:
On a point of order, Mr. Chairman, you mentioned that we'll have three segments, the first hour being the gentlemen we have here right now, followed by two individuals, followed by, from one o'clock to two o'clock, the Minister of Finance, the Honourable Jim Flaherty.
I've mentioned this to you before, Mr. Chairman, but I have a really hard time with these three-hour meetings. Standard meetings for all House of Commons committees is two hours.
I have issues to deal with. I have constituents in town I'm supposed to have taken for lunch. Because somebody decided that we're going to spend three hours of the entire committee on a simple little contract of some $120,000, I am really put out by this. I really would like you to take control of this committee and make sure that we abide by two-hour meetings every time, because MPs are busy, they all have things they want to do. And as I say, I have constituents who are going to go back home and say their MP didn't have time to talk to them, because I'm here doing a simple little thing, with three hours and 13 people focused on a $120,000 contract.
I need to know. I'm quite sure that our member on the steering committee didn't approve the three-hour meeting. If you had supported him, there would have been no agreement that the steering committee have a three-hour meeting. So I want your assurance that these things are not going to happen from here on in.
:
Mr. Chairman and members of the committee, good morning.
I was invited to appear before this committee today to address your questions on the role of the Treasury Board and its secretariat in regards to government procurement.
[English]
As the government's management board, one of the Treasury Board's key responsibilities is to set the rules, standards, and performance expectations for public sector management government-wide. If I could, I'll take a few minutes to give you a quick overview of the management responsibilities for federal institutions.
The Treasury Board Secretariat supports the Treasury Board in its role through a number of activities. This includes setting management policies and assessing management performance in departments through the management accountability framework. The secretariat also supports departments by providing guidance and tools and developing capacity in key functional communities through learning and development activities.
Deputies have the responsibility to ensure that the day-to-day management of their departments comply with Treasury Board management policies. They are also responsible for ensuring that appropriate controls are in place for the sound management of the institution's human and financial resources.
Ministers are also accountable to Parliament for the use of funds in their institutions and their offices. They are also accountable for complying with and ensuring that their exempt staff comply with the Policies and Guidelines for Ministers' Offices. This document sets out financial, personal, and administrative guidelines and policies that govern expenses incurred by ministers and their exempt staff, including contracting. The guidelines clearly stipulate that unless specifically exempted, ministers and ministers' budgets are subject to Treasury Board policies and regulations.
Procurement is one of the key management functions in the government. To give you a sense of the significance of procurement in the Government of Canada, in 2006 the government attributed close to 400,000 contracts, for a total value of more than $12 billion. Of the total number of contracts, 4,700, or 1%, are sole-source contracts over $25,000. A well-managed procurement function is essential to the effective and efficient operations of government. Upholding the principles of fairness, openness, and transparency to achieve value for money for Canadians in contracting is the foundation on which the Government of Canada's contracting policy is built.
I mentioned the management accountability framework. The MAF is used to assess, on an annual basis, the management performance and capacity of each department. This assessment is used to establish priorities and plans for management improvement. In fact the Clerk of the Privy Council uses the MAF as an integral part of his performance assessments of deputy heads. We have been using the MAF now for five years, and procurement management practices is one of the areas we have been measuring since the inception of MAF. One key element that we measure is whether departments have the right oversight and controls in place. Although there is still room for improvement, when we look at procurement through the MAF lens we find that institutions have strengthened their contracting controls and practices over the last three years. As a result, the number of organizations rated positively has risen.
With the coming into force of different components of the Federal Accountability Act and the implementation of key initiatives from the federal accountability action plan, we have taken further steps to strengthen contracting practices in government. For example, an overarching statement of principle in procurement that commits the government to promoting fairness, openness, and transparency in the bidding process has been incorporated into the legislation through the Financial Administration Act. Also, since 2004 all contracts over $10,000 are proactively disclosed on government websites. The proactive disclosure of contracts contributes to the principles of openness and transparency, strengthens accountability in government, and ensures fairness in contracting activities.
