Bill C-277 (Historical)

An Act to amend the Auditor General Act (audit of accounts)

Supply

[Guy Côté, Bloc, Portneuf, QC]

Madam Speaker, first, I would like to point out that I will be sharing my time with the hon. member for Jonquière—Alma.

Over the past few years, the Prime Minister transferred $9 billion to the various foundations. Of this, $7.7 billion has yet to be used. It is essential that the Auditor General have access to the accounting data of these various foundations and report on them to this Parliament, which is the trustee of the taxes paid by Canadians and Quebeckers. That is essential.

Through my hon. colleague, the Bloc Québécois introduced Bill C-277, which I supported. Hon. members will understand that we are in favour of this motion. To us, it is the least objectionable solution; of course, our preference would be for the abolition of these foundations, which this government is using as part of its trick to reduce surpluses and hide from parliamentary scrutiny the amounts previously mentioned.

Why do we think that the foundations should be abolished? I will be brief. The foundations are unacceptable for a number of reasons. They are unacceptable because parliamentarians lose control over the mission of the foundations. They are unacceptable because parliamentarians do not know whether these foundations are managed properly in accordance with the various policies of this Parliament. They are also unacceptable because, as I mentioned earlier, they have served too often to hide the budget surpluses of the current government and Chrétien government preceding it.

In addition—and this is an eminently Quebec concern—I think that the role played by foundations is really unacceptable because they have been used too often to trample—and I weigh my words carefully—on the jurisdictions of Quebec and the provinces. For example, there are the Foundation for Innovation, the Millennium Scholarship Foundation, the Health Services Research Foundation, the Canada Health Infoway. If there are areas that are clearly the jurisdiction of the provinces and Quebec, they are health and education. In addition, these foundations are outside the application of the Access to Information Act.

The foundations exist. What do we do? Let us ensure, as parliamentarians, that we know very clearly what is being done with these funds. The very person to exercise this financial control over the foundations is the Auditor General. I want to underscore this because, in a very important opening, the President of Treasury Board acknowledged this morning the importance of Bill C-277, which would give the Auditor General this responsibility. He said that he agreed with referring Bill C-277 to committee for further study.

This is essential because we, as parliamentarians, want to give the Auditor General this mandate so that at least there is some control over the financial operations of the foundations. The Auditor General must have access to the books. I said it before on another occasion. The government regularly states of course that the accounts are audited by experts. That is certainly true, but what do these experts do?

They really audit what I would call the basic accounting of these foundations. In the end, I am quite certain, the external auditors will recommend that the figures are correct according to generally accepted accounting principles. The Auditor General can go much further than that. She can comment on how these funds are managed and whether they are always fully in keeping with the mission of these foundations and the wishes of Parliament.

In her follow-up report of February 15 on the accounting of foundations, the Auditor General made a point that is important for people to know.

On the audit, she mentioned that, overall, progress was unsatisfactory and that the foundations were largely unaccountable. She mentioned that the transfer of funds to these foundations continues to keep public funds—not private but rather public funds—from an effective parliamentary review.

Furthermore, given the importance of the amounts at stake, she was concerned about the lack of proper accounting to Parliament. Ultimately, this is what it comes down to. These amounts were taken from workers and our fellow citizens. And we as parliamentarians are being told that we cannot do a proper examination in order to see how these funds are being spent. This is truly unfortunate.

As I said, we are in agreement. And with Bill C-277, we are going to give the Auditor General the tools she needs to act as auditor or joint auditor for the following organizations: crown corporations; bodies established by acts of Parliament and to which the Government of Canada has paid $1 billion or more over any period of 12 consecutive months; any corporate entity without share capital, to which the Government of Canada paid $1 billion or more, in money or in kind, over any period of 12 consecutive months and in respect of which the Government of Canada has, either directly or through a crown corporation, the right to appoint or nominate a member of the governing body.

The government is doing its best to earn a reputation as an open government, one that promotes transparency and that says, contrary to reality, its estimates are realistic and correct. If the Auditor General is given access to the figures of the various foundations, if she can do her job as guardian of public funds, then she could—we all hope—confirm what the government is saying. However, if this is not the case, she will be able to say so. She will be able to tell all parliamentarians whether the amounts that were—I will not say misappropriated because it is perhaps too strong—but whether the amounts allocated—to put it politely—to the various foundations were spent correctly or not.

It is our job as parliamentarians to be able to reach this conclusion, to have the tools we need to do this and to report back to the public.

Last weekend, I had the pleasure of a meal with my father-in-law, and the first topic of discussion he raised was this: “How is it possible that, with all the money there is in those foundations, you people have not a word to say about it”? I would have loved to defend the foundations, but what could I do as an MP? The only answer I could give was: “Yes, you are right. We have no control over that money. The government does not want us to. It blocks access to the Auditor General, the key instrument.” I added: “Don't worry. We are onto it. I have supported a bill to bring about some concrete control, and we will not give up.”

I am very pleased, as I have already said, with the openness offered to us this morning by the President of the Treasury Board, in order to get the bill referred to committee. It can then be examined in detail and we will be able to get to the bottom of the matter as far as the funding allocated to the various foundations is concerned.

What we are dealing with here is a fundamental principle of democracy: the public must know where and how the taxes the government collects are spent. These taxes are essential to the government's mission, and that is perfectly all right. That mission, however, must be fulfilled properly.

Care needs to be taken to ensure that there are no more incidents like the ones we have witnessed in recent years. I will mention just the one: the sponsorship scandal, that's it. Because of that alone, the Auditor General must ensure that the funds in the foundations are properly spent.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Madam Speaker, I was listening to the hon. member for Prince Albert, who gave me one more reason to justify the Bloc Québécois opposition when the millennium scholarships was set up. At the time, we had asked for Quebec's share of the money to be transferred to the Government of Quebec so that it could continue to manage its bursary and loan system as it had been doing for many years. I agree with the hon. member when he says that money deposited in bank accounts should not stay there. He is, in effect, saying that the Bloc was right to oppose the creation of these foundations.

I would like the hon. member to comment on this, but first I will quote part of the opposition motion:

That the House call on the government to implement the measures recommended in the latest Auditor General's report to improve the framework for the accountability of foundations—

One measure that could be taken is to support Bill C-277, an act to amend the Auditor General Act (audit of accounts). This would give the Auditor General the right to examine the foundations.

Since the President of the Treasury Board said that this bill corresponds to the Conservative motion, I would ask the hon. member for Prince Albert whether he thinks Bill C-277, as presented by the Bloc Québécois, could be used as one of the measures to resolve the issue of transparency with these foundations.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I thank the hon. member for Sudbury for her question. To begin with, I will tell her the same thing I told the hon. member for Mississauga South. I appreciate the fact that her question looks forward to the debate in committee.

Is it a matter of overseeing money or of allowing the Auditor General the right to oversee the foundations? I think that this question can most certainly be asked of the Auditor General during consideration of Bill C-277 in the Standing Committee on Public Accounts. At that time, she will be asked how, in her opinion, oversight of foundations should be ensured. She will explain this to us parliamentarians, and we will appreciate her responses and her comments.

