OGGO Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Government Operations and Estimates

EVIDENCE

CONTENTS

Wednesday, October 29, 2003

¹

1535

The Chair (Mr. Reg Alcock (Winnipeg South, Lib.))

Mr. Odina Desrochers (Lotbinière—L'Érable, BQ)

The Chair

¹

1540

Mr. Odina Desrochers

Right Hon. Joe Clark (Calgary Centre, PC)

Right Hon. Joe Clark

The Chair

Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Canadian Alliance)

The Chair

Mr. Norman Riddell (Executive Director and CEO, Canada Millennium Scholarship Foundation)

¹

1545

¹

1550

The Chair

Mr. Martin Godbout (President and CEO, Genome Canada)

¹

1555

º

1600

The Chair

Ms. Myrna Francis (Interim President and CEO, Canada Health Infoway)

º

1605

The Chair

Ms. Myrna Francis

The Chair

Dr. David Strangway (President and Chief Executive Officer, Canada Foundation for Innovation)

º

1610

Ms. Carmen Charette (Senior Vice-President, Canada Foundation for Innovation)

º

1615

The Chair

Dr. Arnold Naimark (Board Chair, Canadian Health Services Research Foundation)

Mr. Jonathan Lomas (Executive Director, Canadian Health Services Research Foundation)

º

1620

º

1625

The Chair

Mr. Paul Forseth

The Chair

Dr. David Strangway

º

1630

Dr. Arnold Naimark

The Chair

Mr. Norman Riddell

The Chair

Ms. Myrna Francis

º

1635

The Chair

Mr. Martin Godbout

The Chair

Right Hon. Joe Clark

º

1640

The Chair

Dr. Arnold Naimark

Right Hon. Joe Clark

Dr. Arnold Naimark

Right Hon. Joe Clark

Mr. Martin Godbout

º

1645

The Chair

Right Hon. Joe Clark

The Chair

Ms. Myrna Francis

The Chair

º

1650

Dr. David Strangway

The Chair

Dr. David Strangway

The Chair

Dr. David Strangway

The Chair

Mr. Jonathan Lomas

Right Hon. Joe Clark

Mr. Jonathan Lomas

Right Hon. Joe Clark

Mr. Jonathan Lomas

º

1655

Right Hon. Joe Clark

The Chair

Mr. Pat Martin (Winnipeg Centre, NDP)

Mr. Jonathan Lomas

Mr. Pat Martin

Mr. Jonathan Lomas

Mr. Pat Martin

Mr. Jonathan Lomas

Mr. Pat Martin

Mr. Jonathan Lomas

Mr. Pat Martin

»

1700

Mr. Jonathan Lomas

Mr. Pat Martin

Mr. Jonathan Lomas

Mr. Pat Martin

The Chair

Dr. David Strangway

Mr. Pat Martin

Dr. David Strangway

Mr. Pat Martin

Dr. David Strangway

Mr. Pat Martin

The Chair

Mr. Norman Riddell

Right Hon. Joe Clark

Mr. Norman Riddell

Mr. Pat Martin

Mr. Norman Riddell

»

1705

The Chair

Ms. Carolyn Bennett (St. Paul's, Lib.)

The Chair

»

1710

Ms. Carolyn Bennett

The Chair

Dr. Arnold Naimark

The Chair

Dr. David Strangway

The Chair

Dr. David Strangway

The Chair

Dr. David Strangway

The Chair

Mr. Martin Godbout

The Chair

Mr. Norman Riddell

Right Hon. Joe Clark

Mr. Norman Riddell

Right Hon. Joe Clark

Mr. Martin Godbout

Mr. Norman Riddell

»

1715

The Chair

Mr. Norman Riddell

The Chair

Mr. Norman Riddell

The Chair

Mr. John Bryden (Ancaster—Dundas—Flamborough—Aldershot, Lib.)

The Chair

Dr. David Strangway

Mr. John Bryden

The Chair

Dr. Arnold Naimark

The Chair

Mr. John Bryden

The Chair

Ms. Myrna Francis

The Chair

Mr. Martin Godbout

Mr. John Bryden

Mr. Martin Godbout

Mr. John Bryden

Mr. Martin Godbout

The Chair

Mr. Norman Riddell

Mr. John Bryden

Dr. David Strangway

The Chair

Mr. Jonathan Lomas

Mr. John Bryden

»

1720

Mr. Jonathan Lomas

Mr. John Bryden

Mr. Jonathan Lomas

Mr. John Bryden

Mr. Jonathan Lomas

Mr. John Bryden

Mr. Jonathan Lomas

Mr. John Bryden

Mr. Jonathan Lomas

The Chair

Ms. Raymonde Folco (Laval West, Lib.)

The Chair

Mr. Norman Riddell

»

1725

The Chair

Ms. Raymonde Folco

The Chair

Mr. Leon Benoit (Lakeland, Canadian Alliance)

Mr. Norman Riddell

Mr. Leon Benoit

Mr. Norman Riddell

Mr. Leon Benoit

»

1730

Mr. Norman Riddell

Mr. Leon Benoit

Mr. Norman Riddell

Mr. Leon Benoit

Mr. Norman Riddell

The Chair

Mr. Leon Benoit

Mr. Norman Riddell

The Chair

Mr. Leon Benoit

The Chair

Mr. Leon Benoit

Mr. Norman Riddell

»

1735

The Chair

Mr. Paul Szabo (Mississauga South, Lib.)

Dr. David Strangway

Mr. Paul Szabo

Dr. David Strangway

Mr. Paul Szabo

Dr. David Strangway

Mr. Paul Szabo

Dr. David Strangway

Mr. Paul Szabo

Dr. David Strangway

Mr. Paul Szabo

Mr. John Bryden

Dr. David Strangway

Mr. Jonathan Lomas

»

1740

Mr. John Bryden

The Chair

Right Hon. Joe Clark

The Chair

Dr. Arnold Naimark

The Chair

---

CANADA

Standing Committee on Government Operations and Estimates

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NUMBER 066

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Wednesday, October 29, 2003

[Recorded by Electronic Apparatus]

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[English]

    The Chair (Mr. Reg Alcock (Winnipeg South, Lib.)): Okay, let us come to order. Welcome to meeting 66 of the Standing Committee on Government Operations and Estimates.

    Before I turn the floor over to the various guests whom we've invited to be here today, I'd like to set a context. I believe you were all sent a letter describing our interest in this. I think it's fair to say that when this committee was created, the genesis of this particular committee was to start a process of re-examining how the House of Commons fulfills its role in holding the various departments or agencies in the government accountable for the spending of public money. And a lot of that is well understood, if not well used, in the normal areas of operation of departments and certain agencies and such.

    As is often the case around here, when there is a new opportunity, it becomes a catch-all for things that people don't know what to do with.

    There had been concerns raised about the private foundations, and I'm sure all of you know about this in the earlier Auditor General's reports. And we were given a responsibility for sorting that out. I don't want you to feel that it was just the private foundations. We have statutory programs and tax expenditures and virtually everything else that nobody else wants to deal with. And we thought that the simplest way to do that, particularly with the foundations, would be simply to ask you to come and meet with us to talk about it. We made a selection out of a number of foundations and felt that the larger ones would be more in a position to talk about this.

    You're smart people. You've seen the concerns, and you've certainly read the material. We want to give each one of you an opportunity to make an opening descriptive statement or whatever comments you'd care to make on this issue of your operations and the relationship with the government and the House, and then we'll turn it over to the members.

    Have you had a chance to decide among yourselves an order, or do you want me to call an order?

[Translation]

    Mr. Desrochers, do you have a question?

    Mr. Odina Desrochers (Lotbinière—L'Érable, BQ): Just a few remarks, Mr. Chair.

    You know I sit on the publics accounts committee also. I have noticed more and more that that committee and the Standing Committee on Government Operations and Estimates are doing more or less the same work. When I was called upon today to replace my colleague, I realized that the subject matter on the order this afternoon has already been pretty much covered by the Standing Committee on Public Accounts. I have with me the report of this committee in both official languages, with the government response.

    Will our witnesses today add anything new to what has already been done in the public accounts committee? It has often been said that the public accounts committee deals with the past, but it has made a lot of recommendations that are very often overlooked.

    It might be good that your committee and the publics accounts committee work hand in hand. I do not know whether you have read the proceedings of the public accounts committee and the evidence of witnesses, but there is certainly a need for some co-operation between the two committees, so that both are efficient. Lately, witnesses who have appeared before the public accounts committee have already been heard by the government operations and estimates committee. We get the feeling this is repetitious.

    This is the point I wanted to make. I hope people around this table have read the report of publics accounts committee and the government's response.

    Thank you very much, Mr. Chair.

[English]

    The Chair: I can say in response that we did have the Auditor General in, and others. As far as the relationship between the public accounts committee and this committee is concerned, our area of examination is at the front end of the process, around planning priorities and estimates in the allocation of federal money, not around what has occurred with that money once it's been spent. The members of the committee, having had access to that information, wanted to have these groups come before us.

    C'est tout. Okay?

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[Translation]

    Mr. Odina Desrochers: Did you read all the documents of the public accounts committee before you called these witnesses? Are you aware of what is going on in the Standing Committee on Public Accounts?

[English]

    Right Hon. Joe Clark (Calgary Centre, PC): Speaking for myself, Mr. Chair, I've read it as thoroughly as John Crosbie read the free trade agreement.

    Some hon. members: Oh, oh!

    Right Hon. Joe Clark: I'm acquainted with its general orientation, as I think probably all members are. I think we would want to look at working cooperatively with other committees. With respect,

[Translation]

I think it would be worthwhile if we started to hear our witnesses right away.

[English]

    The Chair: Thank you.

    Mr. Forseth.

    Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Canadian Alliance): Yes, I believe the mandate of this committee is clear. We have witnesses before us. We have issues to deal with into the future. And we should hear them.

    I also sit on the public accounts committee. It's instructive to me to sit on both committees, but I can clearly understand the different roles the two have.

    We have a job here today, we'd better get on with it.

    The Chair: Well, then, let us go in the order that the witnesses are on our agenda here, starting with the Canadian Millennium Scholarship Foundation, moving then to Genome Canada, Canada Health Infoway, the Canadian Foundation for Innovation, and the Canadian Health Services Research Foundation.

    Mr. Riddell, you're here.

    Ms. Chapman, hello.

    Jean-Philippe Lepage, you're here.

    Why don't you start, Mr. Riddell?

    Mr. Norman Riddell (Executive Director and CEO, Canada Millennium Scholarship Foundation): Thank you, Mr. Chairman.

    As you've indicated here, I'm the executive director and chief executive officer of the Canada Millennium Scholarship Foundation. With me are Madame Chapman, as you mentioned, who is the foundation's associate executive director, and Jean-Philippe Lepage, who is my executive assistant.

    I'd like to thank the committee for providing us with the opportunity to explain the foundation's accountability framework and the extent to which the benefits the government anticipated from these arrangements have been achieved.

[Translation]

    The Canada Millenium Scholarship Foundation considers the arrangements whereby it accounts for its activities to be a particularly important matter. It does so for two reasons: the foundation's accountability framework, unlike that of other private organizations, was established by Act of Parliament; the funds which the foundation administers, unlike those administered by most private foundations, are public funds.

[English]

    The actions for which the foundation are responsible are set out in the Budget Implementation Act of 1998. That document not only gives the foundation its mandate but also provides specific administrative and policy direction concerning the way in which the foundation is to fulfill its mandate. Further direction is provided in ministerial statements, government position papers, the by-laws drafted for the foundation by the Government of Canada, and finally, by the funding agreement the foundation signed with the Government of Canada.

    As a result, this direction determines the way in which the foundation's money is invested; the amounts that are available for scholarships each year; the distribution of the foundation's awards across Canada; the persons who may receive our awards, and the amounts they may receive; and the way in which the money that goes to students is to be used.

