PACC Committee Meeting

HOUSE OF COMMONS
OTTAWA, CANADA

Standing Committee on Public Accounts

COMMITTEE EVIDENCE NUMBER 63,

ENGLISH VERSION

09-07-2002

Note: The unedited transcript of this in camera meeting is made public pursuant to Committee Order (38th Parliament, 1st Session).

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[ English ]

The Chair (Mr. John Williams (St. Albert, Canadian Alliance)): Order, please.

Good morning, everybody. Let's wake everybody up. We are today in camera--and we will emphasize the “in camera”--with audio recording, with interpretation, with switching, with transcription.

The Orders of the Day are pursuant to Standing Order 108(3)(e), consider of the Report of the Auditor General of Canada, dated May 8, 2002, on Groupaction Communications.

Our witnesses today are from the Office of the Auditor General, Ms. Sheila Fraser, the Auditor General of Canada, and, as an individual, Mr. Pierre Tremblay, former acting executive director of Canada Communications Coordination Services, Department of Public Works and Government Services. Also, Mr. Tremblay has his lawyer here, Mr. Marino Mendo, who will perhaps be advising his client. You may not ask questions of Mr. Mendo. Mr. Mendo will not be speaking to the committee, but he may, of course, advise his client.

Mr. Bryden.

Mr. John Bryden (Ancaster—Dundas—Flamborough—Aldershot, Lib.): Just a point of order, Mr. Chairman. Would it be useful to have legal counsel explain the--

The Chair: I'll get there in a minute.

Mr. John Bryden: Okay. Thank you very much, Mr. Chairman.

The Chair: And we also have the law clerk of the House of Commons, Mr. Rob Walsh, and his assistant, Mr. Greg Tardi.

Before we get going, we will have Mr. Walsh give us a brief synopsis, as he normally does, of the legal ramifications of meetings, testimony and so on while ongoing RCMP investigations.

Mr. Walsh, please.

Mr. Rob Walsh (Law Clerk of the House of Commons): Mr. Chairman and members of the committee, the comment I might make today, as in earlier occasions, is not quite as pertinent, inasmuch as the meeting is in camera. In the past--I say this for the benefit of members of the committee who might not have attended earlier meetings--there has been a kind of acknowledgement each time that the testimony provided to this committee by witnesses, particularly where it's made public, could have the consequence of impairing the investigation by the RCMP, where they may acquire the same evidence but have the onus of showing they acquired it independent of learning of it through the testimony provided to this committee, which could be difficult. In which case, because we're in camera, Mr. Chairman, it may well be the case that need not be of as great a concern to the committee members today as the testimony provided today is kept within the confidence of this committee. Any transcript made from this testimony, I believe the clerk can confirm, will be held by the committee clerk in confidence and will not be disclosed to any third parties until such time as the committee would authorize that to happen.

Unless there's any questions, Mr. Chairman, I would propose to leave it at that.

The Chair: Okay.

Mr. Tremblay.

Mr. Pierre Tremblay (Former Acting Executive Director, Communications Coordination Services, As Individual): If I may, I would like to introduce a request to ask the interpretation to close the door of the interpretation booth. It's making a lot of noise and it is disturbing for me.

The Chair: Okay.

Mr. Pierre Tremblay: I know it's uncomfortable for them, but--

The Chair: So ordered and done.

Mr. Pierre Tremblay: Thank you.

The Chair: Anything else, Mr. Walsh?

Mr. Rob Walsh: No.

The Chair: The committee has decided the evidence today will be held in confidence for a period of three years. If there happens to be any cases before the courts, the evidence today will be held until such time as all court proceedings, including any appeals, if any, are completely exhausted before the testimony is made public, so that everybody is aware of that.

The final point is that Mr. Bryden has indicated--and I'll see what the committee's preference is--that rather than going an eight-minute round and a four-minute round that perhaps we have everybody speak for five minutes. Questions? Any thoughts on that? It was my intention to go a normal eight-minute round, then four minutes, to make sure that everybody had a chance to speak. Five minutes is fine?

Some hon. members: No, no, no.

Mr. Gilles-A. Perron (Rivière-des-Mille-Îles, BQ): As we do usually.

The Chair: Okay. It seems to me the normal rules of eight minutes would be preferred.

Mr. MacKay.

Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC): I just wanted to just make sure it's clear with respect to the appeal period, the three years, you're saying that should any court proceedings extend beyond three years this information that might transpire here today will still be protected--

The Chair: Right.

Mr. Peter MacKay: --it will go beyond that three-year period?

The Chair: If there are no charges laid then it will be held for three years. If there are charges laid it will be held until everything is exhausted, a minimum of three years.

Mr. Bryden.

Mr. Peter MacKay: Clear. Thank you.

Mr. John Bryden (Ancaster—Dundas—Flamborough—Aldershot, Lib.): A point of order. Mr. Chairman, I am not prepared to accept this eight-minute rule. We on this side of the table are just as interested in the questions on this whole issue as the members of the opposition. I think it is only appropriate that we have five-minute rounds because have experienced this problem with eight-minute rounds. They've had enormous advantages over the members of the government side, in terms of their questioning, and we would like equal time. You can extend the hearing if you want and do a second round. I would be prepared to put this as a motion, if you want.

An hon. member: Let's open it to the outside.

Mr. John Bryden: No, no, he can't do that. That's unacceptable.

The Chair: Mr. Martin, will you go outside.

Anybody else, if a cell phone rings, you are outside immediately and you may not be coming back because cell phones are off. This is an in-camera meeting.

An hon. member: Or those blackberries.

The Chair: Blackberries and everything else.

Mr. Bryden, the rules were set many years ago at eight minutes and four minutes. It was my proposal that all parties have eight minutes and then all Liberals would have a chance to speak and nobody would speak twice, which means the Liberals would have almost half the period of time to speak. You have 48 minutes for the Liberal side, and you would have a little bit more on this side, before I started a second round.

Mr. John Bryden: Whatever, Mr. Chairman.

The Chair: Okay.

I think if we want to debate the eight minutes--

Mr. John Bryden: No, no, let's move along. Let's go.

The Chair: Okay.

Mr. Tremblay, do you have an opening statement?

Mr. Pierre Tremblay: No, I do not have an opening statement. I was not asked to prepare one.

The Chair: Okay.

Mr. Mayfield, eight minutes, please.

Mr. Philip Mayfield (Cariboo—Chilcotin, Canadian Alliance): Thank you, Mr. Chairman.

Mr. Tremblay, good morning.

Looking at the Auditor General's report, at paragraph 43, it mentions there that, of the budgeted or estimated $285,000 for the three contracts to cover reimbursable expenses, only a little more than $33,000 was actually itemized under that category, which meant that more than a quarter of a million dollars was added to the professional services.

Was this your recommendation, that the money not paid for reimbursable expenses go into professional services?

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Mr. Pierre Tremblay: No, it was not.

Mr. Philip Mayfield: Whose recommendation would that have been?

Mr. Pierre Tremblay: I don't know, sir.

Mr. Philip Mayfield: You took over as the executive director and I believe that you were responsible for only the third contract. Is that correct?

Mr. Pierre Tremblay: I was not even responsible for the third contract because I never signed that contract. That contract was signed by my former boss, Mr. Guité.

Mr. Philip Mayfield: Would it be fair to ask you that, when you took over from Mr. Guité, you simply began following the pattern he established?

Mr. Pierre Tremblay: I replaced Mr. Guité in September 1999.

Mr. Philip Mayfield: Yes.

Mr. Pierre Tremblay: Prior to that he was my boss. From February 1999 until September 1999, he was my boss.

Mr. Philip Mayfield: Yes, but when you took over from him, did you continue following the pattern of administration that he set?

Mr. Pierre Tremblay: No, I started changing the pattern, in fact, as early as October, as it is indicated in the audit report from Public Works. The auditors have mentioned that measures were taken to start correcting the problems that were existing with the sponsorship file. In October, I wrote a letter to all the sponsored organizations to let them know the process will change, that the renewal of sponsorship was not automatic, that if they want to reapply for next year they have to send back a new proposal and they should send it directly to me without going through the communication agencies. I mentioned also, if I remember correctly, in that letter that all the fees for the communication agencies will be taken care of by the department.

Mr. Philip Mayfield: Now, was this a collegial decision that you begin this change or was this your own decision that you made?

Mr. Pierre Tremblay: This one was on my own initiative.

Mr. Philip Mayfield: It was your own initiative.

Mr. Pierre Tremblay: Yes.

Mr. Philip Mayfield: So you had no discussions with anyone else, you just make the decision. Is that correct?

Mr. Pierre Tremblay: Yes.

Mr. Philip Mayfield: I see.

Now, in paragraph 29, 30 and 31 of the Auditor General's report, Mr. Tremblay, would you be willing to table a copy of that letter with the committee?

Mr. Pierre Tremblay: I don't know where that letter is. Evidently, there are several copies of that letter. They're within the files that will be audited by the Auditor General, as I understand. I don't have a copy with me because I left all the files behind when I moved to the Canada Food Inspection Agency. But that letter can be found.

Mr. Philip Mayfield: Mr. Chairman, would there be a way that letter could be tabled with the committee?

The Chair: You may ask Ms. Fraser if the Auditor General's department has it and if they're prepared to table it.

Ms. Sheila Fraser (Auditor General of Canada, Office of the Auditor General): Mr. Chair, we have not audited anything other than these three contracts that are indicated in this report, so would not have looked at anything post these three contracts and would not have a copy of that letter. You would have to get it from the department or from the communications branch.

The Chair: Okay. Perhaps later on we'll entertain a motion by the committee to request that. We'll bring that motion up at the end of the meeting, Mr. Mayfield.

Mr. Philip Mayfield: Thank you.

To continue on, then, in paragraphs 29, 30 and 31, we're talking about advice that was given. Now, the Auditor General says that in her conversations verbal advice was mentioned but that she can't find any record of that. I was wanting to ask you, sir, can you tell us who would have given that advice? To whom was that advice given? This took place over the three contracts, so you would have been in position to be there when this advice was given. Can you tell us about that, sir?

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Mr. Pierre Tremblay: No, I was not involved in that. As I said, I started being the active executive director in September 1999, so before that it was Mr. Guité who was responsible for the file. I supposed that and he said the same thing. I suppose the advice was given to him, not to me. Definitely not.

Mr. Philip Mayfield: Sir, it's hard for me to understand how you, as the director, can be on the job and have no responsibility for a contract as large as this. Where were you? Did you know nothing about it?

Mr. Pierre Tremblay: For the third contract, yes. For the former two previous contracts, the two previous contracts--

Mr. Philip Mayfield: Yes.

Mr. Pierre Tremblay: --no, I don't have--

Mr. Philip Mayfield: Okay.

Mr. Pierre Tremblay: --I didn't know--

Mr. Philip Mayfield: I'm talking about the third contract.

Mr. Pierre Tremblay: The third contract, yes--

Mr. Philip Mayfield: And you were responsible for that?

Mr. Pierre Tremblay: No, Mr. Guité signed the contract.

Mr. Philip Mayfield: So you had nothing to do with it, then?

Mr. Pierre Tremblay: My involvement in that file was, essentially, I signed a bill that we received from the communication agency, a bill that was identified to that contract, and I signed it.

Mr. Philip Mayfield: Okay, there was the bill for the advice given, and you signed that?

Mr. Pierre Tremblay: Yes.

Mr. Philip Mayfield: Okay, what was the advice?

Mr. Pierre Tremblay: Not necessarily the advice. It was a bill related to the whole contract. It was a final payment to process the contract.

Mr. Philip Mayfield: But in signing off, you must have had some knowledge of what you were signing for. You certainly didn't sign a blank cheque. I can't believe that.

Mr. Pierre Tremblay: I signed the bill that was put on my desk, assuming that--

Mr. Philip Mayfield: Okay, who put it on your desk?

Mr. Pierre Tremblay: The staff.

Mr. Philip Mayfield: Which staff? Can you name them, please?

Mr. Pierre Tremblay: CCSB staff, the ones preparing the correspondence.

Mr. Philip Mayfield: Are these people who were responsible to you or people to whom you were responsible?

Mr. Pierre Tremblay: They were responsible to Mr. Guité.

Mr. Philip Mayfield: Well, now you're the director.

Mr. Pierre Tremblay: No, I was the acting director at that time.

Mr. Philip Mayfield: But then they're still responsible to you because you're acting.

Mr. Pierre Tremblay: Yes, because I was acting, yes.

Mr. Philip Mayfield: Were there any people that you were responsible to telling you about this, about this advice or--

Mr. Pierre Tremblay: No. About the advice, no.

Mr. Philip Mayfield: Do you really expect me to accept that you just signed it because it was given to you without any knowledge or understanding of this? Would that not be irresponsible, sir?

Mr. Pierre Tremblay: I knew there was a contract. I knew that--

Mr. Philip Mayfield: But you're responsible for seeing the details of the contract are completed and fulfilled before you sign off and payment is made. Is that not correct?

Mr. Pierre Tremblay: My understanding, if I recall correctly, was that no mention of verbal advice was mentioned in the contract.

The Chair: Thank you, Mr. Mayfield.

Mr. Lebel, please.

[ Translation ]

Mr. Ghislain Lebel (Chambly, BQ): Mr. Tremblay, you replaced Mr. Guité in September, 1999.

Mr. Pierre Tremblay: With your permission, I’d like to make a correction: I took up my duties at the CCSB as director general of strategic communications in February, 1999.

Mr. Ghislain Lebel: Fine, I see.

Mr. Pierre Tremblay: So, at that time, Mr. Guité was my boss, from February 1999 until September 1999; he was my boss.

Mr. Ghislain Lebel: So you were in that position in August 2000?

Mr. Pierre Tremblay: In August 2000, yes.

Mr. Ghislain Lebel: And there was a report, an internal audit at that time which was ordered by your big boss, Mr. Quail, who came here before you?

Mr. Pierre Tremblay: Yes.

Mr. Ghislain Lebel: And that internal audit report was, it seems, catastrophic?

Mr. Pierre Tremblay: If that’s the label you want to use.

