PACC Committee Meeting
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37th PARLIAMENT, 3rd SESSION
Standing Committee on Public Accounts
EVIDENCE
CONTENTS
Thursday, March 18, 2004
| ¿ | 0905 |
 |
The Chair (Mr. John Williams (St. Albert, CPC)) |
|
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP) |
|
The Chair |
|
Hon. Alfonso Gagliano (As Individual) |
|
The Chair |
|
Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons) |
| ¿ | 0910 |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Rob Walsh |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Rob Walsh |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Vic Toews (Provencher, CPC) |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
| ¿ | 0915 |
|
The Chair |
|
Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.) |
|
The Chair |
| ¿ | 0920 |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
| ¿ | 0925 |
| ¿ | 0930 |
| ¿ | 0935 |
| ¿ | 0940 |
|
The Chair |
| ¿ | 0945 |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC) |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
| ¿ | 0950 |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
| ¿ | 0955 |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
The Chair |
|
Mr. Odina Desrochers (Lotbinière—L'Érable, BQ) |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
| À | 1000 |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mr. Odina Desrochers |
|
The Chair |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
The Chair |
| À | 1005 |
|
Mr. Odina Desrochers |
|
The Chair |
|
Mrs. Karen Redman (Kitchener Centre, Lib.) |
|
Hon. Alfonso Gagliano |
| À | 1010 |
|
Mrs. Karen Redman |
|
Hon. Alfonso Gagliano |
|
Mrs. Karen Redman |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
| À | 1015 |
|
Mrs. Karen Redman |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
| À | 1020 |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
The Chair |
|
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, CPC) |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
| À | 1025 |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
The Chair |
| À | 1030 |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mrs. Marlene Jennings |
|
Mr. Peter MacKay |
|
The Chair |
|
Mr. Peter MacKay |
|
The Chair |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
| À | 1035 |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
| À | 1040 |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Ms. Pauline Picard (Drummond, BQ) |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
| À | 1045 |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
|
Ms. Pauline Picard |
|
Hon. Alfonso Gagliano |
| À | 1050 |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Alan Tonks (York South—Weston, Lib.) |
|
Hon. Alfonso Gagliano |
|
Mr. Alan Tonks |
|
Hon. Alfonso Gagliano |
| À | 1055 |
|
Mr. Alan Tonks |
|
Hon. Alfonso Gagliano |
|
Mr. Alan Tonks |
|
Hon. Alfonso Gagliano |
|
Mr. Alan Tonks |
|
Hon. Alfonso Gagliano |
|
Mr. Alan Tonks |
|
The Chair |
|
Mr. Alan Tonks |
|
Hon. Alfonso Gagliano |
| Á | 1100 |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
| Á | 1105 |
|
The Chair |
|
The Chair |
|
Mr. Dennis Mills (Toronto—Danforth, Lib.) |
|
The Chair |
|
Mr. Dennis Mills |
|
The Chair |
|
Mr. Dennis Mills |
|
The Chair |
|
Ms. Beth Phinney (Hamilton Mountain, Lib.) |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Rob Walsh |
|
The Chair |
|
Ms. Beth Phinney |
| Á | 1140 |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
| Á | 1145 |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
The Chair |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Mrs. Marlene Jennings |
|
Mr. Vic Toews |
|
Mr. Vic Toews |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
| Á | 1150 |
|
Mrs. Marlene Jennings |
|
Mr. Vic Toews |
|
Mrs. Marlene Jennings |
|
Mr. Jason Kenney (Calgary Southeast, CPC) |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mr. Jason Kenney |
|
The Chair |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
| Á | 1155 |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
| Â | 1200 |
|
Mrs. Judi Longfield (Whitby—Ajax, Lib.) |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
| Â | 1205 |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
|
Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.) |
| Â | 1210 |
|
The Chair |
|
Mr. Christian Jobin (Lévis-et-Chutes-de-la-Chaudière, Lib.) |
|
The Chair |
|
Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.) |
|
Hon. Alfonso Gagliano |
|
Mr. Dominic LeBlanc |
|
Hon. Alfonso Gagliano |
| Â | 1215 |
|
Mr. Dominic LeBlanc |
|
Hon. Alfonso Gagliano |
|
Mr. Dominic LeBlanc |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Jason Kenney |
| Â | 1220 |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
| Â | 1225 |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
| Â | 1230 |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
The Chair |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
The Chair |
|
Mr. Odina Desrochers |
| Â | 1235 |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
Mr. Odina Desrochers |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
| Â | 1240 |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
| Â | 1245 |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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The Chair |
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Ms. Judy Wasylycia-Leis |
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The Chair |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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Mrs. Marlene Jennings |
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Hon. Alfonso Gagliano |
| Â | 1250 |
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Mrs. Marlene Jennings |
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Hon. Alfonso Gagliano |
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The Chair |
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Mrs. Marlene Jennings |
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Hon. Alfonso Gagliano |
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Mrs. Marlene Jennings |
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Hon. Alfonso Gagliano |
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The Chair |
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Mrs. Karen Redman |
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Hon. Alfonso Gagliano |
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Mrs. Karen Redman |
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The Chair |
| Â | 1255 |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
| · | 1300 |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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Hon. Alfonso Gagliano |
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The Chair |
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The Chair |
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Mr. Alan Tonks |
| ¸ | 1435 |
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The Chair |
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Ms. Sheila Fraser (Auditor General of Canada, Office of the Auditor General of Canada) |
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The Chair |
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Mr. Peter MacKay |
| ¸ | 1440 |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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The Chair |
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Mrs. Marlene Jennings |
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Ms. Sheila Fraser |
| ¸ | 1445 |
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Mrs. Marlene Jennings |
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Ms. Sheila Fraser |
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Mrs. Marlene Jennings |
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The Chair |
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Mrs. Diane Ablonczy |
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Ms. Sheila Fraser |
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Mrs. Diane Ablonczy |
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Ms. Sheila Fraser |
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Mrs. Diane Ablonczy |
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Ms. Sheila Fraser |
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Mrs. Diane Ablonczy |
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Ms. Sheila Fraser |
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Mrs. Diane Ablonczy |
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Ms. Sheila Fraser |
| ¸ | 1450 |
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The Chair |
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Mr. Dennis Mills |
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Ms. Sheila Fraser |
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Mr. Dennis Mills |
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Ms. Sheila Fraser |
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Mr. Dennis Mills |
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Ms. Sheila Fraser |
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Mr. Dennis Mills |
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The Chair |
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Ms. Pauline Picard |
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Ms. Sheila Fraser |
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Ms. Pauline Picard |
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Ms. Sheila Fraser |
| ¸ | 1455 |
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Ms. Pauline Picard |
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Ms. Sheila Fraser |
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Ms. Pauline Picard |
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Ms. Sheila Fraser |
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Ms. Pauline Picard |
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Ms. Sheila Fraser |
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Ms. Pauline Picard |
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Ms. Sheila Fraser |
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Ms. Pauline Picard |
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The Chair |
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Mrs. Karen Redman |
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Ms. Sheila Fraser |
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Mrs. Karen Redman |
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Ms. Sheila Fraser |
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Mrs. Karen Redman |
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The Chair |
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Mr. Odina Desrochers |
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Ms. Sheila Fraser |
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Mr. Odina Desrochers |
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Ms. Sheila Fraser |
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Mr. Odina Desrochers |
| ¹ | 1500 |
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Ms. Sheila Fraser |
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Mr. Odina Desrochers |
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Ms. Sheila Fraser |
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Mr. Odina Desrochers |
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Ms. Sheila Fraser |
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M. Odina Desrochers |
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The Chair |
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Mrs. Judi Longfield |
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Ms. Sheila Fraser |
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Mrs. Judi Longfield |
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Ms. Sheila Fraser |
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The Chair |
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Mrs. Marlene Jennings |
| ¹ | 1505 |
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Ms. Sheila Fraser |
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Mrs. Marlene Jennings |
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Ms. Sheila Fraser |
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Mrs. Marlene Jennings |
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Ms. Sheila Fraser |
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Mrs. Marlene Jennings |
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Ms. Sheila Fraser |
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Mrs. Marlene Jennings |
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Ms. Sheila Fraser |
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Mrs. Marlene Jennings |
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Ms. Sheila Fraser |
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Mrs. Marlene Jennings |
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The Chair |
|
Ms. Sheila Fraser |
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Mrs. Marlene Jennings |
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The Chair |
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Mr. Peter MacKay |
|
Ms. Sheila Fraser |
| ¹ | 1510 |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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Ms. Sheila Fraser |
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Mr. Peter MacKay |
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The Chair |
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Mr. Vic Toews |
| ¹ | 1515 |
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The Chair |
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Mr. Alan Tonks |
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The Chair |
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Mr. Alan Tonks |
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The Chair |
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Mr. Vic Toews |
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The Chair |
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Mr. Vic Toews |
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The Chair |
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Mr. Odina Desrochers |
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The Chair |
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Mr. Odina Desrochers |
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The Chair |
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Ms. Beth Phinney |
|
Ms. Sheila Fraser |
|
Ms. Beth Phinney |
|
Ms. Sheila Fraser |
| ¹ | 1520 |
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Ms. Beth Phinney |
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Ms. Sheila Fraser |
|
Ms. Beth Phinney |
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Ms. Sheila Fraser |
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Ms. Beth Phinney |
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Ms. Sheila Fraser |
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Ms. Beth Phinney |
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Ms. Sheila Fraser |
|
Ms. Beth Phinney |
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Ms. Sheila Fraser |
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Ms. Beth Phinney |
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Ms. Sheila Fraser |
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Ms. Beth Phinney |
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Ms. Sheila Fraser |
|
Ms. Beth Phinney |
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The Chair |
| ¹ | 1525 |
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Mr. John O'Reilly |
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The Chair |
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Mr. Dennis Mills |
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The Chair |
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Mr. Vic Toews |
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The Chair |
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Mr. Dennis Mills |
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The Chair |
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Mr. Dennis Mills |
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The Chair |
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Mr. Odina Desrochers |
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The Chair |
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Mr. Dennis Mills |
| ¹ | 1530 |
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Mr. Vic Toews |
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The Chair |
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Mr. Dennis Mills |
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The Chair |
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Ms. Sheila Fraser |
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Mr. Dennis Mills |
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The Chair |
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Ms. Sheila Fraser |
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The Chair |
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Ms. Sheila Fraser |
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The Chair |
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Mr. Alan Tonks |
| ¹ | 1535 |
|
Ms. Sheila Fraser |
|
Mr. Alan Tonks |
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The Chair |
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Mr. Vic Toews |
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The Chair |
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Mr. Vic Toews |
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The Chair |
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Mr. Vic Toews |
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The Chair |
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Mr. Alan Tonks |
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The Chair |
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Mr. Alan Tonks |
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The Chair |
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Mr. Alan Tonks |
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The Chair |
| ¹ | 1540 |
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Mr. Odina Desrochers |
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The Chair |
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Mr. Alan Tonks |
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The Chair |
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Ms. Sheila Fraser |
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The Chair |
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Mrs. Marlene Jennings |
|
The Chair |
|
Ms. Sheila Fraser |
|
The Chair |
|
Mrs. Diane Ablonczy |
| ¹ | 1545 |
|
Ms. Sheila Fraser |
|
Mrs. Diane Ablonczy |
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Ms. Sheila Fraser |
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Mrs. Diane Ablonczy |
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Ms. Sheila Fraser |
|
Mrs. Diane Ablonczy |
|
Ms. Sheila Fraser |
|
Mrs. Diane Ablonczy |
|
Ms. Sheila Fraser |
|
Mrs. Diane Ablonczy |
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Ms. Sheila Fraser |
|
Mrs. Diane Ablonczy |
|
Ms. Sheila Fraser |
|
Mrs. Diane Ablonczy |
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The Chair |
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Mr. Christian Jobin |
| ¹ | 1550 |
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Ms. Sheila Fraser |
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Mr. Christian Jobin |
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Ms. Sheila Fraser |
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Mr. Christian Jobin |
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The Chair |
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Ms. Judy Wasylycia-Leis |
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The Chair |
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Ms. Beth Phinney |
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The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Dennis Mills |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
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Mr. Dennis Mills |
|
Ms. Judy Wasylycia-Leis |
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The Chair |
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Mr. Dennis Mills |
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The Chair |
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Ms. Judy Wasylycia-Leis |
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The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Ms. Sheila Fraser |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
| ¹ | 1555 |
|
Ms. Sheila Fraser |
|
Ms. Judy Wasylycia-Leis |
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The Chair |
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Mr. John O'Reilly |
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Ms. Sheila Fraser |
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Mr. John O'Reilly |
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Ms. Sheila Fraser |
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The Chair |
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Mr. John O'Reilly |
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Ms. Sheila Fraser |
| º | 1600 |
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Mr. John O'Reilly |
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Ms. Sheila Fraser |
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Mr. John O'Reilly |
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Ms. Sheila Fraser |
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Mr. John O'Reilly |
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The Chair |
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Mr. Rob Walsh |
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The Chair |
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Mrs. Judi Longfield |
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The Chair |
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Mrs. Judi Longfield |
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The Chair |
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The Chair |
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Mrs. Marlene Jennings |
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The Chair |
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Mrs. Marlene Jennings |
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The Chair |
| º | 1605 |
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Mrs. Marlene Jennings |
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The Chair |
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Ms. Judy Wasylycia-Leis |
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The Chair |
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Mrs. Karen Redman |
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The Chair |
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Mr. Alan Tonks |
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The Chair |
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Mr. John O'Reilly |
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The Chair |
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Mr. John O'Reilly |
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The Chair |
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Mr. Rob Walsh |
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The Chair |
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Mrs. Marlene Jennings |
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The Chair |
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Mrs. Marlene Jennings |
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Mr. Peter MacKay |
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The Chair |
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Mr. Odina Desrochers |
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The Chair |
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Mr. Odina Desrochers |
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The Chair |
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Mr. Odina Desrochers |
| º | 1610 |
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The Chair |
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Mr. Odina Desrochers |
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The Chair |
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Mr. Odina Desrochers |
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The Chair |
CANADA
Standing Committee on Public Accounts |
|
l |
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l |
|
EVIDENCE
Thursday, March 18, 2004
[Recorded by Electronic Apparatus]
¿ 
(0905)
[English]
The Chair (Mr. John Williams (St. Albert, CPC)): Good morning, everybody.
The orders of the day, pursuant to Standing Order 108(3)(g), are chapter 3, the Sponsorship Program; chapter 4, Advertising Activities; and chapter 5, Management of Public Opinion Research, of the November 2003 Report of the Auditor General of Canada, referred to the committee on February 10, 2004.
This morning, as a witness, we have as an individual the Honourable Alfonso Gagliano. Just so that everyone knows, the orders today will be for a recess from 11 a.m. to 11:30 a.m. and lunch from 1 p.m. to 2:30 p.m., and the meeting will restart at 2:30 p.m.
At the beginning of the third session, at 2:30 in the afternoon, I expect that we will have the Auditor General of Canada come forward. She is in the room observing the hearing this morning, but we didn't want to get into one person versus another person, and therefore Mr. Gagliano will have the floor for the morning. But in the third session, we will start off with questions to the Auditor General; so if you have anything specific, you should know that she will be coming forward later in the day.
Ms. Wasylycia-Leis, you gave me a note indicating that you wanted to speak.
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you, Mr. Chairperson.
I would like to make a friendly suggestion as a constructive proposal to address the significance of today's hearings with one of the key witnesses in terms of the whole sponsorship scandal.
As you know, Mr. Chairperson, we have a method of operation at this committee where we each have eight minutes in the first round, and then we revert to four-minute rounds. Given the significance of today's discussion and the need for a fulsome debate, and the difficulty one has in actually developing a line of questioning in four minutes, I would make a suggestion that we have eight-minute rounds all day today, and revert to the normal way of operating when and if we meet with Mr. Gagliano tomorrow.
The Chair: There is a suggestion by Ms. Wasylycia-Leis that all interventions be eight minutes in length. Is that agreed?
Some hon. members: Agreed.
The Chair: That's agreed.
A standard statement that I always give at the beginning of these meetings, not to any particular witness but as a reminder to all witnesses who appear before the committee, is that refusal to answer questions or failure to reply truthfully may give rise to a charge of contempt of the House, whether the witness has been sworn in or not. In addition, witnesses who lie under oath may be charged with perjury. This is from page 862 of Marleau and Montpetit, House of Commons Procedure and Practice.
Since you are a former cabinet minister before us this morning, Mr. Gagliano, do you feel in any way constrained by your oath of office as a cabinet minister and member of the Privy Council, or are you able to give us full answers this morning?
Hon. Alfonso Gagliano (As Individual): I will be at your disposal, and to the best of my knowledge, I will give all the answers. Naturally, if cabinet material is not public, I am bound by my oath of office and therefore cannot address those issues that are not public.
The Chair: You are aware that the Prime Minister has given us cabinet documents.
Mr. Walsh, our law clerk, sits here. I will not speak for him, so I will ask him to speak about the responsibility of government to Parliament.
Do you want to say something there, Mr. Walsh?
Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons): Yes, I do, just briefly for the benefit perhaps of Mr. Gagliano and his counsel.
We have provided to the committee what are represented as old cabinet documents that are relevant to the sponsorship matter, which is the subject of the inquiry of this committee. Accordingly, I believe the committee would expect that you, Mr. Gagliano, would be able to answer all questions relating to the sponsorship matter. I think the purpose of the chair's inquiry is to know whether, notwithstanding the delivery of all these documents to the committee, you would nonetheless feel constrained by your oath of office as a cabinet minister and might on occasion in the course of the questions put to you by the committee feel unable to answer a question by reason of your oath.
I would just add to that, Mr. Gagliano, if I could, that I would ask you to clarify if it is the case that you anticipate you might be constrained and to undertake to indicate to the committee when it is in the course of an answer that you do so feel constrained.
¿ (0910)
The Chair: Mr. Gagliano.
Hon. Alfonso Gagliano: Thank you, Mr. Chair.
I will be able and willing to answer all questions pertaining to cabinet documents that have been made public. If they have been tabled with this committee and they are public, yes, I will answer the question. But if the documents are not public yet, you understand that because of my oath of office I cannot discuss any of those matters.
The Chair: Mr. Walsh said that if you are constrained--
Hon. Alfonso Gagliano: I will mention that.
The Chair: --would you make the point that there is additional information you have not put on the table by virtue of your oath.
Hon. Alfonso Gagliano: Yes.
The Chair: Thank you.
Mr. Walsh.
Mr. Rob Walsh: Mr. Chairman, I'll say this so it is abundantly clear.
My comment related to your oath of office as it may pertain to matters you would have discussed at cabinet or at a committee of cabinet or matters you might have discussed with other ministers pertaining to a subject matter discussed at cabinet or discussed at a committee of cabinet that may or may not go beyond what is reflected in the documents provided to this committee. Accordingly, the purpose of my comment is to inquire as to whether you would feel constrained from answering questions fully and truthfully, notwithstanding the fact that your answer would go beyond what is evident in the documents provided to the committee.
Hon. Alfonso Gagliano: Would you repeat what you just said?
What I said was that I was able and willing to answer questions concerning the cabinet documents that have been made public. Now I think you are going beyond that. You're going to discussions with ministers and so on, and the oath of office, as you know, includes all those things. Definitely, there is a line. But could you please repeat your question so we can make sure we understand fully what you are trying to say?
The Chair: Rob.
Mr. Rob Walsh: Certainly, Mr. Chairman.
The ambit of the inquiry by the committee is what is referred to as the sponsorship program and the sponsorship so-called scandal. You have responded to the chairman's earlier statements on limiting your availability to those matters found in the documents provided to this committee. I just wanted to seek your clarification that you are not necessarily limiting yourself to what may be found in those documents but that you are prepared to answer all questions pertaining to the sponsorship scandal, including providing answers that may or may not be reflected in the documents provided to the committee.
Hon. Alfonso Gagliano: Again, this is a very grey line we're dealing with. For the first time we have a number of cabinet documents that have been made public, and I'm ready to speak about those documents that are public. But I think that beyond that, at this time I will reserve my right according to my oath of office, and I'll mention it whenever a question goes beyond the documents. I didn't have time to consult the Clerk of the Privy Council on this matter.
The Chair: Mr. Toews.
Mr. Vic Toews (Provencher, CPC): Mr. Chair, I don't want to belabour this point, but as I understand it, while Mr. Gagliano's oath binds him, if he has been relieved of that obligation by cabinet and the Prime Minister, then whether or not that oath was undertaken, that no longer binds him. He is entitled to provide information that relates to matters beyond the documents and that may in fact relate to other cabinet confidences. I think that needs to be clear on the record, because I don't think that's what I'm hearing from this witness.
The Chair: Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis: I only have two points to follow up on Mr. Walsh's comments.
First of all, I think we do need some clarification on the oath that Mr. Gagliano says he has taken and what that means in terms of our deliberations today. Is it in fact the case, as Mr. Toews has said, that Mr. Gagliano may not be bound any longer by that oath of office or has been released from the terms of that oath?
Secondly, I think Mr. Walsh is saying that notwithstanding your interpretation of your oath of office, if we have knowledge of other developments pertaining to the sponsorship scandal that are not referenced in the Auditor General's reports, you are at liberty within the terms of your oath to discuss the issues and questions that we raise accordingly.
¿ (0915)
The Chair: Okay. What I'm going to say is that....
Madam Jennings, do you want to speak on this issue?
Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Yes. Thank you.
In my view, it's perfectly clear that any information contained in the cabinet documents that has been released to this committee and made public can be testified to by anybody who would have had knowledge of the information contained in it.
It's also clear to me that given the oath of office that ministers are required to swear in order to take up their posts, if Mr. Gagliano or any other present minister or past minister is asked a question for which the information is not contained in the public cabinet documents, that individual is sworn to the oath and, as Mr. Gagliano pointed out to Mr. Walsh, would say “I do have other information, but my oath of office does not allow me to divulge it.”
In that case, we can, if we wish, make a motion to the Prime Minister and the privy clerk to have the individual released from the oath of office on that particular matter, and then we can determine it. It may be pertinent, it may not be pertinent. I think that is the best procedure.
I'm not sure if Mr. Gagliano has had a chance to look in detail at all of the cabinet documents that have in fact been made public. I know that notwithstanding the fact that I have them in my possession, I haven't been able to look at all of those documents. I mean, we've been literally drowned under documents. It would not surprise me that there may be information contained in there that Mr. Gagliano doesn't recall because he hasn't had a chance to look at them.
The Chair: Mr. Walsh, when he spoke to the committee some weeks ago, said to us that under our system of responsible government, Parliament can ask any question it wants and it is entitled to the answer. Based on that, this committee passed a motion requesting cabinet documents, which we have received. The Prime Minister has said that he wants everything on the table, nothing to hide, and whatever the other phrases were. There have been some references to some documents. In fact, we know from the cabinet documents that were given to us that decisions were based on verbal conversations rather than written documentation. Therefore, to me, these discussions that were not written form part of the release.
However, last week Ms. Jennings put forth a motion that we ask the Prime Minister and the Privy Council Office to clarify and to authorize the ministers and former ministers who had taken the Privy Council oath of office to be relieved of that oath insofar as the sponsorship program is concerned. Of course, this is not a blanket waiver but as far as the sponsorship program is concerned. In that regard, the clerk sent a letter to the Privy Council Office, which I do not have with me but I may have later on this morning, requesting a response from the Prime Minister.
At this point in time my decision is, Mr. Gagliano, that you have to answer the questions of this committee. If you feel to the contrary and you are withholding information because of your oath, then please indicate that there is additional information that you are aware of but you have withheld by virtue of the fact that you feel you are constrained by your oath.
We'll move on. I want to give the fourth report of the subcommittee on agenda and procedure of the Standing Committee on Public Accounts, which met on Thursday, March 11, 2004, and agreed to make the following recommendations:
| That, if required, the Committee sit on Tuesdays and Thursdays from 9 a.m. to 1 p.m. and on Wednesdays from 3:30 p.m. to 5:30 p.m. |
| That the Committee hold one meeting to consider both the Public Accounts of Canada for 2002-03 and Vote 20 under FINANCE of the Main Estimates of 2004-05. |
| That the Auditor General of Canada be invited to appear before the Committee for 15 minutes on Thursday, April 1st, 2004 in order to present an overview of her March 2004 report. |
| That Charles Guité be invited to appear before the Committee on Thursday, March 25, 2004 at 9:00 a.m. |
Mrs. Jennings.
¿ (0920)
Mrs. Marlene Jennings: This report, insofar as it concerns the motion I made as to the sitting hours of the committee, does not accurately reflect my motion. It was not “if required”. It was that during the work of the public accounts committee pursuant to Standing Order 108, chapters A, B, C, and D of the Auditor General's report, the committee sit on Tuesdays and Thursdays from 9 a.m. to 1 p.m. and on Wednesdays from 3:30 p.m. to 5:30 p.m. It makes a difference.
The Chair: The clerk advised me that's the bureaucratese caveat. If we wanted to have a meeting of the steering committee or the witness committee rather than a meeting of the full public accounts committee, we could use that time for other issues. Therefore, we have put in that caveat “if required”.
So that's the explanation for it. We all agree that four hours on Tuesday, four hours on Thursday, and two hours on Wednesday is the intent.
Mrs. Marlene Jennings: I'm not really satisfied.
The Chair: If you want to remove the words “if required”, that will be fine.
Mrs. Marlene Jennings: Yes, I would like to remove that.
The Chair: So deleting the words “if required”, that the committee sit at these times. So that is the fourth report of the subcommittee. As we're sitting during a break week, we cannot adopt that report. So it will be on the agenda for the next meeting.
I have a letter from Ms. Wasylycia-Leis, which is addressed to me. It says:
| I would like to submit the following motion for consideration by the Standing Committee on Public Accounts at its next meeting. |
So this is a notice of motion. Again, we can't pass this because of the break week.
The motion is:
| That the Committee request that a copy of the daily agendas for all ministers of the Crown between November 1993 and December 2003 be forwarded to Committee's counsel for his review; and, |
| That the Committee's counsel forward to members of the Committee those portions that are relevant to the Committee's study of Chapters 3, 4 and 5 of the AG's November 2003 Report. |
| Sincerely, |
| Judy Wasylycia-Leis, MP |
We may just want to constrain that. I'm not sure we want all ministers. Do you want all ministers?
Ms. Judy Wasylycia-Leis: Well, at this point I would say we're not sure how to narrow that down, so we might want to say “all ministers”.
The Chair: She says “all ministers”, so there it is. That's a notice of motion, and it will come up next week for discussion.
I think we're ready to hear Mr. Gagliano. He is accompanied this morning by Mr. Pierre Fournier, who we understand is his counsel, and we welcome you both to the table.
First of all, I'd like to welcome you back to the House, Mr. Gagliano. You're a former, long-time member of this House, so welcome back.
Hon. Alfonso Gagliano: Thank you.
The Chair: According to the rules, of course, you may consult your counsel, but counsel cannot speak to the committee; he can only advise you. All questions will be directed to you, and of course if you wish to consult your counsel, do so, but he cannot speak.
So turning to you, I understand you have an opening statement, Mr. Gagliano. The floor is yours.
[Translation]
Hon. Alfonso Gagliano: Thank you, Mr. Chair.
I come to this Committee not only voluntarily, but rather anxiously, as my name has been linked to the sponsorship scandal in many misleading and unfortunate ways. I am eager to finally have my chance of telling my story publicly, and I wish to thank the Committee for giving me the opportunity to do so.
Before I review the facts, there are a number of general questions which I think need to be answered, so that you may understand my position better. After reviewing the facts, I will conclude by asking you to draw the obvious and necessary conclusion from all you and I know about this matter.
[English]
The first part of this general point has to do with the nature of responsibility.
Forgive me if I take a very personal approach to this question. I feel I am the one who has paid the greatest price for this scandal so far. I have paid the price politically; it is now evident that I could not get myself elected anywhere in Canada at this time. I have paid the price financially, as I have now been dismissed from my position as ambassador to Denmark, despite earning the best evaluation possible in that function. But most of all, I have paid the price in terms of my honour and my dignity. These are fundamental rights, in which I have been truly violated by too large a number of persons to start naming them now.
What, if anything, am I supposed to be responsible for and in what context?
¿ (0925)
[Translation]
Twenty years ago, I accepted the challenge of becoming a servant of my fellow citizens as their representative in the House of Commons, as each and every one of you did. I did so out of many sentiments: the sentiment that I owed my country the dedication and competence that I knew I was capable of, the sentiment that there could be no greater honour than to be elected to office by one's countrymen, the sentiment that I had what it took to do a good job of it. I am pretty sure that all of you have felt the same. When, in 1994, the Prime Minister asked me to join the Cabinet as Secretary of State for Parliamentary Affairs, I felt not only duty bound to accept, but rather an immense urge to accept and give whatever department I was entrusted with all I could give it.
I have lived up to my part of the bargain. In return, I now learn that I should be considered responsible for a fiasco that was not of my doing; it has gotten to the point where the very same people who once voted me in office now believe that I must be responsible, since everybody says I am. But nobody asks what this word 'responsible' really means.
