Public Accounts Committee on Nov. 2nd, 2011

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Once again, I want to understand. You told the people that they could share the $50 million. There are 242 projects. There is something called the Local Area Leadership Group. Then the number of projects goes from 242 to 33, and no one was really involved in that.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Let me just make it clear again. The local area leadership group was there to flow information back and forth between the organizers of the summit on issues like security, issues like crowd management, issues like road closures, issues like community involvement, those kinds of things.

They did discuss projects, but they never concluded on projects, nor did they submit their project proposals to that group. It was not for that purpose at all. It was an exchange of information.

[The Chair, NDP, David Christopherson]

Thank you.

Sorry, your time has expired.

Mr. Aspin, you have the floor, sir.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Thank you, Chair.

Welcome, ladies and gentlemen, to our committee.

This has been alluded to a couple of times by Minister Baird, but I'd like to drill down on a few specific issues. My question is specifically directed to the deputy minister.

Can you explain, in your own words, why the border infrastructure fund was used, and, as well, why the G-8 legacy fund was not listed in the supplemental estimates?

[Yaprak Baltacioglu]

Thank you, Mr. Chairman.

As Minister Baird mentioned, in February 2009 new money came into the department and the administration of this fund came under Infrastructure Canada authorities.

At that time, some of these projects had to start within weeks, if not days, because most of them had to be completed for the time of the summit.

In February 2009, when this fund came in, it was at the same time that the infrastructure stimulus fund and the whole economic action plan programs came into the department. There were a lot of flexibilities that got instituted later on in terms of approvals processes in the federal cabinet decision-making, but in February it was not very clear that we could get, as a department, approvals for a brand new program in time.

Normally, any new program design takes anywhere between four to six months. If it took four to six months, the proponents could not have been able to start the projects.

So at the officials level, they had discussions and they looked at any mechanism that we could use to put the new money in, almost like a subsection of the border infrastructure fund. It had its own terms and conditions, and it had...so that was used as a vehicle. The presence of the legacy fund was made public around similar times by Minister Clement. So it was a delivery mechanism.

That being said, given that we were able to secure all of the approvals for all of our other programs, with 20/20 hindsight it would have been much wiser to have a separate fund instituted, put in place, and then we would not have recommended to our minister something that the Auditor General found to be not transparent.

On the estimates process, Madam d'Auray is going to take the answer.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I just want to jump in on this.

There are two documents from the estimates: supplementary estimates (B), 2009-10, “Border Infrastructure Fund relating to investments in infrastructure to reduce border congestion”, and supplementary estimates (A), 2010-11, “Funding for Border Infrastructure Fund related to projects in support of the 2010 G8 Summit”. The Auditor General has said we should have been clearer to Parliament when we presented those estimates. While this had been done for many years, she's right, it should have been, and next time it will.

[Michelle d'Auray]

To pick up on the comment that the minister made, we agree with the Auditor General's recommendation about greater clarity. It is a technical process we have that when a subprogram is a subset of a program, in this instance the border infrastructure fund, we roll up all of the subprogram elements into the main program heading. It's a technical aggregation, and in that sense, it is appropriate for us to do that. We have done that for over a hundred years. It is simply an aggregation of a subprogram element into a main program. There is no element of error. It is essentially a technical process that we go through.

We recognize that in some instances that aggregation may be at a too-high level. Should we be more transparent and provide more information on the sub-elements of a program? We have agreed with the Auditor General's recommendations, and in fact have taken steps to ensure that in the future when those differences in program elements are substantial, the subprogram elements will be separated from the programs, and the elements in the funds attributed to those will be clearly set out.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I would just add that we were not trying to do anything secretly. Every one of the projects was announced by press release. It was on the department's website. The advice that I followed from the public service was not done to try to not draw light to the matter. It was all advertised publicly, what we were doing, on the department's website. Press releases were out. It was widely known that the fund existed.

Having said that, the Auditor General is right, and we accept her advice.

[The Chair, NDP, David Christopherson]

Thank you, Minister.

Mr. Aspin, sorry, time has expired. Thank you.

We move now to Mr. Byrne. You have the floor, sir.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you very much, Mr. Chair.

Minister Clement, you've built an explanation of why there wasn't a shred of paperwork to evaluate any of these projects, and why there wasn't a shred of paperwork available to the Auditor General, around the narrative of self-discipline and self-assessment within the group of municipal officials, politicians, and other organizations. The explanation is that they decided these projects amongst themselves and narrowed down 242 projects, eliminating 85% of those projects in favour of 32.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

No.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Therefore you didn't need any paperwork, because 100% of the applications as submitted were approved and spending authorized.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

No.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

And therefore, there wasn't anything further required.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

No.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

The alternative, Minister, is that there was some sort of evaluation, that there was some guiding hand, or guiding force, to create a surgical precision to allow these projects to come in at $50 million or less and all be eligible under the project criteria.

Is that the narrative?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

No: on a number of fronts, the answer to your question is no.

First of all, as I'm sure the individuals can attest, even when the projects were approved, then there was a contribution agreement signed. And not every bill that was submitted by the municipalities was deemed to be eligible in terms of the program.

So the perfection that you're seeing in the process is not in fact accurate.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

I don't think it is either.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I'm not saying, Mr. Byrne, that the explanation for lack of paperwork is because it was a perfect process; I'm saying that the reason why I insisted they go from 242 down to 33 was for time reasons--we had only a limited amount of time to actually build structures, or roads, or parks, or what have you--but at the same time, I felt at the time that they were asking for too much from government. I mean, $500 million cannot fit into a $50-million fund, so I said to them, make your priorities.

The point of the Auditor General is that, look, when you created that system, the documentation or the paperwork wasn't there for deciding how you got from 242 down to 33. I agree with her. With the benefit of 20/20 hindsight, if I could reverse time and go back to that point, I would recommend to the government that they would in fact create the paper process that's missing.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

But Minister, critical to this narrative is...what you're suggesting is that government officials were not involved whatsoever in that narrowing of focus, that creation of surgical precision.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

It's not surgical precision.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

What you're suggesting is that communities themselves went from 242, that the Mayor of Huntsville, acting as the dean or the chairperson, convened a meeting of all of these disparate organizations—

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

You're putting words in my mouth now, Mr. Byrne.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

--and said, listen, let's all exercise self-discipline here and let's pare off 85% from our original ask and let's go with just 32. And everybody just followed suit.

The alternative, sir, is that the government did have a role. If the government did have a role, there should be some paperwork that should have been available to the Auditor General in a formal assessment process.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

There are a lot of reasons--