Debates of April 21st, 2004

Government Contracts

[Stephen Harper, Canadian Alliance, Leader of the Opposition]

I will read it for the Prime Minister, Mr. Speaker. It said:

--only one bid was submitted which was by Earnscliffe Strategy Group. Unofficial comments were received by...my organization, that the scope was unclear and bias to one firm, so why waste time and money on a bid that they had no chance of winning.

That is what it says here. If these contracting schemes with Earnscliffe were so legitimate, why did the Prime Minister's successor at finance immediately cancel them when he assumed office in 2002?

[Ralph Goodale, Liberal, Minister of Finance]

Mr. Speaker, again, let us review the chronology of what happened.

The first contract referred to here was in fact issued by the Conservative government. It was clearly within the limits and the rules permissible at that time. That was in September 1993.

Then, in July and September 1994 there were extensions of that previously existing contract because the new contracting process by public works was not yet in place. It was put in place in the fall of 1994. A competitive process was held, and that is when the Earnscliffe firm won on a competitive basis.

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

Mr. Speaker, the Prime Minister's problems with numbers are well documented. He failed to catch the $1 billion boondoggle at HRDC, missed the boat over $1 billion on the gun registry, does not have a clue about the $250 million wasted in a sponsorship scandal, and failed to differentiate between $130,000 and $161 million given to his shipping empire.

Apparently the Prime Minister is bad at math and has a poor memory. Now he claims he does not know how his buddies got these contracts.

Canadians deserve to know, who is running the show, Earnscliffe or the PMO?

[Paul Martin, Liberal, Prime Minister]

Mr. Speaker, in terms of a finance minister, myself at that time, who had some problem with numbers, let us go through some numbers.

We inherited a $42 billion deficit from that party and a debt to GDP ratio that was going through the roof. What is the net result? Today we are the only G-8 country not in deficit. We are the only one in surplus. I understand those numbers.

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

Here is a figure, Mr. Speaker, $161 million to CSL.

In a note to Chuck Guité, Warren Kinsella expresses his concerns about the improper awarding of contracts to the minister's friends at Earnscliffe. The note in question shows that the Department of Finance, headed by the current Prime Minister, had awarded four contracts in violation of Department of Public Works rules.

And the Prime Minister knew nothing?

[Ralph Goodale, Liberal, Minister of Finance]

Mr. Speaker, the hon. gentleman makes the allegation that somehow the contract was wired.

When the criteria is in the contract, for example, that the lead consultant should have a minimum of five years of media experience and that sort of qualifying ability, that hardly appears to be a wired contract.

Taxation

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, while ordinary people are paying income tax, CSL International, a branch of the Prime Minister's family business, is avoiding the tax man. Thanks to Bill C-28, personally ushered through Parliament by the Prime Minister, this is legal, provided all decisions are made in Barbados. It is just a sham, however; all decisions are made in Montreal.

Will the Prime Minister, who was in flagrant conflict of interest, at least have the decency to ask his family business to pay back the $100 million it has illegally diverted from the Quebec and Canadian tax systems?

[Ralph Goodale, Liberal, Minister of Finance]

Mr. Speaker, the hon. gentleman is going back to a variety of questions that he asked in the House a number of months ago, confusing two different companies and two different corporate rules.

They are quite separate things and the one does not effect or involve the other, and they should not be mixed.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, there is no confusion here. It is very precise. They would like to make things as confused as they feel.

The Income Tax Act calls for a foreign branch of a Canadian company to be administered abroad in order to be exempt from Canadian taxes. In actual fact, CSL International in Barbados is just a front; the orders come from Montreal.

Will the Prime Minister now have the courage to ask his family business to pay retroactively the taxes it avoided paying Quebec and Canada, to the tune of at least $100 million? That is what tax evasion is—

[The Speaker]

The hon. Minister of Finance.

[Ralph Goodale, Liberal, Minister of Finance]

Mr. Speaker, first, the hon. gentleman is referring to the impact of Bill C-28, from a previous Parliament, which has absolutely nothing to do with CSL.

Second, the hon. gentleman makes reference to the tax rules applicable in Barbados. Different people have different views on the tax rules applicable in Barbados.

