Remarks by Milt Isaacs, President
Association of Canadian Financial Officers
to the
House of Commons Standing Committee on Government Operations and Estimates
April 14th 2010

Good afternoon.

I appreciate the opportunity to speak to you today.

I represent 4300 Canadians. They are financial officers. With the exception of 20, the balance is employed in the federal government.

These financial officers see themselves as more than just employees. They see themselves as stakeholders. They’re purpose driven. They want to make a difference.

And they are members of the Association of Canadian Financial Officers, ACFO. ACFO is a bargaining agent. ACFO is an advocate.

We are advocates for sound financial management. As advocates, we have published various studies on financial management. As advocates, we submitted a brief to the Gomery Commission of Inquiry on the Sponsorship Program. As advocates, we are problem solvers.

I am proud to be the president of ACFO. My members understand the importance of controlling expenditures. And that’s what the new budget is trying to do. However, we have concerns with this budget.

Our main concern is the possible impacts of the freeze on operating budgets. The impact that concerns us most is that oversight will become an afterthought. Oversight is making sure rules and regulations are followed. By the way, these are your rules and regulations.

Financial officers provide advice. They provide options within the rules. They are responsible for financial oversight. They understand the crucial role oversight plays in the delivery of programs.

Departments may not. A department’s main focus is the delivery of programs. Usually oversight is secondary.

What happens when operating budgets are frozen? Well, departments are faced with choices. Programs or oversight? Programs win.

So for example, when a financial officer’s position becomes vacant, it could get absorbed into programs. So when that happens, you’ve weakened oversight. You’ve lost your financial roadmap.

A big part of that roadmap is the Financial Accountability Act. Financial Officers are already struggling to implement this Act. We are seeing greater levels of stress within the financial community. Now comes the frozen operating budget.

We’re living with the Act but now we have a budget that potentially conflicts with the implementation of the Act. Both the budget and the Act need financial capacity. That means people.

What happens when you don’t have people to provide oversight?

Not too long ago, there were cuts to the Canadian Food Inspection Agency. They proved to be disastrous. We had a listeriosis outbreak. Twenty-two Canadians died. Fifty-seven were gravely ill. So we can see how a lack of oversight had a profound impact.

A lack of financial oversight also has impacts. Remember the Ponzi schemes? Well many thousands of Canadians lost hundreds of millions of dollars because of Ponzi schemes.

Just recently, in Alberta, Canadians lost over a hundred and sixty million dollars. In Toronto, Canadians lost sixty million dollars. And in Quebec, Canadians lost tens of millions of dollars.

Many of these people lost everything – their homes, their retirement nest egg, their dignity. Most of these people do not have the years needed to recover.

I would suggest that the investment into oversight could have saved these Canadians hundreds of millions of dollars.

What happens where oversight does exist? Remember the banking crisis? In Canada, we have rules and regulations for banks. They are enforceable. They protected us from the meltdown. This was not the case in the US.

In the last quarter of 2008, US banks lost twenty-six billion dollars. Canadian banks earned two point five billion dollars.

Now, if we didn’t have the rules in place, if we didn’t have public servants to enforce them, the story may be different.

The president of France, Nicholas Sarkozy agrees. He said recently, “We can no longer accept a capitalist system with no rules no organization and no regulation.”  And he’s a right wing thinker in France. Wow, times have changed.

Rules by themselves have no teeth. We need to make sure they’re enforced. That’s one of the jobs of a financial officer. Financial officers need to be seen as an investment not a cost.

You need to ensure rules are in place. You need to ensure they’re clear. You need to ensure they’re enforced. Why? Because Canadians expect it, and because you’re accountable to Canadians. We want to help.

Thank you.