Debates of June 4th, 2002

Supply

[Michel Guimond, Bloc, Beauport—Montmorency—Côte-De- Beaupré—Île-D'Orléans, QC]

Mr. Chairman, while he is reviewing and pondering, I would like the minister to think about the link between those agency names that pop up all the time and the contributions to the Liberal Party of Canada.

People question the credibility of the system because of the link between the excessive 12% rate for sponsorships and the number of those companies that have made contributions to the Liberals' campaign fund.

The minister is being very naive. We almost want to give him communion without confession, as people used to say when I was young and folks still used those expressions derived from our Judeo-Christian tradition. We would almost be tempted to do so. I would also like him to think about that.

Furthermore, I would like the minister to examine the proposal of the Bloc Quebecois asking that there no longer be any intermediary and that the total amount of the visibility sponsorships of the government of Canada be paid directly to the organisations responsible for the events, even if you have to appoint officials--you have officials with you--who will check whether the rules for the awarding of sponsorships were followed or not.

We must not forget that all this is being done with taxpayers' money. I would like to correct an error the minister made in his preliminary comments. He compared these contributions to those of a private company sponsoring an event.

I am sorry, but this is not like a private company. If, for example, Volkswagen, Audi or BMW sponsors the Grand Prix de Trois-Rivières, or if BMW sponsors the Vancouver Grand Prix, what we have is a private company that is accountable only to its shareholders.

However, in the present case, we are talking about taxpayers' money, and people have a right to ensure that the money is given in full to the organizations responsible for the events.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, I have two or three points in response.

On the issue of transparency, I think in this whole difficult controversy we are seeing transparency at work. For example, the statistics that have been referred to this evening about the value of sponsorships in past years and the commissions paid and so forth, that information is made accessible either through our websites or through the well established access to information procedure. That form of accessibility and transparency is obviously working as it should.

With respect to the financing of the Canadian political system, we have a law governing that subject that requires disclosure and publication. That system is working as it should.

There are some well established examples of transparency here that are functioning quite well.

In terms of the hon. gentleman's basic point about sponsorships that are contributed by the Government of Canada being a use of taxpayer dollars, that absolutely goes without saying. If a sponsorship is offered by a private sector corporation, as the hon. gentleman said, the corporation obviously has a responsibility to its shareholders. In the case of a sponsorship offered by a government, whether it is the Government of Canada, the government of a province or the government of a municipality, then the shareholder is the taxpayer.

I want to assure the hon. gentleman of my absolute respect for the taxpayer's dollar and my determination that in the sponsorship program there will be transparency and accountability. The taxpayer will get value for the dollars expended.

[Michel Guimond, Bloc, Beauport—Montmorency—Côte-De- Beaupré—Île-D'Orléans, QC]

Mr. Chairman, in the same vein, what does the minister intend to do about the payment of commissions when no work was actually done?

I give the example, among others, of Groupaction's second report, which cost $525,000 or $550,000, and which has yet to be found. The former minister responsible for the department, the hon. member for Glengarry—Prescott—Russell, told us very clearly in this House that he was unable to find this second report. Yet, taxpayers paid $550,000 for it.

Does the minister maintain what he said earlier, namely that a 12% commission for work done is reasonable? What do we do with regard to Groupaction's second report, which no one can find?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, my predecessor looked at this very situation when it was drawn to his attention. He found it to be unacceptable and he invited a full audit by the auditor general of three particular contracts with that particular firm. At the same time he suspended business activity under the sponsorship program with that firm.

The auditor general did her work. She concluded that those particular contracts were unacceptable and she made certain references to police authorities as she should have done.

Accordingly, the matter is being pursued in the appropriate manner by the government, by the auditor general and by the police authorities. We are just as anxious as any other member of the House to make sure that particular issue is fully ventilated and that the proper course of justice is taken.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Chairman, I have here a list which comes from his department. It is the list of sponsorships and I believe that his advisers will recognize it. It really is from his department.

