Government Operations Committee on Feb. 26th, 2008

[Wayne Wouters]

I'm not aware of any department expressing concerns. Again, we dealt with the lead department in this case, which was the Department of Transportation, Infrastructure and Communities. It was its minister who submitted the Treasury Board submission to us.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Under the Canada Strategic Infrastructure Fund, can you tell me how many projects Treasury Board refused to sign off on in 2006 after reaching this stage?

[Wayne Wouters]

Again, I cannot comment on the deliberations of the cabinet committee to Treasury Board. I can say to the honourable member that we do receive a large number of Treasury Board submissions under this particular fund each year, but I can't comment on the deliberations of the board.

[Mark Holland, Liberal, Ajax—Pickering, ON]

I'm not asking about the deliberations; I'm asking about outcomes. These are decisions that are publicly made.

I'll reframe the question and perhaps make it easier to answer. With the exception of this example, when was the last time Treasury Board made a federal contribution agreement to a municipality conditional upon a future city council approval? Has that ever happened in recent history? Can you cite any other example where that has ever been done?

[Wayne Wouters]

I can't cite other examples. I don't have that information with me. All I can say is that there are very varied types of projects that come before Treasury Board under this particular fund. They're all quite unique, and the board could in any given instance put specific conditions on the approval of a project.

[Mark Holland, Liberal, Ajax—Pickering, ON]

I've searched thoroughly, and I have not been able to find another example of this, ever. So if you could give me another example it would be appreciated, because it seems that this is the first time it's ever been done. Of all the projects approved in 2006, it seems that this was the only project—the only project—that was stopped at this stage after it received approval from seven departments.

This leads me to the next question. Who signed off on the Toronto funding, the $350 million that went for the sole-source procurement of TTC buses from Bombardier? Was that Treasury Board?

[Wayne Wouters]

Again, I'm not aware of that project at this point. I don't have that information with me.

I should also comment that, as I said, the board can approve with conditions or without conditions, and it can defer. If conditions are put on by the board, often they're not made public.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Here's the point. We know that in October 2006, in the middle of a municipal campaign in Toronto, a $350-million project was signed off, and this is a project that was in fact sole-sourced, and there were no such conditions placed making it contingent upon a future council. So it seems like we have two different treatments here, depending on what the file is.

This is the concern, more broadly. The explanation that has been given to date by Mr. Baird as to why he interfered in this process was that it was a boondoggle, using his words. Yet we have seven departments under this current government that signed off on this project, including Treasury Board itself on October 10, 2006, contingent upon a future council. Mr. Wouters, do you consider this project a boondoggle? Did your department sign off on a boondoggle? Did seven other federal departments sign off on a boondoggle, and if so, why?

[Wayne Wouters]

The role of the Treasury Board and the Treasury Board Secretariat is not to assess the project. The role of the Treasury Board Secretariat is to assess the contribution agreement that's negotiated between the parties. That means determining if the appropriate due diligence was done by the lead department in this case, if the appropriate management framework was in place in order to release the funding, and if they are compliant with Treasury Board policies.

[Mark Holland, Liberal, Ajax—Pickering, ON]

So once--

[Wayne Wouters]

Treasury Board Secretariat does not undertake the cost-benefit analysis of the project itself. The role of the Treasury Board is to approve the contribution agreement; our role, therefore, is to assess that agreement.

[Mark Holland, Liberal, Ajax—Pickering, ON]

I have two questions stemming from that. Why did you get the contract, if that wasn't your role? And secondly, if it isn't the role of Treasury Board to assess that, if it's the role of other departments who had signed off on this and who had said it was okay, then why are we getting this explanation?

I know it's difficult for you to make that hypothesis as to why the minister then would be seemingly stepping outside the role of the department to make this determination.

Let me ask the question specifically of you: Why would you have gotten the contract if it wasn't your role to do that?

[Wayne Wouters]

I did not get the contract. The minister got the contract. My understanding is that it was as a result of an agreement between the mayor and the consortium to provide the minister with the contract. We basically assessed the contract, and that was part of the information that went back to Mr. Kirkpatrick.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Obviously what I find very concerning about that is we have you saying that it's not the role of Treasury Board to assess the contract in this way, and yet this is the explanation Mr. Baird is giving as to why he intervened in the process.

I'm going to move on to the next question.

[The Chair, Liberal, Diane Marleau]

Mr. Holland, I'm sorry, your seven minutes are up. I know it goes by quickly.

We'll go with Madame Bourgeois.

You have seven minutes. I'm going to be very strict when keeping time this morning.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, Madam Chair. Our witnesses will have to give us very brief answers.

Greetings, gentlemen, and thank you for coming here to shed some light on this subject. I would like to know what powers the city has and what powers Treasury Board has. We must not confuse the two.

My first question is for Mr.Kirkpatrick. In general, when city council makes a decision, it is supposed to be independent and oversee the requests made by the council members. Cities are independent, even with regard to an infrastructure program, is that right?

[Kent Kirkpatrick]

Yes, that's right.

It was the city's position that under the memorandum of understanding that had been negotiated, the city met all of the conditions. Mr. Chartrand can go into more detail in terms of the negotiation of the contribution agreement and its framework.

