Madam Speaker, I begin by observing that politicians are the representatives of the people. We are supposed to hear from the people and carry on a debate such as this one in a forum like this place. This is democracy in action.
I congratulate the member for Témiscamingue for putting his motion on the order paper and giving us an opportunity to debate it today on behalf of all our constituents and all Canadians.
I am pleased to take part because I would like to take the debate around the corner and deal with another aspect of the problem of transferring money from the federal government to the provincial government for health and education.
One idea we have not debated much in the House today—and it has not been much of a debate at all—is that we should be examining, among other things, how efficiently that money is used by the end users, principally education and medical institutions.
It is certainly true that the federal government cut social transfers and that the Ontario government passed that cut on to hospitals and universities. This is not to disparage the Ontario government. Indeed I hope it is listening. One of the problems with what it did is that it basically cut approximately 20% out of the funds available for hospitals and universities as a result of the cuts in transfer payments by the federal government.
The problem with that is when an efficient organization running at 100% efficiency is cut by 20%, the organization gets hurt. On the other hand, if institutions that are running at 50%, 60% or 70% efficiency are cut by 20% they are not hurt. In fact they become even more inefficient.
The question I would like to raise is whether or not, particularly the hospitals and the universities and especially the hospitals, are using the money they receive from all levels of government as wisely and effectively as they should.
The money involved is big. It is not just the $12.5 billion in social transfers from the federal government. It is also from the provincial governments. It amounts annually for hospitals alone from government sources to $17 billion a year. When we include universities and other higher education institutions the amount is $34 billion per year. That is a lot of money.
The difficulty is that the institutions receiving this money, again particularly hospitals and universities, are charities. They are usually incorporated as non-profit organizations under the Canada Corporations Act. These two business entities or organizational entities that comprise hospitals and universities have very little requirement in law for the kind of transparency that other institutions have which leads to accountability.
It might amaze members to realize that a non-profit corporation, for example, does not need to have, certainly under the federal statute, a chartered accountant perform its audit. It does not have to submit annual financial statements to the government as do non-profit organizations. There is a serious omission here.
The board of governors of a non-profit corporation has no standards set by any level of government to explain what it does. When they are charity boards of governors the only legislation that pertains to them is no legislation at all. It is case law.
We have this very big difficulty about whether a charity or non-profit organization, the collective of these, is actually spending the money it is receiving from both the provinces and the federal government in a way that the public can monitor effectively and know that money is being well spent.
The member for Témiscamingue earlier in the debate said that we should let the control of health care and education be done by the citizens, those who are closest to the situation. We cannot do that if the citizens do not know what is happening.
When it comes to hospitals I will give a few examples from my own area, although there are anecdotal examples across the country. The Hamilton Health Sciences Corporation in my riding is in a bit of a controversy. It was contracting out brain injured patients to a facility in Texas which turned out to have such a bad reputation for treating patients that the state of Texas would not use the facility. When the Hamilton Health Sciences Corporation was challenged on this by local journalists and the local MPP, its chief executive responded that it was not the obligation of the institution to monitor what was happening in Texas. This is the problem of a hospital contracting out without careful due diligence as to whether it is a good facility and the public does not even know this is happening.
We must ask ourselves if we want to know in detail how hospitals and other institutions are carrying on when they contract out services. I suggest that this is only the tip of the iceberg of a very big problem. It is not just a matter of health care and care for the patients, it is a matter of the effective use of taxpayer dollars.
There are other areas concerning compensation which have created another major problem in my riding. Chedoke-McMaster Hospitals gave a severance package to their chief administrator worth $818,000. That is an incredibly unacceptable use of taxpayer dollars, but that was done. I will not go into the details of this controversy because it is the subject of litigation, but when the chief executive was hired in 1991 she immediately hired onto the staff a close personal friend. This is a case of nepotism.
One might say that the board of directors of the hospital should be in control of this. But I challenge members to talk to politicians and citizens who have served on hospital boards of directors. They will say that trying to get information out of the administrators of hospitals is near impossible. The reason is that there are no standards. There is no countrywide standard for the administration of charities and non-profit corporations which would apply in the case of hospitals that are spending $17 billion a year as of 1993.
There is a great deal of anecdotal information about how hospitals contract out for goods and services. Hospitals do not have to issue tenders. They can do it however they want, and indeed this happens. Gifts are received by people in the business of purchasing for hospitals. I do not know about universities, but certainly for hospitals there is a lot of very negative information about how goods and services are purchased and gifts are exchanged. This is all because of a lack of transparency.
The cuts originally made by the federal government and the cuts that were inevitably and maybe properly passed on would have worked. I do not know whether the Ontario government had much choice or whether any other provincial government did. Those cuts would have been efficient if only we could have rid the institutions of the inefficiencies. These institutions cut nursing staff and beds when they should have been cutting administrators. They should have been cutting the fat out of their bureaucracies. The machinery is not there and the transparency is not there to enable this to happen.
I would encourage and seek the support of other members of the House for any initiative that might come in this House that would involve bringing a greater level of transparency and accountability to charities and not for profit organizations. It is imperative that we re-examine the Canada Corporations Act and require at least the same level of transparency that exists with for profit corporations or, at the very least, the same level of transparency that exists now with bureaucracies. That would be an important first step.
The next thing would be to re-examine the government's obligation to oversee charities across the country and perhaps to write new legislation that defines the standards of accountability and transparency for charities. That would go a long way to making the cuts in social transfers acceptable to Canadians.