Standing Senate Committee on National Finance
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Proceedings of the Standing Senate Committee on
National Finance

Issue 11 - Evidence - January 31, 2012

OTTAWA, Tuesday, January 31, 2012

The Standing Senate Committee on National Finance met this day at 9:35 a.m. to examine the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2012.

Senator Joseph A. Day (Chair) in the chair.


The Chair: I call this meeting of the Standing Senate Committee on National Finance to order. Honourable senators, first of all, this being our first meeting since both our new year and the lunar new year, I wish you all a very happy and prosperous new year and hope you have all had a good break. We are now back at work.


This morning, we are continuing the committee's study of the 2011-12 Main Estimates.


This morning we are pleased to welcome the new Auditor General for Canada, Mr. Michael Ferguson. Mr. Ferguson's appointment was effective on November 28, 2011, just before the Christmas and New Year's break. We are also pleased to welcome back Jocelyne Therrien, who is the Senior Principal, Parliamentary and International Relations.

Mr. Ferguson, I understand you have a few introductory remarks, and then we will go into a question and answer discussion period.


Michael Ferguson, Auditor General of Canada, Office of the Auditor General of Canada: Mr. Chair, thank you for the opportunity to meet with you today. I am accompanied by Jocelyne Therrrien, who heads our parliamentary liaison team.

I would be happy to answer any questions the honourable senators may have. But first, with your indulgence, I would like to start by providing a bit of background information about myself and how I plan to fulfil my mandate. I will be brief.

As some of you may already know, for five years, I served as the comptroller of New Brunswick before becoming the province's Deputy Minister of Finance last year. I also spent five years, from 2005 to 2010, as the Auditor General for the province, reporting to the Legislative Assembly of New Brunswick. I am currently serving my third term on the Public Sector Accounting Board, the organization that establishes accounting standards for the Canadian government. I also served as the president of the New Brunswick Institute of Chartered Accountants for one year.

My goal is to build on the excellent work of Sheila Fraser, just as she was able to build on the exemplary contribution made by Denis Desautels when he occupied the position. There is a tradition of excellence in the office, and I am committed to upholding the standards set by these two remarkable public servants.

In the two months that I have been in the position, I have been getting to know the people who work in the office and learning about the audits that are currently being conducted. I am also getting to know some of the senior public servants within the federal government.


In the short term, my plan is to stay the course. I do not anticipate any major changes and have the good fortune of having joined an organization that is widely respected and from my vantage point appears to be very well run. I do not expect to have to make significant changes to the operations of the office.

The office has always respected the mandate it has been given to provide information to Parliament, gathered through a rigorous and objective process, so that Parliament can in turn hold government accountable for its delivery of services to Canadians. I can commit to you today that we will maintain this integrity so that you can continue to rely on our work.


Honourable senators, you will recall that there was some controversy regarding my language abilities during the appointment process. I wish to inform you that, since that time, my language training has started, and it is one item in my daily calendar that I try not to postpone.

It is a very intensive and structured program. I am confident that it will lead to good results. I am personally very committed to this learning process in recognition of the fundamental importance of achieving a functional level of bilingualism.

I have also promised the office staff that I am committed to preserving our bilingual work environment.


Mr. Chair, I would like to conclude by saying that I look forward to a productive relationship with this committee. I welcome your input and advice. Part of the success of the Office of the Auditor General is its ability to maintain its relevance to the stakeholders of the office, starting with Parliament as its primary client. We have a parliamentary liaison unit that is dedicated to facilitating this relationship, and I encourage you to contact us should you have anything you would like to discuss.


For this meeting, I have not reviewed the reports presented by the previous auditor general or the interim auditor general. If you have specific questions about work that has been done in the past, I will have to provide you with the answers at a later date.

I would now be happy to answer any other questions you may have. Thank you.


The Chair: Thank you very much, Mr. Ferguson. Could you just lay the groundwork by telling us the annual budget that you have for the Office of the Auditor General and the number of employees that are under your direction and responsibility?

Mr. Ferguson: For the 2011-12 Main Estimates, the total amount was $84.9 million. We have planned a staffing level of approximately 633 full-time equivalents.

The Chair: Thank you. I will now go to senators who have indicated an interest in participating in the discussion. I will start with the senator from Toronto, who is the deputy chair of this committee, Senator Gerstein.

Senator Gerstein: Mr. Ferguson, welcome to our committee and congratulations on your appointment.

I have two questions for you. I know you have been here only a short time, but my first question is, do you have any views as to whether there is a difference between being the auditor general of a province versus being the Auditor General of Canada?

The second question comes out of your remarks, the third point, where you talked about the work of Madam Fraser and Mr. Desautels; you talked about the tradition of excellence and upholding the standards of the department. This is looking a long way out — I am not sure how far — but at the conclusion of your term, what would you like them to say about you? In other words, would you like them to add your name to that list of the two you have indicated here, or do you have some other things that you might like to have as part of your legacy?

Mr. Ferguson: Thank you for the two questions.

In terms of the difference between being an auditor general in a province and the Auditor General federally, a couple of things come to mind. First, in New Brunswick, the staffing level that I had in the provincial auditor general's office was probably about the size of the number of people in this room, maybe a little less. I had roughly 22 or 23 people. That meant that the work that we had to do was very specific; the scope was very tight and that type of thing. It also meant that I had to be very hands-on in much of the work we did. That is one perspective.

Another perspective at the provincial level is that many of the services a province delivers are services that people directly interact with, whereas perhaps a lot of the services of the federal government may be a step more removed than at the provincial level. That is another difference.

At the federal level, a couple of things really struck me with the Office of the Auditor General here: one is the quality and strength of the people in the office, the depth of the skill set that we have; and the second is the machine and the rigour behind the work that we do. Those are just a couple of points regarding some differences.

In terms of my legacy, I do not think my legacy in this role is important. What is important to me is the legacy of the good work of the office — the reputation, the importance of the work that the Office of the Auditor General does. At the end of my mandate, it is not really important to me whether people remember me; what is important is that people still have the same level of respect for the work that the office does.

Senator Nancy Ruth: I have three questions for you this morning. The first deals with nuclear fuel issues. I am interested in Canada's plan for the long-term care of used nuclear fuel, the plan that is known as Adaptive Phased Management. This plan is administered by the Nuclear Waste Management Organization, NWMO, under the oversight of the Nuclear Fuel Waste Bureau of Natural Resources Canada.

We are in the midst of a process to build a large national infrastructure project. It will include a deep geological repository, used fuel transportation systems and a national centre of expertise. I have seen early project costs between $9 billion and $13 billion, which I understand are to be financed by electricity users in Ontario, Quebec and your province of New Brunswick through a trust fund in the NWMO, all governed by federal legislation, the Nuclear Fuel Waste Act.

Can and would the Auditor General review the costing of this very large infrastructure project and the terms and sufficiency of the underlying trust fund? Does the Auditor General have authority to audit the Nuclear Waste Management Organization, and, if not, can the Auditor General reach the project through the Department of Natural Resources?

Often the Auditor General reviews a project of this significance and magnitude after it is done. I am interested to know whether you can get there now as we are coming up to making a decision about where it is going to be.

Mr. Ferguson: That is obviously a question at a detailed level. I do have some past knowledge of some of this issue, given that I was involved with NB Power in New Brunswick in various ways and that NB Power, as you mentioned in your question, would be one of the players in this.

As to whether the Office of the Auditor General would audit this, I cannot answer right now whether we have the authority. I have not looked specifically looked at this, but I will take this back and we will look into it.

That leads me into an area also of concern for me, something I need to get a better understanding of, which is that for organizations that have perhaps multiple jurisdictions involved, what exactly is the authority of the federal Auditor General and of provincial auditors general to ensure that there is an avenue for auditors general to be able to conduct audits of those organizations. I do not know whether or not we have the authority, but I will certainly look into it.

