Debates of Feb. 22nd, 2005

Supply

[Reg Alcock, Liberal, Winnipeg South, MB]

Mr. Speaker, it is unfortunate that the context of the member's question is contained in his opening remarks where he wishes to use a cute phrase or just a little dismissive phrase in naming the Prime Minister, which, frankly, undercuts the debate he wishes to have here.

Is he now asking whether it is true that there were problems discovered in Enron-Andersen, WorldCom, here with the CIBC and others? Absolutely. Is he also asking whether it is true that the Ontario Securities Commission and the U.S. government with its Sarbanes-Oxley reforms took action to fix those things? Absolutely. Is he asking whether it is true that it is the history of man that we constantly discover ways in which we can improve? It is of great value that we do in fact do those improvements.

However if he is saying that all private accounting firms are somehow corrupt, he is simply wrong, and to even suggest that is just so outrageous it debases the debate.

He should look at the names of the people who serve on these foundations. They take their responsibilities seriously. They have independent audits and independent evaluations. The Auditor General herself has said that she has no concerns. The member is substituting his short, quick nine second clip, political debate for the intelligence of others.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I have a comment to make and a little question to ask the President of the Treasury Board.

If the foundations are a model, if other countries come to look at what our foundations are and how they work, if they are a model of transparency, if the Auditor General says that in large part they are good, if his government and everyone watching us says they are good, why does he not want the Auditor General to look at how these foundations are managed? I agree with him that we must not stoop to the demagoguery of the Conservatives and say there is a sponsorship scandal in all the foundations. I am sure that they are all well managed. However, if they are all well managed, let us accept the proposition. That is my comment.

When the President of the Treasury Board says—and I thank him for it—that Bill C-277 is tabled in this House, this bill must go to committee and the Auditor General called in for that to happen. I am sure that he is quite familiar with the parliamentary legislative process. So his party has to support Bill C-277. My question is this: does the President of Treasury Board and his party support Bill C-277?

[Reg Alcock, Liberal, Winnipeg South, MB]

Mr. Speaker, the member asked why, if we agree with all of the other aspects of transparency and accountability, we would be opposed to having the Auditor General as the auditor of these particular foundations. My answer very simply is that it is because of the nature of the private organization. For example, we transfer sums to the Province of Quebec. Should the Auditor General be the auditor for the Government of Quebec? The answer is no, because it is a separate body. There is a boundary area.

All we are saying is that there are lots of ways to get accountability and oversight but we think the danger is that the closer we pull the foundations into the government the more quickly they will lose their independence, which is a serious concern and the concern at the heart of this.

The member asked whether the government would support Bill C-277. I do not support Bill C-277 in principle as it calls for doing what the motion calls for, which is automatically appointing the Auditor General as auditor, but I would be prepared to support the movement of Bill C-277 to committee in order to have this conversation in a proper forum.

It is unfortunate because we have an opportunity with that bill to have a substantive debate about this. I would welcome that debate and participate in it. What we have here is a headline chasing motion that wants to make an important public policy decision like that, which is irresponsible.

I would suggest, if the member is willing, that if we were to get it into a committee in a form that would allow us to look for a solution to the problem that he wishes to solve, I will be his ally.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, the President of the Treasury Board cited the Auditor General a number of times and seemed to indicate that there was an ideological difference between the Auditor General and the government on this question of auditing foundations. I certainly disagree because the Auditor General has been very clear that she does not feel there is satisfactory knowledge about how the funds are being used within the foundations given that we do not audit them.

He also mentioned the issue of independent evaluations. I asked the Auditor General about the number of foundations that had completed independent evaluations. Her office said that it had found five foundations which had completed independent evaluations but that most had not.

I asked a second question on the number of funding agreements that give the government authority to terminate the agreement if defaults are not remedied. The Auditor General found only five funding agreements that had this provision. Most did not.

Then I asked how many funding agreements contained a right for the minister to recover unspent funds on winding up. Her office found only seven funding agreements that had this provision to actually recover unspent funds upon winding up. In most cases we do not even have the right to terminate the agreement if defaults are not remedied.

On the issue of the 11 recommendations, 7 recommendations were rejected or not implemented by the government, which is a failure rate of two-thirds. Is the new Liberal standard of satisfactory performance when something fails two-thirds of the time?

[Reg Alcock, Liberal, Winnipeg South, MB]

Mr. Speaker, let me go back to the member's opening statement when he said that since there were no audited financial statements how could we understand them. It is simply untrue. Every one of them has audited financial statements and every one of them posts an operational plan.

Let me be clear on this. The Aboriginal Healing Foundation, the Canadian Foundation for Innovation, Canada Health Infoway, the Canadian Millennium Scholarship Foundation, the Canadian Health Services Research Foundation, Genome Canada, the Canada Foundation for Sustainable Development, the Canadian Foundation for Climate and Atmospheric Sciences, the green municipal investment fund, the Federation of Canadian Municipalities and the Pierre Elliott Trudeau Foundation are the foundations in question. Every one of them has an independent evaluation report that is on its website and can be tabled in the House.

