Debates of Feb. 11th, 1994

supply

[Gaston Leroux, Bloc, Richmond—Wolfe, QC]

Mr. Speaker, in short, our goal-and I think, judging from their speeches, that it is a goal shared by members from all parties-is to start by looking at every expenditure item in every department. It is a very simple exercise before starting from scratch to set targets and deciding which programs should be maintained. You have recognized that there is a lot of waste and the Auditor General recognizes it also.

Second, we must look at ways to revive the economy and go from budget cuts to investments in order to create jobs and kick-start the economy. We are quite willing to take such actions as soon as possible after all public accounts have been audited.

[Stéphane Bergeron, Bloc, Verchères, QC]

Mr. Speaker, I believe I will have an opportunity during my speech to answer some of the questions asked by my colleague from Kootenay East. I have the feeling that he does not understand very well the point we have been trying to make in this House for the past few days. I will try to answer his comments and questions.

First, I would like to thank my colleague from St. Albert, who sits behind me, for putting this motion to the House. I would say at the outset that the motion he presented today pursues a very laudable objective that we wholly support, and that is putting public finances on a sound footing.

However, I believe the motion is too specific and therefore too restrictive. What I mean by that is that the motion presented by my colleague from St. Albert focuses on a few recommendations, a few items in the last report of the Auditor General. But, as we know, the Auditor General does not have the resources or the mandate to review all aspects of federal government activities.

Consequently, the Auditor General selects for review, every year, a limited number of government activities. The motion of the hon. member for St. Albert does not refer to the previous report of the Auditor General, and I will come back to that later, even though its recommendations might still not have been implemented.

The motion of the hon. member for St. Albert does not mention either any area of government activity not yet reviewed in detail by the Auditor General. What I am trying to say is that the points raised by my colleague are rather restrictive, and this is why the Bloc Quebecois has some reservations.

In our opinion, there are three main categories of causes which account for the present financial problems of the federal government. First, there are extraneous causes, by that I mean the difficult situation we are in, everywhere. That difficult situation results in a lowering of tax revenues and an increase in social spending for the government. What can we do on that front? I believe that we should promote job creation in order to revitalize the economy.

The second category of causes for the financial problems of the federal government are of a more structural nature. We mentioned several times in our speeches the very nature of the Canadian federal system. The sprinkling of federal money from coast to coast in order not to offend sensitivities in the various regions is very inefficient and very costly for the federal government.

There is also the costly and paralysing duplication-in terms of money and economic development-we have mentioned frequently in this House. It is inherent to the present federal system. There is very little we can do in that area until the constitutional make-up of the country is amended.

There is a third category of causes that I would call functional, and they involve the waste and mismanagement of public funds. This is what we are talking about at the present time. Now we have to clean up the government's finances, and that is what has been holding the parliamentarians' attention since the beginning of this session.

We know there are not many recipes for cleaning up government finances. There are basically two recipes, one of which is to increase government revenues. But we know that the middle class, which is already carrying a very heavy tax burden, cannot carry more. So, what we are proposing on this side is to target the tax loopholes that allow our more fortunate fellow citizens to avoid making the contribution that they should to give their fair share.

The other major recipe is to reduce spending. It is that point, I think, that our friends from the Reform Party have trouble with and are getting bogged down because when we talk about reducing spending, we cannot cut everywhere in an anarchic, disorganized way. We must be able to target. Target what? The waste of money, the expensive duplications, the extravagant and superfluous spending. That is where we should be targeting.

I now refer to the comments that were made earlier by my colleague from Kootenay-East. He was saying: Indeed, that is what we are suggesting we cut. But the proposal is to target specific areas, and that is what I was saying earlier. What we are proposing, as my colleague from Kootenay East was saying, is to identify first the tax and budgetary expenditures that should perhaps be cut. We have to identify them first. As a means of doing that, we propose that a special committee of the House be struck, with a mandate to examine all the tax and budgetary expenditures of the federal government, item by item.

