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37th PARLIAMENT, 3rd SESSION

Standing Committee on Public Accounts

EVIDENCE

CONTENTS

Tuesday, February 24, 2004

1105

The Chair (Mr. John Williams (St. Albert, CPC))

1110

Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, CPC)

1115

The Chair

Mr. Alan Tonks (York South—Weston, Lib.)

The Chair

Mr. Alan Tonks

The Chair

Hon. Walt Lastewka (St. Catharines, Lib.)

The Chair

Mr. Gerald Keddy (South Shore, CPC)

The Chair

Mr. Gerald Keddy

The Chair

Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.)

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Odina Desrochers (Lotbinière—L'Érable, BQ)

1120

The Chair

Hon. Joe Jordan (Leeds—Grenville, Lib.)

The Chair

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP)

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Vic Toews (Provencher, CPC)

The Chair

Hon. Shawn Murphy (Hillsborough, Lib.)

The Chair

1125

Mrs. Marlene Jennings

The Chair

Mr. Odina Desrochers

The Chair

Hon. Joe Jordan

The Chair

Hon. Joe Jordan

The Chair

Hon. Joe Jordan

The Chair

Hon. Joe Jordan

The Chair

Hon. Joe Jordan

The Chair

Hon. Joe Jordan

The Chair

1130

Mr. Dennis Mills (Toronto—Danforth, Lib.)

The Chair

Mr. Vic Toews

The Chair

Hon. Walt Lastewka

The Chair

Mr. Vic Toews

Mr. Dennis Mills

Mr. Vic Toews

1135

The Chair

Ms. Judy Wasylycia-Leis

Mr. Vic Toews

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Odina Desrochers

The Chair

1140

Mr. Odina Desrochers

The Chair

Mr. Odina Desrochers

The Chair

Mr. Odina Desrochers

The Chair

Mr. Odina Desrochers

The Chair

Mr. Gerald Keddy

The Chair

Hon. Shawn Murphy

The Chair

Mr. Jason Kenney (Calgary Southeast, CPC)

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

Mr. Jason Kenney

The Chair

Mr. Jason Kenney

The Chair

Mr. Jason Kenney

1145

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Dennis Mills

The Chair

Mr. Vic Toews

Hon. Walt Lastewka

The Chair

Hon. Walt Lastewka

The Chair

Mr. Vic Toews

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

1150

The Chair

Ms. Beth Phinney (Hamilton Mountain, Lib.)

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

1155

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Hon. Joe Jordan

The Chair

Hon. Joe Jordan

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

Hon. Walt Lastewka

The Chair

Mr. I. David Marshall (Deputy Minister, Department of Public Works and Government Services)

1200

Mr. George Butts (Director General, Acquisition Program, Integrity Secretariat Sector, Department of Public Works and Government Services)

1205

1210

1215

1220

The Chair

Mr. I. David Marshall

Ms. Yvette Aloisi (Assistant Deputy Minister, Corporate Services, Human Resources and Communications Branch, Department of Public Works and Government Services)

The Chair

Ms. Yvette Aloisi

1225

The Chair

Ms. Yvette Aloisi

The Chair

Ms. Yvette Aloisi

1230

1235

The Chair

Mr. I. David Marshall

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Hon. Joe Jordan

The Chair

The Clerk of the Committee

The Chair

Mr. Vic Toews

Mr. I. David Marshall

Mr. Vic Toews

The Chair

Mr. I. David Marshall

Mr. Vic Toews

1240

Mr. George Butts

Mr. Vic Toews

The Chair

Mr. George Butts

Mr. Vic Toews

Mr. George Butts

Mr. Vic Toews

Mr. George Butts

Mr. Vic Toews

Mr. I. David Marshall

Mr. Vic Toews

Mr. I. David Marshall

Mr. Vic Toews

The Chair

Mr. Vic Toews

Mr. I. David Marshall

1245

Mr. Vic Toews

The Chair

Mr. Odina Desrochers

Mr. I. David Marshall

The Chair

Mr. Odina Desrochers

Mr. I. David Marshall

Mr. Odina Desrochers

Mr. I. David Marshall

Mr. Odina Desrochers

Mr. I. David Marshall

Mr. Odina Desrochers

Mr. I. David Marshall

Mr. Odina Desrochers

1250

Mr. I. David Marshall

Mr. Odina Desrochers

Mr. Jim Judd (Secretary of the Treasury Board and Comptroller General of Canada, Treasury Board of Canada Secretariat)

Mr. Odina Desrochers

Mr. Jim Judd

Mr. Odina Desrochers

Mr. Jim Judd

Mr. Odina Desrochers

Mr. Jim Judd

Mr. Odina Desrochers

Mr. Jim Judd

Mr. Odina Desrochers

Mr. Jim Judd

Mr. Odina Desrochers

The Chair

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.)

Mr. Jim Judd

1255

Mr. Dominic LeBlanc

Mr. Jim Judd

Mr. Dominic LeBlanc

Mr. Jim Judd

Mr. Dominic LeBlanc

Mr. Jim Judd

Mr. Dominic LeBlanc

Mr. Jim Judd

Mr. Dominic LeBlanc

Mr. Jim Judd

Mr. Dominic LeBlanc

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

Ms. Yvette Aloisi

Mrs. Marlene Jennings

Ms. Yvette Aloisi

Mrs. Marlene Jennings

Ms. Yvette Aloisi

1300

Mrs. Marlene Jennings

Ms. Yvette Aloisi

Mrs. Marlene Jennings

Ms. Yvette Aloisi

The Chair

Mr. Vic Toews

The Chair

CANADA

Standing Committee on Public Accounts

NUMBER 005

3rd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, February 24, 2004

[Recorded by Electronic Apparatus]

Á (1105)

[English]

The Chair (Mr. John Williams (St. Albert, CPC)): I call the meeting to order, so I will ask all the cameras to vacate the room, please.

Good morning, everybody. Our orders today are pursuant to Standing Order 108(3)(g), chapter 3, the sponsorship program; chapter 4, advertising activities; and chapter 5, management of public opinion research, from the November 2003 report of the Auditor General of Canada, referred to the committee on February 10, 2004.

Our witnesses today are from the Department of Public Works and Government Services, Mr. David Marshall, Deputy Minister, and from Treasury Board of Canada Secretariat, Mr. Jim Judd, Secretary of the Treasury Board and Comptroller General of Canada.

Also from the Department of Public Works and Government Services, we have Yvette Aloisi, Assistant Deputy Minister, Corporate Services, Human Resources and Communications Branch; Mr. George Butts, Director General, Acquisition Program, Integrity Secretariat Sector; and Mr. Guy Bédard, Assistant Executive Director, Public Programs and Services Branch at Communications Canada.

I would like to mention to our witnesses, who are senior people in government, that we did unfortunately keep you waiting last week, and I apologize for that. Sometimes it's difficult to tell how much progress the committee makes at any particular time, and I do want to offer our apologies to busy people who have much on their plate if perchance we do keep them waiting--and that may even happen again today. So please accept our apologies.

Before we get into the testimony we have one or two items of business that I would like to deal with. First is the tabling of documents.

We have a letter from Canada Post, which will be circulated to the gallery after I have read it, and it is being distributed to members of the committee. It's from Mr. André Ouellet, the President and Chief Executive Officer of Canada Post, addressed to the clerk, Mr. Bernard Fournier. It says:

Dear Mr. Fournier:

I have received your letter dated February 20, 2004 in which we are advised of the Committee's request for the names of the individuals who authorized financial transactions described in the Auditor General's report. The Corporation is pleased to provide those names which are as follows:

George Clermont, Stewart Bacon, Daniel J. Sawaya, Alain Guilbert and Micheline Montreuil.

I reiterate my readiness to appear before the Committee to discuss the issues raised by the Auditor General. I look forward to receiving word about an appearance before the Committee.

Sincerely,

André Ouellet

That has been tabled, and I think you all have copies.

I've also received two letters from the Auditor General of Canada, one dated February 23:

Dear Mr. Williams:

During the February 19 hearing, a member referred to Chapter 5 (paragraph 5.31) of our November Report. Specifically, the member asked which 10 departments had subscribed to the syndicated survey Rethinking Government for a total cost of $270 000. The departments that subscribed to the survey were the following:

Canadian Heritage

Citizenship and Immigration Canada

Communications Canada

Environment Canada

Health Canada

Indian and Northern Affairs Canada

Industry Canada

Privy Council Office

Transport Canada

Treasury Board Secretariat

I trust that this information responds to the member's question. I would be pleased to assist the Committee in its future deliberations.

Yours sincerely,

Sheila Fraser, FCA

The letter is copied to the clerk.

Á (1110)

I also have a letter from the Auditor General, dated February 20, 2004, addressed to me:

At the February 19 meeting of the Standing Committee on Public Accounts, the issue of access to our audit working papers was raised. I would like, as a matter of record, to outline my position on providing the Committee with information contained in our audit working papers.

We have a broad right of access to information in the course of our audits, and we frequently obtain information that is privileged, commercially sensitive, or a Cabinet confidence. Maintaining the confidentiality of information that we obtain in the course of an audit is one of the fundamental principles governing the way my Office operates. We do not disclose such information except to the extent permitted by law--in particular, the Auditor General Act and the Financial Administration Act. The relationship between auditor and auditee is itself regulated by the rules of professional conduct of the various accounting institutes; by the nature of that relationship, we have a duty, analogous to that of a trust relationship, to maintain the confidentiality of such information.

This duty has been recognized through our exemption from the Access to Information Act. There is no formal avenue of access to documents under our control. Our policy has always been to report what we believe is significant; information that we do not include in our reports remains confidential. We must also protect personal information, as required by the Privacy Act. I trust the Committee will appreciate that the audit process itself could be hampered if information we receive in the course of an audit were not maintained in confidence.

It was for these reasons that I suggested in my letter to you of February 18 that it would be more appropriate if the Committee obtained the information directly from the entities or the government. I understand that the government has agreed to provide all the information the Committee has requested.

That said, we recognize that your Committee has a very broad right to call for witnesses and request information. In this particular case, we understand that the Committee would naturally expect to have information provided to it by the Auditor General, an officer of Parliament.In view of the particular circumstances surrounding this Report, I would be prepared to provide the Committee with information on the transactions dealt with in my Report should the Committee be unable to obtain the information in a timely manner from the entities themselves or from the government.

