Debates of June 4th, 2002

Supply

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, my best information this evening is that it deals with the GST in the normal fashion. If the hon. gentleman would just bear with me on that rather technical question, I will check further to see if I can get him some better information, if not tonight, then in the next day or so. However my information is that the normal GST applies.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Chairman, I have great respect for the hon. minister.

Just last month while on a visit to Saint John, New Brunswick which is my riding, the Minister of Labour who is from Moncton stated on a local radio show that in order to get government contracts or grants or sponsorships the people had to elect a Liberal member of parliament and it would have been far better for my riding if the people wanted to get any contracts or any business whatsoever to have elected a Liberal member.

Does the minister agree with these types of comments? Is that the way the government functions, not for the whole of Canada when it is elected, not to do what is best for all of Canada, but just for the ridings that elect a Liberal member of parliament?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, obviously during election campaigns candidates for all political parties are trying to make the most aggressive, convincing and compelling cases that they can make on behalf of their respective political affiliation.

Whether it is during an election or otherwise, I am sure the member for Saint John has a very colourful inventory of arguments as to why her electors would want to vote for her, not the least of which is that very exciting blue Santa Claus outfit that she wears every Christmas.

Let me say that all of us in this place have a duty to rise above our partisan considerations. When we are in this Chamber, which is a remarkably privileged place in our democracy, we have a duty to act on behalf of all Canadians.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Chairman, on June 7, 2001 the Prime Minister confirmed the existence of a cabinet committee responsible for overseeing the process to replace our Sea King helicopters. The Prime Minister further confirmed that the former Deputy Prime Minister was the chair of that committee. Can the minister inform us tonight who is the chair of the committee at this time and what are their responsibilities?

Can the minister tell us if he has been briefed on the maritime helicopter replacement program? More specifically, has he received a briefing on the costs and benefits of that contract having been split in two?

Also, the former Minister of National Defence and the minister's predecessor at public works and government services both indicated that the maritime helicopter program has been marred by delays. Could the minister now tell us the cause and nature of those delays and provide us tonight with an updated departmental timeline for the completion of the tendering process through to the delivery of the finished helicopters?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, there were a remarkable number of questions in a very short space. If the member could bear with me, I suspect there may be a supplementary.

The creation of cabinet committees, the staffing of cabinet committees and the chairing of cabinet committees is the prerogative of the Prime Minister. Since I have been in this role now for only nine days, I must confess I have not had an opportunity to discuss this particular matter with him or with the new Minister of National Defence. We will no doubt get to that very shortly because we understand the importance and the magnitude and the urgency of the situation.

I am at a bit of a disadvantage tonight. I really have not had an opportunity to canvass this fully with the Prime Minister or other members of cabinet.

I can tell the hon. member that a process is moving forward with respect to the procurement of the maritime helicopter. She will know that on January 29 we did post a draft pre-qualification letter and the latest specifications for the basic vehicle on the MHP website.

The deadline for industry feedback on that draft was March 15. We are now in the process of reviewing all of the comments received. We continue to dialogue with industry on this matter to ensure that when the process is formally launched, it is open, fair and transparent and not subject to challenge after the fact.

[Greg Thompson, Progressive Conservative, New Brunswick Southwest, NB]

Mr. Chairman, it appears that treasury board guidelines were broken when Lancaster Aviation, a company which at best had a contract which was questionable itself, moved spare parts owned by the Government of Canada into a warehouse. It allowed them to be moved into a warehouse in Florida owned by a convicted felon whose assets were seized by the government of the United States on charges that were laid against him. He was convicted of those charges but I have never received any assurances or documentation that the Government of Canada received fair payment. The government says it has but it has never provided us with the documents.

In addition to that, the serial number--

[The Chairman]

Order. That is one of the challenges we have when parties choose to share time. It is very difficult. We have to be mindful that we have time constraints of five hours and at the end of the day it means we might be taking away a slot from someone. It may not be the party who presently has the floor but that is neither here nor there. Please let us be mindful of the time.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, I know that the hon. gentleman has a very passionate interest in this subject. I dealt with one dimension of it when I was House leader in terms of the answering of questions so I understand his interest and sincerity.