Is it by a management audit of the use of resources? Is it by following the money trail? The Auditor General will surely enlighten the Standing Committee on Public Accounts and parliamentarians on the technical and accounting terms.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I am very pleased to see that the hon. member for Mississauga South is going further and not simply limiting himself to the matter before us today. I believe he already sees the bill going to committee for study.

Of course, the hon. member is correct about the fact that if we grant the Auditor General the power to investigate foundations, the Office of the Auditor General will not do an exhaustive audit of all eight or ten of the foundations every year. Nevertheless, the office will be able to audit all of these foundations whenever it sees fit. That is what we want. The Auditor General does not audit all departments every year, but she can audit any of them.

The Standing Committee on Governmental Operations and Estimates may examine other departments or look at a chapter of the Auditor General's report, although that is usually sent to the public accounts committee.

I agree completely with the hon. member. If we vote in favour of today's motion by the Conservatives, if we vote in favour of Bill C-277 and we say in committee that the Auditor General will audit a particular foundation in a particular year, and that all the others will be examined by the Standing Committee on Governmental Operations and Estimates, that is perfectly correct and a good idea, in my opinion, and I think, in the opinion of all members. It will be debated in committee, but I would be in favour of this idea right now.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I am well aware that I am to debate the motion. However, we do not have much time, during the 10 minutes allowed for questions and comments, to address the President of the Treasury Board. That is what I am doing before resuming my speech.

Was he saying that if the federal government transfers funds to a province, such as Quebec, the Auditor General has no right of oversight; consequently, she is unable to investigate the foundations.

However, under the Canada-Quebec-municipalities infrastructure program, whereby each party pays one-third of the costs, money is transferred between the federal government and the province, and the Auditor General has the right of oversight because it is for a federal-provincial-municipal program. She used Quebec as an example, saying that even if there were transfer payments, funding for this program was properly administered.

There are other instances of transfer payments, for example in health, where the department must ensure a follow-up of such funding. But since the Auditor General has been auditing UN files and programs cost shared by the federal government, the province and the municipalities, according to the President of the Treasury Board, she could therefore audit the foundations. But he says no.

This is how we arrive at the point of trying to find, in an instructional approach, not a demagogic one, how and why the Auditor General ought to have an overview of the foundations, and how the government's reasoning, i.e. the foundations' independence, does not hold up to any kind of close scrutiny.

I am totally in agreement with the President of the Treasury Board when he says that caution is required. Saying that the Auditor General ought to be able to vet the foundations is not saying that the foundations are mismanaged. I am not saying that every foundation has its own sponsorship scandal. I am not saying that funds are necessarily being pillaged. What I am saying is that we have a right to know. If they are properly managed, properly administered, properly controlled—as the President of the Treasury Board says they are—let them open up their books and prove it.

Some administrators of foundations have even told me that the Auditor General had to be allowed to come and that they would be only too pleased to show her how well they manage their affairs. Yes, they did support Bill C-277, they told me, because they were proud of the way they were administering the foundations and the foundations' funds. There was no problem.

Others called me to indicate their disagreement, but not out of fear of being found dishonest, or any such thing. If I am not mistaken, it was Canada Pension Plan, which has a federal-provincial transfer, and they asked me to raise the possibility of such an audit. I am totally in agreement with that. If it cannot be done for some legal or accounting reasons, I do not want to show any disrespect for the law and regulations.

If a foundation cannot be included in such an audit for this or that reason, it will be excluded, and parliamentarians along with the Canadian public can be told why it cannot be audited. This is why the Auditor General always adds, at the end of her recommendation, the phrase “with a few exceptions”. These exceptions will have to be defined at the committee stage. We will be able to do it there, and I am glad of that.

This recommendation by the Auditor General is not something that just dropped out of the sky yesterday. It relates to a recommendation subsequent to an April 2002 Auditor General report. Three years ago, she wrote:

Substantial amounts of public money have been transferred to foundations. I am concerned by the limits placed on Parliament's ability to scrutinize them.

While the President of the Treasury Board is in the House, I will quote two other facts which bother us and which suggest that the Auditor General should have oversight over foundations. In her Status Report, tabled February 15, in paragraph 4.64 she says:

However, some sponsoring departments informed us that they had first learned of the amount to be paid to foundations only when federal budgets were announced.

I think this is rather worrisome.

Tomorrow, the Minister of Finance will present a budget in which he will announce that some foundation will receive $3 billion more. The sponsoring minister will then say he did not know it, he did not ask for it, he did not apply for it, and that he is finding out as the budget is brought down. Is this normal? I do no think so. I could ask that question of the President of the Treasury Board.

However, in the same report, the Auditor General has a table showing the foundations. The hon. member for Sudbury told us that it was not known how many foundations could come under the Auditor General's scrutiny: tens, hundreds, thousands. The cancer foundation of Lanaudière region is not there. The foundation to preserve the shores of the St. Somewhere River, in someone's riding, is not there. There are eight foundations mentioned on page 4 of chapter 4 of the Auditor General 's report.

There are a number of questions to be asked about this table, Exhibit 4.2. For example, Canada Health Infoway Inc. was founded in 2001. Four years ago, the federal government gave $1.2 billion to Canada Health Infoway Inc. Today, Canada Health Infoway Inc. has $1,200,002,000 in its account. It received $1.2 billion and now it has more. That is amazing. If this foundation has respected the government's mandate for it, despite its independence, to assist in disseminating health information—and this is not an investment fund like the Caisse de dépôt et placement du Québec; it is supposed to be a foundation—we can see that it has more money now than it did four years ago. Can we ask questions? I think so.

There are other interesting examples, such as the Endowment Fund, which is a group of funds that includes the Pierre Elliott Trudeau Fund. The Endowment Fund was set up in 2001-02 and has granted $10 million in subsidies. It received $389 million to set up, has granted $10 million in subsidies, but cost $11 million to administer. Can we ask why it cost $11 million in administration fees to grant $10 million in subsidies? I am not saying this is wrong, I am just saying it might be questionable.

Then there is Sustainable Development Technology Canada, which was set up in 2001 and received $350 million. Since 2001, it has granted—sustainable development technology is the environment minister's hobby horse—some $6 million. Any idea how much it cost to administer? Seven million dollars. The administration costs outweighed the value of the grants. This is something the Auditor General might want to look into.

Do you understand, Mr. Speaker—and Mr. President of the Treasury Board—that this raises questions? I am not a big tax expert, nor am I very good at counting, so I will not dwell on the interest earned column, because I see that—although I am a poor administrator, at least I am not as bad as some people—some figures are not as good as others. To receive $2.5 billion and to be unable to earn interest on that amount might be a management problem.

This is not a scandal like the sponsorship scandal, but, if, through these statements, the Auditor General has some questions or leaves us with some questions, then it seems to me that we should get to the bottom of this.

First we are told this can adversely affect the foundations' independence. Yet, when a foundation receives all its funding from the federal government, it is not exactly financially independent, is it?

