Debates of Feb. 11th, 1994

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[Harold Culbert, Liberal, Carleton—Charlotte, NB]

Mr. Speaker, I listened with interest to the hon. member's presentation.

Just a very quick question. I wonder if the hon. member considers his party and himself the only members in the House interested in the well-being of people, both financially and otherwise, right across this country. I am sure that was not his intention but that was certainly the impression he gave.

I have had conversations with members from all regions of this great nation of ours, as well as from all political parties represented here. First and foremost their interest is in their ridings, their constituents and certainly in the welfare of this great nation of ours.

I want to point out to the hon. member that we on the government side will be asking those very same questions of our ministers and will continue to. We want to assure members of

the Reform Party and the citizens of this great nation that government members are responsible and interested in every government department and will continue to be.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, I appreciate the comments of my colleague on the other side of the House. I in no way intended to imply there was anything less just because they unfortunately happen to be Liberals as opposed to Reformers.

What I am really trying to say is there is a creeping agenda, not necessarily within the Liberal Party or the Bloc Quebecois or any other party, but there seems to be a creeping agenda in Canada. I cite as an example the one my colleague from Wild Rose has raised where an ongoing process keeps on being stymied by environmental concerns. It is as though a group of people simply will not take yes for an answer.

The difficulty I am having in understanding this is that we can keep on using environmental considerations as a road block rather than an effective way to control all of the areas of concern that we have. Environmental considerations are frequently put up as road blocks to be able to proceed with responsible and reasonable industrial objectives.

[Bob Nault, Liberal, Kenora—Rainy River, ON]

Mr. Speaker, I am quite intrigued by the flow of the Reform Party so far in this particular issue. I would like to follow this up with the member.

The hon. member can correct me if I am wrong because I am trying to read into what he has said so far. He is suggesting the regulations we have in place are not working. He also has the interesting suggestion that all the regulations we have in place are there for some motive not considered acceptable to the Reform Party and that is to do nothing but delay and stop economic development or business.

Even though there are times when he personally disagrees with the decision made on behalf of the environment, would the hon. member overlook his own particular interests? In the case of his colleague from Wild Rose for example, would he agree there are times and situations where the overall good of the environment takes precedence over his own individual interests as a politician and maybe those of his constituents?

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, again in no way did I intend to imply that all regulations are bad. Of course there have to be regulations. What I was suggesting in my response a minute ago is the fact that very frequently people who are opposed to an approved project will find some other way of thwarting it by using regulations.

With respect I ask members of the House is it responsible, is it rational, is it reasonable? I quote the Auditor General when he says there were $4.1 billion invested by industry in regulations that were duplications, in regulations that were changing and regulations that were suspect.

I cite as an example, not necessarily federal regulations although they relate to provincial regulations, in the province of British Columbia some bright light decided we were going to be having zero as the level we had to achieve on a particular contaminant that was coming out of the pulping process. This figure was arrived at from the blue sky as it were.

Industry has invested countless hundreds of millions of dollars trying to achieve this and we now discover it is not necessary to achieve it. Should we now be paying back the industry? We do not have the resources to do that.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, the Auditor General noted last year that CIDA, the Canadian International Development Agency, spent about $3 billion. It has spent similar amounts during the last 25 years of its mandate. Bangladesh alone has received over $2 billion over the last 25 years. The Auditor General notes that the people of Canada are asking whether this money has been spent wisely and whether they are getting a good return on their taxes.

I have a weak spot in my heart for CIDA. In 1978 I lectured and did research at the University of Nairobi in Kenya. My salary and my family's moving expenses were paid by CIDA through the University of Alberta which administered the program of technical assistance under a contract from CIDA. My housing expenses in Nairobi were met by the Government of Kenya.

My personal experience illustrates some of the difficulties which the Auditor General found to exist with CIDA programs more generally.

CIDA had a very tight control over the design and delivery of the technical aid program or what might be called the input. The University of Alberta had worked closely with the University of Nairobi and the Government of Kenya in the determination of the role which Canadian professors would play in the teaching program and development of an effective business curriculum. There was also much care taken in establishing my suitability for the task in preparing me for the problems I was likely to encounter.

As many critics, in particular the Nielsen task force report of government spending programs, have noted, input control and accountability are the easy parts. The difficult part is showing that spending has achieved specified goals and that the investment has yielded the expected rate of return. Let me illustrate the problem, again by reference to my own experience.

I look proudly back on the services I delivered in Nairobi. There were the large courses I taught, the research papers I wrote and published, the students and faculty I induced to go on

to graduate work at my university and the influence I have had on the public discussion of the government's economic policies, including an invited lecture at the School for Kenyan Civil Servants.

