HUMA Committee Report

INTRODUCTION

In April 2000, I joined with my opposition colleagues in issuing a unanimous interim minority report on the scandalous events at HRDC. We stood together in condemning the Liberal government’s attempts to dismiss the very serious problems at HRDC as administrative foul-ups when mounting evidence has suggested far more serious problems.

Since this scandal broke, the Liberal government has consistently downplayed the extent and partisan nature of the institutional problems at HRDC. It has thrown up smoke screens and stonewalled the Committee’s investigation of these problems, just as it has ignored the glaring indictments of a series of audits in the years leading up to our investigation. Of most concern, the government and the Minister have refused to acknowledge the increasingly obvious and partisan misuse of public funds in the awarding of questionable grants for partisan purposes.

To this day, questions remain on a number of fronts: alleged misappropriation of funds for partisan reasons; multiple criminal investigations that are still underway; grants that were approved after payments were made; the existence of varying approval criteria in different regions of the country; evidence of a culture of political interference in local HRDC offices; the withholding of information; and an absolute absence of departmental controls.

Sadly, those who are now paying the price for Liberal mismanagement are the very Canadians whom HRDC programs are intended to serve. We, in the New Democratic Party, have consistently supported programs that create jobs, increase opportunities for youth, enhance social development, and bolster social capital. And, we deplore the fact that they have been put in jeopardy because of Liberal mismanagement.

In this Minority Report, the New Democratic Party renews its call for an independent public inquiry into the HRDC grants and contributions scandal in order to get to the truth regarding allegations of Liberal interference and mismanagement. In addition, we make specific recommendations related to government administration and service delivery, labour practices and financial management, which we believe are in the best interests of the Canadians whom we serve.

RECOMMENDATIONS

1. THE GOVERNMENT MUST INITIATE AN INDEPENDENT PUBLIC INQUIRY IMMEDIATELY TO REPORT ON ALLEGED PARTISAN INTERFERENCE IN THE AWARDING OF HRDC GRANTS AND CONTRIBUTIONS.

New Democrats have been calling for an independent public inquiry into the scandal at HRDC from day one. We believe that if the Canadian public is ever to really understand what has happened at HRDC, it will take an independent public inquiry, with the resources and scope, unfettered by the partisan nature of Parliament and capable of demanding full disclosure from the government, to succeed in that effort. The Liberal-dominated committee has not invoked the scope necessary to address questions and allegations that remain unanswered surrounding the Transitional Jobs Fund. These questions underscore the need for a full, independent inquiry to determine the extent of the partisan nature and use of grants and contributions.

2. WE CALL ON THE GOVERNMENT TO DISMANTLE HRDC AND TO SET UP AN INDEPENDENT REVIEW BODY, COMPRISED OF REPRESENTATIVES FROM THE PUBLIC AND PRIVATE SECTORS AND LABOUR, TO PROPOSE SMALLER DEPARTMENTAL STRUCTURES, WHICH AT MINIMUM SEPARATE SOCIAL AND LABOUR PORTFOLIOS, IN ORDER TO BETTER SERVE THE PUBLIC.

It’s time to slay the HRDC Goliath. New Democrats support the Committee majority in calling for an end to the era of the "super ministry." It has become clear over past months that not only are there serious issues with grants and contributions but the contradictory nature of the mandate of the Department itself is a major concern. In 1993, when HRDC came into existence, it amalgamated under one Minister and one Deputy Minister policies and programs in the areas of labour, employment and training, and social development, which had previously been the responsibility of five ministers and five deputies. HRDC has responsibility for approximately $60 billion in taxpayers dollar, an astounding 45% of federal government spending, and it employs 25,000 public servants.

Many of the Department’s labour and social development programs are at cross- purposes and are often contradictory, and in the end Canadians, especially those who are disadvantaged because of poverty, low income or disability, suffer the most. Public servants that have been willing to come forward have suggested that multiple intents of the Department make it difficult to serve Canadians who may not fit the "retraining model". Incentive programs designed to reward regional offices that are successful in pushing the most people back into the labour market, do not "reward" those staff or offices that assist Canadians who would benefit most from "social" programs rather than labour programs. Furthermore, it is our belief that smaller departments would provide a better working culture for the people that they employ.

3. THE GOVERNMENT MUST REVERSE THE DAMAGE OF YEARS OF SUCCESSIVE CUTBACKS AND LAYOFFS AND REBUILD AND STRENGTHEN THE HUMAN RESOURCES NECESSARY TO DELIVER VALUABLE PUBLIC SERVICES.