Earlier, I asked the member for Peace River, if I am not mistaken, how taking a look to see if the money is properly managed can adversely affect a foundation's strategic decisions. As far as I am concerned, a foundation such as, for example, the millennium scholarship foundation—I should point out here that we want all foundations to be abolished—gives scholarships to a number of students. If the Auditor General takes a look to see if the foundation's budget is well managed, the mandate of the millennium scholarship foundation will still be to give scholarships to students. I do not really understand the government's argument about the independence of foundations.

Second, the member for Mississauga South said that these foundations are audited nevertheless. He is a qualified accountant who knows there are two types of audits: financial audits and value-for-money audits, or performance audits.

Calculating that an organization received $100 million and spent $100 million is internal auditing. Such auditing is conducted in every department. However, determining whether this $100 million went to the brother-in-law of André Ouellet's sister-in-law and was used to take trips, drink champagne and so on, is another type of auditing called value-for-money auditing.

It is true that audits are now conducted in departments and foundations. It is true that foundations are subject to internal auditing. What the Auditor General is asking, and what we are asking is that these foundations be subject to external audits.

I do not want to hear all day long that there is an audit. It is also true that there is an external audit, because I know the member for Mississauga South will mention it.

However, it is the board of directors that decides who will do the audit. In the case of Canada Post, it was discovered that the board of directors, which was friends with the director and CEO, appointed external auditors who were not accountable to the government, but to the board. There may be a problem here.

Why, as parliamentarians, would we agree to give $9 billion to foundations and say that we do not what to know what is going on? If it is true that we do not want to know because this money is being properly administered, and if it is true that we do not want to know because there are internal audits, I must inform the Liberal member that each department has an internal audit branch. Why are we asking the Auditor General to look at all this then? Is it because they are all corrupt and all thieves? No, not all of them are. It is because we want to know how these funds are being administered. And the same is true for the foundations. The Auditor General called for this in April 2002. The Standing Committee on Public Accounts called for this in May 2003. The Auditor General called for it again this year and there is a bill that, I learned this morning, the government will support. So, it is about allowing the Auditor General to have the right of oversight for the eight, possibly twelve, major foundations which are currently funded by taxpayers' dollars.

Of these foundations, for the benefit of the member for Sudbury, it is not about, for example a anti-cancer foundation in her riding and where the volunteers could say—because that is what she said in her first intervention—that if the Auditor General audits the anti-cancer foundation cancer in her riding of Sudbury, it may be because there is something suspicious going on. The Auditor General will not go there. She could, if the bill passed, look at the operations of the Canadian Foundation for Innovation, which received $3.6 billion. Here is a surprising fact: there is still $3.1 billion left. It did not spend much.

Mention has also been made of the Canada Millennium Scholarship Foundation, the Canada Health Infoway, the endowment funds and Genome Canada. With regard to the latter, the Auditor General is verifying if it is a foundation under its letters patent of incorporation or if it is not an independent organization.

There is also the Aboriginal Healing Foundation, the Canada Foundation for Sustainable Development Technology and the Canadian Health Services Research Foundation. In my riding, I have no volunteers at Canada Health Infoway. I do not have any volunteers at the Aboriginal Healing Foundation. This is to reassure the member for Sudbury who was saying that she was afraid the Auditor General would go to the private foundations in her riding. I do not wish to get into this.

I merely want to ensure that we have a right of oversight over the eight foundations which have received $100 million or more from the federal government over a 12-month period, as the Auditor General called for in 2002 and again in 2005, as the committee called for in 2003 and as Parliament will shortly as well. I think this is only right.

The Auditor General said the following in 2002:

The audit found:

significant gaps and weaknesses in the design of delegated arrangements;

limits on what the Auditor General can look at, which prevents her from giving Parliament proper assurance that the use of federal funds and authorities is appropriate;—

She is not saying they are mismanaged, simply that she does not know whether or not their use is appropriate.

—the “parking” of billions of dollars of the public's money in foundations, years before it is to flow to the intended recipients;

little recourse for the government when things go wrong;

limited opportunity for Parliament to scrutinize these delegated arrangements.

If the Auditor General called for this in 2002 and again in 2005, if the President of the Treasury Board says he has nothing to hide, if the Standing Committee on Public Accounts has been calling for it on numerous occasions, I am sure that everyone will agree with this opposition motion presented today by the Conservatives. We will therefore have the pleasure of seeing full unanimity within the House of Commons.

Now, in connection with Bill C-277, I have just learned this morning that everyone will be in favour, and thus there will be another opportunity for full unanimity within the House of Commons. After study and a rational and informed analysis of the matter, we will make it possible for the Auditor General to audit certain foundations. If, for legal or technical reasons, certain others cannot be audited by her, we will at least have been given an explanation to pass on to the public.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, for starters I would like to thank the President of Treasury Board—something that is not done very often in the House of Commons—for having just said, if I understood correctly, that he would support Bill C-277 after the second hour of debate. He said that he did not agree with the principle, but he wanted Bill C-277 to go to committee, where the debate would be held

With the avowed support now of the President of Treasury Board for Bill C-277, I am very pleased to learn that I will have the unanimous support of the House when we vote on this bill. It will therefore move along quickly; it will go to committee to be studied, as the President of Treasury Board wishes and as I do myself. I thank him therefore for his support this morning during the debate.

However, I have a few little concerns in his regard. During the debate, he said that the Auditor General could not be asked to audit the books of foundations because money is transferred to them and that, otherwise, this would mean the Auditor General could be the Auditor General of the UN. But the web site of the Office of the Auditor General, contains the following and I quote:

The Office of the Auditor General audits a number of United Nations agencies and has served as one of the auditors of the UN itself. The Office has also been one of the most prominent supporters of training programs for auditors from national audit offices of developing nations—

Since the Auditor General can audit the UN because the government transfers funds to it, according to the President of Treasury Board, she can therefore audit foundations. But he says she cannot. For example, the government transfers funds to Quebec and other provinces, and the Auditor General cannot audit this money. Therefore, on the strength of this, she cannot audit foundations.

I will return to my speech in a minute. I just wanted to take this opportunity to intervene with the President of Treasury Board, because there is not really much opportunity to do so during the 10 minutes allotted for questions and comments.

So the President of Treasury Board was saying that if the federal government transfers money to a province, for example Quebec, the Auditor General cannot audit it.

I know, Mr. Speaker, that I must give my speech. I am just making some comments....

[Reg Alcock, Liberal, Winnipeg South, MB]

Mr. Speaker, the member asked why, if we agree with all of the other aspects of transparency and accountability, we would be opposed to having the Auditor General as the auditor of these particular foundations. My answer very simply is that it is because of the nature of the private organization. For example, we transfer sums to the Province of Quebec. Should the Auditor General be the auditor for the Government of Quebec? The answer is no, because it is a separate body. There is a boundary area.

All we are saying is that there are lots of ways to get accountability and oversight but we think the danger is that the closer we pull the foundations into the government the more quickly they will lose their independence, which is a serious concern and the concern at the heart of this.