What I do not know and what has plagued me ever since my experience is whether the positive things I accomplished were worth the money Canadian taxpayers invested in the project. I do not know that I or anyone else could make such a calculation, even with large resources and the best of will. Nielsen noted that the inability to do so is exactly at the heart of the problems which many Canadians have with their government.

However, as Nielsen and the Auditor General noted, not all government programs have non-measurable outputs. Roads, water works, factories and other tangible projects fall into this category. It is with these that the Auditor General has found particular problems. The most important of these, repeated a number of times in the chapter, is that some have been undertaken at great cost and have failed to deliver the expected benefits because the host government did not have the resources to continue its operation or even maintain the physical structure. I personally have seen roads built with foreign aid deteriorating at alarming rates and some ending in the middle of a desert.

Reform supports the Auditor General's request that CIDA engage in a systematic assessment of the availability of local support funds before it commits Canadian resources to any project. In addition CIDA should be required to report to Parliament the results of its efforts in this direction and in following up the use to which the projects have been put.

Reform also hopes that the government will follow up on the Auditor General's most basic recommendation: that the minister in question is accountable for measuring and reporting on the results of CIDA's programs. Reform would push for this recommendation further and urge that Parliament have greater involvement through consultation and debate over CIDA's budget.

The Auditor General's report identifies a large number of issues which are of a fundamental nature and that lend themselves to such a debate without interfering with the agency's efficiency in its day to day operations.

I recommend to hon. members a reading of this chapter. One of the issues raised by the Auditor General concerns the fact that historically CIDA has given aid to many countries. He and his consultants have agreed that this approach should be changed and that spending should concentrate instead on a limited number of specific countries. Parliament can make valuable contributions to the solution of these matters.

Another important issue identified by the Auditor General is the conflicting nature of some of the most important mandates of the agency. Thus it is required to help the poor directly but also increase the productive capacity of the poor. These two objectives involve an irreconcilable conflict. Food aid keeps down the prices of agricultural products and discourages local production. It creates dependence.

It is ironic that the exact same problems face domestic Canadian spending on social programs and the interprovincial equalization program extended through Bill C-3. I discussed these problems and offered possible solutions the first two times I spoke in this House.

The proposals of the Minister of Human Resources Development for the redesign of domestic social programs will be discussed by Parliament. So should the CIDA programs and mandates. In this context there would undoubtedly be an evaluation of the Auditor General's view that programs in some countries lack coherence, that they use an inadequate knowledge base and may have failed to review development effort in the light of recent changes in the understanding of the nature of the basic development process.

In the evaluation of the CIDA spending in Bangladesh the Auditor General noted that the country's structural weaknesses make self-reliant development very difficult. I wonder whether this assessment is a code for one of the ideas advanced by some students of development aid, namely, that aid should be made conditional upon the receiving country making structural changes that support the development process such as freeing of markets and prices, the protection of property rights and the introduction of democracy. Certainly this topic would be one on which many members of Parliament would want to have an input.

One of the criticisms of the Auditor General is that CIDA is overregulated and suffers from the widespread bureaucratic disease which makes staff more concerned about following a risk minimizing process for spending money than in getting good results. These are almost the verbatim words of the Auditor General. He believes this state of affairs should be changed by making the management staff and process simpler and more transparent and focused on goals identified in co-operation with recipient countries.

In addition, CIDA should adopt a learning culture and devote more effort to the identification of problems that develop while projects are under way. The Auditor General believes that such a change will be forced on CIDA by making its staff, management and ministers explicitly and directly accountable to Parliament and through it to the general public whose taxes finance its operation.

Reform agrees with this assessment made by the Auditor General. It urges the government to force CIDA into becoming more responsive to Parliament, not only in its day to day operations but in setting goals and processes for the selection

and evaluation of its programs. The people of Canada deserve no less.

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

Mr. Speaker, I listened carefully to the comments made by the hon. member opposite. I want to congratulate him on his speech. Nevertheless, we should not, either inadvertently or intentionally, tarnish all CIDA projects.

I am one of those who had the privilege, during my many years as a member of Parliament, to visit a number of projects in developing countries.

I remember a project in Niger, Africa, where I went to see that a $1,500 grant from the Canadian government made it possible to lay a pipe bringing water to a vegetable garden tended exclusively by village women.

Some 75 families were using that garden and, given Niger's climate, they could have fresh vegetables almost year round thanks to a small investment by this country.

It is all right to talk about all the audits needed to meet requirements, but it would not make much sense to spend $3,000 on audits to review something that cost $1,500.

I remember visiting a well in Niger. This well had cost $5,000 and was providing water for a complete village. This was made by Canadian contributions exclusively. When our delegation entered that village everyone was waving little Canadian flags to greet us.