Clearly we were dealing with three separate governments. The city council, which voted on this project in the summer of 2006, voted fourteen to seven to approve the project. That represented a duly constituted council and a valid decision of a sitting council. And in the city's opinion, it met the conditions of the contribution agreement of both the provincial and federal governments, because the council of the city approved the project and approved the framework. They then delegated authority to me to go and negotiate the final conditions and terms of the contribution agreement. So from the city's perspective and from the Municipal Act perspective, that represented a duly constituted council and a valid decision by council committing the city to that contribution agreement.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

We are not very familiar with the requirements of the Canada-Ontario Infrastructure Program. In general, provided you satisfy the requirements and you are granted funding because you have done your homework, in principle, you should be able to go ahead without having to meet any other demands or deadlines to collect the funding granted under the agreement.

Are you truly independent? There is no clause of the Canada-Ontario Infrastructure Program that states that this funding can be withdrawn under certain conditions, is that correct?

[Kent Kirkpatrick]

I'm not personally aware of all the framework of that infrastructure funding agreement. In general, the city was very aware of the need to ensure that we had identified and were able to meet all conditions from both the federal government and the provincial government as we were moving through this procurement process and negotiating these contribution agreements--and we did that.

At no time in that period of time was it ever raised that the decision of council that this was the number-one top transit priority project for the City of Ottawa or the decision to conduct a procurement process was going to be revisited as part of the federal government's approval of the project.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Do you understand my question? Do federal-provincial infrastructure agreements contain provisions stipulating that the money will not be paid out? Are there other conditions? Mr. Chartrand can answer me if you are unable to do so. I want to know whether the funding is conditional or whether, once you have been allocated a certain amount or notified that you are entitled to a certain amount, you are fully responsible for the project and the funding.

[Kent Kirkpatrick]

As I indicated, I am not aware of any conditions like that in the agreement. However, it was the city's understanding throughout the process that the contribution agreements would be subject to management board approval in the case of the provincial government, and final Treasury Board approval in the case of the federal government.

We understood that the process was working with the federal government and meeting all of their departmental requirements for information for environmental assessment purposes and business case purposes. All of that was done in completing the submission from Minister Cannon in Transport Canada to Treasury Board for their approval. The city was aware that in the end it would require Treasury Board approval for that contribution agreement to be valid.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Perhaps you won't give me an answer. In Quebec, once a federal-provincial agreement is reached, it is normally the province that manages the funds received. In principle, it is Ontario, in your case, that was supposed to allocate funding, because it has full powers. It is not up to the federal government to decide whether you have those powers. I know the answer, Mr. Kirkpatrick, but I just wanted to hear you say it.

Mr. Chartrand, it seems to me that you have developed a fine project. You even sent a copy to a member who sat on this committee, Mr. Pierre Poilievre. You even assured him that there would be no cost overruns, if I remember correctly.

Is it true that everything was already decided, and that the light rail project proposed by city council did not pose any problems?

[Réjean Chartrand]

A budget of $730 million was approved by city council. The amounts in the tenders received were less than 2% higher. At that time, the total cost of the project amounted to approximately $744 million, which was considered a great success by our city council. The agreements with the province and the federal governments were very clear: federal and provincial contributions would total no more than $200 million. Any additional cost would have to be borne by the city. There was absolutely no risk for either the provincial or the federal government.

[The Chair, Liberal, Diane Marleau]

Thank you, Ms. Bourgeois.

Mr. Moore.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Thank you very much, and thank you to all the witnesses for coming before us to talk about this issue.

After hearing the presentations, the first round of questioning is usually the hot stuff, as my experience goes, so I'm left wondering where the “there” is. I think this is much ado about nothing. This is an example of a fishing expedition backfiring a little bit, because what was demonstrated by Mr. Wouters is that all the necessary approaches and all the mandates by Treasury Board were followed and the appropriate behaviour took place.

As a matter of fact, there's a parallel in my riding to this one. There's a light rail project in my riding that is very hotly contested, and the community is divided perhaps evenly on it. The idea that there should be some form of community consultation, that the community's input should be taken into account, is something that I know the people in my community would certainly want to have happen before federal and provincial dollars were put forward for a project such as this.

The idea that Mr. Baird did anything inappropriate in here has been refuted repeatedly. The Ethics Commissioner was asked to take a look at this, and the Ethics Commissioner told the opposition in November 2006 that he was unable to conclude that there are reasonable grounds for believing that Minister Baird improperly furthered his or any other person's private interests in this matter.

All the rules were followed, everything that happened should have happened. With regard to the light rail project and the $200 million that was approved by the federal government, the $200 million is still on the table for future light rail projects. The money was approved in the past, and if there's a re-engagement with the federal government, money for light rail going forward is still available for this region for future projects.

So the idea that something was somehow squashed is in fact not true. What was done was that a new city council that was elected by the public was consulted.

In fact, this is not a Conservative or a Liberal issue. As a matter of fact—this is an indication for Mr. Holland so he's certain of what happened here—the new city council was elected....

This was approved by the clerk, Madam Chair.