The committee met at 8:05 a.m.

[M. Bernier in the chair.]

M. Bernier (Chair): It’s the Committee on Public Accounts. It’s great to have the whole team here today, as we move in…. Starting with the Office of the Auditor General, we’re going to be discussing the Summary of COVID-19 Pandemic Funding Allocations and Other Financial Relief Measures, a report that came in.

Before I turn it to Michael, I just want to, again, thank you. This was a really interesting read, as we were going through this. It really gives a good example of all of the initiatives that government started up after the pandemic, started giving us early last year.

I know you’ll mention it, but it is interesting…. It only covers until the end of August, the work that was done and the information gathered. Of course, a lot of work has been done since then as well.

We’ll maybe open it up to you. Then, as we get through that…. I know we also have another presentation coming forward from the Ministry of Finance as well. But let’s start with the Office of the Auditor General.

Thank you, Michael and your team, for being here.

Consideration of
Auditor General reports

Summary of COVID-19 Pandemic
Funding Allocations and Other
Financial Relief Measures

M. Pickup: Thank you so much.

Joining me today are four other people. With me today is Ardice Todosichuk, who really is the director who led this work. I’ll be turning it over to her shortly to walk through. She’s really excited to take all your questions as well.

Also joining us here today, in our team approach, is Laura Hatt as well. Laura is an executive director on our performance audit portfolio. While you don’t know her well as of yet, you will get to know her. She is instrumental in the running of the office and in the performance audits that we do. So she’s somebody you will get to know well over the next number of years.

Also joining me is Malcolm Gaston. He’s the assistant Auditor General who leads the performance audit practice. Ultimately, he is the one assistant Auditor General who is leading the performance audit practice.

Finally, somebody who many of you have had the chance to meet and know already, of course, is Russ Jones, who is the Deputy Auditor General here at the Office of the Auditor General.

I want to thank the folks for joining me today.

Before I turn it over to Ms. Todosichuk to walk through some comments, which we promise will be relatively brief, just a couple of comments that I would like to make.

Of course, I do want to acknowledge that here on Fort Street today, I’m on the traditional territory of the Esquimalt, the Songhees and the Lək̓ʷəŋin̓əŋ people. As a Mi’kmaw, as a member of the Miawpukek band, I appreciate the earth and the ocean and the sky that we enjoy every day. I just wanted to acknowledge that.

A couple of quick comments. I want to thank the comptroller general and the folks in his office for excellent cooperation throughout this work. From the get-go, when this was nothing but an idea, the comptroller general and his folks were on board and cooperated so well with us to be able to get this done in only three months.

Remember that an audit can typically take one to two years to do. While this is not an audit, it was still done, essentially, in three months. So thank you to those folks.

I also want to thank, of course, all of the folks with me today but also those who may be listening in or who may be not joining us. This really was a team effort, for folks here in my office, for producing this.

I’m reminding you, because they will be shy to do so, that this was the first COVID-related report to a legislature in Canada, when we tabled this in September, and follows some international best practices that we saw throughout the world. The team did it with conviction, curiosity and commitment — to provide this information to those who we work for in the B.C. Legislature.

Of course, this was while transitioning…. I mean, memories can get foggy for us, but this was while transitioning to working during a pandemic and balancing and adapting, in our personal and professional lives, caused by the pandemic.

My final comment would be a reminder of the three questions that we left you with on page 6 of the report, which you may or may not find helpful to assist you in the work you do to hold government accountable. Those questions are meant with the best of intentions. I’m hoping that they are useful to you.

[8:10 a.m.]

I trust this report will help you in asking government officials about the important aspects of COVID funding and financial relief measures.

As a final comment before I turn it over to Ms. Todosichuk to briefly walk through the report, I do want to wish everybody here today and in my office, and outside of that, a happy International Women’s Day. Certainly, I personally acknowledge the importance of women in my life, both personally and professionally, who have been some of my greatest mentors, coaches and allies.

I’ll now turn it over to Ms. Todosichuk.