For example, there is a column showing the date of the event. In the following column, you have the word requested which probably means amount requested, support requested. The word value is a bit more complicated, but it seems to correspond to the amount given as a sponsorship. Then we have the 12% and the 3%. Other columns follow.

In the case of the Jeux de la Francophonie, beside the word requested we have an amount of $545,000; beside the word value, an amount of $850,000. They gave $300,000 more than what was requested.

Again for the Jeux de la Francophonie, for a request of $1,245,000, they gave $1,285,000, or $40,000 more than requested. Groupaction or Groupe Everest took its 12% per cent on that amount and the one who signed the cheque took another 3%. The grants given exceeded what was requested. Does the minister consider this to be normal?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, as the hon. gentleman no doubt knows, the Francophonie games are a very large undertaking wherever they may be held in the world from time to time. In the case of the event that was held in Canada, the planning and preparation was spread over a number of years. In particular there was sponsorship activity over a two year period.

Given the nature of the event, I think it is fair to say that budgets and requirements change over time. This happens from time to time. It is not the normal case with every file, but in some cases, particularly when we are dealing with large international events, the budgetary requirements periodically change.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Chairman, like my colleagues from the other parties, I would like to begin by welcoming the new minister to his new challenging task. We all have a great deal of hope and optimism that some of the many problems we have been dealing with will finally be dealt with properly.

I would like to compliment the minister for what I see as a very good first week in three different senses. First, for having frozen all payments on the sponsorship contracts, at least until a proper investigation can take place. That was the right thing to do and I believe the hon. minister did it within 48 hours.

Second, I approve that more things are being referred to the RCMP as they come forward, to expand the things that we are putting in front of the RCMP to look for criminal actions.

The third and final thing that I will praise the minister for, and then we will revert to customary estimates debate, is he volunteered to consider repatriating this work within the public sector. I am very glad that it came from the minister.

By turning a comment into a question, I would ask the minister to consider this first. There are more things here than just the cost factor and the cost benefits. There are more and better reasons perhaps for bringing this work back into the public sector than just the cost savings. I would argue that even if it costs more to deliver it through the public sector, we could do away with what I call the terrible graft corruption.

The evidence that the auditor general has unearthed and the body of evidence the RCMP is dealing with now would indicate that this set of contractors have soiled their own nests to such a degree that the government should not trust the communications sector with this important work.

What would the minister need to hear in terms of arguments to convince him that the right thing would be to take that work away from the private sector and bring it back into the public sector and under the scrutiny of the public accounts committee and the oversight of parliament?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, first, let me thank the hon. member for his kind words. I hope he and I and all other members of the House can work constructively to ensure that in the future some of the problems we are discussing tonight are avoided and that we can refer someone else's estimates to the committee of the whole so other ministers can enjoy this exciting phenomenon.

I would have to apply one caveat. In any matters that have been referred to police authorities,at this stage no charges have been laid and no findings have been concluded. We need to be careful when arriving at conclusions before police investigations, and in some cases before they have even been launched, have arrived at a result. In deference to the legal process, we need to be careful about that.

On the point about the arguments that need to be mustered about how best to change the administrative process, I will certainly be looking at a whole range of models for how we might do this in future. I would welcome the input of members of the House of Commons either individually or perhaps through the new committee on government operations and the estimates. That might be an appropriate vehicle. Let me just say that my door is open. If anyone has a good idea on how to do this better, I would be more than happy to have all the advice I can get.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Chairman, I appreciate the openness of the minister's remarks.

The public accounts committee is dealing with the Groupaction sponsorship scandal, if we can call it that. As of today we finally agreed on a partial list of witnesses. Two of those witnesses are two members of the staff that the minister has brought here today, the deputy minister and the executive director of communications.

When being briefed by the Law Clerk of the House of Commons, one thing that came up was that sitting public sector employees may not feel comfortable being forthright in answering all questions completely openly and honestly. In fact they may in fact have a legal right in common law to not divulge everything due to the duty of loyalty to the employer.

