CHER Committee Meeting

STANDING COMMITTEE ON CANADIAN HERITAGE

COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, February 4, 1999

• 0913

[English]

The Chairman (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.): I'd like to call to order and open the meeting of the Standing Committee on Canadian Heritage.

The objective of this session is to hear from the board and trustees of the National Arts Centre.

[Translation]

I'd like to remind members of the purpose of this meeting with representatives of the National Art Centre.

On November 17, 1998, the committee unanimously adopted the following motion:

That this Committee call before it members of the Board of Directors of the National Arts Centre, and other interested parties as determined by the Committee, to discuss the centre's mandate, resources, management and operations; and

That these witnesses be scheduled in at the earliest convenience, as determined by the Committee chairperson, provided that the meetings be not held during a period of labour strife at the National Arts Centre.

[English]

It was a motion by Ms. Wendy Lill, which was agreed to by the committee, that this committee call before it members of the board of directors of the National Arts Centre and other interested parties, as determined by the committee, to discuss the centre's mandate, resources, management, and operations; and that these witnesses be scheduled in at the earliest convenience, as determined by the committee chairperson, provided the meetings not be held during a period of labour strife for the National Arts Centre.

The purpose of the meeting, as the motion states, is to examine the mandate, resources, management, and operations of the centre. Yesterday afternoon the committee heard from the Auditor General of Canada, Mr. Denis Desautels, as well as his officials regarding a special examination report of the financial and management control, as well as the information systems and management practices of the National Arts Centre corporation. The report was presented to the board of trustees on June 29, 1998.

• 0915

The purpose of the meeting was to help the members prepare themselves for today's meeting and understand some of the background issues. To that effect, I am certain that members will have many interesting questions for the board members regarding turnover in staff, communications between the board and management, the corporate plan, and the funding, to mention but a few items. The committee is hopeful that this meeting will help clarify some of the issues.

I should add that the committee is master of its own proceedings and reserves the right to determine what future course of action it will take. It is the role of this committee to scrutinize federal cultural agencies assigned to it. Indeed, the committee invited last spring cultural agencies to explain their objectives and mandates. This we will continue to do.

I should also comment on the question that has been put to many of us several times by various parties as to why we decided “not to invite certain witnesses”. First, I think it should be said that the committee doesn't formulate its decision in a negative fashion; rather, it chooses to invite witnesses. We felt, all circumstances considered, especially the time allowed to us, given that we have legislation before us and a cultural study in progress that we have to complete and we have only two days of work...after deliberation it was agreed by members of the committee that the best course of action would be to invite the Auditor General to get an objective background of the issues before us and then to question the board and trustees of the centre, as we are doing now.

I would like to welcome Ms. Jean Thérèse Riley, chair of the board of trustees.

[Translation]

Would you kindly introduce to us the members of the Board of Trustees and the other witnesses who are with you.

I remind members that each party will have five minutes during the first round of questions, and that each committee member will have five minutes during subsequent rounds. If necessary, we will have a short break before going on to the second part of the meeting. We have more than enough time, since we have scheduled four hours for this meeting.

Please proceed with your introductions, Ms. Riley.

Ms. Jean Thérèse Riley (Chair, Board Of Trustees of the National Arts Centre): Thank you, Mr. Chairman, members of the committee, for inviting us to appear before your committee. At this time, I'd like to introduce my colleagues, whom I'm sure you're all know, since I do believe you received some biographical notes on them. With me are

[English]

David Hill from Ottawa, Andrew Ogaranko, Mayor Jim Watson, Roberto Martella, Carole McDougall, Rosemarie Landry, Royce Frith, and Yves Ducharme, le maire de Hull. Also with us is Elaine Calder, our interim director and CEO.

The Chairman: Before I give the floor to you, I'd like to mention the presence of the Honourable Mitchell Sharp, who is well known to all of us as being a very keen follower of the work of the centre. I would also like to welcome back to the Hill Jim Watson and Royce Frith, who are well known to all of us parliamentarians. Welcome back.

Ms. Riley.

[Translation]

Ms. Jean Thérèse Riley: The only trustee not here with us today is Louise Vaillancourt from Montreal who drafted the paper entitled "Board Governance and the National Arts Centre". You have received copies of this document which I will be quoting.

We have also prepared a brief statement because we feel it would be more useful to focus on the question and answer session. Our objective today is to clarify the current status of the NAC for you. We have sent you a substantial number of documents and if anything isn't clear, we will gladly answer your questions or get the information for you. I repeat: we want to lay out the situation as clearly as possible for you.

• 0920

The Chairman: Mrs. Tremblay.

Mrs. Suzanne Tremblay (Rimouski—Mitis, BQ): I was under the impression that Crown corporations were required to comply with the provisions of the Official Languages Act. Your statement contains several paragraphs in French, but most of it is in English. I really would have liked to see you submit a document drafted in both official languages.

The Chairman: Which document are you referring to, Mrs. Tremblay?

Mrs. Suzanne Tremblay: To the one entitled "Opening Statement to the House of Commons Heritage Committee by Jean Thérèse Riley, Chair, Board Of Trustees of the National Arts Centre, February 4, 1999.

Ms. Jean Thérèse Riley: I apologize, Mrs. Tremblay. Although French is my first official language, I'm not always comfortable speaking it, contrary to what some may think, when I work with my colleagues. The text is being translated as we speak and we should have a translation available by the end of today's meeting. I apologize to all members whose first official language is French.

The Chairman: Mrs. Tremblay is quite right. A federal institution of this magnitude should be in a position to submit documents in both languages.

Ms. Jean Thérèse Riley: I fully agree with you and I apologize for not having the translation available at this time.

The Chairman: Thank you. Please proceed with your opening statement.

[English]

Ms. Jean Thérèse Riley: Mr. Chairman, the committee's invitation expressed an interest in discussing the mandate as well as the governance of the National Arts Centre.

[Translation]

These are trying times indeed for the National Arts Centre, and to larger extent, for the performing arts in Canada.

[English]

The National Arts Centre of Canada was created in the 1960s by the Government of Canada for its citizens as the national showcase for the performing arts. Its wonderful orchestra was planned as a smaller classical orchestra to avoid competing with the symphony orchestras of Toronto and Montreal. The opera stage was the best on the continent, and two other stages were built. The larger was to be the winter home of the Stratford Festival. French and English resident theatre companies were developed, and a distinguished visiting dance series was launched. People came from all over the continent for the summer opera festival.

What has changed? One sure thing; the federal government changed its priorities. Funds were cut. The cost of administration climbed and artistic momentum slowed. Disappointment brought criticism, which resulted in lack of transparency, and decisions were increasingly made behind closed doors. In addition, the natural ambiguity of the mandate, with its delicate balance of local, regional and national considerations, brought successive managements under a great deal of pressure. Without a doubt, there has been a failure to establish a coherent long-term strategy, especially one that adequately reflected the new reality of significantly reduced resources.

It is difficult to design and implement a long-range strategic plan in an environment of debate on the nature and mandate of the NAC. This continuing debate has contributed to the problems faced by the NAC. It is clear that the NAC needs a strongly formulated strategic vision for its future. It is also clear that the time for government-sponsored commissions and task forces is past. The NAC itself must find the support within the performing arts community of Canada to help chart the direction for the next chapters of the NAC story and to ensure that we are able to implement our mission. It will not be easy. There are competing interests and expectations.

• 0925

In 1995 the National Arts Centre was faced with a fundamental challenge. We were asked to absorb cuts in federal funding of 31% over four years. At the same time we were expected to deliver quality arts programming and maintain the NAC as the premier performing arts centre in Canada. This has forced a dramatic re-examination of our artistic and community relationships, fundraising, and indeed the very culture of the institution.

Although we have strongly made the case each year for continued levels of support for this vital national cultural institution, we had to set about making up the shortfall through administrative reform, deficit reduction, fundraising, increased ticket sales, and artistic partnerships.

Virtually all performing arts institutions have faced these challenges, many of them without nearly the taxpayer support enjoyed by the National Arts Centre.

We knew we had our work cut out for us. If the NAC were to meet these challenges, it would require a massive change in the way we operate and do business, a more entrepreneurial spirit and more transparency. Our programming would have to be not only creative but also able to attract audiences. In addition, the NAC needed to reaffirm its relationships with the national capital region's artistic and business communities, which up to that point had been tenuous at best.

Now, this is one of the areas where our previous director and CEO, John Cripton, had considerable success, and it is a definite commitment that we have to maintain this area of tremendous opening that John Cripton achieved, the opening of all of the relationships, in particular in the national capital region.

Moving to the area of governance, which your invitation, Mr. Chairman, particularly referred to, the document developed by Ms. Vaillancourt clearly articulates that there is a triad relationship among the government, the board, and management.

[Translation]

While it is management's responsibility to initiate the development of the strategy, to formulate it and to present it, it is the board's role to advise on the strategy, to approve it and to monitor its implementation.

It is also the boards responsibility to regularly review and update the strategy and test it against the major decisions and policy recommendations affecting the Corporation.

Corporate governance is a system of relationships. It is a judicious and delicate balancing act. Balance is the essence of a board member's role while serving on a Crown Corporation. Board accountability must be balanced with government control and priorities.

The future of the NAC will depend on the rigorous and informed decisions of the board and management, taking into account the mandate to the organization as determined by its stakeholders, the government and the citizens of Canada.

[English]

In our case, that delicate balance of relationships is what was irrevocably damaged with our last CEO.

If I were to distil the essence of the problem, there were essentially three issues that caused the irreparable breach between Mr. Cripton and our board. The first issue was the failure to establish proper financial controls while maintaining excellent artistic programming, the second was the issue of hiring practices, and the third was the lack of timely and substantive information to the board.

There were no credible contingency plans if programming did not meet its objectives. Priorities were not assigned to objectives and expenses were frequently over budget. Too much money was being spent on too many questionable commercial initiatives. At the same time, fundraising costs escalated to $1.3 million. Unfortunately, it only generated $1.6 million in revenue. Although we are all aware that it takes time to see the benefit of such an investment, clearly, spending 80¢ on the fundraising dollar was unrealistic.

• 0930

The red flag to the board was that the budget overrun grew five times larger from June 30 to September 18, 1998. A significant portion of the losses were on the expenditure side of the ledger, as opposed to the traditionally unpredictable revenue side.

Let me turn now to the second issue of hiring practices. The Auditor General was concerned that a number of people had been hired without the involvement of the Human Resources Department and without due diligence and proper reference checking. Contracts had been entered into on terms that were inappropriately generous. We have submitted an example of a contract between the NAC and Wayne Thompson, which, with appropriate due diligence, would never have been entered into.

The third issue was the lack of disclosure of timely and substantive information to the board. The record demonstrates several instances where Mr. Cripton did not disclose either fully or in a timely manner information on issues related to financial results, hiring practices, expense overruns, commercial tours, fundraising ratios, and other issues relevant to the long-term integrity, credibility, and success of the NAC. Without accurate information, trustees are handicapped in their ability to fulfil their responsibilities.

While progress has been made to revitalize the NAC, more needs to be done. Since November 2, Ms. Calder and her management team have undertaken a number of initiatives to eliminate the projected deficit. These include the cancellation of Festival Canada and a general reduction in non-artistic programming-related expenditures. We have focused on creating a strong board secretariat as well as an internal audit function for the first time. NAC senior management is working closely with the Auditor General's office. To quote from what was said yesterday by the Auditor General:

The Centre has undertaken to act on our report and we have closely monitored the progress made. We have learned of several initiatives that have been launched to correct the situation that we had reported on.

We noted the Auditor General's observations related to the Canada Council for the Arts, and both institutions are committed to re-establishing our once-close working relationship.

We are opening up our board meetings to the public. In doing so we hope to build trust with the community. Greater trust will help forge strategic alliances not only here but across Canada.

In conclusion, the NAC will continue to build on a strong and proven artistic program.

By the way, Rosemarie Landry has prepared some facts and thoughts about the importance of the NAC to Canadian artists. Although you have not invited us to come to discuss our programming, we will at one time, I hope, turn to her and ask her to speak about what it means to Canadian artists and what some of the legitimate successes are on the programming side.

The NAC will establish management tools to support the artistic programming, operate in a more transparent manner, and reach out beyond the NAC to the performing arts community across Canada to help create long-term strategic direction. This ambitious program needs all of our commitment, that is, the board, NAC management and staff, the artistic community, the business community, the public, and the members of your committee all working toward the same goal.

We have tough choices to make.

Our mission is to develop and promote the performing arts. The arts program is alive and well. We have high-quality programs, and we have interested and enthusiastic audiences. We must not lose sight of this success as we address the issues of administration and governance.

• 0935

Over the past few weeks Canadians have expressed support for their national arts centre. They value their NAC.

In the words of Mr. Grant Burton, who recently donated $400,000 and started up a challenge fund:

It also struck me that the NAC, as one of Canada's too few vital institutions helping to foster internal expression amongst Canadians and greater awareness of other cultures, had taken a few too many knocks recently and might need a bit of a lift.

Well, the support of Canadians like Mr. Burton and others reminds us of our glorious past and of the challenges we face and the fact that we must not be timid in affirming our dreams.

[Translation]

Mr. Chairman, members of the committee, I do hope that you will put your questions to us in French, and again, I apologize for the fact that most of the text of the opening statement was in English only.

The Chairman: Ms. Riley, I feel I must bring up an important question in connection with your presentation.

When we held our first meeting further to Ms. Lill's motion, we discussed at length the relevance of inviting the former director and CEO, Mr. Cripton. We decided unanimously that the committee was not a panel set up to arbitrate staffing issues and, if we were to call him, logically we would have to do the same in other similar cases involving the CBC, the museums and so forth. We decided, and personally I am convinced of this as well, that this is not our committee's role.

[English]

This is why, when the motion was crafted by Mrs. Lill, after very serious discussion with all the members and their input, it was done in a very generic form.

What we want to find out is, especially in view of the Auditor General's report and his comments yesterday, what went wrong in generic terms in the past so we can draw lessons for the future and find out more ourselves to guide Parliament and the government, if necessary, or inform ourselves more deeply as to the future of governance at the centre.

