Bill C-2 (39th Parliament, 1st Session) Committee on May 30th, 2006

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

First of all, we would like to thank you for being here. It is very kind of you to come and present your very interesting thoughts on the Bill to us, on the process itself and on the crisis in confidence in leaders around the world. I find this very interesting.

Here in Canada, within the federal government, Bill C-2 was essentially developed in the wake of the sponsorship scandal. The conservative government has tried to find a way to avoid any future sponsorship scandal. This is stated in all of the government documents. And yet, several witnesses have told us that the Bill will not necessarily prevent another scandal like the sponsorship scandal.

The government also wants to restore Canadian's confidence in their leaders. However, we have the feeling that we are part of an attempt to manage the perception of the population, whereby the government wants to pass the Bill as quickly as possible, and it is rushing the witnesses — and we apologize for that — to this end.

Do you believe that Bill C-2 will be able to prevent another sponsorship scandal?

During the election campaign, you stated that you had defined certain elements that could be added in order to, if such a thing is possible, get our fiscal house in even better order. Can you describe these elements to us?

[Rock Lefebvre, Vice-President, Research and Standards, Certified General Accountants Association of Canada]

I'll try to answer the first part of that question. It goes back I think to the original question as well.

What we felt very attractive about this bill is not only that the institution of the Comptroller General's office has been brought back, but if we look at the bill we see the addition of a parliamentary budget officer, the new authorities granted to the Auditor General, and the creation of various roles, such as a chief audit executive and chief accounting officers. Obviously some people have put a lot of work into thinking about this.

When you try to look at it as a non-accountant—I looked at it more maybe as a fraud examiner or something of that nature—the system is really designed to be as strong as it possibly can be, quite frankly. I don't say that because I'm before this committee; rather, it's a recognition that a lot of energy went into thinking about this and segregating the duties and authorities and responsibilities. We would support that in its entirety. As I say, I don't support it only as an accountant; from a systems point of view, I think it's remarkably strong.

Will it assure us that scandals will never occur? Probably not. I don't know that there is such a thing as a fail-proof system, but I think what we have before us here is certainly a large improvement. Whether or not government or parliamentarians will ever have 100% assurance.... I think that might be overzealous or ambitious. But I think you're certainly on to a good start, and with a bit of experience, the refinements will be brought to it to possibly correct what might be outstanding.

Thank you.

[Carole Presseault]

As far as the second part of your question is concerned, I would be pleased to send you our documents on that subject.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

All right. Could you speak to us about two or three of the main components?

[Carole Presseault]

We made a series of recommendations in our briefs during prebudget consultations, which we repeated during the election campaign. The theme remained the same, namely a return to ministerial responsibility and to the role departmental controllers and independent audit committees could play. And we must not forget standardization. Our recommendations dealt more with the corporate sector than with the public sector.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

You also stated that you were against rewarding whistleblowers, without any further elaboration. Could you do so now?

[Carole Presseault]

Yes, absolutely. We are far from experts on whistleblowing. Several groups appeared before you. Our thoughts really revolve around the principle whereby whistleblowing is really a tool to be used as a last resort. All you really need are good systems in place and an organizational culture to promote the necessary exchanges internally to avoid having recourse to this tool as a last resort. We do nonetheless recognize that it is a necessary evil.

As for the reward, you have heard the previous witnesses. We share their opinion. The members of our association working in the public sector are professionals governed by a code of ethics. The $1,000 amount means absolutely nothing. Out of concern to take the proper action and their sense of professionalism, people will take the necessary action, regardless of the reward.

[The Chair, Conservative, David Tilson]

Thank you, Madam Lavallée.

Mr. Martin.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you.

There's only one issue I'd like to get your view on. You mentioned that many of your clients or members of your organization are lobbyists. Did you mean that you as an organization are registered as a lobbyist? Is the CGA a lobbyist in itself?

