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

[Dr. Vicky Sharpe]

In summary, this will have a significant impact on the ability of SDTC to get our job done.

I look forward to your questions. Thank you for your time.

[The Acting Chair, Liberal, Alan Tonks]

Thank you, Ms. Sharpe, for your presentation.

Mr. Bredt, if you don't wish to make a presentation, that's fine. Thank you.

From Genome Canada, Mr. Godbout, could you make your presentation, please.

[Dr. Martin Godbout, President and Chief Executive Officer, Genome Canada]

Thank you, Mr. Chairman, ladies and gentlemen. Thank you very much for inviting Genome Canada to come here in front of this committee on Bill C-2.

First, you will find that we have provided you with a package of all of our information, and we have provided you with one table. To make your life simple since your time is very important, we would like to attract your attention to a very simple table.

First, I have to make a statement that Genome Canada is a private, not-for-profit corporation, incorporated in February 2000 under the Canada Corporations Act, part II. For any attorneys in the room, you will understand what this means: it is not a federal agency and it is not based on an act of the Parliament. Genome Canada was created by the private sector, and pretty much like Mrs. Sharpe just mentioned, it's managed like a venture capital company and was created by entrepreneurs and scientists. Genome Canada operates at arm's length from government. It is not a department, an agency, or a crown corporation. It is not subject to the Financial Administration Act. Industry Canada's relationship with Genome Canada is governed by a funding agreement.

You will find in the package the following three documents. First, there are the bylaws of Genome Canada. We will not provide you with the corporate governance manual, because of its thickness, but if you need any information in your deliberations, we encourage you to look in the table at the column “Corporate Governance Manual” and you will find all of the items there, and we'd be delighted to provide you with that information.

In the package we have also provided you with the latest funding agreement with Industry Canada, and finally, you will find the corporate plan that was submitted to Industry Canada in February 2006, the latest version that we have. And for transparency, we have also provided you with the high-level cashflow of all the revenues and investments—actual, present and future—of Genome Canada.

Like any private corporation, Genome Canada is governed by a board of directors, elected from among the directors. So it's like a corporation; we select who should be on the board, and we consult the minister for advice, but the directors are not nominated by the Government of Canada. We want to ensure that we cover all the regions of Canada, the genders, and the attributes of our board members. We have a board of sixteen people, five of whom are ex officio, including the president of the Canadian Institutes of Health Research; the president of NSERC, the Natural Sciences and Engineering Research Council of Canada; the president of the Social Sciences and Humanities Research Council of Canada, the third granting council; and finally, the president of the National Research Council.

The reason that the presidents of all of these research council agencies are ex officio members of the board of Genome Canada is to ensure that we are not duplicating what these agencies are doing so well.

We have all of the committees that a typical—even publicly traded—company has, from an executive committee to compensation, audit, investment, election, and corporate governance committees. So that takes care of governance.

We have internal policies, but most of the policies are directed by the agreement that we signed with Industry Canada, from whistle-blowing to reporting, to membership and investment policy—because we manage a substantial amount of funds—emerging policies, a data release policy, confidentiality, and conflict of interest. You have the whole list there in front of you.

On the accountability side, I would again attract your attention to the funding agreement with Industry Canada. We have to produce annually a corporate plan, which we hope Industry Canada can table before Parliament. This corporate plan includes the planned expenditures, the objectives of Genome Canada for the next years, and performance expectations. We just went through a compliance audit, mandated by Industry Canada, to make sure that Genome Canada is in compliance with the funding agreement. And those are all the accountability issues.

We're here to answer your questions. We feel that Bill C-2 as it is right now has no impact on Genome Canada.

[The Acting Chair, Liberal, Alan Tonks]

Thank you, Mr. Godbout. Of course, what you didn't cover probably will be followed up on in questions. Thank you for that.

Now we'll hear from Sister Elizabeth Davis, chair of the board of trustees of the Canadian Health Services Research Foundation.

Sister.

[Sister Elizabeth Davis, Chair, Board of Trustees, Canadian Health Services Research Foundation]

Mr. Chair, honourable members, thank you for the opportunity to be here today.

