Public Accounts Committee on May 13th, 2008

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

I already told you. I already told you exactly what I'm doing to make sure it doesn't happen again. I decided this last summer. It was an action plan: review the contracts, and make sure everything is in order.

It's clear that some administrative functions were not followed. That upset me. I delegated my authority to make sure it would be done properly and on a timely basis. It takes a lot of time to get it done.

The plan also said to make sure from now on that all Treasury Board guidelines are followed to the letter; make sure there's consultation with the department on every contract; and make sure, if there's any communication whatsoever from the department to my chief of staff or my staff, about any contracts, I'm informed about it immediately.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Obviously your chief of staff, David McLaughlin, who was involved in this, is no longer your chief of staff. But I understand that he was promoted, being appointed president of the National Round Table on the Environment and the Economy, an appointment, perhaps, that you approved in cabinet or had something to do with.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Oh, don't ask me about whether I was in the cabinet meeting that approved it. I would have to go back and check that.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Once you've done that, could you provide the committee with information on it?

Also, Mr. Flaherty, the action plan, besides reviewing all the contracts, of which your department has 67% more untendered contracts than other departments....

Clause 153 of Bill C-50 gives you, the finance minister, new powers to establish any advisory committee you want, to hand-pick the members, and then to pay them whatever the cabinet deems appropriate.

Were you involved in the decision to grant these additional powers to the Minister of Finance? What has made this unprecedented spending authority necessary for your office?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

It is not unprecedented. As I already said, the ministers of public safety, industry, and social development have long had such authority.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

It's unprecedented for the Minister of Finance.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

It hasn't been done before for the Department of Finance.

I'll tell you what the concern has been. In the appointment of panels, such as the Godsoe panel on international taxation and the Hockin panel on securities regulation, the department and I realized that we did not have the authority to pay anyone, except for their expenses.

And there are people one would want to do that kind of work for Canada and to give that kind of advice to Canada, who quite frankly can't afford to do so for no compensation. Some people can. I thank the Honourable Tom Hockin and Peter Godsoe for doing this for no compensation, but not all Canadians can afford to take this amount of time off.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

I appreciate your wanting to thank these individuals, but we have limited time.

There's a pattern here, Minister. Your office had 67% more untendered contracts a shade under the $25,000 limit. They went to people involved on various levels with the Conservative Party. When we look at what was arranged with your former chief of staff, this contract was shifted from the Department of Finance into your office, and we heard from the deputy minister and the Secretary of the Treasury Board that a minister could have signed off on it had the contract involved $100,000.

Now, the contract, when signed off, was just a shade under $100,000; it was $98,580. You would have had to sign off on that otherwise. And then afterwards there were a number of expenses that rolled in, taking it up to the $122,000. So once again, we see a pattern. You would have had to sign off on this particular situation, according to what we heard previously.

Did you sign off on this, or was it just your chief of staff?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

I had delegated my authority.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Wrzesnewskyj.

Mr. Fitzpatrick will be the last examiner here.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Good morning, Minister Flaherty.

I want to commend you. I think you've been rather open and transparent on this whole matter. You've acknowledged right from the get-go that it was an administrative error, and you haven't been evasive at all.

Further to that point, Deputy Minister Wright was here this morning, and he said that this whole matter--and he has a lot of experience--was a judgment call, and he didn't disagree with the call that was made. So in many ways, I think you went probably further than what even the deputy minister would say.

Mr. Williams isn't here this morning, but I'm sure he would confirm that it's very unusual to have special meetings in public accounts when we call a political minister before the committee. It rarely happens in public accounts. It's not within the parameter of public accounts, and it suggests that there may be other motivations involved in this whole meeting.

I've listened to the questions today. It doesn't seem to me that a whole lot of people on the opposition side are very focused on improving the process.

If I could summarize it, it seems to me the intent of far too many members of the opposition is to slag your good name or slag the names of other good Canadians who have provided public service or have worked for the government and so on.