[Carole Presseault]

In our role with CGA Canada, we are registered lobbyists. We have about 12 to 14 of our employees under the revised act in the previous Parliament. I'm now considered a registered lobbyist and do so register.

[Pat Martin, NDP, Winnipeg Centre, MB]

Perhaps this question isn't quite as relevant, but I'll ask you anyway.

One of the recommendations the NDP is putting forward is that lobbyists should be barred or blocked from also selling other services to the government agencies they may be lobbying. In other words, it is to put an end to some of the larger firms that may in fact have multiple divisions within their firm that are contracting to the government and lobbying the government at the same time. Do you see the conflict and the need for amendment?

[Carole Presseault]

I wasn't aware of this. I find it interesting, and I immediately leapt, if you will, to what it would mean to our organization.

To start, I would say that the previous Parliament amended the Lobbyists Registration Act and changed the definition. We still don't have a lot of experience in understanding exactly what the implications of that will be. There has been renewed impetus into enforcement provisions, and I think those are the essential things.

I think Parliament has had a tendency sometimes to put a lot of things under the égide, under the cover, of the Lobbyists Registration Act that don't exactly fit. I would really like to spend more time thinking a bit about your proposal. On the face of what you suggest now, CGA Canada, which provides educational products and continuing education products to a number of outside clients, including potentially the Government of Canada, would be excluded from doing that. We have a product. We have courses to strengthen financial management and we have courses to strengthen internal audit. We would be unable to participate in an open, fair, and equitable tendering process because some of the employees, by the nature of their activities, would be registered lobbyists because they communicate with public policy officials.

[Pat Martin, NDP, Winnipeg Centre, MB]

It's an interesting point. I think it speaks to people having misconceptions about who lobbyists are. Many of us think of the large agencies, such as Hill & Knowlton Canada, but there are non-profit lobbyists, there are groups like your own. So that's an important insight that I'll factor into our amendments.

I have a second question about lobbyists. What is your view on banning the contingency fees that were such a high-profile issue in the David Dingwall case, for instance? Do you believe that's a practice that should be stopped?

[Carole Presseault]

I agree with it, yes.

[The Chair, Conservative, David Tilson]

Thank you, Mr. Martin.

Mr. Lukiwski.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Thank you, Mr. Chair.

Thank you both for appearing before us.

I'd like to ask you to make a comment on an issue that keeps resurfacing here at the committee. It deals with a situation that we've encountered several times in conversations with other witnesses, and that is the speed with which we're dealing with this bill.

Many of the concerns mentioned by some of my colleagues have been that it appears that the Conservatives, in particular, are trying to rush this bill and that we need to give this bill its due diligence. We have to make sure that it's a good bill, as Mr. Lefebvre has said. But there are always ways in which to make it better; there are amendments that we can make to strengthen this bill. I'm in full agreement with that.

I want to point out something here and just ask you to comment on it, because it makes perfect sense to me that the approach we're taking is the correct one. In a normal standing committee of Parliament, the committee usually meets four hours a week, and Parliament usually sits about 28 weeks a year. So over the course of a year, committees would hear approximately 112 hours of testimony.

We're currently sitting 24 hours a week, so by my calculations, in five weeks we will have heard slightly more hours of testimony than a committee in a normal Parliament hears in a year. Should we start sitting beyond June 23, when Parliament rises—which I believe we probably will—I anticipate we'll increase that to perhaps 40 hours a week. Again, by my calculations, in three weeks we will have heard a normal year's worth of testimony.

The reason I'm asking you to comment on this is that I believe that by sitting as frequently as we do, hearing as many witnesses as we have, going into a clause-by-clause examination of this bill, it's basically a win-win situation. We will have done our due diligence. In fact, we will probably be in a situation, or it's very likely we could be in a situation, where by the end of July we will have heard over two years' worth of normal testimony, which I think is pretty good. I think if any other standing committee of Parliament examined an issue or bill for two years, they would be able to say they'd given it a pretty good examination, that they'd done their due diligence. But the benefit we would have is that the law would be in effect. We would have done our work. We can get this bill passed, because a minority government could fall at any time.

