HUMA Committee Meeting

STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 9, 2000

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[English]

The Chair (Mr. Peter Adams (Peterborough, Lib.)): Colleagues, I think we'll begin.

The order of the day, pursuant to Standing Order 108(2), is a study of HRDC grants and contributions. In particular, today the theme or the question we are discussing is the role of the member of Parliament and civil servant in the decision-making process. What has it been? What is it? What should it be? What positive action could clarify these roles?

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We are very grateful to our witnesses today. We have Mr. Arthur Kroeger. Mr. Kroeger, we welcome you very much indeed.

Mr. Kroeger is the chancellor of Carleton University. As we all know, he served as a deputy minister in various capacities and he's an officer of the Order of Canada.

Sean Moore is a public affairs adviser. He's currently working at Gowling, Strathy and Henderson, an Ottawa law firm. He's formerly the editor of The Lobby Monitor.

Sean, we welcome you here. Thank you very much.

Then we also have Professor Gilles Paquet. Professor Paquet is a professor of political science at the University of Ottawa. He's authored or edited 25 books and numerous other publications. He also is a member of the Order of Canada.

[Translation]

Welcome, professor Paquet.

[English]

Gentlemen, if it's agreeable to you, we'll proceed in the order we have you on the agenda, which would be Arthur Kroeger first, followed by Sean Moore, followed by Professor Gilles Paquet.

Mr. Kroeger.

Mr. Arthur Kroeger (Individual Presentation): Thank you, Mr. Chairman, for your invitation. I've not done a prepared statement, but overnight I developed a few thoughts that I perhaps could share extemporaneously with the committee.

Your subject is the role of the member of Parliament, and I'd like to offer a few thoughts about that from a particular perspective. What I've been preoccupied with has been, on the one hand, a prolonged and very intense political controversy involving members of the House almost daily and the impact, in my perception, that is having on the functioning of government, on the functioning of officials, on the process of governance in Canada. I'm not sure whether members of the committee have fully appreciated the scale of the impact all of this is having, but I have been impressed by it and I have had some conversations with people about it.

Obviously in something as serious as the grants and contributions audit that came to light there was a requirement for corrective action of a quite far-ranging nature. Certainly it is legitimate for representatives of the public to express intense concern about the under-management of the funds that came to light. My problem is what effect all of this can have.

I agree with the Auditor General's comment before this committee that it is important not to overdo it, not to overcompensate for what has happened. Yet government is a fairly blunt instrument, and a lot of things don't happen in a very nuanced way.

My perception is that as a result of four months of controversy in the House, of daily media headlines, there is in any government now the strongest possible incentive to play safe and do it by the book. That incentive is not limited to officials engaging in what is thought to be normal bureaucratic behaviour. That incentive extends to ministers, because no minister wants to take any chances of being pilloried in the House week after week. Therefore, you play safe and you try for maximum error-free government, and error-free government is bureaucratic government.

Your problem is to find the right kind of balance. Clearly, you could not go on with the kind of under-management that was brought to light by the audit, but it's easy to say we have to correct everything in sight, without looking at the adverse consequences that can flow from this: adverse for the good functioning of the public service, where people who want to be sensitive to clients feel they had better not, that they had better play safe; adverse in its impact on the recipient organizations.

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The committee has been looking at approximately $1 billion in grants and contributions. These funds, contrary to what has been said in some quarters, don't go to big business. They go to tens of thousands of mostly small organizations right across the country.

When I was the Deputy Minister of the Department of Employment and Immigration we transferred funds every year to 70,000 organizations across the country that delivered training programs—the Y, for example, unions, community groups. They could do it more effectively, less bureaucratically, and with less expenditure of money than we as officials could, so we used them very extensively.

If you're going to do that, some things are going to go wrong. And the risk of overreaction is that you now greatly increase the burden on large numbers of voluntary organizations, most of which have very thin resources. They don't have a whole lot of accountants and management consultants on their staff. They're not very good at cashflow forecasts, and they're not very good at giving you a precise estimate of who the beneficiaries are going to be, but they are intent on really trying to do a good job vis-à-vis whatever clientele they're trying to serve, whether it is in the field of literacy, community action, or aboriginal development.

I think the problem is that groups are now going to be required to fill in a lot more forms. They're going to have to engage more professional help, which will divert money. They're going to have to divert staff time. Some of that had to happen. The risk is of overreaction. There's a further adverse effect that is clear in respect of the recipient organizations, and that is that even now funds are being diverted from programs to overheads, and there will have to be more of that.

It's interesting if you look at some of the past audits. Actually, the Department of Human Resources Development and its predecessor periodically tried to get authority to transfer money from program to administration because they were worried about under-management, and the approval was denied by successive governments. Now it is happening. Some of it needs to happen. I would simply caution the committee that if the political reaction is overdone, you're going to get an administrative overload; you're going to get too much money transferred to red tape and overhead to the detriment of the recipient organization.

So I was glad in my last comment to hear from the clerk of the committee and your researcher that you are indeed now turning your attention to the future, to what can be made constructive out of this, to how we can make things work better in the future without simply sinking them into the swamp of bureaucracy.

Thank you.

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

We normally proceed with all the presentations at once. So if we can go to Sean Moore next, we'll be grateful.

Mr. Sean Moore (Individual Presentation): Thank you, Mr. Chairman.

My perspective today is that of one who makes applications for federal grants and contributions, although I don't purport to speak for anyone today, not even the law firm where I work. It's strictly a personal perspective.

I've never lobbied on behalf of any client for the grants and contributions that are the focus of this committee's study, but I've certainly rounded up information on some of those programs and sent it off to clients, corporations, and industry groups for their review. I've also provided, on a number of occasions, some free advice and assessments—the free advice being often worth exactly what you pay for it—on these programs, as they were exploring whether or not they should apply. I have been involved with certain clients regarding federal financial assistance of other types outside the scope of the Department of Human Resources Development, such as Technology Partnerships Canada programs and procurement matters involving various departments.

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In my view, most of the programs run by HRD over the last few years really don't require the services of a professional lobbyist or government relations consultant. Looking at the material that describes the programs and the terms of reference for them, notwithstanding some of which you've heard in this committee before, I find them relatively straightforward. We all certainly understand now that with many of the programs, for better or for worse, there was a lot of flexibility.

The application forms aren't particularly complicated, though for some not familiar with some documentation, they may a little daunting. There is little evidence for me that special representations need to be made by any applicant or lobbyist acting on behalf of an applicant.

Simply put, consultants are often hired to get involved in these things mainly because officials in some of the applicant organizations don't have the time to figure these things out for themselves. Their need often is not necessarily for someone to buttonhole people in Ottawa on their behalf, but rather to help them figure out if they qualify for the program's financial assistance. In fact, the bulk of work done by most government relations consultants in this town, I find, is not so much arguing to government on behalf of clients, as often working with clients to make sure they are doing the things that are consistent with public policy, or would allow them to qualify for particular programs.

These organizations often need someone to take the time to generate the internal information that's required. The vast majority of organizations, particularly non-profit groups, but also corporations, large and small, simply don't have the money, or at least don't want to spend the money on outsiders to help them with grant applications.

Indeed, in my experience over the last few years, increasing numbers of non-profits and especially corporations, small and large, don't want to expend the resources required to apply for, manage and report on financial assistance from government. Over the years there's been a growing belief among many that it's simply not worth the effort and the hassle. I couldn't tell you how many organizations I've talked to that perhaps some years ago enjoyed the benefits of core funding, but now find the strings attached and the reporting requirements attached to funding from various levels of government hardly worth the hassle. Ironically, attempts by HRD to ease the hassle for recipients of federal funding seems to be at the root of much of the grief experienced by the department over the last couple of years.

When you deal with government every day from the outside, one thing is apparent: the public service almost everywhere, but especially at the federal level, has become almost anorexic. While we all like to mouth clichés about doing more with less and being lean and mean, the realty is that the federal public service is a shadow of what it once was. It should come as no surprise to anyone that there simply aren't the bodies there to do the things that used to be done.

One of the greatest losses I find is the loss of institutional memory in the public service. When you phone to try to find out what the antecedents were of a particular policy, how things used to work, and what the government's experience on it was, you are oftentimes left with some difficulty in getting that sort of information.

I'm no authority on the management of public service, but I would think technology could play some role in easing the administrative burden of programs such as this. For example, it might be a lot easier if application forms for some of these programs were electronic and interactive. Surely if you can file something as complex as a Revenue Canada income tax return or a lobbyist registration form, there should be some way of devising a program that allows for the intake of that information and the automatic cataloguing of that information in a way that's useful for those who are managing the programs.

I'm not here to argue that technology is the only answer to the many issues you've been dealing with. It may be a partial response to the fact of life that either more resources are not likely to be dedicated to these programs, or there needs to be smarter use of the available technology.

Thank you.

The Chair: Thank you very much.

[Translation]

Professor Paquet, please.

[English]

Professor Gilles Paquet (University of Ottawa): Thank you very much, Mr. Chairman.