Regarding whether we would do an audit, I will try to stay consistent in my answer to that type of a question, which is that within the office we have a process. Our process for trying to identify areas that we should be auditing is based on where we feel the programs have a certain risk profile that we should look at.

With something like this, it would feed into that process, and then we would decide, based on looking at it and other programs — if we had the authority — where we should best put our resources in doing the audits.

I cannot commit right now to whether it is something we would audit, but certainly I can commit to going back and finding out whether we have the authority and, if we do, to making sure that it is fed into our process to decide whether it is something we should audit.

The Chair: Mr. Ferguson, any time you do not have an answer, we certainly understand that. If you undertake to go back and do some research, if you could let our clerk have your answer in a timely fashion, the clerk will circulate the answer to all members of our committee.

Mr. Ferguson: Thank you. Certainly my commitment now is to find out whether we have the authority on that. We will report back to the clerk on whether we think we have the authority or not. It may not be a simple answer.

The Chair: I understand.

Senator Nancy Ruth: Mr. Ferguson, you will remember last November, when we were before the Committee of the Whole of the Senate, I asked you a question about what I thought was the very proactive and wonderful work of Sheila Fraser in doing a gender-based analysis of five departments of the federal government. I am still interested in how the central agencies, particularly Treasury Board, Privy Council Office and the Department of Finance, undertake their challenge function — that is the phrase they use — with respect to gender-based analysis required to be done by departments and agencies in the federal government.

The federal government is rightly concerned with the elimination of the budget deficit — getting this country in order — and that process requires weighing of many public policy concerns.

My question is, when will your office follow up on the spring 2009 report on gender-based analysis, which was followed by a departmental action plan dated October 2009, just to see what has changed, if anything?

Mr. Ferguson: Thank you for that question. Again, I think the same type of answer applies. First, I will say what I told the honourable senator in November, which was that for any report that my predecessors issued, I stand behind each and every recommendation they made. I fully support all of the recommendations that would have been made on this particular issue as well.

In terms of any further work — follow-up, that type of thing — again we have processes in the office to identify which reports should be followed up and when they would be followed up on. I am not familiar with this particular report — at what stage it is or whether it is something we are planning or not planning to follow up on — so I do not have that information with me. Again, it is something that I would have to go back to. I expect that I may find that we do not have it in the list yet to be followed up on. I do not know that for sure, so I would have to find that out. If it is not on the list right now, it would be one of those audits that we would make a decision to follow up or not.

Senator Nancy Ruth: I have two comments about your answer. First, it is my experience of auditors general that they change lists when they feel like it. That is my first comment. Second, it is nearly three years since this audit was done, and with all the cuts that are coming, it is, I think, critical for Canadian women — for all Canadians — that a gender- based analysis take place in Treasury Board, the Privy Council Office and the Department of Finance. Who will see that this is done? It is partly because of the cuts that have to happen that I am concerned that this also be done as part of that package, so I wish you luck with your piece of that and encourage you to change the list if it is not on the list.


Senator Ringuette: Mr. Ferguson, it is a pleasure to have you with us today. The Standing Senate Committee on National Finance works closely with the Office of the Auditor General of Canada. You are joining us this morning for the first time. However, this will not be the last time we see you over the next 10 years.

I have many questions to ask, but since you said you have not had the time to review previous reports, I will ask you the questions and if you can answer them, great. If not, you may answer in writing.

Given the key role the Office of the Auditor General of Canada plays in holding the government accountable, are you being asked to reduce your costs for the next fiscal year? Are you being asked to reduce the number of employees conducting audits?

Mr. Ferguson: Thank you for your question.


We received a letter early in the process telling us that the government was undertaking an exercise to reduce its spending, and I think the letter was probably encouraging us to do what we could do. Of course, that occurred before I took the role. The office was proactive on that front and undertook an exercise within the office to determine where there could be some reductions in spending. A number of things were identified, including, for example, some audits that we were required to do by legislation or by order-in-council. We felt we were not adding much value any more by continuing some of those audits, so we have put forward that we could save some money if the government made some changes to legislation or orders-in-council on some of those items.

Also, I think we identified significant amounts of savings in some of the administrative areas of the office. Also, for the last couple of years we have been undertaking a fairly large project looking at our whole audit methodology, and we have devoted a lot of resources to that. That project is winding down, and that would free up some money that we could give up in the future.

The short answer is that my understanding is that the office has been proactive in that and has tried to identify areas where it felt that we could reduce our budget without having a significant impact on the work that we do.


Senator Ringuette: According to the last documents Sheila Fraser submitted in November, a number of sectors are affected. I will mention a few of them.

When it comes to National Defence, the auditor pointed out a lack of accountability in terms of repair and equipment costs, as well as questions regarding the infrastructure stimulus fund, since there was information missing. Over the past few months, the media has used access to information to uncover additional information. The time it takes for farmers to receive payments under various stabilization programs was also a concern. Another issue that was brought up was the very troublesome and relevant matter involving visas for temporary foreign workers.

Do you plan to follow up on the last recommendations made by Ms. Fraser in the cases I just mentioned?


Mr. Ferguson: Perhaps the first thing, Mr. Chair, that I will mention is that I think the report referred to by the honourable senator was released in November by the Interim Auditor General, John Wiersema. Again, it is really the same answer. I stand behind each and every one of the recommendations that the office has made in the past. Any areas that we raised as areas of concern, we would expect the departments to be addressing. In terms of follow-up, we produce many reports with many recommendations. We have to figure out how many resources we put in to follow up. That determines when we actually follow up and how much follow-up we do. At this time, those are new chapters. It would be a while before we would do any actual structured follow-up work on those items. Those chapters have been released. We expect the process to take place in terms of various committees looking at those chapters, calling witnesses, and having hearings on those chapters. We expect the departments would do the things that they should do to implement those recommendations and make improvements.


Senator Ringuette: If my understanding is correct, Mr. Ferguson, you are saying that your office has no intention of following up on those cases for a while.


Mr. Ferguson: I was trying to say that following up on those issues would be part of the normal process, like any other issues. That process would involve not only our office following up but also committees calling witnesses and holding hearings on those chapters, that type of part of the normal process. Later on, it would be a matter of whether we need to do any work in official follow-up.

Yes, whether we would do a structured piece of work on it would be a few years down the road, but there are other processes in place to ensure that those chapters can be discussed and departments held accountable for their recommendations.


Senator Ringuette: I would now like to talk about two new matters in relation to which I would like your office to conduct audits.

The first is about the delivery of programs in the regions. It takes almost 50 per cent longer to deliver programs in the regions than elsewhere. I think that all Canadian citizens have the right to the same delivery standards. This situation seems to be very prevalent when it comes to applications for employment insurance, Canadian pension funds, disability pensions, and so on. That is an area where a modicum of fairness should certainly exist across the country.

The second matter I would like to discuss was mentioned in a front-page article that appeared in the Ottawa Citizen on November 28, 2011. It has to do with the Department of National Defence and the purchase of the Nortel complex. This committee has heard from National Defence officers in the past, and I have questioned them about the issue. Their answers were not really clear. According to my understanding of the article, it would appear that all the documents regarding the purchase and renovations of the Nortel complex by the Department of National Defence are suddenly hidden from the public. If my memory serves me well, we are talking about costs of almost $1 billion. I think that taxpayers must have access to accurate information regarding this case and that only your office, Mr. Auditor General, can provide that information to Canadians and this committee.


The Chair: Mr. Ferguson, do you have a comment on those suggestions?

Mr. Ferguson: Mr. Chair, the only thing I would say is that many people give us many suggestions for what types of things we should look into. Certainly, when it comes from a senator or a Senate committee or similar organization, we take those suggestions seriously for consideration. Again, it all has to feed into our process, and then we have to make determinations about which things to look at.