I would refer him to an article that appeared in the February 13 edition of the National Post , written by a distinguished Canadian lawyer in a firm in which the senior partner is the hon. Lucien Bouchard.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, we knew the Prime Minister was in conflict of interest in passing Bill C-28, which, despite what the Minister of Finance has said, was tailor made for international shipping companies like the PM's. We now know that his family business was in contravention of the Income Tax Act. As a result, the Quebec and Canadian tax systems did not get $100 million in taxes.

Is the Prime Minister aware that a number of other companies have followed his example, and as a result $23.9 billion left Canada for Barbados in the year 2002 alone, thereby escaping taxes in Canada and Quebec.

[Ralph Goodale, Liberal, Minister of Finance]

Mr. Speaker, once again, the hon. gentleman is confusing the impact of Bill C-28.

It is clear in the very language of the legislation and it was clear when the evidence was heard before the standing committee of this House that Bill C-28 does not have, did not have, and will not have any connection or impact at all on CSL.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, how can we believe the Prime Minister when he says that his kind of politics will be different, when we realize he custom tailored legislation to benefit his family business, that his company received $160 million in hidden contracts, and that he also custom tailored contracts in favour of Earnscliffe, a company owned by his buddies?

[Ralph Goodale, Liberal, Minister of Finance]

Mr. Speaker, every piece of legislation put before the House that related in any way to offshore companies and offshore taxation presented by the then finance minister was aimed at closing the loopholes and establishing tax on a fair basis, going exactly in the opposite direction to that alleged by the opposition.

Lobbyists

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, my question is for the right hon. Prime Minister.

I say to the Prime Minister through you, Mr. Speaker, that the NDP is as concerned about the influence of corporate lobbyists as we are as to how they are hired and what the details of the contracts are. In this respect, it has come to our attention that Earnscliffe is sitting in on confidential meetings in which government policy is being decided.

I want to ask the Prime Minister, is this true? Could he tell the House whether Earnscliffe is allowed to sit in on confidential meetings where government policy is decided or not?

[Ralph Goodale, Liberal, Minister of Finance]

Mr. Speaker, government policy is determined in cabinet and by cabinet, with the Prime Minister in the chair. There are no private consultants in the room.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, it is not just about cabinet meetings. Again, I ask this question of the Prime Minister because it is about the nature of his government. It goes to the heart of what the influence of corporate lobbyists is in his government.

I ask the Prime Minister, what is the role of Earnscliffe in his government? Can he tell us, for instance, given that one of its clients is MDS, a for profit health care company, how we can have confidence in the government's decision with respect to health care when Earnscliffe, who has a client in the for profit health care industry, is right at the table and has such a close relationship with the Prime Minister?

[Paul Martin, Liberal, Prime Minister]

Mr. Speaker, as the Minister of Finance has just said, government policy is determined in cabinet and by cabinet.

There are outside consultants who may well advise on matters of communication and that kind of thing. There has been no lobbying by any firm of me as far as I am concerned.

I will say to the hon. member that there are outsiders who have certainly given us advice in terms of health care, to begin with, the hon. Roy Romanow.

Government Contracts

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

Mr. Speaker, the Earnscliffe scandal is nothing more than the government's version of insider trading. The Prime Minister is nothing more than Martha Stewart in a blue suit.

The fix was in to guarantee that contracts went to the PM's friends at Earnscliffe. A public works memo confirms that.

Why does the Prime Minister continue to mislead Canadians about his role in this scandal?

[Stephen Owen, Liberal, Minister of Public Works and Government Services]

Mr. Speaker, we have had various documents brought forward to our attention in this House. The place where these documents should be taken, so that the opinions expressed in them can be tested against other opinions, is the public accounts committee and the judicial inquiry that will be forthcoming soon.

Instead of raising in the House, and unshared with the public accounts committee, a memo which expresses a particular opinion, it should be put to the public accounts committee and to the author of that document. That is where these questions should be construed.

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

Mr. Speaker, I just want to ensure that I heard the minister correctly. He is saying now that he wants the public accounts committee to investigate the Earnscliffe scandal as well, the one that the Prime Minister is directly involved in.

Is that the minister's position?

[Ralph Goodale, Liberal, Minister of Finance]

Mr. Speaker--

[Some hon. members]

Oh, oh.

[The Speaker]

I am sure the Minister of Finance appreciates the ovation but we have to be able to hear the answer and we do not want to waste time. The hon. Minister of Finance has the floor. A little order, please.