This is like her own RRSP account from which she is generously withdrawing cash.
One of my colleagues said that it sounds like a special bottle of wine. It is a special bottle of something or other for those who are getting cash under it. Under the transitional jobs fund it was $3.3 million. Of course that is never enough. How could we get by on $3.3 million in our own personal reserve pocket? It was raised to $5 million a year in fiscal year 1999-2000. As if HRDC grants and contributions are not discretionary enough, we have the minister's reserve over and above.
Each year the provinces are granted a notional allocation. I remember in grade 8 home economics that we had to talk about notions: sewing, buttons, thread and all that kind of stuff. Maybe it is the same thing, I have no idea. Anyway, it is a notional allocation. It is the total amount one can expect from the TJF and CJF, but the minister's reserve is not part of that notional allocation. It is not as if we would sit down and have coffee and say that we have a notion to help somebody here. It is over and above the notional stage. Holy smokes, it is cash right out of the reserve. It is not even part of that notional allocation.
On February 18, 1999, just a year ago, the Atlantic council of regional executive heads—I assume they had bodies and things to go with them but these were the heads—senior HRD officials, wrote to the assistant deputy minister asking questions about the use of the reserve. At least—and good for them—they had the fortitude to ask the minister what this was all about.
To summarize the memo, it says “My colleagues in the Atlantic region are very concerned with respect to the proposed distribution under the CJF program”. Thank goodness for people in the bureaucracy who stand up to the minister and ask some of these questions. The memo goes on to say “Furthermore, due to the lack of regional consultation on the structuring of this proposal, we are requesting your review of our concerns”.
It would be easy for the government to rant about the opposition making a fuss about this but these are its very own officials, and good for them.
In this whole HRD scandal that we have witnessed swirling about us over the last few months, the minister has tried to stand up in question period and say that the official opposition, and in fact all opposition parties, were besmirching the officials at HRD. Let me correct the record. We are doing nothing of the sort. These are good people who are trying to do their jobs but their political masters keep getting their paws in the way and they are not allowed to do the job that they were hired to do.
On March 12 the assistant deputy minister replied by saying that under the new Canada jobs fund the minister's reserve was to be $8 million but that the minister has agreed to $5 million. Oh, my, do members not love it when they tighten their belts? If not $8 million then I guess $5 million will do. The minister has $3.3 million at her discretionary spending. The government is trying to force her to take $8 million but I guess she can live on $5 million, which is over and above the $13.3 billion in grants and contributions from the government. There it is, the minister is tightening her belt. She has agreed to $5 million a year.
Regarding the use of the minister's reserve, the assistant deputy minister said “—for proposals that meet the terms and conditions of the Canada jobs fund that the minister wishes to fund”. What does that have to do with merit? I am astounded. I assumed that these project, which the Liberals have been railing about for months, are based on merit. If they are based on merit, why should the minister have to be involved at all? That is a big $13.3 billion barrel. This is the $5 million little discretionary fund in her personal reserve that the minister wishes to fund. In brackets, it says “This continues the practice followed under the transitional jobs fund”. Okay, then if it happened under the TJF it might as well happen under the CJF, right?
This simply means that the minister can do whatever he or she likes with the fund. The note makes clear that a proposal under the reserve could be generated from the minister's office where we would not even have to hear about it. We would not even need to get an application form or anything like that. If I am just out there trucking around and I see what looks to be a great little project, I could initiate it all by myself. That is hard to believe.
An e-mail dated June 2, 1999, nearly a year ago, from a senior financial analyst at national headquarters indicates that at least one region's budget was reduced to accommodate the minister's reserve. A whole ministry's budget was cut back just so the minister's personal reserve could get a little extra cash in it. It is hard to believe.
An e-mail dated February 23, 1999 indicates that the minister's reserve was $3.3 million under the TJF but was increased to $5 million, as I mentioned earlier. The reason given was that the minister's office provided significant support to obtaining cabinet support for the Canada jobs fund and they felt that $5 million a year for the minister's reserve was appropriate.
As far as we know, there were three disbursements totalling $1.38 million from the $10 million minister's reserve under the TJF. To our knowledge, none have yet been made under the CJF, although maybe the minister in question period today could let us know if any of those things have happened. Maybe we are not right up to snuff on that.
There was $500,000 to Cornwall, the riding of the chief government whip. It is not up to a $1 million but it is $500,000 which is a step in the right direction, is it not? It is halfway there. The unemployment rate in his riding was 10.7% according to the 1996 census. It was supposed to be 12% but, yes, he was higher than Brant which was 8%.
Oh, my, $500,000 to Brantford. Oops, that is the riding of the then Indian affairs minister. The unemployment rate in her riding was 8.4% according to the 1996 census.
Why did the HRD fund TJF projects in areas of less than 12% unemployment? We have asked that any number of times in the House. That is when we got the new creative line that it was the pockets of unemployment. We could just pick a pocket and fund whatever we like.
Other access documents showed that the 12% rule could easily be broken. The rule is 12% but who cares. We will just write a little rule to supersede the rule. The rule says that individual communities and groups of communities that had unemployment of 12% and greater but which were outside 12% unemployment insurance regions were also considered to be included in the 12% areas.
It is called a run-on sentence in high school English but let me carry on. In October 1997 Cornwall and Brantford were included as high unemployment areas. That is hard to believe. It looks pretty loosey-goosey here. It just goes on and on and on.
This sounds like a shell game, does it not? We have something under a shell, move it around, then we pick it up and we are not quite sure what we will find under it. Twelve per cent was the limit but let us always remember that it is not this government's money.