I believe that I mentioned in my opening comments that we are interested in hearing from you; and Ms. Therrien's group is involved in liaison with parliamentarians. We are always quite happy to receive input from senators or Senate committees on ideas for things to look at without giving any promises that we will in fact do that.

Senator Marshall: Mr. Ferguson, welcome and congratulations on your appointment. In your introductory remarks, you talked about your audit plans and about staying the course. A area I have always been interested in at both the provincial and the federal level is the role of the lending agencies. In recent years, I have found that the audit tends to focus more on governance issues. Where lending agencies are concerned, I have always been interested in the collectability of their accounts. How much money are they getting back and are they following the proper processes? I am always interested in whether any money will be returned to either the provincial or the federal government. When you appeared before the Committee of the Whole, I commented on your background as comptroller. You have not spent your entire career in the audit field but have been in the operations field.

I am interested in hearing your views on whether there is a possibility — even though you have indicated you would be staying the course — that you would shift direction a little bit and cover areas that would certainly be of more interest to myself and possibly other senators.

You could talk a little bit about the lending agencies. I know you have had experience at the provincial level also.

Mr. Ferguson: Thank you for the question. The general answer is the same that I gave to the previous honourable senator. Any suggestions we get from senators we will take seriously and feed into our process.

Regarding collections, if we are doing an audit in a particular agency, and that agency has a mandate over lending and collections, certainly it would be part of our audit program to look at whether they have the right processes and policies in place, not only for how they distribute the loans but also for how they then manage the collection of the loans.

From my past history in New Brunswick throughout five years as comptroller, five years as Auditor General and one year as Deputy Minister of Finance, I think, at the provincial level at least, a government's approach to collections would be something that I would call inconsistent. At the provincial level, sometimes collection activities have been given a level of importance to make sure that if people owe money, and have committed to paying money back to a province, the province manages that and makes sure the money is paid back. Sometimes the provinces are less focused on that. My experience in the past has been that sometimes provinces take it seriously and sometimes less so.

I certainly understand the issue and question you are raising. In terms of our audit, if we are doing an audit of a lending organization we would make sure they have the right policies regarding both the loans they make and the collection function.

Senator Marshall: I want to make one final comment to demonstrate my point. We did have a lending agency appear before this committee on at least two separate occasions. The first time when I was asking about the collection rate they cited a certain percentage. In my opinion I thought that it was kind of high. I was a little bit doubtful, although I kept it to myself. When they appeared the second time, they gave us a revised number. I think they had gone back and looked at it and the actual collection rate was lower than they had thought. That demonstrates my point that perhaps we need to focus a little bit more on the money. Even though governance is an important issue, I still like to see the numbers analyzed well.

Senator Callbeck: Congratulations, Mr. Ferguson. It is nice to see a Maritimer in this position.

Senator Ringuette talked about the budget and cuts. Last fall your predecessor — before the Public Accounts Committee in the other place — indicated your office will be cut by about $6.5 million by 2014 and 2015 and you will lose 10 per cent of your staff, or roughly 60 people. I would think it would be pretty difficult to have the same effective oversight in your office with 60 fewer people. I would like you to comment on that.

Mr. Ferguson: As I understand it, the office undertook a detailed review of the activities that are part of our mandate. Fundamentally, the impact on our overall performance audit, financial audit and special examinations — the core piece of our business — as I understand it, will be limited. We feel that we will still be able to conduct performance audits, financial audits and special examinations. As I said, we will need some help from the government through making some legislative changes and changes to orders-in-council to free up some of the money.

Most of the reductions are coming from two areas: corporate services and professional practices. As I said before, in the professional practices area, I think we were identifying about a $2.5-million reduction on what was a $5.3-million piece of our business. That sounds like a significant reduction. However, it is primarily because over the last few years we had been undertaking a special project around our methodology, which meant we had to focus a lot of resources on that project. That project is coming to a close, so we will not need to continue to spend that money.

We feel we can manage that. We are planning to reduce our corporate service budget by probably around 8 per cent. I am struggling a little bit with the answer because I have not been in the office. However, what I have been told is that we will be able to make those changes without having a significant impact on our core business, being performance audits, financial audits and special examinations.

Senator Callbeck: How much money was involved in the project that is winding down?

Mr. Ferguson: My understanding is that the total project — and I am not sure over how many years — was roughly $15 million.

Senator Callbeck: It was $15 million?

Mr. Ferguson: Yes.

Senator Callbeck: In answering Senator Ringuette's question you mentioned three areas that the department looked at where you thought you could cut. One was the audits. You said there are some audits required by legislation, orders- in-council, where you feel you are not really adding value. I have read somewhere that there are roughly 20 government agencies, boards and commissions that you will not be doing a financial audit on. You would be doing a performance audit. Who will be doing the financial audit?

Mr. Ferguson: My understanding on this is that some of those are organizations that we feel perhaps do not require a financial audit. Some of them may be organizations that provide services to the private sector. If they still need an audit they can get an audit done and recover that through their fee process. It is a mixture of a variety of different things. I do not have the specifics on each and every one of them. However, I have been assured by the folks in the office that each piece of our business has been reviewed thoroughly to determine which organizations we feel that we would not have to continue the work on that we have been doing.

Senator Callbeck: I wonder if you could provide a list of those 20 government agencies, boards and commissions that you will not be doing a financial audit on in the future sometime.

I want to ask you about the Green Infrastructure Fund. In 2009, the government announced, with great fanfare, that they would spend $1 billion, $200 million each year for five years. They have spent to date, as I understand it, $40 million. Recently, the public servants who were at the Operations Committee in the other place said that $170 million of that has been transferred to other departments. It has been said that really only $25 million of those transfers were approved by Parliament. I know you have been asked to look into this and investigate it, and I am wondering whether you have any comment to make at this time.

Mr. Ferguson: I have no comment, other than the same answer I have given on similar questions. All those types of things that people bring to our attention we take seriously and we consider when we are putting together our audit programs. We have many sources of information and things to look at, so I cannot commit as to whether we will look at any one particular item. However, we take all those things seriously and put them into our process.

Senator Callbeck: This has been criticized by Kevin Page, who said that the practice is difficult for MPs and senators to follow the money. I certainly agree with this. I hope you will look into this whole area so that it is made simpler, and plain, so that the money is accountable and we can follow it. Right now it is difficult.

Senator Neufeld: Thank you for being here, Mr. Ferguson. I am a little in the dark about the process you use in deciding exactly what parts of government you actually do an audit on and what type of audit you do. Maybe you explained that, but I am still not clear on it, or on how the process that you have in your office now to decide what you do and how you do it fits in with recommendations, as you said, from senators, MPs or government asking for different audits. How does that process fit together so that it makes some kind of sense? We can all have our little pet projects we would like to have the Auditor General review, but that does not always make good business sense for your office. How do you actually determine that?

I will pose both of my questions because we are running short of time. The second question I have is about boards and commissions, and possibly some Crown agencies. If they have an outside audit, is that generally accepted by your office as being a complete audit? People tend to say they want the Auditor General to do it because that is the audit that really means something. However, the rest of the world, other than government, works mostly on outside audits. Do you find those to be sufficient and moving forward?

Mr. Ferguson: In terms of the first question, how we determine audits, we have three primary pieces of our business. One is the audit of financial statements of organizations, including the audit of the financial statements of the Government of Canada. Those audits are designed to express an opinion on the financial statements produced by that organization. I am not sure how many financial statement audits we do, but there are a lot of them. This committee, or any other committee, may not actually be aware of a lot of the work we do in financial statement audits, because to the outside viewer many of those things may seem to be just routine.