It made me proud to be a Canadian because of what we were doing for those people. Let us not lose sight of that.

It is easy for all of us to think of a CIDA grant, as what I once heard on television, as buying ham slicers for Muslims. There is no such thing as a ham slicer, it is a meat slicer. There is nothing that says on it that you can only slice one kind of product. In any case, it had been put that way because it was the sexy way, I guess, of appealing to the constituency you wanted to appeal to.

I say to our colleagues across the way and to everyone who cares to listen that it is important for us to keep all of these things in perspective.

All those of us who have worked in the area of international development know that the theories explained by some hon. members-theoretical audits, bills and so on-do not always work like they are supposed to in the field, across the globe, where there is no electricity, no computers, etc., and where someone can be hired off the street to dig a hole. Let us keep that in mind.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, it is obvious that I would never say that all of the programs of CIDA are failures, having been involved as deeply as I was in the CIDA project. It would be condemning what I have done. I may be foolish, but not that foolish.

I am also glad to hear that the hon. member had such a great feeling of being a proud Canadian when he walked by a project financed by us. The question that is being raised by my constituents, by people around the country and that the Auditor's report reflects is in this period of financial difficulty can we afford to pay money so that this gentleman can feel good about walking past a garden that was financed by our money? That is the question.

I also would like the hon. member to notice that I was very statesman-like in this report of mine. I did not do what the media loves to do and pick on individual bad projects. That is cheap. I did not do that. We ought to approach this in an objective way. It was approached by the Auditor General in an objective way. He did a tremendous amount of research to evaluate these projects.

The fact is that we spent $3 billion and he is getting again and again from those people who ask objective questions that they do not believe they are getting their money's worth, that there is too much bureaucracy and making sure that bureaucrats do not get caught doing anything wrong rather than looking to see if they are achieving the right thing.

I did not say all are doing it. The auditor said that this is characteristic of the program. I believe and go along with the auditor, as the Reform Party does, that one way to improve the quality of what CIDA does, one way to raise the quality, which is undoubtedly quite high, is for the people running CIDA from the minister downward to be more responsive to this House.

[John Manley, Liberal, Minister of Industry]

Mr. Speaker, first of all I would like to say I welcome this opportunity to respond to several of the concerns that have been raised in today's opposition day motion, particularly with respect to the aboriginal economic development program.

Although the motion refers this question to the Minister of Indian Affairs and Northern Development the aboriginal economic development program is administered by Industry Canada, formerly Industry, Science and Technology Canada.

In his report to the House of Commons, the Auditor General's comments on the aboriginal economic development strategy served to focus attention on this issue at a time when there is renewed interest by aboriginal Canadians in their tradition of

commerce and there is increasing recognition by the non-aboriginal private sector in doing business with First Nations.

As Minister of Industry, I am responsible for a large number of programs and services designed to increase Canadian businesses' competitiveness. And the businesses managed by aboriginal people play a strategic role in this effort. In fact, these businesses will have an increasingly more important role in our economy, which is about to enter a new millennium.

The government's aboriginal business programs are quite deliberately located in the industry department which is able to offer programs to all aboriginal Canadians, including status and non-status Indians, Métis and Inuit peoples.

This role continues a tradition going back over 20 years as the department and its predecessors help to build a critical mass of aboriginal business owners and managers.

Moreover, with its specialists in business issues and intelligence, Industry Canada is best positioned to serve the business needs of aboriginal clients, the role it plays in the Canadian aboriginal economic development strategy.

In carrying out my duties, I can count on the precious advice and dedication of the native economic development boards in the private sectors, which have played a major role in the evolution of the government's business development programs over the years. The boards, which are mainly made up of aboriginal businesses and chiefs of communities from all over the country, develop policies and make recommendations to Industry Canada on initiatives which deserve support.

We are partnered in the Canadian aboriginal economic development strategy with the Department of Indian and Northern Affairs, which focuses on community economic development, and with the Department of Human Resources Development which promotes training and workforce participation.

Our other partners are the aboriginal women and men who have worked with the program over the last four and a half years to realize their business dreams.

The Auditor General took a look at a number of businesses and he made recommendations on monitoring the progress of our clients. He wants us to follow up and obtain information allowing us to see if public funds are invested shrewdly.

I have to say that I agree with the Auditor General on this point and while procedures were not fully developed at the time last year when he conducted the review, I am assured that our department is currently making improvements in our tracking systems and will be much better able to monitor the performance of our client companies in the future.

I will continue to watch this program and all programs for which I am responsible to make sure that the money being spent, every dime of it, is being used effectively and carefully. We are and want to be accountable to all of the taxpayers of Canada.