This proposal should not surprise the hon. member for Kootenay East since two of his colleagues from the Reform Party, namely the hon. member for Calgary North in response to a question I put to him on January 21 and the hon. member for Lethbridge in response to a question put to him by my colleague from Saint-Hyacinthe-Bagot on February 1, made it known that they would totally agree with the creation of such a committee. I think that we have to go ahead with this proposal and strike a committee that would examine all the tax and budgetary expenditures of the federal government, otherwise we may see, in the next budget and in subsequent budgets, the same mistakes that caused the problems that Canada is facing right now. We must not make the same mistakes. We must target and root out all lavish and excessive public spending as well as costly duplication and waste.

At the beginning of my presentation, I referred to previous reports from the Auditor General which raised interesting points, although no follow-up action has yet been taken. I note the presence in this House of the Secretary of State responsible for International Financial Institutions, which brings me to the 1992 report of the Auditor General. Chapter 12 dealt with Canada's participation in the Bretton Woods Institutions and in the European Bank for Reconstruction and Development.

Of all countries, Canada has one of the highest per capita contribution levels when it comes to funding projects of institutions such as the IMF and the World Bank. Canada's subscription or quota at the IMF is $4.6 billion, while financial commitments in the World Bank Group and the European Bank for Reconstruction and Development are $5.6 billion. One troubling fact, as the Auditor General recalled in last year's report, is that these sums of money are not subject to any

controls or cost-effectiveness or impact studies by the House of Commons.

Lamenting this sad state of affairs, the Auditor General recommends that the government undertake a periodic review and assessment of the objectives, extent, costs and results of Canada's participation in these institutions. To date, no follow-up action to speak of has been taken as far as this recommendation is concerned. And this is what we are talking about.

The Bloc Quebecois is determined to see to it that the relevance, efficiency and effectiveness of all federal government spending is evaluated. It is imperative that such an evaluation be conducted in all areas identified by the Auditor General and for all government spending items.

Of course, Canada must continue to make substantial contributions to international financial institutions. The Bloc Quebecois has no quarrel with this. However, Canada's international development assistance objectives need to be clearly stated.

The sizeable amounts of money that Canada contributes to international development assistance should also be closely evaluated to ensure that the contribution process is as cost-effective as possible. This is the thrust of the recommendation that we have been making for several weeks and months now, namely that a committee be struck. A response on the part of the government is urgently needed.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, I would like to thank the member for his speech.

One thing that I was rather puzzled about was when he started off by saying in his speech that the way in which we had written the motion was far too restrictive and then he finished up his speech by saying that we should focus on one particular area. It seems rather a conundrum to me.

In the last few weeks we have been listening to what is becoming a bit of a broken record. The Bloc Quebecois seems to say that there is a panacea in the duplication of federal and provincial spending. I heard one member talking about Gaspé where he thought if we eliminated federal and provincial duplication there would be more fish in the Gulf of the St. Lawrence.

I heard another member suggest that if we eliminated the duplication there would be sufficient money available for the job creation program. Another member said that if we eliminated the duplication there would be sufficient money to create all kinds of positions for day care.

They are now still on about the same situation they talked about yesterday that if we happen to create another committee this will be the panacea that will solve all of the problems that we have and things will go on from here and everything will be bright and beautiful.

My question to the member, which is basically a repeat of the question by the member from Kootenay, is how does the Bloc Quebecois believe that the answer lies in duplication of federal-provincial spending? Spending by the federal government happens in the province of Quebec, British Columbia and in my home province of Alberta.

How does it think that this panacea of elimination of duplication is going to provide all kinds of money to solve all the problems when it is just using that as an agenda to try and build some kind of defence or justification for its own political platform which has no basis whatsoever?

[Stéphane Bergeron, Bloc, Verchères, QC]

Mr. Speaker, I hope that you will give me time to answer this long question.

First, I think that, like his colleague from Kootenay East, the hon. member for St. Albert did not catch the drift of what I said. I focused on international financial institutions just to show how pointless it was to make the motion as specific, as restrictive as they did, because the Auditor General included in his report last year measures relating to international financial institutions that have had practically no effect thus far. This is to say that focusing on certain areas of the very partial report of the Auditor General is not conducive to a global solution.