Special examinations and performance audits are the other two pieces of our business. Those audits are the ones that produce the types of chapters that come before various committees for discussion, and those are the pieces of the work that get most of the attention for what we do. In determining for our special examinations what we will look at, I do not know the details of it, but we have to do a special examination on a certain number of organizations over a period of time, and that then goes through a rotation.

Performance audits are the ones where we really have to make the decisions about what we will look at. We use a methodology that is based on the risks that the various government programs face. We try to gather information on various programs and departments, and we decide where we feel the programs that face the most risk are. It is on that basis that we make our decision about what to look at. It is not necessarily that we feel something is going wrong in a program. It may be simply that we feel a program is a risky program and it is important for us to look at it and make sure it is well managed. That is the basis of how we make our decision.

In terms of senators or Senate committees or anyone else making recommendations to us with regard to performance audits, it all just feeds into that same process, and it would be information we would use in assessing the risk of the programs.

Regarding audits being done by outside auditors, certainly any audit firm that has good practices, which would be most of the audit firms you would be familiar with, is capable of doing audits according to standards. They have their own methodologies and processes in place to make sure they do financial statement audits up to the same type of rigour that we do.

We have various audits for which we are joint auditors with outside firms. I would not be able to give you one off the top of my head, but for some organizations the audit work is done jointly between us and an outside firm, so we do rely on them in that way.

There are certainly some organizations that we would say we feel strongly that we should audit, even if it is a financial statement audit, because we feel we have the best knowledge of business. The obvious one there would be the financial statement audit of the Public Accounts of Canada.

Those would be my main comments to those questions.


Senator Hervieux-Payette: I have two questions. I have been closely following the progress of a federal research project in the area of health. The project is about the digitalization of patients' medical files. It was also taken on by the governments of Ontario, Quebec, British Columbia and probably other provincial governments.

The federal government has invested billions in CANARIE to conduct research in this area, as have the provinces of Ontario and Quebec. Therefore, is your office required to stay in touch with provincial auditors general when it comes to cases of national interest? I am talking about cases where the federal government and the provincial governments involved in the project have had to invest not only a few million dollars but a few billion dollars in R & D. Despite that, this key health management tool is still not available across Canada.

Could your office not act as a catalyst and make sure that the contributions made to a research case lead to concrete results and that you are able to coordinate your approach with the provinces?


Mr. Ferguson: I cannot speak to any one specific project and what involvement we might have with other offices in those types of projects, but I certainly can say that it is our normal practice and part of our normal business to cooperate with auditors general in provinces when there are issues of mutual concern. It would be part of our normal method of operation that we would collaborate with other auditors general across the country.


Senator Hervieux-Payette: I am not saying that I have observed this phenomenon recently; I may have seen it at the federal level in the past. However, when a transfer is made in the area of social services or health and the money is diverted to public works to build infrastructure when it should have been used to provide social services — day care, services for the disabled or other similar services — does your office make sure that the money is spent in the areas for which it was intended?


Mr. Ferguson: In general, again, part of our normal procedures would be if we were looking at a program of grants and contributions or something like that, part of our testing would be to ensure that the right policies and procedure are there, and the right controls are there over the disbursement of funds.

I cannot speak to any specific case, but, in general, if we were dealing with a program that included activities of providing grants and contributions, then we would normally look to ensure they have the policies and controls in place required for that type of program.

The Chair: We are into round two and we are out time, but I have two senators who had expressed an interest in getting a point on the record. If you can answer quickly, that would be great, Mr. Ferguson; otherwise, perhaps you could provide us with a written reply.

Senator Nancy Ruth: This is not a question, just an alert. Of course our government is very keen on tax reforms and assisting business in any way it can and does the business development board, but we are all aware of the articles that have been in the paper around government funds for CIDA in areas where there is mining development or other economic interests of Canada.

It is not the only department within the government that is doing this. I know Status of Women Canada has given half a million dollars to a women's group in British Columbia, some of which is going to the BC Lions to encourage the football players to go into schools and help young men deal with any issues they might have on violence against women.

What I would like the Auditor General's department to do is to find out where else within the government small pockets of money are being used to aid business, not necessarily for business such as CIDA. In this example from Status of Women, it is not the tradition to give monies from these kinds of departments to commercial businesses. I am just alerting you that that is an issue.

Senator Callbeck: The question I would like to get an answer for at some point, if you could provide a written answer, is regarding the letter that was signed in February 2011 by the Auditor General, the Chief Electoral Officer, and I believe five other commissioners entitled "Accountability of Agents of Parliament.'' They want this pilot project, which is now in the House of Commons, to continue.

As I understand it, there is a panel. I would like to know who is on the panel, what their objective is, what it does, and why you want this to continue.

As well, are there other measures that should be put in place to increase the accountability of the officers of Parliament?

The Chair: Mr. Ferguson, are you able to answer that quickly or would you like to provide a written reply?

Mr. Ferguson: I do not think I could answer it quickly, so we will provide a written reply.

The Chair: If you could send that to the clerk, we will see that all members get a copy.

I would like to thank you, on behalf of the Standing Senate Committee on National Finance, for being here. We wish you well in your tenure in the Office of the Auditor General.

Mr. Ferguson: Thank you very much.

The Chair: I expect we will be seeing one another on a number of occasions along the way.

As part of our examination of the Main Estimates for the fiscal year ending March 31, 2012, we have been meeting with various officers and agents of Parliament. As we have heard from the Auditor General, the role of the officers and agents of Parliament are to help parliamentarians, and this committee in particular, in helping to hold the government to account, which includes the government's responsibility over the public service.

In our second session this morning we welcome Mr. Mario Dion, who is the Public Sector Integrity Commissioner of Canada. His appointment was effective December 21, 2011, but prior to that he served as the interim commissioner for approximately one year.


Mr. Dion, we are pleased to have you with us this morning and we are ready for your comments. Go ahead.

Mario Dion, Commissioner, Office of the Public Sector Integrity Commissioner of Canada: Thank you, Mr. Chair. I will be brief.

A little over a month ago, I appeared before the Senate Committee of the Whole when my appointment was pending approval under the legislation. A limited number of events have taken place over barely six or seven weeks since.


I will remind honourable senators of the mandate of the office. The office was created in a statute that came into effect in April 2007. It is called the Public Servants Disclosure Protection Act. It created the position and the office of the Commissioner of Public Sector Integrity.

Our role is a dual one. We are responsible, among other parties, to receive disclosures on the part of public servants or members of the public who wish to signal that a wrongdoing has occurred in the public sector. That is part one of our mandate. Part two is to protect, or to at least provide a mechanism to ensure that people who make disclosures, whether to us or within their own departments, enjoy a protection from reprisals for having done so.


This instrument was created barely five years ago to give teeth to that desire following the sponsorship scandal. Another reason for its creation was to provide the general public and especially public servants with a way to report wrongdoing and to ensure protection.

Annual reports have been submitted under the legislation since the office was created. As interim commissioner, I personally submitted a report in June to explain to parliamentarians of both houses the progress made in terms of complaints and disclosures.

An annual report for the 2011-12 period will be submitted in the spring, and I hope, Mr. Chair, that you will find that things have improved greatly in the wake of the difficulties the office has gone through over the past few years.

We have been working on a number of fronts. We began by ensuring that our operations budget was optimal. While maintaining the same budget, we went from 19 employees to the current 35 in order to fulfil our mandate more efficiently.

We have studied all the cases processed since the office was created, on April 15, 2007, as there were serious doubts about the legitimacy of the work done following the Auditor General's report. We have so far referred two cases to the tribunal set up under the statute to punish any reprisal that might have taken place.


I am quite confident that in the near future we will be in a position to transmit further cases to the tribunal and to file case reports of wrongdoings before the House of Commons and the Senate.

