Evidence of meeting #38 for Government Operations and Estimates in the 40th Parliament, 3rd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was varin.
A recording is available from Parliament.
President, LM Sauvé
I know that I'm under oath, and I am referring to stories that came out last week or the week before.
Conservative
Daniel Petit Conservative Charlesbourg—Haute-Saint-Charles, QC
I'm talking about you; forget about the stories. Are you sure that the FTQ has been infiltrated by the Hells Angels and organized crime?
President, LM Sauvé
I am convinced that the FTQ is cooperating with the Hells Angels and organized crime. The answer is yes.
Conservative
Daniel Petit Conservative Charlesbourg—Haute-Saint-Charles, QC
During the period when you were bidding on various contracts, particularly the ones you have alluded to, did you know then or did you learn subsequently whether some of your employees or people in the company were connected to the Hells Angels? Have there ever been any such individuals in your company?
President, LM Sauvé
To my knowledge, we have never had any employees connected to criminal groups. When I discovered that criminal groups were attacking us, I asked for help from a member of my family who is in the Royal Canadian Mounted Police. He gave me advice on how to get rid of those people.
Liberal
Pat Martin NDP Winnipeg Centre, MB
Thank you, Chair.
Mr. Sauvé, thank you for your frank testimony. It's very helpful to us that you've come here voluntarily to share this with us.
I also apologize to you, Mr. Dorval, that perhaps our committee didn't accommodate your personal loss. You have my condolences.
Mr. Sauvé, the picture you paint for us is actually our worst fears realized. You're painting a picture of influence peddling, corruption, kickbacks, and infiltration by the mob, not only into the industry generally, but also right under our noses here in West Block. Perhaps even more worrisome, if you can overlook all of those things, are the cost overruns. Our committee is primarily concerned with getting the best value for the tax dollars invested in the renovations of our historical treasure, these Parliament buildings.
I hope we do get time to deal with the last slides of your presentation, indicating that in your professional opinion everything on Parliament Hill costs ten times as much to build. I can tell you that was my observation when I first came to Ottawa as a journeyman carpenter, having spent a lifetime in the industry. It seems everything in Ottawa costs ten times what it costs to build in Winnipeg. We build whole hospitals in Winnipeg for $200 million, with operating rooms and 347 wiring and all of these difficult technical details, yet it was going to cost us $320 million to build a little committee building over here. It had to be cancelled because the costs exploded so much, and I'm starting to understand why.
But what concerns me most and what concerns our committee is that at the same time, at this very moment, Public Works is presumably letting out more contracts for this $6 billion project.
I say to you, Mr. Chairman, that we have a motion passed by this committee calling for a moratorium on all renovation work on the Parliament buildings. I'm going to ask you, as chair, to report, as you were directed to do, to Parliament that this committee recommends a complete moratorium on all of this work until we can be assured it's not being let out due to corruption and kickbacks and illegal lobbying and influence peddling.
I say this because we had this guy Varin here. We shouldn't have let him leave the room. We should have put him in handcuffs right then and there, because this guy sat there and lied his face off to us about what he did for you, Mr. Sauvé, whereas in actual fact, somebody in Public Works is getting paid off to rig these contracts by custom writing them so that your bid wins.
I wrote down a quote in which you said, “We got the contract...because we paid”. Is it your firm belief that because you paid Varin that money, you got this award?
President, LM Sauvé
Having witnessed the rigmarole for the Peace Tower in 1994 and having gone back home to Montreal with our tail between our legs, we had no choice this time around but to try something different. I would like to think today that it is because of the qualifications and the work of my grandfather, my father, and my own, but I tend to believe that it is a combination of that and, more importantly, because of the fact that we hired a lobbyist.
So yes, because we paid, we received.
NDP
Pat Martin NDP Winnipeg Centre, MB
Nobody's doubting the quality of your work, but it makes me sick to my stomach that the way you have to get jobs in Ottawa is to buy them, to grease the right palms, in this case of a well-connected Conservative lobbyist.
Did you hire Varin because he had connections to the Conservative Party? It wouldn't have done you much good to hire a lobbyist with connections to the NDP, I presume, or the Bloc. Well, no offence....
NDP
Pat Martin NDP Winnipeg Centre, MB
Is it because Varin told you he had connections with the Conservatives that you chose that particular lobbyist?
President, LM Sauvé
Varin was suggested to us strongly as a man who had strong connections with the Conservative government, and that he was the go-to guy for this type of small cap infrastructure spending contract.
NDP
Pat Martin NDP Winnipeg Centre, MB
Did you know that he'd been convicted five times for fraud and corruption?
President, LM Sauvé
We had no idea. He was presented as a member of the Régiment de Maisonneuve, and I had no idea at that time that he had those charges looming in his past.
NDP
Pat Martin NDP Winnipeg Centre, MB
Most taxpayers would be horrified if they thought that's what you had to do to get a job on a Public Works project in this regime. I think it's a sick, sick commercial environment, and to say that I am disappointed is an understatement. It really does make me nauseous, coming from the construction industry. We thought fair competition would get the best value for the construction dollar invested, but you're saying you have to pony up if you want to play the game. If you want to be a player, you have to grease the right palms. Is that what you're saying?
President, LM Sauvé
What I'm saying is that the cost of doing business has been propelled at such a high rate that there is no incentive to compete. Labour laws being what they are, cost of wages per hour, cost of goods being what they are, this industry of ours—and it is not just in Quebec. It is also in other areas, in the more populated areas of the country.
NDP
Pat Martin NDP Winnipeg Centre, MB
I know. We're investigating in B.C. at the same time. The Hells Angels are the labour brokers in B.C.; we know that.
President, LM Sauvé
So there is no incentive to compete. There is a culture that not only propels kickbacks.... There is a 5% factor in tender calls in Quebec and a 3% factor that was propelled here by Varin.
NDP
Pat Martin NDP Winnipeg Centre, MB
That's illegal. That's hell. That's like Criminal Code offences here we're talking about. And I know, I'm not blaming you. For a business to stay—but there are contractors dropping out of the industry in B.C. who I've been meeting with lately for that same reason. The level of corruption is so extreme, you either play the game corruptly or you never win another job. I had one guy tell me he bid on 130 jobs last year and he won two, and he was a second- or third-generation major contractor, too. Because he won't use the Hells Angels labour brokers. But that's another story.
My concern—
NDP
Pat Martin NDP Winnipeg Centre, MB
Well, I'm going to use that time, then, to ask you a question, Mr. Chairman. Why have you not reported to Parliament that this committee is calling for a moratorium on all construction projects until we can clear up this rat's nest that we're hearing about?