A. Todosichuk: Thanks, Michael.

Good morning, Chair, vice-Chair and committee members. I would like to take a few minutes to walk you through the Summary of COVID-19 Pandemic Funding Allocations and Other Financial Relief Measures information report, which was tabled in September 2020.

A two-page document has been provided to you to provide a high-level summary of the information in this report. It should be noted that this report is only a snapshot in time and that it covers significant known B.C. government pandemic funding allocations and other relief measures from March to August of 2020.

There are potential limitations and uncertainty in the information provided, given that the accuracy and reliability of the financial information has not been audited. Cost estimates are not available for all of the pandemic response measures, which is expected, given that funding needs will vary according to government’s changing response to the pandemic.

In this report, we noted the following in funding allocations, which you can see on the first page of the summary. Of the $5 billion pandemic contingencies allocation, $1.5 billion was reserved for economic recovery. Of the remaining $3.5 billion, we identified $2.62 billion, including $1.88 billion for individuals and households, $641.97 million for critical services, $100.22 million for businesses and industry and a total of $800 million that had not yet been identified.

If you turn over your summary sheet, you will note that there’s an additional funding allocation of $1 billion, which was also approved as part of the cost-sharing safe restart agreement between the federal and provincial governments to support recovery needs of public transit services and local governments.

Other financial measures that we identified accounted to $1.62 billion. They included $914 million in revenue reductions, $500 million for the one-time B.C. climate action tax credit and $202.71 million, which we presumed was ministry-based budget allocations. In addition, we identified $6.2 billion in deferrals, which includes the postponement of specific payments, fees, taxes or bills.

In the report, we indicated three questions that people may want to consider when asking the government. What lessons has government learned in identifying and prioritizing funding for a pandemic? What oversight exists to ensure that allocated funds will achieve government’s intended outcomes? When will government report on whether the funding has achieved the intended outcomes and how it has benefited the people of B.C. in coping with the effects of this pandemic?

Thank you very much for your time. I’m happy to answer any questions.

M. Pickup: Chair, that concludes our opening comments.

M. Bernier (Chair): Thank you, Michael.

Before we move on, then, I’ll look to see…. From the committee, is there anybody that has any questions to start this off, from the report, or any clarification needed?

I’ll start with Bruce, and then go to Andrew after that.

B. Banman: I’m not the only new one on this, and I’m sure there are people at home. I’m interested in, in particular, the last of the three questions. But perhaps the rationale behind why those three questions should be asked of government. It seems, perhaps, self-explanatory, but I’d like for the writers of the report to expand on what the rationale for asking those three specific questions was.

A. Todosichuk: Sure, I can answer that.

Oh, go ahead, Michael.

M. Pickup: This is the joy of doing this virtually. We’re both going to speak.

Ardice, do feel free to supplement anything I say as well.

[8:15 a.m.]

The point of the three questions…. Again, something you may want to consider asking the following questions. The purpose or the point of some of these is to raise potential questions that are not answered in a report. We’ll do this now on all of our audits, to potentially bring up areas where you wouldn’t expect them to get answered in the report itself but that may be useful, in terms of people saying: “Well, what do I do with this?” For example, this was a snapshot of financial information.

This wasn’t a performance audit, obviously, in terms of looking at the effectiveness of programming or any of these types of things. It was meant to be helpful, to say: “What are some questions that may be logical to ask in this area in advance?” The time will come — and we are planning for such — where we will do performance audits related to COVID expenditures, where we will start looking at effectiveness, and we will start looking at whether outcomes were indeed achieved. But we thought these are some reasonable things that could potentially be asked, recognizing, again, that they may want to consider.

Some of the feedback we have received is that people find this type of thing useful or helpful — again, completely respecting that it’s not intended to overstep the line, to say: “We think the Public Accounts Committee should ask these questions.” They’re really just geared towards the everyday user and reader of the report, as some potential questions to ask.

Ardice, did you want to add anything to that?

