Bill C-277 (Historical)

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

Privilege

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, this is not a laughing matter. There are 26 members who sent out the householder, and 28 who did not, because the Bloc Québécois is truly a decentralized party. No comprehensive study was done to know what was going on. Proposals are made, then each member decides what is appropriate for one reason or another. Some have issues or activities which are priorities in their ridings. For example, Bill C-277 asked that the Auditor General investigate into the $9 billion the government was hiding.

The sponsorship scandal having been exposed, I saw fit to inform the public that, under a bill put forward by the Bloc Québécois, the Auditor General would now have a right of oversight over the foundations through which the government was moving money. I am happy that the question was put to me. The government hid money in the sponsorship scandal. One has to wonder whether it hid more elsewhere.

Committees of the House

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I rise to speak this evening with great pleasure in connection with this rather special and original report, since I am the member who initially introduced Bill C-277.

We have had occasion to debate it several times. If a report has been tabled not to proceed further with Bill C-277, it is not because it was no longer valid, or that its substance and value were no longer important. It is merely because, pursuant to the parliamentary procedures of this House, another party has also found it of great interest. Bill C-277 enabled the Auditor General to audit the main foundations and crown corporations—those in excess of $9 billion. That party was the Liberal Party.

In this year's budget, the Liberal Party took Bill C-277 word for word, or very close to it, and included in the budget Bill C-43—in the Minister of Finance's 2005 Budget Implementation Act.

Since the government has upstaged me by allowing the Auditor General to have that control, which she had been demanding for the past four or five years, and which the committee had recommended twice in two or three years, I felt I needed to publicly acknowledge in this House the occasional good things our political adversaries do. They should do them more often. So I felt they more or less deserved thanks for having understood that there was a need to restore a bit of the public's confidence in its elected representatives, particularly after the sponsorship scandal. This bill is a credit to them. It was necessary, and needed to be implemented urgently and promptly.

I was therefore pleased to propose to the committee that the bill be withdrawn.

In closing, I want to add that it is all well and good that the foundations receiving federal funding, such as the foundations for innovation, the millennium scholarships and all those with $9 billion in their coffers, are now subject to scrutiny by the Auditor General.

However, once I had achieved this, I continued to examine the public accounts and I realized that there is now another area that deserves our full attention. I am talking about the transfer of funding by departments to not-for-profit organizations. For example, the Canadian Unity Council gets nearly $12 million per year from Canadian Heritage, and its internal audits are extremely compromising.

This will be another hobbyhorse for the members of the opposition. I hope that the Liberals will show the same open-mindedness and allow the Auditor General to consider all of these files. At present, she can do so in the case of the Canadian Unity Council, but the internal audits of each department should be tightened up and redone so as to ensure the proper management of public finance.

I am pleased, therefore, to see that the essence of the bill has been recovered and that the wording from the budget legislation has been copied. It is therefore my pleasure to withdraw Bill C-277, particularly since it has been in force since June.

[The Acting Speaker (Mr. Marcel Proulx)]

I would like to remind hon. members that in June 2005, new rules governing private members' business were adopted. The provisions under Standing Order 97(1)(2) provide for a one hour debate for the consideration of a motion to concur in a committee report containing a recommendation not to proceed further with a private member's bill.

Tonight the House will consider a motion to concur in the 20th report of the Standing Committee on Public Accounts presented to the House on Wednesday, October 5, 2005. The report contains a recommendation not to proceed further with Bill C-277, an act to amend the Auditor General Act, audit of accounts.

During the debate no member shall speak more than once or for more than 10 minutes. There is no question and comment period.

In accordance with Standing Order 97(1)(2), the motion to concur in the report is deemed to be proposed.

The motion reads as follows:

That the 20th Report of the Standing Committee on Public Accounts (recommendation not to proceed further with Bill C-277, An Act to amend the Auditor General Act (audit of accounts), presented on Wednesday, October 5, 2005, be concurred in.

Business of the House

[The Speaker]

I want to inform the House that, pursuant to Standing Order 97.1(2), I am designating Tuesday, October 18, 2005, as the day fixed for consideration of the concurrence motion on the twentieth report of the Standing Committee on Public Accounts.

There is a recommendation in the report not to proceed with consideration of Bill C-277, An Act to amend the Auditor General Act (audit of accounts).

The debate on the motion will take place from 6:30 p.m. to 7:30 p.m., after which the House will proceed with the adjournment proceedings pursuant to Standing Order 38.

