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37th PARLIAMENT, 3rd SESSION

Standing Committee on Public Accounts

EVIDENCE

CONTENTS

Monday, April 19, 2004

1120

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

Mr. Claude Boulay (Individual Presentation)

The Chair

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

The Chair

1125

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

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

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

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

1130

The Chair

Mr. Vic Toews (Provencher, CPC)

Mr. Claude Boulay

The Chair

1135

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Odina Desrochers

The Chair

Mr. Claude Boulay

The Chair

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

The Chair

1140

Mr. Vic Toews

The Chair

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

1145

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

1150

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

1155

Mr. Claude Boulay

Mr. Dennis Mills

The Chair

Mr. Claude Boulay

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

Mr. Claude Boulay

1200

Mr. Dennis Mills

Mr. Claude Boulay

Mr. Dennis Mills

Mr. Claude Boulay

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Odina Desrochers

The Chair

Mr. Odina Desrochers

The Chair

Mr. Claude Boulay

The Chair

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

The Chair

Ms. Judy Wasylycia-Leis

1205

The Chair

Mr. Vic Toews

The Chair

Mr. Dennis Mills

Mr. Vic Toews

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

The Chair

1210

Ms. Judy Wasylycia-Leis

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

1215

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Mr. Jason Kenney (Calgary Southeast, CPC)

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

The Chair

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

The Chair

1220

Mr. Claude Boulay

The Chair

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Marcel Proulx (Hull—Aylmer, Lib.)

Mr. Jason Kenney

Mr. Marcel Proulx

The Chair

Mr. Marcel Proulx

The Chair

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

1225

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

Mr. Claude Boulay

The Chair

Mr. Jason Kenney

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

1230

Mr. Claude Boulay

The Chair

Hon. Robert Thibault (West Nova)

Mr. Claude Boulay

Hon. Robert Thibault

Mr. Claude Boulay

Hon. Robert Thibault

Mr. Claude Boulay

Hon. Robert Thibault

Mr. Claude Boulay

Hon. Robert Thibault

Mr. Claude Boulay

Hon. Robert Thibault

Mr. Claude Boulay

Hon. Robert Thibault

Mr. Claude Boulay

1235

Hon. Robert Thibault

The Chair

Hon. Robert Thibault

Mr. Claude Boulay

Hon. Robert Thibault

Mr. Claude Boulay

1240

The Chair

Mr. Claude Boulay

The Chair

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

The Chair

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

1245

Mr. Odina Desrochers

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Odina Desrochers

1250

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

The Chair

Mr. Marcel Proulx

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

The Chair

1255

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

The Chair

Mr. Odina Desrochers

Mr. Claude Boulay

The Chair

Hon. Shawn Murphy (Hillsborough, Lib.)

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

1300

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

1305

Hon. Shawn Murphy

Mr. Claude Boulay

Hon. Shawn Murphy

Mr. Claude Boulay

The Chair

CANADA

Standing Committee on Public Accounts

NUMBER 025

3rd SESSION

37th PARLIAMENT

EVIDENCE

Monday, April 19, 2004

[Recorded by Electronic Apparatus]

Á (1120)

[English]

The Chair (Mr. John Williams (St. Albert, CPC)): Order. Good morning, everybody.

Pursuant to Standing Order 108(3)(g), we are dealing with chapter 3, “The Sponsorship Program”, chapter 4, “Advertising Activities”, and chapter 5, “Management of Public Opinion Research”, of the November 2003 report of the Auditor General of Canada, referred to the committee on February 10, 2004.

Our witnesses today are, as individuals, Mr. Claude Boulay--he is accompanied by counsel, Mr. Daviault--Mr. Jean Brault, and Mr. Gilles-André Gosselin.

As we can all see, Mr. Boulay is before us this morning.

Welcome, Mr. Boulay.

[Translation]

Mr. Claude Boulay (Individual Presentation): Thank you.

[English]

The Chair: Good morning. Before we turn to you, we have some business.

As I've mentioned, at the beginning of meetings, if summonses have been issued, I will so indicate--

A voice: Excuse me, but this is still not working.

Mr. Dennis Mills (Toronto—Danforth, Lib.): On a point of order, Mr. Chair, I think we should make sure that our witnesses' earpieces are working properly before we begin.

The Chair: We're going to do some business that does not affect the witnesses. As we continue to talk, they will try to see if they can get the system working, the assumption being that they can get it working by the time we're ready to turn to the witnesses.

As I mentioned, if summonses have been issued, I will make the announcement at the beginning of each meeting. It will be just a regular pattern if they have been issued.

Summonses have been issued to Mr. Jean Brault, Mr. Claude Boulay, Mr. Gilles-André Gosselin, Ms. Isabelle Roy, and Mr. Jean Lambert.

As for documentation, I have a letter from Public Works and Government Services Canada, signed by I. David Marshall, in both official languages. It's addressed to Mr. Jeremy LeBlanc, the clerk, and dated April 14. It reads:

During its meeting on March 11, 2004, your committee adopted a motion requesting that the Department of Public Works and Government Services write to all parties in receipt of a sponsorship grant from the time of the program's inception. The following information will provide the Committee with an update on the actions undertaken by the Department to respond to this request.

Since the inception of the Program, a total of 2,764 approved sponsorship files were identified in our database. Information on recipients is available for 2,043 files; for the remaining 721 files (i.e. fiscal years 1997 through 2000), there are no coordinates in our database.

We are now in the process of mailing a letter and a questionnaire to all known 2,043 recipients. The questionnaire will help organizers in providing the relevant information and consequently provide us with better information management. A dedicated toll-free line is also in place to answer all questions. We anticipate beginning receiving responses by the end of April. I have included, for your information, a copy of the letter and the questionnaire. For the sake of completeness, we have estimated the incremental cost of this mailing to be $15,000.

I trust this will be satisfactory to the Committee.

Signed by I. David Marshall, that letter is tabled, and a public document.

There are a couple of other housekeeping things.

This was discussed at our in camera meeting last week. As chair, I shall be careful to ensure that the questions by members and the answers by witnesses remain relevant to the orders of the day, that being chapters 3, 4, and 5 of the November 2003 report of the Auditor General of Canada. Where the information given in either questions or answers seems to stray, I shall intervene to ensure that the discussion remains on track. I would ask that, in respect, questions and answers remain succinct and to the point. And we discussed that last week.

The committee has also decided that from here on in, all witnesses will be sworn in as a matter of course. To quote from Marleau and Montpetit, on page 862, “A witness who refuses to be sworn in might face a charge under contempt.” As well, “...any witnesses who lie under oath may be charged with perjury.”

It has also been brought to my attention by the people who are assisting the committee that there has been difficulty in securing the attendance of a number of witnesses. We discussed this, and we did not feel that the evasiveness of the witnesses in appearing before a public investigation of this nature was becoming of the advertising industry as a whole. Therefore, we would encourage those witnesses to identify themselves and to agree to come forward at the time and date identified by the committee so that we can move forward in an orderly fashion.

The clerks have given me...and this is a fairly straightforward thing. For the first time, I think, in the seven years I've been the chair of the public accounts committee, we actually need a budget for witnesses to come forward. We normally just deal with public servants here in Ottawa. The budget is for $49,050 to cover anticipated expenditures by the committee. It has been distributed.

Á (1125)

Hon. Joe Jordan (Leeds—Grenville, Lib.): I move that the committee adopt the budget.

(Motion agreed to)

The Chair: I will take it to the liaison committee and move it forward from there.

Mr. Boulay, before we turn to you, I have to say this, which I say to everybody who comes before the committee:

...the refusal to answer questions or the failure to reply truthfully may give rise to a charge of contempt of the House, whether the witness has been sworn in or not. In addition, witnesses who lie under oath may be charged with perjury.

That is from page 862 of House of Commons Procedure and Practice by Marleau and Montpetit.

You are appearing before us this morning as an individual. Did you have discussions or meetings with any employees of the Government of Canada or any members of this committee in preparing your report before coming to this meeting?

Mr. Claude Boulay: No.

The Chair: Has legal advice been provided or paid for by authorization of any official in the Treasury Board Secretariat, the Department of Public Works and Government Services, or any other government department or agency? Basically, is the government paying for your legal advice?

Mr. Claude Boulay: No.

The Chair: Thank you.

Do you have an opening statement?

[Translation]

Mr. Claude Boulay: Yes.

[English]

The Chair: First, we're going to ask you to take an oath.

Mr. Desrochers, is this a point of order?

[Translation]

Mr. Odina Desrochers (Lotbinière—L'Érable, BQ): Yes. Point of Order.

There were three witnesses scheduled for this morning: Mr. Brault, Mr. Gosselin and Mr. Boulay. I would like to know exactly why Mr. Brault and Mr. Gosselin are not here this morning. What reasons did they give? The steering committee discussed this at length.

[English]

The Chair: Mr. Jean Brault has provided a medical certificate to us that says his doctor prefers that he not come before the committee. I said preference wasn't quite good enough. I wanted a statement from a medical practitioner that said that in his professional opinion, the person should not appear before the committee. We expect that will be forthcoming today or tomorrow.

With regard to Mr. Gilles-André Gosselin, we do not have an address so that we can send him an invitation to appear before this committee, followed by a summons, if appropriate. The committee has not been able to contact him to this point in time.

We are going to swear in the witness.

[Translation]

Mr. Claude Boulay: I swear that in my testimony I shall tell the truth, the whole truth and nothing but the truth, so help me God.

[English]

The Chair: Thank you very much, Mr. Boulay.

Would you now like to read your opening statement to the committee?

[Translation]

Mr. Claude Boulay: Yes.