A. Todosichuk: No, I think that’s great. Thanks, Michael.

M. Pickup: Does that respond to the question?

B. Banman: Yes, thank you.

A. Mercier: I’m not sure if my question will be appropriately directed to you, Michael, or to Ardice. Looking at the report — you’ve mentioned that this is a snapshot and not an audit — you’ve collapsed a lot of terms into a single term: “funding allocations.” You have cost estimates, commitments, voted appropriations, estimates, supplementary estimates and statutory authority.

Now, I take your point that those have more of an import when you’re doing an audit, but I’m wondering if you can just give a bit of an explanation about the legal or accounting difference between those terms and the impact that that would have in an audit vis-à-vis looking at a snapshot.

I was also hoping, as well, if you could just speak a bit about another term you use throughout the report, which is “notional allocations.”

M. Pickup: Sure. I will ask Ardice to take those couple of questions, please.

A. Todosichuk: Sure. I think that in putting that together, clearly, we had a number of terms that we could have used, as you mentioned. I think the best place for a further understanding of this is probably the Ministry of Finance, who is going to be coming up next.

Those words that are often used…. We wanted to make this a public-facing document and to use one word that we could use to cover the entire document without getting caught up in certain terms that are used. What we chose is that one word, “funding allocations,” and there’s a space in the document where we talk a little bit about that.

As far as “notional allocations,” that’s a financial term, and I would probably direct you to the Ministry of Finance for a clearer representation of that.

N. Sharma: I just wanted to start by congratulating you on the quick turnaround in being the only one in Canada to have done it at this stage.

My question was around timelines. You’re talking about an audited statement and performance audits. I’m just wondering what you foresee as the timeline of when we can expect that work to unfold.

M. Pickup: I can take that one, Ardice.

Laura, certainly, as one of our leaders on the performance audit practice, if you want to add anything/correct anything I say, please feel comfortable to do so.

In terms of the performance audits and what we’ll be getting into and when, likely next week, we will be issuing our performance audit coverage plan, and that performance audit coverage plan, which will be reported publicly, is not actually tabled. It’s reported publicly, will be on our website and is available for all. It will outline what performance audits we’re going to do over the next two years. A number of them are COVID-related, but you can look forward to that report coming out next week.

[8:20 a.m.]

How long those will take…. We’ve also identified, in that performance audit coverage plan, when we want to report on those as well. Certainly, I would invite folks…. Part of why we put that performance audit coverage plan out there is to generate interest and discussion in the work we’re doing. Why that? Why not this? Why something else?

I think all folks here have probably heard, as well, that we have reached out and are arranging, with all of the caucus offices, an opportunity to go and meet with folks to talk about our performance audit coverage plan, to talk about what we have on the agenda, and also to solicit input on things we may want to consider from members of the Legislature as well.

I’m sorry if my answers are always long, but like many things in audit, it seems like the answers are always long. Does that adequately respond?

M. Bernier (Chair): Niki is saying yes, so thanks for that.

Any other questions from anybody right now?

M. Starchuk: Michael, when we were sitting on the Select Standing Committee on Finance, you had repetitively said that part of your mandate that you’re bringing forward is more reports, smaller reports, quicker updates — those kinds of things. I see this one, shortly after you leave that committee, for a number of sessions.

Is this the type of intent that you have, to take a look at what’s there, what needs to come out from your perspective? Then it comes out quickly, maybe not with granular detail, but at least setting a pathway for what’s coming down the road?

M. Pickup: Thank you for the opportunity to respond to that. I think when folks see the performance audit coverage plan come out later next week, you’ll see that the number of audits that we have planned over the next two years really do incorporate our vision, our intent and where we are heading as well. These will all be audits.

This report was something different. It was an information report. It was to get that information out there because we thought it was important. Certainly, with quick reports, shorter reports, consolidated reporting, like the one-pager that you see…. Definitely, we’ll be getting these things out.

For the benefit of the committee, the folks here in the office, the team — notwithstanding working through a pandemic and everything involved in that, the longer this goes on…. Since September, up until the end of this month…. This is what we have coming out tomorrow. At the end of March, we will have eight reports out since September, which is pretty remarkable work for the people here in the office. I’m very proud of that. I hope that responds to your question.

