Public Accounts Committee on Oct. 5th, 2011

[The Chair, NDP, David Christopherson]

Thank you both very much.

We'll now move to Mr. Kramp.

Mr. Kramp, you have the floor.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you, Chair.

Certainly I extend a warm welcome to our guests. I can tell you it's been a privilege to work with you over a number of years now. I look forward to continuing to assess, work together, and provide both of our efforts for a much better future. You do great work, and we thank you for that.

Might I say that I've served on this committee for a number of years? I almost hate to bring up another word but I'm going to. I've actually served on this committee since the dear old sponsorship scandal, which was winding down at that point. I know some opposition members have tried to draw a comparison between the two, which I find a little bit disconcerting in a way. We all know that in the sponsorship affair we didn't know how much was involved, to whom the money went, what it was for, where it went, and what it was. There were numerous legal convictions, and for all intents and purposes, there are more to come.

I've noticed that you said in your statement last June that this is just not a sponsorship scandal.

Can you please highlight the differences between what we have here with this examination versus the impropriety of the sponsorship affair?

[John Wiersema]

The member is quite correct, Mr. Chairman, in indicating that this is not the same as the sponsorship program. In this particular case, as I indicated in response to earlier questions, it is clear that the government received the goods and services it paid for. It got what it paid for. In the case of the sponsorship program, there were cases where the government paid significant amounts of money and didn't receive any goods and services in return. That is a significant difference between the G-8 legacy infrastructure fund and the sponsorship program.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you, Mr. Wiersema.

I believe, publicly, back in June as well, you stated that there was no intent to mislead in that the information you received from the various sources—there didn't appear to be mens rea—was forthcoming, with amounts and totals, invoices, and everything in place. Is that correct?

[John Wiersema]

I guess there are two parts to that question, Mr. Chairman.

In terms of intent to mislead, did we see any evidence that anyone deliberately intended to mislead Parliament with respect to the request for the $50 million of funding? No. But as I indicated earlier, I think questions of expediency should not trump transparency in being correct in what you're going to use the money for when you request it from Parliament.

With respect to the second part of the question—were public servants ever attempting to mislead our auditors in the course of this work—I have no evidence and no reason to believe that was the case. I believe that public servants and everybody we dealt with cooperated openly with us and there were no attempts to mislead us.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Fine. Thank you.

We take your recommendations very seriously. This committee always has, and I'm pleased that the government has accepted your recommendations and will obviously move forward, as you said, to look for improvement.

There is one area where I'm asking for your advice and consultation. This infrastructure fund employed the contribution agreement model rather than the grant model. There are differences there. I've been told by a number of senior bureaucrats in the departments that the contribution agreement model is more onerous as to requirements than the grant model.

Could you give me any assessment on that, from your perception of it? Do you think in this case, then, that the contribution model was the appropriate one to use?

[John Wiersema]

Mr. Chairman, the member is quite correct in distinguishing grants from contributions. At the risk of oversimplifying it, a grant is moneys disbursed by the government with basically no terms or conditions and no strings attached. A contribution program involves terms and conditions that the recipient and the money must meet, and contributions are subject to audit. Yes, they are quite different. The contribution vehicle that was used in the case of the legacy fund is more stringent.

I apologize to the member; I've forgotten the second part of the question.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

The second part of the question is, obviously, in this particular case—

[John Wiersema]

Yes. Thank you. I recall.

The decision as to whether to use a grant mechanism or a contribution mechanism is a decision that's correctly left with government. It's not really a decision the Auditor General should weigh in on—should it have been a grant or should it have been a contribution? I will confirm what the member has indicated, that the contribution agreement has more stringent requirements than a grant.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you. I have many more questions, but with the brevity of time, I have the eye of the chair, meaning that it's enough for now, Daryl.

Thank you.

[The Chair, NDP, David Christopherson]

Thanks very much, Mr. Kramp, for being so cooperative.

We are over now in rotation to the official opposition, and as indicated, Mr. Angus is to have the floor next.

Mr. Angus, you have the floor.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Chair.