I am here today at the request of the Standing Committee on Public Accounts, as former vice-president and principal shareholder of Groupe Everest, a communications and marketing firm I co-founded over 27 years ago.

In spite of the very short notice I received about appearing here today—I was called to appear only on the afternoon of Friday, April 16—I would like my testimony here this morning to help shed some light on some aspects of the sponsorship file.

Groupe Everest has always cooperated voluntarily and openly with government authorities and with program auditors.

In May 2002, I myself contacted the deputy minister of Communications Canada, Guy McKenzie, who put me in touch with a senior representative of the PWGSC Audit and Ethics Branch, which then sent an audit team to our offices.

We gave the team full access to all files, invoices, supporting documentation and anything else in our possession required to examine and understand the files being handled by Everest or its subsidiaries.

The sponsorship file has caused a great deal of ink to flow over the past two years. Recently, it has been alleged—and this is unfounded—that agencies pocketed $100 million in commissions and fees, when the money was in fact spent on production costs and fees.

The sponsorship file has generated many unfounded allegations about me, about Groupe Everest, and about its subsidiaries. I want to say to all members of this committee and to all Canadians that no money and no public funds have been misappropriated in the files with which Groupe Everest and its subsidiaries were entrusted.

Groupe Everest was founded and built on principles of integrity, expertise and competency. It is those principles and values that have always underpinned the services we provide to our many private- and public-sector clients.

Groupe Everest became a Government of Canada service supplier in 1997. Since then, all contracts we were awarded were always preceded by calls for tender.

Today, among other things, I would like to clarify the role played by Media/IDA Vision in this file.

Media/IDA Vision is the company that in 1998, through a call for tender, won the advertising purchasing account for all Government of Canada activities. The calls for tender also covered administering and managing sponsorship contracts between the Government of Canada and the sponsored events or organizations.

As the agency responsible for purchasing advertising for the Government of Canada, Media/IDA Vision was paid according to a scale of decreasing commissions, ranging from 3.25% to 2.75%, depending on the volume of advertising bought by government departments. For managing sponsorship contracts, the commission was 3%.

A number of audits—we have noted three—carried out on Media/IDA Vision files by PWGSC showed that the organizations, media and events for which government contributions were intended received 100% of the amounts that were due to them.

Á (1130)

Groupe Everest was also one of the many Canadian agencies retained by the Government of Canada to administer certain sponsorship events. The commission set by the Government of Canada for this work, which was carried out openly and with integrity by our sponsorship department, was 12%.

The fact is that Groupe Everest and its subsidiaries always delivered communication products while meeting the highest standards of the industry, and certainly delivered products that met the expectations of the Government of Canada. All contracts awarded to us included deliverables, which were delivered in accordance with contract provisions, as demonstrated by supporting documentation.

In conclusion, I would like to reiterate to all members of this committee and to all Canadians that no money, no public funds, were misappropriated, and that there was no wrongdoing involving any contracts awarded to Groupe Everest or its subsidiaries.

I would now be pleased to answer your questions.

The Chair: Thank you, Mr. Boulay.

[English]

Now we're going to move on to questions. We had some discussion last week at the steering committee about how to handle the four-minute problem that we have identified. We didn't have a chance to discuss how we may resolve that, but perhaps later on today we will. We'll start with the normal procedure of first round eight minutes and go on from there.

Mr. Toews, please, eight minutes.

Mr. Vic Toews (Provencher, CPC): Thank you.

Thank you, Mr. Boulay.

Mr. Boulay, are you aware if the Auditor General had access to the Groupe Everest and subsidiary documentation and files relating to the audit of the sponsorship program?

[Translation]

Mr. Claude Boulay: Forgive me, but I am having a great deal of difficulty hearing the interpreter. The sound is very, very low.

[English]

The Chair: Okay, can we get our maintenance people to take a look at this again?

Do you hear anything at all, Mr. Boulay?

Á (1135)

[Translation]

Mr. Claude Boulay: That was a very long time ago, Mr. Chairman.

[English]

The Chair: Can you hear me now, Mr. Boulay?

[Translation]

Mr. Claude Boulay: Not really.

[English]

The Chair: Is there still a problem?

[Translation]

Mr. Odina Desrochers: Mr. Chairman, the problem—and this is something I have never complained about—is that the sound on the English channel is very loud, while the sound on the French channel is very low. There is always a significant difference between the two languages. I was in radio for 18 years. Obviously, there is a volume somewhere which has not been properly adjusted, since we often have trouble hearing the interpreter.

[English]

The Chair: Can you hear now?

We'll ask the interpretation to speak into the microphone as closely as possible. We'll see if we can fix this in the short term and we have technicians on the way. As soon as they arrive we'll maybe have a few minutes recess to see if we can resolve the issue.

[Translation]

Mr. Claude Boulay: Yes, let's give it a shot.

[English]

The Chair: Mr. Toews, eight minutes.

Mr. Vic Toews: Thank you.

Mr. Boulay, to repeat my question—I'm sorry for the technical problems—are you aware whether the Auditor General had access to the Groupe Everest files and documentation relating to her audit into Groupe Everest and its subsidiary?

[Translation]

Mr. Claude Boulay: Based on my understanding of the Auditor General's work, she audited the documents in the files, and focused primarily on administrative aspects.

[English]

Mr. Vic Toews: Did she have access to the files at your offices?

[Translation]

Mr. Claude Boulay: Mr. Toews, I said in my opening statement that I contacted senior officials at Communication Canada. It seems that some documents—I'm not talking about Groupe Everest documents but documents in general—were no longer in the files, and this was odd. That is when I contacted Mr. McKenzie to advise him that I wished to cooperate with auditors if you wished to send a team, and if documents were missing.

[English]

Mr. Vic Toews: I appreciate the fact that you want to cooperate. I want to know whether she in fact had access to all the files that you had in your office related to Groupe Everest and its work in the sponsorship file. Did she have access to those files in your office?

[Translation]

Mr. Claude Boulay: No, not in our offices. If I understand correctly, the Auditor General's work does not involve coming to our offices. She works with government files. That is why I believe—

[English]

Mr. Vic Toews: All right. So there may be files in Groupe Everest's office that the government did not in fact have. You indicated that there are some files missing, and that could be supplemented by an examination of Groupe Everest files directly.

[Translation]

Mr. Claude Boulay: Yes. When we heard that some files might be missing, we called auditors; we contacted them through Mr. McKenzie, as I was saying. I think he was deputy minister at the time.

[English]

The Chair: Mr. Boulay, the question to you is this: was there information on your files that perhaps the government didn't have access to because the government didn't have the files?

Was that your question, Mr. Toews?

Á (1140)

Mr. Vic Toews: Essentially, yes.

The Chair: Were you in possession of information in your files that the government didn't have because they didn't have the files in their offices?

[Translation]

Mr. Claude Boulay: I really cannot tell you what files the Auditor General had. I don't know what she audited; I don't know what she consulted. I don't know whether the files she had were complete or incomplete. I simply don't know.

[English]

Mr. Vic Toews: The point is, though, that she didn't examine your files in your office. The only files she had access to were the files with the government, not those that may have been in your offices. They may have been the same, they may have been different, but she didn't come to your offices. She stuck with the government files; she didn't deal with the files that Groupe Everest had.

[Translation]

Mr. Claude Boulay: She never came to our offices.

[English]

Mr. Vic Toews: All right.

Mr. Boulay, I just want to deal very briefly with your relationship and your company's relationship with the Liberal Party of Canada. I have done some research that indicates that between 1996 and 2002 your group of companies, as well as you personally and your wife, Diane Deslauriers, made total contributions to the Liberal Party in the amount of $94,573.46. Do you have any information that would contradict that, or is that a fair assessment?

[Translation]

Mr. Claude Boulay: That seems an accurate assessment to me.

[English]

Mr. Vic Toews: There in fact were also some contributions to individual Liberal candidates, including Mr. Pettigrew, Mr. Patry, Mr. Saada, Mr. Maltais, and Mr. Martin Cauchon?

[Translation]

Mr. Claude Boulay: Yes, that's quite possible.

[English]

Mr. Vic Toews: Other than the contributions that were made to the Liberal Party of Canada, were contributions made to any other federal political party?

[Translation]

Mr. Claude Boulay: Yes, contributions were made to the Conservative Party.

[English]

Mr. Vic Toews: Do you have what that amount was, and in what year?

[Translation]

Mr. Claude Boulay: Unfortunately, I do not know that.

[English]

Mr. Vic Toews: Okay. Any indication about how much that was?

[Translation]

Mr. Claude Boulay: No, I don't remember, sir.

[English]

Mr. Vic Toews: Could you provide that to the committee, please? Can you undertake to provide that to the committee?

[Translation]

Mr. Claude Boulay: If the information is available. I don't know whether it is or not, but I presume that the election committee would have it.

[English]

Mr. Vic Toews: All right, thank you.

I'm specifically concerned, and I want to start with a memorandum written by Mr. Allan Cutler—I don't know if you've received a copy of this—with respect to the Canada savings bond retail debt program. There was a memo that was written to a Mario, dated January 26, 1996, referring to a Groupe Everest contract, an amendment to a contract. In that memo he stated: “As you instructed, I have prepared amendment #1 in the amount of $909,000.00.”

Mr. Cutler stated that he did not recommend the amendment for four reasons. The first was that “The amendment is to cover a completely retroactive situation”, and second, that “Groupe Everest will presumably obtain a commission on the sub-contract without having done any work”. Then there are some technical reasons as well, including that it required ministerial approval and also an issue with delegated authorities.

What do you know about this retroactive amendment of the Groupe Everest contract relating to the Canada savings bond and the retail debt program? Do you have any comments on Mr. Cutler's observations?

