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37th PARLIAMENT, 3rd SESSION

Standing Committee on Public Accounts

EVIDENCE

CONTENTS

Monday, April 19, 2004

1540

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

Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC)

Mr. Claude Boulay (As Individual)

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

The Chair

Mrs. Diane Ablonczy

1545

Mr. Claude Boulay

The Chair

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

Hon. Joe Jordan

The Chair

Hon. Joe Jordan

The Chair

Mr. Claude Boulay

The Chair

Mr. Marcel Proulx (Hull—Aylmer, Lib.)

Mr. Claude Boulay

Mr. Marcel Proulx

Mr. Claude Boulay

Mr. Marcel Proulx

Mr. Claude Boulay

Mr. Marcel Proulx

Mr. Claude Boulay

Mr. Marcel Proulx

1550

Mr. Claude Boulay

Mr. Marcel Proulx

Mr. Claude Boulay

Mr. Marcel Proulx

Mr. Claude Boulay

Mr. Marcel Proulx

Mr. Claude Boulay

Mr. Marcel Proulx

Mr. Claude Boulay

Mr. Marcel Proulx

The Chair

Mr. Marcel Proulx

The Chair

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

1555

Mr. Claude Boulay

The Chair

Mr. Alan Tonks

1600

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

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

1605

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

The Chair

Mrs. Diane Ablonczy

The Chair

Hon. Joe Jordan

Mr. Claude Boulay

Hon. Joe Jordan

Mr. Claude Boulay

Hon. Joe Jordan

1610

Mr. Claude Boulay

Hon. Joe Jordan

Mr. Claude Boulay

Hon. Joe Jordan

The Chair

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

Mr. Claude Boulay

Mrs. Marlene Jennings

Mr. Claude Boulay

Mrs. Marlene Jennings

Mr. Claude Boulay

Mrs. Marlene Jennings

Mr. Claude Boulay

Mrs. Marlene Jennings

Mr. Claude Boulay

Mrs. Marlene Jennings

Mr. Claude Boulay

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

1615

Mr. Claude Boulay

The Chair

Mr. Vic Toews (Provencher, CPC)

Mrs. Marlene Jennings

Mr. Vic Toews

Mrs. Marlene Jennings

Mr. Vic Toews

The Chair

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

The Chair

Mr. Odina Desrochers

The Chair

Mr. Marcel Proulx

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

Mrs. Marlene Jennings

The Chair

Mr. Claude Boulay

1620

Mrs. Marlene Jennings

Mr. Claude Boulay

The Chair

1625

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. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Hon. Robert Thibault (West Nova, Lib.)

The Chair

Hon. Robert Thibault

1630

The Chair

Hon. Robert Thibault

The Chair

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

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

Mr. Vic Toews

Mr. Claude Boulay

1635

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Jason Kenney (Calgary Southeast, CPC)

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

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

1640

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

Mr. Vic Toews

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

1645

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Odina Desrochers

The Chair

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

1650

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. 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

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

Mr. Odina Desrochers

Mr. Claude Boulay

1655

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

Mrs. Marlene Jennings

Mr. Claude Boulay

Mrs. Marlene Jennings

Mr. Claude Boulay

1700

Mrs. Marlene Jennings

Mr. Claude Boulay

Mrs. Marlene Jennings

Mr. Claude Boulay

Mrs. Marlene Jennings

Mr. Claude Boulay

1705

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Mr. Dennis Mills

The Chair

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

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

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

1710

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

Mr. Claude Boulay

1715

Ms. Judy Wasylycia-Leis

Mr. Claude Boulay

Ms. Judy Wasylycia-Leis

The Chair

Mr. Jason Kenney

Mr. Claude Boulay

Mr. Jason Kenney

1720

Mr. Claude Boulay

The Chair

Mr. Claude Boulay

The Chair

Hon. Shawn Murphy (Hillsborough, Lib.)

The Chair

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

Ms. Beth Phinney (Hamilton Mountain, Lib.)

Mr. Claude Boulay

1725

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

The Chair

Hon. Robert Thibault

1730

Mr. Claude Boulay

The Chair

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

Mr. Claude Boulay

Mrs. Diane Ablonczy

The Chair

Mrs. Diane Ablonczy

The Chair

Mr. Marcel Proulx

Mr. Claude Boulay

Mr. Marcel Proulx

Mr. Claude Boulay

Mr. Marcel Proulx

The Chair

Mr. Claude Boulay

1735

The Chair

Mr. Claude Boulay

The Chair

CANADA

Standing Committee on Public Accounts

NUMBER 026

3rd SESSION

37th PARLIAMENT

EVIDENCE

Monday, April 19, 2004

[Recorded by Electronic Apparatus]

¹ (1540)

[English]

The Chair (Mr. John Williams (St. Albert, CPC)): Good afternoon, ladies and gentlemen.

We are resuming from this morning. Our orders of the day are, pursuant to Standing Order 108(3)(g), chapter 3, “The Sponsorship Program”, chapter 4, “Advertising Activities”, and chapter 5, “Management of Public Opinion Research”, of the November 2003 report of the Auditor General of Canada, referred to the committee on February 10, 2004.

Our witness is Mr. Claude Boulay, continuing on from this morning as an individual.

Before we start round three, I mentioned this morning that we had a discussion last week about the four-minute interventions and about how the timing was not found to be conducive to continuing a line of questioning. I have a suggestion, and it is only a suggestion. I'm going to pass this around. It has a column for “accept” and a column for “do not accept” so that I can get some feedback from the members. Basically, it talks about 16-minute interventions, which could be divided between one person or two persons. It would mean that perhaps one party, or any party, would have one or two people speak but not everybody, because it's not possible to give everybody 16 minutes and let everybody speak. I can give everybody four minutes but not 16 minutes.

So it's fairly self-explanatory. If you have some changes that you would like to suggest, let me know. This is only a discussion paper. I'll pass this around, and you can think about it.

Madam Ablonczy, four minutes, please.

Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC): Thank you, Mr. Chairman.

Mr. Boulay, I'd like to take your mind back to September of 1999, when Mr. Chuck Guité retired and Mr. Pierre Tremblay took over the directorship of the sponsorship program. Of course, one of the first things Mr. Pierre Tremblay did was to call a meeting of the advertising agencies involved in sponsorship contracts.

Do you recall that meeting with Mr. Tremblay?

[Translation]

Mr. Claude Boulay (As Individual): I do not remember that meeting, Madam, not in 1999.

[English]

Mrs. Diane Ablonczy: Do you recall your first meeting with Mr. Tremblay?

[Translation]

Mr. Claude Boulay: No.

[English]

Mrs. Diane Ablonczy: Do you recall meeting with Mr. Tremblay and representatives of other advertising agencies involved in the sponsorship program, Mr. Boulay?

[Translation]

Mr. Claude Boulay: At the same meeting?

[English]

Mrs. Diane Ablonczy: At the same meeting, yes.

[Translation]

Mr. Claude Boulay: Yes.

[English]

Mrs. Diane Ablonczy: When did that take place, roughly?

[Translation]

Mr. Claude Boulay: I remember a meeting where there were several agency representatives, but I do not believe, Madam, that it was in 1999. To my mind, if there was a meeting, it occurred later than that.

[English]

Mrs. Diane Ablonczy: But it was with Mr. Pierre Tremblay, and you remember being at that meeting?

[Translation]

Mr. Claude Boulay: I attended a meeting with Mr. Tremblay and other agency presidents, yes.

[English]

Mrs. Diane Ablonczy: At that meeting, Mr. Boulay, Mr. Tremblay told representatives of the advertising agencies, including you, that things were going to be different now that he was director. Do you remember him making that statement, sir?

[Translation]

Mr. Claude Boulay: I do not remember such a comment, Madam.

[English]

Mrs. Diane Ablonczy: You don't remember that?

[Translation]

Mr. Claude Boulay: No.

[English]

Mrs. Diane Ablonczy: A new director was telling you things were going to be different, and you don't remember that?

[Translation]

Mr. Claude Boulay: Madam, I do not remember such a meeting. You are talking of a meeting in 1999. I remember no such meeting in 1999. I remember a meeting I had with Mr. Tremblay.

[English]

Mrs. Diane Ablonczy: Mr. Boulay, we're talking now about the meeting you do recall with Mr. Tremblay and other representatives of ad agencies. At that meeting, Mr. Tremblay told representatives of the ad agencies, including you, that things were going to be different. I'm asking if you remember him making that statement.

[Translation]

Mr. Claude Boulay: No, I do not remember him saying that, Madam.

