by Lucie Guibault
It seems that everywhere these days the fundamental principles of democracy, transparency and accountability are under attack. Unfortunately, the province of Nova Scotia is not immune from this worrying trend. Recent developments at the provincial legislature are indicative of a move towards the removal of key checks and balances on government action.
On February 18, 2025, the Nova Scotia Progressive Conservative government of Premier Houston tabled Bill 1 entitled An Act Respecting Government Organization and Administration. Key elements of this omnibus Bill risk seriously jeopardizing the government’s transparency and accountability towards its constituents, especially those relating to the proposed amendments to the Auditor General Act.
Deletion of grounds for removal of Auditor General
Let us recall that the role of the Auditor General is to audit the annual consolidated financial statements of the government that are included in the public accounts required under the Finance Act. The Auditor General may also audit the performance of an auditable entity or any activity, program, process or function of an auditable entity. The Auditor General’s independence is paramount to allow for the statutory mandate to be fulfilled and to ensure that Nova Scotians obtain a true account of how their tax money is being spent.
Clause 1 in the Bill would amend the Auditor General Act to allow for the unqualified removal of the Auditor General by the Governor in Council on the passing of a two-thirds vote of the House of Assembly. The requirement that the removal of the Auditor General be for cause or incapacity would be abrogated. This section of the Bill has already received attention from the opposition and the press.
The government’s official position is that this amendment would bring Nova Scotia legislation in line with that of other provinces. This is incorrect. Eight out of the ten provinces plus the Federal level allow for the removal of the Auditor General either for cause, or for cause or incapacity. Manitoba and Alberta are the outliers. Nova Scotia would become one of the outliers. This change would give unbounded discretionary power to the Governor in Council to put an end to an Auditor General’s term. It risks having a chilling effect on the Auditor General, who may become very hesitant to investigate or report on issues seemingly unfavourable to the sitting government. This is not the only problematic proposed amendment to the Auditor General Act, however.
Designation of privileged records or information
To fulfil the statutory mandate, the Auditor General is given the right of unrestricted access, at all times, to all records of any auditable entity, including the right to copy such records and to any things or property belonging to or used by any auditable entity. This right of access is recognized “[n]otwithstanding the Freedom of Information and Protection of Privacy Act or any other legislation, and notwithstanding any other rights of privacy, confidentiality or privilege, including solicitor-client privilege, litigation privilege, settlement privilege and public interest immunity.”. The current Act affirms that “[a] disclosure to the Auditor General under this Section does not constitute a waiver of privilege or immunity including solicitor-client privilege, litigation privilege, settlement privilege or public interest immunity.”
Remarkably, and unique to Nova Scotia, the Act further elaborates on the designation of privileged records and information. These provisions would undergo significant changes if the Bill is adopted. According to current subsection 14(6) of the Act, “[w]here the Auditor General and the auditable entity are unable to agree as to what records are privileged records, either party may make an application to the Supreme Court to determine the matter.” Where an application has been made to the Court, subsection (7) specifies that the record in question is not to be disclosed until a determination has been made by the Supreme Court authorizing such disclosure. Clauses 2 and 3 of the Bill would repeal subsections 14(6) and (7) and add a new section 14A.
Under proposed section 14A, the determination process would be concentrated in the hands of the Attorney General. Subsection (1) states that “[w]here the Attorney General determines that, in the Attorney General’s opinion, any record or information…, the Attorney General may, by order in writing, designate the record or information…” Doubling down on subsection (1), subsection (2) provides that “[a]n order under subsection (1) is, for the purpose of this Act, conclusive proof that the record or information described therein is subject to solicitor-client privilege, litigation privilege, settlement privilege or public interest immunity’. In other words, the Attorney General has the sole discretion to make the determination and once this determination is put in writing, it is evidence that the records and information are privileged. Pursuant to subsection (3), the order is subject to judicial review on a standard of reasonableness. Subsections (4) and (5) give the Governor in Council the power to make regulations respecting the Attorney General’s determination and designation of records.
It seems highly incongruous that the Attorney General, as a member of Cabinet, would be the sole person entrusted with the responsibility of determining whether records and information are privileged or not. Since a disclosure to the Auditor General does not constitute a waiver of privilege or immunity, the main consequence is that records and information that are designated as privileged would not be amenable to public disclosure as part of the Auditor General’s report. In any case, should the Bill be adopted in its current state, it would make the entire process surrounding the determination and designation of records and information much more opaque and one-sided than it currently is.
Elimination of Pre-Budget Revenue Estimates
Since at least as far back as 2010, section 20 of the Auditor General Act requires that the Auditor General conduct a review, in accordance with the assurance standards for review engagements of the Chartered Professional Accountants of Canada, of the estimates of revenue used in the preparation of each budget address of the Minister of Finance to the House of Assembly. The findings of the review must be submitted in form of a report to the House of Assembly, be tabled with the budget address and provide an opinion as to whether the revenue estimates are reasonable and presented fairly. Bill 1 would repeal this section entirely.
While this provision is perhaps unique to Nova Scotia, compared to other equivalent Canadian statutes, it does provide guidance to the government at the crucial moment of preparing and presenting its annual budget to the Assembly. These revenue estimates can provide useful support for the government budget options and decisions. They allow constituents to gain a better understanding of the government budget plans and to see whether the plans are feasible and how would they impact public finances. Since making such revenue estimates has been part of the Auditor General’s mandate for the past fifteen years, it seems odd to remove this section altogether from the Act. Without it, the operations of the government will be less transparent.
Possibility to request the confidentiality of the Auditor General’s report
Perhaps the most astonishing part of Bill 1 is the proposed insertion of a new section 21A in the Auditor General Act. This elaborate section would also be a unique feature of the Nova Scotia statute. Proposed subsection 21A (1) provides that “[w]here a member of the Executive Council having responsibility for the subject-matter of a report under Section 21 determines that, in the opinion of the member of the Executive Council, the report, or any part thereof, contains information that in the interests of public safety or otherwise in the public interest should remain confidential, the member of the Executive Council may request that the Auditor General submit the report confidentially to the House.”
Proposed section 21A counts a total of ten subsections, detailing the manner in which the Auditor General’s report is to be submitted confidentially to the Speaker of the House and subsequently, how that report is to be delivered confidentially to the members of the House. Without reproducing the entire provision, it is sufficient to mention that the report could be sent to the Public Accounts Committee for the determination of the confidential character of a part or the whole of the report. Moreover, the House of Assembly Management Commission would be granted regulatory power respecting the disclosure of information in a report that has been submitted confidentially. Finally, except in accordance with the regulations and subject to subsections (5), (7) and (8), no person would be allowed to disclose information in a report that has been submitted confidentially.
It seems not only contradictory, but down right incomprehensible, to mandate the Auditor General with the task of auditing the annual financial statements of the government and the performance of auditable entities as a means to ensure transparency and accountability towards the citizenry, while allowing the report to be kept confidential. This provision beats the purpose of the entire Act.
If Bill 1 were adopted, it would mark a significant and worrisome departure from standard practice regarding the oversight of government operations by the Auditor General. No compelling reasons have been given justifying these proposed legislative changes. They should be rejected. Does the Nova Scotia government have something to hide?