I noticed in your presentation that you have referred specifically to Mr. Cripton and what went on. I would like to underline for the benefit of the record and for the benefit of Mr. Cripton, in case he's here—I haven't seen him, but it's very likely he's here—that we as a committee don't want to pass judgment. We are not here to make conclusions as to what went on because we're not here to micro-manage the centre and take over the role of the centre.

I'd like to make that clear, because in the case of true fairness, now that his case has been referred to and his name has been brought in on the record, we would have to invite him to give the counterpoint, and we don't want to do this because of the reasons I've explained.

I thought I would make this clear, because yesterday when the Auditor General was here, I think I can say without fear of contradiction that the members were very careful not to refer to Mr. Cripton by name at all or bring it up. In fact, I cautioned the members after speaking to the Auditor General that it would be delicate for us to delve into personal matters of the centre and into the case of individual members for the reasons I've explained. I think members on all sides were extremely careful that way.

• 0940

So I thought I would put this in perspective, because I wouldn't like to give the impression that the committee is biased on one side or another, which it doesn't want to be.

It really wants to see where the centre is going, whether the recommendations of the Auditor General are being carried out or will be carried out. And really, this is our function. I thought I would point this out so there is no misunderstanding as to where we stand.

[Translation]

Ms. Jean Thérèse Riley: Mr. Chairman, I fully agree with your comments. It is important that we supply you with some answers, but we have no wish to lay any blame or point the finger at anyone.

[English]

From the report the Auditor General referred to, which was tabled June 30, to the time of our CEO's departure, in terms of public policy and governance there were some issues I thought were important to refer to. So this is not about blame.

I wonder if you'd like to comment on that, David.

Mr. David Hill (Member, Board of Trustees, National Arts Centre): Thank you, Jean.

We appreciate your comments, Mr. Chair, and I think we will try to abide by those general parameters. I think we are at one on that viewpoint.

The Chairman: I understand, of course, it's a thin line because it's part of the generic record as well.

At the same time, I wanted to make it clear, because we're on record here; it's an official meeting, a public meeting. There are a lot of people here who don't know the background of these things, and I don't want the committee to be seen as taking any biased position, in favour or not, of the board or Mr. Cripton.

It's not our role to delve into this, and I thought I would make this quite clear.

So thank you very much. I would like to open the questions.

Mr. Mark.

Mr. Inky Mark (Dauphin—Swan River, Ref.): Thank you, Mr. Chairman. I would like to thank the board for coming before us today.

Like most Canadians, I want a strong NAC, but I think Canadians believe the NAC should be transparent, inclusive, and somewhat accountable. Unfortunately, your presence is precipitated by a controversy. It is unfortunate because I think your presence in normal times would teach us a lot about what you do and it would be educational to all of us around this table.

Yesterday in committee I asked the Auditor General the question, “Where does the buck stop for all that has happened to the NAC?”, and his response was “The board”. Now, if the buck really stops here, my first question is, does this board accept full responsibility for the Cripton and Yashin controversy that's currently happening?

The Chairman: I think you should refer to cases in very generic terms. I don't want to get involved in personalities. I understand we'll have to refer to.... Otherwise we'll start talking about people in general. I think we all know what we're talking about. There have been several CEO changes. So I think you should talk in more generic terms.

Ms. Jean Thérèse Riley: Mr. Chairman, I do think by being here we are demonstrating that we believe in accountability, and that's why we welcomed the opportunity to be here. I don't think there's any lack of clarity around the fact that the board of an organization takes responsibility for what happens under its watch.

Mr. David Hill: I'd just like to add to Jean's comments. I would agree, the buck stops with the board, and we're trying to deal with that buck the best possible way we know how.

Mr. Inky Mark: I'm glad to hear you're accepting that responsibility and not passing the buck.

• 0945

What assurance can this board give Canadians—

The Chairman: Excuse me.

[Translation]

Mr. Yves Ducharme (Trustee, National Arts Centre): I would like the record to show that while I do believe the Board of Trustees must be accountable for its actions, I do not and I will not accept any responsibility for the incident referred to by MP Mark. He asked us if we were willing to take full responsibility for the regrettable incident that made the headlines recently. I won't accept responsibility for something that I was unaware of.

The Chairman: Listen,

[English]

just one minute.

Mr. McWhinney.

Mr. Ted McWhinney (Vancouver Quadra, Lib.): I understood Mr. Mark had, in response to your ruling, withdrawn or rephrased his question. The comment by the member, while interesting, is therefore not relevant to the record.

The Chairman: I really hope this is going to be a fair exchange. I think what Mr. Mark was saying deals with the final responsibility with the board in terms of what goes on within a board. I think this is the sense of it. I really pointed out that we should make an abstraction of particular cases in regard to these questions. I think he had agreed to this, so I think it was put in far more generic terms in regard to whether the board agrees that the final responsibility of any decision during its mandate is within a board, if that's okay.

[Translation]

Is that alright with you, Mr. Ducharme?

Mr. Yves Ducharme: That's fine.

The Chairman: Thank you.

[English]

Mr. Mark.

Mr. Inky Mark: Thank you, Mr. Chair.

My second question is, what assurance can this board give to Canadians that the NAC will put in place the recommendations made in the Auditor General's report of June 1998, so that the NAC will be more transparent, more inclusive, and more accountable to the public in all of its activities? Also, how will this be monitored? Should it be a third-party organization, or is it possible for the board to monitor its own activities?

Ms. Jean Thérèse Riley: Mr. Chairman, this is a question that we welcome. It's at the heart of why we're here today, and I'm going to ask Elaine Calder to speak on the institution's behalf about what is being done.

Ms. Elaine Calder (Interim Director and Chief Executive Officer, National Arts Centre): Thank you, Mr. Chairman.

I believe the Auditor General spoke yesterday about the fact that his office has a good understanding of our organization through many years of annual audits. I believe he also said his office is prepared to work with us on an ongoing basis to assist in whatever way it can, while of course respecting the arm's-length principle.

Since I arrived at the beginning of November, I have been working to address the issues raised in the special audit. In my experience as an arts manager, all of them are essential issues that have to be improved, changed, and addressed if the institution is to function in the way that I believe it should, which is as a support to the artists and artistic programming.

I have a fairly detailed memo that I prepared for Monsieur Flageole just last week to update the Auditor General's office on the measures we have put in place and are putting in place. I would be happy to take the members through that report if they so desire.

The Chairman: Mr. Mark, do you have any more questions for now?

Mr. Inky Mark: Yes, very briefly.

It seems to me that a lot of your problems are pretty basic board operational procedures, including such things as role definitions, role conflicts, and who should do what. In your recent history, three of your artistic directors have been replaced over a term of five years. At the national level, that raises a lot of questions as to why these things happen. I believe Canadians expect better performance at this level. I'm someone who is an outsider, and I'm really totally ignorant of the NAC, but I find that very surprising.

• 0950

Ms. Jean Thérèse Riley: I would disagree with the first part of what you said, which was that it's a simple matter of board operational procedure. First of all, it's not a simple matter. Secondly, I believe the internal management problems of the NAC have been well addressed by the Auditor General. Those things are being addressed and are a considerable challenge, and I think you would be correct in pointing out that this is not the first report of the Auditor General addressing some of these internal management problems.

However, in a larger sense, the lack of clear strategic direction has left the organization vulnerable to management putting in place initiatives that interpreted the mandate. In the late 1980s and early 1990s there was an effort to redirect the resources of the National Art Centre towards high definition television. In 1995 there was a proposal to cancel the activities of the subscription series of English and French theatre and the dance program and replace those with year-long festivals. Since 1996 there has been an increasing commitment to commercial theatre and touring, whose losses have added to the risks and vulnerability of our core programming. So in addressing the issue of the management changes at the leadership of the NAC, I think we cannot pussyfoot around the fact that strategic direction needs to be addressed much more explicitly.

Mr. Inky Mark: Can I also ask—-

Mr. Royce Frith (Member, Board of Trustees, National Arts Centre): Mr. Chairman, can I make a comment? Just to add to what the chairman has said on the other part of the member's observation, I think his definition of the high expectations that Canadians have of the NAC is correct. I thank him for expressing those expectations. I agree with the implication that it's our duty to do our best to meet those expectations.

Mr. David Hill: Mr. Chairman, if I can also be allowed to add to my two colleagues' comments, we are addressing all of the issues raised in the June Auditor General's report. As you referred to in your opening comments, it might be worthwhile for us to revisit your committee in, say, six months to report our progress on how we are achieving those issues. That report might not be as tainted by controversy as we are today.

The Chairman: We'll bear it in mind for sure.

[Translation]

Mrs. Tremblay.

Mrs. Suzanne Tremblay: I reluctantly accept the Chair's apologies. I've been in Ottawa now for five years and I'm a little tired of hearing people apologize when it comes to our rights, when the French language is not respected and in particular when the provisions of the Official Languages Act are disregarded. All we ever hear are apologies. I accept them, but I hope that next time you're here, you won't have to apologize.

Moving on, I'd like to know how the Board operates. As I understand it, there are two kinds of trustees on the NAC's Board: on the one hand, the mayors of the municipalities of Hull and Ottawa, and on the other hand, persons appointed by the Governor in Council. Can you tell me how long each member has been serving on the board? When were you appointed?

Ms. Jean Thérèse Riley: In April 1995.

Mrs. Suzanne Tremblay: What is the length of your mandate?

Ms. Jean Thérèse Riley: I was appointed for a three-year term which was renewed in 1998.

• 0955

Mrs. Suzanne Tremblay: Therefore, your term runs until the year 2001.

Ms. Jean Thérèse Riley: That's correct.

Mrs. Suzanne Tremblay: Do all trustees serve three-year terms?

Ms. Jean Thérèse Riley: As a rule, they do.

Mrs. Suzanne Tremblay: Are trustees appointed at different times to ensure some continuity on the board? For instance, are two new trustees appointed one year, two others the following year and so on?

Ms. Jean Thérèse Riley: There have been some gaps. For example, in 1997-1998, three positions remained vacant for awhile. Appointments were made in June and in September 1998.

Mrs. Suzanne Tremblay: Then some of the trustees on the current board weren't around when three new CEOs were hired in five years.

Ms. Jean Thérèse Riley: I don't believe there is one trustee who has been on the board for five years.

Mr. Yves Ducharme: With the exception of the mayor of Hull.

Some members: Oh! Oh!

Mrs. Suzanne Tremblay: You are a lifetime member.

Mr. Yves Ducharme: I am the board's collective memory.

Mrs. Suzanne Tremblay: I see. When you hire a new CEO, do you follow the procedure outlined in the paper that you submitted to us? Do you rely on a search committee to find prospective candidates? Is this standard procedure for the NAC or was this exceptional?

Ms. Jean Thérèse Riley: I believe the first time we proceeded in this manner was in 1996. Considerable attention was paid to the makeup of the board and to community relations. The selection committee now in place, which is chaired by David Hill, is slated to hold its first meeting this afternoon.

[English]

David, would you mind speaking about how we are planning to change, or somewhat strengthen, the process we had in place last time?

Mr. David Hill: Thank you, Jean.

We have a selection committee. It is not confined to board members but has extended beyond the board. There is an NAC employee on it, selected by the employees; there is a person who is in the performing arts but not connected with the NAC; there is a community person, for want of a better description, from Ottawa-Carleton; and there is a professional consulting firm retained. To some extent, that is similar to the last process, but I can't speak beyond that.

This time, we are actively considering something that would be different from the last time. We would be asking for advice from nationally known people in the performing arts in this country, and that advice would be geared to two things. One would be reviewing the job description—which is, we believe, relatively current—to see if there should be adjustments. The other would be suggesting candidates, so that we wouldn't just have responses to advertising or responses to the consultant. We would hopefully have people's networks at work to try to generate the best possible candidate we can find.

We're anxious to make a permanent appointment. We would like to do it tomorrow, but we have said instead that we are going to take our time and do the best possible job. We don't want to rush and make a mistake.

We are hopeful. Our target time for a permanent appointment is about four months from now. If we can do it faster, that would be great. As I said, though, we don't want to rush and make a mistake.

That's the process. It's a little more refined, a little more broadly cast than the last time. I can't speak on what went on before the last time, though.

[Translation]

Mrs. Suzanne Tremblay: As you know, legislation providing for the appointment of future CEOs by the Governor in Council, much like trustees are appointed, is now before Parliament.

• 1000

Would you go along with this appointment method? I realize that you are all recent appointees. I won't say that your political allegiance had anything to do with that, because it's possible that was merely a fortunate coincidence.

Some members: Oh! Oh!

Mrs. Suzanne Tremblay: What reason do you have to believe that this might well be the last time you will have the opportunity to recruit your CEO?

[English]

Mr. David Hill: Perhaps. Quite frankly, I'm fairly neutral on that issue. Obviously, having been appointed by the process, I think the process has generated a fantastic board member and it may also generate a fantastic CEO.

On the other hand, we have a lot of hard working, experienced people. A lot of my colleagues are on a lot of volunteer boards, have hired a lot of CEOs, have gone through the process. We have professional consultants; we're consulting the performing arts community, our real constituency. So we're working very hard at the process.

Would one system generate a better result than another? I find that very hard to judge. So I'm fairly neutral.

[Translation]

Mrs. Suzanne Tremblay: With the exception of Ms. Landry, whose major concerns I'm well aware of, how many trustees are familiar with the arts, either because they are artists themselves or because they have some administrative experience in this field? How many are from sectors that are far removed from the arts?

Ms. Jean Thérèse Riley: Getting back for a moment to your question concerning draft legislation providing for the appointment of the CEO, I believe it is quite appropriate for my colleague not to comment on this matter. However, as far as we're concerned, clearly the arts community in Canada must be consulted. Moreover, if this consultation process remains in the hands of a board of trustees such as ours, this exercise would, in my view, be simplified to some extent. However, it is extremely important that this consultation process take place.

However, the fact that this decision ultimately rests with our board makes us more vulnerable.

Mrs. Suzanne Tremblay: Could you answer my second question?

Ms. Jean Thérèse Riley: We could go around the table and ask the trustees. You might be surprised.

In 1996, the government was criticized rather roundly for appointing persons with rather tenuous ties to the arts. I believe that has been rectified. Our board is made up of persons who, one way or another, are committed to the arts, either personally...

