011 in which we suggested that one of the things that could be looked at for the reserves would be working on the cyber-threat. Have you given any thought to pursuing that as an activity for reservists and how that might be structured? You can see where it needs continuity, but is there a way that that could create a demand and a greater sense of urgency for the reserves?
Lt.-Col. Selkirk: That is the kind of thing we need to be looking at. Again, if you look at this CDS initiating directive, there is a piece in there about getting into areas — I don't know whether that's a non-traditional area, but I guess it is. We do have electronic warfare reserve units, and the CDS recognizes that that is an area in which reservists could be well employed.
There is another advantage to doing more with reservists in that if we target capabilities like that, there is a lot of experience out there in the civilian world. So you could take those folks and apply them, and that makes a lot of sense as far as I'm concerned.
Senator Mitchell: Some time ago, and I'm not sure whether it was in the context of reservists but generally in the context of the military, the problem was raised with the committee that you can learn a trade in the military, but it doesn't necessarily get you a ticket in the civilian world. You could see where reservists could be attracted if they could actually begin to develop their electrician's ticket, or whatever, at 18. Has your organization given any thought to that or assessed it? Has progress been made?
Lt.-Col. Selkirk: We've given thought to it and agree that that is the most desirable situation, where those qualifications are transferable both ways. I know that work has been done on this, but I honestly don't know at this stage how much progress has been made. I know that in Alberta, some of your advocates out there were working on this and are very interested and concerned about it. I think I can say that some progress has been made, but I don't think it's as much as should be done because they can't go back and forth. It doesn't seem to work.
Senator Kenny: Welcome colonel.
I'm a bit confused with your testimony so far. You were making a case earlier about wanting 45,000 Class A reservists, and then you started talking about Sault Ste. Marie and making the opposite argument about economies of scale. Can you help me out?
Lt.-Col. Selkirk: I'm not sure that I understand exactly what you're asking.
Senator Kenny: You started out by arguing in favour of economies of scale by having 45,000 Class A reservists, and then you said the real problem is the opposite.
Lt.-Col. Selkirk: Well, if I said that, then I certainly misspoke.
Reserves 2000 feels that Canada needs to have 45,000 part-time reserve army soldiers. Having that many people would mean that units could be at least double the size they are now, more so in some cases. They need that in order to be viable and survive into the future. I don't see a contradiction there.
Senator Kenny: How about the proposition that reservists should be responsible for their own recruiting? What are the pros and cons of that?
Lt.-Col. Selkirk: The pro is that without the delays of having to visit recruiting offices, and the distances often involved, the process could be reduced. In years gone by, 20 to 30 years ago, it was done locally in the units, and it was done within a pretty short period of time.
Now, that will take more resources. For example, in those days every unit had a medical officer who could do the medicals. There are not enough reserve medical officers today to do that. However, those medicals can be contracted out. There are lots of doctors who I'm sure would like to make a few extra bucks. There are ways of getting around it.
Senator Kenny: Give me the pros and cons, then.
Lt.-Col. Selkirk: The pros are that history and experience tell us that the time between the individual showing an interest in joining and the time that he is actually enrolled and can start training, getting some money and doing interesting things is shortened up.
Senator Kenny: I get that, sir. I understand that, but you haven't told me any of the negatives, and every proposal has negatives. What are the problems when you revert to the old system?
Lt.-Col. Selkirk: I suspect one of the desires to centralize things was that they — "they'' being the system — felt that a higher degree of quality control was more achievable because you had standards that few people in that organization were applying to a whole bunch of recruits. Whereas the opposite, if you're doing it on a disbursed basis, you have more people, and therefore the possibility of the standards not being exactly the same are higher.
I think quality control was one impetus behind centralization. I would say we need to be capable of accepting a bit of risk.
What are the risks? I assume there were risks in terms of liability, if somebody was accepted for training and turned out to have some medical problem that should have been caught, things like that. But I don't know because I didn't design the system.
Senator Kenny: What I'm saying is what would you have this committee do? Would you have us recommend a return to the old system?
Lt.-Col. Selkirk: Yes, that's exactly what we would ask for. As I say, to keep it short and to put it in a few sweet words, we feel that the policies of centralization that are so beloved at NDHQ should be relaxed and there should be much more decentralization.
Senator Kenny: Thank you.
The Deputy Chair: Colonel, can you tell us the position of Reserves 2000 with respect to the suggestion that has been made on a number of occasions recently of trying to re-instigate, re-implement the Reserve Officers' Training Corps at universities to try to get the future officers training during the winter? Some of them, as you point out, especially in the rural areas and in New Brunswick — for example, going from the University of New Brunswick to Saint John to meet with the unit once a week is pretty tough for a student. Can you help us with that?
Lt.-Col. Selkirk: There is a private initiative. There is a name for the program, which escapes me at the moment; however, it is mentioned in the document from the CDS. It is, for want of a better term, the return of a COTC type of program. The program would not be just officers, however, because it's recognized that today a lot of non- commissioned members are also attending universities and other post-secondary institutions.
We are all in favour of it. Anything that will increase the number of leaders at the unit level is very desirable from our point of view, because right now it just isn't working. There are not enough leaders. We are all in favour.
A pilot project at the University of Alberta is under way now, Senator Mitchell. It's being expanded to Quebec and I believe to Halifax as well. The navy is quite interested in that program.
The Deputy Chair: I'm glad to hear that. When we have the navy in, we'll ask them how that's going.
You talked about the mandate of the new minister to look into the Armed Forces and, in particular, the reserve element. Has Reserves 2000 been approached by the minister yet with respect to that review?
Lt.-Col. Selkirk: No, we have not, and of course the review is defence policy. No, we have not been approached, but we have approached his office and said, "We want to be part of it,'' but I've heard nothing back at this point.
The Deputy Chair: Thank you.
Senator White: Thank you again for being here.
A number of countries identify that the six-month required or voluntary exposure to the military in those countries by 18-year-olds is very helpful to them filling their requirements for militia and other reservists. In Canada, back about 30 years ago, we had a similar program, but it was two months and we would fill militia units across the country. In fact, at the end of those two months, a lot of militia units would be told, "There are 200 applicants and you can take 25.'' That's how many there were.
You haven't said it outright, but a movement back to what worked for keeping those numbers at the top. Really, exposure is what will get kids interested in reservists — 16-year-olds, and then doing it at 17 and 18, going to university and maybe even joining the military full time. Would you agree that that's really where we're going to work?
Lt.-Col. Selkirk: Absolutely. I was a cadet and then I joined the militia when I was 16. As soon as I left high school I joined the regular army. I served for 20 years and then I went right back to the militia. That's exactly the model I went through. It was called the Student Militia Training Program.
Senator White: The same model I went through.
Lt.-Col. Selkirk: It was a wonderful program. Why it was discarded, I have no idea.
Senator White: Thank you very much.
[Translation]
Senator Carignan: I was looking at the Government of Canada's job search websites. The Government of Canada's Job Bank is a single window website. If I were looking for a job that is the site I would go to. That is also the site I would go to if I were an employer looking for candidates who are looking for a job. If I do a search with the word "army,'' there is only one section in British Columbia that has postings for reservists. The job posting says that the salary is $90 a day. How badly does the Department of National Defence want to hire reservists? Do you think the department truly wants new recruits? If so, that is definitely not coming across in the basic recruitment tools.
[English]
Lt.-Col. Selkirk: Senator, I agree with you. You have to wonder if indeed the leadership wants the reservists to succeed. I agree with you entirely. I think the proof of that is in the fact that the strength is 5,000 under. If the reserves were really valued, would there not have been action taken in the last five years to prevent that?
Your question is excellent, to which I do not have the answer. All I can say is look at the evidence.
Senator Kenny: My understanding was that the principal problem facing the Class A reserves was a cut to their O&M. The rest of the Armed Forces have had a similar cut, and the budgets that different regiments have just isn't sufficient. If you take 20 per cent away, there's not enough dough to do anything, and that's why we're not seeing programs that interest people or training that people want to engage in. That's why we've had a drop in members. Is that your assessment?
Lt.-Col. Selkirk: Yes, that is my assessment, except we're in this remarkable situation now where units — and I have had this reported to me from across the country — have more Class A pay money than they can spend.
Senator Kenny: But they don't have —
Lt.-Col. Selkirk: They just don't have the O&M money.
Senator Kenny: Right, so one without the other is like toast without jam.
Lt.-Col. Selkirk: Exactly. So now we have this ironic position where there is money, but the young kids can't get it because they're not doing training, so they say, "I'm going to work at McDonald's or somewhere else.''
The Deputy Chair: Thank you very much. It is good we got that on the record. Class A reserve is the typical reservist who works one night per week and appears usually one weekend per month. That's a Class A reserve as Senator Kenny referred to.
Lt.-Col. Selkirk: Yes.
The Deputy Chair: There are other classes that we don't need to get into, but I just wanted to clarify the record.
The other point was, if I'm not misquoting Julie Lindhout, who was here last week, the group is now called NATO Council of Canada. It was the North Atlantic Council. They've changed their name to NATO Council. Do you agree with that?
Lt.-Col. Selkirk: Yes, I do. I keep getting confused.
The Deputy Chair: I just wanted to clarify the record, in case somebody was looking for the name.
Lt.-Col. Selkirk: That's the organization I was referring to.
The Deputy Chair: It is now chaired by a former senator of this committee, Senator Segal, and prior to that Bill Graham was chair of that committee.
Lt.-Col. Selkirk: That's right.
The Deputy Chair: Colonel, thank you very much for being here and for the work that Reserves 2000 is doing to help keep this issue of reservists alive. The fact that we did a report is an indication that we as a committee in the Senate are very interested and concerned about the reserves. We look forward to working with you in the future to make sure that some of the concerns you have expressed today don't come about.