    The law also establishes a series of reporting relationships within the foundation, and between the foundation, the government, Parliament, and the public, to ensure that the mandate and the administrative and policy direction of the foundation are respected.

    Beginning within the foundation, the act provides for members and directors, either appointed by the government or elected by the members. The members appoint the foundation's auditor, from whom they receive an annual report. The members also elect a majority of the foundation's directors, who also provide them with an annual report.

    The directors supervise the management and business of the foundation and exercise all its powers. The law enjoins directors to establish financial and management controls that will ensure that the foundation's business is managed effectively, efficiently, and economically. The law also requires the board of directors to establish an audit committee, to engage an internal auditor, and to commission internal audits to ensure compliance with the management controls established by the board. The external auditor has regular access to the internal audit reports and uses them in the preparation of his annual audit.

    The fact that the external auditor has not issued any observations in his annual reports should be taken as providing assurance that reasonable controls are in place and are being enforced.

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[Translation]

    The law also provides for external reporting relationships. The foundation is required to provide an annual report that includes not only financial statements, but also a statement of its activities and plans, and an evaluation of the results achieved.

    This annual report is sent to the Minister of Finance and the Minister of Human Resources Development as well as the provincial ministers responsible for post-secondary education, and tabled in both houses of Parliament. It forms the major topic of discussion at the annual public meeting of the foundation's members.

    In addition, the 1998 Budget Implementation Act requires the foundation to cause a mid-term report to be made of its activities and to provide for its distribution, tabling in Parliament and public discussion. This report will be made public within the next few days.

    To ensure that Canadians are more and better informed on its activities, the foundation goes beyond the requirements of its legislation. For example, it has offered briefings about its work to the caucuses of political parties. It has appeared before the human resources committee of the House of Commons. It provides members and senators with copies of its annual report and informs members about awards being made to their constituents. Finally, we meet regularly with representatives of the government to keep them informed of our activities and plans.

    Considerable effort has also been expended to draw the public into a discussion of the foundation's work. The foundation mails thousands of copies of its annual report to a cross section of the Canadian public.

    Its annual general meeting is organized in conjunction with a research conference co-sponsored by the Student Financial Aid Administrators in order to attract student leaders, academics, consultants, federal and provincial government officials, student financial aid administrators and representatives of Canada's universities and colleges.

[English]

    The benefits the government anticipated from the foundation's model of governance have been enumerated here and elsewhere by representatives of the government. In the time remaining, I shall try to provide the committee with a partial description of the extent to which these benefits have been achieved.

    The government promised a funding approach that would put the foundation's programs beyond the risk of on-again, off-again financing. Members of the committee will recall that the Canada Millennium Scholarship Foundation was established in the context of cuts to the CHST. Provinces were, therefore, little inclined to cooperate in the establishment of a new federally funded program. The fact that the foundation was able to guarantee 10 years of funding made negotiations for provincial participation in the administration of the foundation's bursary program much easier.

    The government also believed that the foundation's model would provide an ability to lever additional funds from other areas of government and the private sector. In the administration of its scholarship and bursary programs, the foundation relies heavily on the contributions of the student financial aid administrators working in provincial governments and in Canada's colleges and universities. These contributions in kind significantly reduce the costs of operating the foundation's programs.

    The foundation has also attracted $4.2 million from the Canadian Association for the World Petroleum Congress to assist needy upper-year students with strong academic records in pursuing studies and such disciplines as petroleum engineering and environmental science. Working with the World Petroleum Congress has permitted the foundation to develop a model for public-private cooperation to encourage students to complete their studies and take up employment in Canada. In fact, the foundation's networks can be used by the private sector at a cost of roughly 5% of what the foundation is actually putting out in scholarships.

    The government also argued that the foundation model would provide an ability to foster the application of specialized knowledge to mandated activities. The Canada Millennium Scholarship Foundation is particularly fortunate to count among its current and former members and directors three former provincial premiers, two former provincial ministers of education, the grand chief of Canada's first nations, three college presidents, eight current or former university presidents, the heads of the associations representing Canada's colleges and universities, six college and university students, nine representatives of Canada's leading corporations, three teachers, and two representatives of the non-governmental sector.

    Working together with a broad range of stakeholders in public consultations who have informed the development of all the foundation's programs, members and directors of the foundation have established systems whereby student financial aid administrators, academics, consultants, student leaders, recipients of the foundation's awards, and more than 200 interested citizens have regular opportunities to make regular contributions to the development and implementation of the foundation's programs.

    Finally, it was said that the foundation model would lead to greater flexibility and efficiency. Serving a potential clientele of more than half a million students and operating with a staff that even today is only 30 people, the foundation has in five short years, one, obtained superior returns on its investments, thereby turning an original endowment of $2.5 billion into $3 billion; two, developed two national student financial assistance programs and adapted its bursary program to 13 different student financial systems; three, negotiated agreements for provincial participation in the administration of its bursary program in less than 10 months; four, recruited more than 200 colleges and universities to participate in the management of its excellence award program; five, recruited and trained more than 300 citizen volunteers to serve as assessors, mentors, and seminar leaders in its excellence award program; six, distributed 90,000 need-based, and between 900 and 1,600 merit-based, awards a year for each of four years; seven, developed and implemented a model for public-private cooperation to encourage upper-year students to complete their studies and take up jobs in Canada--

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    The Chair: I have to break in at this point. Thank you. I want to make a couple of comments.

    The members of the committee wanted to have a conversation with the foundations. For the information of members, each foundation was told to come prepared to make a 10-minute presentation; the problem is that five 10-minute presentations are almost an hour's worth of information. We have written documents from every foundation except this one, which is why I let Mr. Riddell go on to the limit of his 10 minutes.

    The members know the actions of the foundations, and it's not unimportant to hear of their successes. I don't mean to cut you off in the middle of those, but I think the members would like to have a conversation with you. The more time we spend on these presentations, the less time we're going to have for conversation.

    Now, I note that each one of the other four foundations has provided us with written presentations. For some reason, we haven't received one from the Millennium Scholarship Foundation.

    Could I ask the subsequent presenters to try to précis their presentation a bit, so we can move to the discussion. I think the discussion is going to be the more interesting piece for all of us. Certainly, a lot of the activities are well known, but I think we'd get more meat out them in a conversation, frankly.

    So let me move to Mr. Godbout from Genome Canada, and then to Myrna Francis and Nancy Desormeau from Canada Health Infoway.

    Mr. Martin Godbout (President and CEO, Genome Canada): Thank you, Mr. Chairman. Thank you, members of the committee, for this opportunity to appear before you today.

    My name is Martin Godbout. I'm the president and CEO of Genome Canada. I'm here today with my executive vice-president, Mr. Marc LePage, corporate affairs; and Madame Anie Perrault, the VP of communications.

    I'll try to make it short and I'll leave my text aside, though I guess it's very dangerous. But I'll try to be very brief and explain to the committee where we're coming from.

    I'll bring you back to 1999, when a group of private citizens involved in science, finance, and in the public sector in ethics and environmental and social issues were sitting together--seven people--and we asked ourselves, what could we do to invest a substantial amount of money in genomics and proteomics research in Canada? It was not coming from the government; the structure was not there.

    So the concept was far beyond the concept of foundation and not-for-profit corporation. We needed something at arm's length to the government. We realized very quickly that there was no organization in Canada at that time, in 1999, that could spend a lot of money on genomics and proteomics research.

    The reasons are as follows. We'd have to convince seven different departments in Canada of the importance of genomics. Genomics is a technology, not a disease. It's a technology that is used in the environment, in forestry, in the fishery, in human health, in animals, in agriculture, in plants, and in microbes. We, and I as a scientist myself at the time, couldn't find one organization that would be able to provide us with large amounts of money to compete with what the other industrial countries were doing. So we proposed having a Genome Canada type of organization. We failed in 1998. We failed for reasons on which we are here today: accountability and governance.

    We came in with the idea of a not-for-profit corporation, at arm's length to the government, and that's the issue here today. But we had another matrix in our complicated system, the five sectors of activity. We had to fulfill not only the universities' research in genomics and proteomics, but also the industry and the government laboratories.

    We used to say, as long as you pay income tax in Canada, you are eligible for funding by Genome Canada, and there is no--I repeat--no other organization like that today in Canada.

    We are doing a benchmarking at the moment. We are under evaluation through a process called RMAF, results-based management and accountability framework, which is guided by the Treasury Board. Through that evaluation, we are also benchmarking whether there is an organization like Genome Canada in the world. As far as we know at the moment, there are none.

    We are very proud to say--it will be announced; officially it has been in operation for one year--we have created a Genoma España, and we are working with Sweden, the Netherlands, and Denmark to implement the concept of Genome Canada in their own countries.

    As my colleague mentioned also, one of the reasons these foundations or not-for-profit corporations have been created is that Genome Canada, under a contractual agreement with the Government of Canada, received $300 million in 2000-01. We had to raise another $320 million from other sources, not as matching funds but as co-funding.

    I am very pleased to announce to you here--it was announced at the board of Genome Canada in September--that we have been successful right now, as we speak. Three and a half years after the foundation of Genome Canada, we have been able to raise $320 million more--cash money, not in kind--in contribution from provincial governments, from international institutes, the Wellcome Trust foundation... Wellcome Trust is in the U.K., in London. It's the first time that Wellcome Trust is investing outside the U.K. It's a multi-billion dollar foundation.

    We have been able to raise co-funding as well from the industry and from other partners. We are expecting that by the end of March 31, 2005, our co-funding partners will have raised up to $400 million.

    As my colleague also mentioned--because I have to cut this short--

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[Translation]

Genome Canada uses the governance principles established by the Treasury Board. We have contractual arrangements with Industry Canada.

[English]

We are bound to it. There is no way we can go around, and we have a very solid board of directors. So far, we have invested in 57 projects across Canada. The average size of a project, in terms of money, is around $10 million. There are 11 projects in British Columbia, 6 in the Prairies, 18 in Ontario, 16 in Quebec, 5 in the Atlantic provinces, and one big international consortium of over $95 million.

    So we are very broad in that it is bottom-up. It's excellence-based. All these projects, not only in health, are highly competitive internationally.

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    So, Mr. Chairman, you have the manuscript, and it's public domain. I'm proud to say it will be on the website of Genome Canada by 4:30 this afternoon, because we have a website. You have received the annual report of Genome Canada.

    We want to be transparent. We are very pleased to be here today, and in my name and the name of the board of directors of Genome Canada, if you need more information from Genome Canada, we'll appear before your committee at any time.

    The Chair: Thank you very much. That's a rather impressive record.

    Ms. Francis, or Ms. Desormeau.

    Ms. Myrna Francis (Interim President and CEO, Canada Health Infoway): Thank you. I'll summarize my comments and then make available the full text afterwards.

    I want you to imagine for a minute what it would be like to have a child who has had over 300 lab tests conducted on them during the course of the year; the physicians, hospitals, and labs can't share this information, and this information is very vital and critical to the treatment and care of that child. Or if you were an elderly person and were taking different drugs and these drugs were prescribed by different physicians, the physicians actually couldn't get access to the information to know what medication you were on, to guide their prescribing patterns, and you might end up with a dosage or a drug that in fact makes you sicker than you were when you came in.

    In a paper world, that's how things exist. In the electronic world, information like this will be made available and will have significant impact on patient safety, and in the case of prescriptions, it can reduce errors by up to 20%.

    Infoway's mandate is to foster and accelerate the development and adoption of secure, compatible electronic health records across the country. We have a goal to have these records or these systems in place in half the country within the next six years. To do this requires collaboration and cooperation of the federal, provincial, and territorial governments, because as you know, health is the purview of the provincial governments.

