HANSARD
Printed and Published by Nova Scotia Hansard Reporting Services
Ms. Maureen MacDonald (Chair)
Mr. James DeWolfe (Vice-Chairman)
Mr. Keith Colwell
In Attendance:
Ms. Mora Stevens
Legislative Committee Clerk
Mr. Roy Salmon
Auditor General
Mr. Daniel Boyd
Researcher
PC Caucus
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HALIFAX, FRIDAY, JANUARY 27, 2006
SUBCOMMITTEE ON PUBLIC ACCOUNTS
9:30 A.M.
CHAIR
Ms. Maureen MacDonald
VICE-CHAIRMAN
Mr. James DeWolfe
MADAM CHAIR: I will call the subcommittee to order and maybe if we just introduce ourselves and give Hansard an opportunity to adjust the microphones.
[The committee members introduced themselves.]
MADAM CHAIR: The purpose of this meeting is to establish more topics so Mora can have some time to do the advanced planning and arrangements. Now I can't remember if we exhausted the previous list we had. Yes, we have exhausted the previous list?
MR. JAMES DEWOLFE: We finished up with what was on the list.
MADAM CHAIR: We did knock a few things off.
MR. DEWOLFE: We knocked off a few, but there were still some outstanding.
MS. MORA STEVENS (Legislative Committee Coordinator): Everything that was approved has now been scheduled.
MADAM CHAIR: But there might have still been things . . .
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MR. DEWOLFE: Oh, no, that's not what I'm talking about. We got to a point where we said this is enough.
MS. STEVENS: Oh, I see, your list you mean.
MADAM CHAIR: Well, the collective list.
MR. DEWOLFE: Yes, the collective list.
MADAM CHAIR: Yes.
MR. DEWOLFE: So we said we have enough for now, that's going to take us through Christmas, and then we adjourned.
MS. STEVENS: There were a couple of other matters discussed, but everything that was approved was scheduled.
MADAM CHAIR: Everything?
MS. STEVENS: Yes.
MR. DEWOLFE: But there were other items on those lists that weren't approved that we didn't deal with, that we didn't finalize.
MADAM CHAIR: That's right. The one thing I can recall is the Nova Scotia Liquor Corporation and the business around Saltscapes Magazine. That was a request to appear.
MS. STEVENS: That was sent to Economic Development.
MADAM CHAIR: Has it been dealt with there or did it come back?
MS. STEVENS: Not formally, but they basically said no.
MADAM CHAIR: They've said no.
MS. STEVENS: But they haven't said that formally.
MADAM CHAIR: Yes, okay. The other one was the AgraPoint.
MS. STEVENS: It is gone to Resources.
MADAM CHAIR: And is Resources going to hear it?
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MS. STEVENS: Yes.
MR. DEWOLFE: It's on the list.
MADAM CHAIR: Yes, okay.
MR. DEWOLFE: The Department of Finance - the debt repayment plan.
MADAM CHAIR: Right, that was on the list as well. Okay. So maybe we'll start with you, Keith, do you have additional items that you would like to have us consider?
MR. KEITH COLWELL: I have four other items here. One of them was put forward to the Resources Committee, but this is a big, big, big issue, and it might be wise to bring in maybe some different people than Resources have. It's the Sydney Environmental Resources of Sydney Steel - expenditure accountability. Then another one I have is the housing agreement with the federal government on affordable housing, and there's the Colchester-East Hants District Health Authority business plan and the Capital District business plan, two separate ones, or they could be put into one. Those are the ones I've got.
MADAM CHAIR: Jim.
MR. DEWOLFE: Well, as I said, the Department of Finance's debt repayment plan, and I had the Department of Tourism, Culture and Heritage and we have that on now for the Bluenose, the other will take care of anything that we want to bring to the table on that. That's all I have at the moment.
MADAM CHAIR: Well, okay, I have a number of things. I have the maintenance enforcement folks to find out what controls are in place, given this question of money being taken from some administrative fund. So that's one thing. I also have, from the Auditor General's Report, Community Services, particularly with respect to the child care centres and sort of the regulation and mechanisms that are in place around child care expenditures - I think most of the ones I have actually come out of the AG's Report. So the Department of Finance, with respect to contracting out for outside consultant work, Department of Education around the student aid program, I also have Community Services, the housing agreement, Keith, same as you do, to get an accounting for that.