Á (1145)

[Translation]

Mr. Claude Boulay: No, I don't have any comments on Mr. Cutler's observations. This must have happened 10 years ago. I have no information on this.

[English]

Mr. Vic Toews: You are not familiar then whether Mr. Cutler's analysis that it was a completely retroactive situation and that Groupe Everest obtained a commission on the subcontract without having done any work--you wouldn't be in a position to agree or disagree with that because, as you indicated, you don't remember.

[Translation]

Mr. Claude Boulay: That is correct.

[English]

The Chair: Thank you very much, Mr. Toews. My apologies; the eight minutes does go fast.

You are quoting from a document. Which document are you quoting from? Is that a public document or a private document?

Mr. Vic Toews: No, this is documentation that has been filed with the committee, as I understand it. If not, I certainly received it from the committee.

The Chair: Was it part of Mr. Cutler's testimony?

Mr. Vic Toews: I believe it is. It had attached certain documents, including developing the procurement strategy and then a handwritten note from Mr. Cutler to one Mario, who was his supervisor.

The Chair: Okay. Perhaps the clerk can take a peek and see if it has.... If it is a public document, fine; if not, then table it and distribute it.

Mr. Vic Toews: It's under one of the tabs of the big binder, but I can show it to the clerk in case anybody wants to follow that up.

The Chair: Okay, thank you, Mr. Toews.

[Translation]

Mr. Desrochers, you have eight minutes.

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

Mr. Boulay, thank you for travelling here today to appear before the Public Accounts Committee.

Mr. Boulay, do you know Mr. Alfonso Gagliano well?

Mr. Claude Boulay: I know him, yes.

Mr. Odina Desrochers: Did you do any work for the Liberal Party of Canada in 1997 with Groupaction, another agency?

Mr. Claude Boulay: What sort of work, Mr. Desrochers?

Mr. Odina Desrochers: Did you work on preparing the 1997 election campaign?

Mr. Claude Boulay: We worked with a number of freelance people, probably to prepare that campaign.

Mr. Odina Desrochers: Were you personally involved in preparing the campaign, since you headed Groupe Everest?

Mr. Claude Boulay: I might have attended one or two meetings, the kind we call strategic meetings.

Mr. Odina Desrochers: How much money did your company receive from the Liberal Party of Canada for this work?

Mr. Claude Boulay: The work was done by volunteers.

Mr. Odina Desrochers: So volunteers worked for Groupe Everest and attended meetings with the Liberal Party of Canada, and no money was paid to your agency.

Mr. Claude Boulay: Not to my knowledge.

Mr. Odina Desrochers: Mr. Boulay, I don't know many advertising agencies that work this way.

Did you work on the 2000 elections?

Mr. Claude Boulay: I no longer recall that, Mr. Desrochers.

Mr. Odina Desrochers: You don't recall. You worked on the 1997 campaign but you don't remember whether you worked on the 2000 campaign. But that is only four years ago. November 2000 is not very long ago.

Mr. Claude Boulay: No, I don't remember whether I worked on the 2000 campaign.

Mr. Odina Desrochers: In 2000, you did not work on the Liberal Party of Canada strategy. Is that what you are saying?

Mr. Claude Boulay: Not to my recollection.

Mr. Odina Desrochers: When you were involved in contracts for the sponsorship program, did you personally meet with Mr. Gagliano?

Mr. Claude Boulay: No, not concerning the sponsorship program.

Mr. Odina Desrochers: You never met with Mr. Gagliano?

Mr. Claude Boulay: That is not the same question.

Mr. Odina Desrochers: Did you meet with Mr. Gagliano within the context of the sponsorship program, or under any other circumstances? Let's separate the two, if you wish.

Mr. Claude Boulay: Yes, I did meet with Mr. Gagliano.

Mr. Odina Desrochers: You never discussed sponsorship contracts with him?

Mr. Claude Boulay: I had no reason to discuss sponsorship contracts with him.

Mr. Odina Desrochers: Even if your company was receiving considerable amounts under the sponsorship program?

Mr. Claude Boulay: Mr. Gagliano was not the person managing the program.

Mr. Odina Desrochers: Who managed the program?

Mr. Claude Boulay: The program was managed by officials.

Mr. Odina Desrochers: Can you identify those officials?

Mr. Claude Boulay: There were a number of them. These are people you have already heard, or contacted.

Mr. Odina Desrochers: I would like to hear their names from you directly, Mr. Boulay.

Mr. Claude Boulay: Very well. Essentially, two or three people were responsible for the sponsorship program at Public Works. They are Mr. Guité and Mr. Tremblay.

Mr. Odina Desrochers: Did you often meet with Mr. Guité?

Mr. Claude Boulay: When necessary, yes.

Mr. Odina Desrochers: What does "when necessary" mean?

Mr. Claude Boulay: Mr. Guité was a client, an important client.

Mr. Odina Desrochers: I imagine he was indeed an important client.

Mr. Claude Boulay: Yes, of course. Let's say I had to meet with him once a month on average.

Mr. Odina Desrochers: Once a month.

Mr. Claude Boulay: At least once a month.

Mr. Odina Desrochers: So what were your dealings with Mr. Guité? Were you directed to discuss things with him?

Mr. Claude Boulay: No, not at all.

Mr. Odina Desrochers: No one in or around the Liberal Party of Canada directed you with respect to some contracts being of greater interest?

Mr. Claude Boulay: No. We talked about existing files.

Mr. Odina Desrochers: Give me some examples of existing files.

Mr. Claude Boulay: For example, we were negotiating a potential sponsorship deal. So we needed to know how things were going and where they were at.

Mr. Odina Desrochers: I want a name. You said in your opening statement that everything was done in a transparent way and was above-board. I'm asking you to give me a specific example. How did this work? Tell us what the role of Groupe Everest was in the Sponsorship Program.

Á (1150)

Mr. Claude Boulay: I think I mentioned that in my opening statement. It was a dual role. On the one hand, we had to administer sponsorship files. That means...

Mr. Odina Desrochers: How many files?

Mr. Claude Boulay: I would say that there may have been 20 to 25 files a year.

Mr. Odina Desrochers: So there were 75 over three years, from 1997 to 2000?

Mr. Claude Boulay: Yes, from 1997 to 2000, there were probably 75.

Mr. Odina Desrochers: How did it work? You had two roles : you had to place—

Mr. Claude Boulay: Yes. The two functions are different.

Mr. Odina Desrochers: And you were paid for both functions.

Mr. Claude Boulay: I see these two functions as being very different. On the one hand, there was the sponsorship management function, which involved interacting with the event.

Mr. Odina Desrochers: Were there contracts then, between you and the event?

Mr. Claude Boulay: The contract was between the event and Public Works.

Mr. Odina Desrochers: You had no control over the event?

Mr. Claude Boulay: Not at all. For example, someone showed an interest in an event.

Mr. Odina Desrochers: Who decided that interest should be shown in the event?

Mr. Claude Boulay: The officials did.

Mr. Odina Desrochers: Mr. Boulay, it may have been transparent, but I am having trouble understanding you. You talk about interests, files, but I want specifics.

Mr. Proulx, the chair will let me know; I do not need you to tell me anything.

Mr. Boulay.

Mr. Claude Boulay: I would like to give you specifics, but you have to try to understand them and give me time to answer you.

As I said in my opening statement, I would like to try to clear up a few things.

Mr. Odina Desrochers: We would too.

Mr. Claude Boulay: I would like to give you information that will probably give you a better understanding of what happened.

Mr. Odina Desrochers: Specific, clear and transparent.

Mr. Claude Boulay: Yes, because many things have been said and there is a lot of confusion. That is more or less why we are here this morning.

Here is the way it worked. Organizations submitted requests.

Mr. Odina Desrochers: To whom?

Mr. Claude Boulay: To the government, to Public Works. The government could then do a preselection or indicate its interest in certain events. Two things could happen. The government might want to do something at the event. For example, it might want visibility with the various Canadian hockey clubs. So it would get an agency, either ours or another one, and indicate that it wanted to allocate money to the league—

Mr. Odina Desrochers: Is the contract clear, or are there only intentions and assumptions?

Mr. Claude Boulay: May I finish?

Mr. Odina Desrochers: Yes.

Mr. Claude Boulay: Okay.

So at that point, either we were contacted and told to negotiate with the National Hockey League or the individual teams, informed of the amount that would be allocated to the sponsorship and asked what the government would get in return in terms of visibility, etc.— we were asked to come up with what was called a visibility plan—or the government received a request directly, for example, from the National Hockey League or the teams, indicating what the government would receive in return.

Mr. Odina Desrochers: Was the government Chuck Guité or Gagliano? Who was it?

Mr. Claude Boulay: It was the Department of Public Works, the officials at Public Works. All the files were sent there.

Mr. Odina Desrochers: But Mr. Guité had full authority to decide that the money would be spread among the hockey clubs.

Mr. Claude Boulay: The requests went to Public Works. Who received them within the Department of Public Works? I do not know, but the requests were sent to Public Works. Once the intention was expressed or the commitment made, a contract was set up between the government and the event, and then an agency was selected to supervise things.

Mr. Odina Desrochers: Your agency, for example.

Mr. Claude Boulay: Not necessarily! Ours was one of nine or ten Canadian agencies selected to manage these contracts.

Mr. Odina Desrochers: We will continue this discussion later, Mr. Boulay. My time has expired.

The Chair: Thank you very much, Mr. Desrochers.

[English]

Mr. Mills, please, eight minutes.

Mr. Dennis Mills: Thank you very much, Mr. Chair.

I just note the opposition's conversion here to wanting specific detail. It's really a noteworthy moment.

The Chair: I'll allow you to make a short comment, but remember, we're not into long presentations here.

