Madam Speaker, I too am pleased to speak on Bill C-263, an act to amend the Financial Administration Act and other acts in consequence thereof, especially with respect to exempted crown corporations.
The bill as presented would remove exemptions from the application of divisions I to IV of part X of the Financial Administration Act for five crown corporations, the corporations being the Canada Council, the Canadian Film Development Corporation, Canadian Wheat Board, International Development Research Centre and the National Arts Centre Corporation.
I believe all members agree that part X was designed to achieve an appropriate system of accountability and control for all crown corporations. The need for such a system was highlighted by the auditor general in his 1979 and 1982 annual reports to the House. The Auditor General reports noted that three main parties effectively participated in the corporate accountability process: Parliament, government and the boards of directors and senior management of the entity involved.
Part X clearly establishes that corporate management was empowered to be responsible for acting in the best interest of the corporation and its day to day operations. At the same time part X ensures that shareholders' rights and objectives are duly considered.
Increasing globalization of trade and recessionary forces have pressured both private sector and crown corporations to be more competitive and efficient. Additionally crown corporations must also achieve the public policy objectives for the reason that their statutory mandates remain respective of taxpayers' dollars.
The government recognizes that crown corporations served the public interest in a business environment. They are expected to use the best available private sector business practices and in practicality are treated in the same manner as private sector firms.
Having rules to govern accountability is one way to cement the expectation. These rules also make roles very clear.
Until 1983-84, the Financial Administration Act did not clearly specify these roles. Because of the resulting lack of co-ordination, it was impossible to ensure effective control or properly account for certain activities such as the creation of new crown corporations and making financial commitments for which, in the end, the government would be responsible.
In 1984 the Financial Administration Act was amended to address these shortcomings and part X as we know it came into existence.
Under part X, a crown corporation annually submits a corporate plan specifying all its projects and operations, including its investments and those of affiliates of which it is the sole shareholder. The crown corporation must describe the mandate of the corporation, its objectives for the duration of the plan and the strategy for achieving those objectives. It is also required to do a comparative study of projected results and annual objectives.
Corporate plans of crown corporations subject to part X require annual approval by the governor in council. Corporations may not carry on any new business or activity that is not consistent with an approved plan.
As well, once a corporate plan receives approval its summary must also be tabled in Parliament by the appropriate minister.
This element of planning and planning approval was regarded as a progressive part of part X of the system.
This accountability framework was not ideal for all crown corporations. The 1984 legislation contained exceptions which may be found in subsection 85(1) of the Financial Administration Act. Under this subsection, seven crown corporations are not subject to part X.
Along with the five corporations mentioned in Bill C-263, subsection 85(1) includes the Bank of Canada and the Canadian Broadcasting Corporation. In addition, the legislation that has been passed but not yet proclaimed would create another crown corporation exempt from part X, the Canadian Race Relations Foundation.
The grounds for exemption are significant and relate to the uniqueness of corporate mandates. The 1984 inclusion of the CBC was due to its uniqueness as a corporation. It required arm's length protective measures although not from the rules of good planning and accountability but from the possibility of political interference in the actual day to day business choices.
Subsequently, in 1991, amendments to the Broadcasting Act integrated many elements of part X in the legislation governing the CBC, while maintaining the arm's length position of the corporation. The auditor general felt this was a step in the right direction, since he had expressed his concern about the exemption.
Some of the remaining exemptions follow certain part X rules on a voluntary basis. Progress in accountability has been made outside part X. Bill C-263 is well intentioned. Although there may be merit in bringing other exemptions under a modified form of accountability framework similar to the part X regime, I suggest that additional work be done first.
For example, Bill C-263 contains the provision that employees of the National Arts Centre, Canada Council and International Development Research Centre become members of the public service.
Why does the bill aim to increase the size of the public service? Bill C-263 has clearly not addressed all the issues. The bill does not respect the fact that corporate independence in certain sensitive areas needs to be protected.
In the past, it was felt that it was necessary to maintain corporate independence and to avoid excessive controls as opposed to providing for an acceptable accountability framework.
For instance, the museums, which are crown corporations, are subject to the provisions on accountability in part X. However, under the museum's enabling legislation, no guidelines may be imposed that would affect their decisions on the acquisition and dispersal of works in their collections.
Similarly, one cannot impose guidelines on the CBC that would encroach on its journalistic freedom.
Specific wording in section 27 of the museums legislation states:
No directive shall be given under section 89 or subsection 114(3) of the Financial Administration Act with respect to cultural activities, including
(a) the acquisition, disposal, conservation or use of any museum material relevant to its activities;
(b) its activities and programs for the public, including exhibitions, displays and publications; and
(c) research with respect to the matters referred to-
I ask if there are better ways to ensure accountability for those crown corporations named in this bill.
Subject areas such as auditing, corporate governance, financial management and control, corporate planning, reporting to Parliament and borrowing plans have been thoroughly addressed in part X of the Financial Administration Act. It has resulted in a system which according to the Auditor General is working well.
This system does not rule out modifications which are prepared to meet the specific circumstances of the majority of exempt crown corporations. Whether this is best achieved through one bill or through a series of amendments to existing statutes for each crown corporation is something we may need to further explore.
In concluding, I am convinced that every effort will be made to achieve the ideal combination of accountability and the arm's length relationship enjoyed by crown corporations that are exempted, and that Canadians will continue to consider this to be in the public interest.
In closing, I cannot recommend support for this bill, despite its valiant effort.