Mr. Speaker, I am happy to respond on behalf of the Reform Party to the minister's statement.
Before I do, however, I would like to mention that we did not get a copy of this report from his office until 90 minutes prior to this announcement. Since he knows that we are expected to respond directly after his statement in the House, and since his own party was scathing in its criticisms of such lack of information and lack of co-operation from the old government when it was in opposition, I would think that the minister would be particularly sensitive to the actions of his own people and would like to look into that in his own office.
One can imagine the righteous indignation from the minister if he were on this side of the House while the government delayed the release of a potentially embarrassing report.
In dealing with the audit report of the Canada Communication Group I will start by commending the minister for the quick turnaround in this audit. While we are happy that the government has moved on this issue, I cannot help but wonder why the government needed an audit in the first place to determine that as both supplier and contractor, CCG was in a conflict position. That appears to me, and I would hazard to say to most of the country, to be self-evident.
This audit was moved up due to a series of complaints against CCG across the country from private sector companies that felt they were unable to compete fairly for government business. These are the types of rumours that have circulated about CCG in recent press clippings.
First, there was a director general attempting to contract work to the private sector. CCG co-ordinates the bidding process. The winning bid selected by CCG is CCG. The agency comes in just below the lowest private sector bid. Understandably all sorts of questions about insider knowledge emerged.
Second, CCG is one of the bidders for a substantial contract with the federal government and it wins with the lowest bid. Only afterward is it known that CCG had a small advantage over the other firms in that it did not feel the need to include its employees as labour because CCG did not have to pay them for the work on the specific project since they already had a federal salary.
One area the minister did not address with any substance deals with the whole issue of special operating agencies or SOAs of which CCG is one. There has been much criticism that these SOAs create unfair competition for those wanting government contracts.
More and more, companies are finding themselves facing off against SOAs for contracts within government and even outside government. Several national industry associations have said that they have been deluged with complaints from their members. Companies have complained that these SOAs receive insider information because of their privileged position within government that can assist them in winning contracts.
Others complain it is not fair that SOAs, which are essentially subsidized by taxpayers' money, are allowed to bid against them in the first place. Still others complain that it is not fair that SOAs are winning contracts with universities and municipalities. Finally, some wonder if allowing government departments to compete for contracts internationally is such a good idea.
A number of questions need to be answered with regard to SOAs, none of which the minister has addressed today. Are there any rules governing SOAs when they find themselves competing with the private sector? Each SOA runs according to a private agreement worked out between it and the department.
Technically, when government departments offer to do work for another government department, the transaction does not fall in the category of contracting. It is called the provision of professional services according to one analyst. When SOAs aggressively seek out work that might have gone to public
tender, it is not competing for contracts because all SOAs are still 100 per cent owned by their departments.
Also the reason why SOAs such as CCG are bidding on contracts with municipalities and universities is they have literally interpreted the standard rule that work can be sought within government to include any level or institution of government. As for international contracts with foreign governments, government departments compete for these because they feel they as government often have the best chance of securing work.
The whole issue of SOAs has not been adequately addressed today by the minister other than his tepid reference to another government study on conflict of interest and some new nebulous review by his department and the Treasury Board on the role of SOAs. This needs much more serious attention in our opinion.
In reference to the auditor's report itself, the auditor has made five major recommendations respecting these conflicts of interest. However of greatest interest to our party is a recommendation that either CCG be privatized, given crown corporation status or retain its special operating agency status but with revised goals and targets.
Our party has a bias toward privatization and in the case of CCG this option does bear exploring. In the interim, the minister has moved to put CCG's procurement arm under-