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I have not had the benefit of actively participating in affairs of government. I live in the mezzanine of all of this. But I've been an observer—and it's in that capacity I take the time here—of the Ottawa administrative scene for the last umpteen years.

My colleagues have pointed to the dangers of overdoing things from a political point of view. From an administrative point of view, my argument is simply that there are things you, as members of Parliament, also have to recognize. You're not operating any longer in the world of the old Westminster model, created at a time when the minister had 17 employees and could walk down the corridor to talk to them. It is not the world in which you're going to be forced to live. So my point will be in three parts.

First, I will try to argue that there are very important changes in the way the private, public and civic sectors are organized and managed these days.

Second, the new government's patterns that are of necessity going to evolve in each of the three sectors are what I will call distributed governance, where power is shared. Therefore, we will not be able to be restricted to looking at it as the simple hierarchical master-servant sort of relationship.

Third, this is going to create for you the need to indulge in much more difficult thinking because you will have to start living with what I call “soft accountability”.

Let me go through each of these three points quickly.

In every sector—private, public, and civic—the complexity of the issues that have faced us in a knowledge-based economy have forced us to create organizations that do not simply respond to mechanical problems. They have to be learning organizations that tackle issues in the making—learning by doing. The main problem is that we haven't done that. Much of our lack of productivity in the three sectors has been due to the fact we haven't managed to recognize the imperative of that new sort of situation.

We need coherence and rules, but if we are going to have innovation it need not be too tight a set of rules, otherwise it will simply kill any possibility of adapting to the new circumstances. That sort of new type of imperative has led to, of necessity, non-centralization. If you try to run everything from the centre there is congestion, very clearly. So managers have had to learn how to delegate, but also how to put into place organizations that are much more modular and horizontal. In the private sector, we now have more and more of these virtual organizations, more and more of the modular units.

The central question is whether it is possible to run such very distributed organizations where power is shared, not only within a department, but more and more, to do the job government is asked to do, you will have to do it in partnership with the private sector, the civic sector—as has been done—and other levels of government. If one is not able to develop forms of organizations subtle enough and loose enough to mobilize the minds of all of these people and to mobilize their capacity to work together, then we are going to be in some difficulty.

But what this distributed governance world is creating is a nightmare, in terms of accountability. Even the armed forces these days are not as they used to be—reporting directly to the Prime Minister only. When the armed forces deal with a work with the UN, when they enter a province like Quebec at the time of the ice storm, all sorts of other people besides the Prime Minister are involved in defining some form of accountability.

In some ways, we have to accept that the defining accountability in a single direction, at a time when we know there are many different stakeholders, many forms of authority, many types of accounts to be rendered—political, administrative, legal, professional, financial—and much more complexity than has been perceived and lived through previously, it becomes extraordinarily dangerous to focus on one aspect, one stakeholder, one type of accounting, and then reduce everything to that. If you do this, you're bound to create an extraordinary nightmare.

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What do I mean by “soft accountability”? It is the recognition that if you are accountable to a large number of stakeholders, you are going to be forced to have rules that may turn out to be more fuzzy. It is of necessity. If you insist on having a hard-and-fast rule, it may be hard and fast but wrong, destructive, and wasteful.

In closing, let me take an example about how we will have to do it not only in Parliament but also elsewhere. We have these days a corporate law that recognizes that the sole proprietor of a firm is a shareholder. It means that if a firm diverts some of the surplus of the company toward their employees, their suppliers, or their communities, under our law they could legitimately be sued for having stolen money from the shareholders.

Now, 28 states in the U.S. have laws that say that the board of directors may use the surplus in all sorts of ways to deal with the other stakeholders. That is not yet the case in Canada. The corporate law is lagging behind. It will mean, therefore, that when we change our corporate law, we will need to change our notion of who is owning the firm and what is the notion of property.

The same sort of problem is in fact imposed on you. If a firm is to be accountable not only to shareholders but also to employees, environmental concerns, and the community, they have to arbitrate and trade off a variety of these accounts at all times. It would be unfortunate if, in a futile effort to reconstruct an old Westminster model, Parliament were in fact to concentrate entirely on one single element of that particular type of account.

We want our civil servants to do things economically and cheaply and we want them to do them right, but fundamentally the citizen is interested in them doing the right thing. Them doing the right thing may not be easy to program in advance. It may depend on the context. It would be absolutely essential that a committee like yours restate those things. They may be basic principles, but very much like the Magna Carta, some of those basic principles need reiteration at a time when we are in danger of fundamentalism, intégrisme, as we would call it in French, a sense of focusing on one element of a broad, complex picture and therefore telling almost everybody that all other elements are in fact irrelevant.

Thank you.

The Chair: Thank you, Mr. Paquet.

Thank you, gentlemen, for your succinct statements and also for tackling the questions we posed in such different ways.

I have a long list. I'll begin with Maurice Vellacott, then Rey Pagtakhan, Paul Crête, Raymonde Folco, Larry McCormick, and Bryon Wilfert. Maurice Vellacott.

Mr. Maurice Vellacott (Wanuskewin, Canadian Alliance): Thank you, gentlemen, for being here this morning.

My question moves in the direction of the CJF, or the TJF, as it was formerly called. I recall talking on Saturday to a small-businessman, in terms of agricultural research and the development of products and so on, and we got into a discussion of the greater complexity of forms that has happened just in the last few months. You kind of alluded to the downside when we want this greater accountability thing.

Something I'm wondering about, though, which I didn't hear mentioned, came up in conversation with him. This is how he put it in very lay language. He said if government didn't tax us to death, if there were some better breaks in terms of corporate tax, lower payroll taxes, and those kinds of things, we wouldn't care about any of these forms. He purported to speak on behalf of many other small-business people. We don't have people we can hire in, as large corporations can, to fill out these applications and so on, as Sean inferred before. He said “Maurice, we do some good work and we do some good research and development of agricultural products for the domestic and overseas markets, but there's another...”. And I don't hear that really coming up much. I think maybe at one point I detected only a little whiff of that.

But is there not a possibility at least with regard to jobs of going in that manner instead of just reducing corporate taxes, having lower payroll taxes, and so on and removing...? If you had small businesses each creating a half-time position and you multiplied that across the country, it could add up very significantly. I didn't hear that explicitly referred to in any of the presentations.

I know you had limited time, but I wanted to zero in on the jobs creation thing. Mr. Kroeger, you were a deputy minister in that area. I would be interested in hearing all of your responses on that.

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We have to think outside of some typical, conventional, old-line paradigm here, outside the box. Why don't we think more along those lines?

Sean, from your experience of this, I'd be interested in your comments and Mr. Paquet's as well.

Mr. Arthur Kroeger: It's true that the tax policy becomes important in relation to employment, and there has been a lot of criticism of payroll taxes, for example. Canadian payroll taxes are lower than they are in the United States and in a number of European countries, but they're still a penalty for hiring. There's always the level of corporate taxation. Those are important in relation to employment.

If you're talking about the recipient organizations here, however, the great majority of them are non-profits. They don't pay taxes. About 30% of them are aboriginal groups of one kind or another. All of these community associations, co-ops, and the like are not affected at least by income taxes. I think they might still have to pay payroll taxes and presumably CPP and that type of thing. But I would distinguish between the significance of the tax question for employment creation in the economy generally and in relation to the recipient organizations we're largely talking about here.

Mr. Maurice Vellacott: Sean, I confess that I am zeroing in on employment and the creation of jobs and the way to do it—

Mr. Sean Moore: I was going to make the same point Arthur has just made, that a substantial portion the types of programs that are the subject of this committee's study are organizations that don't pay taxes.

Mr. Maurice Vellacott: If I might interject, Sean, the ones where bigger questions have been raised, though, are with regard to the—

The Chair: Witnesses, we found it very useful to speak through the chair. It's not ego on my part. It simply has worked better in other meetings. I'm sure this is going to be very congenial, but it does help, Maurice.

Mr. Maurice Vellacott: Through Mr. Chair to you, I'm focusing on this because there were bigger questions in this area of job creation and the kind of money for CJF and TJF in particular. That's why I ask about it and specifically would want to address that, Mr. Chair, if I might.

Mr. Sean Moore: I don't feel confident to talk about the relative merits of reducing taxes to create jobs versus the sort of stimulant programs like the Canada Jobs Fund.

You did mention in your comments that they wouldn't mind all these forms if government didn't impose other burdens on them, such as substantial taxes. Is that the point you were making?

Mr. Maurice Vellacott: He was saying we would be quite content to have not even the necessity of trying to access government funds through this if in fact we had the benefit of less bureaucracy and red tape and lesser corporate and payroll taxes and so on. That was his point.

Mr. Sean Moore: I'm sorry, I have no basis to comment on that.

The Chair: Mr. Paquet.

Prof. Gilles Paquet: Let's understand clearly that tax is still a very blunt instrument. It's cutting across a lot of things.