The other thing in Community Services that was discussed back in 2002, I think was the dental program, under Community Services, the quick card program, which handles the children's dental program and the Department of Community Services Program. It's a private contract. The Blue Cross agreement, which is new, it's worth millions, it's the contract for MSI and Pharmacare with Medavie?
MR. DEWOLFE: This is an additional item, is it?
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MADAM CHAIR: Yes. I'm just throwing out the things that I brought from my list.
MR. DEWOLFE: A renewed Blue Cross agreement, is it?
MADAM CHAIR: Yes.
MR. DEWOLFE: Under maintenance enforcement, you said the monies that were taken from the fund. What are you referring to there?
MADAM CHAIR: Well, I really don't know. I guess that would be part of looking at it. This week in the news, I guess at this stage it is still an alleged fraud, but $200,000 has gone missing.
MR. DEWOLFE: Yes. They said that it wasn't monies that were going out for enforcement.
MADAM CHAIR: They said it was from sort of an administrative fund, I don't know if we have ever really looked at that program. Maybe Roy could help, if that is something that has ever been audited, the Maintenance Enforcement Program?
MR. SALMON: Not to my knowledge, no.
MADAM CHAIR: It would be useful to know about this program a bit more, and what controls are in place in terms of - I mean, this is the second relatively large situation of misappropriation.
MR. COLWELL: That we know about.
MR. DEWOLFE: That they know about.
MADAM CHAIR: Yes. So much of our focus is on controls and what controls are in place and double checking.
MR. DEWOLFE: I think the previous one was the situation that we looked into, wasn't it? The proper controls are put in place now, but that was a situation where one person could follow this right through to fruition, which isn't a good thing.
MADAM CHAIR: That is right. I think in the most recent report for Community Services, there was a flag raised that one person can continue on a file from beginning until end and the checks may not be there. I don't know if you would like to help us with that?
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MR. ROY SALMON: Well, we are not sure what happened in the Department of Justice with maintenance enforcement, but we have raised concerns with regard to the adequacy of controls in a number of programs and it comes down to segregation of duties and proper supervision. It very well may be a resource issue, a staffing issue that is causing these things to happen, but it is of concern when something like this can happen. My understanding is this person became aware that the department was going to launch its own internal audit, and when she heard that, she came forward and admitted that she had taken this money.
MR. DEWOLFE: This current case?
MR. SALMON: Yes, just this past week.
MADAM CHAIR: That is how it has certainly been reported, that that is what occurred. It's $200,000. I mean, it's not small. This is quite significant.
MR. COLWELL: Let's put it on the list.
MS. STEVENS: There would be a question around how you would like to handle it. The last time that a fraud case was dealt with, Justice and the Legislative Counsel Office had raised that concern and we had the meeting over here, it wasn't televised because it was an ongoing case that was referred to the RCMP. So there is just a matter of how the committee would like to handle it. I know they raised that concern last time.
MADAM CHAIR: I mean, we don't have the authority, nor would it be proper if an investigation is going on for us to attempt to investigate. That is not the purpose of what we are looking at, to investigate this specific case and examine the facts and all of that kind of stuff. We are not a court of law. What I think we need to do is look at the program, first of all, to understand the structure of the program. I have no idea where administrative fees would come from in that program, for example, but that is something I would like to know because it was expressed that this was not from money that would be going to families, this was from an administrative pool of money. Well, what is that? I don't know what that is. I would like to know about that and I would like to know what controls they have in place, and what controls were in place prior to this coming into the public domain and, now that this has occurred, what are they doing? That is the focus, rather than examining the case. I think that is very much in the public interest and should be in the public domain.
MR. COLWELL: I would agree with that.
MADAM CHAIR: Okay, so there we have this one. What about maybe the housing agreement, to put that on. That is on at least two lists. I think the Housing people were in about a year and half ago and it would be bringing them back for an update?
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[9:45 a.m.]
MS. STEVENS: They are coming in on February 8th to deal with the housing repair and retrofitting programs, as well as any questions surrounding the Affordable Housing Agreement.