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Mr. Ghislain Lebel: Yes, okay, but you surely used the same label, because about a month later, on September 28, 1999, you convened a meeting with all of the owners of sponsorship agencies, true or false?

Mr. Pierre Tremblay: True.

Mr. Ghislain Lebel: What was said at that meeting?

Mr. Pierre Tremblay: At that meeting, we presented the main conclusions of the report, we identified the deficiencies and the corrective measures we intended to apply.

Mr. Ghislain Lebel: And did that change anything in day-to-day activities, as of that point?

Mr. Pierre Tremblay: Yes, things changed, but some things had been changed before that, as soon as I took up my position in September 1999; as I mentioned earlier, I sent a letter to all of the organizations telling them that the process was changing. Following that, I had discussions with Mr. Quail which led to outlining a mandate to audit the files. That audit was done, and in fact, it took several months; all of the files were reviewed, that is 595 files or thereabouts. They were all examined, and after that we prepared a report, a 31-point action plan which was tabled and which contained many things, including the need to hire additional staff, to train staff, and to hold a new competition.

Mr. Ghislain Lebel: But my question, Mr. Tremblay…

Mr. Pierre Tremblay: If you want me to answer your questions, Mr. Lebel…

Mr. Ghislain Lebel: You did answer, we have eight minutes, our time is limited. You convened those people, and you laid out your grievances.

Mr. Pierre Tremblay: The deficiencies.

Mr. Ghislain Lebel: Yes. And what did that change in your relations with them as of that point; were these deficiencies corrected?

Mr. Pierre Tremblay: Yes, I would say that they were, because there was a subsequent audit that was carried out following the adoption of the action plan, an audit which was done jointly with the Treasury Board audits; Treasury Board thus had some input on the implementation of the action plan, released on the Internet. So, contracts were changed, methods of payment were modified, the contract of the Agency of Record was changed, and so on; several things were changed completely.

Mr. Ghislain Lebel: But, Mr. Tremblay, let me give you an example; recently, when someone communicated directly with your department to obtain a subsidy and learned later that there was a middleman, with whom he never spoke, who pocketed 12 per cent on that, you didn’t have anything to say about that, yourself?

Mr. Pierre Tremblay: First of all, we weren’t in the business of giving out subsidies; a sponsorship is not a subsidy, it is completely different.

And the organizations had already been informed of this in the letter I had sent them in October, in which I explained that there would be communications agencies that would be doing a follow up, but that the fees would be paid by the Government of Canada, so that the organizers were not to expect to have to pay the fees.

Mr. Ghislain Lebel: So the Government of Canada was going to pay the fees, not the organizers.

Mr. Pierre Tremblay: Yes, the Government of Canada, absolutely.

Mr. Ghislain Lebel: And they were authorized by you, even though the middleman had been put there?

Mr. Pierre Tremblay: What do you mean “put there”?

Mr. Ghislain Lebel: Well, I don’t know, I will give you an example; the Canada Grand Prix says “I deal directly with the officials, there is no middleman in my affairs.” Then, if you look at the list here, you discover that Armada took 12 per cent in passing, and that Groupe Everest grabbed 3 per cent on the $750,000 to write the cheque.

Mr. Pierre Tremblay: Yes, but that was the normal procedure.

Mr. Ghislain Lebel: And when there was no middleman, did you appoint one?

Mr. Pierre Tremblay: Well, there always was one. According to the contracts, the agencies signed a contract with the Government of Canada, where they were to provide the services stipulated in the contract for a fee of 12 per cent.

Mr. Ghislain Lebel: Even if they did not provide the services, they got the 12 per cent anyway?

Mr. Pierre Tremblay: Well, if they did not provide them, they were supposed to return the money, and let me add that I was not the person who awarded the contract between Armada and the Grand Prix de Montréal.

Mr. Ghislain Lebel: But when we see, for instance, the $250,000 contract which went up overnight to $500,000, it is true that this was during Mr. Guité’s tenure, but in a case like that one, there are surely documents that were sent to you setting out the reasons that would justify the increase.

Mr. Pierre Tremblay: If it was Mr. Guité’s responsibility, it was not mine.

Mr. Ghislain Lebel: Fine. In another connection, following this meeting on September 28, I presume that you got a little angry, that you said: “A report like this one is unacceptable”?

Mr. Pierre Tremblay: Yes.

Mr. Ghislain Lebel: Was there any outside influence that interfered with your work, people who gave you directives without which you would have acted differently? So, you were never told…

[ English ]

The Chair: Excuse me, shaking your head is not a response.

[ Translation ]

Mr. Pierre Tremblay: No, but it depends, I mean, I cannot guess at Mr. Lebel’s intention, but I have to say that this convening of the agencies to explain the deficiencies, to explain the changes I wanted to make to the system, was a meeting I called after consulting my deputy minister, and the department paid for my expenses. So the deputy minister was perfectly well aware of what I was doing. If you say that the influence that the deputy minister exerted on me at that time was an outside influence, well, yes it was.

Mr. Ghislain Lebel: Good, that is what I wanted to know, so there was no ministerial influence exerted on…

Mr. Pierre Tremblay: By the minister, no.

Mr. Ghislain Lebel: In all of the time you exercised those duties, there was never a minister who said to you: “you give them their sponsorship” or “do not give it to them”, or “give it to this one rather than that one”?

Mr. Pierre Tremblay: No.

Mr. Ghislain Lebel: That never happened?

Mr. Pierre Tremblay: No.

Mr. Ghislain Lebel: Okay.

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[ Translation ]

The Chair: Thank you very much Mr. Lebel.

[ English ]

Ms. Phinney, please, eight minutes.

Ms. Beth Phinney (Hamilton Mountain, Lib.): Thank you.

Thank you, Mr. Tremblay, for agreeing to come and to appear before the committee as soon as we asked you. I'm sorry there's such a delay before you could actually appear. That's our fault, not yours, we understand that.

You began working in this program in February and you reported to Mr. Guité. What sort of handover or transition took place between Mr. Guité and yourself when you became the--

Mr. Pierre Tremblay: He was there on August 31 and September 1 he was gone.

Ms. Beth Phinney: So there was none. There was no--

Mr. Pierre Tremblay: No, no transition at all, but the fact that for the six months we were working together, I was reporting to him, and he was travelling a lot. So I was acting at different periods of time.

Ms. Beth Phinney: Okay. And who asked you to take over the running of the program?

Mr. Pierre Tremblay: It was a decision made under Mr. Guité's recommendation, I would assume, and it was done by Mr. Quail.

Ms. Beth Phinney: Okay. When you took over the program, did you receive any particular guidelines or directions from anybody in the department?

Mr. Pierre Tremblay: No, not really. I had weekly meetings with Mr. Quail and we were talking about the way CCSB was performing its duty.

I want to remind the committee that CCSB was more than the Sponsorship Program. The Sponsorship Program was only a small part of the activity of CCSB. Under CCSB--

Ms. Beth Phinney: Okay, can I stop you? I only have eight minutes

Mr. Pierre Tremblay: Okay.

Ms. Beth Phinney: When you took over, how many people worked in the program?

Mr. Pierre Tremblay: At CCSB or the Sponsorship Program?

Ms. Beth Phinney: The Sponsorship Program.

Mr. Pierre Tremblay: The Sponsorship Program? Two.

Ms. Beth Phinney: Including yourself?

Mr. Pierre Tremblay: Three with myself.

Ms. Beth Phinney: Okay. And what was its budget? Do you have an idea?

Mr. Pierre Tremblay: The budget was $40 million.

Ms. Beth Phinney: Okay.

Now, the internal audit found there were a lot of serious instances of maladministration, including problems with invoicing, monitoring, accountability and structuring practices that didn't meet the Treasury Board's standards. Did you agree with the conclusions of the internal audit?

Mr. Pierre Tremblay: The audit was done on the years prior to my arrival at CCSB.

Ms. Beth Phinney: Did you agree with the requisition?

Mr. Pierre Tremblay: Yes. This is why, with the deputy minister, I put together an internal view and an action plan to correct the deficiencies, yes.

Ms. Beth Phinney: Okay. What did you do differently from your predecessor in the approval and follow-up process?

Mr. Pierre Tremblay: In the approval and follow-up, first of all we had to receive a proposal from an organization. That proposal was then studied. We had guidelines issued to evaluate the process that were not there before. Then once the decision was made, the payment structure was changed under my administration. Prior to that it was an up-front payment of 80%, followed by 20%. We reduced that to 55:50. Then a post mortem was to be tabled with CCSB in order for the payment to be processed.

Ms. Beth Phinney: The final payment?

Mr. Pierre Tremblay: The final payment.

Ms. Beth Phinney: Okay. Were there any other changes that you made?

Mr. Pierre Tremblay: If you look at the action plan, there were, I think, 31 points that were put together, including hiring more staff. We hired at least three more public servants to do the job...or to help to do the job. All kinds of information was provided to the employees, contracts were changed, a new competition for selection of agencies was done.

Ms. Beth Phinney: Did you implement all 31 suggestions?

Mr. Pierre Tremblay: Yes.

Ms. Beth Phinney: Okay. And the internal audit team was satisfied with the results of the 31-point action plan?

Mr. Pierre Tremblay: There was a subsequent audit that was done when I was away--I moved to the Canadian Food Inspection Agency. But after that Communications Canada asked for a review of those files that were done post the internal review. I think it's more than 98% of the those files that are reported to be fully documented and completed.

Ms. Beth Phinney: So were you satisfied with that?

Mr. Pierre Tremblay: I was satisfied, yes. But I haven't seen that audit report because I was no longer there.

Ms. Beth Phinney:Okay. Thank you very much.

The Chair: Thank you very much, Ms. Phinney.

Mr. Martin, please, eight minutes.

Mr. Pat Martin (Winnipeg Centre, NDP): Thank you, first of all, for being here, Mr. Tremblay. We appreciate it.

I guess my first question, Mr. Tremblay, is: did you believe that you were operating within policy guidelines in your treatment of the sponsorship contracts, the awarding of them, the payment for services rendered? Did you believe that you and your staff were operating within policy guidelines in your execution of those duties?

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Mr. Pierre Tremblay: Yes, but it was identified by the internal audit there were deficiencies, so we tried to correct those.

Mr. Pat Martin: Even beyond that, even the Auditor General indicated that senior officials were breaking every rule in the books. How can that be kosher with policy guidelines? Isn't there a contradiction there? If people were breaking all the rules in the books, I'm just wondering how you can think you were operating within policy guidelines.

Mr. Pierre Tremblay: After September 1999, I would say that was not the case.

Mr. Pat Martin: We were only dealing specifically with these three Groupaction contracts. You were signing cheques, I presume, or contracting out many other sponsorship contracts.

Mr. Pierre Tremblay: Yes. I signed one bill related to those three contracts. I signed only one bill. It was the final payment.

Mr. Pat Martin: I see.

Mr. Pierre Tremblay: And there was a report in the file and...

Mr. Pat Martin: Was the payment increased from the original amount of the contract in the one that you signed off on?

Mr. Pierre Tremblay: I don't remember. I would have to check the files because I don't remember exactly the details. When you deal with five hundred and ninety-five five a year...

Mr. Pat Martin: Five hundred and ninety-five was the one that you signed off?

Mr. Pierre Tremblay: No, no, no, no.

Mr. Pat Martin: What are you saying.

Mr. Pierre Tremblay: What I'm saying, I said when you deal with close to--

Mr. Pat Martin: Oh, I see. I see.

Mr. Pierre Tremblay: --a volume of five hundred and ninety-five--

Mr. Pat Martin: I understand.

Mr. Pierre Tremblay: --five a year, sometimes it can be difficult to remember every single detail related to those files.

Mr. Pat Martin: Certainly. I understand.

When there has been an increase in the dollar value of the contract, what would be the justification? For instance, in this one where the original contract was $535,000, it was increased by $267,000 within the life of the contract. On what grounds would be a contract be increased by, in this case, half?

Mr. Pierre Tremblay: I don't know. I would need to see the contract and the file because I don't remember. You have to keep in mind also that when I signed that last bill I was a public servant for only two months.

Mr. Pat Martin: Right. Now, did you check to see the product was delivered as contemplated by the contract? When you signed off on that file, were you satisfied that the work was in fact done to your satisfaction?

Mr. Pierre Tremblay: I assume that all the necessary procedures--

Mr. Pat Martin: You assumed.

Mr. Pierre Tremblay: --were followed. Since the contract was authorized by my boss at the time, I assumed that everything was in order, so I signed it.

Mr. Pat Martin: But is there not a system in place that whoever has the ultimate signing authority should satisfy themselves the work was performed? We have cases here where cheques were paid for either questionable value or no evidence of any work having been done at all under your watch, Mr. Tremblay. Do you have any knowledge or were you even suspect the work was maybe not being performed as per the contracts? Did you have a feeling that perhaps this was going on?

Mr. Pierre Tremblay: In that case?

Mr. Pat Martin: Yes.

Mr. Pierre Tremblay: For the Groupaction contract?

Mr. Pat Martin: Yes.

Mr. Pierre Tremblay: No.

Mr. Pat Martin: So you thought the taxpayers were getting good value for their money?

Mr. Pierre Tremblay: I assumed everything was in order, yes.

Mr. Pat Martin: But does no one check to see? Maybe you, as the acting director, don't have the time, obviously, to look at 590 files, but somebody under your direction and control should surely be having a look at the work that was done prior to a cheque being signed. Wouldn't that--

Mr. Pierre Tremblay: This is why I assumed that when the bill was put on my desk it was ready for signature. This is why I signed it.

Mr. Pat Martin: Some of these are signed by...is it Mario Parent?

Mr. Pierre Tremblay: Mario Parent, yes. He's a former employer of CCSB...not of CCSB, but the former organization.

Mr. Pat Martin: So that would be the level of bureaucrat who should make sure the work was performed prior to the cheque being signed?

Mr. Pierre Tremblay: Yes.

Mr. Pat Martin: We suspect strongly that many of these contracting firms were involved in an elaborate scheme, a premeditated scheme, to defraud the Canadian taxpayer. Did you have any inkling there was perhaps something untoward going on with the awarding of these contracts?

