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Responses to Parliamentary Committees and External Audits

Responses to Parliamentary Committees

Ninth Report of the Standing Committee on Public Accounts (PACP), Chapter 2, "Intellectual Property," of the Spring 2009 Report of the Auditor General of Canada

The Government of Canada tabled its response to the Ninth Report of the Standing Committee on Public Accounts (PACP), Chapter 2, "Intellectual Property," of the Spring 2009 Report of the Auditor General of Canada, which was tabled in the House of Commons on April 19, 2010. Industry Canada, along with Treasury Board Secretariat, was implicated in recommendations 2, 3 and 5 of the PACP report with recommendation 4 involving National Research Council of Canada, a member organization of the Industry Canada Portfolio. The responses centred on Industry Canada and the Treasury Board of Canada Secretariat's joint responsibility for monitoring and evaluation of other organizations' implementation of the Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts.

Government Response to the Fifteenth Report of the Standing Committee on Public Accounts: Selected Departmental Performance Reports for 2008–2009 — Department of Industry and Department of Transport

On September 20, 2010, the Standing Committee on Public Accounts tabled Report 15 entitled Selected Departmental Performance Reports for 2008–2009 — Department of Industry, Department of Transport. As required, the Government has developed a comprehensive response to the seven recommendations made in Report 15. This response was developed collaboratively by the Treasury Board Secretariat, Industry Canada, Transport Canada and the Privy Council Office.

Recommendations 1, 2, 3 and 4 involved Industry Canada. The Department responded positively to all, with responses focused on the more detailed reporting in the DPR and clearer links between departmental activities, expected results and actual performance.

Competition Bureau

House of Commons Committee on Industry, Science and Technology
On July 20, 2010, Competition Bureau (Bureau) officials appeared before the House of Commons Committee on Industry, Science and Technology to provide evidence on its study on the impending closure of the Shell Oil Refinery in Montréal. The Bureau confirmed that the issue fell outside its mandate, although a review could be triggered in the event of a sale under the merger provisions of the Competition Act, but not in the case of a closure. 

Bureau officials also appeared before this Committee on December 9, 2010, to provide evidence on its study of Bill C-452, An Act to Amend the Competition Act (inquiry into industry sector).  Bureau officials noted that, with the passage of Bill C-10 in 2009, the anti-cartel provision of the Competition Act was amended to create a more effective criminal enforcement regime for those engaging to fix prices, allocate markets or restrict output. It was further noted that these changes came into force following the introduction of Bill C-452. Finally, it was confirmed that the Commissioner of Competition has the authority to commence an inquiry without receiving a complaint and, of the formal inquiries being conducted by the Bureau at the time, approximately 30% were initiated without a complaint.

Senate Committee on Transport and Communications
On December 7, 2010, Bureau officials appeared before the Senate Committee on Transport and Communications during its study of emerging issues in the airline industry. Bureau officials provided evidence on the merger review process, issues relating to unfair pricing, collusion and the ongoing Air Cargo investigation.

Senate Banking, Trade and Commerce Committee
Bureau officials also appeared before the Senate Banking, Trade and Commerce Committee on February 9, 2011, to provide evidence during its review of Bill S-201, An Act to Amend the Office of the Superintendent of Financial Institutions Act (credit and debit cards). The Bureau outlined its mandate and discussed its recent announcement challenging Visa and Mastercard's anti-competitive rules. It was also noted that Bill S-201 does not directly relate to the scope and mandate of the Competition Act.  The witness concluded by reminding Committee members that the Bureau does not have the authority under the Competition Act to regulate the daily operations of markets or the level of prices in any particular industry, including the pricing of financial services in Canada.

There were no requests made for follow-up information as a result of these appearances before parliamentary committees in 2010–2011. 

Response to the Auditor General (including to the Commissioner of the Environment and Sustainable Development)

Spring 2010 Report of the Auditor General, Chapter 2, "Modernizing Human Resource Management"
The Public Service Modernization Act (PSMA), introduced in 2003, represents the most significant reform of human resource management since the 1960s. A complex undertaking, the legislation brings into play a multitude of stakeholders, from central human resource agencies to deputy heads, line managers and human resource professionals. The Act, which amends four pieces of legislation, is designed to transform the way the federal government hires, manages and supports its employees. It calls for more flexible approaches to hiring, clearer roles and accountability for human resource management, harmonious labour-management relations, and better integration of training and development for public service employees.

In 2005, an OAG audit reported that the Government had established a strong foundation for managing the implementation of the PSMA. The 2009 audit looked at the impacts of the legislation on the human resource management regime. The audit consisted of review of documentation and interviews in the six organizations with direct responsibilities under the PSMA: the Privy Council Office, the Treasury Board of Canada Secretariat (including the Office of the Chief Human Resources Officer), the Public Service Commission, the Canada School of Public Service, the Public Service Labour Relations Board and the Public Service Staffing Tribunal. The OAG also met with officials of six selected entities, including Industry Canada, and held structured interviews with a sample of deputy heads.