    In September 2000, the first ministers came together, and there was unanimous agreement to work together to strengthen a Canadian infrastructure that would provide for these types of systems that in fact would improve access and quality of care. All governments acknowledged that there needed to be some kind of vehicle, a structure, a corporation, that would ensure that the approach would be consistent and it would be sustainable, that it would foster and nurture this type of partnership, this collaboration among governments, which is absolutely critical if we're going to have these systems that work and are in place, but would also provide enough flexibility to actually leverage their resources. Canada Health Infoway was the response to this need.

    Through extensive negotiation with the governments--and let me add again that it was the provincial, territorial, and the federal governments--they arrived at the structure that we currently have, and it was unanimous that this was the only way to proceed if we were going to get these systems in place.

    In October 2000, the Government of Canada agreed to make available and invest $500 million in the development of an independent corporation, which subsequently became Infoway. In 2001, the members of the corporation, which are the federal, provincial, and territorial deputy ministers of health from across the country, elected their first board.

    We believe Infoway is a unique organization. It's not a crown corporation. It's not an agency of the Crown. It's not a foundation. By virtue of the fact that it represents and its members are the 14 government jurisdictions across the country, each of the members has a significant stake in the success of this corporation.

    We require that at least 20% of any development costs in electronic health record systems, or 50% in the case of telehealth, have to be shared by the sponsor or by our partner. What this means is that we estimate at least $800 million towards the cost of putting these systems in place and developing them comes from the provincial governments. This doesn't include what they've already invested in, what they are currently investing in, or what they're going to invest in, both in terms of other systems or infrastructure or the ongoing operating costs.

    Both Romanow and Kirby, in their reports in the last year, had identified that additional support should be given to Infoway, because this was a model and structure that in fact was working, and they were getting the cooperation and collaboration among the provinces.

    In this past year, in the agreement of the federal ministers, we took on telehealth, and an additional $600 million was given to the corporation to fulfill our mandate.

    The principles of the company are very simple. It requires, first, collaboration of each member jurisdiction. Secondly, it requires that each member has an oversight role. But more importantly, it requires that no one member or jurisdiction has a priority oversight role. This is truly an equilateral governance structure.

    The structure of Infoway allows for 13 board members, two of which are appointed by the federal Deputy Minister of Health, five are appointed regionally by the provincial and territorial deputies, and the remaining six are elected by the corporate member, who are the 14 governments of Canada.

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    In terms of accountability, by virtue of our structure we're accountable to all 14 federal, provincial, and territorial governments. The accountability measures we have are very consistent with good corporate governance and reflect our multi-jurisdictional nature.

    I will not go through the laundry list of different accountability reports--we have the typical audit report, etc.--I will only highlight the few that go beyond what you would typically see. By the way, this information is made available not only to the corporate members but also to the public.

    In addition to the typical measures you would see in annual reports and audited financial statements, etc., we also have an independent third-party review that comes in every five years and actually measures our overall performance relative to the outcomes that are set out in our funding agreement with the Government of Canada. This is fully transparent and made available to the members and the public. In fact, we also have a compliance audit that is done on an annual basis to make sure we are operating according to the funding agreement.

    I think what's interesting, at least within the health sector, and is unique is that we adopted a gated funding approach to investment. What that means is that we flow funds in projects that we invest in, but they flow after certain milestones are met. Those are both milestones in terms of the technology that has to be put in place or developed and also that people are using the technology, so you're getting value for money.

    We're still pretty young and it's still early days, but we're quite proud of what we've been able to do in the last 15 months. Our approach is really a leveraged model. We go to where there is “best of breed” solutions and we invest in them to take them to the point where they can be reused and implemented in other jurisdictions across the country.

    As far as I know, this is the first time there has been agreement among the provincial governments and the territories to actually share the development costs of a particular solution, then actually put it in their own jurisdiction or the jurisdiction of the other, instead of doing one-off and doing it themselves.

    The reason for it is very simple. If you take this approach, you drive down costs--and this is a very costly exercise--but you can also speed the implementation of getting this technology in place. And given the critical impact of having this technology and managing better care and access to care, people are very acutely aware of the time it takes to implement.

    In the last 15 months, following the approval of our first business plan in 2002, the board has approved nearly $200 million of investments. That represents roughly 40% of the initial $500 million that we were given. The investment, as I said, is a leveraged approach.

    I want to note one more thing. I could go on, and you'll note in the written brief that there has also been significant time savings in order to get this in place, but I think what is very exciting is that we now have estimated that it will probably take.... An additional 1,500 to 2,000 net new health information, informatics, and technology specialists are going to be required to actually get these systems in place over the next six years. This is a huge job creation exercise, and we're working very hard with industry to start to ramp them up so they can actually meet the challenge of getting these systems in place.

    I'll end my comments there and simply say that to date we've gone through two plans. Every deputy across the country knows it, understands it, endorses it, and is fully behind this kind of co-development and leveraged model. It's fully a cooperative and collaborative model.

    Thank you.

    The Chair: You have a really easy job coordinating all of the provinces and all of these various interests.

    Ms. Myrna Francis: Oh, yes.

    The Chair: A piece of cake.

    Dr. Strangway.

    Dr. David Strangway (President and Chief Executive Officer, Canada Foundation for Innovation): Mr. Chairman, I'm going to make a few introductory remarks and then I'll turn it over to Carmen Charette.

    Many of you will know that I've had some incredible opportunities in my time. Perhaps the height of these was when I was given the opportunity to head the geophysical aspects of the Apollo mission to the moon and to participate in analyzing the returned lunar samples. But I have to say the opportunity that has been given to me by Parliament, by government, and by the board of the CFI has been extremely rewarding, exciting, and, frankly, humbling.

    Being head of the CFI for the past six years has created an experience for me and my colleagues of unbelievable significance. This is not about us personally; it is about the opportunity to provide a new spirit of optimism among Canadians, particularly young Canadian researchers. It is about helping Canadians contribute to Canada to realize their dreams at home.

    Whether I'm in Victoria, Nanaimo, or Prince George; Calgary or Regina; Brandon or Winnipeg; Peterborough, Toronto, or Guelph; Chicoutimi, Sherbrooke or Montreal; whether I'm in Fredericton or Sackville, Halifax or Truro, Charlottetown or St. John's, I find researchers thrilled with the opportunities they have been given through the CFI to benefit Canada. Most of these are young people, young researchers who want to do their research at home, and they want to do it for their fellow Canadians. They often tell me they didn't know that Canada cared.

    The research ranges from the study of children's diseases and ways to make their lives better, to ways to help the disabled or the aged maintain their quality of life with dignity, to how the understanding of genes leads to the study of proteins, which in turn leads to the very understanding of how these work to define living systems--plant, animal, or otherwise.

    The digital revolution is based on a binary system; today the dictionary of life is based on a system of four digits.

    The research includes a study of the infinitesimal, as we learn more and more about the very structure of matter and how this not only can lead to economic benefits, but also can help us to understand the world at the nano-cosmic level. And there are the wonderful projects to understand biodiversity, ecology, and evolution that are so key to the sustainability of our species on the planet and our ability to thrive on it, or research into ways to reduce air, water, and soil pollution. Or we meet those studying the far reaches of the universe at a scale beyond comprehension, trying to understand the very origins of the universe.

    The reward we feel, which you should feel in turn, is to know that young researchers want to come to Canada. They want to stay in Canada. They want to contribute to Canada, and now they can.

    It has been my privilege to be a very small part in this Canadian renaissance. It is the empowerment of these researchers in all parts of Canada and the remarkable things they are doing that in the end is the real value for money. It is the hope and the dreams not only of this generation but also of coming generations of young people in their challenge to reach new heights of excellence.

    This is probably my last appearance before a parliamentary committee; it's the 13th, just to make a point. I want, therefore, to express thanks on behalf of the thousands of researchers who are helping to build a better Canada. Many of you know that I announced my retirement, which will take place in the spring. I want to express my profound appreciation as Canada continues to reach for the stars.

    Carmen Charette will talk much more about the accountability processes, of which we have many.

º  (1610)  

    Ms. Carmen Charette (Senior Vice-President, Canada Foundation for Innovation): Thank you.

    The CFI board and staff feel it is indeed a great privilege to have the government place their trust in us. We therefore take very seriously our responsibility as stewards of the taxpayers' money and we administer our investments in an open, transparent, and accountable manner that is bringing benefits to the people of Canada.

    You've received our brief, so I won't go into all the details of this, but in the next few minutes I'll try to quickly summarize the answers to the questions you put to us.

    As you know, the CFI was established by the government in 1997. It has the mandate to strengthen the capacity of Canadian universities, colleges, research hospitals, and other not-for-profit research organizations to carry out world-class research and the development of technology at an international level. More specifically, our focus is on research infrastructure.

[Translation]

    Six years into its mandate, the CFI has invested almost $2 billion in over 2,800 research infrastructure projects at 113 institutions in 56 municipalities.

[English]

    Because of our unique status as a foundation, the CFI attaches paramount importance to operating in an economical, effective, and transparent manner and communicating its activities and results to a wide audience. It also recognizes its responsibility to deliver programs that focus on Canada's needs and enable researchers to compete in the global knowledge-based economy.

    The CFI's governance structure is composed of an independent board, drawn from across Canada, that directs the CFI. The board is made up of 15 directors, of whom seven are appointed by the Governor in Council. The board reports annually to members, also drawn from across the country. Board directors, staff, and reviewers sign a statement on ethics to deal with any conflict-of-interest issues.

    In the brief we've provided to you, we've included a model of the CFI's governance and accountability. We've discussed many forms of accountability, including accountability to Parliament and the minister, our internal accountability mechanisms, accountability of award recipients, and of course, accountability to the public. In the brief we give many examples of how we go about doing this.

º  (1615)  

[Translation]

    Here are a few specific examples. As required by legislation, the FCI makes an annual report on its activities to Parliament via the Minister of Industry. The annual report includes information not only on financial performance, but also on activities, results and plans.

    The CFI submits to the minister the results of independent third-party evaluations of its programs, in accordance to a framework and timeframe approved by the board of directors.

    The CFI financial statements and processes are reviewed annually by independent external auditors. They report directly to the audit and finance committee of the board of directors. The CFI website includes comprehensive information on the CFI, its programs, and its review processes. It includes evaluation reports and institutional reports.

    The CFI will organize or be involved in over 75 events this year. These events provide opportunities for members of Parliament and government representatives to join the CFI in showcasing the research enabled through CFI investments.

[English]

    Finally, I would like to address the issue of the benefits of the model. That the CFI is meeting the objectives set out in its legislation and its funding agreement has been shown through program evaluation and progress reports.

    The CFI is responsible for implementing government policy, and the model enables it to do it well and in the best interest of the public. For instance, it has enabled the CFI to plan its investment in an orderly manner and to design innovative and flexible programs.

    It has also ensured independent merit review whereby experts make recommendations on the funding of proposals in a highly non-partisan manner, and this is certainly a key benefit of the model.

    Finally, it has allowed for true partnership in leveraging of funding from many sources.

[Translation]

    In summary, our experience of the last six years has shown that this model can work in an efficient, economical and effective manner.

    Thank you.

[English]

    Thank you, Mr. Chair. We will be happy to answer any questions, and we look forward to a good discussion.

    The Chair: Thank you very much.

    Who is going to make the next presentation, Arnold?

    Dr. Arnold Naimark (Board Chair, Canadian Health Services Research Foundation): Mr. Chairman, the executive director, Jonathan Lomas, will make the presentation, and since we are an efficient organization, I've decided to build it into his annual performance review.

    Mr. Jonathan Lomas (Executive Director, Canadian Health Services Research Foundation): Mr. Chairman, honourable members,

[Translation]

We have followed with a great deal of interest the discussions in committee on the role and structure of Canadian foundations.

º  (1620)  

[English]

Thank you for providing us, as one of these foundations, with the opportunity to speak on and discuss with you this topic today.