Lt.-Col. Selkirk: Thank you very much, senator. Thank you for having me.
The Deputy Chair: Honourable senators, now we have with us our second panel for today.
The Security Intelligence Review Committee tabled in 2014-15 its annual report to Parliament on January 28 of this year, less than a month ago. SIRC's reviews included insider threats, foreign fighters and the collection of information from the Canada Revenue Agency, all subjects of concern and interest to this committee.
The Office of the Communications Security Establishment Commissioner tabled its 2014-15 annual report to Parliament on the same date, January 28, 2016. The report reviews included metadata, information technology security, and disclosures of Canadian identity information. Those subjects are covered in their reports, and we're looking forward to hearing from our witnesses and representatives of each of those groups at this time.
From the Security Intelligence Review Committee, we welcome the Honourable Pierre Blais, Chairman; and Michael Doucet, Executive Director. From the Office of the Communications Security Establishment Commissioner, we welcome the Honourable Jean-Pierre Plouffe, Commissioner; and J. William Galbraith, Executive Director.
Which group would like to begin?
Hon. Pierre Blais, Chair, Security Intelligence Review Committee: Good afternoon. Thank you for the opportunity to speak to you about the work that SIRC has been doing.
SIRC's annual report for the fiscal year 2014-15 was tabled in Parliament in January, as you mentioned. It was in fact delayed due to the federal election. Normally, it is tabled in October, so SIRC will likely table two annual reports this year.
The Deputy Chair: One for the former government and one for this government?
Mr. Blais: We will complete our year in a few weeks.
The annual report contains unclassified summaries of SIRC's reviews and complaints investigations, including recommendations and CSIS's response to those recommendations.
Of note in 2014-15, SIRC noted an improvement from last year with respect to the timely disclosure of information to SIRC by CSIS. In most of its work this year, including the certificate, nine reviews and five finalized complaint investigations, SIRC was satisfied with the manner in which CSIS carried out its mandate to investigate threats to the security of Canada.
However, in two reviews, SIRC felt that the significance of the issues it found warranted sending the reports directly to the Minister of Public Safety as special reports under section 54 of the CSIS Act. I will speak to those shortly, but we will begin with the certificate and also discuss a special examination we conducted at the request of the director.
[Translation]
This year, with one exception, our certificate found that the activities described in the CSIS director's annual report did not contravene the CSIS Act or ministerial direction, and were reasonable and necessary.
SIRC decided to ground its satisfaction of the director's report in a broader appreciation of its original intent, namely, to support the minister in his role. This reflection led us to recommend the issuance of a renewed ministerial direction that would outline more explicit instructions to the service with respect to the format, content and timing of the director's report.
For this accountability mechanism to work, there needs to be an effective system of communication between the service and the minister and his or her deputy, to ensure that the minister is informed of CSIS activities that raise questions of legality or propriety.
It remains the case today. However, the director's report, in its present form, contains long descriptions of the main investigations that do not change substantially from year to year. Far from being an aid to ministerial accountability, the level of detail has the effect of obscuring the more important information for ministerial consideration, including serious issues, challenges, and potentially controversial activities.
[English]
SIRC recommended that the minister make his expectation known to CSIS with respect to the form and structure of the director's report, as well as with respect to being notified of CSIS high-risk activities.
[Translation]
SIRC's reviews provide a retrospective examination and assessment of a representative sample of CSIS investigations and activities. Each review results in a snapshot of the service's actions in a specific case. This approach allows SIRC to manage the risk inherent in being able to review only a small number of CSIS activities in any given year.
In the year that just ended — 2014-15 —
[English]
SIRC conducted two studies which warranted sending the report directly to the Minister of Public Safety and special reports under section 54 of the CSIS Act.
The first report stemmed from examination of CSIS's management of insider threats. SIRC's review identified concerns regarding the training, access and documentation of insider threat investigations and identified one case that it felt was not sufficiently resolved.
The second report examined CSIS's relationship with the Department of Foreign Affairs, Trade and Development. SIRC raised serious concerns with the application of the United Nations Al-Qaida and Taliban Regulations, which is known as UNAQTR. I will discuss each of these in a bit more detail.
[Translation]
In the aftermath of high-profile classified documents leaks such as those attributed to WikiLeaks, Edward Snowden, and Sub-Lt. Jeffrey Paul Delisle — in Canada in the latter case — the "Five Eyes'' community has elevated the concern posed by the "insider threat'' to a higher level. Intelligence agencies are paying increased attention to the insider threat in order to reduce its potential rate of occurrence and, failing that, to help limit the damage that can be caused by a malicious internal actor. This review set out to examine the service's efforts to mitigate insider threats, in particular with respect to information management.
[English]
SIRC found that there are some unsatisfactory thresholds for internal investigations. SIRC recommended that CSIS create more detailed policy on the conduct of internal security investigations into suspected violations and/or breaches of security. SIRC also recommended that CSIS take immediate action to appropriately document all decisions made pertaining to internal investigations in accordance with the standard requirement set by Treasury Board guidelines.
Finally, SIRC recommended that internal security forward final investigation reports to a group outside of its unit for review to help ensure that the investigation is complete, objective and well documented.
CSIS agreed with most of the recommendations and will create more detailed policy on the conduct of internal security investigations and will undertake a review to clarify definitions, timelines and techniques as well as develop clear procedures to ensure that all decision-making pertaining to internal investigations is documented appropriately.
In the second section 54 review, SIRC examined CSIS's relationship with the Department of Foreign Affairs, Trade and Development, now called Global Affairs Canada. Overall, SIRC found CSIS's relationship with DFATD overseas missions to be positive. However, SIRC raised a potential legal concern with respect to CSIS activities and a United Nations Al-Qaida and Taliban Regulation. In fact, CSIS lacks a procedure to systematically verify whether past or ongoing human-source operations conducted against al Qaeda and Taliban threats are in contravention of the United Nations AQTR.
SIRC recommended that CSIS put in place formal internal mechanisms to ensure that none of its human-source operations are in contravention of the United Nations AQTR or any similar Canadian statutes or regulations. SIRC also felt that CSIS needed to examine the full scope of potential violations. Therefore, the committee directed the service to conduct a section 40 review and report the result to the Minister of Public Safety, which CSIS has agreed to do. SIRC will examine the methodology and findings of the CSIS review and provide an assessment both to the Minister of Public Safety and to Parliament.
Regarding the special request, in 2014-15 SIRC also took on, at the request of the CSIS director, an additional examination. In August 2014, the CSIS director notified SIRC's interim chair of an incident involving a CSIS intelligence officer who obtained taxpayer information from the Canada Revenue Agency without a Federal Court warrant. CSIS requested that SIRC review the circumstances surrounding the incident and make recommendations as necessary and appropriate to ensure proper accounting.
SIRC takes very seriously CSIS obtaining taxpayer information improperly. SIRC made a number of findings that lead to several recommendations; namely, that CSIS conduct an audit and a postmortem, clarify the scope of the incident to the Federal Court and the Minister of Public Safety, and advise the Privacy Commissioner.
[Translation]
The committee determined it was not able to make recommendations aimed at preventing such a future occurrence because SIRC was not provided with any explanation to account for the full scope of the improper collection of taxpayer information.
Therefore, though the immediate action taken by the CSIS Executive — to issue a stern reminder to all employees of the need for a warrant to collect taxpayer information — was appropriate in the circumstances, it may not be sufficient.
The committee considers that, if the sharing of taxpayer information from CRA to CSIS is put on a new footing as a result of the new Security of Canada Information Sharing Act, a routine audit of those activities through a renewed memorandum of understanding could be even more important.
The past year witnessed significant legislative developments in the national security area, with the adoption of new laws that brought important amendments to the CSIS Act. For example, our committee, SIRC, now has the statutory obligation to annually review at least one aspect of the service's performance in taking measures to reduce threats to the security of Canada.
This responsibility will require a significant resource commitment from SIRC because threat reduction activities are by their very nature potentially controversial and/or high risk, meaning SIRC will need to ensure these activities are examined annually in a focused and dedicated manner.
[English]
While additional funding for SIRC was announced in the Government of Canada's Economic Action Plan in April 2015, it was not until the end of January 2016 that the funding was a proven practice. For staffing purposes, SIRC only has funding for one year.
[Translation]
Nonetheless, SIRC is clearly willing and able to meet rising expectations. SIRC's work has evolved significantly in past years and, with recent developments, our pace of change will undoubtedly hasten in the months and years ahead. In this transformative process, however, we will remain focused on the principle that has guided our work since 1984 and that is to serve as a cornerstone for ensuring the accountability of Canada's security intelligence activities.
[English]
Thank you very much. I welcome any questions you may have about our full report.
[Translation]
The Deputy Chair: Thank you, Mr. Blais. We will follow up with Mr. Plouffe and then senators may ask you some questions. Mr. Plouffe, you have the floor.
Hon. Jean-Pierre Plouffe, Commissioner, Office of the Communications Security Establishment Commissioner: Chair, honourable senators, I am pleased to appear once again before this honourable committee.
I welcome this opportunity to discuss the work of my office and how it contributes to effective governance and accountability of the Communications Security Establishment, or CSE's operational activities.
It is especially important at this time when changes to intelligence review and oversight are being considered by the government and being discussed by academics and others of the interested public.
You have asked me to appear before you to discuss my annual report that was tabled in Parliament on January 28, 2016. I will provide you with highlights from that report and the accompanying statement I issued regarding metadata and non-compliance by the CSE, and then we would be pleased to answer questions.
I have previously given you details about my mandate, so let me just recall what the National Defence Act provides me to carry out my mandate. First, full independence at arm's length from government and a separate budget granted by Parliament; second, full access to all CSE facilities, files, and systems; and, third, full access to CSE personnel, including the power of subpoena to compel individuals to answer questions, specifically under Part II of the Inquiries Act.