Mrs. Suzanne Tremblay: [Editor's Note: Inaudible]

Ms. Jean Thérèse Riley: Or in some aspect of their lives.

[English]

Royce, would you speak?

[Translation]

Mr. Royce Frith: I simply want to make clear that I am not directly tied to the arts, particularly to the performing arts. My connection to the arts is rather tenuous. I do, however, have a distant connection, but this is something I am rather modest about and it goes back many years.

I was once a professional singer, in that I was paid to sing...

Some members: Oh! Oh!

Mr. Royce Frith: ...but this was not my principal occupation. At the age of 13, that is many, many years ago, I got involved with amateur theatre here in Ottawa, specifically with the Ottawa Little Theatre. I have also been a narrator for the orchestra and for certain musical groups. I know the members of the orchestra fairly well and I admire this group tremendously. It's not much, but I do have some connection with the arts community. Thank you.

• 1005

Ms. Jean Thérèse Riley: Rosemarie.

Mrs. Suzanne Tremblay: We are familiar with Ms. Landry's credentials.

Ms. Jean Thérèse Riley: You are?

Mrs. Suzanne Tremblay: Yes.

Ms. Jean Thérèse Riley: In my lifetime, I have served on many boards of directors of arts organizations. Several years ago in Toronto, I was a member of seven different boards, a rather demanding schedule. Quite frankly though, my interest in this field comes through my involvement as a volunteer and as a professional.

Mr. Royce Frith: Adding to what I've already said, I'd just like to mention that I'm also a member of the Board of Trustees of the Vancouver Orchestra in my hometown of Vancouver.

[English]

Ms. Jean Thérèse Riley: David.

Mr. David Hill: Perhaps I am the least directly connected to an arts background. I am a resident of Ottawa; therefore I think have some ability to represent the Ottawa community. And as a theatre-goer, I am a consumer.

What I bring to the board is more a level of experience in governance of volunteer organizations. I have headed up for some time Canada's largest charity; I have been chair of a police commission, which is a very delicate, sensitive job; and I have been chair of a public hospital that has a multi-hundred million dollar budget. That's really where my background and experience lies more than in direct involvement in the arts.

Mr. Andrew Ogaranko (Member, Board of Trustees, National Arts Centre): I suppose my main thrust in the artistic/performing arts field is my passion for it and the fact that I have a very firm belief that it can be a successful form from both an artistic and a businesslike perspective.

I can substantiate that with the experience I've had. I've been a member of numerous boards both in the visual arts and performing arts fields, but most notably I'm a past president of the Winnipeg Symphony Orchestra. I was an active member on a Manitoba theatre centre board for many years and am now on the advisory council there. I sit on one of Winnipeg's major hospital boards, where we manage a great deal of money, and I think I also bring to the table a business perspective. I was the managing partner of the law firm that I operated. I think that brings a certain breadth of experience and dimension to the board and is of some value to an institution like the National Arts Centre.

[Translation]

Mr. Jim Watson (Trustee, National Arts Centre): Thank you for your question, Mrs. Tremblay. I'm a member of the board of directors of the Ottawa Symphony Orchestra as well as a member of the board of directors of Opera Lyra. In addition, Ottawa, the municipality I serve as Mayor, has a budget earmarked for cultural and heritage concerns.

[English]

Some would say, given my current profession, that I'm still in the performing arts, as you are.

I also chair a new group called the Ottawa Symphony Orchestra Conductor's Circle, which is trying to reach out to broaden the fundraising base of the symphony.

Mr. Roberto Martella (Member, Board of Trustees, National Arts Centre): I am currently a board member of the Toronto Symphony Orchestra and the Canadian Opera Company, and as with the National Arts Centre, those two organizations are most mindful of having to do more with less.

Mr. Mark alluded to the buck stopping. We're dealing currently with a 69¢ buck, if you will, and as with the other arts organizations across the country, we must do more with less. We're mindful of this, and we're not afraid to make tough decisions in that regard.

Ms. Carole McDougall (Member, Board of Trustees, National Arts Centre): I'm from Halifax, Nova Scotia. In our community, cultural institutions overlap considerably.

I've had a number of years experience being involved with Neptune Theatre, which is 30 years old, Symphony Nova Scotia, and various other community organizations. I'm presently working in the not-for-profit field for a large organization called the United Way, which I'm sure you're familiar with.

• 1010

Unlike Royce, I can't claim to have ever been paid for my singing services, but I did sing with the Symphony Nova Scotia orchestra for about five years.

[Translation]

Ms. Jean Thérèse Riley: I assumed that everyone knew Rosemarie Landry, but I would like to say a few words in praise of her anyway.

Rosemarie is a renown soprano. I attended a concert she gave last Sunday in Toronto to mark the 100th anniversary of the birth of Francis Poulenc. She now heads up the department of...

Ms. Rosemarie Landry (Trustee, National Arts Centre): I studied voice at the University of Montreal and I taught at the University of Toronto for 19 years.

[English]

I really sang for my supper all my life.

[Translation]

The performing arts are my livelihood. I have represented Canada abroad and I have performed with orchestras and opera companies around the world. For the past ten years, I have served on the board of directors of the Ontario Arts Council foundation. Also for the past decade, I have been organizing classical recitals in conjunction with the Acadian festival in Caraquet. I have also been actively involved in fund-raising activities for the Acadian festival in Caraquet, which is now a profitable enterprise, a rarity indeed in the arts world.

This year, the University of Montreal is staging three operas, a tour de force even for small companies. Therefore, I'm committed to the performing arts in every respect. Thank you.

Mr. Yves Ducharme: I have been the mayor of Hull since December 1992. This community is known as the bastion of theatre in Quebec, as Guy Provost pointed out. We established the province's first municipal theatre company. We fully subsidize the activities of the Théâtre de l'île. We also receive generous subsidies from the Quebec department of culture.

As a municipal administrator, I too, like my colleague Jim Watson, oversee an annual budget in excess of $100 million and a staff of over 900, which gives me plenty of opportunities to appreciate the various challenges we face.

Since 1993, that is since the very first meeting of the Board of Trustees in 1993 following my election the previous December, the makeup of this body has gradually changed as some terms have come to an end. I have never seen a board as committed as this one.

In my view, the crises gripping the National Arts Centre is the result of the changes that have taken place and the funding shortfall. We are forced to do more with less, to be more transparent and more accountable, whereas in the past, we always received the funding we needed.

Let me tell you that these trustees are dedicated individuals. As Mayor, I must view this board through the eyes of the community that I represent. Current board members are dedicated to their work and respectful of the mandate given to them, despite the problems and obstacles that everyone wishes they could avoid.

However, increasingly, we have had to take a harder line. In 1993, I played a far more passive role. Today, I play a very active role.

The Chairman: Thank you. We'll come back to you later, Mrs. Tremblay.

[English]

Ms. Wendy Lill (Dartmouth, NDP): Thank you. It's wonderful to have you here. I want to first of all recognize Carole McDougall as a fellow maritimer and somebody who has been involved with Neptune Theatre and Eastern Front Theatre—lots of arts activities. It's good to see her here.

• 1015

I want to ask you a question about how you see yourselves. You're a board from across the country, and I'm trying to almost draw a parallel with parliamentarians. We come here representing a place. We bring, say, Dartmouth to Ottawa.

I'm wondering if that is the way you also see yourselves and if, for example, as representatives of particular regions, part of your mandate and your responsibilities as board members is to solicit ideas, hopes, and dreams about this place for your people back home, because that's certainly what you're supposed to do as a member of Parliament. You represent people.

I want to know if that is the case. If it is the case, is there a mechanism, once you all get together, for all of that information to be used in a fashion? As you know, there is a problem with the perception that the National Arts Centre is elite, remote, and doesn't meet the needs of the communities it's supposedly dealing with. How is that presently operating, and is there some room for more very specific job descriptions there?

Ms. Jean Thérèse Riley: It's a very good question. In my opening statement, one of our intentions, I think, speaks to that directly. There is a necessity for far greater outreach to the performing arts community in Canada, and in perhaps a more formal way we do that, of course.

I'm going to ask Andrew to speak about the way we balance the interests and perspectives of the communities we represent, although it is never quite clear-cut. I was born in Quebec City and I now live in Toronto. Rosemarie often sees things from the perspective of Caraquet, but she has lived in Ottawa and Montreal. So it's not always as straightforward as it would appear.

Andrew, you were talking about this last night.

Mr. Andrew Ogaranko: Thank you.

I don't see our role necessarily as delegates in the representative capacity of members of Parliament. Our role is probably somewhat more of a consultative nature and yet representative of sentiments in the regions.

When I was appointed to the board I was contacted by quite a number of people, particularly in the senior artistic management world in the Winnipeg area. They first of all congratulated me on being there and then said it was so good to have somebody from this area in the National Arts Centre because it is perceived by the artistic community in Canada as being kind of the pinnacle of artistic excellence.

Clearly, when we sit around the board table and look at the direction and policy for the National Arts Centre on the one hand and try to be mindful of what our mandate is, there is the sense we bring to the table that we should always look beyond the confines of the Ottawa-Carleton region, although that's kind of the primary constituency, if you will. But there is a broader constituency, and regrettably to date the National Arts Centre has not reached that far beyond as successfully as it could.

Sure, there are co-productions that occur with regional theatres. There are opportunities for regional dance groups to come into the National Arts Centre, and certainly individual performers have an opportunity to come in from time to time. But it's still not being perceived as a national community that has this treasure that is the centre.

I think much more of that kind of thinking has to permeate the strategic direction. Our closer alliance with the Canada Council is certainly going to enable us to spread our wings, if you will. That's the touring component that has been lacking in recent years, so that will certainly give the National Arts Centre an opportunity to have a presence in the regions.

• 1020

The other thing we do bring from the regions is our experience. As you've heard, it's a fairly broad experience, and I think there are measuring rods that are set; there are successful ways of doing things in other places that we know about that we can bring. It's that experience that we believe can be usefully adapted to some of the issues the National Arts Centre is facing today, given that there is a willingness to accept that. And that has, at times, been the struggle. But it's very well intentioned, and I think certainly the dedication and the passion the directors from the regions feel about these issues is very real and very strong. I think that is a very good source of strength for us.

Ms. Jean Thérèse Riley: I think Royce has a comment as well.

Mr. Royce Frith: Thank you. I'm quite new on the board—a matter of three or four months—and I'm making this short intervention just because the question Mrs. Lill has asked concerns me. I'm not sure—and I mean I'm not sure; I don't say this rhetorically. I'm concerned as to whether...since the central part of the mandate that Parliament gave to the National Arts Centre, other than to run the National Arts Centre, is to develop the performing arts in the national capital region—that's what the act says—and to assist the Canada Council elsewhere in Canada. The “elsewhere in Canada” really is in concert with the Canada Council.

I'm torn between the two dimensions, as to whether or not it is better to have board members who live in the national capital region, who are very well connected, so the flow is from the national dimension of the national capital arts centre outward, rather than flying people in, so to speak.

I just don't know the answer, but I'm going to use my time to try to consider that, because it's a very important question as to what would be most effective. There's no question the fact that it could be called, according to the act, the National Capital Arts Centre. It isn't; it's called the National Arts Centre. So obviously there's the wish to have it seen as the national performing arts centre. But in realistic terms, there is a national dimension to performance at Roy Thomson Hall and at various large performing arts centres across the country. How can that achievement of having it viewed as the National Arts Centre be achieved best? By having people come from outside, who, after all, have divided loyalties? I have a divided loyalty, as far as the orchestra is concerned, to the Vancouver Symphony. Or would it be best in the other direction?

I really don't know the answer to that, but I just wanted to assure Mrs. Lill that I think she has hit the point very close to the mark because of concerns I have about the same question. The main thing is to achieve the status that Parliament wants us to achieve.

Ms. Jean Thérèse Riley: I gather Jim Watson would like to make a comment, and so would Carole McDougall, and Roberto.

Mr. Jim Watson: Thank you, Mr. Chair, and through you to Mrs. Lill, for that question because it is one of the dilemmas the National Arts Centre faces. I think Mayor Ducharme and I obviously realize that. We have a loyalty to our own communities that we represent, and that's the reason we're appointed to the board of trustees. We also realize it's a national institution that's funded primarily through the federal government, the national government.

One of the dilemmas we have is trying to divide our loyalties, in essence, between the national mandate and our local responsibilities. One of the initiatives the board has talked about, and I'm hoping in the next few months we can move on, is the establishment of a regional advisory council that would allow the board to look at the centre from a national perspective, but through a regional advisory council, recognizing that the vast majority of subscribers and customers come from the national capital region and that a number of local arts groups, including the Ottawa Symphony Orchestra and Opera Lyra, use the facilities.

• 1025

This advisory council would be made up of representatives from both sides of the river who have an interest in and a dedication to the arts community. I think that will go a long way toward helping bridge the National Arts Centre to the local arts community, which is important, and it will also add to the transparency we're trying to achieve at the National Arts Centre.

I was pleased to move the motion that as of our next board meeting next month, our board meetings will be open and available to the public and the press. I think it's important that when an institution is spending public money, the public get a chance to see how those decisions are made. I think that will go a long way—and my board colleagues agreed to this unanimously—toward trying to build and rebuild the trust between the public and the National Arts Centre staff, performers, and board of trustees.

Thank you.

The Chairman: If I may interrupt at this stage, it's nearly 10.30 a.m. We have a lot of requests for questions by our members, and this is the idea, for members to really find out, so I would ask our guests to be as concise as possible. We're supposed to have five minutes for questions and answers for each member so that each one gets a chance, but with the answers it took nearly 15 minutes. So it means that somebody will be cut off at the pass.

Could we just move on right now.

Ms. McDougall, maybe you can address it later on.

I would like to recognize Ms. Bulte.

Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Thank you very much, Mr. Chairman.

Welcome, Madam Chairman, board of trustees, and Ms. Calder from Toronto. I would like to recognize Mr. Martella as a wonderful patron and supporter of the arts community in Toronto.

One of the things the Auditor General brought up time and time again was the lack of a strategic plan. Madam Chairman, in your remarks you talked about the fact that there has been a failure to establish a coherent long-term strategy.