Furthermore, the government adopted a new code of conduct for procurement in September of last year. As well, a procurement ombudsman designate has been appointed, and draft regulations to define the scope of his duties and functions were posted in December. The ombudsman's mandate is to review procurement practices across government, handle complaints from potential suppliers, review complaints regarding contract administration, and ensure the provision of an alternative dispute resolution process for contracts.
We're also making sure that practitioners have the tools, skills, knowledge, and expertise they need to do their work. That's why we are further developing capacity in the procurement, materiel, and real property management communities. Our professional development and certification program is one example. Finalized in 2006, it is designed to provide learning tools to approximately 10,000 functional specialists involved in the acquisition and management of assets and services. The program includes a competency standard and web-based assessment tools, a program curriculum, and a certification component to give federal government practitioners a professional designation from the Canadian General Standards Board.
Mr. Chair, I hope that this quick overview of the role of the Secretariat of the Treasury Board and of some of the activities we are conducting is useful for the committee. I will be happy to answer any questions you may have.
Thank you. Merci.
:
Thank you, Mr. Chairman.
I am pleased to be here today. Thank you for giving me this opportunity to make a few comments. I read the committee's motion and welcome an open dialogue on these important matters.
[English]
In this respect, I would note that my department had two contracts with Mr. Hugh MacPhie that predate his work for the minister's office in Budget 2007.
In the fall of 2006, Mr. MacPhie was engaged by the chairperson of the expert panel for the children's fitness tax credit, Dr. Kellie Leitch, to assist in drafting the panel's final report and recommendations. This was an independent panel operating at arm's length from the department. It was to provide the minister with timely advice on the definition of programs that should be eligible for the children's fitness tax credit proposed in Budget 2006.
[Translation]
The contract was managed by officials in the department's Tax Policy Branch.
[English]
Mr. MacPhie was subsequently hired by our communications branch in the Department of Finance to provide strategic communications advice and to assist in drafting the fall 2006 Advantage Canada economic plan that accompanied our fall economic statement. The decision to engage Mr. MacPhie was linked to his strong knowledge of the minister's communication style and our experience with him on that earlier project. I had some contact with Mr. MacPhie personally on this project and can attest to the quality of the work. In fact, when I briefed my deputy colleagues on Advantage Canada, I referred to the job he did in communicating this in quite a unique and helpful way for us.
Separate from these two contracts, the minister's office also issued two other contracts related to the two witnesses you have called before this committee, one with Mr. MacPhie and the other with Sara Mintz.
According to guidelines set out for ministers by the Privy Council Office, ministers, and I quote:
...are personally responsible for the conduct and operation of their offices. They hire their own office staff, who are known as “political” or “exempt” staff. The staff are outside the official public service and are exempt from Public Service Commission staffing and other controls.
They are not my staff. Treasury Board, as my colleague mentioned, issues policies and guidelines for ministers' offices based on these PCO guidelines. Part 4 of these guidelines states that
Ministers are individually responsible and accountable for...expenditures made for their offices--whether by them directly [or] by their staff....
Ministers often delegate some of this authority to their chiefs of staff. They practically always do and should appropriately do so, as was done in this case.
Treasury Board guidelines on contracting for ministers' offices are very specific in terms of processes that must be followed. Under these guidelines, ministers' offices may request advice on contracting procedures from the department, which in the case of these two specific contracts was provided by departmental officials. My officials also processed the payments under the contracts once the minister's chief of staff at the time, who was the contract authority in these cases, certified that the work was delivered as specified, as required under the Financial Administration Act.
I would now be happy to provide answers to the best of my knowledge and ability with respect to any questions that committee members might have for me, whether for the contracts administered by the Department of Finance itself or for the department's administrative support for contracts entered into by the minister's office.
Merci.
:
Thank you very much, Mr. Wright.