Mr. Dennis Mills: My point goes back to you, Mr. Chair.

We're a committee of accountability, Mr. Boulay, and the Auditor General has said there is questionable value for money in some of these transactions. I want to know if you or your corporation did impact studies on the work you did on behalf of the Government of Canada.

In other words, if you provided advice, service, an in-house production, a product.... Normally, advertising agencies would go back to their customers and say, “Here is the value added, and here is the worth it brought for the invoice we sent you.” Did Groupe Everest do that in terms of its relationship with the Government of Canada?

Á (1155)

[Translation]

Mr. Claude Boulay: I would like you to be more specific in your question, Mr. Mills, because we are talking about advertising, sponsorships and Media/IDA Vision. Those are three events or three different types of files. If we are talking about advertising files, there would obviously be a post-mortem done after the advertising campaign. That is the case for some files.

With regard to sponsorship work, the agency's responsibility was to oversee the organization and carrying out of the event. It was also to ensure that the government actually got the visibility stipulated in the contract. The agency's responsibility was also to submit a final report, the post-mortem, to the government on the activity itself. The post-mortem for some files contains recommendations; certain things are indicated as having worked well and others less so. So, basically, that kind of document is submitted.

[English]

Mr. Dennis Mills: That leads to my second question. You mentioned in your opening remarks that all of the work you did for the Government of Canada....and I'm referring to the years 1997-98, 1998-99, and 1999-2000. There was approximately $20 million worth of work there for the Government of Canada, according to the Canada audit bureau, with regard to professional fees, in-house production, subcontract production, commission on production, etc.

You mentioned in your remarks that you supported the Government of Canada. Would it be possible for you to make available to this committee all the documents that back that up?

The Chair: Mr. Mills, I understand that Mr. Boulay is here as the former president of Groupe Everest, and if he feels it appropriate, he may want to explain that situation and whether he has access to the documentation you're talking about.

[Translation]

Mr. Claude Boulay: I no longer have any documents. As you know, the company was sold. I no longer have access to those documents.

[English]

Mr. Dennis Mills: Thank you very much.

Mr. Chair, how much time do I have left?

The Chair: You have just taken up three minutes and 33 seconds, so you have four and a half minutes left.

Mr. Dennis Mills: My concern with this exercise is the fact that until we can back up the invoices that were billed to the Government of Canada, it's going to be very difficult for us to decipher the value added, or whether there was value in certain cases. So I feel a little bit stumped. Do you have some thoughts or some ideas on how we could maybe get to a point where our mission of accountability could be met?

[Translation]

Mr. Claude Boulay: Work was done by the quick response team at Public Works. As I understand it, those people did an analysis, probably in 2002 and 2003. They went to the agencies. They were able to do that. The member was asking whether the Auditor came to us. No, she did not come, but the Public Works people visited the agencies and examined files. From what I understand—and this is in the Auditor General's report—the Public Works quick response team analyzed 725 or 726 files.

That is the starting point, in my opinion. I think that they saw documents. I will not speak on their behalf, but they saw deliverables and supporting documentation.

Â (1200)

[English]

Mr. Dennis Mills: Do they have them?

[Translation]

Mr. Claude Boulay: Pardon?

[English]

Mr. Dennis Mills: Does the Canada audit bureau team have those documents? When they came to do the audit with you, did they take copies?

[Translation]

Mr. Claude Boulay: Yes, absolutely. You may recall that at one point a Mr. Marshall appeared before you. I think that he was in the department's rapid deployment team. He commented on the quality of the information, the supporting documents and the cooperation that we had provided in our files, in speaking about Everest and Media/IDA Vision.

So those files exist. In my opinion, when you're trying to determine whether there was a deliverable product or not or if the supporting documents exist or not, that's the starting point.

From what I understand about the work of the Auditor General, she examined 26 files, whereas the people from Public Works examined 725. The Auditor General went through 26 files with a fine-tooth comb, from within the government apparatus, to determine what had happened and what we had as vouchers, contracts, requisitions and documentation, whereas the people from Public Works came with their own fine-tooth comb to look at the other side of reality, namely to determine what we had done to earn that money. They asked us where the deliverable product was, what our involvement in it was, etc.

That part of the deliverable exists in this place.

[English]

Mr. Dennis Mills: Thank you, Mr. Boulay.

I have less than a minute, Mr. Chairman, and I think Mr. Boulay has brought some very important evidence to us here. He's essentially stating that regarding the breakdown of the production budget that we received three weeks ago, the quick response team has the backup to all of that. I think it would be important for all members on this committee to have the backup that apparently the quick response team already has.

The Chair: It may not be out of line to bring the chief of the quick response team forward to tell us what he's found.

We'll see what we can do about that.

Mr. Dennis Mills: Thank you very much.

The Chair: Thank you very much, Mr. Mills.

Is this a point of order, Mr. Desrochers?

[Translation]

Mr. Odina Desrochers: Yes, Mr. Chairman. Is 26 the figure that was identified by the Auditor General? This is the first time I hear that 26 files were examined in the framework of—

[English]

The Chair: That's not a point of order. It's a question we can ask.

[Translation]

Mr. Odina Desrochers: So it's a question.

[English]

The Chair: Do you have something to say, Mr. Boulay?

Mr. Claude Boulay: No.

The Chair: Ms. Wasylycia-Leis, for eight minutes.

[Translation]

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you, Mr. Chairman. I want to welcome Mr. Boulay, as well as his attorney, and thank him for his participation and testimony.

[English]

I would like to begin by referencing the fact that the Auditor General doesn't have the jurisdiction to go into the firms and agencies in question, including your own. That has been clear from day one.

Further to Mr. Mills' question, I'm wondering if you could give us your assurance that we can have access to all files pertaining to all sponsorship programs and transactions between the government and both Groupe Everest and Media/IDA, as well as all files pertaining to the disbursement of advertising contracts for the period in question and relating to the evidence provided by the Auditor General.

The Chair: Ms. Wasylycia-Leis, it was pointed out that Mr. Boulay does not have access to these documents any more. Were you were asking that Public Works provide these documents?

Ms. Judy Wasylycia-Leis: Mr. Chairperson, does the government or the RCMP have access to the files?

Â (1205)

The Chair: This is one of the problems we have with these boundaries of jurisdiction. As the Auditor General has pointed out, she can only audit government files. She has no obligation to go beyond that. Public Works may have authorization within the contracts, if they have built it in, in order for them to audit the value received. I'm not sure that is in there. The RCMP certainly has the authority, but we haven't heard from them. But Mr. Boulay has pointed out that he does not have access to the documents.

Mr. Toews, you were going to say something.

Mr. Vic Toews: I have a point of order. This breakdown of the production budget must have been based on some documents. Did this witness produce this document?

The Chair: This morning I tabled a letter from Mr. Marshall that talked about 2,700 or so contracts, of which--

Mr. Dennis Mills: I have a point of order, Mr. Chair. The document Mr. Toews is referring to has been in our hands for three weeks.

Mr. Vic Toews: This is not the document that was produced by this witness. That's all I want to know.

The Chair: No, that was not provided by the witness.

Ms. Judy Wasylycia-Leis: On this point, Mr. Chairperson, but not as part of my questioning of Mr. Boulay, I think it would be helpful for us to determine--

The Chair: Can I have some order here, please?

Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: We're obviously all interested in getting access to the information to which the Auditor General did not have access. I think it's important for us to ask Mr. Boulay whether he is willing to grant access by this committee to all of those files, wherever they may be.

The Chair: Mr. Boulay, do you have access to any files now that you are no longer with Groupe Everest and Media/IDA?

[Translation]

Mr. Claude Boulay: Naturally, I don't have access to them personally, but I would still like to answer the member's question.

Once again I will send you back to the same place. As I said in my opening statement concerning Media/IDA Vision, both with regard to the work done to manage sponsorship contracts and the work done to manage government advertising purchases, the auditors from Public Works came to our offices. They spent three months with us a little under a year ago. They came to re-audit all the purchasing and all the contract data for Media/IDA Vision.

As I said in my introduction, 100 per cent of all the money that transited through Media/IDA Vision was sent either to media, to suppliers or events. So they reconstituted what's called an accounting. They looked at all the transactions for all the years of the contract. This documentation does exist. So initially, the audit is relatively simple to conduct.

Secondly, when I invited the Public Works auditors to come to our offices, they probably audited 60 or 70 per cent of the files administered in our firm's sponsorship department. That data also exists. It's part of the 725 files we referred to at the outset. So all this information currently exists.

[English]

Ms. Judy Wasylycia-Leis: Just on a point of order, Mr. Chairperson, related to this answer but requiring some action on your part, it would seem to me that if Mr. Boulay doesn't have access to his files, the only basis upon which he could say that would be if the RCMP has taken the files. If he's provided them to Public Works for information, they're also available to us, and I think it would be in our interest as a committee to do the analysis and not leave it for Public Works, given that it is the very department that's in question.

Is there a basis, Mr. Chairperson, for determining where the files are and how we can get access to them?

The Chair: There presumably is the basis that they're still with Groupe Everest and the current owners, and therefore we would have to explore that. Perhaps we can refer this issue to the steering committee. We can discuss there what we can or cannot do.

Â (1210)

Ms. Judy Wasylycia-Leis: Okay, thank you.

One example the Auditor General refers to--it's just a small example, in the scheme of things--is the Maurice Richard series. This was a well-publicized event. For the Maurice Richard series, money went from Public Works to Groupe Everest and Media/IDA, and then it was passed on to L'information essentielle. It would appear from the work of the Auditor General that there was no work involved in terms of that transferring of money. That is just one example of what's at stake here.

If you're saying that every dollar can be accounted for in terms of service, then my question to you is, what service or what product was delivered when you transferred the money from Public Works to L'information essentielle?