    We've distributed to members a summary sheet on the foundation, its accomplishments, partnerships, and accountabilities. I'd like to speak to that—briefly, as instructed by the chair.

    Our foundation was in fact one of the first created by the federal government. It was designed to promote and fund health services research, with a special additional remit later around nursing and a major goal to bridge the gulf between the production of research and its use to improve the organization, management, and effectiveness of health care systems.

    We are a small foundation working to improve a large health care system with many players. Our accountability mechanisms reflect our need to involve and inform these many stakeholders.

    Last year, near the end of our first five-year plan, our board of trustees commissioned an international external review of the foundation. The review was headed by Dr. Duncan Sinclair, a former dean of medicine at Queen's University and former chair of the Ontario Health Services Restructuring Commission. It involved extensive consultation, including the receipt of over 200 letters of feedback from our stakeholders.

    The international review panel report noted the foundation's growing reputation for innovation and responsiveness and supported the CHSRF as to general strategic direction. It also suggested some very useful modifications for improvement. This report is publicly available on our website, and I'd invite you all to look at it and its recommendations at your leisure. You will also find our second five-year plan posted on the website.

    Besides being transparent in our routine evaluations of performance, we're also transparent in our finances. Our audited financial statements are included in our annual report, which we distribute annually to about 4,000 individuals. We also post this information on our website.

    All of our grants and awards undergo a transparent peer review process, and we use an expanded definition of that concept. This includes assessment of both the scientific merit of an application and its potential impact on the management of our health care systems. We recently conducted a compliance audit of a random sample of the projects awarded under this system. This was noted by the Auditor General in her 2002 report. We are proud of this transparency, which has resulted in a number of accolades for our foundation and the way we work. We would welcome suggestions, however, for further improvements we could make.

    Finally, we are proud of the fact that a report by England's comptroller and auditor general identified our work as a best practice for commissioning research by government departments across England. We were used in this report to England's Parliament as the benchmark against which the three government departments being evaluated were judged.

    I'd like to spend a moment on our niche. Our foundation's focus is on the evidence-based management of our health care systems; that is our niche. We are at the forefront of a cultural transformation around the use of research-based evidence in our health systems.

[Translation]

    I am talking about systems because, as you know, Canada has one federal health minister, but 10 provincial health systems. Other health services are provided by the territories, the army, and so forth. Obviously, each one of these systems include many players and stakeholders whose interests are often contradictory. We have people working within the system, the health agencies for whom they work, and the general public.

[English]

    Of course, each of these systems has many different players and competing interests. Inevitably there were many tensions in the system, disagreements between funders, practitioners, and patients about the best way to do things. Our foundation has been able to address many of these contentious, even political issues. As a non-profit and arm's-length organization, we can constructively use our neutral space to address some of these issues with the many players involved, unencumbered by identification with a particular level of government or particular interest group.

    Our role is to bridge the gap, often a very large gap, between research and health care management and policy. This is no simple task. It requires partnerships with both those producing the search and the managers and policy-makers who can use it.

    For the foundation, partnerships are not a choice but an essential strategy in what we do. As you will note in our summary sheet, we have an extensive network of partners, 28 at last count. Our partners run from west to east, from the Michael Smith Foundation in British Columbia to the Newfoundland and Labrador Centre for Applied Health Research. We partner with health ministers in Saskatchewan and Manitoba as well as with the federal government and the Government of Quebec, and so on.

    I am proud to say that last year, for every dollar committed by the foundation to our grant and award programs, we were able to attract $1.20 from outside sources. However, our partnerships are not just about money; they help us address contentious issues, and perhaps most importantly, they allow us to get around the table those who can implement the results once the research is done.

    But producing and communicating research findings is only one part of encouraging a health care system that better uses research. We must also work on building skills and capacities in that system. This requires long-term commitments and sustained programs facilitated by a long-term endowment. For instance, along with our partners, we have made a ten-year-plus commitment of funding to develop Canada's capacity to do research on nursing issues and have provided a ten-year funding commitment to a university-based program of chairs and training centres.

    We are also leading the partnership for a ten-year training program that will help system managers—nurses and doctors—to better use research in their day to day work.

    Our partners in this executive training for research application, or EXTRA, are the Canadian Medical Association, the Canadian Nurses Association, the Canadian College of Health Service Executives, and a consortium of 12 Quebec management organizations.

    The long-term and stable funding commitment we have been able to make to these programs respects the complex and enduring nature of the issues involved in the health care systems of this country.

    May we conclude by underlining our commitment to continuous quality improvement in all of our programs and to an ongoing focus on independent evaluation, so that we may practise what we preach: evidence-based decision-making.

    Thank you for inviting us to speak to you today. We look forward to your questions and perhaps most of all to your suggestions for how we might improve our performance.

º  (1625)  

    The Chair: Thank you very much, Mr. Lomas.

    What we will now get into is a round of questions, to give members a chance. I will give people some latitude as we are following particular lines of questioning, if they want to jump in on one, but we will start with Mr. Forseth.

    Mr. Paul Forseth: Thank you, Mr. Chair.

    Today I see we have five agencies before Parliament. We are talking about an accountability framework. It begins with the taxpayer and has gone to government and eventually to Parliament. Parliament approved the legal structures and eventually voted some money. Today these five agencies are coming back to Parliament in a rather public way, for the public and parliamentarians to evaluate what's being provided as service to the country.

    I think the public needs to be assured that the ethical and legal standards are being maintained, but beyond that, the public needs to see that there are meaningful services being provided, and additionally, that there is real value for the dollar.

    I would hope these foundations that are notionally attached to our committee here today would appear before us on a regular basis, at a minimum once per year. Maybe today is a good start.

    I have outlined a little bit what we are talking about, the accountability framework, but I think we need to get to the point of program evaluation, and that's the focus of my question. I would like to hear each one of these organizations, perhaps in 60 seconds or less, review how they are going to fulfill their accountability duties, but more importantly, how they are going to demonstrate to the taxpayer that real, substantive value is being given for the resources expended.

    To just ask the question, how is the public going to know if their money is being wisely spent?

    The Chair: Do you want to pick up on that, Mr. Strangway?

    Dr. David Strangway: I'd be glad to pick up on that.

    The Canada Foundation for Innovation has put in place a whole series of processes. In fact, since we have been given this process, we consider that we must be more accountable than most. We work very hard to be extremely transparent. We have processes not only to do with financial accountability, but because we serve 110 institutions all across Canada--they're our clients, they're our customers, if you like--all of those have the obligation, as well, to report back to us on the results they have been achieving.

    So every year we receive from them annual reports on the impacts. Those annual reports from each institution are published on the web and they are available. The current set is just going up on the web now, as we speak, and each project receives an annual report. Out of that, we then ask a person who is at arm's length from the situation to sit down and look at those materials and to say what they have found as a result of these activities.

    So that is one of the processes we use. We are also looking at a slightly different model that we will be implementing. And we have already started a pilot process.

    In my comments I talked about value for money. In the end, the value for money is, what is it that these people are able to accomplish and achieve as a result of the support they have received? This new pilot project that we're implementing is one in which we will go back after four years or five years of creating this infrastructure and then have a scientific process by which people will come in and say, “You said this is what you were going to do. How have you gone about achieving it?” That's really more than the traditional value for money concept. It's also the value for the science that you have accomplished on behalf of Canadians.

    So it's extensive reporting, extensive evaluations, and a new process to report on science.

º  (1630)  

    Dr. Arnold Naimark: I'd like to indicate that some of the things that David Strangway said apply to other groups in terms of evaluating projects and usage, and so on. But there's an additional dimension at CHSRF that we have found extremely useful, and that is to put our programs to the test by asking the people for whom the work is intended--namely, the decision-makers--the following questions: Has this been beneficial to you, whether you're in a regional health authority, in a hospital, in a ministry of health, or whatever? Because you are the decision-makers, you are the ones who we want to make the research relevant for, are the foundation's programs working from your standpoint?

    We have annual conferences and congresses we call Listening for Direction, which allow us to hear from people about whether or not what we're doing is making a difference. Of course, the acid test will be some years out, when we can actually demonstrate system-wide changes, but they're starting to happen now, and we're quite gratified by it.

    The other test, of course, is who else wants to partner with us, because what we do is of value to them. The range of our partnerships is growing every day. So that's another index, in addition to all of the auditing and financial accountability issues that we deal with on a day-to-day basis.

    The Chair: Mr. Riddell.

    Mr. Norman Riddell: Thank you, Mr. Chair.

    The vice-chair has asked how the public will know if we've done a good job. I mentioned in my statement that we issue annual reports on a regular basis and that these are made broadly available to the Canadian public and to members of Parliament.

    Also, I think the research conferences that the foundation holds twice a year have provided a very important opportunity for people to discuss what's actually going on. What we do occurs in the context of a student financial assistance system, so it's not merely what the foundation does, it's what other people are doing in the system and how those things interact. So we've taken the initiative to create research conferences to which we invite all the major stakeholders, provincial and federal people and, I believe, members of Parliament. I know some members of Parliament are aware of these conferences, and I think one actually attended a research conference here in Ottawa as recently as two weeks ago.

    This is what we were doing there. We were looking at what we were doing, in a very critical way, to find out what was good about it and what was not so good about it, and seeing if we, together, could find ways of improving it, because any improvement in my program would require improvement in both the provincial and federal systems.

    Now, there's a third way, I think, that we are going to get a look at what's going on, to know whether things are going well. I cite two pieces of evidence from the outside. One is that people are willing to partner with the foundation. Provincial governments are entering into cooperative projects with the foundation, which they perhaps didn't initially welcome, to find out how to get people who are not normally in post-secondary education into post-secondary education.

    Furthermore, I receive hundreds of letters a year from students who have received the foundation's awards, indicating how this money has actually changed their lives. It isn't always just the money, because the kids will tell me, what was important is that at a particular time of my life, when I was short of money, there was a sign that the government cared, that the Parliament that voted for this money cared about me. I think these letters are a very important testimony about the fact that we're doing something important.

    Last, as I think other organizations did here, we mentioned in the statement that a mid-term review is being made. It was originally described in the law as a report on our activities, and we make one of those every year. So the board decided to go further and we've actually commissioned an evaluation by an outside party, and we will be releasing that within a few days.

    The Chair: Ms. Francis.

    Ms. Myrna Francis: Let me start with something simple. We've all lived through SARS in the last year. One application that is currently under development and is actually going to be available and ready to put in place across the country in the next six to ten months is a registry application.

    In the reviews of how SARS was managed, one of the big problems was that they couldn't link the information. They were doing it with Post-it notes on the walls of a room. If this application were in place today, it would have cut down the problem probably by about 30% in dealing with SARS. We will actually, through the way we're operating, get this out in 6 to 9 months, and it normally would take 24 months. I think that's part of the proof in the pudding of providing value for money.

    If you would like to look at it in a more regimented way, again, I've listed in our submission all the different audits that we're required to do. The one I'd like to highlight is this. We're required every five years to have a third-party independent audit. The whole focus of that audit is, are you achieving your outcomes? We have two major outcomes. We not only have to have the technology in place, but more importantly, we also have to have people using the technology. Having it in place without anybody touching it is not going to be value for money. So that is a requirement every five years and that is fully available to our corporate members and to the public.

    As well, we do compliance audits.

    I would like to re-emphasize that we're responsible to 14 jurisdictions, and 14 deputy ministers are the members of our corporation. They provide information to their ministers in each of the federal, provincial, and territorial governments.

º  (1635)  

    The Chair: Thank you.

    Mr. Godbout, do you wish to say anything?

    Mr. Martin Godbout: I think, Mr. Forseth, your question was in two parts.