The other point my hon. colleague made was: how do we, of the Bloc, think that our marvellous committee is going to solve all the problems of this country? It is no panacea. In itself, creating a committee does not solve the problems, but this committee would identify the areas were costly duplication exists, not only costly duplication but also squandering and extravagant expenditures. After having identified all this, we would be able to take action on the various unnecessary, superfluous expenditures.

The last question my colleague asked me was: why insist so much on eliminating duplication? Are there reasons to believe that everything will work out for the best in our beautiful Canada just because duplication will have been eliminated? Of course not, but the fact remains that-based on figures from serious sources, not the Bloc Quebecois but a serious economist

like Mr. Fortin, as well as the Bélanger-Campeau Commission-duplication between Quebec and Canada alone costs from $2 to $3 billion a year. Perhaps savings could be made in that area by cutting unnecessary government expenditures, would you not say?

[Doug Peters, Liberal, Secretary of State (International Financial Institutions)]

Mr. Speaker, I am pleased to have the opportunity to participate in this debate. Today I will be addressing a technical issue relating to the income tax law which was mentioned by one of the earlier speakers.

This government is committed to the efficient and effective use of public funds. Our commitment extends to the timely clarification of the income tax law in situations in which the wording of a provision may not have given effect to the government's intent, thereby resulting in some revenue exposure.

Such a situation was recently described by the Auditor General with respect to tax allowances provided to resource companies. In order to appreciate the concerns expressed by the Auditor General's report it is important to understand a certain amount of background information. I would commend you, Mr. Speaker, on your ability to hold your joyous response to the Minister of Industry's speech. This one will require even more indulgence on your part.

For this reason I would like to take a moment to set out a few of the relevant facts. In 1974 the government of the day stopped resource companies from deducting provincial crown royalties. Instead, alternative tax relief was provided for such companies depending on the amount of their resource profits.

Since 1976 this alternative tax relief has been in the form of a resource allowance. Resource allowances are not a tax preference. They were introduced in order to compensate companies for the non-deductibility of provincial resource royalties. The resource allowance provision permits a deduction equal to 25 per cent of resource profits.

In 1979-80 Revenue Canada reassessed a resource corporation after it took the position that it was not required to deduct certain scientific research expenditures and capital cost allowances in computing its resource profits. The company's approach increased the amount of profits eligible for tax relief.

The resource corporation challenged the reassessment in the courts. Litigation proceeded and finally culminated in July 1992 when the Supreme Court of Canada denied the government leave to appeal a decision by the Federal Court of Appeal which had ruled in favour of the corporation.

That is the background of the Auditor General's comments regarding resource allowances.

In his report, the Auditor General expressed the view that the Department of Finance should have acted more quickly to clarify the policy intent of the resource allowance provisions. The government did not act while the issue was before the courts because it was advised that doing so would have prejudiced the ongoing litigation.

Moreover, until the decision of the Federal Court of Appeal on this matter in January, 1992, most of the resource industry had been filing its income tax returns in a manner consistent with the government's view of the law's intent.

In the same month of the Supreme Court of Canada ruling, the previous government issued a press release clarifying the policy intent of the resource allowance provisions. This press release included draft regulations which were effective immediately. The draft regulations of July, 1992 are currently being reviewed and finalized as expeditiously as possible. They will be included with regulations under Bill C-92 dealing with the abuse of the resource allowance through the use of partnerships. Bill C-92 was passed in June, 1993.

The period for reviewing, finalizing and processing these draft regulations is not excessive. It permits concerns regarding the text of the draft regulations to be fully considered before their enactment.

The amendments in question deal with a complex area of tax law. The law is complex because it deals with corporations which carry on many different types of business activities in the resource sector. Over the years it has been subject to many changes which addressed court decisions and closed various loopholes.

Following a review by the Department of Finance, the Department of Justice and Revenue Canada, the draft regulations will be sent to the appropriate cabinet committee for approval as quickly as possible.

Regardless of the time of their enactment, the amendments in the draft regulations relating to the calculation of resource profits will be effective from July, 1992.

With that very long preamble, I would also like to note that the revenue exposure estimates contained in the Auditor General's report require some clarification. The report estimates the amount of revenue lost, and the hon. member before mentioned it as well, at about $1.2 billion. However, nearly one-half of that amount relates to issues that were not covered in the court case.