[English]

Mrs. Diane Ablonczy: Do you remember there being any discussion about changes to the way the sponsorship program was going to be run or administered, or there being any talk of changes under the new direction of Mr. Tremblay?

[Translation]

Mr. Claude Boulay: I do not know if this is what you are alluding to, Madam, but there was a meeting with Mr. Tremblay and with agency presidents, and this meeting took place, not upon Mr. Tremblay's arrival in his new position...

[English]

Mrs. Diane Ablonczy: It doesn't matter when it took place. I'm asking about the discussion at that meeting.

[Translation]

Mr. Claude Boulay: But you asked me if there was a meeting right off the bat as soon as Mr. Tremblay took over.

[English]

Mrs. Diane Ablonczy: We can forget that. Our time is being wasted.

The Chair: I'm going to interrupt, because, Ms. Ablonczy, your time is over. All you're trying to do is find out whether Mr. Boulay remembers being at a meeting with Mr. Tremblay. Mr. Boulay, you prefaced that remark by saying Ms. Ablonczy said “and Mr. Pierre Tremblay took over”, and you took that as an opportunity to say there was no meeting and so on. It has taken four minutes of her time for you to admit that there was a meeting, and she still didn't have time to elicit what actually transpired at that meeting. We as members of Parliament find it quite frustrating that we have to elicit the answers piece by piece. The law clerk has advised us that witnesses who come to this committee are supposed to put all the facts on the table and voluntarily disclose the information in order for us to ask questions with regard to the information. It's not the process of this committee to pull the information out word by word and inch by inch. It's your obligation to put it on the table. So when Ms. Ablonczy asked about a meeting with Mr. Tremblay, you should have been more forthcoming than you were, sorry to say.

I'll give you time for a final comment, Ms. Ablonczy.

Mrs. Diane Ablonczy: Mr. Chairman, I'm asking about a discussion at the meeting that is germane to this program. Mr. Boulay very cleverly quibbled about when the meeting took place, which is not at issue.

Mr. Boulay, would you please do the right thing by Canadians and answer the question with regard to a discussion you had at that meeting about changes in the program that Mr. Tremblay said were going to take place? Be forthcoming and tell us what that discussion about change consisted of, in your recollection.

¹ (1545)

[Translation]

Mr. Claude Boulay: Mr. Chairman, I have since this morning been trying to be cooperative and I will continue to do so. I simply wish to put the member's question in the proper context. Her question seemed to be along these lines: new management arrives on the scene and from that moment on things will be different. She was talking about 1999. But that is not at all the way things went. That meeting never took place.

Here is what happened. I do not have the dates, but I would say that a year or a year and a half after Mr. Tremblay's assumption of duties, there appeared a document, a recommendation on improvements to be made to the entire program. It is at that point that Mr. Tremblay invited us, the agency people, to a presentation of the recommendations contained in that report. That is very different from saying that Mr. Tremblay is commencing his job tomorrow morning, and that as of tomorrow morning, the way things are done is going to change. It is following that audit or that document that there was this meeting and that the agency presidents met with Mr. Tremblay.

[English]

The Chair: With regard to Mr. Tremblay's meeting with the advertising agencies, you referred to improvements. Our impression is that he was starting to put it back on track and saying that verbal contracts were no longer going to be the way business was done. Is that the type of improvement he was suggesting?

Mr. Jordan.

Hon. Joe Jordan (Leeds—Grenville, Lib.): I have a point of order. When you say “we”, I hope you're not including me. You're asking for clarification.

An hon. member: It's the royal we.

Hon. Joe Jordan: But he doesn't speak for me as a member of this committee.

The Chair: I appreciate the point, Mr. Jordan.

Hon. Joe Jordan: I think this witness has been very forthcoming. I think what's happening here is that the opposition is paying for its style of questioning.

The Chair: We're not going to get into a long debate about this. The focus is to try to get the information from the witness. So I asked Mr. Boulay about the nature of the improvements suggested by Mr. Tremblay at the meeting. Was it to say there would be no more verbal contracts and that it would be done the way it should be, by written contracts and so on?

[Translation]

Mr. Claude Boulay: The purpose of the meeting was first and foremost to inform us of the recommendations of the committee. There were a certain number of points; as a matter of fact, it was already out there. That document was tabled. I believe it is Mr. Gagliano who mentioned it when he appeared here. There was a follow-up on recommendations of various types that were made or asked for by the auditing people. I believe the document contained some 25 or 26 recommendations, but to my knowledge there was nothing with regard to verbal or written agreements. I do not know what you are alluding to when you ask if that would change the nature, verbal or written, of the contracts. In our case, the mandates we were given were always in writing. I do not know what you mean when you talk of verbal contracts.

[English]

The Chair: I'm sure some members will want to carry that line of thinking a bit further.

Monsieur Proulx, for four minutes.

Mr. Marcel Proulx (Hull—Aylmer, Lib.): Thank you, Mr. Chair.

[Translation]

Good afternoon, Mr. Boulay, and welcome to the committee. I have four minutes, so we are going to be quick and we are going to speak one on one.

Mr. Boulay, you stated that as of 1998, following an invitation to tender, Media/IDA Vision was granted the contract to act as a funnel. Before 1998, were you a consultant to the Government of Canada with regard to the preparation of this invitation to tender? Did you assist officials of the Government of Canada in the preparation of this invitation to tender?

Mr. Claude Boulay: Not at all.

Mr. Marcel Proulx: Was the system that Media/IDA Vision took charge of in 1998 in existence before 1998?

Mr. Claude Boulay: There was a company, what we call the agency of record, in other words a lead agency responsible for media coordination, which for ten years was in Toronto. It was the same outfit that was the lead agency for ten years.

Mr. Marcel Proulx: And in 1998, with a similar outline...

Mr. Claude Boulay: Yes.

Mr. Marcel Proulx: ... it is your company that won.

Mr. Claude Boulay: Within the framework of the process. That is correct.

Mr. Marcel Proulx: You stated earlier, that Media/IDA Vision was indirectly an insurance policy for the Government of Canada.

What would have been different if the Government of Canada had decided to deal directly with the various media agencies or recipients of sponsorship deals instead of going through Media/IDA Vision?

¹ (1550)

Mr. Claude Boulay: This morning, if you recall, I stated that there was the before Media/IDA Vision and the after Media/IDA Vision, and that there had been a break in 1998. The important thing to know is that before 1998, therefore in 1995, 96 and 97—I do not remember exactly when the program began—, the funds allotted to organizations did indeed get distributed exclusively via the agencies, and that at the time the agencies were getting 15%. From what I understand, as a result of recommendations—were they those of Treasury Board or of the internal auditing service of Public Works?—, they said that from then onwards there would be a separation between the two functions so as to have on the one hand someone who would be responsible for managing the sponsorship and, on the other, someone who would be in charge of managing the contract, in order for the government to be better protected.

Mr. Marcel Proulx: You said earlier that the agencies, by virtue of your contracts with the government, were responsible for keeping the documentation relating to the sponsorship files. In other words, group abc handed over to you invoices, documents in proof, visibility-supporting exhibits, and you, as the agency, kept these items in your files.

Mr. Claude Boulay: No. The first duty of the communications agency responsible for a sponsorship project is to produce, at the very end, a post mortem, a post-event analysis proving that the government got what it expected or what was outlined in the transaction. If the agency, for whatever reason, incurs additional costs in the administration of its...

Mr. Marcel Proulx: I am going to stop you here, because my four minutes are ticking along. We might check in the “blues“ of this morning's session. In answer to a question put by my colleague Mr. Mills, you stated that the Auditor General did not necessarily have access to all of the documentation on the various files, because your contracts with the federal government--and you were talking of the agencies in general--provide that the files, the documents, be kept by you and that you not necessarily hand them over to the government.

Mr. Claude Boulay: I would simply like to make two distinctions, very quickly. In the case of administrative paperwork, namely invoices, time sheets, etc., it was the responsibility of the agency to keep that on its premises. The agency's responsibility was to supply a post mortem. This is why I stated this morning that all of our post mortems were delivered to the government.

Mr. Marcel Proulx: I understand that.

Mr. Claude Boulay: There are therefore two different things. There is the post mortem, that the agency is required to produce in order to prove that the government got what it was supposed to get under the contract that...

Mr. Marcel Proulx: On the basis of what the agency tells the government. But the government does not have access to the documentation.

