Mr. Speaker, I welcome the opportunity to discuss and review the government's actions with respect to the sponsorship program.
I want to point out that I have been on the public accounts committee. For the last three months the committee has been meeting on average about four times a day. There are only one or two members on the present committee who have the advantage of having served on the previous public accounts committee. The chair is one of those members as am I. We followed this issue back in 2002 and the investigation that we have here today.
I am not going to stand in the House of Commons to defend the indefensible or to make excuses for the inexcusable. There are certain problems but we have to bear in mind also that these events occurred six to eight years ago. Remedial action was taken about three and one-half years ago. Having said that, it is a serious situation. The committee has spent a lot of time on it and has heard from many witnesses.
I attribute no blame in this; I do not blame anyone. I am not going to stand here and blame people, but because of the timing of the electoral cycle it is my position that to a certain extent politics has contaminated the whole process, especially recently. It is my hope and prayer that we are able to write a report, even an interim report. The committee does have some excellent recommendations to make. If there is an election, the committee can reconstitute itself and continue its work.
We have more than enough information to make a certain number of very bold recommendations to Parliament. We had a great meeting this morning. I hope that a report will come forward containing a number of bold recommendations with respect to the whole issue of ministerial accountability, deputy ministerial accountability and a whole host of other issues that ought to be addressed by the committee.
I would like to spend a few minutes providing members of the House with some background information on the sponsorship program and in particular, some of the decisions that were taken by the former minister of public works and government services, the member for Wascana, who as everybody knows is the present Minister of Finance, to get to the bottom of the matter. I will also address the unprecedented actions taken by the government since the release of the report of the Auditor General on February 10 this year.
There have been questions concerning the program's former delivery mechanism through communications agencies working on commission, and I have my own view on that. There is no place for the Government of Canada to deal with advertising agencies, or any other agencies for that matter, on a commission basis. I hope that will be a firm recommendation from our committee and I hope it will be accepted by the government.
There were also concerns about transparency, accountability and value for money. The previous speaker said that $250 million was missing or stolen, but that is not correct. It was clearly pointed out that was not the Auditor General's position. Those statements will continue to be made in the House and in the streets of Canada. I can say to members here and to Canadians that is not correct and that is not what the Auditor General said. Anyone who says otherwise is not being truthful with themselves, they are not being truthful with the House, and they are not being truthful with Canadians.
The issue is value for money, and because of the whole issue of value for money, the program's credibility had been seriously eroded, particularly in light of the highly critical analysis which was so well done and so well documented by our Auditor General. These questions triggered public concern, and rightly so.
On May 26 the then prime minister appointed the former minister of public works and government services and gave him the mandate to find out what went wrong and to fix it. The former minister's first action following his appointment was to impose an immediate moratorium on all sponsorship initiatives. Everyone in the House has had initiatives in their own ridings. Members on both sides of the House were certainly aware of the moratorium and the problems that followed from that. This action had to be taken. It gave him the opportunity to properly assess the situation.
The former minister would have been lobbied hard by members, his own colleagues on this side of the House and members of the opposition, so he did not take lightly to the decision to impose the moratorium on all sponsorship contracts. The moratorium meant that the full demand for the Government of Canada sponsorships was not met in the summer of 2002. No one, least of all the former minister, wanted to penalize these organizations, these groups, these communities and these events. However, the moratorium was absolutely essential to ensure that the public interest and the public good were fully protected.
I would like to provide a bit of perspective of the former minister's portfolio. Again, this is not to defend the indefensible or to excuse the inexcusable, but we are talking about a very large department. It involves 1,400 public servants handling some 60,000 purchases every year worth approximately $10.5 billion. The Department of Public Works and Government Services deals with everything from paperclips, to vehicle fleets, to consulting and translation services, to office towers and buildings right here on the precinct of Parliament Hill, from information technology to medical equipment and military equipment.
Of that $10.5 billion total, the sponsorship program represented approximately $40 million per year, less than one-half of one per cent. Again, it would not make any difference if the amount was $40 million, $10 million, $1 million or $.5 million; if the Government of Canada, representing the taxpayers of Canada, is not getting value for its money, it is my submission that it is a serious problem. The government recognized that there was a problem and that the problem had to be corrected.
From the outset the former minister made no attempt whatsoever, inside or outside the House, to defend the indefensible. He indicated from the outset that wrongful overpayments had to be recovered and that any files that raised legal issues had to be immediately referred to the Royal Canadian Mounted Police.
The sponsorship program was originally created in 1997. In 2000 it was subject to an internal audit called for by the then deputy minister of public works and government services. As we all know now, and I certainly know after what I have gone through over the last three months, this program has been the focus of extensive concern and criticism from inside and outside government, particularly for the period between 1997 and 2000.
As I said when I started my speech, during the latter part of 2000 the total program was revamped. The government knew it had a problem once it received the audit and the correct remedial action was taken about four years ago.
In May 2002 the Auditor General of Canada, Sheila Fraser, released her audit on the three contracts that she had been asked to review. These contracts, which were awarded between 1996 and 1999 through Groupaction, were referred by Ms. Fraser to the RCMP for further investigation. As we know from events that have occurred in the public domain over the past week, charges have been laid.