Given that the standing committee has some power to oblige people to respond, would the minister direct those civil servant witnesses who are still employed by government, because some of our witness are in fact no longer in the civil service, to answer forthright, openly and divulge everything they know about the delivery of the Groupaction scandal when those questions come before the public accounts committee?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, obviously all of us want to ensure that these matters are dealt with completely. I have only had a week and a day to get to know my new officials but I have no doubt that they are endeavouring in every way to be open, transparent and forthright. They very much want to be associated with program successes that are a credit to the department, to the government and to all Canadians. I believe they will do their very best to be completely forthcoming with the committee.

If some legal impediment stands in the way, I do not know of it. If there is one, I would be happy to look at it and see if there is a way it can be removed. My view at the moment, based on my very brief association with my very good officials, is that they will co-operate in every way to deal with the issues that are outstanding and improve things for the future.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Chairman, the last point I will make on the sponsorship scandal is to comment, for the record, that I do not mind spending $40 million a year or even more if it means promoting the Confederation of Canada across the country to remind Canadians what a great and fragile nation we are dealing with today.

What I do object to is a great deal of that money is being spent in one province, the province of Quebec, on the unity issue. Coming from western Canada, especially rural western Canada, there is barely any visibility or one would never know there is a strong central government in Canada. With all the privatization, cutbacks and closing of public institutions, there is not even a federal building in a small town in rural Manitoba. However at the post office in the 7-Eleven, a whole generation of kids are growing up thinking the post office is 7-Eleven. They do not give the Canadian government credit for those fixtures. The only presence of the federal government might be rented space in a strip mall.

I do not think we should throw out the baby out with the bathwater and cancel the federal government sponsorship programs. If the minister is going to continue with the $40 million or more per year, would he commit to each province getting an equal amount of this $40 million, at least by ratio and proportion? Will he look retroactively at some makeup pay for some of those provinces like mine and probably other provinces in Atlantic Canada that were ignored and bypassed by these programs? Will he make the commitment that if spending continues, it will be done on a fair shared basis across the country?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, first regarding the hon. member's initial comments about investing in ways in Canada, that build inclusiveness, cohesiveness, adhesion and a sense of unity, it is appropriate to note that we live in a fair, decent, diverse and tolerant country, one that is the envy of much of the rest of the world. When we see events as they are unfolding at the moment in places like the Middle East and elsewhere, it indicates what a precious thing it is to have the capacity as we do to live together so successfully in our diversity, and we need to contribute to all of that. I support the sentiment he has expressed about the sponsorship program where it contributes to that kind of attitude.

The problems we are dealing with tonight are ones that existed in an old style program prior to the year 2000. Since 2000, we have been working hard to identify the problem areas and to make the necessary corrections. We have made progress. We have a way to go yet. We will certainly be examining delivery mechanisms that will improve upon the situation that existed in the past. Coming from Saskatchewan, the province next door to his, I always look for regional balance, regional equity, regional consistency and that will be one of the objectives for which I will strive.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Chairman, as I have a few minutes left, I will ask one more sponsorship related question.

Compass Communications is a Halifax firm owned by a Tony Blom, who was a Liberal strategist in the last election and the cousin of former provincial Grit party president, Gerry Blom. He seems to get all of the contracts in Manitoba.

Only twice since I have been a member of parliament has a Liberal cabinet minister allowed me to deliver money in my own riding. Usually that is done for me by neighbouring Liberals. Both sponsorship contracts were from communications-public works. Both times they were little rinky-dink cheques and both times they had to be administered from Halifax by Compass Communications. I could not understand that a lousy $50,000 contribution to a great big music festival had to be administered for a fee from Halifax.

Would the minister, as part of this new commitment to try to be more equitable regionally, not admit that if the money is to be delivered within Winnipeg we can find a Winnipeg communications company, that is, if he has not repatriated by then and delivered it himself?

