This site will look much better in a browser that supports web standards, but it is accessible to any browser or Internet device.

Skip to Content

Speech in Senate Chamber: Inquiry—Office of the Auditor General—Debate Adjourned

Office of the Auditor General

Inquiry—Debate Adjourned

Hon. Anne C. Cools rose pursuant to notice of May 14, 2015:

That she will call the attention of the Senate to the terms, conditions and tenure of office of the Auditor General of Canada, pursuant to the Auditor General Act, sections 3.(1) and 3.(1.1), that say:

3. (1) The Governor in Council shall, by commission under the Great Seal, appoint an Auditor General of Canada after consultation with the leader of every recognized party in the Senate and House of Commons and approval of the appointment by resolution of the Senate and House of Commons.

(1.1) The Auditor General holds office during good behaviour for a term of 10 years but may be removed for cause by the Governor in Council on address of the Senate and House of Commons.

and, to his tenure in office, and the unique independence granted to this officer as "the auditor of the accounts of Canada," to permit him to verify and certify that government spending is in accord with the appropriation acts, as dictated and adopted by the Commons House; and, to his constitutional duty to support the Public Accounts Committee and the Commons House in their pre-eminence in the national finance and their power in the control of the public purse.

She said: Honourable senators, the Auditor General of Canada is a statutory officer. This means that his powers and duties are those set out in the Auditor General Act, sections 5 to 11, headed Powers and Duties. No Senate motion can add a new power to this act to audit the Senate. Audit was born of the British House of Commons' long struggle that won pre-eminence in the public finance, revenues and expenditures, the control of the public purse. As the house of "representation by population" and of "no taxation without representation," this was their Commons House's highest constitutional achievement. "Control of the public purse" means that government spending must be as the Commons dictated and voted in their appropriation acts, which in Canada, like Britain, must originate in the Commons by a Crown minister's motion.

The Auditor General was created to conduct the appropriation audit. The appropriation audit was a high watermark in constitutionalism and ministerial responsibility. The Auditor General's audit was to verify and certify that government spending was as the Commons dictated in their appropriation acts, which in their schedules listed every appropriation by appropriation vote number. Each appropriation vote had its own account. In Canada, control of the public purse was established early in our new confederation's House of Commons. This issue had been a large goal in our pre-confederation assemblies.

Honourable senators, in Canada the deputy minister of finance had been the Auditor General until 1878. That year, Liberal Prime Minister Alexander Mackenzie's government divided these two offices. Guided by the British reforms of the Exchequer Chancellor, the Great Commoner Liberal William Gladstone, who moved the 1866 Exchequer and Audit Departments Act. In Canada, Prime Minister Mackenzie's Finance Minister, Richard Cartwright, presented his bill, An Act to Provide for the Better Auditing of the Public Accounts. About the new, independent auditor general, he said on March 19, 1878, at page 1218 of our House of Commons Debates, that:

. . . there would be some alterations in matters of detail in addition to the main alteration, which would consist in separating definitely the office of Deputy Minister of Finance from the office of the Auditor General, in accordance with the English custom.

Honourable senators, the intention of the Liberals' 1878 act was to separate completely and wholly the auditor general from the functions of government.

Our finance minister, like the British exchequer minister, was then and is now, central to the national finance and public expenditure. By our Financial Administration Act, Schedule I.1, he is the minister responsible for the auditor general. On April 2, Finance Minister Cartwright explained his bill, at page 1625 of the Commons Debates, thus:

. . . to have a perfect audit of accounts there should be a complete division between the offices of Auditor and Deputy Minister of Finance. The main object of the Bill was to carry that out, . . . It was deemed expedient, therefore, to adopt the English practice, and to create an officer, who should hold his appointment during good behaviour, and be removable, as Judges are, on an Address by both Houses of Parliament.

Honourable senators, by completely and definitely separating the finance department from the independent Auditor General, this officer was constituted to support the Commons House's pre-eminence in the national finance and the public purse. Created wholly by its statute, he was a parliamentary creature, as distinct from a Crown creature. The ancient problem was ever that the two houses had no power to appoint their own officers and relied on the Crown to appoint their clerks by commissions. Not statutory officers, these two clerks, unlike the auditor general, are ancient Crown officers who attend and serve the houses daily. On April 4, Minister of Finance Cartwright explained his bill to create an office to assist the Commons and not the government. For better audit, his act's section 11 said:

For the more complete examination of the public accounts of the Dominion, and for the reporting thereon to the House of Commons, the Governor General may, under the Great Seal of Canada, appoint an officer, to be called the Auditor General of Canada, and such officer may be paid out of the Consolidated Revenue Fund, . . .