    One part was on the accountability, and we can talk about it technically, as any of my colleagues here can. We have the auditing for the financials. But most importantly, at Genome Canada we are following right now the results-based management and accountability framework. As everyone who has gone through that knows, it's huge, it's big, and it's guided by the Treasury Board. This is something that you don't see in the private sector. We are proud to say we are following that. The results of this evolution will be public, there's no doubt about it.

    The second part of your question was on what is in the case of Genome Canada the biggest challenge, the public outreach. How do you communicate with the public about the goods and the bads of genomics research? There is no one here at Genome Canada who could say all the pros and cons of Genome Canada.

    We have put forward a year and a half ago an exhibit called put “The GEEE! in Genome”. It's co-sponsored with the CIHR, the Canadian Institutes of Health Research. The exhibit was started last spring. Last summer it was the most attended exhibit in Ottawa.

    This exhibit will travel. It left Ottawa in September. It's now in British Columbia. It will travel across Canada for the next three years and it will come back here in 2006 as a permanent exhibit.

    The people to whom we are addressing that exhibit is the next generation of scientists. They're the high school students. They're the primary schools. This exhibit has been done in collaboration with the scientific community. Our goal is to reach, as much as possible, the public.

    The Chair: Mr. Clark.

    Right Hon. Joe Clark: Thank you very much.

    I want to thank all of the witnesses for coming today. There's no question you're involved in exciting and important work. All of us recognize that. You should understand that you are here not only among friends with respect to your purposes but, I think it's fair to say, among admirers. We're very proud of what is being done in some of your organizations.

    That really isn't the issue here. The issue for us is a question of accountability. Just to pick up on a point of semantics, you're not agencies of the Government of Canada. That's the issue. You are independent institutions to whom we give money, but which operate beyond our reach. That is precisely the dilemma that has to be addressed here.

    Mr. Godbout talks about results-based reporting. In most of government there are three essential elements of the results-based concept. One is the independent audit, by law, by the Auditor General; a second is guaranteed transparency, not at your choice but under the aegis of the access to information law; the third is the capacity by a minister or by Parliament in extremis in an unusual circumstance to intervene. None of those apply in your case, I believe.

    Let me come to the question. The independent foundations are not required to be audited by the Auditor General. They are not subject to the access to information law. Curiously, they are not subject to the Official Languages Act, and they are not subject to any intervention by any minister or by Parliament.

    My question here is not about convenience or inconvenience. I would like to know what fundamental problem would be caused for any of the independent foundations by being, first, fully subject to audit by the Auditor General; second, subject to the access to information law, with all of its inherent protections; third, bound by the Official Languages Act; and fourth, required to report to Parliament through a minister.

º  (1640)  

    The Chair: Who wants to start? Arnold.

    Dr. Arnold Naimark: As far as the CHSRF is concerned, we try to function as if all of those criteria that Mr. Clark enunciated so clearly and very helpfully to us were in effect. We make all our information public. Any minister, even deputies or others who want to know anything about the foundation can get all the information they want without any hindrance. We naturally protect individual privacy and things of this sort that the legislation does. We have been looked at by the Auditor General in a special study, and I personally--this is a personal thing--would not have any objection to the Auditor General auditing the foundation and so on.

    On the question of reporting through a minister, we now largely behave as if we do, because we have a deputy minister of health who sits on our board of trustees, and the president of CIHR, who reports through the Minister of Health, is there. So we act as if we are accountable in ways and through channels that would be part of that criterion.

    The remaining nub, I think, is the power to intervene. There I think the issue is one of whether one can achieve the broadest purposes, long-term commitments on which we can build long-term programs that others have confidence in not being “perturbed by unilateral action that may happen”. So that's part of the concern I have about that letter.

    Right Hon. Joe Clark: Just in that connection, I understand that you try to do that. Agencies, arm's-length foundations, are required to do that.

    Dr. Arnold Naimark: Right.

    Right Hon. Joe Clark: You are free of the requirement. It's your choice. Why should you have that freedom when, for example, the Canada Council does not or what used to be called the National Research Council does not? They have the same requirement for long-term funding as you do. Why are you in this special status, beyond the reach of the Parliament, that gives you $8-plus billion?

    Mr. Martin Godbout: As an introduction to my entry, I think you have to look at us in good faith. It's beyond the reach of Genome Canada, if I speak in the name of Genome Canada. In the last budget on March 2003 we received $75 million for a specific competition, and we had an addendum to the initial agreement that we signed. I'm going to read one paragraph--it's only one--the audit for compliance:

The minister may require, at the Department's expense, that an audit of the books and records of Genome Canada be carried out by such person as the Minister may appoint, or may request that the Board have an audit of the books and records carried out, to ensure compliance with this Agreement.

    We signed that. So Genome Canada is not in a position to say, Mrs. Fraser, please come in. They have the power to do it, but they have to talk to the minister. So it's beyond Genome Canada's responsibility at one point. We report to the minister, and it's up to the minister.

    On the information act, we are not subject to the law of l'accès à l'information. But some people asked, and they did it through Industry Canada. Industry Canada called us, and again, in good faith, we gave them all the information. I agree with you, we are not subject to it, but you have to look at us in good faith. Yes, we do it.

    On la Loi sur les langues officielles, again, it's in the agreement that we signed with Industry Canada that Genome Canada shall provide its communications in all its service to the public in at least both official languages. I can assure you that every contract we sign with institutions and every contract we sign with the genome centres are in both official languages, the annual report and so on. Again, in good faith, we comply with what is in the agreement. The agreement has been signed, and I didn't say “negotiated”, because they didn't negotiate. This is the agreement, and if we look at the agreement.... If Genome Canada can work within that framework, we'll do it, and we did it.

    So my answer is that it's beyond our responsibility at one point.

º  (1645)  

    The Chair: Thank you.

    Mr. Clark, and then I'm going to go to Ms. Francis.

    Right Hon. Joe Clark: I'm raising the question because it's precisely within our responsibility, and what is at issue here is whether or not the frameworks within which you operate should be changed. What we need from you is some indication, not of justification to the status quo, but some evaluation of the consequences of some of the changes, including a change that would put the independent foundations in a role where they were not quite so absolutely independent of the body that in our system exists to hold public entities accountable.

    The Chair: Thank you.

    Ms. Francis.

    Ms. Myrna Francis: Let me start off and say I understand the reason for the question and I appreciate it.

    To go back to how we're structured and why we're structured that way, the key to Infoway and to the success in getting this automation in place in the industry is really to get collaboration among 14 different governments. That is absolutely critical; otherwise, we can't move forward.

    In the way Infoway was set up--and as I said, it was really the by-product of long and hard negotiations among the governments--the belief was that if it was set up in an equilateral way and that all 14 members had equal responsibility, there would be a higher probability of success. I think what we're seeing is that in fact this is starting to play out.

    So in terms of being equilateral--and people are quite specific when you talk to each of the governments--it truly is that no one government has a sole oversight to this organization, whether it be the federal government, provincial, etc. As a result of it, we're getting collaboration and cooperation. We're getting our objectives met, but we're also leveraging money, because, remember, for every dollar we put in we're now starting to see a two-to-one ratio, and the contributions by the other members are equal. Because of the way we're set up, with the 14 deputy ministers, they in fact are working through their accountability processes to their ministers and to the public with respect to the funds that are met.

    On the bilingual question, actually everything is done in bilingual fashion in terms of products, materials, and whatever. I think of it this way. I come from the private sector. My customers are the actual provinces and the hospitals, etc., using the systems. So not only do we do everything in a bilingual fashion, but we also have staffed in that way as well, because whether it's going to be Quebec, or the francophone community in Manitoba or in New Brunswick or whatever, you can't work with them and have systems that are going to be of value unless you, in fact, have that kind of staffing. So this is the case and this is how we operate.

    In regard to the auditor, I'll give you a perspective of what could happen, because there are such strong feelings that this needs to be an equal situation, and that's why we're breaking through ground that I don't really think has been done before to get this kind of agreement. If the Auditor General was the auditor, the members would have to agree and appoint her. As for freedom of information for the federal government, they'd have to agree to that as well. I think if they said, we'll go with the Auditor General, well, we have 13 other jurisdiction; why wouldn't you go with the Auditor General of those jurisdictions, or be subject to their freedom of information?

    In reality, you actually are, because you're going up through the deputies and the ministries. Minister McLellan is aware of every report and every audit and compliance report that we have to do, and as I said before, every five years we have an independent evaluation of whether we are achieving our outcomes. In fact, in our business plan, we have already set out three-year deliverables that are pretty bold, I think, in saying how much of the country is actually going to have what system in place, working and operating.

    That is a perspective we would have.

    The Chair: I have two other individuals who have indicated they want to speak. I would like to do two things. One is to ask you to shorten your comments a bit if we can. Also, you heard the discussion before we started here from the member of the Bloc who sits on the public accounts committee about the public accounts questions. There are two parts to the accountability. One is the after the fact, what did you do with the money, the audit follow-up function. The other is what sort of examination took place at the time you requested the money--the funding of the system, the planning, estimates review part of the system.

    As you're going through your remarks, would you comment on whether or not any of you have ever been before a committee to discuss your estimates, to discuss your request? Has there ever been any discussion with you on your funding agreement before a parliamentary committee? You've talked about the set-up and the criteria that allowed you to be set up, and you've talked about additional moneys you've received from government. Have you ever been involved in this process at the point at which you're requesting money as opposed to at the point at which you're defending how you've spent it?

    I believe Dr. Strangway was next, and then Mr. Lomas.

º  (1650)  

    Dr. David Strangway: In response to your comment, Mr. Clark, my comment is basically very similar to the comment you just heard from Genome Canada. First of all, we are subject to legislation that requires us to offer our services in both official languages, and we do so.

    Secondly, with respect to the question that was mentioned in terms of compliance and the Auditor General, the Auditor General at the present time is, in fact, conducting just such a review, a compliance review, as to whether we are conforming to the funding agreement. We signed that document in the same way as Genome Canada did at the end of March of this year. So I would say that aspect is being looked at.

    In terms of the overall aspect with respect to the Auditor General and her purview over this issue, this is entirely a matter of how the government has decided to establish and set us up. I think in many ways it's really not an issue for the individual foundation or for the CFI, it's an issue the government, in its wisdom, has chosen as the way to deliver these programs, and we are delivering these programs to the best of our ability and with maximal capacity to do the auditing and review.

    In terms of the question you asked, Mr. Chairman, the question about estimates, you will probably realize that the funding that has come to the Canada Foundation for Innovation has come not as an issue of the foundation, but as an issue in which the minister, the finance ministers, whoever, makes those processes and decisions. And I don't know what processes they use in order to--

    The Chair: So you've never had any discussion with them about the possibility of receiving additional money or your initial grants?

    Dr. David Strangway: We inform them as to what we are doing. They decide entirely what it is they think should happen with us.

    The Chair: You have no discussion with them. A cheque for $800 million arrives or--

    Dr. David Strangway: As strange as it may seem, that's exactly how it happens: they make those decisions and then they come to us and ask us if we can deliver the programs.

    The Chair: We'll come back to that.

    Mr. Lomas.

    Mr. Jonathan Lomas: Let me see if I can gauge what I see to be the real spirit of your question. The spirit of the question is, essentially, why shouldn't we become government agencies?

    Right Hon. Joe Clark: No. Why shouldn't you become a real arm's-length foundation like, say, the Canada Council or whatever the new name for the National Research Council is?

    Mr. Jonathan Lomas: For the foundation, you asked what would be the repercussions, what would be the consequences. Far be it from me to argue with my board chair; there would be nothing that I would argue with except this last issue of reporting to the minister and providing the minister with the capacity to withdraw our funds and shut us down, effectively. That's the bottom line, as far as I--

    Right Hon. Joe Clark: But in the long history of the CBC, despite provocation, in the long history of all the paintings that have been done that upset pig farmer members of Parliament from rural Manitoba, the foundations have not been shut down. You are, in effect, saying, trust us. I'm saying that on the record of more than a century of public activities, more or less at arm's length in Canada, it would be hard to find a lot of instances where one could not trust the good sense, by and large, of Parliament on some of these matters.

