Debates of Feb. 22nd, 2005

Committees of the House

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Mr. Speaker, I have the honour to present, in both official languages, the fifth report of the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities on Bill C-22, an act to establish the Department of Social Development and to amend and repeal certain related acts.

Bill C-22 as well as Bill C-23 represents a recommendation to the standing committee in June 2000 when Parliament had an opportunity to review the report. This is a concrete example of the work of the committee in dealing with legislation.

It is also an indication of the commitment of our government in terms of the Prime Minister's priorities in strengthening Canada's social foundations. We now have a focal point with these two pieces of legislation in our social development.

Electoral Boundaries Readjustment Act

[Paul Forseth, Conservative, New Westminster—Coquitlam, BC]

moved for leave to introduce Bill C-336, an act to change the name of the electoral district of New Westminster—Coquitlam.

Mr. Speaker, it became very obvious during the last election that the name of the riding should be changed. Perhaps you could take notice that we should have private discussions to collect all such similar bills and at another time agree to pass all these bills at all stages.

There are a number of ridings that want a similar effect to my current bill which meets the community need.

(Motions deemed adopted, bill read the first time and printed)

Petitions

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, many Canadians generously support the fight against HIV-AIDS and wish to draw to the attention of Parliament to the rate at which HIV-AIDS is spreading in marginalized areas of Canada and the world. They would also like to point out to Parliament that the debts owed by less developed countries hinder the effort to fight HIV-AIDS; that dozens of people are dying of AIDS every day; and that HIV-AIDS funding has not increased since 1993.

The people want Parliament to use its influence to cancel the debts that developing countries owe to Canada, increase funding and ensure that patents do not block access to medicines.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, pursuant to Standing Order 36, I am pleased to present a petition to the House signed by a number of Canadians, including from my own riding of Mississauga South, concerning the definition of marriage. We have received many of these but I think it is a very important issue that bears repeating.

The petitioners would like to draw to the attention of the House that the majority of Canadians believe that the fundamental matters of social policy should be decided by elected members of Parliament and not by an unelected judiciary. They also point out that the majority of Canadians support the current traditional definition of marriage.

They petition Parliament to use all possible legislative and administrative measures, including invoking section 33 of the charter, commonly referred to as the notwithstanding clause, if necessary, to preserve and protect the current definition of marriage as between one man and one woman to the exclusion of all others.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Speaker, under Standing Order 36, I would like to present two petitions from my riding, both dealing with the definition of marriage.

The petitioners indicate that their strong belief is that marriage is a lifelong union of one man and one woman to the exclusion of all others.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Mr. Speaker, I am very honoured to present, on behalf of a number of constituents in my riding, yet another petition on the issue of marriage.

These are people who say that this should be decided by elected officials in a free vote and not by an unelected judiciary, and that the government should use all possible legislative and administrative means to preserve the definition of marriage as the union of one man and one woman.

There are all together now I do not know how many thousands of petitions, but this adds 57 to the number of names on that count.

Questions on the Order Paper

[Raymond Simard, Liberal, Parliamentary Secretary to the Deputy Leader of the Government in the House of Commons]

Mr. Speaker, I ask that all questions be allowed to stand.

[The Speaker]

Is that agreed?

[Some hon. members]

Agreed.

Supply

[Monte Solberg, Conservative, Medicine Hat, AB]

moved:

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.

[Bill Casey, Conservative, North Nova, NS]

Mr. Speaker, I rise on a point of order. So many of our members feel strongly about the accountability of foundations that all Conservative members will split their time for this debate.

[Monte Solberg, Conservative, Medicine Hat, AB]

Mr. Speaker, I appreciate the opportunity to rise and debate this issue today, which is a very timely one. As we know, the Auditor General reported just last week and in her report provided some substantive and pretty substantial criticism of how the government deals with the issue of money going into foundations.

I will start by pointing out that one of the most basic roles a parliament plays is to ensure that the public's money is well spent and spent in a transparent way. If we look back over the history of parliament, we discover that parliament was born for that reason. I was doing a little research and found that in 1254 sheriffs of the various counties in England sent knights of the shire to advise the king on finance, precisely because it became pretty obvious, even at that time, 750 years ago, that it was important to have representatives from local areas go and talk to the Crown, in that case, about how money was being spent.