I remember the first time we met was in my former life in 1995, I believe, when you had just been appointed chairman of the National Arts Centre. We were at a meeting, and Ms. Calder was there as well, of the Professional Association of Canadian Theatres. You were doing your outreach to the artistic community. You talked about how in 1995 the National Arts Centre was going to embark on a strategic plan, and that was quite novel in arts organizations.

What happened between 1995 and now, and why isn't there a strategic plan? That seems to be the crux of this. Over and over I've heard that there was the lack of a strategic plan. We're talking about management problems. Maybe you could deal with that.

I have a number of other questions that specifically deal with why we're here today.

Ms. Jean Thérèse Riley: I believe it was the spring of 1996, and by then it was very clear that a really productive, cost-effective future was going to depend on the kind of prioritization and discipline that comes from having a strategic plan. I don't remember speaking to it, but it was certain that we knew it. We knew it in-house, and there was nothing the matter with saying it.

Part of our search for a CEO included the obligation to create a corporate plan. I think it might even have been in the job description. It was certainly written into our former CEO's contract. In our evaluation of our CEO we expressed repeatedly to him our frustration.

To be fair, I think a corporate plan is about choices, and when you don't have enough resources, some of these choices are pretty tough to make. So in saying that we haven't had a coherent, long-term strategic plan, part of that is because there isn't a consensus around that, and the exercise of building consensus around making those tough choices is, I think, part of why it really wasn't done.

• 1030

Ms. Sarmite Bulte: But the board itself didn't embark on its own strategic plan with consultants or anything like that.

Ms. Jean Thérèse Riley: We had meetings, and we articulated a mission and objectives. But they were, I think, probably not specific enough, and they were never taken from intentions and objectives to corporate goals. That translation process didn't happen. So they were left as trying to please everyone and trying to be everything. There were seven or nine of them, and we kind of bandied them about. But that translation process from those objectives to the actual tough choices we had to make in order to determine how exactly we were going to chart our future and prioritize simply didn't occur. It is not an easy thing to do.

Ms. Sarmite Bulte: We talked about choices. We also looked at your mandate, which is a large mandate. When I asked the Auditor General if there were any other organizations in Canada—never mind just crown corporations—like the National Arts Centre to compare it to, he admitted that no, there were not. Do you feel that maybe there is too much in your mandate and that what we should be looking at is perhaps amending the mandate? One of the things you talked about is developing a greater partnership with the Canada Council, which up until now you haven't had the time to do. You're running an arts centre, and now you're going to do something else. Is it realistic that you can do all of these things? Perhaps it's time we examined what the mandate actually is.

Ms. Jean Thérèse Riley: It seems to me that some clarification of the mandate is what we're talking about in order to make the next chapter successful. But we've indicated that we're going to take responsibility for that next exercise, which is to check with the performing arts community in Canada and try to build consensus on how we can interpret that mandate and maximize the national part of it.

I think it would be a great pity to start to change the mandate and perhaps lower the expectations. I think when Grant Burton sent his cheque by courier on Friday afternoon a couple of weeks ago, he was reminding us that there are people out there who say, yes, this is important; yes, this is national. He actually said to me, we have a great country, we have a beautiful national capital, and it's absolutely essential that our national institutions thrive. So it's yes and no.

Ms. Sarmite Bulte: Then I'll ask you another question, if that's the case. Do you need more board members? Most arts organizations have many more board members who are locally located, and here you are from across Canada being representative of Canada and trying to be the National Arts Centre. Do you need more board members to assist you in carrying out your mandate?

Ms. Jean Thérèse Riley: The National Arts Centre Act allows us to have advisory committees. This is not something we have used particularly, and I think it's something we may turn to. I can tell you that during the process of the search in 1996, our professional consultant did comment on how complex an operation it was and how small a board it was for how heavy the responsibility is. I think Mr. Ducharme has spoken about the devotion. We are volunteers, and it has been a very heavy responsibility.

The Chairman: This is your last question.

Ms. Sarmite Bulte: Thank you, Mr. Chairman.

I have a quick question with regard to your search committee. One of the things I've found from working with arts organizations is that you're drawing from a very limited number of talented individuals, number one. You can have the world's greatest search committee or do whatever you want, but you're dealing with a very limited pool, so your networks are still going to come up with the same people. With my understanding of salaries, when you compare them with other arts organizations, you are certainly at the lower level. Is this not an area where you need to look at readjusting those expenses to try to be competitive across Canada?

Ms. Jean Thérèse Riley: Why don't I hand this over to the chairman of the search committee.

• 1035

Mr. David Hill: I agree with you completely on both counts, and not only is it a small pool that you can draw from, but, as was said by the Auditor General and you repeated, this performing arts centre is more complex than any other in the country. It produces English theatre, French theatre, dance, orchestra, and it has hall rentals. There are none in this country that are this complex, so even that pool is restricted in terms of trying to find somebody with the experience to run such a complex organization, because there is no other organization as complex.

So yes, it's a small pool. It makes the search very difficult, and yes, you don't get rich being the CEO of the NAC. I think the attraction is because it is a national institution, because of maybe the challenge, which is perhaps bigger than anyone really wants. That's what attracts people. They don't come here for the money. Whether you get better candidates if the money goes up, I'm not sure. I think there are so many dedicated people who are attracted to the challenge and to the National Arts Centre that maybe the money isn't as big an issue as finding the people with the appropriate experience.

Ms. Jean Thérèse Riley: However, can I say in answer to this—

The Chairman: Briefly, Ms. Riley.

Ms. Jean Thérèse Riley: If the salary range is an impediment, then we are committed to getting the best and we will have to find a solution for that.

The Chairman: Before I go on to the second round—I have a long list for the second round, which is individual members who have asked to be listed, starting with Mr. Godfrey, Mrs. Catterall, Mr. Bonwick, Mr. Mark, Madame Tremblay, Monsieur Dumas, Monsieur Bélanger, Madame Lill. But in fairness, I would like to recognize Mr. Muise, who has an appointment.

Mr. Muise, I think I'll recognize you at this time.

Mr. Mark Muise (West Nova, PC): Thank you, Mr. Chairman, and thank you to our guests today.

I'd first like to start by saying that the National Arts Centre is a very important institution not only to the national capital region but also to Canada as a whole, and I don't in any way want my questions to be interpreted as negative towards the NAC but rather to help understand and maybe bring to light some of the issues. So that's where I'm coming from with some of my questions here.

Madame Riley, earlier in the first part of your presentation, you mentioned that some of the problems seemed to be coming from when the cuts started happening from the federal government. I was questioning that yesterday when I asked the Auditor General if there was a correlation between some of the difficulty that happened at the NAC and when the funding started to happen, and he said not really. He said some of those concerns were there before that time. So I'd like you to, if you would, just touch on that a little bit.

Ms. Jean Thérèse Riley: Mr. Muise, I think the Auditor General is correct, there is no direct relationship. However, there has been a pattern of cuts made to our most successful programs and in every case those cuts brought controversy. They often got made in adversarial situations, and that created a climate of controversy and turmoil, which is an indirect effect, but it is an effect. Would you agree with that?

Ms. Elaine Calder: Perhaps I can add something to that.

Institutions that have strong strategic direction and strong management are better able to withstand cuts than those that don't.

The Chairman: Mr. Muise, do you have any other questions?

Mr. Mark Muise: Yes, Mr. Chairman.

During yesterday's meeting with the Auditor General, we noted that during the audit of June 1998 there were many points or concerns the auditor raised, and I'd like to touch on a couple of them, or one of them at least to start.

• 1040

He says, for example, in number 22 on page 5:

Indeed, we observed that there was a need to clearly state performance expectations and to ensure that performance was monitored.

It seems that over and over again some of these points were brought up by the Auditor General, but the results didn't flow through to the organization. Pardon me for being absent—maybe that was already touched on—but I'd like to hear some comments on it, if you would.

Ms. Jean Thérèse Riley: Thank you, Mr. Muise. We did touch on it, but not with the clarity that I think it merits.

Ms. Calder, if you wouldn't mind addressing this....

Ms. Elaine Calder: Thank you. I think the issue the Auditor General is raising in that point, unless I'm mistaken, is one of management accountability and performance expectations, and one of the things that had started before I arrived and was completed earlier this winter is a complete review of the senior management of the National Arts Centre. When I arrived there were 16 people who reported directly to the director. We have reduced that to nine, which makes this particular management set of responsibilities that much easier, clearly.

Probably more important is that very detailed descriptions have been created for the senior management positions that talk to their very specific responsibilities, the competencies that would be required in an individual to fulfil those responsibilities, the accountability they have, who they report to, and what it is they're responsible for.

That's a beginning, and we have to work with those and with the people in the institution to put in place a greater rigour around the issue of accountability and performance expectation.

The other thing that will help is the formulation of our corporate plan, because aside from the high-level strategic objectives of the plan, there clearly have to be business objectives. It is much easier to measure someone's performance when they know what it is that's expected of them, and that is what's missing right now.

The Chairman: Mr. Muise, we'll come back to you afterwards.

Mr. Godfrey.

Mr. John Godfrey (Don Valley West, Lib.): I want to pick up on some of the things the Auditor General said as well, specifically about fundraising and some questions that I also put to him about the board structure in relation to fundraising.

It would seem that when the arts centre was first created and the vast amount of the money came from the government, it was reasonable to have a board representing the taxpayers and concerned artistic folk from across the country. We now have a situation where, at most, 50% of your total funding and budget comes from us, and there's no indication that we are going to increase that substantially, though that might be to the regret of people on this committee. Therefore, the logic would seem to say that you need to raise more money. In any arts organization I've been associated with, and which the powerhouse at the table has been associated with, that tends to come down to the board.

Logically, then, you might have thought you would want a larger board because you would expect board members to do a lot of the fundraising and, in the vulgar expression “give it, get it, or get off”, everybody's expectations would be understood. Of course, what did we do? At the same time we shrank your budget, we shrank your board, so the individual level of expectation of course just went up exponentially from the existing board members.

I'm going to put a question to Elaine Calder, understanding that she is the interim director and can say what she likes about the board, and she's had, as many of the board people have had, direct experience with this function at the Shaw Festival, the Canadian Opera Company, along with Mr. Martella. If I asked you to design me a board that will take into account the complexities, the need for local representation, the need for a more vigorous oversight function, but, above all, the need to get money, tell me how big it should be. Tell me how much the fundraising members of the board should be expected to give. Tell me what they were expected to give at the opera company. Then I'm going to go to the board, of course. But I'll start with you.

Ms. Elaine Calder: It's a—

Mr. John Godfrey: Stinky question.

Ms. Elaine Calder: No, it's a rather large question.

• 1045

I think it's probably fair to say the composition of the board as described in the act does not seem to contemplate that it be a fundraising board, and I do not believe the instruction to board members when they are appointed to the board is that that is their role. So immediately we have a disconnect between the realities of today and the act and current practice. That's fine; we'll accept that. What we do need is perhaps the more interesting part of the question.

If I could get my wand and get what I wanted—

Mr. John Godfrey: Wave your wand.

Ms. Elaine Calder: With the increased focus on earned and unearned revenue from the private sector, it's clear that a lot of our base of support comes from the Ottawa-Hull area. We sell most of our tickets here; we raise most of our money here. We have very loyal supporters in our community who contribute through a number of different programs to the National Arts Centre.

At the moment, we are using volunteers from the community to head up things such as our galas, which raise money very successfully for us. They do not have a seat on the board, but they work extremely diligently with volunteer committees and with our professional staff. Should we formalize that by creating more board seats for people from the Ottawa-Hull community? That would certainly be one way of going.

On the other hand, and since I am the interim director and can say what I like, I believe we do have a national responsibility. I believe that in the response of Grant Burton last week and an individual I'm going to be meeting with this weekend from outside the capital, there is a belief among Canadians that we deserve these national institutions and these national symbols. I think we can fundraise effectively across the country with a board of directors for whom that responsibility is made clear.

That's going to be tricky because most of the people who care about the arts in this country and who have a commitment to raising money are already raising money for other institutions. It's going to be delicate, but I suspect we could recruit a board. Is that helpful?

Mr. John Godfrey: Let me just finish by asking one short question, and perhaps one of the board members might care to answer this.

The short question is, in your experience, is a regional advisory council likely to be very helpful in the fundraising department as opposed to the psychic benefits of actually being on the board? Does that model work where you have sort of lesser-ranking folk still being expected to give money, or the board membership as a kind of quid pro quo?

Then let me just say to any of the members present, were you asked to fundraise, would you find it a tough task in your community to fundraise for an institution up here, a national institution, because many of you have had experience raising money locally successfully?

Mr. Royce Frith: To answer from the board, very briefly, in the order of questions: no; yes.

Ms. Elaine Calder: I think Mr. Godfrey's question was about the role of a regional advisory committee in a kind of secondary status. I think we should stress that our local volunteer committees are working very well for us right now. What does happen in a number of arts organizations is you use the committee method in order to identify and ultimately attract board members, so you move from a volunteer position on to a board.

Ms. Jean Thérèse Riley: Mr. Chairman, if I may, before turning to some of my board members, who I know will want to comment on this, I'd like to say—

The Chairman: Maybe you can comment, and Mr. Frith has, and then I think we'll pass; otherwise it will take too long.

Ms. Jean Thérèse Riley: Okay. I wanted to clarify that when I was first approached to take on this position, one of the assets that it was considered that I brought was a fundraising track record, both on a volunteer basis and on a professional basis. So I gladly thought I would put my skills and my network and my connections to work for the arts centre. That has not been achieved. I have brought one sponsor, but most of the—and this has to do with the inner workings of the organization. It's not a mystery. We had a fundraising department that was in a start-up mode and wasn't functioning very well. And the connections I made and offered to make—and I know that a number of my colleagues were willing to make—were simply not ever followed through.

• 1050

The Chairman: Ms. Catterall.

Ms. Marlene Catterall (Ottawa West—Nepean, Lib.): A number of us have expressed the importance of this national institution, and Jim's right when he describes a bit of the schizophrenia. But I think there is also a very strong feeling in this community of pride in our national institutions and responsibility for the national role, so I really don't see a tremendous dichotomy there. But it is also important to have input from various people across the country and different segments of the artistic community.

I appreciated the points the chair made right at the beginning, that the committee is anxious to play a constructive role here. And so far this morning I haven't heard the board give us thoughtful advice on why this problem exists.