Colleagues, like judges' salaries, this salary was a direct charge on the Consolidated Revenue Fund. This technique was used to avoid such salaries being subjected and exposed to confidence votes and the fatal conflicts on appropriation and supply votes. On tenure, section 12 of the act said:

The Auditor General shall hold office during good behaviour, but shall be removable by the Governor General on address of the Senate and House of Commons.

Honourable senators, the English phrase "during good behaviour" is the Latin phrase quamdiu se bene gesserint. Both mean "life estate in office," the tenure of our BNA Act section 96 superior court judges. The British North America Act, 1867, "Judicature," section 99(1) headed "Tenure of Judges," says:

. . . , the Judges of the Superior Courts shall hold office during good behaviour, but shall be removable by the Governor General on Address of the Senate and House of Commons.

The tenure that judges and senators hold was given to the new independent auditor general, who, by the way, no longer has this same tenure. This was noted by John A Macdonald. On April 4, 1878, he said at page 1700 of the Commons Debates:

He is a judicial officer, . . . independent of the Government.

Our BNA Act, 1867, phrase "during good behaviour" was taken from the British 1701 Settlement Act that:

. . . , Judges Commissions be made Quamdiu se bene gesserint, and their Salaries ascertained and established; but upon the Address of both Houses of Parliament it may be lawful to remove them.

Honourable senators, "during good behavior" means that a judge's tenure is life estate in office. This was confirmed in the Court of King's Bench 1692 judgment in Harcourt vs. Fox. Then, Justices Gregory and Holt ruled on tenure during good behavior. About "during good behavior" and the Settlement Act, Chief Justice Holt said, in The English Reports, Vol. 89, at page 734:

. . . I knew the temper and inclination of the Parliament, at the time when this Act was made; their design was, that men should have places not to hold precariously or determinable upon will and pleasure, but have a certain durable estate, that they might act in them without fear of losing them; we all know it, and our places as Judges are so settled, only determinable upon misbehaviour. . . . But now I think since the making of this last statute in the first of this King and Queen, he [the clerk of the peace] has absolutely an estate for life in his office independent of the custos, and determinable only upon misbehaviour.

Justice Gregory noted, at page 728:

. . . I conceive that by this Act the clerk of the peace has his office for his life, by these words, "to have and enjoy so long as he shall well demean himself in the office." If these words had been annexed to a grant of any other office in Westminster Hall, without all question the grantee had been an officer for life(d) . . .

Honourable senators, from 1878 to 1977, Canadian Auditors General held office for life, subject to removal by the Senate and the Commons. The first independent auditor general, John McDougall, served for 27 years, from 1878 to 1905; George Gonthier for 15 years, from 1924 to 1939; and Robert Seller for 19 years, from 1940 to 1959. Life estate in office is taken from the ancient common law property concepts, tenure, tenancy and estate in property and land. By the common law, offices were held as property and land, by a tenure or tenancy in it. For senators and judges — this concerns us senators — life estate in office, that is, during good behaviour, is no longer natural life but is now limited to age 75. However, life estate in office is liable solely to forfeiture of the office for misbehaviour.

In his 1820 work, A Treatise on the Law of the Prerogatives of the Crown, Joseph Chitty wrote, at page 85:

. . . that as they are constituted for the public weal it is expedient that they should be properly executed. On this principle a condition is tacitly and peremptorily engrafted by law on the grant of all offices, that they be executed by the grantee faithfully, properly, and diligently: on breach of which condition the office is forfeited or liable to be seized.

Honourable senators, by the wish of then Auditor General Macdonell, the 1977 Auditor General Act repealed life estate for the Auditor General and replaced it with an inferior term of years. This act and its inferior tenure were Macdonell's brainchild. Sonja Sinclair, in her 1979 book, Cordial But Not Cosy: A History of the Office of the Auditor General, wrote, at page 122, about Macdonell's fixed term:

In accordance with Macdonell's specific recommendation, . . . auditors general were to retire at the end of ten years of service, . . . As he explained to the Public Accounts Committee, he had seen many organizations suffer because their chief executive officers had been appointed without a fixed term . . . "After a period of time," he told the committee, "any leader will have begun to feed on his own ideas.

That was the end of the true protection for the independence that the Auditor General had. It was taken away at the wish of an overbearing and overreaching Auditor General.

Auditor General Macdonell clearly knew little about the law of Parliament or the law of office tenure. He swept away this officer's independence, that was granted to assist the Commons House. In his 1766 Commentaries on the Laws of England, Book 2, William Blackstone wrote, at page 36:

Offices, which are a right to exercise a public or private employment, and the fees and emoluments thereunto belonging, . . . For a man may have an estate in them, . . . for life, or for a term of years, or during pleasure only: save only that offices of public trust cannot be granted for a term of years, especially if they concern the administration of justice, . . .