Our foundation, one of the first created by the federal government, was designed to support evidence-informed decision-making in the organization, management, and delivery of health services through funding research, building capacity, and transferring knowledge.

Our programs are supported by an endowment of approximately $110 million plus the significant contributions of more than two dozen partner organizations. These programs include support for applied health services in nursing research and researchers, the dissemination of research findings to those managing and making policy for the health system, and the training and support of health service executives in how to use these research findings in their day-to-day work.

Our stakeholders, therefore, are the Canadian people as well as the researchers and decision-makers working to improve the health system. As a publicly funded foundation, we expect to be held accountable and we wish to be held accountable to the Canadian people and to these stakeholders. One of our guiding principles, therefore, is transparency. We see ourselves being held accountable for two things--our fiscal prudence and propriety in the use of public funds, and the effectiveness and impact of the programs we offer. Clearly these two are inextricably linked.

For our fiscal accountability, our audited financial statements are presented at a public annual meeting and posted on our website, and in our annual reports provided to the Minister of Health. Last year, in addition, we completed external and independent reviews of our governance, our enterprise risk, our internal controls, and our investments. We have acted on the recommendations from these reviews. Next year we will be doing a repeat compliance audit of our grant and award holders.

We routinely evaluate the impact of our programs and make modifications in line with the results. Our main programs have external evaluations built into their development, and all other programs are periodically evaluated by our in-house impact and program evaluation unit. We are preparing this year for our second five-year review of the foundation's overall effectiveness by an independent, external international review panel.

We have received acknowledgments nationally and internationally for these initiatives. Our first five-year review, which was done in 2002, included the receipt of more than 200 letters of feedback from our stakeholders. The review commented on the foundation's growing reputation for innovation and responsiveness to stakeholders' needs. The review noted that, if anything, we had been over-evaluated in our first five years, and they commended us for our internationally peerless work.

In 2003 England's comptroller and auditor general identified our work as a best practice for commissioning research by government departments across England, and used us as a benchmark for their report to England's Parliament. In 2004 we were asked to speak about our work at a summit on health research of world health ministers in Mexico, a meeting organized by the World Health Organization. Last year our chief executive officer, Dr. Lomas, received an honourary doctorate from the University of Montreal in recognition of the work done by the foundation in better linking research to the workings of the health system.

The goal of our foundation is to maintain a balance between the two forms of accountability, the prudent use of public funds and the demonstrable impact of our programs. We are aware of the high risk of ever more resources being diverted to increasingly detailed fiscal and process accountabilities. Our challenge is to ensure that we are able to appropriately demonstrate accountability without doing so at the expense of the resources, flexibility, and innovation needed for our programs to have an impact in a timely way on the needs of our stakeholders and the good of the health care system.

To a small foundation like ours, Bill C-2 in its current form appears to strike this appropriate balance.

We look forward to your questions and comments.

[The Acting Chair, Liberal, Alan Tonks]

Thank you, Sister Elizabeth.

We'll go immediately to Dr. Leighton for his presentation.

Dr. Leighton, please.

[David Leighton, Past Chairman of the Board, National Arts Centre]

Thank you, Mr. Chairman.

As I'm sure all of you know, the NAC was set up in 1969 to provide a federal agency that would compete at world-class levels in the performing arts of music, dance, and English and French theatre. At the time, it was consciously structured, as a crown corporation, to be at arm's length from government.

I have been chairman of the board of the National Arts Centre for the past seven years. My background is that I have published extensively on the subject of corporate accountability and have extensive experience on boards of both profit and not-for-profit organizations.

I am co-author of a book entitled Making Boards Work, and I was a member of the Dey committee appointed by the Toronto Stock Exchange to examine corporate governance in Canada. Our 1994 report, Where Were the Directors?, has had a major influence on corporate governance in this country.

My colleague Darrell Gregersen is with me today. She is the National Arts Centre's executive director of development and CEO of the National Arts Centre Foundation. Darrell is one of Canada's most experienced fundraisers, joining the NAC after leaving the major gifts program at the Hospital for Sick Children in Toronto. Under her leadership and from a standing start about six years ago, the National Arts Centre is on target to raise $10 million a year from private sources to fund our artistic and educational activities across Canada.