Ms. Bulte commented on the failure to establish a coherent long-term strategy. That's a difficult thing to do, but the board has existed for a long time. The faces and names may have changed, but the board has existed for a long time.

What I'd like to hear from you is how this committee can help get to the essence of that. What needs to change so the board can perform that role? I think a strategic plan is the responsibility of the board, and the other decisions flow from that. What have been the impediments to that happening? Ms. Bulte asked a number of good questions, on which I'd like to hear more reflection from the board, because I was a little concerned that the presentation focused too much on the current situation. That's not what we're all here for. We want to know what needs to be done to ensure the strategic direction is there, that the decisions flow from that.

I personally would be reluctant to see a board whose primary function is fundraising. I'm not sure that those people.... The artistic community in this country is not known for being overly wealthy or having wealthy connections. So in my own personal view, I don't want that to become the prime function of the board or the prime criteria for appointment. If I'm wrong, please tell me. But I really would like to hear, if not today, then subsequently, if there are changes that need to be recommended by this committee.

Ms. Jean Thérèse Riley: I think, in quoting from the statements on governance that Madame Vaillancourt prepared for us, “la responsabilité de la gestion d'amorcer l'élaboration de la stratégie” is quite different, and that has been in fact the practice at the National Arts Centre, that the responsibility for the elaboration of strategy was left with management. I think this committee has helped in inviting us to examine with a lot of care what has happened and why.

Now, there's a dimension of time required to take a little distance from recent events, from reactive positions, because we have been in reactive positions in relation to various recent events. But over the process of preparing for this meeting.... My colleague, Mr. Hill, expressed a willingness on our part to come back to share the next steps with the committee at a later date. The responsibility for the lack of a long-term coherent strategic plan that was put forth in my statement does rest with the board, but there has been a shift in the view of governance in recent years, at least for crown corporations.

• 1055

In our case, we have always felt that the mandate spoke for itself. It is only in really grappling with what happened and why that we're faced with there being room for interpretation. It's a difficult mandate to interpret. There's a matter of balance between competing interests, and the prioritizing around that has not been done by the board. We have tended to rely on our management. So the taking of responsibility for that, the going out to the performing arts community across the country to help us elaborate clear strategic direction, is what we're committing ourselves to in the future.

The Chairman: Ms. Catterall, this is your last question.

Ms. Marlene Catterall: Let me make more of a comment, because I think this is a discussion that has to pursue. We keep coming back to the current situation. I don't think that's what any of us are here to address. It's a symptom, and I don't think it's the board's responsibility to act as managers and to develop, in fact, a strategy, but certainly to approve, to provide direction—absolutely. That's why it's a board of directors.

Obviously, management has to provide the advice to do the ground work, to present you with that, but I'm still having a sense that we're caught in the current situation, and I think that's not particularly helpful to us as committee members wanting to make a positive contribution here.

I don't know where we go from here after this meeting, Mr. Chairman, but I think I find it a useful start only.

[Translation]

Mrs. Suzanne Tremblay: Could I use my five minutes right now, after the witness has answered the question?

The Chairman: Do you mean your five minutes for the second round?

[English]

Ms. Suzanne Tremblay: Our five-minute break.

The Chairman: Oh, I see.

[Translation]

I don't have a problem with that, provided its only five minutes. Otherwise, I know what will happen. If you're only talking about five minutes, then we'll come back just after 11 a.m. Is that okay with you?

A member: Could we first have an answer to the question?

The Chairman: Certainly.

[English]

Mr. Hill.

Mr. David Hill: Ms. Catterall, I think part of the problem in moving significantly forward in the strategic plan has been the lack of stability at the institution, which was referred to by the Auditor General in front of this committee yesterday.

The previous CEO and the board had started into a strategic planning exercise. There was a consultant who was assisting us. There was a retreat. So there was a start on that process that had to wait for that CEO to get his feet under him and learn some things about the institution. Then there was the disruption of the CEO change. Then there was the most recent problem, which has completely sidetracked us.

I'm not sure how much of this is the committee, but I think all of us, if we want to see this forward, have to be allowed to get on with our business. Our business is producing great performances, which we have managed to do despite all this disruption. We have to continue that and build on that, but on the administration and management side we have to have some stability to let us get back to doing that strategic plan that we started, that we know needs to be done, that we've talked to the Auditor General about doing. I would say the main problem has been, since I've been on the board, that lack of stability that has allowed that to go forward.

The Chairman: We will break for five minutes only, please.

• 1100

• 1109

The Chairman: I'd like to resume the session today with the NAC. We have covered a lot of ground so far, but I want to remind members of the various key points that were raised by the Auditor General yesterday, to which I think it would be interesting for the committee to find answers today.

• 1110

The Auditor General reminded us that his office carried out four special examinations in 1985, 1989, 1993, 1998, and many of the recommendations in the present report were found in the previous ones—certainly the question of the strategic direction—and I think that's been alluded to by the NAC today.

He also talked about the composition of the board. Maybe there should be a larger board, a different board. We should get ideas as to whether the present board and its composition is the ideal for today. That's been alluded to as well. He also suggested to us that one of the questions he felt was missing was that the CEO perhaps, by the very nature of his or her work, had to be very involved in the artistic side of the issues. Maybe there should be a parallel, or somebody of administrative management skills who would back up the CEO.

He also suggested that communications between the board, the CEO, and management seem to be in complete disarray. It might be nice before we break up today to find out, for instance, how many times the board meets. We don't know if there's a senior management committee. Does somebody from the senior management committee or the CEO attend the board meetings? Are minutes available to management? What is the format of the relationship between the board and management? It seems to be at the heart of the communications problem that has caused this disarray to occur, so no strategic direction has happened and problems, as we know, have occurred over the years.

He also referred to the relationship between the centre and the Canada Council through the mandate in the act, where the Canada Council has the mandate to be the link with the centre to interact with performing arts across Canada. He feels there has been a complete lack. In answer to a question, he even told us he felt there was some sort of perceived—or he or his office perceived—malaise between the two organizations. The centre doesn't want the council to know what it is doing, and the link that should be very close doesn't seem to happen.

I just thought I would lay out this context because we have barely three-quarters of an hour to go and it seems to me these are the questions that perhaps—

Ms. Suzanne Tremblay: We still have almost two hours. It's only 11.15 a.m.

The Chairman: Sorry. I apologize. We have lots of time. That's better still. I feel it is important for us to have answers to these key issues before we close because they are the ones the Auditor General suggested to the committee we find answers for.

This being said, I recognize Mr. Bonwick.

Mr. Paul Bonwick (Simcoe—Grey, Lib.): Thank you, Mr. Chair. I will preface my remarks by acknowledging the commitment the trustees have shown to maintaining a critical part of Canadian culture, in my opinion, from the NAC perspective. I say that so nobody takes the comments, suggestions or questions personally, but rather sees them as attempting to find solutions to the existing dilemma you're facing.

I was disappointed in your first presentation. After knowing that we had a presentation yesterday by the AG and what he stated to us, I expected somebody to offer definite detailed solutions—a corporate plan. He speaks of the need for a corporate plan from 1985 to 1988, 1993, and 1998. So I envision that this is not about simply casting blame or finding rationales, but coming up with solutions.

• 1115

So if you would grant me a little latitude, Mr. Chair, my line of questioning will lead into the findings of the Auditor General and hopefully some solutions.

My first question would be, how many members are on the board presently—and this is in line with your presentation at the start—and how many were there during the period of concern and in the end during the removal of the most recent CEO? How many members are there presently that were there during that period?

Ms. Jean Thérèse Riley: We have a full board and have had a full board since September 1998, so the events immediately leading up to the departure of Mr. Cripton were witnessed by all on the present board.

Mr. Paul Bonwick: You've stated in your presentation that the existing difficulties, some of the rationales or reasons for the existing situation and in effect the termination of the past CEO, were basically threefold. There was, first, financial controls or the lack thereof; the second was hiring practices; and third was the disclosure or the transparency and again the lack thereof.

The Chairman: Mr. Bonwick, I hope you're not referring to the previous CEO, but to the substance of what happened, what is lacking.

Mr. Paul Bonwick: Absolutely, and hence the reason for maybe a little latitude on this.

The Chairman: If you are going to talk about why there is a lack of financial responsibilities within the management, etc., that is fair enough.

Mr. Paul Bonwick: Thank you.

The Chairman: But I don't want you to refer to whether it belonged to Mr. Cripton or somebody else's field.

Mr. Paul Bonwick: No, Mr. Chair. What I'm attempting to do is find out what the measures of accountability are and in the end hopefully find a solution to that. So the line of questioning is not dissimilar to Mr. Mark's. That is concerning the areas of responsibility, or the areas that you outlined of concern. Are they the joint responsibility of the board of trustees as well as the CEO?

Ms. Jean Thérèse Riley: It seems to me the area of concern has to do with the relationship, and trustees are only able to do their job responsibly when the other part of the relationship, which is to provide the information and the tools for exercising that leadership, can be relied on. To go to the first part of your comments, if I can, about the—

The Chairman: Excuse me, Ms. Riley. Could you perhaps explain it to us so that we understand? What happens now between Ms. Calder and yourself? Does she attend the board meetings? What is the communication system? What is the system?

Mr. Paul Bonwick: Perhaps she could follow through on my questions and then maybe she could explain at the end.

My question was, I thought, fairly succinct, and that is, are the areas of responsibility on the three issues you outlined that generate your present situation the sole responsibility of the CEO, or are they shared by the board of trustees?

Ms. Jean Thérèse Riley: In the relationship, I have attempted to answer. I think I'd like to pass it to Ms. Calder, who will speak from a management's point of view.

Ms. Elaine Calder: I will try to be as brief as possible, sir.

The responsibility for financial management and controls and for hiring practices rests with the CEO. I think responsibility for disclosure is more of a moral than a legal obligation, and it rests with all of us.

Mr. Paul Bonwick: You spoke, again in your original presentation, and I'm going to ask you to expand on that, about experiencing “a difficult time in history”, referring to the NAC, and I'm wondering if you might enlighten me as to your definition of a “time in history”. Is it a month, six months, a year, five years, 10 years, 13 years? What is that “time in history” you are saying is the difficult time for the NAC?

Ms. Jean Thérèse Riley: In my statement, I was referring to the particular episodes that have led to our presence here today, and more recent episodes.

• 1120

Mr. Paul Bonwick: My line of questioning is more in fact with that difficult time in history and the apparent unresolved problems. You've outlined, on a very neutral basis, some of the things you are trying to implement, but I'd quote the Auditor General, who made the statement:

We were therefore very concerned to note, once again, the lack of strategic direction and the absence of a solid corporate plan that was understood and accepted by the Board of Trustees, management and staff.

That was in 1985, 1989, 1993, and the current $3 million deficit in 1998.

I guess I'm saying that, from my understanding, this isn't just a short, little period of time in history, but rather this has been ongoing for 13 years. That's why I'm asking you to give your definition of this period of time.

Ms. Jean Thérèse Riley: When I used the expression “a difficult time”, my intention was to refer to the controversies and the visibility that have been focused on the centre. The fact is that every night there are concerts; there are shows; there is an absolutely stunning production of a David Harris play, Skylight, and we are forgetting about that.

The visibility and the controversy of recent events is what I was referring to. Of course there is a long history of key problems not being addressed. The fact that they have started to be addressed is something Ms. Calder offered to put forward in answer to Mr. Mark's first question. If it would be helpful to the committee at this point to address some of the specific solutions that are already underway, I think—

Mr. Paul Bonwick: That might be something I think the chair is going to ask you about when I finish off.

I wasn't citing your specific crisis or issue with a particular staff person. The chair, quite eloquently, said that's not what we're here to concentrate on, but rather the overall problems over a long-term basis and potential solutions. That's why I was hoping there was going to be something to say—this is what we're dealing with; this is the corporate plan to deal with it.

You touched as well in your presentation on a 31% reduction in financing from the federal government, which would equate to about a 7.8% reduction per year, or about $5 million, if I'm doing my math properly. How does that impact your overall total budget as a percentage? I'm trying to get a feel for what our reduction has done to your overall budget. That seemed to be one of your rationales.

Ms. Jean Thérese Riley: Well, why don't I hand this to the chair of the finance committee? You're asking several questions, but as to the particulars of your last question, why don't we go into that?

Mr. Andrew Ogaranko: Well, to understand the reductions as a percentage, if you consider that the NAC operates with a budget somewhere in the range of $44 million, you do the math. I haven't done the calculation, but that'll give you some order of magnitude in terms of what that's done.

What the committee should not lose sight of is that of that budget, approximately $10 million goes toward the building and maintaining the facility. That's often lost somewhere in the explanations and justifications that are given.

When you consider what the contribution of the government's funding is to the programming dimension, which is really what the arts centre is about, yes, we have a responsibility for the bricks and mortar, but the real function of the arts centre is art. When you look at what the contribution of the government is to the art component, it drops to something less than 35% of the overall artistic programming budget. That then puts it on par—in fact, less than par—with other arts organizations across the country that are receiving funding from governments.

It has put a very significant dent into the centre's ability to maintain a level of programming at the levels that were pre-cut, which is 1995 and prior.

Mr. Paul Bonwick: Briefly, in response, as we attempt to find solutions or recommendations, work with you on a possible solution, what would your opinion be of a recommendation going forward to the minister of actually bringing in an independent management firm to try to resolve this situation of lack of a corporate plan, or lack of a strategic plan, which has been identified from 1983 to the present time? What would your opinion be on actually bringing in an independent management firm to do this, to clean it up, so to speak, for the short term?

• 1125

Ms. Jean Thérèse Riley: It seems to me that—

Ms. Elaine Calder: I wonder if I could speak to that.

I would take that recommendation as a lack of faith in my management abilities. I am working with a number of external professionals in addressing what I think are the absolutely critical issues that the Auditor General raised, which for me are the strategic plan, the financial management and reporting systems, and the fundraising. We're doing a number of other things as well, which perhaps we don't have the time to go into.

But to suggest that an outside management firm be brought in to fix the problems would render my.... There would be no reason for me to stay here, would there? I could go back to Toronto.