We're going to go now to the first round. We'll only have one round. There are six examiners at seven minutes each. Before we go to Mr. Wrzesnewskyj, I want to point out to the members that we're dealing with specific issues here. I would ask that you keep your questions short and brief. Similarly, I would ask the witnesses to keep your answers to the point and to be as succinct and as brief as possible.
Also, I want to take this opportunity to remind members, in their examination of these two witnesses before us, of the recent changes made in the Federal Accountability Act, which have codified the rule that the accounting officer--in this case, Mr. Wright--is accountable to Parliament for the prudent management of resources allocated to their department so that it is in compliance with Treasury Board policies, regulations, and standards, and that the Secretary of the Treasury Board has responsibility to ensure that the accounting officers are aware of these obligations, that the departments have the capacity to fulfill these obligations, and that any breaches be addressed.
That having been said, Mr. Wrzesnewskyj, you have seven minutes.
:
Exactly. That contract was issued by David McLaughlin. As I mentioned, there's an important distinction in terms of ministers' offices and how they're managed. They are all part of the departmental vote. But the ministers' offices are not populated by public servants. The people in those offices do not work with me.
Treasury Board and PCO have been very specific about the rules that should be followed and have been very specific about the roles of the department and the role of the minister's office in that area.
In this case, for the budget of the minister's office within that departmental vote, the minister has delegated authority to contract directly from the Minister of Public Works. He may delegate that to his chief of staff, David McLaughlin, which he did, and sensibly did.
I want to just make one other comment. I alluded to it earlier. Perhaps my opening comment should have been more expansive. Within that budget allocation, the minister has delegated authority for issuing contracts to his chief of staff. That chief of staff is encouraged to seek advice from the department, but he is not required to. That's what he did. He sought advice. He was given advice.
Now, the early advice on that, from Mike Giles, was that this is how you deal with an issue like that, and this is how you approach it. But we did not discuss and we did not release specific advice on this contract, as it is contrary to our approach.
:
I would like to continue in the same vein.
I have a question for Mr. Wright. Essentially, the secretary of the Treasury Board Secretariat just told us that there are four possible exemptions that could apply in the granting of a $100,000 contract. According to the legislation, Mr. Wright, you are the accounting officer, and if there is a disagreement with the minister in any particular case, you must ask for advice from the secretary of the Treasury Board Secretariat. You did not do this, from what I gather. Would this mean that you agreed with the minister as to the granting of this contract?
How could you justify, at $122,000... Was it an emergency? The contract was not under $24,000. You also stated that it could have been done by someone in-house. How can you explain that a contract such as this one, of a value exceeding $100,000, in fact worth $122,000, was granted without a call for tenders, despite the fact that in all probability, the act does not provide exemptions for this type of case?
:
That is a key point for our review.
[English]
I think I will just give a little context for it.
First of all, as the accounting officer, I make sure that I have adequate controls for the entire budget of the Department of Finance, including the review and accounting for the minister's office. The budget of the minister's office is not managed by public servants, and the people in that office are not accountable to me. The guidelines from the Privy Council Office and the Treasury Board minister are very clear in that regard.
Just to step back from this contract, and further to the comments from your colleague from the Liberal Party, the minister's office wished to engage in a contract above $25,000. They asked about the rules to do that, and were given a high-level response from Mike Giles, which is the same advice we would get within the department: this is what you should consider as you are going forward; there is no law there, but these are the guidelines for how it should be done. That was the advice given.
Now, the question was, is there something unique about Mr...? And this is a judgment, by the way, delegated properly to the chief of staff of the minister to make. The judgment was: was this unique, and should there be a request for proposals?
Well, it is quite unique: you don't go to the public with requests for proposals to ask somebody to come in and work in a minister's office at budget time to manage the political interface with others. That was a key factor that the person responsible and accountable, David McLaughlin, considered. It's the same consideration. The department itself has had some direct contracts above $25,000 with individuals for personal services. It's a consideration that we've made, and it's a consideration of judgment.