The member asked whether the government would support Bill C-277. I do not support Bill C-277 in principle as it calls for doing what the motion calls for, which is automatically appointing the Auditor General as auditor, but I would be prepared to support the movement of Bill C-277 to committee in order to have this conversation in a proper forum.

It is unfortunate because we have an opportunity with that bill to have a substantive debate about this. I would welcome that debate and participate in it. What we have here is a headline chasing motion that wants to make an important public policy decision like that, which is irresponsible.

I would suggest, if the member is willing, that if we were to get it into a committee in a form that would allow us to look for a solution to the problem that he wishes to solve, I will be his ally.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I have a comment to make and a little question to ask the President of the Treasury Board.

If the foundations are a model, if other countries come to look at what our foundations are and how they work, if they are a model of transparency, if the Auditor General says that in large part they are good, if his government and everyone watching us says they are good, why does he not want the Auditor General to look at how these foundations are managed? I agree with him that we must not stoop to the demagoguery of the Conservatives and say there is a sponsorship scandal in all the foundations. I am sure that they are all well managed. However, if they are all well managed, let us accept the proposition. That is my comment.

When the President of the Treasury Board says—and I thank him for it—that Bill C-277 is tabled in this House, this bill must go to committee and the Auditor General called in for that to happen. I am sure that he is quite familiar with the parliamentary legislative process. So his party has to support Bill C-277. My question is this: does the President of Treasury Board and his party support Bill C-277?

[Reg Alcock, Liberal, Winnipeg South, MB]

I hear a member asking why. Let me refer him to chapter 4 of the current audit recommendation. Paragraph 4.17 states:

If the foundations were deemed to be controlled by the government pursuant to this new standard, then payments to them could not be recorded as expenses, since the foundations would then be considered to be within the government reporting entity.

That has been the problem from the beginning. They are not departments. They are instruments of public policy, established by the House in accordance with legislation passed in the House and overseen by standards that have been debated in the House and discussed at committee. They produce independently audited statements and independent evaluations. They report all that information transparently. They appear before the House but they are not departments of this government, which is the fundamental issue here.

I do not reject one of the Auditor General's concerns about the oversight and relationship in terms of the reporting we get from these foundations. We have been working with her. In fact, we have worked with her to implement a number of changes that she has recognized. The new Comptroller General is working closely with her office to see where else we can go to satisfy these concerns.

The one concern where we do not have agreement is whether or not she should be the auditor of record of these organizations.

However I do have a recommendation to make that I think begins to address this concern, and I would encourage members to look at it.

The member for Repentigny has put before the House a private member's bill, I believe it is Bill C-277, that addresses this question. I believe there is one more hour of debate on that bill and then it will move to committee. I would encourage the House to get that bill into committee where it can call before it various actors, the auditor, myself, certainly, and the foundations. The committee can take a look at this because there may be another way to achieve the goal that the Auditor General wants.

When I get below some of the simplistic criticisms and into the substantive part of this debate, I think members want to be is satisfied that there is good oversight, which is what I think we all want.

However the Auditor General has asked for something else, which I think gives us a bit of an opportunity to differentiate here. She has spoken to the need to have the ability to, what is euphemistically called, follow the money audits. When there is a concern she wants to be able to follow the money into the organization.

I think that would be a very fruitful and useful avenue to explore. It would solve a number of problems. It would differentiate between the Auditor General being the auditor of these organizations and bringing them into the government fold, which creates other problems, and allowing her to have the independent oversight that she might like to have to satisfy herself should a concern arise.

I want to read what the Auditor General said last week. She always gets caught and she said this in her previous audit report, that often things that she says are picked up and taken out of context and used as supposed evidence of more serious problems. On CBC last week she said, “We do not have any issues with the people who are there and I would not want any of our comments to be taken as a criticism of the people nor of the activities that are going on in the foundations. I certainly wouldn't want to give the impression either that we think there is anything inappropriate going on in those foundations”.

Those were the words of the Auditor General. We can always raise the spectre of things but those are the words of the very person who members are purporting to represent here. The reality is that she says there is no substantive concern, that there is a policy dispute about whether or not these instruments should be part of government.

I should remind members that this House has taken the position by the passage of successive budgets that this instrument is a useful one and it works. These foundations were not created by the snap of a finger of the finance minister. Most of them were created in legislation that was debated and passed here in the House. The money was put before this Chamber and members passed it. Therefore to suggest that somehow this is a shady deal in the backroom is just simply inaccurate.

One more time I hear a member wanting to besmirch the good names of all the people who serve on these foundations and, under the cover of privilege, accuse them of being like the sponsorship.

Auditor General Act

[Guy Côté, Bloc, Portneuf, QC]

Mr. Speaker, I am a new member, and, as such, it is with emotion that I stood the first few times, but I am very happy today to support Bill C-277, which was tabled by my colleague from Repentigny. In fact, this bill is meant to lower the unfortunate level of public cynicism towards politicians.

We have before us a government that pretends to promote transparency. We have before us a Prime Minister who pretends to be a champion in the fight against the democratic deficit. We have before us a finance minister who says it is respectful to provide faultless management. I am happy that Bill C-277 gives the government an opportunity to practice what it preaches.

This bill will give back to the House and to the members of Parliament some control over the management of funds, which had been removed from the scrutiny of Parliament, something that started back in 1997, when the Prime Minister, then Minister of Finance, began to hide billions of dollars in different foundations. That way, he could remove these funds from public debate and distort his real manoeuvring room. Huge sums of money were involved.

I was making a quick calculation this afternoon. An amount of $9.1 billion was transferred within a number of foundations. If you add to that the $9.1 billion surplus for last year and the estimated $8.9 billion for the current year, we have a total amount of more than $25 billion that has been concealed from public debate in this House.

A government member was talking a moment ago about the work done by external auditors within the framework of their duties. I must say that my colleague from Repentigny has quite aptly explained the difference. I would still like to come back to that aspect.

Let me give you a few quick examples of the difference between the work of an external auditor and the work the Auditor General could do when it comes to the auditing of foundations.

In 1997, the Canada Foundation for Innovation has received a subsidy of $3.651 billion. As of 31 March 2004, that foundation still held $3.122 million. This means that, over a seven-year period, that foundation only spent 14 % of its budget.

Of course, an external auditor will look at the figures, examine everything and, at the end, I suppose, conclude that effectively, according to generally accepted standards in external accounting and audit, all the figures are correct. On the other hand, the Auditor General, in such a case, could make recommendations. She could tell the government that is not normal for a foundation after seven years to have spent only 14% of the budget allocated to it by the government.

The same goes for the Canada Millennium Scholarship Foundation. As we know, the Bloc has opposed this foundation specifically because it was impinging on Quebec's jurisdiction. The scenario is somewhat similar. Only 20 % of the budget allocated to the foundation was spent since 1998. That is 20 % in six years. We can ask ourselves why the finance minister of the time, who is now Prime Minister, wanted so much to allocate these funds to the foundations since, clearly, they were not ready to hand out the necessary sums.