Mr. Pierre Tremblay: That's not my experience in dealing with those companies.

Mr. Pat Martin: Did anybody from the Prime Minister's office ever talk to you directly about the partnership initiative or the sponsorship contracts?

Mr. Pierre Tremblay: No.

Mr. Pat Martin: Did anybody in the minister's office, if not the minister, ever talk to you specifically about this?

¹ » (1040)

Mr. Pierre Tremblay: Yes, we had regular meetings with the minister, as other officials are meeting with the minister.

Mr. Pat Martin: Were you told to give preferential treatment to any of the...Groupaction, Group Everest, Compass Communications, Polygon--

Mr. Pierre Tremblay: No. No, that choice was mine.

Mr. Pat Martin: That choice was yours--

Mr. Pierre Tremblay: Yes.

Mr. Pat Martin: --who to award the contract to?

Mr. Pierre Tremblay: After September 1999.

Mr. Pat Martin: Did you not feel there was a disproportionate amount of those contracts going to Quebec Liberal contractors? Did it not--

Mr. Pierre Tremblay: Yes, but--

Mr. Pat Martin: --occur to you that some other contracting firms elsewhere in the country may want to bid on some of this work?

Mr. Pierre Tremblay: This is why we recompete the agencies. In the action plan there was an agreement to recompete...to redo the competition.

Mr. Pat Martin: But once they were prequalified, seven out of nine were Montreal, Quebec, Liberal-dominated firms--

Mr. Pierre Tremblay: Yes.

Mr. Pat Martin: --where all the work went.

Mr. Pierre Tremblay: I'm not saying they're Liberal-dominated firms.

Mr. Pat Martin: No, you don't have to say that. I can say that. You didn't have to say that.

You didn't have any sense? As the executive director, as the guy in charge, you didn't have any sense there was something untoward going on with the delivery of these contracts?

Mr. Pierre Tremblay: No.

Mr. Pat Martin: How could you possibly be so oblivious to what's going on in our own agency, Mr. Tremblay? What was your job prior to being transferred to the Communications Co-ordinating Services?

Mr. Pierre Tremblay: I was chief-of-staff to the minister.

Mr. Pat Martin: Minister Gagliano.

Mr. Pierre Tremblay: Yes.

Mr. Pat Martin: Why do you think the minister took Mr. Guité out and put you, a political exempt staff person, as the acting director of this politically sensitive file?

Mr. Pierre Tremblay: I don't know, but--

Mr. Pat Martin: Was Mr. Guité in some kind of trouble having these files?

Mr. Pierre Tremblay: As far as I'm concerned, he was not forced to resigned. But ask the question to Mr. Guité.

Mr. Pat Martin: We certainly will.

What is your personal view of the 12% mark-up for the communications contracting firm to handle the sponsorship files?

The Chair: If I can just interject a second, Mr. Lebel, you're coming across on the microphone, if you can....

Sorry, Mr. Martin.

Mr. Pat Martin: We have examples, for instance, where, for the Government of Canada to give $1.2 million to Via Rail, it had to go through one of these sponsorship contracting companies and charge a 12% mark-up on $1.2 million--a $150,000, if you will, conveyancing fee. When you buy a house, your lawyer charges you a conveyancing fee from moving the money from the bank to the vendor. It's usually about $350--one hour's labour. How can your department justify and supervise that kind of thing and not think that something is wrong here?

Mr. Pierre Tremblay: Those were the rules that were set in place. I live through those rules. When we went ahead with the action plan, we consulted with the industry--not the communication company, but the ATA, the Association of Canadian Advertisers--and they told us it was--

Mr. Pat Martin: Well, what do you think they're going to say? Is it okay to pay the 12%? They're in the industry. How can--

The Chair: Okay, thank you very much, Mr. Martin.

Now, we'll turn to Mr. MacKay for eight minutes, please.

Mr. Peter MacKay: Thank you very much, Mr. Chair.

Mr. Tremblay, the whole panel, we appreciate your attendance.

Just to pick up where Mr. Martin left off, the action plan that was brought about by yourself, you supervised the implementation of these changes?

Mr. Pierre Tremblay: Yes.

Mr. Peter MacKay: And most of those changes, you would agree, came as a result of the recommendation of the Auditor General.

Mr. Pierre Tremblay: Not of the Auditor General, of the internal review--

Mr. Peter MacKay: The internal review.

Mr. Pierre Tremblay: --done by Canada Consulting and of Canada, yes.

Mr. Peter MacKay: And those changes were, I would suggest--this is my word--the result of an atrocious shortcoming within the department as to how these contracts were being supervised.

Mr. Pierre Tremblay: Those are your words. I was very open. I worked with the auditors at that time. They identified deficiencies and I moved ahead to correct those.

Mr. Peter MacKay: Yes, and to your credit, Mr. Tremblay. But you will admit there was something drastically wrong to bring about that number of changes, recognizing things were not being done appropriately, were certainly not consistent with the Financial Administration Act. That act was not being followed. That's why these changes had to be made. Correct?

Mr. Pierre Tremblay: Not necessarily. It was also just, in some instances, commonsense. You needed documentation in the file.

Mr. Peter MacKay: Yes. And that was very much the shortcoming. There were contracts based on “verbal advice, discussion and strategic information”--those are words coming out of the Auditor General's recent report--and that was happening consistently prior to the 34-point plan. Correct?

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Mr. Pierre Tremblay: I don't know. I don't know.

Mr. Peter MacKay: You felt changes were necessary.

Mr. Pierre Tremblay: Yes.

Mr. Peter MacKay: And they were necessary because things weren't being done properly before. Correct?

Mr. Pierre Tremblay: They weren't necessary because deficiencies were identified, yes. This is why we did some changes. I was fully open to it. I worked fully openly with the Public Works' auditors and with the team of senior public servants who was put together to have a look at that.

For example, there was a group of five or six senior public servants, mainly ADMs, who worked on the new request for proposals to compete for new communication agencies. It was very, very soundproof, I think.

Mr. Peter MacKay: Did you think the process was tight beforehand? When you were working in the minister's office, Mr. Tremblay, were you ever dispatched on occasion by Mr. Gagliano, or members of his staff, to speak to Mr. Guité about these contracts?

Mr. Pierre Tremblay: No.

Mr. Peter MacKay: At no time?

Mr. Pierre Tremblay: No, not about the contracts or anything like that. We were talking about the files because, as you can imagine, the minister was receiving tonnes and tonnes of proposals coming from all over Canada. Sometimes it was coming directly from members of Parliament, other times it was coming from organizations, other times it was coming...all kinds of sources.

Mr. Peter MacKay: And did you review that information yourself when you were in the minister's office? This is prior to your appointment as acting director. When you were working for Mr. Gagliano in his political office, would you receive that information?

Mr. Pierre Tremblay: The information we received was the list of the sponsorship that was in the system, yes.

Mr. Peter MacKay: And would you receive supporting documents justifying?

Mr. Pierre Tremblay: No.

Mr. Peter MacKay: No. Would have ever, on any occasion, spoken to an individual named Jean Carle about these contracts?

Mr. Pierre Tremblay: No. I met Jean Carle, but I've never talked with Jean Carle about the contracts or things like that.

Mr. Peter MacKay: As acting director, as acting director after September, did you ever have occasion? You said that you met regularly with the minister or the minister's staff.

Mr. Pierre Tremblay: Yes.

Mr. Peter MacKay: Would you have discussions about the merits of these contracts and who should be awarded these contracts?

Mr. Pierre Tremblay: Essentially, what I was reporting to the minister was three lists: the lists of all the proposals that we had received, a list of proposals that we were recommending with an amount of money identified to that proposal and a list of the contracts that were rejected.

Mr. Peter MacKay: Okay. And so the final decision was the minister's?

Mr. Pierre Tremblay: No, the final decision was my decision.

Mr. Peter MacKay: All right. So you presented that list of three recommendations--

Mr. Pierre Tremblay: Yes.

Mr. Peter MacKay: --and you made the final recommendation?

Mr. Pierre Tremblay: Yes. Because once a project was in the list of approved, with a certain amount of money, the contract was already signed at that time.

Mr. Peter MacKay: So he, either directly or through staff, gave you no recommendation, personally?

Mr. Pierre Tremblay: We were in constant communication with the minister's office. In fact, there was an officer that was assigned as a liaison with the minister's office.

Mr. Pierre Tremblay: Who was that?

Mr. Pierre Tremblay: Mr. Mackenzie, when he was in front of that committee, also mentioned that in the new government structure he had assigned one person to deal with the minister's office.

Mr. Peter MacKay: So he was working for the minister and giving you advice, is that correct, this liaison?

Mr. Pierre Tremblay: No, he was a public servant. This liaison was a public servant. The job, that person was to keep in touch with the minister's office, to receive proposals coming from the minister. The minister was getting proposals on a daily basis, so to make sure our list was accurate we had to collect all those proposals coming from all kinds of sources.

Mr. Peter MacKay: Was this an additional staff person?

Mr. Pierre Tremblay: Sometimes the minister was going to Question Period and after Question Period he had two or three proposals coming from members of Parliament.

Mr. Peter MacKay: Is this an additional staff person that you referred to? You said there were two.

Mr. Pierre Tremblay: No. It was part of the crew.

An hon. member: Probably opposition members--

The Chair: No, no, we don't need the editorial comment from this side, thank you.

Mr. Peter MacKay: You mentioned at one point in your testimony already you signed 595 files per year or during that period of time that you were in office.

Mr. Pierre Tremblay: It was close to that, yes.

Mr. Peter MacKay: Okay. And of those contracts, you wouldn't personally review each and every one of them. You were acting on the advice of people within your office.

Mr. Pierre Tremblay: Yes, but most of the proposals...I had discussions on a regular basis, I would say at least two to three times a week, with the staff. They were presenting me the proposals they had in line and on their table.

¹ » (1050)

Mr. Peter MacKay: And so you were relying on your staff, essentially, to review the contracts, consult the terms of the contracts, the conditions, to see whether they've been met.

Mr. Pierre Tremblay: I guess all the ADMs are doing the same thing.

Mr. Peter MacKay: You guess or you know that's what they're doing.

Mr. Pierre Tremblay: No, no, all the ADMs are doing the same thing. When you're the ADM procurement at Public Works, you cannot go to every single warehouse to check if a pound of glue has been delivered.

Mr. Peter MacKay: So you're relying on them to essentially ensure the approved work was complete, that it didn't vary or there were no shortcomings, in terms of what was stipulated in the contract. You were satisfied, based on what people were telling you about the contracts. Is that fair to say?

Mr. Pierre Tremblay: I had discussions with them, yes, and after discussions...and they were in constant communication with the agencies, with the organizations. Sometimes, for example, the organization will say they could not get the payment done. But my staff then checked with the organization and no bills were sent.

Mr. Peter MacKay: I just want to be sure, on the third contract you were satisfied. The third contract, the one that you admit you signed, were you satisfied? Did you go through this process of ensuring the contract was complete, the terms that were stipulated were complete, before you signed it? Did you satisfy yourself of that? If you did, I suggest something broke down here because we know, or at least it's alleged, that contract was not up to par, that it wasn't complete, and yet payment was made.

Mr. Pierre Tremblay: But it was done, as I said, prior to my time, okay? I was responsible to sign for one bill for the Groupaction contract, and that's it. I learned about the two other contracts by the press.

The Chair: We can come back to that later, Mr. MacKay.

Mr. Murphy, please, we're now into the second round, four minutes.

Mr. Shawn Murphy (Hillsborough, Lib.): Thank you very much, Mr. Chairman.

Thank you very much, Mr. Tremblay.

Mr. Tremblay, my questions deal with the general system. It seems to me we have a general total failure of the system in the Government of Canada and the taxpayers and the government and everyone else was let down. In every organization there's people who will take advantage of the system, who will steal. Imperial Oil has them and the Royal Bank has them. But you expect to see checks and balances that these breeches will not happen. Those checks and balances did not exist in the department that you became the director of. We have clear evidence there was a total mess, as Madam Fraser has testified.

Mr. Pierre Tremblay: Yes.

Mr. Shawn Murphy: We have evidence you were the director. My question to you is: who is responsible for this mess? Now, Mr. Quail came and said he wasn't supervising it, you're testifying that you're not responsible. But it's incumbent upon you, I believe, to tell this committee who is responsible for this mess.

Mr. Pierre Tremblay: I guess--and I when I say “I guess”, it's an expression--the Auditor General's report was quite clear. I think the auditors have reported there were essentially two individuals involved in the Groupaction file who were there at the time and were involved in those files.

Mr. Shawn Murphy: No, no, you're missing my question. We're not blaming Groupaction about this situation. If somebody can send an invoice to the government for $550,000 to be paid with no checks and balances, we're not going to get into that. We're talking about the public service. Who in the public service is responsible for this mess?

Mr. Pierre Tremblay: I don't have any answer to that. I don't know who's responsible for that. I don't know.

Mr. Shawn Murphy: It's not you, that's what you're testifying here today?

Mr. Pierre Tremblay: I arrived there and that was the situation when I arrived.

Mr. Shawn Murphy: Okay, my next line of questioning, Mr. Tremblay, is you came there, you found a mess, you say as a result of the internal audit you started action to clean it up. But, obviously, there was some real breaches of the Financial Administration Act, real breaches of the guidelines of the Treasury Board. Obviously, you would have had to take disciplinary action against employees. So I'd like you to tell this committee what disciplinary action you took against these employees that screwed up and what was the outcome of this disciplinary action. I hope you're not going to tell us there was no disciplinary action taken.

Mr. Pierre Tremblay: That's the case. No disciplinary action was taken.

Mr. Shawn Murphy: Any reason for that? You were the director. Obviously, I would expect there would be disciplinary action taken.

¹ » (1055)

Mr. Pierre Tremblay: I started as the director in September 1999 and I started correcting the problems as soon as I was in place in charge of the program.