Following the rules of the Treasury Board and the Privy Council, the person authorized to make that judgment was the minster's chief of staff. He sought some advice on some parts of that contract, the department reported it, and he made his decision. And there was no difference between me and the minister in this regard. I did not discuss this with the minister, and he did not discuss it with me.
:
I'm actually not saying that. Let me just be very clear on this, Mr. Williams.
As the accounting officer for the department, I want to make sure that all the appropriate due diligence is done, but I also want to reflect the reality that this authority is delegated to the minister and from him to his chief of staff. The minister is solely accountable and answerable for that particular part of his budget. It is in a framework that I say is coherent enough for me to be the accounting officer of, but there's no way you want deputy ministers to be looking over their shoulders on every particular consideration with those offices, and, frankly, the rules and guidelines reflect that reality.
All I am saying is that I did not have disagreement with the minister, under the terms of the Federal Accountability Act, for this approach. In fact, the chief of staff made a judgment. I don't have to agree with that judgment. He made a judgment under terms that authorized him to make it, and it was not inconsistent with the sorts of judgments I make when we make a sole-source contract above $25,000, so I reflected that. And when I looked at it, I didn't have to agree with it because I didn't know everything he considered, but I did not disagree with what was going on and his judgment. He was accountable for that judgment, accountable to the minister.
:
There were a lot of questions there. From what I knew of this individual, he did very good work for us. It wasn't one speech; it was the whole communications process leading up to a very large budget. This was not unreasonable in terms of what was asked for.
Similarly, from what we knew, when Sara Mintz was engaged for quite a modest contract at budget time for an extended period of time, people worked very hard. There's no question there was value, in our view, even at arm's length. We don't know the details of what they were doing--they didn't work for us--but there's no question there was that value.
On the overall budgets, I think the Ottawa Citizen took a subset of all of those above $10,000 and within $1,000 of $25,000. I'm advised we had 43 contracts between $24,000 and $25,000 out of 1,394 contracts. By the way, all those contracts followed the rules, so that's really a non-issue, in my view.
:
Thank you, Mr. Chair. I'll carry on.
MacPhie & Company is a professional services firm that specializes in strategic planning and communications. Yes, our firm is small, but we compensate for what we don't have in the number of staff members through the talents of the professionals on our team and through the passion for our client engagements. Also, we just plain work hard.
Our company has grown quickly and we have served clients in telecommunications firms, high-tech companies, health care organizations, financial services, engineering companies, advertising agencies, national charities, the tourism industry, management consulting firms, industry associations, the energy sector, and all levels of government.
Mr. Chairman and committee members, the budget process is time-consuming. It forces you up an incredibly steep learning curve in terms of content knowledge, and it requires a blend of congenial teamwork and unrelenting focus on the task at hand.
Reflecting upon other federal budgets, veterans of the Department of Finance said that Budget 2007 was one of the largest budgets in recent memory in terms of the number of pages and supplementary materials. Over the course of our work on Budget 2007, my colleague and I worked for over 800 hours. There were few, if any, days off. Working closely with the Department of Finance and the minister's office, our work included, but was not limited to, developing a comprehensive communications strategy and editing communications products, including the budget plan, the budget fanfolds, video scripts for the Department of Finance, the briefing book, and chapter highlights. It involved drafting the budget speech. It involved developing messages and strategic approaches to budget communications; drafting a speech strategy for the minister's budget speech; managing the timelines and critical path of key budget-related communications; providing creative suggestions, counsel, and planning related to pre- and post-budget events; acting as liaison between the minister's office and the Department of Finance for budget-related communications products; coordinating revisions to communications materials from the minister's office to the Department of Finance; attending detailed budget page-turner meetings, which involved going page-by-page through the budget plan, the briefing book, and fiscal-balance materials; developing and conducting budget lock-up presentations for cabinet ministers and government caucus staff; attending pre-budget speech and media training and practice sessions with the minister; and fact-checking communications materials for accuracy and consistency.