What these programs are trying to do, as far as I could determine, is to deal with local issues in local ways. There is no such thing as the Canadian with a capital C and a rate of unemployment with a capital R, but rather very difficult circumstances.

At a time when government was pulling back and cutting out of the economy $30 billion to $40 billion a year, obviously, different portions of the country would be affected quite differently. It may turn out that people say now that they would be quite delighted to raise no questions about the administration of forms if they were paying less taxes. You will allow me to have some grave doubts about it. If they were to cut the taxes by 50%, the same people would start complaining maybe in the same way about one of these elements that does not work very well.

I think these types of difficulties, as Arthur Kroeger mentioned, come from the fact that you're trying to deal with 70,000 different sets of circumstances in a way that is more or less as adequate and as clearly tailor-made as possible to their circumstances. In those sorts of cases a trade-off between that and broad tax cuts is not easy to see.

Mr. Maurice Vellacott: I think I have another couple of minutes here.

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There's a little bit of frustration here. I'm assuming we're trying to get to the bottom of some of the problems in the area, particularly, I concede to Mr. Kroeger, some of those other good areas. I don't think those are the areas in dispute; it's the areas where we've spawned some half a dozen RCMP investigations in the Prime Minister's riding. It's the job creation ones that are at the centre of the controversy, and that's the flashpoint here.

I think it behoves us to get at an understanding of how we could be better served in that area. I'm thinking that's the intent of this committee and of our witnesses as well. Are there some better ways to be doing it? That was basically the intent.

I'll move to a different line quickly. Donald Savoie, the professor, made the point in his writings that in the British parliamentary system, the role of the MP is very precise. A backbencher has no business in deciding or advising that projects should be approved, where money should be spent, or to whom it should go. Can any one of you comment on that statement of Dr. Donald Savoie?

The Chair: Gentlemen, you will have to be quite brief, I'm afraid. There will be another round.

Mr. Arthur Kroeger: I'll make a brief comment about this question.

This has to do with whether members of Parliament should be consulted about the allocation of funds. There can be obvious problems about it, but as a former official, I see some merit in it. You're sitting in a local office in Kamloops and you have three applications in front of you and you don't have enough money for all three of them, so you have to make a choice. You could look at the three, and one looks somewhat better than the other two, but you're not altogether sure. You have the further problem of who elected you to choose among these three.

In fact, administrative decisions have to be made all the time, but in something as discretionary as the awarding of grants, checking it out with a local person who did get elected does not strike me as a bad idea. I know it can be open to political abuse, I know it can take the form of unhealthy pressure by members of Parliament on officials, who are then in a pretty awkward situation, but there is some merit as well to political consultation about the awarding of public funds.

The Chair: Thank you.

I'm sorry, Maurice, but we'll have to come back to it, and I hope we do.

Mr. Maurice Vellacott: Can I make a comment?

The Chair: No. We're up to a minute over, Maurice.

Colleagues, I want to explain for our witnesses that we have a large committee. The members' time is a rough approximation. It includes the witnesses' responses. I'm not cutting you off; it's just that Maurice had a reasonable amount of time. We will get back to it, I'm sure.

Rey Pagtakhan.

Mr. Rey D. Pagtakhan (Winnipeg North—St. Paul, Lib.): Thank you, Mr. Chair.

Perhaps a useful beginning is where the previous dialogue ended. In terms of the role of MPs and the need for consultation, you say that indeed there could be some value to it. Mr. Chair, I would just like to make the comment for the record that perhaps part of the apprehension is the lack of exercise of integrity in putting that signature, as a member of Parliament, on a particular grant recommendation.

I happened to be involved in review of articles for medical journals in the past, as part of my little job, and certainly when you give dutiful attention before you fix your signature, the essence is the need for integrity and not politicking. I thought I should make that point on record.

I was interested and curious when I was hearing the thesis that if you reduce taxes, employment will be increased and there is no need for job creation. I think the implication—it was not said, but it was very clear—is that there is no need for grants and contributions, there is no role for government in job creation.

My question is to Mr. Kroeger, in light of his previous life. Do you see a continuing role for government in the development of skills for citizens and in job creation for Canada?

Mr. Arthur Kroeger: Job creation grants of the traditional kind we had in the 1970s, 1980s, and 1990s have a mixed history. They have alleviated the effects of unemployment locally. Sometimes they've made it too easy for people to remain in parts of the country where there just wasn't any future and you could live from year to year with a make-work project here and some unemployment insurance there. People like that and their children might be better in the long term if in fact they were to move to an area where there is more employment.

There's a case to be made on the opposite side, where you can get a government measure that has a disproportionate local impact and the government has to come in and alleviate that. You can argue that one either way, but there's a larger question I'd like to comment on about the use of grants and contributions. They have an employment significance, Mr. Chairman, but they also have a larger role in society. They contribute to what political science people like my colleague Mr. Paquet call social capital.

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You get community groups, small organizations, strung out across the country, a lot of them in small centres. You know, we really ought to try to raise some money to create a children's playground. The Kiwanis can contribute $10,000 and we can run a bake sale and get $5,000 and the province will probably kick in $30,000. Can we go to the federal government and get $50,000? This is the sort of discussion that takes place endlessly in every part of this country. Because federal, provincial, and municipal governments in fact do have grant contribution programs, they provide an incentive for citizens to mobilize, to get together to engage in community action for the benefit of the community as a whole.

If government simply said we aren't going to have anything to do with anything that doesn't make money because it's of no interest to us and we'll shut down all of the grant and contribution programs and just let the market determine it, an economist might find some merit in that. But I think from a social point of view, in terms of the social glue, social cohesion in Canada, there is a role for the kinds of grants and contributions the member just asked me about.

Mr. Rey Pagtakhan: As a former community volunteer, I did receive some grants under multiculturalism that introduced me, as an adopted citizen of the country, to the process of governance, which eventually led me to change my career from medicine to politics.

Mr. Moore, you indicated the potential role for technology to allow for input and interaction. To this date, I am not clear whether indeed in government we are able to use a natural source of data, of information, for future improvement in our policy development such that the actual projects that are being funded today will be utilized as a basis for future improvement on policy development.

How do we make all these things interact in terms of technology? Do you see from your experience that our common data can be a common denominator for all grants and contributions government-wide? Then, specific to each department, there would be a subsegment so that we can put all of this into an integrated model using the information technology we have today. I would like all of you to comment on that.

Mr. Sean Moore: I'd like to think that government could come up with something that would allow that sort of comparability. When you look at something as simple as government e-mail addresses, the format for those e-mail addresses seems to differ from department to department.

In terms of how able the government is to have systems that would be applicable through several different ministries, are you talking just about grants and contributions?

Mr. Rey Pagtakhan: Yes.

Mr. Sean Moore: I'd like to think that would be possible. Whether or not the data that would be in an information management system for the sorts of programs in HRD would be useful or in any way provide a basis for comparability for things that Industry Canada does, I don't know. But I do know that the time that is spent taking hard copy application forms and having them inputted and manipulated would be a lot easier if it were done on a basis that would provide for that sort of comparability.

We work for a number of high-technology companies, and I would assume that the other problem is the rapid change of technology and software programs and the platforms for software programs. It's changing so often. How likely is it that you could have an approach that would last more than three or four years? It probably would take that long for some departments to install those programs and have them up and running.

In terms of cross-government comparability, I wouldn't put too much hope in that, though in individual government departments, I would think there would be some significant administrative gains at least.

Mr. Rey Pagtakhan: Mr. Paquet and Mr. Kroeger, do you have any comments to add?

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Prof. Gilles Paquet: I don't think it's a technical problem. It is a problem you have to face with the great variety of circumstances around the land. You may be able to solve some of these issues technologically, but they are trivial. The real problem is that something happening in the lower St. Lawrence, Kamloops, or the Maritimes may turn out to have circumstances so different that you need judgment. As far as I can determine, there's no computer yet that I know of that has been able to substitute for judgment.

Mr. Rey Pagtakhan: Mr. Kroeger—through you, Mr. Chair.

Mr. Arthur Kroeger: I think, Mr. Chairman, that a good deal of work is now going to be done on this. There's been so much public attention given to the management of grants and contributions. While I have no inside knowledge, I would have thought there would be a lot of effort being put into it by the main departments involved. With the technology that exists, they should be able to make some reasonable headway over a couple of years.

The Chair: Okay. We can move on to Paul Crête.

I would point out, colleagues, that our topic on Thursday is tools for tracking grants and contributions and that kind of thing.

It's Paul Crête, Raymonde Folco, Larry McCormick, Brian Wilfert, Stéphan Tremblay, and Judy Sgro.

[Translation]

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Mr. Kroeger, professor Paquet, Mr. Moore, you seem to forget that grant management is subject to the balance theory. If a problem was identified long ago—besides, audits done in 1991 and 1994, when Mr. Kroeger was deputy minister, had highlighted serious problems—and we say that in order to avoid conflicts it is better not to solve it, in the end, people who claim that these programs are not useful will win the fight. This is how politics works. If the programs are not adjusted in a timely fashion, all things considered, it is the ones who advocate their abolition who will win.