[English]
My annual report tabled at the end of January summarizes nine classified reports as submitted to the Minister of National Defence, who is the minister responsible for the Communications Security Establishment, or CSE, and this during the fiscal year 2014-15.
First, these reports included a review of the metadata activities relating to CSE's foreign signals intelligence program. I will speak to this in more detail shortly.
Second, it included a review of CSE information technology security activities conducted under ministerial authorization that included a recommendation for an amendment to the legislation to remove an ambiguity, adding to the list of amendments required.
Third, it included a review of foreign signals intelligence activities of the Canadian Armed Forces that are conducted under CSE authorities.
Fourth, it included a review of CSE assistance to the Canadian Security Intelligence Service, or CSIS, relating to foreign intelligence collection activities within Canada, at the end of which I referred information to SIRC that related to CSIS.
Finally, the annual report included three annual reviews relating to privacy: first, an annual review of foreign signals intelligence ministerial authorizations, which included two separate spot-checks of intercepted private communications; second, an annual review of disclosures of Canadian identity information; and, finally, an annual review of CSE's files of privacy incidents and procedural errors.
[Translation]
Why do I conduct these reviews?
By law, CSE is prohibited from directing its foreign signals intelligence collection and information technology security activities at Canadians — wherever they might be in the world — or at any person in Canada.
My review of CSE activities includes determining whether CSE, in its use and retention of collected information, takes satisfactory measures to protect every Canadian's reasonable expectation of privacy. I examine CSE use, disclosure, and retention of private communications. I verify that Canadian identity information is protected and only shared with authorized partners when needed for understanding foreign signals intelligence or IT security information.
I also verify that metadata is used only to understand the global information infrastructure, to obtain foreign intelligence, or to protect cyber systems, but not to obtain information about a Canadian.
In these reports, I made eight recommendations for CSE to promote compliance with the law and strengthen privacy protection. The Minister of National Defence accepted all eight. I will monitor CSE's efforts to implement the recommendations.
With the exception of the one review related to metadata, all of CSE's activities that I reviewed in 2014-15 complied with the law. While a number of important issues were identified by the reviews, I will focus on the review of metadata and on my finding of CSE's non-compliance with the law.
[English]
The National Defence Act authorizes the CSE to acquire and use information from the global information infrastructure, which includes metadata, to provide intelligence on foreign entities located outside of Canada, in accordance with priorities set by the government.
Metadata is information associated with a communication that is used to identify, describe, manage or route that communication. It includes, but is not limited to, a telephone number, an email or Internet Protocol address, and network and location information. Metadata does not include the content of a telecommunication.
Metadata is fundamental to CSE's activities. It helps CSE understand the networks it is targeting and helps it avoid targeting a Canadian.
Both the National Defence Act and a ministerial directive on metadata require CSE to have in place measures to protect the privacy of Canadians in the conduct of its metadata activities.
One important measure to protect privacy is what we call the minimization of any Canadian identity information contained within the metadata. Minimization is the process by which information that could identify a Canadian is rendered unidentifiable before it is shared. It is this point that became a significant focus of my review.
Following the start of the review on metadata in November 2013, CSE discovered on its own that certain metadata containing Canadian identity information was not being properly minimized prior to sharing with our Five Eyes partners. As a result, CSE shared some metadata that contained Canadian identity information with its Five Eyes partners in the United States, United Kingdom, Australia and New Zealand.
After making this discovery, CSE proactively suspended the sharing of metadata with its partners and subsequently informed me about this incident. I directed my staff to investigate the metadata minimization deficiencies.
CSE cooperated fully with my investigation. The chief of CSE assured me that the suspension will remain in effect until systems are in place to properly minimize any and all Canadian identity information in the metadata. I concluded that CSE's failure to minimize certain Canadian identity information prior to it being shared with its partners did not — and I emphasize that — comply with the National Defence Act and as a consequence did not comply with the Privacy Act.
I therefore exercised my legal duty under the National Defence Act and informed the Attorney General of Canada and the Minister of National Defence of this non-compliance with the law.
While I believe the actions of CSE were not intentional, it did not, however, act with due diligence when it failed to ensure that the Canadian identity information was properly minimized prior to sharing.
In this review of metadata, I made two recommendations to the Minister of National Defence, who accepted them. My first recommendation was that the minister issue an updated directive to CSE to provide greater specificity and clarity to CSE's collection, use and disclosure of metadata in a foreign signals intelligence context.
My second recommendation was that CSE use its existing records system to ensure decisions and actions taken are recorded regarding updated collection systems and regarding minimization of metadata involving Canadian identity information.
In my letter to the Attorney General and to the Minister of National Defence, I made an additional recommendation: that the National Defence Act be amended to provide a clear framework for CSE's metadata activities. While the National Defence Act provides authority to CSE to conduct metadata activities, an explicit authority for these activities would strengthen overall accountability.
My predecessors and I have repeatedly — and I should add, over the last 10 years or so — stated that important provisions of Part V.1 of the National Defence Act are ambiguous and need to be amended. The last recommendation I made regarding metadata adds to the list of amendments. I sincerely hope that the government will seize the opportunity to act on these long overdue amendments as part of its stated objective of strengthening accountability of intelligence activities by government agencies and departments.
My decision to inform the Attorney General and the minister was a duty under the law and it had the consequence of prompting the minister to issue a statement about the matter, and CSE to take the unprecedented step of holding a briefing for the media. I encourage CSE to continue to provide as much information as possible.
As I stated on the occasion of my last appearance before this committee, I think that transparency is important for CSE if it wants to maintain public trust.
My office has challenged CSE to justify why certain information needs to be considered classified. Indeed, last year, I included statistics related to unintentionally intercepted private communications collected through CSE's foreign signals intelligence activities; this year's report contains more statistics. I see these as important steps in helping to demystify the work of CSE and contributing to better-informed public discussion.
[Translation]
My final remarks will touch briefly on some general points that relate to current discussions about intelligence review.
I support ongoing efforts to increase the accountability of security and intelligence activities within government agencies and departments. I welcome the fact that there is more and more interest in the work of my office, which was not the case for my predecessors. I also welcome the opportunity to engage more closely with parliamentarians.
The work of my office forms an integral part of Canada's system of expert, independent review. I believe that expert review is effective, that is, that a single review body focusses on one intelligence agency. This allows for depth of review and investigation and for the accumulation of in-depth knowledge about the intelligence agency by those conducting the review.
This is not to say that there are no gaps. The intelligence functions of certain government departments and agencies are not currently subject to independent, external review. I believe that efforts to enhance intelligence review should build on the strengths of the existing system. Expert review could, for example, help inform a committee of parliamentarians or of Parliament that is cleared to receive classified information.
I also believe it would be preferable to have an explicit authority for co-operation among review bodies — SIRC and CSE, for example — in support of joint reviews of integrated operations by security and intelligence agencies. I have noted, as did my predecessor, that much can be done under the existing laws.
Pierre Blais, who is sitting to my right, and I have discussed ways to enhance co-operation of our two agencies. For example, we can refer to each other questions or basic information regarding a matter that involves the agency under the other's mandate. My office and SIRC have consulted each other on a review of activities in a sector involving co- operation between CSE and CSIS. My officials completed our review and briefed SIRC officials on the conclusions that concerned CSIS, to inform SIRC's review.
Last of all, I would like to reiterate the offer made in my letter to you last April to provide an information session to the committee about the work of my office, how I select activities to review, how I conduct my reviews and the expertise in my office.
Thank you for this opportunity to appear again before you today. My executive director, Mr. Galbraith, and I would be pleased to answer your questions.
[English]
The Deputy Chair: Thank you very much, Mr. Plouffe.
Colleagues, we have 20 minutes left, but these were both long presentations and very worthwhile. I would propose that we go for half an hour on questions. If that's agreeable, we'll start right away with the questions.
Mr. Plouffe, we made note of your offer, and we had not forgotten. We had an election intervene that might have delayed some of us taking up the offers, but we do appreciate that very much and haven't forgotten it.
I will begin with Senator Kenny, former chair of this committee and senator from Ontario.
Senator Kenny: I'm going to focus my questions, at least in the first round, on SIRC.
I'm concerned about your capacity, Mr. Blais, not individually but as an organization. I start with the understanding that your review is of CSIS, which has relations with 265 foreign agencies in 144 countries. It manages 2,500 employees in 14 regional offices and has a number of offices overseas or individuals overseas and an annual budget in excess of $500 million. In contrast, you have an executive director, a staff of 17, at my last count, five part- time committee members, when all the positions are filled, which hasn't been the case for a number of years, and you only met nine times in 2013-14.
Perhaps you could start by telling us how often you met last year and how you managed to deal with an agency the size of SIRC. You refer to yourself, or the agency has referred to itself, as a micro-agency and said that there are many inherent risks of being a micro-agency. Perhaps if you could comment on those risks, that would be very helpful.
I ask you this all in the context of the reality that SIRC does not review the intelligence agency for effectiveness or value for money. You simply review them to see if they're in conformity with the legislation. I'd like to know your views on whether your organization should be looking at effectiveness and value for money.
Mr. Blais: Well, on the number of meetings we have, usually we meet every two months and we receive reports from our staff. Our staff is very dedicated and spends most of its time on the CSIS site, working with them.
I would say that we will move shortly to new premises here in Ottawa, and we will probably be electronically linked to CSIS, which will be helpful for our staff to have better access to the whole of the information driven by CSIS.
The first point that you should remember, one you didn't mention but that is probably a very important one, is that, around the world, only SIRC has access to everything in CSIS. You will not find any other country — well, maybe some other countries where there is no real democratic government — where an oversight body has access to everything. Our people could enter there I wouldn't say any time, but they could have access to everything. You will not find that anywhere else in the world, even with our allies. We have access to that, and we do use it.