Members should spend some time looking at this. It has only been in recent history that they have even been called before the House.

I would encourage the member to give some support to his obvious strong feelings about that and suggest that the committee, on which he sits, call the foundations forward to have this conservation with them. However to simply do it based on a headline is not very functional.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, for starters I would like to thank the President of Treasury Board—something that is not done very often in the House of Commons—for having just said, if I understood correctly, that he would support Bill C-277 after the second hour of debate. He said that he did not agree with the principle, but he wanted Bill C-277 to go to committee, where the debate would be held

With the avowed support now of the President of Treasury Board for Bill C-277, I am very pleased to learn that I will have the unanimous support of the House when we vote on this bill. It will therefore move along quickly; it will go to committee to be studied, as the President of Treasury Board wishes and as I do myself. I thank him therefore for his support this morning during the debate.

However, I have a few little concerns in his regard. During the debate, he said that the Auditor General could not be asked to audit the books of foundations because money is transferred to them and that, otherwise, this would mean the Auditor General could be the Auditor General of the UN. But the web site of the Office of the Auditor General, contains the following and I quote:

The Office of the Auditor General audits a number of United Nations agencies and has served as one of the auditors of the UN itself. The Office has also been one of the most prominent supporters of training programs for auditors from national audit offices of developing nations—

Since the Auditor General can audit the UN because the government transfers funds to it, according to the President of Treasury Board, she can therefore audit foundations. But he says she cannot. For example, the government transfers funds to Quebec and other provinces, and the Auditor General cannot audit this money. Therefore, on the strength of this, she cannot audit foundations.

I will return to my speech in a minute. I just wanted to take this opportunity to intervene with the President of Treasury Board, because there is not really much opportunity to do so during the 10 minutes allotted for questions and comments.

So the President of Treasury Board was saying that if the federal government transfers money to a province, for example Quebec, the Auditor General cannot audit it.

I know, Mr. Speaker, that I must give my speech. I am just making some comments....

[The Deputy Speaker]

I remind the hon. member that this is the time allotted for debate and not a time for questions. He may continue.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I am well aware that I am to debate the motion. However, we do not have much time, during the 10 minutes allowed for questions and comments, to address the President of the Treasury Board. That is what I am doing before resuming my speech.

Was he saying that if the federal government transfers funds to a province, such as Quebec, the Auditor General has no right of oversight; consequently, she is unable to investigate the foundations.

However, under the Canada-Quebec-municipalities infrastructure program, whereby each party pays one-third of the costs, money is transferred between the federal government and the province, and the Auditor General has the right of oversight because it is for a federal-provincial-municipal program. She used Quebec as an example, saying that even if there were transfer payments, funding for this program was properly administered.

There are other instances of transfer payments, for example in health, where the department must ensure a follow-up of such funding. But since the Auditor General has been auditing UN files and programs cost shared by the federal government, the province and the municipalities, according to the President of the Treasury Board, she could therefore audit the foundations. But he says no.

This is how we arrive at the point of trying to find, in an instructional approach, not a demagogic one, how and why the Auditor General ought to have an overview of the foundations, and how the government's reasoning, i.e. the foundations' independence, does not hold up to any kind of close scrutiny.

I am totally in agreement with the President of the Treasury Board when he says that caution is required. Saying that the Auditor General ought to be able to vet the foundations is not saying that the foundations are mismanaged. I am not saying that every foundation has its own sponsorship scandal. I am not saying that funds are necessarily being pillaged. What I am saying is that we have a right to know. If they are properly managed, properly administered, properly controlled—as the President of the Treasury Board says they are—let them open up their books and prove it.

Some administrators of foundations have even told me that the Auditor General had to be allowed to come and that they would be only too pleased to show her how well they manage their affairs. Yes, they did support Bill C-277, they told me, because they were proud of the way they were administering the foundations and the foundations' funds. There was no problem.

Others called me to indicate their disagreement, but not out of fear of being found dishonest, or any such thing. If I am not mistaken, it was Canada Pension Plan, which has a federal-provincial transfer, and they asked me to raise the possibility of such an audit. I am totally in agreement with that. If it cannot be done for some legal or accounting reasons, I do not want to show any disrespect for the law and regulations.

If a foundation cannot be included in such an audit for this or that reason, it will be excluded, and parliamentarians along with the Canadian public can be told why it cannot be audited. This is why the Auditor General always adds, at the end of her recommendation, the phrase “with a few exceptions”. These exceptions will have to be defined at the committee stage. We will be able to do it there, and I am glad of that.

This recommendation by the Auditor General is not something that just dropped out of the sky yesterday. It relates to a recommendation subsequent to an April 2002 Auditor General report. Three years ago, she wrote:

Substantial amounts of public money have been transferred to foundations. I am concerned by the limits placed on Parliament's ability to scrutinize them.