If we want public accountability in program delivery we must ensure that those who deliver, monitor and evaluate crucial public programs are provided with the tools necessary to get the job done. Years of massive cutbacks in the public service and resources stretched to the limit have taken their toll. Since 1995, 5,000 jobs have been cut from HRDC. In addition, 2,000 positions were devolved to the provinces. These cuts have left the Department with inadequate staffing levels and without the depth of experience and knowledge to do the work effectively. Coupled with systematic devaluing of public sector work through the government’s refusal to address pay equity settlements, to wage freezes, to years of program reviews which position public servants as the government’s scape goats, and the result has been an overall weakening of our public sector.

In testimony before this Committee, we heard first hand from the Canada Employment and Immigration Union, that there must be adequate staff and training, a moratorium on the "contracting out" of public services, and provisions to allow carryover and conversion of program dollars into salary incentives. We support these recommendations.

4. THE GOVERNMENT MUST ENACT WHISTLE-BLOWER LEGISLATION TO PROTECT PUBLIC SERVANTS

The Committee heard testimony that seven in ten HRDC employees believed that there would be repercussions if they voiced concerns about ethical breaches at the Department. This is unacceptable.

INCENTIVE PROGRAMS FOR UPPER MANAGEMENT MUST BE HALTED TO END THE PRACTICE OF REWARDS AND PROMOTIONS, WHEN IN REALITY SENIOR MANAGERS DID NOT FULFIL THEIR DUTIES IN THE PUBLIC INTEREST.

WE RECOMMEND THAT THE PRESIDENT OF THE TREASURY BOARD, IN CONJUNCTION WITH THE AUDITOR GENERAL OF CANADA, DEVELOP A CODE OF CONDUCT FOR DEPARTMENTS THAT AWARD GRANTS AND CONTRIBUTIONS. THIS CODE OF CONDUCT SHOULD INCORPORATE TRANSPARENCY, DISCLOSURE, FAIRNESS AND STANDARD PRACTICES.

Federal grants and contributions should adhere to guidelines related to clear rules, transparency, and public disclosure. This Code of Conduct should also incorporate a clear role for MPs in the approval process of all government grants and contributions, in this the NDP supports the general intent of recommendations related to the MPs role in the main Committee report.

Eligibility guidelines for the Transitional Jobs Fund, the program that preceded the Canada Jobs Fund, were so malleable that they could be made to fit wherever the Liberals seemingly had something to gain. The so-called "pockets rule" in particular seems to have contained the most glaring opportunities for political interference. At this stage in the process, and as stated earlier in this report, we believe a public inquiry is necessary to get to the bottom of that mess. However, lessons have been gleaned from the HRDC fiasco that can immediately be applied to the broader government spectrum to ensure that these sorts of questions and impropriety are curtailed and that future "inquiries" into scandals of this magnitude need not be called. A clear Code of Conduct would aid in achieving this goal.

7. THE TREASURY BOARD MUST HAVE THE LEGISLATIVE AUTHORITY AND WILL TO ENFORCE RULES AND TO INVOKE CONSEQUENCES IF ESTABLISHED RULES, OR RECOMMENDATIONS OF THE AUDITOR GENERAL, ARE IGNORED.

The Committee learned of numerous internal and external audit reports collecting dust, reporting lines that have been circumvented, and recommendations from monitoring agencies that have been completely ignored. The Auditor General himself, in his testimony before this Committee, said "we have no power to force departments to implement our recommendations, nor do we have powers to sanction government departments if they don't implement our recommendations." This lack of accountability is unacceptable. Government-wide rules must be put in place to ensure that this sort of disregard for important systems of checks and balances will face serious consequences. Our democracy depends on a healthy system of monitoring and compliance to ensure that the smooth, untarnished business of government is carried out in the best interest of the public. Never again, should any government’s lack of respect for this balance go unsanctioned.

8. THE GOVERNMENT MUST TAKE IMMEDIATE STEPS TO END OUTDATED FINANCIAL MANAGEMENT BY CREATING AN "OFFICE OF THE COMPTROLLER GENERAL" TO ENSURE VISION, LEADERSHIP AND CROSS-DEPARTMENTAL HARMONIZATION OF SOUND FINANCIAL PRACTICES.

Since 1993, the Auditor General has released four separate reports expressing strong concern with the availability of financial expertise in the Public Service. Massive downsizing has dramatically reduced the number of financial managers in the public service. Witnesses from the Association of Public Service Financial Administrators (APFSA) suggested the following measures to redress this situation: (1) immediate action to address issues of attrition, recruitment and retention of financial managers; (2) greater integration of financial managers into the governments operations and program delivery; (3) creation of the Office of Comptroller General, separate and distinct from the Office of the Secretary of the Treasury Board to ensure vision, leadership and cross-departmental harmonization of sound financial practices. We support these recommendations.