MR. COLWELL: Are we going to have enough time to do that though, at that session? They are two different issues.
MADAM CHAIR: I think Keith is probably right. Maybe we should bring them back again.
MS. STEVENS: Separately then? Okay.
MR. COLWELL: This housing agreement is a big issue. People need housing and the money's not being spent, it's crazy.
MR. DEWOLFE: How much money can we afford to put into it, I guess that's the question. Just about every area of government could use more money, but we don't have the tax base to generate that money, do we?
MR. COLWELL: Yes, but there's federal money there to spend on it and it's not being spent.
MR. DEWOLFE: Well that will be coming now, you got rid of the rascals.
MS. STEVENS: Shall I let the department know that we'll only talk about the housing repair program for February 8th and then we'll bring them in separately. That would help them in their preparations.
MADAM CHAIR: Absolutely.
MS. STEVENS: Okay, thank you.
MADAM CHAIR: Okay. I want to go back to whether or not we want to bring in NSLC, given that we had sent them to another committee, but it's not going to be heard there. Do we want to bring them in and get that off the backlog?
MR. DEWOLFE: Yes.
MADAM CHAIR: The question is about the Nova Scotia Liquor Corporation and the request we had to have them appear in front of us with respect to their publication, and there may be some additional issues around their pricing and those kinds of things.
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MR. COLWELL: Saltscapes was involved in this too, right?
MADAM CHAIR: Yes.
MR. COLWELL: Let's bring them in too. Same time.
MS. STEVENS: Is it before the courts?
MADAM CHAIR: I don't know. That's a very good question.
MR. COLWELL: If it's not before the courts, why not? Let's hear their side of it.
MR. DANIEL BOYD: It was my understanding it was going before the courts, now unless Saltscapes decided not to sue, but the last I heard was that they had.
MADAM CHAIR: I don't know. I recall that it may have been withdrawn. Let's double-check it, that's probably the best thing to do.
Jim had the debt repayment plan, bringing the Department of Finance in.
MR. COLWELL: I'd go along with that.
MADAM CHAIR: I would as well.
MR. COLWELL: We can ask some other questions besides that, right?
MADAM CHAIR: I think it's a good idea.
MR. COLWELL: What is the real debt?
MR. SALMON: There are some major issues we have raised with regard to the management of debt. There was a report done for the Department of Finance by Deloitte & Touche in which they denied an opinion on the adequacy of controls. It was in the management of debt, so there's lots to deal with there. It's a very complex subject because they get into the use of derivatives and do currency exchange swaps to manage the risk associated with their borrowings, instruments to swap from floating to fixed rate interest, instruments to, again, reduce their exposure and take advantage of what's going on in the currency market. There are a lot of issues there.
MR. COLWELL: If I could make an unusual request. Would it be possible for members of the committee to meet with some of your staff to discuss that so we understand what all this stuff's about? I understand a lot of it, but not all of it.
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MR. SALMON: Sure.
MR. COLWELL: Prior to the meeting?
MR. SALMON: We could do that. It would be Claude Carter and Angela Cook.
MR. COLWELL: That way when we're asking questions and they say we do this because of this, we'll understand what they're talking about, because this stuff is very complex.
MR. SALMON: It is very complex.
MADAM CHAIR: Excellent suggestion.
MR. COLWELL: Maybe not as a committee meeting, but just . . .
MR. SALMON: We could do it in camera.
MR. COLWELL: I think that would be a real good one, maybe we could put that on before some of the other ones.
MR. SALMON: I'm sure my successor would love to sit in on that to try and understand it as well.
MS. STEVENS: If I may, the Deputy Minister of Finance called me late yesterday. Because they're already scheduled to come in on the 22nd, they had a concern because the last time they came in on such an advanced topic - they're due to come in with Transportation and Public Works, Finance, and Gardner Pinfold to talk about provincial transportation agreements, gas tax - the last time when they came in on a similar subject with SNSMR, they weren't even asked a question, and they're in the midst of budget time. So I said I would bring forward the request if there's anything in writing or if there's another time that they could do it, they would be more than happy, instead of being involved in that particular meeting. It has been the committee's policy just to be very sensitive around budget time in bringing in Finance because they have to pull off all their people who are doing the budgeting, in the midst of that, to prepare for these meetings. So they just asked for it to be put on the table. I said I would bring it forward for your consideration, but it was up to you.