Of the remainder at least 50 per cent represents interest on funds, and the government had use of those funds.

In conclusion, I would like to stress once again this government's commitment to timely introduction of income tax

legislation and regulations. At the same time, it is vital that the quality, effectiveness and fairness of such legislation or regulations not be compromised.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, on a point of order. I would seek to indicate to the Chair that it was our intention that the time of the hon. minister who has just spoken be shared with the member for Scarborough West.

[John Godfrey, Liberal, Don Valley West, ON]

Mr. Speaker, poverty alleviation, protecting human rights, building democracy and ensuring environmental stability are the challenges facing the Canadian International Development Agency.

The Auditor General states that few Canadian organizations, private or public, attempt the complex and high risk taking tasks that CIDA undertakes. Our aid effort ensures that Canadian values help to shape the world of the 21st century, a world we hope will be peaceful and prosperous, fair and free.

Canada's aid program helps define Canada's place in the world. It is beneficial in a number of ways. For example, a good part of the aid budget is directed to fulfilling basic human needs. It supports the humanitarian concerns of Canadians. It supports the respect of human rights, gender equality and popular participation, all values important to Canadians. It helps developing countries achieve environmental sustainability. What kind of work does our aid budget actually support?

In West Africa CIDA has been helping the people of Senegal fight against the spreading desert by planting trees. The Panaftel project, one of Canada's major initiatives in Africa, gives several countries a good basic communication link.

In Zimbabwe the University of Ottawa's human rights centre and Zimbabwe's legal resources foundation, a non-governmental organization, are bringing legal services and rights to the rural poor.

Part of the program has involved the training of paralegal workers who operate in different parts of the country, educating people about their legal rights and helping them deal with problems that range from finding missing relatives to damage claims after bus accidents, a big concern in Zimbabwe.

In Honduras there is a problem of rapid destruction of the hardwood forests which stretch along the Caribbean coast. Each year over 2 per cent is cut and burned for shifting agriculture.

CIDA's hardwood forest project is addressing the problem on two fronts, improving forest management and sustainable land use in buffer zones next to the forest. The project is expected to reduce deforestation and reduce the pressure to convert forests to farms.

A rural development project in northern Pakistan supported by the Aga Khan Foundation and CIDA is widely regarded as one of the world's best.

The Auditor General recognizes in his chapter on CIDA that most Canadians support international aid efforts, but they want assurance that their taxes are really being used to develop the potential of the poor and of the developing world in general.

The Auditor General and CIDA have agreed to a follow-up on the action taken by CIDA to implement the recommendations of the 1993 chapter. The Auditor General will be reporting on CIDA's progress in implementing changes at all levels of management in his 1995 report to Parliament.

We believe that a sustained partnership with non-governmental organizations and business people doing outstanding work abroad can strengthen this support from taxpayers for the Canadian aid program.

International development is very important, considering the present world situation. It promotes global security, respect for human rights and democracy.

We need to work together to deal with the problems of our planet and the aid budget is a contribution Canada makes as a good citizen of the world community.

The aid program brings significant benefits to Canada. The aid program sustains over 40,000 jobs in this country with 2,000 businesses, 45 universities, 80 colleges and dozens of provincial departments and agencies benefiting from aid-related contracts.

Canada's food aid represents the output of some 3,000 Canadian farms.

Canada's aid program alone cannot change the world. It has made a difference. CIDA has a reputation in the field for integrity and co-operation.

The Auditor General said many things about CIDA but he did not say that aid is a poor investment for Canada. He did not say that aid is wasted.

As the Auditor General mentioned in his report, CIDA is recognized throughout the world for its integrity and co-operation. Nevertheless, we are aware that improvements must be made and CIDA is committed to renewing its management.

CIDA has committed itself to management renewal and to demonstrating results for investments. CIDA has launched a

process to streamline and modernize its management practices. Some early steps such as simplifying its organizational structure and improving management systems are already completed. Others are under way.

We have a lot of resources, technical expertise, and experience gained in our own development. Our role in development has won Canada a lot of good will and credibility virtually everywhere in the developing world.

