Opening Statement before the Standing Committee on Public Accounts
Regional Relief and Recovery Fund
(Report 14—2021 Reports of the Auditor General of Canada)
7 April 2022
Karen Hogan, Fellow Chartered Professional AccountantFCPA, Fellow Chartered AccountantFCA
Auditor General of Canada
Mr. Chair, thank you for this opportunity to discuss our report on the Regional Relief and Recovery Fund, which was tabled in the House of Commons on 9 December 2021. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabeg People. Joining me today are Philippe Le Goff, who was the principal responsible for the audit, and Lucie Després, who led the audit team.
As part of the response to the COVID‑19 pandemic, the federal government announced the Regional Relief and Recovery Fund in April 2020. The fund was managed by the federal government’s regional development agencies across Canada. It was meant to help businesses and organizations that could not access other federal pandemic support programs and emergency funding or that required additional assistance. In total, the government allocated more than $2 billion to the fund.
This audit focused on whether Western Economic Diversification Canada, the Federal Economic Development Agency for Southern Ontario, and the Federal Economic Development Initiative for Northern Ontario designed, delivered, and managed the fund effectively and efficiently, and whether they reported on results.
Overall, the Regional Relief and Recovery Fund was successful at providing last-resort assistance to thousands of businesses and organizations affected by the COVID‑19 pandemic. Also, according to data provided by the regional development agencies, the program will likely succeed in reaching the objective of providing at least 25% of its funds to the tourism sector.
However, the management of the program was weakened by a lack of efficiency, consistency, fairness, and transparency that may have resulted from the efforts to administer the program quickly. Applicants from different regions of the country faced different requirements because of the various approaches taken by regional development agencies, and the agencies’ different interpretations of the eligibility criteria.
We found that, as a result of these differences across regions, funding was awarded in some cases to applicants who did not meet all of the eligibility criteria set out under the national fund, and ineligible expenses were funded. In addition, in some regions, not-for-profit organizations were directly invited to apply for funding without an open call to all potentially eligible organizations.
We found that the system put in place to report on the fund’s performance relied on inaccurate information for key indicators. For example, the number of jobs maintained was mainly based on information provided by applicants without further verification. In our view, the number of jobs saved was often overstated.
The 3 regional development agencies that were covered by our audit expected that between 25% and 42% of the total amount of repayable contributions granted would not be repaid. This is due to the fact that the Regional Relief and Recovery Fund was designed as a last-resort funding program and, therefore, carried increased risks.
We made 3 recommendations to the regional development agencies, including 1 recommendation that was also addressed to Innovation, Science and Economic Development Canada. The regional development agencies only partially agreed with our recommendations.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have. Thank you.