Pursuant to notice of December 12, 2019, moved:

That the Rules of the Senate be amended:

1.by:

(a)deleting the word “and” at the end of rule 12-3(2)(e) in the English version; and

(b) replacing the period at the end of rule 12-3(2)(f) by the following:

“; and

(g) the Standing Committee on Audit and Oversight, three Senators and two qualified external members.”;

2.by replacing rule 12-3(3) with the following:

“Ex officio members

12-3. (3) In addition to the membership provided for in subsections (1) and (2), the Leader of the Government, or the Deputy Leader if the Leader is absent, and the leader or facilitator of each recognized party and recognized parliamentary group, or a designate if a leader or facilitator is absent, are ex officio members of all committees except the Standing Committee on Ethics and Conflict of Interest for Senators, the Standing Committee on Audit and Oversight and the joint committees. The ex officio members of committees have all the rights and obligations of a member of a committee, but shall not vote.

Restriction on membership

12-3. (4) No Senator shall be a member of both the Standing Committee on Internal Economy, Budgets and Administration and the Standing Committee on Audit and Oversight.”;

3.by replacing the portion of rule 12-5 before paragraph (a) by the following:

“12-5. Changes in the membership of a committee, except for the ex officio members and members of the Standing Committee on Ethics and Conflict of Interest for Senators and the Standing Committee on Audit and Oversight, may be made by notice filed with the Clerk, who shall have the notice recorded in the Journals of the Senate. The notice shall be signed by:”;

4.by replacing rule 12-6 with the following:

“Quorum of standing committees

12-6. (1) Except as provided in subsection (2) and elsewhere in these Rules, the quorum of a standing committee shall be four of its members.

EXCEPTION

Rule 12-27(2): Quorum of committee

Audit and Oversight

12-6. (2) The quorum of the Standing Committee on Audit and Oversight shall be two Senators and one external member, except in the case of the organization meeting, for which the quorum shall be three Senators.”;

5.by:

(a)deleting the word “and” at the end of rule 12-7(15) in the English version; and

(b)replacing the period at the end of rule 12-7(16) by the following:

“; and

Audit and Oversight

12-7. (17) the Standing Committee on Audit and Oversight, which, for the purposes of integrity, independence, transparency and accountability, shall be authorized, on its own initiative, to:

(a) retain the services of and oversee the external auditors and internal auditors;

(b) supervise the Senate’s internal and external audits;

(c) make recommendations to the Senate concerning the internal and external audit plans;

(d) report to the Senate regarding the internal and external audits, including audit reports and other matters;

(e) review the Senate Administration’s action plans to ensure:

(i) that they adequately address the recommendations and findings arising from internal and external audits, and

(ii) that they are effectively implemented;

(f) review the Senate’s Quarterly Financial Reports and the audited Financial Statements, and report them to the Senate; and

(g) report at least annually with observations and recommendations to the Senate.”;

6.by adding the following new rule 12-9(3):

“Audit and Oversight — access to information

12-9. (3) The Standing Committee on Audit and Oversight may review the in camera proceedings of other Senate committees, including any transcripts of meetings, as they relate to the mandate of the Audit and Oversight Committee.”;

7.by replacing rule 12-13 with the following:

“Organization meeting

12-13. (1) Once the Senate has agreed to the membership of a committee, the Clerk of the Senate shall, as soon as practicable, call an organization meeting of the committee at which it shall elect a chair.

Chair of Audit and Oversight

12-13. (2) The chair of the Standing Committee on Audit and Oversight shall be a Senator who is not a member of the recognized party or recognized parliamentary group to which the chair of the Standing Committee on Internal Economy, Budgets and Administration belongs.

Audit and Oversight — nomination of external members

12-13. (3) After electing its chair and deputy chair, the Standing Committee on Audit and Oversight shall adopt a report to the Senate nominating two qualified external members for the committee. This report must be agreed to by all three Senators who are members of the committee. The report shall include recommendations on remuneration and permissible expenses for the external members, which shall be paid from Senate funds once the report is adopted by the Senate.”;

8.by replacing rule 12-14 with the following:

“Participation of non-members

12-14. (1) Except as provided in subsection (2) and elsewhere in these Rules, a Senator who is not a member of a committee may attend and participate in its deliberations, but shall not vote.