We have skilled and talented people in the province of Manitoba, some who have communications skills as well. Would the minister make commitment to us that in the future we do not need to farm this out across the country?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, the nine firms that are acknowledged as standing agents for this program, as it stands at the moment, were all selected by means of a competitive process. My predecessor identified some of the problems with the present roster, including the issue of regional balance. He indicated, while he was Minister of Public Works and Government Services, that we would go through the process again of a new request for proposals and a new selection of standing agents. That process is to commence on or about June 15, with a full national competition to be concluded in the fall.

Certainly one of the objectives of this new exercise would be to remedy any deficiencies that are apparent in the list, including the question of regional balance. That is something that will unfold over the course of the next number of months.

I would also note in my answer the caveat that the hon. gentleman referred to in his question and that is, for the future there may or there may not be a requirement for external agencies at all. That remains to be determined and I am certainly looking at the alternative of not requiring such agencies for the delivery of a program like this one.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Chairman, moving from that, the issue of sole source contracting keeps coming up. Certainly the auditor general commented on that.

Under the current rules, sole sourcing is an exception to the competition process. It is acceptable, under government contract regulations, when there is a pressing emergency, when the contract is valued at less than $25,000, when it is not in the public interest to solicit bids or when only one person or firm is capable of doing the work.

When public works wants to sole source, it has to do an advance contract award notice. I believe it is called an ACAN. An ACAN is used to publicly advertise the government's intention to award a sole source contract. Given that it is only acceptable in emergencies or when the contract is $25,000 or less, in 1997 contracts over $25,000 totalled $3.9 billion and $1.34 billion of that was sole sourced. Clearly, more than 25% was sole sourced.

How does the department justify that? Is that still the current situation? Is there as much sole sourcing now as those rather dated statistics?

While I am at it, I have more specific questions. Of those, an examination was done in 1999 by the auditor general. Of a sample of 50 sole sourced contracts that were examined, 25% were neither adequately justified or linked to program objectives, 95% did not include an analysis of alternatives that were adequate to support the decision to contract and in 46% of the cases the statement of work and requirements, the expected performance and the outcome, the level of effort, the value and the costs were completely unclear. They were incomprehensible in fact.

It is a long question regarding the issue of sole sourcing. What is the current status? How much of the overall spending is sole sourced? Do we continue to be plagued by the problems that the auditor general identified in that practice?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, the statistics I have available to me on the question would indicate that back in 1997, which I believe was the year referred to in the question, in Canada's case, competitive contracting stood at the 80% level. At that time it was significantly higher than Europe which was at 63% or the United States which was at 63%, or Japan which was at 73%. We were doing better than most of the world even in the situation that was referred to in the question and described as unacceptable back in 1997.

I am pleased to report that in the intervening five years the Canadian performance has continued to improve and for the latest year for which statistics are available, which would be the calendar year 2000, 92% of the total value of government contracts in Canada were awarded competitively. We have moved up from 80% to 92%.

I agree with the general sentiment in the hon. member's question that we should be striving for competitive bidding to the maximum extent possible. There will be circumstances based upon pressing emergencies, dollar values, the public interest, or the single capabilities of a particular supplier where sole sourcing will make the best public policy. However that should be the exception and not the rule.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Chairman, I would like to ask a question that merges two of the minister's portfolios. The government owns 68,000 buildings under public works, many of which are not energy efficient because of the time they were built. Would the minister commit to energy retrofitting more of those buildings to save operating costs, create jobs and reduce harmful greenhouse gas emissions? What sort of a schedule would he recommend to rehabilitate those energy wasteful buildings?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, there is one interesting statistic. Back in 1995 when the current Minister of Health was the energy minister she set the target, in terms of greenhouse gases from federal government operations, to reduce them to 20% below 1990 levels and to reach that target by 2005. We have already reached that target. Our new target is now to get to 1990 levels minus 31% by the year 2010 and we are confident we will reach that.