The information I have before me is that the value of the assets that would be remaining in that particular warehouse would be something less than $1 million and that they have been disposed of in the proper manner for proper value received.

I will undertake the commitment this evening, even though I have not had a chance yet to fully explore this issue, to review it with my officials. Previous questions and answers notwithstanding, I will do my very best to provide as much information as I possibly can to alleviate the concern that the member has expressed.

My understanding is that there is nothing at all untoward about these circumstances, but because of the member's persistence on the subject I will try to be as forthcoming as I can as rapidly as I can as soon as I have the details.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Chairman, after two weeks on the job--

[Ralph Goodale, Liberal, Wascana, SK]

Nine days.

[Roy Cullen, Liberal, Etobicoke North, ON]

Nine days, and the minister is doing an incredible job.

I know there are some serious questions being addressed that have to do with procurement and sponsorship et cetera, but I will just change the pace a little bit, if I may, and talk about government online, e-commerce and some of those aspects. It is an area that is of great interest to me. Our colleague from Winnipeg South has spent a lot of time studying government online. One of his initiatives is to try to encourage more online activities and initiatives for the Government of Canada.

Government online of course has many different components. Some of them include accessing information for citizens. Some of them have to do with transacting through the federal government and that could be for goods and services.

E-commerce is of course is a rapidly growing area where many productivity gains are possible. We hear a lot about consumer to business e-commerce. There is government to business e-commerce. There is business to business e-commerce. In fact I believe that globally we have only begun to scratch the surface of what we can do with e-commerce.

I would appreciate it if the minister could comment on this and give us an update on the government online initiative, especially the secure channel project.

Before he does that, I would like to speak briefly about the MERX system. MERX is an acronym for something, but I do not know what. It is government online procurement. A small or medium sized enterprise or in fact any type of enterprise can log on to the online system. Through that system a business can very easily discover what procurement contracts are up for bid. It is a very handy tool. I know that many small and medium sized businesses, in fact many businesses of all descriptions, use this system. MERX is a relatively new system. It replaced the former system, but nonetheless I think it is an advanced and a better version of what preceded it.

Very recently at the House of Commons Standing Committee on Finance we were looking at the question of cost recovery and user fees. We did have a brief presentation by the Canadian Federation of Independent Business, the CFIB, which represents, as all of us in the House know, a very wide spectrum of small and medium sized businesses across Canada. It brought its brief to the finance committee in the context of cost recovery and user fees, and the CFIB was concerned because the fees had gone up from $5 a month to $30 a month, I think it was.

CFIB's discussion with the finance committee centred on the process. In its view the process had been fast tracked and there had not been adequate consultation, et cetera. That was one aspect of it and that really fits more into the vein of the cost recovery and user fees, which really falls within the purview of the Treasury Board, but nonetheless it is an area in which I have developed quite a keen interest and I am working on a number of initiatives.

The other aspect was that a small or medium sized enterprise that was paying $5 a month to access this government procurement system was then suddenly faced with a bill of $30. This is quite a significant increase. Representatives of CFIB were quite concerned about that, because for many small and medium sized enterprises this was the vehicle, the way that they could discover in an efficient and effective way what types of procurement contracts were available.

I wondered if the minister could discuss the MERX system and how effectively it is working and if he also could address the concerns of the Canadian Federation of Independent Business in regard to the fee going up from $5 a month to $30 a month without, in its view, adequate consultation, but particularly from the point of view that this is quite an additional cost burden.

I wonder if the minister could take that point and elaborate on it to give us a briefing regarding where we are with government online services, government procurement of goods and services and particularly the secure channel initiative. Could the minister put it in the general context of e-government with a particular focus on the MERX system and some of the concerns raised by small and medium sized enterprises?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, this whole subject area is a fascinating field of technological development that 10 years ago was essentially unheard of. In this day and age we are right in the thick of the so-called e-commerce, e-government phenomenon. It is revolutionizing the way in which governments around the world do business. Those governments that are the most successful and those that are prepared to lead the pack will be the ones that have a decidedly significant competitive advantage in this knowledge based, technology driven, highly skilled world in which we live. Both of the things the hon. gentleman mentioned in his question are a part of that.