[English]
To be responsible, Mr. Chairman, is to have to answer to someone for one's actions. If someone commits a crime, he must answer to the criminal justice system. If someone defaults on his contractual obligation, he must answer to his creditor and, if he fails to do so, to the civil justice system. To whom does a politician, a member of Parliament, a cabinet minister answer?
The answer is manifold. As a member of Parliament, you answer to your voters. You do so by standing for re-election and being voted in or out depending on how they perceive your performance as their representative, how they think your party performed, etc. I'm not standing for re-election, and will not in the forthcoming election because in our Canadian political system, unless you are the recognized candidate for one of the main political parties, your chances of being elected are nil. I would not be a candidate for any political party other than the Liberal Party of Canada, and it is clear that I cannot be their candidate at this time.
In effect, whether I did anything wrong or not, I have already been held responsible politically as a member of Parliament. This may seem unjust--and indeed it probably is--but it's the system we have all accepted to live in, and I will not denigrate it. It served me well in the past, and I have no regrets that it doesn't serve me well at all now. That's life.
As a minister, your responsibility itself is twofold. First, you answer to the man who appointed you in the first place, the Prime Minister. Second, you answer as a group before the House of Commons. This is known as ministerial responsibility.
In the first case, you all know that the Prime Minister has dealt with me in a manner that says that he did not think I had done anything wrong. For that reason he appointed me the Canadian ambassador to Denmark.
As to my collective ministerial responsibility, you are all witness to the fact that the House of Commons did not then, and has not now, lost confidence in the cabinet--nor should it--for the reason I will explain shortly.
Let's review the facts. Most of these facts are far better known to you than they are to the public, so you'll not be surprised to hear them. What I find amazing is that I am now compelled to remind you of them.
These facts can be grouped into three different categories: what I did generally while I was a minister, particularly of Public Works and Government Services; what has been found about me in relation to the sponsorship scandal; and what I did specifically in relation to that issue.
First of all, please bear with me as I explain to you what a minister does in our system and what he does not do. A minister does not run his department. He has neither the time nor the freedom to do so. When appointed to head a department, a minister is instructed to consider his deputy minister as principal adviser in exercising his new functions. The new minister does not appoint his principal adviser, nor can he fire him. His principal adviser is chosen by the Privy Council Office. He serves in that capacity at the office's pleasure, and not the minister's.
I have to add that even without this instruction, that would necessarily be the case anyway. The legal constraints on the minister in dealing with bureaucracy prevent him from exercising any real direct control on the personnel in his department. In any case, the corollary jobs that go with his appointment simply do not give the time or the opportunity to exercise any such direct control.
In my particular case, in addition to my principal responsibility as Minister of Public Works and Government Services, I was also the Deputy Leader of the Government in the House of Commons, the minister responsible for Canada Post Corporation, for the Canada Mortgage and Housing Corporation, for the Royal Canadian Mint, for the Canada Lands Company, for the Old Port of Montreal, for the Defence Construction Corporation, for the Queensgate Corporation, for the Canada Information Office, and I was the regional minister for Quebec. I sat on or presided over many committees, including the economic union cabinet committee, the social union cabinet committee, and the cabinet committee on government communications. I was a member of the Treasury Board and of the cabinet special council.
For all of these functions, I was seconded by more than 90,000 employees, and I supervised a budget in excess of $4 billion.
¿ (0930)
During the week, I worked from 7 a.m. to 7 p.m., mostly going from meeting to meeting. At many of these meetings my principal function was to ensure the proper coordination between my departments and those of the other ministers on those committees. For this purpose I acted as a spokesman for my department, and unless I had some serious reason to disagree with him, I accepted my deputy minister's recommendation as the position I should take. Just like you, I spend my weekends in my riding. Being a cabinet minister is not for the weak-bodied; it is a very strenuous job, and I gave it all I had.
There were times, of course, when I had to intervene more directly in the workings of the department. The strategy I followed was fully in accordance with tradition. When you find something is not working as it should, you order a study and you put in place the recommendations that follow the study. This is the time-tested method of dealing with delicate issues, because it ensures that you will not run afoul of any applicable legislation.
[Translation]
I can summarize my activities in relation to the Sponsorship Program thus: when told there was a problem, I tried to fix it; when not told, I was powerless. That is in complete conformity with the guidelines issued to ministers and those issued to deputy ministers as well.
More particularly, in the case of the Sponsorship Programs, what I did was as follows:
Inherit the communications program, as it had been entrusted to the Minister of Public Works on June 23, 1994 by decision of the Treasury Board and reviewed on at least two occasions by the Treasury Board; the Sponsorship Program had been approved for the fist time in November 1996 for the years 1996-1998 by another decision of the Treasury Board and included a list of venues which pretty well reflects what the Auditor General has found deficient in her most recent report.
Upon my arrival at the head of the Public Works department, in 1997, I reviewed and followed the recommendations of the Secretariat of the Treasury Board; these included the redirection of the procurement process within the department.
I witnessed the organization of the Communications Coordination Services Branch; this organization was made necessary by the privatization of the Canada Communication Group, leaving a number of orphan programs in various departments; it was government policy that communications be reunited under a single responsible authority.
In August 1998, I signed a submission to Treasury Board to create the position of Assistant Deputy Minister, Government of Canada, Communications Coordination Services, to assist me in my capacity of Chair of the Cabinet Committee on Communications; this submission was approved in September.
I directed an audit of the management of sponsorship at the Communications Coordination Services Branch, which resulted in the report of August 31, 2000, of which the key finding leads as follows:
| The selection process adopted by CCSB officials to select communications firms and distribution agencies did not comply with the spirit or the letter of the rules and directives established by Treasury Board. |
Following the presentation of that report, I asked the Auditor whether I should call the police but I was told that the nature of the problems was administrative, not criminal; I immediately ordered a halt to the Sponsorship Program until a new management action plan was devised and put in place.
The new management action plan was put in place at the end of 2000 or the beginning of 2001; new communications firms were chosen after a new competition had taken place and the program was started again, following Treasury Board guidelines.
In 2001, the Ethics Counsellor, whom I had asked to review the matter of some of the advertisement contracts that had been given to Groupaction and Groupe Everest, issued a report in which he concluded that I had not participated in the awarding of those contracts, but merely approved the recommendation of the selection committee to comply with the signing authority requirements.
In the same year, I combined the Canada Information Office and the Communications Coordination Services Branch in Communications Canada. I did this because I wanted to separate the people running the programs from those awarding the contracts; effectively, this was an attempt to put things back in the state in which they had been prior to 1994.
In March 2002, after I had been appointed ambassador to Denmark, the internal audit of Communications Canada contained this mention: “There are no recommendations resulting from this follow-up review of sponsorship files.”
This internal audit concerned the Sponsorship Program for the period of June to September 2001, was mandated under the managerial action plan that I had put in place and was taken at my request.
¿ (0935)
[English]
The remarkable fact is that most of this is already in the Auditor General's report, and she has not found me wanting in any respect in relation to my performance as Minister of Public Works. She stated in her testimony on February 19 before this committee:
| We wouldn't (have) been here today if the internal audit hadn't done that initial audit in the year 2000. |
That initial audit was the very audit I had ordered. Remember, she also stated in Halifax in early March:
| There has been a lot of allegations about Mr. Gagliano without any fact and it's important that we follow due process, with someone not being tarnished unfairly in all this. |
In conclusion, Mr. Chairman, I will not ask you or any of the members of this committee to treat me with any particular sympathy. I will not ask you to have regard for the fact that I honestly believe I did everything in my power to fulfill the obligations of the cabinet positions I held. I do not seek favours here. I seek justice.
If you seriously wish to avoid similar situations in the future, if you are concerned about doing what is in the best interest of our country, then I suggest you consider ways in which you can give those with ministerial responsibilities better tools to enable them to do their jobs.
I'm out of government, so I do not think I should be the one making those recommendations here, but let me suggest to you some general criteria that should be followed.
We should not do away with collective ministerial responsibility, but within this broad responsibility, ministers should be specifically responsible for all that goes on within their departments.
To ensure that they are able to fulfill this requirement, ministers should have the power to appoint and dismiss the high-level executives of their departments and to follow their recommendations in appointing or dismissing lower-level employees in their departments.
You have to consider ways in which the coordination between departments can be ensured without requiring the physical presence of the minister at every committee designed to ensure this coordination.
I realize that many laws and guidelines would have to be amended for this purpose. I also realize that many of you may balk at giving individual ministers so much power, but you can't have your cake and eat it too. You cannot say to a minister that he is personally responsible for everything that goes on in his department, and yet deprive him of the tools that any other responsible person would insist upon having.
My experience as a minister tells me that no matter how much I tried, I never had the control and power over my departments that would have given me the ability to answer for all that went on within them. That was most certainly the case with the sponsorship program.
I did not derive any benefit from these programs. It was in my personal best interest to ensure that they were run correctly. That is why I insisted on putting in place the reforms that were necessary to ensure that all Canadians were well served by the sponsorship program.
Justice, in my humble opinion, is entirely in conformity with the 1989 guidelines of your committee:
| Because of the amount of delegation that is required today, it is not fair to the Ministers to them to be personally responsible for the actions and decisions of all employees in a department. As well, it is impossible for a Minister to have knowledge of all actions and decisions taken by departmental officials. |
Thank you, Mr. Chairman. I welcome all questions from you and the committee members.
¿ (0940)
The Chair: Thank you very much, Mr. Gagliano.
I mentioned to the committee earlier that I anticipated receiving some letters, and I want to read them into the record before we get into the questioning. This is in regard to the motions that we had passed on an earlier date.
One is dated Tuesday, March 16, to the Right Honourable Paul Martin, Prime Minister of Canada:
| Dear Prime Minister: |
| During its meeting on March 11, 2004, the Standing Committee on Public Accounts adopted a motion requesting that all departments and Crown corporations be informed to produce in their entirety all documents the committee requests, notwithstanding the Privacy Act and the Personal Information Protection and Electronic Documents Act, and that, should any part or parts of these documents be subject to the said legislations, the department or Crown corporation so inform the committee in a separate and covering document. An extract of the Minutes of Proceedings is attached. |
| The Committee would very much appreciate your cooperation as well as that of the Clerk of the Privy Council in informing all departments of this request. |
| Yours sincerely, |
| Elizabeth Kingston |
| Co-clerk of the Committee. |
| c.c. Alex Himelfarb, Clerk of the Privy Council. |
The second letter is to Mr. Himelfarb, the Clerk of the Privy Council and Secretary to the Cabinet:
| Dear Mr. Himelfarb: |
| During its meeting on March 11, 2003 |
--that should be 2004--
| the Standing Committee on Public Accounts adopted a motion ordering that the Privy Council office provide a copy of the minutes and all records from all meetings of any cabinet committee, including ad hoc committees (including all documents created and generated by the committee itself), wherein communications and sponsorship activities / programs were discussed between January 1, 1994 and February 10, 2004. An extract of the Minutes of Proceedings is attached. |
| Please note that the Committee expects these documents to be provided in both official languages. Should complying with this requirement create a significant delay, please contact me at 996-1664. |
| Your assistance in complying with the order of the Committee in a timely fashion is appreciated. |
| Yours sincerely, |
| Elizabeth Kingston |
| Co-Clerk of the Committee. |
There is also a letter to Mr. I. David Marshall, Deputy Minister/Deputy Receiver General for Canada:
| Dear Mr. Marshall: |
| During its meeting on March 11, 2004, the Standing Committee on Public Accounts adopted a motion requesting that the Department of Public Works and Government Services Canada write to all parties in receipt of a sponsorship grant from the time of the program's inception, asking that they provide a description of the event, when they first learned of the sponsorship program, how they applied for the grant, the amount approved for each year, as well as the amount of the overall monies received. The Committee has requested that a summary of this information be presented to the Committee by constituency. An extract of the Minutes of Proceedings is attached. |
| Please note that the Committee expects the document be provided in both official languages. Should complying with this requirement create a significant delay, please contact me at 996-1664. |
| Your assistance in providing the Committee with this information in a timely fashion is appreciated. |
| Yours sincerely, |
| Elizabeth Kingston |
| Co-Clerk of the Committee. |
Finally, there is another letter to the Right Honourable Paul Martin, Prime Minister of Canada:
| Dear Prime Minister: |
| During its meeting on March 11, 2004, the Standing Committee on Public Accounts adopted a motion requesting your authorization that all members of the Privy Council and public office holders called to testify before the Committee be released from their oath of secrecy and confidentiality in matters related directly to Chapter 3, the Sponsorship Program, Chapter 4, Advertising Activities, and Chapter 5, Management of the Public Opinion Research of the November 2003 Report of the Auditor General of Canada. An extract of the Minutes of Proceedings is attached. |
| The Committee would very much appreciate your cooperation in releasing Privy Councillors from the oath under these special circumstances and in providing a prompt written response to this request. |
| Yours sincerely, |
| Elizabeth Kingston |
| Co-Clerk of the Committee. |
¿ (0945)
We are awaiting a response from the Prime Minister on these issues.
I have a couple of questions, Mr. Gagliano, before we move into questions from the committee members.
On your last point, you refer to the 1989 guidelines of this committee. I'm not aware that we have any guidelines other than those of the House of Commons. Perhaps you could tell us where these guidelines come from.
Hon. Alfonso Gagliano: Mr. Chairman, we took it from a document, I believe from the Internet. It's the 2003 Report of the Auditor General, chapter 2, which says in paragraph 2.40:
| 2.40 Public Accounts Committee guidelines. Developed in 1989 by the Canadian Council of Public Accounts Committees, Guidelines for Public Accounts Committees in Canada provides a contribution to this discussion of the responsibilities... |
That's where we find the quote I used. This is page 7 of 17 in that report.
The Chair: Thank you very much.
Here's my second question. You're appearing before us as an individual this morning. Did you discuss or have meetings with any members of the government in preparation before coming here this morning?
Hon. Alfonso Gagliano: No, sir.
The Chair: You didn't, okay.
Hon. Alfonso Gagliano: I only called the Clerk of the Privy Council concerning my oath of office and should I address questions when a document is not public. I didn't speak to any current member of Parliament or cabinet ministers.
The Chair: Okay--or bureaucrats? Did you speak to anybody in the bureaucracy?
Hon. Alfonso Gagliano: No.
The Chair: Okay.
Mrs. Ablonczy, I believe you are the first person with questions. You have eight minutes, please.
Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC): Thank you, Mr. Chairman.
Mr. Gagliano, I take it from your response to the chairman that you are aware that the committee has been mandated to conduct a study with respect to the Auditor General's 2003 report that was referred to the committee in February of this year. Are you aware of that, sir?
Hon. Alfonso Gagliano: Yes, I'm aware.
Mrs. Diane Ablonczy: I take it that you therefore have read the Auditor General's report--
Hon. Alfonso Gagliano: Three times.
Mrs. Diane Ablonczy: --and that you understand the nature of the report, sir.
¿ (0950)
Hon. Alfonso Gagliano: Yes.
Mrs. Diane Ablonczy: I refer you to the observations made in the Auditor General's report, the findings of the report starting on page 21 with respect to the sponsorship programs, where the Auditor General found: “Widespread failure to comply with contracting policies and regulations”; “Selection of communications agencies broke the rules”; “Selection of the agency of record contravened contracting rules”; “Contracts awarded for specific events without following contracting policies”; “Lack of due diligence in selecting and approving events to sponsor”; “No analysis of sponsorship amount for each event”; “Little evidence of the value received by the Crown for the money spent”; “Work subcontracted without competition”; “Contracts amended without documented support”; “Lack of compliance with relevant financial authorities”; “Oversight and essential controls were bypassed”; “The role of Parliament was not respected”.
I would ask you, then, Mr. Gagliano, do you accept these findings of the Auditor General with respect to the sponsorship program?
Hon. Alfonso Gagliano: I believe it was around February or the beginning of March, I think, after we learned about the problems the human resources department had with their programs, that I discussed with my deputy minister the possibility of having an internal audit of the sponsorship program--
Mrs. Diane Ablonczy: With respect, Mr. Chairman, that was not my question. I have reread for the witness the findings of the Auditor General with respect to the sponsorship program--
Hon. Alfonso Gagliano: Mr. Chair--
Mrs. Diane Ablonczy: --and my question is very simple: yes or no, does the witness accept these findings of the Auditor General with respect to the sponsorship program?
Hon. Alfonso Gagliano: Mr. Chair, if the committee wants to know what happened, definitely it's not by a “yes” or a “no” that we're going to find the truth.
Mrs. Diane Ablonczy: Well, that should--
The Chair: The point is that the question from Diane Ablonczy asks for “yes” or “no”.
Hon. Alfonso Gagliano: Yes, yes, those findings that the Auditor General mentioned in her report.... She says in that same report that those were the same findings as those in the internal audit of 2000. So what I'm trying to explain is that—
The Chair: I know, but—
Hon. Alfonso Gagliano: So what I'm trying to explain is that we know that in the year 2000 we found those anomalies and we took correction of them--
The Chair: That was not the question by Mrs. Ablonczy. She said, did you agree with these statements?
Hon. Alfonso Gagliano: Yes, that statement was found in the internal audit of the year 2000.
The Chair: Do you agree with them?
Hon. Alfonso Gagliano: Well, I agree with the general thrust. I mean, she read a whole list. The general thrust was that there were administrative problems. That's what we found in the audit of 2000. The Auditor General says that those same things were found in her report. It's in this report here. I've read it three times.
The Chair: Mrs. Ablonczy.
Mrs. Diane Ablonczy: Just to clarify, Mr. Chairman, Mr. Gagliano, do you accept these findings by the Auditor General, yes or no?
Hon. Alfonso Gagliano: I accept the general thrust of the findings of the Auditor General. Yes, I do.
Mrs. Diane Ablonczy: Mr. Gagliano, the Auditor General, on page 21 of her report, at paragraph 3.44, says the following:
| What is particularly disturbing about these sponsorship payments is that each involved a number of transactions with a number of companies, sometimes using false invoices and contracts or no written contracts at all. These arrangements appeared designed to provide commissions to communications agencies, while hiding the source of funds and the true nature of the transactions. The parliamentary appropriation process was not respected. Senior public servants in CCSB and some officials of the Crown corporations were knowing and willing participants in these arrangements. |
Do you accept that finding of the Auditor General, sir?
Hon. Alfonso Gagliano: I was not aware of the finding of the Auditor General. So if you say that—
Mrs. Diane Ablonczy: With respect, that's not my question, sir. My question is, do you accept the finding of the Auditor General?
¿ (0955)
Hon. Alfonso Gagliano: I'm not aware, and all the facts are not known; therefore, I cannot accept.... I mean, I acknowledge reading those findings, but I was not aware that such things were happening.
Mrs. Diane Ablonczy: Well, sir, the Auditor General has a large department. In it, she has a number of accountants and auditors. She has a mandate to show due diligence in examining the matters before her—in this case, the sponsorship program. She made the finding that I've just read to you.
My question is, do you accept that the Auditor General, after exercising due diligence, made this finding, and do you accept that finding?
Hon. Alfonso Gagliano: I don't have to accept it. I have read the finding; I've read the report three times, but I cannot accept whatever we don't know. This committee is trying to find out what happened; there is also a public inquiry; and there are 14 or more police investigations.
Therefore, yes, I read the report. Yes, I took notice of what it says in the report. But if your question is, do you take responsibility for what she's saying in the report, my answer is no.
Mrs. Diane Ablonczy: That's not my question, Mr. Gagliano.
Let me put it another way, sir. Do you have any knowledge that would lead you to dispute the finding in the report that I have just referred you to?
Hon. Alfonso Gagliano: I'm not disputing the findings. But I cannot say I accept them, because I don't know all the facts.
Mrs. Diane Ablonczy: Thank you, Mr. Gagliano. That's my question, thank you.
[Translation]
The Chair: Mr. Desrochers, you have eight minutes.
Mr. Odina Desrochers (Lotbinière—L'Érable, BQ): Thank you, Mr. Chair. Mr. Gagliano, Mr. Fournier, good morning.
Mr. Gagliano, I'm startled by what you say in your statement on page 6. According to you, when you were appointed minister, a deputy minister had been identified by the Privy Council Office. I'm also startled at the fact that you've said from the start of this entire affair--and you've done a fairly major media tour--that you weren't aware of anything when you were the minister responsible for Public Works and the Sponsorship Program.
However, you say on page 6 of your address that Canada Post Corporation, the Canada Mortgage and Housing Corporation, the Old Port of Montreal and the Canada Information Office reported to you, Mr. Gagliano, and that you were also the minister responsible for Quebec. By the most curious of coincidences, those Crown corporations appear in the Auditor General's report.
Would you have me believe that you weren't aware of the events? Those Crown corporations reported to you, but suddenly, this morning, you tell us that you didn't make any decisions about anything, that it was the Privy Council Office... You nevertheless had the power since those Crown corporations were under you. Explain that to me, Mr. Gagliano.
Hon. Alfonso Gagliano: First of all, Mr. Desrochers, you should note that it wasn't all the corporations. There is also the Royal Canadian Mint, the Queen's Quay West Land Corporation...
Mr. Odina Desrochers: They reported to you.
Hon. Alfonso Gagliano: Yes, but they aren't in the report.
Mr. Odina Desrochers: Most of them are in the Auditor General's report.
Hon. Alfonso Gagliano: There's also the Canada Mortgage and Housing Corporation and so on.
Mr. Odina Desrochers: All right, they reported to you.
Hon. Alfonso Gagliano: Yes, but they aren't mentioned in the report; that is to say that the Auditor General...
Mr. Odina Desrochers: Canada Post Corporation isn't mentioned?
Hon. Alfonso Gagliano: No, no, but there's also the Royal Canadian Mint, Mr. Desrochers. It wasn't all the corporations...
Mr. Odina Desrochers: I wasn't talking about the Royal Canadian Mint; I'm talking about you. Mr. Gagliano, Canada Post Corporation, the Canada Lands Corporation and the Old Port of Montreal Corporation are identified in the Auditor General's report and they were under your responsibility. It's these questions I'm asking you. Don't try to flee by saying I said something I didn't say.
Hon. Alfonso Gagliano: No, no.
Mr. Odina Desrochers: I want to know whether you knew what was going on.
Hon. Alfonso Gagliano: You said that all those corporations were under my responsibility.
Mr. Odina Desrochers: That's correct.
Hon. Alfonso Gagliano: First, I wanted to point out to you that there were corporations under my responsibility, such as the Royal Canadian Mint or the Canada Lands Corporation, about which the Auditor General said there were no problems...
À (1000)
Mr. Odina Desrochers: Let's talk about Canada Post Corporation; let's talk about the Old Port of Montreal Corporation.
Hon. Alfonso Gagliano: Mr. Desrochers, I can tell you that I never discussed sponsorships with the officers of the Crown corporations. It's as simple as that.
Mr. Odina Desrochers: Did someone from your office do so?
Hon. Alfonso Gagliano: No, not that I know.
Mr. Odina Desrochers: Didn't you speak to Mr. Guité or Mr. Tremblay about the subject?
Hon. Alfonso Gagliano: No. Mr. Guité and Mr. Tremblay sometimes came to meet with me. They requested meetings at my office and we met a few times. They came to talk about budgets, for example, and a list of sponsorships had to be drawn up to go before Treasury Board, but...
Mr. Odina Desrochers: They never talked to you about...?
Hon. Alfonso Gagliano: They told me that we shared sponsorships with the Crown corporations. I was informed about that by Mr. Guité or by Mr. Tremblay, but I never discussed the subject with the officers of the Crown corporations.
Mr. Odina Desrochers: Mr. Gagliano, you never discussed the fact that it was always the same five agencies that obtained contracts from Mr. Guité and Mr. Tremblay?
Hon. Alfonso Gagliano: I was informed that the agencies had been selected by a selection committee of which two of the members were people from the Department of Industry.
Mr. Odina Desrochers: How do you explain why you called upon those agencies to work on the campaign of the Liberal Party of Canada in 1997? Was it the Department of Public Works or the Liberal Party of Canada that paid?
Hon. Alfonso Gagliano: Not at all. The government had nothing to do with it. When I called upon the services of Groupaction or Groupe Everest, or other communications companies in Quebec by the way, I was the Minister of Labour, not the Minister of Public Works and Government Services.
Mr. Odina Desrochers: You were the minister responsible for Quebec, the minister responsible for political organization.
Hon. Alfonso Gagliano: I was the minister responsible for Labour. I was responsible for organization; I was not the regional minister and...
Mr. Odina Desrochers: But you were nevertheless the one who had to find money to finance the Liberal Party.
Hon. Alfonso Gagliano: No. As of 1994, when I was appointed minister, I completely withdrew from political party financing.
Mr. Odina Desrochers: Mr. Gagliano, you were the minister responsible for Quebec, and you weren't involved in financing?
Hon. Alfonso Gagliano: No, as minister, I...
Mr. Odina Desrochers: You're really something, Mr. Gagliano.
Hon. Alfonso Gagliano: Yes, perhaps, but I can assure you that, as of 1994, when I was appointed a Cabinet Minister, I sought advice from the Ethics Counsellor, and I decided to withdraw from financing activities...
Mr. Odina Desrochers: So you weren't aware.
Hon. Alfonso Gagliano: There was a director general and an executive. I left the organization...
Mr. Odina Desrochers: Mr. Gagliano, you weren't aware?
Hon. Alfonso Gagliano: ...looking for candidates. That's the strategy... [Inaudible - Editor]
[English]
The Chair: Madam Jennings has a point of order.
[Translation]
Mrs. Marlene Jennings: When we ask a witness a question, we usually give him the time to answer it, and Mr. Desrochers has been asking questions and interrupting for three minutes. I ask him to show some basic courtesy.
[English]
The Chair: That's not a point of order, Madam Jennings, but the courtesy is noted.
Mr. Desrochers, if you are asking questions, of course the witness is entitled to respond. If you ask a general question, you sometimes get a general response. If you ask a specific one, you're entitled to a specific response.
Mr. Desrochers, s'il vous plaît.
[Translation]
Mr. Odina Desrochers: How much time do I have left, Mr. Williams?
[English]
The Chair: You have about two and a half minutes.
[Translation]
Mr. Odina Desrochers: Mr. Gagliano, I'm going to ask you a question to see whether I've understood correctly. You were the Minister of Public Works, you were the minister responsible for Quebec. You were a minister in Jean Chrétien's Cabinet, and you were the minister responsible for the Sponsorship Program; there were Crown corporations reporting to you that benefited from that program, and you still say you didn't know things weren't right in that section?
You still say you regularly talked to Mr. Guité and Mr. Tremblay and that you never referred to all those amounts that were circulating. You were never made aware of the fact that supporting documentation was lacking, you were never made aware that the documents did not exist, you were never aware that millions of dollars were being awarded on the basis of a telephone call. You weren't aware of that, Mr. Gagliano, even though the entire sector was under your responsibility?
Hon. Alfonso Gagliano: I was informed of it by the internal audit report that I myself requested in spring 2000.
Mr. Odina Desrochers: Mr. Gagliano, when the committee's report on Groupaction was introduced and we tried to send for you, the Liberal majority objected to it. You were a lot more silent at the time than you are today. What made you change your behaviour and way of doing things between the tabling of the Groupaction report in 2002 and the tabling of the Auditor General's report? The Auditor General has painted an overall picture of what was succinctly described in the Groupaction report. Explain that to me.
Hon. Alfonso Gagliano: I don't understand. What do you want me to explain to you?
Mr. Odina Desrochers: You were also involved in Groupaction and in those three reports, which cost $1.5 million.
Hon. Alfonso Gagliano: I can tell you that I never requested those three reports and I never read them. I heard about them through the newspapers.
Mr. Odina Desrochers: But you authorized them.
Hon. Alfonso Gagliano: No, I didn't authorize them. I never authorized a contract.
Mr. Odina Desrochers: Thank you, Mr. Chair.
[English]
The Chair: You still have a minute. I would just say, you must allow Mr. Gagliano the opportunity to respond to the questions.
[Translation]
That's all?
À (1005)
Mr. Odina Desrochers: That's all.
[English]
The Chair: Madam Redman, please, for eight minutes.
Mrs. Karen Redman (Kitchener Centre, Lib.): Thank you, Mr. Chairman.
Mr. Gagliano, it's a pleasure to be able to ask you some questions.
I have to tell you that this whole Auditor General report, which I certainly welcome, and as you point out in your presentation, was actually the result of an internal audit that was initiated by this government.
I'd like to go on the record saying that I do object to this being called the “sponsorship scandal”. This is actually, I think, based, in essence, on an auditor general's report of a sponsorship program, and I think it would be much more fitting if we referred to it in that vein.
When I talk to my constituents in Kitchener Centre, they are really happy to see that this government has taken a three-pronged approach. There's this process, there's certainly a judge in charge of trying to recover any funds, as well as some very, very troubling aspects, actually, of criminality, and they're being handled by the RCMP.
I think probably a little bit because of the Auditor General's report, and certainly because of what has happened in the press, you're seen to be perhaps a bit of a key to unlocking what actually happened in this process.
The Auditor General did expose the lack of checks and balances, and you, too, have acknowledged that in your presentation. I guess my question really is not that dissimilar to some of the aspects that Monsieur Desrochers was trying to touch upon. The questions that I get asked by my constituents are ones of political accountability, where the lines of reporting were, as far as a political presence is concerned.