Mr. Claude Boulay: The government receives the documentation relating to the event. What it does not have, in certain cases—and that is also the case with production contracts—is the administrative portion, which must be kept by the agencies.

Mr. Marcel Proulx: Thank you.

I have one last quick question, Mr. Chairman.

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

Mr. Marcel Proulx: Your $676,000 plus $836,000 contract with the Canada Mortgage and Housing Corporation was for what, Mr. Boulay?

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

[English]

We're already up to over five minutes. It was a long four minutes. You said it was short; it actually turned out to be fairly long.

Mr. Tonks, please, four minutes.

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

Mr. Boulay, I guess nothing galls Canadians and taxpayers more than the notion that money is washed through in such manner of commissions being paid for work that is just not done. I think the committee is trying to get a deeper understanding of how that could happen in the manner the Auditor General has indicated in her report.

If this question has been asked in a different way, I apologize for asking it in my way, but could you please explain.... In the Maurice Richard series, Groupe Everest received commissions according to the industry average or policies of $67,826, but got $116,000 to transfer funds from Public Works to the producers of the series, $7,500 to funnel money to the millennium series, $4,500 to funnel money to the old port, and $39,000 to help move money to the RCMP celebration. Why was that necessary, and what did Groupe Everest do to earn that money?

¹ (1555)

[Translation]

Mr. Claude Boulay: I believe I explained that this morning. Media/IDA Vision's responsibility, as I have just explained, was to manage the contracts, in other words to ensure that the various amounts of money had indeed been transferred, which means ensuring that the work was carried out according to plan. That was the responsibility of Media/IDA Vision.

What one must understand, as I explained earlier, is that the government decided to work with a business model that is used in various places within the industry and that the government has for several years been working with this same business model. It pays agencies on the basis of 15%. It was not us who made the decision. Every agency, every company that worked with the government, worked on the same basis. Therefore, the government decided to work on the basis of a commission system, and all of the industry, all of the people involved worked on the basis of the same commission. As I explained earlier, based upon recommendations—and, as I was saying earlier, I do not know if they came from Public Works or from Treasury Board—, it was decided to divide the work in two. Thus, in essence, rather than having one agency receive 15% and execute both tasks, it was decided to divide the work in two in order for there to be better control, on the one hand, and, on the other, for there to be some distance, and this explains the 12% and 3% distribution, the 11.75% for the media portion, that was paid out to the agencies, versus the 3.25% paid to the agency that took care of the exposure, the management, the media material and all of the media-related transactions flowing from that.

[English]

The Chair: One minute.

Mr. Alan Tonks: Thank you, Mr. Boulay.

I do understand the architecture that has been described as “somewhat opaque”, and I guess when you look at the magnitude of what the Auditor General has pointed out in terms of what you just described, the contracts, we all understand that when there is a contract change obviously it's based on different work or additional work being done. But the Auditor General points out, Mr. Boulay, that you had a contract for $250,000 with CMHC, and that was changed to the tune of $60,000. Groupe Everest had another contract for $300,000, and that was changed for $178,000. These are big numbers. Groupe Everest also had a contract for $120,000, and it was changed to $618,000.

Now, would this happen in any other sector, in any other agreement, that there would be changes to that magnitude? Is it your experience that those changes would take place with no contract change whatsoever, or at least no record of any contract change?

º (1600)

[Translation]

Mr. Claude Boulay: Once again, I believe that what must be understood is that within the government of Canada people use the term “contract“ for what we in our industry call a “purchase order“. Therefore, basically, for us, when we win a contract... for example, if there is an invitation to tender, if I have the winning bid and I am the agency of record for National Defence, for us, that is a contract. We have just won a contract. With the government's way of doing things, what happens is that it assigns an agency to that department.

There is some misunderstanding with regard to the contracts because, indeed, as you are saying, an initial contract of $100,000 that is increased to $300,000 and then to $600,000 is not a contract that went from $100,000 to $300,000 and to $600,000: rather, what we have here are two, three or four communications activities. In the industry, what we would say is that one, two, three or four purchase orders were made, because one, two, three or four projects were carried out.

We talked a little earlier about Media/IDA Vision. Media/IDA Vision did, as was said, win in 1998. Up until very recently, people were saying that Media/IDA Vision had yet again snagged two million dollars worth of contracts over the last two months. But it is not two million dollars worth of contracts that we got: several departments purchased media exposure or signed contracts with Media/IDA Vision for the purchase of media exposure, and this is what all the great confusion is about, because people are saying that a contract went from $100,000 to $500,000. Is that normal? No, that is not normal. But is it normal to have a first project for $100,000, a second one for $200,000 and a third one for $300,000? Yes, that is very possible. That is, I believe, where a lot of the misunderstanding lies.

[English]

The Chair: Thank you, Mr. Tonks.

You mentioned confusion, Mr. Boulay, and I have to say that I am confused. You mentioned that the 15% commission is the industry norm. Is this a norm that deals strictly with the federal government, or is this a norm that applies as well to the private sector when you deal with advertising in the private sector?

[Translation]

Mr. Claude Boulay: I said, Mr. Chairman, that it was one of the norms. From what I know, a lot of governments in Canada work with a formula...

[English]

The Chair: No, no, my question was, does the 15% overhead commission apply to your advertising agencies doing business in the private sector as well, or is this only for the federal government?

[Translation]

Mr. Claude Boulay: No, it applies as well. It is not the only formula. As I was saying earlier, the government could have chosen another formula. It is not the only one, but it is very widely used.

[English]

The Chair: Even in dealing with the private sector?

[Translation]

Mr. Claude Boulay: Yes. I would say, but you would have to verify this if ever you had the opportunity to talk to people from ad agency associations in Montreal or in Toronto, that probably...

[English]

The Chair: But I'm talking to you.

[Translation]

Mr. Claude Boulay: No, Mr. Chairman. I believe that perhaps some 40% of private industry works that way.

[English]

The Chair: Okay.

Madam Ablonczy, please, four minutes.

Mrs. Diane Ablonczy: Mr. Boulay, as far as you were aware, was every contract Groupe Everest had with the federal government a written one? Did your contracts with the federal government follow the contracting requirements that were set out in the rules of the Government of Canada?

In other words, were they written and did they follow the rules?

[Translation]

Mr. Claude Boulay: To my knowledge, yes, Madam.

[English]

Mrs. Diane Ablonczy: On the meeting that we were talking about before, I want to clarify this. We know that in 2002, after the internal audit that showed some real problems with the sponsorship program, Pierre Tremblay called a meeting of the advertising agencies, at which time there was a discussion about a strategic communications plan with respect to the audit. This was at a retreat somewhere in Quebec. I'm assuming you remember that meeting in September of 2002.

[Translation]

Mr. Claude Boulay: That is the meeting I was talking about earlier, Madam.

[English]

Mrs. Diane Ablonczy: Yes. So my question to you is, was there an earlier meeting with Pierre Tremblay and representatives of the advertising agencies?

[Translation]

Mr. Claude Boulay: Not to my knowledge, Madam.

[English]

Mrs. Diane Ablonczy: With respect to your sale of Groupe Everest to Draft Worldwide, did you retain any interest in Groupe Everest in any way, following the sale?

Mr. Claude Boulay: No.

Mrs. Diane Ablonczy: You don't have shares in the company.

[Translation]

Mr. Claude Boulay: You must understand that Groupe Everest is a management company, a holding company that controlled a certain number of entities, a certain number of businesses. What we did was sell entities to the organization you have just mentioned. Therefore, Groupe Everest per say still exists, but is inactive. It is purely a management company.

[English]

Mrs. Diane Ablonczy: But you have no interest in Draft Worldwide at this point.

Mr. Claude Boulay: No.

Mrs. Diane Ablonczy: What happened to the Everest files? Did Draft Worldwide take over the files?

[Translation]

Mr. Claude Boulay: To my knowledge, when I left, they were there. In my view, they should still be there.

º (1605)

[English]

Mrs. Diane Ablonczy: Where is “there”?

[Translation]

Mr. Claude Boulay: In Draft Worldwide's offices in Montreal, I presume.

[English]

Mrs. Diane Ablonczy: So they could be accessed there, to your best knowledge.

[Translation]

Mr. Claude Boulay: I am not there. I cannot say whether or not one might indeed access them there. I presume that such is the case.

[English]

Mrs. Diane Ablonczy: Were there--

[Translation]

Mr. Claude Boulay: Madam, if I were still president of Groupe Everest, you would have access to all of the documents. I always made all documents available to all of the people wishing to see them. You are asking me hypothetical questions. I cannot make a commitment on the part of the people who bought my company.