[Translation]

Mr. Claude Boulay: Media/IDA Vision's responsibility with regard to contract management is, first of all, to ensure that a contract has been signed by the various parties. So we would receive a copy of the contract and we then had to make sure that the money was disbursed in accordance with the terms of the contract. After that, with the participation of the people from Public Works, we had to ensure that the product was delivered. So Media/IDA Vision's mandate with regard to management was really to manage the contract. In every case, that was our responsibility. We acted as contract managers, for a preset percentage.

[English]

Ms. Judy Wasylycia-Leis: Yes, you received quite a percentage. Groupe Everest alone received almost $68,000 simply to transfer the money from Public Works, the body that determines eligibility around the contract. It begs the question, what else was involved besides paying for, as someone said earlier, the postage stamp to deliver that cheque to L'information essentielle?

[Translation]

Mr. Claude Boulay: Look, I think this can be seen in a very minimalist way. Media/IDA Vision managed a set of contracts. It didn't manage one element of them or one event. Media/IDA Vision managed a set of files for the government. Media/IDA Vision was also the guarantor for the money paid to the events. For the government, that was an insurance policy.

It's easy to take one example where a large amount is at stake. Groupe Everest's proposal to the government on Media/IDA Vision was a global proposal that also included sponsorship management. Our function was to ensure that the money managed by Media/IDA Vision would be managed in the government's best interest and in compliance with the contracts.

[English]

Ms. Judy Wasylycia-Leis: I appreciate the answer, except I don't think you've exactly dealt with the matter I'm raising, which is to explain what services you provided, or products you delivered, for simply transferring or moving cheques. And you know, it's not just a small amount here. All of this adds up to a huge sum of money for fees for agencies when there doesn't seem to be service delivered or product delivered.

Let's leave it at that for now, but I think you owe us more of an explanation on what actually was provided for each of the sponsorship agreements and ad contracts you received.

Let me ask you, are you familiar with the term “tollgating”?

[Translation]

Mr. Claude Boulay: No, I'm not familiar with it.

[English]

Ms. Judy Wasylycia-Leis: You've acknowledged donations to the Liberal Party. Have you ever provided services to the Liberal Party at reduced or no cost?

[Translation]

Mr. Claude Boulay: No.

[English]

Ms. Judy Wasylycia-Leis: Have you ever provided gifts to any of the individuals in question, such as Chuck Guité and Roger Collet, and others in the Department of Public Works involved in the sponsorship file?

[Translation]

Mr. Claude Boulay: Not to my knowledge.

[English]

Ms. Judy Wasylycia-Leis: You don't recall paying for suites for federal officials, including Roger Collet and Chuck Guité, and their families during the Grand Prix in Montreal?

Â (1215)

Mr. Claude Boulay: No.

Ms. Judy Wasylycia-Leis: Do you recall giving gifts to Chuck Guité upon his retirement?

[Translation]

Mr. Claude Boulay: When he retired? I don't know. I don't remember.

[English]

Ms. Judy Wasylycia-Leis: I have a point of order, Mr. Chairperson. I would ask the researcher to check the previous testimony about gifts provided, including gifts from Groupe Everest to Chuck Guité at the time of his retirement. I would like to have information corroborated in terms of a trip being paid for or other gifts being given to Chuck Guité by Groupe Everest.

The Chair: Where do you suggest this information lies at this time?

Ms. Judy Wasylycia-Leis: In previous testimony.

The Chair: I will have the previous testimony checked.

Your time is up, Ms. Wasylycia-Leis, unfortunately.

Ms. Judy Wasylycia-Leis: Did you include the points of order?

The Chair: No, we stopped the clock for the points of order. We stopped the clock for your last point of order at eight minutes and ten seconds. You were going to get cut off there, anyway.

We're now in round two. We're still on eight minutes.

Mr. Kenny.

Mr. Jason Kenney (Calgary Southeast, CPC): Mr. Boulay, you testified earlier that you had contributed to parties other than the Liberal Party of Canada. Our search of the public disclosures from Elections Canada reveals that in total you and/or your companies contributed $106 to a Progressive Conservative candidate in a by-election in 1999. Is that the full extent of contributions that you or your properties may have made to parties other than the Liberal Party of Canada?

[Translation]

Mr. Claude Boulay: No. I think it was more than that, sir.

[English]

Mr. Jason Kenney: If you believe it's a higher amount, would you care to estimate what it would be?

[Translation]

Mr. Claude Boulay: No. I cannot give you an estimate, but it's certainly more than that.

[English]

Mr. Jason Kenney: Would it be more than $1,000?

[Translation]

Mr. Claude Boulay: I think so.

[English]

Mr. Jason Kenney: We will have to look more closely at the public disclosures, but the public record at this point indicates that you and your companies contributed nearly $100,000 to the Liberal Party over this period and approximately $100 to all other parties combined.

I'm sure you wouldn't deny, Mr. Boulay, that you and your companies are known to be very close and loyal supporters of the Liberal Party. Would that be an accurate characterization?

[Translation]

Mr. Claude Boulay: I would like to demystify these amounts a bit. Since the beginning of the sponsorship affair, we've seen a tendency to multiply numbers, to take figures that apply over ten years, contracts that have been obtained over ten years, contributions that have been made over ten years. Of course the amounts are quite spectacular. When the public hears this, it feels that these are enormous amounts and I understand that. But many things are being confused here, and I think the figures are being mixed up even more when the subject is political contributions. You are all politicians and you all raise funds. You know that contributing $7,000 or $8,000 per year to the Liberal Party can be done very quickly. For your information, I will tell you that a table at one of the Prime Minister's dinners costs $4,000 and participation in a golf tournament costs almost $2,000. So you reach $7,000 or $8,000 very quickly. I will admit that our—

[English]

Mr. Jason Kenney: It could very easily reach $100,000. I understand that.

The Chair: Mr. Kenny, I think he said it could very easily reach $8,000 or $10,000.

[Translation]

Mr. Claude Boulay: I'm telling you that you very quickly reach the equivalent of $7,000, $8,000 or $9,000 a year. I think the law does allow for that type of contribution.

[English]

Mr. Jason Kenney: Do you know Jean Lapierre?

[Translation]

Mr. Claude Boulay: Yes.

[English]

Mr. Jason Kenney: He characterized your wife...and I believe your wife, Madame Deslauriers, was also vice-president of Groupe Everest, responsible for the sponsorship file. Is that correct?

[Translation]

Mr. Claude Boulay: I apologize, I didn't understand the question.

[English]

The Chair: Is there a problem with the translation?

Â (1220)

[Translation]

Mr. Claude Boulay: They didn't finish the question.

The Chair: Ask it again.

Mr. Jason Kenney: Your wife, Ms. Deslauriers, was vice-president of the company responsible for the sponsorships.

Mr. Claude Boulay: She was for a few years.

Mr. Jason Kenney: Mr. Jean Lapierre, who is the political director of the Liberal Party of Canada in Quebec, if we can put it that way, has said that Ms. Deslauriers was the queen of ticket sales for the Liberal Party cocktails and fundraising dinners in Quebec. Is Mr. Lapierre correct?

Mr. Claude Boulay: Well, you can ask him. When he made that comment, he was wearing his hat as a radio show host.

Mr. Jason Kenney: But you do agree with this characterization by Mr. Lapierre?

Mr. Claude Boulay: It's not up to me to agree.

[English]

Mr. Jason Kenney: You are not in accord.

Mr. Boulay, is it true that in 1990 you ran the publicity element of Paul Martin's leadership campaign?

[Translation]

Mr. Claude Boulay: No.

[English]

Mr. Jason Kenney: It's not. Were you involved in his leadership campaign in 1990?

[Translation]

Mr. Claude Boulay: No.

[English]

Mr. Marcel Proulx (Hull—Aylmer, Lib.): I have a point of order, Mr. Chair. I apologize. Why is it that on the channel 2, for the interpretation, we can hear the interpretation from English to French, but when the witness answers in French, we can't hear it?

Mr. Jason Kenney: I'm having a hard time myself.

Mr. Marcel Proulx: Why is that? No, it's not your fault. It's the system.

The Chair: Quite frankly, Monsieur Proulx, I don't know.

Mr. Marcel Proulx: I appreciate your honesty.

The Chair: We called the technicians about half an hour or more ago.

May I have a little order here? There seems to be a little bit of levity in the room. I'm sure it's coming through in both languages quite well.

It has been checked already, Monsieur Proulx. I think we're going to try to get it checked once more. The communication system is not that great here this morning in either language, I think, but we will do the best we can.

Monsieur Boulay, if you have a problem hearing the question, please let us know.

Sorry about that, Mr. Kenney.

Mr. Jason Kenney: With all the translation problems, perhaps we just had a misunderstanding, because there have been many media reports, Mr. Boulay, that you were very active in Mr. Martin's 1990 leadership campaign.

[Translation]

Kathleen Lévesque said in a newspaper that in 1990, you were head of communications in the leadership campaign for Jean Chrétien's adversary, Paul Martin. Is that correct or not?

Mr. Claude Boulay: I was not head of communications. I was involved in a committee with other people—there were about 20 of us—but I was not in charge of communications.

[English]

Mr. Jason Kenney: Well, I wonder if there was a translation problem, because just a minute ago you said you weren't involved at all when I asked you what your involvement was.

[Translation]

Mr. Claude Boulay: No, sir. You asked me if I was...

[English]

The Chair: We are not going to have a debate across the floor. Yes, Mr. Kenney asked if he was involved, and the response was no. We can check the blues.

But I would expect that the answer we have now, that you were part of a committee of 20, is what you are saying, Monsieur Boulay. Am I correct?