This is but a sampling of the work we were asked to complete as part of the Budget 2007 process.
There has been some talk, both in the House of Commons and in the media, that MacPhie & Company was involved with writing the 2007 budget speech. That's true, but as I have just demonstrated, helping with the budget speech itself was but a small part of the work we delivered. Working closely with the minister, his office, and the Department of Finance, we worked hard to build a speech that would clearly outline the key themes of the budget and inspire Canadians to believe in themselves and in their country.
We are very proud of the work we did related to Budget 2007. The taxpayers of Canada received value for money. We delivered our work professionally and within a very short timeframe.
I must add that we were extremely impressed with the level of dedication, professionalism, and passion that we found among staff working within the Department of Finance and in the minister's office. These are hard-working people who, like us, truly went above and beyond the call to deliver the federal budget. It was our pleasure to work with them.
[Translation]
Honourable francophone members of the committee, I would ask for your indulgence in allowing me to respond to your questions in English, my mother tongue.
[English]
The value of the professional service we provided greatly exceeded the amount charged to the Department of Finance for those services. Furthermore, we incurred nearly $14,000 in expenses related to work on Budget 2007. Not one dime of those expenses was charged back to the Department of Finance.
[Translation]
Thank you very much.
:
Mr. Chairman and honourable members of the committee, my name is Sara Beth Mintz. I'm here today voluntarily in response to this committee's invitation to appear concerning the study on the subject of untendered contracts in relation to the preparation of Budget 2007.
In mid-December 2006 I was asked if I was available to come to Ottawa to work on Budget 2007. I was honoured to be asked. As a student of politics, law, and business, I was being offered the opportunity to use my education and skills to serve the public.
It was agreed that I would begin working on Budget 2007 in mid-January, and would be compensated up to $24,900 for work performed. I signed a contract, which provided that I would be paid a sum not to exceed $24,900. It was a condition of the contract that I would be personally responsible for all of my living expenses and any expenses in relation to my fulfilling the contract.
On January 22, 2007, I joined the budget team, and over the course of the next two months I worked long hours: six days a week on average. In March I worked 18 days straight in the lead-up to the presentation of Budget 2007.
I would now like to address my qualifications. In 1999 I graduated with an honours bachelor of arts in political science from the University of Western Ontario. I was accepted into the concurrent honours business administration program at the Richard Ivey School of Business and the bachelor of laws program at the University of Western Ontario. I completed this program in 2003, and was called to the bar of Ontario in 2004.
Each summer during my undergraduate degree I returned home to Dundas, Ontario, where I worked for my local MPP in his constituency office. In 2000 I applied to the summer intern program at Queen's Park. I was placed by the then-premier's office in Minister Flaherty's office, who at the time was the Attorney General for Ontario and the minister of native affairs. Prior to my placement,I had never met Minister Flaherty.
During this tenure I developed a professional relationship with Minister Flaherty. One of my major responsibilities was to provide background research and recommendations on several policy initiatives. The most interesting research project involved reviewing and considering a policy for Ontario on the sexual exploitation of children, which resulted in the Rescuing Children from Sexual Exploitation Act being passed in June 2002.
During my time in Minister Flaherty's office I developed a deep respect of his work ethic, his intellectual capacity, and most importantly, his devotion to public service.
In summer 2001 I worked in the office of the Honourable Michael D. Harris, Premier of Ontario, in issues management and question period preparation. In summer 2002 I was again placed in the premier's office. After graduating in 2003 with my HBA and LLB degrees, I began working in the private sector, first as an articling student, and then as a lawyer after my call to the bar.
I would now like to address my responsibilities on Budget 2007, which included the following: analysis of and advising the minister concerning appropriate policy inclusion; meeting with minister's staff concerning their department budgetary funding requests; contributing to policy development; and organizing and managing Budget 2007 day events.