I would also like to inform the House that under the provisions of Standing Order 30, I am designating Thursday, October 20, as the day fixed for the consideration of private member's Motion No. 153 standing in the order of precedence in the name of the hon. member for Burnaby—New Westminster.

This additional private members' hour will take place from 6:30 p.m. to 7.30 p.m., after which the House will proceed to the adjournment proceedings pursuant to Standing Order 38.

Committees of the House

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

Mr. Speaker, I have the honour to present the 20th report of the Standing Committee on Public Accounts concerning Bill C-277, an act to amend the Auditor General's Act (audit of accounts). Mr. Speaker, your committee recommends that the House of Commons not proceed further with the bill as Bill C-43 achieves goals similar to those proposed in Bill C-277.

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

Mr. Speaker, there have been discussions among all parties and I believe you would find consent for the following motion. I move that the 16th report of the Standing Committee on Public Accounts, which asks for an additional 30 sitting days to consider Bill C-277, presented to the House earlier this day, be concurred in.

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

Mr. Speaker, I have the honour to present, in both official languages, the 15th report of the Standing Committee on Public Accounts concerning Chapter 1—Internal Audit in Departments and Agencies of the November 2004 report of the Auditor General of Canada.

In accordance with Standing Order 109, your committee requests a government response within 120 days.

I also have the honour to present, in both official languages, the 16th report of the Standing Committee on Public Accounts concerning Bill C-277, an act to amend the Auditor General Act (audit of accounts), and I intend to move concurrence in the report later this day.

Auditor General Act

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, it is with some emotion that I exercise my five minute right of reply before we conclude this debate. In the life of a parliamentarian, personally developing a bill and introducing it in the House for first reading and then consideration in second reading is a rather long, arduous and at times painstaking process. It is therefore with some emotion that I now see this bill reach the end of a stage. Moreover, throughout the debate on Bill C-277, I have been able to count on the cooperation, open-mindedness and professionalism of my hon. colleagues from all parties.

Some may say there are bad sides to a minority government, but there are good ones too. For instance, in the past little while, motions and bills from all parties have been receiving greater attention and consideration than before.

The week before the latest recess, my friend and colleague from Charlesbourg—Haute-Saint-Charles moved a motion on reversing the burden of proof. I had the privilege of speaking on this motion, saying that we have to take our blinders off and stop thinking that whatever comes from the Bloc or from Quebec is no good because they are all separatists. Our colleagues from all parties really considered the motion on its merits and content, and not just the messenger. That bodes very well.

As my hon. colleague from Hochelaga said, without presupposing how the House will decide, things are looking very good for Bill C-277 today. It may well be referred to committee and eventually be considered at third reading stage. It could enjoy a longer life, and perhaps even be passed. The process Bill C-277 is going through seems to be moving along very nicely.

At first, some colleagues had concerns about the scope of the bill with respect to private foundations or smaller foundations in their ridings or provinces. As the debate progressed, this irritant was eliminated.

As we had an opportunity to discuss the bill, other hon. members sitting on the Standing Committee on Public Accounts raised certain questions but they have not opposed it. These questions were completely legitimate and proper and caused us to work harder on how this bill was to be interpreted.

The final and most serious question was about the kind of audit done by the Auditor General. For the benefit of the House and Treasury Board officials, I shall quote from part of a reply I received from the Auditor General on these questions:

The new subsection 5(3) stipulates that the Auditor General may make such examinations and inquiries as he or she considers necessary in order to enable a report to be made in accordance with this act. This provision leads me to conclude that my office would conduct management audits only for all bodies other than crown corporations. This conclusion is based on the words “enable a report to be made in accordance with this Act”. The requirement to report under the Auditor General Act concerns management audits exclusively. The opinion expressed under section 6 of the Auditor General Act on the financial statements included in the public accounts is submitted to Parliament by the government.

The Auditor General concludes with this:

I hope that these comments will help you in your deliberations—

It was signed by Sheila Fraser.

I believe that all during the deliberations on this bill, my colleagues have offered concrete and constructive arguments to improve the bill and its interpretation.

I would be very pleased today if the House were to give its unanimous consent to send this bill to committee, for that would enable us to hear witnesses representing foundations, crown corporations and the Auditor General's office. In that way, we would be able to see what practical impact this bill would have on the management of the $7 billion in terms of the foundations.