I regard this as an example of the very rare situation where it would be appropriate for me to disclose information from our working files on the basis that all other avenues to obtain that information had been attempted and found wanting.

I would hope that this solution is acceptable to the Committee and I will, of course, make myself available to the Committee to answer any further questions it may have.

Yours sincerely,

Sheila Fraser, FCA

A copy was sent to the clerk.

Do you have a brief comment, Mr. Forseth?

Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, CPC): Yes, because I was the one who pushed that point. I appreciate the Auditor General's advice, but I take it as advice. She talked about policy, and that is fine for the Auditor General to have policy. But I would also say that the committee is capable of being considerate of those concerns on a case-by-case basis.

The offer of the Auditor General to cross-check documents and provide material that may not be available from original sources is greatly appreciated. However, I must remind you that nothing shall ever limit the ability of this committee; it has a legal right to pursue where it needs to pursue. But, of course, mindful of all the caveats that the Auditor General has given us, we would always move forward with the best advice on what is socially, legally, and ethically appropriate at that time. I only want to signal that the committee has its right.

Á (1115)

The Chair: I think that has been acknowledged by the Auditor General in her letter, but prudence is always a good way to proceed.

Mr. Tonks.

Mr. Alan Tonks (York South—Weston, Lib.): Thank you, Mr. Chairman.

On the same point, in terms of the points raised by the Auditor General, a letter was sent out to Mr. David Marshall with respect to minutes of the CCSB and other pertinent information. Do we have a response back to that?

The Chair: The clerk said we don't have it yet, but Mr. Marshall will explain it when he appears as a witness.

Mr. Alan Tonks: Thank you, Mr. Chairman. I only wondered if the committee had a response.

The Chair: Mr. Lastewka.

Hon. Walt Lastewka (St. Catharines, Lib.): There were some questions that the Auditor General said she would get back to us on from the meeting we had. I don't seem to have all the answers back. Is she still providing information that was requested at the meeting on February 12?

The Chair: We deferred from the Auditor General and requested the information directly from the crown corporations, Mr. Lastewka. The Old Port of Montreal has responded. Canada Post responded this morning. We have not had a response from the others. In accordance with Ms. Fraser's letter, as she said, in the event that they do not provide the information on a timely basis, she will provide it herself.

Mr. Keddy.

Mr. Gerald Keddy (South Shore, CPC): Thanks, Mr. Chairman.

There was another question, the request of Ms. Kathy O'Hara for all the names of the people running the voluntary action program from 1993 to 1996.

The Chair: We're dealing with Ms. Fraser's letter at this point in time. That's another issue.

Mr. Gerald Keddy: The point is we had requested a number of names. That was one of the requests that went out.

Do we have any answer on that?

The Chair: No.

At this point in time, I will table all documents at the beginning of each meeting, as the first order of business, as I receive them. If I don't table them, I don't have them.

We do have some other documents, and they are contained in the red boxes. They are the first cabinet documents, I understand, to have been released in history. They are thick binders. There are three binders and a letter for everybody.

It is my suggestion to the committee that we distribute them to the committee, and one embargoed copy to the press gallery, so that it can copy it for the media and for anybody else who would like a copy. That copy should be available on Thursday morning, once committee members have had a chance to review the binders themselves. It's a public document on Thursday morning, but this will give you, as members, a couple of days to look at it. It will also give the press gallery a couple of days to make photocopies, so that the binders are widely distributed.

Is this acceptable?

Madam Jennings, do you have a point?

Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): I honestly would prefer that the documents remain with the committee members, and no one else, until we have had a chance to look at them and make a determination as to whether or not we wish to publicize every single document or whether or not we wish to hold some back.

[Translation]

I will go with the will of the committee, but that would be my preference.

[English]

The Chair: Why don't you make that a motion that we have them distributed to the committee? The committee has to respect that they are given as private documents, and if, as, and when the committee agrees to release them, they will be released at that point.

Mrs. Marlene Jennings: I so move.

The Chair: There is a motion on the floor.

We will have debate.

[Translation]

Mr. Odina Desrochers (Lotbinière—L'Érable, BQ): Fine, I will debate it.

This government claims to want more transparency. The Standing Committee on Public Accounts is not going to get into the habit of receiving documents and keeping them on members' desks for 48 hours before allowing the media to be apprised of them. As far as I know, these are public documents. If certain members wish to cooperate with the media, I certainly hope we will not prevent them from doing so, Mr. Chairman.

I personally insisted on including the word “Tuesday” in my motion. The documents are available. It may not be easy to photocopy everything at once, but I think it is too much to ask that the documents be held until Thursday so that we can look at them. The media have to do their job and we should be cooperative.

Á (1120)

[English]

The Chair: Mr. Jordan, Ms. Wasylycia-Leis, and Ms. Jennings.

Hon. Joe Jordan (Leeds—Grenville, Lib.): Mr. Chair, with all due respect to my colleague, I think what you're proposing is reasonable. The issue of releasing the documents is that we're going to be having the hearings in public anyway, so if we don't follow either your suggestion or the expedited suggestion of my colleague from the Bloc, then when stuff gets released, it will be up to individual members when they are asking and answering questions.

I think the simplest solution is to release them as public documents. Clearly, the commitment has been made; we voted on a motion to do that. I think that's the road we're on, and we need to continue down that road.

The Chair: Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Let me speak against the motion.

I agree with the suggestion that if we are a committee trying to get at the whole issue of transparency around the sponsorship scandal, then everything we do should, as much as possible, be done on that same basis.

I think if it weren't for the media, we may never have been informed of this scandal all along. We need to work openly, and we need to follow the chair's recommendation that in fact an embargoed copy be given to the media, so that we can all work from the same basis on Thursday.

The Chair: Madam Jennings.

Mrs. Marlene Jennings: First of all, my job here as a parliamentarian is not to work with the media; it's not to do the work of the media. I have been elected, as has every single person around here, and I see my role as being accountable to Parliament, to the House of Commons, and to my electors. That being said, we all know it is unprecedented that the Prime Minister release cabinet documents.

I'm not saying that this committee, in its wisdom, will not release and make public every single one of these documents, but there usually is a principle by which committees operate, and that is, yes, it's open, yes, it's transparent, but it's the committee that determines itself what requires publication and what is pertinent and what is not pertinent and therefore does not require publication. I'm saying this authority rests with this committee. Therefore I think this committee, cognizant of all of the documents, should determine whether or not all of the contents of all of the documents are pertinent and therefore require publication or not. That is all I am saying.

The Chair: Mr. Toews.

Mr. Vic Toews (Provencher, CPC): I would disagree with Ms. Jennings' comments. I think the determination as to which documents are to be made public, at a minimum, have already been made for us. Those documents are sitting there. As far as cabinet is concerned, those are ready to be released publicly.

I have not heard one reason why there should be any delay and contradiction of cabinet's determination that those documents are public. Unless Ms. Jennings has some kind of a statement, and perhaps that's why the 48-hour thing is not bad.... Frankly, if cabinet has no concerns about it, why should this committee? This committee's role is not to stop the publication of information; it's to facilitate the release of that information.

The Chair: Mr. Murphy.

Hon. Shawn Murphy (Hillsborough, Lib.): I want to go on the record as agreeing with the comments just made by Mr. Toews, that the documents should be released in accordance with your suggestion, Mr. Chair.

The Chair: Okay.

I think we've had the debate, and this seems to be coming to a consensus. I would like to try to facilitate an orderly release of the documents. Of course, once they're in the hands of 17 people they will get out without control, so I would ask people to please respect the confidentiality of these documents until the meeting commences on Thursday morning. By that time there will be enough photocopies made available for an orderly dissemination of the information, rather than somebody grabbing a page here and a page there.

In that case, Ms. Jennings' motion will have to be defeated. Do you wish to withdraw the motion?

Á (1125)

Mrs. Marlene Jennings: Given that the debate has shown a clear consensus among the members of this committee, government and opposition members, I will withdraw my motion.

The Chair: Okay. Therefore the recommendation of the chair will stand that an embargoed copy will be given to the gallery, who will make whatever number of copies they feel is appropriate.

Mr. Desrochers.

[Translation]

Mr. Odina Desrochers: Mr. Chairman, if we want to make sure that reporters get the information they need, could we not decide how many copies are needed and make a number of extra copies for when we hand over the documents? If we need to take money out of our budget to make copies for reporters, then let us do so. If we had enough money to make triplicates of Groupaction's documents, then we can also make copies for reporters.

[English]

The Chair: Mr. Desrochers, we're talking about three binders. We cannot do this in five minutes. Two days I think is reasonable, because I've made a decision that I will only release documents at committee. We will not float them out as we have them available. That way everybody knows the committee will get them first, and at the beginning of the meeting I will release the documents. The next meeting is Thursday morning; they will be released on Thursday morning.

Moving on, according to the motion by Ms. Wasylycia-Leis, there is a very short report, which is only basically three paragraphs long, to be tabled in the House of Commons dealing with whistle-blowing legislation. I would hope we can fairly well approve it. If not, we will just refer it to a later date.

Mr. Jordan.

Hon. Joe Jordan: Just as a point of information, Mr. Chair, I think if you spoke to the chair of the Standing Committee on Government Operations and Estimates, you would find that they would concur with this motion as well, and it may be helpful if there's some weight behind it.

The Chair: Okay. I can speak to the government ops committee, but they would have to go through the same process as we are of tabling a report. They can submit their own report as well. So Ms. Wasylycia-Leis can make the rounds and make that motion there as well.

So it's basically that on Tuesday, February 17, 2004, the committee met with the President of the Treasury Board, the Honourable Reg Alcock, to discuss matters related to chapters 3, 4, and 5 of the November 2003 report of the Auditor General of Canada. One of the topics of discussion involved the desire by the President of the Treasury Board to extend to the members of the Public Service of Canada the same form of protection they would have under a proper whistle-blowing regime in the absence of that regime. That was the testimony, and reference is given.

The committee shares the concern expressed by the President of the Treasury Board and notes that on February 10, 2004, the government announced its intention to introduce legislation to protect disclosers of wrongdoing no later than March 31, 2004. In this regard, the committee wishes to inform the House of Commons that it unanimously adopted a motion urging the government to introduce effective whistle-blowing legislation at the earliest opportunity.