[English]

Mrs. Diane Ablonczy: I understand that, Mr. Boulay. That's not the problem.

[Translation]

Mr. Claude Boulay: Thank you.

[English]

Mrs. Diane Ablonczy: Did anything change with the program following the change from Mr. Guité to Mr. Tremblay as director?

[Translation]

Mr. Claude Boulay: I am trying to recollect, Madam, because you asked me a question earlier about the 1999 meeting during the course of which it was said that things were going to change. I do not remember there having been any changes. There perhaps were some, but I do not remember, Madam.

[English]

The Chair: Thank you very much, Ms. Ablonczy.

Mrs. Diane Ablonczy: A shocking lack of memory, Mr. Boulay. It would be more helpful if you could remember.

The Chair: Thank you, Ms. Ablonczy.

Mr. Jordan, please, four minutes.

Hon. Joe Jordan: Thank you, Mr. Chair.

Mr. Boulay, perhaps I could get you to turn to page 10 of the Auditor General's report, chapter 3. I want to just reference the chart on the Maurice Richard series.

I want to pick up on what my colleague Mr. Tonks was saying. Media/IDA Vision, as the agency of record--and I'm the first to admit that I'm lacking in knowledge in terms of how this industry works--got a 3% commission for the...off the contracts that were put through these various companies.

[Translation]

Mr. Claude Boulay: Yes, indeed.

[English]

Hon. Joe Jordan: I'm just wondering, did anybody explain, in your capacity with Media/IDA Vision, why it was done this way ? Why was the money put through these individual companies when it was...? The gentleman putting together the movie was trying to put together this financing. Is there a reason why CCSB chose to put this money through a series of advertising agencies? Was there ever a reason given for that?

[Translation]

Mr. Claude Boulay: You may have to put the question to Mr. Guité when you see him, but know this: whether it is called L'Information essentielle or the Ottawa Senators or something else, in all of these files, there have always been, as you will see, agencies that have managed government visibility and others that have administered the contract. Therefore, L'Information essentielle is nothing more, nothing less, than an event. It is therefore the same process, the same system, in essence, that was followed for all of the sponsorship projects carried out over the years. There is nothing special in the case of L'Information essentielle, nothing that is not similar to what was done elsewhere.

[English]

Hon. Joe Jordan: Fair enough. I guess I can accept the 3% commission to manage what was essentially a $4 million or $5 million project here. Obviously there had to be some coordination. But if you look at Groupe Everest, Groupe Everest received...or was part of a $650,000 payment in March 1999, and then transferred $565,218. Based on this chart, Groupe Everest got $67,826 to take money from CCSB and give it to this film project. Or that is certainly the impression this chart leaves you with.

Can you give me some indication of what Groupe Everest did to get $67,826? I think that's one of the things taxpayers are very confused about.

º (1610)

[Translation]

Mr. Claude Boulay: What was done, in the end, is the same thing that was done with all of these events. We supervised the visibility of the government in the context of the different products. Yes, there was a television show; yes, there were advertising pieces; yes, there were different elements. The purpose was to ensure that the government would get the visibility it was entitled to in the context of the mandate.

[English]

Hon. Joe Jordan: But wouldn't it have made more sense to use one company? Because what's been introduced here is four or five companies essentially all trying to do the same thing.

I'm at a complete loss here. I suppose this may be a question for Mr. Guité, but I'm at a complete loss as to why breaking the money up, and flowing it through these individual companies....

If the goal was to coordinate this money, to me it would certainly make more sense to go through some process and select one agency to do it as opposed to four or five. It seems to me that what you introduce into the mix is this problem of coordination between agencies.

[Translation]

Mr. Claude Boulay: Why was it decided to retain the services of only one agency as opposed to those of two, three or four agencies? I am unable to answer that question. However, I would like to underline the fact that if you look at the dates, you will see that this is a project that was spread out over three years. Payments thus began in 1998 and continued on into 2000. This probably means that the project lasted until 2001. Why, in that case, would one have wanted to have three or four agencies supervising a single project over a four-year span? There perhaps lies the answer to your question. I do not know.

[English]

Hon. Joe Jordan: Thank you.

The Chair: Thank you, Mr. Jordan.

Madame Jennings, s'il vous plaît, quatre minutes.

[Translation]

Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you, Mr. Chairman.

Thank you very much for appearing before us.

You have perhaps already stated this, but I would like to know in what year you founded Groupe Everest.

Mr. Claude Boulay: In 1976, Madam.

Mrs. Marlene Jennings: Has Groupe Everest been doing business with the federal government since then?

Mr. Claude Boulay: No. I mentioned this morning that according to us that perhaps goes back to the year 1987.

Mrs. Marlene Jennings: Perfect. At its peak, when you were chief executive officer of the company, how many employees worked for Groupe Everest?

Mr. Claude Boulay: Perhaps 165.

Mrs. Marlene Jennings: Was it you yourself who negotiated all of the contracts Groupe Everest signed with the federal government, be it for ad campaigns or for communication services, or did you have a division or a group of employees who carried out that work?

Mr. Claude Boulay: In fact, there are several people who... if you are asking me if I was the main contact, the answer is yes. There were people on our various teams working with different officials on different files. As an example, we had an office here in Ottawa. Thus, there were people who were obviously working with various departments here, in Ottawa.

Mrs. Marlene Jennings: Based upon the questions my colleagues from both sides have asked you, you are clearly aware that they are having trouble understanding what Groupe Everest did exactly to earn its 12% commission. I am not talking here about Media/IDA Vision but about Groupe Everest.

Could you therefore give us an example? I am hoping that the Chair will be kind in this regard. Let us talk about L'Information essentielle and the television series on Maurice Richard. Several MPs have asked you what Groupe Everest did to earn these $67,826. Yes, there is a company—L'Information essentielle—that produced a television series. What did Groupe Everest do to earn its 12%?

Mr. Claude Boulay: Madam, I said that earlier.

Mrs. Marlene Jennings: But explain it to us once more.

Mr. Claude Boulay: It is because...

Mrs. Marlene Jennings: Wait, Mr. Boulay, wait.

[English]

The Chair: Madam Jennings.

[Translation]

Mrs. Marlene Jennings: My colleague here has just asked you the question. Clearly the answer given has not been understood. I am therefore asking you to repeat your answer and, if possible, to add to it. In order to explain your answer, give us an example of what you did. Do not say that you “administered“ because most people do not know what you mean by “administered“.

º (1615)

Mr. Claude Boulay: Very well. I will give you another example that might be more easily understood by everyone. Forgive me for using the word “administer“ but we administered the visibility program.

[English]

The Chair: Mr. Toews.

Mr. Vic Toews (Provencher, CPC): On a point of order, I've been trying to follow this line of questioning, and I think it's a good line of questioning, but my translation keeps cutting in and out.

Mrs. Marlene Jennings: Would you like me to repeat it in English? Mr. Boulay understood my question in French.

Mr. Vic Toews: I wouldn't mind her repeating it in English. It was interesting.

Mrs. Marlene Jennings: What you could hear of it, right?

Mr. Vic Toews: It cuts in and out. I've been flipping channels here.

The Chair: Is anybody else having the same type of problem?

[Translation]

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

[English]

The Chair: Monsieur Desrochers.

[Translation]

Mr. Odina Desrochers: It is a technical matter. I saw what was happening. The microphone is turned on between two speakers. Why is it that whenever Mr. Boulay is going to answer, we always lose the first two or three seconds? And it is the same thing for the interpretation. That is the problem.

[English]

The Chair: I've noticed the same thing myself. The microphone comes on, the person is speaking, and yet it takes two or three seconds before anything comes through on the ear piece. We'll have the technician come here and stay for the rest of the day, because this is quite frustrating, and members need to understand.

Monsieur Proulx.

Mr. Marcel Proulx: I have asked the technician a few times since this morning, and I'm told translators have to press on a button--it's like an ejection seat, I guess--to switch, and it's not done at the right time.

The Chair: Okay, maybe that's what it is. It's a switch going back and forth between the two languages.

We will continue as best we can. Madam Jennings, you may....

Do you want it repeated it in English?

Mr. Vic Toews: Yes, at least the last question.

The Chair: It was a very good question

Mr. Vic Toews: It was a good question.

Mrs. Marlene Jennings: It's become clear from the questions of my colleagues on both sides of this committee, opposition and Liberal colleagues, that there's still confusion as to what Groupe Everest did to earn its 12% commission. I used the example of the Maurice Richard television series. I'm not talking about the agency of record, which was Media/IDA Vision; I'm talking about Groupe Everest. Mr. Boulay said he can use another example that he hopes will make clearer what they did to administer--“administer” can mean a lot of things.