I hope that everyone will agree that members of Parliament ought to have greater oversight over these foundations and public monies, and that the Auditor General will have the opportunity to audit and review these foundations and crown corporations.

I also want to thank all the hon. members who have spoken on Bill C-277.

[Réal Ménard, Bloc, Hochelaga, QC]

Yes, because her appointment was supported by all parliamentarians. I think I can safely take it upon myself to say that Sheila Fraser has no enemies in this place. She is held in high esteem by everyone. This is a woman who has managed to exceed the expectations we had upon her appointment. In a sense, she is a clairvoyant. I think that all parliamentarians in this House will agree on that.

However, there are limits to what she can do. Even though, as everyone knows, she is a very enterprising and efficient woman, there are limits to what she can do, since there are a number of crown corporations that she cannot investigate. Bill C-277, introduced by the hon. member for Repentigny, would give the Auditor General the means to investigate and review, with her keen eye, Canada Post—of course, we have reasons to think it would be interesting to know more about what Canada Post is doing—the Bank of Canada, the Public Service Superannuation Plan, the Canada pension plan and the Canadian Race Relations Foundation.

One of the objectives of the hon. member's bill is to allow the Auditor General to act as auditor or joint auditor of crown corporations, which, until now, have not been subjected to her control.

I hope I am conveying fairly accurately our colleague's view when I say that, should his bill become law, what would make him particularly proud is the fact that the Auditor General would be able to follow very closely what is happening with the foundations. For the benefit of those who are watching us, I should point out that, over the past seven years, the federal government has transferred a little over $9 billion generated with Quebeckers' taxes.

At a press conference, the hon. member for Repentigny clearly said that the purpose of his bill was not to question the merits of these foundations, although we never agreed with them. It is the foundations themselves that are targeted, not their mandate or relevance. It is the mechanism through which the government is pursuing, with taxes paid by Quebeckers and Canadians, public policies without parliamentarians having any control over these initiatives.

As I was saying, over the past seven years, close to $9 billion has been transferred to foundations. I want to be a little more specific for the benefit of our viewers. What are we talking about here?

For example, the Canadian Foundation for Innovation, which conducts industrial research and so forth, was established in 1997. It has received $3.6 billion from Parliament, Treasury Board and the Department of Finance.

There was a problem with the Canada Millennium Scholarship Foundation, which was created in 1998 and which has received $2.5 billion. If I remember correctly, all the parties in the National Assembly were uncomfortable with the idea that the federal government could intervene by granting educational scholarships, for excellence in education, since it does not have the relevant or appropriate jurisdiction to do so.

The Canada Health Infoway, created in 2000, has received $1.2 billion. In 2000, its first year, Genome Canada received $375 million. In the most recent budget tabled by the Minister of Finance, its funding was increased, as we all know.

The Aboriginal Healing Foundation, created in 1998, has received $350 million. Sustainable Development Technology Canada, created in 2001, has received $350 million. The Canadian Health Services Research Foundation, established in 1997, received $152 million in its first budget, but if I recall correctly, additional funds were allocated during the 2000 first ministers' conference.

Consequently, the hon. member for Repentigny did not tackle some sort of commonplace occurrence. There are billions of dollars going to foundations. So what is the dispute about, what is the basis of the problem? It is that both the Treasury Board and the Department of Finance take for granted that the moneys allocated to the foundations were actually spent by the government. Examples have been brought to our attention thanks to the vigilance of the Auditor General. We have learned that, in certain cases, money lay dormant in bank accounts for years. What is more, as we speak, although foundations were created back in 1999, 2000, 2001 or 2002, we know that the money has not always actually gone where it was intended, whether for research, bursaries, aboriginals or whatever. However, the federal government considers these as expenditures on its books.

This leads to two problems. As far as bookkeeping is concerned, it is dishonest. As far as policy is concerned, it lacks transparency. As far as Parliament is concerned, it is unacceptable, because accountability is obviously lacking.

In some countries this is cause for revolution. I wonder, in our parliamentary history—the hon. member for Repentigny knows the answer since he was a popular history teacher—what was the ministerial accountability in 1848? It was precisely that parliamentarians should monitor the budgets meticulously and with a sense of detail. Throughout our constitutional history, no one has been prepared to give up or cut down on the prerogatives of parliamentarians for that type of control.

