OTTAWA — Auditor General Sheila Fraser says the federal government was generally successful in rushing out $47 billion in stimulus money, but it sacrificed strict environmental controls and its tracking of job creation to the need for speed.
The first instalment of Fraser’s stimulus audit finds that the myriad government departments involved in the Economic Action Plan hired extra people, put in many extra hours and threw all their available resources at getting the money out the door quickly.
As a result, Fraser says the approval time for infrastructure programs was dramatically reduced to just two months from six months.
But even though the main goal of the unprecedented government spending was to create jobs, Fraser finds that there has been no serious attempt to determine how much employment has actually resulted from the stimulus.
Her observation adds weight to criticism from opposition parties — that there is no credible way to assess how effective the stimulus plan was in alleviating the effects of the recession or enabling recovery.
Fraser also points out that in their rush, government officials did not look closely enough at projects to see if they should have undergone an environmental assessment.
Instead, they relied on simple statements signed by the applicants for government money. Well over half the approved projects examined in the audit did not have enough information to show whether or not an exemption from environmental assessment was warranted.
“Decisions on whether an environmental assessment was required for some projects were made on the basis of insufficient information gathered from applicants,” she writes. “As a result, it is unclear whether some projects that were approved should have undergone an environmental assessment.”
She says she might revisit the issue in her next audit of the stimulus program, which will look at how well the money was spent.
The federal government has now made its streamlined requirements for environmental assessments permanent, in an attempt to cut red tape.
Absent from Fraser’s report is any mention of political interference leading to money for friends to build bridges to nowhere, as opposition critics have suggested. An analysis by The Canadian Press of the early stages of the stimulus program found that funding favoured Conservative ridings, and paid little heed to areas struggling with high unemployment.
The auditors note that all the stimulus programs they examined were heavily oversubscribed, but they did not look deeply into whether the rejected project proposals deserved to be tossed.
Rather, they point out that in most programs cabinet ministers made the final call, as set out in the structure of the Economic Action Plan. The Office of the Auditor General does not have the scope to dig into policy decisions made by cabinet ministers.
The audit did look at whether the building projects were significantly delayed, a key concern for many municipal organizations who argue that Ottawa should extend its funding past the deadline of next March so that unfinished projects aren’t left in the lurch.
Fraser found that many infrastructure projects did not start on time, for many reasons, and some of them missed an entire building season.
“Project delays increase the risk that projects will not meet the completion deadline of 31 March 2011,” the report warns.
The government has responded by increasing its monitoring of delayed projects. The stimulus rules allow Ottawa to cancel the project outright if the deadline is not going to be met.
Fraser also criticizes the government for its shallow reporting to Parliament.
The quarterly reports were required in response to a demand of the Opposition Liberals, but the government larded the reports with anecdotes and amounts of money spent, instead of accounts of job creation.
“As a result, we found the reports presented an incomplete picture of project-level jobs created or maintained,” the audit says.
The Finance Department has been using an economic model to estimate how many jobs might be created, explaining that any jobs-creation data that may have been collected by program administrators was not reliable.
Finance has agreed to prepare a summary report for Parliament about the Economic Action Plan’s impact, but that report, like earlier versions, will still be based on modelling.
In a news conference, Fraser said that without a firm jobs count, it will be hard for the government to evaluate which of its programs were most effective in fighting off the recession.
“What it will not be able to do, in all likelihood, is establish which particular programs were most successful and what can be learned from that.”
Generally, though, Fraser was impressed with the attention public servants paid to properly implementing such a large and complex program.
“This report is evidence that when senior officials give priority to large initiatives like the Economic Action Plan, public servants rise to the challenge,” she wrote.
“I would say I would give the government high marks for how they managed the initial phase” of the plan, she said in the news conference.