We cannot look into the work of each and every employee of CSIS. It's not possible. You can understand that. I don't think that's the objective. The objective is to conduct a review of what they're doing.
We are going to have a meeting in a couple of weeks where we will receive the reports prepared by our employees on what they were doing that we provided a year before. We're working on the plan for next year; that will start in a month or so.
We have to prepare what we are going to look for next year. At every meeting, we're looking at reports about what they found and whether there is something wrong or something that has to be addressed.
It will not be possible. What you're asking for, if I understand your question, is the basics of reviewing everything, every day, of every employee around the world. It's impossible.
What is possible and what we should address is to put our energy into identifying where to look at, which we have done over the last year, and just review and get CSIS's direction. A month ago or so we met with the executive board of CSIS. We discussed many issues. We discussed those recommendations, even though, when they say, "We go with your recommendations, or we decide not to go with them,'' it's okay. We cannot force them, but we'll put that in our report. You could have access to it. The public has.
At the end of the day, we report to you, to Parliament and to the minister. We did that twice last year, directly pursuant to section 54.
We could probably do more with more means, more money, but what we try to do is to use our money. It will be up to you probably; you're involved somehow with this situation, when decisions are made by the government to provide more money. We were allowed more money in the last budget. Unfortunately, with the electoral period and all of that, we were not in the front-line of priorities, and we got access to the money just at the end of January. We were close to cancelling a meeting just because of the access to the money. It's important to have some money.
We're part time, as you mentioned. I will speak for myself, but if you look at the resumé, the people who were appointed to our committee I think have great experience, are very good and are dedicated. They are spending time not only on the meetings we have every two months to review the report by our employees, but we also act as a tribunal, as you know. We have hearings for complaints. We didn't address that in our report today, but you have it in our report. We work very hard on that. Our people are meeting as a judge, in a sense, hearing cases and rendering decisions. It's another part of our job.
In a nutshell, we cannot say that we're useless. We're very useful, I think, for the government. We could be more. The more we are asked to come here to help, providing reports, providing information, we will do that.
I could come back here next week, if necessary, but I don't think the number of meetings or the number of individuals will decide the work we do and the return for money spent. As you mentioned, senator, although I don't remember the words, we cannot appreciate if we get enough in return for the money we spend. For the committee, at least for the millions we spend, you get a good return for your money. As far as I'm concerned, we provide a report that makes sense.
The Deputy Chair: Mr. Blais, unfortunately we could spend all day talking just about your group and your organization. We had hoped that this meeting with the two of you here would be focused on the two reports that came out on January 28. It may turn out that we'll have to have you back to talk in more detail about your organization.
We will now move on to Senator White from Ontario.
Senator White: Mr. Blais, high-risk activities are things that I expect you're looking at, such as search warrants. I think I read that 104 federal court orders or warrants were issued. Did you also review the warrants that were refused by the courts to see if those errors were of concern? If so, what concerns did you identify?
Mr. Blais: As far as I'm concerned, our people have access to all of those warrants. As you know, in another life I was part of that, so I know very well this strict process. We also have dedicated judges addressing those warrants, which is very important.
We have access to all of them. Sometimes if a warrant is asked for and refused, which does not happen often, CSIS is allowed to come back. There is no jurisprudence against that. Before going to a judge, as you know, the minister has to approve the warrant. It has to go through the process. When the judge has the application for a warrant, he has access to the persons who sign the affidavits. I have to be careful with the details as I don't want to cross the line of confidentiality, but I want to be sure. The judge should be satisfied that the warrant is really needed, that what they're asking for in the warrant is really needed, and that the evidence is provided. If he is satisfied, he will sign the warrant. If he is not satisfied, he will just refuse. It could go back and forth if there is a problem with the details of the request.
I'm sorry, Mr. Chair, I have to be careful with the technical details. I don't think I can enter into too many details.
The Deputy Chair: You don't want to breach confidentiality.
Mr. Blais: We're in public, so I have to be careful with that.
I can assure you that we have access to all of that, if that's your question. I wouldn't say that many are refused because it is possible to refine the material.
[Translation]
Senator Dagenais: I would like to thank our witnesses. Mr. Plouffe, you mentioned that an intelligence officer obtained taxpayer information from the Canada Revenue Agency. I believe the information was obtained without a Federal Court warrant at that time. Do we know the scope of the problem? I understand that action was taken and that this did not happen again. I think the question should be for Mr. Blais instead.
Mr. Blais: Your question is very important, and you will understand why. Our executive director asked for a review of this issue, which was diligently carried out by our staff. We found that the problem was more widespread than it seemed to be at first glance. There was not just one offence, but many. That forced us to broaden our recommendations.
An important point, and I believe this is the right time to talk about it, is that we review the secret services, but we do not have access to the CRA. We cannot review it. My colleague, Mr. Plouffe, spoke about this earlier. We communicate with one another on the issue, and we can exchange a certain amount of information. However, in the case of the CRA, neither I nor CSIS have that ability. We were limited in our ability to examine the details of this issue.
I can tell you that we were very concerned, as were you, senator. It is unsettling to know that our tax records can be examined without justification. The issue raised was extremely serious. Unfortunately this underscores the need for a review of the CRA's activities — I have reason to believe that the government is considering this — because it has become quite involved in intelligence activities in recent years as a result of its role at the border and in the area of security.
Unfortunately, neither my colleague nor I can review the activities of another agency. We mentioned in our report that we had limitations, but we did nevertheless include some provisions. I believe that the service took this seriously. We cannot guarantee that the problem will not occur again, but I can tell you that if it does there will a number of us who will stay on it. That was unacceptable.
Senator Dagenais: That situation is similar to the one police find themselves in. Their powers are sometimes limited as well, but we will talk about that another time.
Mr. Plouffe, with respect to the Security of Canada Information Sharing Act, under the famous Bill C-51, could CSIS obtain information from the CRA without a warrant if it said there was a national security issue?
Mr. Plouffe: I believe that is a question for Mr. Blais as it falls outside my mandate. It is not that I do not wish to answer.
Mr. Blais: You were wondering whether the services could obtain a warrant?
Senator Dagenais: Yes, under the famous Bill C-51, could the service decide that with the security of Canada legislation it could seek information without a warrant? Could it do that?
Mr. Blais: I want to be sure that I remain on the right path. We had to examine the fact that documents were consulted without a warrant. We did not examine a warrant because there were none. I believe that if a proper request is made, a warrant could be granted. That is a question that could be examined in another context because you are asking a hypothetical question. However, in this case, what happened was that the service realized that some of its employees obtained information without a warrant. We were not asked if there could be a warrant. It was more about the fact that the damage had been done.
You will have the opportunity to meet the directors of the services and you can ask them the question. However, at first glance, I believe that it is legitimate if it can be justified.
Mr. Plouffe: I can add one thing, if I may. At this point, it is difficult for us to determine the implications that Bill C- 51 could have for the CSE. You must understand that the CSE works with CSIS only when it is providing assistance. That is Part C of our mandate. It will be in day-to-day situations that we will see the extent to which CSE will participate.
Senator Carignan: Mr. Plouffe, I have a fairly specific question. You found that the CSE did not adequately minimize Canadian identity information in the metadata. That is something that came out of your report.
Can you tell us why the public was not informed of this situation until 2016? In your estimation, how many Canadians were affected by this error?
Mr. Plouffe: If I were to be succinct, I would say that you should put the question to the CSE. Nevertheless, I will try to answer your question.
Senator Carignan: Yes, what were your findings, your observations?
Mr. Plouffe: We found that our office has studied or investigated metadata issues since 2006. When we were notified in early 2014, it was part of this ongoing review that we were doing of metadata.
It should be understood that when an intelligence agency knows that the oversight agency is going to conduct an investigation, it is going to go looking around and, at some point . . . In this case I don't know if it was by chance or the result of our investigation, but, in any event, it was the CSE that informed us voluntarily.
Senator Carignan: The review was the reason to some extent.
Mr. Plouffe: I presume that it was a factor. I cannot prove it.
Senator Carignan: What about the number of Canadians?
Mr. Plouffe: It is very difficult to determine how many Canadians were affected. Once again, that is a question for the CSE. To the best of my knowledge — the Minister of Defence also issued a statement in that regard — because of the number of years over which this happened and the fact that the issue is related to the machine systems, it is very difficult to determine the volume and the amount of information — this is known as Canadian Identity Information — that could concern Canadians.
Senator Carignan: Are we talking about hundreds of thousands?
Mr. Plouffe: It is impossible to determine. I have to say that, after a certain period of time, the data disappears from the CSE system. If people want to investigate after the fact, it is very difficult because the data has already been erased. There is a time limit, and after that the data is erased from the system. In light of the volume, if you intercept millions of metadata pieces over the course of a year, the machine can store a certain amount, but after a certain period the data is automatically erased.
Senator Carignan: My next question is for Mr. Blais and concerns insider threats at CSIS.
CSIS has an internal security group that does the work. What are the responsibilities of this internal security group? Why did you recommend to that an outside group investigate insider threats? Can you explain the reasons for this recommendation? What was CSIS's response?
Mr. Blais: I believe that CSIS did not accept it. This will not happen because it rejected the recommendation.
Senator Carignan: Why?
The Deputy Chair: The government rejected it?
Senator Carignan: No, I believe it was CSIS.
Mr. Blais: It was CSIS that rejected this recommendation.
Senator Carignan: Why?
Mr. Blais: I do not remember the exact reason it gave. It looked at confidentiality and did not want this to be shared with people from outside.
I have to say that this may be the easy answer. We understand our role, we make recommendations, we believe they may be good recommendations. However, they can be rejected. In some cases, we balk and insist because we believe that the recommendation should at least be considered. In this case, it was set aside.