M. Bernier (Chair): Mike’s acknowledging yes. Thanks for the question and answer there, too.

D. Coulter: This is just building off, or maybe clarifying, your answer to Mike. I just maybe hear it in different terms. Are you talking about building smaller reports quicker, but they would basically add up to one report — like one that you’d normally give, but you’re giving it in chunks as you get it quicker? Or are they just more reports with more information?

M. Pickup: You’ve given me a great opportunity to really explain the difference here. What I’m really talking about, for the most part, is a fairly unique topic. They’re not taking one big audit, dividing it into four reports and calling it four reports. Generally, they are discrete pieces of work.

It could be something like cybersecurity and teleworking. It could be the northern bus. It could be procurement of hotels. It could be providing safe spaces. Then it could also be the conservation land program work that we’re doing and oversight of home-share providers.

In those cases — very unique pieces of work — they will be shorter. We will get those out the door more quickly. They’ll be more focused but definitely discrete, unique pieces of work not related to each other. Having said that, when we get into an issue, and we feel it should be split into two because it is big and we want to get something out quicker, and it just makes a lot of sense, we will do that as well.

[8:25 a.m.]

That’ll be more unique, but we will have an example coming up on that of avalanche safety, where we have split the audit into two audits — one looking at the avalanche safety program and then the other looking at avalanche worker safety. We’ll get one out before the other and to you more quickly. So it really does depend. But for the most part, no, they are very unique and discrete audits.

A. Mercier: Just to ask you, in your report, you talk about these funding allocations as “event-driven administrative measures,” and you talk a bit about the specific risks of rapid-response programs. I’m just wondering if you could speak to your own experience as an auditor. How unusual are funding allocations being put together this quickly like this? Can you think of other instances where things have gone from idea to being operationalized this quickly — and talk about that in the context of what you called the specific risks of rapid-response programs?

I apologize. I don’t have the page of the report that that’s on in front of me.

M. Pickup: Sure. Maybe what I’ll do is let Ardice respond first, and then I will supplement with a couple of thoughts that I have in terms of some of my experiences. But to the report itself, Ardice, if you want to add anything, jump in, or give what you’d like to add from the report. Then I will share some of my experiences, as you requested, as well.

A. Todosichuk: To answer the question, I don’t think we’ve seen this — or at least, I haven’t seen it personally — where we’ve had this kind of allocation happening. A word that’s been used, maybe overused, is “unprecedented” — for this kind of funding allocation for an event such as the pandemic.

You could see something happening like this in the event of one of the other audits that I worked on called Catastrophic Earthquake Preparedness, where you would see the need to allocate money very quickly and would have to be prepared for that.

Government does have business continuity plans in place around responding very quickly to these things, but from a personal point of view, I haven’t seen this, of course, in this very huge size that we’re talking about for this particular allocation.

I will pass it on to you, Michael.

M. Pickup: Thanks so much, Ardice, and thank you for giving me time to think. I’m rolling back here through the years, which are 30-some years of doing this now.

Certainly, I would never suggest that there has been anything like there is now, because there hasn’t been. Having said that, I think one of the things we are doing in conjunction with the comptroller general’s office is, as part of our financial audit work, we are looking at controls over buckets, if you will, of COVID expenditures. We’re picking three programs where we’re going beyond what we would typically just do as a minimum on a financial audit, and we’re going to be looking deeper at the controls over that.

Why am I saying that? Part of why I’m saying that is because we will get that to you in October, in the financial report. This year, the financial report came out in March. We are advancing that to October for next year, so that will give you a sense of that.

Having said that, if I start flipping through my mind in terms of experiences, some of the programs that I think of…. Again, this is in no way to suggest they are anywhere near the situation of what we’re dealing with here in the pandemic. If I think back to the 1990s — particularly, I guess, the early ’90s, when I was much younger than today — I think of some of the collapse of the cod fishery in Newfoundland and some of the quick programs. They were called TAGS back then.

I was with the Office of the Auditor General of Canada at the time. We did lots of work around what happened, in terms of getting those expenditures out the door quickly — lessons learned from the control perspective, lessons learned from an effectiveness perspective as well — and what happened with those programs. That’s going way back into the ’90s, from my experience.