While the President of the Treasury Board is in the House, I will quote two other facts which bother us and which suggest that the Auditor General should have oversight over foundations. In her Status Report, tabled February 15, in paragraph 4.64 she says:

However, some sponsoring departments informed us that they had first learned of the amount to be paid to foundations only when federal budgets were announced.

I think this is rather worrisome.

Tomorrow, the Minister of Finance will present a budget in which he will announce that some foundation will receive $3 billion more. The sponsoring minister will then say he did not know it, he did not ask for it, he did not apply for it, and that he is finding out as the budget is brought down. Is this normal? I do no think so. I could ask that question of the President of the Treasury Board.

However, in the same report, the Auditor General has a table showing the foundations. The hon. member for Sudbury told us that it was not known how many foundations could come under the Auditor General's scrutiny: tens, hundreds, thousands. The cancer foundation of Lanaudière region is not there. The foundation to preserve the shores of the St. Somewhere River, in someone's riding, is not there. There are eight foundations mentioned on page 4 of chapter 4 of the Auditor General 's report.

There are a number of questions to be asked about this table, Exhibit 4.2. For example, Canada Health Infoway Inc. was founded in 2001. Four years ago, the federal government gave $1.2 billion to Canada Health Infoway Inc. Today, Canada Health Infoway Inc. has $1,200,002,000 in its account. It received $1.2 billion and now it has more. That is amazing. If this foundation has respected the government's mandate for it, despite its independence, to assist in disseminating health information—and this is not an investment fund like the Caisse de dépôt et placement du Québec; it is supposed to be a foundation—we can see that it has more money now than it did four years ago. Can we ask questions? I think so.

There are other interesting examples, such as the Endowment Fund, which is a group of funds that includes the Pierre Elliott Trudeau Fund. The Endowment Fund was set up in 2001-02 and has granted $10 million in subsidies. It received $389 million to set up, has granted $10 million in subsidies, but cost $11 million to administer. Can we ask why it cost $11 million in administration fees to grant $10 million in subsidies? I am not saying this is wrong, I am just saying it might be questionable.

Then there is Sustainable Development Technology Canada, which was set up in 2001 and received $350 million. Since 2001, it has granted—sustainable development technology is the environment minister's hobby horse—some $6 million. Any idea how much it cost to administer? Seven million dollars. The administration costs outweighed the value of the grants. This is something the Auditor General might want to look into.

Do you understand, Mr. Speaker—and Mr. President of the Treasury Board—that this raises questions? I am not a big tax expert, nor am I very good at counting, so I will not dwell on the interest earned column, because I see that—although I am a poor administrator, at least I am not as bad as some people—some figures are not as good as others. To receive $2.5 billion and to be unable to earn interest on that amount might be a management problem.

This is not a scandal like the sponsorship scandal, but, if, through these statements, the Auditor General has some questions or leaves us with some questions, then it seems to me that we should get to the bottom of this.

First we are told this can adversely affect the foundations' independence. Yet, when a foundation receives all its funding from the federal government, it is not exactly financially independent, is it?

Earlier, I asked the member for Peace River, if I am not mistaken, how taking a look to see if the money is properly managed can adversely affect a foundation's strategic decisions. As far as I am concerned, a foundation such as, for example, the millennium scholarship foundation—I should point out here that we want all foundations to be abolished—gives scholarships to a number of students. If the Auditor General takes a look to see if the foundation's budget is well managed, the mandate of the millennium scholarship foundation will still be to give scholarships to students. I do not really understand the government's argument about the independence of foundations.

Second, the member for Mississauga South said that these foundations are audited nevertheless. He is a qualified accountant who knows there are two types of audits: financial audits and value-for-money audits, or performance audits.

Calculating that an organization received $100 million and spent $100 million is internal auditing. Such auditing is conducted in every department. However, determining whether this $100 million went to the brother-in-law of André Ouellet's sister-in-law and was used to take trips, drink champagne and so on, is another type of auditing called value-for-money auditing.

It is true that audits are now conducted in departments and foundations. It is true that foundations are subject to internal auditing. What the Auditor General is asking, and what we are asking is that these foundations be subject to external audits.

I do not want to hear all day long that there is an audit. It is also true that there is an external audit, because I know the member for Mississauga South will mention it.

However, it is the board of directors that decides who will do the audit. In the case of Canada Post, it was discovered that the board of directors, which was friends with the director and CEO, appointed external auditors who were not accountable to the government, but to the board. There may be a problem here.

Why, as parliamentarians, would we agree to give $9 billion to foundations and say that we do not what to know what is going on? If it is true that we do not want to know because this money is being properly administered, and if it is true that we do not want to know because there are internal audits, I must inform the Liberal member that each department has an internal audit branch. Why are we asking the Auditor General to look at all this then? Is it because they are all corrupt and all thieves? No, not all of them are. It is because we want to know how these funds are being administered. And the same is true for the foundations. The Auditor General called for this in April 2002. The Standing Committee on Public Accounts called for this in May 2003. The Auditor General called for it again this year and there is a bill that, I learned this morning, the government will support. So, it is about allowing the Auditor General to have the right of oversight for the eight, possibly twelve, major foundations which are currently funded by taxpayers' dollars.