[Translation]

Your turn, Mr. Boulay.

The Chair: Mr. Boulay.

Mr. Claude Boulay: Fine. I will give an example, that of the National Hockey League. It is an interesting subject: we are all in the playoffs. In essence, as I was saying this morning, the government of Canada would for example say that it wanted to have a presence with the various hockey clubs in Canada. It therefore mandated Groupe Everest to sit down with the clubs or with the league, if need be, to negotiate for the government of Canada a visibility agreement. That was the first stage. Then, there was a proper contract between the league or the clubs and the government of Canada. We, at that stage, were mandated to supervise things and to ensure that what the contract entailed was indeed carried out. That meant, for example, that in the context of the visibility plan that was negotiated, we were entitled to a banner, to messages on the electronic board, to advertising inside magazines, to various shots for visibility purposes during press conferences, etc. Each of the teams or each of the events granted visibility, and this visibility could be delivered in different forms.

Mr. Claude Boulay: As soon as these visibility plans were announced and acknowledged, it was up to us to ensure that there was this visibility. Thus, if we were entitled to a message banner, it had to be produced; if we had a page in a magazine, it had to be produced; if we had messages for the electronic scoreboard, these messages had to be produced. Such was the situation during the six, seven, eight or nine months that the hockey season covers because, as you know, there could be changes in events, and messages to be changed. The government might want to change its messages, and the magazines therefore had to make changes. That, basically, was the work.

The idea, therefore, was to ensure that we were getting what we were entitled to. Once all of that was done—and that it was I was explaining earlier—, we were responsible, at the end of the season, for producing a post mortem showing all of the visibility elements the government was entitled to and for delivering that document to the government. The government only paid once it had the post mortem in its hands.

It was therefore virtually impossible for an event to receive money if, firstly, there was not a contract binding the government and it and, secondly, if we, Media/IDA Vision, did not have a copy of it and, thirdly, if the work in question had not been done. Groupe Everest's mandate was therefore not carried out until the post mortem report was filed, the recommendations drafted and the product delivered.

Is that...? That might serve as an example.

º (1620)

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

Therefore, if the Auditor General, in the 53 files she audited with regard to sponsorship and the 25 or 26 files she audited with regard to advertising, did not find a post mortem, what you are saying is that as far as the files you administered are concerned, as you well explained, there should be, at Groupe Everest, a post mortem for each and every one of the contracts Groupe Everest worked on.

Mr. Claude Boulay: Each and every one of them.

[English]

The Chair: I'm going to ask some questions myself, because I'm really concerned. Mr. Jordan has been on this Maurice Richard series, as have Madam Jennings, Mr. Kenney, and others. I'm going to read a few statements from page 10 of chapter 3 of the Auditor General's report, and then I'll ask you some fair and specific questions.

There's a chart on the sponsorship of the Maurice Richard television series, 1998 to 2000. It states:

A representative of L'information essentielle told us the following:

He had approached the Executive Director of CCSB about having the Government of Canada sponsor three...television series.

The Executive Director

--that's Mr. Guité--

agreed, and verbally committed the government to funding that included $7.5 million for a series on Maurice Richard, $1.2 million for Le Canada du Millénaire, and funding for a series called “Innovation”.

No business case was presented; the Government of Canada did not sign a contract with the company; and no other documentation or exchange of correspondence between the government and L'information essentielle reflected these commitments.

All day today, Mr. Boulay, you've been telling us about these written contracts and how you managed elements in the sponsorship programs on behalf of the Government of Canada. In this case L'Information essentielle went to the government. You didn't go to the government; they went to the government. They struck a verbal deal with the government, there was no documentation, there was no contract. So I need to know from you how you manage a contract along the lines you've been telling us all day when no business case was presented. How can you tell us the criteria were met, when the company tells us there was no business case? How could you measure something that did not exist? How can you say you managed the contract and got hundreds of thousands in commissions, when you didn't manage a thing, it was all verbal, and there was no contract? I want you to be clear and specific and give us the facts.

º (1625)

[Translation]

Mr. Claude Boulay: You must understand, Mr. Chairman, that there are several parts to your question, several sub-questions.

First of all—and I said this morning—, it is not in all cases that the agencies negotiated. I earlier gave the example of the National Hockey League, in which case we were asked to negotiate.

[English]

The Chair: I'm talking about your participation in this particular issue. There was no contract, everything was verbal, there was no business case, and you've been telling us all day that you managed these written contracts. I want to know why you were paid through Lafleur, Media/IDA Vision, Groupe Everest, Gosselin, and so on. All these companies got all this money, hundreds of thousands of dollars, and there was nothing to manage, but you've been telling us how you managed these contracts. There was nothing to manage, there was no business case. How do you manage a business case when there is no case? There was nothing to measure. You just passed on the cheque and got paid. Let's just get the facts on the table here.

[Translation]

Mr. Claude Boulay: It is being said that no cost-benefit analysis was provided. What is a cost-benefit analysis? What one must see, first off, is the visibility that the government obtained through those products. So what is visibility? It is the visibility the government did in fact obtain. The government did not sign a contract with the company, and the file...

[English]

The Chair: Let's stop right there. When the government asked you to develop the visibility for them, for some reason or other, L'information essentielle went to the government. You were not involved in discussions about this improving government visibility, because you were bypassed and completely out of it. The company went to the government, they struck a verbal agreement, with no business case, no business plan, whereby the money would flow through your organizations, and there was nothing else there. That is what we're trying to understand.

[Translation]

Mr. Claude Boulay: Mr. Chairman, I said this this morning: in certain cases we negotiated, and in others, the mandate came to us whereas...

[English]

The Chair: I'm talking about this case.

[Translation]

Mr. Claude Boulay: It is perhaps so in 50 or 25% of cases. I do not know, but when the government people—and I said that this morning—received the requests that flowed to them, it was up to them to decide if they wanted to go forward with the project or not. As soon as it was decided in the case, for example, of L'Information essentielle, that they did indeed want to contribute to a project, then it was at that moment that the agencies were assigned to carry out one of the two following things: either to develop visibility or to carry out the supervision of the visibility that was to be granted.

[English]

The Chair: How do you supervise getting “Government of Canada” at the end of a film? When it scrolls up on the television screen, the Government of Canada logo shows up. Is that what you call managing it? What else did we get for the money?

[Translation]

Mr. Claude Boulay: Listen, there were all sorts of events. If you want post mortems, then ask for them. They exist, they are there.

[English]

The Chair: No, this one event--

[Translation]

Mr. Claude Boulay: You are asking me for details on what the government got...

[English]

The Chair: I'm sorry, Mr. Boulay, but you are just trying to be as evasive as you can. I'm talking about the Maurice Richard series. We're talking about hundreds of thousands of dollars. We paid that to get the name “Government of Canada” at the end of the film, and you try to tell us that you manage these things. You didn't even get involved in deciding whether it was a good thing. The decision was made before you were even engaged, and yet, for some reason or other, you felt you were managing this and therefore entitled to these huge sums of money. Did you not have a moral question in your mind that this wasn't quite right?

[Translation]

Mr. Claude Boulay: Sir, we obtain a contract, we obtain a mandate and we execute the mandate. You are telling me that there was no...

[English]

The Chair: That's it. Thank you very much.

Mr. Thibault.

Hon. Robert Thibault (West Nova, Lib.): Mr. Chair, I agree with your attempt to get this information. I think that's at the basis of what we're doing, but I think that when you ask a question of the witness, he should--

The Chair: I know. I would love to listen to the response. I've had it time and time again. When I say Maurice Richard series, he goes off on a tangent about something else. I'm not interested in something else; I'm asking about--

Hon. Robert Thibault: In this case you cut him off at the first three words. I don't know what the sentence is going to be.

º (1630)

The Chair: Well, let me ask him again. I would love him just to tell us--

Hon. Robert Thibault: He starts speaking, and we get a bunch of smirks from the--

The Chair: My question, Mr. Boulay....

You have a point of order?

Mr. Dennis Mills (Toronto—Danforth, Lib.): You read from this document, “no business case was presented”. We had a presentation given to us last week where there were three or four pages of components that were negotiated with this Maurice Richard series, everything from radio spots to TV. I just want to remind you.