You know, you’ll get into these issues, as well, if you’re dealing with catastrophic events that happened, and perhaps there’s a desire to get money out quickly. But nothing compares to what we’ve been through. I hope, Chair, that helps to answer the question. I’m happy for a follow-up if you need it.

M. Bernier (Chair): I think Andrew was nodding his head. We were good?

A. Mercier: I’m only in disbelief that you’ve been doing this for 37 years, Michael. I don’t believe that. Mike Ber­nier, maybe.

[8:30 a.m.]

M. Bernier (Chair): Gee, thanks, Andrew.

Any other questions directed on this?

Maybe I’ll wrap up.

First of all, Michael, just thanking you and everyone in your office for the work they did putting this together.

I know I’ve had lots of questions, since this has been put out, and knowing that it was going to be on the agenda today. I’m glad you answered some of the questions that I’ve been hearing, more on the follow-up side of things. This is, as you said, a very high-level not so much report but information package of where we were in a certain part of time there.

Again, there has been so much going on since August. There have been more funding allocations. There have been more announcements. A lot of people are saying: “Okay, how is this going to get bundled and finalized, then, to see what’s been successful, what money has been actually spent and allocated as per announcements?” This is really a great package that kind of highlights for people…. You start to forget after a while all of the different areas that government has been announcing and trying to get financial or support packages, in some facet, out to help people.

I really appreciate this, but it also gives us a great opportunity, now, to ask questions later on based on this report on the outcomes, as we’ve said. Really appreciate that. Look forward to some of the further stuff, as well, as we get more into the performance audit side of things, because that’s where I know a lot of people will have a lot of interest, to see how that worked out.

I see Bruce just put up his hand. We’ll just go to Bruce quick.

B. Banman: I’m sorry, Chair. I didn’t mean to interrupt you. I just wanted to get in the queue.

The only question I would have of the audit team is: is there any direction from this particular committee that they would find helpful or that they need, moving forward?

M. Bernier (Chair): Yeah, that’s a good question.

M. Pickup: Yeah, I love that opportunity to engage with the elected folks on the work we do. I think what will be interesting, when the performance audit coverage plan comes out next week, is to, if people want to engage in a discussion, including the committee, obviously…. We have caucus meetings being set up with all of the various caucuses to discuss it and to solicit input as well. But more than happy if the committee wants us to come and talk about our performance audit coverage plan, the work we’re doing and what we have planned and why — why is something else not there, and what might we be thinking of?

I’ll also remind folks that at the end of March, we also have a report coming out, sort of a status report to indicate some audits that have been delayed — for example, the substance use, formally called the opioid overdose audit. That one has been delayed. We’re putting a report out that talks about all of our work that has been delayed. So more than happy to engage with folks on any of that as well.

As the Auditor General, as an office, we’re reporting to the Legislature. We’re very much interested in what you think of what we have planned in terms of work, to answer questions as to why something might not be on the agenda and to reflect on that as well.

M. Bernier (Chair): Good. Thank you.

We appreciate that answer, as well, and the question, Bruce.

Anything else from anybody before we move on?

Okay. I don’t see anything else.

Again, Michael and team, thank you very much for this. I know we’ll have further discussions as we get down the road, especially getting into a new fiscal year and budget process.

M. Pickup: Chair, can I just say, just before we’re done, that I saw people clapping. That was the first time I’ve ever seen clapping at a Public Accounts Committee. So on behalf of everybody, thank you for that. That’s a first for us — for me, anyway. I’ve never seen that before.

M. Bernier (Chair): Unfortunately, with the fact that we’re doing this on Zoom and through Hansard, nobody else gets to see it, so thanks for acknowledging. At least we on the cameras get to see it, and Hansard didn’t hear it. That’s good.

Well, thank you again, Michael and team.

Let’s move forward. I know we have Carl, our comptroller general. He has joined us, with some of his team. We also have a presentation coming forward here. I see it has popped up on our screens.

Carl, have you joined us?

[8:35 a.m.]