In the present situation, as one who is in favour of these programs, I hope that there is enough honesty to avoid our businesses, which are entitled to those grants and contribute to regional economic development, being deprived of such a tool because it will have been decided that these programs are no longer useful. That decision won't necessarily have been made on the grounds that the programs are good or not but because their management was lacking. People always argue that we the elected representatives must be held accountable for our government actions. As elected representatives, we must be able in the final analysis to be held accountable. It seems important to me.

As today's topic is the role of the member of Parliament, I would like to hear you tell us about the role of an important MP, that is the minister, regarding that situation.

I will give you an example. On April 10, 1997, a Montreal business received a $700,000 grant to create jobs in the textile industry. So far, there is no problem. But we have in our hands a letter dated March 25 signed by the employer already telling his employees that the grant would be paid to another company. The employer reassures them by saying that they will not lose their jobs as they will be transferred to the other company which will pay their salaries from then on.

Do you foresee possible solutions to that kind of situation so we can be sure that money allotted to a job creation fund will be used towards the fulfilment of that goal and we can avoid such situations in the future? I am not officially accusing the government party of partisan use of funds, rather, I am highlighting a situation where there was certainly bad management of a sum of $700,000 paid to a company which did not create any new jobs, which only transferred its employees from one place to another.

I am giving you this as an example so that we can examine the issue of the political role in relation to that type of decision. What kind of solutions would you propose in order to avoid—I am not saying that there cannot be exceptions—raising such situations to the status of a system?

Prof. Gilles Paquet: The warning that we three gave you must not be interpreted as kind of a blessing of bad management, scheming or possible disorders. It is not the case. It is very clear that when there is bad management, deficiencies have to be corrected. The problem is that we are under the impression—and I am talking as an observer from the mezzanine—that there is a witch-hunt going on and that one wants to convey the impression that 1 billion dollars were wasted while in reality half a dozen or a dozen serious blunders were made.

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The solution to this problem does not lie in the creation of a police state which will double, triple and quadruple audits, but rather in an effort to accept the idea that a program must not be judged only on the basis of minor management mistakes. As our good friend Kroeger was saying, if 70,000 payments were made among which a few might be a bit difficult to explain, the program must not be questioned simply because blunders were found.

Administrative solutions are possible. Technology can help us. But what scares me is that we might, like you were saying, throw away the baby with the bath water and find administrative trifles which are indefensible to attack a program which otherwise has important impacts.

In my view, the way to counter that is to proceed to evaluations that are a bit more transparent, a bit clearer and a bit more frequent that will allow us to put these trivial blunders into perspective. If we could for example demonstrate to you that out of 30,000 payments made in a year 29,990 are faultless, you would not have to worry much about what happened as the auditing would take care of the rest.

What is worrying for the moment, and that did not show through for the public to see, is that we are not under the clear impression that you are convinced—maybe you were not properly informed—that most of those transactions are absolutely faultless. Thus, the feeling I have when I examine the situation from the mezzanine is that we were not told that it was badly done; two or three juicy cases were blown up out of all proportion and that was enough to challenge the integrity of the program as such.

Mr. Paul Crête: Mr. Chairman, I would like to tell the witness that the auditor general who carries the flag when difficult cases have to be elicited said that the situation is very serious at the Department of Human Resource Development. He did not tell us that it was mere trifles. He reminded us that there had been internal audits in 1991 and 1994 during which he had identified difficulties resembling those that surfaced in the year 2000 and that following the three audits there had not been any correction in the system. And today we are about to embark on a political debate to determine if those job creation programs are necessary or not when the merit of the question has not yet been decided upon, that is if grant programs have been properly managed or not by the federal government.

I do not agree with the witness when he asserts that these are trifles. We are talking among other things about a $700,000 grant to a business from Montreal. I rather agree with you when you say that we should clarify the situation and make sure that there is sufficient transparency. Could we not get to that result by changing, for example, our administrative practices in order to be able to ask the present minister to appear before us during this period? Should we not resort to an independent public enquiry process as the MPs are part of that decision? Would it not be possible for the government to show more originality?

[English]

The Chair: You have one minute.

[Translation]

Prof. Gilles Paquet: Mr. Chairman,

[English]

it's fairly important to recognize also that if you can quote the Auditor General...the Auditor General is interested only in whether things are done economically or done well. His job is not to ask if they've done the right thing.

The real issue would be to get a much broader evaluation that would obviously indicate what's wrong with those practices and eliminate it, and allow the public and you people in the committee to take a broader view of whether or not the thing was done right. Whether it was done cheaply and economically is important, but whether the right thing was done should not be lost track of.

The Chair: Mr. Kroeger, very briefly.

Mr. Arthur Kroeger: I just wanted to make a supplementary comment.

For years, audits have found that there wasn't enough surveillance, there wasn't a good enough paper trail, that there should be closer attention to the management of these programs. The last audit is no exception, although the problem was found to be even worse.

What is striking about all of these audits is how little evidence has been found of misappropriation of funds, or diversion of funds to improper ends. In spite of the fact that the management of them was deplorably loose, these organizations, with a few exceptions, used the money conscientiously for the reasons that had been given to them. If you look at the long lists of recipient organizations, you can see why.

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People who are in a community-living association aren't there to line their own pockets or the pockets of their friends. They really are trying to do the job in the community. And while you have to have some surveillance of them, the evidence of a number of years now is that extraordinarily little money gets misappropriated at the end of the day.

[Translation]

The Chair: Ms. Folco.

Ms. Raymonde Folco (Laval West, Lib.): If you allow me, I would like to get back to an issue which I think is wider and deals with the role of an MP in a more comprehensive way.

Of course the balance we are looking for in Parliament in relation to the civil service in general and not only in relation to the Department of Human Resource Development is a balance between a control of the way public funds have been used on the one hand and the flexibility at the level of the service to the client on the other hand. I think it is a bit what Mr. Paquet was talking about earlier in his presentation.

What is of interest to me has to do with Parliament's role. Incidentally, Mr. Kroeger was telling us that he could foresee a possible input from the MPs in the attribution of local budgets.

I would like to come back to a stage preceding the attribution of budgets, that is program development. I think that my question will go more specifically to Mr. Kroeger and Mr. Paquet, but you are welcome to answer it if you wish to Mr. Moore.

In your view, in the matter of program development, is the role of the MPs limited only to the setting of general objectives, following which the civil service at all levels looks into the details and designs the programs, or do you think that Parliament should have an important input?

I am thinking of other people, people outside the government who wrote and will write about the role of the MP. I am referring among other things to the book published last summer by Donald Savoie on the role of the MP and on the little attention given to backbenchers. I am also referring to the Parliamentary Centre which, through Mr. Dobell, takes an interest in the matter.

This question is not simple. Even though it is linked to program development, I would like you to go further and to go deeper in the matter of the role of the MP. Thank you.

Mr. Arthur Kroeger: Mr. Chairman, I must give you a diversified answer because there are different levels. In a more general way, it is very important that members of Parliament examine carefully bills presented to them, including the details of a proposed program, the impacts of a new measure and the funds that are allocated to those. These are very important questions.

There are evidently limits regarding the possibility of increased supervision on their part. The role of the MPs is not the same as that of the officials. We are not asking them to be specialists. Their role is rather different: they must protect the public interest. I think that it is at that level their important contribution lies, which includes the examination of legislation.

That being said, it is also true that members of Parliament are also in the best position to assess the situation locally. The MP can say that Parliament had set such or such an objective and that in his riding the impact is different from the one expected. It is a very legitimate role for the MPs to express their opinion when problems are obvious.

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Prof. Gilles Paquet: Allow me to go a bit further. I think that Mr. Kroeger is perfectly right even though we must recognize that the old Westminster model, that some colleagues and some parliamentarians continue to defend and which requires that the House of Commons define major policies which can afterwards be applied mechanically by the civil servants, is outdated and obsolete. It is impossible to govern a modern country in that fashion. The elected representatives must govern, it is true, but they must also be well enough informed to ally themselves to bureaucrats in all sorts of different ways. It is true, like Arthur Kroeger was saying, that when the member of Parliament presents his or her point of view or opinion or sheds light, we might open the door to abuse. Unfortunately, it is unavoidable.

I do not see how, in our society, the elected representatives could simply sit back and vote according to the party line without thinking when important legislation is being passed to remain silent ever after because they would not be allowed to express themselves to defend and explain the values, the interests and the problems of the people who elected them.

Therefore, the parliamentarian must play a more important role. In a society like the American society, members of the American Congress have more say in committees and many more ways to influence policies than is the case here. In my view, it is something that needs not to be copied maybe, but considered as being... We know that all governments coming into office promise a larger role for members of Parliament. I have not witnessed such a thing in my lifetime. I hope to see it before I die.

The Chair: Ms. Folco.

Ms. Raymonde Folco: I have no other question, Mr. Chairman. Thank you.

[English]

The Chair: Sean.