I have to say that everyone is aware of the insider threat and the risk it represents. Our recommendations came out of the work done by our employees and highlighted the fact that it would have been advisable, perhaps more transparent, to entrust the review to an outside group. That was rejected. We are not going to flog this to death. We will move on to something else and see what happens.
A little earlier in our report we mentioned that this became an important element. We noted the harm caused to people. I am not going to comment on the actions of Edward Snowden or other individuals, which had elements of sensationalism. Fundamentally, people's lives are at stake when internal information is disclosed. It poses a threat to Canada, the people and the sources. People's lives are in danger. We are still somewhat concerned, and I believe that you are just as concerned as we are.
National security is a serious issue. Naturally, everyone wants to have access to information. Everyone would like internal information to be public. It is glamorous or sexy to have all the information. We cannot disclose the information because it would put people's lives at risk. That is the danger, even at a parliamentary committee.
[English]
Senator Beyak: Thank you, gentlemen.
From your comments I expect you know that many Canadians are interested in national security and watch these programs. The domestic terror threat is always uppermost in their minds. There was a concern about the few charges that are laid against radicalized Canadians who go overseas to fight. Could you elaborate on what you found in your report and do you have recommendations to remedy it?
Mr. Blais: One thing is that we all agree it is now a new reality that we have to live with and be concerned with. This is a reality.
We should know that CSIS has always dedicated many resources to this particular point. We're not far yet in the process. In a sense, it is a day-to-day operation dealing with that because what we have seen recently in Canada and abroad tells us that it's not something that hasn't happened in the past. It is happening every day.
We review after the fact, as you know. We cannot properly identify on a daily operation what they should do. We review what they have done and whether they comply with the reality, and we make recommendations. This is what we did.
We agreed that CSIS is exposed to an internal threat here in Canada. You started with the radicalization question with a Canadian, which is something that is an internal threat in a sense that it is internal in Canada but also abroad.
The best we can say is that everybody has an eye on that right now. We will follow up and probably, as I mentioned, we will have a report. As you know, this report finished last year. So we have another 11 months now done. We know what is going on right now. I cannot report right now on that. I can tell you that shortly, with our next report, we will have a little more to say about it.
You see my point? I cannot go too far because we're not yet there, but we will be shortly.
Senator Mitchell: In one sense I was glad to see that both organizations are focused on metadata. Both of your reports refer to problems. I will say, in the case of CSE, at least it was contrite enough to admit it had made a mistake and began to take steps to fix it.
But that can't be said in the case of CSIS, where your recommendation was that CSIS should advise the Federal Court of activities relating to metadata collected. They just thumbed their nose at you and said they didn't agree.
Clearly, it is an issue. It is a privacy issue and a rights issue. It is of grave consequence to Canadians and to the fundamental liberties we have enjoyed in this country.
What steps could you take? Could you recommend that the legislation that they say gives them the out should be changed, that the government needs to strengthen the CSIS Act?
Mr. Blais: If you remember what we put in our report, our recommendation was to be more transparent, that CSIS should be more transparent with the judges, when they brought the metadata to the attention of the judges. To make a long story short, it is in our report, so everybody can read that, including judges.
Senator Mitchell: Right.
Mr. Blais: In my view, I think we're probably close to seeing that the judges will have discussions with CSIS. They could have discussions on this particular suggestion we made. Even though our recommendation is there, we could expect that the judges will have more transparent access in the near future.
Is it clear enough?
Senator Mitchell: Yes. I think you are sending a message to the judges, who should be watching this.
Mr. Plouffe: In our case, we are not in the same predicament that my friend is. Most of the recommendations are being accepted by the minister who is responsible for the CSE. In my mind, if a recommendation that I make to CSE is not respected, I go to the minister and I say, "Sir, I made this recommendation. I had reason to make this recommendation, and I would suggest that you speak to your employee, CSE.''
We have done that in the past with success. In our case, 93 per cent of our recommendations have been accepted by both the minister and CSE. There is a way to put pressure on the agency with regard to recommendations they don't accept.
Senator Mitchell: Last year, legislation — I think it was Bill C-44 — gave CSIS special warranting authority to break laws in foreign lands. You can write your response. I want to know whether you are taking steps to monitor that, to see how it is being set up, and to give us some assessment on how that is operating.
The Deputy Chair: Can you answer briefly?
Mr. Blais: It would be a good question for our future presentation before you because, as I mentioned, we report about last year, so everything that happened over the last few months.
Senator Mitchell: Just encouraging —
Mr. Blais: It is not because I don't want to answer; I'm not in a position to answer.
The Deputy Chair: The work that each of your organizations is doing is extremely important to parliamentarians and to the public at large. You can see from the questions that every senator could have gone on at some length.
Mr. Blais, I was going to ask if we could arrange through our clerk and your office for a reappearance to continue this discussion. Many senators have indicated an interest in continuing the discussion, but unfortunately we have scheduled another panel that should be starting any time now. Would that be possible?
Mr. Blais: Yes, and I'm sure I'm also speaking for Mr. Plouffe. We're open to that. It is important. So far, you are the only committee that we could —
The Deputy Chair: We will have you back soon.
Mr. Blais: I wasn't here before, but I will be more than happy to come back.
The Deputy Chair: Mr. Doucet has represented you well in the past before Senate committees, and it is good to see him back.
Mr. Plouffe, is that all right?
Mr. Plouffe: By all means.
The Deputy Chair: I thank the four of you very much for being here.
We will now hear from the final panel of the afternoon.
The Office of the Auditor General of Canada tabled its 2015 Fall Reports in Parliament on February 2, 2016, not long ago. The Standing Senate Committee on National Security and Defence, our committee, is authorized through its general orders of reference to examine and report on Canada's national security and defence policies, practices, circumstances and capabilities.
The Office of the Auditor General has been invited to appear before the committee to discuss Report 2, Controlling Exports at the Border, and Report 5, Canadian Armed Forces Housing, which both can be found in the 2015 Fall Reports of the Auditor General.
We are pleased to welcome Nancy Cheng, Assistant Auditor General. She is accompanied by Gordon Stock, Principal. Some of us would have met him in another incarnation a while back that we're trying to forget now. Nicholas Swales, Principal, is also present.
Thank you very much for being here. We appreciate it and look forward to your discussion.
Ms. Cheng, the floor is yours.
[Translation]
Nancy Cheng, Assistant Auditor General, Office of the Auditor General of Canada: Thank you for this opportunity to discuss two reports that were recently presented to Parliament. I am accompanied by Nicholas Swales, principal responsible for Report 2 — Controlling Exports at the Border and by Gordon Stock, principal responsible for Report 5 — Canadian Armed Forces Housing.
Let me begin with our report on controlling exports at the border. Exports are vital to Canada's economy, but are controlled to achieve a range of strategic objectives including national security. Several federal entities play a role in controlling exports, but the Canada Border Services Agency is the last line of defence in preventing goods that contravene Canada's export laws from leaving the country.
Our audit focused on whether the agency had what it needed to implement its export control enforcement priorities, prevent the export of goods that contravene Canada's export laws, and facilitate legitimate trade.
We found weaknesses in the authorities, information, and practices the agency applied to assess export risks, assign its resources, and act on its priorities. As a result, the agency missed opportunities to stop some goods that did not comply with Canada's export control laws from leaving the country.
[English]
For example, the Canada Border Services Agency relied on export declarations to identify and examine high-risk shipments but was unable to review all the declarations it received. We noted that it was not able to review export declarations received on paper as rigorously as those received electronically. Even when the agency flagged shipments as high risk, it did not examine about one in five.
We also noted some systematic gaps in coverage. For example, as a result of staffing challenges, the agency did not conduct any examinations of parcels leaving Canada at one large processing centre.
We also looked at the impact that the agency's export control activities had on legitimate trade. We found that the number of legitimate export shipments that were delayed by the agency to carry out its control activities was very small compared to total exports. However, the agency did not process 11 per cent of temporarily detained shipments in a timely manner.
Mr. Chair, we are pleased that the Canada Border Services Agency has agreed with our recommendations.
[Translation]
Let me now draw your attention to the second report of interest today on Canadian Armed Forces housing. This audit focused on whether National Defence and its Canadian Forces Housing Agency had managed military housing in a manner that was supported housing requirements, was cost effective and was consistent with government regulations and policies.
We found that National Defence did not comply with key aspects of its housing policy, which states that it can provide housing only in locations where there is an operational requirement, or where the private housing market cannot meet Canadian Armed Forces members' needs. We found the Department had not determined which members should be receiving housing, what form this housing should take, or where it should be located.
We also found that National Defence did not consider whether the private market could meet members' housing needs in some locations, although it had market analyses that showed they could be met in some urban locations like Halifax and Valcartier by the private sector.
[English]
We noted that National Defence policy requires that rental rates for its housing units be in line with market rates. We noted that the department had market analyses that showed that rental rates for military housing were below market in some locations. In the past, the department used appraisal values set by the Canada Mortgage and Housing Corporation until it stopped providing this service in 2013.
Most of National Defence's housing portfolio was built between 1948 and 1960 and needed renovation and updating. We found that the department had set a goal to modernize its portfolio but had not developed plans that set out the work, time and resources required to meet this goal. It also lacked up-to-date information about the condition of housing units.
About $380 million was spent on military housing between the 2012-13 and 2014-15 fiscal years. Without a plan to guide its spending and accurate information about the condition of units, National Defence cannot ensure these funds were used effectively on the highest priorities.
The timing of receipts of capital funding for major renovations from National Defence did not always match the construction cycle. For example, the agency received $6 million in January 2015 and did not have enough time to allocate funds to significant and highest priority work.
We are pleased to report that National Defence agreed with our recommendations and committed to take corrective action.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.
The Deputy Chair: Thank you very much, Ms. Cheng. I see you have with you the two principals responsible for each of the studies, which is very good.
