moved that Bill C-277, An Act to amend the Auditor General Act (audit of accounts), be read the second time and referred to a committee.
Madam Speaker, it is always with a lot of emotion that the members participate in this part of our parliamentary life, that is the Private Members' Business.
For the benefit of the viewers I explain that while bills are generally introduced by the governing party, every day, parliamentarians exercise the privilege of introducing a private member's motion or bill. However, during their mandate or a session, individual members seldom have the opportunity to do so.
At the Bloc Québécois, we have made it a duty to introduce bills to respond to the concerns, aspirations and wishes of Canadians, after having consulted and heard what they have to say.
That is why I am very pleased today to introduce Bill C-277, an act to amend the Auditor General Act (audit of accounts), in order to allow the Auditor General to act as auditor or joint auditor, firstly, of crown corporations; secondly, of certain other bodies established by acts of Parliament to which the Government of Canada has paid at least $100 million during any period of 12 consecutive months; and, thirdly, of certain corporate entities without share capital in respect of which the Government of Canada has, either directly or through a crown corporation, the right to appoint or nominate a member of the governing body, andto which the Government of Canada has paid at least $100 million in money or in kind during any period of 12 consecutive months.
What do these legalistic and very opaque words mean? The bill is quite brief. It means that at present, as we speak, the Auditor General of whose power, credibility and relevance within the government we are all aware, whose role and mandate is to ensure that public funds are well managed, finds herself prevented from examining certain public funds, those in foundations and in five crown corporations.
To simplify and summarize: this bill gives the Auditor General the right, power and opportunity to investigate, examine and audit all public funds.
I am sure that those on the government side will say that most foundations, crown corporations and departments manage their money well. If everyone manages their money well, then they ought to agree with the Auditor General reassuring us every year that this money is well managed. Therefore, there should be no problem with this.
Which crown corporations not under the supervision of the Auditor General would become so if the bill is passed? I will name them; there are only five. Some are more special than others, but you will see they are all quite interesting.
There is Canada Post. At this moment, the Auditor General cannot examine the budget of Canada Post. We are not saying that there is no external audit; we are saying that the person doing the audit is chosen by the board of directors. That is rather unusual where public funds are concerned.
Some say that the Auditor General could look at the budgets and the management of Canada Post. She will not do so every year, but she could. After what happened with André Ouellet recently, it would be legitimate for the Auditor General to take a look at management and resource optimization within Canada Post.
Therefore, we have Canada Post, the Bank of Canada and the Canadian Race Relations Foundation. We do not want her to interfere with policy and decision-making or with day-to-day operation of these bodies. All we want is for her to review the management.
I was told after the bill was introduced that two are more sensitive, and I am quite open in this regard. People who know me understand that I am open to dialogue, discussion and amendments. We would have to see. The two are the Public Service Superannuation Plan and the Canada Pension Plan.
If, after discussion in committee, it is demonstrated that they are indeed problematic—the goal being to allow the Auditor General to do her job, and not create problems for anyone—we will see what can be done.
As far as the foundations are concerned, we are talking about the ones with a budget of at least $100 million. We are not talking about just any local shore protection foundation. We do not want the Auditor General to keep an eye on everything that happens, all the time. This would be unfeasible or almost unfeasible.
We have heard that foundations have received large amounts from the federal government, but are beyond the scope of review by a truly independent external auditor.
Again, we can be told that there are external auditing mechanisms in place; however, the external auditor is named by the board of directors. This does not ensure full accountability, transparency and responsibility towards the Parliament.
I will give a few examples of foundations. Again, let me state very clearly that I am not accusing these foundations' managers of being dishonest or bad. All I am saying is that if they are, then we should let the Auditor General take a look at their books.
The Canada Foundation for Innovation received $3.6 billion for its funding. The Canada Millennium Scholarship Foundation received, when it was founded in 1998, $2.5 billion. Canada Health Infoway, founded in 2001, received $1.2 billion. The Genome Canada endowment foundation received some $300 million.
When they were established, these foundations received around $9 billion. Today, $7.1 billion is still beyond the scope of the Auditor General's review.
