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OAG Audit of the Investing in Canada Plan

Topic

On March 25, 2021, the Office of the Auditor General (OAG) released its performance audit of the Investing in Canada Plan (the Plan).

Key Messages

• We welcome the Auditor General's report and findings. Infrastructure Canada agrees to implement the Auditor General's recommendation to more clearly report on progress made under the Investing in Canada Plan.
• We are pleased to see confirmation that our reporting provides an accounting of the Plan's full $188-billion budget.
• Five years in, we are 40 percent of the way through the 12-year Plan and we have delivered over 40 percent of the funding available. We are on track and on time.
• The Plan supports infrastructure projects that build modern, resilient, inclusive and green communities across Canada. It is getting high-speed internet to Canadian households, cleaning our air and water, and making our communities safer, more resilient, and inclusive.

• The Plan is delivering jobs and growth. The Plan is associated with the creation of 100,000 good, well-paying jobs each year and boosting our GDP at a time when we need it most.
• The Investing in Canada Infrastructure Program is just under a third [28%] of the way to its GHG emissions reduction target of 10 Mt.
• That's the immediate benefit of building infrastructure. This is significant, measurable progress at a time we need it most.
• We agree with the Auditor General—the full value of these investments has yet to be tallied. The Investing in Canada plan was created to pay dividends for generations to come.

Flow of Federal Funding

• It is important to understand that the work that matters to Canadians, the “shovels in the ground,” happens well before a dollar of federal money is ever spent.
• Under the majority of Infrastructure Canada's programs, construction work can begin once a project is approved. Jobs are being created, infrastructure is being built, and benefits are being realized even before federal funds officially flow. Infrastructure Canada pays when receipts are submitted – so our funding often flows last.
• The progress of infrastructure projects is up to the proponents. Sometimes, progress is not as fast as anticipated. In these cases, we defer the spending – we reprofile unspent funds to the future years when the costs are likely to be incurred.
• Reprofiling of funding contributes to a more back-end loaded overall funding profile. However, this would only put the ultimate objectives of the Plan at risk if the Government were to “turn off the taps” at the end of the 12 years instead of extending the programs, which it will not do.

Reporting on Progress

• The Auditor General's report found that the 21 departments and agencies responsible for the 93 programs do not all report in exactly the same way, and do not all provide the same level of information—nor are they required to.
• This is to be expected given the scope and breadth of the Plan. Some of the programs, what we call “legacy programs,” were created and in operation before the Investing in Canada plan was launched. These programs were not originally designed to report against the Investing in Canada plan's objectives, and thus the reporting is different.
• Some other programs do not submit reports that are as detailed, or complete, as others for two very good reasons.
• First, some programs, such as the Gas Tax Fund, are administered by partners according to pre-existing agreements that do not require the same level of details as those programs provided directly by the Government of Canada.
• Second, some programs such as the Supporting Shelters for Victims of Family Violence program delivered by the CMHC don't report details such as addresses for shelters that would compromise the safety of some of Canada's most vulnerable people.
• INFC will work with partner departments to improve reporting on existing “legacy” programs under the Plan. While our reporting on legacy programs could be strengthened, these programs are contributing to the Plan's objectives.

Sustainable Development Goals

• The Auditor General notes in the report that the Investing in Canada plan will very likely have meaningful impact in achieving the United Nations' Sustainable Development Goals (SDGs).
• Employment and Social Development Canada is responsible for reporting on the SDGs for the Government of Canada. While it is true that the Plan is not specifically designed to report progress against the SDGs, there is not a single SDG that is not advanced by programs under the Plan.

Background

The Auditor General's audit of the Investing in Canada Plan was undertaken in response to a motion adopted by House of Commons on January 29, 2020:

Motion of Mr. Berthold (Mégantic—L'Érable), seconded by Mr. Lehoux (Beauce):

That, given the Parliamentary Budget Officer posted on March 15, 2018, that “Budget 2018 provides an incomplete account of the changes to the government's $186.7 billion infrastructure spending plan” and that the “PBO requested the new plan but it does not exist”, the House call on the Auditor General of Canada to immediately conduct an audit of the government's “Investing in Canada Plan”, including, but not be limited to, verifying whether the plan lives up to its stated goals and promises; and that the Auditor General of Canada report his findings to the House no later than one year following the adoption of this motion.

During its audit, the Office of the Auditor General (OAG) collaborated with Canada Mortgage and Housing Corporation, Indigenous Services Canada, and Infrastructure Canada, selecting a number of their programs under the Plan to analyze in detail. Together these three departments account for 83% of the Plan's funding commitment.

The final OAG report, which was published on March 25, 2021, includes two principal findings and one recommendation:

• Finding 1: Infrastructure Canada was unable to report complete information on the Investing in Canada Plan.
• Finding 2: Federal partner organizations did not spend infrastructure funds as quickly as planned.
• Recommendation: To improve monitoring, tracking and reporting on progress towards the Investing in Canada Plan's objectives, Infrastructure Canada should work with its federal partners in the Plan and with central agencies to determine:
  • how to better measure progress of projects toward the objectives of the Plan;
  • which legacy programs are meant to contribute to the objectives of the Plan and how to report on them; and
  • what information the department needs from federal partners to provide complete and consistent public reporting on the Plan.

As part of her tabling of this audit, the Auditor General released a message noting that it is challenging for lead departments to successfully deliver a horizontal initiative, such as the Plan, without clear authorities and power. She called for the government to consider how it manages horizontal initiatives, and to improve coordination between federal departments.