Senator White: It is good to see the Auditor General's office here. I'm not sure I would have been saying that a year ago, but I do appreciate it.
My question surrounds the housing. I look at 1,500 empty units. It may not sound like a lot to National Defence, but certainly for the folks out there looking for PMQs, it would have had a real impact, I think, on the military and their ability to provide housing. You briefly talked about renovations, which may explain the 1,500.
Have you seen a document that may have given advantages or disadvantages to Crown versus renting from the public market? If so, could you share the results as to whether or not you made recommendations to them?
Ms. Cheng: I will ask Mr. Gordon Stock to answer that question.
Gordon Stock, Principal, Office of the Auditor General of Canada: We did not see a specific document that you are speaking of, if one exists. What we did look at was the percentage, and we thought it was a significant percentage that was still open. That's why we included it in the report.
From our work, it is far above what would be expected of someone providing the service for the private sector. It allows them to do that renovation work, but from our perspective it is a very high number.
Senator White: Thank you for that.
I know in the past that PWGSC has provided the renovation work in large centres. Having been in the RCMP and in communities where the military were, there have been complaints about how long it took PWGSC, because housing wasn't always a priority but offices were.
Was there any consideration or anything in there indicating that concerns raised about the 10 per cent was as a result of a lack of support from PWGSC?
Mr. Stock: No, we did not have evidence of that. There is some work done by Defence Construction Canada as well for some of the construction contracts. They report through the similar minister.
Senator White: Yes.
Mr. Stock: I don't think that would be the same issue.
The main thing we noted was that the timing of when the funding was provided was very late in the year.
Senator White: March madness.
Mr. Stock: Because of that delay and the timing of the construction season and winter, it prevented some of the work from being done.
Senator Kenny: Mr. Stock, I wanted to ask about housing. This committee visited Gagetown about 10 years ago, and we were interested in their housing facilities there that were referred as their "shacks.'' I think that's the colloquial phrase for them in the military. We were told that they set aside 2 per cent of the value of the housing for maintenance on an annual basis and that amount was sufficient to keep the houses habitable and in good shape.
Did you encounter that percentage anywhere, and is that percentage sufficient to do the job?
Mr. Stock: We did not encounter that percentage. The percentage that we had was closer to the 15 per cent previously mentioned in terms of keeping houses open. Of that, approximately 10 per cent was for the renovations.
Part of the other need that was expressed to us was the period of time, especially in the summer, when there are a lot of transfers and trying to organize the work and renovations so that it fit in with the transfers.
In terms of the 2 per cent, no, we did not encounter that.
Senator Kenny: Frankly, 15 per cent of the market value of a house seems extraordinarily high. Do people spend that percentage on maintenance and upkeep in civilian life?
Mr. Stock: I'm sorry; I may have misunderstood your question. I was looking at the 15 per cent of units that were vacant.
Senator Kenny: I'm talking about 2 per cent of the market value.
Mr. Stock: That may have been an average of the amount, but given the age of the facilities that we're talking about — most of them were built between 1948 and 1960 — it would require a significant amount of money to keep them up, especially the older facilities.
Senator Kenny: Mr. Swales, my understanding is that two hours are permitted for CBSA to take a look at goods leaving the country on aircraft and 48 hours on ships. Those two figures seem to be very short periods of time in which to do anything reasonable. I'm also concerned about trains in as much as CBSA doesn't inspect any freight trains coming into the country. It would seem strange if they were inspecting any leaving.
Nicholas Swales, Principal, Office of the Auditor General of Canada: With regard to trains, we didn't look at exports to the United States because the process of control for them is very different.
With regard to ships and aircraft, those time frames that you provided are correct. We do make a comment in the report about some work that the agencies had done on random examinations, and they certainly found those time frames challenging to try to look at goods through those exercises.
Senator Kenny: I don't want to put words in your mouth, but challenging verging on impossible?
Mr. Swales: These time frames are established in regulation, so they are established by policy.
They certainly find it challenging. It's not always impossible. They clearly get to many of the shipments that they've identified for examination. Eighty per cent were looked at in a timely manner; 20 per cent were not.
Ms. Cheng: Often when you look at what CBSA is trying to do, they're trying to balance enforcement with facilitation. A longer period might have an impact on calmness as well. That's probably the underlying reason for the policy to be made like that.
Having said that and as Nick has pointed out, there were able to show results. Even with the short turnaround, they were able to intercept a number of activities whereby they were able to stop certain goods that shouldn't go without permit or the necessary paperwork.
The Deputy Chair: If I understood Senator Kenny's question and your response, you say the time limits are established by regulation. I read in your report that the agency has accepted all your recommendations. Have they accepted the recommendation that the regulation should be changed?
Ms. Cheng: The recommendations did not specifically suggest that regulations be changed. This would be a policy call on the part of CBSA to propose to the government to see if the regulations should be modified.
The Deputy Chair: If you felt CBSA wasn't able to properly do the job expected of them because the regulation was too limiting, surely you should make comment on that, shouldn't you?
Ms. Cheng: We have made comment on the various limiting factors to highlight the problems and issues to the department so it, in turn, can study and decide the proper course of action to move forward. We did not go as far as explicitly asking for regulations to be changed.
The Deputy Chair: You're saying that the CBSA would have to ask for that change, but did you have a discussion with them that that should be done?
Ms. Cheng: We have had discussions about that.
Mr. Swales: The one thing we said in the report is that they weren't, in fact, tracking the reasons for missed targets and that we had to go through a process of trying to collect information on that by primarily asking the people in the ports what was causing some of these challenges. They said to us that the fact that these things were sometimes loaded on the conveyances was already a problem. We ended up saying, "Since you do not have a full understanding of the situation, the first thing to do is to get a full understanding of the situation, which, amongst other things, could include the impact of the time frames on that.''
The Deputy Chair: They agreed with all your recommendations?
Mr. Swales: They did.
[Translation]
Senator Dagenais: My question is for Ms. Cheng. Do you know how many border services officers are responsible for export control?
[English]
Ms. Cheng: We do have comments about the resources that have been allocated to export. I believe it is in paragraph 2.7.
We have not looked at the exact number. The agency itself did not keep track, so in our estimate, we felt that roughly less than 1 per cent of its full-time complement had been dedicated to exports.
[Translation]
Senator Dagenais: In your opinion, is that sufficient?
[English]
Ms. Cheng: From our perspective, we highlighted a number of problems and challenges that the agency faced. One of them is the resourcing and the staffing levels. Later on in the report we indicated how it manifested itself. There were certain activities such as targeted examination that did not get carried out when people were on leave or on vacation.
They are locations whereby the enforcement is very light. One example we quoted was at a processing centre for parcels. Indeed, it wasn't really looked at.
[Translation]
Senator Dagenais: In your opinion, does the CBSA have the necessary information, practices and authorities to prevent the export of goods that contravene Canada's laws? In other words, do officers have adequate tools? We realize that there will always be goods that get through, but do they have the tools they need?
I will give you an example. I often go through customs on my way to the United States, and I have noticed that the U.S. customs service is very well equipped in terms of cameras and detection systems. I have the impression that there is a little less equipment on the Canadian side.
[English]
Ms. Cheng: We're primarily speaking to the export side of things. When you look at export activities, the audit found that the information is limited. The tools they have aren't exactly adequate either.
We describe a system whereby the declarations could be electronically declared. That system is old, and it was set up to trace statistics; it was not for the purpose of export control.
So, as a result, while the information is there, it's not actually helping the agency to identify or target risk. They have to set up separate resources to look at those declarations to decide whether some shipments are risky and should therefore be detained so they can examine them.
So the information is not very good. They have lots of declarations to deal with. Volume-wise in 2014, we're looking at 780,000 electronic declarations, and they have to go through those.
On top of that, there is the ability for exporters to file paper declarations, which makes it even more challenging. We were just talking about the 2 hours and the 48 hours. It's not so bad that if a local office gets the information, looks at it, the shipment is right there, and they have grounds to say, "We need to inspect this shipment or the other one.''
Exporters can file paperwork at port A and export through port B. So if you only have a limited amount of time, by the time you say, "I want to stop to look at this particular shipment,'' it's quite possible and does happen that the shipment has already left the country. The law does not require the exporter to get release before goods can leave Canada. It's unlike import, where it needs to be accepted before it can be admitted into Canada.
The Deputy Chair: To clarify the record, Ms. Cheng, we're talking about full-time equivalents dedicated to export control activities. Paragraph 2.7 or Report 2 says "fewer than 1 per cent.''
Ms. Cheng: Yes, that's correct.
The Deputy Chair: I wanted that on the record.
Senator Mitchell: I'm interested in the fact that your review, which I expect you don't do much more frequently than once every decade — maybe I'm wrong, give or take a few years — caught this serious problem. There is an emerging debate now, at least on the Hill and elsewhere, that we need better oversight. We just had SIRC and the Commissioner for CSE here. CBSA, which is every bit as big as CSIS, has zero oversight except once every couple of decades or the decade you happen to look at it.
Did you make any recommendations about the need for an oversight body to supervise CBSA on an ongoing basis like SIRC does CSIS?
Ms. Cheng: When you look at the government machinery, many departments and agencies are delivering important mandates. Most do not have an oversight body. You have a management board, such as Treasury Board Secretariat, that provides government directives and policies that help guide good conduct and god behaviour, promote probity, transparency and accountability. Also, there are a lot of government policies that require people to do "the right thing'' — normal processes that need to be followed in terms of making sure that there is fairness and equity in things we do within the public sector.
It is also incumbent upon those central agencies to oversee and provide management oversight. That's the management oversight that gets provided.
Of course, there would be parliamentary oversight as well. Whenever we do our reports, they are automatically referred to the Standing Committee on Public Accounts. That committee often calls us as witnesses and also calls departments and agencies to appear as witnesses to ask them about what happened with respect to the some of the observations we make and what they plan to do with some of our recommendations.