Again, you've done a good job of pointing out how huge your portfolio was, but where did it come from, and who gave either implicit or explicit direction, on a political level, to say that these kinds of programs could go forward?
Hon. Alfonso Gagliano: Thank you very much for the question.
First of all, I was appointed Minister of Public Works and Government Services in 1997, on June 11, I believe. The sponsorship program was in existence. You can see it through a Treasury Board submission of November 1996, signed by my predecessor and the Prime Minister, with a list of events. So it's clear that the program existed.
When I became minister, I was briefed by my officials on the advertising and public opinion research service. With the new Treasury Board guidelines, the advertising contract procurement was in that section. Therefore, when I arrived, the sponsorship program existed. The special structure of the procurement contract was done from Treasury Board guidelines established in July 1994. That's what my briefing was. Therefore, the only thing I agree with my officials since the privatization of the Communication Group.... We had a bunch of services, such as the Internet side, the 1-800-OCANADA number--before that it was another system--the blue pages, and so on. After March 1997, when the Communication Group was privatized, we had four or five services. The government policy was to have all communications services grouped into one entity, and that's when we created CCSB, the Communications Coordination Services Branch.
When I arrived at the department, I had no indication that there was anything wrong, until the beginning of 2000, when we found out there were some control problems in the human resources department. I felt that since we were delivering these communications services through a private sector agency, we should have an internal audit done to make sure we didn't have the same problems. Even though my deputy minister said that the audit Treasury Board was requiring was on grants and contributions, I said, “Regardless, sponsorship is not a grant or contribution, but I would like to have an internal audit done to make sure that everything is okay”. I have to say that I was very upset when I got an interim report for the internal audit of 2000. In the middle of the audit they came to see me. I was very upset. That's when I said, “Should I call the police?” They said, “No, there is no criminal intent there. It's only an administrative problem.” We put 37 points in place. We called again for a competition for the agency.
But I did more than that. At the same time, I asked my deputy minister to meet and start negotiations with the executive director of the Canada Information Office on transferring CCSB to the Canada Information Office and keeping in Public Works just the procurement service, so that we could really separate the two and go back to the way they were before July 1994. It took a little while. Following the first negotiation, we were only able to transfer the public opinion research branch. Then there was a change of deputy minister, and also there was a change of executive director of CIO. I immediately asked the new Deputy Minister of Public Works and the executive director of CIO to get back to negotiations. In the summer of 2001 we were able to finally transfer. As of September 1, this became real. The Auditor General acknowledges all that in her report.
So yes, there were problems. But when we found out there were those problems, we took immediate action, and they were corrected. That's the role of a minister. You cannot correct something you're not aware of.
À (1010)
Mrs. Karen Redman: I think a lot has been made of timing in this whole issue. Had Groupaction and Groupe Everest done business with the previous government, before the Liberal government came in, to your knowledge?
Hon. Alfonso Gagliano: I know for a fact that Everest, yes, was an advertising agency recognized as doing business during the Conservative government, before we took office. I'm not sure about Everest.... But I want to add that all those agencies that the Auditor General talks about in the report were already recognized in the department before I became Minister of Public Works and Government Services--and even, I think, before I became minister, because I was only appointed minister in September 1994.
Mrs. Karen Redman: If we can look forward...you've also gone forward in your brief and talked about better tools and how we can ensure that this doesn't happen. Given your experience, I'm really interested in your input, but when I look at collective ministerial responsibility, as well as the ability to deal with high-level bureaucrats, whether to hire them or fire them, it seems to me that would open the door to what would be perceived as greater political involvement in a way that may not be as transparent as we would like to have.
I wonder if the audit function is as rigorous as it needs to be. Had the internal audit function been more rigorous, perhaps.... How else would we get at the perception that there needs to be some kind of separation?
The Chair: The time has expired, so I'll ask Mr. Gagliano to give a brief response, please.
Hon. Alfonso Gagliano: Well, Mr. Chair, definitely I think this case proves that the internal audit started the whole process.
It should have a strong internal audit, but I don't think the internal audit should be in the department. The internal audit function should be at Treasury Board.
I believe it should be annual, and I discussed this with the Auditor General. We ask business to have annual audits; why shouldn't government programming be audited annually?
Secondly, we don't have a rotation system in the public service. We should have a rotation system so that we have more transparency when people move around.
The Chair: Thank you very much, Mr. Gagliano.
Ms. Wasylycia-Leis, please, for eight minutes.
Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
I know I shouldn't rise to the bait--
The Chair: No, don't.
Ms. Judy Wasylycia-Leis: --but in response to Karen Redman and any other Liberals who want to take us down this line of thinking, by any definition of decency and ethics in government, there was something wrong with the sponsorship program.
I think calling it a scandal is exactly what Canadians think of it as, and I think we need to in fact pursue the line of questioning from the point of view of something being very, very rotten.
À (1015)
Mrs. Karen Redman: On a point of order, Mr. Chair, I in no way was alluding to this not being troubling and that it does not need to be dealt with and that this committee--I am clarifying, Diane--should not do due process in absolute diligence and get to the bottom of this. However, in order for this not to appear or in fact be a witch hunt, I think this committee needs to be careful of the language it uses.
The Chair: Your point is noted, Ms. Redman. It's not a point of order. “Scandal” is a perfectly parliamentary word, and if Ms. Wasylycia-Leis wants to use it, she may. I can't stop her from doing so.
Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis: That's correct, Mr. Chairperson, but obviously the time taken on a point of order wouldn't be deducted against my time.
The Chair: It is added to your time, of course.
Ms. Judy Wasylycia-Leis: Let me just begin by thanking Mr. Gagliano for coming before our committee. I think we all appreciate the fact that you are here, that you didn't delay once you had returned to Canada and had been in contact with your lawyer, and we certainly appreciate the fact that in your statement you said you seek justice. That's what we seek here too.
We know we have to get to the bottom of where this money went and why it was siphoned off, in order to do exactly what you said in your opening remarks, to be true to democracy, true to our work as members of Parliament.
So if you accept the general thrust of the Auditor General, then you would agree that we have to follow the money and get to the bottom of it in order to ensure that politics isn't happening out there because of dirty money.
Hon. Alfonso Gagliano: I agree with you, definitely, at this committee, and I hope the public inquiry. I have been saying, and I want to say, I will cooperate and I am eager to appear before the public inquiry. I think we'll have to find out exactly what happened.
Now that I'm back, I definitely have a lot of time on my hands, so you understand that I've been watching you practically on a daily basis. I saw, for example, that the present Deputy Minister of Public Works tabled here or sent by mail a chart. I didn't see the details on TV, but if I could understand that chart...there is a list where the so-called $100 million went, with the names of the events, the communications agency, what was paid in commission, what the production costs were, and what the management fee or whatever they call it was. There definitely is something we have to find out. Did we get value for our money?
Believe me, I'm the one here who has paid the big price, so if somebody wants to know the truth, it's me. I agree that as a member of Parliament, you want to know too because you represent the taxpayer, but the integrity.... You have no idea what it is at this stage to walk down the street, go into a shopping centre, and see how people look at you. It looks like I'm the guy who ran off with $100 million, but nobody ran off with $100 million. We know where the $100 million went, and let's look at that.
Ms. Judy Wasylycia-Leis: We agree. We have to get to the bottom of it because it gives a bad name to politics and to this country in general.
I appreciate the seriousness with which you took your job as a minister. As a former minister myself in the Manitoba government, I can testify as well as to how hard a job it is and how seriously we take our responsibilities.
What I don't understand is how it could be that a bureaucrat, that whoever knew what was going on, didn't come to you and give you a heads-up. Did no bureaucrat ever come to you and tell you something was amiss?
Hon. Alfonso Gagliano: No.
Ms. Judy Wasylycia-Leis: No one came forward.
Did you seek that kind of feedback from your bureaucrats, from your deputy minister or from your ADM? It was out there, right? It was out there, so did you seek the information?
À (1020)
Hon. Alfonso Gagliano: I had no indication whatsoever that there was anything going wrong, so I never asked, “Is there anything wrong?” Services were delivered. As a minister, whenever I was in the province of Quebec or anywhere else, I would see those services being delivered. I didn't know that there was a problem with the management of the files or with the invoicing, that a contractor had not given a proposal, or that there was no contract at all.
Ms. Judy Wasylycia-Leis: Are you saying that no one ever contacted you, your assistant deputy minister or your deputy minister, even though they knew, because Allan Cutler had already come forward and there was a process in place...? And you knew about Allan Cutler, so did you pick up the phone?
Hon. Alfonso Gagliano: No, I didn't know. I learned about Allan Cutler at the same time you learned about him here, by watching the committee and by reading the news.
Ms. Judy Wasylycia-Leis: That's interesting.
Hon. Alfonso Gagliano: I learned about the Ernst & Young report. I learned there was the Allan Cutler situation. I learned there was an internal report. This I learned like you did; nobody ever informed me or briefed me when I arrived at the department, even later, that those problems existed.
Ms. Judy Wasylycia-Leis: I accept that, but I find it very hard to believe, because as a former minister myself, I would expect that if there were something wrong in the department that was unethical or if there was an indication of bad administration, I would need to hear about it. I would make sure my deputy minister knew he had to tell me anything that happened. How is it that you didn't have that kind of flow of information happening?
Hon. Alfonso Gagliano: As I said, I was informed in June 1997, when I became minister, that the program existed. There were new Treasury Board guidelines. We were delivering the program with outside communications agencies because we didn't have enough resources or expertise. This was going out there in the field; therefore, they could enter into a better.... And we were paying 15% commission. That's it.
Ms. Judy Wasylycia-Leis: Okay, I accept that.
You also say on the last page of your report that you would have liked to have had the responsibility for hiring and firing key personnel in the department. By implication, that sounds like you believe someone was foisted on you for some other reason, one you had no control over. So where was the problem coming from? Was it Treasury Board? Was it the Prime Minister's Office? Who imposed on you these individuals you had no control over?
Hon. Alfonso Gagliano: First of all, I want to clarify that in my statement I made that suggestion in the sense that if a minister has to be responsible, then you have to be responsible all the way, and therefore--
Ms. Judy Wasylycia-Leis: Sure, but by implication it means you didn't have any control over the people--
Hon. Alfonso Gagliano: No, definitely--
Ms. Judy Wasylycia-Leis: So who put them there?
The Chair: We'll have questions and answers, and not a multi-dialogue going across the table.
Ms. Judy Wasylycia-Leis: All right, sorry.
Hon. Alfonso Gagliano: When I was appointed Minister of Public Works and Government Services in June of 1997 my deputy minister was there, all the assistant deputy ministers were there, Mr. Guité was there. In other words, you arrive as a minister and it's here is what we're doing, those are the briefings, those are the files, and if there is a problem they're supposed to tell you there's a problem in that file and make you a recommendation. But the minister doesn't fire or hire anybody in his department. So I was making that reference in terms of responsibility. How can you be personally responsible if you don't have control over those who are supposed to help you to do the job?
Ms. Judy Wasylycia-Leis: So it still begs the question, who had the control? Who was driving the agenda?
I have one more quick question.
The Chair: We'll have to come back. Your time has expired. I'm sorry about that. I wish I could allow everybody to continue their own line of questioning forever.
Mr. MacKay, please, eight minutes.
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, CPC): Thank you, Mr. Chair.
Mr. Gagliano, welcome back. Welcome, Mr. Fournier.
You said just a moment ago that you know where the money went. You said you knew where the money went. There were millions that went missing, and I think that's the crux of the matter for a lot of Canadians. It's tax season. A lot of people are concerned about where the money went.
You also said earlier in your opening statement, “A minister does not run his department. He has neither the time nor the freedom to do so.” That is an alarming statement, I think, given the circumstances of ministerial responsibility and what has happened here. Just in the exchange with Ms. Wasylycia-Leis, you said you got a briefing when you came into the Department of Public Works. I suspect that Mr. Guité gave you that briefing. Is that correct?
Hon. Alfonso Gagliano: I believe it was Mr. Guité with the deputy minister, or maybe an associate deputy minister. I don't remember exactly.
Mr. Peter MacKay: Was there anybody from the PMO present during those briefings?
Hon. Alfonso Gagliano: There was nobody from the PMO for the ministerial briefing, no.
Mr. Peter MacKay: And did those briefings include a description of how the sponsorship program itself was to operate?
Hon. Alfonso Gagliano: Yes, in general, a very general description.
Mr. Peter MacKay: There was an atmosphere at that time that was later used as a justification for some of the spending that went on in your province of Quebec, and it had to do with the referendum. You were aware of that atmosphere in which this sponsorship program was operating, correct?
Hon. Alfonso Gagliano: Yes, definitely.
We had no problem in other provinces. The province of Quebec was the only province that had a government that wanted to separate from Canada, and therefore we wanted to ensure that we had a good presence of the Government of Canada, that Quebeckers could understand they were part of Canada.
À (1025)
Mr. Peter MacKay: So the spending was directed at raising the profile of Canada inside Quebec?
Hon. Alfonso Gagliano: That was the objective of the program, and that objective was established even before I arrived.
Mr. Peter MacKay: You bought into the Prime Minister's objective, which was that this spending could be justified because it was to save Canada--correct?
Hon. Alfonso Gagliano: The objective of the program was very good. It was, yes, to keep the country united. It was a national unity strategy, but the Prime Minister and myself, anybody.... And if you look at the cabinet documents that you have before you, there is always a mention that those moneys were supposed to be spent according to the Financial Administration Act and the Treasury Board guidelines. Nobody ever gave instruction to anybody not to do the things that were supposed to be done.
In terms of the objective of the program, yes, it was a very good program. The proofs are there if you look at the public opinion research and so on, and we even have a federalist government now in Quebec.
Mr. Peter MacKay: Mr. Gagliano, you still maintain it was a good program, even though the Auditor General issued a scathing report, in fact two scathing reports, that touch upon massive mismanagement, waste, money that went missing? And you maintain still that this was a good program for taxpayers? Would you go so far as to say that?
Hon. Alfonso Gagliano: I say that the objective of the program was very good: national unity. The unity of this country is very important. Unfortunately, there were management problems. Even before the Auditor General's report was made public, there was the internal audit of 2000, which I ordered, and all the changes that came from it. There are police investigations, and I think the previous and the current governments are doing everything they can to get to the bottom of this thing.
The objective of the program was good. Unfortunately, it was badly managed.
Mr. Peter MacKay: So it was management problems, essentially.
What I'm gleaning from your testimony is that even though you had your fingers in a lot of pies—you were a Quebec minister, you were head of an ad hoc cabinet committee on government communications, and you talked about your role in briefing other ministers and other departments, and about your busy activities in Quebec and in your constituency—you're telling us today that you were essentially a finger puppet of your own department, that you had no control over the sponsorship program and how this money was being administered and doled out, and over the specific contracts that went to Liberal-friendly advertising firms in your province.
You didn't make those decisions—is that your testimony today?
Hon. Alfonso Gagliano: Mr. Chair, first of all, I object to the word “puppet”, and I would remind everybody that I'm no longer in politics. I'm a private citizen, and I think I came here of my own free will, and I don't expect to be insulted.
The Chair: I think Mr. MacKay was referring to your statement about your management responsibility while you were a minister.
Hon. Alfonso Gagliano: But I'm not a puppet. I take that as an insult, and I expect an apology.
Mr. Peter MacKay: Mr. Gagliano, you're here to answer questions about your time as a minister. You may be here as a private citizen today, but the subject of this examination is about taxpayers' money that went missing on your watch, sir. That's what we're here to examine today.
Hon. Alfonso Gagliano: I remind you that I'm here voluntarily, and I am ready to answer all of the questions, but I don't expect to be insulted—by you or anybody else.
Mr. Peter MacKay: Well, you're here to answer questions, and you talked earlier about accountability to the people of this country.
Hon. Alfonso Gagliano: Ask the questions with the proper language, and I'll answer them.
The Chair: Mr. Gagliano, Mr. MacKay has the floor.
Mr. Peter MacKay: I have a question for you, Mr. Gagliano.
You chaired this ad hoc committee. This set-up was between 1998 and 2001. And I suggest to you that other ministers of Mr. Chrétien's government, your colleagues, were also part of that committee.
Hon. Alfonso Gagliano: Yes, there were a number of cabinet ministers on that committee.
Mr. Peter MacKay: They included the current Prime Minister, the then Minister of Finance Paul Martin.
Hon. Alfonso Gagliano: I don't think so.
Mr. Peter MacKay: You don't believe he was present.
Hon. Alfonso Gagliano: Mr. Chairman, here I need some guidance. Again, regarding the things we discussed this morning, are those cabinet committees the member is asking me about public? If they are public, I am willing to answer.
An hon. member: It's a cabinet committee.
The Chair: I don't see that it's a state secret, Mr. Gagliano, which cabinet minister sits on which committee. I would think that you should be able to answer.
À (1030)
Hon. Alfonso Gagliano: Okay, fine.
Mr. Peter MacKay: Mr. Gagliano, I'll ask this specific question.
You chaired this ad hoc committee—
Hon. Alfonso Gagliano: Yes, I was the chair.
Mr. Peter MacKay: You agree with that. I am suggesting that members of that committee included Anne McLellan, Ralph Goodale, Andy Scott, David Anderson, and the current Prime Minister, Paul Martin. Is that correct?
Hon. Alfonso Gagliano: No. I agree with all the others, but I do not remember the current Prime Minister being a member of the communications cabinet committee.
Mr. Peter MacKay: You do not recall Paul Martin being present at any of the meetings that took place of this ad hoc committee on communications?
Hon. Alfonso Gagliano: His office, yes, when we were discussing budget communications, but I don't recall him—
Mr. Peter MacKay: Members of his office staff.
Hon. Alfonso Gagliano: I beg your pardon?
Mr. Peter MacKay: Members of his office staff would have been present?
Hon. Alfonso Gagliano: Yes, when we were discussing budget communications strategy.
Mr. Peter MacKay: Would those persons have included Terrie O'Leary?
Hon. Alfonso Gagliano: I don't recall. I don't think she was in office then.
Mr. Peter MacKay: Mr. Littler?
Hon. Alfonso Gagliano: I don't recall the name. I know that there were people from the minister's office during the budget communications strategy, but....
Mr. Peter MacKay: Did Terrie O'Leary ever contact you or your office directly on behalf of the Prime Minister on any subject matter dealing with sponsorship?
Hon. Alfonso Gagliano: No.
Mr. Peter MacKay: The Treasury Board referred specifically, in documents and in testimony we've heard already, to money laundering. Have you ever heard that expression in the context of this sponsorship program?
Hon. Alfonso Gagliano: No. I heard it through the committee here, while watching the committee hearings.
Mr. Peter MacKay: With respect to the Auditor General's report itself, do you disagree with the findings of that report--the question posed to you earlier by Mrs. Ablonczy? Do you disagree with Ms. Fraser's findings that essentially these rules were broken, that money has gone missing, that money is unaccounted for?
Hon. Alfonso Gagliano: I agree, like I said, with the general thrust. In terms of the $100 million, like I already said, we know where the money went. You have a chart to--
Mr. Peter MacKay: Where did that money go?
Hon. Alfonso Gagliano: Well, you have a chart. I don't have the list; you have the list, which was tabled to this committee.
The Chair: Okay, we're not going to....
Thank you very much, Mr. MacKay.
Madam Jennings, please, pour huit minutes.
Mrs. Marlene Jennings: Thank you, Mr. Chair.
Mr. Peter MacKay: Mr. Chair, I have a point of order.
The Chair: On a point of order, Mr. MacKay.
Mr. Peter MacKay: Mr. Chair, at the end of the session here today, could I request that briefing books and briefing notes that were referred to by this witness, from when he took office and was first appointed to cabinet, be the subject of an examination by this committee as well?
The Chair: Okay. I'll take that as a notice of motion, Mr. MacKay. We can't adopt any motions today, so we'll take that as a notice of motion. The clerk will make sure that we discuss it at a subsequent meeting.
Madam Jennings, please.
Mrs. Marlene Jennings: Thank you, Mr. Chair.
Thank you very much, Mr. Gagliano, for coming before this committee and for answering the questions of the committee.
I do have a couple of questions. First, your nomination to cabinet as Minister of Public Works was in June 1997.
Hon. Alfonso Gagliano: Yes.
Mrs. Marlene Jennings: That's the point at which you were sworn in.
Hon. Alfonso Gagliano: Yes.
Mrs. Marlene Jennings: Shortly thereafter, you would have received briefings. From responses that you've given to questions asked by some of the members of this committee, the then Deputy Minister of Public Works, Mr. Ran Quail, was definitely present at these briefings.
Hon. Alfonso Gagliano: Yes.
Mrs. Marlene Jennings: You've stated that you believe that at least one or more assistant deputy ministers were present, including Mr. Chuck Guité, who wasn't, at that point, I don't believe, an assistant deputy minister.
Hon. Alfonso Gagliano: If I may answer and explain, the Department of Public Works and Government Services is so large that for the first two weeks, practically, I had scheduled briefings for different divisions and general divisions, and so on. Therefore, I cannot recall exactly who was there.
Mrs. Marlene Jennings: I understand.
Hon. Alfonso Gagliano: The deputy minister was coming with the appropriate people; some were assistant deputy ministers, some were directors general, and so on. This was a continual flow of information, with people coming and seeing me to give me those briefings.
Mrs. Marlene Jennings: Thank you. That's quite important.
You've also stated that during these briefings, at no time were you informed of the existence of a Mr. Allan Cutler, public servant, employed by Public Works, in the advertising, polling and opinion research sector. At no time during those briefings--you've testified to that.
You've also informed us that at no time in those briefings were you informed that, subsequent to a complaint that Mr. Cutler made, an internal audit of APORS was conducted.
You've also stated that at no time were you informed of the existence of that internal audit, or of the subsequent external audit in 1996 conducted by Ernst & Young.
You've since learned of the existence of Mr. Cutler, the internal 1995-1996 audit, and the external 1996 audit of APORS headed by Mr. Chuck Guité. Am I correct?
À (1035)
Hon. Alfonso Gagliano: Yes. I learned of all these things that happened prior to my arrival only by listening to this committee here.
Mrs. Marlene Jennings: Yes. Thank you.
Given what you've now learned about Mr. Chuck Guité and his management of APORS from 1994, the period that the internal audit and then the Ernst & Young audit covered from 1994 to part of 1996, and the conclusions of those audits on backdating, duplication of invoices, false invoices, missing requisitions, and basically complete flagrant disregard for the most basic policy guidelines and rules concerning contracting, etc., would you not, as minister, have questioned why this man was in charge of communications and sponsorship?
Hon. Alfonso Gagliano: Definitely, I would have questioned that.
Mrs. Marlene Jennings: Do you not now ask yourself how it is that the deputy minister, Mr. Ran Quail, who came to Public Works as a deputy minister in 1993, and who was there and present during Mr. Cutler's complaint, the internal audit, and the Ernst & Young audit, I assume, is the one who suggested, proposed, or recommended to you that a position of assistant deputy minister for communications be created and that Mr. Guité would be a good guy to fill that position?
Hon. Alfonso Gagliano: Again, the creation of the position of assistant deputy minister of communications is a separate matter. But I met Mr. Chuck Guité for the first time when I arrived at the department in the summer of 1997--
Mrs. Marlene Jennings: So you didn't know Mr. Guité previous to that?
Hon. Alfonso Gagliano: --and until the internal audit of 2000, I had no complaints or anything. He was a nice gentleman and always well mannered. Nobody ever told there was something wrong, and so on. Therefore I had no knowledge of what was going on prior to that.
Mrs. Marlene Jennings: When the former deputy minister, Ran Quail, testified before us, he informed us that Mr. Guité had a direct line to the minister's office; that Mr. Guité went directly to the minister--and that included the ministers who preceded you--and that was very unusual. Under normal government hierarchy and authority, assistant deputy ministers or executive directors go through the hierarchy and the deputy minister. He said he was basically paralyzed before this.
Did Mr. Ran Quail ever inform you that you or your officials should not be having direct contact with people who were in positions below Mr. Ran Quail; that this was not in accordance with regular rules and procedures regarding authorities?
Hon. Alfonso Gagliano: No. I don't recall that he made that specific statement to me.
I want to say that I had good relations with the then deputy minister. I used to meet with him regularly. He knew that once in a while Mr. Chuck Guité would meet with me to give me some information on the sponsorship program. Every time I met Chuck Guité I would kind of debrief Ran Quail. I would meet with him and say, “I met with Chuck Guité. We have to go before Treasury Board for a new budget, so he will be coming to see you with the information, and so on.”
À (1040)
Mrs. Marlene Jennings: On the three contracts the Auditor General was initially asked to audit, the first one was signed in December 1996; therefore you were not at Public Works. The second one was signed in April 1997. If I'm not mistaken, we were in an election at that time and you were not the minister.
Hon. Alfonso Gagliano: I wasn't there. I became minister on June 11, 1997.
Mrs. Marlene Jennings: When you ordered the internal audit of the communications and sponsorship program, was there any possible uneasiness on your part about how the people were running the program--Mr. Guité and his subordinates? Did that play any part in your decision that “It seems something's not right with this. Let's see if it's just my feeling or if it's...”?
Hon. Alfonso Gagliano: Definitely. Two things happened. Mr. Guité left the department, I believe around the end of 1999, and we also had the problem with human resources. Naturally, once he left the department rumours started and we had a problem. So that really made me decide to call for an internal audit and find out what was there.
The Chair: Thank you, Madam Jennings.
Madame Picard, I apologize. I should have gone to you before I went to the Liberal round. You are next, followed by Mr. Tonks.
[Translation]
Ms. Pauline Picard (Drummond, BQ): Thank you, Mr. Chair, Mr. Fournier, Mr. Gagliano, good morning.
Mr. Gagliano, in your interview on RDI, on March 7 last, you said:
| I didn't learn that there were serious administrative problems until the spring of 2000. |
What did you learn, Mr. Gagliano? What was the nature of those problems?
Hon. Alfonso Gagliano: I was referring to an interim report that I'd received from the internal auditor in the presence of the deputy minister and other persons. It was an oral report; so I didn't have the report in hand. He told me at the time that certain file documents were missing, that the files hadn't been properly kept and that the way in which the contracts had been awarded was not clear.
So all those problems were reported, and it was then that I asked the internal auditor whether I should call the police. He answered no, because the problems were not criminal in nature, only administrative. I demanded that an action plan be developed to correct them immediately. A 37-point action plan was subsequently submitted to me. I froze the Sponsorship Program, and a new competition was opened for communications agencies. In late 2000-2001, if I remember correctly, order was restored.
I then asked that an internal follow-up audit be conducted to ensure that all the corrective action we had decided on had been implemented. At the same time, I asked that steps be taken to negotiate the transfer of the Communications Coordination Services Branch from Public Works to the Canada Information Office, but that contract awarding be kept at Public Works in order to separate the two functions and thus to avoid problems.
So all those things were done and acknowledged. Moreover, it was then that Communications Canada was created by Order in Council.
Ms. Pauline Picard: In the discussion you had before requesting the audit report, was any reference made to favouritism, the preparation of false invoices and money that didn't go to the events?
Hon. Alfonso Gagliano: No. As I told you, the auditor made that first report to me orally. He did not mention that funds were missing or had been used for other purposes. If that had been the case...
Ms. Pauline Picard: Can you tell us what problems led you to request an internal audit?
Hon. Alfonso Gagliano: If you request an internal audit report and the internal auditor tells you there are serious administrative problems, the first thing you wonder is whether you've been robbed and should call the police.
However, the auditor assured me that the problems were administrative, not criminal in nature, and he gave me a few sample invoices that had not been prepared properly and situations in which copies of the contracts were not on file. Those were administrative matters. I put the question to the internal auditor responsible for the audit, and he told me that I didn't have to call the police. So I decided to prepare an action plan to solve the problems. Since they were administrative problems, I wanted administrative measures to be taken, and that's what was done.
À (1045)
Ms. Pauline Picard: It was serious enough for you to consider calling the police. Exactly what was involved? False invoices and reports that funds had not be used for their intended purpose?
Hon. Alfonso Gagliano: The first thing a minister does when a civil servant tells him something's wrong--and it wasn't the first time that it had happened to me--is wonder whether there has been fraud and whether the police should be called. I asked those questions, but the persons responsible told me that was not the case. So we took administrative corrective action.
Ms. Pauline Picard: Mr. Gagliano, the present prime minister said he did not understand that there was a problem until he read the Auditor General's report in November 2002. Do you find that statement credible, in view of the fact that he was a member of the Treasury Board at the time?
Hon. Alfonso Gagliano: As minister responsible for the program, I was made aware of the fact that there serious administrative problems in April 2002, I believe. The internal audit report was put on the Internet in August 2002, I believe. So everybody was aware of it. The report was sent to Treasury Board and to the Privy Council. So I imagine that, internally, in the context of the operation of government, the Department of Finance might have been made aware of the matter at the same time as Treasury Board, that is in spring 2000.
If I myself hadn't been informed of the problems before spring 2000, I don't see how he could have been.
Ms. Pauline Picard: But you were the Minister of Public Works.
Hon. Alfonso Gagliano: Yes.
Ms. Pauline Picard: You were a member of the Treasury Board.