For the benefit of some hon. members and perhaps anybody who may be watching this evening, the MERX system, the government electronic tendering service, advertises procurement opportunities subject to national and international trade agreements and is provided under contract by the Bank of Montreal using the service called MERX. That is where the acronym comes from.

The previously existing MERX contract was to expire at the end of May 2002 and it was extended under certain procedures. For the information of members I would note that a complaint has been received about the contract extension by the Canadian International Trade Tribunal, which is a trade resolution dispute mechanism in Canada. Because that complaint has been raised and referred to the CITT, it is not possible for me to comment in detail about anything else having to do with the contract extension because the CITT will deal with it in a quasi-judicial process in due course.

On the point about the fee that was charged, the evidence was pretty compelling that at the previous level the MERX system was losing money. If we were to continue this service on this broad based electronic basis to companies all across the country, a fee increment was required to keep it viable. I appreciate that moving from $5 a month to $30 a month is a hefty increase, but even at $30 a month it is less than some newspaper subscriptions and less than the average cable bill. It is a reasonably small amount of money.

Nevertheless, because the hon. gentleman has raised it and, as he mentioned, it has been raised in a committee of the House, I will certainly make some inquiries about the reasonableness of the fee increase and whether there is any possibility of any recourse with respect to it. However, it is important for this system to pay its way so that it can be available on a broad basis across the country.

With respect to the secure channel that the hon. gentleman referred to, this is another dimension of e-government and one in which my department is playing a leading role in establishing. Once it is completed, the secure channel will serve as a fundamental component to enable highly secured, responsive and economical online access to Government of Canada information and services, services such as: registering a business online; obtaining a federal business number; paying corporate taxes online; giving a company the ability to securely view its accounts with the Canada Customs and Revenue Agency online; and status requests for immigrant applications on behalf of Citizenship and Immigration Canada. Those are some examples of the kinds of transactions that we want to be able to do online.

Because of the nature of the information involved in just those few examples I referred to or in other cases with respect to veterans' benefits or commercial transactions and so forth, I think colleagues in the House would see why security on this channel is an extremely important thing. In order for Canadians to have confidence that they can use this new technology to its maximum advantage, they need to be assured about its security, therefore we are leading the way in establishing this secure channel.

Services such as registering a change of address with the Canada Customs and Revenue Agency should be available online by the end of the summer of this year. Services such as an individual between jobs being able to apply for employment insurance benefits or for job training approvals online with HRDC, Human Resources Development Canada, should be available by the fall of this year.

Services from Veterans Affairs, such as applying for veterans' benefits online, services such as being able to competitively bid for federal government contracts online with my department, services such as the Department of Foreign Affairs and International Trade Export and Import Controls Bureau's online system, all those services where privacy and security are key elements, are on the future agenda, which we hope to accomplish at the earliest possible date.

We have a schedule of how we intend to move forward in this regard. We want to do it right. We want to get the security right and we want to get the service right so that Canadians can deal with their government efficiently and in the absolute confidence that their information will be safe and secure. We want to make Canada the leader in the world in e-government and we are moving in that direction.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Chairman, I thank the minister very much for that update on some very exciting and worthwhile initiatives that are on the way in his department and also for the commitment to at least review the fee for the MERX system. I do appreciate that.

I want to switch gears and talk about another topic. It is always useful when a minister takes on his new portfolio to raise an issue. Some time ago I had discussions with a company in my riding that makes modular floor systems. If during or after installation someone wants to wire computers, these systems are easily replaced. As the computer configuration is changed, the wires can easily be put in different places. In terms of ongoing operating costs, if the office space has to be renovated it is a lot more inexpensive.

The problem the company ran up against is that the capital costs for its system are greater than those for a conventional system, but the ongoing operating costs are reduced as companies restructure, add more technologies and rewire their offices. What they ran up against of course, in their view in any case, was a bias toward getting the lowest price capital costs through the public works system.