Senator Mitchell: You have recommended external oversight in other audits that we're aware of.
My next question concerns housing. I happened to have lived in eight military houses because I grew up with a military father. When we went back to Oromocto, not 10 years ago but even more recently, the house where I lived had a small roof over the steps. The post had broken and was hanging down and had been for some time. Clearly, there is a structural problem in many places.
With respect to your point 15 of your presentation, the agency received $6 million in January 2015 to do some work, which as too late to get it done. Whose fault would that be? Why would that happen? How would we structure it so it doesn't happen again?
Ms. Cheng: Perhaps I can give a general answer, and then I will ask Gord to provide more details.
If they were provided funding in January, you only have until the end of the fiscal period to deploy and use that. So if that money gets sent to the agency by the Department of National Defence, then the agency only has two months to try to provide for the work orders to do construction. In January, it would be difficult to try to do that kind of work; it would be difficult to address the urgent needs.
Mr. Stock: This problem is not just within National Defence but also across government, to a certain extent. In this particular case, you've got National Defence providing funds to the agency. It comes from the parliamentary appropriation that is approved much earlier in the year, but the authorization to spend is not with the agency until late in the year for some of that capital funding. So that part is somewhat within the department.
But the part that's more across government, especially on the capital expenditure side, where you have a number of houses and long-term assets, and you're trying to match the actual funding and the replenishment of the long-term assets with allocations made during one year — and it may take more than one year to plan, construct and deliver the assets that you need. It takes considerable organization to be able to do that, and it is not always possible to have the authorization to spend before you spend the money.
So while this could point some in the direction of accrual appropriations, it is a long-standing issue and not just with the agency.
Ms. Cheng: If I may add, basically they were also able to use the rental revenue, but the rental revenue can only be used for operations and maintenance; they couldn't use it for capital construction. So when you have old houses that date back to the 1948 and 1960s period, there is a lot of capital construction work needed. If you don't line up your construction cycle with when the money comes, then every year you only get to do a small part of it and the money doesn't really help you renovate those houses. You only have the rental revenue to help support the ongoing maintenance.
There was a question about why the maintenance cost is so high. When the houses are run down, obviously it costs more to maintain them.
So there are problems with the actual cycle itself to match up with when they get capital funding, but they are also hamstrung with the fact that they can't use the rental money to do capital construction.
I found it: paragraph 5.57, about $270 million in rental revenue and $110 in capital. So of the 380, most of the funding was rental revenue that they would get throughout the year, but they can't use that with capital work.
Senator Mitchell: But that could be changed with a legislative or regulatory change.
Mr. Stock: That is beyond my knowledge in terms of the actual mechanisms as far as how that would be changed.
They do have the special operating agency authority right now, so they have the authority to re-spend the revenue, as Ms. Cheng said. They have not been able to use all of that for the renovations, and so they have used a mechanism whereby they have provided some of that money back to National Defence. National Defence has provided them with the capital. That's part of the delay that is going on within that mechanism.
I don't think it is a good mechanism right now.
Ms. Cheng: If you are looking at departmental spending, then it's actually a change between the capital vote and the operating vote. For that change, it actually has to go to Parliament.
If it's a special operating agency, we are not specifically clear on what the rules are, but if you're interested, I think we should be able to find that and get back to you.
Senator Ngo: My question is related to your audit. You say about one third of the targets were not examined because the agency's local office receives information about the targets too late or after the shipment has already left or had been loaded onto the planes or the ships. How do you explain these delays? And did the targets you mentioned that were examined contain weapons or goods subject to economic sanctions?
Ms. Cheng: Mr. Chair, if I may, I will clarify the context a little bit.
Essentially, what we're saying is that there is a targeting unit that identifies major shipments that might have risk. Then it would be the up to the Border Service officers to stop shipments from leaving Canada, and examine them. Even know the targeting unit has identified a number of these high-risk shipments, 1 in 5 did not get looked at. What you quoted was the reason one in five did not get looked at. One of the reasons is that by the time they get to it, the shipment has already left the country. The shipments can leave the country if they are not held and formally detained by the Border Service officers. That is one of the problems that the agency faces.
Senator Ngo: With these missing targets, we do not know if the containers hold weapons?
Ms. Cheng: In one of the exhibits we showed there are three priorities. One is strategic goods, and the priority is essentially to deal with counter-proliferation. For that particular one, about 1 in 5 did not get examined. When they actually are able to examine them, they have results to show. Our audit noted that 29 per cent of them found exceptions. Not all were major exceptions, but some were important.
Senator Ngo: How do you explain the fact that the CBSA has limited authority to review all export declarations, such as the importation of illegal drugs. What would you recommend to address this situation?
Ms. Cheng: There are a number of authority-related issues and challenges that CBSA faces. One of them is a situation where there is no report. Not every export requires declaration, so if they don't declare, the CBSA does not actually have authority to go in and open up and stop a shipment unless they have reasonable grounds. They need to say, "I have reason to think there may be a contravention here,'' and therefore they can stop the shipment. That is a significant limiting factor when you start to look at non-reported shipments. That's one of the authority issues we're referring to.
Senator Ngo: Thank you.
Senator Beyak: I have two questions, one for Ms. Cheng and Mr. Swales. The number was mind-boggling to me: 780,000 declarations. If they did 2,000 a day, 24 hours a day, 7 days a week — how can they possibly review that many? How many are they not able to review and are slipping out without review?
Ms. Cheng: It is a lot. They do have a central targeting unit. We just talked about the statistics. From our estimate, less than 1 per cent of their full-time strength has been assigned the responsibility to look at the declarations. There they were not able to cover all of the declarations that were received in the system.
With regard to the problem with looking at it in terms of how many a day, I think I'll ask Nick to give more clarification.
Mr. Swales: The way in which it is at least conceptually possible is that these declarations are received electronically. The way they go about is to apply filters to the electronic information so that they are looking for particular things.
It's an old example now, but shipments to Iran would be something that, in the past, they would have looked at and tried to identify. You could do that electronically in the system. It's not entirely impossible if you have the right kind of system.
Part of the problem is they don't have a system that can do that part of the work automatically, so they have to do all that filtering manually.
The other issue we saw is that staffing levels are not consistent. There were periods of time when there were fewer people and the declarations were coming through at a fairly consistent rate.
We weren't able to come up with any data on how many they miss or aren't able to look at. Again, the information system doesn't track how they look at them well enough for us to do that. But we did know that there were periods of time when there weren't people working on them.
Ms. Cheng: I will add a little bit of information.
If you look at the report in paragraphs 2.46 to 2.48, you will see comments about the staffing level. One problem is that because they couldn't staff it 24/7 — essentially evenings and weekends — if the information were to come about then, and you only have short turnaround from 2 hours to 48 hours, it would be difficult to spot those high-risk shipments, stop them, inspect them, and the satisfy yourself before you release them.
One of the concerns we have is the patterns. There are times that you talk about controls. They need to be systematic and you need to implement them, but from time to time there are gaps. What we are seeing now is that there are systematic gaps, so it makes it not that difficult for people who want to skirt the system to try to do something.
We are satisfied with the results. That's something the agency needs to look at and have dialogue and discussion with the government. Perhaps if Parliament were to take an interest and ask questions on that, they could decide whether the status quo is sufficient.
Certainly the agency is rather receptive. As we indicated in our opening statement and have confirmed at this hearing, they agree with all our recommendations and are preparing action plans to try to deal with some of the comments we've made. They need to be able to look at the resource balance, the authority question, and the automatic tool.
With regard to the case system we referred to, there have been a number of statements to say how it has been falling short and needs updating, but also because different departments are working with their priority lists. Statistics Canada indicated that's not something they wish to maintain, so even its viability is being questioned at the moment. There are a number of issues that the agency faces, and they have to come to an informed decision as to what to do.
Senator Beyak: Your report was excellent.
Mr. Stock, I notice that DND agreed with your report completely and is going to implement your recommendations. What did you take into account from the 2010 report that they did not agree with? It was an external report, not one of yours, and they didn't take into account personal life, finances, divorce, actual proximity to the base.
Mr. Stock: The report you speak about was one that tried to estimate the number of houses that were needed. It was done as an internal report, and there was a different basis on which the information was put together. Underlying that different basis is a difference between government policy and what is being put in place in terms of regulations under the National Defence Act. Some aspects of the regulations allow them to do things. Affordability is one instance. They can provide houses to meet their needs under those regulations that may not be totally in line with the policy. It's because of that that you get a discrepancy coming in between the two, as the regulations take precedence over the policy. Therefore, that's the real answer to the question as to how they can agree with the recommendations.
We were quite happy with the agreement, with the recommendations and the commitment to action.
[Translation]
Senator Carignan: I am somewhat troubled by some of your statements. First, with respect to the strategic objective of inspection, particularly national security, you explained that in one centre in particular, no packages were inspected for a long period of time. You also said that there were systematic gaps at certain locations and that an ill-intentioned person could use them to contravene national security rules. Given the importance and seriousness of the situation, did you report individuals to the RCMP?
[English]
Ms. Cheng: Certainly, there are significant implications in terms of some of these gaps. The member has highlighted several of them, things like when I indicated earlier that a paper declaration can be filed in port A and export happens in port B. Those things actually happen. The audit tried to find out whether people were filing and shipping goods in different ports. Those things actually came to pass. They happened.
In terms of some of the paper returns, we also found that the CBSA has these watch lists for exporters. We also found that paper declarations were filed by exporters that were on the watch list, and they were generally not looked at. So there are a number of concerns of this kind.
That's why we're underscoring that we're somewhat making it a little easy for people who are trying to skirt the system. We need to be less predictable. That, indeed, is one of the recommendations.