I am sure members would be interested to know, however, that there are many successes being achieved by aboriginal businesses in Canada. Most Canadians do not know that there is high tech equipment manufactured by a Canadian aboriginal firm, ACR Systems Inc. of Surrey, British Columbia, which has its products on the Canadarm in outer space and on formula one race cars very much on the ground.

ACR's temperature data loggers meet the highest quality standards and serve a variety of uses, including measuring building environments for energy savings and maintaining the careful temperature controls of blood products while in transit.

We all take pride in the achievements of Canadian aboriginal entrepreneurs and film producers as well as entertainers who are increasingly making their mark on national and international stages.

Canadian aboriginal tourism products and destinations are now being sought by visitors to Canada, particularly from Europe, for the unique experiences created and the genuine hospitality offered by aboriginal hosts. The aboriginal tourism sector is already an important contributor to the country's performance in this important area of our economy.

There are many examples of success from the small community based grocery store to the investment bankers on Bay Street. Winnie Giesbrecht has created a thriving business operation in downtown Winnipeg so that she could fill a need for a care home and employ aboriginal women.

D'Arcy Moses and Dorothy Grant have unveiled Canadian aboriginal high fashion to the world at the Canadian Embassy in Paris.

So, even if we learn some tough lessons from previous initiatives, the things which we do well must be pointed out.

Under our current aboriginal economic programs, we have supported some 3,000 client firms. The $230 million that went toward these business ventures of every size levered other investments and an injection of half a billion dollars in total resulted for the aboriginal private sector.

From a study commissioned last year looking at firms the program supported over their first two years we learned the following facts: 90 per cent of all businesses the department capitalized were still operating after two years; 60 per cent of these firms were operating with a profit or a small loss. These results compared favourably with the Canadian average for small business performance.

[Translation]

Important jobs are created by aboriginal businesses. The study encompassed some 300 companies which either created or preserved more than 2,000 jobs.

The cost to the government in helping to create these jobs turned out to be much lower when compared with past efforts. These firms proved to be effective providers of jobs for non-aboriginal Canadians as well, especially in some of the more remote areas of the country.

I am committed to building on the momentum that I have described. There is a critical mass of entrepreneurship, of skilled and talented aboriginal people who are working very hard right now to turn things around for themselves and for their communities.

As a government we will continue to do what we can to improve the climate for this business growth and support the leadership and the initiative and the desire for self-reliance being shown by aboriginal Canadians in all parts of the country.

As Minister of Industry I would like to respond to some of the issues raised by the Auditor General in his report on the failure of the former Department of Industry, Science and Technology to follow the government's accounting policies. I am sure, Mr. Speaker, you will find this especially fascinating and I hope that you can contain your excitement as I talk about accounting policies.

The policy, entitled "Payables At Year End", requires departments to charge expenditures to the period in which they were incurred rather than that in which they were paid. The net result was that in the Auditor General's opinion the department under-recorded its liabilities at year end by some $42 million.

I am told the discussion between the office of the Auditor General, my department and the Treasury Board Secretariat, formerly the Office of the Comptroller General, has revolved around the difficulty of managing multi-year contribution agreements. This is complex and the rules for accounting are based on long standing and generally accepted principles of recognizing liabilities when they occur.

However, in the case under discussion, there has been a legitimate difference of opinion as to which accounting policy should apply and which fiscal year the liabilities should appear in the public accounts. The office of the Auditor General is not disputing the legality of the payments, only the accounting treatment.

The department's interpretation of the accounting policy has always been approved by the former Office of the Comptroller General, which is now part of the Treasury Board Secretariat. In fact, according to this office, the department maintains a high degree of control.

Also, it is generally agreed that departments do not always have control over the timing of costs incurred in multi-year contractual arrangements. This can result in variances from planned spending levels on a year to year basis even though parliamentary authorities are adhered to on a multi-year timeframe.

The department has had extensive discussions with the Treasury Board Secretariat which drafted the policy and that the Auditor General, in his report with respect to this item, is interpreting. This resulted in the deputy comptroller general agreeing with the department's accounting treatment of all items under discussion with the office of the Auditor General save for one item for $7.3 million.

This item was recorded in the 1992-93 fiscal year by the department and we accept the Treasury Board Secretariat as the final arbitrator in all accounting matters. The Auditor General's figure of $42 million was not adjusted to reflect the department's action in recording the $7.3 million item due to printing deadlines for the annual report. The amount actually under discussion is therefore roughly $35 million. This is comprised of one amount of $31 million which the Auditor General felt should have been recorded in fiscal year 1992-93. The disagreement, especially in the case of this amount, rose to the extremely complex nature of the contribution agreement in question. In situations of such complexity, often professional accountants will arrive at different conclusions based on their interpretations of the same set of facts.