I don't think we need much debate on that.

So there are two questions. First, shall the draft report be adopted as presented?

Some hon. members: Agreed.

The Chair: Shall the chair present the report to the House?

Some hon. members: Agreed.

The Chair: The next one is the report from the subcommittee on agenda and procedure.

Mr. Jordan.

Hon. Joe Jordan: Just in terms of order, I think Mr. Mills gave notice of a motion at the last meeting.

The Chair: He is next. I have him after the steering committee report.

Hon. Joe Jordan: It's not on the agenda. So I'm just wondering, in terms of timing, whether we might not go to Mr. Mills and let him speak to his motion, because I actually had to go through the notes of the committee to sort out exactly where it stood. I understood it was tabled and he did get--

The Chair: Yes, it's the next item after the steering committee.

Hon. Joe Jordan: The reason I say that is because I think it might impact on that motion.

The Chair: Which one?

Hon. Joe Jordan: The second report of the steering committee, because, if I remember correctly, it does deal with witnesses.

The Chair: The clerk says we're okay. But if you really want to it's no big deal. We can switch. Do you want to switch the reference?

Hon. Joe Jordan: Yes, if we could.

The Chair: Okay. We'll deal with Mr. Mills' motion, which I understand from the clerk has been circulated in both official languages. Notice was given and therefore it is properly before the committee.

It is moved by Mr. Dennis Mills that this committee invite the ministers and deputy ministers of Public Works and Treasury Board, for the period covering the sponsorship program, to appear as a panel to discuss their ministerial responsibilities; and that on February 26, 2004, the time provided be unlimited, only to be interrupted by question period, so that all questions can be answered and the issue can be dealt with expeditiously.

Mr. Mills, speak to your motion.

Á (1130)

Mr. Dennis Mills (Toronto—Danforth, Lib.): Thank you very much, Mr. Chair.

As you can remember when Mr. Walsh, our legal adviser to the committee, talked to us in the initial stages, he said that essentially this issue is going to boil down to ministerial responsibility. That, combined with due process, which I asked the Minister of the Treasury Board about when he was here a couple of weeks ago, I think forms the basis that we allow the ministers responsible to come before us.

As you know, there's a public perception out there right now that $100 million went out the back door. And as the Auditor General told us last week, that is not in fact the case. We have a distinction here between fees, production costs, and she added managerial costs, and I really believe that if we're going to get this discussion on a solid footing and due process is respected, these ministers should come before us all at once.

The Chair: Okay. Thank you, Mr. Mills.

Mr. Toews.

Mr. Vic Toews: Thank you, Mr. Chairman.

I think that in due course, indeed, these ministers should come before this committee, not as a panel but individually. I can see one minister and one witness playing off against each other. Talk about due process. Talk about a complete lack of due process, Mr. Chair.

Mr. Chair, today we see documents behind us there, boxes of documents, that we have not seen. Today is February 24. This member is now bringing forward a motion to bring forward the cabinet ministers. We haven't even had a chance to see these particular documents.

We haven't had a chance to hear from Public Works. We haven't had a chance to hear from Public Works as to how contracts, generally speaking, are authorized, and if this in fact was an exception, which has been suggested by some members, why that exception occurred and the process inside the department. The proper groundwork for establishing the testimony of the ministers has not been established.

What we are seeing here, Mr. Chair, is a deliberate attempt to get the ministers onto the stand, so to speak, before we can even have the background information to be able to properly question them and cross-examine them. This is one of the biggest scams that I have ever heard of. I don't know what the member's experience is, in terms of putting forward a case.

The Chair: A point of order, Mr. Lastewka.

Hon. Walt Lastewka: I think we need to speak to the motion. If the member has a concern with the date, then we need to talk about the date. It's the intent of the motion. I think the discussion should be to the intent of the motion, not all the political grandstanding.

The Chair: Okay. Mr. Toews, can you restrict your remarks to the motion presented?

Mr. Vic Toews: Well, I am. I've spoken to two aspects. I'm speaking to two aspects at present. The date is the first aspect. The second aspect is that we have not heard the background evidence to even know which ministers are the appropriate ministers to call.

Mr. Dennis Mills: We know who they are.

Mr. Vic Toews: The member across the way says “we know who they are”. Well, frankly, Mr. Chair, we don't know who they are.

Only the witnesses from the civil service will be able to flesh out the details, the process, the lack of process, the lack of contracts. To suggest that we bring these ministers here in a great big ball and then start trying to unravel how these matters interacted with the civil service is one of the most irresponsible things I have ever heard of in my life.

The process that needs to take place, Mr. Chair, is we need to set out the groundwork. The groundwork is set out by calling the appropriate witnesses from the departments and making sure that every piece of paper is here on what the process is for the contract.

I cannot support this, and I can't believe that this was actually brought forward seriously.

Á (1135)

The Chair: Okay.

Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.

I, too, want to get to the bottom of this horrific chapter in the life of this government as soon as possible. I don't think Canadians will have much patience with a long, protracted process that will take many months, as we collect the documents, study each one, and get to the bottom of it. Therefore I'm a bit concerned with the Conservatives' suggestion that we have to set out the groundwork, build the case, and move from the ground up, because that could go on forever.

I think we have been charged with the mandate to try to assess ministerial responsibility and confidence in this government as quickly as possible. I do not believe, however, that this motion itself will allow us to do that. I think if I read this motion correctly, the member is suggesting that we hear in one fell swoop, in one morning--

Mr. Vic Toews: No, all day, unlimited.

Ms. Judy Wasylycia-Leis: --okay, even all day--from Mr. Dingwall, Mr. Gagliano, Mr. Goodale, Mr. Boudria, Madam Robillard, Mr. Alcock.... Who else? That's just at the ministerial level.

Mr. Chairperson, the Liberals are proposing a method for doing this that is not workable, that will lend itself to confusion, and that will in fact create the appearance of this committee sloughing off the work it has to do and giving the government a free ride to bury this issue and get on with it. That is not the solution. The solution is for the steering committee to meet as soon as possible after this meeting to determine a reasonable set of witnesses that combines the need to work from the ground up with the need to get at the issues as quickly as possible.

The Chair: I think we could go around forever on this issue. Therefore, I think Ms. Wasylycia-Leis's point is correct, that we refer this to the steering committee, which meets immediately after this meeting. The February 26 date is coming up very quickly. I think if we are going to have a long debate, perhaps it should go to the steering committee. So if someone wishes to make that tabling motion, fine.

I have Mr. Keddy, Mr. Kenney, Ms. Jennings, and Mr. Desrochers on my list. Ms. Wasylycia-Leis may want to make another point. Mr. Mills wants to make a point. We could go on for a long, long time.

Ms. Judy Wasylycia-Leis: I have a point of order. My comments were meant to move that we table this and deal with it at the steering committee.

The Chair: The motion is to table. The motion is not debatable. The motion is that Mr. Mills' motion be tabled and referred to the steering committee. I'm going to call the question.

Mr. Dennis Mills: Could you repeat that, Mr. Chairman?

The Chair: The motion is a tabling motion put forward by Ms. Wasylycia-Leis that your motion, Mr. Mills, be referred to the steering committee.

Mr. Dennis Mills: Mr. Chair, can I respond to Ms. Wasylycia-Leis?

The Chair: It's not debatable, but I will allow you an intervention since it's your motion.

Mr. Dennis Mills: Mr. Chair, I'm perfectly willing and happy to collaborate and work with the committee because I think we all have the same intention here. As our legal adviser said, we put a focus here on ministerial responsibility. There are reputations and there are names of a lot of people who are being slandered across this country right now, and we as parliamentarians are not giving them due process.

The Chair: I think we're very cognizant of the situation, Mr. Mills, which is why I'm very much in control of the release of documents and names.

I'm going to put the question on tabling.

Mr. Desrochers, is this a point of order?

[Translation]

Mr. Odina Desrochers: We have not even finished discussing Mr. Dennis Mills' motion and already you want to move on to the next one. I would like us to conclude discussion on the first one. I think we are going too fast.

Mr. Chairman, every time we decide to hand a matter over to the steering committee...

[English]

The Chair: You're out of order, Mr. Desrochers. The debate will continue at the steering committee.

Á (1140)

[Translation]

Mr. Odina Desrochers: Mr. Chairman, you cannot propose a motion on a point of order.

I would like to conclude the debate on Mr. Mills' motion.

[English]

The Chair: Mr. Desrochers, let me assure you that if the committee decides, this will be referred to the steering committee for further debate.

The motion to table is perfectly in order, and I'm going to put the question now.

Mr. Odina Desrochers: I refuse the consensus.

The Chair: You can refuse the consensus.

Mr. Odina Desrochers: I'm not agreeing. You need a consensus to do it.

The Chair: I don't need a consensus.

Mr. Odina Desrochers: You didn't bring the motion forward 48 hours before.

The Chair: Mr. Desrochers, I'm calling the question. Will you please refrain?

(Motion negatived)

The Chair: We continue the debate.

Mr. Keddy is next.

Mr. Gerald Keddy: Thank you, Mr. Chairman.

I'm just absolutely amazed at this motion and the fact that we'd want to bring not one, two, or three, but perhaps four, five, or six ministers of the crown here at the same time, have back-to-back hearings, stop for a little washroom break and maybe have a sandwich, and try to deal with this issue all in one day. That's absolutely impossible. We can't get half of these ministers here to produce their own estimates to the committee and you expect them to come and be able to deal with this in a day. That's just a sham. That's absolutely ridiculous.

The Chair: Thank you.

We're going to hear from Mr. Murphy, Mr. Kenney, and Ms. Jennings.

Hon. Shawn Murphy: Mr. Chairman, I agree with the principle of the motion. However, common sense also has to enter into the debate. If the date is a problem, maybe we can talk about the date.

I think it's important that the ministers appear here. I don't see any problem, despite what's being said on the other side, with them appearing together. That's the problem with this committee sometimes. We have a deputy minister coming before us, and he's the second or third deputy removed from the incident. This is why it's so important to get these people within the four walls of this room--

An hon. member: One at a time.

Hon. Shawn Murphy: --they'll talk one at a time--to find out why the department was set up in the manner it was and why the correct oversight was not in place so that this was allowed to happen. I don't see anything wrong with having these ministers here in a room to hear the testimony of other ministers and to find out the answers to these questions.