C. Fischer: Yes, I have. Thank you, Chair.

M. Bernier (Chair): Thanks very much. I’ll maybe turn it over to you. You can mention who else is here, and we can move forward.

C. Fischer: Thank you, Chair. I’m here today with Tiffany Ma, who is the acting ADM of Treasury Board staff, and Amanda Thompson, who is an acting executive director in Treasury Board staff.

OAG prepared this information report, which is a compilation of government announcements of response measures up to August 18, 2020. The report itself doesn’t have any recommendations or findings. We’ve tried to put together information that, hopefully, will help the committee understand the context of the report and where government is.

As Michael mentioned, we worked very closely with OAG in compiling this information. It provides a good starting point or baseline to support government’s response measures that will evolve and adapt as the pandemic continues.

The focus of this report is on the initial $5 billion COVID-19 action plan, as well as shifts in ministries’ budgets to respond to the pandemic and other revenue and timing measures taken by government. We are still in the midst of the pandemic, and these programs are still in progress, so the audit or evaluation of the programs will come in the future, as the Auditor General has discussed.

Government allocated the $5 billion spending authority into three broad categories or buckets: $1.7 billion for critical services, $1.8 billion for financial supports and $1.5 billion for economic recovery. Additional spending related to pandemic response came from ministries’ existing base budgets as programs shifted to respond to the needs of stakeholders and also from statutory authorities that the government has within its legislative framework.

I have a long list here of key financial updates provided through 2020. I don’t want to read through all of them. I just provided them so that you would have a reference and you would be able to go back and research any of these documents if you have questions in the future.

Enhanced reporting. As was mentioned earlier, the pandemic is an extraordinary circumstance. I’ve never seen anything like it myself. Neither has anyone else currently working in public sector financial administration. Within the Ministry of Finance, we’ve focused on enhanced financial reporting as listed on this slide. We did that because we felt very strongly that taking appropriate measures to control the way we collect and manage information from the start of the emergency to the end gives us the best opportunity to provide information to legislators and the public. It also allows us to respond to the audit scrutiny that inevitably comes after a significant event.

The pandemic. This pandemic will have financial impacts that extend beyond the parameters of a single budget cycle. We’re moving into the second year now. One of the critical things that we have to plan and prepare for is to maintain continuity throughout the entire life cycle of this unfortunate emergency.

Our challenge will be to capture pandemic-related financial information to enable complete and consistent financial reporting over the long period and also support the audit requirements as questions emerge and we deploy those audit resources, both internal and external, to answer questions. We’ll need to be able to do this for as long as we are responding to the effects of the pandemic. We’re not in the business of anticipating when things are going to end, although I really hope they’re soon.

[8:40 a.m.]

It will be most interesting to see how the debate evolves in our jurisdiction as well as other jurisdictions across Canada and around the world. We will all be working very hard to prepare to respond as that debate goes on. Ultimately, the goal of any debate would be to learn from our experience and to better prepare to deal with emergencies in the future.

Some key things that we have done within the Ministry of Finance to respond to the specific administrative requirements of the pandemic are: developed and implemented a formalized recording approach to capture pandemic-related financial information that will allow us to maintain continuity across the whole life cycle, and it will provide a baseline for future evaluation. We’ll be able to compare the results of every stage of this emergency on a similar basis.

We’ve used our resources from Treasury Board staff and banking cash management, as well as internal audit, to dramatically streamline the process for getting newer change programs up and running quickly. That means analyzing the specific risks, designing oversight and control mechanisms to manage those specific risks of the response and to be there to support ministry program delivery staff as the programs are rolled out and we start to gain experience.

Finally, we shifted our compliance resources to focus on ongoing oversight of the pandemic response programs while still monitoring the financial activity of ongoing ministry programs. We do that mostly through data analytics, ensuring that financial transactions are within program parameters, but it also requires constant back-and-forth engagement with ministry financial staff and our colleagues in Treasury Board staff to adapt to the changing situations that happen, often in real time, as we gain more experience.