Moreover, there are two adjusting entries representing a total of $4.5 million. However, as was already mentioned, the Treasury Board Secretariat supports our accounting procedure regarding those items.

In summary, the issue of unrecorded liabilities is part of a fairly long standing dialogue between the Department of Industry Canada and its predecessor, the Department of Industry, Science and Technology, and the office of the Auditor General due to the complex technical accounting issues surrounding the management of multi-year contribution agreements within the current accounting framework.

The Treasury Board Secretariat, author of the government's accounting policy, fully supports the manner in which the department has treated its liabilities and reported them in its annual report. The department has, for its part, been in full compliance with the accounting policies of Treasury Board.

We do, however, undertake to continue to work closely with the Auditor General in endeavouring to ensure that in future, agreement is reached between the department, the Treasury Board Secretariat and the Auditor General prior to publication of the Auditor General's report.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, I would like to preface my question with a broad statement so that we can set the agenda.

It seems that whenever a Reform Party member asks a question about aboriginal issues that Reform Party member must be racist according to certain people within this House. That is exceptionally unfortunate. This is not question period and not widely shown on television but I would like to enter into a very honest, candid and searching dialogue with the minister. I thank him for being in the House.

One of the concerns expressed about the aboriginal economic program, and I suggest not just in ridings that have members from the Reform Party but perhaps in some of the other ridings as well, is the issue of competitiveness.

This is a very sincere question. It is not a trick question. I would like the minister to assure the people in my constituency and perhaps many other Canadians. We are attempting to correct what has gone on previously, particularly with the aboriginal community, by investing $230 million, to use the minister's figures, into a business program. That program has the potential of pitting those businesses against non-aboriginal businesses. The non-aboriginal businesses are under very severe taxation. Some are actually at the point of failure because of severe taxation. There seems to be some hostility and some concern that $230 million of these businessmen's tax money is being put into something which is based on a situation because of race, and that those people then have a $230 million advantage.

I wonder if the minister could help me and perhaps help Canadians get around the feeling that this is not setting the non-aboriginal community at a disadvantage.

[John Manley, Liberal, Ottawa South, ON]

Mr. Speaker, I appreciate the question. The best way to explain my view of this is to say that I do not see the contribution to aboriginal businesses under this program as putting the non-aboriginal community at a $230 million disadvantage. I would suggest to the hon. member that the amount we are able to invest in aboriginal businesses falls far short of enabling the aboriginal community to reach an equilibrium with the non-aboriginal community.

Let me explain a little more what I mean. First, as we know, throughout Canada access to capital for small and medium sized business is difficult. It is doubly difficult for members of the aboriginal community, particularly those living in parts of the country where the existing economic infrastructure is not well developed.

Second, with respect to this program, we are endeavouring not to right the wrongs of past generations, but to assist a group of people to build on a base of self-reliance.

If we are going to do that, we have to not only provide capital, we must have programs that assist in helping the members of the aboriginal business community expand their businesses in a meaningful way, to have the kind of interest shown post-advancement of capital, as the business grows and develops, that ensures its success.

We are dealing with financial assistance which is rather small when compared to assistance given to other segments of government, some federal, some provincial, to many non-aboriginal businesses. We are endeavouring, with some success, as I think statistics will show, to create within the aboriginal community a successful spirit of entrepreneurship, culture of entrepreneurship if you like, leading to self-reliance and offering people the opportunity not just to get handouts and not even to get jobs of their own but to create jobs for themselves and for others in their community.

This is a very important contribution, which is why I agreed with the Auditor General, provided the strategy is clear and developed, and that is what we are endeavouring to do, and also providing that this ability to work with the entrepreneurs is there. This is why the program is set up with a very thorough review process largely directed by experienced members of the aboriginal community who provide their input as to what businesses should receive financial assistance. It is a multi-faceted approach.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Mr. Speaker, I thank the Reform Party for giving us this opportunity today

and I notice, as the debate wears on, that there is a basic distinction between what the Reform Party is suggesting and the proposal put forward by the Bloc Quebecois. I would like to emphasize this difference based on the minister's speech.

Every time we have brought up the subject of government finance, we have said that it was imperative, capital that a committee composed of representatives of all the official parties in this House be set up to review all expenditure items that make up the government's financial commitments. While the motion that the Reform Party has put before us is interesting, I think that it would not give us a broad enough view, a comprehensive view of where cutbacks should be made.