We'll be able--and anxious--to answer any questions at the end of our brief presentation.

We believe in and have encouraged a policy of openness at the National Arts Centre, and the centre supports the move to bring the NAC under access to information. We congratulate the government on finding a balance between the need to provide greater levels of transparency for crown corporations and the need to protect certain types of information relating to our competitive business. That is, we support the goals of the draft legislation, but we want to avoid creating unintended negative consequences unique to our operation, consequences that would severely hamper our ability to fulfill the mandate under our act. Our concerns are in two areas dealt with in the draft act--namely, artistic contracts and fundraising.

The draft legislation recognizes that all contracts negotiated between the NAC and individual artists are presently confidential and that it is necessary to continue to provide some protection against the disclosure of the amount we pay a director, a designer, or a performer. Many leading artists would not perform at the NAC if this information were to be made public. In addition, if the fees the NAC pays for artists were to become public, it would seriously undermine our ability to secure certain artists. In other words, we operate in a highly competitive artistic milieu.

The other area where the draft legislation provides some protection is with regard to our ability to fundraise in the private sector with individual donors and corporate partners. The National Arts Centre is the only federal agency with a major strategic commitment to fundraising from the private sector and individual philanthropists. We now generate approximately 50% of our revenue from non-government sources, and we expect that percentage to go to 60% by the end of the decade. We are projecting a contribution level of $10 million a year in fundraising revenues, or 15% of our total budget annually, by 2010.

This fundraising revenue is the major factor that has enabled us to fulfill our strategic plan over the past six years, with specifically three objectives: first, to raise and maintain artist standards at world levels; second, to become truly a national arts centre; and third, to invest heavily in educational activities.

In fundraising, the relationship between donor and recipient organization is a highly personal one. The donor must believe that the institution to which financial and other resources are being entrusted is willing and able to ensure the highest standards of confidentiality should the donor so wish. Any breach of the trust between donor and recipient would severely damage the donor-NAC relationship. Individual donors often disclose highly personal family and financial information when discussing possible support for our organization.

[The Acting Chair, Liberal, Alan Tonks]

Could you sum up now, please. Then we'll go to questions.

[David Leighton]

I'm coming right to the end, sir.

We need to be able to give donors an absolute assurance of confidentiality, and not one that is contingent upon a third party agreeing that the donation should not be disclosed.

In conclusion, we are pleased with the manner in which the draft legislation has provided us with some protection for information related to both artists and donors; we are also very pleased that it has opened up access to information generally, and are very supportive of that fact. We would urge the committee and Parliament to keep these protections in the final legislation.

Thank you.

[The Acting Chair, Liberal, Alan Tonks]

Thank you, Dr. Leighton, and thank you to all the deputants.

Members of the committee, because we have a limited amount of time, I'd suggest that we try to cut our questions to five-minute parcels, and then after we get through everybody, we can see if we wish to extend the time. Do we have agreement on that? Good. Thank you.

Seeing no opposition to that, perhaps we will start with Mr. Murphy, and then we'll work our way down through the opposition. Thank you.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Thank you, Mr. Chairman.

First of all, I would like to thank you all for your presentations. I have a few questions, but they are all for Mrs. Sharpe. However, I would like to stress that I fully understand the position of Genome Canada. Mr. Godbout, I clearly understand the gist of all your comments, and I fully agree that Genome Canada is not part of the scope of this bill. This is why I do not have any questions for you.

Sister Davis, I likewise respect your view—and yours as well, Dr. Leighton—that you have no large problems with the bill. So without any disrespect, in the interests of time, I just want to focus my questions on Sustainable Development Technology Canada.

I'm a bit miffed, actually, not only because it's late, but also because we've been meeting a long time for many hours, and it seems to me that with proper homework, this organization should have been left in the same position as Export Development Canada. It clearly was set up—whatever you think of the previous government—to meet the purpose of innovation and to keep it at arm's length from meddling by government. It's a testament to how well it works that on page 32 of their annual report, there are some 15 directors who, variously, have been board members of Petro-Canada, Chrysalix Energy, Fortis, the University of Waterloo, Falconbridge, Parr Johnston, and Jacques Whitford. I mean, everybody's there but Gwyn Morgan—and maybe my friends opposite could find a spot for him there.