Upcoming financial updates. We mentioned earlier that we would be reporting enhanced financial information consistently throughout the process. The immediate ones that are coming up, to draw to your attention. On April 20, the release of Budget 2020-21, including the third-quarter report, with enhanced reporting on pandemic fiscal impacts. We will have a topic box talking about where we started off and where we are now.

Then by August 31 — hopefully, in July; it’s our target time frame — we’ll be releasing the 2021 public accounts, including contingencies, actual costing, as specified by the Budget Transparency and Accountability Act. Once again, for the actual results, we will want to echo the form and structure and information that we’ve been providing in the quarterly reports and budgets.

That’s the information that we’ve put together for you today, and if you have any questions that we can answer, we’d be happy to do so.

M. Bernier (Chair): Excellent, Carl. Thank you so much, again, to you and your team.

We’re going to jump to Niki first, who has a question.

N. Sharma: Thank you, Carl, for that presentation. I have two questions.

The first one is just a check on my understanding. The report that was released didn’t actually analyze or take a look at the quality of controls that were put in place for the programs that were unveiled through COVID. Am I understanding that correctly?

C. Fischer: That’s correct. It was not an audit. It was an information report to collect and identify the information.

N. Sharma: Yeah. So that wasn’t looked at but will be looked at in the future.

My follow-up question is just out of curiosity. I know that you were called upon, Carl, in an extraordinary way this time, to figure out how to get programs out. You talked a little bit about some of the controls, or the ways you oversaw some of those program launches. I’m curious about what we learned from this process, on a go-forward basis, about what we’re able to do and how we’re able to look at our financial controls and how things roll out in a way…. What would be something you learned that you would use going forward for ministry programs?

C. Fischer: Certainly. There are two things that are very important to me and I’m still kind of digesting and learning from.

[8:45 a.m.]

First of all, the capacity of staff resources within the province — that includes all of us here, including our friends at OAG but also Treasury Board staff and program delivery staff. Their capacity to respond very quickly and very smartly was a huge asset. It was great. I wasn’t as confident in the beginning that we would be able to quickly come together and solve problems so dynamically. That was the big, positive thing for me.

The second thing that I learned is that here in British Columbia, across Canada and around the world, we realized that being able to respond with one-off programs was a challenge, because governments are not very good — we’re not prepared — to deal with identity registration. A lot of that has to do with the inherent conflict between information availability and the privacy expectations of society.

There is no magic database that solves your specific problems, whether you’re dealing with individuals or organizations or businesses, that you can draw on and quickly confirm the constituency and send out a bunch of cheques. It is a very complicated, drawn-out process.

We’ve been very lucky, actually. We’ve been able to adapt quite quickly, to work with our federal counterparts to manage those programs. I spend a good portion or period of time every week googling COVID benefits fraud, and I’ve been learning a huge amount from around the world.

The one thing that seems to be consistent everywhere is that identity registration is a big challenge — being able to identify the population that is relevant for the program and to be able to validate that. Unfortunately, we are all subject to risks. We have risks in program delivery, but unfortunately, also, risks of bad actors wanting to perpetrate fraud or even systemic fraud.

The balance of all those things, I think, will inform a lot of work in our profession, our collective field, for many, many years to come.

M. Bernier (Chair): Good. Thank you for that.

Andrew has a question.

A. Mercier: I’d asked a question earlier of the Office of the OAG, and they deferred to your expertise on this. So I’ll just quickly ask it again.

A lot of government financial terms have been collapsed into the term “funding allocations.” I’m wondering if you could just unpack that for us, in terms of the impact and import of those terms — costs, estimates, commitments, voted appropriations, estimates, supplementary estimates and statutory authority — and how that might be brought to bear on an audit, as opposed to an informational report.

As an aside, I’d also like to just get a bit of clarity on the distinction with “notional” funding allocations.

C. Fischer: I’ll look, down here, to my colleague Tiffany and ask whether she wants me to take a first crack at it, or whether she wants to jump in and respond.

T. Ma: Why don’t you take a first crack, Carl? Then I’ll jump in.

C. Fischer: Okay. There are a lot of terms. They are technical terms. They’re not as difficult as they might appear. I think the first demarcation I would make is that within our system, in Canada and British Columbia, we really have two steps that go into the use of financial resources.