Hon. Alfonso Gagliano: Yes, but I was informed at the time of the internal audit report that I myself had requested. I believe the Minister of Finance was informed of these problems at that time as well.
Ms. Pauline Picard: After the report?
Hon. Alfonso Gagliano: Yes, after the 2000 audit report. The entire government was made aware through the Treasury Board and the Privy Council. When events of this kind occur, all departments are informed of them.
Ms. Pauline Picard: Who do you think was aware?
Hon. Alfonso Gagliano: I'm sorry, aware of what?
Ms. Pauline Picard: Of the internal audit report.
Hon. Alfonso Gagliano: I believe the deputy minister told this committee that he had informed Treasury Board and the Privy Council that we were doing an internal audit.
Ms. Pauline Picard: Was the Minister of Finance aware?
Hon. Alfonso Gagliano: I don't know whether he was aware, but we're still referring to spring 2000. That's when the audit was done.
Ms. Pauline Picard: He was still Minister of Finance.
Hon. Alfonso Gagliano: Of course.
Ms. Pauline Picard: As a result of the internal audit requested, it was observed that there were serious problems. What did you decide to do with that report?
Hon. Alfonso Gagliano: We made it public. We put 37 points in place to correct the situation. We froze the program until the action plan was implemented. We started a competitive process to select communications agencies. For the first time, a large number of agencies were selected.
I believe that the action plan was implemented and the new agencies selected by late 2000, early 2001. At the same time, I asked my deputy minister to start negotiations to transfer all communications programs to the Canada Information Office and to keep contracting at the Department of Public Works in order to separate the two functions. Everything went into effect on September 1, 2001. I left on January 15, 2002. A week after my departure, the executive director of Communications Canada informed me that the internal follow-up audit had been completed and that everything had been put in place as required by the action plan.
À (1050)
[English]
The Chair: Merci, Madam Picard.
I would like just one clarification on your testimony, Mr. Gagliano. You mentioned that when you took over you were concerned about these contracts and you put them out for new bids. Am I correct in saying that?
Hon. Alfonso Gagliano: I said that once I learned about the management problem we had in the 2000 internal audit.... At that time there was a 37-action plan to correct all the problems, but there was also a new competitive bid to choose a communications agency. That was after the other 2000, and not when I arrived at the department. When I arrived at the department I didn't know anything.
The Chair: Were you the one who asked for these new competitive bids? Who asked for them?
Hon. Alfonso Gagliano: I did.
The Chair: Okay.
Mr. Tonks is next, please, for eight minutes.
This will be the last intervention before our scheduled break at 11 o'clock. Then we will return.
Mr. Alan Tonks (York South—Weston, Lib.): Thank you, Mr. Chairman.
Thank you, Mr. Gagliano, for being here this morning.
I think one thing we can agree on is your characterization of the sponsorship program and its administration--that now in retrospect it really was a fiasco. That's your word, and I think all of us certainly can agree with that.
You have spent a considerable amount of time--I can appreciate it, as can the members of the committee--on how you feel particularly let down by the system, that it didn't respond appropriately. You had put recommendations forward that you thought would make a change--for example, being able to, as a minister, designate the deputy minister. That's an interesting proposal. But you haven't spent any time characterizing how you think the taxpayers of Canada, the citizens of Canada, feel with the kind of information that has come out on that fiasco. You've demonstrated how you feel, but would you like to take just a moment to reflect on how you think the taxpayers feel, in terms of how the system protected their interests?
Hon. Alfonso Gagliano: I can tell you one thing from my personal experience on this matter. Canadians in general feel very angry. Because everybody has portrayed me as the great inventor or the great director of this fiasco, I can tell you that sometimes it's dangerous for me even to walk in a shopping centre. So yes, Canadians are angry. But I think what is important is that this committee, the inquiry, and the police investigation will prove at the end of all this--it might take two or three years before we know the real truth--that in discharging my ministerial responsibility, I acted with integrity and honesty. Yes, Canadians are angry, and they are entitled, and rightly so.
Mr. Alan Tonks: They are entitled to be angry.
Notwithstanding the fact that Mr. Marshall provided us with a chart showing that most of the activity Canadians are angry about occurred under your watch, so to speak, your contention is that you didn't know anything about the fiasco that was going on.
Hon. Alfonso Gagliano: Yes. I've been giving details and referring to documents on how the process was put in place. First of all, a new communications guideline concerning advertising and opinion poll research was issued in 1994. I was not even in cabinet. Whoever occupied this special box, I think they call it, in your chart had the authority to not only deliver the communications service, but also to do the contracting. That was a Treasury Board guideline issued in 1994. I was not in cabinet.
Everybody says that the program was created by me in 1997. The sponsorship program was created in 1996. You just have to read the minutes of the Treasury Board cabinet committee. The word “sponsorship” is there. Everything is there, even a list of events, the same events the Auditor General is talking about in her report. I arrived in 1997. I was told about the way the program functioned. I was told the program was functioning well. I had no indication that there were problems until early spring or late winter of 2000, and that's when I ordered an internal audit.
À (1055)
Mr. Alan Tonks: Mr. Harder, the Secretary of the Treasury Board, has stated that internal audits normally would not go before Treasury Board.
Hon. Alfonso Gagliano: That was the policy before 2000. I was sitting on the Treasury Board when that policy was changed.
Mr. Alan Tonks: You were there when it was changed.
Hon. Alfonso Gagliano: Yes.
Mr. Alan Tonks: Mr. Marshall has stated that through that period of the CCSB, which you said you put in place, there was a complete short-circuiting with regard to the stages calling for procurement strategies to be mapped out for the solicitation of bids and the companies that were going to be provided with the opportunity to bid. There was no evaluation given, and there was no contract approval. Those stages were completely circumvented. Were you aware that was happening, since you did put in place the CCSB?
Hon. Alfonso Gagliano: Let's put it this way. The CCSB was put in place during my tenure as a minister. We took APORS, which existed before my arrival, I believe since 1994. It was already in that structure because of the Treasury Board guidelines issued in 1994. We added four more programs. Because of the privatization of the Communication Group, they were lying out there, and we were asked to put them together. So we put the four programs together, including the advertising service, the sponsorship program, and the public opinion research, and we created the CCSB. In other words, we created a new name, a new box, but with the same rules that were already in place and where nobody told me there were problems. Therefore, what I did as a minister was approve the CCSB, everything that was in APORS, and add those four new programs.
Mr. Alan Tonks: Mr. Chairman, perhaps I could put it this way.
In 1994 Mr. Cutler brought out the same issue that you had identified in 2000 on the process of the audit. Mr. Cutler was aware of the deficiencies in taking the contract review, the authorization of cheques, and the cross-referencing of work to be done with payment, and so on. Mr. Cutler has indicated that he was taken out of that loop, if you will, intentionally. An internal audit in 1996 and an external audit found that his concerns were founded. Were you not informed, on taking over in 1997, that the audit had been done? Were you aware in 2000 of how important that was?
When Mr. Cutler was asked, Mr. Chairman, “what could you have suggested in 1996 that would have obviated and stopped this kind of thing?”, he answered, “by putting the kind of system in that you did in 2000”.
Are you suggesting here, then, that this came as a--how do I put it?--bolt out of the blue that the audit told you that you should do this, and you weren't aware that you perhaps should have done that?
The Chair: Your time is up.
Mr. Alan Tonks: Can I have an answer? Could the committee have an answer?
Hon. Alfonso Gagliano: I think I said it very clearly from the beginning. I arrived there in 1997, but the program wasn't in place. The structure you're talking about for the communication service was in place. Nobody told me that there was a problem, that there were internal audits in 1996, or Ernst & Young. I'm not aware of that.
There was a program; things were working well. We had here four new programs that we had to put somewhere. The government told Public Works to take care of those programs and policies. They wanted all communication services in one box. We took those four programs and created CCSB with the same structure as prior to my arrival. Therefore, I had no indication.
When I saw those problems in 2002, then I said no, we'll have to separate. Besides the planned action, I went to my deputy and said that I wanted that transferred.
Á (1100)
The Chair: Okay.
I have a couple of questions, before we break, on a slightly different topic, Mr. Gagliano.
Canada Communication Group was sold to a company called St. Joseph Corporation. I have a letter here from the executive chairman and chief executive officer of St. Joseph Corporation, a Mr. Tony Gagliano. Is Mr. Gagliano in any way, shape, or form related to you?
Hon. Alfonso Gagliano: No, sir.
The Chair: No relation to you.
Hon. Alfonso Gagliano: I can give you an example.
The Chair: No, that's fine.
Hon. Alfonso Gagliano: My counsel is Fournier, and I believe the Clerk of the Privy Council is Fournier. There's no relation.
The Chair: Okay. That's fine.
Hon. Alfonso Gagliano: I know, Mr. Chairman, that question had been asked all the time that I was in--
The Chair: It's on the record. Thank you very much, Mr. Gagliano.
The other question has to deal with the sale of the Canada Communication Group to the St. Joseph Corporation. They were given a special deal that broke the contracting rules of the Government of Canada. In fact, they were given a privileged administrativearrangement that guaranteed them all printing jobs larger than a certain amount--that's blanked out--and less than $100,000, and more specifically, for printing and duplicating services, reproductive photo services, such as photocopying of fleet management warehouse distribution, integrated foreign management distribution, etc.
Mrs. Marlene Jennings: Did you get the year?
The Chair: I believe the document that I have doesn't have a date. It only says “a directive must be given to all departments for mandatory use of the PAA (Privileged AdministrativeArrangement) for all printing jobs greater than a certain amount and less that $100,000. The PAA guarantees that CCGI”--presumably Canada Communication Group Inc.--“is automatically compliant for all services covered in the agreement.”
Mrs. Marlene Jennings: We don't know when that was contracted?
The Chair: It goes on to talk about a meeting with the Honourable Marcel Masse held on March 2, 1998. “We'd request a response by March 23, 1998”. So it's March 2 or March 23, 1998.
Mrs. Marlene Jennings: Thank you.
The Chair: Anyway, when they bought Canada Communication Group, Canada Communication Group Inc. was given a special deal by the Government of Canada that broke the contracting rules. It may even have broken the NAFTA rules. Why were they given this? Because that was under your watch.
Hon. Alfonso Gagliano: No, sir. I believe that contract was completed by March 31, 1997, and I became minister on June 11, 1997.
The Chair: Did you take any action to bring it within the normal guidelines?
Hon. Alfonso Gagliano: No. I was briefed. I was informed of this contract, as to why such a special privilege, if you want to call it that, or special arrangement was created, the fact that the company that won the competition would keep in their employment the over 500 employees who were in the plant, and so on. This was the period during which the government was commercializing their own services, and so on. That was the briefing I got, but I was not directly involved in the contracting procedures.
The Chair: Do you know why Mr. Guité was involved?
I'm looking again at a memo dated May 22, 1998, where it says
| There does not seem to be copies of these documents in the Treasury Board...files. I am advised that the government copies are with PWGSC. |
| By copy of this message, I would suggest that Mr. Guité make available these documents so that the government side will have a starting point to resolve the situation. |
Was Mr. Guité involved in the sale of Canada Communication Group?
Hon. Alfonso Gagliano: Frankly, I wasn't on there, sir, but if you can tell me the date of the letter--
The Chair: It was May 22, 1998.
Hon. Alfonso Gagliano: Well, what happened was, after the incorporation, after the creation of CCSB, we included all those services. And even though the Communication Group was privatized, we still had officially the Queen's Printer, and I know that among their duties, Mr. Guité was the Queen's Printer of the government; therefore I believe he was probably answering all queries.
Yes, he was the acting Queen's Printer, but you can find the record.
Á (1105)
The Chair: That's news to me.
The meeting is suspended until 11:30, at which time we will reconvene. Thank you.
Á (1105)
Á (1135)
The Chair: Okay, we're back in session.
Mr. Mills, do you have a point?
Mr. Dennis Mills (Toronto—Danforth, Lib.): Thank you very much.
We keep going back to this problem that I have with the perception that $100 million went out the back door.
Last week we received from the Deputy Minister of Public Works this spreadsheet on the estimated expenditures and events sponsored. Now we see here in this document that there was about $19 million in—
The Chair: Are you suggesting a motion, or are you--
Mr. Dennis Mills: I'm suggesting a motion, Mr. Chair, that for the production costs—which represent the biggest number here—of $83 million for the 1,986 events, we get the backup to that $83 million, because we do not know what amount has been misappropriated until we have the actual backup of that $83 million.
The Chair: Okay, you're making a motion, but as we can't adopt motions today, we'll take that as a notice of motion, Mr. Mills, that the committee obtain the background documents pertaining to.... How much money was it?
Mr. Dennis Mills: It's the production costs of $83 million for the 1,986 events over the five years.
The Chair: Okay, thank you very much. We'll have that motion at the committee next week.
Before we move on, I have received from the Privy Council for Canada something relevant to the proceedings of the committee and the commission—which I presume is the judicial inquiry.... I'm not going to read all of it, because the whole document will be public. I'll just talk about the appropriate parts here:
| Therefore, the Committee of the Privy Council, on the recommendation of the Prime Minister, with the consent of the former Prime Minister, the Right Honourable Jean Chrétien, and with the concurrence of the Clerk of the Privy Council and Secretary to the Cabinet, advise that |
| (a) the confidences of the Queen's Privy Council for Canada, as defined in section 39 of the Canada Evidence Act, in existence since July 1996 until the date of the making of this Order of Council, shall be made available in response to requests made by |
| (i) the Committee for the purpose of inquiring into certain activities of the sponsorship program, advertising activities and the management of public opinion research of the Government of Canada referred to in Chapters 3, 4 and 5 of the Report of the Auditor General of Canada to the House of Commons of November 2003, and |
| (ii) the Commission for the fulfillment of its mandate, and |
| (b) any individual required to testify in respect of the confidences of the Queen's Privy Council for Canada referred to in paragraph (a), for the purposes of the proceedings of the Committee and the Commission may do so. |
Therefore, Mr. Gagliano, that is a statement from the Privy Council for Canada releasing you from your oath of secrecy, so that if there are questions from the commission or this committee, you are free to answer them. The full document is tabled with the clerk and is now a public document.
Okay, Ms. Phinney, I believe you're next on the list, for eight minutes.
Ms. Beth Phinney (Hamilton Mountain, Lib.): Thank you very much, Mr. Chairman.
I have some questions about—
The Chair: My apologies for interrupting.
Mr. Gagliano, do you agree that you're released from your oath by that statement from the Privy Council?
Hon. Alfonso Gagliano: Could I have a copy, please?
The Chair: Yes.
We'll just wait until Mr. Gagliano agrees that we have a transcript from the Privy Council.
Hon. Alfonso Gagliano: Mr. Chairman, I think we can continue with the proceedings. If I have a problem with a question, my lawyer will be looking at it.
For expediency and to save time, let's proceed.
The Chair: Very good.
Okay, Ms. Phinney, please proceed.
Ms. Beth Phinney: Thank you very much.
Welcome to our committee, and thank you for agreeing to come.
While you were the minister, the deputy minister was Ran Quail. Does he have to take an oath?
Hon. Alfonso Gagliano: I don't know. I know that they are security-cleared, but I don't know about an oath.
Ms. Beth Phinney: Could we ask our...?
Hon. Alfonso Gagliano: Maybe the legal counsel might know.
The Chair: Mr. Walsh, do you know the answer? Do deputy ministers have to take an oath?
Mr. Rob Walsh: I think they take oaths as federal public servants. I don't know if there's an oath particularly for deputy ministers, but they take oaths as public servants to the federal government.
The Chair: Thank you.
Ms. Beth Phinney: If you look at the hierarchy in the department when you were the minister there, would you say that Ran Quail was responsible or accountable to you?
Á (1140)
Hon. Alfonso Gagliano: Definitely, as a minister, yes. He was my deputy minister, and was running the department. I have to say that I had good relations with him. We used to meet two or three times a week.
Ms. Beth Phinney: The next person I'm going to ask you about is Mr. Guité. Looking at the hierarchy on the sheets we have, Mr. Guité normally would be responsible to the deputy minister, who would be Mr. Quail.
Hon. Alfonso Gagliano: Yes. Once the CCSB was created, Mr. Guité reported directly to Mr. Quail.
Ms. Beth Phinney: All right. Now, before that, do you know who he was reporting to?
Hon. Alfonso Gagliano: When he was with the organization I think was called APOR, I believe he was reporting to an assistant deputy minister.
Ms. Beth Phinney: Mr. Quail said when he was here that there was a special relationship between yourself and Mr. Guité, and you have said this morning that you met regularly with Mr. Guité. I'm presuming that if you've been watching our meetings, you know that we have talked about the department and this little box on the side. Mr. Guité was in that little box on the side. When you took this over, when you moved into the department, that little box was still on the side, with Mr. Guité running it.
Hon. Alfonso Gagliano: That little box continued exactly the same way. It was created, I believe, with those powers in 1994 through new guidelines by Treasury Board.
Ms. Beth Phinney: Wouldn't it have been normal for Mr. Guité to do any briefing he had to do directly to his direct boss, who would have been Ran Quail?
Hon. Alfonso Gagliano: I believe that there were regular meetings or discussions, definitely, with Mr. Quail.
Ms. Beth Phinney: But there were also meetings between you and Mr. Guité.
Hon. Alfonso Gagliano: Yes. I never called Mr. Guité to come to see me. Mr. Guité would call my office to see me, to discuss the sponsorship file. Most of the time it was to prepare a presentation for Treasury Board because the initially allocated budget was not enough. So he would discuss those files with me in terms of approving a list that would go to Treasury Board.
Ms. Beth Phinney: All right. That's--
Hon. Alfonso Gagliano: I believe Mr. Quail explained that since I had to sign, I had to be informed. Then he would go back to the deputy and discuss it. I would inform my deputy that I met with Mr. Guité to discuss those sponsorship files.
Ms. Beth Phinney: So Mr. Quail was privy to everything that you discussed with Mr. Guité.
Hon. Alfonso Gagliano: Yes, he was always briefed after. I always told Mr. Quail that I met.... It was not only, as in this case, Mr. Guité, but in other parts of the department other assistant deputy ministers, directors general, may have come to see me for an opinion.
Ms. Beth Phinney: Yes. Okay.
Then the only briefing Mr. Guité was doing was to you. He was not accounting for everything that's going on in the whole sponsorship program to Mr. Quail, who said that his relationship was more with you, a direct relationship between the two of you, rather than with Mr. Quail.
Hon. Alfonso Gagliano: My relationship with Mr. Guité was strictly with budget approval. For example, in a couple of instances he came to brief me on a major project. If you recall, for example, we had the Nagano Olympic Games. Mr. Guité called my office to have some time on my agenda so he could come and present me the ads that we were going to use. So those are the things. But in terms of the management of the program, I always assumed that Mr. Guité was reporting to Mr. Quail. So therefore in terms of the management of the program, the files, that was normal procedure, according not only to that program, but all the other programs in the department.
Ms. Beth Phinney: So you just assumed that. Because Mr. Quail suggested it wasn't that way, that it was between the two of you.
So are you saying that Mr. Guité at no time spoke to you about any money, other than the fact that you were going to Treasury Board to ask for permission to have more money, I presume, not less--
Hon. Alfonso Gagliano: Yes, and the list.
Ms. Beth Phinney: So he at no time discussed with you--except maybe that very large one you mentioned--the fact that this group wants money and this group wants money and this group wants money? You never discussed that kind of thing?
Hon. Alfonso Gagliano: He would come to me and say this is what we have. He would say we have lots of demands, but that's the money we have, and I think we could go and ask for another $17 million, supplementary estimates, and here are the projects that I think we should do with the level of funding.
I would look at them and say all right, it makes sense. On some I would ask questions. Then he would proceed to go back to the deputy minister and prepare a Treasury Board submission.
Á (1145)
Ms. Beth Phinney: So it would be between you and Mr. Guité to decide what projects you wanted.
Hon. Alfonso Gagliano: Yes. He would come with some recommendations and I would--
Ms. Beth Phinney: The Auditor General's report on page 3 says that from 1997 until March 31, 2003, the Government of Canada spent about $250 million to sponsor 1,987 projects. Over $100 million of that, or 40% of the total expenditures, was paid for communication agencies, etc.
Did he ever discuss with you the fact that this money went from him? He seemed to have total control of this money. I guess it went from Treasury Board to him.
Hon. Alfonso Gagliano: It went from Treasury Board to the department, and from the department to him.
Ms. Beth Phinney: Then the money went to an advertising company, and they were taking a certain percentage of it and handing it to a crown corporation. Did that discussion ever come up? With the percentage of money that was being--
Hon. Alfonso Gagliano: We never discussed commissions. We never discussed, “I'm going to give the file to this agency, and the other file to that agency”.
Ms. Beth Phinney: That was his total domain.
Hon. Alfonso Gagliano: That was his decision--his branch decision. He was supposed to operate according to the Public Administration Act and Treasury Board guidelines.
Ms. Beth Phinney: So you didn't at any time while you were there think it was strange that this one man, with 14 people under him, had total control of how much money he spent, what projects it went to, what advertising company got the money, and what percentage they could take off the top? It didn't seem strange that Mr. Guité had total control?
Hon. Alfonso Gagliano: He was not alone in that branch. He had 14 people.... I assumed that those responsibilities were divided according to Treasury Board guidelines.
I only found out about it in the 2000 audit. Then I not only corrected it but took the service completely out of the department and put it somewhere else. We just kept the procurement, so there was a division of power.
Ms. Beth Phinney: So you trusted Mr. Guité to be accountable to the deputy minister for all of his actions, and you just discussed some of the details when it went to Treasury Board.
Okay, thank you.
The Chair: Thank you very much, Ms. Phinney.
Mr. Toews is next, please, for eight minutes.
Mr. Vic Toews: Thank you very much.
Mr. Gagliano, you've indicated in your testimony here today that as Minister of Public Works you had very onerous responsibilities. You mentioned all of your quite extensive responsibilities in your testimony and pointed out that you had 90,000 employees reporting to you, and a budget of about $4 billion. Is that correct?
Hon. Alfonso Gagliano: Yes.
Mr. Vic Toews: So that's quite a number of responsibilities--department, crown corporations. Yet you had what we've heard was a very direct relationship with a middle manager in a department that in 1997-98 had an appropriation of $17 million for the sponsorship program.
Is there any specific reason why you would choose a middle manager out of a department to have this direct relationship with?
Mrs. Marlene Jennings: I have a point of order, Mr. Chairman. I believe Mr. Toews is perhaps inadvertently mischaracterizing Mr. Guité. I understand he was an EX-3, which is a senior manager.
Mr. Vic Toews: Just a minute--
An hon. member: Don't interfere.
Mr. Vic Toews: That's exactly what she's doing. She's interfering in my question, Mr. Chair.
Mrs. Marlene Jennings: In the interests of clarification--
The Chair: The clock has been stopped, but Ms. Jennings is saying you mischaracterized--I presume you're taking about Mr. Guité--
Mrs. Marlene Jennings: Inadvertently.
The Chair: --as a middle manager. You're talking about someone other than EX-1, EX-2, EX-3, and EX-4.
Mr. Vic Toews: The senior member is, of course, the deputy minister. This was not the senior member; he was a middle-management member.
The Chair: I do not find “middle manager” to be a derogatory term, but we--
An hon. member: On a point of order--
The Chair: Mrs. Jennings.
Á (1150)
Mrs. Marlene Jennings: Mr. Chairman, the clock is stopped. I'm not trying to interfere with Mr. Toews' time.
An hon. member: That's nonsense.
Mr. Vic Toews: Unbelievable.
Mrs. Marlene Jennings: In the interest of clarity, it has always been my understanding--and the information we received from the former deputy ministers and the actual deputy minister--that senior managers are EXs, and that includes assistant deputy ministers and deputy ministers. If I am in error--
Mr. Jason Kenney (Calgary Southeast, CPC): On a point of order--
The Chair: I'm hearing one point of order, and then I'll hear the next point of order.
Mrs. Marlene Jennings: If I am in error, then I would appreciate being corrected. But if I am not in error, then I think it's incumbent on all members to make sure that when we're making statements, we try to make them as correctly as possible.
The Chair: According to the Government of Canada chart of November 1, 1998, the assistant deputy minister of Government of Canada communication coordination services was, acting, a Mr. Guité, as an EX-04.
Now, Mr. Kenney, your point of order.
Mr. Jason Kenney: This is an actual point of order, Mr. Chairman, which is that we have now had, during opposition members' questioning, five specious points of order from government members, all of which have been points of debate, each of which has interrupted a line of questioning from opposition members, and none of which has been reciprocated. No opposition member of the committee has interrupted a government member's line of questioning with such a specious point of debate disguised as a point of order. I would ask, Mr. Chairman, that you use some discretion more quickly not to accept these specious points of order.
The Chair: Unfortunately, one has to hear the point of order before one determines whether it's specious or not.
Mr. Toews.
Mr. Vic Toews: Let me proceed, then, Mr. Chairman. I will re-characterize. I don't want to waste any further time.
The question then is, here's a minister with $4 billion of budget and 90,000 employees, and he has a very direct relationship with an individual who supervises approximately 14 people. Can you account for that, Mr. Minister?
Hon. Alfonso Gagliano: Yes. First of all, we'll have to clarify exactly what the direct relationship was that I had with Mr. Guité. As I said publicly, I met him maybe three or four times a year. He used to come to inform me of the budget and to discuss supplementary budgets, special programs. But let's not forget--
Mr. Vic Toews: All right, now we have the characterization--
Hon. Alfonso Gagliano: May I finish?
The Chair: Mr. Gagliano has to finish his point, briefly.
Hon. Alfonso Gagliano: Mr. Guité's responsibility was not just the sponsorship program. We had 1-800-OCANADA, we had the website, and three or four other programs.
The Chair: All right.
Mr. Vic Toews: So your testimony is that you saw Mr. Guité only three to four times a year, and indeed earlier in your testimony you said that you saw him “once in a while”. Is that correct? Is that a fair summarization?
Hon. Alfonso Gagliano: Definitely we're talking here about a few years back. I cannot remember exactly.
Mr. Vic Toews: Yes, but three to four times a year, and once in a while.
Hon. Alfonso Gagliano: Yes.
Mr. Vic Toews: So a characterization that you would have seen Mr. Guité approximately once a week or once every two weeks would not be correct. Is that right?
Hon. Alfonso Gagliano: No, I don't think I was seeing him once a week or once every two weeks.
Mr. Vic Toews: No. So three or four times a year or once in a while you would see this individual.
We have Mr. Quail stating that you have a very direct relationship with Mr. Guité, and you've indicated that this direct relationship isn't as extensive as perhaps some of the other testimony has indicated.
You've indicated that Mr. Guité came to see you three to four times a year, and you stated earlier in your testimony that he came with ads, that he came to speak to you about ads. Why would he come and see you with respect to ads when you're only seeing him three or four times a year?
Hon. Alfonso Gagliano: I'll give you an example. As I was explaining before, we had the Nagano Games, and Mr. Guité, on his own authority, made ads for those games by the Government of Canada, and he came to see me to present those ads and asked me if--
Á (1155)
Mr. Vic Toews: All right, so he's coming to see you, then. He's created some ads on his own authority, and a man who comes to see you maybe three or four times a year shows up in your office with these ads and says, “I have these real nice ideas about ads,” and you say, “Sure, I'd love to talk to you about ads”?
Hon. Alfonso Gagliano: It's the Winter Olympic Games ads that we're talking about, and definitely he told me at that time that he was hoping that Heritage Canada would sponsor those ads, pay for those ads--
Mr. Vic Toews: Yes, all right. So that's what he was hoping to do--
Hon. Alfonso Gagliano: Let me finish. Let me finish--
Mr. Vic Toews: I only have eight minutes here.
Hon. Alfonso Gagliano: Mr. Chairman, can I finish my answer?
Mr. Vic Toews: I want to clarify--
The Chair: Just very briefly, Mr. Gagliano. Provide us a direct response to Mr. Toews' question.
Hon. Alfonso Gagliano: Yes, I'm trying.
He came to see me with those ads and then asked if we could sponsor those ads through the budget. And if you see at Treasury Board--
Mr. Vic Toews: All right.
Hon. Alfonso Gagliano: If you see at Treasury Board submissions--
Mr. Vic Toews: All right, so that's fine. That's fine. So he came to you----
Hon. Alfonso Gagliano: --in the list, there are those Olympic Games ads.
The Chair: Mr. Toews.
Mr. Vic Toews: He came to you to see if you could sponsor those ads through the budget. I've been a minister of the Crown and I find this quite remarkable, that a person dealing with an area with 14 employees, of 90,000 employees, comes and says, “Mr. Minister, can you approve this budget for specific ads?” Wouldn't the normal practice be to go through the deputy minister and have the deputy minister come and talk to you about that?
Hon. Alfonso Gagliano: He came to me and after went to the deputy minister, and then we prepared a submission through the Treasury Board--
Mr. Vic Toews: Yes, I know.
Hon. Alfonso Gagliano: --the submission to Treasury Board which you have in your hands.
Mr. Vic Toews: I know he came to see you, but what I find astounding is that this man, who runs a program, a specific program--I'm speaking about $17 million out of your $4-billion budget, out of 90,000 employees--phones up your office and says, “I want to see you”. It isn't coming through the deputy minister's office.