Sometimes, the images the media give us lead us to believe that the history of developing countries is just one of failure and despair. The figures tell another story. Despite the problems, we must admit that international aid has helped improve the situation in developing countries.

My government is proud of the success achieved in international development.

Within a generation, the average real income in developing countries has more than doubled. Infant mortality rates have been halved since 1960.

The adult literacy rate has risen 20 per cent in recent years.

Over 70 per cent of the people in developing countries have access to health services.

Smallpox has been eliminated, at a cost of $250 million. This involves a saving of $1 billion a year on vaccine and treatment, in addition to the relief of the suffering formerly associated with the disease.

CIDA's program in South Africa continues to play a constructive role in the transition toward political pluralism.

Let me say, Mr. Speaker, that just this week there was a letter published in the Globe and Mail that discusses the positive side to CIDA which press reports often do not cover. The letter states: ``On a visit to El Salvador I witnessed some absolutely incredible success stories such as an industrial co-operation made possible through CIDA. I was never so proud to be a Canadian''.

With respect to more business-like and accountable modes of operation CIDA like other government departments is responding to public demands to demonstrate better accountability. Clearly this will require the support of our government and the support of development partners in Canada and overseas.

However, let me assure you, Mr. Speaker, that CIDA through its annual report to Parliament and its appearance before the public accounts committee in the House of Commons makes every effort to ensure that parliamentarians are properly informed. There is already an evaluation and audit process in place at CIDA as well as a comprehensive consultation process between CIDA and its partners.

The Auditor General did say that CIDA, like all other organizations, must adapt to new conditions. It needs to do better with less. CIDA must be more systematic in measuring the impact of development programs. CIDA's partners including multilateral organizations, other governments, Canadian companies and non-governmental organizations must participate in this change. CIDA needs to be more transparent to Parliament and the public. CIDA agrees with the thrust of the recommendations aimed at improving the agency's accountability and strengthening its management effectiveness.

By addressing issues at the level of program management CIDA will achieve a more results oriented and business-like style of management and will also address project management concerns.

Clearly there can be no question of the importance of the aid programs to the developing world and to Canadians. The government is committed to renewal in the public service, improved effectiveness, openness and transparency. This applies to CIDA as well as other departments. There is no doubt that CIDA will meet this challenge.

Mr. Speaker, it is also important to note that the foreign policy review will answer some of the questions raised in the Auditor General's report.

This foreign policy review involving a broad consultation with Canadians and partners is the process the government has chosen to help us define our priorities in foreign policy. Once the review has been completed the government will establish its new priorities, thus tackling what the Auditor General describes as making CIDA's task so difficult, that of trying to meet so many contradictory priorities.

[Philippe Paré, Bloc, Louis-Hébert, QC]

Mr. Speaker, I was happy to hear the previous speaker defend CIDA programs. I think that, despite what Canada is already doing, we should not make cuts in that sector. There may be a need for reorganization, but Canada is not one of the most generous countries. I simply want to remind the House that Canada only spends four tenths of 1 per cent of GDP on aid, compared with 1.10 or 1.16 per cent in Sweden. There may be a need for reorganization, but we should be extremely careful on this issue.

I think that when we address this issue, we should also look at our options regarding CIDA. I sometimes feel that we may be investing too much in international trade and not enough in people's development.

I think that the main objective of CIDA development assistance should always be to help developing countries and populations take hold of their own chart destiny and put out their own development. So much the better if Canada can benefit in a number of ways. I often think that we insist too much on linking development projects to the requirement for assisted countries to trade with Canada. I think that, in doing this, we may be a little greedy.

[John Godfrey, Liberal, Don Valley West, ON]

Mr. Speaker, I thank the hon. member for Louis-Hébert for his comments. I fully agree that, at the present time, Canada's objective is 0.7 per cent, but it is very difficult with the upcoming budget later this month.

As regards government priorities, indeed we have to make choices. I think that when we review our foreign policy we will have to ask ourselves: What worked in the past? Where were we successful and where did we fail?

We must also acknowledge the fact that we are part of an international setting. In my opinion, we will always have two objectives: the centrality of the individual's development, as well as the basic needs which underlie any development. However, we must remember that developing countries need high technology just like us.