The Chair: Mr. Kenney.

Mr. Jason Kenney (Calgary Southeast, CPC): I have a lot of regard for the member who put this motion. Could I ask him a question of clarification about the motion?

When Mr. Mills says in this motion “all of the ministers”, would that include Alfonso Gagliano?

Mr. Dennis Mills: I will be very specific. It said “since the sponsorship program began”, so it's Dingwall, Gagliano, Boudria, Goodale, and the President of the Treasury Board, Lucienne Robillard--five ministers.

The Chair: How many deputy ministers, Mr. Mills?

Mr. Dennis Mills: Well, presumably there could have been one deputy minister for three ministers. It would be the appropriate deputy ministers.

Mr. Chairman, in seeking the advice of our legal counsel, Mr. Walsh, in the very first meeting when he came to advise our committee, it was he who said this ultimately is an issue of ministerial responsibility.

Mr. Jason Kenney: If I could make my intervention, I do want to draw this back from the partisan colour it has taken, because I do think there is a very serious problem with the motion, which maybe Mr. Mills didn't contemplate. If there are five ministers and perhaps five deputy ministers, that's a panel of 10 people.

The Chair: We're not going to have a debate. There are five ministers from Public Works, two deputy ministers from Public Works, two presidents of the Treasury Board, and three secretaries of the Treasury Board, which is 12 people.

Mr. Jason Kenney: Mr. Chairman, with respect, I really do think that's unworkable. I'm sure Mr. Mills, who is a very diligent member, would see that as being unworkable.

I don't understand what the point is here. I think we all recognize, Mr. Chairman, that the key witness in this whole affair is former Minister Gagliano.

The Chair: Okay, thank you.

Mr. Jason Kenney: No, no, Mr. Chairman, if I could just make the point, please, there's no disputing that Mr. Gagliano is the key witness. In a similar scandal in front of a congressional or British parliamentary hearing, a key witness like that could appear for two, three, or more days because of the critical knowledge they have.

I really don't think Mr. Mills is suggesting that the Minister of Finance, who's preparing a budget for the next couple of weeks, should have to sit here through two or three days, or several hours, for that matter, of questioning Alfonso Gagliano.

It seems to me we're trying to bury the key witness here in an enormous panel that will waste a lot of people's time, and it's not logistically feasible.

Á (1145)

The Chair: Madam Jennings.

Mrs. Marlene Jennings: I must say that on the face of it I'm supportive of this motion. At the same time I do have some concerns, one of which was just expressed by Mr. Kenney. It's quite clear. I think the principal minister during the period of the sponsorship program—and I'm using “program” judiciously, because we've been told it wasn't a program until 2002—was the primary minister at the time.

So I would, with the indulgence of this committee, suggest that this motion could in fact be amended to state that we wish to hear from the ministers, deputy ministers, and Treasury Board for the period covering the sponsorship program, to begin with Mr. Gagliano, and that the appearance of the others would be determined by the subcommittee.

I think that would be a very good way that this committee could move forward with its job, because we know it is ministerial accountability. Therefore, we know those are the principals who may have some responsibility in the problems that were uncovered by the Auditor General.

So I would say we do that, beginning on the 26th with Mr. Gagliano, but we do not call as a panel every single one. We know the list, and we begin with Mr. Gagliano. The order of the rest can be determined by the steering committee.

The Chair: Thank you, Ms. Jennings.

Mr. Mills, if I can paraphrase, you're agreeing with Madam Jennings' recommendation that we do not have a round table but that the subcommittee on witnesses would bring these particular people forward on a particular schedule.

Is that agreed?

Mr. Dennis Mills: To begin with Mr. Gagliano on the 26th.

The Chair: Okay. The motion has been amended. There's a significant change in the motion.

Mr. Toews.

Mr. Vic Toews: I have a point of order. That motion would not be in order. If they want to bring that kind of motion, bring it for the 26th. I haven't had a chance to look at those documents so I don't know what's in them relative to Mr. Gagliano. I have a right, as a committee member, to be apprised of what's in those documents before we bring the key witness forward. I'm surprised this member would bring this kind of sham in order to thwart the activities of this panel.

Hon. Walt Lastewka: Mr. Chairman, we have a motion on the floor. I don't believe we--

The Chair: Just a second, Mr. Lastewka. Before you get to that, Mr. Toews raised a point of order concerning the validity of the motion.

Hon. Walt Lastewka: That's what I'm speaking to.

The Chair: The clerk advises that the proposed change is in order; therefore I will rule that it is in order. The motion has been amended. Are we all comfortable with what it now means?

The motion is that the five ministers of Public Works, the two ministers of Treasury Board, the two deputy ministers of Public Works, and the three secretaries of the Treasury Board be called before this committee in accordance with the schedule developed by the subcommittee on witnesses, starting on February 26 with Mr. Gagliano.

Do you understand that motion?

Mr. Toews.

Mr. Vic Toews: With Mr. Gagliano being first, but no date set for that.

An hon. member: Starting on the 26th.

Ms. Judy Wasylycia-Leis: Can I speak in favour of the motion?

The Chair: You can speak in favour or against.

Ms. Judy Wasylycia-Leis: I think this is a reasonable compromise. It shows the cooperative spirit that we can accomplish occasionally at this committee. We have two days to review the cabinet documents to prepare for questioning of Mr. Gagliano. Of course, that does not preclude us from inviting him back to this committee.

Á (1150)

The Chair: Are we ready for the question? All those in favour of the amended motion? Opposed?

(Motion as amended agreed to)

The Chair: Moving quickly to the second report of the steering committee, the subcommittee met on Thursday, February 19, and agreed to make the following recommendations:

1. With regard to witnesses who may appear before the committee in relation to its study of chapters 3, 4, and 5 of the November 2003 report of the Auditor General of Canada, the committee will decide which witnesses to call based on discussions within the committee or recommendations from the subcommittee on agenda and procedure or the subcommittee on witness protection and testimony; the subcommittee on witness protection and testimony may meet in camera with potential witnesses whose names are not in the public domain and make recommendations to the committee as to the manner of receiving their evidence; and the committee and its subcommittees may have the office of the law clerk and parliamentary counsel meet with possible whistle-blowers and make recommendations to the committee or its subcommittees as to the manner of receiving their evidence.

2. If required, the committee will hold meetings on March 1 and/or March 2 for the sole purpose of receiving and publishing evidence.

3. The chair requests that the Library of Parliament assign additional resources to the committee for the duration of its study on chapters 3, 4, and 5 of the November 2003 report of the Auditor General of Canada, namely a forensic auditor and an investigator.

That is the report of the subcommittee. It is so moved by Mr. Lastewka. Are there any questions on the report of the subcommittee?

Madam Phinney.

Ms. Beth Phinney (Hamilton Mountain, Lib.): I'm just wondering what “if required” means in number 2. You say we will sit next week, but who's deciding “if required”?

The Chair: It will be required if we can line up the witnesses in a short timeframe. I wouldn't want people to come all the way in and find out we didn't have the witnesses.

The intention is that we have a meeting. We're giving notice that there will be a meeting during the break week, with the intention of lining up the witnesses. If that can be done, the meeting will be held.

Madam Jennings.

Mrs. Marlene Jennings: If I'm not mistaken, when this committee was first constituted, we adopted routine motions regarding procedures. There was a motion regarding the number of members required to constitute a quorum for receiving and publishing evidence and not for any motions. If I'm not mistaken, that was five.

The Chair: Yes, but it's number 2 right here, which says “for the sole purpose of receiving and publishing evidence”.

Mrs. Marlene Jennings: The point I'm trying to make is simply to remind members that at our first meeting where we adopted our motions--for instance, the rule on 48 hours' notice--we adopted a motion stipulating that a quorum of the committee in order to simply receive evidence, whether it was testimonial or documentary evidence, was five members, if I'm not mistaken, which means, then, for those members who have concerns about the possibility of holding hearings on March 1 and/or March 2, it should not be an issue.

The Chair: That's correct; we can receive evidence with five members. If five members do not show up after 15 minutes, we can actually drop to three members. However, this also says that even if we have a full quorum, we cannot entertain motions.

Are there any further questions regarding the steering committee report?

(Motion agreed to)

Á (1155)

The Chair: I apologize again to our witnesses, and I would ask Mr. Marshall, the Deputy Minister of Public Works and Government Services, to come forward, together with his staff--Yvette Aloisi, Mr. George Butts, and Mr. Guy Bédard.

Why don't you come forward, too, Mr. Judd, just in case we have a chance to have your evidence as well?

Mr. Toews.

Mr. Vic Toews: On a point of order, in respect of names of additional witnesses that are to be presented to the subcommittee, should I be providing names at this time?

The Chair: Yes. Anybody who feels they have people they would wish to come before this full committee would submit them to the subcommittee on witnesses.

Mr. Vic Toews: Well then, I'm not reading the names out, but following the article from the Toronto Star this morning, there are a couple of names I would want to pass on to the subcommittee on witnesses.

The Chair: Okay. That will be received by the clerk.

Mr. Jordan.

Hon. Joe Jordan: As a point of clarification--and this goes a little bit to what Mr. Reynolds made reference to in terms of his brown envelope--if people are coming forward with information like that, my understanding is that would go to Mr. Walsh for initial screening. That's a whistle-blower, essentially, isn't it?

The Chair: Well, no, it's reported in the paper today.

Hon. Joe Jordan: Well, okay, that's what I'm asking for some clarification on.

The Chair: Perhaps the subcommittee will discuss that with Mr. Walsh, as to how it goes back and forth.

Mr. Toews.

Mr. Vic Toews: In fact, I was going to raise that other issue just as a point of order: what is happening with that brown envelope that I understand was passed to you yesterday?

The Chair: I could have it in my pocket, Mr. Toews, but it contains names and allegations that are unsupported.

I feel that it should also go to the subcommittee, which will meet in camera and discuss what's contained in the brown envelope that I received, and however they wish to handle it, they will decide and report back to the committee.

Mr. Vic Toews: So you will be referring that material, then, on to the subcommittee?

The Chair: I will.

Mr. Vic Toews: As a final point, I wonder whether the chair has considered the entire issue of hiring professional staff to assist the committee in some of its inquiries, whether that includes a forensic audit or legal assistance.

The Chair: We dealt with that in the report we just approved.