The former minister continued to investigate the details of the sponsorship program and get down to the fine print. In the spring of 2002, a quick response team was assembled, comprised of financial, procurement and audit specialists from within the Department of Public Works and Government Services. An extensive, comprehensive, complex, case by case review was carried out on over 700 sponsorship files to determine their completeness and report on areas of concern.
The quick response team conducted a detailed review of 126 files of primary interest. In other words, these were the files that they thought were most serious. These files, which were valued over $500,000, had received media coverage or had known deficiencies.
Throughout the review, the former minister's aim was clear. Where irregularities were discovered, they were to be pursued. If there was evidence of wrongdoing, the authorities were to be called in.
The work of the quick response team is included in the final project report which was tabled in the House on October 10, 2002. It contained five recommendations which the department followed up in detail. Several files, as we all know now, were referred to the Royal Canadian Mounted Police.
These include the three specific referrals which I mentioned earlier made by the Auditor General in May 2002, and I should add, 10 additional cases. As I have said, the RCMP has laid charges. It is continuing its investigation, wherever that may lead.
In the meantime, members will recall that in June 2002 the then minister indicated several times in the House of Commons that he wished to remove the communication agencies from the delivery of the program. He also made his opinion known that he preferred to have the sponsorship program delivered in house, by qualified, dedicated public servants. I made this point in the earlier part of my remarks, that in my view there is no way the Government of Canada should deal with any ad agency or any other agency on any type of a commission contract. There is no point in doing that.
Members may also recall that the former minister informed the House that in instances where money was paid, but where no services were delivered or inadequate services were delivered, he would attempt to recover the money. That is exactly what he proceeded to do, and that is exactly what this government continues to do. Outstanding payments were withheld and new business was halted with certain communication agencies associated with troubled files. The minister commenced the process to recover overpayments.
In early July 2002 the moratorium was lifted for the balance of that fiscal year. That is the fiscal year which would end on March 31, 2003. Subsequently, the communication agencies were removed from the delivery of the sponsorship program, which was the correct decision to make.
In December 2002 the former minister announced that a re-designated sponsorship program would be put in place for a one year trial program, ending on March 31, 2004. The new program was to be limited to not for profit sporting, cultural and community events, with the goal of achieving an equitable distribution of sponsorship funds in all provinces and territories. That is exactly what happened.
Certainly the members of the House, who were elected in the election of 2000, have dealt with the sponsorship program, and I can say it was administered with extreme rigour. We did receive complaints. There were mainly two complaints. The first complaint was the timeliness of the response. That was a constant complaint.
When small community groups, organizations, events, festivals would apply for limited funding, the biggest complaint in my riding was they could not get an answer quick enough. Sometimes the events would be scheduled for a weekend and they were still trying to get an answer out of the Department of Public Works and Government Services three or four days before the event.
The other complaint was the rigour with which they had to follow up after the event to get their money. They had to file documents and pictures to prove that the event took place. This was quite onerous and rigorous. The larger ones had a staff or infrastructure to handle it. The smaller ones had great difficulty. As we know, the sponsorship program was cancelled quite some time ago, but there are still situations in my province where organizations still have not been paid for events that occurred eight or nine months ago. I think these things will be ironed out, but I point this out to show the rigour that this department administered. Again, that is since 2000, not before that.
Communication Canada was responsible for managing this program without the use of any intermediaries. As everyone is aware, that has all changed with the Prime Minister's decision to cancel totally the sponsorship program due to the government's belief that the program was fundamentally flawed.
In response to the Auditor General's report on February 10, the government announced a comprehensive set of measures to ensure we that we would get to the bottom of the matter.
The first measure includes the establishment of an independent commission of inquiry, which is already fully mandated under the Inquiries Act. We had a report from the chair of that inquiry, Mr. Justice Gomery of the Quebec Supreme Court. I expect that Mr. Justice Gomery will add a lot to why this was done the way it was.
The second measure was the appointment of a special counsel for financial recovery. The third measure was the introduction of whistleblower legislation. The fourth were measures to strengthen audit committees for crown corporations and the possible extension of the Access to Information Act to crown corporations. The fifth measure was the initiation of review and changes to the governance of crown corporations on changes to the Financial Administration Act and on the accountabilities of ministers and the public service.
The sixth measure were steps to allow the public accounts committee to begin immediately examining the report of the Auditor General, which, as everyone is aware, is what we have been doing for the last three months. The government has taken unprecedented steps in allowing the committee to have full access to cabinet documentation, cabinet memoranda and records of government. We have done a lot and that has assisted the committee greatly.
As I indicated previously, the public accounts committee has been at work for more than three months now and it has heard testimony from 51 witnesses. I believe committee members from all sides should be commended for their work.
Also, over the last three months we have had full cooperation from all government departments and crown agencies. Ministers, former ministers, deputy ministers and former deputy ministers have all testified before the committee. The government has provided the committee with valuable documents when it requested them.
The independent mechanisms of a public inquiry, the Royal Canadian Mounted Police and the special counsel for financial recovery are all in motion. On a cumulative basis, these will get to the bottom of this situation. All these mechanisms will provide the results publicly as they become available.