Sheila Fraser gives Tories thumbs up on stimulus

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In a report that will no doubt delight Stephen Harper and frustrate his critics, Auditor-General Sheila Fraser is giving the Conservatives good grades for the way their government disbursed stimulus spending during the economic downturn.

But Ms. Fraser's fall report Tuesday does flag some concerns about whether Ottawa improperly exempted some make-work projects from environmental assessments that would have delayed their start date. Two thirds of projects examined lacked sufficient information to determine whether an exclusion was warranted, she said.

The spending watchdog is also taking the federal government to task for failing to accurately estimate how many jobs were created by the $47-billion in spending.

Ms. Fraser's initial audit of the Harper government stimulus package is not her office's final word on the matter. It reviewed how stimulus programs were designed, the steps taken to ensure only eligible projects were funded. A second audit, due next year, will look at specific projects and probe whether funds were misspent.

Nevertheless Tuesday's favourable assessment is a boon for the minority Tory government because it burnishes their economic stewardship credentials even as the Conservatives prepare to fight a possible 2011 federal election campaign.

"I would say I would give the government high marks for how they managed that initial phase" of the stimulus spending, Ms. Fraser told reporters.

"I think public servants worked very hard to deliver the program quickly without completely ignoring the appropriate controls -- and they paid a lot of attention to managing the risks around that."

The follow-up audit -- looking for misspending -- won't be ready for release until the fall of 2011, a due date which may fall months after an election.

In this first report on the stimulus spending, Ms. Fraser's office examined about $9-billion of the $47-billion in the federal government's Economic Action Plan -- money that will continue to be disbursed until the end of March 2011. Programs that went under the microscope include the centrepiece Infrastructure Stimulus Fund and the Recreational Infrastructure Canada Program (RInC).

"We found that the government has adequately managed these selected programs by putting in place appropriate management practices and providing programs to eligible recipients in a timely manner," Ms. Fraser's report said.

The spending watchdog said Ottawa has not presented Canadians with a complete picture of how many jobs were created by the stimulus spending.

It found that the Department of Finance relied on economic modeling to estimate the employment created because "project-level information was unreliable and did not provide a complete picture of jobs created or maintained" by the stimulus package.

"The total number of jobs created or maintained under the Economic Action Plan remains to be fully measured."

The Harper government introduced legislation that allowed some infrastructure projects to skip environmental assessments but the Office of the Auditor General found 35, or two-thirds, of the 52 approved projects did not have properly justified exclusions.

After Ms. Fraser pointed out the error, Infrastructure Canada conducted further analysis and said it is now satisfied that all projects met the appropriate criteria for exemption from environmental assessments.

But her report Tuesday noted that her office has not audited Infrastructure Canada's follow-up work.