Looking at it, I wondered at the time and in fact communicated with the minister at the time to say that on the basis of simply the capital costs this bid would lose out, but I asked if anyone was actually looking at the operating costs. This was an operating cost that would be incurred by a department of the federal government, but I forget which particular federal department. On an ongoing basis its operating costs would perhaps be increased but their capital costs would be reduced in the short run.

I just put that challenge to the minister. Maybe when he fully assumes all his responsibilities he might ask that question: Is anyone in the government looking at this on a life cycle basis and saying that not only do we need to look at capital costs but we need to look at ongoing operating costs? For the federal government as a whole, those operating costs would end up in various government departments. I put that forward to the minister.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, what the hon. member has described is an important concept. Part of what we contract for in terms of the various goods and services we acquire on behalf of the Government of Canada is related to upfront capital costs, and part of course is related to operating costs over time.

Earlier this evening we had a good example of the distinction when a question was asked about the federal buildings initiative. By and large, if we install energy efficient equipment in either new buildings or retrofits the upfront capital cost will be higher. However after a while it is amortized and we make savings on lower energy bills. The way we have done this through the federal buildings initiative has been so successful it is now entirely financed by the private sector which gets paid back over time on the savings that come from energy efficiency. The upfront capital cost is higher but the ongoing operating costs are sufficiently lower that we are ahead of the game and the private sector makes a profit.

I refer to this to underscore the member's point that there are two elements: initial cost and operating cost. We should be prepared to look for the best long term value because a cost is a cost whether it is initial capital or operating costs over time. Both are important from the taxpayer's point of view.

The whole issue of procurement reform is something we take seriously. I will try to make it a priority in finding better ways to achieve value for taxpayers.

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Chairman, I have lots to say to the minister regarding the Groupaction problem. The minister has been making all kinds of warm and fuzzy noises about how he will get to the bottom of the issue. I want to ask him a couple of simple questions.

Because this is on behalf of the Canadian taxpayer, will the minister work with his departmental officials to voluntarily disclose any illegalities or any breach of the Financial Administration Act he may discover, either to the RCMP if it is a criminal situation or to the House if it happens to be an administrative situation? Will the minister do this so we can see that he is interested and committed to getting to the bottom of the situation?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, this is my first formal opportunity for an encounter with the hon. member for St. Albert. I do not know whether that is good or bad but it will certainly be interesting. In any event, I am pleased that we are in our respective roles. I hope we will have a constructive relationship pursuing what we both want in terms of the public interest.

On the issue of disclosure, it is an operating principle and practice of my department and my officials. Complete co-operation with the auditor general is a fundamental dimension of what my department does and would do in all circumstances. The auditor general has a function to perform and it is the obligation of government departments to co-operate and collaborate with her. There are specific provisions in the law including the Financial Administration Act that require collaboration and disclosure when certain kinds of information come to the attention of officials.

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Chairman, I hope the minister did not purposely evade my question. I specifically asked if he would direct his officials to voluntarily disclose as they investigate their files or the verbal commitments that have been made because in many cases there are no files. Will he make that commitment?

I am not talking about collaboration with the auditor general. I am asking if the minister will voluntarily disclose to the RCMP if he finds there are illegalities or to the auditor general or the House if he finds there are serious breaches of the rules of contracting for government.

Is the minister serious about getting to the bottom of the problem? Will he disclose what he finds rather than waiting to collaborate with someone who comes along and asks the question?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, the sections of the Financial Administration Act I referred to a moment ago are by no means passive or reactive. They impose a positive duty on public officials to make the kind of disclosure the hon. gentleman has referred to. The duty exists in the law already.

However as I have said on many occasions in the House, there will be full co-operation on my part and on the part of all my officials with any investigation that may go forward whether by another government department, the auditor general or the RCMP. The proof is that we have already made references to the RCMP as we are obliged to. We will continue to do so.