Mr. Sean Moore: I want to add one thing.

I suspect that if members of Parliament had a substantial role in making decisions about these applications, they wouldn't want to have it for very long, because making decisions means making choices, and making choices means having to explain to some people why they're not going to support it. Are they not going to support it because of administrative things, or are they not going to support it because their party is opposed to those sorts of direct job creation grants?

I think it would also be particularly difficult, given the delivery mechanism of many of these programs, which, while they're federal funding, are going through provincial governments in some cases. So there would be great variance within the House of Commons as to the particular role of MPs and what influence they may have in the spending on different programs.

I think it's the Chinese who say you should be careful what you wish for. I would caution MPs to modify their expectations in terms of their role in making decisions on applications such as we're talking about today.

The Chair: Next is Larry McCormick, and then Bryon Wilfert, Stéphan Tremblay, Judy Sgro, and the chair.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thanks, Mr. Chair.

I want to thank the witnesses for being here today and sharing a little bit of the ample amounts of wisdom they have on these subjects.

Be careful, because what we ask for we get. I'm on my way to another committee, and on and on from there. It's unfortunate that we get, even here at the committee level, people trying to score cheap political points. Yes, I want accountability; I pay taxes, as all Canadians do.

I had some questions about partnerships and accountability, but I've heard HRD every day in the House for the last few months. Of course it's political, and yes, there were faults there, but to any one of the witnesses, how can we address this fact? People get up and ask questions and say this is no good and absolutely no good, but of course their own party and their own province signed off on it. Even people here, in the last few minutes, have talked about the Prime Minister's riding, when it's a fact, a proven fact, that more money went to some ridings represented by their party than the Prime Minister's.

That's all fine and dandy, and you people have had experience in your own walks of life, but how can we overcome some of this political noise-making? We have a plan to fix some of these situations and to do the best we can. Do we just go on working and forget the rattle, or do we have to overchange what we might want to do? Do we have to overreact, as you warned us about earlier?

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Mr. Arthur Kroeger: I'm probably not the right person to give advice on how to end a political controversy, Mr. Chairman, because my life was on the other side of the fence. So I won't try to advise on that, but I will say that at a certain point, after the politics of something has been thoroughly aired, it is important to turn to something constructive. It is important to say okay, they made a mess of that, now what are we going to do with it? How are we going to avoid that in the future in a sensible way and a balanced way?

As a private citizen, all I can say is I hope that will happen. I think a lot of the public would welcome more attention at this stage being given to the constructive measures that might be put in place for the future, rather than to another couple of months of finger-pointing and accusations.

Mr. Larry McCormick: Gentlemen, do you think we've had more problems because of working with the provinces? Again, it's political, but you would think it would help if another layer of legitimate government has to approve the project, and I'm sure they do it in an earnest manner.

I just wonder if anybody had any comments to share on that.

Prof. Gilles Paquet: I think you're putting your finger on what is going to be the challenge for you people for the next decade. You are not able to resolve most of the problems the citizens have independently from the province, the municipality, the private sector, or the civic sector.

Unfortunately, Mr. McCormick, it's not going to make life easy. If you have distributed governments, it means you have distributed also accountability. It means that you will have to live with accountability that's going to be much fuzzier, much softer—not necessarily unreal, but it means you will have to recognize that this will have to be negotiated.

It's like learning how to ride a bicycle. If you insist on a manual for this, you will never ride the bicycle. If you try to write the rules, they are going to be impossible to write. So you will have to accept that a bit of trust, a certain amount of general principle, and a bit of deliberation are going to be able to clarify it. You will not get it necessarily in a system of government where confrontation is a rule.

We've had occasions in the past when people have been able to overcome this. In looking at the top level of government I find there's a fair bit of this aggressiveness, a fair bit of this confrontational style. If you look at the way it's done in the bowels of administration, you find that civil servants at the federal, local, and provincial levels have found ways to do it well and they are able to cooperate very well.

Mr. Larry McCormick: Mr. Chair, I have a closing comment.

There is a great need for these programs and services across the country. Being a government rural caucus chair, that's always my concern. The fact that we overreact.... Most HRDC employees are great people and go the extra mile so often. Because of all this being on the front page of the paper and on television every day, the programs are now shut down to too much of an extent. The need is out there, especially in rural Canada and in some areas that are more challenged than others.

The Chair: Thank you, Larry.

Bryon Wilfert

[Translation]

then Stéphan Tremblay.

[English]

Mr. Bryon Wilfert (Oak Ridges, Lib.): Gentlemen, I'd like to first of all thank you for coming and presenting very interesting presentations.

There is one issue that often has been overlooked to a very large degree in this discussion. When you have a hole in your roof you don't tear down your house in order to fix it. It seems that for the last few months we have been too busy concentrating on trying to tear down the house rather than on fixing the hole in the roof.

Some of you went through this issue of public interest, which I would like to get a more precise definition of, because defining “public interest” depends on who's doing the defining. From the perception of my colleagues on one side of the House, of course, they viewed this very differently, even though I think we all viewed the fact that there were clearly administrative problems that may or may not have been systemic. You may want to comment on that and whether it is something that needs to be addressed.

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We need to make sure that public confidence, the confidence within the bureaucracy, the confidence in Parliament, and also what's being reported in the media is in fact reflecting the fact that one of these seven programs that HRDC administers is a good thing—and that's open for debate. If it is a good thing, how do we make sure, then, that we are able to regain that confidence, given particularly Mr. Paquet's comments with regard to soft accountability, to the fact that we have so many third parties now? It's us, the provinces, perhaps the municipal governments, the private sector. If one of those fails on its commitments with regard to the recipient, the buck comes back, it seems, to us. In fact, you don't hear too much about the others.

So trying to strike a balance is what I would like to have you perhaps explore.

There was a comment about the role of the MP, and you mentioned in the American Congress the interventionists versus those who were stand-offish. Often in this nature of our federal system, we have created in many respects, much to my dismay, agencies and arm's-length organizations, which are all very nice in theory. In reality, they don't get the phone calls when something goes wrong. It's the members of Parliament.

So on one hand, if you take the one scenario, we won't have anything to say about any of these grants or contributions, but in the end we will get all of the flak, even though we have absolutely no say in it. On the other hand, we could take an interventionist approach and have a tremendous say in it and then get all the flak. So is there a way, in your view, of trying to respond to this by looking at the balanced approach, given all those factors?

The Chair: To respond to that series of questions, you have two or three minutes.

Mr. Bryon Wilfert: I'm sure you could be more liberal than that.

The Chair: No, I can't.

Mr. Arthur Kroeger: An RCAF veteran was once quoted as saying “If you're not taking flak, you're not over the target.” I need hardly tell members of this committee that flak is part of the stock and trade of being a member of Parliament.

Picking up a comment Gilles Paquet made, I think it is irreversible that more and more governments are going to work in collaboration with not just one organization but a set of organizations. That's going to make the accountabilities more diffuse. I like that phrase “soft accountability”. I think that is a more contemporary way of looking at it.

It is the case that organizations are not just accountable to the person who gave them the money; they're accountable to the public and they're accountable to their clients, to their staff, to the people who contributed money in their fund-raising drives. It's a much more diffuse kind of accountability.

It can be quite real for some of these organizations, where if it looks as though a charity has been sloppy in the way it ran a program, the way it managed its money, it pays a price. The price shows up in reduced contributions. So they do get impacts. The impacts are not nearly as visible as the kinds of impacts that are sustained by members of Parliament, but I think that's inevitable. That's part of the job.

Prof. Gilles Paquet: I think you're just amplifying on this. If it is irreversible, then you will have to develop new tools to do it. To me, one of the new tools that is being developed much too slowly, for instance, is collective reporting. If in fact five groups are working together and they are all reporting separately, you never get the whole picture.

It's the same thing about transparency. There is nothing better than regular transparent reporting. Crapola will crop up and you will be able to address it. These seem to be so simple, but it cannot be done for the time being because there's no right for mistakes.

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To my mind, the only way to learn is by correcting mistakes. To the extent that you have a denial of mistakes because that seems to be a survival instinct, a denial of mistakes means a denial of learning in some manner. So the new tools will be new types of reporting, more regular reporting, a recognition also that you do not want to ask only questions of whether the form was filled...whether it was done right, but also whether they were doing the right thing.

The Chair: I go to Stéphan Tremblay.

[Translation]

Mr. Stéphan Tremblay (Lac-Saint-Jean, BQ): I would like to give you the example of a program, the only program in fact on which the member of Parliament is entitled to have his or her say. I am talking about Summer Career Placements. Recently, I personally had—and I think that it is the case of everybody around this table—to make choices about the management of funds.

I had a $300,000 envelope while we had requests worth 1 million dollars. I decided to set eligibility criteria. I did it in consultation with officials from HRDC. I obtained very good cooperation from them and we told the population about the eligibility criteria. Then, we made our selection and the official made his. We came to the conclusion that 90% of the decisions were the same as we had given ourselves very definite criteria.