Of course over the hundreds of years since that time, parliaments more and more have played the role of being a check on the expenditures of government, but the only way that can happen is if there is transparency and if the government ensures that the money it brings in through taxation and various levies actually stays within the parameters of parliament, where parliament can actually scrutinize what is going on. That is a very ancient tradition and it has been there for a very good reason.

It is important that we fulfill our obligations to ensure that people's money is well spent. I want to point out that in Canada today people work extraordinarily hard and pay very heavy taxes. As I pointed out yesterday in this place, the average Canadian earning $35,000 in Ontario pays $17,175 in taxes, according to the Fraser Institute. Forty-nine per cent of that income goes to taxes. I think that is an outrageous number and I think people would agree.

Apart from the fact that Canadians are taxed too heavily, we want to know that the money being taken from them is actually going to something that benefits them. It is reasonable for Canadians to say that if that amount of money is going to be taken from them, which is way too much, they should at least know that their representatives can scrutinize how it is being spent.

As we know, the Auditor General concluded that the government is not ensuring that there is parliamentary oversight of this spending. There was concern about ministerial oversight. There was concern about the lack of performance audits and the fact that the Auditor General could not go in and audit these various foundations to ensure that the money going in there is actually producing results for Canadians. Because that is the point, of course: this money is not there just to go into a big slush fund to be used in whatever way the government wants to use it down the road. It is there to serve the public.

Since 1997 when the government first started doing this, the Auditor General complained about it and said the government should not do this, that it really is a violation of everything we have always believed about transparency and accountability. Since that time the government has funnelled over $9 billion into these foundations and $7.7 billion still sits there today. In other words, the government set up these foundations and the money has been funnelled in, but we are not seeing it used to some good effect for Canadians, with some rare examples.

We know that in the past, although this was not the subject of the Auditor General's report we are talking about today, there has actually been some criticism of how that money is being used by these foundations. There was a news story a couple of years ago about Canada Health Infoway, which is there to ensure that people in the medical community can use high tech services like the Internet to become more efficient. Canada Health Infoway was going to help with that.

One of the reports that came out indicated that doctors who were using this service found that it was a nightmare, but we as a Parliament have no way of scrutinizing this because we do not get proper reporting, according to the Auditor General. The Auditor General does not have the ability to scrutinize the books of these foundations and cannot do these performance audits to determine if we are really getting value for money.

In the current context that should concern everybody in this place, because in the current context, of course, we have an inquiry right now looking into how $100 million was misspent by the government through the public works department and the sponsorship program. Thus, I would argue that this is not some academic discussion. I think it has real consequences for Canadians today.

It is the obligation of the government to respect that age-old tradition that Parliament has oversight of the public money, of the public purse, precisely because we do not want to see that money being used for things it should not be used for. We do not want to see it potentially used for things that are completely antithetical to the public interest. We have no assurance of that today. We are not talking about a little bit of money. We are talking about $9 billion that has been funnelled there. That is a tremendous amount of money.

I want to point out, too, and I think this is an important point, that it was the current Prime Minister when he was the finance minister who made the decision to start doing this. It is important to understand what has happened or why this all occurred initially. Going back to 1997, when the government started running surpluses, it has been absolutely Machiavellian how the government has handled the manipulation of the surpluses that the country has run since that time.

In this case, the government broke all the accounting rules, broke the tradition of Parliament and put this money into these foundations, but that was only the tip of the iceberg. It was $9 billion. Since 1997, $95 billion in surpluses that were not forecast has been manipulated in various ways, manipulated so that the public has had no say in how that money would be spent.

I am a member of the finance committee and my friend over here is the vice-chair for the official opposition. When we sit down in the fall and go through the prebudget hearings we have a role to play. Our role, allegedly anyway, is to gather input from the public and provide a report to the finance minister that will give him guidance on what to include in the budget and how to spend the money that the government forecasts coming in. Unfortunately, the government has never really been very upfront with Canadians about the size of the surplus that it has anticipated. In the last number of years since 1997 we have actually had $95 billion in surpluses that were not forecast by the government. The government consistently lowballed these figures.