The act, in my view, is relatively young. It is far from having been fully exploited. I see my mandate as essentially being given an opportunity to make it work, to make sure it does fulfill the objectives that Parliament had in mind when it adopted the statute. In spite of the events of the Auditor General's report of 2009, we are observing a significant increase in the number of disclosures and complaints of reprisals that are made to our office, and we are working hard on trying to build the confidence so that the objective of the act is fulfilled.

Those are my short opening remarks. I do not want to take too much time. I would rather have a dialogue or answer questions with members of your committee, Mr. Chair.

The Chair: Thank you very much, Mr. Dion. We appreciate your being here. You have been in your position for just a little over a month, but we do recognize that you were the acting commissioner for a period of time, so you will know some of the files.

To lay the groundwork, you indicated you have 35 employees now and you have been ramping up the department. Have you been subject to the first round of the 5 per cent review, and are you anticipating, with the 5 per cent or 10 per cent review that is ongoing and likely to be reflected in the budget for next year, any change in the number of employees and the budget?

Mr. Dion: The answer is no and yes; I will explain myself.

The office is an agent of Parliament. The office was not asked by government to prepare a plan for submission to the Treasury Board for consideration as part of the deficit reduction action plan, but we decided voluntary to conduct an examination of our future requirements. We will be able to contribute the equivalent of 5 per cent of our budget, or $256,000, starting in 2014 and 2015. Yes, we will contribute; no, there will not be a reduction in the number of employees because I was in the fortunate position, as we were developing the staffing plan, of knowing what the budget would be in 2014-15. Therefore, no jobs have been or will be cut; we will perhaps simply staff fewer jobs than we would otherwise have staffed.

The Chair: I am seeing from the Main Estimates that your increase this year over last year was 5 per cent; that is the 5 per cent that you may be able to live without in a few years.

Mr. Dion: That is right.

The Chair: You are back where you were last year.

Mr. Dion: Since the office was set up in 2007-08, it has never fully spent its budget. It was able to re-profile or carry forward significant sums of money from one year to another.

Next year, 2012-13, will be the first year where we actually have the core budget to operate with. We will not have a significant carry forward. We are going back to a stable situation where we have a budget and we will spend our budget. My aim is to spend as close to 100 per cent of the budget as possible, which has never been done before.


Senator Ringuette: Mr. Dion, my understanding is that you have occupied your current position for only a month, but how long have you been working for the office?

Mr. Dion: I became the interim commissioner in December 2010, at the government's invitation. Almost in succession, I served two six-month terms as interim commissioner, for a total of just under 12 months. I took over as interim commissioner at the very end of 2010 and occupied that position throughout 2011, until December 21, when I became the permanent commissioner.

Senator Ringuette: Did you not work for this office prior to that?

Mr. Dion: No.

Senator Ringuette: Where were you working? At the Department of Justice?

Mr. Dion: I was actually retired.

I left the public service in May 2009, at which time I was serving as chairperson of the Parole Board of Canada. I then did some freelance work and was contacted in December 2010 about occupying the interim position.

Senator Ringuette: One of the things you have done since 2010 is conduct a logical review of all the complaints submitted to the office since the statute that created the organization came into effect.

Mr. Dion: That is correct.

Senator Ringuette: How many complaints have you reviewed?

Mr. Dion: We have reviewed 221 cases.

Once I was appointed interim commissioner, given the serious doubt cast on the legitimacy of the work done, I decided to review the 221 cases that the office had processed since April 15, 2007. I wanted to scrutinize those cases in order to determine whether the legislation had been complied with in each of them.

I carried out that task with the help of the private sector because it was necessary to have a completely impartial review by someone who had never been involved in those cases before. I also wanted it to be done quickly. Therefore, it had to be done intensively. We gave a private firm three months, under my guidance, to review all 221 cases.

Senator Ringuette: Which firm reviewed the cases?

Mr. Dion: It was Deloitte, which was selected through a competitive process I launched on December 31, 2010, a few days after being appointed interim commissioner.

Senator Ringuette: How much did it cost?

Mr. Dion: The total cost was $199,000. Our organization is small, so I remember the figures.

Senator Ringuette: It took three months to complete the review?

Mr. Dion: The review was actually completed on March 31. I submitted a public report in May, as I felt that the election prevented me from doing so earlier.

Senator Ringuette: So you receive an average of 75 to 80 complaints a year?

Mr. Dion: It varies from year to year, but as I was saying earlier, there has been a significant increase in complaints. The standard is about 75 disclosures of wrongdoing and 25 allegations of reprisal a year. That is an average. It varies; it could be 72 or 78. However, that figure will be much higher this year.

Senator Ringuette: I am wondering how come only 1 per cent of the 221 complaints reviewed were referred to the tribunal. I am also wondering why you have 35 employees reviewing an average of 75 complaints a year. That means that each employee handles an average of two complaints a year.

Mr. Dion: A certain number of factors need to be taken into consideration. As I said earlier, two cases were referred to the tribunal, but as of now, we have 98 active files, which could very well end up either before the tribunal or in a case report to Parliament.

There is a difference between the number of new cases every year and the case flow. Cases are very inexact units of measure. Some cases take two hours, others may take 2,000 hours. It all depends on how complex and significant the allegation is, how many individuals need to be questioned, when people are available, and so on.

What I am trying to explain is that two cases before the tribunal is not at all the final number. That number will clearly increase. We have 98 active files currently under review, and some of them date back to previous years. As for our employees, they are not all investigators. There is a whole infrastructure in place. We are a government organization. We have to comply with all the Treasury Board policies, all the relevant legislation, the Financial Administration Act, and so on. Therefore, we spend about 30 per cent of our budget on complying with all the provisions that have to do with the handling of public money and human resources within the public sector.

So, we do not have 35 people working directly on the cases. That is one reality of a small organization. We have the same obligation to submit reports as do the large departments, such as the Department of National Defence and others.

I do not know whether that partially answers your question. It is fairly complicated. The role of the commissioner is made difficult by a very clear provision of the act. Section 44 stipulates that everything we do, all the information we gather under the act, is confidential. Therefore, I cannot clearly explain to someone what is in those files. We must always be very careful about respecting confidentiality, which is one of the pillars of this act. Clearly, people would not disclose information if they had any doubts about the confidentiality of their dealings with us. So I am fairly limited in my ability to explain the whys and wherefores of our current caseload.

Senator Ringuette: I understand and especially respect the need for case confidentiality. How many of your 35 employees are investigators?

Mr. Dion: If we leave out investigation managers, there are eight. I am using the word "investigator'' in the strictest sense of the word because there are people who work in operations but do not conduct investigations. They analyze cases. When we receive a case, we follow a three-step process. We begin with a screening process to determine whether the complaint or disclosure falls under the scope of the act. For instance, the case has to concern the federal public sector. It also has to satisfy the definition of wrongdoing.

There are four employees in charge of the initial screening. They also prepare the correspondence if it is decided that the complaint or disclosure does not come under the act. Those four people are not investigators in the strictest sense of the word. They do not investigate, they only analyze. We have another small three-person team that works on determining whether a formal investigation should be conducted. Their job consists in considering the facts, finding more specific information to help the commissioner decide whether it is necessary to conduct a formal investigation. If you add those seven employees to the eight investigators I was talking about earlier, you have a total of about fifteen people in the chain being supervised by a member of the management category.

That is done in three steps, and each step is set out in the act. I often use the word "straitjacket'' as a reference. The act stipulates what needs to be done at each step, how it should be done and on what grounds, and all that enables the commissioner to decide whether the complaint is admissible or not. We are talking about rigorous work that requires careful examination because everything we do is subject to judicial review by the Federal Court and must be done in full compliance with the act's provisions.