This model, that I would term decision sharing between the official and the elected representative, could maybe be applied to other government programs given the fact, as you said earlier Mr. Kroeger, that the member of Parliament goes all over his or her territory and knows the organisations, which is useful when making a choice between them. The MP is in the field and knows their needs.

Therefore, would it not be possible to use this decision sharing model for general programs? Because of this model, I cannot attack the minister as I was part of the decisions made. The only thing I can do, though, is complain about the $300,000 I was given. That is not enough. That's it.

Mr. Arthur Kroeger: Mr. Chairman, it is a very interesting example of very fruitful cooperation between a member of Parliament and local officials. I was deputy minister at Employment and Immigration for four years and I often visited local and regional offices. In many cases, I had the impression that such cooperation existed. It was not always close enough but the principle was the same as the staff of the MP's office or the member of Parliament himself or herself and local officials maintained a constant dialogue on the needs of local organisations and possible projects. I am in total agreement with Mr. Tremblay. This is a good model for the future.

Mr. Stéphan Tremblay: Do you think that it could be applied in other fields? Could it be applied in other sectors, other projects of Human Resource Development?

Mr. Arthur Kroeger: Yes, of course. It is true that there has long been cooperation between members of Parliament and officials regarding employment projects. In the 70s, it was the same for Local Initiatives Programs. There were consultations with the member of Parliament. There is a long tradition of collaboration in the Department of Human Resource Development but I have the impression that in other fields, in the Department of Canadian Heritage for example, there are also good examples of collaboration between the elected representatives and the officials.

The Chair: Okay, Stéphan?

Mr. Stéphan Tremblay: I would like to ask another question. In the example I gave you, the member of Parliament has a definite amount of money which he or she must manage. The other Human Resource Development programs may be such that there is only one envelope for a region. Here at the federal level Quebec is considered as a region. Therefore, there is no money specifically allotted to a riding. The funds are distributed according to the requests in Quebec, in the Atlantic, etc.

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Would it still be possible to come to a common decision when there are no definite sums allotted to specific ridings given the fact that for other programs some ridings will have absolutely no grants and others will have some as the requests submitted are a lot more relevant under the program?

Mr. Arthur Kroeger: Mr. Chairman, I think that this could be rather complex. We would have to see if all the MPs of a region belong to the same party, for example, because there is always a possibility of various reactions and disagreement between the MPs.

For large projects, industrial projects, it is sometimes better to have the collaboration of the provincial government and to consult provinces about the impact, as the impact is larger than it is in a local situation. There is also the possibility of some consultation with the MPs but it would be very complicated to put a bit of money here and there. It would take a lot of money to deliver some projects having a very large impact.

[English]

The Chair: Judy Sgro is next.

Ms. Judy Sgro (York West, Lib.): Thank you very much.

It has been very refreshing listening to all three of you this morning and talking about where we can go with this issue. My concerns are the ones we will be dealing with at our next meeting, which are the tools to monitor these ongoing problems.

The fact is that there have been issues since 1977 in and around the handing out of grants and contributions. So the problems we're seeing today are not new ones. The question is, how are we going to make sure that, once and for all, we're able to put as many indicators as possible in place so that the program will follow through in the way we want it to, but by the same token, going on to Mr. Moore's comment, in such a way that the application for grants, and so on, is not too difficult? Exactly your comment—many organizations I know of don't bother, because it's too complicated and too difficult, yet on the other hand, we're hearing questions about whether we were managing the systems properly.

So I guess we're caught in the midst of two different approaches here. What do you see as the answers for us? What should we be doing, and how can we put better controls on here?

Mr. Sean Moore: I don't know who designs these forms. Maybe Arthur does.

I spend a lot of time dealing with forms, a lot of time dealing with RFPs from government. I know that's not the subject of these hearings, but to me, there's a wonderful hearing to be had by government on the terms and requests for proposals that are put out by government for goods and services, because it automatically precludes all sorts of organizations. Because they're so complex, you really do need to have someone who has spent a lot of time with them, in order to fill out the proper forms.

I would think, unfortunately, as both Arthur and Gilles have mentioned this morning, everything that has happened over the last three or four months politically would indicate that we're going to head in the opposite direction, unless this committee is particularly influential in steering another course. I think there's a need for much greater simplicity in these forms, even though, as I mentioned in my remarks, I went through the forms from the various programs and didn't find them particularly complicated. I'm perhaps a bad measure of that, because I spend so much time looking at these things.

I would think there's expertise out there somewhere in terms of a combination of both management capacity and simple communication skills that could provide the sort of information that government needs to make decisions.

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Again, I should say I agree entirely with Gilles' comments about the limitations on the simplicity of forms, the limitation on the technological solutions, because at the end of the day someone will still have to make some judgment about what's contained in those.

I find that a lot of the information in these forms is the result of obsessive-compulsive behaviour. I think it would be very interesting to have someone do some analysis of those forms, not just from an administrative and management perspective, but also to determine whether the information requested in those forms is beyond what is really required to make the decisions. Are the questions being asked, in a maximum way, accessible to average people who would fill them out?

The Chair: Mr. Kroeger, then Gilles Paquet.

Gentlemen, Judy only has a certain amount of time.

Mr. Arthur Kroeger: Okay. I'll be brief.

The Chair: You're using it.

Ms. Judy Sgro: The information is well worth the wait.

The Chair: She says the information is worth it.

Ms. Judy Sgro: I won't ask any more questions, because I'm enjoying the answers.

The Chair: Arthur Kroeger and Gilles Paquet.

Mr. Arthur Kroeger: Unfortunately, you're never going to hit the exact balance between supervision and judgment. Technology can help. Electronics can get you more central monitoring capacity, so you can see what's going on locally, and that will help. But at the end of the day it's a judgment call. What balance is right between standing over a local charity and prescribing in detail what they have to do, compared to giving a lot of discretion to a local official to work with local people?

There's no final answer. It is judgment, and the judgment needs to be made by elected people. That's where the final determination of the public interest has to lie. I guess my concern of the past four months has been that the business of pointing fingers has gone on for longer than it seemed likely to be productive, and so far not enough attention has been given to the more complicated question of what is the right balance. How do you serve the public interest by, on the one hand, allowing latitude for people to make local decisions, and yet keep it from being just a free-for-all where you can do anything you want with public money? That's the kind of decision I hope this committee will spend some time on.

Prof. Gilles Paquet: As already mentioned, the problem is—and I'm sorry if I offend some of my friends' lawyers—lawyers are in the business of interrogating and finding the culprit. This is not a problem of culprit-finding; it's a problem of social architecture. How do you design a system that will not commit the same errors next time?

It seems to me it's at three levels. One is a level of process. You can design better mechanisms, better forms to do these things, and indeed we could work on this. Second, it's a matter of capacity. We have to have the resources to do that. To hope that resources will materialize and people will be capable of doing it when you slash 5,000 or 7,000 jobs is really unreasonable. Third is due diligence. How do you get safeguards and some form of monitoring that will ensure we have a sort of warning signal when things may go wrong?

It's your role, it seems to me, as not managers but governors to sort of indicate how the process could be improved, how the capacity could be improved, and how due diligence could be ensured.

Ms. Judy Sgro: Of all of the people who have come to see us and given us comments, the information from these three gentlemen has been extremely informative, as to the simplification and direction we want to go.

The Chair: Thank you.

Ms. Judy Sgro: Thank you.

The Chair: One of our main focuses is the role of the MP. I don't think in the time the chair allows me I can describe my role in these processes we're discussing. Stéphan gave a particular case.

My riding is in a small city surrounded by a county. Part of my job, I believe, is to know everybody, not for political reasons, just to know them, and to know the different organizations. A lot of my work is cross-fertilization among those organizations. I'm one of the few people who goes to the annual general meetings of scores and scores of groups. So think of my role in this process.

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People come with an idea. These are creative people in the community. They might be small businesses or social groups. They ask for my comments on the idea. Once I've commented, I'm involved. There's a political dimension to my position. Then they ask what sort of government aid there is. I will help them look for programs. By the way, if you're thinking of loops in this, they may be programs I've lobbied for or I've lobbied to change the design of.

Then they'll say “Fine, we've found a program. Can you give us some help getting information?” Sean deals with this in some sort of professional capacity. So I give them some help in completing the application. I look at the application. Now, all of this is political. I could refuse, which would be political; I could be very bland, which is political; or I could be very supportive.

Then the application goes forward, which is the stage most people think of. They think of me going to the government program to get money for my friends. That's the way they think it is. When it goes forward, they will ask me to write a letter of support. Again I could say no, which is a signal to the people receiving the application as well as to the people putting the application in. I could write a very bland one, such as “I have seen this application”, or again, I could support them.

When the grant has been given, as one of you mentioned, there is the post-mortem aspect. If it is successful, I know about that. That's a credit. If it's unsuccessful, I'd follow through. I know it has been unsuccessful. There's a post-mortem. That group or those individuals would have more difficulty getting the funding the next time.