MR. COLWELL: If that's the case, I want to really hear about this debt repayment plan and this whole system. I wouldn't mind having that changed to the February 22nd meeting and just move that one down another week or two.
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MADAM CHAIR: I don't know, once you have people scheduled, they have made their schedules up, I'm kind of reluctant to ask people to change because if they can't do it the next week, then we'll end up with them longer. This is about the rising cost of energy. I could pretty well guarantee Finance that they're not going to be wasting two hours of their time, that there will be questions asked of them. It's not like they're going to come and sit and nobody is going to have anything to say to the Department of Finance about this, especially when you have the HST implicated here in this. So I think we should just stick with it. Two hours isn't a lot of time, three hours, let's say a half an hour on either side of that. It's not like they're bringing the whole department over either, it's a few people. So, anyway, that's my thinking about it really.
MR. DEWOLFE: You want to have a three-hour session?
MADAM CHAIR: No, I'm thinking it takes them a half an hour to get here and get their coats off and probably another half an hour to get out. It's not like they're going to lose this huge chunk of time for the whole department, that's what I sort of think.
MS. STEVENS: They did mention it was the prep time that was going to do it, like prepping for a meeting; they just don't come, they spend time in prepping. I said I would mention it. I will relay that to the department.
MADAM CHAIR: I think it is a good idea if we tried to schedule as soon as possible this whole question of debt repayment, perhaps after any of these other issues.
MR. DEWOLFE: Can I ask a question? Why does this committee feel obligated to have a meeting every Wednesday? You talk about prep time and everything, we all have that, and travel time when we live outside of metro, like many of us do. It's the most active committee in Canada. Some of them meet every second month. Some of them only meet when the House is in session. It just seems to me, quite frankly, that it's just a continuous witch hunt to try to uncover something. That's precisely what it is. It's controlled by Opposition, obviously. I'm not speaking as just a government representative, I'm speaking as a rural Nova Scotian who has to give up constituency time to get in here for these things every week as well; this week, twice.
MADAM CHAIR: Well, there are so many aspects of what you raised to respond to.
MR. DEWOLFE: I've been on this committee for many years and it seems to be getting more regular than ever before.
MADAM CHAIR: I think it has always been weekly - in the eight years that I've been here, the Public Accounts Committee generally meets on a weekly basis. It is an active committee. I think that's a really good thing. It's good for the members to get a better appreciation of the actual workings of the finances of the province from department to
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department, program to program. It's only if we have that understanding that we can represent back to our constituents and they can have a better appreciation as well. It's complex, so I appreciate perhaps if your caucus had more metro members, you could find somebody who could be here who didn't have to drive so far.
MR. DEWOLFE: Come April, we'll probably have some.
MADAM CHAIR: Jim, I think in fairness, we had this discussion earlier about some changes we wanted to make around scheduling - longer meetings, less meetings - and we haven't revisited that. Maybe what we should do is put that aside for a full discussion at a further subcommittee. What I would say in preparation for that kind of a discussion is for us to talk with our colleagues who are on the committee; it has implications for them if we decide to make some changes. We should get some input from our caucuses and then come back and share those and make some decisions about how we want to proceed.
We still have a couple of items. We have the whole question of Sydney Steel, which I think is a very interesting issue and it's a big issue, I would say. What is it precisely?
MR. COLWELL: Well, it's the amount of money that's being spent there and how it's being spent and how it's being looked after.
MADAM CHAIR: The name, I guess, is what I'm looking for. Who would we be asking to come?
MR. COLWELL: Well, we'd be looking for Sydney Environmental Resources Ltd. and Sydney Steel. It's the company that's looking after the shutdown of the operation. I can get more detail if we decide to go that way.
MADAM CHAIR: I think that's a good idea. I think sometimes we need to pay greater attention to issues that are important to the regions, especially Cape Breton.
MR. DEWOLFE: It's important to Nova Scotia. It's a big expense.