One way the government has dealt with this is to create these foundations and slide $9 billion of that over into these foundations. Again, these foundations are not even doing anything to a large degree today. Some of them have administrations of 30 people and have spent almost nothing of the hundreds of millions of dollars that they have sitting in accounts. It is not clear what they are doing.

Of course I have heard the protestations from the other side of the House. They say the Auditor General is not criticizing these foundations, which is true, but the point is that the Auditor General really cannot criticize them because she does not have access to their books. It is a very disingenuous argument that members on the other side raise. If the Auditor General had access to the books to determine whether or not Canadians were getting value for money, we might find out that she had some very stern criticisms of these foundations. I would just like to encourage the government to be more honest in its refutation of some of these arguments.

My final point is that justice must not only be done, it must be seen to be done. It may well be that some of these foundations are doing good work, but forgive me for saying that I am not quite prepared to take the government's word for it, especially in the light of sponsorship, the firearms registry debacle and the $350 million in Davis Inlet that came to no good effect. I would like to know that the Auditor General had the ability to look at those books.

In conclusion, my motion reads:

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.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the House has dealt with this subject on other occasions. We also dealt with it in the Standing Committee on Government Operations and Estimates in the last Parliament. Approximately 20 foundations or so are under the purview of that committee. Notwithstanding what the member said, I was the chair of the committee at that time. I am aware that all but two of those foundations, which are very small, required audits. They have financial audits now.

The member's motion speaks to performance audits, and this is a little different. Performance audits are done under the auspices of a management consulting purview. In terms of opining on the financial or fiscal position and performance of a body with financial responsibilities, it is a financial audit, not a performance audit.

The other point I will raise for the member's comment is he should clarify for the House the variance between forecasted surplus and actual surplus. Could he explain to the House the first point so everybody understands what the timeframe differential is between when the forecast is made and when the final surplus is determined?

[Monte Solberg, Conservative, Medicine Hat, AB]

Let me deal with the second point first, Mr. Speaker, which is important.

The member has asked when the forecasts are made. The last time a forecast is made in the year before a budget is presented, for instance, is the fiscal update. Then in the budget there will also be some numbers that opine on where the government will be for the current year. At that point, the government has the third quarter national accounts numbers at which it can look.

Unfortunately, we argue it has not done a very good job of this. I point to last year as a good example. In the budget the government said that the surplus would be $1.9 billion. When the numbers finally came out in August, the surplus was $9.1 billion based on the fourth quarter. The government has it within its power to call the forecasters together in April, for instance, when it has the benefit of the new national accounts numbers, to provide an updated projection of the size of the surplus.

This is exactly why the official opposition, the Bloc Québécois and the NDP have recommended that independent forecasters be hired. That is what the finance committee has done. The forecasters are before the committee today to bring forward these numbers. They are now updated numbers that give Parliament a much better idea of the actual size of the surplus.

The first issue deals with performance audits. The member is correct that we are concerned especially about performance audits, but that is vital to the proper operation of government programs. Look at the sponsorship program. Look at Davis Inlet, which is one of the most unbelievably inefficient uses of Canadian tax dollars ever; $350 million to move a community of 700 people 20 or 25 miles away to a different place in the hope that it would somehow cause them to leave the problems that gripped the community behind, problems like addictions of all kinds.

If we did a performance audit on something like it, I am sure we would determine that this was one of the most colossal wastes of money in the history of the country. In fact, it gave the people, who were in absolute dire straits, false hope. It somehow suggested that they would be helped out of the terrible situation in which they were. It was an absolute disaster and a complete waste of money. It is an example of why it is important to have performance audits for foundations as well.

[Charlie Penson, Conservative, Peace River, AB]

Mr. Speaker, I am pleased to rise today in the debate on our motion with regard to the Auditor General. I would like to thank my colleague from Medicine Hat, our finance critic, for bringing this subject forward.