There are all sorts of loops, and the loops often involve public servants. Do you have an idea of programs that might be useful to support such and such a project? That would be an example. It's a political involvement, because they say the MP has phoned to see if there's a program. This is in a small community. We told him yes. Then they wait. Even if I don't support the program, the program comes up and they say this sounds like the one the MP was inquiring about.

I'd like you to think aloud about that process. I think it is most of what I do. I like to think it's proper. Most of what I do I think improves the quality of life and the economy of my region. It's all political because I'm the member of Parliament. I wonder if any or all of you would care to comment on that.

Mr. Arthur Kroeger: There's no need to apologize for the fact that it's all political, as far as I can see, particularly because in listening to what you said, Mr. Chairman, what you're describing is small politics, rather than partisan politics. It seems to me that this is a normal process of governance. As a former official, I would have welcomed that in a local office.

There are obviously some limits on the kind of interaction there should be between elected people and officials, but there's lots of latitude for really constructive interaction of the kind Mr. Tremblay referred to without breaching those limits. Indeed, in many cases if officials can be helpful to a member of Parliament by saying there's this program and that program, here's how you apply, and here are the criteria, a member of Parliament can be helpful to officials in sorting through competing demands when there's not enough money. I think in many cases, from the local officials of my department, when I had one, who I used to talk to, I found this to be a pretty non-partisan process. I thought that in the great bulk of cases it worked pretty well.

The Chair: Thank you.

Professor Paquet.

Prof. Gilles Paquet: Mr. Chairman, I don't want to quote the American example as if it is something that is perfect and that we should copy, but they have found ways for sheriffs to be elected and yet to administer justice in a manner that is not reprehensible. The idea that we have to be schizophrenic and say if you are elected, as opposed to being a fonctionnaire, these things do not mix is in fact silly.

In the same way as partnerships among different levels of government and private, public, and civic sectors is the new way, it's quite clear that you are going to be, whether you like it or not, more involved if in fact we want to serve the citizens in a tailor-made way and you happen to be a very knowledgeable person in that neck of the woods.

It seems to me that what is difficult is that we are schizophrenic. We live in this black-and-white world. We don't like these areas where you need judgment and discernment and to exercise some caution. People feel uneasy about all of that because it's grey. Yet my own sense is that a modern-type government cannot afford not to do this. This old view of the Westminster system where the governor of the House of Commons governs and those characters down there administer is simply an echo of the past.

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We cannot do things well without finding new ways. Now, it will lead to abuse, but it seems to me that one of the real possibilities is that it will help us redefine the notion of accountability and define some of those grey zones.

The Chair: Thank you.

Sean, if you could be brief....

Mr. Sean Moore: I took a few years out between various stints doing government relations work to be a consultant in strategic philanthropy, working with corporations and helping them manage how they gave money away. One of the phenomena I found most interesting over the last few years I was doing it was that members of corporate boards of directors were begging for a restructuring of their corporate contributions programs to get them out of making the individual decisions. They wanted to make the broad decisions about what types of things the corporation was going to give money to, but the one thing they wanted was to have people stop hectoring them before their corporate contributions committee about sponsoring a particular proposal.

How relevant that is to members of Parliament I don't know. But many of them remarked to me that in their early days on the board they found it one of the perks of being a board member to be able to have some influence on that. After a couple of years they found it to be one of the great burdens they were very keen to be relieved of.

The Chair: Rey Pagtakhan.

Mr. Rey Pagtakhan: Thank you, Mr. Chair.

I will indicate from my perspective what the role of a member of Parliament ought to be and the process relating to this role in relation to the public. I will indicate some of the ingredients that I feel ought to be recommended. I would like your input to put a clarity of closure to this particular issue, because it will be a major part, I think, of the committee's debate.

In terms of the role of an MP, one, we ought to have a role in identifying the apparent value of a given community project being applied for. Two, we ought to play a role in the prioritization of the many projects that have been submitted to the department and whose list we have been given. Three, we should have input into the credibility of applicants or groups within the community, not so much to be the final judgment as a need for further evaluation by the project officer. Four, we would like to indicate our view as to the reasonableness of the amount being requested. Five, we should give input into the history of the performance of groups that have previously applied for any other kind of government funding. Lastly—but not the last, because it's only the extent of my imagination today—we should provide our input as to the development of policy, which has been mentioned by the Bloc, to the extent of giving the rationale for such kinds of ideas.

My question to you, then, would be are any of these legitimate bases for the role of members of Parliament? If you say yes, there is no further discussion. If you say no, there will be a little discussion.

The Chair: Professor Paquet.

Prof. Gilles Paquet: The most helpful contribution on these things will come necessarily from Arthur, who has been there. But let me take a kick at it by saying no.

Mr. Tremblay mentioned one example of agreeing on basic principles. That, to my mind, is acceptable. But the idea of vouching for the credibility, defining the reasonableness, telling tales about the history of the individual, and prioritizing, all of this is management. Then we might as well abolish departments and make the office of the MP particularly big.

It seems to me that the first and last items on your list are extremely important—that is, the value of the thing and whether or not we can agree on certain types of policies. But the idea of going as far as prioritizing, vouching for the credibility of the individuals, defining the reasonableness of the project, or telling the history of the individual, all of this, it seems to me, would make the MP.... It would really be a sin that I would call the More sin: he would fall into a trap he would never get out of.

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Mr. Rey Pagtakhan: Just for greater clarity, through you, Mr. Chair, because it's very important, I would like to advise Mr. Paquet that all of this is in the context of being advisory and not definitive. This is advisory. In other words, this is advisory to the project officer, and this is also voluntary on the part of the members of Parliament to do or not to do.

The Chair: Arthur Kroeger.

Mr. Arthur Kroeger: Mr. Chairman, you aren't going to get complete agreement amongst the three of us all day, and this is a point on which I will take a different view.

First of all, those six activities could very well work out very beneficially. I don't have an objection in principle to any of them, although there could be questions of how they're applied. What is particularly interesting about this kind of role and advice on these kinds of functions is it's a way of reducing the paperwork.

One of the striking things about how these programs have worked at the local level—and not just in the 1998 period, when the audit was done; it was happening when I was the deputy minister and it happened for ten to twenty years before I was the deputy—is that what happens is a local official knows the local women's group who wants to create a battered women's shelter, knows a fair amount about them, has personal contact, and a lot of the toing and froing is done not by submitting a form, not by giving in a whole lot of numbers, not by writing a lot of memoranda, but by personal and informal contact.

That's really the story of the audit. They found there weren't enough applications on file. Yes, in a number of cases there were letters, not the application form. If you're a local official, you go to visit a project, you come back, and you have a choice: either you can then sit down and write a memo to file so that the auditor will find it on the next visit, or, because you're short of time, you can go out and visit the next project to make sure they're doing all right. This kind of informality has been a very important characteristic of the interaction between officials and local people, and auditors get frustrated because there isn't all that much of a paper trail. That doesn't mean a lot of surveillance didn't take palace.

Let me come back to Mr. Pagtakhan's question. One of the ways of supplementing your own impressions from conversations you have when you go to lunch at the local Rotary Club, one of the ways of getting a rounded-out picture of where things are going well and where maybe there's trouble, is by relying on the local member of Parliament, because the local member of Parliament has responsibilities that are comparable to those of a local official, which are to know the local scene, to know the local people.

I realize there are limits on this, and the audit of 1999 brought those limits rather severely to light. You have to have more paperwork than there was at that time. But if you want to avoid going overboard and burdening these organizations with every kind of form and memorandum and weekly and quarterly reporting, one of the ways of doing it is to have that kind of regular dialogue with the local member of Parliament.

The Chair: Sean.

Mr. Sean Moore: Again, as someone who has approached members of Parliament to assist on certain things before, particularly immigration applications, I find there's great variation among MPs in who's prepared to write a letter or do anything in support of an immigration application.

On something such as this, the problem is you're going to have both the political platform and the personal ideology of individual members of Parliament become a very significant factor in whether or not Canadians in one part of the country have real access to these programs versus another.

Mr. Pagtakhan has mentioned this is advisory, but I just wonder how many public servants will be spooked by the notion of a particularly negative and damning report by an MP, when otherwise the application for that particular organization merits positive approval.

Mr. Rey Pagtakhan: Mr. Chair—

The Chair: Very briefly. A comment perhaps?

Mr. Rey Pagtakhan: Of course my proposal is based on my innate belief in the integrity of the civil servants. They have the right to say no to any intervention by a member of Parliament, because the civil servants know in advance their role is advisory. The politician who abuses that particular obligation abuses it to his or her peril.

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My last point, Mr. Chair, is this.

The Chair: Very briefly, Rey.

Mr. Rey Pagtakhan: For the sake of clarity, would you agree that the role of the members of Parliament...? Of course this is to Mr. Kroeger, who has given me some qualifications on approval, and also to Mr. Moore and Mr. Paquet. I respect your views. Should these kinds of specific roles be defined clearly and be made known to the citizenry at large so that there is no mistake as to the so-called role of the member of Parliament? Could you briefly comment on that?