The complaints are not administrative; they are regulated by a very clear piece of legislation and must be processed in the manner prescribed by the act.


Senator Nancy Ruth: Welcome, Mr. Dion. All my questions have to do with the access of the general public to your commission.

I understand you accept complaints from the general public. Apart from the office's website, how else do you let Canadians know about their rights to make a disclosure?

In your office's disposition of reporting about disclosures, do you separate disclosures from within the public service and complaints from the general public? If they are not reported separately, why not? Are you considering changing this?

Could you comment on what you have learned about how the general public is using your office and what you are considering for the future?

As a more general question, does your office have counterparts in other governments around the world? If so, how are you connected to best practices in this field?

Mr. Dion: I will try to answer these questions, and if I find there is a significant element missing, I will provide a further written answer.

The Chair: Thank you. You may provide the written answer to the clerk, and the clerk will make it available to all senators.

Mr. Dion: I have been at the office since December 2010. We were in a crisis situation when I assumed the duties of interim commissioner. We did not devote any energy during the last year to publicizing the work of the office so that members of the public are made aware of its existence and the fact that they have access to it. Some efforts on that were made in previous years.

I hope honourable senators will see that we are back to an era of normalcy when the next annual report is filed. I intend to resume several of the activities that are worthwhile and important, which were suspended because we were dealing with a very unusual situation of turnover and files that needed to completely be revisited.

In our reports, we do not distinguish between complaints coming from members of the public and those within the public service.

At this point in time a very small proportion of complaints come from members of the public, in the order of fewer than 10 per cent, I would say. The act prescribes the manner in which we report the numbers in our annual report and does not create that distinction, but it would be entirely open to the office to publish with that distinction because the act mandates a minimum. We can do more than what the act requires, and I can make a commitment this morning that we will, starting with our next annual report, distinguish complaints coming from members of the public from those coming from within the federal public sector.

The last point was about international intergovernmental relations. The office has had activities involving exchanges with the four jurisdictions in Canada that I think have a similar office. New Brunswick has one; Ontario has one; Manitoba has one; and I think Newfoundland is the fourth jurisdiction. There is an annual meeting of commissioners or counterparts, which we attended a couple of months ago in Winnipeg.

The legislatures in the various provinces that have created such an office are generally modelled along the lines of the federal statute, so we are talking about apples and apples. The public sector varies from one province to another, but at least the parameters of what the statutes cover are essentially the same, and we can have worthwhile discussions with provincial counterparts.

My predecessor also had meetings, I believe, with the responsible person at the federal level in the United States, called the Office of Special Counsel, a very significant office created back in 1973, if my memory serves me well, as well as with officials in the United Kingdom and Australia. I intend to resume, in a modest, cost-effective way that draws on technology and economy, to resurrect those relationships, especially because we will be called to participate in a five-year review of the act as mandated in the statute. It would be interesting to see how the systems have evolved in other countries that have set up such systems in the recent past.

I hope, Mr. Chair, that answers the question to your satisfaction.

The Chair: Can you clarify that for us? When does that start?

Mr. Dion: The President of the Treasury Board has under the statute an obligation to cause an independent review to be made of the act and its operations within five years, which means that by April 15, 2012, an independent review has to be initiated, and the president has yet to decide. I have seen no announcement that the review has been launched.

The Chair: Next we have Senator Hervieux-Payette from Quebec.


Senator Hervieux-Payette: Mr. Dion, welcome. I must say that, in French, the expression "acte répréhensible'' is not very common. Perhaps it is common to you, but in everyday language, the term "acte répréhensible'' is much closer in meaning to the term "criminal offence''.

The new commissioner of the Royal Canadian Mounted Police spoke out against the fact that sexual harassment was not addressed, but we should also think about psychological harassment. Things are even more complicated when it comes to psychological harassment. Is that considered wrongdoing?

In the case of women, we may be talking about one or the other, and I do not see sexual harassment as strictly wrongdoing but rather a criminal offence. Do you investigate any psychological harassment cases? I feel that those are the most difficult cases to assess.

Mr. Dion: I want to begin by saying that the answer is not simple. I want to use this opportunity to explain that the definition of wrongdoing is set out in section 8 of the act. The act stipulates that any contravention of a federal or provincial piece of legislation constitutes wrongdoing.

Under the act, a violation of the Criminal Code automatically constitutes wrongdoing. Subsection (b) covers the misuse of public funds or public assets; subsection (c) covers gross mismanagement; subsection I covers the infliction of substantial and specific danger on the life, health or safety of persons, or on the environment; subsection (e) covers serious breaches of a code of ethics or conduct established under section 5 of the act; finally, subsection (f) covers the act of knowingly directing or counselling a person to commit a wrongdoing.

As for harassment in a situation that would not constitute a criminal offence, the office has so far considered that it had no jurisdiction over such offences, unless they involved gross mismanagement. It depends on the facts.

If we are talking about an isolated case, a situation that lasted a few seconds, involving an employee and their manager, for instance, it would be considered a violation of a Treasury Board directive, and that does not come under the definition set out in the act. We have no jurisdiction.

In the coming months, the situation will change completely because the president of the Treasury Board has submitted to the Senate and the House of Commons a draft code of conduct within the meaning of our act, which contains clear provisions. Therefore, if a serious violation of the code of conduct were to occur, the Treasury Board would have jurisdiction, and psychological harassment cases would come under that jurisdiction.

Psychological harassment generally occurs over a period of time and is pernicious and prolonged in nature. The Treasury Board will have jurisdiction over such cases as soon as the new code of conduct comes into effect, as planned on April 2.

Senator Hervieux-Payette: Will that apply to sexual harassment cases that constitute criminal offences?

Mr. Dion: It will depend on the nature of the sexual harassment. Some things are considered criminal offences and others are not. It depends on what is involved in terms of the actus reus, as they say in criminal law.

Senator Hervieux-Payette: Which public servants can use your services? Are we talking about all public servants employed by all crown corporations and federal government institutions, or is it limited to a certain number of them? Are we talking about 20,000, 30,000, 50,000 or 100,000 public servants?

Mr. Dion: As far as the federal public service goes, the former commissioner calculated that there were about 400,000 people. Three large organizations are expressly excluded from the application of the act. I am talking about the Canadian Forces, the Canadian Security Intelligence Service and the Canadian Security Establishment. So, all told, there would be about 400,000 public servants, less the ones who work for those three organizations.

Senator Hervieux-Payette: Why is National Defence not part of that?

Mr. Dion: When the act was passed, the Canadian Forces were expressly excluded. I must admit that I have never looked into why they were left out. I have my own theories, but I do not know what the real reasons are.

Senator Hervieux-Payette: I think that all employees should have the same rights, the same choice, and that is certainly not a matter of national security. I think that sexual harassment issues have been just as present in the army as in the Royal Canadian Mounted Police.

What kind of training do your investigators have? When it must be decided whether the case involves mismanagement or misappropriation of funds, I assume you need to have people with different types of training?

Mr. Dion: Our investigators have different types of training and different types of experience. Earlier, I talked about a fairly limited number because the office is small. If we go by the public service classification system, our office has three levels of investigators: AS-5, AS-6 and AS-7. By definition, each of those is more experienced than the last.

When we assign cases based on complexity or the area of specialization — because, for instance, an allegation of misusing public funds is completely different from an allegation of inflicting substantial danger on the environment — specialization is taken into account when making the initial selection. When hiring someone, we keep in mind our future workload needs so as to be able to refer the files of a certain nature to a person with experience in other organizations. That experience often comes from other government organizations, be they federal, provincial or even municipal. We have some people who have experience in police matters. However, most of our employees have no such experience, but do have experience in other areas, such as transportation, the environment, and so on. That is how we proceed.