There is, in fact, what Mr. Quail indicated in earlier testimony, a very direct relationship, and you're asking us to believe that all we're doing here is talking about ads. He had some really neat ideas about skiing or whatever it is in the Olympics, and this man.... You've plucked him out of this 90,000-employee department, a $4-billion budget, and you have to see these ads. Is that what you're trying to tell us?
The Chair: One minute.
Hon. Alfonso Gagliano: What I've been trying to tell you since this morning, if you're listening, is that I was not asking Mr. Guité to come and see me. Mr. Guité was calling me to see me, and as a minister, if any employee of the department would come and ask to see me, definitely, yes, I would see them, because I think it's important. But I always made a commitment to my deputy minister that when anybody from his department came to see me, I would inform him. And Mr. Quail was always briefing me on a regular basis.
Mr. Vic Toews: All right, but why wouldn't you follow the standard, usual practice that a minister follows by following the chain of command to ensure that the deputy understands what's going on and that this particular idea is vetted through the department? For some reason, this man had a special relationship with you--as you said, could phone up your office, out of 90,000 employees, ask for an appointment about some advertisements, and you put everything aside and, Mr. Chair, had a meeting with this individual.
How does that work?
The Chair: Mr. Gagliano.
Hon. Alfonso Gagliano: Yes, I've been explaining how it works. He would call me and say, “I have an important project. I would like to have your brains, or what you think”, and my secretary would give an appointment. He would make the presentation and I'd give him my opinion, and that's it.
The Chair: Thank you very much.
I would like to set the record straight, Mr. Toews. It's 19,000, not 90,000, for the record.
Mr. Vic Toews: All right.
So then, just on a point of order, 19,000, and this individual on the sponsorship program supervised 14 employees.
The Chair: Yes, we have the point there, Mr. Toews, but it was not 90,000.
Ms. Longfield, please, eight minutes.
 (1200)
Mrs. Judi Longfield (Whitby—Ajax, Lib.): Thank you, Mr. Chair.
Thank you, Mr. Gagliano, for agreeing to come.
At this time of the day, a number of the questions I had originally wanted to ask have been asked, but I'm going to pick up on something Mr. MacKay said. He pointed out that in your statement you said that a minister doesn't run the department, and that this is alarming. I would certainly agree, and it begs the question, if the minister doesn't run the department, who does run the department, and to whom does he or she ultimately answer?
And then you had also indicated that in your experience, “no matter how much I tried, I never had the control and power over my departments that would have given me the ability to answer for all that went on within them”. I would like to know, if you had a problem, to whom did you go, what were the results of making that intervention, and who should have the power?
Hon. Alfonso Gagliano: What I was saying in my statement was that, under the present structure of the government, the minister is at the level of policy. The minister goes to cabinet. He goes to cabinet committees. That's where policies are discussed. And then, through PCO and Treasury Board, all the mechanisms comes down to get to the minister and to the different divisions so those programs can be implemented.
I was making the case that as a minister I don't hire my deputy minister, and neither can I fire him--or anybody else, as a matter of fact, down through the chain. This committee's main purpose—from what I read and saw on TV—is to establish ministerial responsibility. Well, if we have to give ministerial responsibility, we'll have to give also ministerial power.
The minister doesn't have effective powers. I can go to the deputy minister and say, “I think that person is not doing a proper job”, but I cannot ask him to fire or hire that person. That is his responsibility—the minister approves. You ask the Treasury Board for the assistant deputy minister of communication position, but it doesn't fill the position. So I was making that case as a suggestion--if we want to go down the road to have personal responsibility for ministers.
Mrs. Judi Longfield: Okay. I agree that responsibility and authority should go hand in hand. You can't give one without the other.
Do you believe a minister should have that authority and responsibility?
Hon. Alfonso Gagliano: If the minister should have the authority.... I also make the case in my presentation that then the minister should have taken away all the responsibilities that he has to attend all the cabinet committees. I was practically a member of most of the cabinet committees, so I was always in meetings. And when you are in meetings, attending policy discussions and other things...you know, I was relying on the deputy minister to be watching. Really, the department is run by the deputy minister.
If I can give you a very simple comparison, a minister is like the chairman of a board and the deputy minister is the CEO.
Mrs. Judi Longfield: Okay. You also indicated that you supervised a budget in excess of $4 billion. I want to know what the nature of that supervisory role would be.
Hon. Alfonso Gagliano: Definitely I had my own budget of the Department of Public Works and Government Services. I'm talking functioning budgets, because if you're talking budgets for what we used to buy for the Government of Canada, then we're going to a much higher figure. But in the functioning, I think the department in my time was over $2 billion, just the Department of Public Works and Government Services. There was the Canada Information Office, there was CMHC, Canada Post. This was a kind of overall general figure of functioning budgets, but naturally when you're talking crown corporations, you have a board of directors and so on, which is different from a department.
Mrs. Judi Longfield: Okay. On page 9 of your submission to us you indicated that you “merely approved the recommendation of the selection committee to comply with the signing authority requirements”. Those, I take it, are the submissions that were going to go to Treasury Board.
Hon. Alfonso Gagliano: On page...? Sorry.
 (1205)
Mrs. Judi Longfield: Page 9, and it's the third bullet.
Hon. Alfonso Gagliano: I believe that was on the report from the ethics councillor concerning some contracts in the department. He was explaining how the system was functioning, I believe, if we're quoting from the same page.
Mrs. Judi Longfield: Okay, then let me be more specific. When Mr. Guité came to you and indicated that he had events he thought were worthy of sponsorship and that exceeded what was in the budget and you were going to ask for additional funds, did you personally sign off on the submission to Treasury Board?
Hon. Alfonso Gagliano: Yes.
Mrs. Judi Longfield: Okay. If you personally signed off on the submission.... I know members of Parliament have a very small budget and we are required to sign when we do it, and before I or any other member signed a submission, we would ask for some backup documentation.
I would like to know what kind of supporting documentation there would be, just a broad sort of general outline, or would there have been some specifics—how much was it going to cost, how was it broken down, was there an application process, were there invoices attached, what was the nature of it, what were going to be the cost overruns, and were we getting value for the dollar? I would like to know, before you sign off, what constitutes, in your mind, appropriate documentation to support the request.
Hon. Alfonso Gagliano: I didn't see the appropriate documentation, where the appropriate documentation existed. I was briefed through a list, and the discussions were simply, “This is the list, and these are the individual events”, with the amount recommended and so on. I assumed that all of the paperwork and the documentation talked about was in the file, but I didn't see it and I didn't ask for it. I had no indication that those documents, those procedures, were not in the files, because if you see the Treasury Board submission that you have, it's written in black and white, very clearly, that the division or branch had to operate within the Financial Administration Act and the Treasury Board guidelines. Therefore, I assumed that all of those procedures you mentioned should have been done, but I didn't see them, and when he came to see me, he didn't bring them along and they were not attached to the Treasury Board submission.
The other thing I want to note is that once you make a submission to the Treasury Board, the Treasury Board officials also go through all of those documents with the departmental officials and review all of those. Treasury Board approved them, and I assume that all that needed to be done was done.
Mrs. Judi Longfield: So in your mind, who should have had all of that documentation? Who should have had a file on each sponsorship event, with all of the supporting documentation? Was that Mr. Guité?
Hon. Alfonso Gagliano: Mr. Guité should have had that file with all of the documentation; and Treasury Board, I assume, would have asked for that file before they recommended to the minister to approve it.
Mrs. Judi Longfield: And should the deputy minister have been able to review that submission before it came to you, or before it went to Treasury Board?
Hon. Alfonso Gagliano: In principle, yes, because I wouldn't have signed any submission to the Treasury Board without the recommendation of my deputy minister.
The Chair: Okay, thank you very much.
I've got an indication that there are a number of points of order, by Mr. Toews, Mr. O'Reilly and Mr. Jobin.
Mr. Toews.
Mr. Vic Toews: First of all, I hate to belabour a point, but I think it's an important point of order.
In the testimony provided by Mr. Gagliano, he indicated that he supervised 90,000 employees—nine, zero, zero, zero, zero employees—and supervised a budget in excess of $4 billion. So my comments, in terms of that 90,000, were based on the testimony I heard. Now, somebody else has indicated it's 19,000—
The Chair: That was me; that was the chair.
Some hon. members: Oh, oh!
Mr. Vic Toews: That was the chair. Well, I'm just wondering if the chair has any comment on that.
The Chair: Okay, thank you, Mr. Toews.
The difference in mathematics between 90,000 and 19,000 is a significant one.
An hon. member: No wonder you got out of accounting.
An hon. member: Oh, oh!
The Chair: But I think 19,000 is much closer to the real number of those who worked at Public Works than 90,000. But again, we can get the research department to figure that one out if we so desire.
Now, for Mr. O'Reilly's point of order.
Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.): It was the same point of order as Mr. Toews had.
 (1210)
The Chair: Okay, so it wasn't specious, because two people were raising the same point of order.
Mr. Jobin, did you have a point of order?
[Translation]
Mr. Christian Jobin (Lévis-et-Chutes-de-la-Chaudière, Lib.): I have a question. Is it my turn?
[English]
The Chair: No, it's not your turn. We're going to move to Mr. LeBlanc, followed by Mr. Kenney, and I may come back to you after that. But the order is Mr. LeBlanc and Mr. Kenney, and I'll figure it out from that point forward.
[Translation]
Mr. LeBlanc, you have eight minutes, please.
Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.): Thank you, Mr. Chair.
Thank you, Mr. Gagliano, for agreeing to come here voluntarily so soon after the committee's request.
One discussion often heard here in this committee concerns the question of the Cabinet Communications Committee. If I have correctly understood, you chaired that committee for a period of time. I think it would be useful for us to understand the role of the Cabinet Communications Committee.
For example, what ministers regularly took part in that committee? If I have understood correctly, and I would like you to confirm this, you said that the Minister of Finance never went to Communications Committee meetings when you were there, but that a member of his staff might have been there to discuss the preparation of a communications budget.
More generally, can you tell us about the role of the Cabinet Communications Committee and tell us how, for example, you were involved as chair or member of that committee, in decisions concerning federal government communications?
Hon. Alfonso Gagliano: Mr. Chair, the government Communications Committee was established to advise the government on its communications strategy in general. The committee met once a week when the House was sitting, late on Monday afternoons. I was there, of course, as committee chair, as well as regional ministers; all the regions were represented on the committee so they could give their opinions and views and explain how they saw government communications and advertising. As for any Cabinet committee, there was a secretariat, which was supported by the Privy Council. The Canada Information Office also attended our meetings.
As chair, every Monday afternoon before the meeting, I had the Communications Committee secretary come into my office and inform me about the committee's agenda and the persons or witnesses invited. As the chair, I followed the agenda, and we had the same kind of discussions as are held in any committee.
The present Prime Minister was not a member of the Communications Committee. Of course, the people from his office may have come to present the strategy to us when the communications plan was being prepared for presentation of the budget each year and to request comments by ministers who were members of the committee. But I don't remember the Minister of Finance attending our meetings.
Mr. Dominic LeBlanc: Thank you, Mr. Gagliano. That committee wasn't involved in making decisions? Didn't it offer its opinion on the selection of advertising agencies, for example? Didn't it take part in discussions on sponsorships for specific events? Didn't the committee have discussions of that kind?
Hon. Alfonso Gagliano: No. If, for example, the Department of Health decided to conduct an anti-tobacco advertising campaign, the committee, through the secretariat and the Privy Council, asked the people of the Department of Health to make a presentation to us on their campaign plan. Then the committee expressed its opinion on the content, on the strategy. But the Communications Committee did not make decisions. It really was an advisory committee.
The department is still responsible for spending and approving programs under the Financial Administration Act. Of course, if the committee didn't agree with the department on how that advertising campaign was conducted with regard to strategy, advertising products, videocassettes or newspaper articles--I'm only talking about content, not management of the campaign itself--it could decide to report to Cabinet. At that point, all the ministers, together with the Prime Minister, could make the decision. Otherwise, it was just advice. We often proposed changes; the department accepted them and came back with the modified product.
 (1215)
Mr. Dominic LeBlanc: Mr. Gagliano, as you said in your comments at the outset, you were the minister responsible for a number of Crown corporations. As a minister, were you involved in decisions of those corporations, decisions, for example, regarding the selection of advertising agencies or administrative decisions? Please give us a brief description of your relations, as minister, with Crown corporations for which you were accountable to Parliament.
Hon. Alfonso Gagliano: A minister's main responsibility with regard to a Crown corporation is to make recommendations concerning the appointment of members of the board of directors, including the chairman. Those recommendations are made to the Governor in Council. Of course, there is also approval of the corporation's business plan and action plan. The minister responsible then signs the documents and sends them to Treasury Board. Once they are approved by Treasury Board, the minister signs them and they are tabled in the House of Commons. These are the minister's traditional responsibilities.
However, depending on the Crown corporation's objectives and line of business, closer relations may be established. Let's take Canada Post Corporation, for example. I believe I received hundreds and hundreds of letters, particularly about rural post offices and retail postal outlets as well as mail boxes. Canada Mortgage and Housing Corporation is another corporation for which we received a lot of complaints from people who wrote to the minister. So there was that relationship because the letters had to be answered.
You also have to speak in question period, of course. When a question is asked in the House, it's the minister, not the president of Canada Post who answers it. That's somewhat what we did in the case of the corporation, but it has an executive committee and a board of directors that were responsible for their own management.
Mr. Dominic LeBlanc: Mr. Gagliano, my final question concerns the relations you had with Mr. Guité when he was an official in your department.
People have claimed that Mr. Guité had weekly or very frequent access to you as minister when it came to making specific decisions. Could you briefly describe for us, and in French, the working relations that you, as minister, had with Mr. Guité?
Hon. Alfonso Gagliano: They were very ad hoc meetings which Mr. Guité himself requested. We discussed budget and strategy, but not program management as such. That was his responsibility under the Financial Administration Act and Treasury Board guidelines.
I met him perhaps three or four times a year. He called to make appointments. As my agenda was quite full, he waited his turn. I always reported on our meetings to the deputy minister.
[English]
The Chair: Merci beaucoup, Monsieur LeBlanc.
Mr. Kenney is next, please, for eight minutes.
Mr. Jason Kenney: Thank you, Mr. Chairman.
Mr. Gagliano, you testified today the sponsorship program was created in response to the political environment created by the 1995 referendum in Quebec. Is that accurate?
 (1220)
Hon. Alfonso Gagliano: Yes.
Mr. Jason Kenney: I think you also said it was designed to promote national unity.
Hon. Alfonso Gagliano: Yes.
Mr. Jason Kenney: Where was that program objective ever described? I cite from page 5 of the Auditor General's report, where she said:
| When it created the Sponsorship Program, the federal government did not inform Parliament of the program's real objectives... |
And she continues:
| In the absence of any written direction from the Deputy Minister or the Executive Committee of PWGSC and any written decision by the Cabinet or the Treasury Board, it is not clear to us how the decision to create the program was made, and by whom. |
How do you respond to her finding in that regard?
Hon. Alfonso Gagliano: Mr. Chairman, I arrived in the department on June 11,1997, and the program already existed. There was a Treasury Board submission on sponsorship events in November 1996. I was told that this was a national unity program and envelope, and as a matter of fact, every Treasury Board submission was signed by the Prime Minister, because that national unity envelope was indeed in the PCO budget--that is, the budget of the Prime Minister.
Mr. Jason Kenney: So you were told this verbally, even though according to the Auditor General--
Hon. Alfonso Gagliano: Yes. I have no written documentation. I always trusted my officials. I had no reason to believe my officials were not telling me--
Mr. Jason Kenney: So you just trusted your officials in this regard.
Hon. Alfonso Gagliano: Yes.
Mr. Jason Kenney: Did the Prime Minister ever discuss the objective of this program with you?
Hon. Alfonso Gagliano: I never discussed the sponsorship file with the Prime Minister.
Mr. Jason Kenney: He never discussed this program with you in any way, shape, or form?
Hon. Alfonso Gagliano: No.
Mr. Jason Kenney:
In his testimony before this committee, your former deputy minister, Mr. Quail, said the following:
| ...the fact of the matter is that at the government political level, they wanted to move forward.... That's why they gave rather sparing dollars, in a very tight budget environment, to undertake those sponsorships. |
| The minister was charged with that. Obviously, in order to move that forward quickly, you needed to have a capability within the bureaucracy, and the decision was taken that we would use CCSB. Hence the reason for the very direct relationship between the minister and the Canada Communication CCSB group, and in particular the executive director. |
He was referring to you as the minister. Do you agree with Mr. Quail's characterization that you had a very direct relationship with the executive director?
Hon. Alfonso Gagliano: If we understand the direct relationship with Mr. Guité was the way I described it before, yes.
Mr. Jason Kenney: It was a very direct relationship?
Hon. Alfonso Gagliano: Well, I say a direct relationship. I've said I would meet him three or four times a year, and it would come--
Mr. Jason Kenney: So you agree with Mr. Quail's characterization?
Hon. Alfonso Gagliano: Yes, this was government policy.
Mr. Jason Kenney:
Now, the former deputy minister went on to say that this created some difficulties for him. He said:
| Obviously, this is a very difficult situation for a deputy in terms of the fact that you're working with the minister. On the one hand, you can say, “Minister, you can't talk to that particular group....” I did not do that.... The minister wanted to have these discussions. He wanted to be involved. He had a responsibility. He had signed the submissions. He had direct approval to proceed and get this done. |
Do you agree with that characterization of Mr. Quail's?
Hon. Alfonso Gagliano: Yes, generally. Definitely, this was government policy. We almost lost the country by 50,000 votes, and the policy was yes, we have to ensure Quebeckers understand the--
Mr. Jason Kenney: So you had direct approval to get this done. What was “this”? To get what done?
Hon. Alfonso Gagliano: Well, to make sure we had visibility for the government. The sponsorship program was one of the priorities, and like Mr. Quail said, at a time where.... If you look at Public Works and Government Services' budget, you'll see this was the only item where the budget was increased when all the other budgets were decreased. Definitely, it was here that there was a priority--
Mr. Jason Kenney: Do you agree that you wanted to have--
The Chair: Mr. Kenney, let Mr. Gagliano finish.
Hon. Alfonso Gagliano: If you look at all the documents, you'll see that every time we made very clear that this was a priority, we said that this program had to be delivered within the terms of the Financial Administration Act and within Treasury Board guidelines.
Mr. Jason Kenney: Mr. Chair, the witness has testified that he only met Mr. Guité three or four times a year, but Mr. Quail says the minister wanted to have these discussions as part of his very direct relationship with the executive director.
He's talking about discussions only three or four times a year, sir?
Hon. Alfonso Gagliano: He's talking about discussions held because I had to sign Treasury Board submissions, if you read more. We only presented a Treasury Board submission one or two times a year, I believe.
Mr. Jason Kenney: Mr. Quail further said you wanted to be involved in it. You wanted to. How did you express your desire to be directly involved in the administration of the sponsorship program, sir?
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Hon. Alfonso Gagliano: Well, I would sign for the budget. I would sign the submission for the Treasury Board. I think I would have expected to have some information before signing that Treasury Board submission.
Mr. Jason Kenney: You just testified that this whole thing was designed to save the country because of the 50,000-vote gap in the referendum. I think you're implying that if that meant breaking some eggs to make the omelette, so be it.
Your former boss, Mr. Chrétien, said on May 30, 2002, that:
| Perhaps there were a few million dollars that might have been stolen in the process, but how many millions of millions of dollars have we saved because we have re-established the stability of Canada by keeping it a united country? |
Do you agree with Mr. Chrétien's characterization of this program, that the money was stolen but that it was justified?
Hon. Alfonso Gagliano: I believe Mr. Chrétien said that if there were moneys stolen, let the police look after it. But the program was important. We had to create the unity of the country, and I think for any of us who were in public office at the federal level, this was a major responsibility. The future of the country was at stake here.
Mr. Jason Kenney:
Mr. Gagliano, on February 12 of this year the current Prime Minister said the following, referring to the management of the sponsorship program:
| I do know that clearly there...had to be political direction... |
--there had to be political direction--
| It's a small group of people and the auditor talked about the 12 or so people who worked for Public Works, but there certainly has been other people in Crown corporations who were accomplices, and...it is impossible to believe there was no political direction. |
Who provided the political direction to which the Prime Minister is referring, sir?
Hon. Alfonso Gagliano: I'm not aware of any political direction on this sponsorship file.
Mr. Jason Kenney: So you reject the comment of the current Prime Minister that there was clearly political direction. Is that correct?
Hon. Alfonso Gagliano: I'm only saying that as far as I'm concerned, as far as I'm aware, I'm not aware of any political interference.
Mr. Jason Kenney: If there were political direction, would it not have come from you, as the minister responsible?
Hon. Alfonso Gagliano: I assume. I didn't give any political direction, therefore I say that I'm not aware of any political direction.
Mr. Jason Kenney: So you're saying that the current Prime Minister is wrong when he says there was clearly political direction, that it is impossible to believe there was no political direction. Are you saying the Prime Minister is wrong in that comment?
Hon. Alfonso Gagliano: You have to ask him.
Mr. Jason Kenney: Well, sir, I'm asking you.
Hon. Alfonso Gagliano: I'm answering you that I didn't have any...I am not aware. I didn't get any political direction, so I'm--
Mr. Jason Kenney: Mr. Gagliano, you say you were not responsible. Your former deputy minister says that he was not responsible. Who exactly was responsible? You claim that you've been wronged. You may have a tort here against somebody who misbehaved and committed fraudulent activity under your watch as minister. Who do you think might have been responsible for this?
Hon. Alfonso Gagliano: I think that's what this committee is trying to find out.
Mr. Jason Kenney: What's your opinion, sir?
Hon. Alfonso Gagliano: That's what a public inquiry is; that's the RCMP's investigation--
Mr. Jason Kenney: That's why you're here, sir, to give us your opinion.
The Chair: Okay, okay.
Hon. Alfonso Gagliano: I'm here to tell you exactly what I did and what I knew, as a minister. I'm not here to accuse anybody. It is important that we have due process, so let's find who was responsible. If somebody did something wrong, let them pay the price.
The Chair: Thank you very much, Mr. Kenney.
We'll now move on to Monsieur Desrochers.
[Translation]
Mr. Odina Desrochers: Thank you, Mr. Chair.
In the major media tour you conducted on March 6 of 7, Mr. Gagliano, you said--and it was you who said it, not your deputy minister--that the sponsorship money came from the so-called National Unity envelope that was part of the Prime Minister's budget.
Can you tell us how long that envelope has existed, Mr. Gagliano?
Hon. Alfonso Gagliano: I was made aware of the National Unity's envelope's existence when I made the first Treasury Board submission for an additional sponsorship budget.
Mr. Odina Desrochers: When was that?
Hon. Alfonso Gagliano: I believe it was the fall of 1997.
Mr. Odina Desrochers: Mr. Gagliano, is that when you signed a request with Mr. Chrétien to obtain additional credits of $18 million, and was it on that same notice that it was written that only Chuck Guité should be aware of how that $18 million would be spent?
Hon. Alfonso Gagliano: I believe there was a list of events attached to that Treasury Board submission. If you read that submission, which, I believe, was prepared by Chuck Guité and approved by deputy minister Ran Quail, you'll see that it clearly stated that everything had to be done in accordance with Treasury Board guidelines.
Mr. Odina Desrochers: Mr. Gagliano, did other officials have as many privileges in your department? Mr. Guité seemed to be able to do what he wanted.
Hon. Alfonso Gagliano: I don't think Mr. Guité had privileges. He called and made appointments to come and see me and present those projects to me, but I can tell you there were other officials. We had a major project on Parliament Hill, and there were officials...
 (1230)
Mr. Odina Desrochers: Mr. Gagliano, was there another official who could select, put things in the media, handle the invoice, or was it only Mr. Guité who had that privilege?
Hon. Alfonso Gagliano: I wasn't aware of the fact that he had that privilege.
Mr. Odina Desrochers: Do you think that's normal?
Hon. Alfonso Gagliano: The rules were clear. I invite you to read the guidelines...
Mr. Odina Desrochers: I'm not interested in the guidelines.
Hon. Alfonso Gagliano: ...of July 1994. It was said that the contract rules had to be given to the Communications Service.
Mr. Odina Desrochers: The guidelines and rules were not complied with.
Hon. Alfonso Gagliano: Everything had to be in compliance with Treasury Board guidelines.
Mr. Odina Desrochers: But $100 million is missing, Mr. Gagliano.
Hon. Alfonso Gagliano: We learned that there were problems in 2000, sir, and we corrected the situation.
Mr. Odina Desrochers: But $100 million out of $250 million is missing.
Hon. Alfonso Gagliano: Mr. Chair, I would like us to clarify this $100 million question once and for all. I don't think we're giving Canadians good service.
Mr. Odina Desrochers: And you think you rendered good service to the Canadian government?
Hon. Alfonso Gagliano: Let me finish. Yes, [Inaudible - Editor] ...very much.
Mr. Desrochers says that $100 million is missing. One hundred million dollars is not missing. The auditor said we did not know whether the services we had received were worth the money we spent. So let's tell Canadians the facts. You have before you the list...
The Chair: Mr. Gagliano.
Hon. Alfonso Gagliano: It states the amounts of the commissions and production costs. So let's go into the facts rather than keep on repeating than $100 million is missing.
Mr. Odina Desrochers: Mr. Gagliano...
[English]
The Chair: We're going to get, based on Mr. Mills' motion, the documents of background to the $83 million, and the Auditor General can reaffirm what she said earlier, when she appears at 2:30 this afternoon.
[Translation]
Mr. Desrochers, please.
Mr. Odina Desrochers:
Mr. Gagliano, the auditor states, and I quote:
| ...the Sponsorship Program consumed $250 million of taxpayers' money, and more than $100 million of that amount went to communications agencies in fees and commissions. |
Earlier on, she also states:
| We found widespread non-compliance with contracting rules in the management of the federal government's Sponsorship Program, at every stage of the process. |
Do you really believe, as you tried to tell us a moment ago, that you rendered service to the Canadian public by tolerating this kind of situation? Do you think this kind of mess is normal, sir? Do you think it's honourable? What do other countries think of that?
It was the federal government that caused the sponsorship scandal, and you can't say the contrary. We are in no position to know who was involved, but it happened when you were there, when Jean Chrétien, Jean Pelletier and all those who've been talked about in the past few weeks were there.
Really, Mr. Gagliano, does that constitute serving the Canadian government?
Hon. Alfonso Gagliano: Mr. Chair, I'm proud to have served the Canadian government and all Canadians. I fought and I worked hard to keep the country united, whereas this man...
Mr. Odina Desrochers: You rigged the referendum.
Hon. Alfonso Gagliano: ...did everything he could to divide the country. Let's start off by setting the record straight.
Mr. Odina Desrochers: Mr. Chair, the Sponsorship Program was designed to steal our country from us!
[English]
The Chair: Mr. Desrochers, I will have Mr. Gagliano answer his questions.
[Translation]
Hon. Alfonso Gagliano: Mr. Chair, he says the Sponsorship Program was designed to steal the country. Let's look at the facts.
The Sponsorship Program was a good program.
Mr. Odina Desrochers: For rewarding agencies.
Hon. Alfonso Gagliano: Mr. Chair, we fought for four or five years. I would like to thank the member for affording me the opportunity to repeat what his separatist accomplices did...
Mr. Odina Desrochers: You violated the referendum laws.
Hon. Alfonso Gagliano: ...to keep the federal government and the Canadian flag out of Quebec.
Mr. Odina Desrochers: That's why you authorized sponsorships...
Hon. Alfonso Gagliano: If he wants to talk about that, we're going to talk about the people who waste money.
Mr. Odina Desrochers: Mr. Chair, that's why...
[English]
The Chair: Okay, one moment, Monsieur Desrochers, s'il vous plaît.
Monsieur Desrochers, this is not a political fight. We're not in here to debate the policies of our particular parties; that can be done in the House of Commons. We're here to investigate what happened in the sponsorship program, and perhaps if we focus on that issue rather than a partisan debate, we can actually make some progress.
[Translation]
Mr. Desrochers, please.
Mr. Odina Desrochers: Mr. Chair, I apologize for getting carried away, but I find it hard to understand why a program was established to thank people for advertising across the country in order to reverse the objective decision of a people.
Mr. Chrétien himself freely admitted that the purpose of the Sponsorship Program was rooted in national unity. I asked him whether he knew where the national unity envelope came from in the Prime Minister's budget, and he admitted that he was aware of that envelope.
How much money came from the envelope? How much money was transferred to your department, Mr. Gagliano? You said that envelope existed.
 (1235)
Hon. Alfonso Gagliano: Mr. Chair, the member is still insinuating things. You know the amount I got from the national unity envelope. Did the member read the documents?
You asked the government for a large number of documents on taxpayers' behalf. It's clear: the amount of money that I got from that envelope is stated in the Treasury Board submissions, and I signed that myself, as did my predecessor and the Prime Minister. We hid nothing, Mr. Chair. That's clear. I understand that the Sponsorship Program didn't suit the member. Perhaps we'll talk about that somewhere else.
