Evidence of meeting #5 for Public Accounts in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was accounting.
Senior Director, Government Accounting Policy, Treasury Board of Canada Secretariat
We have larger meetings where we take minutes of such items. At this meeting, neither ourselves nor the OAG took minutes. In the future, I think we will.
Liberal
The Chair Liberal Shawn Murphy
Okay then.
Colleagues, those are the questions I had. We have another 30 minutes.
We have about 10 minutes that we need to approve the minutes of a steering committee.
We've had a very interesting discussion, and I'd like to give everyone who came here today an opportunity, in perhaps two minutes or less, to give a closing statement or remarks, if they wish. That gives us perhaps seven or eight minutes for additional questions.
Mr. Lake and Mr. Nadeau did not have the opportunity to question. I'd like to extend them the courtesy.
Perhaps three minutes, Mr. Nadeau, if you wish, then Mr. Lake.
Monsieur Nadeau, trois minutes.
Bloc
Richard Nadeau Bloc Gatineau, QC
Thank you, Mr. Chairman, ladies and gentlemen.
This entire matter reminds me a little of the repatriation of the Constitution of 1982, when the Supreme Court held that it was legal, but immoral. We all remember the confusion that subsequently caused. That moreover is one of the reasons why the Bloc québécois exists today.
We know it is not consistent with the Treasury Board policy to spread $39 million over 15 years, as we saw. That's written and that's in the documents.
I asked the people from Justice, who were responsible for this, why that was done all the same, when we know that it was not compliant to act in that way. Ultimately, a decision was made that was not compliant.
Former Deputy Minister and Deputy Attorney General, Department of Justice, As an Individual
Mr. Chairman, does the question concern the $39 million in 2002-2003?
Bloc
Richard Nadeau Bloc Gatineau, QC
In fact, it concerns everything pertaining to the non-compliant deferral of money. Do we understand each other?
Former Deputy Minister and Deputy Attorney General, Department of Justice, As an Individual
I believe that each situation must be examined separately because there is a different explanation for each one.
For 2002-2003, based on the information we have on this point, this contract caused major concerns, particularly regarding deadlines. There was a six-month deadline for a nine-month contract. It was impossible to get to the certification stage, and, in the meantime, costs mounted. That raised some red flags at that time. This point was raised in the consultants' reports, and Mr. Hession and HLB confirmed that the contract entailed risks. So officials acted on the basis of the information that was available at that time. They did so in good faith, based on their interpretation of the Treasury Board policy.
Mr. Ganim, who is here with me, was the Director General of Finance at that time. He'll be able to provide you with additional explanations.
Wayne Ganim Former Director General, Finance, Department of Justice, As an Individual
All the factors that Mr. Rosenberg cited were taken into consideration. In addition, we had plans and budgets that were based on a three-year contract with the supplier, and the payments were made over three years.
When we thought about establishing an account payable at the end of the fiscal year for the whole contract, plus an amount for the delays, I didn't realize that I could debit that amount from the appropriation under section 33 of the act, because the merchandise hadn't been delivered by March 31, as provided in the contract. There were too many doubts about the contract's validity with regard to the delivery of known services.
Another important aspect is that the contract was designed to transfer all the risk to the supplier. It's a risk-transfer contract. If the contractor can't provide the service, no balance is payable. That's based on these two factors. I didn't feel comfortable using section 33.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
The timing of all this stuff is very interesting.
One question I have right off the bat is for Mr. Baker. I notice that right off the bat you said there were only two options: you could ask for supplemental estimates or blow the vote—neither of which was a very good option from your standpoint. I imagine you probably very early on had a conversation with the Treasury Board Secretariat, and I notice from Mr. St-Jean's comments that he acknowledged the possibility of a need for supplementary estimates. I think Mr. Wiersema was at that time in his position with the Treasury Board Secretariat, and obviously the feedback you would have received would be that you did need to go for supplementary estimates.
So you've got some accounting advice. It looks to me, at this point, as though the political interest would be to look for any way to avoid accountability to Parliament, given that I imagine there was some tension at the time, and this is not a good thing. Then we go to February and this meeting that we have. I believe the ad scam report had been put forward just prior to that, and I imagine things got all the more tense.
I'm wondering, first of all, was the ad scam report discussed in the meeting in February?
Former Commissioner, Canada Firearms Centre, As an Individual
No, not at all.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Not at all, okay.
In terms of the order of events, going back to the discovery of the cost overruns and everything else, you had a conversation, you said, with the Minister of Public Safety at the time?
Former Commissioner, Canada Firearms Centre, As an Individual
As indicated, I brought the matter to her attention through correspondence.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Okay.
And did she have any concern about the need to go for supplementary estimates at that time?
Former Commissioner, Canada Firearms Centre, As an Individual
Supplementary estimates on the firearms program were, there's no question, a sensitive matter. But if that's what had been required, that's what we would have pursued.
You raised a concern about a supplementary estimate. Believe me, there was also a very dominant concern about making sure we were completely forthright with Parliament, because that was the big issue of 2002 in the Auditor General's report. It was my mandate, coming in, to make sure we did accurate reporting to Parliament on costs and production. So there was a strong interest on everybody's part to do simply the right thing. That was clearly my understanding, and that's how we conducted ourselves.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Was there ever any expression of the need to avoid supplementary estimates, if possible, from the minister?
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
To the Justice folks, I guess the legal opinion came from you. Was there any suggestion of the need to avoid supplementary estimates from the minister at that time?
Former Deputy Minister and Deputy Attorney General, Department of Justice, As an Individual
No, there wasn't.
Comptroller General of Canada, Treasury Board of Canada Secretariat
I wasn't there.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Okay.
Mr. Wiersema, was there ever any suggestion from the President of the Treasury Board of the need or desire to avoid supplementary estimates at that time?
Former Comptroller General of Canada, As an Individual
Mr. Chairman, I wasn't privy to any discussions with any ministers relating to the accounting of costs for the firearms program.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Okay.
Going back to the Justice folks, when you were asked to provide a legal opinion, was there any discussion that you remember having, any meeting, that would have involved the Minister of Justice at the time?
Former Deputy Minister and Deputy Attorney General, Department of Justice, As an Individual
I'm not aware of any meeting. I don't think there was a meeting that involved the Minister of Justice. My role in this was to assign this to a senior expert in crown commercial law, who took over and did the legal opinion.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Okay.
My last question is in regard to subsection 37.1(1) of the FAA. The question is for Mr. Baker, but Mr. St-Jean can jump in.
I'm curious; when you read this, it refers to “any amount due or owing under a contract, contribution”--and then the key words--“or other similar arrangement entered into before the end of the fiscal year”. Would this arrangement qualify as an “other similar arrangement”? From a regular citizen's standpoint, it seems pretty obvious to me that it does.