The Chair: Thank you, but I read from the Auditor General's report. It says, “no business case was presented”. It goes on to say the Government of Canada did not sign a contract. My question to Mr. Boulay, since he was so adamant about managing these written contracts that he's been talking about all day and there was no written contract here, was how he could manage that. There was no business case to assess. My final question was, didn't your conscience have a little pang and say, maybe I'm getting paid something for nothing here?

[Translation]

Mr. Claude Boulay: Sir, you talk of cost-benefit analyses: we should define what a cost-benefit analysis is. You are saying that there were no contracts; there were contracts. Had there been no contracts, there could not have been payments made. I therefore fail to see how one can say that there were no contracts. Where is this coming from? This is probably coming from the fact, as I was saying earlier, that we are having problems with semantics and the definitions of contracts and purchase orders. What is the contract? We have not found it. There obviously are contracts in existence. If we acted and if funds were transferred between the government and L'Information essentielle, it is because there were contracts. Otherwise, there was absolutely no way at all for me to make out checques. I cannot charge the government for something that does not exist. I need a proper contract in order to be able to invoice the government.

[English]

The Chair: Well, we'll just leave it at that, Mr. Boulay.

We're now through the complete round, and I think there should be about time to go through an eight-minute round.

We'll start off with Mr. Toews. Are you next?

Mr. Vic Toews: Yes.

I've been having some of the same concerns about managing the contracts, and indeed I was thinking about the same contract. But I know that most of my colleagues have been over that field, and I don't think we're any further ahead after five or six people have questioned Mr. Boulay on that issue.

I want to go back to the retail debt strategy program and refresh your memory perhaps. A 1994 letter written by Terrie O'Leary recommended your company for work on the retail debt strategy on the sale of Canada Savings Bonds. Were you aware of the fact that Ms. O'Leary was doing this and why she recommended your company?

[Translation]

Mr. Claude Boulay: No. I was not aware that Ms. O'Leary had done that.

[English]

Mr. Vic Toews: You didn't know she had written a letter in that respect.

Did you or representatives of your company discuss the retail debt program with anyone in the federal government, whether it was a minister or someone in the bureaucracy like Mr. Guité?

[Translation]

Mr. Claude Boulay: Could you repeat your question, please. I did not get all of the interpretation.

[English]

Mr. Vic Toews: Certainly. Did you or anyone in any of your companies discuss the retail debt program with anyone in the federal government, whether it was a minister or someone in the bureaucracy such as Chuck Guité?

[Translation]

Mr. Claude Boulay: I probably had discussions with Mr. Guité, who informed us that this file was probably going to be the object of an invitation to tender.

[English]

Mr. Vic Toews: I'm sorry...you probably had a discussion and he probably said something else. Could you repeat your answer, please?

[Translation]

Mr. Claude Boulay: What must be understood is that in the government there are mandates, there are mandates with timeframes...

[English]

Mr. Vic Toews: Just repeat your answer, please. Thank you.

[Translation]

Mr. Claude Boulay: I said that I probably discussed with Mr. Guité the matter of whether or not there would be a competition with regard to the Canada Savings Bonds.

º (1635)

[English]

Mr. Vic Toews: All right. So now you don't really recall; it's just that you probably did. Did you or didn't you?

[Translation]

Mr. Claude Boulay: What I am saying is that I had discussions...

[English]

Mr. Vic Toews: Did you or didn't you?

[Translation]

Mr. Claude Boulay: I am telling you that I...

[English]

Mr. Jason Kenney (Calgary Southeast, CPC): Let him answer a yes or no question once.

[Translation]

Mr. Claude Boulay: You are asking me to discuss something that took place in 1994. I am telling you that I probably...

[English]

The Chair: I'm sorry, I'm going to interject here again.

When we talk about the advertising program for the Canada Savings Bonds, this isn't going down to buy the weekly groceries here. We're talking about something that was likely a huge contract for your company. I would have thought the company would have been elated if they had won the contract or totally deflated if they had lost it. But you can't remember.

So, Mr. Toews, what was the direct question? Did you or did you not...?

Mr. Vic Toews: Did you or did you not discuss the retail debt program with anyone in the federal government, whether it was a minister or someone in the bureaucracy, such as Chuck Guité? And the answer, as I understand it, was that he probably discussed it with Chuck Guité. I'm assuming he's saying he did discuss it with Chuck Guité.

[Translation]

Mr. Claude Boulay: I imagine that the answer is yes and so I am saying “probably“.

[English]

Mr. Vic Toews: Probably.

Do you know if anyone else in your company discussed it with Chuck Guité or the minister, and that knowledge was relayed to you?

[Translation]

Mr. Claude Boulay: Not to my knowledge.

[English]

Mr. Vic Toews: Getting back to the point I talked about earlier this morning, your company received a million dollar amendment to a finance department advertising contract related to the Canada Savings Bonds in 1996. It was an amendment. Mr. Cutler said the amendment was backdated. He suggested there was a commission received without any work done.

So you essentially had a retroactive amendment of between $900,000 and $1 million. You have indicated you don't even remember that amendment. That essentially means you got 15% on $900,000 for doing no work, and you don't remember it.

[Translation]

Mr. Claude Boulay: You are the one who is saying that it was for doing no work. What I am saying is that I do not remember the details of that file.

[English]

Mr. Vic Toews: Do you remember the contract?

[Translation]

Mr. Claude Boulay: What contract, sir?

[English]

Mr. Vic Toews: The million dollar amendment to the finance department contract on the Canada Savings Bonds.

[Translation]

Mr. Claude Boulay: I come back to what I was telling you earlier. You are talking about a contract whereas it was a purchase order. Do I remember a purchase order? No, I do not remember a purchase order.

[English]

Mr. Vic Toews: There was an amendment made to the contract of about $900,000 plus. I don't want to tie you down to exactly $900,000 and some cents or dollars, so let's assume it was somewhere between $900,000 and $1 million. You don't remember the amendment that was made to that particular contract we've been discussing?

[Translation]

Mr. Claude Boulay: As I was saying earlier, amendments are often made to what you call contracts. But these are not contracts but rather supplementary purchase orders. You are asking me if amendments were made and if I remember them. No, I do not remember them. I do not know how many amendments I saw over the course of the years during which I worked with the government. Every time a $25 change was made to what you call a contract, there was an amendment. If there was a further $100 change, there was a new amendment made.

[English]

Mr. Vic Toews: Did they make those amendments verbally?

[Translation]

Mr. Claude Boulay: No, we received papers, amendments, documentation.

[English]

Mr. Vic Toews: But in this context you don't remember at all Terrie O'Leary recommending your company for that entire project back in 1994?

[Translation]

Mr. Claude Boulay: I do not even know what the recommendation was. I heard talk of the letter in the same way you heard talk of it. I do not know what this letter was,in what context this recommendation was made. Were we, at the time, the agency of record of the department? I do not know. I do not know what the dates were, I do not know what the letter is and I do not know what this intervention was.

[English]

Mr. Vic Toews: Just going back to your contract on the Maurice Richard series, you indicated that you managed the contract, moved the money, and made sure the work was carried out.

Earlier you gave us an example of $100,000 for the tulip festival. You indicated, for example, that $50,000 would be moved in advance, and then $50,000 would be moved when the government contacted you to tell you the work had been done.

That was your testimony earlier. Do you recall that?

º (1640)

[Translation]

Mr. Claude Boulay: Absolutely.

[English]

Mr. Vic Toews: All right. Now why would the government be contacting you to tell you the work was done if you were the one who was supposed to be managing the contract? Why was the government managing the contract? Isn't that what you were being paid $50,000 to do?

[Translation]

Mr. Claude Boulay: No. The communications agency's responsibility was, as I have already stated, to supply post mortems to the government, therefore to send the documentation to Public Works to demonstrate that the work had indeed been done. This is why I was saying a little earlier that, inevitably, in the majority of cases--and probably in the majority of the cases that were examined by the people in Public Works--, the post mortems were delivered. That is therefore proof of delivery of the product by the...

[English]

Mr. Vic Toews: So a post-mortem was delivered, but you didn't manage the contract; the government managed the contract. This gets back to the question that some of my colleagues have been asking: what are you doing for the commission? You're not managing the contract. In fact, the government is phoning you up and telling you, “The contract is completed. Pay out the rest of the money.” That's what I'm concerned about. That's the impression your testimony is leaving us with--that you've done nothing for it and the government is managing it. I'm wondering what you were doing there.

[Translation]

Mr. Claude Boulay: I am telling you that we managed the contract and that the government received the post mortem as proof that the work had been done.