The Chair: Could it be yes or no or something, very quickly?

Mr. Arthur Kroeger: The answer is yes, particularly as long as it's made clear that the role is advisory.

Mr. Sean Moore: Yes. I think clarity on who's involved in decision making is very important, absolutely.

Prof. Gilles Paquet: But don't believe that even though you may have a great wish for clarity, you will succeed in clarifying it.

Mr. Rey Pagtakhan: It's worth the effort.

The Chair: Bryon Wilfert and then I'll wind it up.

Mr. Bryon Wilfert: The lack of attendance today obviously doesn't reflect on the quality of what's been presented. Unfortunately, it would have been helpful if we'd had you gentlemen a lot earlier in the process, given the fact that Mr. Kroeger talks about a lot of finger-pointing that's been going on. We've heard terms like boondoggle, which I don't think you can even find if you look it up in the dictionary, and slush fund and $1 billion lost. Unfortunately, all of those terms have been reported as fact by the media. Of course, the opposition's job is to continue that role.

My question is whether we have really crossed the Rubicon. If you look at what has happened over the last number of months, I think we've spent 95% of the time on the disease and less than 5% on the cure. Meanwhile, in my view, the patient may expire. In these organizations, there has been a retreat by HRDC—a marked retreat, in my view—in terms of wanting to be front and centre out in the communities. They have called off all sorts of announcements. They have not been willing.... There has been a lot of internal navel-gazing and less attention to the clients.

It may be that in the public mind, the role of.... Mr. Kroeger talks about the thousands and thousands of organizations that are benefiting from this, not necessarily large companies or the private sector. In my view, they are suffering.

I guess it goes back to the original comment. Is it too late? If it isn't too late, what would you suggest would be helpful to try to steer that discussion back to the issue of how we deal with the problem? I think it has been embedded in the public mind as being that the ship has absolutely no rudder and no captain and basically we've hit the rocks.

Mr. Arthur Kroeger: I'd like to give an upbeat answer to that question but I can't. It is too late. The damage has been done in many ways. The damage has been done to the credibility of governance in the eyes of the public across the country, and not just to federal governance, incidentally. I recently had a conversation with a very senior official who works for an NDP government in a province. He was just as concerned as the people in HRDC have been about what the impact of this prolonged acrimony is going to be.

Secondly, I'm currently completing a project that has taken me to all five regions of the country. I've been visiting local government offices and I've talked to a lot of members of the public service. Uniformly, they feel their reputations have been tarnished and their competence and their honesty have been called into question by lurid, misleading headlines. They feel the media have grossly misrepresented the realities of what is happening. They feel there has been a very one-sided picture presented by the media.

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This has had an effect on the way they think about their jobs and it's had an effect on their morale, not just vis-à-vis their superiors. It's the kind of thing that the local MP runs into, when he's cutting his grass and the neighbour says “You guys really made a mess of it, didn't you?” There's a demoralization that has taken place as a result of all this.

All that damage has been done. It's going to take a long time to recover from it. I don't think there's any avoiding that. The one thing that one can say is that there's still a prospect that some serious constructive proposals about the future will emerge from the work of this committee, and that over time they will offset some of the very damaging things that have happened since last January.

The Chair: Thank you.

Gilles Paquet.

Prof. Gilles Paquet: Nobody can say it better than Arthur. There is, however, a window of opportunity. I'm not very hopeful, but if all of you are really interested and concerned about the role of the MP, one way to do it would be to transform this particular committee's report not into a schizophrenic sort of document like the interim report, where we seemed to have two solitudes, but maybe into finding a way to identify things on which all parties might agree.

We may disagree about many things and you may disagree about many things, but is there such a thing as a common denominator of things that might be done now? A new vote of confidence in the civil service, with the proviso that those things be addressed in ways that a multi-party committee would be willing to agree to, would at least be a small way of getting to repair the damage that Arthur Kroeger mentioned.

The Chair: Sean Moore.

Mr. Sean Moore: I have nothing to add.

The Chair: Before I thank you formally, I want to thank you for your contributions on the role of the MP and the role of the public servants. I think we stressed the MP and we may not have stressed the public servant and the public service organizations in general as much as we might.

There is one technical thing that has come up a number of times. If you think of the public service, you think of the members of Parliament. There is the idea of local advisory committees. Just for the record, because it's the sort of material we need for our report, what are your thoughts on that?

You know what we've been discussing for the last couple of hours. One idea is to either complement the MPs or the public servants or, as some people think, to replace those two. The idea is to have a public advisory committee of local citizens who in some way are appointed to a committee and who do the ranking and the assessing of applications such as those we're discussing. Would you care to comment on that?

Mr. Arthur Kroeger: Personally, I like the idea, because it broadens decision-making. I said earlier that I think MPs can be helpful, but there is always the risk that in this or that constituency you could get a rather capricious influence being brought to bear. If you broaden it, you mitigate that risk and still get the benefit of a member of Parliament's usually quite extensive knowledge of the constituency.

I guess there would be a question of who's going to appoint the committee. There would be something to be said for arrangements whereby the committee were selected locally so that there could be no questions raised about their credibility and outside influences.

Mr. Sean Moore: When I heard about that particular proposal, that too was my first question: Who would select them? It may be interesting, if you were going to have a committee like that, to have it represent some of these other levels of government we've talked about and the partnership arrangements that are in place in some parts of the country so that it's not just the local member of Parliament who determines who's on that committee. Perhaps local government or a provincial government representative would be involved.

Prof. Gilles Paquet: Along the same lines, it seems to me that the more comprehensive the representation, the better. The real danger of a small, federal-only, appointed-by-God-knows-whom thing is that it's going to be patronage writ large. We are not very good at organizing collaboration. It seems to me that to say we would like members of the opposing parties to also be present may not be welcome.

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In some manner, what you might have to do is do it at a slightly broader, regional level. It may not be riding by riding that will work, but sub-region by sub-region, because in some ways a sub-region has a variety of parties being represented. People are very interested in the promotion of their particular region. There may be a common denominator there waiting to be discovered.

The Chair: Rey Pagtakhan, very briefly.

Mr. Rey Pagtakhan: Briefly, I alluded to the roles of members of Parliament, specifically on those items to which Mr. Kroeger and Mr. Moore gave some qualified support. I would like you to also address when those roles are for the minister of the department under which the grant and contribution is coming from, ministers of other departments, and the Prime Minister. How do you delineate the positions with respect to these roles, the specific positions of minister, the Prime Minister, and members of Parliament? Do you have a mechanism, if you feel there ought to be a more delicate approach in handling those roles?

The Chair: If we could do this briefly, I would be grateful.

Mr. Arthur Kroeger: At the risk of giving a text-book answer, I think what I would say is that a member of Parliament's role is advisory and the role of an official is advisory. The decision-making role rests with the minister, who then takes responsibility for the decision. That's ultimately still the way it works, in spite of great evolution in government. At the end of the day, the responsibility still lies with the minister, and therefore it's the minister who has to have the final word.

The Chair: Gilles Paquet.

Prof. Gilles Paquet: Let me respond by not responding, in the sense that I think many of those suggestions would not necessarily be bad if I could believe there would be a capacity for this interaction to operate with the integrity the honourable member is hoping for.

In a world in which.... A lot of the things that Arthur Kroeger mentioned were big losses, and they have been ascribable to a government that has been in a position of denial. My mother used to say that there were no more powerful words in the French language than je m'excuse. When you say “I'm sorry”, there's nothing much you can do.

In many ways, the thing that has been so destructive there has been rooted in the fact that there were mistakes, and instead of denying them, if one would have admitted them and tried to correct them, things would probably have been much easier.

So in a backhanded way, I'm saying yes, what you've proposed is obviously reasonable. My worry is that in an ambience or an atmosphere where denial is the policy of the day, learning is not going to occur much, and the danger of a stalemate is important.

The Chair: Sean. No?

Rey, thank you very much.

Colleagues, I have two comments before I close the meeting and thank our witnesses.

The first is that for our regular meeting on Thursday, the topic or the theme—following today, which was the role of MPs and public servants in grants and contributions—is what tools are available to ensure accountability, and can these be applied to the administration of grants and contributions by the federal government? How can the new technology provide information to donors, in this case the government, and the public about administration as well as effectiveness, and what is the cost?

Gentlemen, I read that out so you would know. We've dealt with some of these things today, but you'll understand where we're at.

Secondly, colleagues, at our last meeting we had a motion to call the Honourable Claudette Bradshaw, the Minister of Labour. I am suggesting that if it's possible, we'll have an additional meeting a week tomorrow to meet with the minister. We have to meet with her before the end of this month, so a week tomorrow, Wednesday, at 3:30 p.m., there will be an additional meeting of the committee.

Colleagues, on your behalf I would like to thank Sean Moore, Arthur Kroeger, and Gilles Paquet for their testimony today. Gentlemen, we appreciate your patience. It's been a very informative meeting.

The meeting is adjourned until Thursday.