Public Accounts Committee on May 13th, 2008

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you.

Then as an accounting officer, at what point do you feel it is your responsibility to raise an alert? For instance--I'm going to use the extreme to make the point--if the contract was for $5 million, I assume you would feel some obligation to jump up. So at what point do you go beyond saying, “You make that decision, it's your's, I'm off the hook”? At what point do you say, “This is so beyond the pale that I'm taking responsibility and raising an alert formally”?

[Robert Wright]

I would raise with the minister any case that went beyond making an honest judgment of how to act within the rules. Clearly, if there were any evidence of something untoward or fraudulent--a problem or anything beyond the scope of what was doable--we would raise that alert.

Even within the minister's office and the delegated authorities, they are encouraged to consult. So if I saw a major problem I would raise an alert. If I saw a pattern of abuse of authorities, we would brief the minister and his office on concerns and perhaps take additional steps--even on administrative matters, which cumulatively can be important.

But in this case I am really confident that everyone in the department gave the appropriate advice and did the appropriate authorities within a limited perspective, with limited knowledge. These people didn't work for me. They didn't have the whole picture from the minister's office. But I did not see anything that was beyond judgment on this matter.

[David Christopherson, NDP, Hamilton Centre, ON]

But you acknowledge there is a point when it is your responsibility to step forward.

[Robert Wright]

Absolutely, and I would exercise that responsibility with or without the Accountability Act, as I have in the past.

[David Christopherson, NDP, Hamilton Centre, ON]

Okay, I appreciate that.

You also said you would keep alert for patterns. Concerns are being raised about the number of contracts that are so close to $25,000. In fact, I believe the Ottawa Citizen crunched some numbers a few months ago and showed that there was a 15% increase in the number of contracts between $24,000 and $24,999. In some cases maybe contracts were split in two, with the same sort of mandate.

I want to leave with you the notion that somebody made $122,000 for one speech. That didn't take it to the point where you thought something needed to be said?

[Robert Wright]

There were a lot of questions there. From what I knew of this individual, he did very good work for us. It wasn't one speech; it was the whole communications process leading up to a very large budget. This was not unreasonable in terms of what was asked for.

Similarly, from what we knew, when Sara Mintz was engaged for quite a modest contract at budget time for an extended period of time, people worked very hard. There's no question there was value, in our view, even at arm's length. We don't know the details of what they were doing--they didn't work for us--but there's no question there was that value.

On the overall budgets, I think the Ottawa Citizen took a subset of all of those above $10,000 and within $1,000 of $25,000. I'm advised we had 43 contracts between $24,000 and $25,000 out of 1,394 contracts. By the way, all those contracts followed the rules, so that's really a non-issue, in my view.

[David Christopherson, NDP, Hamilton Centre, ON]

So no matter how the Ottawa Citizen or anybody else crunches those numbers, nothing is going to jump out that there was an increase in the number of contracts that were close to the line?

[Robert Wright]

The question is, are you consistent with the rules or not? We followed the rules in every case.

[David Christopherson, NDP, Hamilton Centre, ON]

I just attended the Council of Europe. I don't want to be too extreme about this, but one of the things they were talking about was that in the history of Europe almost everything the dictators did was lawful. They made sure there was a law there first.

So I'm hearing what you're saying, but we're talking about discretion. We're talking about 100 contracts for $24,999. You can't just say they're all okay because they're under $25,000 and that's the rule. There is some requirement for an analysis here.

Is the Ottawa Citizen analysis so far off that there is nothing that jumps out when you calculate it by a reasonable means?

[Robert Wright]

We benchmark our processes, and they benchmark very well with other departments. I am satisfied that the overall management of the contracting function within the Department of Finance is within a standard that's more than acceptable and that meets all the rules, even if they're redefined by some people in the Ottawa Citizen.

My colleague has tracked this with other departments. He can comment.

[Wayne Wouters]

On the $25,000, of the $12 billion in contracting across the government, about 10% is for contracts under $25,000. That limit has been in place now, I believe, for over 10 years. Some have argued that, based on inflation and the like, we should be looking at a higher limit.

[David Christopherson, NDP, Hamilton Centre, ON]

I'm still not getting a clear, solid answer about whether there is an increase in the number of contracts under the current government, as opposed to historical context. You're telling me no. Don't tell me they're all within the rules; I understand that. I want to know whether there are trends beyond the normal pattern. Would they stand out, regardless of whose analysis or formula you used, if it was a reasonable, fair-minded approach? You're saying there is absolutely no trend line, no problem at all. You're going on the record in saying that.

[Wayne Wouters]

It's not clear to me. Is the question what are the trend lines since this government has come to power with respect to overall contracts, or with respect to contracts under $25,000? I'm not certain what the—

[David Christopherson, NDP, Hamilton Centre, ON]

I'm interested in the number of contracts between $24,000 and $24,999 that look like they've been pegged there to get under the wire.

[Wayne Wouters]

I'm sorry, I don't have statistics on what has happened over the last couple of years with respect to that range of contracts.

[Robert Wright]

There may be one trend that would be evident, which is inflation. It's been in place for a long time, as my colleague just said, and the sorts of people who said that the limit is too low are people like the Canadian Federation of Independent Business. That is the only trend that comes to my mind.

[David Christopherson, NDP, Hamilton Centre, ON]

Are you saying you broke it because so many people are breaking it?

[Robert Wright]

No, that's—

[The Chair, Liberal, Shawn Murphy]

We'll go on to Mr. Hubbard.

[Charles Hubbard, Liberal, Miramichi, NB]

Thank you, Mr. Chair.

Mr. Wright, when did you first meet this man, Hugh D. MacPhie? When did he come to your attention?

[Robert Wright]

We were working on our fall update in 2006. We were in a race to produce our fall economic statement, which has a fiscal or economic outlook. We also did a lot of work over the summer of 2006—the minister, myself, the whole department—on Advantage Canada.

[Charles Hubbard, Liberal, Miramichi, NB]

So from your answer, I understand that the minister introduced you to a Mr. MacPhie. And almost immediately you, or people in your department, gave him or his company two contracts.

[Robert Wright]

No, that's not true.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Wright, that is what we're saying here—an Advantage Canada contract and another one dealing with sports.

[Robert Wright]

Well, allow me to correct your record. We let two contracts, and we are accountable for the details of them.

There was one contract for which he was engaged directly by the chairperson of an arm's-length panel, Kelly Leitch, who was looking at a budget initiative. This was done earlier.