[English]

The Chair: On just a final question, did the government write its own post-mortem or did you write it and submit it to the government?

[Translation]

Mr. Claude Boulay: No, the post mortems were written by the communications agencies.

[English]

The Chair: On what basis was that done? Because the government had all the information.

[Translation]

Mr. Claude Boulay: No, the government did not have the information. What I was saying earlier—and I come back to Ms. Jennings' question—, is that for us, our responsibility—again using the example of the National Hockey League—was at the end to produce a document showing all of the visibility that the government had obtained and, subsequently, to deliver this document to Public Works. They, upon reception of these documents, gave instructions to proceed with payments and exchanges. The production of this document was therefore the responsibility of the agency and not of the federal government.

[English]

The Chair: In paragraph 3.69 of chapter 3 of the Auditor General's report she says:

In 49 percent of our files, there was no post mortem report and therefore no evidence that the government had obtained the visibility it had paid for.

Are you telling me the Auditor General is wrong?

[Translation]

Mr. Claude Boulay: I repeat, once again, that as of 1998 and throughout the subsequent years, when we were managing these files, for a payment to be made to the agencies there absolutely had to be a post mortem supplied. I stated this morning in my introductory comments that I myself called officials at Communications Canada, who put me in contact with the auditors at Public Works, because I had heard rumors to the effect that the documentation was disappearing. Why? I do not know. Is it true? I do not know. But it is at that time that I contacted those people to tell them that we had files and that if they wanted to see them all they had to do was to come over. It took exactly five minutes for a senior official at Public Works to get in touch with me and set up an appointment to come and look at our files. If the Auditor Gneral did not see any documents, sir, I do not know why.

º (1645)

[English]

The Chair: What was the gentleman's name from Public Works?

[Translation]

Mr. Claude Boulay: Unfortunately, I do not remember his name. If you talk to Mr. McKenzie, who is with Communication Canada, you will be able to verify that he is the one who made the contact. I am not certain of this, sir, but I believe it was an assistant deputy minister who was responsible for the auditing function. I believe it was a deputy minister, but I do not remember his name. I will try to find it. As you know, I did not have very much time to prepare myself for my appearance here, but Mr. McKenzie will most certainly remember.

[English]

The Chair: Was it Mr. Steinberg or Mr. Stobbe?

[Translation]

Mr. Claude Boulay: No, those names do not ring a bell, sir.

The Chair: Mr. Desrochers, please.

[English]

Mr. Dennis Mills: Point of clarification.

The Chair: Mr. Mills.

Mr. Dennis Mills: In paragraph 3.69 you read that “In 49 percent of our files, there was no post mortem report and therefore no evidence....” That was from the Auditor General. How many files was that of the 1,987? There was a number earlier that you quoted. She audited 63 files or something.

A voice: She audited 26.

Mr. Dennis Mills: So for 49% of the files there was no post-mortem...53 files out of the 1,987.

The Chair: In paragraph 3.60 it says, “Most of the 53 files in our audit sample contained no assessment of the project's merits or even any criteria for assessing merit.” Of course, we wonder how you could manage when there is no assessment for management.

It also says, “No file contained the rationale supporting the decision”. Again we ask how one could manage. It's all laid out there, but it is a sample of 53.

Mr. Dennis Mills: But for clarification, she would obviously have a list of those 53 files--the names of them. Could we find out the names of the 49 files where there was no post-mortem? I think that would be kind of interesting.

The Chair: We will ask the Auditor General.

Mr. Dennis Mills: Each one of those files had to represent a special event that happened, and anybody with part of a brain should be able to assess whether or not the taxpayers got money...for the cost of that event.

The Chair: We will ask the Auditor General who that was, Mr. Mills.

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

[Translation]

The Chair: Mr. Desrochers, you have eight minutes, please.

Mr. Odina Desrochers: Mr. Chairman, I am having difficulty understanding how Liberals are able to trivialize the fact that money belonging to the public was spent in this way and that attempts are being made to lessen...

[English]

The Chair: I said at the very beginning, Mr. Desrochers, that we would ensure that the focus was on examining the witness. It's not appropriate to start impugning motive, and so on, and making comments about other people's interventions. We do not make comments about your interventions. It's not appropriate for you to make comments about others and their interventions.

So you may proceed and ask questions of Mr. Boulay, please.

[Translation]

Mr. Odina Desrochers: Forgive me, Mr. Chairman, but I do feel some frustration once in a while.

Let us discuss one file, Mr. Boulay, that you are very familiar with, that of Attractions Canada. You cannot say that it is not your file, because one can read on the opening page on the Internet site that it is a design of Groupe Everest.

Mr. Claude Boulay: Absolutely.

Mr. Odina Desrochers: It is you who did that.

Forgive me the anglicism, but who did the sales pitch for this project to the Government of Canada?

Mr. Claude Boulay: I took part in the presentation.

Mr. Odina Desrochers: Who was there with you?

Mr. Claude Boulay: Who was there?

º (1650)

Mr. Odina Desrochers: You should know, it brought in $27 million.

Mr. Claude Boulay: Who was the pitch presented to?

Mr. Odina Desrochers: Yes.

Mr. Claude Boulay: I would like to say that it did not bring in 27 million dollars.

Mr. Odina Desrochers: Whatever.

Mr. Claude Boulay: This is important. It is this type of detail that counts. It did not bring in 27 million dollars.

Mr. Odina Desrochers: Let us not dig in our heels about the amount.

Mr. Claude Boulay: We managed 27 million dollars worth, which is very different. Therefore, it is not 27 million dollars that went out through the back door or that wound up in the coffers of the Liberal Party. Let us be clear.

Mr. Odina Desrochers: Who was there?

Mr. Claude Boulay: We made different presentations. We made presentations to Public Works.

Mr. Odina Desrochers: Who was there for Public Works?

Mr. Claude Boulay: There was Mr. Guité and probably two or three other people from his department.

Mr. Odina Desrochers: Mr. Gagliano was not there?

Mr. Claude Boulay: No, not at all.

We also made presentations to Heritage Canada.

Mr. Odina Desrochers: Were these presentations always made to officials or were any ministers present?

Mr. Claude Boulay: No ministers were ever present.

Mr. Odina Desrochers: Is that serious to your mind?

Mr. Claude Boulay: As a matter of fact, Attractions Canada was probably one of the great success stories in terms of communication, in terms of the information program. It was a program that gave visibility to 3,000 attractions throughout the country, attractions in all of the provinces. Money was invested in a equitable manner in all of the provinces, from one end of the country to the other. It was an excellent program, precisely due to the fact that we were able to keep it somewhat removed from politicians.

Mr. Odina Desrochers: I am as a matter of fact going to talk about your excellent program. According to an article in the Globe and Mail, Mr. Boulay, an internal Publics Works' report showed that in 1999-2000, Groupe Everest charged 1.3 million dollars to manage 3 million dollars, which is a ratio of 43%. Is that true?

Mr. Claude Boulay: No.

Mr. Odina Desrochers: Was there a post mortem for that slice, for Attractions Canada?

Mr. Claude Boulay: Every year, we had—and all of this probably still exists—50 boxes of documents on Attractions Canada. We did an awful lot of things for Attractions Canada, an awful lot of projects. It must be understood that most of the money for Attractions Canada went to Media...

Mr. Odina Desrochers: Of the 27 million dollars, you made how much...

[English]

The Chair: Mr. Desrochers, let him finish the first.

Mr. Boulay, you have the floor.

[Translation]

Mr. Claude Boulay: It is an information program, a communication program, a program whereby a lot of money was invested in the media, whereby the media gave us two and three to one for each dollar we invested in the media. This was a very successful program with respect to the media, to presentation and to visibility.

Mr. Odina Desrochers: Of the 27 million dollars, how much did you pocket in commissions?

Mr. Claude Boulay: I have absolutely no idea.

Mr. Odina Desrochers: You do not know?

Mr. Claude Boulay: No idea.

Mr. Odina Desrochers: Groupe Everest does a project, Attractions Canada, you are the president of Groupe Everest and you cannot tell us how much money you pocketed as your commission?

Mr. Claude Boulay: No.

Mr. Odina Desrochers: We will move on to another question, Mr. Boulay.

It seems that a large portion of the 8 million dollars that Chuck Guité quickly spent for the referendum campaign went through Attractions Canada. Is that the case?

Mr. Claude Boulay: No. That is false.

Mr. Odina Desrochers: Did Groupaction...

Mr. Claude Boulay: Let me finish, please. In what year was the referendum held?