I think we can do two things at the same time: Improve the plight of the poorest in the world and try to make them benefit from our technological advances.

[Fred Mifflin, Liberal, Parliamentary Secretary to Minister of National Defence and Minister of Veterans Affairs]

Mr. Speaker, we have the perspective of the comment made by my colleague from Louis-Hébert and that of my colleague from Don Valley West.

I speak from a national defence perspective. We have to recognize more clearly today that national security means more than the traditional sense of defence of a physical perimeter. It means a lot of things. Among those things it means co-operation. The concept of security today, particularly in the post cold war period, goes far beyond the question of what was traditionally known as the military balance.

It is about politics, it is about economics and it is about human rights and the environment. Those thoughts are sometimes slow to be inflicted on the thoughts of National Defence. I am no avant-garde but I think it is important that we think of CIDA in that perspective.

It is clear that the individual welfare of ordinary Canadians is now affected by global factors, particularly since we are very much a trading nation made up of multinational facets from other countries and that the individual Canadian is affected by global factors that are far beyond any single nation.

Our contribution to CIDA, while it may not look particularly helpful to any individual in an election, in the overall perspective of national security and the well-being of Canada could be a very significant and effective tool. Could the member comment on that?

[John Godfrey, Liberal, Don Valley West, ON]

Mr. Speaker, the point is well made that security is being redefined as we speak after the cold war. It is also being redefined in the countries we are trying to help. I remember in my own time during the Ethiopian famine when the geopolitical concerns of Somalia versus Ethiopia and their protectors, the superpowers, was of overriding consideration.

Now we face a world in which we potentially have a peace dividend in this country, but there is also potentially a peace dividend in the developing countries. We are in a position where we can force a greater degree of conditionality by saying that if the priorities in such and such a country are to rearm rather than to help the poorest of the poor we may share those priorities with them and not give them a hand.

Therefore we have the foreign policy debate, the security debate and the environmental debate. All these debates come together in a most complex pattern and it is an ideal time to be reviewing our foreign and development policies.

[Jim Hart, Reform, Okanagan—Similkameen—Merritt, BC]

Mr. Speaker, it is an honour to participate in the debate on the motion put forward by my party. Hopefully it will bring the unresolved issues of the Auditor General's report to light.

I would like to start by quoting from the report: "Today it is clear to both public servants and parliamentarians that Canadians expect them to demonstrate sound and prudent management rather than finding new ways to spend borrowed money". I believe the Auditor General is saying that Canadian taxpayers are demanding greater accountability.

It seems odd that eight corporations are exempt from the Auditor General's scrutiny. Under section 85(1) of the Financial Administration Act, the Bank of Canada, the Canada Council, the Canadian Film Development Corporation, the Canadian Institute for International Peace and Security, the Canadian Wheat Board, the International Development Research Centre and the National Arts Centre have been exempted from the sections of the Financial Administration Act that provide for good management and accountability. The CBC is also exempt although it has since incorporated provisions of the Financial Administration Act in its own legislation.

The Auditor General has raised this issue several times over the past five years and it still remains unresolved.

Let us examine why these corporations are exempt from the Financial Administration Act. Apparently they need to be at arm's length from government. Then we must pose the question, who is the government? The easy answer is, they are the members opposite in the House. If you go deeper than that, the answer is the people of this country. It is saying these eight crown corporations have to be an arm's length from the people of Canada, the people who pay the bills for these corporations.

What does it all mean? According to the Auditor General their exempt status means there are not explicit requirements for these corporations to table corporate plan summaries in Parliament to inform Parliament of their objectives. They are not required to fulfill certain management responsibilities. They are not required to give assurances that the assets of these crown corporations are safeguarded. They are not required to undertake an internal audit or even establish audit committees on their own board of directors. There are no explicit requirements for them to be subject to an explicit legislative requirement to undergo special examinations of value for money audits by the Auditor General, which are an important part of the annual audit and accountability provisions of the Financial Administration Act.

This is not to say these crown corporations are not fulfilling these requirements. Rather the problem is they are not required to submit to this process of accountability as all other crown corporations are required.

