Ottawa has little control over billions of dollars in federal finances which are regularly transferred to the provinces for specialized programs like housing and transportation, Canada's auditor general said.
Sheila Fraser's latest report to Parliament, released Thursday, states that Ottawa uses trusts to funnel money to the provinces, but once the money is sent, the provinces are free to spend it as they see fit.
Fraser's report also found that the federal government has no legal power to ensure that the funds are spent on the intended initiatives.
Though Ottawa's trust transfers include "operating principles," which are supposed to act as spending guidelines, they lack teeth and can't be enforced, said Fraser.
"However, because these operating principles are not part of the trust agreements, they are not legally binding," said Fraser's report.
- Read the auditor general's report by clicking on the link that appears to the right
Over the past 10 years, the federal government has transferred $27 billion to the provinces through different trust agreements, states the report.
Other key findings in the auditor general's report pointed to problems in the way that Public Works hands out some professional services contracts and in the general operations of smaller government agencies.
Those include bodies like the CRTC, the Canadian Human Rights Commission and the Copyright Board, which Fraser said aren't given a fair shake from their parent organizations.
Fraser said that the Canada Revenue Agency mismanages IT spending and that Health Canada's recent public reports on wait times and quality of care are ineffectual.
The release of Fraser's document, which was delayed for weeks after Prime Minister Stephen Harper prorogued Parliament in December, coincided with a report from Canada's environment commissioner.
The environment report slammed the efficacy of the government's green initiatives, which have cost Ottawa billions of dollars in recent years.
With files from The Canadian Press