However, there is worse still, and this is incredible. In 2001, $350 million was allocated to The Canada Foundation for Sustainable Development Technology. Today, as of March 31, 2004, this foundation still has $347 million on hand.

Listen to this next one, because it is truly mind-boggling. In 2001, Canada Health Infoway got $1.2 billion in financing from the federal government.

On March 31, 2004, the foundation had $1,202 billion. Not only did it not spend the money obtained from the federal government, but it made even more money.

In the mean time, incredible needs have been mentioned since the return of the House. There are people living in extreme poverty in Canada and in Quebec. I will not go back over the opposition day of the Bloc Québécois. I think that we have demonstrated that the federal government is not doing its job.

All this to say that Bill C-277 introduced by my colleague from Repentigny, gives to the government an opportunity to act where, until now, it has only talked. I sincerely hope that the government members will support the effort by my colleague in the committee as well as in the House, so that Bill C-277 may be passed. This is really important.

Also, we must not forget that these foundations established by the government are not subject to the Access to Information Act. There must be a specific provision in their financing agreement for the members of Parliament to be allowed to use the Access to Information Act and find out what is really going on within these foundations.

It has been mentioned that the Auditor General did an excellent job in the last few years. I said earlier that foundations cannot be scrutinized by members of Parliament. Actually, in April 2002—this is quite a while ago, and we again return to the lack of leadership in the government—the Auditor General wrote in her report called “Placing the Public's Money Beyond Parliament's Reach” that, in her opinion, the information provided to parliamentarians about the foundations “is not adequate for parliamentary scrutiny”. She concluded that “the foundations had been placed beyond the reach of effective ministerial oversight and parliamentary scrutiny”.

Knowing that, is it surprising that those who do not get the chance to listen to our proceedings daily tend to be cynical? I wish more people in Quebec and Canada could follow our proceedings as regularly as possible, because I hope, somewhat naively I suppose, that they would view the politicians with less cynicism. But their cynical view of the government and its party would increase immensely. Maybe the government would then really work in the best interest of the people instead of wasting its time in different ways and failing to resolve problems.

I hope the House will pass Bill C-277.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I am very proud to rise in support of the bill put forward by the hon. member for Repentigny. It is important that he brought the bill forward today because Bill C-277 really touches the heart of why we are here. We are in this place to manage the finances of our federal government effectively and to make sure that taxpayers across this country, all Canadians, are aware that their money is being managed effectively.

I also congratulate the member for Repentigny because Bill C-277 is similar to a motion that I brought forward in the House on November 1:

That, in the opinion of the House, the government should appoint the Auditor General as the external auditor of foundations, with a few exceptions, and ensure that adequate mechanisms are in place for a broad scope audit of all delegated arrangements.

The motion that I brought forward in the House is similar to the bill that thankfully the member for Repentigny has brought forward today. It is extremely important. His bill goes beyond the scope of my motion and deals with crown corporations and foundations in an effective way.

We know very well that this is a fundamental issue. It is an issue because the Auditor General has flagged it, as we know. She said, “Substantial amounts of public money have been transferred to foundations”. In her press release in 2002, which I will come back to as part of her report a bit later on, the Auditor General mentioned that she was “concerned by the limits placed on Parliament's ability to scrutinize them”. She has raised this question of foundations.

She also mentioned in her 2002 report that her audit found: “significant gaps and weaknesses in the design of delegated arrangements”; that there were “limits on what the Auditor General can look at”, which prevents the Office of the Auditor General from giving Parliament proper assurance that the use of federal funds and authorities was appropriate; that the “parking of billions of dollars of the public's money in foundations, years before it is to flow to the intended recipients” was something that occurred systematically.

Her report also indicated that there was “little recourse” for the government when things went wrong and unfortunately also “limited opportunity for Parliament to scrutinize these delegated arrangements”.

Very clearly the Auditor General has flagged the issue of foundations and, in a broader sense, crown corporation moneys that are paid by Canadians across the country and are set aside and outside her scrutiny. We know with a great deal of assurance that Canadians support the Office of the Auditor General and the task she takes on with ardour and professionalism to make sure we know that the money being spent through the federal government is being spent effectively.

I was very happy to learn this week that the efforts of the opposition parties in three corners of the House to fight to eliminate the withholding of $11.5 million in funding for next year for the Office of the Auditor General has been successful. That is another sign that this four-cornered House with four parties working together can help to resolve issues. It is unfortunate that the government chose to withhold that funding. Fortunately, due to opposition pressure, that funding is now being allocated to the Office of the Auditor General. Fortunately now she is not forced to lay off 85 of her employees. It was unfortunate that the government did not confirm this earlier, but again, opposition pressure made a difference.

We have talked about financial mismanagement. There are a lot of examples. We could talk about the $9.1 billion that is dropped into unaccountable foundations. Very fortunately, Bill C-277 would help us to start address that important issue. There is also the $46 billion employment insurance surplus, which we have talked about and which literally was made on the backs of workers and communities across the country.

We also know that the Liberal government consistently underestimates the budget balance. That is a total of $86 billion. Also, other speakers have referred to the sponsorship scandal, which is in the order of $250 million.

On the one hand, we have seen the mismanagement of funds from hard-working Canadian taxpayers across the country, funds that are being paid to the federal government in order to ensure that we build a better quality of life for all of us. On the other hand, we are seeing a situation in my area, for example, where homelessness has tripled.

Child poverty is not being reduced but is actually increasing. It is shameful that this is happening at a time when there is a budget surplus. In my community St. Mary's Hospital was closed this year, a hospital that was important and badly needed. Due to federal government cutbacks and bad decisions by the provincial government, we have seen the closure of that hospital.

We talk about the EI surplus and at the same time there is unemployment. Families are having a hard time making things meet because the social safety net is no longer there. There is growing child poverty and yet we have a surplus and there are corporate tax cuts.

We see this dysfunction between resources that should be available to all Canadians and how those funds are allocated. That is why I welcome the measure by the member of Parliament for Repentigny, to start to address that so that we know what is happening with every dollar that Canadians pay to the federal government.

Earlier I made reference to the 2002 report. I would like to come back to that for a moment. It is the issue around the financial accountability of some of these foundations. The 2002 Report of the Auditor General made reference to a number of these foundations and made reference as well to whether or not there was the overseeing of these foundations through the House and the Office of the Auditor General.

For example, on Genome Canada, the Auditor General mentioned in the 2002 report that there was no ministerial direction and action. There was no departmental audit and evaluation.

For the Canadian Foundation for Climate and Atmospheric Sciences, there was no reporting of expected performance to Parliament. There was no reporting of performance results to Parliament, no reporting of audited financial statements to Parliament, no reporting of evaluation results to Parliament, no strategic monitoring, and again, no ministerial direction and action and no departmental audit and evaluation.

For the Canada Foundation for Sustainable Development Technology there was no ministerial direction and action.