The prerogatives of parliamentarians were given up, not subtly, but surreptitiously—there is no other word for it—and it was accepted as normal that the foundations should not have to come under the close scrutiny of parliamentarians.

We must thank the hon. member for Repentigny, and his assistant, for all the vigilance he demonstrated with this bill he introduced in this House. Out of pure respect for the prerogatives of parliamentarians, the best thing that could happen would be for this bill to receive support from all parties, and for it to be sent to the Standing Committee on Public Accounts for improvement, if necessary.

In my opinion, Parliament would be better for it and better equipped in terms of public accounts. This will be a lasting contribution by the hon. member for Repentigny to the development and future of our work.

[Réal Ménard, Bloc, Hochelaga, QC]

Mr. Speaker, I am very pleased to speak to Bill C-277, introduced by our likeable and endearing colleague from Repentigny. Today is a historic day in certain respects, as there is great hope that it will see this bill passed, without presupposing what the House intends to do, of course.

The hon. member for Repentigny, who is our critic for the Treasury Board and public accounts, has been very well advised to introduce a bill which, frankly, adds transparency, integrity and even broadness of outlook to our legislative process. His goal is to ensure that, as parliamentarians, we have total control over the funds allocated by the government. We are not talking about private foundations. I realize that, in very specific cases, foundations would still be able to use private mechanisms. But, for the most part, we are dealing with creatures of Parliament established by acts of Parliament, with respect to which it is appropriate, fair and wise that parliamentarians be able to follow how this funding is used.

As I understand it, the bill introduced by the hon. member for Repentigny has three main purposes. This is a very well-thought-out and relevant bill, as were all the other bills he has introduced in this House. He is a very prolific member in terms of legislation.

First, reference is made to the Auditor General, Sheila Fraser, whom everyone holds in high esteem. Can the Auditor General be considered an officer of the House?

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Mr. Speaker, I am pleased to address Bill C-277 and to compliment the member for Repentigny on his noble purpose in this private member's bill. Without hesitation, I applaud the intention to expand the scope of the Office of the Auditor General. It is a measure that I know the residents of my community feel is long overdue.

The Auditor General has become somewhat of a hero to all of us, but perhaps not to the government, which cringes every time she sheds more light on its mismanagement of taxpayers' dollars.

As an officer of Parliament, the Auditor General serves us well with the thorough audits of the accounts of federal government departments. However, there are currently many organizations, funded with billions of tax dollars, which she does not have the authority to investigate. These federal crown corporations include the Bank of Canada, the Canada Council for the Arts, the Canadian Broadcasting Corporation, Telefilm Canada, the International Development Research Centre and the National Arts Centre Corporation.

Beyond these significant corporations that operate with taxpayers' money, there are also numerous foundations that receive the majority of their funding from the government. These include: the Canada Foundation for Innovation, the Canada Millennium Scholarship Foundation, Canada Health Infoway Inc., Genome Canada, the Aboriginal Healing Foundation, the Canada Foundation for Sustainable Development Technology and the Canadian Health Services Research Foundation.

There are also endowment funds, which include the following: the Green Municipal Funds, the Pierre Elliott Trudeau Foundation, the Clayoquot Biosphere Trust, the Pacific Salmon Endowment Fund Society, the Canadian Institute for Research on Linguistic Minorities, the University of Moncton and Frontier College Learning Foundation.

Other foundations also include: the Canadian Institute for Health Information, the Green Municipal Enabling Fund, Precarn, the Canadian Network for the Advancement Research, Industry and Education, the Canadian Institute for Advanced Research, and the Canadian Centre for Learning and Development.

To my mind, any organization established and operated on government funding needs to be open to the appropriate scrutiny to ensure that Canadians are being served well and our money is being spent responsibly.

I sat on the Ontario Trillium Foundation, which gives out $100 million a year, and I can assure the House that what the government is doing pales in comparison to the levels of scrutiny and accountability we faced for $100 million. The levels of accountability were far more significant for only $100 million than they are for the billions of dollars we are talking about here today. I believe there should be more scrutiny of this money.

All Canadians deserve this overdue accountability. During my last election campaign, accountability was the central issue in my community. People have lost trust and confidence in their government and its institutions and, based on a recent survey, I would say in politicians as well. I do not blame them.

It was because of this that I lost trust in this government and decided to run for office and advocate for accountability. Over the past 11 years of the Liberal government we have seen shocking scandals involving grants, contributions and government contracts. This was driven home again last week by the continued revelations at the Gomery commission.