The federal buildings initiative is a key part of this. It is so innovative. The private sector finances it and is paid back through the energy efficiency savings over time. It is a terrific program. We have promoted it reasonably well. We can go a lot further. I am glad to say that the public works department is one of the leaders in promoting this program through the Government of Canada.

At the moment I do not have a specific timeline to offer the member, but I refer him to the government House in order commitment that we made under action plan 2000 for Kyoto. He will find more detail there in terms of how we intend to pursue it.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Chairman, I wish to thank the new public works minister for being here and undergoing this rigorous new process, and also to express my regret that we were only working such a short time in his previous portfolio as government House leader. I do note that his predecessor was there for a relatively short time. I also would note for the record and for members present that the previous minister to undergo this process was dismissed from office. I do not wish that upon the minister in any way.

The minister spoke of the excellent and courageous work done in his department. I want to acknowledge that and predicate my questions with a concern that the government in many instances seems prepared, particularly the Prime Minister, to blame bureaucrats for what happened with respect to scandals in this department.

The auditor general issued what generally was received by Canadians as a rather scathing condemnation of the actions of some senior members within the department, and yet the trace seems to be one which suggests that they were acting upon instructions. Some of those commentaries by the auditor general, Ms. Fraser, include observations that there was no documentation on how the need for the services was determined or how the price was arrived at. The basis on which contracts were awarded was unclear.

She goes on to talk about the payments that were made. We were informed about verbal advice but no such advice was either stipulated in any way or contracts documented as having been received. She talked about the practice of senior bureaucrats saying that was how business was done. She basically went on to say, as an overall comment, that every rule in the book was broken.

With that as a backdrop I am concerned, as are Canadians, about the way in which these sponsorship programs are being administered, where the blame is being placed and this effort, not of this minister in particular but of the government, to shift the blame away and avoid any kind of ministerial accountability.

I want to put on record some important comments made by the Prime Minister on June 12, 1991, and recorded in Hansard where he stated:

I took all the credit. On the other side of the ledger, when I made a mistake I took the blame.

This was in reference to civil servants. He went on to state that same day:

You take the blame when something is wrong and you do not finger anybody else but yourself. That is what a person of dignity does.

Further he stated:

--every minister in the cabinet that I will be presiding over will have to take full responsibility for what is going on in his department. If there is any bungling in the department, nobody will be singled out. The minister will have to take the responsibility.

Two ministers preceding the current minister did not appear to be willing to take any blame. In fact one predecessor was awarded and given a diplomatic appointment to Denmark.

There is a longstanding pattern, and I would suggest epidemic, of political interference when grants are rejected or the amounts awarded seem to be deemed insufficient. For example, the intervention with the Francophonie Games, the Highland Games, the deputy minister's intervention with the Tulip Festival, the regatta in Shawinigan that seemed to get more money for no good reason, and the Prime Minister's much heralded intervention with the president of the Business Development Bank of Canada.

I have two questions for the minister. What concrete steps have been taken to guarantee that senior civil servants, or any civil servants for that matter, will not be singled out for blame if they are overruled in their decision making capacity for political reasons? Would he also agree that this highlights the need for whistleblowing legislation to protect that scenario from playing out as it has in recent days?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, the internal audit that was done by the internal audit section of Public Works and Government Services Canada found, in relation to that period of time from 1997 to 2000, deficiencies in documentation. There were deficiencies in contracting procedures and in management practices.

But that internal audit did not disclose evidence of fraud, misuse of funds or criminal intent. Similarly, in the findings of the auditor general it seems to me on a fair reading of her report that she found unacceptable management practices and procedures but did not make a finding of political interference.

What has happened subsequent to that is that she of course is undertaking a full value for money audit on a government wide basis with respect to all sponsorships and advertising activity. In addition, either the auditor general or the other appropriate government officials, if and when matters requiring legal action were drawn to their attention, would make the appropriate reference to police authorities.