Herein lies the problems with non-declared shipments, for example, because for those, the CBSA doesn't have authority to do random checks. Random checks are a good deterrent. I don't actually know what's there, but every so many shipments I'm going to stop one and look at it. It would act as a deterrent to those who try to skirt the system. For non-reported shipments, CBSA does not have the authority to do random checks. That's another constraint they have, in addition to the other constraints that we talk about.
[Translation]
Senator Carignan: Perhaps my question was not clear enough. In view of the fact that there are systematic gaps and that there is at least one centre with no controls, an ill-intentioned manager at that location could systematically not staff the position and tell a criminal to use centre X or Y where no controls take place on the weekend, for example.
I am very concerned by what you discovered. I imagine that since the objectives are linked to national security, this also caught your attention when you were conducting your audit.
Therefore, did you go to the RCMP so that it would investigate those people and determine whether this lack of oversight provides the opportunity to commit crimes? Did you refer information to the RCMP?
[English]
Ms. Cheng: I thank the member for clarifying his question. His question refers to whether we have referred any information to the RCMP.
The RCMP was an intervenor when we were looking at the audit work, when we were looking at stolen cars and illicit drugs and the like, but I don't believe any of the audit findings, as such, were referred to them for further investigative work. I'll ask for confirmation that Nick might have.
[Translation]
Mr. Swales: No, we did not give information specifically to the RCMP. You are wondering whether gaps in oversight were deliberate.
Senator Carignan: They could be, especially since the objective is national security. These are not simply financial issues.
Mr. Swales: We only found that there was not enough staff in certain locations and over a certain period of time. We did not look for all the reasons.
Senator Carignan: Why not?
Mr. Swales: We realized that there were problems caused by the number of people assigned to the area. The evidence showed that how people were assigned and the decisions made in different regions were the problems rather than a systematic issue.
Senator Carignan: You relied only on the manager's or the supervisor's response without considering that they could be acting in bad faith?
[English]
Ms. Cheng: This is not an investigative audit, so it is not a forensic audit as such. We don't go into those levels of detail. My understanding is that whenever we deal with the RCMP or refer cases to the RCMP, they require a lot more evidence for them to take on the case and see if there's a criminal element so that they can follow up.
This is an audit of the administration and the management by the agency. We don't go into that level of detail whereby we would have the information to provide to the RCMP so that they can take it on and follow up.
We haven't seen anything that suggests that any employees were involved in any collusion to provide information to outsiders in order to take advantage of the system.
[Translation]
Mr. Swales: Yes, precisely.
[English]
The Deputy Chair: Mr. Stock, before I go to round two, I am left a little confused about the good work that you did with respect to housing on military bases. A number of us are quite familiar with the housing. We remember when this housing agency was created. At that time, the agency was authorized to move the rental up to market value in order to fix the units up and to provide market-value housing.
I am finding it difficult to understand where all the rental income goes now because it seems like the agency was transferring, from time to time, that amount to National Defence under its operation and maintenance general appropriation. Can you help me out?
Mr. Stock: I will try, senator.
The amount they receive in rental revenue is not always at market value. In some cases we found that it was below market value.
Three different programs affect the provision of housing to the military. One is relocation, which protects them to a certain extent in terms of fluctuation in value. Another one is the post-living differential, which should provide a certain amount of assistance in terms of affordability, and then there is the housing itself.
The rental revenue they receive is used for maintenance and repair. If they cannot use an amount of that within the year but believe that it would be better to put some of that money toward capital, they can't transfer it themselves. However, within the general appropriation within Defence, Defence can use that amount of their capital to provide that to the agency. So it is more of an internal allocation as opposed to changing things directly between votes of Parliament.
The Deputy Chair: I am glad you got to that. It didn't sound awfully good to me when I read that in paragraph 5.65. Where a piece of operating revenue by the housing group is moved over to DND and then DND, from their budget, finds the money that switches back to them for capital, that seems to me to be getting around the appropriations that honourable senators and members of the House of Commons have voted.
Mr. Stock: We started off having the same concern until we looked into it a little more deeply. In fact, it does not change because it is within the general appropriations of National Defence. It is not actually a transfer from one vote to another but an increase or a reduction within the votes overall within National Defence.
The amount of the revenue that they did not spend was still used by National Defence for maintenance and operating, per se, of the housing to pay for payment in lieu of taxes. It came out of the National Defence side, but it was still in support of the houses.
On the other side, they did have access to capital funds from National Defence's appropriation.
The Deputy Chair: National Defence's appropriation for capital as opposed to operation.
Mr. Stock: That's correct.
The Deputy Chair: They're two different votes.
Mr. Stock: They are two different votes, and they were used according to how it was voted from Parliament.
The Deputy Chair: But why did they have to bribe them? That's what this sounds like: "Well, we'll give you a little money you can apply for a grant in lieu of taxes out of operations, and then you'll free up some money for us out of your capital budget to do what Parliament had already voted for in capital.'' Am I missing something here?
Mr. Stock: It is a convoluted process, I grant you that, but it is still a way that the agency tried to devote something toward the capital side. I would not repeat the bribe aspect. It is more of a negotiation between the agency —
The Deputy Chair: An inducement.
Ms. Cheng: Mr. Chair, if I may, DND is such a large entity. The housing authority is a small component within that special operating agency. DND has this big bucket of operational O&M money and also capital money. In essence, at the end of the day, DND's spending is still in line with those votes. However, within that a lot of the smaller organizations are able to swap money internally so that overall it does not upset the balance that Parliament has voted to give to DND. They're living within their O&M budget, within their capital budget, but in there they're trying to trade.
When you look at the reason for it, we don't read anything negative into it. It shows the scenario of a housing agency struggling to say, "Here is my source of funds. How can I best make use of that to upgrade the housing that some of you actually have seen? How do we try to make best use of that money?'' They're looking for as much leeway within the system of parliamentary votes to help them do that.
One of the things I believe the team has looked at is they're also trying to see if there's any way to give them multi- year funding for capital. If they can get that, it would be a lot more helpful than this January funding to try to do construction.
The Deputy Chair: Mr. Stock's investigative reporting here has been reported to Treasury Board; do they understand what is going on here?
Mr. Stock: This was within the National Defence portfolio audit.
The Deputy Chair: Yes.
Mr. Stock: Other than our regular briefings with Treasury Board Secretariat personnel, we would have advised them and they would have read the report.
The Deputy Chair: Time doesn't permit to go further into this, but I want to express my concern that I see a little red flag here. If you go back and think about this and feel you can enlighten me more on this matter by writing a response, I would certainly appreciate that.
Senator White: Since 2004, CBSA has literally gone from being a revenuer to being one of the largest police agencies in the country. It follows a little in line with oversight because realistically everybody has made recommendations in the past decade that would have changed some parts of what CBSA has done.
Did you make a recommendation that legislation be changed so they could actually search on exportation rather than have to have reasonable or probable grounds?
Ms. Cheng: We rarely — and I wouldn't want to say never — make a recommendation to say that the legislation should be changed. We usually point to problem/outcome/impact of existing legislation and allow management and the government to decide that legislation should be changed in whatever fashion.
That's not the way we tend to approach as a solution.
Certainly, if it's a limitation, in this particular case we actually went as far as saying that it is a limitation. It is up to management to decide whether they want to live with it or that they should make a case to make the changes and amendments necessary to give the authority required for them to discharge its mandate.
Senator White: That was not really my question, so I will continue, Mr. Chair.
Some countries have gone to what is considered to be "trusted partners''; in other words, a highly bondable company that CBSA or the equivalent in Australia, for example, would allow. If you put your sea container through that company, they have already been cleared. They actually do the search on the sea container so that the border agency doesn't have to or seldom does.
Did you look at any other models outside of Canada and make any recommendations? And I apologize; I didn't look for it here.
Mr. Swales: Those exist primarily on the import side in Canada.
Senator White: They do.
Mr. Swales: So we didn't look at them in the context of this audit.
Senator Ngo: I want to follow up on the question from Senator White regarding housing. Did the OAG report uncover the main reason why the Canadian Armed Forces will use military housing even if private housing is available?
Mr. Stock: No, we did not. We sought answers, but we did not receive an explanation. Part of this was that no agency has actually provided the value of housing in the last couple of years since the Canadian Mortgage and Housing Corporation has not provided that information. They have updated what they could, but no explanation has been provided.
Certain base commanders have certain views as to whether their members should be living on base or not. There are many members that need to live on base, for instance, if they need to be able to be in the air in 15 minutes, they need to be close by, living on base. From the operational point of view, there are requirements.
Bases have change considerably over time. For example, five years ago, Petawawa may have been in a position where housing might not have been needed. But with the medium heavy-lift helicopters, the Chinooks, being based at Petawawa now, they have needed housing.
There are long-term considerations as to whether to keep the housing they have and whether or not they prefer to have the members living on base or in the community.
Senator Mitchell: You are not suggesting that if there were vacant military houses on the base that somehow they shouldn't be available and that a family should be encouraged to go off base? You're saying that if everything is filled up, don't build new houses; try to use the private sector?
Mr. Stock: If the private sector can provide it, government policy is that the private sector should provide it unless there are operational reasons otherwise.
Senator Mitchell: Is there any argument to be made for a private sector contract to manage military housing?
Mr. Stock: I'm sure there is, but we did not consider that or recommend it.
The Deputy Chair: You just want that former residence of yours at Base Gagetown to be fixed up; right?
That concludes our meeting with the Auditor General's office. I hope you will take back our regards to the Auditor General. I'm sorry he couldn't make it, but we're actually pleased he didn't make it because we had the chance to meet with you again. Thank you very much, Ms. Cheng, Mr. Swales and Mr. Stock.
Colleagues, we will suspend for one minute. I have a little bit of information to pass on to you and then receive any input you might have.
(The committee continued in camera.)