$1 billion later, no idea if it bought jobs

Auditor general raps fund meant to create jobs during recession: "They should have had a mechanism in place to actually measure how it did."

Photo courtesy of Wikimedia Commons.

When the recession hit, the fiscally conservative Harper government held its nose and went on a spending spree aimed at preserving jobs and keeping the economy afloat.

But, according to a stern report just issued by the federal auditor general, it never set up a system to measure how successful the $47-billion stimulus plan was.

And that's a problem, the report says. Especially since $1 billion of the money was spent on a fund aimed at preserving and creating jobs in small communities hard hit by the recession -- money spent with absolutely no evidence that jobs were actually created.

The Canadian Press has the story:

OTTAWA -- The federal auditor general says he's been given no way to measure the employment impact of a billion-dollar fund designed to maintain or create jobs during the last recession.

The Community Adjustment Fund was one of three programs under the Conservative government's self-styled Economic Action Plan that were examined by interim auditor John Wiersema.

The heavily promoted plan was a two-year, $47-billion stimulus spending exercise launched in January 2009 in the midst of a global recession.

Wiersema told a news conference Tuesday that his "overall message'' is that the government should follow through on its commitment to Parliament to report on the impact of the full $47-billion action plan, "both in stimulating the economy and creating employment.''

"Whether or not we can rely on what the government does in reporting on the Economic Action Plan, well, we haven't seen the government's report yet,'' said Wiersema, whose permanent replacement, Michael Ferguson, was appointed earlier this month by Prime Minister Stephen Harper.

"I haven't audited the models that it will use.''

But opposition critics said Wiersema's limited audit covering $7 billion of the full program gives them little reason for optimism that any government report will be verifiable.

"I don't have confidence that the government is going to come clean on what the full results of the Economic Action Plan were, because they haven't monitored it, so they don't know,'' NDP critic Peter Julian told a news conference.

"That's my conclusion of reading the auditor general's report.''

Despite the Harper government's massive promotion of the action plan, Wiersema found a common theme among the three specific programs and $7 billion in spending he examined: All are hobbled by a failure to coherently say whether results met expectations for the dollars that were spent.

The auditor general's criticism was particularly pointed for the $1-billion Community Adjustment Fund, which was created with the express purpose of creating and maintaining jobs in smaller communities hard-hit by the recession.

"Given that objective, we think they should have had a mechanism in place to actually measure how it did,'' Wiersema told reporters.

Wiersema, who replaced retired auditor Sheila Fraser on an interim basis last spring, also looked at the $4-billion Infrastructure Stimulus Fund and the $2-billion Knowledge Infrastructure Program.

The programs were part of a whole-of-government advertising and promotion scheme in which tens of millions of dollars were spent on advertising.

A slick website, criticized by many observers for its partisan overtones, directed readers to community-funding announcements by MPs and cabinet ministers, complete with a map showing project locations. More than 8,000 project signs were erected across the country, tracked by public servants on a weekly basis with reports going all the way up to Prime Minister Stephen Harper himself.

Yet the auditor found that on the most critical performance appraisals of the actual stimulus programs he examined, Canadians remain in the dark.

"In our view, the fragmented presentation made it difficult for parliamentarians and Canadians to obtain an overall picture of results achieved against the planned performance expectations and public resources spent,'' said the audit.

It noted the results of the three programs audited cannot be extrapolated to the entire $47-billion action plan.

Part of the audit problem, said the report, is that the examination took place during a period when the stimulus spending deadlines were extended to Oct. 31, 2011.

Only about 70 per cent of the projects examined met the initial March 31, 2011, government deadline, Wiersema noted, although the prime minister had stated last Dec. 2 that nearly 90 per cent of projects "will be done'' by the deadline.

Even those projects that were completed by the end of March had another 90 to 180 days to submit final reports, meaning the auditor general's office did not have these reports in time for the audit.

Projects that were extended to Oct. 31 have another 90 days to submit final reports.

The auditor also noted that, after it became apparent there would be unspent stimulus funds for a variety of reasons, 42 additional projects were approved by Infrastructure Canada last December.

Those 42 projects were approved "on the condition that they be completed by Mar. 31, 2011,'' stated the audit report. Instead, it found that 34 of those projects opted to take the extension to October.

In a previous audit of the Economic Action Plan conducted last fall, former auditor Sheila Fraser gave the Conservative government "high marks'' for its management of the initial spending roll-out. Civil servants got the money flowing quickly without abandoning government controls or oversight, said the October 2010 report.

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