The Auditor General has led numerous investigations into government mismanagement and misappropriation of funds. It is clear that the government is incapable of managing taxpayers' dollars in a prudent manner. Government spending has continued unabated and with little accountability. Funds are too often being used for all the wrong reasons. This government needs a watchdog with sharp teeth and a strong bite to keep it in line.

The federal government spends approximately $18 billion a year on various grants and contributions and another $13 billion annually in awarding government contracts. This is a staggering amount of taxpayers' dollars and we trust our government to spend it responsibly.

Unfortunately, experience has shown us that we have misplaced that trust. Unarguably, a serious review of all government spending is required. Canadians have found out in recent years that the Prime Minister's companies received $161 million of taxpayers' money, not the $137,000 originally claimed by the government.

We have also watched $100 million disappear into thin air as government friendly communications agencies were paid millions of dollars in commissions and fees, with little or no service provided to the federal government or to Canadians. The gun registry was supposed to cost $2 million and is now costing us $2 billion, and $1 billion in grants and contributions at Human Resources Development Canada was misappropriated.

The list seems endless. What is really scary is that these abuses of tax dollars took place in departments that were subject to investigation by the Auditor General. We all have to wonder what other horrible mismanagement we may uncover through the extension of audits to a broader spectrum of the government departments and other organizations that receive government funding.

What we do not know does in fact hurt us. That is why it is so important to find out how federal crown corporations and other bodies established by Parliament and funded by Canadian taxpayers' dollars are managing Canadian resources and funding.

We need transparency and accuracy in all the accounting of government finances, whether that is for a government department like defence, a government corporation like Canada Post or an at arm's length foundation like Canada Health Infoway.

The Auditor General has stated that since 1997 the government has transferred $9.1 billion to 15 foundations. As of March 31, 2004, $7.7 billion was either still in the foundations' bank accounts and investments accumulating interest or was a receivable from the government, yet the government has already recorded these transfers as expenses.

The Auditor General has also stated that she is concerned about the manner in which these foundations are funded, the accounting for transfers and the accountability regime for the foundations. With her current mandate, she has no authority to audit any of these foundations even though this is taxpayers' money.

As a matter of fact, there is absolutely no parliamentary accountability or scrutiny of these foundations whatsoever. Can members believe that this government, which is constantly telling us that it believes in transparency and accountability, has not taken into account the Auditor General's own recommendations, year after year, on being able to review and audit these foundation books?

Nine billion dollars of hard-earned taxpayer dollars have been handed over with absolutely no parliamentary perusal or scrutiny or even a review by the Auditor General. Not only is this reckless, but this government's unaccountability is totally unacceptable.

Again, I agree with the objective of this bill. The Auditor General should most definitely have access to all the government books. I will support this bill's passage in principle. There is some loose wording that needs to be tightened, such as specifying that the Auditor General should be the Auditor General of any federal crown corporation rather than just crown corporations, as the bill currently reads. However, I am certain that the appropriate amendments, which we will propose at the committee level, can address such items.

I also think this bill should be expanded upon. Along with providing access to all government books to the Office of the Auditor General, we need to include access to the books of other outside organizations such as foundations, and we need to provide appropriate resources for the Auditor General to fully and completely execute her duties to the best of her ability.

There is no doubt that the cost of implementing expanded audit services will be substantial. However, the benefits of enhanced scrutiny are well worth the initial cost. The public's trust and confidence in government operations need to be restored and that can only happen through rigid accountability measures.

In fact, I would argue that the Auditor General should be authorized and directed to conduct expedited audits on all federal grant and contribution programs and contracting policies. Granting programs should be reviewed every five years on an ongoing basis at an absolute minimum.

As well, the government should act on the Auditor General's recommendations rather than just let them gather dust.

I would have no problem in supporting increased funding for internal audit functions and I am sure many of my esteemed colleagues would feel the same. The payoff for all Canadians would be tremendous. With a clear and accurate picture of how our tax dollars are spent, we could finally move forward in meeting the concrete demands of Canadians by providing more focused federal government that gives better service to all of us.

We would spend our money more wisely and clean up government waste and mismanagement. As a result, we could provide to Canadians both more efficient government and tax relief.

[Françoise Boivin, Liberal, Gatineau, QC]

Mr. Speaker, I am pleased to have an opportunity to speak to Bill C-277, proposed by the hon. member for Repentigny.