Of these foundations, for the benefit of the member for Sudbury, it is not about, for example a anti-cancer foundation in her riding and where the volunteers could say—because that is what she said in her first intervention—that if the Auditor General audits the anti-cancer foundation cancer in her riding of Sudbury, it may be because there is something suspicious going on. The Auditor General will not go there. She could, if the bill passed, look at the operations of the Canadian Foundation for Innovation, which received $3.6 billion. Here is a surprising fact: there is still $3.1 billion left. It did not spend much.

Mention has also been made of the Canada Millennium Scholarship Foundation, the Canada Health Infoway, the endowment funds and Genome Canada. With regard to the latter, the Auditor General is verifying if it is a foundation under its letters patent of incorporation or if it is not an independent organization.

There is also the Aboriginal Healing Foundation, the Canada Foundation for Sustainable Development Technology and the Canadian Health Services Research Foundation. In my riding, I have no volunteers at Canada Health Infoway. I do not have any volunteers at the Aboriginal Healing Foundation. This is to reassure the member for Sudbury who was saying that she was afraid the Auditor General would go to the private foundations in her riding. I do not wish to get into this.

I merely want to ensure that we have a right of oversight over the eight foundations which have received $100 million or more from the federal government over a 12-month period, as the Auditor General called for in 2002 and again in 2005, as the committee called for in 2003 and as Parliament will shortly as well. I think this is only right.

The Auditor General said the following in 2002:

The audit found:

significant gaps and weaknesses in the design of delegated arrangements;

limits on what the Auditor General can look at, which prevents her from giving Parliament proper assurance that the use of federal funds and authorities is appropriate;—

She is not saying they are mismanaged, simply that she does not know whether or not their use is appropriate.

—the “parking” of billions of dollars of the public's money in foundations, years before it is to flow to the intended recipients;

little recourse for the government when things go wrong;

limited opportunity for Parliament to scrutinize these delegated arrangements.

If the Auditor General called for this in 2002 and again in 2005, if the President of the Treasury Board says he has nothing to hide, if the Standing Committee on Public Accounts has been calling for it on numerous occasions, I am sure that everyone will agree with this opposition motion presented today by the Conservatives. We will therefore have the pleasure of seeing full unanimity within the House of Commons.

Now, in connection with Bill C-277, I have just learned this morning that everyone will be in favour, and thus there will be another opportunity for full unanimity within the House of Commons. After study and a rational and informed analysis of the matter, we will make it possible for the Auditor General to audit certain foundations. If, for legal or technical reasons, certain others cannot be audited by her, we will at least have been given an explanation to pass on to the public.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member for Repentigny is an experienced parliamentarian and a skilled debater. I do not find very much in his speech that I would disagree with.

Canadians would want us to say as a matter of principle that where Canadian taxpayers' dollars were involved there should be an accountability and reportability mechanism. Therefore, I do not know whether or not there is any reason not to support the motion.

The member however talked about the independence a lot of foundations would have and he somehow suggested that since the board of directors get to pick the auditing firm that there may be a problem.

Just to protect my profession, I want to remind the member that the auditing and accounting profession is guided by the professional practices of the Canadian Institute of Chartered Accountants through the handbook. It makes its business based on its word and its credibility. Without that credibility, it is out of business.

Having said that, my question for the member has to do with how we get to the point which he has raised so well about how we keep in touch with the foundations on their performance. The Auditor General herself does not even look at every department every year. She reports on selected ones and over a series of years we might have a full cycle.

However, the Standing Committee on Government Operations and Estimates has assigned to it the responsibility for reviewing these foundations as part of the overall estimates process each and every year.

I wonder if the member would concede that it is not just simply sufficient to rely on the Auditor General to do all things for us, that in fact members of Parliament, through the committees and their other work, also have a responsibility to look diligently at the operations of foundations.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I am very pleased to see that the hon. member for Mississauga South is going further and not simply limiting himself to the matter before us today. I believe he already sees the bill going to committee for study.

Of course, the hon. member is correct about the fact that if we grant the Auditor General the power to investigate foundations, the Office of the Auditor General will not do an exhaustive audit of all eight or ten of the foundations every year. Nevertheless, the office will be able to audit all of these foundations whenever it sees fit. That is what we want. The Auditor General does not audit all departments every year, but she can audit any of them.

The Standing Committee on Governmental Operations and Estimates may examine other departments or look at a chapter of the Auditor General's report, although that is usually sent to the public accounts committee.