Mr. Vic Toews: That has been approved then?

The Chair: That has been approved, that the Library of Parliament provide a forensic auditor and an investigator.

Mr. Vic Toews: Specifically in that respect, I assume then that those individuals will be working with the clerk under your direction.

Hon. Walt Lastewka: [Inaudible—Editor]...it's in the minutes.

The Chair: He just had a question.

We just agreed to hire these people. They will be working under the direction of myself and the clerk, and I expect they will be reporting, likely in camera, to the committee in full.

Again, my apologizes to our witnesses.

I'm going to ask, just in case we don't get to Mr. Judd's report, that his opening statement be withheld until such time as he presents it. But Mr. Marshall's opening statement can be distributed.

All right. Are we ready for that?

Mr. Marshall, the floor is yours.

Mr. I. David Marshall (Deputy Minister, Department of Public Works and Government Services): Thank you, Mr. Chairman.

First of all, I would like to address the request we received from the committee for information.

We were apprised of two motions that concerned information we should provide to your committee. The first one was to provide the names of individuals who authorized financial transactions described in the Auditor General's report, chapters 3, 4, and 5; and the second one called for a copy of all contracts between the communications coordination servicesbranch and the other organizations mentioned in the Auditor General's report.

I've instructed my officials to retrieve these documents immediately. However, in regard to the sponsorship documents, they are very, very numerous--over 1,000 documents. So in order to assist the committee, we are going to supply in the first tranche the 50 or so files that relate specifically to the events reported in the Auditor General's chapters, and at the same time we will provide the names of the individuals who authorized financial transactions.

We will summarize these documents for you and show you, by individual sponsorship series, who recommended the series, who requisitioned it, who signed financial authority for funds, who approved the contract, who approved any amendment, and who approved the final issuing of the payments, so that you will have very complete information on this, and we will attempt to get this to you. We believe we can get it to you by the end of this week.

In regard to the advertising documents, these are, of course, more numerous. Once again, we will follow the guideline of giving you what is mentioned, the files in the Auditor General's report, and of course should you want more, we will proceed to provide you with all the others.

I trust this is satisfactory, Mr. Chairman; we're trying to summarize the information for you.

Mr. Chair, it was with great interest that I followed your deliberations last Thursday, and I have prepared a presentation for this morning that aims to answer as many of the questions that were raised as possible.

My department is, of course, the Department of Public Works and Government Services. I became deputy minister in June 2003. Prior to that I had senior positions in government and industry, and I've had the honour of serving as an assistant auditor general under former Auditor General Mr. Kenneth Dye. I've also been on the management committees of banks in both Canada and the United States, and just before my return to public service I was a vice-chairman of the Canadian Imperial Bank of Commerce here in Canada.

Mr. Chairman, as we now have learned, my department has had the misfortune of being at the centre of the events surrounding the sponsorship and advertising activities that have been reported by the Auditor General. I do say “misfortune”, because Public Works is a proud department. It has 14,000 men and women who are working hard every day to serve the Government of Canada in a wide variety of ways.

As the Auditor General has pointed out, on a normal basis the department operates under a fairly sophisticated system of internal controls. To try to understand what might have gone wrong in this case, my staff has prepared for you two presentations, which we would like to take you through very soon.

The first one is a presentation that depicts, in the form of a flow chart, the normal controls that are exercised in Public Works over contracts similar to the sponsorship and advertising contracts. We then show where the sponsorship activities varied from the normal controls.

The second presentation is designed to explain how the sponsorship activities came to be organized and the names of the people who were responsible.

Mr. Chairman, in summary, I'd like to say that no system is foolproof. As the Auditor General has pointed out, controls and procedures did exist at the time these activities were taking place that would have ensured good administration had they been followed. Yet in the case of sponsorship they were not followed, and a few individuals who were put in positions of power took advantage of that. Nonetheless, as information became available, and due to the severity of the situation, the government did take action, and plenty of it. You can see that controls and scrutiny were increased. Audits were done, funds were withheld, files were referred to the RCMP, management of the sponsorship and advertising was changed and restructured, employees' actions were reviewed, and, following due process, certain employees were sanctioned.

The Treasury Board has set out additional guidelines and is working actively with us and other departments to ensure a much greater degree of management accountability and control. Our own internal audit and the test cases the Auditor General made on files initiated after 2001 do show indeed that significant progress has been made.

That said, the work of the Auditor General is a warning to us all that there is no room for complacency. That is why corrective actions are continuing, with many more to come. In my opinion, Mr. Chairman, this audit, the work of the committee, and the work that will follow will change the very nature of government administration for many years to come.

With your permission, Mr. Chairman, I will now go through the first of our two presentations. I'll ask Mr. George Butts to walk you through a typical procurement process within Public Works and then show you how it differed from what was carried out in the communications coordination and services branch.

Mr. Butts is a senior officer in our procurement division. I would ask him to go through it with you.

Â (1200)

Mr. George Butts (Director General, Acquisition Program, Integrity Secretariat Sector, Department of Public Works and Government Services): Thank you very much, Deputy Minister.

Mr. Chairman, it's my pleasure to describe to the committee the procurement process followed within Public Works and Government Services Canada and subsequently to identify a number of key differences in the process followed within CCSB, which were the subject of the Auditor General's report.

First, however, may I point out that PWGSC, as a common services contracting authority for the Government of Canada, contracts for and awards some 40,000 contracts on an annual basis, and approximately 20,000 amendments, all for around $10.5 billion. So in attempting to describe a process, please bear in mind that this is a typical process for similar services. The actual contracting processes may vary, depending on the value or the particular type of service we are procuring.

I'm going to refer to the charts that were provided in your brochures, and I'll offer a number of examples as I go through those charts, in order to help describe the process.

Finally, however, before I actually go to those charts, it's important to understand that I will be using a couple of terms throughout. First is the project authority. When I use project authority, I'm referring to the client department or division that is actually requisitioning the services.

Then there is the payment authority. While PWGSC issues cheques in its receiver general capacity, it is the individual departments that authorize the payment of funds.

We reserve the term contract authority for PWGSC, particularly in the first chart. You will notice in the second chart, however, a real comingling of authorities. This point was raised by the Auditor General with respect to the lack of segregation of duties and the weak oversight control.

Moving on to the first chart, I have nine boxes to describe the typical control framework within PWGSC for contracting for services. First of all, in defining the requirement, it is the project authority or the client department that defines the requirement or type of service they need to assist them in delivering their program.

The project authority authorizes the expenditures of moneys in order to deliver that project. Project authorities work with a delegation-of-authorities matrix. Different levels within each department have different authorities delegated to them: more junior officers delegate lower-dollar-value procurements and senior officers could in fact go all the way to the Treasury Board to authorize a program.

The project authority—again meaning the client department—certifies that funds are available under section 32 of the Financial Administration Act. They then prepare and sign a requisition and deliver that requisition to Public Works and Government Services Canada.

In receiving the requisition, we develop a procurement strategy, seen in box 2. We apply the Treasury Board contracting policy, the government contract regulations, and the PWGSC supply manual in developing the strategy. We review the trade agreements and any obligations we have under them and any socioeconomic issues that may be involved. In fact, for all procurements over $2 million we distribute the proposed procurement or a notice of the procurement to many departments to involve them in the procurement strategy.

We develop a solicitation process. Will it be an open competition, will it be a limited sort of tendering, or will it be a closed competition to one source only? We establish how we're going to evaluate the bids we receive or the proposals that will deliver the services.

We will obtain legal and quality assurance advice as we develop this strategy.

Finally, we will develop a procurement plan that is approved in a structured manner with a delegated matrix. For different levels of procurement we go to different levels within the department to approve the process.

As I move into the solicitation box, it's important to note that within PWGSC we are following, as the norm, an open process. As required under the trade agreements, we advertise our procurements. Certain exceptions under government contract regulations permit us to use other than open advertising.

A notice of proposed procurement is thus prepared and posted on MERX, the government electronic tendering system. We issue an RFP document containing all of the information that was developed in the procurement strategy, the evaluation criteria, etc.

In the event of a non-competitive contract, we will issue an ACAN, an advanced contract award notice, thereby allowing the industry to come forward and say, “We have the capabilities to respond to this as well”. If there is a challenge made to us, and it is an acceptable challenge, we will revert to a competitive, open process.

Moving to box 4 on the evaluation negotiation, I'll add at this point that you'll notice in this box that I have used two shades, white and green. I've used the shading in these boxes to signify a change in responsibilities or authorities within the department versus PWGSC.

Â (1205)

So in box 4 we have an area where both the client department and PWGSC are involved. Bid receipt is controlled very, very closely by Public Works and Government Services Canada. One location, one time, anybody seconds late, and we have evidence of not accepting those bids.

We use the client department to assist us in bid evaluation. PWGSC does a price evaluation and looks at the financial capabilities of the firm in order to do business for this type of contract. The client department looks at the technical aspects of the requirement.

Together we will work to select a supplier and from there negotiate any particular outstanding items in terms of contract security that may be required--insurance requirements, terms and conditions. And particularly, again, if we're looking at a sole-source contract, there are significant negotiations at this time.

On the contract approval stage, again we summarize all of the information that has gone on before us on a contract approval request. That document is then submitted to the appropriate authority to authorize us entering into the contract.

I'll deviate slightly and provide you with an example. Within the department we have a very detailed level, a matrix of authorities that cascade throughout the department.

At the first level of executive, the director level, for example--and I describe different methods of solicitation--if we use a total open procurement notice on GETS, electronic bidding, a director has the authority in services contracts for $5 million. If we use a limited tendering, a source list, the director's authority is halved, $2.5 million. If we're looking at a sole-source type of contract, that director's authority is down to $400,000 for services.

If I drop down one level, again to demonstrate the control mechanisms within the department, a manager has $1 million, no matter how the process is conducted in a competitive environment. So whether it's electronic, totally open, or whether it's limited, there's no difference, it's $1 million--considerably less than the $5 million the director has.

The contract approval document is again subjected to a quality control review as well as a legal review, and I've mentioned we use the grid to approve the document.

Moving on to contract award, another grid is used for signing authorities. In this case, the manager who has been managing this particular contract, or the contracting officer, may have had to go to the assistant deputy minister for authority. They now have authority to sign the contract, which may occur at a signing ceremony with the company. There may be some final i's to dot and t's to cross on the contract.