The evidence would show that all of the necessary steps are being taken to ensure that the level of probity that the hon. member would seek to achieve is being pursued aggressively by me, and by the department.

I would add one small point about political representations made by members of parliament. There were some allusions in the hon. member's question to that indirectly. It is perfectly legitimate for members of parliament to indicate to the minister responsible for a program that they support that program or a particular application under that program.

There are letters on file with my officials from members of all political parties in the House indicating their support for particular sponsorship initiatives. We would not want that form of representation on the part of members of parliament to be in any way impugned or limited, and I do not think the hon. member meant that in his question but I wanted to make the point clear.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Chairman, I appreciate the minister pointing that out because that is not at all what I was suggesting. There is an important difference to be pointed out. The actions of individual members of parliament, be they opposition members or government backbench members, differ greatly in that they might make representations that show support or illicit support for a certain project in their riding. They do not have their hands on the levers of power to make that happen. That is the important difference. That is where other ministers, not this minister in this government, have crossed that line.

I want to allude to the point that the minister made himself. He admitted there was no problem with community events. We agree with that. Previous speakers have mentioned they support these type of events being sponsored by the government. The problems rests in the delivery of these contracts. The government is responsible for the delivery.

The auditor general, in committee just last week, indicated that the officials in public works were well trained, experienced and senior enough to know that they were breaking the law, or breaking government guidelines or acts, in their actions. The auditor general's report states clearly they went about their business in an improper way. This leaves one conclusion. These senior bureaucrats were not doing this for their health or advancement. They were taking direction. Who would be giving that direction, if not the minister?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, again on the basis of the information that is before me at the present time, information that would be drawn from our own internal audit or information that would be drawn from the work of the auditor general thus far, there is no evidence that I am aware of, of fraud or misuse of public funds or criminal intent.

I would say that if and when there are any suspicious circumstances that come to the attention of me or of my officials, we are not only honour bound but indeed under the legal duty to refer those matters to the appropriate police authorities. Those authorities decide quite independently, as should be the case, whether an investigation should be launched and in what direction that investigation should go. The police are totally independent in making those decisions.

I want the hon. gentleman to know that we are pursuing all of these issues in a very assiduous way. I for one want to get to the bottom of any questionable circumstances as rapidly as possible and have the course of justice pursued.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Chairman, I thank the minister for his response but he would also know that the auditor general in her capacity has a very limited mandate to go far afield in probing these issues, as does the RCMP. It is limited, as the minister has correctly pointed out, to look for illegal actions as opposed to immoral or improper ones. A broad public inquiry is what is needed.

The Prime Minister stated in Winnipeg just the other night that perhaps millions were stolen. I would suggest that similarly he should be turning over any information that he might have, if he is aware that millions have been stolen. More to the point, what is being done to recover that money? Has that investigation been started to recover that money?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Chairman, the Prime Minister and the Deputy Prime Minister have been asked similar questions in the House in the last number of days. They have pointed out that perhaps there were some comments by the Prime Minister that were taken out of context and misinterpreted.

The real gist of what the Prime Minister was saying is something that I repeated earlier this evening in my opening remarks. We are determined to find the administrative mistakes and problems and to ensure that they are corrected. Where there may be overpayments, we certainly want to see that money recovered and recollected by the Government of Canada. If there is any evidence of illegality on the part of anyone, that must be investigated and prosecuted under the law.

It is certainly my intention to make sure that for the future this program stands up to the tests of transparency, accountability and value for taxpayers' dollars that Canadians would expect and that the problems that existed in the past are properly pursued.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Chairman, just before I turn the floor over to the member for Saint John, it is my understanding that private advertising companies that sell advertising must charge GST and remit to the government.

Can the minister confirm that Communications Canada does in fact charge GST? For example on the Lafleur contracts, on behalf of his department or Heritage Canada, does it charge or remit GST and if so, how many contracts were awarded where GST was charged?