EXCEPTIONS

Rule 12-28(2): Participation of non-members

Rule 15-7(2): Restrictions if declaration of interest

Rule 16-3(6): Speaking at conferences

Audit and Oversight

12-14. (2) Senators who are not members of the Standing Committee on Audit and Oversight shall not participate in its meetings, unless they are appearing as witnesses.”;

9.by replacing the portion of rule 12-16(1) before paragraph (a) by the following:

“12-16. (1) Except as provided in subsections (2) and (3) and elsewhere in these Rules, a committee may meet in camera only for the purpose of discussing:”;

10.by renumbering current rule 12-16(2) as 12-16(3), and by adding the following new rule 12-16(2):

“Audit and Oversight — in camera

12-16. (2) The Standing Committee on Audit and Oversight shall meet in camera whenever it deals with the in-camera proceedings of another committee.”;

11.by replacing the portion of rule 12-18(2) before paragraph (a) by the following:

“12-18. (2) Except as provided in subsection (3) and elsewhere in these Rules, a Senate committee may meet when the Senate is adjourned:”;

12.by adding the following new rule 12-18(3):

“Audit and Oversight

12-18. (3) The Standing Committee on Audit and Oversight may meet during any adjournment of the Senate.”;

13.by replacing rule 12-22(1) by the following:

“Majority conclusions

12-22. (1) Except as provided in subsection (7), a report of a Senate committee shall contain the conclusions agreed to by majority.”;

14.by replacing rule 12-22(2) by the following:

“Presentation or tabling

12-22. (2) Except as provided in subsection (8) and elsewhere in these Rules, a committee report shall be presented or tabled in the Senate by the chair or by a Senator designated by the chair.

EXCEPTION

Rule 12-31: Report deposited with the Clerk”;

15.by adding the following new rules 12-3(7) and (8):

“Reports of Audit and Oversight Committee — Content

12-3. (7) The Standing Committee on Audit and Oversight shall include the opinions of the external members in its reports.

Audit and Oversight — report deposited with the Clerk

12-22. (8) A report of the Standing Committee on Audit and Oversight may be deposited with the Clerk at any time the Senate stands adjourned, and the report shall be deemed to have been presented or tabled in the Senate.”;

16.by replacing the opening paragraph of the definition of “Committee” in Appendix I, starting with the words “A body of Senators, Members of the House of Commons or both,”, by the following:

“A body of Senators, Members of the House of Commons, members of both houses, or others, appointed by one or both of the two houses to consider such matters as may be referred to it or that it may be empowered to examine, including bills. A Senate committee is, except in the case of the Standing Committee on Audit and Oversight, one composed solely of Senators (as opposed to a joint committee — see below). (Comité)”; and

17.by updating all cross references in the Rules, including the lists of exceptions, accordingly.

He said: Honourable senators, I rise today to speak to the proposed motion to establish a standing committee on audit and oversight within the Senate of Canada.

I arrived in the Senate in 2016, but I had been watching from a distance as this institution made strides toward modernization over the past several years. You have worked out ways to organize our review of bills, including agreement on themes and dates for debates, as you did with the debate on medical assistance in dying, and you have divided complex and important pieces of legislation for review by several committees to ensure thorough and fulsome consideration.

As we continue to evolve, we are now picking up on work previously completed by colleagues here on the establishment of an external audit and oversight committee. This is a further step in building a more modern and accountable Senate. I believe the approach proposed is reasonable. It is relatively consistent with the Auditor General’s 2015 report and responds to the sort of fiscal oversight the public is seeking in order to restore trust and confidence in the Senate of Canada. It also reflects compromise that is based on extensive discussion and consideration.

Honourable colleagues, before I speak to the substance of the motion, I will give a brief overview of what has happened so far.

You will recall that the Auditor General of Canada was asked to conduct an audit of the Senate, following some expense issues that arose in 2012. The Auditor General’s report in 2015, among other things, recommended that oversight of senators’ expenses should be performed by an oversight body with a majority of members and the chair being independent of the Senate.

The Standing Committee on Internal Economy, Budgets and Administration, CIBA, considered this proposal in 2017, and in view of its breadth, referred it to the Senate as a whole. The matter was then considered by the Senate’s Rules Committee, which reported progress to the Senate in 2018, certainly on the potential structure and mandate of an audit and oversight committee. However, there was no consensus on whether external members should be included on a new committee. At that point, the question of external representation was referred back to CIBA.

It’s worth pointing out that at this stage in a long biography of this initiative, the focus on the mandate had shifted away from senators’ expenses, as colleagues in this room had wrapped their arms around that and made our expenses the subject of much more rigorous oversight and, indeed, external transparency. The focus shifted to oversight of the internal audit function and advice on issues such as risk management, so a committee very similar to those that we find in business enterprises where we have an outside-in perspective on probity in our general approach to auditing.

Under the rubric of CIBA and charged with this question of external representation, Senator Saint-Germain and Senator Wells reviewed the file and considered several options prior to focusing on a model that envisaged minority external representation on an external audit and oversight committee. I was privileged and fortunate to be present at some of the meetings between our two colleagues, and I can attest to the diligence, hard work and effort put into this by Senator Wells and Senator Saint-Germain to find a practical compromise.