The notice is then published on our MERX, the government electronic tendering service. We tell the rest of the industry we have now awarded a contract to a particular supplier. It's also posted on the Contracts Canada database.

The contract itself is finalized. A copy of that is provided to the client department, the project authority, as well as to the payment authority, which again, as I mentioned earlier, resides in the client department.

With respect to contract administration, throughout the project, throughout the contract's life, we will work jointly with the client department to review the progress of the contractor and how they are performing on the contract. We will review any financial progress as we go forward. There may be milestones, there may be progress payments, there may be certain rates that are required to be delivered. We work very hard to avoid disputes. We deal with issues as they arise, and, if necessary, we move to alternate dispute resolution mechanisms.

In bold I've indicated that it is only the contract authority that amends the contract. That is there very, very clearly as a control mechanism. We're able to provide the checks and balances within the department to ensure that these contracts do not grow unchecked.

Contract payments, number 8. Again, it's a client department responsibility. The client department project authority accepts that the services were delivered and in so doing signs, under section 34 of the Financial Administration Act, saying that goods and services, or services in this case, have been delivered in accordance with the contract. That payment document is then handed over to the finance group, who has a copy of the signed contract. The financial officer will review that, yes, the section 34 signature has been so certified. They will, under section 33, actually issue the payment.

Thus is the process normally followed within PWGSC for contracting.

Â (1210)

Moving to the second chart, first of all, please notice that the second chart is all shaded.

In the process that was followed within CCSB at the time, the contracting activity was closely guarded. A relatively small number of people were involved in this process.

My colleague, Madam Aloisi, will discuss the organization of CCSB, its development, and we'll get into those people at that time.

First of all, in the requirements definition, the executive director played a key role in all that was happening. The Auditor General very clearly pointed out there were a number of questions about which program was decided on or funding and how much funding would be decided for each program. Those decisions were all made at the executive director level.

As well, the executive director, acting as the project authority, authorized the expenditure of funds and signed the requisitions under section 32, committing the funds to be spent. That signed requisition was then processed within CCSB itself.

There are a lot of questions about the strategy. Few records exist to explain what happened.

Clearly the executive director, acting as the project authority, looked at existing lists of companies that were in place for quite some time, and that became, in effect, the procurement strategy that was followed.

Moving into solicitation, again the executive director determined from that list of prequalified contractors who would be invited. Little information again exists to describe why some were and some were not. I raise this point because again the Auditor General questioned whether these were competitive awards or not, and clearly this is not in accordance with the contract policy.

By inviting these companies to submit a proposal, as opposed to the regular process of posting an RFP and developing evaluation criteria, they would issue a letter of intent along with a questionnaire. They would invite the companies to come in and make a presentation, and then that presentation was reviewed by a selection committee at a very high level and a determination made as to which contractor should get the contract.

With respect to evaluation and negotiations, again it's very difficult to understand how this happened. Records do not exist to explain how a particular source was selected. It's clear, however, that again it was the executive director who was doing the reviewing and moving forward with, “Let's go to contract approval”.

Delegated authorities were not respected in this case. The authorities I mentioned earlier are department-wide within CCSB. The executive director guarded this. He approved the entry to the contract. He also, in effect, lacked any type of competition in what was going on, as the Auditor General has stated.

On contract awards, the approval grid again was not respected. The executive director kept this very, very close...the small team that was there. The Auditor General also recognized in her report that there were a number of verbal agreements lacking contractual documentation.

So when we talk about distributing documents to the finance authority and the project authority, some of these came after the fact.

In contract administration, again the project authority, the executive director fulfilled both roles, acting as contract authority and amending contracts as he so chose. Clearly this was an absence of the checks and balances provided within the PWGSC system and it again allowed the projects to go unchecked. The Auditor General clearly pointed out that 21% of all of the contracts reviewed were able to grow, again without any explanation in the contract documentation, in the files.

On the payment process, the acceptance of deliverables was done again by the project authority, not against milestones or hard and fast deliverables of draft reports, etc., but against a reasonability check. So it's very difficult to determine if the services were actually delivered under all of the contracts that were reviewed.

The sign-offs under section 34 saying, yes, goods and services have been delivered in accordance with the contract, were done again by the executive director. Lack of evidence of the deliverables, however, causes us to question that.

Moving to the payment authority, here, rather than a detailed review of, yes, this was done, a verification of the certification, the payment authority was exercised again within CCSB. The Auditor General reported that the certification under section 33 of the FAA had been authorized; however, the section 34 certifications lacked credibility in many cases because of insufficient information on the file.

Â (1215)

I've attempted to show you the process we follow normally in the majority of the contracting we do, and also to lay out the processes that were not followed our way in the CCSB organization.

Thank you.

Â (1220)

The Chair: Thank you, Mr. Butts.

Anything further to add, Mr. Marshall?

Mr. I. David Marshall: Yes, Mr. Chairman. There's a lot of information. I'd be happy to walk through individual pieces as you need.

I think the final piece that would help you put everything into context, Mr. Chairman, is the presentation on the structures supporting sponsorship and advertising. It's the bar chart in your material.

Mr. Chairman, we will quickly go through it, and then I think we'll be ready for questions from your committee members.

In looking at the chart, I would draw your attention to the middle line, the blue line, showing dates, 1993 through to 2004. We've attempted to show, over time, how the organization of the sponsorship and advertising activities was organized.

Above the blue line you will find the names of the deputy ministers and the ministers responsible for these activities. You will notice under Minister Gagliano that we have also given the names of the executive assistants, because indeed one of those, Mr. Pierre Tremblay, then moved to become an executive director of the sponsorship activity done in the department.

Below the blue line you will see the green bar, which shows the creation of the communications coordination services branch. To the left of it are all the antecedents that were gathered and consolidated into that branch. To the right of it, with the red bar, you see the creation of Communication Canada. I only wanted to share that structure with you.

In terms of the names, as I mentioned to you, Mr. Chairman, we have only gone down to the executive director level on this chart, but by the end of this week we'll be providing you with a summary of the names of every individual who signed contracts within CCSB, who approved them, and so forth. You'll have that information in another few days.

I would ask Madam Aloisi now to describe to you the process by which the organization was made of this activity, and then we'll be ready for questions.

Ms. Yvette Aloisi (Assistant Deputy Minister, Corporate Services, Human Resources and Communications Branch, Department of Public Works and Government Services): Thank you, Mr. Chair.

If you look at the bottom part of the chart, it is a very complex chart.

The Chair: Which chart are you talking about?

Ms. Yvette Aloisi: This one.

Â (1225)

The Chair: The one with the blue bar across?

Ms. Yvette Aloisi: Yes, the blue, yellow, and orange. We tried to put a lot of information on one piece of paper because we thought it would be easier to understand the evolution of this file.

As you can see from this chart, Mr. Guité started as a director of advertising and research in the then called Department of Supply and Services. He was then reporting to an assistant deputy minister of corporate services, and that was a lower-level activity within Public Works and Government Services Canada.

In 1993, you will recall, the Department of Public Works and Government Services Canada was created with the combination of DSS and Public Works.

In 1995, as you can see, Mr. Guité then got additional responsibility. He became a director general and was reclassified from an EX-1 to an acting EX-2, reporting to a different assistant deputy minister of corporate services and the senior financial officer. Then he became responsible for a directorate called advertising and public opinion research, one they called APORS. So he was responsible for this until November 1997, when, as the deputy mentioned previously, the creation of the communications coordination services branch took place.

In 1997, you will notice at the bottom of this chart, in yellow, the Canada Communications Group was privatized. The printing and warehousing were privatized, but the other parts of the communications group were transferred to Public Works and Government Services Canada. You will see that the Canada Gazette, the crown copyright, and Reference Canada were transferred to Public Works and Government Services Canada. This was combined with APORS, advertising and public opinion research, to create a new branch in the department. Mr. Guité at that time was again promoted to the EX-3 level because he had, as you can see, more responsibilities. So he became the acting director reporting then to the deputy minister. He was no longer reporting to an assistant deputy minister. In the spring and fall of 1992, because of the additional responsibilities given to this person, the deputy minister felt that this position required an additional level, at the assistant deputy minister level, the EX-4 level.

In August 1992--

The Chair: You mean 1998.

Ms. Yvette Aloisi: Yes, 1998, sorry.

In 1998 the department went to the Treasury Board, as is usually necessary to do this, to get approval for that level for the assistant deputy minister level, EX-4. This Treasury Board approval was retroactive to April 1998.

Mr. Guité continued to be an acting EX-4 until he retired at the end of August 1999. At that time Mr. Tremblay became a public servant. As you know, the Public Service Employment Act allows an executive assistant who has been an executive assistant for a number of years to have a priority status if in the opinion of the Public Service Commission the person meets the requirement to become a public servant. Mr. Tremblay became an executive at Public Works and Government Services Canada at the EX-2 level, acting in an EX-4 level.

At the same time that this was happening, if you look at the blue box underneath--and that's why it is very complicated--the Canada Information Office was created in July 1996 in the portfolio of Canadian Heritage. This is a separate agency that was created by an order in council. As a colleague last week, Kathy O'Hara, explained to you, when it is a separate agency like this it requires an order in council.

The Canada Information Office was really created to promote the federal government to Canadians and to promote Canadian unity.

In June 1998 the Canada Information Office was transferred, again by an order in council, to Public Works and Government Services Canada because it was felt that it would make more sense to combine and harmonize all the communication activities in one portfolio, Public Works and Government Services Canada. At the time the executive director in June 1998 was Monsieur Marc Lafrenière.

In September 2001, if I move along to the creation of Communication Canada, you will see that at that time the Canada Information Office was under Guy McKenzie. The branch of Public Works and Government Services Canada, CCSP, was transferred to the CIO by an order in council, and on the same day the CIO was transferred into Communication Canada on September 1, 2001, and Mr. McKenzie.

So this is a separate agency; that's when it becomes a program per se. The rest was under the authority of the deputy minister. As you know, the sponsorship program was cancelled in December 2003, and just recently an order in council was approved to wind up Communication Canada--transfer a portion of Communication Canada to Public Works and Government Services Canada and another portion to the Privy Council Office. I understand Ms. Kathy O'Hara mentioned this to you last week.