In principle, the government supports the intent of the member's bill regarding improved oversight of federal government entities, such as crown corporations, as well as not for profit organizations, such as foundations that have received significant federal assistance.

As we have already mentioned, the Government of Canada has made a commitment to improving accountability and has taken practical steps toward more transparency for the Canadian public.

That is the context in which the President of the Treasury Board tabled the report on crown corporation governance in the House of Commons on February 17.

In that report, the Government of Canada promised to amend the relevant legislation, including the Financial Administration Act and the statutes governing crown corporations, to ensure that, first, the Auditor General is designated the sole or joint external auditor for all crown corporations; second, that the Office of the Auditor General has the power to conduct special audits, focusing on value for money in all crown corporations; third, special audits are governed by an audit strategy based on the risk associated with each crown corporation, taking into account each corporation's complexity, field of activity and changes in its operational and strategic environment; and finally, that a protocol should be concluded with the Auditor General to ensure that commercially sensitive information is protected when special audit reports are presented to Parliament.

These amendments would include and go even further than the private member's bill.

In addition we are also concerned, as the hon. member has said, about the need for increased oversight over federal government institutions.

The Office of the Auditor General vigorously supports the measures outlined in the report on governance of crown corporations. It considers this the most complete review done in 20 years on this issue.

The government believes that these proposals are clearly a more efficient solution than that suggested by the hon. member for Repentigny to improving the transparency and accountability of crown corporations.

With respect to not for profit organizations, such as foundations, I would like to draw to the attention of hon. members the commitments made in budget 2003 to improve accountability and transparency. At that time the government undertook to amend funding agreements to incorporate, among many other measures, provisions for compliance audits and evaluations, and the recovery of funds in the event of default or wind-up.

It also undertook to strengthen the reporting of plans and results to Parliament. The Auditor General has recognized the improvements that have taken place in this area. She has recognized that the government has amended these funding arrangements to deliver on its commitments of improved accountability and transparency.

The government recognizes that the Auditor General would like to see the government go further in the areas of audit, evaluation and ministerial oversight. In the government's response to her recommendations, we indicated that we would continue to work with the Auditor General to resolve these issues. The government is following through on this commitment and discussions are progressing well with the Auditor General. As we gain a better understanding of each other's views on these issues, we are hopeful that any issues will be successfully resolved to the satisfaction of all concerned.

As an example, the office of the Auditor General recently indicated to the Standing Committee on Public Accounts, the Standing Committee on Government Operations and Estimates and to the Senate national finance committee that the office's thinking has evolved with respect to the audit of foundations. Previously, the office had taken the position that it should be the auditor of these organizations. This has now changed based on discussions with the government and the fact that the office of the Auditor General has no concerns with the financial audits that are being done by private sector auditors on the foundation.

I think this is important. It must not be thought that foundations and non profit corporations are not audited or reviewed.

Its real priority is to conduct performance or value for money audits in these organizations. The government also recognizes the motion from the member for Medicine Hat that was passed by the House on February 22. The government has expressed its desire to work with parliamentarians to address the concerns related to these arrangements.

The President of the Treasury Board has indicated that he would welcome a debate to find a solution to the problem. He has indicated that he does not support the motion in principle as it calls for automatically appointing the Auditor General as auditor. Similar to the Auditor General, he does not see this as the solution or the real priority.

I too do not see the bill's proposals as the best solution. I believe there are more effective solutions possible and support the government working with the Auditor General to find these solutions. One specific concern I have is that the bill would extend the Auditor General's powers into entities created or controlled by other levels of government.

In conclusion, I want to emphasize that I support the idea of broadening the Auditor General's role to include auditing or joint auditing of crown corporations, if the mechanisms for implementing this concept are examined more closely.

This government is committed to enhancing accountability and welcomes constructive input from all members of the House. The time we are devoting today to the motion in question highlights our eagerness to listen and consult on all matters before Parliament.

If the bill goes forward I would encourage the public accounts committee to carefully examine it and I expect that the committee will take into account the views of both the Auditor General and the government on the appropriate role of the Auditor General in the audits of independent organizations.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I rise to speak in favour of Bill C-277. Its summary states that the enactment amends the Auditor General Act in order to allow the Auditor General of Canada to act as auditor or joint auditor of crown corporations, certain other bodies established by acts of Parliament and certain corporate entities without share capital.