The first is appropriation. You’re all legislators. You all understand the need for that legal authority to spend money first. The second would be the actual expenditure, or the administration of the transactions.

When we talk about funding allocations, we talk about the process of an authorized decision-maker — in this case, Treasury Board — looking at that $5 billion authority and making a series of decisions about which programs need how much money to be able to operate. That’s allocating that $5 billion out to a number of different programs. That provides the opportunity for Tiffany and Amanda and their colleagues to monitor and report on the actual use of that money, so that, at the end of the period, we can tell you how much money government used and what they used it for.

[8:50 a.m.]

There are a lot of different types of authority to spend. The main ones, first of all, are voted appropriations. That would be the annual base budgets that ministries operate under to deliver their programs and services.

Then we have statutory authorities. That’s where specific legislation provides the authority for government to spend money on a specific purpose. A really good example would be the Emergency Program Act. If there’s an emergency, government can spend money. It doesn’t have to worry about the process of going back to the Legislature to have a specific amount appropriated for that. The appropriation is already there.

The third type would be contingencies. There’s no way that government or Treasury Board can know everything at the beginning of the year. They have to reserve an amount of money — or provide an amount of money, in the case of supplementary estimates — that can be used for new business that comes up or new things in the year that they have to respond to. That’s what we mean by contingencies.

When we talk about formal allocation or final allocation versus notional allocation, many times when ministries…. The Ministry of Health, for example, will come to Treasury Board and say: “We need more money for critical care services because of the pandemic.” They won’t have a complete estimate at that time because the situation has yet to evolve.

Treasury Board will provide notional allocation and will say: “Okay. Spend up to X dollars, and then come back to us later as the information provides.” That’s when they would confirm or change or amend that notional allocation to a final allocation.

All of those authorities are reported at the end of the year as part of the public accounts. They are directly aligned back to the budget as well.

Tiffany, did I mess that up? Do you have anything to add?

T. Ma: No, that was perfect. Thank you.

M. Bernier (Chair): On that, I just wanted to ask you if you could elaborate a little bit for the public….

I know most people on the screen here know the process through the appropriations and Treasury Board, etc. But we had two large supplementals, the $5 billion and the $2 billion, so one of the big things that I’ve seen in the public is: does that mean the government went out and borrowed $7 billion, and it’s sitting in a pocket, and they’re slowly administering it and paying interest on that? Or do they borrow it as the appropriations are needed? Can you just clarify that for people who might be listening, Carl?

C. Fischer: Two entirely separate things. The authority to spend money doesn’t drive an expense, and it doesn’t result in any cheques being paid out to anyone. The province is a pretty complex business organization. It manages its treasury, including borrowing and cash management, on a centralized basis.

So provincial treasury — banking cash management, in this case — will be in contact with all of the ministries and organizations. They will estimate and forecast their cash requirements, and they will use not just borrowing but a vast array of financial facilities, like short-term and overnight borrowing mechanisms, to make sure that government has enough cash on hand at any time for its requirements because those requirements don’t happen evenly throughout the year.

Regardless of the pandemic, that same process of making sure that we’re good at forecasting our future requirements and we have enough cash invested on the side to deal with emergencies and also to deal with liquidity challenges — that’s what banking cash management does.

M. Bernier (Chair): Excellent. Thank you for that.

Any other questions? I don’t see any further questions at this time from anybody on the committee, so I want to thank the different offices for coming in today with those different reports.

Again, we’re looking forward, as we dive into it a little bit further…. When we’ve got the third quarter and the budget in just a month’s time, I guess, we’ll have a little bit more clarity on some of these allocations and how things have worked out, and going forward, for the next fiscal.

Jennifer, is there anything I’ve missed? No? Okay.

We are finishing a little early. I know nobody is going to complain about that. I want to thank everybody for coming in today.

With that, I just need someone on the committee for a motion to adjourn, then.

Motion approved.

The committee adjourned at 8:55 a.m.