I agree completely with the hon. member. If we vote in favour of today's motion by the Conservatives, if we vote in favour of Bill C-277 and we say in committee that the Auditor General will audit a particular foundation in a particular year, and that all the others will be examined by the Standing Committee on Governmental Operations and Estimates, that is perfectly correct and a good idea, in my opinion, and I think, in the opinion of all members. It will be debated in committee, but I would be in favour of this idea right now.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Mr. Speaker, what we are really talking about today is accountability. I want to address a somewhat related issue to accountability and have the hon. member comment on it.

There is an ongoing discussion about moving government departments out of the city of Ottawa, out of the national capital region, to shore up Liberal support in other regions. I will just quote a report that came out of the Regina Leader-Post :

Liberal MPs from Atlantic Canada have made it particularly clear that he shouldn't repeat the kind of cuts that hit their region very hard a decade ago and led to the loss of 20 Liberal seats in the 1997 election, said McCallum.

[The Deputy Speaker]

Order, please. I would like to remind the member for Nepean--Carleton not to name members but to use their title or their riding names please.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Mr. Speaker, the report goes on to quote the revenue minister saying:

I think the lesson that we learned...is regional balance is crucial and the vividness of their (Atlantic MPs') view on that has to do with the experience and also the election of 1997.

In other words, he wants to make decisions on reallocating government departments based on the 1997 election results. This is an issue of accountability, and here in the national capital region it reminds us of when Jean Chrétien and David Pratt moved the tax processing office out of Bell's Corners, killing jobs in my constituency.

I have a question for the hon. member. Why is it that Liberal politicians' jobs are more important to the government than the jobs of my constituents?

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I will reply to the hon. member by saying that, in connection with the debate on transferring funding for child care, for example, Quebec should have its fair share without conditions. It seems to me that first we could recognize the fiscal imbalance and look at the exchange between the Liberal governments in Quebec City and Ottawa.

If the two ministers manage to agree, a system of child care could be established that would be better for all parents in Quebec and would provide a better work-life balance for more families.

[Diane Marleau, Liberal, Parliamentary Secretary to the President of the Treasury Board and Minister responsible for the Canadian Wheat Board]

Mr. Speaker, would the Bloc Québécois be prepared to consider the possibility of letting the Auditor General have oversight of amounts of money, without being obliged to audit all the foundations? She could be free to report on this subject, without acting contrary to the foundations' wishes as regards their annual audit.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I thank the hon. member for Sudbury for her question. To begin with, I will tell her the same thing I told the hon. member for Mississauga South. I appreciate the fact that her question looks forward to the debate in committee.

Is it a matter of overseeing money or of allowing the Auditor General the right to oversee the foundations? I think that this question can most certainly be asked of the Auditor General during consideration of Bill C-277 in the Standing Committee on Public Accounts. At that time, she will be asked how, in her opinion, oversight of foundations should be ensured. She will explain this to us parliamentarians, and we will appreciate her responses and her comments.

Is it by a management audit of the use of resources? Is it by following the money trail? The Auditor General will surely enlighten the Standing Committee on Public Accounts and parliamentarians on the technical and accounting terms.

[Paul Crête, Bloc, Rivière-Du-Loup—Montmagny, QC]

Mr. Speaker, I have listened to my friend's speech with much interest. I would now like to focus on a very particular situation. The government's inaction in ensuring that the foundations are correctly audited is detrimental to the reputation of those foundations, and that is a situation which cannot be justified.

Take for example the Canada Foundation for Innovation. The Auditor General has said that it ought to be audited. We know about projects funded by this foundation, which produce tangible results.

However, we are presently faced with the fact that, so far, the government's inaction has contributed to undermining the reputation of these foundations. Is what we want to propose not an opportunity to separate the wheat from the chaff, to be able to say what is working and what is not? And in the end, why could an hon. member not ask for an audit to be done of a particular foundation? In the end, we could proceed as we do for the departments.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, my colleague is totally right in pointing out that the purpose is to increase public confidence in these foundations and even determine how relevant the foundations and their mandates are.

If we agree with the statement of the President of the Treasury Board that the foundations in question are well managed and administered, that they are carrying out their mandates—to the point of being the envy around the world, with foreigners coming here to study how the federal government put them in place—that they are transparent and are a model, since the President of the Treasury Board once said he had the “bestest public service in the world”, we must have nothing short of the “bestest” foundations in the world.

If we have the “bestest” in the world, let us also make it obvious to the Auditor General. She will be delighted.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I will be sharing my speaking time with the hon. member for Churchill, who, as we know very well, has battled for years in this House to ensure that proper use is made of public funds.

It is my pleasure to rise today to speak in support of this official opposition motion. It reads as follows:

That the House call on the government to implement the measures recommended in the latest Auditor General's report to improve the framework for the accountability of foundations, in particular, to ensure that foundations are subject to performance audits that are reported to Parliament and that the Auditor General be appointed as the external auditor of foundations.