The Chairman: I want to follow up briefly with a comment following Mr. Bonwick's questioning, because this is something that I think all of us are wrestling with. We have discussed this before. Following the Auditor General's appearance yesterday, he told us, for instance, that there have been five CEOs over seven years. In reply to a question, he said that was exceptional for a crown corporation. He didn't know of any other case like it.

So I think what we're trying to find out is, is the latest case different from the others, and in what way? Or is it a generic problem that repeats itself because of all the various reasons he has alluded to? He feels this will go on and on unless the basic problems are addressed, such as strategic direction, such as a performance evaluation—is there one?—and so forth.

I think that is what members are interested in finding out. Is there a pattern there that keeps repeating itself time and time again so that you get five CEOs over seven years? I asked him if that was a record for a crown corporation, and he said certainly it's exceptional. So this is what we are trying to find out.

Mr. Mark.

Mr. Inky Mark: Thank you, Mr. Chair.

Yesterday I asked the Auditor General whether he felt this board was capable of implementing the recommendations. Hearing the quality and the talent that sits on the board, that has been answered. In fact, I would say that having two mayors on your board certainly would be an asset to teach the board how to be transparent and accountable—speaking with prejudice and bias, having been a former mayor myself.

But the question I have is, how inclusive will the strategic planning process be? Will all the stakeholders be involved, other than just board members?

Ms. Jean Thérèse Riley: Mr. Mark, before we describe the process around the creation of a strategic plan, I'd like to go back to what Mr. Chairman said about the various chapters of management turmoil at the NAC.

There are some points in common. We know from the Auditor General and we know ourselves that there has been a lack of rigour about internal management systems around accountability and around a lack of financial information. That's a fact, and that's being corrected.

We know the mandate has not been expanded on in an explicit way. There has been a lack of clarity around the interpretation of the mandate. We know there have been chapters of redirecting the resources of the NAC in order to interpret the mandate in different ways, and that those have always been corrected after the fact and the board usually has moved to correct rather than to lead. So that's a fact.

However, you have urged us to refrain from commenting on the particular circumstances of the last chapter, when in reality there are some very particular features there.

• 1130

In 1996, with the search process that we certainly were proud of, where we had a lot of outside advice and where we had started to articulate some objectives, where we wrote into our CEO's contract some very specific obligations, that was not just a legal contract but a moral contract that was entered into. We had expectations as a board. They were not fulfilled. I would call that specific.

In the past you could say that the board's performance was rather more passive, but in taking responsibility for the problems in the fall of 1996 and being very clear and explicit about what the requirements were to do the job in the years following September 1996, the disappointment is of quite a different nature from the disappointment of a passive board that is really leaving all of the leadership to the management.

I wonder if our vice-chair would like to comment. I think that is absolutely to the heart of the matter of why we're here today, and I think it's extremely important that we make ourselves clear.

Mr. David Hill: The one thing I would add that you mention, Mr. Chair, is evaluation. There was evaluation. There were criteria established, as Jean has said, in the contract. That evaluation took place last summer, based on the criteria. The evaluation was shared with the CEO, and it was not a particularly glowing evaluation.

So there were criteria. There was evaluation. When there is disappointment in the achievement of an executive being evaluated, that is sometimes the breaks of the game.

I don't want to leave the committee with the idea that there weren't criteria or there wasn't evaluation. This board has been quite aggressive in moving in that direction, and I think we'll continue to do so with the new CEO. That's a very important part of the board's job.

The Chairman: Mr. Mark.

Mr. Inky Mark: Thank you, Mr. Chairman.

I believe on a personal level or on an organizational level one cannot move into the future without dealing with the past. So my question to the board is, has this board reached final a resolution to the current problems and can it move on from the past?

My perception is there are still a lot of unanswered questions out there. So where are you right now in terms of moving on, or do you have to deal with current events?

Ms. Jean Thérèse Riley: I think there are two parts to your question. One is our availability here to deal with the past. We are willing to answer any question. If there's any doubt on any of these issues, you have documents and we are completely available to answer questions, although I take the chairman's instruction that some of those things maybe do not belong in this forum. But the facts are out there, and I think clarity should emerge.

About the future, about the solution to the internal management problems, and about the processes that have been put into place, why don't I ask Ms. Calder to speak more explicitly than she did the last time?

Ms. Elaine Calder: Thank you.

In response to the part of Mr. Mark's question that deals with the management problems identified by the Auditor General, I have no hesitation in saying to you, sir, that we are addressing those problems. We are seeking outside assistance where we need it, and there are places where we do, but we also have tremendous resources inside the institution who are committed to making the NAC work in the way I described earlier, as an efficient, cost-effective organization that is there to support the art.

So the management focus is really to clear up those problems so that the art can be produced as brilliantly as possible, and I have no hesitation in saying to you that those steps are underway.

We've heard today that these problems go back to 1985. I don't want to suggest to people that we can fix 13 or 14 years of difficulties overnight, but there are processes in place and there is outside assistance as well.

• 1135

Mr. Inky Mark: Because of your track record, can we trust your commitment, and should there be a watchdog organization to whom you should report? Who are you accountable to? That's the bottom line.

Mr. Royce Frith: Whose track record?

Mr. Inky Mark: Well, your track record. As someone indicated, you had a number of changes over the last....

Mr. Royce Frith: I'm just trying to understand. When you say “your” track record, do you mean Ms. Calder's? Do you mean mine?

Mr. Inky Mark: No, I mean the board's employee track record.

Mr. Royce Frith: You mean the previous board?

Mr. Inky Mark: The previous board, yes.

Ms. Jean Thérèse Riley: Well, I think we have offered to come back to this committee to report on progress. We would welcome that and consider it to be appropriate in every way.

There is a matter of time. It takes time to address some of these processes. They have started. I would think that a progress report would be in every way appropriate.

Mr. Andrew Ogaranko: If I might just add to the comments that have been made, I think it's important for the committee to be aware that this board has taken the Auditor General's report very seriously. It has embarked on a very specific remedial plan. We can certainly share with the committee the details of the remedial work we have put in place to date through our interim CEO. There has been a report submitted to the AG's department detailing exactly what is being done to address the specific concerns they raised in their report.

But in addition to that, we seem to be leaving the impression that nothing is happening in terms of a strategic plan, and nothing could be further from the truth. In fact, this board, together with staff and outside consultants, has been working very diligently since the summer at least to put such a plan in place. I think although we have a rudimentary outline of the plan, which has been adopted and which we are now fleshing out with the aid of outside consultants, we expect that plan is going to be completed within the very near future for submission to the department. We certainly are prepared to share it with this committee.

We're not in a standstill position. We have simply been interrupted by the regrettable events of the last several months, which have so diverted the energies of both the board and the staff that we couldn't focus on the business of the day. We couldn't get on with what we were supposed to be doing. Hopefully, this exercise today is going to be a bit of a watershed for us and we can indeed go on and continue the work we have commenced.

There is a great deal of work that has been commenced. So lest you have the impression that we're not doing anything or that things have been sidetracked and nothing is happening, that is not the case. We can provide you with considerable evidence of the work that has been done and efforts that have been made to rectify some of the criticisms levied against the organization.

The Chairman: Mr. Bélanger.

[Translation]

Mr. Mauril Bélanger (Ottawa—Vanier, Lib.): I have two or three comments to make before I put my questions. I realize that we don't have much time, but I'd nevertheless like to get all of my questions in. I don't expect you to necessarily provide me with answers today, but perhaps you could send me the information I'm looking for.

The presence of certain people in the room has already been noted. I too would like to mention that we have here with us George McDonald, the former CEO of the Museum of Civilization and Trudy LeCaine, a great patron of the arts in the National Capital Region. Both are prominent members of our community.

For the benefit of the people who draft our proceedings, I'd just like to point out that when Mayor Ducharme referred earlier to the small "cahots" that the National Arts Centre has encountered, he was talking about "cahots" or obstacles, not chaos. I trust that this will be accurately reflected in our proceedings.

I'm not prepared to be as magnanimous toward Ms. Riley as Mrs. Tremblay was. You are the Chair of the Board of Trustees of a national institution located in the heart of the nation's capital. You knew in advance that you were appearing before this committee today. It is unacceptable, unconscionable and inexcusable that you did not have the sensitivity or foresight to prepare your submissions in both languages. I can only hope that this lack of sensitivity toward the committee is not a reflection of the board's lack of sensitivity in dealing with other situations.

• 1140

[English]

I also wish to express something here that I've heard repeatedly in the past few weeks in this community and have read elsewhere: that people could rise above the clash we've been witnessing. Whether it's a clash generated by personality or by vision, there is an ongoing clash. We see it and read about it. There is a tremendous thirst in this community for all parties to rise above it, settle their differences as soon as possible, and get on with their lives and responsibilities, which are essentially to this institution. It's a wish I share and have been asked to communicate.

There are three areas I wish to address. One we focused on principally this morning and yesterday, and that is how is this place managed? How does it manage itself? It goes without saying we all agree that the recommendation from the Auditor General of June, released in November and discussed yesterday, is that there has to be a strategic plan, but that was not the first time the Auditor General suggested that.

I've come to the conclusion that historically, at least, the board has been faulty in setting clear, strategic directions and establishing clear mandates for senior management, which may indeed have led to some of this instability or lack of continuity, and not vice versa. I think we expect—we from this committee from what I've heard, and at large—there will be remediation of ces lacunes and perhaps you will be kind enough to share these with this committee as soon as it's possible.

[Translation]

We've talked about the appointment of the director and CEO. Who should have this responsibility? Should this individual be appointed by the board, as was the case in the past, or should the appointment be by order in council? Either way, this situation will be resolved by a recommendation from the committee or through a legislative initiative. It might be a good idea to discuss this matter and to weigh the pros and cons. MPs will quite likely be called upon to voice their opinion during second reading and when the bill referred to by Mrs. Tremblay comes before the committee for consideration.

[English]

Now I want to turn to the local dichotomy versus the national dichotomy. I am in a bit of a quandary here because I have essentially two hats, one as a local member of Parliament and one as the parliamentary secretary to the minister. Unfortunately, sometimes I feel an internal tug of war there. I'll share some notions I would like you to reflect on and at some point come back to.

One is this notion of a regional advisory committee. It's been in the air, on the books, and out there for a long time. I haven't heard anyone disagree with it, so why don't we just go ahead and do it? There may be problems in setting it up, and some people or groups may wish to be formally or informally part of it, but let's just deal with it and do it.

It's the same thing with fundraising, which I put a great deal on the local community. I've heard the notion of legislative change this morning to do that, but if you need legislative change, ask for it. When all crown corporations and agencies of government need legislative change, they're not shy about asking for it, so do it. But I don't believe it's necessary.

I don't think there's anything in the act as it stands that prevents the National Arts Centre from creating a foundation. Hospitals, universities, colleges, local arts institutions have created foundations throughout the land. As far as I can determine, nothing prevents the National Arts Centre from doing it. If you have a foundation and you want to appeal to your local clientele, which represents the bulk of the clientele, you have one that might be predominantly made up of people from the national capital area, but not exclusively. So you tap into the whole country. Having those two layers of representation might cause a greater balance between the local and the national.

• 1145

I would also suggest something else. We've heard and we've read in the papers over the last week of these plans for various additions or improvements to the facility. Let's not get carried away in terms of what's doable, but perhaps it would be interesting for that foundation, if you were to create one, to have as a mandate to get the funds necessary to set up this box office concept that would serve the NAC greatly, but also the entire community here and beyond. That would be a very appropriate challenge, I suspect, for this kind of a foundation if you were to set one up.

[Translation]

On the national front, I really would like to see a firm, clear and tangible commitment to increase participation by the Canada Council. When I hear or read in the AG's report that this partnership that once existed between these two national institutions and that was once part of the NAC's mandate has been neglected, the only conclusion I can draw is that there is a lack of cooperation. Can you tell me specifically how you intend to restore this active partnership without delay?

Mayor Ducharme raised an interesting point, and I would like your reaction to it. What's stopping the board from meeting outside Ottawa, particularly when the NAC is involved in mounting major co-productions in another community, whether it be Halifax or Winnipeg? What's stopping a foundation from seizing this opportunity to engage in fund-raising which would benefit both the local institution and the NAC? Initiatives of this nature might help restore the institution's reputation. Everyone here agrees that the NAC is an important institution that must be preserved.

I haven't heard you talk about your orchestra. It has been mentioned recently and I have read some articles and listened to a recent report where former CEOs were being interviewed. If this is an internal matter and you can't talk to us about it, I'll respect that. However, is the orchestra, a fundamental component of the NAC, facing some problems? Some argue that the orchestra takes up too much space. What is the board's position on this? If it agrees with that assessment, what action does it intend to take? If it disagrees, then it should say so and let us all move on. We must clear up any confusion once and for all.

I apologize for asking so many questions, but I live in this community and I regularly attend events at the NAC. I know that people are deeply concerned. Some have banded together and made some suggestions. I've shared a few of them with you this morning. The NAC must chart a course for itself and assert its national mandate. And I'd like to know sooner rather than later how the board intends to proceed. Thank you, Mr. Chairman.

The Chairman: Ms. Riley and

[English]

Mrs. Calder, I don't know if you have made notes of Mr. Bélanger's questions. If not, the transcript will be available. Maybe you could just give us feedback and send your notes to the clerk, who will make sure they are passed on to all the members, and of course to Mr. Bélanger first.

[Translation]

Mr. Mauril Bélanger: Thank you, Mr. Chairman.

Ms. Jean Thérèse Riley: Mr. Chairman, I want to thank Mr. Bélanger for his suggestions which we will seriously consider and I'd like him to know that we will supply him with the answers to his questions sooner rather than later. In fact, we have already taken some measures that are line with his suggestions.

I'd like us to work more closely with the Canada Council, but this would involve more than just being invited to attend Council meetings. We would have to work together closely and openly. Time is a factor. We will consider all of your suggestions and get back to you. We heard what you said and we appreciate your comments.

The Chairman: Mr. Dumas.

• 1150

Mr. Maurice Dumas (Argenteuil—Papineau): Mr. Chairman, Madame, I was happy to hear Ms. Landry say that her festival in Caraquet had turned profit in recent years, but I was also distressed to learn this, because to my mind, the arts and culture are not something that should necessarily have to be profitable ventures. Obviously, every effort is made to maximize cost efficiency, because the arts and culture always seem to get short shrift from governments, whether federal or provincial.

