Public Accounts Committee on June 8th, 2006

[John Williams, Conservative, Edmonton—St. Albert, AB]

Yes, but still representing the department...?

[The Chair, Liberal, Shawn Murphy]

Okay. Does anyone have any opening remarks they want to provide?

If not, we're going to go right to it. Members, I want to point out that because we have one hour, this will be one round only. If anybody wishes, especially for the Conservatives and the Liberals, you can share your time. Again I ask that the members focus their questions. We want specific questions dealing with this particular issue.

I would ask that the witnesses' answers be short and to the point. We have no appetite or tolerance for any long, rambling answers, and we've been getting a few of them over the last number of weeks in this committee.

Mr. Fitzpatrick, you have a point of order.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I'd like the chair to remind the witnesses that the giving of testimony at a parliamentary committee, even though we haven't administered the oath, is in fact the same in effect as giving testimony in a court of law under oath.

[The Chair, Liberal, Shawn Murphy]

Yes. At Mr. Fitzpatrick's request, I want to remind the witnesses that in an appearance before this committee, or of course any parliamentary committee, you're deemed to be under oath. Of course, Mr. Judd and Madam Bloodworth have been before the committee many times previously, so they understand that.

We're going to go to the first round. Madam Ratansi, you have eight minutes.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you, Mr. Chair.

And thank you for being here.

My question is directed to Ms. Bloodworth. Could you help me understand the interplay between section 37.1 of the Financial Administration Act, an appropriation, a supplementary estimate, and the Treasury Board directive? The reason I ask you this question is that as I have been reading the legal opinion, I think your focus has been on the Treasury Board: “One cannot presume the Treasury Board will approve and the Treasury Board has no obligation to approve.”

So question number one concerns contractual obligations set out by the Treasury Board guidelines and the Financial Administration Act and how section 37.1 plays with them. Then I'd like to ask a few more questions.

[Margaret Bloodworth, Former Deputy Minister, Public Safety Emergency Preparedness Canada, As an Individual]

First of all, Mr. Chair, I'm not sure I'm the best person to explain to you. The reason I asked for the opinion is.... I'm not an accountant and I'm not an expert in commercial law. I am a lawyer. The reason for asking for the opinion from Mr. Pigeon was to have the explanation. I can go through the opinion if you like, but I'm just reading from the opinion.

If it's helpful, I can certainly speak as a deputy minister and say that all of us are responsible for the appropriations under our responsibility. Our first responsibility, as I see it, would be to live within the appropriation. If we feel that for some reason we're not going to be able to, it would be our responsibility to flag to a minister—but also to the Treasury Board and perhaps others, depending on what the issue was—that we were not able to.

That's due to both the Financial Administration Act and also management accountability, which is a whole series of Treasury Board policies.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

When you sought this opinion, they cited other cases, such as the Greater Toronto Airports Authority v. Air Canada, the 1999 case, and stated:

Therefore, unless and until TB approval is obtained and the TC contract is amended, the amounts contemplated under the agreement in principle cannot be paid as there is no legally binding and enforceable agreement....

That's their opinion. Did you feel that this opinion was contravening the Financial Administration Act, section 37.1? And you're a lawyer.

[Margaret Bloodworth]

Well, no.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

No. There have been statements made that the intention was to wilfully mislead Parliament. Was that the intention?

[Margaret Bloodworth]

No.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

What was the real intention? Could you give us your reasons for taking the legal opinion, and what were the parameters that you guided yourselves under?

[Margaret Bloodworth]

First of all, I certainly categorically deny that I or anyone else I was involved with had any intention of misleading Parliament. Indeed, if that was the case, it would be hard to understand why it would be in the performance report, which it was.

I only became involved quite late in this issue, because Mr. Baker, as he explained when he was here, had flagged that there was a possibility that supplementary estimates would be required for the Firearms Centre. I was at the time the Deputy Minister of Public Safety and Emergency Preparedness. The deputy minister of that department and that portfolio, which is a very large and complex one, is the senior public service adviser to the minister.

My reason for contacting Mr. Baker first and then the Deputy Minister of Justice for an opinion, was that it became apparent to me that people were using the words “debt” and “liability” interchangeably, and I knew they were not the same, and that seemed to have some significance. So at that stage I was just in the process of asking questions to see whether all options had been canvassed.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

So you're saying that there was no way....

Was there any political interference to, say, avoid accountability? I think you were doing due diligence. You were going through a step-by-step process to say, here is a problem; somebody doesn't understand debt, or the difference between a debt and a liability, and how it affects the appropriation.

When you were seeking a legal opinion, were you in any way trying to avoid accountability? Was the minister involved? Was there any political interference there?

[Margaret Bloodworth]

The decision to seek a legal opinion was mine. I received no direction from anyone, including the political level, to do that.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

So you were not trying to avoid accountability, as had been mentioned.

[Margaret Bloodworth]

No.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

You were the deputy minister for public safety. When you went to the justice department in your seeking of a legal opinion, was there any political interference from the justice department?

[Margaret Bloodworth]

No. I phoned the Deputy Minister of Justice and said I was asking him for an opinion on this debt versus liability question and how it related to the issues involved, and I said I felt we needed a lawyer with some commercial law experience, which I knew I did not have in my department and neither would the Firearms Centre.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Fair enough.

How do you take the statements that have been made by the Auditor General that Parliament was misled by the way you treated this account? What is your reaction?

[Margaret Bloodworth]

Well, as I said, I categorically deny that there was any intention, on the part of us, any of the people I was involved with, to mislead Parliament.

I certainly accept that the Auditor General is the main auditor of the Government of Canada, and if she has concluded that this is not the right way to account for things, in the end she's like a court, if I can make an analogy to my profession, and her view will prevail in the future. So I certainly don't quarrel with the fact that she has a view that, in accounting, is certainly a bigger view than mine.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

In a private sector or external environment, when companies do have external auditors to come and review their books, etc., there's always a discussion between the external auditor and the client. Was there any attempt to get any discussions going, or was that never part of the process? Did your department ever get into any discussions with the external auditor?

[Margaret Bloodworth]

Well, it's a little more complicated in government, because in addition to the department, we also have the Treasury Board, and I think the Firearms Centre, quite rightfully, had involved the Treasury Board.

I can't say, in my experience, I've ever had the experience that in the process of deciding on whether or not supplementary estimates are required or performance reports are prepared, we've actually gone to the Auditor General. I understand that the current Comptroller General is thinking of changing that, but it, frankly, wouldn't have occurred to me. I would have assumed, if that was what was going to happen, that would be what the Comptroller General and the Treasury Board would have taken care of.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Were there any Liberals in high places conspiring to hide overruns, as stated by the member from Yorkton—Melville? This is a statement being made. There are some outrageous statements being made; therefore, I need to know from you whether there were any people in high places conspiring to hide the so-called overruns in the gun registry.

[Margaret Bloodworth]

None that I was aware of.

[The Chair, Liberal, Shawn Murphy]

Thank you very much.

Monsieur Nadeau, huit minutes, s'il vous plaît.