Mr. Shawn Murphy: Mr. Tremblay, if situations occur where people are getting paid invoices with no documentation, all these reports that came from the Auditor General, you would expect, any organization or company would expect, there would be disciplinary action: people would be suspended without pay, it would be noted in the file. There would be all kinds of disciplinary action that would arise out of this file, and you're saying there's none?

Mr. Pierre Tremblay: None.

Mr. Shawn Murphy: And can you give me the reason why no disciplinary action was taken?

Mr. Pierre Tremblay: No, I can't.

Mr. Shawn Murphy: But you were the director.

Mr. Pierre Tremblay: Yes.

The Chair: Twenty seconds.

Mr. Shawn Murphy: Twenty seconds. That's it. Thank you.

The Chair: Okay, thank you very much, Mr. Murphy.

Mr. Shepherd, please, four minutes, and then we'll go to Ms. Meredith.

Mr. Alex Shepherd (Durham, Lib.): Yes, thank you.

I want to focus on the area in which the time you actually took over as director. That was in October 1999. But, in fact, the audit, the internal audit, actually wasn't completed or didn't take place until the spring of 2000.

Mr. Pierre Tremblay: Yes. No, but in fact, just to put the chronology in place, September 1999, I took charge. I think it was October 3, or something like that, I sent a letter to all the organizations saying that we were changing the process.

Mr. Alex Shepherd: Okay, let's just focus on that. Suddenly you take over you and you say instantly or somehow you know there's something wrong. How's that possible?

Mr. Pierre Tremblay: Because I had a look at the files and I was not satisfied with the way the files were documented.

Mr. Alex Shepherd: So when you say you looked at the files, in what way were you not happy about the way the business had been transacted?

Mr. Pierre Tremblay: It was not to my satisfaction in any way.

Mr. Alex Shepherd: Did you know that we were not receiving value for money?

Mr. Pierre Tremblay: No, that's not what I was suspecting.

Mr. Alex Shepherd: What was your concern with the file?

Mr. Pierre Tremblay: My concern was, for example, I was asked questions, let's say, by the minister about a certain event and I could not find documentation in the file.

Mr. Alex Shepherd: You had ongoing discussions somewhere in there with Mr. Quail.

Mr. Pierre Tremblay: With Mr. Quail, yes, on a weekly basis.

Mr. Alex Shepherd: Now, was Mr. Quail aware of the fact these files were defective?

Mr. Pierre Tremblay: Yes, we talked about that. This is why--

Mr. Alex Shepherd: In what way? Did he ever talk about the possibility we never received value for the money we paid out?

Mr. Pierre Tremblay: No.

Mr. Alex Shepherd: There was no consideration of that?

Mr. Pierre Tremblay: No, not to my knowledge.

Mr. Alex Shepherd: Have you ever specifically met with the Groupaction people, themselves?

Mr. Pierre Tremblay: Yes.

Mr. Alex Shepherd: On their premises?

Mr. Pierre Tremblay: Yes, a couple of times. I met the president, Mr. Brault, a couple of times when I was in Montreal. But I assume that was part of my business. I was meeting with all the others, as well.

Mr. Alex Shepherd: Did you ever review any of the so called “what we got for our money”? The events, did you go to some of the events that were supposed to have been paid for out of that?

Mr. Pierre Tremblay: Yes, I went to some.

Mr. Alex Shepherd: And were you satisfied the money was being expended properly?

Mr. Pierre Tremblay: Yes.

Mr. Alex Shepherd: Even after you took over as director, you stated earlier it was your preference to continue on with these companies. I think you used the word “preference”, “I had a preference”.

Mr. Pierre Tremblay: It was not a “preference”, it was the fact that a competition was done and we had those companies. So part of the action plan, we issue a new RFP out on the street using the MERX system at public works, a certain number of companies across Canada answered, they went through the process, I was not involved in the selection of the agencies, and at the end we came out with a new list of agencies and some of the agencies--

Mr. Alex Shepherd: Groupaction continued to rate fairly high in the approval index somehow.

Mr. Pierre Tremblay: Yes.

Mr. Alex Shepherd: For what reason? Because of value they gave you for the money?

Mr. Pierre Tremblay: Because part of the RFP, the request for proposal, was insisting on former experience in dealing with the Government of Canada, in dealing with sponsorship events and that kind of things. There was a system of notation and--

Mr. Alex Shepherd: You stated earlier that you were getting phone calls from people asking for money. You went back and looked in the file and there was no invoice. That seems to be part of the problem with Groupaction. You said the file was defective. You thought when you reviewed the files they were defective, and yet under your watch you continued to use Groupaction.

Now, was it not a concern with you that Groupaction--

¹ » (1100)

Mr. Pierre Tremblay: I'm not putting any responsibility on Groupaction. If an organization, after the event, don't send the bill, they should not expect to be paid.

Mr. Alex Shepherd: Was this not the case of Groupaction? Did they receive money without an invoice?

Mr. Pierre Tremblay: No.

The Chair: Thank you, Mr. Shepherd.

Ms. Meredith, please, four minutes.

Ms. Val Meredith (South Surrey—White Rock—Langley, Canadian Alliance): Well, I don't really know where to begin here. I think what I'm going to do is I'm going try and clarify some of the information that seems not to be coming.

You said--the process--that you only had two employees, when you took over as acting director you had only yourself and two employees. Then a little bit later you said you didn't know. When Mr. Murphy asked you who was responsible for the mess, you said you didn't know. Well, unless I'm missing something, there were only three people in the office: yourself and two employees. So what positions were they? Who were they? What are their names or what positions did they hold? Who are the two people who were responsible, as you see it, for the mess?

Mr. Pierre Tremblay: I won't say those public servants were responsible for the mess. The public servants were performing their duty as they could and to the best of their knowledge. They were dealing with the organizations and with the communication companies and...

Ms. Val Meredith: Okay. I don't buy that, quite frankly. You have people who were responsible for putting a contract together, reviewing it, making sure the work was done as it was supposed to be done and then putting it before the director or acting director to make the payment. So somebody was responsible for maintaining management of that file. You told us there were three people: the director or acting director and two other individuals.

Mr. Pierre Tremblay: Yes.

Ms. Val Meredith: Who else was involved in that file--

Mr. Pierre Tremblay: There were people from procurement who were involved because they had two contracts.

Ms. Val Meredith: Who in procurement? What level?

Mr. Pierre Tremblay: I don't know. There's a bunch of...at CCSB we had close to 40 people in procurement. I don't know who was working on which file. But a contract has to be put in place, so procurement people were responsible. The bills were coming, so finance was involved also at that point. And at the top of the pyramid there were two officials and myself dealing with the Sponsorship Program.

Ms. Val Meredith: Okay. Another thing you said was the department didn't place any influence on you for the decision to hire Groupaction. But then you said earlier that you weren't part of that decision, that you happened after the whole thing had been done and that you just signed off on the final payment. So you really are not in a position to say whether or not there was any department involvement in selecting Groupaction for this particular Sponsorship Program, are you?

Mr. Pierre Tremblay: You mean for the three contracts the auditors--

Ms. Val Meredith: I'm talking about the three sponsorship contracts. You're really not in a position of saying there was no government involvement, are you?

Mr. Pierre Tremblay: No, I wasn't even there.

Ms. Val Meredith: Okay. Thank you.

When you met with the minister's office, you said you met on a regular basis two or three times a week with the minister's office.

Mr. Pierre Tremblay: No, I said two or three times a week with my staff. With the minister's office, it was more than a month...once a month, something like that.

Ms. Val Meredith: So who would you have met in the minister's office and what would you have discussed about these contracts? You said to the committee the minister continually got requests for these contracts. Did you meet on that basis?

Mr. Pierre Tremblay: I'm confused about what contracts you're talking about at the moment.

Ms. Val Meredith: Sponsorship contracts.

Mr. Pierre Tremblay: Yes, but, which ones?

Ms. Val Meredith: I don't really, at this point, care which ones. I'm just saying, the minister's office met with your office on these contracts. Who, in the minister's office, would be at those meetings?

Mr. Pierre Tremblay: Usually, at my monthly meeting with the minister was the minister's chief of staff, and, I don't know, it depends, sometimes there were more people than that. Sometimes, I was there with some of my staff; other times, I was alone. Sometimes, I was there with Mr. Guité when Mr. Guité was the executive director. It varies.

Ms. Val Meredith: But the minister, and the chief of staff, were there at those meetings?

Mr. Pierre Tremblay: Yes.

The Chair: Thank you very much, Ms. Meredith.

Mr. Bryden, please. Four minutes.

Mr. John Bryden: Thank you.

When you worked for Mr. Guité from February to September, did you get the impression that procedures weren't being properly followed?

¹ » (1105)

Mr. Pierre Tremblay: If I was getting the impression, maybe, but I didn't know. Really, I didn't know. When I started working there, in February 1999,--

Mr. John Bryden: I realize that, but by the time September arrived, did you have the impression that perhaps proper procedures may not be followed?

Mr. Pierre Tremblay: Clearly, about the procedure, I can't say, but clearly, I was not satisfied with the way the files were documented, becausein the file.

Mr. John Bryden: Between February and September, you had the definite impression, then, that there weren't the proper documents in the file? Is that correct?

Mr. Pierre Tremblay: Yes.

Mr. John Bryden: That's for the even before you became acting director that there was something wrong in the department?

Mr. Pierre Tremblay: I would not say there was something wrong with the department. There was something wrong, maybe, in dealing with the sponsorship items, yes.

Mr. John Bryden: That's what I meant, okay. That's for the Who would be responsible for maintaining the integrity of those files, and making sure the proper documentation was there?

Mr. Pierre Tremblay: It was the Acting Executive Director who was responsible for that, Mr. Guité.

Mr. John Bryden: Alright. But, who, actually, has the hands-on responsibility to make sure the documents come in? The Executive Director has the real responsibility, except that some person, actually, ought to be looking at those files to make sure that the appropriate documents are appearing in those files as the sponsorship program goes on. Would that be somebody else in the department, some subordinate?

Mr. Pierre Tremblay: Yes, a subordinate for Mr. Guité, reporting to Mr. Guité.

Mr. John Bryden: Finally, and this is just a very direct question, were you ever asked by anyone to do anything that you considered would have been improper?

Mr. Pierre Tremblay: No.

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

The Chair: Thank you, Mr. Bryden.

Mr. Harb, please, four minutes.

Mr. Mac Harb (Ottawa Centre): Mr. Tremblay, have you ever financially, personally, benefited from your dealings with any of your contractors? Have you received any commissions, any money, have you done anything illegal?

Mr. Pierre Tremblay: No.

Mr. Mac Harb: Mr. Quail appeared before the committee, and spoke about the audit of 2000. Could you tell us briefly in terms of what did you do. The internal audit was ordered, and what was your role there? You had a meeting with the Prime Minister's Office, and PCO. I wanted to find out whether you were ever pressured in order to change the course of action, whether you were told to do things that you felt were out of line. What did you do when this internal audit had taken place. Tell us exactly the steps you took as an director during that time.

Mr. Pierre Tremblay: First of all, I said that I started changing the process by sending a letter in October to all the organizations. Then I had a meeting with Mr. Quail. It was during the fall of 1999 that he, in discussions with the deputy minister, we agreed that an audit, an internal audit should be done of all the files. Then I started talking to the legal counsel. Mr. Quail did the same thing. Finally, they came with a mandate for the scope of work to be done for the audit. Then I started working with the auditors. They had an office on the same floor where I was working. They were there for at least three months, definitely, looking at every single file, interviewing employees, talking to people, checking whatever they wanted to do. We opened our files to them. After that they wrote the report of their findings and they found there were a lot of deficiencies.

Subsequent to that, meeting with Mr. Quail and a group of senior public officers, essentially ADMs in PWGSC, in public works, and the legal counsel of public works, we sat down and we drafted an action plan that we double-checked and we presented to Treasury Board. Treasury Board were satisfied with the way we wanted to move with the file and we went ahead with the action plan.

We had 31 different items that were identified in order, bringing solutions to some deficiencies. They were all implemented. The process was definitely a lot better after that because another audit was done. I haven't seen the results because I moved, as I said earlier, but I'm told the audit that was done from the files under my supervision said all the files are properly documented and with everything, so complete.

¹ » (1110)

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

[ Translation ]

Mr. Desrochers, four minutes please.

Mr. Odina Desrochers (Lotbinière L’Érable, BQ): Thank you, Mr. Chairman.

Thank you, Mr. Tremblay, for having come here today. When the famous internal audit report was sent to your supervisor, it must certainly have made it to someone, somewhere, in the Prime Minister’s Office; did you receive any feedback on the internal audit report?

Mr. Pierre Tremblay: I do not know if it made it to the Prime Minister’s Office, I have no…

Mr. Odina Desrochers: No one from the Prime Minister’s Office spoke to your deputy minister, even though this report was very negative, no one from the Prime Minister’s Office intervened?

Mr. Pierre Tremblay: Well, listen, the normal procedure was that my deputy minister was made aware of the report. Did my Deputy Minister report to the Clerk of the Privy Council? I do not know, you could put the question to Mr. Quail, if you have not asked him already. Did the Clerk of the Privy Council discuss this with the Prime Minister, since he is responsible for the Prime Minister’s affairs? I do not know.

Mr. Odina Desrochers: So, to your knowledge, there was no maneuvering at the political level?

Mr. Pierre Tremblay: I was no longer there.

Mr. Odina Desrochers: Okay. You often tell us that you were no longer there. When you received the famous internal audit report, you certainly saw that a list of agencies were identified in that report. You submitted 31 action points; were you then particularly vigilant in monitoring the agencies that had been identified as having done things in a totally irregular manner, that did not comply with the standards for awarding contracts?

Mr. Pierre Tremblay: Yes, and that is why a new process was put in place and also why we held a new competition for agencies.

Mr. Odina Desrochers: Yes, but as far as I know, the federal government uses the median as a standard, as opposed to Quebec, which awards contracts to the lowest bidder; at the federal level, they use the median system, which gives Public Works a certain leeway in the awarding of contracts.