For the Green Municipal Investment Fund and the Green Municipal Enabling Fund, there was no reporting of expected performance to Parliament, no reporting of audited financial statements to Parliament, no reporting of evaluation results to Parliament, and no ministerial direction and action.

For Canada Health Infoway Inc. there was no reporting of expected performance to Parliament, no reporting of performance results to Parliament, no reporting of audited financial statements to Parliament, no strategic monitoring, no ministerial direction and action, and no departmental audit and evaluation.

These are issues that have been raised, thankfully by the Office of the Auditor General. Clearly, as one of the other members mentioned, accountability and good financial management are extremely important to all Canadians, to all taxpayers, and should be important to all parliamentarians. We welcome Bill C-277 because it effectively starts to address the issue of lack of oversight.

In conclusion, thanks to the hon. member for Repentigny, we have a bill that will begin to address all these problems that exist outside of government initiatives and that are currently being assessed by the Office of the Auditor General.

Indeed, in adopting this bill, we will increase the Parliament's scope for action as well as financial accountability, which is so important to Canadians.

I fully support this bill and I know we will have the opportunity to improve it at committee.

I salute the hon. member for Repentigny for this initiative and hope all the members of the House will support it.

[John Williams, Conservative, Edmonton—St. Albert, AB]

Mr. Speaker, I want to compliment my colleague from the Bloc Québecois for Bill C-277. There is no question that his heart is in the right place and in the right area. I am glad to see that the member speaking on behalf of the Liberal Party is going along with the idea that, yes, we need more accountability in this place.

I also support the intention of where Bill C-277 wants to go. Perhaps when it gets to committee it will have to be amended but I support the intent. What we need to talk about here at second reading concerns the sponsorship scandal and what happened when the Auditor General pointed out that the government had received little or no value for $100 million. We know that crown corporations were involved. For example, Canada Post was exempt by legislation from being audited by the Auditor General.

We know that Canada Post was very much into the sponsorship scandal and working with the advertising agencies and so on and so forth. After that it turns out that the president, CEO and chairman of the board was getting expenses reimbursed without any documentation. Then we found out that the audit committee had not been doing its job. We really need to know what is going on over there.

Canada Post is a crown corporation that has a monopoly in this country to deliver mail. Nobody else is allowed to do it. Canada Post is going to put the prices up again. I know the minister says that it is less than the cost of inflation. However we have no idea if that organization is being run efficiently and effectively. We have no value for money audits coming from the auditors of Canada Post. We have no capacity in this place to examine what the auditors are doing. We cannot bring them in and ask them to give us some real facts so we can see what is going on down there.

The bill is a good idea. When we take a look at the foundations, as was pointed out, they had about $7 billion sitting in their bank accounts which we had given them to do good work in society, the health innovation foundation, the scholarship foundation and so on. These were things that we approved in this House thinking that the money would be spent for the benefit of Canada and Canadians.

What happened? Canada Post put it in the bank as if it was its own money. Guess what? It pretty well was its own money. When we dealt with this issue at the public accounts committee the deputy comptroller general told us that they could not even get the money back. If the government decided to wind up the foundations and say that was it, that they did not want any more of this, then where do members think the money would go? It would not come back to us. It would be divided among the recipients who already received money from the foundation.

It may have changed since then. After we rapped the knuckles of the government at the public accounts committee, it decided it would see if it could make some changes. However it found out that it had no capacity to impose any change on these foundations unless it gave them more money.

We must remember that Canada Post had $7 billion in the bank. How much more did it need? We had to give it more so we could change the agreement. This is the nonsensical type of stuff that needs to be stopped. Therefore it is important for the Auditor General to go where she needs to go in the Government of Canada.

It is the old checks and balances thing. If people think the Auditor General will be showing up at their door, then we know they are going to suck it in and get it done right.

What about the privacy commissioner? He thought he was too small, with only an $11 million office budget. He did not think the Auditor General would come knocking on his door because he was just small potatoes. Then, of course, when it all started to unravel and fall apart, the Auditor General did go in and then we found that there were illegalities going on over there. They were spending money that was not even authorized by this place.

I stood up on a point of order and I said that the office had to be fixed and that we needed that money back. Unfortunately, and a disappointment to me and everyone else in this House I am sure, the government thought of every eventuality. In the event that the government spends money that is not authorized by this place, and it is fundamental to our democracy that we authorize it before it spends it, the line in the Financial Administration Act says that is okay and that we should not worry about it. The government can put a note in the public accounts when it is tabled saying that it is okay.

It did not even require a supplementary estimate to come into this House to be debated. It just had a little line saying that we should not worry, that we should be happy and that it was okay; it was illegal but it was okay: the sponsorship program, the foundations, Canada Post.

What about VIA Rail and the Business Development Bank? They were both wrapped up in the sponsorship scandal too. Why can we not take a look at them and do value for money auditing?

The intent of the bill is honourable and good and we do need to support it. As I say, it may need some tweaking in committee.

The other thing I wanted to mention has to do with federal-provincial relationships. The government is entering into a number of relationships on such things as the child care policy, the child benefit and so on. The federal government and a provincial government get together and deliver a program but nobody has the capacity to audit the whole program. The Auditor General of Canada may be able to look at one half and the provincial Auditor General can take a look at the other half, but they cannot talk to each other and audit the whole program because that is against the law and they adhere to the law. Even though other departments do not adhere to the law, they do. Therefore we cannot get a combined report auditing the whole program. We need to be able to do that. It makes eminent sense, I would say, to be able to do that.

It is interesting that when they negotiate these agreements, they always seem to forget to negotiate the accountability section. It just kind of drops off at the end and is not there. It is time we, just by default, ensure that it is there. In that way Canadians can expect the program will be audited. Canadians can expect a report saying that it is fine or it is otherwise. If it is otherwise, then we take the appropriate action and do what we have to do and start inquiries and spend $40 million, whatever it is we are spending over at the Gomery inquiry, plus the RCMP investigation and so on and so forth. It is called accountability and it does not matter what it costs. Accountability is what keeps people honest and it is what promotes honesty and integrity. The more we have of that, the better off we are.

[Diane Marleau, Liberal, Parliamentary Secretary to the President of the Treasury Board and Minister responsible for the Canadian Wheat Board]

Madam Speaker, I rise today to speak to Bill C-277, the private member's bill put forward by the member for Repentigny.

Bill C-277 proposes amendments to the Auditor General Act that would enable the Auditor General of Canada to act as auditor or joint auditor for all federal crown corporations and a variety of independent, not for profit organizations.

I will focus my comments on the proposal to expand the Auditor General's mandate to include not for profit organizations. However, before speaking on this, I would like to comment on the proposals relative to crown corporations.

In principle, I am very supportive of the Auditor General's oversight of all federal government entities such as crown corporations. After all, these organizations are owned and controlled by the federal government and are part of the federal government. It seems reasonable to me that Parliament's auditor should be eligible to act as their auditor or joint auditor.

Although the government agrees in principle with fostering more transparency to ensure that public funds are used as intended, we still do not believe that an amendment to the Auditor General Act is the best way to achieve this objective.