They did that, but the clock ran out on us. Despite best efforts, the tenth report of Rules died on the Order Paper at dissolution in the fall of 2019. We are today considering this proposal again, one that has been derived in part from the Auditor General’s recommendation but also from the hard work already conducted on this issue by a number of senators, including members of CIBA, the Subcommittee on Senate Estimates and the Rules Committee.

I want to particularly thank Senator Saint-Germain, Senator Massicotte and Senator Wells, as well as other senators and advisers in this place, for their valuable contributions to this proposal, which I now hope will become our collective proposal.

Honourable senators will have copies of the motion before them. I know you will have had time to consider this proposal over the course of the past couple of months. Since much of this proposal was based on the excellent work of the Rules Committee, I’d like to focus on what has been developed further.

This motion finds a good balance of interests. It proposes a three to two split of senators and external members respectively. The committee would be made up of non-CIBA members, and it would be chaired by a senator who belongs to a parliamentary group that differs from the chair of CIBA. We’re looking for balance and equity here. This will ensure fairness, accountability and provide for as much representation from various parliamentary groups and caucuses as possible.

After a great deal of deliberation and research, it was felt that this model would be an appropriate balance between external oversight — it would be consistent with the Auditor General’s recommendations — and it would respect parliamentarians’ jurisdiction fully. This motion would ensure that external members could voice dissenting opinions, albeit in a minority, in reports of the committee to guarantee transparency and accountability. Also, like witnesses and staff members participating in committee proceedings, external members would, as participants in the proceedings, be protected by the parliamentary privilege of freedom of speech.

I note that with this composition of 40% of external membership, the Senate would, in fact, be leading the way in terms of best oversight practices in comparison to other legislatures, such as the United Kingdom and Newfoundland and Labrador, which have oversight and audit committees, albeit with smaller membership ratios.

A key point here is we’re not the first to do this. There’s nothing revolutionary about it. There are precedents today in this country and in the United Kingdom.

In the U.K. House of Lords, the current composition of their audit and oversight committee is seven members, two of whom — or less than 30% — are external. Their Audit Committee is, in fact, chaired by an external member and considers internal and external audit reports and management responses, and provides advice to the Clerk of the Parliaments — in his role as the accounting officer — and senior management on the effectiveness of internal controls.

The model that’s being proposed today is a little closer to the structure in Newfoundland and Labrador, where the committee was established via the Audit Committee Charter in October 2016 and consists of a maximum of eight members, including the Minister of Finance, the Deputy Minister of Finance, as well as up to six additional members to be appointed by the Minister of Finance. The six additional committee members are to consist of a minimum of one to a maximum of three external members who are appointed by the Finance Minister through a merit-based competitive process. This means that the maximum composition of lay members accounts for a little over one third of the committee.

Regarding other rule changes, this proposal ensures that there would be no ex officio status for leadership senators, and by changing rule 12-18, the standing Senate committee on audit and oversight may meet during any adjournment of the Senate in order to continue important business.

Finally, in terms of process, it’s proposed that after electing its chair and deputy chair, the standing Senate committee on audit and oversight shall adopt a report to the Senate nominating two external members for the committee. This report must be agreed to by all three senators who are members of the committee and include recommendations on remuneration and permissible expenses for the external members, who will be paid from the Senate funds once the report is adopted by the Senate.

I know that many of us here, and I would hope all of us, are comfortable with the establishment of an audit and oversight committee. It will be fiscally responsible, prudent and transparent, and it will be integral to our — and should I say “your” — efforts to modernize the Senate. I say “your efforts” because many of you were working hard to improve and reform the Senate long before I arrived.

We know that Canadians expect us to work together for responsible fiscal governance. Our collaboration on this important issue will be a tangible representation of our common efforts for a more transparent, accountable and modern Senate.

In closing, I understand that Senator Massicotte may well propose some amendments, and these are agreeable to me.

Colleagues, with this initiative, we’re restoring the public’s trust in the upper chamber. It’s time to open the door to external oversight.

Honourable senators, as you know, more than four and a half years after the publication of the Auditor General’s report and two years after the recommendation by the Standing Committee on Internal Economy, an audit process adapted to the parliamentary context was finally proposed to review our parliamentary expenditures. Senator Dean moved a motion to amend the Rules of the Senate to create a standing committee on audit and oversight.

I rise today to express my support for the proposed process. This process is the result of a lengthy study and discussions aimed at finding a fair balance between the independence needed for a legitimate audit process and our parliamentary privilege to manage our own affairs, which guarantees us the freedom we need to carry out our duties.