Mr. Pierre Tremblay: Well, for us, it was clearly identified in the--I am going to say this in English because I can never remember the term in French--Request for proposals, so in the document of intention which was published on the MERX, it was clearly stated that in order to qualify a company had to break down its time, and that the criteria awarded so many points for this, so many points for that.

Mr. Odina Desrochers: But you were responsible for the program at that time, Mr. Tremblay, and you read the internal audit report. You knew that there were some agencies which had more or less respected standards. Did you monitor them with a particular vigilance? I don’t know, you say that you had $40 million, 595 files, but if you were responsible, as manager, you must have taken the time to monitor those people more carefully? Were the agencies identified in the internal audit report awarded other contracts subsequently?

Mr. Pierre Tremblay: What I can say about the agencies is that we held a new competition, and so we started fresh with a new process. The internal audit report identified deficiencies in the system.

Mr. Odina Desrochers: Did it identify the agencies or just the deficiencies?

Mr. Pierre Tremblay: I think that in any case, all of the agencies had deficiencies, there were deficiencies in just about every file, in the files that were given to Groupaction, perhaps in the ones given to Everest, and in the ones given to Compast, there were deficiencies in the system overall. It is those deficiencies that the action plan aimed to correct.

Mr. Odina Desrochers: So you submitted action plans, but did you give contracts to the agencies that had done things that were not acceptable?

Mr. Pierre Tremblay: I cannot tell you whether the agencies did things that were not acceptable.

Mr. Odina Desrochers: But you tell me that there was a list of deficiencies both on the part of officials and of the agencies.

Mr. Pierre Tremblay: There was a list of deficiencies identified in the system for awarding sponsorships, and that is why we held a new competition for agencies, and some agencies…

Mr. Odina Desrochers: But it seems to me that the same ones turned up again, even though you had made all of these recommendations, a nice action plan, the same bunch got in again, the same bunch seemed to be back, profiting abundantly from the system.

¹ » (1115)

Mr. Pierre Tremblay: The competition was held and I was not a part of the competition process, except for working with the team of senior public service officials to prepare the Request for proposals; the process then followed its normal course. Yes, some of the agencies that qualified were the same ones, but some new ones also qualified; Armada was not on the original list, and so on, there were a couple of others that were added.

Mr. Odina Desrochers: That is very unfortunate, Mr. Chairman.

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

Mr. Bertrand, four minutes please.

Mr. Robert Bertrand (Pontiac Gatineau Labelle): Thank you very much, Mr. Chairman.

Mr. Tremblay, I would like to get back to the agencies. For the second competition, you talked earlier about the selection criteria could you give us a broad outline of what you were looking for in communications companies?

Mr. Pierre Tremblay: We were looking for expertise, we had various criteria in mind; I would have to look at the documents again, I do not have in front of me the complete contract document we published on the MERX, the document of intention; it was a document of approximately 50 pages, and I do not remember each one of the criteria. There were, among other things, weighting involving the hourly rates which varied, the way in which the agencies could qualify; if their hourly rate was higher than a certain level, they lost points, if it was below a certain level, they could be awarded additional points, so there was a certain competition with regard to rates in the letter of intention, in the competition as such. Basically, we were looking for agencies that had a certain experience, that had already managed sponsorships, that had some major clients.

Mr. Robert Bertrand: Why use agencies in the first place? Why did you go through agencies? I would have thought that there would have been specialists in-house, that Public Works could have done a good job.

Mr. Pierre Tremblay: I must tell you that the volume of transactions that were done within the framework of the sponsorships was such that it would have been difficult for public servants to do all the work; I am not convinced that we would have saved the 12 per cent that was paid to the agencies, considering public servants’ salaries, their benefits, travel expenses to go to the events, to check things. The current minister has decided to put in place a new procedure where agencies will not have a role to play; I do not have a problem with that, that is his decision. But with the small group of people we had at CCSB, we could not do that, unless we hired people on a massive scale--and we did not have the money to do that unless we went into the $40 million in the budget to pay salaries--we did not have the resources to do so, and furthermore, we were following the private sector model quite precisely.

Mr. Robert Bertrand: When you arrived, you became director general in September; I presume you were aware of what was going on?

Mr. Pierre Tremblay: No, I am sorry to correct you, but I became director general of strategic communications in February 1999, and I became executive director of the CCSB Program in September 1999.

Mr. Robert Bertrand: Fine. When you arrived in September 1999, I presume that you were aware of Treasury Board rules, of the way in which payments were supposed to be made to communications companies?

Mr. Pierre Tremblay: I learned it on the job, as I did my work.

Mr. Robert Bertrand: Then, when you reviewed old files, I presume that that is when you saw that there were certain irregularities, invoices that had not been sent, where a payment had been made nevertheless?

Mr. Pierre Tremblay: No. In any case, I do not want to go into all of the details, but basically what I realized when I arrived, before I took over the management of the program completely, was that I was not satisfied with the way in which the files were documented.

Mr. Robert Bertrand: Very well.

Thank you very much, Mr. Chairman.

[ English ]

The Chair: Thank you very much.

Mr. Jordan, please, four minutes.

¹ » (1120)

Mr. Joe Jordan: Thank you, Mr. Chair.

I want to ask a question of Ms. Fraser, just in terms of the, sort of, cursory examination that produced this document.

It seems to me that when we're looking at systems, or processes, which public funds flow, I think at the very least, in this case, we have a very serious disconnect between whoever is supposed to evaluate services, and who is supposed to make payment. It could be much more than that, but, at the very least, there has been a breakdown in how that system has been designed.

Are you planning, and I'm just trying to seek some sort of level of comfort, are you planning on looking at, in this particular case, what interests me is certainly, I think Public Works, someone told me 5,000 contracts a week is what it averages out to--it's a huge operation. The findings of this report are very disturbing.

Are you going to look at what triggered the internal audit within this department? It seems to me that it went on for an incredible length of time before that internal audit kicked in. In a perfect world, mistakes are made, they're corrected, but, this one, it seems to me, the timing of the audit, it went on for a very long period of time before it was actually triggered. Have you looked in detail at the actions that were taken, and do you think that those were appropriate, corrective actions, in terms of establishing some sort of oversight and control over this thing?

Ms. Sheila Fraser: Thank you, Mr. Chair.

As I have mentioned already, this audit report only deals with three contracts, so we can't generalize as to whether this was a practice that was current or not in Communications Canada. We are, of course, aware of the internal audit. We are also aware of the subsequent work that was done. In our audit that we will be beginning shortly, we will look at the systems because, just from these three contracts, there are a couple of things that are troubling. One, there is sort of a basic principle in systems in that you have segregation of duties, so no one person should be authorizing it, giving a contract, and giving out payment. This is sort basic auditing 101, yet, we see evidence of that here. We will have to look at how are the structures designed that allowed this to occur, and have corrective actions been taken.

We will be looking at the period before the internal audit, and we will also be looking, obviously, at the corrective action which was taken since then to see if things have been addressed.

The Chair: That's three questions, Mr. Jordan, that's 15 minutes, and 15 seconds.

Mr. Joe Jordan: Okay, sorry.

Mr. Tremblay, you indicated early on that the CCSB was more than the sponsorship program. Can you give me a 10 or 15 second overview of exactly what the scope of that was?

Mr. Pierre Tremblay: CCSB was created in December, 1997. CCSB, at the time, was grouping the Gazette du Canada, the depository service program, the 1-800-O Canada call centre, the Canada website. They were not at the stage they are at the moment because there is a lot of work that has been done since then--that was part of my job, too.

We had all kinds of things like that. For example, all the members of Parliament are familiar with the pink leaflets that are being distributed to members in order to pay publication. That was also something that was under the responsibility of CCSB.

Mr. Joe Jordan: Okay.

Thank you.

The Chair: Thank you, Mr. Jordan.

Mr. Ritz, please, four minutes.

Mr. Gerry Ritz: Thank you, Mr. Chair.

Thank you, ladies and gentlemen, for your time here today.

Mr. Tremblay, you stated earlier that you were chief of staff to Minister Gagliano.

Mr. Pierre Tremblay: Yes.

Mr. Gerry Ritz: For how long?

Mr. Pierre Tremblay: I became his chief of staff when he was appointed Secretary of State for Parliamentary Affairs.

Mr. Gerry Ritz: Okay. So you go back a long ways. You go back a long ways. All right, fine.

Mr. Pierre Tremblay: And then I moved on to labour and then to public works.

Mr. Gerry Ritz: To public works. You went with the minister.

Mr. Pierre Tremblay: Yes.

Mr. Gerry Ritz: All right. When he became Minister of Public Works and had all of these communications problems underneath him, did you meet with Mr. Guité, as chief of staff?

Mr. Pierre Tremblay: Yes.

Mr. Gerry Ritz: Okay. The minister chaired the cabinet communications committee. Did you attend those meetings?

Mr. Pierre Tremblay: I attended on some occasions. When I was at CCSB, I even did a presentation to the cabinet committee.

¹ » (1125)

Mr. Gerry Ritz: Okay, great. So you were familiar with the workings of CCSB long before you were sent there in February?

Mr. Pierre Tremblay: Yes, because I was involved in the creation of CCSB.

Mr. Gerry Ritz: All right. Whose idea was it for you to get involved with CCSB and leave the minister's office, since you'd had such a track record of length of time with him?

Mr. Pierre Tremblay: I mentioned to the minister back in 1997 that the 1997 election was my last election. I do have a family, I have a home and I have three young kids and all kinds of stuff, so I was looking for more security. I mentioned that to the minister back in 1997. When I had the opportunity, when Mr. Guité announced he was retiring, I made the request, as the Public Staff Relations Act allow--

Mr. Gerry Ritz: Okay. Did the minister, then, give you a mandate or a job description going in to take over that portfolio--

Mr. Pierre Tremblay: Absolutely not.

Mr. Gerry Ritz: No?

Mr. Pierre Tremblay: No.

Mr. Gerry Ritz: Absolutely no contact with the minister at all? He just cut you loose after all those years of working together?

Mr. Pierre Tremblay: Yes.

Mr. Gerry Ritz: All right. There was an audit that was done that you reported. You set it up with Mr. Quail.

Mr. Pierre Tremblay: Yes.

Mr. Gerry Ritz: All right. There was also a briefing, when that audit became available. It hadn't been public yet, but there was a briefing, then, between you folks at CCSB, the minister and his department, and the sponsorship contractors. Do you remember that meeting in September, after the audit?

Mr. Pierre Tremblay: Yes, that's a meeting I called myself.

Mr. Gerry Ritz: Right.

Mr. Pierre Tremblay: It was CCSB staff involved in sponsorship, myself and the president of the agencies.

Mr. Gerry Ritz: Right. Okay, now at that meeting who else attended? That was it?

Mr. Pierre Tremblay: That was it.

Mr. Gerry Ritz:That was the whole roster? The minister's office was not involved, and yet it's under his purview?

Mr. Pierre Tremblay: No.

Mr. Gerry Ritz: So you're going to make all these changes, a 31-point plan, and you didn't include the minister in that meeting to let him know what these changes were going to be? You wrote a letter a year before saying there's changes coming--

Mr. Pierre Tremblay: Yes.

Mr. Gerry Ritz: --you have a meeting to brief all these folks and you leave the minister and his new chief of staff and all that out and Mr. Guité?

Mr. Pierre Tremblay: No, no, the minister was briefed, but he was not at the meeting.

Mr. Gerry Ritz: Okay, so he was briefed on that.

Mr. Pierre Tremblay: He was briefed by Mr. Quail.

Mr. Gerry Ritz: You also openly here today completely disagree with the new minister, Minister Goodale, on how the Sponsorship Program should be administered.

Mr. Pierre Tremblay: That's not--

Mr. Gerry Ritz: Yes. He's saying that it should go back to people such as yourself to administer it. You're saying, no, there's too much workload, that you have to stay with a sponsorship contractor to do it. You're saying that's the proper route to go. So there seems to be a disagreement there between what Minister Goodale wants to do now. You've actually been in there and worked with it and you're saying that's not possible.

Mr. Pierre Tremblay: That's not what I said. If that's your understanding, I'm sorry about--

Mr. Gerry Ritz: That was your response to Mr. Bertrand, that there was too much workload for civil servants to do it, that you had to go to outside contractors to perform this work.

Mr. Pierre Tremblay: That's what we did at CCSB, but now the minister has decided to go another route. That's his business, and I respect his decision--

Mr. Gerry Ritz: But you're openly disagreeing with that, saying it's too much workload for civil servants to do, that you have to--

Mr. Pierre Tremblay: At the time, yes. At the time, yes. But at this moment, now, that's the minister's decision, anyway. If the minister can find the funding--or Mr. Mackenzie--within Communications Canada, he's able to find the funding to hire public servants to do the job, that's--

Mr. Gerry Ritz: You subsequently moved to CFIA. Was that at your request?

Mr. Pierre Tremblay: No, there was a national competition. It was open not only to the public service, it was open--

Mr. Gerry Ritz: So there's more security there--

The Chair: Thank you, Mr. Ritz.

Mr. Pierre Tremblay: No, it's just the fact that I'm moving in terms of career options.

The Chair: Okay, very good, very good.

The Chair: Mr. Proulx, four minutes please.

[ Translation ]

Mr. Marcel Proulx: How many employees were there aside from yourself, Mr. Tremblay?

[ English ]

The Chair: If I can interrupt. We have a problem with audio volume, and we don't quite hear it loud enough. Sorry. My apologies for interrupting, Mr. Proulx.

Mr. Marcel Proulx: Shall I start back the clock?

The Chair: No, continue on.

Mr. Marcel Proulx: Too bad.

[ Translation ]

Mr. Pierre Tremblay: It depends what you are referring to.

Mr. Marcel Proulx: From February 1999 to September 1999.

Mr. Pierre Tremblay: There were approximately 200 employees at CCSB.

¹ » (1130)

Mr. Marcel Proulx: Very well. But when you arrived in September 1999, you said earlier that – and this is what I want to understand – there were two employees I was responsible for and after that the awarding of contracts was passed along to the Department of Public Works. Could you clarify that? What did you mean when you said you had two employees under your responsibility and that the rest of the work was done elsewhere?