I commend some of these crown corporations which have undergone value for money audits. Even if they do undergo these audits they do not have to make them public. They are at arm's length. They do not have to be accountable to the people of Canada. The Auditor General, millions of Canadians and I are concerned that this lack of mandatory accountability leads to three specific problems.

First, Parliament may not not have sufficient information to fill its role in scrutinizing and authorizing the use of public funds.

Second, the crown corporation's management has the responsibility for economic, effective and efficient use of resources but this is not clearly defined.

Third, these corporations are not subject to an audit regime that is sufficiently broad to address all issues of concern to the members of the House.

What is most important about the Auditor General's comments is that we as parliamentarians are not able to gain enough information about how the taxpayers' money is being used by these exempt corporations. It affects our abilities to make good and responsible decisions. This is especially important since Parliament appropriates hundreds of millions of dollars each year for these corporations.

I would like to give this House one specific example that I think captures the need for these crown corporations to be more accountable.

Late last month the Auditor General undertook a special examination of the National Arts Centre Corporation and found that serious deficiencies exist in the way the National Arts Centre Corporation handles its finances. The NAC operates on a budget of $40 million a year and has a staff of about 300. Since the NAC is exempt from special examination by the Auditor General it was a very tedious and long process for Canadian taxpayers to discover how their money was being spent.

Let us look at the process. It dates back to 1990 when the standing committee of this House on communications and culture recommended that the Auditor General do an examination of the NAC. Its board members had to approve that request and they did. The Auditor General then started his investigation which covered the period between September 1991 and March 1992.

The report was not presented to the NAC board until May of 1993 partly because of a dispute between the Auditor General and the NAC over the public release of this information. Finally in January 1994, almost four years after the initial recommendation was made, the report was made public.

In its response to the Auditor General's report the NAC board recognized that improvements were needed in its financial management. Quoted in the Ottawa Citizen , the National Arts Centre Corporation also made what I consider to be a very revealing comment: ``Given the limited resources which the centre's management had at its disposal, tackling the institutional mentality rooted in two decades of lack of accountability has been a monumental task''.

This raises two questions. For how long have Canadian taxpayers' dollars been spent inefficiently while the National Arts Centre Corporation developed an institutional mentality rooted in the lack of accountability? Why did it take almost four years for the Auditor General's report to reveal this situation to the Canadian public?

As the Auditor General has stated and as the House committee on communications and culture stated in 1991, these exempt crown corporations must be moved into part X of the Financial Administration Act so that the Auditor General can undertake special investigations of these corporations. The Minister of Finance said this week that he does not agree with these recommendations. However, I think the NAC example shows the necessity for these changes.

Canadian taxpayers are now demanding that governments spend their tax dollars efficiently and effectively. I do not believe that we or the Canadian taxpayers have the luxury of exempting crown corporations from these special examinations. Everyone must be held to a standard of financial accountability.

The cynicism people have about government can be partly attributed to the waste and mismanagement that can be found in government. We should take every step possible to address this issue and promote the effective use of tax dollars.

I urge all members of this House to support this motion. I urge the government to introduce legislation to act upon these recommendations of the Auditor General and to make these crown corporations more accountable for their financial practices by moving them into part X of the Financial Administration Act.

Members of this House not only campaigned on accountability, but each and every day we all use those words. We must be accountable. If we are going to talk the talk, we must walk the walk. This is an opportunity to show the Canadian public that this government will be truly different from previous governments.

[Beryl Gaffney, Liberal, Nepean, ON]

Mr. Speaker, I compliment the member from Okanagan on his speech. My ears picked up when I heard him talk about the National Arts Centre. I am not going to disagree with what the member had to say. In fact, I agree there has been a siege mentality at the National Arts Centre that must be overcome.

However, I think that one of the main stumbling blocks is gone. The director general of the National Arts Centre was released from his position just a few weeks ago by the board of the National Arts Centre. I think the number one siege mentality was there.

I think we have to go one step further. I believe that the National Arts Centre must be responsible to this Parliament. Presently it is responsible to Treasury Board. The chairman of the board was appointed by an Order in Council and he was reappointed for another five-year term just prior to the previous government leaving office. I think that has to be corrected before we can get an active input into how the National Arts Centre is maintained.