The fact is that that program, the objective of which was national unity, was good. However, as I said this morning,...
Mr. Odina Desrochers: I'd like to ask a final question.
Hon. Alfonso Gagliano: ...there were problems of administration and poor management. That's what the committee and the public investigation are discovering. The Auditor General stated it, as did the 2000 internal audit report.
Mr. Odina Desrochers: I'd like to have 20 seconds, Mr. Chair.
Mr. Gagliano, since you're talking about the outcome of the national unity program, I would like to know whether Paul Martin was aware of the dealings that were going on in the public accounts and in the Prime Minister's Office to ensure that the Canadian flag was everywhere across Canada and that national unity was perceived as a good thing. Has that subject been addressed? Was Paul Martin informed of it?
You seem to have played a prominent role. You boasted of having saved Canada. Consequently, I would like you to tell me more about the role Paul Martin played in this regard.
Hon. Alfonso Gagliano: Mr. Chair, the Sponsorship Program was of course approved by Treasury Board and the Prime Minister. So it was a government policy. If it was a government policy, I assume all ministers supported that program. Did any discussions take place between the former Minister of Finance and the former Prime Minister about the program? I don't know, and I don't believe any did. For my part, I had none either with the former Prime Minister or with the former Finance Minister. Is that clear?
[English]
The Chair: Before our one o'clock break, we'll hear from Ms. Wasylycia-Leis and one more member on this side. Then we'll have our one o'clock break.
Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
It certainly feels like, with all due respect, Mr. Gagliano, you're playing with us and you are full of contradictions.
On the one hand, you suggest that you accept the thrust of the Auditor General and that we should get to the bottom of it, yet every time we go down that path, you start to question the very assumptions that are part of the Auditor General's report.
You also seem to indicate specific knowledge on certain projects, but claim no general knowledge of the program, even though, as you said, this was part of national unity objectives. If it was so important in terms of saving Canada, how is it that you know so little about this program, and why did you let it run on its own?
Hon. Alfonso Gagliano: Ministers don't run on a daily basis to manage programs. Ministers establish policies and turn those policies and programs, once they become government policy, over to bureaucrats to run.
Ms. Judy Wasylycia-Leis: All right. Perhaps--
Hon. Alfonso Gagliano: Do you expect me to be on the streets at festivals or sports events to check whether we had the flag or other things? I mean, that's not the role of a minister.
Ms. Judy Wasylycia-Leis: No. But you were clearly involved in some minutiae, in some details, around this program at some times, and at other times you were not. Your involvement in terms of the ad contract for the Winter Olympics is certainly indicative of that.
My question to you is, what did you know about the sponsorship arrangements with the Pan Am Games in Winnipeg?
Hon. Alfonso Gagliano: Let me clarify one thing to make sure that it's right.
Ms. Judy Wasylycia-Leis: Could you answer that last question?
Hon. Alfonso Gagliano: Yes, I'll be answering that, too.
On the Nagano Games, you said that I was involved in the ad contract. I was not involved, I want to that make clear, in the ad contract.
Ms. Judy Wasylycia-Leis: I only said that you were involved in the nitty-gritty of a specific project.
Hon. Alfonso Gagliano: Again, if you want to go that way, you accuse me of being contradictory. Let's say things the way they are.
I said that Mr. Guité came to see me to show me a tape, which he had prepared by a communications firm, of advertising that we should air during the Winter Olympics. He showed it to me, definitely. I am sure you remember. Some of you saw them. They were really nice. He had the objective of making Canadians feel good about the country, and so on. It was an important event. I said that they were good, but then there was the question of money. We had to go to Treasury Board. If you see the Treasury Board submission, you see there is the $4 million point something, I believe, to pay for those ads on Nagano.
So that was my level of involvement.
 (1240)
Ms. Judy Wasylycia-Leis: Okay.
Did you have any involvement at all with the Pan Am Games in Winnipeg, in terms of the sponsorship program?
Hon. Alfonso Gagliano: I believe in the Pan Am Games it was the same thing. It was in the list of projects. I said that yes, it was an important thing. But again, I didn't manage the contract and I didn't know exactly what happened. Now I've heard--I think it was last week--that there were some problems and we should find out what happened.
Ms. Judy Wasylycia-Leis: Yes. Well, it's a bit like the Bluenose issue--
Hon. Alfonso Gagliano: It's exactly the same thing.
Ms. Judy Wasylycia-Leis: --which you seem to know, which you indicated in the Hill Times that you knew a fair bit about, but yet you don't know so many other things.
Let me ask you--
Hon. Alfonso Gagliano: I knew, for example, on the Bluenose, the first submission to Treasury Board was in 1996 and there were another two parts later on. But how that was managed.... Again, I am making the case here that I was not micromanaging the projects.
Ms. Judy Wasylycia-Leis: No, okay. But in that article, you suggested that we should go to the ad agencies and ask them for explanations.
Hon. Alfonso Gagliano: Exactly, yes.
Ms. Judy Wasylycia-Leis: Let me ask you this. You were aware then that advertising firms were sometimes reaping six-figure commissions just to transfer funds between Public Works and crown corporations.
Hon. Alfonso Gagliano: No.
Ms. Judy Wasylycia-Leis: You weren't. Okay.
Hon. Alfonso Gagliano: The first time I learned that moneys were transferred to crown corporations from the sponsorship fund was when the Auditor General came to see me on September 8, 2003, in Copenhagen.
Ms. Judy Wasylycia-Leis: Okay, I accept that. You assert also that you never directed contracts. Why did you personally meet with officials from advertising firms on a regular basis and listen to their pitches for specific campaigns?
Hon. Alfonso Gagliano: No, I didn't meet with officials of ad agencies. The only official of an ad agency I met was on Nagano; Mr. Guité came with the president of the communications branch.
Ms. Judy Wasylycia-Leis: You never met with any advertising firm officials on a regular basis?
Hon. Alfonso Gagliano: Not after I became Minister of Public Works and Government Services. I've already said publicly that I met two agencies before the election campaign of 1997. I was the organizer of the campaign—then I was Minister of Labour—and I asked those agencies if they would be part of a communications consortium for the next elections. Some said yes, some said no. They made a presentation and they were part of that consortium. But I never—
Ms. Judy Wasylycia-Leis: Okay, fair enough. Did you ever solicit political donations from any of these ad agencies in question?
Hon. Alfonso Gagliano: Not at all.
Ms. Judy Wasylycia-Leis: Okay, I accept that.
Hon. Alfonso Gagliano: As I have said, after I was appointed minister in September 1994, I made it very clear that I withdrew myself from any political fundraising activity.
Ms. Judy Wasylycia-Leis: Isn't it interesting then that every ad agency in question, whether we're taking about Groupaction, Lafleur, Gosselin, Groupe Everest, Vickers and Benson, gave major contributions to the Liberal Party? There were no contracts going to Bloc ad firms. There were no contracts going to Conservative ad firms. There were contracts going strictly to a select number of firms and donations coming back.
Hon. Alfonso Gagliano: As I said before, and I repeat it again, I was not participating in fundraising activities except to go and make a speech. The party had a financial committee who were organizing the events, and I made it clear, not only during the regular period but also during the election campaign, that I didn't want to get myself involved in financial matters—who was giving money—because I didn't want to know. When I was sitting at the cabinet table, I wanted to make my decision based on the merit of the file and not on who was giving money to the party.
Ms. Judy Wasylycia-Leis: Okay. Isn't it true, though, that whenever a contract was awarded that didn't go through this process, where commissions were handed out to these ad firms, you would have a tantrum? I refer specifically to an episode pertaining to A Scattering of Seeds and a film that was produced by a company that did not go through what we would consider to be this skimming process or money-laundering scheme .
Hon. Alfonso Gagliano: Really, I don't even know what film or what company you are referring to. It's the first time I've heard of it.
Ms. Judy Wasylycia-Leis: Okay. With respect to your office, could you tell us who in your office was the special assistant or special policy adviser who dealt with the sponsorship file?
 (1245)
Hon. Alfonso Gagliano: It depends on the period. We had two or three. But as a minister, I would receive representations from members of Parliament from all sides, mayors, provincial MNAs—
Ms. Judy Wasylycia-Leis: I'm asking who on your staff? Could you give us the names of those—
Hon. Alfonso Gagliano: We can provide the names. I would have to ask my executive assistants to see which period, because as I said—
Ms. Judy Wasylycia-Leis: If you would provide us with the names of all your special assistants between—
The Chair: Ms. Wasylycia-Leis, are you talking about a specific—
Ms. Judy Wasylycia-Leis: Okay, let me ask you, Mr. Chair, if we could ask for the names of all special assistants.
The Chair: We can pass a motion next week asking for these names to be provided yes.
Carry on with one last question. You have about 30 seconds.
Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
It would seem to me that you're playing with us, Mr. Gagliano. You're making us play a game of Clue, asking questions like, was it Mr. Guité in the laundry room, or Mr. Pelletier in the PMO?
If you're so determined for us to get to the bottom of this, then will you tell us who you think we should talk to so we can actually find out where the money went and what game was being played?
I think that's a fair question. He says we should get to the bottom of it. Who should we talk to?
Hon. Alfonso Gagliano: Well, from what I saw on TV, I think the committee has a list of witnesses. You should talk to them.
Ms. Judy Wasylycia-Leis: Who would you recommend?
Hon. Alfonso Gagliano: I have no recommendations. I came on my own here.
The Chair: Okay, thank you, Ms. Wasylycia-Leis. We'll cut you off there.
Hon. Alfonso Gagliano: I believe Mr. Pelletier offered. There are a lot of people who have offered to come before this committee, so invite them.
But I want to make one point about how I'm playing games, Mr. Chairman. I didn't talk about a laundry. If you don't want to play a game, let's use the right words. But when we presume and throw innuendoes around and so on, it's very hard for a witness like me not to react. I mean, it takes two to tango.
The Chair: There are a lot of rumours and innuendoes out there, as you have said. I think this is the place to put these facts on the table, on the public record, so that the questions are answered, so that we have a definitive statement on the record and we take that as fact until we find out otherwise.
Madam Jennings, please. I believe you're splitting your time with Ms. Redman. Is that correct?
Mrs. Marlene Jennings: Yes, I am.
Mr. Gagliano, I basically have two questions for you. The first one is that the Auditor General audited some specific funding contracts for specific projects with crown corporations--le Vieux-Port for the giant screen, the Canadian innovation program, BDC for the Le Canada du Millénaireseries, and so on.
In just the Vieux-Port one, in her report at page 15, it says:
| As part of its operations, Old Port of Montréal wanted to purchase a giant screen for its science centre but lacked sufficient funds. We [the Auditor General] were informed that initially Old Port had approached CCSB to obtain funding for the giant screen. However, CCSB did not provide it with any funds. Following a presentation by Old Port to the Minister of Public Works and Government Services Canada, CCSB offered verbally to provide $1.5 million in sponsorship funds in return for federal visibility. |
So I'd like you to explain how that came about and whether you were aware, once that presentation went through, an approval that initially had been denied went through, how the moneys were then flowed through to Tribar for the purchase of the screen and Multivet?
My second question concerns Mr. Cutler. You are aware, since all the information has come into the public sphere, that he filed a grievance, that there was a whole investigation, and so on, and that ultimately on March 11, 1998, a letter of apology was sent to Mr. Cutler, signed by an assistant deputy minister. Were you aware of that letter of apology that went from an assistant deputy minister of human resources to Mr. Cutler?
Hon. Alfonso Gagliano: No, I was not aware. Again, I repeat, the Mr. Cutler file was news to me when I came here before the committee.
On the Société du Vieux-Port de Montréal, yes, I think the Auditor General describes what happened. As I said this morning in my statement, the Old Port of Montréal was under my responsibility. The chairman of the board, Mr. Lamarre, came to see me, making this proposal, and I said, well, you have to make a presentation to the communications branch; you could qualify. As you know, this is probably the only physical federal presence in Montreal, and over 8 million tourists a year pass through there. Therefore, in terms of visibility, it was a good spot.
 (1250)
Mrs. Marlene Jennings: May I interrupt for one moment? Were you aware, when Mr. Lamarre of le Vieux-Port came to see you, that he or Vieux-Port had already approached sponsorship and had been refused?
Hon. Alfonso Gagliano: I was--
The Chair: Mr. Gagliano, please allow Mrs. Jennings to ask the question.
Mrs. Marlene Jennings: Did he apprise you of that?
Hon. Alfonso Gagliano: Sorry, I didn't know--
Mrs. Marlene Jennings: According to the Auditor General's report, le Vieux-Port went to the sponsorship branch--Mr. Guité--and asked for funding for this giant screen. Mr. Guité told them no. Then at some point later, Mr. Lamarre met you and said, “We'd like to get this big screen, and it can provide visibility to the federal government”, and you think, “Well, maybe that can go through sponsorship, so make your presentation or application to the sponsorship branch”.
When you met with Mr. Lamarre, did he inform you that he had already tried to get money for that screen from sponsorship?
Hon. Alfonso Gagliano: I could say no, because I really...I agree with the fact that he came. I agree; I knew that they made this presentation. At that time I believe it was Pierre Tremblay who was the acting executive director, and he accepted to do it. The only thing I told Pierre Tremblay, because of the strategic importance of that giant screen in Old Montreal, because of the amount of money that Mr. Lamarre was asking for, was to make sure this was not for one year; I wanted it for ten or twenty years, so there's that giant screen and there's visibility for Canada there.
I passed in front of it the other day, so it's still there.
I assumed that contract...because I didn't follow after.... I was informed by the Auditor General that we pay a commission. Really, I'm as surprised as you are. Why are we paying a commission to transfer the money? I hope somebody can explain why we have to pay a commission every time we move money.
The Chair: That's a question we'd all want to know, Mr. Gagliano.
Thank you, Mrs. Jennings.
Mrs. Redman, you have a couple of minutes.
Mrs. Karen Redman: Thank you, Mr. Chair. I'll try to be very brief, I realize you're being generous with the time.
You've stated that you were aware that there were Treasury Board guidelines, Mr. Gagliano, and that it was your expectation that they were being followed both by your department and the crown corporations. Clearly the Auditor General's report says something different.
Whose responsibility should it have been to ensure that those guidelines were being followed within the department and the crown corporations? Is it the minister? Is it the deputy minister? Is it the assistant deputy minister? Within whose responsibility does that fall?
Hon. Alfonso Gagliano: Definitely the person who was managing the program, the person who had the responsibility, the executive director, was responsible. He would sign under--I don't remember which article--of the Financial Administration Act that the services were rendered accordingly and so on, and authorize payment. So definitely the first responsibility comes there. That's clear.
Now, the question is why the system failed, why the deputy minister was not aware, and why the minister was not made aware, of what was happening. I think hopefully that this committee and the inquiry can answer those questions.
Mrs. Karen Redman: Thank you.
The Chair: Thank you, Mrs. Redman.
I have a few points myself, Mr. Gagliano.
First of all, you mentioned earlier today that you wanted the advertising bids to go out for a new competition. Therefore I will ask for a motion that these documents be provided at a later date. That motion can come forward next week.
It's been in the media that you talked about “my crowns”, the crown corporations that were underneath your responsibility. Did you meet on a regular basis for lunch with the heads of these crowns? Is that a regular feature of your calendar?
 (1255)
Hon. Alfonso Gagliano: No. This was in the program. Hopefully when you get the briefing books from the department you will see there is a program called portfolio management. After talking with my deputy minister, I said it would be good that we not only just exchange letters between CEO and deputy minister, but I think it would be good that, under portfolio management, we get all the crown corporations under the department so that we have everything....
We used to have a meeting every three months with the chairman of the board of each crown corporation I was responsible for and the president of the crown corporation. My deputy minister was sitting next to me; as a matter of fact, he would prepare the agenda after discussing with me. That was about three or four times a year. It was a one-day meeting; we would stop for lunch and continue in the afternoon. Once I remember we even had somebody from the Auditor General's Office talking about governance.
Let me say, Mr. Chairman, there are minutes of every meeting. If you ask the department, you will see the meeting.
The Chair: Okay. What you're saying is you did not meet on a monthly basis for lunch. Anyway, that's fine.
Hon. Alfonso Gagliano: And no sponsorships were discussed.
The Chair: It has been suggested at times, and this is where we put these matters on the public record, that these crown corporations, and perhaps even Public Works, were arranging the bids so that they determined before the bids went out who was going to receive the bids. So on paper it looked like it was a legitimate request for proposal and a bidding process and awarding to the best contract; however, it had been arranged beforehand both in the crown corporations and Public Works. Are you aware that anything like this was going on?
Hon. Alfonso Gagliano: No, I was not aware of that.
The Chair: Not whatsoever?
Hon. Alfonso Gagliano: I learned by reading the Auditor General's report.
The Chair: Okay.
It has been mentioned or suggested that in 1997 you took a trip to Italy with Mr. Lafleur and Mr. LeFrancois. Is that correct?
Hon. Alfonso Gagliano: Yes. There was Mr. Dominic Taddeo, who is the president of the Montreal Port Authority and, I believe, Mr. Mingarelli, who was one of the administrators of ADM airport in Montreal, and a couple of other people. This was a follow-up after the trip of the Prime Minister to Italy the year before, and there was an official from my department.
All of the trip was organized by the Canadian embassy in Rome. We had an activity in Rome with a financing project, definitely, as a department; the Prince Edward Island bridge project finances is a good example. I made a speech; the officials of the department made a speech. We had another two series of meetings, and everybody paid for their own expenses.
The Chair: Okay.
Did you receive any gifts during that trip, and did you report them in accordance with the public policy regarding gifts?
Hon. Alfonso Gagliano: Anytime that I received gifts above, I believe, a $200 value, they were reported. I don't think in that trip I received any gifts of more than $200.
The Chair: Okay.
I'm going to take a different point of view from my colleague Mr. Toews, who thought that such a small department really didn't warrant a great deal of attention.
The Prime Minister said that this was to save Canada, and I think you've said the same thing as well. This was a very important program, according to what we've had from the Prime Minister.
You have said that the future of the country was at stake, it was a very important program, we almost lost the country with 50,000 votes, and so on, and yet you were only meeting with Mr. Guité two, three, or four times a year.
You talked about, for example, communications strategies. I think that you mentioned the health department would come forward to this cabinet committee on communications to get their strategy approved.
Did the sponsorship program, which was perhaps the most important communications program in the country, according to the Prime Minister, get approval at this committee? Was there a strategy proposed?
Hon. Alfonso Gagliano: No. I don't believe that the sponsorship program ever came before the communication committee, at least when I was there.
· (1300)
The Chair: This was to save the country, and the cabinet committee in charge of communications didn't even have anything to say on a strategy, or lack thereof, for this sponsorship program that was to save the country, nothing to say at all?
Hon. Alfonso Gagliano: Yes, but not only the communication program that existed in the committee came before the committee. Definitely, the committee was interested mostly in new programs and not existing ones.
I don't recall anybody.... I mean, as a chair, like you are the chair, usually, you are hoping that your members--
The Chair: So the future of the country was--
Hon. Alfonso Gagliano: I don't recall anybody asking the chair to bring before the committee the sponsorship file, and it was never brought before the communication committee.
The Chair: So the future of the country was delegated to one Mr. Guité, and that was it. The cabinet had nothing to say.
Hon. Alfonso Gagliano: Well, the program, at least from the report that we had, was working well. I can say that the visibility, the objective of the program, was definitely there. I can say that I went around; I did the region of Quebec, and I definitely saw a large improvement in visibility of the Government of Canada in Quebec, naturally.
The management of the program, it's clear that since the audit of 2002--and the Auditor General practically showed the same period--is disturbing, and we should find the facts. But again, you know, we're talking about a lot of things to hear still. Nobody came out with specific facts; there is a police investigation. Let's wait before we conclude what really happened.
The Chair: Okay. I find it rather strange. I think that I'm quoting your own words by saying this cabinet committee was not a decision-making one, but if it did not agree with the recommendations, it could report to cabinet. I think I'm quoting you here. It seems strange that they would talk about Health Canada, maybe cigarette smoking, and they were talking about some other things, but they wouldn't talk about this.
Anyway, we'll leave that for perhaps another day.
Hon. Alfonso Gagliano: If you want to know the truth, that's what happened.
The Chair: I have two or three announcements. I understand that the blues, without translation, from the beginning until 11 o'clock will be available this afternoon for anybody who wants them, and the blues for today will be available tomorrow.
I have a note here that says Mr. Guité's lawyer has sent us a letter saying that his client will not be available to appear on March 25. They did not offer another date. That's hot off the press.
Lunch will be served for members and staff in the room behind. Also, at 2:30 we will have the Auditor General come forward. Not that we want to take the rest of the afternoon with her, but if there are some points from Mr. Gagliano's testimony this morning that you want to have clarified, you may of course ask her, and then she will be excused. Mr. Gagliano will be back.
If we deem it necessary, Mr. Gagliano, we will continue on tomorrow.
This meeting is suspended until 2:30.
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The Chair: Good afternoon, everybody.
Before we talk to our next witness, there are a couple of things. I think we owe a great deal of gratitude to the personnel of the House of Commons in that they were able to produce for all of us the blues from 9 o'clock to 11 o'clock this morning. We appreciate very much what they have done. When they prepare the blues for this afternoon, they will read that we recognize their phenomenal contribution. We thank them very much indeed.
A letter has been circulated from Edelson & Associates, dated March 18, 2004, to the Standing Committee on Public Accounts, attention Mr. Jeremy LeBlanc, the clerk:
| Dear Sir: |
| RE: Charles Joseph Guité |
| I am in receipt of your letter dated March 12, 2004. The Committee is aware, from my previous correspondence, that Mr. Guité is out of the country on vacation. Mr. Guité will not be returning to Canada prior to March 25, 2004. Accordingly, he will not be available to meet with me in order to consider the contents of your letter until after that date. |
| Yours very truly, |
| Michael D. Edelson |
Mr. Tonks, you have a motion.
Mr. Alan Tonks: I do, Mr. Chairman; thank you.
Pursuant to the letter we received from Mr. Guité's solicitor, I would hope the committee would support this under the provisions and warrants that are provided to committees to summon witnesses. Mr. Chairman, I would move notice of motion that you be authorized to invoke the summoning provisions to summon Mr. Guité, and that it be for a date prior to March 31. I would ask that this be a notice of motion in order for us to get on with this.
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The Chair: We'll take that as a notice of motion, Mr. Tonks.
It's interesting that the letter states he's unable to discuss the issue with his client; it's not that his client doesn't want to come here. You would have thought that telephones do work fairly well in North America, wherever he may be. Obviously he was in communication with him to learn that he couldn't be back by March 25.
Anyway, we'll leave that. We have a notice of motion, and we'll deal with that next week.
We will now turn to our witness under the order of the day at 2:30 this afternoon, Ms. Sheila Fraser, the Auditor General of Canada. Welcome again.
She does not have an opening statement. As I mentioned this morning, this is for clarification of testimony you heard this morning. As you know, Ms. Fraser has written extensively on this issue, and perhaps not everything we have heard is always in accordance with what she has presented. Therefore, if there are clarifications to be made, we are now going to ask the Auditor General.
I don't want to get into four-minute rounds or eight-minute rounds. I will basically take individual questions from both sides, and if you can, just keep them as questions of clarification. We do want to get back to Mr. Gagliano, who is of course waiting to come back to the committee.
Let me start off, Ms. Fraser. You went to Denmark to interview Mr. Gagliano, and that is public knowledge. It seems that you have said he was actively involved in redirecting some decisions that had been made by his department, I believe by Mr. Guité, saying, “I don't want the money to go to that particular sponsorship event; I want it to go over here”. Can you give us a synopsis of the conversation and interview you had with Mr. Gagliano in Denmark?
Ms. Sheila Fraser (Auditor General of Canada, Office of the Auditor General of Canada): Mr. Chair, it is correct that I met with Mr. Gagliano this past September. The purpose of that was twofold: first, to inform him of some of the findings of the report before it was finalized; and to discuss it with him, to try to get a better understanding of the program, how it operated and, in particular, how it was established.
Any part of the interview that we felt was of significance has been reflected in the report. There are several references throughout the report to comments and opinions that Mr. Gagliano gave us in that interview. In particular, I would refer the committee to paragraphs 3.24 to 3.29, as they relate to the management of the program. In those, we noted that issues had been discussed with the minister. The retired executive director, Mr. Guité, told us that the discussions with the minister were only to provide information, and Mr. Gagliano informed us that his office did not decide which events to sponsor. He confirmed parts of it, that there were no written objectives or guidelines....
We did find two cases—noted in paragraphs 3.27 and 3.28—where decisions taken by public servants not to support a program or a sponsorship event were subsequently overturned by the minister's office. We don't know who in particular it was in the office. As we note--and this is what I think is the important thing in this--there was very little documentation in the files to support the final decision.
So we concluded that, yes, there was interaction between the minister's office and the public servants, but given the lack of documentation, we are unable to conclude if it was appropriate or not.
The Chair: Mr. MacKay.
Mr. Peter MacKay: Thank you, Mr. Chair.
Thank you, Madam Fraser, for being here with us again.
With respect to what you have just described, in trying to draw certain conclusions about the appropriateness, which you clearly say you really can't without any documentation or any evidence in the file that points to how decisions were made, or how decisions were overturned, were you able to determine in that effort where the responsibility in the actual bureaucracy would lie? Who was empowered then to make those decisions to overturn a contract or to award a contract? Did you receive any direct evidence from individuals you were interviewing as to how those decisions were arrived at?
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Ms. Sheila Fraser: It would appear from the audit that the bureaucratic functions, if you will, were done by the executive director. The executive director would appear to be the one who initiated the requests, approved the funding, and approved the paperwork. Beyond that.... So I guess the answer would be the executive director, from what we could see in the process within that program.
But in the two cases that we note, of course.... I think we all have to recognize that there can be cases where it is appropriate for a minister to overturn a recommendation of a public servant; there could be very valid considerations for that. We would have expected to see documentation, and that is one of the issues that have been there throughout this whole--
Mr. Peter MacKay: So when you referred in your report to oral decisions or oral communications being made, these were in lieu of any documentation that referred to either overturning or awarding of contracts.
Ms. Sheila Fraser: There was a flagrant lack of documentation throughout the files. We were told of oral communications with some of the crowns, for example, such as a telephone call from the executive director to the president. That would have been an example of an oral communication.
Mr. Peter MacKay: So it is the anecdotal evidence you received from interviewing various people for your report.
Ms. Sheila Fraser: Obviously we like to see things on paper, but it wasn't. So it was through interviewing people that we were able to get a story, which we have reported here. When we were not able to validate through paper--invoices or whatever--and it was that someone had told us, we tried to be very careful to say it was someone who told us this.
Mr. Peter MacKay: I have a final question along that line. Ms. Fraser, in talking to these people, were you of the opinion that they either were reluctant, fearful, or surprised at the way in which things were operating in the department as they relayed this information to you? I know that we have to be careful. I'm not asking you to characterize their evidence. But in talking to them, did it appear to you that they felt it was untoward?
Ms. Sheila Fraser: I am unable to answer that because I did not conduct all of the interviews. I conducted very few of the interviews. I must admit that I would be uncomfortable trying to characterize how people reacted in responding to us.
Mr. Peter MacKay: I understand.
Thank you.
The Chair: Mrs. Jennings.
Mrs. Marlene Jennings: Thank you, Mr. Chair.
In chapter 3, starting at paragraph 3.49, under “Selection of communications agencies broke the rules”, and going down to paragraph 3.55, “Selection of the agency of record contravened contracting rules”, your report talks about the contracting policy, appendix Q. Could you just give us a brief summary of what that contracting policy, appendix Q, says? We have been told that under appendix Q it was perfectly proper--in fact it was required--for the minister in certain circumstances to approve the selection of a company or whatever. I'd like to know if in fact that's accurate. I haven't seen the contracting policy, appendix Q. We've asked for it.
Ms. Sheila Fraser: Mr. Chair, I think what we're referring to in this paragraph—and I can ask one of my staff to correct me if I'm wrong—is that the letter of interest to get the agency of record was posted for less than 30 days as required by appendix Q. So we are noting an anomaly, that it wasn't posted that long. Then we go on to say, “It did not say when the services would be required, what the mandatory and the rated requirements were, and how suppliers would be selected....” So we're noting that the way this was done in this contract given to this agency of record did not meet those criteria.
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Mrs. Marlene Jennings: I'm very clear on that.
You may not be able to give me this information.
We've been made to understand that the contracting policy, appendix Q, stipulates that once the selection process for companies has been done, the minister has to sign off on that. That would then mean it was perfectly appropriate if the minister did sign off. Do you know whether that information is accurate?
Ms. Sheila Fraser: I don't have that information.
Mrs. Marlene Jennings: Thank you.
The Chair: Mrs. Ablonczy.
Mrs. Diane Ablonczy: Thank you.
I'd like to refer to two paragraphs in your report that relate to Mr. Gagliano's testimony. The first is paragraph 3.44 on page 21, where you state:
| The former Minister of Public Works and Government Services told us he was aware that CCSB's Executive Director had entered into transactions with the Crown corporations; the Executive Director had informed him that moving money between entities in this way was appropriate. |
I take it that the former Minister of Public Works and Government Services to whom you refer in that paragraph is Mr. Gagliano.