It is a very important topic. It is timely in the sense that the Auditor General has again come out and recommended that foundations be put under her purview in terms of auditing. It is also important to tell the House that it is not only the current Auditor General who has made that recommendation.

When the former finance minister, now the Prime Minister, brought this practice into being in 1997, we had a different auditor general. That auditor general, Mr. Desautels, also was very concerned about the practice. I think his concerns have been borne out.

We have seen the corporate sector struggle through some pretty bad accounting practices. I am not sure how the government of the land can lecture the corporate sector on cleaning up their corporate governance, corporate malfeasance, when we have the same kind of practices from our own government. I suggest the government tries to get things off the books for political purposes.

Of over $9 billion that has been set aside for these foundations, only $1.3 billion has been spent. This means there is $7.7 billion sitting in bank accounts or investments by those foundations. The bottom line is the foundations did not need that $7.7 billion at all. Why is that important? It is important because this is basically the tax money of Canadians. It is revenue that went into these foundations which has not been used. The money is sitting there gathering interest.

What does that mean to the average person? It could mean a substantial tax cut, or it was overtaxation during that period of time of $7.7 billion. It is fairly significant, considering that the Liberals brag about their tax cut in 2000 of $100 billion, although the real numbers are more like $40 billion. However, when we stack up that almost $8 billion against the $40 billion, it would be a significant tax cut.

Yesterday the Auditor General was at the health committee. I was sitting in committee for one of my colleagues. I normally sit on the finance committee. Yesterday the health committee was reviewing the federal government's administered drug program for aboriginal people, the RCMP and the different groups that fall under that purview.

I had the opportunity to ask her questions about why she thought it was important for foundations to be brought under her mandate. She said that it was for the purpose of parliamentarians. The Auditor General is an officer of this House. It also is for Canadians. My analysis of what she said is that in many cases, although there are internal audits done in organizations, the audits are fairly narrow in scope and they do not always uncover some of the problems.

I do not think I have ever seen an Auditor General's report that has been tabled in the House in the almost 12 years I have been here that did not identify some problems in practices with this federal government's administration. The hope is those practices will be corrected, and in many cases they are.

I suggest that if the Auditor General had not identified them, if the credibility of her office was not out there and she did not raise this in a public manner, then they may not have been addressed. In many cases she has to go back and review it, and some of those changes have still not been made.

The office of the Auditor General does Canadians a great service and it should be extended to the business of the foundations.

If we wanted to go to the really hypothetical, we could say why do not pre-fund all departments? That is basically what we are doing with the foundations. However, it is not allowed under the rules of Parliament. It was not allowed up until 1997 when the foundations were brought into being by the current Prime Minister. Then exceptions were made for the foundations. Therefore, if the principle is good enough for ordinary day to today operations in the department, then it is good enough for the foundations as well. I cannot see any harm in having the Auditor General look at these foundations.

One member raised the point that she was not aware of any problems. Looking from the outside, how could anyone see any problems? How could anyone see any problems with the sponsorship scandal? We did not know that some of the agencies even existed. They were hidden from Parliament. Therefore, it is important that the Auditor General has that ability to look at it

My colleague from Medicine Hat talked about the prebudget hearings, which both he and I sat in for almost two months in the fall and into early December. Hundreds of Canadians and Canadian organizations came before our committee to tell us what their priorities were. Many of them identified the problems with predicting budgets and budget surpluses, and rightfully so. I think for the last seven years the government has underestimated the budget surpluses by almost $95 billion.

I talked about credibility. The credibility of the government is at stake in these kinds of operations. These Canadians told us that they did not want this practice to continue. They wanted parliamentarians to be better informed about the fiscal numbers. In fact, we discussed that with them. My colleague raised the issue that the finance committee took direction from the House, from the throne speech amendments, that we set up an independent fiscal forecasting process that was responsible to the finance committee. In fact, I will be going over at eleven o'clock to hear the committee's first report, and hope to have questions for it.