I will talk for a few minutes now about the actual HRD audit. This was what broke loose when everyone was recessed out of the House in January. I see that I am getting so relevant here that people are starting to hide behind the curtains. Tell them to brace up because there is more.
Let us go on to the question of how the HRD minister was made aware of serious problems with the grants and contributions. We have seen that it is a nightmare. Let us take a look at some of the problems with the grants and contributions and what the minister did or did not do about them.
On January 19, 2000 it was stated that Human Resource Development Canada manages grants and contributions programs that represent a significant investment in public funds. That means a lot of cash and taxpayer dollars. It was also stated that the audit looked at programs representing approximately $1 billion of annual spending. That was a lot of cash.
It was further stated that HRD initiated the internal review to get an objective assessment of the administration of its grants and contributions programs. This type of review was part of an ongoing process to improve program management. Surely that is what we are all after. The audit looked at a random sample of 459 projects from April 1997 to June 1999. The review included a cross-section of projects from seven HRDC program areas across Canada. A number of areas requiring improvement were identified in the report, including project monitoring, contracting procedures and general financial practices.
For example, the auditors found that of the 459 project files, 15% did not even have an application on file. Of the remaining applications, the following elements were missing. Some 72% had no cashflow forecast. In other words, what was going to be done with the money? They were not sure because they did not know what their forecasts were.
Some 46% had no estimate of the number of participants. Half the people, almost one out of two, said they did not know how many participants there would be. This is supposed to be job creation. We are supposed to be making sure that people are working. How many people were they going to have working? They were not sure yet. They had not figured it out yet.
Some 25% had no description of the activities to be supported. Maybe it was going to be a cribbage tournament. Who knows? Let us get together down at the local hall, and who knows what we are going to do?
Another 25% provided no description of the characteristics of participants. Who are these people they are trying to meet the needs of? Who are these people they are trying to minister to? They are not sure yet.
Some 11% had no budget proposal. How much were they going to spend on it? They did not know. There was no budget proposal whatsoever.
Another 11% had no description of expected results. What did they hope to accomplish by this? They were not really sure. Just give them the cash anyway and they will try to figure that out as they go along.
That was the review of 459 project files. I think there were about 60,000 projects, if my memory serves me correctly. If that is extrapolated, we are looking at a pile of cash. We labelled this the billion dollar boondoggle. Yet the minister continues to get up and say “No, we know exactly where that money is”. Maybe they do. I do not know that I have accused her of saying that the money is missing, but I am sure saying the money is misspent. Where is it? This audit uncovered some amazing things.
Of all the files reviewed, 97% showed no evidence that anyone had checked to see if the recipient already owed money to HRDC. Nobody even asked if they had tried this one before. Did they get cash once already? No one even thought to ask that. It seems like a pretty basic question.
Eight out of ten files reviewed, that is 80%, did not show evidence of financial monitoring and 87% of project files showed no evidence of supervision. It seems to me that somebody somewhere ought to be asking these questions.
This is the billion dollar boondoggle that the minister tried to hide by saying that HRDC has already taken action to improve administrative standards and that a comprehensive action plan has been put into place. Dear knows we have heard about that action plan on and on again.
Let me look a little more specifically at the auditor general's report. He certainly was concerned about some of the things going on there and these huge percentages. The auditor general has made some comments on grants and contributions for many years now. In the December 1998 report of the auditor general, in chapter 27, section 12, he stated:
We have reported to Parliament on numerous audits of grant and contribution programs over the past 21 years. Many of those audits identified similar concerns.
In other words, here we go again. There was inconsistent application or interpretation of government policy on grants and contributions. We look at it and we say yes. There were inefficient use of funds and inadequate measures to ensure accountability by program recipients. Yes. There was lack of control, monitoring and evaluation. Yes. Reporting in the estimates and public accounts was inadequate to facilitate examination and year to year comparisons by parliament. Yes. That was in December 1998.
We saw exactly that going on in 1999. It was reported to the minister in January 2000 while the House was not sitting. We of course put in an access to information request on those documents. While that was over in the access department, the minister hurried and scurried and threw together a press conference to say that she wanted to be transparent and to bring this forward. I cannot exactly concur with that. It did not look transparent and forward to me. It looked like when your hand is caught in the cookie jar and someone is ready to give you a snap for it. You say you are sorry and apologize a little beforehand but only after you got caught.
Chapter 27.15 of the December 1998 audit of the auditor general on grants and contributions states that the 1985 audit of the direct assistance programs of the Department of Regional Industry Expansion reported a number of weaknesses in control processes and program delivery practices. In other words, it was not working. It has gone on for years. Any number of years ago I am sure the auditor general was making these same kinds of comments.
Chapter 27.17 states that in 1988, as part of the audit of the Department of Indian Affairs and Northern Development, ongoing concerns were reported in two main areas: the release of funds before complete documentation requirements had been satisfied and inadequate monitoring of band operations to ascertain whether funds were being spent for the purposes intended. It is unbelievable.
You run a business, Mr. Speaker. You know that you have to keep a pretty tight watch. You know also how much you lose through all kinds of things. You know that well. We talked about it lately. You lose too much. You have to use an iron fist when you are the manager of something because stuff leaks. It disappears. Staff steal things. Someone says “I really like these baguettes at the French Meadow so I am going to help myself to them”. Yes sirree. I would never accuse the member for Edmonton Southeast of stealing baguettes from French Meadow, but—