I am speaking in favour of this motion for a number of reasons, one of which is that it is based on my own private member's motion, Motion No. 181. It is one of the first I submitted in this House as a new member of Parliament, on November 1, 2004, and that motion reads:

That, in the opinion of the House, the government should appoint the Auditor General as the external auditor of foundations...and ensure that adequate mechanisms are in place for a broad scope audit of all delegated arrangements.

We are in favour of this motion because of what we have seen with the refusal of the government to take into consideration and to follow up on what is very clear from the Auditor General, that is, to follow the direction that she has indicated she needs to take to make sure we are having the appropriate use of public funds. She needs to be able to audit these delegated arrangements, these foundations.

In a sense what we have seen from the government is the old Liberal arrogance making its reappearance with this refusal to in any way accept the auditing of foundations when it is very clear that there is a problem, when it is very clear that the Auditor General is not aware if we are having a satisfactory use of public funds, and when it is very clear that the Auditor General has raised concerns.

As I mentioned earlier and will mention in the course of my presentation today, most of the foundations do not have in place the type of contract that really makes it clear to Canadian taxpayers across the country that the funds are being used and verified in an appropriate way.

Since we are seeing this reaction from the government, it is very important that in all corners of the House we consider this motion today. I certainly hope that the motion will be adopted with support from all four corners of the House, but if the government refuses to support it, it is very clear that in this minority Parliament three corners of the House will be sufficient to adopt the motion, which would be in Canadians' interests.

The facts are very clear. Nine billion dollars in grants have been provided to these foundations since fiscal year 1996-97. In fact, in the last four years the amount of money in these foundations has almost doubled. To this day we now have $7.6 billion in Canadian public funds that has been sent to these foundations without the appropriate oversight. That is unfortunate.

The Auditor General has called for a broader scope of responsibility. She has been very clear that she needs to be able to monitor and audit those funds. How does the government reply? It has said it will not allow that appropriate type of auditing.

We saw last fall as well that the government was very reluctant to allow the Auditor General to play the important role that she does. We saw the Liberal government actually withholding funds, believe it or not, from the Auditor General's department and pushing her to the point where she would have had to lay off 85 staff members. In other words, she would not be able to do the good and effective job that she does on behalf of Canadians. It was only with pressure from this and two other corners of this House that we were able to push the Liberal government back and finally have acceptance of funding for the Auditor General. The staff was not laid off and the Auditor General could continue to do the good work she does in monitoring federal departments.

Now we are going beyond that. We need to stop this game of hide and go seek. We need to be able to monitor effectively the funds that are going into these foundations. We have enough cause for concern with the sponsorship scandal, the boondoggle around employment and the employment insurance fund, and the huge missteps around budgeting with the fact that when small budget surpluses are forecast we actually see large budget surpluses coming out.

We have some real concerns about this government's ability to sit down and monitor finances in an honest and prudent way and in a way that benefits all Canadians. It is not as if the need is not out there. We have seen a tripling of homelessness in my area in greater Vancouver. We have seen a health care crisis that led to closure of hospitals. We have a child care crisis. We have increasing child poverty. There are needs across this country that are not being met and we have the Liberals playing games with appropriate monitoring of public funds.

The Auditor General was very clear in her report about her concerns around foundations. I will give a brief resumé of some of the recommendations that she put forth and what the status is in terms of how the government has reacted since this issue was raised by her a few years ago.

She recommended that, in new or amended funding agreements, sponsoring departments should seek to ensure that evaluations commissioned by foundations meet recognized evaluation standards. I raised that question with her when we had the opportunity to discuss her report. She said that five foundations have completed those independent evaluations that meet recognized evaluation standards. Most of the foundations are not doing that, despite the fact that it was very clear in the Auditor General's report that this recommendation needed to be followed.

She also said in her report that eight funding agreements gave sponsoring ministers the authority to undertake compliance audits but none were planned or under way at the time of her audit. The ability existed, but the government did not follow up. There were no compliance audits even though the opportunity exists in many of the funding agreements to make sure Canadians are getting good value for money.

The Auditor General also talked about adjustment mechanisms. When a foundation is clearly not meeting its purpose, or when circumstances have changed, a mechanism needs to be put into place to ensure that value for money is met. She recommended that the adjustment mechanism should not rely on the allocation of additional funding and revisions to the funding agreement. Right now the mechanism available is to put more money into the foundations and that is how we negotiate an adjustment mechanism. The Auditor General raised the alarm around funding agreements in regard to making sure that the government has the authority to terminate the agreement if defaults are not remedied.

As I mentioned earlier, in most cases there are no provisions under funding agreements to ensure that the government has the opportunity to terminate the agreement if a foundation is in default. In most cases, Canadians' interests are not being looked after by this government.

Finally, the Auditor General also was very clear that funding agreements need to give the minister the right to recover unspent public funds upon the winding up of the foundation. Many of the funding agreements do not have this provision. We are now facing a circumstance where the Auditor General does not have the power to intervene. When defaults are found, how they are recovered is a matter of some speculation because the Auditor General cannot do that work, and in most cases the funding agreements do not allow the termination of the agreement. In many cases, ministers representing this Parliament do not even have the right to recover unspent funds upon the winding up of a foundation.