[Translation]

Mr. Claude Boulay: Yes.

[English]

The Chair: And you were involved through that committee in the leadership campaign for Mr. Martin. Is that correct?

[Translation]

Mr. Claude Boulay: I understood the first question to be whether I was the director of communications in Mr. Martin's leadership campaign.

[English]

The Chair: The first question asked whether you were involved in the communications. There was a second question that asked whether you were involved. The answer to the second question was no. We'll take it as a translation problem. We'll take this answer as the final answer. Did you participate in any way in the leadership campaign of Paul Martin in 1990?

Â (1225)

[Translation]

Mr. Claude Boulay: Yes.

[English]

Mr. Jason Kenney: Have you been involved in other campaigns of Mr. Martin since that time?

[Translation]

Mr. Claude Boulay: In a leadership campaign? No.

Mr. Jason Kenney: Any campaign, a local campaign or a campaign in his riding?

Mr. Claude Boulay: I believe I did lend a hand in the 1993 campaign.

[English]

Mr. Jason Kenney: Mr. Boulay, have you made contributions to trust funds for members of the Liberal Party that would not involve public disclosure?

[Translation]

Mr. Claude Boulay: I did not know that these funds existed, sir.

[English]

Mr. Jason Kenney: It's a mystery to you, is it?

[Translation]

Mr. Claude Boulay: A total mystery.

[English]

Mr. Jason Kenney: It's a total mystery.

Have you or your companies contributed financially to leadership campaigns?

[Translation]

Mr. Claude Boulay: Not that I can remember, sir. There might have been contributions but I don't remember because it happened quite some time ago.

[English]

Mr. Jason Kenney: You mean apart from what we call gifts in kind, which you would have provided through your services.

[Translation]

Mr. Claude Boulay: I don't know what gifts you're talking about.

[English]

Mr. Jason Kenney: Under the Canada Elections Act, when you provide volunteer services as a professional, that's considered to be a contribution, even though it may not be a direct financial one.

[Translation]

Mr. Claude Boulay: It was a personal contribution on my part.

[English]

Mr. Jason Kenney: In answering questions from Ms. Wasylycia-Leis, you said that with regard to the L'Information essentielle dossier, your companies were involved in making sure that money was properly spent. But according to the Auditor General, Media/IDA Vision and Groupe Everest received $116,432 in commissions apparently for passing money from Public Works to L'Information essentielle. What was the service you provided? The Auditor General testified that the only value added was that of a stamp. What value did you or your companies add for the $116,000 in commissions that you received? I don't want a vague answer about being responsible for the money. What did you add?

[Translation]

Mr. Claude Boulay: I believe I already answered that question.

[English]

The Chair: Would you like to answer it again, Mr. Boulay?

Mr. Jason Kenney: You haven't answered it to my satisfaction.

[Translation]

Mr. Claude Boulay: I understand that I may not have answered it to your satisfaction. There is an agreement between Groupe Everest and the Government of Canada for the management of all files and all contracts between all the stakeholders, whether it is Information essentielle or a sponsored event.

[English]

The Chair: Mr. Boulay, there was a specific question there. A $116,000 commission was paid, according to the Auditor General. As far as she could determine, the cheque came through your office. The question was, what value did you provide for the $116,000?

[Translation]

Mr. Claude Boulay: I repeat what I said: our responsibility was to manage the contract, do the administrative work, and that's what we did. You are singling out one file but we probably managed around a thousand files every year. That was our responsibility. It is easy to take one single case and to generalize. We represented the government, we were the government's insurance policy in these files and our agency acted as guarantor.

[English]

The Chair: Yes, but I don't know that this is the answer we were expecting, Monsieur Boulay. Each file is an independent file, and you're entitled to earn your appropriate commissions for work done on each file. You can't, in essence, double up on one file and go nothing on the other file. Each one should be handled in an appropriate fashion.

On that particular file you got $116,000 in commission, according to the Auditor General. She says there was no value added, other than the fact that you passed the cheque through your office. And the question was, what did you provide for that particular commission on that file?

Â (1230)

[Translation]

Mr. Claude Boulay: That's what I'm telling you: we acted in that case as we did with regard to all other files. We carried out the duties set out in our agreement with the Government of Canada.

[English]

The Chair: Okay.

Monsieur Thibault, s'il vous plaît.

[Translation]

Hon. Robert Thibault (West Nova): Thank you, Mr. Chairman.

Thank you, Mr. Boulay, for being here today. We appreciate your coming to explain to Canadians what happened from your point of view.

My role is not to decide who is guilty and who is not. My role is to understand. Companies such as yours and others might have received commissions that were perfectly legal. However, when we put it all together and look at what happened, as did the Auditor General, there are issues of ethics that are being raised, perhaps not for the private sector, but ethical issues for the whole system, political, administrative and private. We see that commissions were received for simple transfers of funds from the Government of Canada, especially from Public Works, to federal agencies such as crown corporations and the RCMP or even production companies such as L'Information essentielle. We want to understand what the situation was that led to these events.

Perhaps we could start by your relationship with Mr. Guité. You have indicated that you would meet Mr. Guité once a month and sometimes more often, if necessary. What did you discuss during those meetings?

Mr. Claude Boulay: We discussed the current advertising and sponsorship files.

Hon. Robert Thibault: Did you meet Mr. Guité to select the sponsored events?

Mr. Claude Boulay: Not at all. That's a misperception. Advertising agencies were never involved in the selection of sponsored events. Never.

Hon. Robert Thibault: You're saying that the events that were to be sponsored had already been selected when Mr. Guité got in touch with you. It had already been decided that about 10 community events would be sponsored in Quebec or in Canada. Were you asked to manage those sponsorship files?

Mr. Claude Boulay: There had probably been some kind of screening and some of the amounts might already have been preestablished. In some cases, as I said, associations or organizations might have submitted a public exposure plan and asked for a certain amount in their request.

Hon. Robert Thibault: In their request to Public Works?

Mr. Claude Boulay: Yes, always to Public Works. We would come in when the government would be interested in getting involved in a particular event. To come back to my previous example, they might tell us that they wanted exposure in hockey clubs throughout Canada and ask us to get in touch with the appropriate people. We were told that, in principle, there were certain guidelines, that certain amounts of money were available and they would ask us to see what kind of exposure they could get for that money. That's one of the ways it was done.

It could also be done in another way and I will use the same example. A club or event organizers might have submitted a request and the government was interested in working with that organization. We were then asked to get in touch with the organization, negotiate an agreement, sign the agreement, perhaps renegotiate a few things, get some clarification on the agreement and then sign the contract. We could then be called upon to be further involved.

Hon. Robert Thibault: Would it ever happen that organizations, communities or event organizers would contact you before contacting Public Works, before getting in touch with Mr. Guité or Mr. Tremblay's office?

Mr. Claude Boulay: People would sometimes ask us who they should talk to, where they should send their request, what kind of documents they should include. That sometimes happened.

Hon. Robert Thibault: Were any of them sent by Mr. Gagliano's or the Prime Minister's Office?

Mr. Claude Boulay: Not to my knowledge.

Hon. Robert Thibault: I'm just trying to find out how these people knew that they should go through you, that it might be useful to get your advice first.

Mr. Claude Boulay: There are many of these organizations and, generally speaking, organizations and event organizers want to get some funding, whether it's private or public. The program was quite well known and was also quite good. There were eight or nine people managing the files, and that fact might also have been known. We are also members of a community and sometimes people would come to us with questions and requests. They would come to us with such requests or go to people from other firms. People wanted to know where they should go, what kind of documents they should submit, what kind of presentation they should make, etc.

Â (1235)

[English]

Hon. Robert Thibault: How much time, Mr. Chair?

The Chair: Two and a half minutes.

[Translation]

Hon. Robert Thibault: What we have seen in the Auditor General's and other auditors' documents raises questions about certain things. I will mention three. First of all, you are reputed to have submitted an invoice to Public Works Canada for approximately $800,000 and questions have been raised about the documents supporting this invoice. Secondly, there are issues surrounding a supplementary amount of $836,000 which appears to have been transferred between your firm and the Canada Mortgage and Housing Corporation without much supporting documentation. I will stop here for now. Were these two amounts raised during Public Works Canada's internal audit? Was the supporting material audited at that time?

Mr. Claude Boulay: Yes. It is important for the committee to understand that there are two periods: there is the Sponsorship Program before 1998 and the Sponsorship Program after 1998. I will refer to them as the period before Media/IDA Vision and the period after Media/IDA Vision. In 1998 the way government worked with organizations changed, and Media/IDA Vision was brought in following a recommendation.

Hon. Robert Thibault: As the agency—

Mr. Claude Boulay: Yes, and perhaps I can give you more details later on.

So before 1998, when organizations received confirmation of a sponsorship, they were entitled to bill it immediately. As we know, organizations very often require funds. At the time then, they were entitled to immediately send in an invoice for 80% of the total sponsorship. That is what they did. The auditor says that there are very few details on the invoices but there is one thing you must understand. Let's take Festival XYZ as an example; it submits an invoice in May when the government's fiscal year begins in April. At that point, it must be determined whether the funds are available or not and what projects are to be accepted or not. The month of April goes by and here we are in May, the month when the associations submit their applications, since the events take place in the months of June, July and August. They need funds. At the time, the associations were allowed to bill 80% of the invoice immediately. So it would probably happen that Festival XYZ, for example, would submit an invoice for the first 80%. The details relating to the visibility plan or the post-mortem would come afterwards, when the second part was submitted, the remaining 20%. It's important to understand this. The Auditor General maintains that there was not enough detail. She's entitled to this opinion and it may be true.