Mr. Pierre Tremblay: No, no, there were two. At the CCSB, we had a branch which was responsible for communications purchases, which made purchases for all of the departments when there were publicity campaigns and the like. When a decision was taken, there were three employees, three people who were directly assigned to sponsorships in the decision-making. When we decided to move forward with a file, we then had to request a contract, put a contract in place, and so on…

Mr. Marcel Proulx: Okay, let me stop you for a moment.

Mr. Pierre Tremblay: …at that point the CCSB employees were involved, but then the procurement branch employees took over.

Mr. Marcel Proulx: Fine. Let me stop you because I want to understand clearly. You received a request, whether it came from the minister’s office or through Canada Post, you received a request for a sponsorship for the Bullfrog Festival, let’s say. You examined that in your office with your two employees.

Mr. Pierre Tremblay: Yes.

Mr. Marcel Proulx: You decided, in your office, that that festival should receive a sponsorship from the Government of Canada.

Mr. Pierre Tremblay: Yes.

Mr. Marcel Proulx: And what happened after that? You sent it along to the Public Works section where contracts were awarded?

Mr. Pierre Tremblay: We submitted a requisition for a contract, but it was sent on; we were all Public Works employees, but Public Works had two procurement systems, one for the department as a whole, and one for communications which came under CCSB.

Mr. Marcel Proulx: But from the moment when the decision was taken to accept a sponsorship or to fund a sponsorship, am I to understand that this was no longer under your control or that of your two subordinates?

Mr. Pierre Tremblay: Well, it was simply to put the contracts in place. So, we made a requisition for a contract for a given organization, for a certain sum of money, the transaction to be handled by a given agency.

Mr. Marcel Proulx: And when that came back, did you approve it? Because I’m talking about September 1999, Mr. Tremblay; when the invoice came back to you, who approved it?

Mr. Pierre Tremblay: The invoice came back, it was checked by…first, there was an affidavit that had to be issued by Media IDA Vision and afterwards I approved the invoices, I signed the invoices.

Mr. Marcel Proulx: What did that affidavit from Media IDA Vision say?

Mr. Pierre Tremblay: That the work had been done.

Mr. Marcel Proulx: And you received that and upon reception, you paid?

Mr. Pierre Tremblay: We received the invoices, when the invoices were ready they were sent to us, I signed them and they were paid.

Mr. Marcel Proulx: Fine. And that is the system that you had changed?

Mr. Pierre Tremblay: Indeed, that is the system that was changed.

Mr. Marcel Proulx: That is the system that you had in mind when you prepared your action plan and you…

Mr. Pierre Bertrand: Among others.

Mr. Marcel Proulx: Among others, fine, yes. Thank you.

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

[ English ]

We didn't get going until about a quarter after ten. I'm suggesting, since many people have indicated they would like to speak again, that we basically have a three minute round for everybody. That will take us to about twenty-after. Is that agreeable to everybody?

Mr. Pat Martin: Not all of us got the five minute round.

The Chair: Everybody has spoken. Every party had an eight minute round, and then everybody else has spoken. Everybody has spoken once. Now, I'm suggesting that we go around, and give everybody a three-minute round for more questions, if they want.

Is that agreeable?

Mr. Mayfield.

Mr. Philip Mayfield: Thank you, Mr. Chairman.

Mr. Tremblay, are you familiar with the Financial Administration Act?

Mr. Pierre Tremblay: Now I am.

Mr. Philip Mayfield: Now you are, but you were not then?

I was never briefed on that, no.

Mr. Philip Mayfield: I see.

Are you familiar with the government contracting regulations?

Mr. Pierre Tremblay: I went through those, yes.

Mr. Philip Mayfield: You are familiar with those. Were you familiar with those at the time?

Mr. Pierre Tremblay: No.

You have to keep in mind that when I signed the Group action contract I was a public servant for only two months.

Mr. Philip Mayfield: Are you familiar with the Treasury Board regulations regarding contracting?

Mr. Pierre Tremblay: You have to keep in mind that when I signed the Groupaction contract, I was a public servant for only two months.

Mr. Philip Mayfield: Are you familiar with the Treasury Board regulations regarding contracting?

Mr. Pierre Tremblay: Yes.

Mr. Philip Mayfield: Were you familiar at the time?

Mr. Pierre Tremblay: At the time, not fully.

Mr. Philip Mayfield: No, no.

When I have to sign my name that means that I've taken responsibility. Yet, you signed off on the third contract, and you told me that you're not responsible. How can that be?

¹ » (1135)

Mr. Pierre Tremblay: I didn't sign the contract. I signed the last bill coming.

Mr. Philip Mayfield: The last bill, only. What does that mean?

Mr. Pierre Tremblay: It means we received the bill, and I signed the bill, and that closed the contract.

Mr. Philip Mayfield: So you're confident when you signed that bill that everything in the bill was up to date, appropriate, and complete, and had full knowledge of what that bill was for?

Mr. Pierre Tremblay: I assumed that everything was done correctly, yes.

Mr. Philip Mayfield: There's only three people in the office, you, and two others. Who was the other person that would have known, if you didn't know?

Mr. Pierre Tremblay: As I said, those contracts were put in place before my time.

[ Translation ]

Mr. Pierre Tremblay: As I told the Auditor General, it was the final payment for the contract. Then I signed the bill, assuming that all background activities had been done.

[ English ]

Mr. Philip Mayfield: But you signed, though, you see. That means that you took responsibility.

Mr. Pierre Tremblay: I was presented with a bill. I signed the bill that closes the contract, and that's it.

Mr. Philip Mayfield: But you just signed a blank cheque, is that right? Why did you sign it when you didn't understand what it was about? I asked you if it was complete, up-to-date, and all the details were looked after, and I think you said yes, and you signed it. That would be appropriate. But if you did not, then why did you sign it? Which was is it? Did you understand what was on the bill, or did you not?

[ Translation ]

Mr. Pierre Tremblay:

[ English ]

Mr. Philip Mayfield: What would the amount of that final payment be?

Mr. Pierre Tremblay: Three hundred and seventy-five thousand dollars, or something like that.

Mr. Philip Mayfield: Three hundred and seventy-five thousand dollars?

Mr. Pierre Tremblay: Yes.

Mr. Philip Mayfield: Not a small amount of money.

Mr. Pierre Tremblay: No, it's a lot of money.

Mr. Philip Mayfield: Yes, more than half of the contract price, and you signed off without understanding that? I just have great difficulty understanding that a responsible person would do that, and treat your signature so casually.

The Chair: Thank you, Mr. Mayfield.

Mr. Desrochers, please.

Oh, Mr. Lebel.

[ Translation ]

Mr. Desrochers, please.

Oh, Mr. Lebel, three minutes.

Mr. Ghislain Lebel: Yes.

Mr. Tremblay, you just told us a moment ago that Media IDA Vision provided you with an affidavit and that on the basis of that affidavit you paid the sponsorship, is that correct?

Mr. Pierre Tremblay: That was the process that was in place, yes.

Mr. Ghislain Lebel: Yes, but you know, there were articles in the paper about that. For example, the Salon national de la chasse et de la pêche in Quebec cost $333,000, which was paid, and here I am not referring to a period that took place before you, or after you, I am talking about the sponsorships in 1999-2000 under your responsibility; you authorized $333,000, $39,965 for Groupaction, and $9,991, that is the 3 per cent for IDA Vision, but the event was never held, the event was cancelled. Where is the affidavit? How was it that you paid that invoice?

Mr. Pierre Tremblay: The payments must not all have been made.

Mr. Ghislain Lebel: Well, they are on your lists here, they were certainly made, it’s here in black and white; I’m not making this up.

Mr. Pierre Tremblay: When they are on those lists, it means that the event was accepted. I haven’t seen your lists.

Mr. Ghislain Lebel: They are your lists, and this is dated May 9, 2002, 1:56 p.m., and the payment was made.

Mr. Pierre Tremblay: On May 9, 2002, I was already…

Mr. Ghislain Lebel: No, no, this concerns all of the sponsorships since 1996, up to May 9, 2002; in 1999 2000, you were there, and there was a sponsorship which was paid, and which cost us in total $382,999, and the event never took place.

Mr. Pierre Tremblay: Mr. Lebel, I don’t know what document you are referring to, and it is difficult for me to judge.

Mr. Ghislain Lebel: Forget my document and try and remember the sponsorship for the Quebec hunting and fishing fair, the Salon chasse et pêche; did you not authorize that?

Mr. Pierre Tremblay: Yes.

Mr. Ghislain Lebel: This was a very lucrative day. On the same day, March 15, 1999, Groupaction was bellying up to the trough; there were eight payouts on that day, and I am not talking about small amounts than would likely turn up in St. Anthony’s donation box at the St. Joseph Oratory; it starts with $337,500, then $315,000, $337,000, $584,000, two amounts of $337,000, $765,000, these are all your papers, ah, this was a very lucrative day, that particular day. Then we discover that there’s one event in the list – there may have been others, who knows – but there is one that never took place, and yet you tell me that Media IDA Vision used to prepare affidavits according to which it was okay for you to pay, that everything was on the up and up, everything was dandy.

Mr. Pierre Tremblay: I can’t answer you on that because, first of all, I don’t have the lists you are referring to; secondly, the lists we prepared at our office were lists of projects that had been approved, with which we decided to award a sponsorship for a given amount. Those lists don’t mean that the amounts were paid.

Mr. Ghislain Lebel: But this is the same list on which one sees, Mr. Lebel, the famous missing contract of $575,000, which we never saw.

Mr. Pierre Tremblay: I can’t say, I’m not familiar with your list, Mr. Lebel.

Mr. Ghislain Lebel: But you are aware of this $575,000 Groupaction contract for work that was never done. You are not aware of that? One of the three reports was audited.

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

[ English ]

Mr. Bryden, please, three minutes.

Mr. John Bryden: My impression is that you noticed deficiencies in the documentation and you reported that to Mr. Quail. Was that what initiated the internal audit? The fact that you reported to Mr. Quail there was deficiencies, is that the reason why Mr. Quail undertook an internal audit?

¹ » (1140)

Mr. Pierre Tremblay: I suppose it was part of it, yes, but I never went to Mr. Quail saying, “Mr. Quail, I want to launch a formal complaint”. It was part of the briefing that I had with Mr. Quail. I exchanged information with Mr. Quail and he said, “How about those contracts?”. I said, “I cannot say more because I don't have documentation in the file”. And then we had discussions about that and subsequently an audit was asked.

Mr. John Bryden: So, then, we can assume--

Mr. Pierre Tremblay: So, yes, it was part of the decision.

Mr. John Bryden: So, then, if you had not raised the alarm about the lack of documentation in the file, then, we can assume that Mr. Quail would never have known enough to undertake an internal audit?

Mr. Pierre Tremblay: Yes.

Mr. John Bryden: So, in other words, it was you who actually raised the red flag about the files?

Mr. Pierre Tremblay: If you want to put it that way, yes.

Mr. John Bryden: Well, I think you are to be commended for it. We wouldn't be here if you hadn't done that, I would say.

Just one other question very quickly, then, because I know I don't have much time, is there any easy way of verifying that work has been done? Looking only at the Groupaction files and only your very limited association with them, was there any way, at the time you signed that last bill, you could have verified reasonably the contract had been fulfilled?

Mr. Pierre Tremblay: For me it was very difficult because I would have to go to Mr. Guité and turn over to Mr. Guité...ask Mr. Guité if everything was done. Mr. Guité, he already said publicly that he was receiving verbal advice. I cannot judge the kind of verbal advice he received, so...

Mr. John Bryden: Thank you.

Mr. Pierre Tremblay: And I'm not blaming Mr. Guité. I'm just stating--

An hon. member: Fact.

Mr. Pierre Tremblay: --what I sense.

Mr. John Bryden: Thank you very much. That answers a lot for me.

The Chair: Thank you, Mr. Bryden.

Mr. Martin, three minutes.

Mr. Pat Martin: Mr. Tremblay, this is the third Groupaction contract you did sign that we have here. This is the one we can't find any evidence of the work. When they did try and provide it, it was a badly photocopied reproduction of the number two contract. But you signed off on this. I notice an aspect of these invoices, whenever a senior person signs off they go through this checklist, the verification checklist: the work has been performed, the goods and services were supplied as per the contract, and all those are ticked off and then signed by you. Did you, in fact? Were you satisfied the work had been performed when you signed these invoices?

Mr. Pierre Tremblay: As I said to the auditor, I haven't seen that cheque out from finance.

Mr. Pat Martin: You've never seen it.

Mr. Pierre Tremblay: No.

Mr. Pat Martin: This is an aspect of every public works' payment contract and you didn't know about it.

Mr. Pierre Tremblay: I don't recall seeing it, anyway.

Mr. Pat Martin: That's unbelievable. It certainly seems to us that Groupaction was getting preferential treatment because in the contract, which you didn't negotiate, your predecessor...they stipulate how much they can bill for services rendered: the president of the communications firm can bill out $150 an hours, right down to what a secretary can bill out at. Yet, you've signed this invoice where Jean Brault charged himself out at $252 an hour--fully double what is allowed in your own guidelines. And Lyse George, the vice-president, charged herself out at $227 an hour. In fact, virtually everybody on this page pretty much doubled what is allowed to be paid, entered that and then you signed it.

Were you aware these advertising contracts stipulated the amount you can bill out at?

Mr. Pierre Tremblay: As I said earlier, and, if I remember correctly, I said the same thing to the auditor, I signed the last bill assuming that everything was in order.

Mr. Pat Martin: But you had no idea, really, anything about these contracts.

Mr. Pierre Tremblay: I didn't check those.

Mr. Pat Martin:You were appointed to this job by then. It certainly wasn't based on your skill or your ability. Why were you appointed to this job?

Some hon. member: Oh, come on!

Mr. Pat Martin: It just makes me wonder. If you have no knowledge of the--

Mr. Mac Harb: Mr. Chair, it's totally out of line. I would suggest just be on track again.