If you look at the boxes that are not in colour you will see that all through this period there were a number of audits, reviews, that took place. There was an audit in 1996 of APORS, which was followed in August 2000 by the internal audit that brought the whole issue of sponsorship to light.

Â (1230)

This audit was followed by an action plan in the department in October 2000, which was also followed by an internal audit follow-up review. What we discovered, as my colleague has mentioned to you, was there was not a lot of documentation in the files, and it was felt that we needed to do a more thorough review of the files in order to be able to see what happened to them.

It was at this time that Mr. Boudria became the minister, and in March 2002 he referred two Groupaction contracts to the Auditor General.

The Auditor General reported in May 2002, as you will recall. At that time, three contracts were referred to the RCMP by the Auditor General. The minister at the time, Mr. Goodale, put a moratorium on sponsorship in May 2002. The moratorium was lifted in July 2002, but with a big difference, the difference being that we were getting rid of the intermediaries between the department and the people who were sponsored.

In May 2002 the Prime Minister asked the President of the Treasury Board to look at this whole sponsorship advertising program. In December 2002 there were guidelines sent to departments with the objective of strengthening the accountability and the transparency of this program.

So there was a redesigned interim program in July 2002. Ten files were then referred to the RCMP. The department also initiated a recovery of funds at the time. Then the minister, Mr. Goodale, decided to put in place a quick response team to look at the whole sponsorship file again. This led to what we call an administrative review, which was done by a forensic firm, Kroll, and later we hired a labour relations expert who interviewed the people involved in the sponsorship file. As a result of this, some disciplinary action was taken.

In April 2003, if you get to the last box on your right, we had within Communication Canada--and the Auditor General recognized this--a totally revamped sponsorship and advertising program, which, as I said previously, got rid of intermediaries for advertising. For example, we got rid of the necessity for the company to be 100% Canadian owned.

I also want to emphasize that at this time the sponsorship program became a contribution program. So it was no longer through intermediaries that those events were being sponsored.

This is really how this whole program evolved. If you look at the bottom part of the chart, we have strived to give you the sponsorship spending as it appeared in the Auditor General's report. Also, what we give you here is a number of people who were involved in this program, this activity, which was a very small number of people, as George mentioned to you previously.

As you can see, because there were so few people who were involved in this activity, they had to rely heavily on intermediaries. This explains a little bit how it happened. But when it became a contribution program at Communication Canada, because then public servants started doing the work, as you can see, the number of employees increased.

Â (1235)

The Chair: Thank you very much. You've put a lot of work into these charts. We appreciate that very much.

Do you have any closing comments, Mr. Marshall?

Mr. I. David Marshall: Mr. Chairman, we're available to you for questioning.

Mr. Dennis Mills: On a point of order, Mr. Chairman.

The Chair: A point of order, Mr. Mills.

Mr. Dennis Mills: On this document, I understand everything but FTEs.

The Chair: Full-time equivalents. That's basically the number of persons.... It's the acronym we use.

Mr. Judd has an opening statement, but I understand it's a long statement. He had anticipated that these cabinet documents would be public today and he makes significant reference to them. Because of the short time available, I expect that the bulk of the questions will be addressed to Public Works, but since Mr. Judd is at the table, he is available to answer questions. And we will have his statement, I think, on Thursday morning.

Mr. Jordan.

Hon. Joe Jordan: I wonder, if it's agreeable to the committee, if we could look at extending to 1:30 today.

The Chair: I think that would require unanimous consent, because others may have other commitments.

Am I correct, Mr. Clerk?

The Clerk of the Committee: Yes.

The Chair: Is there unanimous consent to extend the time to 1:30? There is no unanimous consent.

The objection was over here, but he doesn't have to justify his objection.

I expect Mr. Judd will be back on Thursday to provide his statement, which will refer to the documents that will be made public at that point in time. But he is available for questions.

Mr. Toews, eight minutes, please.

Mr. Vic Toews: Thank you very much for your presentations.

I note the last witness's comments that there were only a small number of people involved in this. I assume she's saying there were a small number of people in the public service involved with this, and that as there was a transfer of the responsibilities back from the outside agencies, which, as we heard from the Auditor General, contributed little or no work anyway, we have this growth in full-time employees to 40 employees.

Some of the evidence that has come up--and some of the witnesses have referred to it--is that back in 1996 there was an internal audit done. There's been some controversy about that because there was an original audit done and then an edited version or a different version was put up on the website.

I'm wondering if the witnesses are prepared to produce both copies, the web edition as it appeared back in 1996 and the original audit that was done. Is that agreeable?

Mr. I. David Marshall: Certainly, Mr. Chairman, we will table those.

Mr. Vic Toews: Thank you.

Similarly, I understand that in August 2000 there was an original internal audit done, and what has been referred to in the press as a “sanitized” audit was actually put out. Perhaps we could have, Mr. Chair, both of those audits as well.

I assume there's no problem with that.

The Chair: Is that agreeable, Mr. Marshall?

Mr. I. David Marshall: It is agreeable. It will actually be the same document, but we will table that.

Mr. Vic Toews: I note the nine boxes in the typical procurement process that was provided to us here, and then the CCSB procurement process. On the CCSB procurement process document we have one box--the first box--in which it suggests that everything was complied with. I want to draw your attention to the last line in that box, the signed requisition in CCSB. Was that in fact always complied with?

Â (1240)

Mr. George Butts: I'll respond to that, Mr. Chairman.

I will say that based on the report provided by the Auditor General there is not evidence signed requisitions were received in all cases.

Mr. Vic Toews: So in every single step, all nine boxes.... In the first box there was not in fact compliance. We may as well put the universal “no” sign through that box as well. Whether it's a big universal “no” sign or a little universal “no” sign, there was no compliance in fact at any stage of the process.

The Chair: Mr. Butts.

Mr. George Butts: Your point is accepted. We'll put the “no” sign in there.

Mr. Vic Toews: I just wanted to know, because it was a crucial point from the Auditor General that there weren't signed requisitions, that she had evidence of individuals picking up the phone and moving a million dollars. I would assume there was no requisition that then followed that written....

Mr. George Butts: That is correct. I believe I indicated that there were verbal agreements made in those cases. I'd like to say the paperwork followed.

Mr. Vic Toews: You'd like to?

Mr. George Butts: I would like to. There is no evidence of it.

Mr. Vic Toews: I think most Canadian taxpayers would also like you to have said that. Certainly, for the purpose of this investigation, it would be a lot easier for us as well.

My time is limited. So I would like to turn to the page with the blue, red, yellow, and green bars in the bottom right-hand corner, and the white box, the “10 files referred to RCMP”. There is a notation, “Recovery of funds” and then “Quick Response team final report”. Have any funds been recovered?

Mr. I. David Marshall: Mr. Chairman, the work of the response team and the verification of some of the contractors' records showed that, for example, two things happened. First of all, the funds were withheld from bills received, about $3.9 million worth. More specifically, we determined that the government was owed interest on money that had been advanced to the agency of record for onward distribution and that this interest had not been paid. That was recovered and the cheque was received. It was about $100,000.

Mr. Vic Toews: In total, of the funds we see in the bottom left-hand corner, from 1997 to 2004, we're speaking of about $250 million. To date we've recovered about $100,000.

Mr. I. David Marshall: No. These were the expenditures as recorded. About $3.6 million of that has not been paid, and we've recovered about $100,000.

Mr. Vic Toews: So we held that. That was not a recovery. It was held. We learned recently in the newspaper that there has been a court order forcing the government to pay out some of that.

How much time do I have left?

The Chair: A minute and a half.

Mr. Vic Toews: The Auditor General came forward and indicated 14 names, and I believe most Canadians were waiting for the release of certain names. The Auditor General indicated that those names would be properly released by Public Works. I'm wondering whether those names have been submitted to the subcommittee on witnesses, and if not, could they be referred quickly to the subcommittee?

Mr. I. David Marshall: Mr. Chairman, unfortunately, with a situation like this there are a lot of numbers--10, 14, and such. It would be useful to pin it down in terms of what the 14 was referring to--the people who were found to have signed improperly or the number of people who were in the program and so on. What I can tell you, Mr. Chairman, is that we will supply you by the end of this week with all the contracts involved as well as a summary of all the individuals and what they signed and so on so that you can have a look.

Â (1245)

Mr. Vic Toews: Just in closing, perhaps you could have a sidebar conversation with the Auditor General. She obviously had certain names to give to the committee. Perhaps you could communicate with the Auditor General, see what names she was specifically referring to, and then refer those names to the subcommittee on witnesses.

Could I count on the witness to do that, Mr. Chair?

The Chair: It seems that's correct, Mr. Toews.

I think we are cognizant of the need for the Privacy Act and to ensure that people's names are not in the public domain if they shouldn't be. I will refer that list to the subcommittee on witnesses and testimony, which will not make it public right away, so that we can figure out exactly what needs to be in the public domain and what doesn't.

[Translation]

Mr. Desrochers, please, you have eight minutes.

Mr. Odina Desrochers: Thank you, Mr. Chairman.

Mr. Marshall, you have been in your current position since June of 2003. To your knowledge, when you took up your duties, was Mr. Goodale aware of the scope of the sponsorship scandal?

[English]

Mr. I. David Marshall: Mr. Chairman, could I have that question repeated?

The Chair: Mr. Desrochers.

[Translation]

Mr. Odina Desrochers: Mr. Marshall, when you took up your duties in June of 2003, was the minister of the day, Mr. Ralph Goodale, already aware of the scope of the sponsorship scandal, as far as you know?

[English]

Mr. I. David Marshall: When I took over the office, Mr. Goodale was extremely conscious of the seriousness of the situation. Of course, he did not have the Auditor General's report with him at the time—the one that has just been tabled—but just simply based on the information that he had up to that point, which was the Groupaction situation, the internal audit report, and so forth, he was determined to get to the bottom of the issue. He immediately suspended the sponsorship program when he arrived, and he put in a number of other steps.

Yes, he was conscious. I'm not sure he knew quite the scope that has since been revealed, but he was taking it very seriously.

[Translation]

Mr. Odina Desrochers: Mr. Marshall, beginning in June 2003, when Mr. Goodale was Minister of Public Works, were you made aware of other irregularities within the program, which was still in existence?

[English]

Mr. I. David Marshall: On other irregularities with the sponsorship activities, I'm afraid I'm not sure what you're referring to. If you would be more specific, I might be able to help.