What we would have from the fiscal forecasting committee would be a timely analysis of what Canada's fiscal situation would be on a quarterly basis so Canadians, through their parliamentarians, would have a better idea of the current fiscal status of the country. Whether it is surpluses, deficits or whatever, we need to know that because pertinent policy decisions need to be made. Perhaps the finance department has had it in the past but parliamentarians certainly have not, with the exception of the fiscal update in November of last year.

My understanding is that even since November, there have been substantial changes to those numbers. Therefore, if we have that on a timely basis, it would keep us better informed in the same way the Auditor General's auditing reports on foundations could keep us better informed. We could find out whether these foundations were following their mandates.

I think it is a natural flow. In fact, I would go so far as to say it is unnatural that we would exempt the foundations from the Auditor General's scrutiny. I am not sure why the government did that, although it is now clear that there is $7.7 billion in the banks accounts or investments of foundations that would normally have shown up as larger surpluses than we even had.

It is important to get hold of this. We think the government probably will embark on further endeavours with these foundations or trusts that will not be answerable to the Auditor General. She will not have a chance to look at their books, and that does not serve Canadians very well.

I have great faith in the Auditor General's department. The department does us proud. We hopefully can have better use of taxpayer money. Every time a dollar is wasted, it is a dollar of taxpayer money that could be left in their pockets or better spent in some other way.

It is all about that. Canadians are one of the highest taxed countries anywhere in the industrial world. If we can save some dollars by having less government misspending, that is important. We need the department to fully look at all the books of the operations of the Government of Canada, including the foundations. If there are further trusts or foundations anticipated in the budget tomorrow, I hope the House will vote to give the Auditor General the ability to audit these organizations.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I have listened carefully to the speech by my friend and colleague from the Conservative Party.

This is the third time that this recommendation has been made—the second was by the Auditor General and the first by the committee—that the Office of the Auditor General be designated to look into what is happening with the foundations. Each time, the government has given the same answer. I would like to hear the comments of the hon. member about this answer.

The government says that the Auditor General must not be given this right of oversight, because it might cast doubt on the independence of the foundations. That is more or less what we are going to be hearing from the government party all day—that the Auditor General cannot examine the foundations, because doing so would prejudice their strategic or organizational independence, or whatever.

I would like to ask my colleague how he interprets the act of verifying whether money has been well managed and well used. As I see it, that is one thing. Furthermore, does he agree with me that an external audit held to ensure money has been well managed, does not call into question the decisions of the board of directors, the mandate of the foundation, its operating method, its operational strategy or anything else?

Does he feel the government's excuse that this would prejudice the independence of the foundations still holds?

[Charlie Penson, Conservative, Peace River, AB]

Mr. Speaker, my colleague's question was well put. He asked whether the Auditor General's being able to audit the foundations would inhibit the foundations' ability to act. I do not think it would. I do not think it inhibits the ability of the departments to act on the different programs within the departments that she audits now.

What she does bring to this is a measurement. There is some measurement that the public can see through their parliamentarians of whether the goals of an organization as outlined in its mandate and rules are being achieved.

It seems to me that the more transparency we can bring to this process, the better off we will be. Credibility in the whole process is very important. Canadians are participating less in the democratic process. The voter turnout in the last election was only about 60%. As people are really concerned about the way matters are being handled here in the nation's capital, it has the ability to turn people off in terms of voting. If they think they are not being listened to, or if elected members are not being listened to, or if they are not getting the proper respect, people get turned off in the process.

The more transparency we can bring to this, the more accountability of taxpayers' dollars, the better off we all will be, especially as it pertains to the corporate sector. The corporate sector has gone through some tough times. I remember the current Prime Minister when he was finance minister giving a speech in Toronto a few years ago. He lectured the corporate sector to get its corporate governance in order. I would give him the same advice.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member seemed to imply that the government is pre-funding things and that is inappropriate. Let me use the example of the millennium scholarship fund. It was set up to provide scholarship benefits to Canadians right across Canada for a lifetime. Some $1 billion was set up as an endowment and was put into a separate foundation. It has its own board of directors. It is audited. It is reported on through the proper minister to this place.