Mr. Pat Martin: I have the floor here, I believe. My light is on.

The Chair: Mr. Martin, your editorial comments you can reserve for another time--

Mr. Pat Martin: All right.

The Chair: --but you cannot draw these inferences and make these accusations where the witnesses cannot respond.

An hon. member: Along with the chair.

The Chair: You're entitled to ask questions, but you cannot accuse him of...

Mr. Pat Martin: Fair enough, I understand your point.

But I would ask, then, Mr. Tremblay, would you agree there's something untoward about Groupaction billing themselves out at double the allowable rate for virtually every...in fact, a secretary is only allowed to bill out at $25 an hour. They've charged you $56 an hour, even for admin staff.

¹ » (1145)

The Chair: Okay, thank you, Mr. Martin. I'll have the answer to the question and then we'll move on.

Mr. Tremblay, do you want to respond to Mr. Martin's question before we move on?

Mr. Pierre Tremblay: I don't have the documentation in front of me, so, no.

The Chair: Okay.

Mr. Murphy, please, three minutes.

Mr. Shawn Murphy: Thank you, Mr. Chairman.

Again, I want to follow up with an overall systems question. One of the components of any system is human resources. Again, we have evidence here that in September of 1999, Mr. Guité moved out and you were appointed. That's a very senior position in the civil service, sir. I guess I would like to review with you your qualifications for this position. One would expect to see a lot of public service experience and a fairly significant formal education. Can you review for the committee your qualifications for this position?

Mr. Pierre Tremblay: I'm a Ph.D. in Psychology, I'm a Doctor of Psychology. Based on that kind of training, I can interpret surveys. I can also look at surveys and figure out what direction public opinion is going. I was there as an adviser to the minister, in terms of communication. I was helping also the minister with the cabinet committee on communications. So I think that formally I have a sound and solid background.

Mr. Shawn Murphy: Was this your first position in the public service?

Mr. Pierre Tremblay: It was my first position, yes.

Mr. Shawn Murphy: And to get this position, I take it, you went through a full-blown public service competition.

Mr. Pierre Tremblay: Absolutely. It's a process. First of all, in the public service legislation, after three years in the minister's office, you can ask a transfer to the public service to an equivalent position. That's what I requested when the job of the director, Strategic Communications, came open at CCSB. By going through the Public Service Commission, I did the test for the executive to demonstrate you have the capacity for being an executive. I went to all the language testing. I had an interview with the Public Service Commission. Based on all of that, I was selected as the priority candidate for the job of DG, Strategic Communications. I worked there for nine months...or eight months. After that, when Mr. Guité retired, I took over.

Mr. Shawn Murphy: Explain this a little further. Three years on the political staff, you're given preference in the public service?

Mr. Pierre Tremblay: Yes.

Mr. Shawn Murphy: But you still go through a competition?

Mr. Pierre Tremblay: Yes.

Mr. Shawn Murphy: But you're guaranteed a job?

Mr. Pierre Tremblay: You go through the competition, but you have a priority. It's a process that is covered by the public service. It's not necessarily a competition. A job was open. I asked for a transfer in that position. I went through the Public Service Commission process. After that I was evaluated as a good candidate for that job and they offered me a job.

Mr. Shawn Murphy: But if other people had applied, they wouldn't have got it because you would have had priority because you had three years in the...?

Mr. Pierre Tremblay: Yes, I think so.

The Chair: Okay, Mr. Murphy, we've had the information on the qualifications.

Mr. MacKay, three minutes.

Mr. Peter MacKay: I think Mr. Murphy is onto a very good line of questioning.

The accountability and responsibility aspect, I guess, is what we're most concerned about here. You've told us previously you were not familiar with the public works guidelines, you hadn't been briefed on that, you weren't overly familiar with the Treasury Board guidelines or the Financial Administration Act. Is that correct?

Mr. Pierre Tremblay: When I started, the day I started?

Mr. Peter MacKay: Yes.

Mr. Pierre Tremblay: That's correct.

Mr. Peter MacKay: So, you didn't feel that it was part of the criteria, to familiarize yourself before taking the reins with those very relevant guidelines that would govern how you would conduct yourself in that role?

¹ » (1150)

Mr. Pierre Tremblay: I went through the Public Service Commission process, and I was identified as a good candidate for the job, so Public Works made me an offer, and I moved--

Mr. Peter MacKay: An offer you couldn't refuse.

Page 7 of the Auditor General's report specifically sets out, amongst other things, that before payment is made--she is quoting directly, Ms. Fraser is quoting directly from the Financial Administration Act, ``Before payment is made for services for goods received, the responsible departmental officer must certify that the performance conditions were met, and that the price charged is reasonable.''

I'm very concerned about this idea that you, the responsible departmental officer--that's what we're talking about here--must certify that the performance conditions were met. You told us that you signed the third contract, the final payment of the $375,000 of taxpayers' money, you signed off on that contract, you've told us, you weren't satisfied, you did nothing, you did absolutely nothing to certify that that contract was complete.

Would you do that, sir, if work was being done on your house, or somebody was gardening for you. Would you pay them without looking to see if the work was done?

Mr. Pierre Tremblay: As I said earlier, I assumed that the work had been done.

Mr. Peter MacKay: You assumed. You were the responsible individual, Mr. Tremblay. You were the one person, you were the one, thin line of protection for taxpayers on that $375,000 cheque, and you just signed it off. Is that what you're telling us? And, do you feel no responsibility, no contrition, no accountability whatsoever, in having done that? I've heard nothing from you that suggests that you feel, in any way, that you did anything wrong.

Mr. Pierre Tremblay: As I said, in the Groupaction contract, I had the last payment to authorize. I assumed that everything was in order, and I authorized it.

Mr. Peter MacKay: So you just signed off, and then it was on to future business?

Mr. Pierre Tremblay: Yes.

Mr. Peter MacKay: Having done that, are you satisfied that from that time forward, keeping in mind that there's an audit going on currently, and this will be back, are you satisfied that in the future, you did, in fact, take the time to look through files and see that things were being done properly before you signed off any contracts?

Mr. Pierre Tremblay: As soon as I became executive director, after September, 1999, yes.

Mr. Peter MacKay: You stopped assuming things?

Mr. Pierre Tremblay: Yes, because at that time I was the executive director, so, I would say that.

The Chair: Thank you, Mr. MacKay.

Mr. Jordan has a point of order.

Mr. Joe Jordan: Mr. Chair, certainly I wasn't involved in the discussions of how, when, where, and why of why we're in camera. But, I just went to the washroom, and overheard Mr. Mayfield with the press giving details of his exchange with the witness. I'm just wondering if we can maybe clarify that.

I know it's very tempting to the lure of those lights out there, but I understood that there were very solid, legal reasons why the exchanges in this room should not find their way on the airwaves because it could jeopardize potential criminal action. If that's the case, I would just like to know the ground rules.

The Chair: Let's ask Mr. Walsh to go over this area for us, please.

Mr. Rob Walsh: : The in camera status of this meeting, I've always understood this practice, Mr. Chairman, to be one that calls upon each member of the committee to not discuss outside the committee room those matters that are discussed within the committee room. That is my understanding. The committee clerk can correct me on that.

My understanding of the House practice is that in camera means that these matters would not be discussed outside the committee room. Is that the response you were--

The Chair: I think my point, and I think Mr. Jordan would like to know, is the privileged information that is here, is it privileged when it's out there?

Mr. Rob Walsh: : No. Once you leave the proceedings of the committee, as in the case with the House, there is no privilege enjoyed by statements made outside the committee room.

Ms. Beth Phinney: You can't anything that was said in here, and repeat it to somebody outside? We can't, or you can't either.

Mr. Rob Walsh: : When you use the word, can't, I have to say that this is a matter of parliamentary practice, and the rules of the House. The rule of the House put him at exposure outside this committee meeting because it's in camera of matters that are said, or discussed, in the meeting.

Ms. Beth Phinney: So what I just said is correct. Whatever is discussed in here, anything that is said in this meeting, while we are in camera, cannot be repeated to anyone outside of this room?

Mr. Rob Walsh: : That is my understanding, Mr. Chairman. You might confirm that with the committee clerk.

Ms. Beth Phinney: I said it would take five minutes after the meeting to get this information out. I didn't know it would get out before the meeting was finished!

An hon. member: You were wrong!

Mr. Philip Mayfield: You may want to know, Mr. Chairman, that one of the questions I was asked was why this is in camera. I went through the details that Mr. Walsh has explained. I don't know that Mr. Jordan really even knows what he's talking about. He was on the way to the bathroom and I had a conversation, and it was a guarded conversation.

¹ » (1155)

The Chair: Okay. Mr. Jordan had a point of order. He was asking for the rules. We've had the rules explained by the clerk. The clerk has said what is said outside is not privileged information as it is said in here. However, one should exercise the responsibilities of the office which we hold. I guess we will leave it at that.

Is that okay, Mr. Jordan?

Mr. Joe Jordan: Just a point of clarification with Mr. Walsh, then.

My point is this: if this practice continues, of going out there and saying it--and I'm not trying to get political--could we be jeopardizing a future criminal action by doing that?

The Chair: It's a very good point.

Mr. Walsh.

Mr. Rob Walsh: A comment by a member of Parliament, for all its merits or lack thereof, is not to be confused with a comment by the witness, himself, to this committee. So, obviously, it would not necessarily have the same impact.

Having said that, it's inconsistent with the respect being given to the member's testimony to discuss it outside this room.

Mr. Joe Jordan: Thanks.

The Chair: Thank you, Mr. Walsh.

Now, we're going to move to Ms. Meredith, for three minutes.

Ms. Val Meredith: Sorry for the interference here.

Trying to get focus back on the process and who is responsible, Mr. Tremblay, you've admitted here or you've stated here that you knew things were wrong when you took the position.

Mr. Pierre Tremblay: That's not what I said. I said I was not satisfied--

Ms. Val Meredith: Okay, you weren't satisfied because things weren't being done according to regulations.

Mr. Pierre Tremblay: With the way the files were documented.

Ms. Val Meredith: Okay. Mr. Quail knew, because you told him.

Mr. Pierre Tremblay: Yes.

Ms. Val Meredith: I have to assume the minister knew, that Mr. Quail, through you, or you, through Mr. Quail, or your directly, would have informed the minister things weren't satisfactory and would be changed.

Mr. Pierre Tremblay: I cannot say. I don't know. That I don't know. Sincerely, I don't know.

Ms. Val Meredith: Okay, so you don't know the minister was informed--

Mr. Pierre Tremblay: No. I don't know if the minister was informed or not.

Ms. Val Meredith: Okay. I want to talk a little bit about the process. In response to somebody else's question, you went through the process of short listing, of selecting these companies to do the work--the advertising companies. Could you or can we get a copy of those conditions or qualifiers that select companies? How many companies were there on the existing list that Groupaction and Group Everest were selected from when you arrived? You said you put it out for reprocessing.

Mr. Pierre Tremblay: Yes.

Ms. Val Meredith: When you arrived, how many groups were on there? When you reprocessed, how many groups were selected and which ones were the same?

Mr. Pierre Tremblay: I think that information has already been provided to the committee.

Ms. Val Meredith: Okay. I'm not aware of it.

Mr. Pierre Tremblay: That can be easily found by asking public works to provide you with the accurate information.

Ms. Val Meredith: Are you aware of which companies maintained their presence on that list? After you revisited that list, are you aware of what companies were the same?

Mr. Pierre Tremblay: Yes.

Ms. Val Meredith: Which ones were they? How many changed, I guess, would be an easier way to phrase it?

Mr. Pierre Tremblay: I think three. There were three new companies that were selected.

Ms. Val Meredith: There were no companies that were taken off the list?

Mr. Pierre Tremblay: I can't say. I'll have to check the list. Maybe yes, maybe not, but I suspect...I don't know. I will have to check.

Ms. Val Meredith: How open is that competition?

Mr. Pierre Tremblay: It was fully open. The RFP was put on the MERX, the electronic bidding system, with all the criteria and everything. It's a normal competitive process.

Ms. Val Meredith: So, then, companies in British Columbia would have been considered for that short list?

Mr. Pierre Tremblay: Yes, assuming they were meeting the criteria as outlined in the RFP.

Ms. Val Meredith: Is that criteria selected to allow a broad distribution of agencies or to pinpoint a few agencies that are already under contract?

Mr. Pierre Tremblay: Yes, assuming that they were meeting the criteria of outlining the RFP, yes.

¹ » (1200)

Ms. Val Meredith: Is that criteria selected to allow a broad distribution of agencies, or to pinpoint a few agencies that are already under contract?

Mr. Pierre Tremblay: That process was designed by a committee of several senior public servants at Public Works, including the legal counsel. I think that the process was sound.

The Chair: Thank you, Ms. Meredith.

Mr. Shepherd, please, for three minutes.

Mr. Alex Shepherd: The half year that you, and Mr. Guité were together, you expressed the fact that you had some concern about these files. You discussed that concern with Mr. Guité?

Mr. Pierre Tremblay: Yes. We had--

Mr. Alex Shepherd: So you sat down with Mr. Guité, and you said you were concerned about the documentation in these files?

Mr. Pierre Tremblay: We had discussions like that, not necessarily--I never went to Mr. Guité saying, Mr. Guité, I'm really not satisfied with those files, blah, blah, blah, but I could say at some point, Mr. Guité, I'm working on that file, and I cannot find the proposal for it.

Mr. Alex Shepherd: What was his response? He didn't care?

The Chair: You can't shrug. That is not satisfactory, it doesn't get on the record. So, what was his response?

Mr. Pierre Tremblay: As I said, I never made a formal request to Mr. Guité to change the process.

Mr. Alex Shepherd: No, no. You expressed some of your concerns of working with Mr. Guité. So, what did Mr. Guité say? He couldn't care less?

Mr. Pierre Tremblay: No, no, not at all. He would say, for example, read the proposal, it should be there, have you checked with the communication company, maybe they received the proposal--

Mr. Alex Shepherd: Did he ever say, I know that it's not there, don't worry about it?

Mr. Pierre Tremblay: No.