And thank you for your excellent work on behalf of the people of Canada. I'm concerned about your G-8 legacy infrastructure fund conclusion that no documentation was available within the federal government to explain how or why these 32 projects were selected. I find that an extraordinary statement, even more so since we did find that the documentation had been handed out by Mr. Clement's staff and run through his constituency office, where the projects were vetted.

Were you aware that Mr. Clement had documentation of this nature outlining the various project applications?

[John Wiersema]

Mr. Chairman, I share the member's concern. As I indicated in my opening statement, I too am concerned, very concerned, that there is no documentation in the federal government to explain how those projects were selected.

During the course of the audit, and Madam Loschiuk will help me here, we did approach the minister's office to request any documentation that was available in the minister's office or in the constituency office to explain how the projects were selected. We received a small amount of documentation, which wasn't directly relevant to the question of the project selection, and we therefore concluded as we did in the audit.

Wendy, is there anything you would like to add or clarify?

[Wendy Loschiuk]

I don't think there's anything really to add to that. We did ask if there was more documentation available other than through the normal channels, which would be Infrastructure Canada, and we were given, as Mr. Wiersema said, a few documents, but they really were not helpful in deciding how the projects were chosen.

[Charlie Angus, NDP, Timmins—James Bay, ON]

These documents were handed out to communities by Minister Clement. The communities were told to send this. It doesn't even have “Government of Canada” on this; it goes right to Sondra Read, constituency manager, Tony Clement's office. You asked Mr. Clement to provide documentation, and they didn't have any of this, which they were handing out. You were not aware of this?

[John Wiersema]

Wendy, did we receive that application form?

[Wendy Loschiuk]

We had already seen a blank version of the application form, so we had noticed on the bottom who you were to send applications to, which is why we approached the minister's office. But in the course of the audit there was nothing forthcoming.

[Charlie Angus, NDP, Timmins—James Bay, ON]

There was nothing forthcoming. In your 33 years in your office, have you seen anything like this, where $50 million is set aside without Parliament being made aware that civil servants are excluded from the criteria process and that the constituency office of a member of Parliament has his own homemade form to hand out? Is this something you've seen before?

[John Wiersema]

Mr. Chairman, I indicated when we released the report on June 9 that no, in fact, this is not something I have previously seen in my time in the Office of the Auditor General. In particular, the situation of public servants being totally excluded from the process of selecting the projects, yes, is one of a kind.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm concerned, because I'm hearing from my colleagues about this need for expediency, and yet we find out that the minister was meeting back as early as September 2008, long before Parliament was even made aware that the border fund was going to be raided and that this plan to distribute money was being set up with local mayors. So it seems they had a lot of time to get their ducks in a row. Yet we find out that through the local area leadership group, federal civil servants were brought in to discuss criteria and ideas but were then excluded so that the mayor, the hotel manager, and the minister were then left with free rein to decide how these projects, these hockey arenas and all the other baubles and gazebos....

Were you given any of the documentation from the meetings Minister Clement held with his two friends in the Huntsville area?

[John Wiersema]

Mr. Chairman, as I understand it, most of the documentation that has been made public subsequent to the tabling of our report has its origins in the records of municipal governments. Therefore, no, we did not look at work that was happening in the municipal governments. And much of that documentation that was subsequently made public was not available to us during the audit.

[Charlie Angus, NDP, Timmins—James Bay, ON]

You found out that documents exist--

[The Chair, NDP, David Christopherson]

Mr. Kramp, on a point of order.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you, Chair.

I would just remind the chair that this is not the House of Commons. To put allegations out there that, for example, hotel managers made decisions I don't think is appropriate for this committee unless we have someone actually saying that. To throw that inference out there, and that question, is quite frankly out of order.

I would ask the chair to accommodate that. As I said, we're not in the House of Commons now. We are here. We are televised. We should act within our assessments and not simply have a conclusion brought forward before it is reached.

[The Chair, NDP, David Christopherson]

I understand your concern.

I don't see a point of order. I don't see that the comments are out of order or that the question is out of order. It is in order.

You're just about out of time, though. If you could do a quick question and a quick answer, then we'll move along.