Does the member believe that setting up the millennium scholarship fund and putting $1 billion in an endowment to provide for those future scholarships was inappropriate?

[Charlie Penson, Conservative, Peace River, AB]

Mr. Speaker, I think that is pretty irrelevant to the issue. Quite frankly, if the member feels so strongly that this is a good program, and it probably is, what would be wrong with letting the Auditor General have a look at it? I see nothing wrong with it. It gets back to the credibility issue again. If the Auditor General is not allowed to look at it, it creates a problem.

The member raised the other issue about pre-funding. I think he will know, and the Auditor General confirmed yesterday, that departments are not allowed to pre-fund programs. An exception was made for the foundations. The member should know that. If he does not, I would advise him to check the Auditor General's response in the health committee yesterday.

[Reg Alcock, Liberal, President of the Treasury Board and Minister responsible for the Canadian Wheat Board]

Mr. Speaker, I appreciate the opportunity to speak to this issue. It is useful for the House to have debates on important public policy issues. This is certainly one that has been around, but we have to differentiate this in a couple of ways.

The first thing is it seems that whenever we want to inflame debate all we have to do is throw out the aura of some dishonest or inappropriate behaviour. We use words like sponsorship and we do not know what is happening with these foundations. The members really do a great disservice to the people who are involved in these organizations, all of whom subject themselves to very rigorous oversight regimes. The Auditor General herself has said that. To try to confuse what is a substantive policy debate with this kind of unfortunate language and mudslinging debases the debate that we could have here.

What is at issue is a policy disagreement. It is very important that we stay focused on that. To do that let us step back a few years. After 27 years of deficits we dug ourselves out of debt, thanks to the very hard work of the current Prime Minister when he was finance minister, and the government of the day .

I hear lots of talk about the forecasting. In fact the forecasting methods the government uses are as rigorous as we are going to find. It would be really interesting to see the others. What happens is that on a cash flow this year of some $190 billion, it is enormously difficult particularly when a big chunk of the revenue comes in the last quarter to determine exactly where we are going to be. The government exercises a very serious prudence regime to guarantee that we do not overshoot because there is no way we want to go back to the old days of deficits. Those are the simple facts of it.

As we got close to coming out of debt, the then finance minister realized that we would likely have a very large surplus toward the end of that first year, and he made a decision. He said the problem was that it is also an accounting issue which the Auditor General talks about. He said at that time that because of the way the rules were currently structured, he could not put any of that money out to do other work.

The reality was, if members will cast their minds back to that time, there were huge concerns about the brain drain, about people having to move to the United States to get quality jobs, about our research communities being depleted. There were huge cries across the country for investments in our capacity to innovate because all of us believe, and I have heard members on the other side express exactly these same beliefs, that if we are to grow as a country, we simply have to develop ways to invest in our innovative capacities. The Prime Minister when he was finance minister made the decision to put 25% of the surplus that year into an instrument that allowed it to carry on in subsequent years.

According to accounting policy at that time, he had to put it out to an independent agency, otherwise it would remain on the government's books and would have gone toward the debt. He made a decision. It was not a shady, hidden decision. He spoke about it; it was announced in the budget. This House looked at the legislation, passed the budget bill, debated it here and approved the expenditure. It was not done in any secret way. It was done on the floor of this chamber with the support of people in this chamber. We set up a facility that brought people of very high reputation, people who unquestionably are leaders in this country, around a table to make decisions on a peer review basis about how we would fund science. That is what was done. It is as simple as that.

We have to try to get to the substantive debate and not play these foolish games. The Auditor General herself has said over and over again that she has no concern about the financing. There is no sponsorship here. There is nothing hidden here. In fact, of these institutions, it might interest members to note that every single one of them produces an audited financial statement. Every single one of them subjects itself to independent evaluation and those reports are tabled here in this House. When I chaired the committee on government operations, there were concerns because they had not been before the House.

It is interesting to note the comments of the member for Medicine Hat about the sheriffs in 1254. Those same actions were the ones that actually created the foundations of the modern House of Commons and its role to oversee government expenditure.