I wanted to draw a parallel with the department that the Minister of Industry runs, as his committee met for the second time this week. I attended the meeting because I take a keen interest in the issue. I was surprised to learn for one thing that the total budget for his department was nine times smaller than that of National Defence, in spite of the fact that the manufacturing sector is known to create jobs and that commitments need to be made in that area. I would like to submit to you that with respect to cuts, the problem with what the Reform Party is saying is that we get the impression that there should be cuts everywhere, across the board. On the other hand, a parliamentary committee like the one we are suggesting could give us a much more balanced picture. There are indeed areas where cuts can be made, but there are others where additional resources are required.

At that committee meeting where all the deputy ministers had come to tell us about their financing activities, every one was amazed to hear for instance that as little as $15 million was earmarked in the department's budget for the very important sector of tourism, a sector that is expected to gain more and more importance toward the year 2000. So, both the government members and the opposition members present were surprised at how meagre their resources were, considering how much needs to be done in Canada in that area.

Just think that the Quebec Ministry of Tourism alone has about the same budget. I picked that particular example because it is in the magnificent riding of Hochelaga-Maisonneuve -where the hon. minister is always welcome- that you find the Olympic Stadium, the Botanical Garden and the Biodome.

This is a case where, if a parliamentary committee carried out a qualitative study of each budget item related to governmental activity, as the Bloc Quebecois is proposing, we could make a quantitative determination and realize, for one thing, that there should be more resources allocated to the Department of Industry, particularly for tourism, and we would be able to make nuances. I do not know whether the hon. minister agrees with me on this, but I think that this is a basic distinction between what the Reform Party and the Bloc Quebec are proposing.

[John Manley, Liberal, Ottawa South, ON]

Mr. Speaker, I would love to visit the riding of the Bloc Quebecois member. Perhaps shortly.

As to his proposal, I agree that we cannot cut indiscriminately. We need to have a strategy, and I believe strongly in a real strategy of economic development. After all, this is going to cost a bit of money.

I agree with a system whereby members would have more say in budget affairs, even those of government departments. Historically speaking that is the real reason for the existence of Parliament. The legislative process is only secondary to it. The first thing is to provide the government with money, and that is what Parliament was created for.

I would welcome the opinions of members on the expenditure of public funds. Whether we need a committee like the one proposed by the Bloc Quebecois, I am not so sure, because government spending is extremely complex. Let us take the example of my department. A member of the committee-not my committee, but the committee of the House- would have to look not only at the expenditures under my authority, not only at all the programs of Industry Canada which total about $6 billion, but also at the spending of the National Research Council, the Canadian Space Agency, Statistics Canada and others. There is a lot to cover, and I was just talking about the Committee on Industry.

I believe that any given committee has a lot of work if it wants to review the expenditures of all departments. If one committee should review all government expenditures, it is really the Public Accounts Committee which answers reports like the one presented by the Auditor General.

[Eugène Bellemare, Liberal, Carleton—Gloucester, ON]

Mr. Speaker, I would like to congratulate the Minister of Industry for his presentation on the development of aboriginal businesses. I think he explained well enough that the program is worthwhile and that we should maintain and even expand it.

I would like to comment on the motion of the Reform Party. I will read the French version if the members of that party will allow me. It says that the government should study the report of the Auditor General, make recommendations and report, I quote:

-no later than the first week of June each year, what measures have been taken by the government to address unresolved problems identified by the Auditor General in his report-

I have been a member of the committee for the last five years and I can say it is totally impossible to implement the proposal of the Reform Party. The report was just presented in January and I know the members of the steering committee of the Public

Accounts Committee must meet in order to determine the agenda for the study sessions they will hold. The report of the Auditor General is not final; the committee must do its work and make recommendations.

Many recommendations have been made during the last five years. The Reform Party and the rest of Parliament should focus on the recommendations of the Public Accounts Committee, they should make representations and have debates here in the House.

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

Just a short question, Mr. Speaker.

Yesterday I touched on this whole issue of program management and I would like to ask the industry minister for his opinion on program management and strategy. The Auditor General's report-and his colleague, the Minister of Intergovernmental Affairs, who was a senior official himself, will probably agree on what was suggested-seems to point to a 28 per cent reduction in funds earmarked for program evaluation over two fiscal years. I think this is fundamental in the whole question of programs when in 1991-1992, for example, $124.5 billion was invested in 16 programs, only two of which were thoroughly evaluated.

So I am asking you this: What do you think of the lack of an assessment mechanism allowing us to see if the money injected has achieved the goals that were set, if program management and processes on which so much money is spent have had some success.

[John Manley, Liberal, Ottawa South, ON]

Mr. Speaker, I think it is necessary, after all, to have review systems. It is not necessarily required to review every program under a formal system every year because it would be too difficult, but each program should be effective. My department must have a system of accountability to the minister. After all, it is the minister who bears the burden of accountability to Parliament.