Let me turn to another bill for a moment, Bill C-39, which has already been before the House. It is the enabling legislation for the first ministers' accord on health care and it sets up a third party trust for wait times reduction transfer. The Government of Canada will set that money aside this year but it allows the provinces to draw upon that money until 2009. The House will not review that agreement until 2008. That is a lengthy period of time without oversight on how that money will be spent.

If the Auditor General were allowed to audit the foundation there would be transparency to Canadians and all their demands on health care funding. It is absolutely essential that we commit to openness and transparency in funding that is being spent by the government on behalf of taxpayers.

I want to quote from a document I found useful in considering how health care funding is provided. It is from the CCAF and the Canadian Healthcare Association. The document is entitled, “Principles for Governance, Management Accountability and Shared Responsibility”. It states:

Health system partners need to demonstrate commitment to public transparency and accountability. They do this by explaining to, and involving the public in, what they plan to do, how well the system is performing, and the implications of both.

A third party foundation that has no parliamentary oversight is not the way to achieve public transparency. If the government continues to insist on using these bodies as a way of providing funding, we need to provide the public with confidence that this money is being spent well, that the money is providing the benefit the public needs and that any deficiencies are being identified and acted upon. We do not want to see a repeat of needing to implement a Gomery inquiry.

Another part of that report reads:

Reporting principles and standards are key to the integrity and utility of reported information and aprerequisite for fair comparisons and benchmarking.

These are critical elements in terms of what we have seen over the last several years of various private practices in accounting like Enron.

The Auditor General provides Canadians with reporting principles and standards in regard to how tax dollars are spent, principles and standards the Liberals seem willing to ignore by salting money away in foundations instead of spending it in a transparent manner. The bill would give Canadians some assurance that money directed into foundations is being spent appropriately.

I would like to turn to another foundation, Canada Health Infoway Inc. It was set up in 2001 to help develop efficient data systems for health care. Make no mistake, the NDP knows that more efficient methods of health information transfer are absolutely vital to our Canadian system, but how do we know if Canada Health Infoway is providing good value on that strategy? Four years after it was set up, the need for improved methods of health information transfer is still front and centre with the wait times reduction fund, the need to better understand what parts of the country are underserviced by health professionals and as a way of developing a comprehensive pharmacare system.

In a recent article in the Ottawa Sun the headline read, “Suspect Worst of Foundations”. The article reads:

Canada Health Infoway Inc: Set up in 2001 to help develop efficient data systems for health care, the foundation so far has managed to spend $30 million administering $51 million in grants. (How's that for efficiency?)

These are the kinds of facts and figures that cry out for the need to have the Auditor General look at what is happening with these foundations, instead of treating them as an arm's length mechanism to tuck away funds that do not have the kind of oversight that parliamentarians should have over these kinds of funds.

When we are talking about oversight and transparency, another bill is being put forward to the House, Bill C-201, which talks about the need to look at crown corporations and access to information. It is just another example of how private members need to bring forward business to encourage the government and the rest of the House to really walk the talk when we are talking about transparency and accountability.

I would urge all members from all parties to support this very worthwhile private member's bill.

[Richard Marceau, Bloc, Charlesbourg, QC]

Mr. Speaker, obviously, it is a great pleasure for me to speak today to Bill C-277, an act to amend the Auditor General Act (audit of accounts).

First, I want to pay tribute to the efforts of my colleague from Repentigny, who is expertly leading this battle. Everyone knows he is an experienced, dynamic and clever MP, who has been here since 1993. I hope that Bill C-277, an all-encompassing bill, will therefore receive strong support from both sides of the House and all four political parties, in order that it may pass.

For a long time, the Bloc Québécois has been trying to make the various federal foundations more transparent. In our opinion, the best solution would be to abolish them and ensure that parliamentarians retain control over public funds. If that is not possible, we believe that it is imperative to increase our control over these foundations, as well as their accountability.

So that everyone both inside and outside the House can truly understand what we are talking about, we need to ask ourselves a few simple questions and try to answer as best we can.

The aim of Bill C-277 is to refocus the public debate on the approximately $9.1 billion that has been allocated to federal foundations since 1997.

We are introducing Bill C-277 because the federal government is misappropriating part of its huge surpluses by investing in foundations that are outside Parliament's control, and therefore outside the control of the people's elected representatives and the Auditor General.