Next month, we will be providing a more uniform training program on investigation techniques — more generic techniques, if you will — and the steps to follow during an investigation, regardless of its nature or the specific area it relates to. That is how we work, Mr. Chair.

Senator Hervieux-Payette: Let us imagine the vehicle inspection office dishonestly overlooking a process that is dangerous for the public. An employee says that the process is dangerous, but a manager says that it is not because he or she may have some sort of interest in it. Can that type of situation occur in your office?

Mr. Dion: That specific situation has not occurred in our office. However, there are very similar examples of employees with a different point of view who feel that the safety of the public is jeopardized and disclose the fact that their employer, in their opinion, is committing wrongdoing through gross mismanagement. That has happened in the past. It can happen, and the act provides for that type of situation. That is why employees need to be protected, especially when they go against the desires or points of view of their first-line supervisors. That is why the legislation protects any employees in such situations.

Senator Hervieux-Payette: You have not advertised much outside the public service, but how are your 400,000 employees informed? Do they have to obtain the information on the Internet? Do they undergo training about this when they are hired? Does the public service inform them? How are current and new federal employees informed about your office?

Mr. Dion: I am familiar with a certain number of tools we use, but not all of them. Therefore, I will send the clerk additional information about that. Our means are limited, so our tools are also limited.

We often participate in national meetings attended by communities within the public service. We have a booth set up at meetings attended by hundreds of people over two or three days. We hand out documentation and promotional items that remind people that our office exists, such as coffee mugs.

We use the Web a lot. We will be using it more and more, since it is economical, but people first need to know that we exist.

One of the things we will focus on in our strategic plan for next year is finding practical ways to make our office more visible. It would be nice if we could send something to all federal public sector employees to remind them of our existence. However, there are rules standing in our way. I cannot send an email to 400,000 people; I first need to get permission. I am thinking about doing something like that, as I am sure that a large portion of public sector employees do not know that we exist or what we do. The legislation is complicated and is somewhat difficult to explain in detail, while being accessible. I plan on doing more to improve our visibility in the near future.


Senator Marshall: Welcome, Mr. Dion. I wanted to speak about the cases. When you appeared before the Committee of the Whole before Christmas you did give us an update on cases, and you talked about the Deloitte review. When you testified before the House of Commons Standing Committee on Government Operations and Estimates, you indicated that one of your greatest challenges continues to be how to respond to criticism that no case of wrongdoing has yet been the subject of a case report to Parliament.

I am wondering whether you could elaborate on that because earlier in your testimony you were speaking about two cases that have been sent to court. What criteria would a case have to meet in order to qualify as a case report to Parliament? I did notice, reading your annual report, that there is no, or very little, information in there with regard to individual cases. I know some ombudsmen do provide examples of cases they have dealt with. Could you elaborate on that issue with regard to case reports?

Mr. Dion: Thank you very much for the question. There are two streams in our statute. There is the disclosure of wrongdoing — that is one stream — which, if well-founded, will end up in a case report to Parliament. The second stream is allegations of reprisal. Someone alleges that as a result of having made a disclosure they have been subjected to reprisals. The end of the process for reprisals is a reference to the tribunal. It is two different streams.

If someone makes a disclosure, we investigate, and we conclude that there was indeed a wrongdoing within the meaning of the act. "Acte répréhensible'' in French equals "wrongdoing'' in English. If we are of the view that there has been a wrongdoing, as alleged, then, after having observed the rules of natural justice vis-à-vis the alleged wrongdoer and the department or the agency involved, it will culminate with the tabling of a report in the House of Commons and the Senate. I expect we will be doing that in the near future.

The second stream is tribunal. When the committee believes, on reasonable grounds, after an investigation has been conducted, that reprisals did indeed take place, they may refer the case to a special tribunal that has been set up for that purpose under the statute. We have done so in two cases already. I spoke about 98 active files. Thirty of these files are full-fledged investigations, 12 investigations of reprisals and 18 investigations of wrongdoing. Before something finds its way before Parliament or the case tribunal, it has to first be the subject of an investigation. Mathematically speaking, it is very likely we will have a few cases to report to Parliament, and we will have cases to refer to the tribunal because we have 35 active investigations, most of which were decided by me since I was appointed interim commissioner. I felt the need to investigate, which essentially means there is something to investigate, unlike cases that are not going forward. I expect there will be some action in the coming months.

Senator Marshall: If I understand you correctly, cases that go before the tribunal do not necessarily go before the courts. It is two different streams, is it not?

Mr. Dion: The tribunal is a special court, if you wish, set up by the statute. It is composed of three judges of the Federal Court. It is people who typically sit at the Federal Court who have been appointed especially to be members of the tribunal.

Senator Marshall: Some of the cases that go to court and the tribunal would eventually end up before Parliament and the Senate. Some of them, but not all of them, right?

Mr. Dion: There is no reprisal without a wrongdoing, but there can be a wrongdoing without reprisals.

Senator Marshall: I understand.

Senator Callbeck: Thank you, Mr. Chair. Welcome, Mr. Dion. You said there have been about 75 to 80 disclosures every year. I believe you also said you expect the number to increase this year; by how much?

Mr. Dion: In fact, I do not expect anything. I know that it has increased. Doing a comparison, during the first three quarters of fiscal year 2010-11 we had a 53 per cent increase in the number of cases. This year to date, we have received 64 disclosures and 30 reprisals; and we still have two months before the fiscal year ends. The number we have received this fiscal year is 94, with two months yet to go. Our typical case load is about 100 per year; so it will increase significantly. The quarter-over-quarter comparison is 63 per cent. I do not know how many we will receive because it fluctuates. In some months we receive 1 or 2 while in other months we receive 14. It is impossible to predict the numbers because they go up and down. It is a large public sector with some 400,000 people, so it is hard to know whether 10 people or 2 people will have problems this month; it is impossible to know.

Senator Callbeck: That is quite an increase. There are rumours from time to time that public servants or the public are really hesitant to make a disclosure. Are we protecting these people enough? I would like to hear you express your opinion on that. Are there other things that should be done to protect them?

Mr. Dion: Our act provides protection to public servants. It does not provide protection to people who have never been public servants. The only protection provided for in the act is against reprisals in the workplace if you have been a public servant or if you are a public servant. It is clear through the evidence that coming forward and disclosing a wrongdoing is indeed difficult. It is fraught with peril. The act goes farther than it ever went before in Canada to try to create a climate that makes it possible for someone to come forward and disclose a wrongdoing. In spite of that, it is still a very risky enterprise. People feel it is risky. The culture within the public sector and the public service has improved over the last several decades, but it is still a serious act. That is why confidentiality is so important in disclosures of wrongdoing. Someone who comes forward will want to be sure that it will not be known until the time comes for it to be known. That is one of the pillars on which we insist. For instance, the manner in which we do security reviews of incoming employees is very rigorous to ensure that this remains the case.

I have to function within the statute — that is rule number one, as far as I am concerned. However, I tend to take a liberal interpretation of the statute to ensure that it allows what it is supposed to allow by way of disclosure and that those who exercise reprisals will be punished. I believe in the need to deter people who might be tempted to commit wrongdoings or to exercise reprisals. Within the confines of the act, when I have to make a decision I will err on the side of making the decision that pursues the objective of the act, as opposed to trying to reserve those decisions to the most exceptional situations, which would be wrong. I have already started to do that on several files.

I hope, Mr. Chair, that this somewhat starts to answer the question; it is a very complex matter.

Senator Callbeck: I can appreciate that. Does it include contract employees?

Mr. Dion: It includes any member of the public. A term employee, an indeterminate employee and a casual employee are all employees within the meaning of the act. They are at the same level and are covered under the act. We have three categories of employees: casual, term and indeterminate. They are employees within the act and they all have access. Members of the public, by virtue of section 33, have access to the system but do not enjoy protection from reprisals.