MADAM CHAIR: Yes, it is. We could put that on our list.
Jim, what was the other? You had the debt repayment plan, the Bluenose - which we're doing - but you had another one as well, and I'm sorry I can't seem . . .
MR. DEWOLFE: I had Tourism, but we're already having Tourism in so that can be dealt with then.
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MADAM CHAIR: What about looking at Community Services and the regulation of child care centres and what have you. Also, I'm quite interested in knowing what the implications are of not having a federal-provincial agreement. I mean, we have a federal-provincial agreement signed, but I don't know what that means anymore. That would be something that would be worth looking at. I don't know if money's already been spent or allocated, what the province's commitment has been.
MR. COLWELL: That would be a good idea but why don't we put it further out because, with the change in the federal government, they said they were going to change some of that. See if they do, see if they continue programs or what happens there. Maybe give them time to see how they're going to react after the election, and see how that affects Community Services. Maybe put it down the list a way, but I think it's a good thing to have on the list.
MR. DEWOLFE: Tourism - what I had in mind was essentially the fact that tourism was down and what we might be able to do to get growth going in tourism for the upcoming year. What do we have to do to ensure that happens?
MR. COLWELL: That's a good idea.
MADAM CHAIR: I think we have them scheduled for the 8th of March. Bluenose, but I think we said other issues as well which would include this.
MR. DEWOLFE: Sydney Steel, I haven't heard too much about what you're alluding to - I guess it's probably a big expense to close it down and all that but, my gracious, when Sysco was operating it was a big expense to the taxpayers as well. Nothing could be as big as that.
[10:00 a.m.]
MADAM CHAIR: Well, it would be worth having a full airing of that. We could certainly do that. It's not going to happen right away, it will be down a ways. Well, at this stage, we have a quite a number of things, I think. We have six approved. There are still some items on the list that I brought forward, but I would be happy to have them sit there for a bit. Do you need more than that, I guess, I'm asking you?
MS. STEVENS: I would take as many as you want to give me.
MR. DEWOLFE: That will carry you then. That is going to carry us until April or May.
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MR. SALMON: Could I suggest one thing? I would suspect that my successor will be coming forward with a business plan for next year probably by early April, and that it would be useful for you to have a session with him on that. Whether he plans any major changes in direction or is he going to continue the way we have been operating it, I haven't got a sense of that. If he starts the first of March, I would think by April he will have a good idea of what he wants to do.
MADAM CHAIR: Good suggestion.
MR. DEWOLFE: That is the start-up, is it? He starts the first of March is it?
MR. SALMON: He starts the first of March.
MS. STEVENS: What we have scheduled so far will take until April 12th.
MADAM CHAIR: Okay. Did you add the new Auditor General?
MS. STEVENS: That would be then to April 19th.
MADAM CHAIR: That would be good timing.
MS. STEVENS: I can put that last.
MADAM CHAIR: So, are we okay with that?
MR. COLWELL: That is good, that's fine with me. This briefing with the Auditor General's office and this debt repayment, I would like to do that while you are still here, if that is possible. If we have time to squeeze that in and you have the time, where you have experience with that, even though your other staff will be on it, just so we don't lose any continuity.
MR. SALMON: Yes, even if it was in March, I am still going to be on the payroll for the month of March as a special advisor to Jacques. So, we could both take part if it was in March.
MADAM CHAIR: Excellent. Mora will schedule that for us.
MS. STEVENS: March 1st is available.
MR. DEWOLFE: That's a little early.
MR. SALMON: A little later than that.
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MADAM CHAIR: As I said, I am happy to let the rest of the things that I brought forward just sit there and we can bring them forward with anything else that we might have.
MR. DEWOLFE: We have a pretty good agenda ahead of us.
MR. COLWELL: Some interesting stuff.
MR. DEWOLFE: Well there was some interesting stuff brought to the table, actually.
MADAM CHAIR: When you go back to your colleagues who are on this committee with you to talk about the idea of scheduling differently, let me know when you have had that discussion and we then can schedule another subcommittee meeting to just try to tidy up that issue. If there is anything else that comes up, you know where to find me. The committee is adjourned.
[The committee adjourned at 10:04 a.m.]