The National Arts Centre is a Canadian institution. It is the arts centre of all Canadians and it is something that we should all be proud of. I cannot remember the dollar figure but a few dollars from every Canadian went to build that project and it is something that we should all be proud of. It is not Ottawa's. It is not ours just because we live in the nation's capital.

We have to move beyond what has been happening there and look forward to the future and develop our arts and develop our orchestra so that we can all be proud of it right across this country.

I am agreeing with the member. I am not disagreeing. I want us to move forward and make the centre responsible to this Parliament so that he and I as parliamentarians can have some input and some say into how it is being operated.

I do not have a question. I am just agreeing with the hon. member for Okanagan-Similkameen-Merritt.

[The Acting Speaker (Mr. Kilger)]

Well it is Friday and in that spirit of agreement, would the hon. member for Okanagan-Similkameen-Merritt wish to comment?

[Jim Hart, Reform, Okanagan—Similkameen—Merritt, BC]

Mr. Speaker, I would like to thank the hon. member for her comments. Each and every day that I sit in this Parliament as something new in my career, I find it very enjoyable that we can find common ground among many of the players in this House. I would like to thank the member for her comment. The Canadian people do require accountability and I think it is incumbent upon us to supply it for them.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I certainly did not want us to run out of speakers towards at the end, and since I saw no one else who wished to speak, I thought I would take this opportunity to put to my colleague some questions about the motion before us today.

We talked about a lot of things, I mean all kinds of things, but it doest not change the fact that we have before us a motion of about 1,000 words that just calls on the government, and I quote:

• to demonstrate its commitment to accountability and to the efficient and effective use of public funds by reporting to the House, no later than the first week of June each year, what measures have been taken-

to review the deficiencies in various departments.

Does our colleague know that, according to current parliamentary procedure, we do have a framework within which we are able to undertake every year a complete review of the budget estimates of every department, particularly as, pursuant to Standing Order 108(2), any parliamentary committee can undertake a detailed study on any matter, without asking anyone's permission, as long as the committee does not travel outside the national capital region?

Third, if expenditures are incurred, the public accounts committee is enpowered to examine all previous expenditures, including the report of the Auditor General.

I did not want to miss this opportunity to raise the following question: Are the members opposite trying to do what the members from the Bloc did yesterday, that is, create even more duplication and overlap, contrary to what they are supposedly advocating?

[Jim Hart, Reform, Okanagan—Similkameen—Merritt, BC]

Mr. Speaker, I thank the hon. member. I do not believe we are trying to mirror the image of the Bloc whatsoever. We are suggesting that there has to be more accountability, more improving upon the system that we already have in place, making it better.

I am not suggesting at all and I do not think any members of the Reform Party are at all suggesting that we should create another department. As a matter of fact, we would be totally opposed to such an argument. I do feel that the illustration that I presented in this House this afternoon is an example that, yes, while our committees can suggest special investigations and special audits and do this, the length of time is totally unsatisfactory to me, many other members of this House, and to the Canadian people.

If their money is being spent and if there is an indication that there could be something wrong, the Canadian taxpayer has the right to know, as does this House, as soon as possible. Four years is unacceptable.

[The Acting Speaker (Mr. Kilger)]

In the final 60 seconds remaining before we adjourn I will recognize the member for St. Albert, being the mover of this motion on behalf of his party, if he would like to make one final comment in this last minute before we adjourn.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, you caught me unaware but certainly I have enjoyed the tone of this House today. We have been constructive in our debates. We have recognized that the Auditor General has a real role to play as our servant to ensure that the taxpayers' money is spent wisely and well.

As I mentioned earlier this morning, this is only the third time since the position of Auditor General was created in 1878, I think it was, that we have debated his report in this House. I gave notice that we will be back debating this again and I would hope that we can enter into some kind of arrangement with the government to ensure that this becomes an annual debate.

[The Acting Speaker (Mr. Kilger)]

It being 4 p.m. it is my duty to inform the House that pursuant to Standing Order 81(17) proceedings on the motion have expired.

This House stands adjourned until Monday next at 11 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 4 p.m.)