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

Mr. Speaker, I would like to take this opportunity today to remind the House of some of the factors that contribute to the problems of Canada's public administration.

My comments are largely based on the positions taken by the Bloc Quebecois in this House during the pre-budget debate. We think it is important to repeat these discussions on public administration and the wasting of public funds, because we see the latter as one of the causes of the failure of Canadian federalism.

The rising federal deficit has increased our foreign debt and, as you know, this trend towards relying on foreign loans to finance the deficit has mortgaged the future of generations of Quebecers and Canadians.

Our children will pay for the debt, for what I would call the Trudeaumania of the 1970s, when credit cards became the Canadian government's main economic instrument.

From 1960 to 1994, the debt as a percentage of GDP rose from 34.6 per cent to 71.8 per cent-a typical example of public finances out of control. This means that since 1960, the debt has increased faster than the revenue that would be used to pay it off. If the debt/GDP ratio indicates the extent of the problem inherited from the past, it is easy to see, if we look at how the deficit evolved as a percentage of GDP, where this explosion of the federal debt started. It started when the Liberal Party of Canada was in power.

The Liberals are responsible for this public debt explosion.

Today, during this sluggish economic recovery, taxpayers have the impression that the federal government is not doing its share to improve its management methods and eliminate waste. In the Auditor General's last report we read, and I quote: "Today, it is clearer than ever, 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".

In order to eliminate waste, unnecessary spending and poor management in our public administration, I reiterate the request by the Bloc Quebecois for a parliamentary committee that would analyse and review public expenditures, item by item.

[Louis Plamondon, Bloc, Richelieu, QC]

Hear, hear.

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

Mr. Speaker, it would be appropriate to create such a committee, because the Auditor General's report, as I said before, shows that Quebecers and Canadians are right when they believe that the government is wasting part of public funds. I suggest we look at a few examples of waste, unnecessary spending and poor management to support this view.

For instance, at National Revenue, because of a loophole in the resource deduction, the government lost $1.2 billion in revenue.

[Louis Plamondon, Bloc, Richelieu, QC]

That is unacceptable.

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

If the government had a mechanism for quickly adjusting tax credit programs where there was a problem, as recommended by the Public Accounts Committee, it could have avoided much of this loss.

Investment Canada spent $132,000 on a new office, kitchen and bathroom for its new president, although her predecessor's office was located in the same building and had the same amenities.

[Louis Plamondon, Bloc, Richelieu, QC]

That's a big waste.

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

Another example of waste is the $54 million cost related to the use of the Challenger aircraft. Travelling done by ministers accounted for more than half of this amount, as the Minister of Intergovernmental Affairs is well aware. According to the Auditor General, this figure translates into an hourly cost of $19,650. Is this the best way to finance the travelling of ministers and other officials? This is the question asked by the Auditor General, who does not have access to the information which would reveal whether or not this travelling was justified.

Another example of mismanagement is the Northern Cod Adjustment and Recovery Program, through which the Department of Fisheries and Oceans spent $587 million. The Auditor General estimates that, of that amount, close to $15 million were wasted because the program was poorly managed.

Another example is the Canadian Aboriginal Economic Development Strategy which we just mentioned. The strategy provided for an investment of one billion dollars over a five-year period. Three departments were directly involved: Indian Affairs and Northern Development, Industry, as well as Employment and Immigration. The stated goal was to reduce the gap between aboriginal people and other Canadians.

We do not question the objectives of those programs. As the hon. member said earlier, we are not asking for cuts to those programs, but we want some tools to be able to evaluate their implementation. In 1993, $900 million were spent to reduce that gap. The Auditor General deplored the lack of co-ordination between the three departments. It is not clear who must assume leadership for the implementation of the strategy. The departments concerned should have a co-ordination plan as well as a system to evaluate that strategy.

In short, we do not know what concrete benefits resulted from this strategy. We do not know if the funds were spent according to aboriginal people's priorities. We do not know if there is a more profitable way of attaining the same results. As I said earlier, between 1989 and 1992, the budget to conduct evaluations was reduced by 28 per cent, and out of 16 programs representing a total of close to $125 billion, only two were evaluated.

I want to draw your attention on the duplication of programs and the overlapping of jurisdiction, which are also responsible for the waste of public funds. In a 1991 study done by the Treasury Board of Canada, not the Bloc Quebecois or any other group, the Treasury Board concluded that, for at least half of the provinces, there is apparent duplication between provincial and federal programs, this in 60 per cent of cases. The vague division of responsibilities, the incursion of the federal government in provincial fields of jurisdiction, as well as the federal spending power are the main causes of this duplication and overlapping.