Ms. Sheila Fraser: That's correct.
Mrs. Diane Ablonczy: And the executive director you refer to in this paragraph is Mr. Guité.
Ms. Sheila Fraser: That's correct.
Mrs. Diane Ablonczy: Did Mr. Gagliano give you any explanation of why he, as a chartered accountant, would find the movement of moneys between crown corporations and advertising agencies that you described appropriate?
Ms. Sheila Fraser: I just want to clarify something here. I think Mr. Gagliano mentioned today he was aware that CCSB entered into cooperative arrangements with crown corporations at times to do events. We have said that can be perfectly appropriate if there's the proper paperwork and understanding and everybody knows what they're doing.
What we raised with him was the issue of money being transferred from Public Works essentially to a crown, bypassing the parliamentary appropriations process. It was not the issue of having commissions paid. As he indicated today, he did not appear to be aware, at least in the conversations--and he reaffirmed it today--of the commissions that were being paid. It was more the fact that Public Works, CCSB, was financing an activity of a crown corporation. We raised it because we said the crowns had their own separate appropriations. You're essentially moving money from one appropriation to another, which does not respect the parliamentary process. It was not the issue of the commissions being paid.
Mrs. Diane Ablonczy: And he didn't have any explanation for why he thought it would be appropriate for money to move from his department directly to the crown corporations.
Ms. Sheila Fraser: No.
Mrs. Diane Ablonczy: With respect to paragraph 3.48 you said:
| We observed, from 1997 to August 2001, there was a widespread failure to comply with the government's contracting policies and regulations, a pervasive lack of documentation in the files, and little evidence in many cases that the government had received value for its sponsorship--in some cases, no evidence. |
During this period of time, Mr. Gagliano was Minister of Public Works. Is that correct? You said there was widespread failure to comply and a pervasive lack of documentation. Did you discuss with Mr. Gagliano how this could have happened on his watch? Did he have any explanation for why there was such a lack of proper procedure in the department under his watch?
Ms. Sheila Fraser: Basically--and I think Mr. Gagliano has reaffirmed it today--we were told that the executive director and the bureaucrats were running the day-to-day operations. He would have been informed of certain events, but he was not aware of how the operations were being conducted until the internal audit of 2000.
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The Chair: Thank you very much, Mrs. Ablonczy.
Mr. Mills, please.
Mr. Dennis Mills: Thank you, Mr. Chairman.
Ms. Fraser, I'm having difficulty understanding how, as an auditor, one would judge the appropriateness or the inappropriateness of political intervention on a file. I can think of many cases in my parliamentary career when officials have either parked initiatives or not supported initiatives, and I have considered it an almost natural function to appeal to the minister for political intervention. Not all political interventions are documented.
I've had use of this sponsorship money--as I've said to this committee before--in projects outside Quebec. I have appealed to the minister or ministers when I thought something was good public policy, I wasn't getting support from the officials, and I needed the minister to intervene.
I'm just wondering how, as an auditor, you judge what is appropriate or inappropriate, when essentially at some time a political judgment has to be taken on what is in the greater public good or what is in the national interest.
Ms. Sheila Fraser: I do recognize that. We do not take the position that any decision taken by a minister, contrary to what a public servant may advise, is wrong. That is clearly not what we're saying here. We're just saying there's no documentation to indicate why the decision was changed; why a program that had initially been refused money was then given money. I guess maybe it's the fault of an auditor. I would have liked to have seen some notation somewhere as to why this still met program objectives and why the decision should have been overturned.
Mr. Dennis Mills: If I could quote paragraph 3.27 here in your report, you say:
| We found a memo in one file indicating that the Minister's office had overturned a decision by program staff not to sponsor an event; |
What if it was discovered by the local member of Parliament that the event that was being recommended was essentially going against government policy or going against the policy objective? Does a minister not have a right to intervene and say that this doesn't really qualify?
Ms. Sheila Fraser: The case is the contrary, where the program staff said we should not sponsor and the minister's office said we should sponsor.
Mr. Dennis Mills: But I'm saying, doesn't a minister then have the right to overturn the officials? Isn't that part of the normal, natural political process?
Ms. Sheila Fraser: Of course, but then I think I would ask the committee, would the committee not expect to see some notation on file as to why that decision to award that sponsorship should be given--does it meet program objectives, what are the other considerations that should be taken into account--rather than simply an e-mail from somebody saying, decision to give the money, period?
Mr. Dennis Mills: Thank you.
[Translation]
The Chair: Ms. Picard, please.
Ms. Pauline Picard: Thank you, Mr. Chair.
Good afternoon, Ms. Fraser. When you met Mr. Gagliano in Denmark, did you inform him that Crown corporations were involved in the sponsorship scandal?
Ms. Sheila Fraser: Yes.
Ms. Pauline Picard: Did he seem surprised to you?
Ms. Sheila Fraser: As I said a moment ago, I prefer to discuss the facts. I don't feel I'm in a position to accurately assess the reactions of individuals, and I prefer not to do so.
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Ms. Pauline Picard: Did he give you answers to your questions?
Ms. Sheila Fraser: As we noted in the report, he told us that he was aware that there had at times been transactions in which Crown corporations might have taken part with the department, but he was not aware of the fact that there was... He thought it was appropriate for money to be transferred from the department to Crown corporations, but, as he mentioned again today, he was not aware of the commissions that had been paid at the time of those transfers.
Ms. Pauline Picard: Did you question other Public Works ministers?
Ms. Sheila Fraser: Yes, we met with two former ministers: Ms. Marleau and Mr. Dingwall.
Ms. Pauline Picard: Were they aware of what Mr. Gagliano told you, that is that there might perhaps have been misappropriations, a certain process?
Ms. Sheila Fraser: The period we audited started in 1997. The main reason why we met with the other two former ministers was that we were trying to understand how the program had started, by what process it had started. As you can see in the report, we didn't feel we had obtained sufficient explanations when those questions were answered.
Ms. Pauline Picard: Did you inform those two ministers that Crown corporations were involved in the scandal?
Ms. Sheila Fraser: I don't remember. I don't think so, but I'm not sure.
Ms. Pauline Picard: Thank you very much.
The Chair: Thank you very much.
Mrs. Redman, please.
[English]
Mrs. Karen Redman: Thank you, Mr. Chair.
I have two quick questions. Thank you for appearing, Ms. Fraser.
The first one I want to ask you is the last one I asked Mr. Gagliano. There was an assumption made clearly on his part that Treasury Board guidelines were being met, both by crown corporations and by his department, but who is the appropriate body or person responsible for that, in your view?
Ms. Sheila Fraser: I think that's a very interesting question, and it's one question that I would hope this committee or another committee would look at, because under our current parliamentary system it is the current minister who is responsible for the current operations in his or her department.
In our chapter 2 we raise the question as to whether that is a realistic expectation of a minister, and even, quite frankly, of a deputy minister. So I think I would prefer to raise the question. I'm not sure the answer is as clear as one might like.
Mrs. Karen Redman: Thank you.
If I may, this may be another way of asking Mr. Mills' question, but in a different way.
It seems to me the answer Canadians are looking for, and really what this committee is grappling with, is the interface between the fact that we are politicians and there are political decisions made and how that interfaces with the bureaucracy in the regime of decision-making. In essence, where does the buck stop? To whom does the final accountability come?
Clearly, it was an internal audit, and your report kind of brought this to light. Is this the best instrument, and is this the only instrument, to try to figure out what that appropriate interface is, to be accountable and transparent?
Ms. Sheila Fraser: I would really hope this audit and other situations would lead to due consideration and reflection on that interface. I think we have probably not discussed it enough and have not given adequate thought to it.
One of the reviews, which has been announced by the Prime Minister, is in fact to look at that interface. I think that's an excellent initiative. There should be an open and frank discussion about the realities on both sides, the political and the bureaucratic, and how that interface should work. There are probably various mechanisms that could be instituted to help alleviate at least some of the perceived problems or perceptions of problems that can exist.
Mrs. Karen Redman: Thank you.
The Chair: Thank you, Mrs. Redman.
Monsieur Desrochers, s'il vous plaît.
[Translation]
Mr. Odina Desrochers: Thank you, Mr. Chair.
Ms. Fraser, when you met with Mr. Gagliano, he might not have been aware of the commissions that had been paid, but did he suggest to you that advertising agencies had been taking hefty sums out of the amounts awarded for projects carried out with the Crown corporations?
Ms. Sheila Fraser: We informed him of our audit findings, yes.
Mr. Odina Desrochers: At that point, did you mention the names of the agencies concerned by your findings?
Ms. Sheila Fraser: Yes.
Mr. Odina Desrochers: Did you ask him why only Quebec agencies were involved and why there were no agencies from other provinces?
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Ms. Sheila Fraser: No. Obviously, at that point, we had clearly seen that there was no process for selecting the agencies. It was simply an audit finding at that point.
Mr. Odina Desrochers: After you informed him of your finding, did Mr. Gagliano admit that there had in fact been a serious problem with regard to agency selection?
Ms. Sheila Fraser: As I mentioned, the things we found relevant are in the report, and Mr. Gagliano informed us that he was not aware of the program's day-to-day operations.
Mr. Odina Desrochers: I have a final question. Was he aware of the fact that an agency had been hired to supervise the other agencies in order to ensure that the Sponsorship Program was carried out?
Ms. Sheila Fraser: The answer is the same once again, Mr. Desrochers.
M. Odina Desrochers: Thank you.
[English]
The Chair: Thank you very much. Merci beaucoup, Monsieur Desrochers.
Mrs. Longfield, please.
Mrs. Judi Longfield: Thank you.
Thank you for agreeing to appear.
I'm going to pick up on Karen Redman's line of questioning.
There are several places in your report, paragraph 3.59, “lack of due diligence in selecting and approving events to sponsor”, paragraph 3.81, “contracts amended without documented support”, paragraph 3.83, “lack of compliance with relevant financial authorities”, where I think everyone--Canadians, members of Parliament--wants to know who should have been responsible for ensuring that sponsorship funds were distributed in an ethical, responsible, transparent fashion, in conformity with Treasury Board guidelines.
While you don't necessarily have an answer and you're asking us to find out, is it reasonable to assume that there should be several levels of sign-off on projects of this magnitude, starting with the program director, then the executive director, and perhaps the ADM and the DM, and then the minister? Is that reasonable?
Ms. Sheila Fraser: Yes, I think so.
Obviously, in a lot of these programs, and in most programs in fact, authorities are delegated down throughout the organization. But even beyond--and I guess this is a very personal comment--the delegated authority, I think people have a responsibility to do the right thing. People who are involved in any way in not respecting process have some degree of responsibility. I agree with you that there is a shared responsibility.
Mrs. Judi Longfield: Given that this whole communications branch was set up separately and apart, and given that it was different from other programs, would you expect that someplace along the line, even if it wasn't a full internal audit, there would have been some checks and balances?
There were 1,900 programs being approved. It appears that once they got a certain level of approval, they were sort of rubber stamped all the way up. We might have pulled one, two, or three out to check to see that things were being done.
Ms. Sheila Fraser: I think it would probably be worthwhile for the committee to talk to the people who ran the internal audit group at that time.
I would recall for members that this was during the time of the program review, and many of those internal audit functions were downsized. I don't know if that was the case in Public Works at the time, but the internal audit group did go through quite a downsizing and probably had more limited resources than it may have had even today.
It is clear to us that the way in which that group operated, CCSB, it did not have the normal checks and balances, even in separation of duties, that you would expect to find in an organization. There was a lot of authority vested in the executive director, for example.
The Chair: Thank you, Mrs. Longfield.
Madam Jennings, s'il vous plaît.
Mrs. Marlene Jennings: We've heard a significant amount of testimony concerning APORS, which was the predecessor to the communication sponsorship branch.
We've also had evidence tabled before this committee that Mr. Cutler, who was an employee responsible for procurement, worked in APORS. He filed a complaint concerning the practices of Mr. Guité in regard to issuing of false invoices, backdating requisitions when contracts had not in fact been issued, and not consulting legal people. Basically, almost everything you've detailed was part of Mr. Cutler's complaint.
An internal audit was in fact carried out. The internal audit found that Mr. Cutler's allegations were founded. As a result of that, an external audit conducted by Ernst & Young took place.
I'm assuming the deputy minister knew all about that. It would be astonishing if the deputy minister did not.
When you were asked to conduct an internal audit and you met with people to try to find out a little bit about APORS, were you informed about Mr. Cutler, the internal audit, the Ernst & Young audit? While your office was conducting your own audit of the sponsorship grants, were you informed about this?
Did the ministers you met with, Mr. Dingwall and Ms. Marleau, and the deputy minister--whom I assume you would have met with--inform you about the existence of this internal audit, the Ernst & Young audit, and Mr. Cutler's complaint?
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Ms. Sheila Fraser: If I can clarify, I believe the Ernst & Young audit and the internal audit are one and the same. At least, that's my understanding of it.
Mrs. Marlene Jennings: No, it's not.
Ms. Sheila Fraser: Well, there's the internal audit of 2000. There was the Ernst & Young audit of 1996.
Mrs. Marlene Jennings: No. There was an internal audit in direct response to Mr. Cutler's complaint, which was tabled in late 1996.
Ms. Sheila Fraser: That's right, in 1996.
Mrs. Marlene Jennings: That's right. That internal audit found that his allegations were founded.
One of the recommendations was that there be an external audit of all of the contracts of APORS from 1994 until 1996. That audit was conducted by Ernst & Young. The scope and terms of reference of that audit were defined by Public Works.
Ms. Sheila Fraser: Okay. We were given a copy of the Ernst & Young audit, yes.
Mrs. Marlene Jennings: But you were not given a copy of Mr. Cutler's complaint, nor whatever documents Mr. Cutler provided to the department officials.
Ms. Sheila Fraser: No.
Mrs. Marlene Jennings: Nor were you given a copy of the internal audit that came about as a result of his complaint.
Ms. Sheila Fraser: No. I would recall for the members that we were auditing the period from 1997 forward, and that may be part of it.
Mrs. Marlene Jennings: I do understand, but one of the points you raise, which is a very important point, is that there was flagrant violation of the Financial Administration Act and of contracting policy. Every rule in the book, as you've said, was broken by the bureaucrats who were running the program.
In your report you talked about APORS, because you wanted to understand how the sponsorship branch and the sponsorship program came about. Then my point is, there was already that track record on the part of those very same bureaucrats. The deputy minister was perfectly aware of it and the assistant deputy minister was perfectly aware of it because they were the ones who ordered the internal audit as a result of Mr. Cutler's complaint.
They're the ones who then determined, as a result of the conclusions of that internal audit, that Ernst & Young should conduct an external audit. They never informed the Auditor General's office that these practices already existed dating back to at least 1994 and, given some other testimony, possibly back to 1990 or the late 1980s...by Mr. Guité. None of that information was every brought to the attention of the Auditor General.
Would you think this might have been material to your audit in terms of trying to understand?
The Chair: Thank you, Marlene.
Ms. Fraser.
Ms. Sheila Fraser: Well, Mr. Chair, all we could have said was that our questions about why oversight broke down and why this situation was allowed to go on for so long would have been even more pertinent.
Mrs. Marlene Jennings: So it would have been material.
The Chair: We have Mr. MacKay, Ms. Phinney, Mr. Mills, and Mr. Tonks, and that will be it.
Mr. Peter MacKay: I just have a couple of very quick questions on who you actually had contact with. You at no time spoke directly or indirectly to Mr. Guité in the course of your examination?
Ms. Sheila Fraser: We interviewed Mr. Guité when we did our first audit.
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Mr. Peter MacKay: That was the 2000 audit.
Ms. Sheila Fraser: It was in 2002, on the three Groupaction contracts.
Mr. Peter MacKay: Did you at any time speak to Jean-Marc Bard?
Ms. Sheila Fraser: I am uncomfortable giving names of people we interviewed or didn't interview. It's public record that we interviewed Mr. Guité, but quite frankly, I'd worry if you started going down a list of who I interviewed and who I didn't interview.
Mr. Peter MacKay: Generally, could you tell us whether you met senior staff in the minister's office?
Ms. Sheila Fraser: No, we did not.
Mr. Peter MacKay: Very specifically, I'll address the problems, if you will, that were uncovered in the way the contracts themselves were awarded to these various agencies, like Groupaction, Groupe Everest, and Lafleur Communications. Were you able to glean any rhyme or reason as to how those firms received those contracts? Did there appear to be any formula you uncovered in your examinations?
Further to that question, was there any formula you uncovered as to the amount these agencies were taking? Did there appear to be a percentage, for example, of money that went in, money that was skimmed off, and money that then went on to the proper recipient?
Ms. Sheila Fraser: We only looked at the process, and as has been mentioned several times, we did not find a proper selection process with open tendering or any evaluation. So the selection process was, in our terms, arbitrary, and we did not look beyond that as to what each firm might or might not have received.
Mr. Peter MacKay: I take from this that there was no way to either determine why they received those contracts or to show, as to the amounts that are laid out in considerable detail in your report, how much money came out of the original allotment of money, if you will. After it passed through the hands of these agencies, was the amount that was taken off also arbitrary, in your view?
Ms. Sheila Fraser: Well, there were percentages that were fixed, as we note in the report. As to the commission percentages, I think those were probably within certain ranges. As to production fees and the rest of it, we don't have sufficient support to know if those amounts were reasonable or not.
Mr. Peter MacKay: So those commissions were random.
Ms. Sheila Fraser: Well, the commissions were 3%, 12%, 15%, depending on.... So there were several fixed percentages that were there for the commissions.
There were, of course, the production fees, which were the bigger amounts paid, and in many of those there was not enough support to know what the amounts were being paid for.
Mr. Peter MacKay: This is my final question, Mr. Chair.
By support--
Ms. Sheila Fraser: It would be, for instance, fees on an amount. Well, what were the fees for? Who did the work? What were the hours? What were the billing rates, all of the normal documentation? What was the contract? What did the contract specify? Was there an evaluation of the product that was received? The normal process you would expect when giving a contract was not followed--
Mr. Peter MacKay: That's what I'm getting at.
Ms. Sheila Fraser: --so it was hard to evaluate if value was received for the moneys that were paid.
Mr. Peter MacKay: You were not able to determine whether there was any fixed rate or whether there was value for money, whether the work was anything from licking a stamp to actually providing advice? There were no set criteria that appeared to be followed?
Ms. Sheila Fraser: There was not sufficient documentation in the files to do that.
Mr. Peter MacKay: Thank you.
Thank you, Mr. Chair.
The Chair: Mr. Toews.
Mr. Vic Toews: On a point of order, I note that there's quite a bit of interest in examining the Auditor General and there are three more questioners on the list. I just wonder whether it wouldn't be appropriate to utilize her time as much as possible for the questions that might have arisen, and then we can have Mr. Gagliano come tomorrow--because I think we're all expecting Mr. Gagliano to come tomorrow in any event. That will give Mr. Gagliano, and us, a chance to absorb some of the testimony.
So I would think, rather than cutting off any questioning now, we should let that proceed and then we can continue with Mr. Gagliano tomorrow morning, because he's going to be here anyway.
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The Chair: Is it the desire of the committee that we continue on this style of questioning of the Auditor General until such time as we run out, or 4 o'clock, whichever comes first, and then we continue with Mr. Gagliano tomorrow? Is there any disagreement?
That seems to be fine.
Mr. Tonks.
Mr. Alan Tonks: Just for clarification, Mr. Chairman, was there a suggestion that if we were able to finish with the Auditor General and Mr. Gagliano, we wouldn't have to reconvene tomorrow?
The Chair: I don't think that was Mr. Toews' point of order. He said we will start again with Mr. Gagliano tomorrow morning.
Mr. Alan Tonks: I understand that, but I guess I was just--
The Chair: But I think Mr. Toews' point, to give Mr. Gagliano the chance to review what has already been on the record, and so on, might be quite appropriate for reasonableness.
Mr. Vic Toews: Yes. He has been here all day. I think he's entitled to consider some of the things that have been said, review some of the testimony, review some of the comments of the Auditor General. I think it's the fair way to proceed, rather than trying to squeeze all of his testimony into another 20 minutes today, and the Auditor General....
I could ask a number of questions, but I'm holding back.
The Chair: It also relieves the chair of trying to pick winners and losers, as to who gets to speak and who doesn't.
Mr. Vic Toews: Exactly.
The Chair: It seems to me there's consensus there, so I will consider that a direction that we will--
Mr. Odina Desrochers: No.
The Chair: Well, I'll put it to a vote, then, Mr. Desrochers.
Do you have a point to make?
[Translation]
Mr. Odina Desrochers: I don't agree with that suggestion. Ms. Fraser has previously appeared before our committee, and we've had all the necessary time to ask her questions.
I understand that Mr. Gagliano's statements today raise other questions, but I may have other questions to ask him myself. Mr. Chair, I would also like to know whether that means that we would only be hearing from Mr. Gagliano tomorrow or whether it would be possible for us to do something else.
[English]
The Chair: We were going to have a meeting at 4 o'clock, at the end of this, to make that decision, so I'm not in a position to make that specific statement at this point in time. I think there was agreement that at 4 o'clock, at the end of this meeting, we would decide if we would continue all day with Mr. Gagliano.
Anyway, the issue is, shall we hear from Mr. Gagliano after? To continue on with the Auditor General, I think there was consensus in the room, and that is the decision of the chair.
I was just going to say that Mr. O'Neal from the Library of Parliament has pointed out in the opening statement of Mr. Cutler, and I will quote:
| As a result of the report of the audit and review branch in June 1996, an audit of APORS was conducted by an outside auditor. |
So there were actually two reports, an internal one, which I believe was part of the documentation supplied by Mr. Cutler.... If it wasn't, then we'll ask for a copy of that particular report, but I think we actually have it.
Ms. Phinney.
Ms. Beth Phinney: Thank you, Mr. Chair.
Madam Fraser, I have a couple of questions to ask based on your statement right at the very beginning that over $100 million of the $250 million, 40% of total expenditures, was paid to communications agencies as production fees and commissions. That's the figure about which everybody is saying, oh, there's $100 million missing. It's like the HRDC $1 billion boondoggle, which turned out to be $600 or something that they couldn't find a paper for. There wasn't $1 billion lost, but the opposition still uses those quotes, and I'm worried about that happening here.
There weren't the normal checks and balances and there's a lot of backdating and things like that being done. You've said yourself that there wasn't sufficient support to be able to say how much was spent on production fees or these different sorts of areas, that we don't know how much was normally paid for that or how much should have been paid for that. Is there anywhere in here that tells us for sure that $45 million disappeared and here's exactly where it came from? Or, as the auditors, is this $100 million what you people can't justify? Further paperwork may be able to justify it, but there isn't paperwork there, as you said. Is it absolutely a fact that $100 million has disappeared illegally into somebody's pocket?
Ms. Sheila Fraser: No, that is not a finding of the audit.
Ms. Beth Phinney: That's certainly what the public thinks.
Ms. Sheila Fraser: The point we've said is that of a program of $250 million, $100 million went to communications agencies. We did not make an assessment of what would have been an appropriate amount for the management and production fees; the committee may wish to do that. I would question if 40% of the program is not a little high. But we are not saying it is or it isn't. What we are saying is if you look at the transactions, just the transactions that we have with the crowns, there's over $1 million paid in commissions for simply transferring funds from the department to a crown corporation.
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Ms. Beth Phinney: So you're saying in the--
Ms. Sheila Fraser: In the VIA Rail case, which we have in there, one of the communications agencies billed the government department, CCSB, $750,000 in production fees, but it was simply to recover money. So we were very reluctant to give a great deal of breakdown between commissions and production fees, and even the $100 million itself we obtained from a database at CCSB. The numbers were grouped together there; there was not a clear split. The invoices weren't clearly split out in all cases between production fees, commissions, and actual sponsorship. And even if we talk about production fees, because some of them were subcontracted, there were in fact commissions within that amount.
So that is why we've always stayed at an order of magnitude of $100 million and have not tried to separate between production fees and commissions, because we could never get any kind of certainty around those numbers. It was simply to give parliamentarians an order of magnitude of the funds that were paid in commissions and production fees to these communications agencies.
Ms. Beth Phinney: But there's no place where you have said that there's $100 million stolen or put in somebody's pocket?
Ms. Sheila Fraser: We cannot obviously make that assessment. All we see is the payment going from the federal government to these agencies.
Ms. Beth Phinney: But you have said that 40% was a little high. If you're doing an audit and you're saying you're not sure where $100 million went and if it was justified, to say this is a little high...these are not auditor's words, I don't think.
Ms. Sheila Fraser: It isn't in our report either, so I probably shouldn't have said it. But when the program is designed to sponsor events, I think I question if $100 million in production and commissions versus $150 million, presumably to events, is the right balance in that kind of program.
Ms. Beth Phinney: I understand that, but I'm wondering, as an auditor--and there may be, I don't know, other auditors in there--whether a judgment call like that.... Now, with the breakdown, maybe 40% out of that total is a little high; maybe it should be 30%. So rather than dealing with $100 million, maybe we should use whatever....
Ms. Sheila Fraser: In fact you're right. We would have expected to see, for the amounts that were paid, an indication, first of all, of what was being contracted for, an indication that this had actually been done, and what was an evaluation of the program. None of those documents, none of that, was in any of those files. So it's hard to make any assessment of any of the value that was received from that.
Ms. Beth Phinney: I'm just very concerned we are assuming that the $100 million disappeared in a way that was irregular. We don't know the value of the return you get on a movie or a television program. I'm very concerned that an auditor's report would have such a statement that can be picked up by the media. The reason we're here today is because of all the irregularities, but also because it's $100 million.
Ms. Sheila Fraser: We have never made the statement that $100 million was lost. We simply stated that out of the $250 million spent on this program, $100 million went to production fees and commissions.
Ms. Beth Phinney: You can't explain that part of it, and you think there should be another audit on that part of it to find out--
Ms. Sheila Fraser: No. We no longer have an audit to do. Quite frankly, I think the RCMP investigations will say if there was anything irregular or not.
Ms. Beth Phinney: I didn't say by you people, but by--
Ms. Sheila Fraser: A commission of inquiry.
Ms. Beth Phinney: We need to find out where that money went. Rather than saying $250 million was spent and $100 million was somebody's profit, we should be saying--the opposition should be very careful in saying this also--that's not necessarily the case at all.
The Chair: I'm sure the opposition members will be very judicious in their use of these words from here on in.
Mr. O'Reilly, you have a point of order.
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Mr. John O'Reilly: I just wonder if we could perhaps have some instruction from the chair. When I come here I shut my cellphone off, but we've been interrupted about eight times now by staff cellphones ringing. I wonder if you could ask them to put them on vibrate or something so we're not interrupted.
The Chair: I think that's a valid point, Mr. O'Reilly. If anybody in the room has a cellphone on, please shut it off. You can get your messages later.
Mr. Mills.
Mr. Dennis Mills: Thank you, Mr. Chair.
Picking up on Ms. Phinney's comments, we know from Mr. Cutler's testimony last week--he had the job of being responsible for contracting for many years--that 17.5% was an industry standard for fees. So when you deduct--
The Chair: Mr. Toews.
Mr. Vic Toews: The cross-examination of the Auditor General was to deal with the testimony she gave today. We're going far afield. I noted that you gave three individuals that extra...and I understand that. The point is, the Auditor General is here to deal with what she heard--her testimony on her discussions. That's what I understood the questioning was going to be limited to.
Now they're going on a full-scale attack in that respect, and that certainly wasn't my understanding when I suggested that if there were questions about the comments the Auditor General made today, we cross-examine her on them. I've been very silent and very patient, but I don't see what this line of questioning has to do with the testimony she gave today.
The Chair: I think you're right, Mr. Toews. As chair I am being lenient today and have allowed a wide latitude of questions because I think that is fairly important. But the Auditor General was invited to take a position today to clarify issues. The intent was not to analyse her report and ask her to explain; therefore, you may want to take that under advisement, Mr. Mills.
Mr. Dennis Mills: Should we not have an opportunity to clarify situations here?
The Chair: I didn't rule your point out of order, Mr. Mills; I just said perhaps you should bear that in mind as you're posing your questions.
Mr. Dennis Mills: I've been quite open about this situation from day one. There is a misperception in the Canadian public that $100 million went out the back door. That is factually incorrect, and the Auditor General has just verified that. She said--and I wrote down her words--“there was no way of knowing what the production costs were”. As parliamentarians, when you do 2,000 events across Canada, there are some real production costs.
The Chair: We have a point of order. M. Desrochers, s'il vous plaît.
[Translation]
Mr. Odina Desrochers: Mr. Chair, coming back to the remarks you made, Ms. Fraser decided to come back to meet us today--and I thank her for doing so--to provide us with clarification on the testimony we heard this morning from Mr. Gagliano. The idea is not to reexamine the Auditor General's report in full.
Is it true that Ms. Fraser is here this afternoon for that purpose?
[English]
The Chair: That's correct, Mr. Desrochers. That's why I asked Mr. Mills to perhaps ensure he was keeping that in mind as he was phrasing his questions, so as not to put the Auditor General on the hot seat for her report but to try to find additional clarification.