How many hours does the member spend in committee on estimates? How many times have those members called departments before them to rigorously look at their spending? One of the great failings of the House is that we do not take that seriously and we do not do exactly what the member says we need to be doing.

Those foundations will come before the House and answer questions. We could call any one of them and they would share their financial information. In fact, they would be glad to do it. When I called them and when the chair who followed me called them, there was absolutely no resistance to it.

Any suggestion that there is something shady, underhanded or hidden from public view here is simply wrong. The foundations' audits and evaluations are published on their websites. In many ways one could argue that these organizations are models of transparency. Not only that, the foundations have been enormously successful in their prime missions. The volume of quotes that talk about the good work they have done is extraordinary.

Dr. Adele Diamond from the University of British Columbia wrote, “The Canadian government's vision and foresight in establishing the chairs program was absolutely inspired. Indeed other countries are now scurrying to follow Canada's lead”.

There is renewed energy across the country. We no longer have a brain drain; we have a brain gain. People are coming back to Canada to occupy these positions because we have made investments in research. Students are able to go to university because we have invested in them, despite the actions of certain provinces to claw back.

There are always opportunities for improvement. Frankly, I am a huge fan of the Auditor General. I work very closely with her on her comments about government. She provides an invaluable service.

The boundary issue here is the closer we bring these organizations to government, they may as well simply become departments of government and we would lose the ability to carry the funding over fiscal years. Why is that a problem? I encourage members to take this issue seriously and to call the various organizations before them. Members should call the auditor before them to discuss some of the other issues of the funding of research in government. They should call the head of the Canadian Institutes of Health Research who is currently saying that he has a problem in that he cannot plan ahead because the accounting rules are in many ways based on the recommendations of the sheriff in 1254 and do not allow for moving into a more modern kind of accounting.

It is interesting to note that in the auditor general's report where concern was raised about foundations, in chapter 8 she talked about the government's need to go to accrual accounting. This would allow us to account for activities multi-year and perhaps would make it unnecessary to use some of these instruments.

The fact is that in the current circumstances, if we want to manage our cash flow so wo do not go into deficit and we want to put some money into the hands of Canadians who can do good work, this is a vehicle that works exceptionally well and has been enormously successful. I would simply challenge members to put on the table a substantive concern.

The Auditor General also went on in her report to say that she had no concerns about the accounting standards. In fact, she has issued unqualified audits of the government's books every single year. It is important to stay focused on what is essentially a policy disagreement between the auditor and the government. It is a disagreement around whether or not these institutions should be separate.

Members have said that if the government makes a grant, the auditor should be able to audit that organization. We make grants to the United Nations but we do not expect the auditor to be the auditor of the United Nations. We make grants to the OECD, the World Bank and other organizations. We give money to other organizations in pursuit of agreed upon policy goals debated in the House and passed in the House. We do not make it a requirement that the Auditor General be the auditor for all of them.

We do sit down and look carefully at our agreement rules and the text of our contracts with these companies. We simply put in place performance measures that people can look at in order to satisfy themselves that the funds are being used in a way that is consistent with the purposes for which they were given.

Do we want proper information? Do we want proper evaluation? Do we want Canadians to know that this money is being spent? Absolutely. The question is, are they independent of government? It is the government's belief that to bring them in closer puts us in a dangerous position which would make it impossible for us to use these vehicles to fund those important services.

[An hon. member]

Why?

[Reg Alcock, Liberal, Winnipeg South, MB]

I hear a member asking why. Let me refer him to chapter 4 of the current audit recommendation. Paragraph 4.17 states:

If the foundations were deemed to be controlled by the government pursuant to this new standard, then payments to them could not be recorded as expenses, since the foundations would then be considered to be within the government reporting entity.

That has been the problem from the beginning. They are not departments. They are instruments of public policy, established by the House in accordance with legislation passed in the House and overseen by standards that have been debated in the House and discussed at committee. They produce independently audited statements and independent evaluations. They report all that information transparently. They appear before the House but they are not departments of this government, which is the fundamental issue here.