Right now we are basically operating on faith. As I mentioned earlier, given the spending scandals of this government, my faith in its ability to handle the financial management of this country responsibly is, to say the least, in question. The challenges are enormous. As we see increasing poverty and a decrease in the quality of life for most Canadians, this government continues to play hide and seek with public funds. That is a shame. That is why we in this corner of the House will be supporting the motion.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Mr. Speaker, the hon. member made an impassioned plea for accountability and I cannot help but agree with him. He was extremely eloquent in making that case.

I want to speak to the broader issue of accountability here today. The revenue minister stated in the House recently that he wants to spend millions of dollars by moving major government departments out of the capital region to shore up Liberal support in other regions. This reminds my constituents of the time when Jean Chrétien and David Pratt moved the taxation processing office from Bell's Corners to, let us guess where, Shawinigan, killing Nepean's jobs in order to save Jean Chrétien's jobs.

I wonder if the hon. member would stand in this House and agree that the jobs of public servants are more important than the jobs of Liberal politicians.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, the member for Ottawa Centre has been extremely impassioned to ensure that the public service does not become another victim of the old Liberal arrogance coming back.

In this corner of the House we are appalled by the fact that there has been no consultation for this plan, a plan that was thrown out or leaked a few days ago, and apparently may be in the budget tomorrow. Again, there has been no consultation with the public service or with people, who have in mind the best interests of the country, to ensure we provide adequate services. It is the same situation we saw with Bill C-31 and Bill C-32. Things were tossed into the middle of this Parliament without appropriate consultation or without appropriate development of a plan.

If it comes out tomorrow in the budget, we will oppose that portion of the budget in the same way we will fight for the interests of Canadians to ensure the budget is a budget for Main Street and not another budget for Bay Street.

[Bev Desjarlais, NDP, Churchill, MB]

Mr. Speaker, my colleague mentioned the situation with Bill C-31 and Bill C-32. We voted in the House and rejected that plan. Once again, the government wanted to move forward to split two departments, spend taxpayer dollars and have Parliament rubber stamp it. I know the opposition parties got together and voted against that.

The member drew the similarity with what has taken place with these foundations. Could the member expand a bit further on that?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, we see the old Liberal arrogance coming back. It is as if the government did not understand the message of June 28, 2004. What we saw that with the introduction of Bill C-31 and Bill C-32. There was no plan or consultation.

The Auditor General has clearly indicated that we need to have this oversight provision to ensure we see value for money, for Canadian public funds, on foundations. However, the government simply seems to refuse to allow that to happen. To compound the refusal, a few months ago the government withheld funding for the Office of the Auditor General. It took intervention from the other three corners of the House, led by the New Democratic Party caucus I should add, to push the Liberal government back and to ensure the Auditor General's Office was adequately funded.

We again see the old Liberal arrogance creeping up. I believe it will be up to the other three corners of the House to ensure that we put the government on the right road, which includes no more hide-and-go-seek with public funds, no more refusal to have adequate vetting of public expenditures and no more secret buddy-buddy agreements with Liberal appointees. We saw a repetition of the sort of serial nature of these agreements where Liberal appointees would have bottomless expenditure accounts that supposedly met Treasury Board guidelines. We saw that with Canada Post and the privacy commissioner, high-flying Liberal nominees and appointees not subject to prudent and appropriate use of public funds.

Unless we in the three corners push the Liberals in the right direction, we will see what we have seen over the last 10 years, which is the quality of life of most Canadians going down while the Liberals seem to be engaged in a feeding frenzy to ensure their friends get public funds, and that would be a shame.

[Bev Desjarlais, NDP, Churchill, MB]

Mr. Speaker, I will start my comments by responding to some of the comments made by the treasury board minister. He seemed to suggest that there was outside auditing of these foundations and that somehow was good because the people involved in these businesses were trustworthy.

The member from Mississauga touched on that as well, that we should automatically trust people in these types of businesses of auditing because they would never do anything wrong. Like people in lots of different businesses, we always get some who are the bad apples in the crowd. There must be in place good measures to keep tabs and keep on track with how the money should be spent.

The reason I am prefacing my further comments is because we are talking about Canadians having respect and trust for the Office of the Auditor General. Members would be hard pressed to find a Canadian who does not believe what the Auditor General says. Both the Auditor General and the Office of the Auditor General have the utmost respect of Canadians, without question.

The Liberal government does not have the respect or the trust of the Canadian people. My colleague from Burnaby has indicated that by referring to the June 28 election. There was not resounding support for the government. Canadians told the government that it had to do things better if it expected a majority government. Canadians wanted the government held to task because it was not doing the job properly.