    So the danger is there. But the danger on the other hand is why should we trust you to a degree greater than we trust the chair of the other councils that are subject to some of these requirements? Why should you...and I'm not saying “you”; I'm saying why should your family of foundations not be obliged to play by the same rules as every other creation of government is obliged to play by?

    Mr. Jonathan Lomas: My answer on what would be the consequences for us is that probably the single most valuable asset the foundation jealously guards is our neutral space. The fact is that in a politically and interest-group extremely contentious area like health care, were we to be considered to be an animal of the federal government, it would significantly compromise our ability to deal with, to bring together the players around many of the issues that we have to deal with on a routine basis.

    To us, our ability, for instance, to strike substantive partnerships with the Province of Quebec over the last five years of our existence has been crucially dependent upon our independence from being identified as a federal government agency, even though there is a recognition--and we constantly give it--that we are a federally endowed national organization.

º  (1655)  

    Right Hon. Joe Clark: Thank you, Mr. Chairman.

    The Chair: Thank you, Mr. Clark.

    Mr. Martin.

    Mr. Pat Martin (Winnipeg Centre, NDP): Thank you, Mr. Chair.

    As much as I enjoy the broader issues that Mr. Clark raises, I'm going to deal with some more finite spending matters. My role in this committee has sort of become like Gordon Sinclair on Front Page Challenge. I kind of go for the numbers here.

    If you were subject to that sort of estimates process, one of the things I would raise is why is it that 51% of expenses in the Canada Health Services Research Foundation goes to overhead? That's the kind of question I would want to ask. I don't know, there probably isn't time to give a full answer to this.

    Mr. Jonathan Lomas: I would say it is very easy to give a fulsome answer. It is not the case that 51% goes to overhead.

    Mr. Pat Martin: Salaries, administration, investment management, amortization of capital assets, and overhead?

    Mr. Jonathan Lomas: No. The foundation structure is not as a granting council. This is something we had to deal with a little while ago with the Auditor General, which you will see in the report that comes out.

    It is not the case that money that does not go out of our door is overhead. It is extremely expensive, for instance, to take research reports and create usable knowledge out of them for decision-makers. It is expensive for us to create a program that trains decision-makers in how to use research. These are not grants that go out of our door, but they require staffing in order for us to be able to provide these functions. It is, therefore, a very significant component of what we do.

    In our year two, we undertook a benchmarking survey of the administrative costs or overhead costs of all organizations of comparable size. We established that for an organization of our size, between 12% to 15% would put us at the 25th percentile in terms of better performance on administrative costs. Throughout our history, we have maintained ourselves in that 12% to 15% administrative cost benchmark.

    Those other costs are not costs for the overhead, but they are the costs for actually delivering programs, which may not be grants.

    Mr. Pat Martin: Okay, fair enough. We can look at the reports later.

    In the same period of time, though--I guess it was in year two--you lost $22 million on investments in the open market, but your management fees rose from $90,000 to $235,000 in the same year. I understand those were bad years to be gambling in the open market with investments. Who are your money managers, or what firms do your brokerage and money management for you?

    Mr. Jonathan Lomas: We actually have a number of money managers. All organizations would like to make sure they have a spread of money managers. TD Quantitative Capital is one of our money managers.

    I don't have the information in my file.

    Mr. Pat Martin: Phillips, Hager—

    Mr. Jonathan Lomas: Phillips, Hager and North Investment Management on the west coast is one of our money managers.

    Mr. Pat Martin: The Bank of Ireland Asset Management.

»  (1700)  

    Mr. Jonathan Lomas: And the Bank of Ireland Asset Management.

    Over the life of our foundation, as we say in our reports, we now have a return of 3.8% on the—

    Mr. Pat Martin: Yes, the report says 3.8% per year, but over one year $28 million is 20% of total assets.

    Mr. Jonathan Lomas: No, again I'm not sure. The $22 million would presumably include a drawdown for the actual expenditures of the foundation, as well as whatever losses there may have been on the market.

    So yes, in two years we did lose money on the market, as many others did; but as a board of trustees, we have established a long-term investment policy. Therefore, I would hope our performance would be judged over a long term, not over any single specific year.

    Mr. Pat Martin: That's what most funds are saying.

    The Foundation for Innovations has $2.9 billion invested in the financial markets. What has its experience been in the last fiscal year in terms of return on that $2.9 billion invested in the private markets?

    The Chair: Dr. Strangway.

    Dr. David Strangway: The return of the CFI on its investments has been 5.69% per year on average over that period of time, and it has been pretty steady throughout that time. So it has gone neither up nor down.

    To understand, we have within our funding agreement a very clear statement on the kinds of investments in which we are permitted to invest. So we have had a very good, steady, ongoing return, with essentially no significant fluctuations in it. We may see a little bit of a downturn, but it will be like a fraction of a percent.

    So, basically, we have made 5.7% per year consistently on the money we have invested.

    Mr. Pat Martin: We should give you the Canada Pension Plan investment money if you are drawing a return like that.

    Some hon. members: Oh, oh!

    Dr. David Strangway: A lot of people have made such suggestions, but we are doing what we can with what we've got.

    Mr. Pat Martin: Congratulations, then.

    Dr. David Strangway: Thank you.

    Mr. Pat Martin: I have a last question for the Millennium Scholarship Foundation.

    The operating expenses are around $10 million a year. There are critics of the whole idea of the Millennium Scholarship Fund. I'm not dumping that on your lap, as you are just doing your best with what you were mandated to do. But there are people who would say, wouldn't it be more economical to simply transfer these billions of dollars to the provincial loan and bursary agencies and let them...as they already have the administrative infrastructure in place? So how do you answer those critics who say it would simply be more streamlined and better to get that money into the hands of students through the provincial wings that exist already?

    The Chair: There may be some disagreement with that on the other side of the table.

    Go ahead, Mr. Riddell.

    Mr. Norman Riddell: Thank you, Mr. Martin.

    If I might first answer a question you didn't ask me, our return on investment last year was 7.1%.

    With respect to your question, it's true, our management expense is roughly $10 million. Our total expenses in a year are about $310 million. We're making good on our commitment to the Government of Canada to deliver $300 million of awards per year for 10 years, in other words, to make $3 billion out of $2.5 billion. Under current returns, we're going to do better than that, considerably better, but I'd like to wait till the end before I guarantee exactly how much it's going to be.

    We make significant use, as I mentioned in my statement, of the provincial government systems. We did not go out to duplicate them, so that is one of the reasons I can run the program at that kind of cost. We don't do our own needs assessment; our needs assessment is performed by provincial authorities in the different provinces.

    There is a consequence of that, of course, which is that they differ slightly from one place to another. Provincial systems occasionally recognize a program for funding in one province while another province won't. We decided it was worth tolerating these differences.

    Right Hon. Joe Clark: You're not saying you have an asymmetrical system?

    Mr. Norman Riddell: We determined it would be better to tolerate those slight differences in the interests of getting the kind of return we're getting.

    Now, in the $10 million there is a substantial sum of money that we have to pay to get our money managed. You don't get 7.1% return on your overall investments for nothing. We have good money managers, but they charge us substantial fees.

    Mr. Pat Martin: What was the total amount on money management and brokerage fees?

    Mr. Norman Riddell: It would be about $1.5 million.

    Then we pay roughly $2.5 million to the provinces each year for their participation in the program. They were required to make modifications in their computer systems, and they do incur extra work as a result of handling our awards. So you have to take that off, if you like, to get what we have.

    And then we manage one of our own programs. It is much more labour intensive; it is a merit program. Obviously, when you're evaluating qualitative data as opposed to quantitative data, which is what you do on a need-based award and which is the one we do with the provinces, you have a very extensive job to do. You get 10,000 applications at six pages each, and you have to read each of them five times to know who's going to get the award. We get around that by training, as I mentioned, roughly 300 citizen volunteers all across the country who do this work for nothing. But there's work there that needs to be done. We could not have run a merit program through the provinces; there simply was no system in place for such a thing. We are the first national merit program that exists.

    One other thing I would mention is that at the moment we are spending close to $1.5 million a year on research. One of the things I mentioned is that the placement of our money really is affected enormously by the two other partners in the student financial aid system--the provincial governments, on the one hand, and the federal government. It's very important to understand that interaction so there can be an improvement in the targeting and the effectiveness of the money. So we've been involved in research that we do conjointly with the provinces and the federal government, sharing the results and then discussing them in fora so we can mutually improve one another.

»  (1705)  

    The Chair: Ms. Bennett.

    Ms. Carolyn Bennett (St. Paul's, Lib.): Joe Clark has just asked, I think, the question that we were all here for, and I wish we had the whole time just to discuss those things one by one. I almost wonder whether somehow your boards should have to actually write the answers to Mr. Clark's questions, or what would happen to your organization if these four criteria were met, because it is what's bugging all of us--and the Auditor General's report, which says that putting all of this public money, or a lot of it, out of Parliament's way.... And when she was here, I think we were led to believe that each one of you could appoint her the auditor of your organization and get one of these things crossed off.

    There are some things you could do voluntarily that I think all of us who are struggling with the next chapter...whether we end up with a CDC North, whether we end up with a drug agency that the provinces...all of these things are going to have to have some provincial buy-in for this next chapter to go forward.

    I think what I hear is that somehow this federal-provincial gridlock is more important than accountability to Canadians--for example, “Oh, the provinces would never let us do that” or “We won't get their cooperation if we have to report to Parliament”. I don't think the federal-provincial gridlock is more important than Canadians actually having access to information. I think it's really worth it, as we look at you doing your exemplary work, to ask how you can help us move into the next chapter.

    If you were going to write the structure for the next one of you, what would it look like?

    You know, happily the King's Fund in Britain was given $100 million a hundred years ago and therefore it can have total independence because it's not getting any money from government any more. So that's the way that was set up in its ability to literally criticize government.

    So help me with the answers to Mr. Clark's question. What would be wrong with all four of you voluntarily doing the four questions that Mr. Clark asked? It's almost like every single model is the best model ever, I think we heard, yet they're all very different, and maybe it does have to be customized. I mean, the Genome Canada model got an award; the health foundation got an award.

    My other thing is that there is the other gunk I don't understand. I understand the Canadian Blood Services started out with a perfect model, getting board members from a pool that had the 30 best people who knew about blood, and then they replaced two-thirds of them out of the crony pool again. We ended up with trouble on CIHI, and it has taken five years to get that board to be functional.

    So as we go to set up new things, what should we do? Do we need a task force? What should we do to make sure we aren't sitting here with a whole bunch of public money out of Parliament's way?

    The Chair: Is that a task force on gunk?

»  (1710)  

    Ms. Carolyn Bennett: Yes, on gunk.

    The Chair: Would anybody care to take a run at that? Let's start with Dr. Naimark.

    Dr. Arnold Naimark: From the standpoint of the Canadian Health Services Research Foundation, we'd be very pleased to try to formulate our thoughts and put them on paper and give a more considered or expanded response to Mr. Clark's questions; they're good ones. But I think you'll find there will be differences, because we have different constructs behind our formation. Nonetheless, from our standpoint, I will be happy to do that.

    We don't pretend that our model as it exists now is perfect and that the objectives could not be achieved in other ways. We could imagine some ways of doing it. But to some extent it will vary by purpose, because the political purpose landscape varies across the country. And to the extent that you want all the jurisdictions as partners, there has to be a partnership model that works for all partners, including the federal government.

    But to answer to the question, yes, we'll try to provide whatever--

    The Chair: Thank you.

    Dr. Strangway.

