Summertime Reading
© 2012 FrontLine Defence (Vol 9, No 4)

While parliamentarians enjoy their summer break, they might spend some time thinking about how they can do a better job of holding government to account. Perhaps a bit of ­summertime reading would remind them of what needs to be done. The first item on their reading list should be the recent report, released quietly in June, by the House of Commons Standing Committee on Government Operations and Estimates, which states:

Standing committees, as extensions of the House, play an important role in reviewing and scrutinizing the government’s spending plans in order for Parliament to approve it. The committees are expected to perform detailed scrutiny of government spending and performance. However, it has long been acknowledged that Parliament does not effectively fulfill its role, and standing committees are at best giving perfunctory attention to the ­government’s spending plans. – June 2012

Within a month of that report, government suddenly stopped the bidding process for a major military truck project, ostensibly because DND had tried to slip in a cool, additional, and unauthorized $300 million worth of add-ons – without Treasury Board approval. Unanswered, so far, is the question as to why the process was allowed to proceed even that far without the additional costs being identified and properly dealt with. With DND as lead department on the project, the first responsibility for getting things right (or not) lies with the Minister of National Defence. Defence Minister Peter MacKay has certainly had his share of gaffes this past while.

However, it gets curiouser and curiouser. Remember that Julian Fantino was appointed Associate Defence Minister specifically to manage the defence procurement process... did he not know DND was proceeding with unauthorized costs in the military truck project? Only days before government killed the project’s ­bidding process, Minister Fantino was given control of the Canadian International Development Agency. Could it be that he was moved out of DND and into his new post quickly so as to avoid embarrassment over a job badly done?

It seems fair to say that government has lost confidence in DND’s ability to effectively manage its share of the defence procurement process – at least for the most expensive projects – but DND is not a solo act here. Public Works and Government Services Canada, Industry Canada, and the Treasury Board Secretariat all have major roles (with equal veto rights) and their ­performance demands detailed scrutiny too, but they can only work with whatever DND gives them. Moreover, we should not forget about Cabinet – where ministers are expected to exercise procedural stewardship and oversight. Why did ministers not learn of the additional costs before the unauthorized add-ons became a ‘show-stopper’?

Speaking of oversight, let us return to the point that Parliamentary committees have a responsibility to oversee the implementation of government policy and hold government to account. It looks like the Government Operations committee is right. Parliament is doing a lousy job of scrutinizing government spending. Why is it that no Parliamentary committee discovered any cost anomalies in the military truck project before they evacuated their seats for the summer?

Both SCOND (the House of Commons Standing Committee on National Defence) and SCONSAD (the Standing Senate Committee on National Security and Defence) could have done much more to prevent this debacle and other procurement mishaps.

It is interesting to note that at no time during the current session of Parliament, did either committee devote any attention to a review of major defence projects. Instead, they limited themselves to periodic airing of specific procurement issues, but only when such topics became media highlights (such as F-35 fighter jet costs). This ‘whack-a-mole’ approach does little to provide Parliamentarians with an adequate understanding of overall system ills. In fact, manifesting concern only after an issue has apparently become a problem does no one any good, apart from self-centered politicians trying to score partisan political points.

A much more appropriate and professional way for defence committees to exercise effective oversight that provides more value to Canadians, is to conduct regular strategic reviews of the entire defence procurement program – with particular attention devoted to major crown projects (those valued in excess of $100 million). In this way, potential difficulties might be identified before they become toxic.

How would Parliamentary defence committees go about such reviews? For a start, there are two fundamental sources committees must consult. Both are part of the government estimates process. First, in the spring of each year, a few weeks after the main estimates have been promulgated, federal departments and agencies present their reports on plans and priorities (RPPs) to Parliament. RPPs explain how a department intends to use the funds voted to them by Parliament for the coming fiscal year. Details are provided on financial and human resources dedicated to each program activity, as well as expected results and performance measurement indicators and targets. In the specific case of DND, RPPs also include detailed cost and spending profiles for all major crown projects and other significant program activity. Second, departmental performance reports (or DPRs) are presented in the fall and seek to demonstrate the results departments have achieved with the funds Parliament approved in the previous fiscal year. DPRs also include cost and spending details for major projects and activities.

Disappointingly, both the Commons and Senate defence committees have routinely shunned the mundane but important work of studying RPPs and DPRs. Perhaps because such documents are not ‘sexy’ and involve too much work. In fact, most ­Parliamentarians do not even read these reports. At best, this is certainly a shame because knowledge of DND RPPs and DPRs would go a long way to educating committee members – and all members of Parliament – as to how DND and the Canadian Armed Forces (the constitutionally correct term) actually work, and what is really important. At worst, it is an abrogation of Parliamentary responsibility to ignore departmental reports dealing with matters of federal spending.

Both SCOND and SCONSAD could easily conduct a meaningful review of DND major crown projects. Over the span of one or two meetings, during which committee members could hear from one panel of ­witnesses (composed of representatives from DND, the Canadian Armed Forces, Public Works, Industry Canada, and Treasury Board), to learn the ‘ground truth’ about the overall defence procurement process and the status of the more expensive equipment projects. They would then be in a much better position to exercise their oversight responsibilities with more effect and hold involved departments to account.

The fundamental problem is two-fold: Parliamentary defence committees have simply not been doing their homework, and Parliamentarians generally have done an inadequate job of holding government to account. Figuring out how they will do better when they return to the Hill in September should occupy their thoughts as they sip a poolside beer between BBQ events in their riding. They might even find time to actually read an RPP or DPR. The time invested will be well spent.

Hudson on The Hill
© FrontLine Defence 2012