Reg Alcock

[Public Service, February 22nd, 2005]

No, Mr. Speaker, I will not confirm that.

[Supply, February 22nd, 2005]

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.

[Supply, February 22nd, 2005]

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.

[Supply, February 22nd, 2005]

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.

[Supply, February 22nd, 2005]

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.

[Supply, February 22nd, 2005]

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.

[Supply, February 22nd, 2005]

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.

[Information Security, February 17th, 2005]

Mr. Speaker, once again the member mischaracterizes what the Auditor General said. It is true that we are under increasing attack all the time. If we note the graphs in her reports, she identifies the attacks the government is under. Thus far, we are successfully defending ourselves against them.

We have put in place the strongest secure facility on the Internet that exists; we built the gold standard and we are deploying it right now to all departments. This government takes the security of personal information very, very seriously.

[Auditor General's Report, February 17th, 2005]

Mr. Speaker, I think the hon. member does a disservice to the many services that these foundations provide when he misquotes the Auditor General.

What the Auditor General said yesterday was, “I'd just like to say, Mr. Chair, that we have no concerns about the financial audits that are being conducted in the foundations”.

Those are the Auditor General's words.

[Report on Governance of Crown Corporations, February 17th, 2005]

Mr. Speaker, as part of an effort to provide parliamentarians and Canadians with the most comprehensive review of crown corporations governance in over 20 years, I have the honour to table, in both official languages, a report entitled “Review of the Governance Framework for Canada's Crown Corporations: Meeting the Expectations of Canadians”.