Honourable senators, Macdonell's "fixed term" is Blackstone's common law "a term of years." This inferior tenure set aside this officer's legal independence. Auditor General Macdonell, by his will, public campaigns and his own limitations, degraded irreparably the Auditor General's constituted independence from government. This is clear in his 1977 Auditor General Act. This was the new act. Senators may not be familiar with this, but this act was still new when I came here in 1984. There were many senators here still smarting from Auditor General Macdonell's campaign. This act's section 3(1) replaces the term "Governor General" with "Governor in Council," another diminution.

3. (1) The Governor in Council shall, by commission under the Great Seal, appoint a qualified auditor to be the officer called the Auditor General of Canada to hold office during good behavior for a term of ten years, but the Auditor General may be removed by the Governor in Council on address of the Senate and House of Commons.

Colleagues, a removal on the two houses' address is the Governor General's grave action to cancel or void the commission, as advised by the two houses. In an officer's removal by address, the Governor-in-Council cannot replace the Governor General. An address is Parliament's houses' unique proceeding to speak to the sovereign as the head of Parliament. In removal, there is no address to the Governor-in-Council. By address, the Governor General acts with the two houses' advice, as distinct from his ministry's, which had advised the failed appointment. We must understand, a removal of a high officer is always a serious crisis in the administration of justice. This is one of the reasons it is rarely done, but the Governor General would act with the two houses' advice, as opposed to the advice of the ministry of the government that had advised the failed appointment in the first place and which appointment and advice were being repudiated in the houses' removal addressed to the Governor General. In an address, the Governor General must absolutely use his judgment and power to remove someone to whom he had granted office on his minister's advice. The GG alone can remove or suspend from office.

Honourable senators, tenure during good behaviour protects against removal by the governor on the cabinet's advice. Terms for years do not. The independence of the Auditor General of Canada is now most degraded from its original intent. This degradation continued in the 2006 Federal Accountability Act, section 110, which added the words "for cause" after the words "may be removed." The current Auditor General Act, subsection 3(1.1), now says:

The Auditor General holds office during good behaviour for a term of 10 years but may be removed for cause by the Governor in Council on address of the Senate and House of Commons.

The term "for cause" is employment and employee law of dismissal. It is not for high appointments, as we senators would know. It treats the officer as an employee. None of this applies to high offices during good behaviour, which limit removal only to misbehaviour in the office.

Further, the term "qualified," which formerly described the auditor to be appointed, was also repealed by the above Accountability Act, section 110. The current act's section 3(1) is now unclear whether it means that auditors who are not qualified may be appointed by the governor.

It is a joke what they did with the act. This was all done at the behest of a particular Auditor General.

The Hon. the Acting Speaker: Do you need a few minutes more?

Senator Cools: Yes, I do. Thank you so much.

The Hon. the Acting Speaker: Agreed?

Hon. Senators: Agreed.

Senator Cools: Honourable senators, since the 1878 act's adoption, the auditor's legal and constitutional position has been degraded by the incumbent Auditor Generals' wishes. By their own self-definition, they have also taken the powers they want through their adroit media use, by which they present themselves to the public as the watchdog over politicians' spending as though they represent the taxpayers.

I thank honourable senators for their attention. I wanted to say that for a period of time in this Senate, I was the deputy chair of the National Finance Committee, and, as you know, that senator is charged with the responsibility of piloting the government's appropriations acts and supply bills through the Senate. I did that for many years. I was told that I did a very good job, but my point, honourable senators, is to show that during those years I learned much about the public finance, about the national finance, and I made it my business, in those years, to study the history and background of the Auditor General.

Colleagues, I note that some time back, in 1988, the same Senate National Finance Committee undertook a study of the Auditor General. Our concerns were birthed by the unhappiness that so many senators have been caused by the Auditor General's actions in coming into the Senate to audit senators, which, of course, is not permitted or authorized by the Auditor General Act. In any event, I thought it would be useful if we gained some insight into the origins of this particular position, and why it was created, and what Parliament had in its head when it did create the position of the independent Auditor General.

I can tell you the one thing that was farthest from Parliament's head was that the Auditor General of Canada would be auditing the Senate and senators at the behest of a government motion moved as government business. The 1878 act intended that the Auditor General was to be no part of government business.

I thank you very much, honourable senators.

(On motion of Senator Moore, debate adjourned.)

The remainder of this day's Senate Debates are available here.