To answer your question, I would say that when people from Publics Works Canada came to us, they took a look at three or four years of the program Attractions Canada, since this is part of a whole, and they reconstituted all of the invoices.

In addition, it is just as important for the committee to understand the following. There were eight, nine or ten advertising agencies with different structures and of varying degrees of importance. In the government's contracts with these advertising agencies, it is written in small letters, probably at the back of the contract, that the agencies are responsible for retaining records rather than sending them. In principle, this means that we send in the invoice and we are responsible for keeping the relevant supporting material. So when the auditor examines a file and sees an invoice for $800,000, she says that she has nothing. It is a fact that she has nothing because it is the agency that is responsible for keeping this material. Yes, the people from the quick response team did look at these records when they came to see us and all the backup documents were available. You know it's very embarrassing to see comments like those made in the document, about the lack of supporting material; that is not where the material was to be found. We are not required to send it, we are required to keep it.

Â (1240)

The Chair: Thank you, Mr. Thibault.

[English]

Perhaps a question is appropriate at this point in time, Monsieur Boulay. You mentioned that all the documentation has moved on with the current owners of Groupe Everest and Media/IDA Vision. In your agreement of sale, did you retain any right of access to these documents at all?

[Translation]

Mr. Claude Boulay: That type of clause is not in my agreement.

[English]

The Chair: Okay.

Monsieur Desrochers, please.

[Translation]

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

Mr. Boulay, I'd like to go back to your involvement in the election campaign of the Liberal Party of Canada. It was in 1997, wasn't it?

Mr. Claude Boulay: I think so, Mr. Desrochers.

Mr. Odina Desrochers: You say that you lent volunteers. How many did you lend? Was it during their working hours or did they do this in the evening and on weekends?

Mr. Claude Boulay: I don't supervise the work of all our employees. We had some 200 employees at one time.

Mr. Odina Desrochers: Yes, but the Liberal Party of Canada must have asked you for reliable people. I'm sure you didn't just send anyone to this meeting.

Mr. Claude Boulay: I may have said earlier that I personally attended a meeting. I probably attended two or three meetings. You must understand that during an election campaign, and you've all been involved in them, there is a preparatory period and this is when committees meet.

Mr. Odina Desrochers: Yes, but you weren't being paid for that, as you already said.

Mr. Claude Boulay: No, no.

Mr. Odina Desrochers: Did you assign someone to look after this file when you were not able to attend, in view of the fact that the Liberal Party was calling upon your expertise as a strategist, as you said?

Mr. Claude Boulay: No. As I was going to mention, in preparing for a campaign, strategic committees are often set up.

Mr. Odina Desrochers: The Liberal Party didn't ask you to carry out any follow-up? They just asked you to work at the beginning? Then, during the election campaign, you were no longer consulted and you didn't identify anyone to give you a status report on the advice you had given and your commitments toward the Liberal Party of Canada? You remained independent of all of this during the entire election campaign?

Mr. Claude Boulay: Yes, because at the time permanent staffers were in place. People, particularly communications directors, are hired to...

Mr. Odina Desrochers: From the Liberal Party?

Mr. Claude Boulay: For the Liberal Party. So the Liberal Party hires these people and they are the ones who follow up on the campaigns.

Mr. Odina Desrochers: Thank you.

I have another question for you. You often refer to the internal audit report. You say that many documents were available when this audit was done. In the internal audit report, it says:

Requirements for the management control of government funds administered by the AoR should be defined.

It is said that the agency viewed itself as the owner of interest generated by the bank account and made use of it as it pleased. Did Mr. Gagliano or Mr. Guité provide you with significant advances in your account so that you could respond to requests from events, suppliers or the media? We were told that there were sizable advances and that interest was generated in your account.

Mr. Claude Boulay: You are mixing things up, Mr. Desrochers.

Mr. Odina Desrochers: I am not mixing things up.

[English]

The Chair: Monsieur Desrochers was--

[Translation]

Mr. Claude Boulay: No. Your question if very confused. It goes all over the place.

Mr. Odina Desrochers: Well, let's clarify matters. Advances were paid into your account by the Government of Canada, were they not?

Mr. Claude Boulay: No.

Mr. Odina Desrochers: No advances? How do you go about paying the agencies? If you administer 3%, what do you do?

Mr. Claude Boulay: We would receive a confirmation from the Department of Public Works that the product had been delivered.

Â (1245)

Mr. Odina Desrochers: So no payment of money was issued to your agency?

[English]

The Chair: Mr. Desrochers, let's understand this transaction properly.

You received what from the Government of Canada? Your point was.... Let me get this clear. You mentioned that you would get an invoice as an advance payment, maybe up to 80%, and you would pay for that. Where did you get the money to pay for that advance prior to the activity taking place?

[Translation]

Mr. Claude Boulay: We would receive an invoice from an event, which we would validate and which matched the amount in the contract between Public Works and the event. I talked earlier about an initial amount of 80 per cent. That initial amount became 50 per cent; I do not know whether it was in 1998, 1999 or 1997. An adjustment was made. Later, probably in 2000, it became, I believe, 40 per cent, 40 per cent and 20 per cent. That was changed. When the department received the confirmation that the product had been delivered, etc., it advised us. Then we took the invoice from the person or the event and we invoiced the Government of Canada.

[English]

The Chair: The point we're trying to get at.... I don't have it straight in my mind. You are saying that when the government gave you confirmation that the product was delivered, they would get the money. But your own admission earlier on was that you would advance the money prior to the product being delivered. So how did you finance the advance of the product before it was delivered?

[Translation]

Mr. Claude Boulay: I did not say that we financed or advanced the money. I said that the government provided 80 per cent or 50 per cent of the amount.

[English]

The Chair: Yes, but did the government advance the money to you, and you pass it on, or did they pay the money directly?

[Translation]

Mr. Claude Boulay: No. We sent an invoice to the government, and the government paid us. Under the terms of our contract, we were required to provide the money to the event within five days. That was our obligation. The audit people came twice. They audited our books and found that the turnover time was approximately two and a half days. So we met our obligation.

[English]

The Chair: Yes, but we have a complication here. You're saying that the government would deliver the money when the product had been delivered. However, they were advancing money prior to the contract being delivered. It seems to be a mixed message here.

[Translation]

Mr. Claude Boulay: There were two things, Mr. Chair. First, there was the initial instalment of 50 per cent. Let us take a transaction. The government made a commitment to the Tulip Festival. So the Tulip Festival received confirmation that it would receive a 100,000-dollar sponsorship from the government. So the Tulip Festival could invoice $50,000. It sent the invoice to Media/IDA Vision, to us. We took the invoice and made sure that it was in compliance with the contract, then we invoiced the government. The government sent us the money. Then we issued cheques to the event within five days as required in the contract.

Then came the second phase, at the end of the event, when the same process started over again. Once the event was over—we are talking here about the Tulip Festival—the Festival invoiced Media/IDA Vision again, then we waited for authorization from Public Works before invoicing. We once again invoiced the Government of Canada, which transferred the money, and once again we had to issue a cheque within five days.

[English]

The Chair: So you're telling me that the contract you had with the Government of Canada on behalf of the organization included the provision for advances before the event?

[Translation]

Mr. Claude Boulay: For the first part, yes.

[English]

The Chair: Okay.

You've got four and a half minutes.

[Translation]

Mr. Odina Desrochers: Mr. Boulay, I am not the one who is confused. I am going to read you an excerpt, slowly and word for word, from page 3 of that very report that you mention:

Requirements for the management control of government funds administered by the AoR should be defined.

It says that the interest earned in the bank account seemed to belong to the agencies, who used this money as they saw fit. The report also says:

There are currently no CCSB guidelines or contract provisions for dealing with the use of interest earned on funds advanced to the AoR.

The conclusion that I draw is that, in order to have interest... Did you receive advances from Public Works or not? And why did the internal audit question the way this was handled?

Did you get advances or not, Mr. Boulay?

Â (1250)

Mr. Claude Boulay: No.

Mr. Odina Desrochers: You could generate interest without an advance? Explain that to me.

Mr. Claude Boulay: I will be pleased to explain it.

Mr. Odina Desrochers: I can hardly wait to hear this.

Mr. Claude Boulay: I said that one of the conditions in the Media/IDA Vision contract was that cheques had to be issued within five days. Right?

When the Audit Canada people came, they saw that we issued our cheques within an average of two and a half days.

Mr. Odina Desrochers: You already said that to the chair, Mr. Boulay. I want to know where the interest came from. The auditor said that. How much did the interest amount to? Once again, this is the auditor saying this.

Mr. Claude Boulay: If you want me to answer, Mr. Desrochers, I will answer.

Mr. Odina Desrochers: I do not want you to give the same answer you gave to the chair. You are starting to say the same thing.

[English]

The Chair: Mr. Proulx, on a point of order.

Mr. Marcel Proulx: Mr. Chair, I'd appreciate it if you would ask our colleague to let the witness answer him. I'd like to hear the answer. You would like to hear the answer.

The Chair: I would like to hear the answer too.

Mr. Dennis Mills: Point of order as well, Mr. Chair.

The Chair: Mr. Mills.

Mr. Dennis Mills: There seems to be some confusion here between the agency of record responsibility, which is that part of this column where the 3% fee is entitled--

The Chair: This is not a point of order. You just want to be part of the debate.

Mr. Dennis Mills: No. It's causing confusion, because we're dealing with an industry standard here and facts about the industry that most Canadians do not readily understand. The witness needs time to explain it.

The Chair: Monsieur Desrochers, you will allow Monsieur Boulay adequate time to respond, provided the response is directly appropriate to the question.

[Translation]

Mr. Claude Boulay: It is important that I get a chance to answer, Mr. Desrochers, because your leader made comments in the House about the interest that were not relevant and that got us on the front pages across Canada.