According to the Bélanger-Campeau Commission on the Constitutional Future of Quebec, set up by the Quebec Liberal government, the best way to put public finances in order is for Quebec to become sovereign. Indeed, the Secretariat of the Bélanger-Campeau Commission reached a basic conclusion: since Quebec is not recording any significant net gain under the current system, we will soon have a negative balance. It now has been established that federal transfers to Quebec will continue to decrease, relatively speaking, as shown by the announcement made by the federal government concerning established programs financing.

As for the equalization program, its very foundation is eroding. The role of the government as the main provider can only decrease. The consensus reached by the Bélanger-Campeau Commission is also the opinion of all Quebec decision makers, including the unions, the professional associations as well as the business and financial communities. They all agree on one thing: to eliminate the federal government's debt, the current political system needs to undergo major changes. The Canadian federal system has failed us and cannot be reformed, as all Quebecers have proved with Charlottetown. And that political situation is at the root of our public finance crisis.

The dynamics and the gigantic proportions of the Canadian civil service are further examples of significant waste and loss of energy. In management training, we learn that civil servants and other managers often look forward to increase their influence by hiring too many people or requesting a bigger operating budget than they need. In so doing, they cannot properly streamline expenditures. Employees do not always have reasons or the desire to confront government machinery.

The Bloc Quebecois, with the best interests of Quebecers in mind, asks that a standing committee on government spending be struck right now with members accountable to the people.

We believe that the people's representatives should make sure that the objectives of the various programs are met and that the government is managing the public purse with equity, efficiency and care. Besides, the Auditor General brought that up when he wrote, and I quote: "Most of the time Parliament is not provided with adequate information on the results that departments and Crown corporations have achieved with billions of dollars of taxpayers' money".

A parliamentary committee on government spending could ensure that Parliament and thus the Canadian people are better informed on the government financial situation.

That is why we support the Auditor General's proposal to require departments, and I quote: "to submit, through the committee on government spending, clear and comprehensive reports to Parliament on the exact state of their stewardshipand to provide, when significant expenditures are incurred, information based on results". The point here is for the

government to achieve political justification rather than trying desperately to stay in power thanks to unjustified grants.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, with all kindness intended before I ask a question I must express to the House the tremendous amount of difficulty I have sitting here day after day listening to the reference to Quebecers and Canadians. Until such time as that situation should change, I suggest it might be helpful certainly for me, but I say that I am a Canadian from British Columbia, and probably the majority of members in this House would refer to themselves in a like manner. The exception seems to be with some of my friends to my right and I am having some difficulty with that.

That having been said I am interested in the position of members of the Bloc Quebecois. On one side of the coin they, like ourselves, would not support tax increases. On the other side of the coin when we talk about targeting there seems to be some misunderstanding by Bloc members where they believe that the Reform Party is calling for cuts evenly distributed across the board.

We talk about targeting to make sure that people who require the support of social programs will be protected and that the funding for those social programs for those who are in the most need will be there. That is why we are talking about targeting the support of social programs thereby creating decreases in the amount going out.

I wonder if the member could help us understand. I believe the member is talking about eliminating waste in government programs. We could shut down all of the federal apparatus, fire every single solitary person in the federal civil service, close down this institution and indeed stop paying rent on all of the buildings. Does the hon. member realize that even in doing that we would still have a deficit and still be adding to the problem of an increasing amount of debt?

If over 50 per cent of the current expenditures by the federal government are in the form of transfers to individuals either through the provinces or in direct payments in social assistance and his party is unwilling to touch that, but cannot possibly balance the budget without touching it, how would his party propose to balance the budget? I do not understand that kind of thinking.

Yes there is waste and yes waste must be eliminated. I agree with the comments of some of the Liberal Party members who have said that they too want to cut down on that waste. However, that is not where it is going to come from.

If the member cannot possibly balance the budget without cutting into or directing the payments to individuals under social programs, how would he propose we balance the budget?

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

Mr. Speaker, I want to thank the hon. member for his comment and questions. First of all, the hon. member must understand that all members of the Bloc Quebecois were elected in a democratic fashion by the people of Quebec. It is with a great deal of pride that all my colleagues from Quebec come to sit in Ottawa with a culture recognized in Quebec through the French language, with English-speaking friends who are true Quebecers, and all across Canada with people we want as our friends, with their great English Canadian culture.

So it is with pride that we often refer to Quebec and to the mandate we have been given to defend the interests of Quebecers because of the $28 billion we contribute to the federal coffers.

Having said that, I think it is-

[The Acting Speaker (Mr. Kilger)]

I must remind the hon. member that the five-minute question and comment period is not very long. Could he please keep his comments short so that debate can resume with his colleague from Verchères. The hon. member for Richmond-Wolfe has the floor.