OTTAWA
The Canadian Northern Economic Development Agency (CanNor) is among the federal agencies under the unflattering glare of the auditor general in his spring report.

Nunavut MP Leona Aglukkaq, the minister responsible for the Canadian Northern Economic Development Agency, said the agency has accepted all of the auditor general's recommendations. - NNSL file photo

"The Canadian Northern Economic Development Agency has not managed and delivered selected economic development transfer payment programs in accordance with key requirements of the policy on transfer payments," the report concluded. "The agency's administration of contribution agreements is weak, monitoring of recipients is inadequate, and the agency has not measured and reported on whether its programs are achieving their objectives."

In the report tabled in Parliament May 6, auditor general Michael Ferguson noted CanNor has begun to address its problems.

"In 2012, it established a management control framework that sets out expectations on how its transfer payment programs are to be managed, and it is implementing this framework," the report states. "As well, it has started to harmonize its economic development programs."

At a May 6 news conference following the release of his report, Ferguson said in an audit of selected transfer payment programs of CanNor, it was found that the agency is not adequately monitoring the contributions it pays out.

"It does not collect enough information from recipients to know the extent to which they are complying with the requirements set out in their contribution agreements," he said. "As a result, the agency does not know the extent to which programs are achieving their intended objectives, nor whether the funding it provides is making a difference to economic development in the North."

Ferguson also noted that, when the agency was established in 2009, the government determined its headquarters would be in Iqaluit.

"However, the agency has not been able to fill some key positions in the North, and critical corporate functions continue to reside in the Ottawa liaison office," he said. "The agency is updating its human resources plan to guide future recruitment, but it does not have a plan to relocate corporate functions to Iqaluit."

Western Arctic MP Dennis Bevington said the report clearly shows CanNor is an organization in disarray, pointing, to the fact the agency is still being run out of Ottawa, where key positions like the president are located.

"No wonder the agency is in disarray," the MP stated in a news release. "All the decisions are being made in Ottawa, not the North. There is only one person responsible for this incompetence and that's the minister."

Bevington told Nunavut News/North that, when CanNor was created, there was a big announcement by the government that the headquarters were going to be in the North.

"That hasn't happened, and, in the report, it says there is no plan to make it happen," he said.

Environment Minister and Nunavut MP Leona Aglukkaq, the minister responsible for CanNor, said the agency has accepted all of the auditor general's recommendations.

"In fact, the agency has already taken steps and made progress in addressing these recommendations," she stated in a news release. "We remain committed to supporting the North through investments in communities, business, energy, and important infrastructure."

Aglukkaq said CanNor will continue to work alongside its clients, partners and stakeholders to create a strong, diversified and sustainable economy that creates jobs, growth and long-term prosperity.

"The agency is committed to ensuring effective and efficient service to all three territories and is continually improving its business processes to better serve the North," she said.

Mike Bradshaw, executive director of the NWT Chamber of Commerce, said there is not really a lot that is surprising in the auditor general's report.

"There are a couple of disappointing criticisms with regard to CanNor," he said. "One that we're most concerned about is that they don't appear to have a proper assessment process once they make an investment in any project in the North, which just isn't good business."

Bradshaw said CanNor appears to be mired somewhere between a noble effort to support the North and actual economic development results

"The kinds of projects that have been invested in to date aren't very inspiring," he noted, pointing to a recent investment of $100,000 to enhance playground equipment in a small community in Nunavut. "I'm not sure how that assists the development of the economy in the North or even in Nunavut itself. It's a nice thing to do and it's a noble gesture, but what's the result."

Bradshaw said CanNor has the potential to be vital for the North, "We are hopeful that CanNor will fulfill its potential, because we certainly need the funding in economic development in Northern Canada, and definitely in the NWT."

Since its creation in 2009, CanNor has invested more than $185 million in 910 projects to foster economic development across the North.

Three key programs were selected for the audit, through a random sampling of projects - the Targeted Investment Program, the Community Economic Development Program, and the Northern Adult Basic Education Program.

Auditor general says ...

Auditor general Michael Ferguson has made recommendations to the Canadian Northern Economic Development Agency (CanNor) in a recent report. Among the main recommendations, Ferguson said CanNor should:

* Ensure assessments of eligibility for assistance are completed and documented as required by the policy on transfer payments.

* Formally review processes for the review and approval of projects so that funding decisions are made in a timely manner.

* Review its quality assurance processes to ensure that, before contribution agreements are signed, they do not contain inconsistencies.

* Document its recipient and project risk assessments, and define appropriate levels of monitoring and reporting for contribution agreements.

* Review recipient reports and follow up on cases where information is incomplete or does not support activities specified in contribution agreements.

* Fully implement performance measurement strategies for its economic development programs.

* Finalize implementation of its management control framework for grants and contributions.

* Update its human resources plan and establish an Inuit employment plan as required under the Nunavut Land Claims Agreement.

* Review its staff complement to fulfill its mandate of having an organization based in the North.

* Finalize harmonization of its economic development transfer payment programs so that objectives are clear and accountability is clarified.

Source: Auditor General of Canada

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