If you could, bear that in mind as you're posing your questions, Mr. Mills.
Mr. Dennis Mills: I hear you, Mr. Chair.
Ms. Fraser, I struggle with this file as much as you do and everyone else, and here is the problem I'm having with this. The procurement process we use for advertising agencies that has been tabled here is essentially the same procurement process we use if we are buying a tank, a battleship, or any other government product.
Communications is such a different type of product or service to the public because a lot of it is time-sensitive. We are sometimes faced with deadlines to get communication out, and that's totally different from the timelines you take when you're buying a tank or a helicopter. In your experience going through this whole file, have you thought of ways where we could keep the process pure and at the same time try to meet the time-sensitive deadlines you have to meet sometimes when we are--
¹ (1530)
Mr. Vic Toews: I have a point of order. That's exactly my concern here. He's asking the Auditor General, Mr. Chair, to go through her entire report to develop an alternative system.
What we were here to do was to examine the Auditor General in respect of her conversations with Mr. Gagliano. We understand that the Auditor General will come back at another time to deal with the more general questions, but at this time the questions that should be put to the Auditor General should relate to the conversations she had with Mr. Gagliano. This is the kind of question that I would think, given your prior ruling, is simply out of order.
The Chair: I have to address this issue. Mr. Mills, Mr. Toews is quite correct. I've given you significant latitude to address your questions, and I would now ask you to put your questions to Ms. Fraser on the clarifications you would like to have on the testimony of Mr. Gagliano. He is coming back again tomorrow morning so we can continue our line of investigation on him. This is not an investigation of the Auditor General today.
Mr. Dennis Mills: I never took this to be an investigation, but I think it's totally appropriate to seek clarity, and that's all I was doing. I have no further questions.
The Chair: Thank you.
Ms. Fraser.
Ms. Sheila Fraser: I think I have a very short answer to Mr. Mills' question. In our report we note several problems with the sponsorship activities, with advertising activities, and to a much lesser extent with public opinion research for a given period of time. We also note in the report several measures that were put in place by government and many corrective actions that were taken to improve sponsorship and to improve advertising. We note in there that while we hadn't audited, obviously, the results of that because many of those corrective actions had taken place just before our audit, they appeared to have addressed or would address many of the concerns you raised.
Mr. Dennis Mills: Thank you very much.
The Chair: Yes, thank you.
Before I go to Mr. Tonks, I'm going to ask a question, Ms. Fraser.
Mr. Gagliano mentioned this morning that, I think it was after the 2000 audit, he asked that the advertising program be put out for a new competition--those are not quite his words--put out for retendering, or something along those lines. Are you aware from your conversations with Mr. Gagliano or from your investigation of the sponsorship program if at any time around the 2000 mark the whole process was subject to rebidding or retendering?
Ms. Sheila Fraser: We note, Mr. Chairman, in paragraph 3.95 that after the internal audit--and we say in 2001--certain improvements were carried out, including a new solicitation process, an improvement in the agreements with the agency of record.
Then we go on later. After that, in September of 2001, Communication Canada was formed. We note in paragraph 3.106, I think, that there were again more changes made by Communication Canada to strengthen the program.
We do note that there were improvements made from 2001 on.
The Chair: It did actually go out for a retendering process.
Ms. Sheila Fraser: I don't have all of the details, but we do talk about a new solicitation process, which I believe is probably what Mr. Gagliano was referring to.
The Chair: Okay. Thank you.
Mr. Tonks.
Mr. Alan Tonks: Thank you, Mr. Chairman.
Madam Auditor General, as you can appreciate, Mr. Gagliano's testimony today is the culmination of a number of individuals who have testified.
As a member of the committee I'm trying to come to grips with the same question you asked in an interview on February 11, in which you said we've clearly said that this isn't only a case of missing documentation or the breaking of a few rules. The system would appear--would appear--to have been designed in such a way as to put commissions into the hands of these communications agencies.
I guess I use that to say there will be, through the RCMP and the judicial inquiry, a very intense follow-up with respect to the fraudulent nature.
Would you agree that this committee--what you hope this committee would attempt to do--should look at why the system broke down, how we ended up with this, and whether it was deliberate? Is that a rather accurate characterization?
¹ (1535)
Ms. Sheila Fraser: Very much so. I think one of the major issues that comes out of this is why the oversight mechanisms failed and what needs to happen going forward to ensure that it doesn't happen.
I really think one of the dangerous reactions to an audit like this is to put in more rules, more regulations, and more control over people, the vast majority of whom are doing a reasonable job. We need to make sure the current system works better.
Mr. Alan Tonks: Mr. Chairman, that's right.
As a layperson and not as an audit-oriented person, or whatever, this is what has occurred I think to the committee, and in particular to myself, with respect to that end, that objective, with all of the different testimony we've heard. Mr. Cutler indicated that under his regime there was--
The Chair: I have a point of order again.
Mr. Toews.
Mr. Vic Toews: Am I missing something? I didn't hear the Auditor General raise this in her conversations with Mr. Gagliano. There seems to be an almost deliberate attempt to stray away from the testimony Mr. Gagliano gave and the testimony the Auditor General made in respect to her conversations.
What's the game plan here? You've made your rulings, Mr. Chair--
The Chair: Mr. Toews--
Mr. Vic Toews: Could I finish?
The Chair: Briefly.
Mr. Vic Toews: You've made your rulings, Mr. Chair, and it seems to me that the Liberal members seem to be taking this way off track. I'm very concerned here.
The Chair: Mr. Tonks.
Mr. Alan Tonks: How could he say that without even giving me the opportunity of asking and finishing the question? Mr. Chairman, I think that's most unfair.
The Chair: I did not uphold Mr. Toews' ruling. I would remind all members asking the questions that this is for clarification. If you try to stay within those fairly broad limits, which I'm sure everyone is capable of doing, then the questions are in order.
Bear that in mind, Mr. Tonks, and please proceed.
Mr. Alan Tonks: Thank you. I appreciate that, Mr. Chairman.
I think the Auditor General is quite comfortable in answering and facilitating the kinds of questions and answers that we are seeking, and she is certainly capable of doing it.
Mr. Cutler indicated how the system broke down to the point that he even felt he was going to lose his job. In 1996, the internal audit/external audit found that Mr. Cutler was accurate in terms of his problems with the procedures.
In 1996, appendix Q was waived. There were no quarterly reports. There were no internal audits that went to Treasury Board.
Madam Auditor General, working toward the objective that you would have at least this committee working to, if you had an opportunity to write this report, having heard what Mr. Gagliano has had to say and what you said, do you think you could now, from an operations basis, add to your audit in terms of how those systems really did break down?
Everything went under the radar screen in terms of the executive director and what was happening. Would it be possible to be more accurate now having seen the interdepartmental, interministerial things?
The Chair: There is a point of order, Mr. Tonks.
Your point of order, Mr. Desrochers.
Mr. Alan Tonks: You know, Mr. Chairman, when people don't want to hear the truth, or they don't try to search it out, they try to put muzzles on people. That's a kangaroo court. I take great exception to that, and this committee should too, Mr. Chairman.
The Chair: I hear you, Mr. Tonks, but when a person raises a point of order, be it on either side of the room, I have an obligation to hear it before I can decide on it. I can't decide on a point of order until it's presented to me. I have been very lenient in receiving points of order and in ruling on them; I have not made narrow decisions but have allowed the members a great deal of latitude, and I will hear Mr. Desrochers' point of order.
¹ (1540)
[Translation]
Mr. Odina Desrochers: Mr. Chair, like my Conservative Party colleague, I'm coming back to this point.
Ms. Fraser is here today to answer questions on the discussions she had with Mr. Gagliano and on the report she tabled. As far as I know, there is no mention in the Auditor General's report of Mr. Cutler in 1994.
We must stick to the work we have to do today. We may be sticklers, but we want the work to be well done. The same is true of my colleague. It seems to me we have enough on our plate without adding other issues.
Thank you, Mr. Chair.
[English]
The Chair: We only have about 15 more minutes to go until 4 o'clock, and I'm not going to be absolutely iron fisted on this issue, so if you want to pose a question, Mr. Tonks, we'll carry on, please.
Mr. Alan Tonks: I guess my question is that as the Auditor General did not have the advantage of all of the testimony that this committee has now had, does she see a pattern across a whole variety and spectrum of systems that had broken down that would give the committee a better indication of how the system failed?
The Chair: Ms. Fraser.
Ms. Sheila Fraser: Well, Mr. Chair, obviously—
The Chair: We now have a point of order on this side.
Madam Jennings.
Mrs. Marlene Jennings: I'd just like to make a clarification, because the members of the opposition.... In fact, it's not a clarification, but a contestation. The members of the opposition have done points of order, saying that Liberal members are attempting to question the Auditor General on events and discussions that were not part of her report.
Talking about the selection of communications agencies breaking the rules, I would draw the attention of the chair to points 3.51 and 3.52 of the Auditor General's report, in which it is said: “In the first process, five firms were selected in early 1995 to provide advertising services to the Advertising and Public Opinion Research Sector (APORS) of PWGSC. However, the selection process did not comply with the Government Contracts Regulations”, and so on and so forth.
When questions are being asked of the Auditor General about her report and about the testimony of Mr. Gagliano that deal with APORS, and the discrepancies and irregularities, it is part of the Auditor General's report. Therefore, I would encourage you, Chair, when you receive points of order like that from Mr. Desrochers, to simply rule them out of order.
The Chair: Thank you very much, Madam Jennings.
Madam Fraser, you were responding to Mr. Tonks' question.
Ms. Sheila Fraser: Mr. Chair, I would say that those internal audit reports add greater weight to the findings of our audit. I don't think they would have changed in any way what the findings are.
I would refer the committee perhaps to chapter 2 of this report, which talks about accountability and ethics, and why things go wrong for a very long period of time before they're dealt with. I think that discussion is probably more relevant.
The Chair: I have Mrs. Ablonczy, Mr. Jobin, Ms. Wasylycia-Leis, and Mr. O'Reilly.
Basically, as time is getting quite short, I'd like you to know that Mr. Tonks' notice of motion does have a fairly quick timeframe on it, as our law clerk pointed out to me, because he's asking that we issue a subpoena for Mr. Guité to show up by March 31.
Therefore, since we have a full complement of the committee, we may wish to reverse a decision that we can't deal with motions and deal with that one specifically. So I'll be putting that to the meeting at 4 o'clock.
We'll move to Mrs. Ablonczy—and I'm going to be much tighter on the time from here on in.
Mrs. Ablonczy.
Mrs. Diane Ablonczy: Thank you very much, Mr. Chairman. Glad to be the recipient of such efficiency.
Auditor General, on page 5 of Mr. Gagliano's testimony to the committee this morning, he told the committee, “A minister does not run his department”. Aside from the fact that this is news to me, and certainly to most Canadians, it seems that in testimony Mr. Gagliano gave, he said he didn't know what was going on in his department. Who did run the department if it wasn't the minister?
In Mr. Cutler's testimony before this committee, he said that as early as March 1995 Mr. Guité, who was only an executive director of a small program within the department, had acquired the authority to authorize advertising and advertising-related expenditures on behalf of Public Works. So this is a mid-level official in the department--as I say, an executive director of a very small program--being given the authority to authorize advertising and advertising-related expenditures. That was in 1995. During the timeframe of your audit of the sponsorship program, did Mr. Guité retain that authority to select the agency, approve the terms of the contract, and authorize payment? Did he retain that broad authority during Mr. Gagliano's time as minister?
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Ms. Sheila Fraser: It is our understanding that he did.
Mrs. Diane Ablonczy: Auditor General, would that be in accord with generally accepted accounting principles and comptroller principles in a government organization?
Ms. Sheila Fraser: I'm afraid I can't answer on what would be the general principle. I think each department has its own delegations of authorities and signing authorities for different levels of transactions. It would have to be department specific. I don't know if you raised that with the deputy minister. I think the committee may want to know what the various levels of signing authorities are.
The issue we raised, of course, was that there wasn't a proper segregation of duties within that group. So it's not necessarily a question of the level of authority, but how that authority is exercised.
Mrs. Diane Ablonczy: Auditor General, would it be normal for the same person to be able to authorize expenditures, decide who gets the money, approve the terms of the contract, confirm that the work was performed, and authorize payment? We all know there would be no checks and balances in such a system. If that one person were to go wrong, the whole thing would go wrong. Isn't that correct?
Ms. Sheila Fraser: That's correct. As we noted here, there was not what we call a proper segregation of duties. There are certain duties that should not be performed by the same person, which then provides a check and balance within an organization.
Mrs. Diane Ablonczy: My final question is this. Who would have authorized such an unusual and, I think it's fair to say, inappropriate arrangement when it comes to the expenditure of public funds?
Ms. Sheila Fraser: I think that is one of the unanswered questions as to why that was allowed to occur.
Mrs. Diane Ablonczy: Did you find any evidence of how that was authorized?
Ms. Sheila Fraser: No.
Mrs. Diane Ablonczy: Did you ask Mr. Guité about who said he could do this?
Ms. Sheila Fraser: As we indicated earlier, he said this was the way he did business. No, he didn't have a sufficient explanation either.
Mrs. Diane Ablonczy: Did you ask the minister why such an unusual arrangement would have been entered into within his department?
Ms. Sheila Fraser: We asked why it was set up the way it was, why the normal control structures were not there, and why oversight failed, and as we indicate in the report, we did not receive a sufficient explanation in answer to any of those questions.
Mrs. Diane Ablonczy: Thank you.
The Chair: Thank you, Ms. Ablonczy.
Mr. Jobin, please.
[Translation]
Mr. Christian Jobin: Thank you, Mr. Chair.
Mr. Gagliano said in his report this morning that his reputation was tainted, but I believe the Canadian public is the most shocked today over the mismanagement of the Sponsorship Program.
Mr. Gagliano also said that he generally endorsed your report, and, in your report, you stated 21 times that Mr. Gagliano's office, either himself personally or his staff, had contact and discussions concerning the management of the Sponsorship Program.
Mr. Gagliano also told us that he was not responsible for the bungling, the mismanagement of the Sponsorship Program. Is it thinkable that Mr. Gagliano's political staff might be implicated, in view of the fact that we're looking for the political people responsible for that mismanagement?
¹ (1550)
Ms. Sheila Fraser: As I mentioned a moment ago, Mr. Chair, we didn't conduct interviews with political staff. The rules and processes that we audited apply to civil servants, to members of the public service. I don't have an adequate answer to your question.
Mr. Christian Jobin: Then is there any reason to push things in that area?
Ms. Sheila Fraser: I believe it's up to the committee to decide whether it should send for those people and ask them questions.
Mr. Christian Jobin: Thank you.
[English]
The Chair: Thank you, Mr. Jobin.
[Translation]
Is that all?
[English]
Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
I want to start off my line of questioning with just a comment about the way in which I think the Auditor General, her assumptions, and her work have been challenged by members on this committee. I've seen this happen every time the government of the day doesn't like what it hears, and it ends up challenging the work of the--
The Chair: Ms. Phinney.
Ms. Beth Phinney: On a point of order, Mr. Chair, I was not challenging the Auditor General; I was questioning her.
The Chair: Okay, that is noted.
Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis: Mr. Chairperson, I wasn't referring to Beth Phinney or one particular individual but to a general tone from across the way that--
Mr. Dennis Mills: On a point of order--
The Chair: The chair will deal with this.
You can't impugn motives into the questioning by other members of the committee.
Ms. Judy Wasylycia-Leis: All right, I won't impugn any motive.
Mr. Dennis Mills: But she has.
Ms. Judy Wasylycia-Leis: Mr. Chairperson, I will withdraw those comments.
The Chair: Mr. Mills, you had a point of order.
Mr. Dennis Mills: On a point of order, the big lie here is that $100 million went out the back door, and the opposition doesn't like the fact that when we strip away the commissions and we realize that there are production costs, the story is quite different from the story that has been told here for the last two months.
The Chair: The point we have here, Mr. Mills, is that it has not been verified in the affirmative or the negative. Therefore, no one can make that statement.
The point of order was that Ms. Wasylycia-Leis was impugning motive onto members of Parliament, and that is not appropriate.
We've done very well all day. We are just about at the end, so let's just stay focused and calm.
Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis: I will withdraw that if you think it was offensive. I was only trying to make the point that it wasn't the Auditor General who was suggesting calling this a scandal or a fraud. It was the Prime Minister of the land, in fact, who said those words.
But let me go on to my line of questioning--
The Chair: Order, please.
Ms. Wasylycia-Leis, you're not going to talk across the floor. You may ask questions of the Auditor General.
Ms. Judy Wasylycia-Leis: Right. Sorry, Mr. Chair.
I have a couple of questions.
We are obviously having some trouble getting some specific names. When we asked Mr. Gagliano about who he, or his office, was in touch with in terms of the PMO, he didn't know, or he might get back to us. He couldn't remember. When we asked about names of his political staff who might have been involved in this file, he didn't know, or couldn't remember, or might get back to us.
So we're taking an awfully long time just to get to the basics, and I know you said you would prefer if we went to the government to get the names. How long should we wait before we get the names, and then what should we do?
Ms. Sheila Fraser: I guess I am a little confused as to which names.
The Chair: I think that's more a question addressed to the chair. The Auditor General said she preferred that names come from the department, not from her, because of the confidentiality of her audit work and to maintain the confidence of her being able to do her audit work. She also said that if we were unable to obtain the names, then we could go back to her.
It's up to us to decide if we have waited long enough from a department. It's not to put the Auditor General on the spot.
Ms. Judy Wasylycia-Leis: Right. Thank you, Mr. Chairperson. I guess my point was simply about the difficulties we are having trying to get to the bottom of this when there has been such a reticence on the part of the witnesses we've had to actually be forthcoming.
You were here. You heard Mr. Gagliano's testimony. Given the fact that as an auditor general your primary function is to review value for money, do you have any comments on whether we're getting value for money in terms of ministerial responsibility, based on Mr. Gagliano's testimony?
¹ (1555)
Ms. Sheila Fraser: Mr. Chair, I perhaps would like to clarify.
First of all, even though we call our practice value for money, we look at systems, processes, and controls that government establishes for itself, to see if those are respected. Quite frankly, it is up to parliamentarians to decide. We are giving you the objective information for you to decide if you are getting value for money.
As to ministerial responsibility, that is obviously a question that goes far beyond the remit of the Auditor General, though we did raise questions in our chapter 2 about there needing to be clarity around accountabilities and responsibilities of ministers, deputy ministers, and public officials generally.
Ms. Judy Wasylycia-Leis: Thank you.
The Chair: We'll have the last word from Mr. O'Reilly.
Mr. John O'Reilly: Thank you very much, Mr. Chairman.
Thank you very much, Madam Fraser, for attending.
I want to go to Mr. Gagliano's report, which he gave us this morning, and ask if in your opinion it is accurate or not. Mr. Gagliano stated that “There are no recommendations resulting from this follow up review of sponsorship files”, which he mentioned in the internal audit of Communication Canada. I wondered if that was true, but also if that was accurate.
The other statement he makes is the remarkable fact that most of this is already in the Auditor General's report, and “...she has not found mewanting in any respect in relation to my performance as minister of Public Works.”
Your statement in his testimony was that, “We wouldn't (have) been here today if the internal audit hadn't done that initial audit in the year 2000.” That initial audit was the very audit that Mr. Gagliano had ordered.
He also states that you stated in Halifax, which I quote:
| There has been a lot of allegations about Mr. Gagliano without any fact and it's important that we follow due process, with someone not being tarnished unfairly in all this. |
That was in Mr. Gagliano's statement this morning, and I want to ask you if in fact that's true, if that's accurate, if that is what you said, and if you still feel that way. Well, it's not fair to say “if you still feel that way”; you said it, so unless you've changed your mind, you don't have to tell me.
Ms. Sheila Fraser: I am aware of the follow-up audit that was done. I believe the follow-up audit looked simply to see if there was proper documentation in the files, so it wasn't as broad a scope as the first one. I think the committee actually has a copy of that internal audit, but I also believe the conclusions were fairly satisfactory from that internal audit.
As to the second question, finding the minister wanting or not, that is not my role. That is not the role of an auditor general. We simply reported elements of the discussion we had with him that we thought were relevant to our audit. There is no contradiction with what Mr. Gagliano said today and what we reported in our audit report.
Mr. John O'Reilly: I was referring to a statement that apparently you made in Halifax in early March.
Ms. Sheila Fraser: I was just getting to that. I can't recall if that is word for word, but it is essentially the essence of the question. Reporters were asking if I thought people in general were being tarnished by this. I said I thought it was very important in anything like this that we follow due process and that we not jump to conclusions about anybody, be it communications agencies, individuals, anybody. That's why the process is important, and that it be done rigorously and fairly.
The Chair: Final question, Mr. O'Reilly.
Mr. John O'Reilly: So the internal audit for the period of June to September 2001 was what triggered your external audit?
Ms. Sheila Fraser: Well, no. In fact the internal audit was done. Then I believe there were access to information requests by journalists for working papers. Some of the cases were reported in the press, and amongst those were reports of moneys that had been paid to Groupaction for certain reports that could not be found. The Minister of Public Works at the time, Mr. Boudria, asked us to conduct an audit of the three contracts. That was when we first became actively involved. We were aware of the internal audit previously, but we actively became involved in auditing those three Groupaction contracts.
º (1600)
Mr. John O'Reilly: Mr. Gagliano gave us a long list of principal responsibilities of the Minister of Public Works. If there are 90,000 employees and $4 billion, when you have.... The largest budget in Ottawa, I believe, is for Defence, at some $13 billion. You have staff in Defence all the time. Do you have staff in Public Works all the time?
Ms. Sheila Fraser: We generally have a regular audit going on in Public Works probably every year to 18 months.
Mr. John O'Reilly: So would your people not pick up something like that somewhere along the line? Is that not within your purview? You need the checks and balances, I realize, to do that.
Ms. Sheila Fraser: We had looked at various aspects within Public Works at about the same time the internal audit came out. We had done an audit on personal service contracts and had found many problems generally in the process around those contracts. We've done several audits on contracting procedures and have always come up with recommendations—and hopefully improvements to the system.
Mr. John O'Reilly: Merci beaucoup.
You cut me off, Mr. Chair.
The Chair: I know I cut you off, Mr. O'Reilly.
An hon. members: Oh, oh!
The Chair: I didn't cut you off, but the clock had run out.
The law clerk advises me that he has available, now or later, guidelines for ministers, to be tabled tomorrow.
Am I correct, Mr. Walsh?
Mr. Rob Walsh: I haven't got the document in my hands right now, but we're expecting it to arrive momentarily. I believe it might be of interest to members of the committee, with respect to ministerial responsibilities.
The Chair: So it will be available by tomorrow morning, if not earlier.
Mrs. Longfield.
Mrs. Judi Longfield: Mr. Walsh said it would be ready momentarily.
The Chair: Well, “momentarily” may mean 5, 10, 15, or 20 minutes, so we're not sure how long a moment is.
Mrs. Judi Longfield: I guess I'm asking, if I were prepared to stay momentarily, could I have the documentation today?
The Chair: If it's available, absolutely.
The other thing I mentioned earlier is that we have a notice of motion by Mr. Tonks, but because we had a previous motion saying we would only meet during break weeks to hear evidence and nothing else, I require, first of all, unanimous consent to waive the committee's previous order that meetings during the break weeks be for the sole purpose of hearing evidence. If we are prepared to give unanimous consent to that, then we can deal with Mr. Tonks' motion today.
So let me ask if there is unanimous consent.
Some hon. members: No.
The Chair: There is no unanimous consent. The question was for unanimous consent and the answer is no.
Mrs. Jennings.
Mrs. Marlene Jennings: The first notice of motion is that this committee, on Tuesday, when we meet to consider the agenda, the scheduled meeting times of our committee, go through the list of witnesses who have already been identified and that we begin to slot those witnesses into the meeting time schedules. That's the first motion.
The second notice of motion is that this committee meet the Monday, Tuesday, and Wednesday: on the Monday from 11 o'clock until 4 o'clock; on the Tuesday from 9 o'clock until 4 o'clock; and on the Wednesday from 9 o'clock to 4 o'clock, with the same schedule we had this time, on the Monday, Tuesday, Wednesday that immediately follow the Friday adjournment for Easter.
The Chair: Okay, but I didn't quite get that in my mind.
Mrs. Marlene Jennings: I don't have specific dates. We adjourn on a Friday for two weeks for Easter, so on Monday, April 5, this committee meet from 11 a.m. until 4 p.m.; on Tuesday this committee meet from 9 a.m. until 4 p.m.; and on Wednesday this committee meet from 9 a.m. to 4 p.m.
The Chair: That's a notice of motion?
º (1605)
Mrs. Marlene Jennings: Yes.
The Chair: Next Tuesday is budget day, and committee rooms are hard to find. It was my intention that I would not have a full meeting of the committee and that we would again have an in camera meeting regarding witnesses. So rather than a full meeting, it would be an in camera meeting—not a secret meeting, but an in camera meeting.
Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis: On a point of order with respect to Mr. Tonks' motion, given the confusion in the room, I'm wondering if Marlene Jennings actually heard and appreciated the circumstances for needing that motion to get Mr. Guité to our committee by March 31.
So I'm wondering if we could actually reconsider. I'd like to move a reconsideration.
The Chair: Mrs. Jennings, Ms. Wasylycia-Leis has asked that the committee reconsider its denial of unanimous consent.
I'm not going to get into a debate, but I'm just going to put the question again, because as Ms. Wasylycia-Leis said, due to the timeframe of Mr. Tonks' motion.... I'm not going to get into the debate of the motion; it's not on the floor. And I'm not going to get into a debate or a reconsideration, a waiving, and so on.
So I'll put the question once more: is there unanimous consent to waive the committee's previous order that meetings during the break weeks be for the sole purpose of hearing evidence?
Some hon. members: Agreed.
The Chair: Mrs. Redman.
Mrs. Karen Redman: On a point of clarification, am I to understand from Ms. Wasylycia-Leis' comment that we are merely looking at this single notice of motion? We are waiving consent for this motion alone because of the time-sensitive nature of having a summons?
The Chair: That is correct. There is only one motion that we will deal with. I will read the motion that was given to me by Mr. Tonks:
| That pursuant to the authority provided to the Committee to summon witnesses, that Mr. Charles Guité be summoned to appear before the Public Accounts Committee at a date to be arrived at by the Chairman, but no later than April 1, 2004. |
I would ask, Mr. Tonks, if you could change that to April 1, 2004, because that's a Thursday.
Mr. Alan Tonks: Agreed.
(Motion agreed to)
The Chair: Mr. O'Reilly.
Mr. John O'Reilly: On some of the dates that were mentioned that are notices of motion, I think some are Wednesdays. I don't think we can meet on Wednesday mornings.
The Chair: The notices of motion for the meetings have just been put off to the next meeting, so there are no specific dates.
Mr. John O'Reilly: I was just concerned that you were dealing with caucus dates. I'd hate to miss caucus.
The Chair: The law clerk has advised me that he is now in receipt of the English version of the guidelines for ministers and the French version is on its way. If those who would like copies want to wait, they will be here. The English one is now available. Has the French version arrived?
Mr. Walsh.
Mr. Rob Walsh: I am advised that the French version will be here momentarily.
This is a document dated 2003. There is, I believe, a history to this document. The committee might consider making a motion for the Privy Council Office to provide the earlier versions of this document pertaining to the years that are the subject of the committee's inquiry, in case there are differences. This edition is dated 2003. It's called “Governing Responsibly: A Guide for Ministers andMinisters of State”.
The Chair: Okay.
There were some other points. On a point of information, Mrs. Jennings.
Mrs. Marlene Jennings: On our hearings tomorrow, at what time will they begin and end?
The Chair: It will be the same as today. They will go from 9 a.m. until 11 a.m.; 11:30 a.m. to 1 p.m.; and 2:30 to 4 p.m.
Mrs. Marlene Jennings: Thank you.
Mr. Peter MacKay: Pursuant to Mr. Walsh's advice, I move that we request the earlier documentation so that we have the appropriate--
The Chair: We just requested those documents. I don't think we need a motion. That will just be done. The clerks will take care of that.
Monsieur Desrochers, s'il vous plaît. You have a point.
[Translation]
Mr. Odina Desrochers: Mr. Chair, you say Mr. Gagliano will be back tomorrow morning from 9:00 to 11:00. Is that correct?
[English]
The Chair: The notice will be going out tonight regarding tomorrow. That's all.
[Translation]
Mr. Odina Desrochers: I want...
[English]
The Chair: Yes, Mr. Gagliano will be here tomorrow.
[Translation]
Mr. Odina Desrochers: Mr. Chair, let me finish my question. Will we have other witnesses tomorrow? At a steering committee meeting, we talked about the possibility that another witness might appear tomorrow. I just want to ensure that tomorrow...
º (1610)
[English]
The Chair: The notice of the meeting will be going out. We expect Mr. Gagliano back tomorrow morning. Myriam Bédard will be here as well.
[Translation]
Mr. Odina Desrochers: At 11 o'clock?
[English]
The Chair: It will be at 11:30 a.m.
[Translation]
Mr. Odina Desrochers: Thank you very much, Mr. Chair.
[English]
The Chair: Is there any further business?
The meeting is adjourned.