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Chairman, it seems the minister is purposely avoiding making a commitment to voluntarily disclose information. He is talking about collaboration and co-operation with other agencies. I hope the minister has directed his officials to go through the files, take a look at everything in which the name Groupaction shows up and ask whether it is legitimate, proper, and has received the appropriate approvals. If something is not legitimate I hope he would voluntarily disclose the information. I hope he would not wait for the auditor general to try to find it or for the RCMP to launch a criminal investigation.

However let us move on. A lot of this has to do with advertising. The Prime Minister said it is better to waste a few million dollars on illegalities than to lose the province of Quebec. I do not believe that for a minute, but let us find out how much advertising is going to Quebec and how much is going elsewhere. What is the total advertising budget of the Government of Canada, and what is the breakdown by province?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, first, I will deal with the first part of the hon. gentleman's question. He is going to considerable lengths to leave the impression that I am not being forthcoming, that I am declining to disclose information or that I am hiding something. The record in the House for the last nine days discloses exactly the opposite.

I have indicated very clearly that where there are administrative mistakes we will find them and root them out. Where there are overpayments we will recollect and ensure the Government of Canada is reimbursed. If there is any evidence of illegal or criminal activity it will be instantly referred to the RCMP. I have said that over and over again. Any implication on the part of the hon. gentleman to the contrary leaves the misimpression that there is an effort to hide something. I know enough about being House leader that I cannot use unparliamentary language, but I would appreciate that he not do so because on my part it is flatly untrue.

Second, with respect to the advertising question, the global amount on an annual basis is in the neighbourhood of $200 million. I do not have a province by province breakdown with me tonight but I will try to obtain the information and provide it subsequently if it is available.

The hon. New Democratic member from Manitoba raised the issue of regional balance and fairness in government programs. I would indicate again my absolute commitment to that. Coming from a region of the country I am very anxious to see a balance from coast to coast to coast.

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Chairman, I thank the minister for answering the first part of my question. We now have a commitment from him to be forthcoming and voluntarily disclose information.

If the minister does not have a regional breakdown on a province by province basis could he tell us how much of the $200 million is spent in the province of Quebec?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, as I indicated, I do not believe we have the provincial breakdown available tonight. We are checking to see if it is accessible this evening. If it is, fine, we will provide it. If not, I will provide the best breakdown I can as soon as possible.

As to the earlier point about being forthcoming with information, making references to the police where appropriate, fully providing information to the auditor general and so forth, I made that commitment last Monday, less than 24 hours after coming into office.

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Chairman, in addition to Groupaction and Groupe Everest there is the problem with Canada Lands. The minister's predecessor who is now Ambassador to Denmark seemed to be embroiled in something there.

I will give some background as to how Canada Lands operates. The fundamental concept is that when the government wants to dispose of property it transfers it to Canada Lands and takes back a promissory note for the approximate value. When the land is sold the promissory note is repaid with cash from the sale of the property. It is a fairly simple transaction. It is not that complicated.

However with Downsview Park Inc. some property was sold there for $19 million. Rather than repaying the promissory note it was used as a cash flow to start running a business of property development. This was outside the confines of the rules of parliament which say the money should have gone to the Consolidated Revenue Fund. Why did it not come back to the Consolidated Revenue Fund? That is question number one.

The other point is that there were two loans of $50 million each, totalling $100 million interest free for 49 years. The government does not expect to see it again because it is now treating it on financial statements as equity rather than a debt to the Government of Canada.

Why is the minister permitting that situation when Canada Lands and Downsview Park are not subject to the Access to Information Act?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, as much as I would dearly love to be able to respond to the hon. gentleman's question I must point out that I am not the minister responsible for the Canada Lands Corporation. That is within another minister's portfolio. I would certainly wish the other minister the joy of a committee of the whole proceeding so that he might answer the question, but it is not within my portfolio of responsibilities.

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Chairman, I hope the hon. minister will not avoid all the questions about Canada Lands. His predecessor who is now Ambassador to Denmark was heavily involved in Canada Lands and said “the rest of Canada is for Canada Lands to administer but Quebec is for us to administer”.

I will ask the minister a blanket question: Will he answer any questions about Canada Lands or do I need to find another line of questioning?