Briefing binder created for the Deputy Minister of Finance on the occasion of his appearance before the Standing Committee on Public Accounts on December 9, 2024 on the Auditor General of Canada's report 8, entitled “Canada Emergency Business Account” - part 3

CEBA Program Governance

Issue

Finance Canada is the policy lead for the CEBA program, responsible for providing advice to the Minister of Finance on all elements of program design. Export Development Canada (EDC) is responsible for program administration.

Key points

• Finance Canada is the policy lead for CEBA. As policy lead, Finance is responsible for providing advice to the Minister of Finance on all program design aspects, such as eligibility, program expansions, and the strategy for loan collections and enforcement.
• Finance Canada is also responsible for advising the Minister of Finance on the exercise of her powers under the Export Development Act relating to the Canada Account, specifically powers relating to authorizing EDC to undertake transactions under the Canada Account.
• EDC is responsible for administering the CEBA program within the framework of Government of Canada policy decisions. EDC, as an arm's-length Crown corporation, operates independently from Finance Canada and is empowered to make its own decisions regarding program administration, particularly administrative expenditures and oversight.

Anticipated Questions and Answers

1. Does Finance provide operational oversight of the CEBA program?

Finance Canada is not responsible for CEBA program oversight. Finance monitors program operations to the extent appropriate for a Canada Account transaction program administered by EDC. Finance does receive regular (monthly) reporting on administrative expenses, loan disbursements, outstanding loan balances, and collections efforts. Finance also receives information on key CEBA processes and workflows. However, this information is used to inform further policy development and report to decision-makers. Finance does not have a role in overseeing, evaluating or directing on EDC administrative costs or operational policy decisions.

2. Can Finance restrict EDC's administrative spending?

Finance Canada does not have a role in overseeing, evaluating or directing EDC's administrative expenditures. Finance Canada does provide advice to the Minister of Finance on authorizations (including maximum spending amounts) for Canada Account transactions, including the CEBA program. However, under the relevant legislation, it does not have the authority to input into or otherwise restrict EDC's spending decisions. It is the responsibility of EDC and its Board of Directors to ensure that CEBA administrative spending remains appropriate.

3. Could Finance Canada stop EDC from contracting Accenture?

Finance Canada does not have a role in overseeing or evaluating administrative policy decisions made by EDC. EDC is a Crown corporation operating at arm's length from government. Under the Export Development Act, it is responsible for undertaking contracting as necessary to administer Canada Account transactions and related programs.

4. Was the Department of Finance aware in the Spring of 2020 that EDC was going to award a sole source contract to Accenture

Yes, the Department was aware of the need to aware a sole source contract, and that Accenture had been identified by EDC.

At the beginning of the program, there were daily calls between EDC and department officials.

5. Was the Department of Finance also aware that Accenture had selected themselves for a sole source contract? If so, did the Department of Finance raise this conflict-of-interest issue to EDC?

To my knowledge and based on documents available to us, the Department of Finance was not aware of the situation identified in the OAG report.

Finance Canada does not have a role in overseeing or evaluating administrative policy decisions made by EDC. EDC is a Crown corporation operating at arm's length from government. Under the Export Development Act, it is responsible for undertaking contracting as necessary to administer Canada Account transactions and related programs.

6. What governance measures are in place for Canada Account transactions?

Under section 23 of the Export Development Act, the Minister of Finance and the Minister of International Trade must authorize EDC to undertake transactions using the Canada Account. Ministerial authorizations outline the parameters for each transaction and outline how EDC is to be reimbursed for expenses to administer the transaction. In accordance with section 23, EDC maintains decision-making power for all decisions, including expenses, that are consistent within the ministerial authorization. In the case of CEBA, a ministerial authorization provided authority to EDC to provide a line of credit to eligible financial institutions based on parameters set by the Government and, due to the notable size and rapid implementation of the program, a subsequent ministerial authorization was provided updating the manner in which EDC can recover costs to ensure the Crown corporation would be appropriately compensated for their administrative costs.

Recognizing the extraordinary nature of the CEBA program, the government established additional governance committees specifically for the CEBA program that included representatives from EDC, Finance Canada, Global Affairs Canada, the Canada Revenue Agency, and Innovation, Science and Economic Development Canada. The Deputy Minister committee and Assistant Deputy Minister committee provided a space for implementation plans, financial updates, program changes, roles and responsibilities, stakeholder issues, etc. to be discussed and the Assistant Deputy Minister committee is still ongoing.

7. Why was decision-making on collections delayed?

At the outset of the CEBA program, the public health and economic situation was highly uncertain. As more became known and in response to the evolving needs of businesses during this time, CEBA was rapidly expanded and fine-tuned over the course of the pandemic.

The context was not conducive to early complete program lifecycle planning, including early planning and decisions on collections.

Moreover, planning and decision-making around collections necessitated coordination across government departments, which required machinery of government decisions that were not made at the outset of the program.

There were also other external events such as the 2021 federal elections that contributed to delays in a decision being made.

Background

Finance Canada is the policy lead for CEBA. As policy lead, Finance advised the Minister of Finance on providing the required authorities to enable the Canada Account transactions (alongside the Minister for International Trade). Finance also provided analysis to decision-makers to inform all program design aspects, such as eligibility, program expansion, and the strategy for loan collection.

Export Development Canada (EDC) is responsible for administering the CEBA program within the framework of Government of Canada policy decisions and the Ministerial authorization to use the Canada Account. In administering the program, EDC entered into contracts with various third parties to develop a loan accounting system, operate a call centre, and take other actions necessary to administer the program.