Getting back to Mr. Desautels' report, he states on page 11 that the way in which the NAC is structured could be simplified with a view to streamlining operations and increasing cost-efficiency. As of October 30, the NAC had 698 employees. Have there been any staff cuts since then? That's my first question.

My second question concerns music. The AG points out that the NAC is clearly banking on the arrival of a new musical director. He was likely referring to Mr. Zucherman, a world renowned violinist. Have subscriptions to the orchestra series increased as a result of the hiring of this famous conductor? These are my two first questions.

Ms. Jean Thérèse Riley: As far as subscriptions and ticket sales go, yes, they have increased. The public has responded very enthusiastically to Mr. Zucherman's arrival on the scene. That's the good news.

Your first question was somewhat more complex and I will ask Ms. Calder to answer it.

[English]

Ms. Elaine Calder: There was a highly publicized reduction in our workforce of nine people in late November, early December, 1998 and in fact every month I receive reports of the staff who have left, the staff who have been hired. It's a large workforce. It fluctuates. I would not say there has been any reduction in the size of the staff, but we have already concluded one collective agreement with our security staff, which I think addressed the intentions of some of Mr. Desautels' comments, which gave us greater flexibility at no additional cost and which was what in fact will save us significant amounts of money over the life of that agreement.

That's a pretty sketchy answer, sir, but there has been some progress in that one collective agreement.

[Translation]

Ms. Jean Thérèse Riley: Mr. Chairman, I'd like to focus for a moment on something Mr. Bélanger said in order to reassure him at this time. He wanted to know what percentage of our budget was earmarked for the NAC orchestra. I'd like him to know that last fall, we decided to reduce our funding of regional francophone theatre, some important co-productions and several francophone theatres across Canada. This was a strategic decision on our part. We have made a commitment to our orchestra because of the national scope of our mandate. We have re-allocated funds to this institution.

Mr. Maurice Dumas: I have one final question, Ms. Riley. On page 5 of your opening statement, you note that too much money has been spent on too many questionable commercial initiatives. The figure of $1.3 million is mentioned. The word "initiatives" is in the plural. Can you give the some examples of other questionable initiatives?

Ms. Jean Thérèse Riley: I don't particularly like that choice of words.

Mr. Maurice Dumas: That's what your statement says.

Ms. Jean Thérèse Riley: Perhaps the word is a little strong. Obviously, the NAC was involved in a number of commercial initiatives, such as the production of the Mikado, which failed to turn a profit and which proved extremely costly to mount. We also made a commitment to purchase a production called Patsy Cline. Again, box office receipts were only 30 per cent of projected sales.

• 1155

From a commercial standpoint, we have made some mistakes. Our plan was to counter government cutbacks with commercial initiatives, but these only resulted in losses, to the point where the programming for which we were well-known was threatened. Does that answer your question?

Mr. Maurice Dumas: At one time, the NAC exported French theatre productions to Montreal. That was back in the days of André Brassard, as I recall. Are French theatre productions still being exported to Montreal or to Quebec City?

Ms. Jean Thérèse Riley: The NAC is involved in co-productions. Our involvement in such ventures was called into question last fall because of our budget problems, but we have reaffirmed our commitment in this area.

Mr. Maurice Dumas: Were initiatives like this once profitable?

Ms. Jean Thérèse Riley: Our involvement had been threatened because of our commercial initiatives. Now that we have terminated these activities and re-allocated our resources, we have made a very serious commitment.

Mr. Maurice Dumas: Thank you.

Ms. Jean Thérèse Riley: Our objective in this instance is not to make money, but rather to mount theatre productions.

Mr. Maurice Dumas: Thank you.

The Chairman: Ms. Lill.

[English]

Ms. Wendy Lill: I asked the Auditor General yesterday a question that I felt needed to be asked, and it was about the fact that a newspaper report had stated it was the Auditor General's report that had led the board to make its decision around the dismissal of the previous CEO. He said at that point, absolutely not. He said there are many auditors' reports that would come out for agencies all over this country that could be much worse, and if we started getting rid of people based on that there would be a lot of expertise floating around this country. I wanted to make that point.

I'm comfortable with the level of.... We are hearing very much what is going on in your heads and in terms of the acting CEO, and I must say that I would like to ask you what you think—and I know you're aware of this—of the petition by 200 employees of the National Arts Centre expressing grave concerns with the board of trustees, and particularly the chair. This was sent to Sheila Copps, appealing to her to deal practically and swiftly with the current situation.

I feel it's very important to represent the people who are not being represented here, and perhaps they should be, but this document is out there and it's in the minister's hands. What do you make of that? We are talking about hundreds of artists in this country who have grave doubts about the board and specifically about the chair of the board. What do you have to say about that?

Ms. Jean Thérèse Riley: I can tell you that when I heard about that document I was very affected. I'd have to say I think it's understandable. Allegiances are created. That's what happens around leadership. There were a number of facts that weren't known around the departure of our previous CEO and there have been a number of misunderstandings, and I think I understand that this happened.

Relationships are about trust, and it's my intention, as it is my colleagues' intention, to do everything we can to earn back that trust. We certainly value what our employees have continued to do under extremely difficult circumstances.

Ms. Wendy Lill: I would like to talk a bit about trust, but I'd like to ask you directly what difficulties you see being created in the fact that the chair of the board has at different occasions moved into the CEO role when that person has left? I'm wondering about the difficulties of moving back out of that position. I'm trying to get at whether it is hard for the chair to become the CEO and then move back out of that position. Is there something inherently inflammatory about the relationships that are created when there are people who are at one moment the chair and at the next moment the CEO? Is there not somebody else about to walk into this position—and let's hope it's the best of the best who we can bring to this job—and are they not walking into another hornet's nest? I'm sorry, but I still don't have any real guarantee that this is not going to be the case.

• 1200

Ms. Jean Thérèse Riley: I think that about the decision—or, it was not a decision, it just happened during the absence of a CEO in 1996 that I stepped in. I think there were problems around that and I think it was a difficulty, and in the current situation we were very quick to move to name Ms. Calder because the traces around that were certainly not what any of us wanted. I don't think I would ever use the word “inflammatory”, and I think in any disagreements that have occurred between the board and the CEO it was not personal. I think the delicate balance of relationships between management and board occasionally have some strains. That's not unnatural. It's designed that way. It's a balance. It's a dance. And I think we've learned a lot.

I believe in terms of governance we're here to answer all of your concerns and questions, and I understand that this is one of them. If you'd like to hear from any of my colleagues...I wonder if David Hill would like to speak to that.

Ms. Wendy Lill: I would like you to address the claim that the chair of the board has a tendency to micro-manage the National Arts Centre. I'd like to know whether you think that is a danger and what steps you are taking to remove yourself from that accusation.

Ms. Jean Thérèse Riley: The steps I'm taking have to do with being extremely careful and conscious of the normal processes of governance. The steps I'm taking are that I'm getting on a plane on Saturday and going skiing.

The fact is we have a job to do. It's not our job to be here all the time and it's not our job to be visible, as we have been. It's been a highly unusual set of circumstances, which I'd like David to speak to, if he would.

Mr. David Hill: I think we are all quite sensitive to the risk of governance moving across the line into management and we attempt not to do this.

Having said that, my experience is that while there remains a great amount of trust between management and a governing board, it happens in a better way. But when that trust erodes—boards close in and feel things aren't going right—we then have to get more involved, and not necessarily take over management, not necessarily cross over the line, but be more vigilant in getting reports from management and directing management. So I think, to some extent, it is a bit of a flux. Boards move in and out depending on the level of trust and confidence the board has in management and the information being provided by management and the results of the operation.

I think that, I readily admit, is what has happened here. I do not believe, however, that we have crossed over the line. I don't believe we are micro-managing or managing in any way; we are governing. For example, on the budgetary process, we didn't tell management to cut this line, cut that line. That's management. What we said is balance the budget. That's governance. Almost on all of the issues I feel quite comfortable in saying no, what I have done as a board member is give a governing instruction to management.

For instance, hiring practices. We have a process; follow the process. I don't hire, I don't interview, I don't sign the contracts. I don't know anything about it. In terms of performance, I know nothing about it. I don't say do this performance, do that performance; don't do a Mikado; do a Mikado. We don't cross that line. This board has not crossed those lines. I think the accusation that it has is a defence mechanism of the people making the accusation.

• 1205

The Chairman: Mr. Muise.

Mr. Mark Muise: Thank you, Mr. Chairman.

The couple of questions that I have pertain to some of the points the chairman made earlier. How many board members are there?

Ms. Jean Thérèse Riley: There are 10 board members in all.

Mr. Mark Muise: How often do you meet?

Ms. Jean Thérèse Riley: Normally, we meet four times a year. It has been our habit to meet in Ottawa, and we have recently resorted to telephone meetings.

Mr. Mark Muise: Is there an executive committee on your board?

Ms. Jean Thérèse Riley: Yes.

Mr. Mark Muise: Who sits on the executive committee?

Ms. Jean Thérèse Riley: The vice-chair, the chair of the finance committee, and Rosemarie Landry.

Mr. Mark Muise: How often does that executive committee meet?

Ms. Jean Thérèse Riley: As need be. It's at the call of the chair, which is four or five times a year.

Mr. Mark Muise: Is this over and above the four or five other times?

Ms. Jean Thérèse Riley: Yes.

Mr. Mark Muise: Is there a secretariat on that board that does a link between?

Ms. Jean Thérèse Riley: There is a board secretariat that's being set up. As you know, the Auditor General's office commented on the fact that the board was not supported properly by a strong secretariat, and that has been corrected.

Mr. Mark Muise: I've listened very intently to the deliberations that have taken place. You, Mrs. Riley, for example, stated earlier that you came on because of some of your fundraising abilities and connections, and you said, well, there was no follow-through. Then Mr. Hill mentioned you don't micro-manage and you don't try to do the hands-on management, and I don't think it's the board's duty to do so.

However, if management is not doing what they should be doing, if they're not following through with recommendations—I might be wrong, but with the boards I've sat on, it is the board's responsibility to make them accountable.

Ms. Jean Thérèse Riley: That's right, and one does that once a year in an evaluation, and in this case we made an evaluation.

Mr. Mark Muise: The point I'm trying to make is that I think board members have a certain accountability, very much so.

Ms. Jean Thérèse Riley: Yes.

Mr. Mark Muise: If there are problems that management or whatever department is not following through and you notice this, and if there are problems that are developing and ongoing, is it not the board's responsibility to put their foot down and say this is not being done, it's got to be done?

Ms. Jean Thérèse Riley: I believe we've done that.

[Translation]

Mr. Yves Ducharme: That explains why at least three CEOs have left. We took care of business. We asked questions, but we weren't getting any answers. The public crisis we are experiencing is a result of the very difficult decisions we had to make.

[English]

Mr. Mark Muise: Okay, if that's the case, then let's think about it just a little bit. Is there a problem with the hiring or the way the hiring was done? The Auditor General yesterday said five in seven is rather exceptional. I think everyone is allowed to make mistakes—we all make mistakes—but I guess what I'm trying to say is that one mistake, okay; two mistakes, well, gee, we're learning, but—

Ms. Jean Thérèse Riley: Mr. Muise, before you go any further, the number of five CEOs in seven years has to do with, I believe, two interim situations. So there were three CEOs. I think that is a clarification that's important.

Mr. Mark Muise: Thank you. That is an important clarification.

The Chairman: Mrs. Bulte.

• 1210

Ms. Sarmite Bulte: Thank you, Mr. Chairman.

I have a couple of questions, following up on those of Mr. Muise.

In addition to the board of directors, did the CEO also attend those board meetings over the years?

Ms. Jean Thérèse Riley: Absolutely.

Ms. Sarmite Bulte: You said you have a finance committee. Did the CEO attend the meetings of the finance committee?

Mr. Andrew Ogaranko: Yes.

Ms. Sarmite Bulte: Did the comptroller also attend?

Mr. Andrew Ogaranko: The chief financial officer did.

Ms. Sarmite Bulte: Fine. Did you get monthly financial statements?

Mr. Andrew Ogaranko: I'm glad you asked that question.

Ms. Sarmite Bulte: I'm just trying to figure out why it took you a year to make a decision.

Mr. Andrew Ogaranko: We were handicapped from a financial reporting perspective by the technical systems available at the NAC, and it wasn't until May 1998 that the finance committee was finally able to obtain monthly reports in a consistent format. Prior to that the systems at the NAC were so archaic that it was impossible to obtain current information. I think one of the observations made by the AG was that from management the board did not have available to it information that was current enough to be able to make strategic decisions. This is a difficulty we've been facing and a frustration we've been living with for a considerable period of time.

I might say that even though we are currently in the process of implementing a new accounting system that will tie together all of the various departments of the NAC, the implementation process for that new system has taken longer than anticipated, so that even as we sit here today, we are unable to have accurate information on a monthly basis that enables us to have red flags arise so that we can identify when a problem is coming. It doesn't enable us to look for contingencies or to see where there are plans that could be put in place in the event that budgeted programs aren't meeting expectations. So we are working with that kind of a handicap, which we are trying to address, but that has been the frustration we've been living with.

Ms. Sarmite Bulte: Why did it take until May? I don't want to go too much into this, because I want to go to another line of questioning, but it seems incredulous. You're getting all this money from the federal government and people are donating money to you and you have no idea where it's going or how it's being handled. Why did it take until May to get into a position where you were getting monthly accounting? It's incredible.

Ms. Jean Thérèse Riley: Why don't we ask Elaine to speak about even the most recent—

Ms. Sarmite Bulte: No, that was just a comment there, and I want to get into something else. I want to go in a different direction completely, because part of this exercise is to look at the mandate and the mission.

One of the things, Madam Riley, you said in your speech is “Our mission is to develop and promote the performing arts”. Then, when you refer to the act, you talk about developing and promoting the performing arts. Then we go to your mission statement, and you talk about developing the performing arts. These days we're talking at the CRTC about Canadian content, and we're talking about it in film. I know it's not in the act. That's why I went back to check it, because it really stuck out for me that it says “Our mission is to develop and promote the performing arts”, but it doesn't say the “Canadian” performing arts.