Senator Callbeck: Do contract employees have the protection?

Mr. Dion: Yes. "Contract employees'' is a misnomer because one who is under contract is not an employee. In the private sector, one who signs a contract to do work or offer services is not an employee within the meaning of any statute, including ours. That person is a member of the public.

Senator Callbeck: They have no protection.

Mr. Dion: No. I am sorry to be so technical.

Senator Runciman: Mr. Dion, you talked about protection of employees. You also said that the matter will not be known until it is time for it to be known. What do you mean by that? Is there some point during a process that the complainant's identity becomes known?

Mr. Dion: We always have two streams. In the case of a disclosure of wrongdoing, the person comes to our office and we decide to launch an investigation. We can do this without revealing who has made the disclosure; and in some settings it is not difficult. We begin the investigation and we go to see the person's supervisor. If the supervisor supervises only two people, it is quite possible to have an idea of who it is. To the extent of our capacity, we keep it confidential under section 44, as I mentioned.

If it goes before the tribunal, then confidentiality is gone because the tribunal, like any court of law except in the most exceptional circumstances is a public forum. The fact that Mr. X alleges that he has been subjected to reprisals becomes public knowledge, as well as everything else contained in the pleadings.

Senator Runciman: Going before the tribunal is still a bit of a gamble if the tribunal does not support the complaint. Is there a relationship with respect to whistle-blower legislation? Does that have any relationship to what your office does?

Mr. Dion: We are the whistle-blower office. The act does not use the word "whistle-blower,'' but that is indeed what it is.

Senator Runciman: That is the whole role. If a complainant has another avenue available, for example through filing a grievance as a union member, do you point them in that direction or do you take it on so that two complaint streams are being undertaken?

Mr. Dion: If the grievance has been filed, I am prevented from going forward. If a process is under way or if I am of the view that another existing process would be more appropriate, I am essentially in a position of either having to say or it being mandatory to say no. Sometimes the act says "the commissioner shall refuse'' to deal with a complaint in situation X, Y or Z, such as in the case of a grievance being filed. Then, I am prohibited from going any further. In some situations, it says that "the commissioner may refuse.'' For example, if too much time has elapsed since the events captured in the complaint, I have the discretion not to proceed further. There is a long list of situations where I have to say no or where I may say no under the act.

Senator Runciman: One of the concerns of your predecessor was morale within the organization. Obviously, you have had an opportunity to look at that and determine whether the concern was valid. If it was, how have you addressed it?

Mr. Dion: More than two thirds of the 35 people I am talking about this morning were not there in December 2010; the population has changed. People left for promotions or lateral assignments elsewhere in the public sector.

Although this is somewhat dated, it is important to state that when I did take office in December 2010, the morale of the staff was much higher than I had predicted it would be after reading the report of the Auditor General. I was quite encouraged. Perhaps the morale had evolved since the report was written.

It was a perfectly normal office, essentially, with many vacancies, which we carefully filled to try to build a positive work atmosphere, and I think that is what we have achieved at this point. It is always fragile. A positive work atmosphere should not be taken for granted because we have a difficult mandate and it has to be nurtured daily through decisions. Every decision you make is important, and the climate within the public service is somewhat difficult, as I am sure you have heard, so we have to ensure the morale remains good.

Senator Runciman: I think I know your answer to this, but I read I think from when you appeared before the house committee that you acknowledged the credibility problem essentially because it has not found any cases of wrongdoing since the office was created. It seems the whole justification for undergoing a five-year review, although the mandate is going to be expanded, is that it seems to me you have said here we have to find cases of wrongdoing to suggest that this office is working appropriately and properly. Does that raise some pressures for the office that perhaps could be suspect?

Mr. Dion: With 98 active files, 35 investigations, I am very confident that within the parameters of the act we will find some valid cases. My outlook on this whole situation is I am there to implement the statute. We get the cases we get. Some cases are better than others. Some cases are much more important than others. We have to deal with each case in a manner consistent with the statute, in a fair manner, because even though the case may not appear important it is important to the person who has disclosed or has made the complaint. I am confident we will end up with some results, but I am not striving for a quota.

Being in a post-retirement situation, my mission in life is not to make sure I keep a job for the next 30 years. I am one of the few individuals in Canada with a global view of the caseload. It will happen; I know it will happen.

Senator Runciman: Do you accept under any circumstances anonymous complaints?

Mr. Dion: We do. Of the 98, we have a few that are anonymous complaints. We need enough information to initiate some inquiries or investigations. We do accept anonymous complaints when there is enough specificity.

Senator Runciman: I have a problem with anonymous complaints and the nature that they could impact people's lives in a negative way, but as long as you are giving it very thorough scrutiny with respect to the specifics of the complaints and the merit behind them, that will give me comfort.

Mr. Dion: It is another very sensitive issue surrounding the operations of our office which has to be decided on a case-by-case basis because it is too easy as well.

The Chair: I will just conclude by asking a couple of points, and if you wish to reply in writing, Mr. Dion, that would be fine too.

First, given that this legislation is new and that there were clearly some growing pains with respect to the commission, have you made any suggestions or would you like to now make any suggestions with respect to amendments that should be made to the legislation?

Mr. Dion: As the five-year review is imminent, we have done some work to compile a list of possible suggestions for consideration regarding some of the provisions in the statute. For instance, section 34 prohibits the commissioner from going beyond the federal public sector in any investigation that is conducted. So if we have an alleged reprisal against Mr. X and Mr. X retires, Mr. X becomes untouchable. So section 34 will be on my list. It is probably the most important section for consideration. It has defeated the purposes of the act.

The Chair: I understand that, but could you provide us with your list of sections that you believe require some attention and some amendment?

Mr. Dion: I will review what we have done and I will communicate with the clerk and exchange some information.

The Chair: Thank you. That would be helpful in giving us an understanding and showing us what you were doing during your time as interim commissioner as well in providing a new, fresh look at this commission and the legislation.

Second, given that you have worked in the public service and have experience there and have obviously met many people in the public service in the various jobs that you have held, what steps are you taking and what are you doing to avoid conflict of interest or potential conflict of interest where you might end up having to investigate someone that you know?

Mr. Dion: Every two weeks I meet with the director of operations and the deputy commissioner at the office, and we go over every case received during those two weeks. On three occasions to this point in time since December 2010 I have signalled right at the onset that I will not be able to deal with this case because there is an allegation against Ms. X or Mr. Y. Because of a concern about appearance of conflict, even if in some situations I do not sense a conflict, I recuse myself at square one, and every such case will be dealt with from a decision-making point of view by the deputy commissioner. I currently have asked for some legal advice on what happens on the day that both I and the deputy commissioner have a conflict, real or perceived. We have to find a solution should that happen, and it is mathematically possible that it will happen.

The Chair: Do you have that protocol in writing, and is that something the public can become aware of through your advertising campaign? It is the appearance of conflict that is —

Mr. Dion: It is not currently in writing, but we are developing a series of decision-making policies involving our advisory committee, and in so doing we have members of the public on the advisory committee, and we will have one dealing with this issue of conflict — recusal, essentially, as we call it in the judicial sphere, the need to recuse oneself when there is a perceived risk.

The Chair: When you generate that particular protocol in writing, could you provide us with a copy of it so we can keep on top of that?

Mr. Dion: Yes, we will, and we will include the result of the legal advice I was mentioning.

The Chair: Thank you. That would be helpful, and we will look forward to participating in some manner in the legislative review since we participated in the legislation when it was originally passed. We will also look forward to your first report as commissioner in due course.

Thank you very much for being here, and we appreciate your openness and frankness in helping us understand your objectives and your challenge.

Mr. Dion: Thank you very much.

The Chair: This meeting, colleagues, is now concluded.

(The committee adjourned.)