I have been involved in the political process for most of my life. I have volunteered many hours of my time to participate in nomination races, leadership contests, and elections. I have served on my provincial riding executive. Most recently, I served on the Ontario PC Party executive as the fifth vice-president. I volunteered for Minister Flaherty during both of his leadership races. I have been at every provincial PC convention held for as long as I can remember. I am proud of my political involvement and my history of public service.
When I received the call to work on Budget 2007 I was deeply honoured to be asked. I was aware that by accepting the contract I was forgoing lucrative work at a private law firm. I knew that accepting the position would be a great sacrifice, not only professionally and personally, but also financially.
I accepted this position for many reasons: my loyalty and respect for the minister, my interest in public policy work, and my commitment to public service. But the underlying and fundamental reason is that I was called upon to use my knowledge and abilities to serve the Canadian people, and I when I received the call I answered it willingly and without hesitation.
I would be pleased to answer your questions now.
Thank you.
:
Thank you, Mr. Chairman.
Mr. MacPhie just confirmed—and for their benefit, because they weren't in the room before with the two deputy ministers—the figure that was public.
What actually disturbs me here, Mr. Chairman, is that when the requests that the Liberal Party asked for were ATIPed, they actually knew this number, and it was not even part of their line of questioning. That's a real concern for me today, because there seems to be a notion that if somebody has been politically active, then even though their credentials are substantial, they can't be involved in public service.
I would like to ask Sara.... Maybe before that I need to also disclose that, as you heard Sara say in one of her comments, she returned to Dundas. She is a friend and has been a constituent of mine.
Sara, you had alluded to your credentials and everything at the beginning. You roughly spent about 400 hours in your work, calculating what you said for the two months, in your budget development. You're a lawyer, and that works out to me to be less than maybe $100 per hour. I would think you probably took a substantial hit, wanting to serve the Canadian government on this. Is that correct?
:
Thank you for the question.
As I mentioned in my opening remarks, I did accept this at great sacrifice professionally. There were offers in lucrative private practice that I could have accepted at that time, and I was in the development of talks with them when the call came in.
I trust that you are aware that I have three degrees. I have a political degree, a business degree, and a law degree. That allows me to have a unique set of skills, which I feel I brought to the table. Along with that I did have two and a half years of serving the public in government over a seven-year period prior to this work on the budget.
I was very honoured to be asked, and I was aware that I would be doing this at a lower rate than I could expect in the fair-market value of my work in the legal profession or in any other tasks that I was going to be doing.
What I'd like to point out, since you raised the issue of my taking a financial hit to do this job, is that the $24,900 awarded under the contract did not take into account the various expenses that I had to incur to come to Ottawa and do this work.
I had to find furnished accommodations in Ottawa for the two months, at about $5,500. I had to travel back and forth for various meetings, all at my own personal expense, for another approximately $900. I had to keep my apartment in Toronto, which was $1,800. I had a 416 cell phone, and there were many other various little expenses.
When you add this all up, the net result of my work was approximately $16,000 over that course. I was proud to do it because I was excited to have this opportunity to use all of my skills to serve this public, to serve the Canadian people.
:
I'd like to call this meeting back to order.
This is our last one-hour segment, colleagues, and we're very pleased to have with us the.
Welcome, Minister Flaherty.
Before we go to the first round, I'm going to urge the members again. We are dealing with very specific contracts, and I'd ask the members to keep your questions short, brief, succinct, and I would ask Mr. Flaherty, of course, to keep his answers short and to the point.
Having said that, we're going to go to the first round of seven minutes to.... Excuse me. I forgot.
Do you have an opening statement, Mr. Flaherty?
Mr. Chairman, I appreciate the opportunity to meet with you and the members of the committee today to set the record straight with respect to the work that was carried out in support of the second budget, Budget 2007.
In some instances, in the House of Commons and in the media, this work has been mischaracterized and, quite frankly, belittled.
[Translation]
It is a pleasure for me to be here today with you. I would like to say a few words regarding contracts and clarify certain points.