If Parliament adopts my bill, it is simply to reassure the public, which got really burned, obviously, during the sponsorship scandal. Its aim is to reassure the public that it is not only a portion of public funds that are well managed and well administered and on which the Auditor General has oversight. In fact, all public funds are subject to scrutiny by the Auditor General.
What is the idea behind this bill? It is not a result of the sponsorship scandal and it is not for strictly political reasons. The idea takes shape in three specific documents.
First, this idea is based on the report of the Auditor General, who is not a political person but an independent officer of the House. In April 2002, she tabled a report. I want to read some excerpts. The press release accompanying the April 2002 report stated, and I quote the Auditor General:
Substantial amounts of public money have been transferred to foundations. I am concerned by the limits placed on Parliament's ability to scrutinize them.
Later, she stated:
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;
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; and
limited opportunity for Parliament to scrutinize these delegated arrangements.
Later in her report, the Auditor General says:
We found that the essential requirements for accountability to Parliament—credible reporting of results, effective ministerial oversight, and adequate external audit—are not being met.
Later still, she says:
With a few exceptions, Parliament's auditor should be appointed as the external auditor of existing foundations and any created in the future, to provide assurance that they are exercising sound control of the significant public resources and authorities entrusted to them.
Those are the words of the Auditor General. Later in her April 2002 report, she says:
—the essential requirements for accountability to Parliament...are not being met.
The last two excerpts from the Auditor General's report that I want to cite read as follows:
The creation of more foundations and the transfer to them of very large amounts of public money raise increasing concerns about the lack of adequate means for parliamentary scrutiny.
She goes on to say:
The auditor general should be appointed as the external auditor for foundations, with a few exceptions.
So that was back in April 2002. In accordance with parliamentary procedure as we know it, the Standing Committee on Public Accounts examined the report in April 2002, and its report was tabled in turn in May 2003. What was contained in that May 2003 report by the standing committee after its examination of the auditor general's report? There was one key recommendation which read:
That, for those foundations either created through legislation, or receiving significant federal funding--
They were talking here of $500 million, which after discussion was brought down to $100 million.
—the federal government appoint the Auditor General of Canada as external auditor of these foundations.
In response to this recommendation, the government said:
However, requiring foundations to accept the public sector type standards and operations as well as establishing the Auditor General of Canada as their auditor as identified in recommendations eight through thirteen, could undermine the independence of foundations, reduce their operational flexibility—
If the money is being properly managed, I have trouble seeing how this would reduce their operational flexibility. The government response was a bit odd.
So what we have here is a report released in 2002 and a response in 2003. Then in 2004, the auditor general said the following in connection with the public accounts:
For a number of years I have included in my audit report on the government's financial statements a discussion of my concerns about foundations. SInce 1997, the government has recorded as expenses in its financial statements $9.1 billion in transfers to several foundations—
So what she was saying is that she needed to see whether this had all been done properly. So what we have here is a report released in 2002 and a response in 2003, plus a repetition in 2004 by the auditor general that this needed to be corrected.
Being overly preoccupied with other issues, this government has neglected, forgotten or rejected its responsibilities concerning the supervisory power of the Auditor General. This is why, today, it is totally appropriate to recall these recommendations to the government party and to parliamentarians.
Following discussions with my colleagues from the New Democratic Party and the Conservative Party, I know that there seems to be some support for this, and I am very pleased about that. I hope that on the Liberal side, they will show the same respect for the powers of the Auditor General and the same interest when it comes to allowing her to review the totality of public monies. I do not want to accuse anybody, I only want the books to be open.
The government talked about transparency during the election. Our citizens talk to us of cynicism toward the political world. Let us open the books more; let us ensure greater transparency; let us allow the Auditor General to take a look at what is going on in the entire government machinery; let us not hide $9 billion from the Auditor General through foundations. If we do so, we will probably increase somewhat the citizens' confidence in politics and we will ensure that all that money is well managed.
Concerning the Millennium Scholarships, let me remind you that we are in favour of their abolition. At the end of the day, we feel that departments should manage these programs but, in the very least, while these foundations are in existence, they should open theirs books to a truly independent audit. This audit should not be done par existing boards. Thus, confidence will be restored.