I do not reject one of the Auditor General's concerns about the oversight and relationship in terms of the reporting we get from these foundations. We have been working with her. In fact, we have worked with her to implement a number of changes that she has recognized. The new Comptroller General is working closely with her office to see where else we can go to satisfy these concerns.

The one concern where we do not have agreement is whether or not she should be the auditor of record of these organizations.

However I do have a recommendation to make that I think begins to address this concern, and I would encourage members to look at it.

The member for Repentigny has put before the House a private member's bill, I believe it is Bill C-277, that addresses this question. I believe there is one more hour of debate on that bill and then it will move to committee. I would encourage the House to get that bill into committee where it can call before it various actors, the auditor, myself, certainly, and the foundations. The committee can take a look at this because there may be another way to achieve the goal that the Auditor General wants.

When I get below some of the simplistic criticisms and into the substantive part of this debate, I think members want to be is satisfied that there is good oversight, which is what I think we all want.

However the Auditor General has asked for something else, which I think gives us a bit of an opportunity to differentiate here. She has spoken to the need to have the ability to, what is euphemistically called, follow the money audits. When there is a concern she wants to be able to follow the money into the organization.

I think that would be a very fruitful and useful avenue to explore. It would solve a number of problems. It would differentiate between the Auditor General being the auditor of these organizations and bringing them into the government fold, which creates other problems, and allowing her to have the independent oversight that she might like to have to satisfy herself should a concern arise.

I want to read what the Auditor General said last week. She always gets caught and she said this in her previous audit report, that often things that she says are picked up and taken out of context and used as supposed evidence of more serious problems. On CBC last week she said, “We do not have any issues with the people who are there and I would not want any of our comments to be taken as a criticism of the people nor of the activities that are going on in the foundations. I certainly wouldn't want to give the impression either that we think there is anything inappropriate going on in those foundations”.

Those were the words of the Auditor General. We can always raise the spectre of things but those are the words of the very person who members are purporting to represent here. The reality is that she says there is no substantive concern, that there is a policy dispute about whether or not these instruments should be part of government.

I should remind members that this House has taken the position by the passage of successive budgets that this instrument is a useful one and it works. These foundations were not created by the snap of a finger of the finance minister. Most of them were created in legislation that was debated and passed here in the House. The money was put before this Chamber and members passed it. Therefore to suggest that somehow this is a shady deal in the backroom is just simply inaccurate.

One more time I hear a member wanting to besmirch the good names of all the people who serve on these foundations and, under the cover of privilege, accuse them of being like the sponsorship.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Nobody said that.

[Reg Alcock, Liberal, Winnipeg South, MB]

Please, let us try to rise above that. Let us try to have a debate that is substantive and focussed on the issues at hand.

Managing something as large as the Government of Canada is an important responsibility that we all share, and we particularly share that in a minority. Members have to get focussed on their responsibilities. To simply attack things because it is cute in the public debate or because they will get a headline some day, does a huge disservice to the Government of Canada and to the people of Canada. This is important business and they should be up to it.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Mr. Speaker, last week in the public accounts committee I asked the Auditor General a point blank question. Last week in the House of Commons the Prime Minister, Mr. Dithers, said that the foundations had a lot of transparency and accountability and that there was absolutely no problem with Parliament or anyone else finding out what was going on in the foundations. When I asked the Auditor General whether she shared Mr. Dither's enthusiasm, she said “absolutely no”.

Liberal governments, I would say for 30 years, have been undermining the role of government. We can argue that back in the seventies there was restructuring in this place that concentrated power in the Prime Minister's Office and undermined every member of Parliament from carrying out his or her duties.

We now have another Liberal government, under the charter, that backs off from making major policy decisions and allows the courts do it. It hides behind that. Now it is trying to farm out the functions of Parliament to foundations.

I have two questions for the President of the Treasury Board. He said that independent auditors were reviewing the books. I would remind him of Enron. Andersen Consulting was doing audit and consulting work for the same outfit which ended up destroying the organization because it was in absolute conflict of interest.

The government is doing extensive consulting work with major auditing firms that are also doing audit work. I would like him to respond to that clear-cut conflict of interest in the context of Enron and good governance.