[An hon. member]

Oh, oh!

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

But seriously, the governance of SDTC, with a 15-member council from various universities across Canada, first nations, and the Federation of Canadian Municipalities, reflects a well-managed, very transparent organization that is audited by Peat Marwick or KPMG—I forget which.

The point is, what are you doing here and why are you under this regime? I agree with you totally that you have transparency, and confidentiality is going to be an issue here. You're on the same footing as any other group that wants to encourage innovation but doesn't want to let out secrets, if some person decides they want to get more into why somebody got money and somebody didn't.

I guess my comment to you is, how strongly do you feel that you should be exempt from this law?

[Dr. Vicky Sharpe]

Thank you very much for your characterization.

We feel extremely strongly. I was speaking with the chairman of the board, and I have to say we do have extremely strong governance and capability there. The chairman of our audit committee is the head of Falconbridge. We were looking at Sarbanes-Oxley implementations early on.

It is very serious for us. We do not avoid, at all, any issues around general accountabilities, and I did not have time to list all the areas where we do post on our website, and provide to Parliament, our annual report, our annual report supplements, and our corporate plans.

I should also mention that in the last 18 months, we have just been through a series of compliance audits from Natural Resources Canada, which we passed. We undertook an early third party evaluation for lessons learned to improve the efficiency of our program.

We have also been working with the Auditor General. We will be the first foundation that she will have a performance report on this fall. It's a performance, value-for-money audit under the Commissioner of the Environment and Sustainable Development. I cannot say what the outcome will be, but I can't say we're worried about seeing the material before Parliament.

We've also just finished our interim evaluation. We consider ourselves to be respectful of the fact that we have taxpayers' money. We do believe that we are highly accountable. We report about what we can, but we are severely concerned that we will not be able to continue to be efficient or to engage the private sector to the level of success that we have.

I believe the issue around innovation in Canada, and the capacity of our entrepreneurs to take their products to market, from which we then see profit flow back into the innovation chain, is severely at risk, particularly in clean technologies.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Mr. Chair, please--

[The Acting Chair, Liberal, Alan Tonks]

You'll have to be very fast.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Thank you.

Very briefly, Ms. Sharpe, just on that issue, the Canada Foundation for Innovation, through its peer review process--I'm wondering if it's parallel to your concern about researchers--keeps peer reviewers anonymous so they're not compromised in the process. Is that something that would assist you, or is that something you do in any event?

[Dr. Vicky Sharpe]

Currently, we do not give the list. No one knows who has done the peer review. Obviously, with the breadth of technologies, we are obliged to use that kind of expertise. They are well-known individuals, and they would be lobbied if they were known, so we do provide the same protection.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Thank you.

I'll just finish by congratulating all of you and thanking you for the fine work that your organizations provide for Canadians.

[The Acting Chair, Liberal, Alan Tonks]

Mr. Sauvageau.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Thank you. Good evening to all.

For starters, if you have specific amendments to Bill C-2 to bring forward, I would invite you to send them to us as soon as possible. I do not know if you were here earlier, but a member tabled a motion that compels us to submit our amendments before noon on Friday. They need to be checked by the Law Clerk and Parliamentary Counsel. Therefore, I would say that we need them at the latest tomorrow morning. This seems to surprise Mr. Petit.

My first question is directed to all of you, except the representatives of the National Arts Centre. Are all of you subject to audits by the Auditor General, under Bill C-48, an Act to authorize the minister of Finance to make certain payments, which was passed last year?

[Dr. Martin Godbout]

As far as Genome Canada is concerned, in our new agreement with Industry Canada, the Auditor General may audit our books at the request of the minister.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Very well. So the accountability is there.

Does that go for you also?

[Sister Elizabeth Davis]

Yes, the Canadian Health Services Research Foundation is also under the Auditor General.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Madam Sharpe.