    Dr. David Strangway: The point I hinted at earlier is that we were established by government. We were established in a particular manner. We were established with a very clear funding agreement. The funding agreement is modified from time to time. From our perspective, this is not an issue between you and us; it's the way the government wants to run and operate its activities.

    I don't want to duck your question particularly, but it is not a question that we can answer, because we have a funding agreement. We work within our mandate and we work to deliver.

    The Chair: Has it been reviewed by a House of Commons committee?

    Dr. David Strangway: I have no idea, Mr. Chairman. That may be something that you--

    The Chair: You or the organization have never been called before a committee to discuss your funding agreement or your next year's funding allocation. Is that correct?

    Dr. David Strangway: No. Our funding agreement is with the Minister of Finance and the Minister of Industry.

    The Chair: I think Mr. Godbout and Mr. Riddell may want to make a comment also.

    Mr. Martin Godbout: As a matter of information, Mr. Chair, when we were raising our funds in the fall of 1999, we appeared in front of the finance committee. In 2001 we appeared before the industry committee, not to assess the funding agreement but to get the budget put forward.

    The Chair: Thank you.

    Mr. Riddell.

    Mr. Norman Riddell: Thank you, Mr. Chairman.

    Clearly, our first obligation is to obey the law that you voted. It may not be the law that particular members here want now, but it is the law that Parliament wanted when it was voted and we must obey it.

    With respect to Mr. Clark's questions--and I will try to come to what Madame Bennett was saying--we are already required by law to produce an annual report that goes to Parliament. The Minister of Human Resources Development tables in the House of Commons and in the Senate an annual report. She has already tabled five annual reports for my foundation.

    Second, as others have mentioned--

    Right Hon. Joe Clark: I am sorry, Mr. Riddell. I understand that, but they are by way of information, not by way of obligation.

    Mr. Norman Riddell: There's a legal obligation in my law to produce it and for her to table it.

    Right Hon. Joe Clark: It is not a report we can do anything with but read. That is the point.

    Mr. Martin Godbout: It is in the agreement.

    Mr. Norman Riddell: Mr. Clark, you would be in a much better position than I am to know what Parliament could do with the report. I only know that I have to produce it and the minister must table it.

    With respect to the Official Languages Act, we serve the public in both languages. It's required by law. I understood from the Treasury Board that I was subject to the Official Languages Act. With respect to access to information, we behave as though we were. We are not by law. That was a decision of the government, but I behave as though I were.

    Obviously, there are certain things that are discussed in my foundation that would be exempt from being exposed. For example, I must obey 14 different privacy laws and the board has to approve every single scholarship, so there are certain things that you wouldn't be putting out. In addition to that, a lot of things we do involve intergovernmental relations, and those are also normally exempt under the access to information law.

    Finally, with respect to the Auditor General, it is really a question for the members of the foundation, because it's the members, not the board, of the foundation who appoint the auditor. They would have to decide if they wanted to ask her. I think she would have to decide whether she could accept such a mandate under the law under which she operates. If she couldn't, then the government would have to change her law. It really is a decision for the Government of Canada as opposed to us.

»  (1715)  

    The Chair: Thank you.

    Mr. Norman Riddell: One last thing. With respect to the estimates--

    The Chair: We'll pick it up on the.... Oh yes, go ahead. That was my question. Go ahead, you can answer that one.

    Voices: Oh, oh!

    Mr. Norman Riddell: That was your question, Mr. Chairman.

    In a sense, the government did my estimates 10 years in advance. It told us we had to provide $300 million of scholarships a year and there isn't really any getting around it.

    The Chair: I said at the beginning of this also that one of the reasons this committee was established was that some of these accountability problems rest here, not necessarily with your organizations. It may be as well that we messed up and continue to mess up annually, I would argue, as new money flows, because there is no proper oversight, challenge, question, or amendment to those agreements that is dealt with at a committee. That is something I suspect we will think about changing in the future.

    However, Mr. Bryden and then Madame Folco.

    Mr. John Bryden (Ancaster—Dundas—Flamborough—Aldershot, Lib.): Thank you, Mr. Chairman.

    I have a general question to all of you: if a reporter were to call up your organization and ask for the salaries of every person earning more than $100,000 in your organization, would you be able to supply that information, or would you supply that information?

    The Chair: Dr. Strangway.

    Dr. David Strangway: Mr. Chairman, if you open the annual report we just gave to you, you will find all the salaries for our senior people.

    Mr. John Bryden: Can I go down the line, then?

    The Chair: Dr. Naimark.

    Dr. Arnold Naimark: Yes, you could get that. We don't publish it on an annual basis, but it's available.

    The Chair: Ms. Francis.

    Mr. John Bryden: But is it available all the way along the line?

    The Chair: That's what I'm asking, John; just hang on.

    Ms. Francis.

    Ms. Myrna Francis: We don't report salaries in that fashion, but you could ask it.

    The Chair: Mr. Godbout.

    Mr. Martin Godbout: If you want to know the salaries of individuals, it's not provided in the annual report. It gives the global figure. If you want to know my salary, you go under management services.

    Mr. John Bryden: It's not your salary, but all the salaries of your employees who make over $100,000.

    Mr. Martin Godbout: It's global.

    Mr. John Bryden: So we can't get it, then?

    Mr. Martin Godbout: You can get it.

    The Chair: Mr. Riddell?

    Mr. Norman Riddell: Mr. Chairman, I think we would report those salaries in the same way the Government of Canada reports salaries; that is, within ranges, rather than in specific dollars to individuals. We would report that.

    Mr. John Bryden: Mr. Strangway and Mr. Lomas, you manage a lot of money and dish out a lot of money in both organizations. How would you be able to detect a lobbying of the decision-makers in your organization where you might have abuses or people trying to exert influence on the decision-makers on these decisions pertaining to money? How would you personally detect whether it was improper?

    Dr. David Strangway: This, of course, is an issue for any agency that's working with grants. First of all, we have a very complex process of selection of projects. We involve external reviewers in individual projects; we involve panels who look at all of these processes; and every member of those panels and those review committees signs a freedom-from-conflict declaration, so they have to sign on the ethical issue.

    Second, all of the staff and all of the board members similarly sign a conflict declaration. If there is ever an opportunity where, for example, there is a board decision about a project that involves a person at that institution, that person leaves the room and does not participate in the discussion or the debate. For us, in a way, this is what is really important about what we do: that the process has and is seen to have integrity. We work very hard at that.

    We occasionally receive a comment from an individual who says their project might have been reviewed by somebody who has a conflict. When that happens, we immediately go to the source and determine whether there was or was not. The process is set up to have a maximum amount of integrity associated with it.

    The Chair: Mr. Lomas.

    Mr. Jonathan Lomas: We have all of the same systems in place for our peer review panels. For somebody to exert that kind of undue influence, they would have to have the reach of Solomon. There are 15 members or more on our panel. The recommendation to fund something is not made by one person; it is made by that panel.

    Mr. John Bryden: The nature of my question is, what if somebody is taking your decision-makers out for lunch or applying that type of pressure? If you can't see or don't normally see the documents of your own department, how are you able to be sure your department is running properly, that there aren't bad apples in the operation? We've had experience with bad apples. I'm just wondering whether—

»  (1720)  

    Mr. Jonathan Lomas: Can I clarify your question? Are you asking about the staff who are working as employees in the foundation, or are you—

    Mr. John Bryden: About the staff.

    Mr. Jonathan Lomas: Oh, so it's the staff workers, the employees in the foundation, that you mean. They don't make decisions about giving grants out. The decisions about giving grants out are made by external review panels of peers and others. The actual recommendation goes from them to our board of trustees, from our granting competition. The staff themselves are not making the decision that we will fund this person or that person. They can be taken out to lunch however much they like, but they don't have the power to do that.

    Mr. John Bryden: But they're making the recommendations.

    Mr. Jonathan Lomas: No, the merit review panel, in our case, makes the recommendation, and that's a group of 15 or more people. They're using criteria and information provided by the applicant and/or the staff.

    Mr. John Bryden: So do you have no worries about undue influence in the process anywhere?

    Mr. Jonathan Lomas: I would always have due process issues about making sure my employees are not using credit cards for personal expenses, or anything like that, and we have all those accountability mechanisms in place. Similarly, when I go around the country, I frequently ask researchers how my staff are doing, whether they are providing good service to them, and all of those questions. Beyond that, I have no concerns about any fraudulent issues.

    Mr. John Bryden: Then, staying on this theme—and I'm running out of time, which is too bad—you were commenting on the sensitivity of dealing with the Province of Quebec and presumably other provinces. Why does the section of the access to information legislation that protects the confidences of federal-provincial relations not apply to you? Why wouldn't the Access to Information Act give you the same protection it gives every other government institution when it deals with federal-provincial matters?

    Mr. Jonathan Lomas: That's not the nature of the protection we would be looking for. When we are trying to create some consensus around a health policy issue or a health services management issue, it's mainly a matter of getting the people in the room who will be able to bring the research and the reality of the system together. If some of those players are missing because they do not wish to attend, because they perceive us as a federal government agency as opposed to a national foundation, then we are missing a very crucial piece in being able to come to some moving forward in how we improve the health system.

    The Chair: Madame Folco.

[Translation]

    Ms. Raymonde Folco (Laval West, Lib.): Thank you, Mr. Chair.

    My question is for Mr. Riddell of the Canada Millennium Scholarship Foundation. Mr. Riddell, we have had over the years many opportunities to discuss the merits of your foundation and the way it works. I noticed in the notes provided by the Library of Parliament that you have a mandate and various activities, the second of which is research on ways to improve access to post-secondary education. I know you put a lot of work into these research activities. Could you tell us how these activities fit in your mandate from the Government of Canada?

    Second, which percentage of your budget is earmarked for these activities, as compared to the percentage going into scholarships per se?

    Third, what impact or consequences did these research activities have on the way your foundation works and on the very merits of your foundation, that is on the number and types of scholarships handed out throughout Canada?

[English]

    The Chair: Mr. Riddell.

[Translation]

    Mr. Norman Riddell: The research our foundation makes includes two parts. First, we want to administer a scholarship program that is as efficient and effective as possible. I mentioned that our scholarship program is based on the system that is administered by the provinces and the federal government. For example, we do not look after the assessment of needs ourselves. So, we have investigated the impact of needs assessment on the selection of those who receive our scholarships. We have already started sharing the results of our research with the public. We have found out that the recipients of our scholarships are students in need, but not necessarily from the poorest segments of the population. This is something we should now be discussing with the public, to determine whether the targeting of our scholarships reflects what people want. That is an example of one type of research we do.

    The other type of research is based on the importance we give to section 5 of our legislation. It states that our scholarship program should improve access to post-secondary education. The program we manage, that is the general scholarships program and the excellence scholarships program, on which we spend $300 million a year, is targeted to people already in the post-secondary education system. But we should certainly discuss access to post-secondary education for those not already in the system, and which we want to encourage to enter the system. These are people from poorer segments of the population, natives, and immigrants, for example.

    We need to do some research to find ways to develop programs to have people who otherwise would not do it enter the post-secondary education system. With that objective in mind, we co-operate closely with the provinces. We signed agreements with British Columbia, Manitoba and New Brunswick, and we are trying to sign more with other provinces.

    As to the amount we spend on research, it is about $1.5 million a year, and overall spending stands at $310 million. This is less than 0.5% we spend on research, and we believe it is important for the future our scholarship program and the whole system in general.

    Finally, what is the impact? We have discussions regularly with the provinces and the federal government about the research program of our foundation. In these discussions, we are already starting to see some interest on some issues we have raised, for example the very rapid increase in loans from the private sector, because public money is not adequate to finance post-secondary education. This issue was pinpointed by our foundation, and the provinces and the federal government are now getting together to try to do something.

    Our research work is in tune with that already done in the government, but what is nice with the research work in our foundation is that everything we do is public.

»  (1725)  

[English]

    The Chair: Thank you.