[English]
First let me say that I do not regret hiring MacPhie & Company or Sara Mintz. They provided good value for money for the taxpayers of Canada. These people worked long hours to help us deliver what is unquestionably the most important document of the government, the national budget. I do regret, however, that administrative functions were not followed, and I'll have more to say about that in a minute.
The national budget, as you know, is the financial road map of the government. It provides a snapshot of Canada's fiscal situation. It sets out economic projections going forward. It presents new tax measures and policies from various departments and crown corporations, and it provides a series of annexes and technical papers providing extremely detailed financial information.
This particular budget, Budget 2007, was an historic document. It dealt with many complex issues, such as equalization, which are difficult to communicate to the public, and it was the largest budget document ever, at 477 pages. When you pick up the actual budget documents, you really don't get a sense of the scope of the work involved.
I look around the room to see if any of you have ever worked on a budget. I guess Mr. Christopherson would have in the province of Ontario, so he has some idea of the complexity involved. It is far more complex and labour-intensive than many may think. For those of you unfamiliar with the budget process, let me take a few minutes to mention some of the stages involved.
Clearly, you cannot have a budget without policy. Policy work for Budget 2007 began soon after Budget 2006, which was delivered on May 2, 2006. First we identified stakeholders to provide input into the process: representatives from municipal governments, representatives from provincial and territorial governments, academics, associations, consumer groups, business groups, members of Parliament, and so on.
Second, there were officials from the Department of Finance. The finance committee of the House, my staff and I spent hundreds of hours over the course of months travelling the country and meeting with various people and holding pre-budget consultations. We gathered political ideas from our political colleagues and other departments. We also opened up the pre-budget process to all Canadians by offering online consultations.
Thirdly, all of the ideas were then carefully reviewed, prioritized, and eventually costed. All policy decisions were reviewed with our long-term economic plan in mind--that is, Advantage Canada. We believe that this is the responsible approach.
Fourthly, budget policy briefings were held. During those briefings, department officials presented binders of policy options and various alternatives. Over the course of months, these were eventually reduced to a manageable and affordable budget package that reflects the priorities of Canadians.
As policy development moved closer to a final package, a team of communications, parliamentary affairs, and logistics people from within and outside government swung into action. These people were looking at a mountain of work within very compressed timelines. They were responsible for quantitative and qualitative research, writing, and editing of the budget speech; writing and graphic design for all of the companion documents, the fanfolds, “The Budget in Brief”, and in 2007 the fiscal balance document; also writing and producing briefing books and materials for members of Parliament; writing and producing videos and website content; producing budget day presentations for cabinet and staff; coordinating the production that is budget day--an event that involves literally hundreds of people both here in the parliamentary precinct and throughout Ottawa; organizing budget lock-ups for members of Parliament, hundreds of stakeholders and the media; and developing pre- and post-budget rollouts, including speeches and events.
As I mentioned, developing and rolling out Budget 2007 was an enormous task. To ensure that it was done in a timely and professional manner, we brought in help from outside, a practice followed for many years by past federal ministers of finance.
Obviously this budget material was confidential. I engaged people who I not only knew could do the job but who I could trust.
MacPhie & Company consisted of two individuals, Hugh MacPhie and Paul Tambeau. These two gentlemen are communications professionals who provided hundreds of hours of work on this file. They worked on several aspects of Budget 2007, such as participating in the budget search process; developing a comprehensive communication strategy; drafting, editing, and proofing various budget products, including the budget speech; managing the communications critical path and production schedules; and developing pre- and post-budget rollouts.
Sara Mintz is a lawyer with extensive private and public sector experience. Her responsibilities included working on policy, providing analysis and assessments to the budget director and senior Finance Canada officials, coordinating budget day logistics, and assisting the budget director.
These people have worked with me in the past during my time in public life. They are dedicated and hard-working. I trust them. They have always acted in the public interest.