Mr. Odina Desrochers: The auditor said the same thing.

Mr. Claude Boulay: No. Here is the way it worked. I was telling you that when we received the money, we were required to issue the cheques within five days. We managed to do it within two and a half days. The money was managed in a corporate account. Media/IDA Vision is our company. Media/IDA Vision does a lot of transactions, including with the government. When your leader said that hundreds of millions or millions of dollars in interest had been earned by Media/IDA Vision, that naturally led to questions. So the audit people came and looked into the matter. The contract did not say anything about what was to happen between when the cheque was issued and when the money was received.

Mr. Odina Desrochers: Who was the cheque made out to?

Mr. Claude Boulay The cheque was issued to the Tulip Festival, the National Hockey League or the Ottawa Senators. Between the time that the cheque is issued and the time that it is stamped in the bank, it is in transit. How long is it in transit? How many days does it take to be deducted from our bank account? It might take two, three, five or seven more days. When the audit people came, they did a sampling. They looked at a large number of transactions and tried to figure out the time it took between when the cheque left and when it was cashed, that is, when the amount was deducted from the bank account.

[English]

The Chair: Mr. Boulay has said that the cheques are moving on within two, three, or four days. If that is the case, I can't imagine where the hundreds of thousands of dollars of interest would have been accumulated.

Â (1255)

Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): I have a point of order. Mr. Boulay said that the cheque is issued under the contract within five days. But it could be a month after that before the organization actually cashes the cheque. Then that money is removed from the corporate account. That's where interest would be accumulated, as long as the money is in the corporate account.

The Chair: If they take a long, long time.

Mr. Desrochers.

[Translation]

Mr. Odina Desrochers: Mr. Boulay, I am going to ask you a very clear question. I think that this will clear up the dilemma. You received interest in your bank account, regardless of the amount. When you had the Media/IDA Vision company, how much money did you get from that? That would clarify things. You are telling us that the numbers that my leader presented were wrong. I would like to know the truth, sir. Do not fudge. I want to know the amount and I especially want you to respond to the comments in the internal audit.

Mr. Claude Boulay: I am getting to that, Mr. Desrochers. I am not fudging, I am getting there.

If you want to understand, I have to explain. You have to give me the time to explain because there are details involved.

So, as I was saying, the contract made no mention of what should happen to the interest once the cheque was issued. We deposited the money in a corporate account. At that point, we assumed that the interest belonged to us. But here is what happened. I mentioned it in my opening statement and it was also said here, before the committee, by Mr. Marshall. We have always cooperated with the government. We have always been willing to share information. The Public Works people came to our offices and examined all of Media/IDA Vision's transactions: how long it took for the cheques to go out and how long it took for them to be cashed. They made the following calculations.

In the four years which were audited, we accumulated—these are ballpark figures— the amount of $30,000, three times, and the amount of $3,000, once. In fact, that figure has been made public and you have seen it. At a certain point, the figure of $101,000 came up. The amount of interest generated for the entire period was $101,000. This amount strictly represents the interest generated between the time the cheque was issued and the time it was cashed.

We have had discussions with officials from Public Works and have received legal opinions telling us that we were the owners of the money in the corporate account and that we could keep it. However, following our discussions with representatives from Public Works, we decided to return the money to Public Works as a gesture of good faith. Second, we told Public Works that they surely had legal advisors informing them of their rights, and that we also had legal advisors informing us of our rights. Rather than paying $100,000 in legal fees, I decided to send the government a check for $100,000.

[English]

The Chair: Thank you very much, Monsieur Boulay.

Mr. Murphy, please.

Hon. Shawn Murphy (Hillsborough, Lib.): Thank you very much.

Mr. Boulay, as a point of clarification, you've testified that you're the founder and were the president of Groupe Everest. Do you have a position now with Groupe Everest?

[Translation]

Mr. Claude Boulay: No, sir.

[English]

Hon. Shawn Murphy: Since when?

[Translation]

Mr. Claude Boulay: I left and the company was sold. I've been gone for about a year or a year and a half.

[English]

Hon. Shawn Murphy: Mr. Boulay, my sources within this industry are telling me that we're on the wrong path when we classify ad agencies as Liberal-friendly and non-Liberal-friendly, that it should be federalist-friendly ad firms and separatist-friendly ad firms. In the case of Groupe Everest, would you consider this a federalist firm or a separatist firm?

[Translation]

Mr. Claude Boulay: I cannot speak on behalf of Everest, but I can tell you that I am a federalist.

[English]

Hon. Shawn Murphy: Are there firms in Quebec that would be considered by the public to be separatist-friendly ad firms?

[Translation]

Mr. Claude Boulay: I could probably say the same thing. There may be people heading other agencies who have other political allegiances, but, again, these are individuals. I assume that what applies to me also applies to others.

· (1300)

[English]

Hon. Shawn Murphy: I take it that in the government of Lucien Bouchard, the government of René Lévesque...when they were in power, did they gravitate toward your firm, Groupe Everest?

[Translation]

Mr. Claude Boulay: That's hypothetical. I don't know.

[English]

Hon. Shawn Murphy: Mr. Boulay, you've testified that you've been in the ad business for a long time. I want to talk to you a little bit about the situation pre-1993. We have evidence that Mr. Guité was very much involved in the late 1980s and early 1990s and he was very close to the Conservatives and the Conservative firms. In fact, there was an article in the paper this morning, and I'll just quote a paragraph:

The Mulroney government, with the 1992 Charlottetown referendum to fight and Canada's 125th birthday to celebrate, perfected a system of giving non-tendered contracts to political friends -- pollsters and advertising companies that supported the Tory cause for free during election campaigns in return for a later lion's share of the millions of dollars in taxpayers' money every government spends on polling and advertising.

I want to talk to you about life in the Quebec advertising industry pre-1993. Did you know Mr. Guité then?

[Translation]

Mr. Claude Boulay: What year was that, sir? I apologize.

[English]

The Chair: Did you know Mr. Guité prior to 1993?

[Translation]

Mr. Claude Boulay: I knew who he was.

[English]

Hon. Shawn Murphy: Did you deal with him during this period of time, when he was setting up contracts?

[Translation]

Mr. Claude Boulay: Not to my knowledge.

[English]

Hon. Shawn Murphy: Is there any reason you weren't dealing with him at that point in time?

[Translation]

Mr. Claude Boulay: At that time, he was one of my associates who was the contact with the federal government.

[English]

Hon. Shawn Murphy: Who was that associate?

[Translation]

Mr. Claude Boulay: He was the co-founder and he had to leave due to illness.

[English]

Hon. Shawn Murphy: And his name was...?

[Translation]

Mr. Claude Boulay: Jean-Bernard Bélisle.

[English]

Hon. Shawn Murphy: Was this gentleman a Conservative?

[Translation]

Mr. Claude Boulay: He was probably more Conservative than Liberal.

[English]

Hon. Shawn Murphy: Was he also a federalist?

[Translation]

Mr. Claude Boulay: Yes.

[English]

Hon. Shawn Murphy: And Guité used him at this point in time.

[Translation]

Mr. Claude Boulay: I don't know what you mean when you say he used him. What does “using someone” mean?

[English]

Hon. Shawn Murphy: The relationship was between this gentleman and Mr. Guité.

[Translation]

Mr. Claude Boulay: Indeed, there was a relationship between Mr. Bélisle and Mr. Guité.

[English]

Hon. Shawn Murphy: This media article also talks about how the policies and guidelines weren't followed then, and I quote:

...the policy is a guideline. It's not a rule. ... We change the guidelines to fit the situation. ... It was not the first time it's been done and not the last time.

Do you have any clarification to add to that on how things were done pre-1993 and after 1993?

[Translation]

Mr. Claude Boulay: From the time I became an associate, the bidding systems I am familiar with never changed. At the time when my associate was the person responsible for the files, the procedures were the same. Under this bidding system, people were invited to make representations to a selection committee. If the system has changed, we have not seen the difference. In my opinion, there is a business model with regard to the way agencies are selected or preselected. In my view, they have not changed since we started dealing with the Government of Canada. The process is basically the same as the one used by other governments or by many private sector businesses.

[English]

Hon. Shawn Murphy: Do I take it from your evidence that you didn't see any discernible change in the way Guité handled these situations pre-1993 and post-1993?

[Translation]

Mr. Claude Boulay: I can't speak about Mr. Guité or the way he operated. As I said, I was not there, so I cannot tell you how he operated. All I'm saying is that it seems obvious to me that the agency selection or preselection process has not changed.

· (1305)

[English]

Hon. Shawn Murphy: Give us some other examples pre-1993. You talked about Groupe Everest. You seem to have continued the same relationship, but the relationship changed within the ad agency. He went from dealing with one person--I forget the gentleman's name--to yourself. What about the other agencies, Groupaction and Lafleur Communications? Were they around before 1993?

[Translation]

Mr. Claude Boulay: I don't know, sir. I don't know.

[English]

Hon. Shawn Murphy: Did you notice any change at all in the way things were done pre-1993 and after 1993?

[Translation]

Mr. Claude Boulay: I don't understand what kind of changes you are looking for. As I told you, we participated in processes, which basically have not changed. The current government business model, which is to have a coordination agency and a communication agency, was the same back then.

[English]

The Chair: Thank you very much, Mr. Murphy.

We will continue at 3:30 this afternoon. I think it's the will of the committee that we keep Mr. Boulay here for the afternoon. We did have someone else lined up by invitation.

I have a very sad announcement to make. We all know Mr. Robert Lanctôt, member of Parliament. I understand that his five-year-old son died today. We offer our sympathy and deep condolences from all of us to his family.

The meeting is adjourned until 3:30.