I also want to take this opportunity to make five changes to the motion by way of amendment. Four of them simply seek to correct technical issues, and one is more substantial.

First, I would like to reaffirm why this new audit and oversight committee is so important in the context of our efforts to modernize the Senate and restore its legitimacy.

The main objective of this committee is to reassure taxpayers that senators spend their money wisely, all according to the most appropriate rules and policies. Our current model, where only senators via the Internal Economy Committee supervise, review and approve the expenses of their colleagues, does not meet the needs of the public for trust and reliability, nor is it remotely in sync with basic modern governance principles that are applied in other parts or organizations of our society, whether private or public.

The model proposed by the Auditor General in 2015 was quite radical. It proposed the creation of an audit committee where a majority of members, including the chair, would come from outside the Senate. It also proposed a fully independent oversight and accounting body. That model is thorough, but also cumbersome and very costly, and would clearly conflict with our parliamentary privilege for self-management.

As an alternative to the Auditor General’s recommendation, our then Internal Economy Committee suggested creating a committee on audit and oversight composed entirely of senators who did not sit on the Internal Economy Committee with the authority to employ auditors and experts to confirm that our spending is appropriate. However, this model did not really remedy the glaring weaknesses of our existing governance system, where, in the end, senators still approved other senators’ expenses.

With Senator Dean’s proposal, the introduction of two qualified external members out of the five members who compose the committee brings the crucial element of independence that was missing. Some will say that this is not enough, since senators will still hold a majority in the presidency of the committee. I’ve had the same reservation. If you recall, the last time I spoke about this issue — two years ago — I proposed to totally externalize the process to an auditor.

Of course, I understand that a majority of external members on the committee could be interpreted by the courts as a renunciation of our parliamentary privilege to manage our internal affairs without outside interference. This could bring about considerable legal risks for our institution.

To compensate for the impossibility of appointing a majority of external members to the committee, we have decided to publish their opinions in the annual reports.

Of course, it would be possible and desirable for votes by committee members who are senators to be made public. I think such a mechanism would give external members sufficient latitude to express their opinions during discussions with members who are senators. That would allay the concerns of Canadians who want the new committee, with a majority of senators, to be less partial than the current auditing system.

I will now present the amendments that I would like to make to Senator Dean’s motion. If I may, I would like to ask for my colleagues’ consent to distribute a copy of chapter 12 of the Rules of the Senate along with my motion to amend so they can see and better understand Senator Dean’s and my proposed amendments.

I’ll begin with a substantive amendment, the most important one, which can be found in point number 2 of my motion. I propose to delete paragraph (c) of the new rule 12-7(17), created by point number 5 of Senator Dean’s motion.

Paragraph (c) directs the Standing Committee on Audit and Oversight to do the following, and I quote:

make recommendations to the Senate concerning the internal and external audit plans;

This paragraph could be interpreted as an obligation on the committee’s part to obtain Senate approval for each audit exercise it chooses to undertake. This goes against the principle of good governance, particularly the principle of independence, whereby an audit committee should be able to handle its own affairs, on its own, to do its work properly. I’m afraid that if we keep this paragraph, Canadians might be inclined to question our good faith and suspect the Senate of wanting to maintain some discretion to be able to avoid any audits likely to embarrass a senator.

That is why I propose deleting that paragraph, so as to avoid any risk of ambiguity.

Let me move to the explanation of the clerical corrections. We noticed some typos after Senator Dean tabled his motion in December. The first clerical modification I propose in point number one of my motion is in the French version of point number 3 of Senator Dean’s motion. I suggest replacing the introduction of section 12.5 of the Rules of the Senate with an edited text.

The second clerical modification in point number 3 of my motion is within point number 14 of the French version of Senator Dean’s motion. The numbering of the rule that is modified is actually rule 12-22(2) and not 12-22(1).

The third clerical modification in point number 4 of my motion is in the English version of the introductory wording in point number 15 of Senator Dean’s motion. The rule that is modified is rule number 12-22(7) and (8) and not 12-3(7) and (8).

The last clerical correction in point number 5 of my motion is in number 15 of Senator Dean’s motion. It creates a new rule number 12-22(7) that was wrongly numbered 12-23(7).

As Senator Dean’s notice of motion was already signed and delivered, it was not possible to edit it. With his agreement, we chose to correct the errors in the same motion that also proposed to delete paragraph 12-27(17)(c).

To conclude, honourable senators, once these modifications are approved, I believe we will have reached the best audit and oversight system possible, given our need to vote, preserve the integrity of our parliamentary structure and restore public confidence in a key institution that is meant to serve Canadians. This can’t wait any longer.