The audit findings included the observation that the key requirements of the legislation have been implemented. Changes have been made to allow for more flexibility in how the public service is staffed and how recourse is managed. Primary responsibility for human resource management has been transferred to deputy heads, who now exercise those direct responsibilities as well as those delegated to them for human resource management and staffing. The Treasury Board of Canada Secretariat and the PSMA Legislative Review Team agreed with the recommendations of the audit and provided responses to each recommendation. No specific recommendations were directed at the interviewed entities, including Industry Canada.

The full report can be accessed at the Office of the Auditor General's website.

Fall 2010 Report of the Auditor General, Chapter 1, "Canada's Economic Action Plan"
In late 2008 and early 2009, Canada was in the midst of a global economic downturn. The federal budget in January 2009, titled Canada's Economic Action Plan (EAP), was designed to respond to this downturn by stimulating the economy, in part by increasing government spending for sectors of the economy and regions of the country in need. The EAP sought to stimulate spending by Canadians, stimulate housing construction, build infrastructure, and support businesses and communities. Together, these initiatives amounted to about $40 billion, with an additional $12 billion funded by the provinces and territories. These amounts were subsequently increased to about $47 billion in federal stimulus and $14 billion from provinces and territories.

Over 35 federal entities, including Industry Canada, worked to deliver close to 90 programs in support of the EAP. Industry Canada programs included the Knowledge Infrastructure Program (KIP) and the Marquee Tourism Events Program (MTEP).
 
The OAG audited the EAP as it was being delivered and looked at how programs were designed and delivered and what steps were taken to ensure that only eligible projects were funded. Eleven programs, including KIP and MTEP, were selected for examination. The audit included the role played by central agencies: the Privy Council Office, the Treasury Board of Canada Secretariat and the Department of Finance Canada. The scope included three primary departments for detailed audit work and/or potential reliance on internal audit: Industry Canada, Infrastructure Canada, and Indian and Northern Affairs Canada.

The audit findings included the observation that central agencies and departments took steps to ensure that programs were designed and processes streamlined to allow individual projects to be selected and funds to be allocated quickly. For example, the Privy Council Office and Treasury Board of Canada Secretariat used an accelerated process to speed up the policy and financial approvals for many EAP programs, such as the KIP. As a result, the total time needed to design, review and approve programs was reduced from the approximately six months normally required to two months. All the projects reviewed met the eligibility criteria as set out in the program terms and conditions. Important considerations for eligibility were that projects would start quickly and be substantially completed by March 31, 2011.

The Treasury Board of Canada Secretariat, the Department of Finance Canada and the Privy Council Office agreed with the recommendations of the audit and provided responses to each recommendation. No specific recommendations were directed at Industry Canada.

The full report can be accessed at the Office of the Auditor General's website.

2010 Fall Report of the Commissioner of the Environment and Sustainable Development, Chapter 4, "Environmental Petitions"

The environmental petitions process provides Canadians with a formal means to bring their concerns about environmental issues to the attention of federal ministers and departments and to obtain a response to their concerns. On behalf of the Auditor General of Canada, the Commissioner of the Environment and Sustainable Development (CESD) manages the environmental petitions process and monitors responses of federal ministers. As required by the Act, the Commissioner reports annually on the quantity, nature and status of petitions received and on the timeliness of departmental responses.

The Annual Report on Petitions and Responses covers the period between July 1, 2009, and June 30, 2010. During this period 18 new petitions were received by the CESD. Two of those, petitions 287 and 301, were directed at Industry Canada. Petition 287 was responded to on time on October 26, 2009, and was reported on in Industry Canada's 2009–10 DPR. The other was received on June 30, 2010, and responded to on December 14, 2010.

In addition, two new petitions (301-B and 306) were received in January 2011. They will be reported on in the 2011 CESD report.

Brief summaries of all petitions received by the Office of the Auditor General are posted shortly after they are forwarded to the responding departments. The full text of petitions is posted to the catalogue, with the petitioners' consent, after they are tabled in the House of Commons. The CESD's petitions catalogue is available at the Office of the Auditor General's website.

2010–2011 Activities

Response 
Petition 301 — Alleged misinterpretation of exclusion list conditions under the Canadian Environmental Assessment Act related to the construction of a communications tower in Pontiac, Quebec

Pending Responses
Petition 301-B — Follow-up petition on the alleged misinterpretation of exclusion list conditions under the Canadian Environmental Assessment Act related to the construction of a communications tower in Pontiac, Quebec

Petition 306 — Regulation of biosolid-based fertilizers under the Fertilizers Act

2010 Fall Report of the Commissioner of the Environment and Sustainable Development, Chapter 4, "Environmental Petitions" (December 2010)
Department or Agency	Number of Responses Due	Number of Late Responses	Percentage on Time (%)	Notifications of Delay*
Industry Canada	1	0	100	0

 * A response is not considered to be late if the petitioner is notified of an expected delay before the due date.

External Audits

• Audit by the Office of the Privacy Commissioner of Canada — Personal Information Disposal Practices in Selected Federal Institutions
  Sector: Computers for Schools Program, Regional Operations (October 2010).
  The full report can be accessed at Office of the Privacy Commissioner's website.

• Public Service Commission — Study on the Use of Temporary Help Services (October 2010).
  The full report can be accessed on the Public Service Commission's website.

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