You said the Mikado wasn't a success. The Mikado isn't Canadian. When you bring in shows, are those Canadian actors and Canadian set designers, or are they American shows that are coming into the National Arts Centre? We haven't talked about that, and I think it's very important. We're talking about a national arts centre, and the National Arts Centre isn't promoting Canadian performing arts all the way across. I have a concern about that. I know we're going into a whole new area, but I think it's important that we address that. Have you even addressed that?

Ms. Jean Thérèse Riley: It's a constant consideration, in particular in the selection of a music director. A very big dimension of our considerations was whether we were going to find a Canadian. Our most desirable scenario would have been to have found a Canadian music director whose qualities would have fit the requirements.

• 1215

I'm going to turn this question over to Rosemarie Landry. But before I do, I'd like to tell you that in our preliminary meetings over the creation of our corporate plan, one of the things we addressed very specifically was the special responsibility we had to Canadian performing artists and creators.

Ms. Sarmite Bulte: But it doesn't say that in your mission statement, as I pointed out. It does not.

Ms. Jean Thérèse Riley: No, but our statement, as I say, is a work in progress, as we are reassembling ourselves around a strategic plan. The basic work we've done contains that consideration.

Ms. Elaine Calder: You will find those commitments in the corporate plan. They're not in the mandate. The mandate is—

Ms. Sarmite Bulte: Do you have a copy of the corporate plan?

Ms. Elaine Calder: No, that is what is being prepared for submission in May.

The Chairman: This is your last question.

Ms. Sarmite Bulte: You've spoken a number of times about outreach to other performing arts organizations, and, again, I hope the caveat is that it is Canadian performing arts organizations.

Ms. Jean Thérèse Riley: Yes, it is. We've said “of Canada”.

Ms. Sarmite Bulte: Okay. What is the plan for this outreach? What has been done to date? How are you going to do it?

Ms. Jean Thérèse Riley: With respect, we've addressed that in particular with our search committee, and, in a larger sense, we are going to be looking at suggestions for exactly how to make that happen, how to make that outreach, how to formalize it. I would welcome the opportunity to come back to you at a later date with our specific commitments.

Ms. Sarmite Bulte: So that's an idea. Nothing has been done to date.

Ms. Elaine Calder: I think what perhaps isn't widely understood is that our dance program, for instance, each year brings in all three of the classical ballet companies from across the country and a number of the contemporary dance companies. Our English and French theatre productions are heavily co-productions with companies from across the country. We commission a fair amount of work. We commission work by Canadian composers, which we then perform here and make recordings of. There's a lot of work being done with the performing arts community from across the country that perhaps isn't understood as much as it should be, and that's a story we need to get out.

It's also part of our commitment to working with the Canada Council. The conversations I have had with both Dr. Thomson and Joanne Morrow have been about how we take our resources and some of their programs and find a way to lever the two so that we are jointly able to do more with less money, which, as we've all been saying, is of prime importance.

Ms. Sarmite Bulte: Thank you.

Thank you, Mr. Chair.

Ms. Rosemarie Landry: May I say that the centre has historically championed Canadian performers, certainly Canadian theatre, and this program of sharing, collaboration avec les théâtres en régions, is certainly very vibrant, and it has to stay. Now, it's also very important not to suffer nombrilisme. Le nombrilisme is very important. How in the art world do you measure yourself? You also have to measure yourself to the world in order to be one of the best, and that's what we're aiming for, excellence.

The Chairman: Mr. Harb.

Mr. Mac Harb (Ottawa Centre, Lib.): Thank you very much, Mr. Chair.

I have just a comment and a very brief question. First, looking at this whole thing, I can't help but say that the National Arts Centre perhaps is the victim of its own success, and to a large extent they are so busy trying to do the job they are doing that there is another segment that has not been taken care of. That is to tell Canadians about all of the success stories and all of the wonderful things that take place at the National Arts Centre. It is my hope that as you develop your strategical plan, you will put enough emphasis on telling Canadians about the importance of the arts to Canada.

• 1220

Mr. Chair, all I have to do is look a little to the south. Every time I turn on the television—and I'm very primitive when it comes to art—I look at artists and I see that lots of Canadians have done extremely well across the border.

While I want to see the National Arts Centre continue to do the excellent work they are doing, I'm also interested as an elected official to see the story being told to Canadians from coast to coast about the importance of art from an economic development point of view and from a cultural development point of view.

At the same time, my colleague mentioned something about promoting Canadian art. That's fine. It's great, but there's another component that I think is important to put on the record, which is that art, like education, like culture, like anything else, should know no borders. If there is a talent that exists in Latin America or Africa or elsewhere and Canadians want to have access to that talent and they want to go to the National Arts Centre in order to see it, I hope the National Art Centre will continue to provide us with those opportunities.

I would say I am quite content with the presentation I have heard from the board, Mr. Chair. I know when you are in a dump everybody wants to dump all over you even further. It's almost as if the experts more than multiply when there is a crisis and everybody starts pointing the finger. But building is a lot harder than destroying. Looking at the situation reminds me almost of someone climbing up a mountain who's halfway through. If you look up, of course, you still have some work to do. It's hard climbing, but there is hope. But if you look down, it's pretty scary. There's fear.

As this board told us this morning, they have heard what the Auditor General has said. They know about some of the concerns. They are trying to address them. But if we want to continue reminding them about what happened 10 or 15 years ago, frankly, Mr. Chair, this is not fair. These are volunteers, members. We have two mayors. We have fantastic talent on this board. What we have to do as a committee is ask them what it is we should do in order to make their job easier, in order for them to continue to do their job well.

I wanted to say, Mr. Chair, on behalf of my constituency in the riding of Ottawa Centre, where the National Arts Centre is, that I'm delighted and I'm extremely satisfied with what the board has told us today. It is my hope, Mr. Chair, that we will do everything we can to make the job easier.

The Chairman: Thank you.

Could I go on to Mr. Godfrey, Mr. McWhinney, and Mr. Bonwick.

Mr. John Godfrey: I have first a question on the strategic plan. Will it include performance benchmarks? I'm assuming that would be part of—

Ms. Jean Thérèse Riley: Yes.

Ms. Elaine Calder: Absolutely.

Mr. John Godfrey: Secondly, as I understand it, you'll have your strategic plan by May, and I would never wish to pre-empt the views of the other members of the committee, but would it be a reasonable expectation on our parts that if we notionally thought of having you back in June, this would be a fair time to assess the response you're making collectively to the problems the Auditor General has laid out? Would that be a good time to see ourselves again?

Ms. Elaine Calder: From a management point of view, certainly, yes.

Mr. John Godfrey: The final question has to do with the recommendations of the Auditor General on how, as he puts it rather benignly, the organization of work could be simplified and made less costly. He points out that there are 698 employees, but understandably a lot of those are part time. I assume those are ushers, parking lot attendants, restaurant workers, etc.

I'm really asking this of Ms. Calder. First of all, I know it's an odd beast, it's a theatre, it's an orchestra, etc., but given your experience with other institutions, are these numbers excessively large, the fact that there are 134 full-time employees and so on?

Then, the follow-up question is this. It sounds as if the collective agreements aren't your friend when the overtime clause is costing you $1.5 million in one year. How would an outsider coming in on an interim basis view this, Ms. Calder? Are the numbers high, and are the arrangements too restrictive? If yes to either of those, what do you do about it?

Ms. Elaine Calder: No, I don't think the numbers are too high. The NAC is an extremely complex organization, as I think everyone around the table understands, and I won't go into it again, but the number of employees we have is certainly no greater than the number of employees you would find at the Stratford Festival, for instance, in the course of a year. Stratford's budget is $30 million and ours is $40 million, so there's a rough benchmark. I don't think we're out of line there.

• 1225

On the collective agreements, I haven't really gotten to the collective agreements problem yet. I certainly am going to need the advice of Bernard Geneste, our corporate secretary, and a new director of human resources we will be hiring, as to how to approach that. Whether we can reduce the number of collective agreements or not, I'm not so sure, to be honest.

Mr. John Godfrey: Well, maybe we'll talk about it in June.

Ms. Elaine Calder: Exactly.

The Chairman: Thank you.

Mr. McWhinney.

Mr. Ted McWhinney: Allow me to explain that when I left you, it was not for any feeling that there was nothing interesting happening here. I had to go to the House to defend the social union, which is, of course, what the Prime Minister and the premiers are talking about. But there is an analogy here, and I wonder if I can raise this issue with you.

In my pre-parliamentary professional life, I was very often in national capital cities, some of them artificial capitals, some of them smaller than here. The offerings, quantitatively and qualitatively, of the equivalent of the National Arts Centre seemed richer than here, and I think there's a very easy explanation: finance. Most of these capitals are very heavily subsidized by their national parliaments, their national institutions.

I really have two questions here. Have you found any difficulty in making the case to the federal government that even though it isn't a special statutory region like the District of Columbia and that in many other territories, the national capital is something more than an Ontario city on the Ottawa River? In other words, maybe there is a case for positive discrimination or some favourable differentiation and financial treatment in relation to other regional centres.

The second issue would be profiting from our lessons with the social union, which is really cooperative federalism under another name. Have you ever investigated in depth the possibility of partnership with regional centres in co-productions? I think you might find that to be a device for getting more money to Ottawa and also more money to the regions.

I'll leave those questions with you.

Ms. Jean Thérèse Riley: To the first question, which I welcome, I don't think we could say we've encountered difficulty because I think Canadians' view of their national capital really is reflected in the government's view, usually. We are finding—and I'm sure the government is finding—that there's a change of psychology out there. Canadians are starting to think it's important to have a national capital that we're proud of. It's from that perspective that some of the great gifts have come to us in recent weeks, and we find that extremely encouraging. In charting the course for the next chapters and in addressing all of these challenges, part of the excitement is that we would hope to come back to the government and say that we've put everything in order.

One of the interesting things that is not in our mandate or in our strategic plan, but which I think is an implicit direction that we haven't dared to address, is that we have one of the best opera spaces on the continent. We don't use it. It's an investment of the Canadian people that's not used, so there's a disconnect there somewhere. We wouldn't dare put that as a strategic direction right now, until we've addressed some other more pressing questions. In a larger sense of a national capital that has institutions and facilities that citizens are proud of, the next chapter is about being extremely ambitious for our national symbols that we all are coming to think of and understand as so important.

Mr. Ted McWhinney: I share your sentiments on the empty opera house. It's acoustically beautiful. As I say, one of the charms of any capital is opera every night, in a different opera.

• 1230

We do respect the work you're doing. I think all of us understand how much is involved in volunteer work in the arts. In some senses, the response, the appreciation, is an elite and limited one, but the national implications are hugely important.

Thank you for coming.

Ms. Rosemarie Landry: I would add to this that our orchestra, which is playing better and is younger because of the presence of Zukerman, is going on tour across the country. There are immediate plans for touring. As I mentioned earlier, there is a collaboration avec les théâtres en région in this, in both French and English, as well as in dance. So that is alive and well.

[Translation]

Things are going very well indeed.

Mr. Ted McWhinney: Excellent. Thank you.

[English]

The Chairman: Mr. Bonwick.

Mr. Paul Bonwick: Coming back to trying to understand how the board is making use of some of the solutions to put itself in a little better position, what I have are two questions, and then maybe I'll ask for a response. The questions fall in line with some basic, fundamental business practices or strategies.

I'm just wondering if there has been a detailed marketing assessment or study performed in the last five years, first, for identifying key niches that the NAC should be focusing on to raise the level of awareness and, in turn, the level of use; and second—and I guess of use to management—to focus in on the most lucrative or greatest opportunities for fundraising. The second question, as a caveat, is whether the marketing assessment or study was conducted internally, or was it done externally by a marketing specialty firm?

Ms. Jean Thérèse Riley: Mr. Chairman, from the Auditor General's report, I think we all know this has not been done, and one of the serious criticisms is that programming has been done on an ad hoc basis.

In putting in place the processes to address those challenges, I will turn to Ms. Calder.

Ms. Elaine Calder: There has been very little market research done at the centre—and I think you delineated the last five years. The programmers were described by the Auditor General as relying on intuition to a greater extent than might seem reasonable.

In defence of our artistic programmers, their intuitions are pretty damned good. They're doing extremely well at the box office. Clearly, in terms of what we call our core programming—the presentations that go on in the three theatre spaces over the course of September to June—without benefit of market research, the programmers seem to have a pretty good idea of what this region is looking for on an ongoing basis. I think the real difficulty came around Festival Canada and the launch of a very expensive undertaking without any preliminary market research or identification of target market segments. That is something that will have to be addressed before that festival is reinstated.

Mr. Paul Bonwick: I'm certainly not questioning their intuitiveness. Having sat on a board of trustees myself, one of the first things the board wrestled with was doing a marketing assessment for both fundraising from a use standpoint and from a fundraising standpoint, in order to give a clear direction to the management team in terms of where they should be heading. Do you have plans in the short term to either contract out a marketing study or perhaps do one internally?

Ms. Elaine Calder: If what we are talking about are the marketing and fundraising aspects, or marketing as it applies more specifically to fundraising and sponsorship, the answer is yes. We are working with Ketchum Canada, which in fact worked with the Auditor General in the special audit last year. Ketchum assisted the Auditor General in the fundraising aspect of that audit and is now working with us to do precisely what you suggest.

Mr. Paul Bonwick: Is there a timeline in place for when this marketing study will be done?

Ms. Elaine Calder: Over the next few weeks. I would say we'll have pretty significant results by the end of March.

The Chairman: Okay, thank you.

Members, I think we have had ample opportunity to ask questions. We must now give our witnesses a well-deserved break.

I would like to thank you very much for coming. Ms. Riley, I know questions to you, to members of the board, and to Mrs. Calder may have seemed pointed at times. Some of the questions to you directly from certain members have been very pointed, but I think I can express the feeling of people on this committee that it has been an exceptionally non-partisan committee. It really believes in what it is doing, and I don't think the spirit here has been to try to be unfair. On the contrary, it has been to try to find solutions and finances and information.

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As suggested by Mr. Godfrey, I think it would be good to see each other again at the end of May or June—especially now that we also have the answer from Ms. Calder that a marketing study will be completed by that time—in order to catch up with what has happened to your strategic study and to find out where we're going from here.

I thank you very much for attending.

The meeting is adjourned.