[Translation]

Mr. Odina Desrochers: People have been talking about the past and of Mr. Alfonso Gagliano, but I would also like to talk of the past and of Mr. Ralph Goodale. You took up your duties under him in June of 2003. Given the fact that you knew what was going on, had you also been informed of other irregularities with regard to the sponsorship program?

[English]

Mr. I. David Marshall: I will do my best to answer the question.

We are aware of the issues of the sponsorship activities. There were, of course, similar problems, though not as severe, with communications activities. I don't know if there were more problems than we're already aware of.

I must say, that's my understanding.

[Translation]

Mr. Odina Desrochers: Mr. Marshall, were you involved in advising the Minister of Finance or the Minister of Public Works to put an end to this program?

[English]

Mr. I. David Marshall: No, I was not personally, but there are other witnesses who can help shed light on that particular decision. There is Mr. Guy McKenzie, who was heading up Communication Canada, and of course other officials who might be able to help with that.

[Translation]

Mr. Odina Desrochers: From the moment you took up your duties in June of 2003, did the Tower of Babel, as it is currently described and as it existed then—we are still trying to shed light on the situation, and important witnesses still have to come before the committee—start to become more comprehensible? Did you feel that things were changing?

Â (1250)

[English]

Mr. I. David Marshall: Yes, I would have to say, in the spirit in which I believe the question is asked, there is no question that the spirit in the department had significantly changed with the appointment of Minister Goodale. There is always a period of evolution in a department's personality, and for quite some time prior to Mr. Goodale's arrival there was a lot of emphasis on trying to expedite matters on behalf of departments that were asking for things and so forth. There is nothing wrong with that, but certainly with Mr. Goodale's arrival, he made it very clear--drew a line in the sand--that where ethical behaviour and the check and balance was concerned, that always took precedence over service to clients and so forth. The kind of guiding spirit of the department had certainly made a change. That's what I sensed when I arrived.

[Translation]

Mr. Odina Desrochers: I would like to ask a question of Mr. Judd.

The documents which were tabled last week repeatedly referred to the Treasury Board's approval process at the time the program was created and at the time amounts were granted. Based on Treasury Board's signature grid, who can sign these authorizations? Is it the minister? Is it the deputy minister? Is it the Deputy Minister of Treasury Board? Someone, somewhere, signed the authorization for the money to leave Treasury Board. Can we know who that was?

Mr. Jim Judd (Secretary of the Treasury Board and Comptroller General of Canada, Treasury Board of Canada Secretariat): That is something I will be able to explain much more clearly when I give my presentation on Thursday. Treasury Board decisions are decisions taken by a cabinet committee. They are taken on the basis of recommendations made by officials working for the Treasury Board Secretariat. They are responsible for evaluating submissions which come from other—

Mr. Odina Desrochers: But who signs? I want to know who signs the authorizations. Under your delegation of signing authority process, who signs? I know that there is consultation, but at some point, somebody has to sign.

Mr. Jim Judd: For a submission to Treasury Board?

Mr. Odina Desrochers: Or to authorize the creation of a program. It seems that we are lacking information with regard to certain signatures from Treasury Board. I want to know who signed. Surely there has to be a head of Treasury Board.

Mr. Jim Judd: The creation of Communication Canada was approved by cabinet, I believe, and also by... [Editor's Note: Inaudible]

Mr. Odina Desrochers: Did Ms. Robillard sign the authorization for the creation of Communication Canada?

Mr. Jim Judd: This initiative was submitted by the Minister of Public Works and Government Services.

Mr. Odina Desrochers: I want to know who signs the authorization.

Mr. Jim Judd: The submission was approved by Treasury Board in its capacity as a committee of cabinet.

Mr. Odina Desrochers: Is it ever hard to find out who signs! Surely there must be someone who has to sign the authorization.

Mr. Jim Judd: I suppose Ms. Robillard is the one who did so.

Mr. Odina Desrochers: I hope it is Ms. Robillard. We would like to know.

Thank you, Mr. Chairman.

[English]

The Chair: Thank you very much.

[Translation]

Thank you very much, Mr. Desrochers.

Mr. LeBlanc, please.

[English]

Eight minutes, please—but we may run out of time.

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.): Thank you, Mr. Chairman.

If I have a few minutes remaining, my colleague, Ms. Jennings, may fill up our eight minutes.

Mr. Chairman, I wanted to ask Mr. Judd something, following up a bit on Mr. Desrochers' question. There's been considerable confusion about the role of the Minister of Finance at the Treasury Board. The Prime Minister has made it very clear that he was totally unaware as Minister of Finance of any of the problems the Auditor General reported two weeks ago.

I'm wondering, Mr. Chairman, if Mr. Judd could tell us if the Minister of Finance ever signs cheques for the Government of Canada.

Some hon. members: Oh, oh!

Mr. Jim Judd: No, Mr. Chairman.

Â (1255)

Mr. Dominic LeBlanc: Mr. Judd, perhaps you could tell us who does sign cheques for the Government of Canada?

Mr. Jim Judd: The Receiver General for Canada.

Mr. Dominic LeBlanc: Thank you.

Mr. Judd, in your experience, did the Prime Minister, as Minister of Finance, and in his role as vice-chair of the Treasury Board, attend Treasury Board meetings, for example, meetings when the sponsorship program was discussed?

Mr. Jim Judd: Not to my knowledge, no.

Mr. Dominic LeBlanc: So you think it would have been unusual, Mr. Judd, for the Minister of Finance to have attended a Treasury Board meeting?

Mr. Jim Judd: It was rare.

Mr. Dominic LeBlanc: Mr. Judd, from the process described by your colleagues, in terms of the approval process with the executive director at Public Works, is there anything in the sponsorship program, as it went along in the normal processing of these contracts, that would have alerted the Minister of Finance in his capacity as Minister of Finance and as vice-president of the Treasury Board?

Mr. Jim Judd: No.

As my colleagues explained, all of these transactions were conducted within CCSB in the Department of Public Works.

Mr. Dominic LeBlanc: Therefore, nothing would have flagged this for the Minister of Finance.

Mr. Jim Judd: Nothing would have been flagged outside of Public Works, no.

Mr. Dominic LeBlanc: Thank you.

Thank you, Mr. Chairman.

The Chair: Ms. Jennings, I think you have a few minutes to wrap up the meeting.

Mrs. Marlene Jennings: How many minutes do I have, Mr. Chair?

The Chair: We've become a little bit lost with our time, but I'll give you four minutes.

Mrs. Marlene Jennings: Thank you.

I want to examine this document.

Some hon. members: [Inaudible—Editor]

The Chair: Order.

Ms. Jennings, you have the floor.

Mrs. Marlene Jennings: Thank you, Mr. Chair.

I'm starting to wonder if there's not a cabal to make sure Ms. Jennings cannot ask her question.

The Chair: You have the floor. Please proceed.

Mrs. Marlene Jennings: Thank you, Mr. Chair. My four minutes begin now.

Concerning this chart and Monsieur Guité, from the testimony and the documentary evidence we received from Ms. Kathy O'Hara from Privy Council Office as to the machinery of government and how a program or a branch is actually set up, with the authorities, etc., the documents she gave us do not concord with what you have given us.

If we look at the green box on the chart, we see it says “Creation of Communications Coordination Services Branch, CCSB (Nov. 1997)”. But in fact given the documents she gave us on the process, it was only legally constituted in 2002 as an actual program, according to the machinery of government branch. Is that correct?

Ms. Yvette Aloisi: From a machinery perspective, clearly it became a program when Communication Canada was established in September 2001. Before that, the creation of the branch in CCSB, within Public Works and Government Services Canada, was part of an internal type of organization; it is not considered as a machinery issue. It is not approved.... As you can see, I did not mention the words “order in council”. We did not require an order in council. Whenever you do a machinery issue, when it is a separate agency, it requires an order in council.

Mrs. Marlene Jennings: It was in 2001, was it, that under the machinery of government it actually became a branch program?

Ms. Yvette Aloisi: A program, yes.

Mrs. Marlene Jennings: Exactly. Prior to that it was simply subsumed within existing services.

Within those existing services, according to this chart, Monsieur Guité, from January 1995 until November 1997, was an EX-2. In November 1997 he was reclassified as an EX-1. Is it at that point that he reported to the ADM corporate services and senior financial officer, or did he report as an EX-2 to that same assistant deputy minister?

Ms. Yvette Aloisi: When he was an EX-1 at DSS, Mr. Guité reported to an ADM of corporate services. When he was an EX-2 from 1995 to 1997—he was an acting EX-2—he reported to another assistant deputy minister of corporate services and senior financial officer. When the branch was created in November 1997, he reported directly to the deputy minister.

· (1300)

Mrs. Marlene Jennings: Fine. Could we have the names of the ADMs to whom Mr. Guité reported prior to November 1997, at which point he reported directly to the deputy minister?

You can provide that to the committee through the usual procedure.

Ms. Yvette Aloisi: Absolutely.

Mrs. Marlene Jennings: My other question is, given that the creation of the communications coordination services branch, although it really wasn't until 2001, is November 1997, who would have had the authority to say, we are going to regroup x number of communication services, we are going to take it out of the internal organizational structure of Public Works, we are going to create a direct authority from Monsieur Guité, who heads up this branch—and I'm using that term judiciously—to the deputy minister? Who would have had the authority to make that decision?

Ms. Yvette Aloisi: The deputy minister would make that decision.

To be clearer, Monsieur Guité, when he was the director general of advertising and public opinion research, was reporting then to an assistant deputy minister. That was then a very small part of a bigger branch. Then when CCSB was created, it was a branch on its own. It evolved from a small sector in the branch to a branch on its own.

The Chair: Perhaps you may want to table a letter with the committee as to who was making these decisions, in response to Ms. Jennings' questions.

Do you have a point of order, Mr. Toews?

Mr. Vic Toews: I would assume that because Ms. Jennings has not had an opportunity to finish her questioning here, and others have not even begun, this panel will be back on February 26.

The Chair: Mr. Judd is going to come back to make his opening statement; I think he'll be here on Thursday. There will be a meeting of the steering committee right away, and you're absolutely right that many people haven't had a chance to question. That will be an issue for the steering committee, to see if we can bring these people back to continue the questions that many people have.

The meeting is now adjourned.