As I have stated consistently, my office failed to follow some of the administration functions in engaging MacPhie & Company. As I've mentioned on several occasions both inside and outside the House of Commons, regrettably administrative functions were not followed with respect to the contract with MacPhie & Company.
I've been open and transparent about this. The moment my staff brought the error to my attention, I instructed my staff that all Treasury Board guidelines were to be followed to the letter. I made it clear that any other breaches would not be tolerated. I ordered a review by my new chief of staff. Errors were administrative, since the value for money was delivered, but I ordered the review, and we developed an action plan, which was first of all that there had to be strict compliance with all Treasury Board guidelines; second, that my staff must consult the departmental staff with respect to all contracts; and third, that my staff must advise me of any concerns expressed by the department to them concerning issues of contract.
I can say this at the end, Chair: it's far better to bring experts into the office on a short-term contract when needed than to hire permanent staff unnecessarily. It's cost-effective.
:
Mr. Hubbard points out, and I quote, that he and his colleagues are “not really concerned about your ability to do a good job”. The people he was referring to are Ms. Mintz and Mr. MacPhie. So we now have an opposition that's put together a hearing to look into the work, which they admit does not concern them, of some contractors who provided value for money and who broke no rules.
We know that this group--we're talking about Mr. MacPhie--for example, put in over 800 hours of work. That's not disputed by anyone. They went over 400 pages of budgetary material and helped with writing and editing that material. They had sessions in Calgary, Winnipeg, Vancouver, North York, and Montreal to gather feedback from everyday Canadians on the budget. And they did all that for what is the standard hourly rate, if not significantly less. It raises a lot of questions about why we're actually here having these hearings.
Ms. Mintz is highly qualified. If she were billing in the legal community, with her qualifications, she would have been billing at a much higher rate than she ever did the government. She's a hardworking person. No one disputes any of that.
I guess, Minister, it all comes down to the fact that you know these people, and therefore there must be something nefarious about their hard work. That's what this is really about, isn't it?
:
I appreciate your wanting to thank these individuals, but we have limited time.
There's a pattern here, Minister. Your office had 67% more untendered contracts a shade under the $25,000 limit. They went to people involved on various levels with the Conservative Party. When we look at what was arranged with your former chief of staff, this contract was shifted from the Department of Finance into your office, and we heard from the deputy minister and the Secretary of the Treasury Board that a minister could have signed off on it had the contract involved $100,000.
Now, the contract, when signed off, was just a shade under $100,000; it was $98,580. You would have had to sign off on that otherwise. And then afterwards there were a number of expenses that rolled in, taking it up to the $122,000. So once again, we see a pattern. You would have had to sign off on this particular situation, according to what we heard previously.
Did you sign off on this, or was it just your chief of staff?
:
Good morning, Minister Flaherty.
I want to commend you. I think you've been rather open and transparent on this whole matter. You've acknowledged right from the get-go that it was an administrative error, and you haven't been evasive at all.
Further to that point, Deputy Minister Wright was here this morning, and he said that this whole matter--and he has a lot of experience--was a judgment call, and he didn't disagree with the call that was made. So in many ways, I think you went probably further than what even the deputy minister would say.
Mr. Williams isn't here this morning, but I'm sure he would confirm that it's very unusual to have special meetings in public accounts when we call a political minister before the committee. It rarely happens in public accounts. It's not within the parameter of public accounts, and it suggests that there may be other motivations involved in this whole meeting.
I've listened to the questions today. It doesn't seem to me that a whole lot of people on the opposition side are very focused on improving the process.
If I could summarize it, it seems to me the intent of far too many members of the opposition is to slag your good name or slag the names of other good Canadians who have provided public service or have worked for the government and so on.
I concur with you. Why would anybody want to take on these jobs if they're going to be submitted to this kind of defamation before a parliamentary committee? In many respects, I think this thing is getting to be a low in Canadian politics.
Do you have any comments, sir, on what's going on here today and on what seems to be the focus of the opposition's questions?