This tactic allows the federal government, among other things, to invest in an underhanded manner in areas of jurisdiction for which Quebec and the provinces are directly responsible. So this is a way for Ottawa, in this case, to use the back-door approach when it cannot use the front door.

The way to avoid this is, first, to adopt Bill C-277, which will give the Auditor General the right to examine how taxpayers' money is spent.

Five organizations and crown corporations do not fall under the authority of the Auditor General but would if the bill introduced by my friend from Repentigny were adopted. They are Canada Post, the Business Development Bank of Canada, the Canadian Race Relations Foundation, the civil service superannuation plan and the Canada pension plan.

As for the foundations, we are talking about those paid $100 million or more. I think we agree that $100 million is a bit more than pocket change. Obviously we are talking about some very large amounts that require at the very least some scrutiny by parliamentarians. In fact, one of MPs' primary responsibilities is keeping an eye on taxpayers' dollars, the various types of taxes that millions of Quebeckers and Canadians pay into the federal coffers.

I certainly do not wish to denigrate the work done by my colleague from Repentigny in any way, but he really has not reinvented the wheel in fact. He merely wants to put into practice within a legislative framework the recommendations of both the Auditor General and the Standing Committee on Public Accounts.

The idea behind this bill, contrary to what some may have heard, is not a reaction to the sponsorship scandal, although I could spend a lot of time on that. As you know, the Gomery inquiry has almost as large a Canadian TV audience as popular series like Les Bougon . The source of the initiative is not the sponsorship scandal, but rather three specific documents.

First of all, there is the Auditor General's report. I would remind hon. members that the Auditor General is not political; she is instead an officer of Parliament, that is of all of us. In April 2002 she tabled her report, and the accompanying press release reads as follows:

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.

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.

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 tabled its report in turn in May 2003. It will soon be two years since that date.

What did it say? There was one key recommendation, which read:

That, for those foundations either created through legislation, or receiving significant federal funding [...] the federal government appoint the Auditor General of Canada as external auditor of these foundations.

The Standing Committee on Public Accounts was talking about $500 million. My colleague from Repentigny wanted to reduce that amount to $100 million, which, in my opinion, is quite reasonable.

However, in response to this recommendation, the government said:

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—

In my opinion, this response is completely false and foolish, perhaps even slightly crazy. I hope this was merely a slip of the tongue by the government and I hope the government will support Bill C-277.

The purpose of this bill is simply to make public funds management more transparent. The Prime Minister is the one who described himself as the slayer of what he called the democratic deficit. One way to get rid of the democratic deficit is to give back to elected parliamentarians all the tools and means necessary to closely monitor the work of parliamentarians, legislative work and governmental work. One way to help parliamentarians do so is to provide all the information they might need, for example: where do taxpayer dollars go? What do the foundations do with these billions of dollars in public money? What do Crown corporations do with this money from Quebec and Canadian taxpayers?

In conclusion, I want to reiterate my congratulations to my colleague from Repentigny for being highly effective in this matter. I urge my colleagues from the Liberal Party, the Conservative Party and the NDP to support this bill, which I would describe as inclusive, as it is non partisan. Simply put, this bill will provide us with all the necessary tools to do what is required of us under this British parliamentary system, which is to control the actions of the government and thereby help the Auditor General help us.

The Budget

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, to reassure my colleague who just spoke, I can tell him that the interpretation was interrupted for about 40 seconds. Since we were listening attentively to his speech, we were able to point this out right away. So he did not have to begin all over again. We clearly heard him and, above all, we listened attentively.

I want to thank my colleague for one part of his speech that I particularly enjoyed. I am talking about the part on accountability and when he asks the Auditor General to look at how the funds are administered by, for example, the Canada Health Infoway and the other foundations.

I am happy to learn from his speech that the Standing Committee on Health introduced a motion on this, which was carried by a majority vote. I also want to remind him that his party devoted an opposition day to this subject. That motion won by a majority vote in the House. However, since he has shared this with me, I will gladly share with him that, on March 21, we will be discussing Bill C-277 in the House, to allow the Auditor General to audit all the foundations. His party, through the chair of the Standing Committee on Public Accounts, has already shown support.

So, I would like to hear his comments on this part, whether he agrees with giving the Auditor General oversight with regard to the Canada Health Infoway and all the other foundations too? Also, once he has read the bill, does he intend to support all legislation seeking to achieve that objective?

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)