The government is examining amendments to the Financial Administration Act as it relates to Crown corporations. It is very likely that these tools will be more effective to ensure transparency and achieve the objectives of this bill concerning Crown corporations.

Now, with respect to the proposal for the Auditor General of Canada to act as auditor or joint auditor for private, not for profit entities, I would like to express my concern that such an expansion of the Auditor General's mandate could be seen as an intrusion on the independence of these organizations.

These organizations are independent of government. Unlike crown corporations, they are neither owned nor controlled by the government. They have their own members and boards of directors.

As members know, not for profit corporations and the voluntary sector are essential to Canadian life and the economy. Their independence is fundamental. I believe a key element of this independence is their ability to choose their own auditor. Without this, I believe many Canadians would be reluctant to work or volunteer in such organizations.

The bill proposes a $100 million threshold in federal assistance in any 12 consecutive months above which the Auditor General would act as auditor or joint auditor. This appears to be a very arbitrary number and I believe would be extremely difficult and disruptive to apply. It would exclude organizations that receive just below this threshold even if they receive such annual funding every year.

However, it would include an organization one year and not the next year if the $100,000 million threshold is not reached. This would be very disruptive to these organizations, as they would be required to change their external auditor to suit the varying levels of payments. As members know, the external auditor role is fundamental to any organization and there needs to be stability in their appointment.

Several not-for-profit organizations rely on the revenues of public sector organizations, whether they are from federal, provincial or municipal governments. It is precisely because governments recognize the importance of these organizations that they support them.

Governments are consistent in providing assistance to these organizations, and a significant element is an adequate government and a specific audit regime. The appointment of their own external auditor general is one of their fundamental rights.

I should also point out that the bill simply refers to payments in excess of $100 million. As such, it covers all forms of payment, whether they be grants, contributions, payments for goods and services or lending activity. Some of these organizations could involve other levels of government and often do in their assistance or governance. It would certainly not be appropriate to impose Parliament's auditor on these organizations and risk alienating other governments in Canada.

It is very uncertain just how many organizations the bill would impact. In addition, while there would be additional costs to expand the Auditor General's mandate and accept such engagements, it is uncertain what the total of these costs might be.

Another aspect to consider is that the House is currently considering new legislation introduced by the Minister of Industry governing federal not for profit organizations. This proposed legislation would replace parts II and III of the Canada Corporations Act with a leading edge, modern corporate governance framework for these organizations.

It proposes to strengthen corporate governance and accountability rules so that not for profit corporations have the necessary tools to meet the challenges of the future. I believe this private member's bill may be congruent with the intent and spirit of the proposed Canada not-for-profit corporations act.

Putting aside the question of expanding the Auditor General's mandate to enable her to accept appointments as external auditor for such not for profit organizations, I do believe that Parliament needs to be comfortable with the governance, accountability and oversight regime with respect to the use of federal assistance no matter who receives this assistance and no matter what the amount.

However, there are many ways to achieve this that better respect the independence of these organizations.

Through existing policy frameworks and contractual arrangements with recipients of federal funds, the government should be able to ensure effective governance and oversight. Many of these regimes provide for performance reporting, audits, evaluations and other forms of oversight. If there is a need to explore ways to make these regimes more effective, then I would certainly be supportive of such.

An area in particular where the government has shown significant progress is not-for-profit organizations, sometimes known as “foundations”, which receive financial assistance directly. By being responsible in the use of public funds, the government is committed to keep the promises stated in the 2003 budget and reiterated in the 2004 budget. All these statements were made to demonstrate sound management.

Funding agreements are entered into between the foundations and the government through the responsible minister providing the funding to the specific foundation. The funding agreements are approved by Treasury Board and cover areas such as the purpose of the federal assistance to the foundation, reporting, audit and accountability requirements regarding the use of this funding, prudent investment vehicles for the endowment funding, and the expected results to be achieved from the specific foundation investment.

As with all not for profit organizations, officers and staff handle the day to day operations of each foundation appointed by the board of directors. The board is made up of individuals appointed under the governing charter. The federal government may appoint some directors, but in all such cases these would be in the minority. The foundation's membership appoints independent auditors to audit the financial statements, which must be prepared in accordance with generally accepted accounting principles. The government can undertake compliance audits to ensure that the terms and conditions of funding agreements have been respected.

I understand that the Auditor General Act already provides the Auditor General the power to inquire into and report on any organization receiving financial aid from the government. The expansion of the Auditor General's mandate as proposed by this bill could be seen as intruding on the independence of not for profit corporations in Canada.

That being said, there may be additional oversight measures that can be undertaken which would not be as intrusive, and I understand these are currently being explored.

The Auditor General does not need to be appointed external auditor for these organizations in order to provide additional oversight over the use of federal assistance.

In conclusion, I support the principle of expanding the role of the Auditor General as auditor or joint auditor of crown corporations on the understanding that the mechanism to put this into effect be examined. However, I oppose the provisions of the bill that deal with not for profit organizations.

[Benoît Sauvageau, Bloc, Repentigny, QC]

moved that Bill C-277, An Act to amend the Auditor General Act (audit of accounts), be read the second time and referred to a committee.

Madam Speaker, it is always with a lot of emotion that the members participate in this part of our parliamentary life, that is the Private Members' Business.

For the benefit of the viewers I explain that while bills are generally introduced by the governing party, every day, parliamentarians exercise the privilege of introducing a private member's motion or bill. However, during their mandate or a session, individual members seldom have the opportunity to do so.

At the Bloc Québécois, we have made it a duty to introduce bills to respond to the concerns, aspirations and wishes of Canadians, after having consulted and heard what they have to say.

That is why I am very pleased today to introduce Bill C-277, an act to amend the Auditor General Act (audit of accounts), in order to allow the Auditor General to act as auditor or joint auditor, firstly, of crown corporations; secondly, of certain other bodies established by acts of Parliament to which the Government of Canada has paid at least $100 million during any period of 12 consecutive months; and, thirdly, of certain corporate entities without share capital in respect of which the Government of Canada has, either directly or through a crown corporation, the right to appoint or nominate a member of the governing body, andto which the Government of Canada has paid at least $100 million in money or in kind during any period of 12 consecutive months.

What do these legalistic and very opaque words mean? The bill is quite brief. It means that at present, as we speak, the Auditor General of whose power, credibility and relevance within the government we are all aware, whose role and mandate is to ensure that public funds are well managed, finds herself prevented from examining certain public funds, those in foundations and in five crown corporations.

To simplify and summarize: this bill gives the Auditor General the right, power and opportunity to investigate, examine and audit all public funds.

I am sure that those on the government side will say that most foundations, crown corporations and departments manage their money well. If everyone manages their money well, then they ought to agree with the Auditor General reassuring us every year that this money is well managed. Therefore, there should be no problem with this.

Which crown corporations not under the supervision of the Auditor General would become so if the bill is passed? I will name them; there are only five. Some are more special than others, but you will see they are all quite interesting.