Mr. Alex Shepherd: Were you in with Groupaction, or other sponsorship recipients with Mr. Guité?

Mr. Pierre Tremblay: I don't know. There were several meetings--I was introduced to all of them by Mr. Guité, yes.

Mr. Alex Shepherd: You intimated about further advice that Mr. Guité was receiving. Who was he receiving that from?

Mr. Pierre Tremblay: Ask the question to Mr. Guité.

Mr. Alex Shepherd: Did Mr. Guité tell you that he was receiving verbal advice that satisfied him on those files?

Mr. Pierre Tremblay: He told me that. I don't know if it was before, or after, the fact, but, yes, he told me that.

Mr. Alex Shepherd: So when you talked to Mr. Guité about the irregularities of the file, he may have dealt with that by saying, fine, but I know better, or I know the answers to these problems?

Mr. Pierre Tremblay: Yes.

Mr. Alex Shepherd: And that was the end of it. He didn't say why, he didn't intimate why. He was happy. He just knew the details about what you were asking?

The Chair: No, you can't shrug your shoulders, Mr. Tremblay. You have to say something for the record.

Mr. Pierre Tremblay: I had several conversations a day with Mr. Guité, so I cannot remember all the conversations we had regarding files. Essentially, I was working in his office,--

Mr. Alex Shepherd: Did you carry on a personal relationship with Mr. Guité outside the office?

Mr. Pierre Tremblay: Since he retired, yes.

Mr. Alex Shepherd: You have been to his house?

Mr. Pierre Tremblay: Once, or twice.

Mr. Alex Shepherd: Do you think he lives beyond his means?

Mr. Pierre Tremblay: That I cannot judge. It's not for me to judge.

[ Translation ]

The Chair: Mr. Desrochers, three minutes please.

Mr. Odina Desrochers: Mr. Tremblay, you worked for Mr. Gagliano before you took up your position in the sponsorship program?

Mr. Pierre Tremblay: I worked for Mr. Gagliano, yes.

Mr. Odina Desrochers: For how long?

Mr. Pierre Tremblay: I began to work for Mr. Gagliano in 1990 when he was appointed chief whip for the government.

Mr. Odina Desrochers: Until?

Mr. Pierre Tremblay: Until he was named secretary.

Mr. Odina Desrochers: At that time, was Mr. Gagliano the minister responsible for organization in Quebec? Were you working for him during that period?

Mr. Pierre Tremblay: Mr. Ouellette was the minister responsible for organization in Quebec at that time.

Mr. Odina Desrochers: And once Mr. Gagliano replaced Mr. Ouellette after his departure, were you working for Mr. Gagliano at that time?

Mr. Pierre Tremblay: I would have to check the dates, I can’t say, it’s possible that there was a period where I was working for him then.

Mr. Odina Desrochers: You know, political staffers have some idea of what is going on in a minister’s office. Were you aware of the generous commissions or the generous sums of money that were being given to the coffers of the Liberal Party of Canada?

Mr. Pierre Tremblay: I believe this has been published in all the papers.

Mr. Odina Desrochers: But did you know when you began working there, that those people where giving money to the Liberal Party of Canada, at the time when you left Mr. Gagliano to take up your duties in the program, did you know that those people were giving money to the Liberal Party of Canada?

Mr. Pierre Tremblay: I read the report of the...

Mr. Odina Desrochers: But did you know that when you arrived? And when you read the document, didn’t it jump out at you that there was a serious problem?

Mr. Pierre Tremblay: You asked whether I was aware of donations. My answer is yes, because I read the papers and I read the report of the Chief Electoral Officer, just like everyone else.

Mr. Odina Desrochers: So you were not aware of that when you worked for Mr. Gagliano, but just found out when you read the reports?

Mr. Pierre Tremblay: I never had anything to do with funding when I was Mr. Gagliano’s chief of staff.

¹ » (1205)

Mr. Odina Desrochers: I’d like to get back to.

Mr. Serge Marcil: Don’t forget that Groupaction had also given you money.

Mr. Odina Desrochers: Mr. Marcil, please ask for the floor when you want to speak.

Mr. Tremblay, when Mr. Proulx asked you about the fact that you needed an affidavit from a company, and that there was a 3 per cent fee, you knew how the system worked. When you prepared your famous action plan, did you keep the provision according to which 3 per cent was to be paid to the company that authorized the final payments for the sponsorships?

Mr. Pierre Tremblay: The Media IDA Vision contracts were in effect at that time. The contract will expire this year, I believe. So at the time, we decided not to change the rate that had been subject to a competition, but, however, we did ask...

Mr. Odina Desrochers: So, it was the company that decided rather than you?

Mr. Pierre Tremblay: May I finish my answer?

Mr. Odina Desrochers: Yes.

Mr. Pierre Tremblay: Okay. So at that time we decided, since the contract had been let, that it had been the subject of a competition process, that we would not change the rate; but other changes were made to the contract voluntarily following our request, in order to change, for instance, the payment methods, the 50/50 and things like that.

Mr. Odina Desrochers: How many companies competed to obtain that famous contract to check the sponsorships?

Mr. Pierre Tremblay: I don’t remember the exact number, perhaps... I don’t remember the number. As I said earlier, I did not conduct the competition as such.

Mr. Odina Desrochers: Thank you, sir.

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

[ English ]

We have a new member here on the Liberal side, Mr. Serge Marcil, who has indicated he would like to ask a question. He is not a member of the committee, we actually have a full slate here, but since he is a new member of the House of Commons and we are in recess for the summer and he has shown his motivation to be here, I think we'll let him ask a few questions.

Mr. Marcil.

[ Translation ]

Mr. Serge Marcil: Thank you.

I had a question, Mr. Tremblay. The first one is: when a sponsorship was recommended by your organization and the event did not take place, could that money be redistributed to other sponsorships in the same region? I’ll give you an example. Take the hunting and fishing fair in Quebec. Since the event did not take place, was the money for that sponsorship redistributed to other events in the region?

Mr. Pierre Tremblay: Not necessarily in the same region. If the sponsorship was cancelled, the amount that had been earmarked for it reverted to the general fund, and could be assigned to any other sponsorship.

Mr. Serge Marcil: Madam Auditor General, could there have been mistakes – I’m just trying to get a better understanding of the way in which things worked – given all of the lists that came out – I’m using that as an example – could there have been errors in the transmission of lists that would today make it difficult to say that more sponsorships were given than expected, or that the organizations were given more money than planned? Did you do that analysis, or did you limit yourself strictly to three contracts?

Ms. Sheila Fraser: Up till now we have only reviewed the three contracts, and our report was only drawn up on those three. Of course in the course of the government audit we are going to do, we are going to look at things more in depth, but as to the different lists, I doubt that we are going to start to audit the various lists; we are going to try to get the payments from public accounts and do our checking on that basis.

Mr. Serge Marcil: And my last question: as to the group whose responsibility it was to inform you, to issue the cheque as such, because there was an organization that received a percentage to issue a cheque, what was its primary function? You put out a call for tenders to choose a company whose mandate it would be to check things, to authorize the payment, or did that company receive the payments? Did it issue the payment? What was its function?

Mr. Pierre Tremblay: The primary function of what we call the Agency of Record, which was Media IDA Vision, was to do all of the media placement for the Government of Canada. So, for example, when National Defence decided to launch a publicity campaign for recruitment, media purchases in theatres, cinemas, in various forms of media where publicity could be purchased, was the direct responsibility of Media IDA Vision.

Mr. Serge Marcil: Yes, but I see two players here. When you received a request for a sponsorship, you authorized it, and then a company took over the order and went to see the organization in question and said: this is how you are going to do things. There were activities in my riding where that is how things happened. Afterwards, you check to see whether the model is correct and that person receives a sum of money to do that, just like all the other companies.

¹ » (1210)

Mr. Pierre Tremblay: Twelve per cent.

Mr. Serge Marcil: Afterwards, another company received 3 per cent because it issued the cheque or because it said to you: we feel the work was done suitably, we will sign an affidavit, now issue the cheque, but when you issue the cheque you will be giving me 3 per cent?

Mr. Pierre Tremblay: That is correct.

Mr. Serge Marcil: Thank you.

[ English ]

The Chair: I think we have completed all the rounds, but I have a couple of questions, Mr. Tremblay. I always have a couple of questions.

The Sponsorship Program was to meet a political objective, according to the Prime Minister. This was a program that, presumably, he was taking personal interest in and had, presumably, delegated it to the Minister of Public Works to ensure this public policy was implemented. I find it rather strange that you, as a person who was the chief of staff for the Minister of Public Works for some number of years, and even prior to him being a Minister of Public Works, that every time a question is asked about details below you, you were so high up the chain that you weren't aware of what was going on, but whenever the question was ask about what was going on at the top, you were just a lowly civil servant doing your job. You never answered one question, other than the fact that you admitted to signing the authorization for $375,000, and you had no idea what you were signing for because you hadn't checked to find out if anything had been delivered.

You have a Masters Degree in Psychology--

Mr. Pierre Tremblay: No, doctorate.

The Chair: A Doctorate in Psychology, my apologies--and therefore a highly qualified and highly intelligent person. You've admitted you didn't know the rules. But when we take a look at the organization chart going back to 1988, November 1, 1998, you were the Director, Contracting and Support--Contracting and Support--on September 1, 1999, you were the Director General, Strategic Communications Co-ordination and acting as the executive director of Communications Co-ordination Services, and April 1, 2001, you were still as the executive director. You were running a department, Mr. Tremblay. This was to implement a public policy that had the specific endorsation of the Prime Minister's. I cannot understand that you can sit here and say you did not discuss these programs in detail with your minister. To what degree did you discuss these programs with the Minister of Public Works?

Mr. Pierre Tremblay: I had, as I said, meetings on a regular basis with the minister, as his chief of staff.

The Chair: I know you had the meetings, but I said to what extent did you discuss the matter of the Sponsorship Program?

Mr. Pierre Tremblay: Yes, but we were talking about the files that were received and--

The Chair: But there were $40 million to be spent to achieve a public policy that was endorsed by the Prime Minister. Now, presumably, the Prime Minister had to be informed whether the policy was working, whether it was being implemented, whether it was achieving what he wanted to have achieved. Did you report this to the minister in any way, shape or form?

Mr. Pierre Tremblay: No, because the minister never asked me to--

The Chair: And the Prime Minister never asked?

Mr. Pierre Tremblay: I don't know. I'm not privileged to the Prime Minister's discussion with his ministers, but what I can say is that I was--

The Chair: But the policy was implemented by the civil service, which was your department. You were in charge in the department to implement a program that had a very definite and specific public policy of the Government of Canada, even endorsed by the Prime Minister, himself, who would presumably want to see that his objectives were achieved. What reporting back to the minister...? And you were also saying you reported to or were part of, in some way, shape or form to the cabinet committee on communications. You were part of that organization. Surely, you must have talked about the effectiveness of the program.

Mr. Pierre Tremblay: Yes, we were talking about--

The Chair: So what did you say?

Mr. Pierre Tremblay: Yes, we were talking about the main objective--

The Chair: So was it good, bad, working or not working?

Mr. Pierre Tremblay: It was working effectively, I think, because the goals for the program were to raise the visibility of the Government of Canada and to demonstrate to local organizations that we were representing their community.

The Chair: How can you say that the program was working when we know there was no reporting. You weren't even checking to find out if value was received when you authorized a cheque for $375,000. On what basis did you say the program was working?

¹ » (1215)

Mr. Pierre Tremblay: As I said earlier, the whole reporting system that is in place at the moment is a post mortem to evaluate the work that has been done in the field for every single organization. Those post mortem were not part of the file and were not part of the process--

The Chair: I'm not talking about part of the files. I'm talking about the minister would want to know if the public policy of the Government of Canada was being implemented by the civil servants, the bureaucracy, of which you were in charge of that particular program. Now, did you file reports for the minister? Was it all verbal or did you give him actual written reports about what was being done, what was being spent, who was getting the money, what was being expected to be achieved by spending $40 million? Did you give a written report to the minister?

Mr. Pierre Tremblay: The report I gave to the minister was the list of the sponsorships that were approved with the organization, the time frame. We had details of the elements of visibility the Government of Canada was getting in every file. So if the minister was interested in knowing, for example, Festival de Saint-Tite, what we did for the Festival de Saint-Tite, then we had the post mortem in the file describing exactly what we bought, in terms of visibility.

The Chair: Okay. This is my final question, Mr. Tremblay. In The Globe and Mail, on Tuesday, May 8, 2001, it said, “The company that got a $615,000 federal contract to evaluate its own work merely produced a 20-page report listing projects that wanted government money, a federal source said yesterday”. That was in The Globe and Mail. Was that deemed to be a satisfactory evaluation of a government policy?

Mr. Pierre Tremblay: That's the evaluation The Globe and Mail is making.

The Chair: No, I asked you if a company was asked to evaluate its own work and produce a 20-page report listing projects that wanted government money, in your opinion, as a director of that department, do you deem that to be a sufficient evaluation of the implementation of a public policy that was endorsed by the Prime Minister?

Mr. Pierre Tremblay: I will answer your question by another question: why do you think--

The Chair: No, no, I don't want another question. I asked the question.

Mr. Pierre Tremblay: --why do you think I put the action plan in place?

The Chair: The action plan, as far as I'm concerned, was put in place because Mr. Quail said, after the HRDC scandal, “Let's take a look at ourselves and see if there's something going on with us”.

Ladies and gentlemen, the meeting is going to be...oh, yes, Mr. Mayfield.

Mr. Philip Mayfield: I'd like to make a motion, if I may. Mr. Chairman, I move the committee request that the Department of Public Works and Government Services provide a copy of the letter, dated October 3, 1999, from Pierre Tremblay to the private agencies concerning the operation of the Sponsorship Program.

The Chair: This was a follow-up to his questioning earlier on.

(Motion agreed to)

The Chair: Mr. Tremblay?

Mr. Pierre Tremblay: I'm sorry about that, I said October 3. It can be October 4, October 5, I don't know.

The Chair: Okay.

This meeting now stands adjourned.