2014 Fall Report of the Auditor General of Canada
Chapter 5 - Support to the Automotive Sector audit - Industry Canada

Management Action Plan (November 2014)

OAG Recommendations

Department’s Response

Actions

Target Completion Date

1

(5.65) – Industry Canada, in collaboration with the Department of Finance Canada, Export Development Canada, and other relevant entities, should publish a report with clear information on the financial assistance provided to Chrysler and General Motors, and on the impact the assistance had on the viability of the companies. Information on the financial assistance should include the total amounts disbursed, the use of the funds, the amounts recovered so far, the value of shares outstanding, and the cost of the financial assistance.

Agreed. While the various Government of Canada departments involved in the restructuring of General Motors (GM) and Chrysler have met all formal reporting requirements, Industry Canada, in collaboration with the Department of Finance Canada and Export Development Canada will complete and publish a final report on the financial assistance provided to GM and Chrysler by the end of 2014.

Industry Canada, in collaboration with the Department of Finance Canada and Export Development Canada has completed and published a final report on the financial assistance provided to GM and Chrysler.  The report was published December 19, 2014 on Industry Canada’s website.

Completed December 19, 2014.

2

(5.67) – Industry Canada, in cooperation with the other entities involved, should conduct a review of the management of the financial assistance provided to restructure Chrysler and General Motors and should identify lessons learned.

Agreed.  In the immediate aftermath of the restructurings, Industry Canada undertook to identify factors that led to our success in preventing the collapse of the automotive sector.  These specific actions were recognized by the Institute of Public Administration of Canada in awarding the 2010 Silver Innovative Management Award and by the Public Service Award of Excellence 2009 in the Exemplary Contribution under Extraordinary Circumstances category, both awarded to Industry Canada. With the benefit of time, Industry Canada, in cooperation with the other entities involved, will undertake, in 2015, a review of the management of the financial assistance to restructure Chrysler and GM with a focus on identifying lessons learned.

In 2015 Industry Canada will undertake a review of the management of the financial assistance to restructure Chrysler and GM with a focus on identifying lessons learned.

The project would entail, but not necessarily be limited to, reviewing the OAG’s report, relevant documentation and interviewing key government staff including key decision makers who worked on the restructuring and could identify actions that were undertaken at the time (2009) that were effective and actions that, with the benefit of time, have been identified as potentially useful in a crisis situation.


By December 31, 2015.

3

(5.76) – Industry Canada should review its management procedures for the Automotive Innovation Fund to ensure that risk profiles of projects and applicants are taken into account during project assessment.

Agreed. Industry Canada will continue to assess project proposals to the Automotive Innovation Fund as outlined in the program’s terms and conditions, including risks to government and risks inherent to funding automotive projects. The Department has reviewed its risk framework for assessing projects and will use this framework to ensure the risk profiles of projects and applicants are taken into account during project assessments.

The Automotive Innovation Fund (AIF) Risk Framework has been updated.  The updated document makes explicit the manner in which the Department considers the risk profiles of projects and applicants during project assessments. 

The AIF Risk Framework will continue to provide a governance and accountability framework to AIF management and staff to integrate risk management principles and practices into program and project related activities including initial assessments, due diligence, negotiation of agreements, monitoring, and the management and administrative processes of the AIF.

Completed October 31, 2014.     

4

(5.86) – Industry Canada should continue to monitor the performance of the projects and should use this information to determine whether the Automotive Innovation Fund is achieving its objectives of bringing environmental, economic, and innovation benefits to Canada and fostering competitiveness of the automotive sector.  It should also report on the program’s results.

Agreed. While the 2012 evaluation found that the Automotive Innovation Fund was on track to achieve its intermediate outcomes, it was too early to assess whether the program was meeting its long-term objectives. Industry Canada has monitored, and will continue to monitor, the performance of the Automotive Innovation Fund projects, and will use the information to determine whether the program is achieving its long-term objectives of bringing environmental, economic, and innovation benefits to Canada and fostering competitiveness of the automotive sector.  Industry Canada will report on program results once it has the information to do so in a comprehensive manner, as part of the program evaluation currently scheduled in its departmental evaluation plan for 2017-18.

A program evaluation to determine whether the AIF is achieving its long-term objectives is scheduled for 2017-18, in compliance with the Treasury Board Policy on Evaluation and with Industry Canada’s Five-Year Strategic Evaluation Plan. 

To this end, the program will continue to collect performance information on individual projects and on the industry in support of this evaluation.  

By March 31, 2018.