As my colleague for Burnaby—New Westminster has mentioned, we have Liberal arrogance. He mentioned it as being old Liberal arrogance. I have been around for a while now, and I call it continuing Liberal arrogance. This arrogance has followed through year after year with little regard for Parliament and Canadians.

The government believes that somehow taxpayer dollars become the private dollars of the Liberal Party and the Liberal government. Once the money gets in, it is their money and they do with what they wish. They set up foundations here and there and appointment people to boards without any regard for the prudent spending of taxpayer dollars.

I will refer to a couple of the foundations. First, I want to read a section from the Auditor General's reports so Canadians will know some of her comments. She said:

From 1996–97 to 2003–04, the government transferred more than $9 billion to foundations—$1.2 billion in 2002–03 alone and $400 million in 2003–04 (Exhibits 4.1 and 4.2). These are up-front payments made many years in advance of need. With transfers of this magnitude, concerns about the accountability of foundations have grown. This audit examined 6 sponsoring departments...

The Auditor General's report as a whole is quite large. If individuals want, they can take sections of it and look at her comments.

With regard to the foundations, some which are mentioned in the report, she talks about money being upfront and long in advance of need. I would suggest that might be a tiny area where I might disagree. There is a lot of need out there. We have seen dollars being set aside, again with no real accountability to Canadian taxpayers as to exactly how it is flowing through. There is no real accountability to Parliament. The accountability to taxpayers comes through Parliament.

I will mention the foundations that jump out. Endowment funds are sitting with $389 million in them. There has been $10 million in grants set out. There is $48 million in interest. This is a balance of $416 million of taxpayer dollars that were supposed to do something for Canadians.

We have the Canadian Health Services Research Foundation and the Canada Health Infoway Inc. These services are needed. The dollars are not going out, interest is being collected, directors are being paid and taxpayer dollars are sitting there. Again, there is a question about exactly how the Liberal government looks at setting aside that money in budgets and how it incorporates it into different areas

I come from the Churchill riding and represent a number of first nation communities and individuals who have gone to residential schools who have tried to get claims heard for their residential school time. There have been some good stories from the residential schools, but for the most part there have been some seriously horrendous stories, such as the loss of language and culture. They are being ripped from their families as a result of the residential school process. The saddest part is we have a government, through the residential school claim process, that has spent millions of dollars on lawyers. Now it is going to spend millions of dollars on private investigators. It has paid out a pittance in comparison to what it has spent and what it has paid to residential school claimants.

I have met a number of people in my riding who are in their later years in life. They will not live much longer because they live in the most strenuous conditions that people have ever lived under as far as poverty. They do not the best housing, they have poor health and numerous others problems.

We have the Aboriginal Healing Foundation, which its intentions were very good. I review its annual report each year. It has some really good projects. I know people in my riding have made representations for funding through the Aboriginal Healing Foundation, and there have been some good projects.

However, I some I thought were rather questionable. If anyone has read the report, a project on the review the aboriginal healing fund was done. Imagine that. We set up a foundation and out of that foundation we give funds to someone to report on the aboriginal healing fund. When I know the need in the first nation communities in my riding and the healing that needs to be done, I have to question it.

The most striking area I question is this. Of all these foundations, the percentage of dollars received went toward administration costs. The fund was set up in 1998. I believe the intention of the fund was to have it run for about nine or ten years. As of this report, there is only about $13 million left. Three hundred and fifty million dollars was put into the fund. There was $86 million in interest. That did not shock me because of the first two or three years of the aboriginal healing fund, groups in my riding were saying that they had been trying to get at the fund because they wanted to do certain things. There were some really good proposals, but nobody received funding. It was absolutely unconscionable.

We wrote letters to the board of the aboriginal healing fund and questioned the government on it. Finally some of the dollars started to flow. Let me tell the House where $43 million went. It went to administration. I have a serious issue when $43 million goes to administration. We have other funds that operated with $1.2 billion and they spent $30 million on administration. The saddest part of all is first nation members throughout the country do not have access to a parliamentary oversight of those dollars. Under the aboriginal healing fund, this is not required, and that is a serious issue.

I know dollars need to be spent on administration, but there is no way that $43 million should have been spent on administration when we have the needs in the communities and urban centres as well. It is not just the first nation communities. People from the residential schools are living in the cities and towns throughout the country, and they have no oversight of the aboriginal healing fund. It is absolutely unconscionable.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, the member for Churchill made a very impassioned and eloquent intervention. She mentioned the aboriginal healing fund and that $43 million was expended in administration charges, much more than 15%. Given the fact that there is great need in the member's riding and across the country, it is quite appalling that so much would be spent on administration rather than dealing effectively with the issues at hand and the great need that is out there.

What does the member think is motivating the government in this respect? Why does the government seem to be refusing to acknowledge the importance of having an appropriate auditing function in place through the Auditor General who, as she mentioned, very clearly has credibility across the country and the confidence of Canadians? Why is the government resisting bringing in the Auditor General to verify the $9 billion that the federal government has put into the foundations?