So I'm just asking you to comment on whether or not you would agree that this bill needs to be passed and be given due diligence, but done quickly, so that the spirit of this act, which you seem to agree with, would actually have some real meat behind it by actually becoming a law; it would be enacted.

[Rock Lefebvre]

I hate to start with a disclaimer, but I guess it could be expected in the sense that there is a lot of political science and environmental factors to be considered here, and I won't profess to be an expert on those. But I think the way this has to be approached—and I think Mr. Martin put it eloquently—is that this committee has confidence that it has looked at the subjects and at the research. In reality, we have to evaluate it as accountants or auditors probably would and determine whether or not additional hearings would bring any added value.

Again, as an association, it's really hard to speak for all our members, but if we look at what's before us and the quality of that work, I think as an association we could support the view that there is enough information available to this committee at this time.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Thank you very much. No further questions.

[The Chair, Conservative, David Tilson]

Mr. Petit.

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Ms. Presseault, I would like to ask you a question.

You mentioned the huge scandal at Enron. However, in all major financial scandals, accountants have always been complacent about the one committing the crime. That was the case with the accounting consultant firm Arthur Anderson that carried out its activities in the United States and Canada.

In the opinion of the Certified General Accountants' Association of Canada, will Bill C-2 solve the problem of overly complacent accountants that risks leading to scandals?

[Carole Presseault]

We could rewrite Enron's history, but I do not think that is the purpose of your question. In the Enron affair, there are several accomplices. Last week, two of the corporation's most important executives were found guilty. The example comes from the top.

The printed copy of my text includes quotes from Warren Buffet who states that integrity is truly what is most important. Other associations, like ours, have stated that history alone will determine what Bill C-2 will resolve. Within the system, you need a good organizational culture that promotes dialogue and includes checks and balances, which often helps the Auditor General establish whether the mistake is attributable to internal auditing. The process was in place, but it was not in the right place, if I can put it that way. Will setting up independent autonomous internal audit committees for a department or a Crown corporation correct the mistake? In the corporate sector, much has been said about independent audit committees that have proven their worth. We are eager to see them established. The policy will only come into force in 2007, but we have been assured that several departments are already interested.

Many of our members throughout Canada, licensed general accountants, have a vast expertise and considerable experience in the corporate world and other areas. They would like to sit on these committees that would not just be committees of accountants. No one can say that it's the accountants or the auditor's fault, because they are an integral part of the system. You are aware that financial officers are in the hot seat. They are on the front line in this sector. In this situation, it was not clear that financial officers were present.

I am not sure that I have answered your question, Mr. Petit, that was my morning skating exercise.

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

You skate well. Thank you.

[The Chair, Conservative, David Tilson]

That appears to conclude our questions of you. Thank you very much to both of you for coming. We appreciate it.

The chair has a couple of announcements before we adjourn until this afternoon. I will be unavailable to be here tonight. Mr. Tonks will chair the meeting, and that's on the understanding that there are no votes, that all caucuses have agreed to that.

The meeting tonight will be across the hall at 237-C at 6 o'clock. There will be a subcommittee meeting tomorrow at 12:15 at the Promenade Building in room 701.

Finally, there are two notices of motion outstanding: one is from Mr. Poilievre and the other is from Ms. Jennings. We will deal with those tomorrow night at 8 o'clock, unless there's some unforeseen event.

There is a vote?

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

The opposition motion is being voted at 7:15 this evening. The bells are supposed to start at 6:15, with the vote at 6:30, so that's going to mess up this committee's schedule.

[The Chair, Conservative, David Tilson]

Mr. Tonks will have to solve that one.

Thank you. The meeting is adjourned until 3:30 this afternoon in this room.