[Translation]

    Ms. Folco, are you finished?

    Ms. Raymonde Folco: Yes, Mr. Chair.

[English]

    The Chair: Thank you.

    Mr. Benoit.

    Mr. Leon Benoit (Lakeland, Canadian Alliance): Thank you very much, Mr. Chair.

    And thank you all for coming. I know you've come at great expense in terms of time and money, and I do appreciate that.

    Just so I can focus a little more, I'm going to direct my questions to one individual, and that's Mr. Riddell. What I'm going to do is ask some of the questions that the Auditor General suggested we should ask of you. So if you've had a look at those, you'll have a pretty good idea of what questions are coming.

    Of course, I think there is very little doubt as to why these foundations were established to be at arm's length, to keep the operations of the foundations safe from ministerial and departmental meddling. So I think the reason for the foundations being established like that is good and certainly valid—but the problem is accountability.

    The Auditor General said this in her 2002 report in regard to accountability. She said that the government's arrangements with the existing foundations did not meet the “essential requirements for accountability to Parliament in three ways—credible reporting of results, effective ministerial oversight, and adequate external audit....” Those are the problems.

    Starting with the first issue, which is credible reporting of results to Parliament and the public, the Auditor General said that the foundations publish annual reports, but that few of them—at least as of 2000—are tabled in Parliament.Are you aware whether that has changed or not?

    Mr. Norman Riddell: We have issued five annual reports. Those five annual reports have been tabled in Parliament by the Minister of Human Resources Development, all five.

    Mr. Leon Benoit: So yours wasn't one of the ones targeted for that.

    Mr. Norman Riddell: Secondly, copies of those five reports have also been provided to the Auditor General.

    Mr. Leon Benoit: The follow-up question on that is, if Parliament didn't receive multi-year plans or evaluation findings, to your knowledge has that changed?

    Some of these questions, I understand, would be better going to the minister, but I want to hear it from your side as well. This was the Auditor General's concern. It said that Parliament didn't receive multi-year plans nor evaluation findings. It said that while Parliament did receive some useful information in the estimates documents of the sponsoring departments or in the foundation's annual reports, the performance information provided there could have been better. That was their comment.

    Have changes been made as a result of the Auditor General's work in that area?

»  (1730)  

    Mr. Norman Riddell: Mr. Chairman, from the very beginning, the foundation has been complying with its law. This requires that we not only account for past activities but that we indicate what our plans are for the future.

    I draw the attention of the member to my most recent annual report, from which you will see the plans of the foundation, what we are going to do under each of our major objectives out to year six.

    Mr. Leon Benoit: Okay. The Auditor General goes on to say, “In the 2003 budget, announced requirements“--and that was the response, I think, to the Auditor General's report; that response came through the 2003 budget--“for corporate plans, with summaries to be tabled in Parliament”. Is that occurring from your foundation now?

    Mr. Norman Riddell: As I indicated, the work plan of the foundation we include in the annual report, and that is tabled in Parliament, in both Houses. A copy is sent to each member and each senator.

    Mr. Leon Benoit: Would that be considered a corporate plan, as the Auditor General was--

    Mr. Norman Riddell: Yes, I think so. I'm not quite sure what she has in mind. If a corporate plan is saying what you're going to do and how you're going to do it, I think this probably covers it.

    The Chair: Perhaps I may interrupt for a minute, Mr. Benoit. For the benefit of everybody, a 15-minute bell has started. I will continue to sit until we get to within about five minutes, because there are other questions. We'll monitor the time and adjourn the meeting in time for members to vote. At that point we'll have to say a very quick goodbye, because we'll have to rush down the hall to vote.

    Mr. Benoit, a final short question.

    Mr. Leon Benoit: A final short question, okay. I was kind of going through a process here but....

    The third issue the Auditor General brought up was the adequacy of the audit regime. She said that each of the foundations they examined in 2002 had provisions for financial statements and a financial audit by an external auditor appointed by the foundation's board; however, none of the foundations had adequate provision for independent audits and evaluations. And she has focused on the value-for-money audit. She indicated that was simply not adequate and that there really wasn't a value-for-money audit done that was available to Parliament, which of course is critical.

    I'd like to ask whether that has changed, whether there will be a value-for-money audit made available to Parliament this year.

    Mr. Norman Riddell: Mr. Chairman, as I mentioned in my statement, we have an external auditor. We also, by law, have an internal auditor. The internal auditor, by law, is required to look at the compliance with the management systems that we have put in place to achieve the objectives.

    Third, by law we are required and will be publishing, as I mentioned, in a few days what is an evaluation of the foundation's work to date. Evaluation of the contribution that our awards make to access is somewhat difficult to make after a period as short as four years, but the report will very clearly indicate that the foundation has complied with all of the requirements laid upon it by Parliament.

    The Chair: Mr. Benoit, I am running out of time.

    No, Mr. Bryden. Mr. Szabo has not had an opportunity to ask a question yet.

    How about if we allow you, Mr. Benoit, one final short, well-crafted question, and then we'll move to Mr. Szabo.

    Mr. Leon Benoit: Thank you.

    You're asking a lot. It's late in the day.

    The Chair: You're up to it.

    Mr. Leon Benoit: But as an example of a value-for-money issue, the foundation says that part of the purpose of the foundation is to pursue research into new ways to improve access to post-secondary education. What has the foundation discovered that the provincial education ministers don't already know?

    Mr. Norman Riddell: CFI has discovered a number of things, partly because provincial administrations, in my experience—and I've worked in two of them—do not usually have a lot of money for research. Generally speaking, they're running the program.

    What we have learned and what we are sharing with the provinces, for example, is something that I mentioned in my reply to Madame Folco, that the loans and the grants in our system—so that includes the federal and provincial money and ours—are going to people who we may not think they're going to, and they may not be going to the people we think are being helped. In other words, one would expect, if you had a need-based program, that it would be the low-income people who would be getting the lion's share of the money. We're finding out that because of the needs assessment formula, which is cost of attendance minus the resources at the person's disposition, a very significant amount of money is going to people in the two top income quartiles. That is something the provinces simply didn't know until recently.

»  (1735)  

    The Chair: Thank you very much.

    Mr. Szabo.

    Mr. Paul Szabo (Mississauga South, Lib.): Mr. Strangway, I read in your annual report that you do evaluation programs to assess the impact and to help determine the benefits they are producing for Canadians. I think that would be expected.

    In the fiscal year ended March 31, 2003, did you have any assessments of any of the programs we've funded in whole or in part that did not meet the standard that you felt should have been met?

    Dr. David Strangway: We've had many of our programs evaluated over a period of years, including the most recent year. In each case, the recommendations and the views of the evaluators were that we were performing very well, to a very high standard. There were, as you might imagine, a number of smaller issues that they advised us we should take into consideration, and of course, we are doing so. But fundamentally the message was, you're doing a really good job.

    Mr. Paul Szabo: You have no failures or disappointments to report?

    Dr. David Strangway: I have no failures or disappointments to report.

    Mr. Paul Szabo: Okay.

    Mr. Strangway, are you a member of the board of directors of any other agency, board, or company?

    Dr. David Strangway: I'm a member of the board of Terasen Inc. in British Columbia.

    Mr. Paul Szabo: In your financial performance, the administrative charges since 1998 have been growing. In fact, from 1999 to 2003, there has actually been a 100% increase in administrative charges. Can you explain why that is?

    Dr. David Strangway: Yes. Let me start by pointing out that fundamentally the CFI, in its current activities and as we project to the future, is spending and will spend no more than 2.5% to 2.6% in the total money that does not go to the organizations.

    When we started, we were obviously a small organization. We obviously had a situation in which we were putting together the planning, and so on. So this has built up to the current plateau.

    Mr. Paul Szabo: This would be a normal operating level?

    Dr. David Strangway: Absolutely, yes. We're at the normal operating level.

    Mr. Paul Szabo: I'm going to allow Mr. Bryden to ask my last question, because I can't read his writing.

    Mr. John Bryden: Thank you, Mr. Szabo.

    On behalf of the committee, can I ask you to provide us with a report on the potential negative impact that being under the Access to Information Act would have on your organization? I think you will find that, judging by the quality of the administration you have, there would be very little impact.

    Mr. Lomas, I have to reserve a comment for you. Your objections to the Access to Information Act, your concerns, Hansard will show, are more political than practical. But I think it would be very, very helpful if you could have a formal briefing on the Access to Information Act and come back to this committee with the reasons you feel your organization would have difficulty under the act.

    Dr. David Strangway: Again, Mr. Chairman, let me answer the question the same way as I did previously.

    We are not subject to that act. It's not our decision. The point is that we operate entirely as though we were subject to the act. So obviously the imposition of that act to do something we're already doing would not be a fundamental issue.

    I point out to you that in terms of the revisions to the funding agreement that were made, some of which were referred to also by Genome Canada, those were already things that we as an organization were practising. So in this case, I don't think we need to give you a report to that question. It is not a CFI question; it's a government question.

    Mr. Jonathan Lomas: In response to the access to information issue, I think you misunderstood. I at no time opposed our operating under access to information. We already are. My concern was about the capacity of a minister to be able to essentially, as expressed in the earlier exchange, come in and actually cease operations for us.

    That was more the concern. It has nothing to do with access to information.

»  (1740)  

    Mr. John Bryden: Mr. Chair, if I understand correctly, all the witnesses are in agreement that the Access to Information Act could easily apply to them, because they're all operating as though it should, so we don't need a report for them. I think they have indicated that they could live easily under the Access to Information Act, and gentlemen, we'll try to arrange it.

    The Chair: Thank you, Mr. Bryden.

    Mr. Clark.

    Right Hon. Joe Clark: Mr. Chair, we've dealt with the access question. I posed three others, and Dr. Bennett suggested that it would be helpful if there could be a response. I think we, or certainly I, would welcome that.

    I'd like to make two quick comments.

    One, we don't want to get into a situation where the nature of federalism prevents accountability. What we have to do in a system like ours is reconcile the natural difficulties that are inherent in the country. Maybe we'll run down to Mr. Charest and have everybody report to the Council of the Federation, or whatever he's calling it.

    Two, let's not make a bogeyman of ministerial or parliamentary intervention. The record of foundations, emanations of the government, being able to operate independently is in fact excellent. It also has the benefit of respecting the fundamental principle of our particular system of democracy, which is that there has to be accountability for the expenditure of public money.

    The Chair: Mr. Naimark.

    Dr. Arnold Naimark: As one quick point, Mr. Chair, I have been listening to the discussion, and I think there are some ways in which we can achieve the ends, even under the arrangements we have now. It might be better to have a more global view of it, but I think there are some ways in which we could operate within a framework that would achieve some of the points that the Auditor General made and some that Mr. Clark has made. We'll try to include those in our response.

    The Chair: Thank you.

    Just for the benefit of all, we are four minutes away from the vote, so I think it is becoming apparent that we should adjourn. But given that there are four whole minutes, the chair, of course, will forgo his question--which is a great disappointment to all, I'm sure. I would simply say thank you. I appreciate your openness, you willingness to come here and discuss this.

    There is just one question I would pose, more for the consideration of members. While it's true that there is this disjointed process, there is a point, though, Mr. Clark, where the government did decide, and there was government House process around here when it made the decision. It just strikes me that we handled it very badly.

    Mr. Riddell talks about his five-year plans. I think the Auditor General's point, Mr. Benoit, was that those plans were never out and discussed in the House as part of the approval process as opposed to after the fact. So I commend you for doing it after the fact.

    The accountability question, though, sits on our side, and we need to think a little bit about what we do as we move down the road with this. Perhaps next year's budget will be a bit of an opportunity to test some of that.

    With that, thank you very much.

    Members, watch your notices. There will be some special meetings next week. We have a couple of other items coming on the agenda.

    The meeting is adjourned.