There is Canada Post. At this moment, the Auditor General cannot examine the budget of Canada Post. We are not saying that there is no external audit; we are saying that the person doing the audit is chosen by the board of directors. That is rather unusual where public funds are concerned.

Some say that the Auditor General could look at the budgets and the management of Canada Post. She will not do so every year, but she could. After what happened with André Ouellet recently, it would be legitimate for the Auditor General to take a look at management and resource optimization within Canada Post.

Therefore, we have Canada Post, the Bank of Canada and the Canadian Race Relations Foundation. We do not want her to interfere with policy and decision-making or with day-to-day operation of these bodies. All we want is for her to review the management.

I was told after the bill was introduced that two are more sensitive, and I am quite open in this regard. People who know me understand that I am open to dialogue, discussion and amendments. We would have to see. The two are the Public Service Superannuation Plan and the Canada Pension Plan.

If, after discussion in committee, it is demonstrated that they are indeed problematic—the goal being to allow the Auditor General to do her job, and not create problems for anyone—we will see what can be done.

As far as the foundations are concerned, we are talking about the ones with a budget of at least $100 million. We are not talking about just any local shore protection foundation. We do not want the Auditor General to keep an eye on everything that happens, all the time. This would be unfeasible or almost unfeasible.

We have heard that foundations have received large amounts from the federal government, but are beyond the scope of review by a truly independent external auditor.

Again, we can be told that there are external auditing mechanisms in place; however, the external auditor is named by the board of directors. This does not ensure full accountability, transparency and responsibility towards the Parliament.

I will give a few examples of foundations. Again, let me state very clearly that I am not accusing these foundations' managers of being dishonest or bad. All I am saying is that if they are, then we should let the Auditor General take a look at their books.

The Canada Foundation for Innovation received $3.6 billion for its funding. The Canada Millennium Scholarship Foundation received, when it was founded in 1998, $2.5 billion. Canada Health Infoway, founded in 2001, received $1.2 billion. The Genome Canada endowment foundation received some $300 million.

When they were established, these foundations received around $9 billion. Today, $7.1 billion is still beyond the scope of the Auditor General's review.

If Parliament adopts my bill, it is simply to reassure the public, which got really burned, obviously, during the sponsorship scandal. Its aim is to reassure the public that it is not only a portion of public funds that are well managed and well administered and on which the Auditor General has oversight. In fact, all public funds are subject to scrutiny by the Auditor General.

What is the idea behind this bill? It is not a result of the sponsorship scandal and it is not for strictly political reasons. The idea takes shape in three specific documents.

First, this idea is based on the report of the Auditor General, who is not a political person but an independent officer of the House. In April 2002, she tabled a report. I want to read some excerpts. The press release accompanying the April 2002 report stated, and I quote the Auditor General:

Substantial amounts of public money have been transferred to foundations. I am concerned by the limits placed on Parliament's ability to scrutinize them.

Later, she stated:

The audit found:

significant gaps and weaknesses in the design of delegated arrangements;

limits on what the Auditor General can look at, which prevents her from giving Parliament proper assurance that the use of federal funds and authorities is appropriate;

the "parking" of billions of dollars of the public's money in foundations, years before it is to flow to the intended recipients;

little recourse for the government when things go wrong; and

limited opportunity for Parliament to scrutinize these delegated arrangements.

Later in her report, the Auditor General says:

We found that the essential requirements for accountability to Parliament—credible reporting of results, effective ministerial oversight, and adequate external audit—are not being met.

Later still, she says:

With a few exceptions, Parliament's auditor should be appointed as the external auditor of existing foundations and any created in the future, to provide assurance that they are exercising sound control of the significant public resources and authorities entrusted to them.

Those are the words of the Auditor General. Later in her April 2002 report, she says:

—the essential requirements for accountability to Parliament...are not being met.

The last two excerpts from the Auditor General's report that I want to cite read as follows:

The creation of more foundations and the transfer to them of very large amounts of public money raise increasing concerns about the lack of adequate means for parliamentary scrutiny.

She goes on to say:

The auditor general should be appointed as the external auditor for foundations, with a few exceptions.

So that was back in April 2002. In accordance with parliamentary procedure as we know it, the Standing Committee on Public Accounts examined the report in April 2002, and its report was tabled in turn in May 2003. What was contained in that May 2003 report by the standing committee after its examination of the auditor general's report? There was one key recommendation which read:

That, for those foundations either created through legislation, or receiving significant federal funding--

They were talking here of $500 million, which after discussion was brought down to $100 million.

—the federal government appoint the Auditor General of Canada as external auditor of these foundations.

In response to this recommendation, the government said:

However, requiring foundations to accept the public sector type standards and operations as well as establishing the Auditor General of Canada as their auditor as identified in recommendations eight through thirteen, could undermine the independence of foundations, reduce their operational flexibility—

If the money is being properly managed, I have trouble seeing how this would reduce their operational flexibility. The government response was a bit odd.

So what we have here is a report released in 2002 and a response in 2003. Then in 2004, the auditor general said the following in connection with the public accounts:

For a number of years I have included in my audit report on the government's financial statements a discussion of my concerns about foundations. SInce 1997, the government has recorded as expenses in its financial statements $9.1 billion in transfers to several foundations—

So what she was saying is that she needed to see whether this had all been done properly. So what we have here is a report released in 2002 and a response in 2003, plus a repetition in 2004 by the auditor general that this needed to be corrected.

Being overly preoccupied with other issues, this government has neglected, forgotten or rejected its responsibilities concerning the supervisory power of the Auditor General. This is why, today, it is totally appropriate to recall these recommendations to the government party and to parliamentarians.

Following discussions with my colleagues from the New Democratic Party and the Conservative Party, I know that there seems to be some support for this, and I am very pleased about that. I hope that on the Liberal side, they will show the same respect for the powers of the Auditor General and the same interest when it comes to allowing her to review the totality of public monies. I do not want to accuse anybody, I only want the books to be open.

The government talked about transparency during the election. Our citizens talk to us of cynicism toward the political world. Let us open the books more; let us ensure greater transparency; let us allow the Auditor General to take a look at what is going on in the entire government machinery; let us not hide $9 billion from the Auditor General through foundations. If we do so, we will probably increase somewhat the citizens' confidence in politics and we will ensure that all that money is well managed.

Concerning the Millennium Scholarships, let me remind you that we are in favour of their abolition. At the end of the day, we feel that departments should manage these programs but, in the very least, while these foundations are in existence, they should open theirs books to a truly independent audit. This audit should not be done par existing boards. Thus, confidence will be restored.

The Auditor General Act

[Benoît Sauvageau, Bloc, Repentigny, QC]

moved for leave to introduce Bill C-277, An Act to amend the Auditor General Act (audit of accounts).

Mr. Speaker, it is a pleasure for me to introduce a bill to amend the Auditor General Act. This bill will allow the Auditor General to audit the accounts of the foundations created by the government, particularly those created since 1997, and of the other crown corporations where right now the Auditor General cannot examine the administration of the federal government funds.

(Motion deemed adopted, bill read the first time and printed)