I concur with you. Why would anybody want to take on these jobs if they're going to be submitted to this kind of defamation before a parliamentary committee? In many respects, I think this thing is getting to be a low in Canadian politics.

Do you have any comments, sir, on what's going on here today and on what seems to be the focus of the opposition's questions?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

I was the first one to acknowledge that the administrative functions were not followed, because they weren't. And when I looked at it, I was very concerned and took steps to make sure it would not happen again.

But talking about people on panels and talking about people actually running for public office.... I will not mention the person's name, but last evening I spoke with one of our Canadian financial leaders and we got talking about public office. I can assure you he's not in our political party. He told me about the number of times in his life he had been asked to run for public office, and how he chose not to because he did not want to expose his family to the kind of public ridicule that sometimes occurs.

I'm not preaching here. It's not something any of us should do--attack people who are not elected.

[The Chair, Liberal, Shawn Murphy]

Mr. Lake, you have four minutes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Yes.

Minister Flaherty, I want to start by expressing my appreciation for the work you do on behalf of families dealing with disabilities. You and I have had many conversations, and I know that you and your wife have a real heart for families dealing with these issues. Given the circumstances of both of us, it's something not to be taken lightly, and I feel for what you're going through right now.

You talked a little bit about the politics of smear. I've noticed, and you may have noticed, that the Liberal Party right now is not asking any questions in the House any more about anything to do with policy. In addition to that, they rarely show up for votes on anything important.

[The Chair, Liberal, Shawn Murphy]

Do you have questions on the contract?

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Yes. We're talking about value for money.

I'm just curious whether you feel that Canadians are getting value for money out of the Liberal opposition.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Well, they remind me of the Canadian dollar when it was at 62 cents. That wasn't good value for money, and that's what I'm hearing from the Liberal opposition these days.

Oh, I know you want to argue for a low Canadian dollar. I know.

[The Chair, Liberal, Shawn Murphy]

I'll direct this back to Mr. Lake.

Mr. Lake, we're talking about the MacPhie and Mintz contracts.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

You talked a little bit about the importance of trust. Obviously, when you're dealing with budgets, one of the worst things that can happen is a leak. Maybe you could touch on the importance of trust in relation to the release of a budget, something as important as that.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

The leak issue is a big concern in budgets, and as you know, we've had situations, not with our government, but in the predecessor government, the Liberal government, where we had some leak issues. There was one occasion when a budget had to be released quickly, as I recall, because of a leak.

My exempt staff is fairly large--some in Toronto, some here, some in Whitby, some on Parliament Hill, some at the Department of Finance--and I'm quite clear with them that they must be absolutely confidential in their work. That's not easy for people who aren't used to having to be absolutely mum about what they're doing--even on the subject matter. It's not so much about arguing one side of whether some tax credit or some tax reduction would be a good idea; you can't even talk about the fact that the idea is being discussed. And that's not easy for people when they're with their families or their friends or whatever. But it's absolutely imperative, and it's another reason why I want to make sure the people who work on the budget, in particular, are very sensitive and have a track record of trustworthiness.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Mr. Wrzesnewskyj touched on the 2006 budget. I believe it passed unanimously in the House. I don't think there's a precedent for that in Canadian history. Mr. McCallum might remember, I think he was in the House that day.

The 2008 federal budget passed without opposition from the Liberal Party. Can you maybe speak a little bit to the importance of that Liberal support?

[The Chair, Liberal, Shawn Murphy]

I'm going to rule that out of order.

If you have any questions on the MacPhie contract, go ahead. You have one minute left.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Actually, I think I'm done with my questions. Thank you.

[The Chair, Liberal, Shawn Murphy]

I have one clarification, Mr. Flaherty, if I may. The $122,000 that came to pay Mr. MacPhie for his work has never really been explained. What envelope did that come from?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

I would have to check. I assume it came from my budget, but it may have come from the departmental budget. I would have to check to determine that.