Mr. Odina Desrochers: In 1995.

Mr. Claude Boulay: Attractions Canada was established in 1997, for one. Secondly, I wish to underline the fact that it is not eight million dollars that were spent on publicity surrounding the referendum. What Mr. Guité said is that the Government of Canada purchased eight million dollars worth of billboard ads to advertise Canadian products. That is what he said.

Mr. Odina Desrochers: During the referendum.

[English]

The Chair: Mr. Desrochers, let him finish, please.

[Translation]

Mr. Claude Boulay: No, he did not take eight million dollars to support or to fight one cause over another during the referendum. What he did was rent billboards and use this billboard space to advertise products like anti-smoking messages and other environmental programs, etc. These billboards were used to promote Canadian products.

Mr. Odina Desrochers: During the referendum, during the referendum campaign, by coincidence, Mr. Boulay.

Mr. Claude Boulay: I believe he stated that it was not by coincidence.

Mr. Odina Desrochers: You find it amusing, Mr. Boulay, to take eight million dollars from the Canadian government? How much did you get? What was your share of the pie at Groupe Everest, your share of the eight million dollars?

Mr. Claude Boulay: Zero.

Mr. Odina Desrochers: Mr. Boulay, Alain Guilbert, does that ring a bell?

Mr. Claude Boulay: Absolutely.

Mr. Odina Desrochers: He worked for you from what year to what year?

Mr. Claude Boulay: I do not know from what year to what year, but he spent two or three years with us.

Mr. Odina Desrochers: During the time he spent with Groupe Everest, did he take care of the Sponsorship Program?

Mr. Claude Boulay: Not to my knowledge. I believe Mr. Guilbert was no longer with us when the Sponsorship Program was launched. It is my understanding that Mr. Guilbert left us in the early 90s.

º (1655)

Mr. Odina Desrochers: To go and work for Canada Post or somewhere else?

Mr. Claude Boulay: No. At the time he left to go and work for a company in Saint-Hyacinthe, the name of which escapes me. It was in the publishing industry, in the newspaper industry in Saint-Hyacinthe. He perhaps stayed there for a year or two. He then moved on to hold the position of president of Éditions Transcontinentales for two or three years. I believe he then went on to freelance for a year.

Mr. Odina Desrochers: When did he land at Canada Post?

Mr. Claude Boulay: It seems to me it might have been three of four years ago, or perhaps a little earlier.

Mr. Odina Desrochers: Did Mr. Ouellet consult you with regard to Mr. Guilbert's candidacy?

Mr. Claude Boulay: He did, as a matter of fact, ask me if he was a good candidate.

Mr. Odina Desrochers: And what did you answer?

Mr. Claude Boulay: Clearly he was a good candidate.

Mr. Odina Desrochers: You knew that he would be able to get good sponsorships with Canada Post as well.

Mr. Claude Boulay: No. What you should be aware of is that Mr. Ouellet and Mr. Guilbert had known each other for some time, I believe.

Mr. Odina Desrochers: I would like to come back to the numerous questions that have been asked with regard to the television series on Maurice Richard. I know that you had a company that did planning, but you also had a company called Groupe Everest that produced an invoice for $68,000. Everyone around this table is asking you the question, and you stated, when you began this morning, that there were deliverable products that had been produced, etc.

Could you tell us what you did? What products did you produce in the case of that series and how does your work appear in the Maurice Richard series? Could you tell us?

Mr. Claude Boulay: I have answered the same question three or four times now.

Mr. Odina Desrochers: It still is not clear for me.

Mr. Claude Boulay: Unfortunately, I cannot tell you anything more than I have already. If you want to see the work, if you want to see the finished product, if you want to see the government's visibility, I say to you once again, ask the people who have the documentation to supply it to you.

Mr. Odina Desrochers: To talk of finished products is rather vague. As for the documentation, we are looking for it.

Mr. Claude Boulay: It exists, because the people from Public Works have examined 721 files. I presume that the documentation exists somewhere!

Mr. Odina Desrochers: But you, you must have documentation, given that you were involved.

Mr. Claude Boulay: What is certain is that when I left the organization, we had documentation.

Mr. Odina Desrochers: Are you able to tell us that there was a proper contract between Public Works, Groupe Everest and L'Information essentielle.

Mr. Claude Boulay: Definitely.

Mr. Odina Desrochers: Was it a contract that was planned for and for which there is a financial analysis? Let us be clear--I am not talking about a purchase order but about a contract.

Mr. Claude Boulay: What there was was a proper agreement between those three entities.

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

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

Madam Jennings, please, you have eight minutes.

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

If I have understood you correctly, Mr. Boulay, it is not even you who should be here this morning, but rather the present chief executive officer of Groupe Everest, since all of the documents that might serve to confirm the statements and affirmations you are making today before this committee are in his hands. These documents are in the hands of Groupe Everest, if the company has not destroyed them since you sold it. But at the time of the sale, for each and every one of the events Groupe Everest worked on after 1997 and for which Groupe Everest received a commission, there are post mortems, there are documents, there are all of the relevant documents in Groupe Everest's files, and this information was still held there when you sold the company.

Mr. Claude Boulay: Yes, Madam.

Mrs. Marlene Jennings: And this is why, as former owner and chief executive officer, you are appearing here before us and making affirmations without however supplying the documents that might prove the veracity of these affirmations. But if my understanding is correct—and I will have to interrupt you here—you are going to advise us to first hear the present chief executive officer of Groupe Everest in order for us to gain access to these documents, if they still exist, and then the quick response team that, according to your statements, went to your premises, at Groupe Everest, and had access to all of the files Groupe Everest had worked on and for which it was paid a commission.

Mr. Claude Boulay: I wish to clarify two things. Fist of all, the CEO in question is no longer with Groupe Everest: he is with another company. Secondly, I never stated that the quick response team had audited all of Groupe Everest's files.

However, if I call someone in the government to say that I am worried because I have been told that there are documents missing, emphasizing the fact that we have them and that the person is invited to come and see us, it is not because I think we have some or because we do not have them all. If I act in this manner, it is that I am confident that we have them and that, for starters, the goods were delivered.

Furthermore, what I am telling you, Madam, is that the reason why we have them is that in all cases we supplied a post mortem report to the government. I repeat once again that without a post mortem it is impossible for those responsible for the event to get their money, in other words to be paid.

Ask those in charge if, since 1998, they have received the amounts agreed upon with the government under the Sponsorship Program. In theory, they should all, without exception, answer yes. What that means, Madam, is that these agencies did the work.

» (1700)

Mrs. Marlene Jennings: I must conclude, based upon the answer you have given me, that in 1999 or 2000—most probably in 1999—Groupe Everest produced a post mortem report to obtain the money paid out to L'Information essentielle for the Maurice Richard series.

This post mortem must exist somewhere, be it at Groupe Everest, at the company you sold the entity to, within government or in Public Works. Groupe Everest produced a post mortem report corresponding to this $67,826 amount, which represents a 12% commission on the payout to L'Information essentielle for the television series on Maurice Richard.

Am I correct in stating that?

Mr. Claude Boulay: Yes, Madam, you are perfectly correct, but if you will allow me, I will add a few details. You will even be able to verify them with the people from the quick response team: this is one of the files they audited. All right?

I would like to emphasize once again that it was not all of the files that were involved. I believe in fact that the quick response team helped me audit approximately 720 files out of a total of 3,000 to 4,000 files relating to that particular period. I believe that the work of the quick response team consisted in auditing the large amounts. The amount of money given to L'Information essentielle was in that category and the team therefore looked at it. I do remember that that was indeed one of the files it audited.

Mrs. Marlene Jennings: The Auditor General's report says that as far as the Sponsorship Program goes, she audited 53 files. As for advertising, she audited 25 or 26 files and, in another area, she looked at 14 supplier selection processes.

The Auditor General however said—and I do not question this—that in 40% of cases, there were post mortem reports, documentation, etc., missing from the files or the documentation was unrelated to events Groupaction had worked on. I am talking here of the 53 files as well as of the 25 or 26 other files. But if these were indeed files that Groupaction had truly worked on, what that means is that somewhere along the way the post mortem report disappeared. It did not wind up in the government's file.

Mr. Claude Boulay: Those reports must be there, Madam.

Mrs. Marlene Jennings: The Auditor General stated that she had audited 53 files and that, of these 53, there were 40% for which there were documents missing. Therefore, either Groupe Everest worked on none of these 40%, in other words on none of these 20 some files, or Groupe Everest did work on them, your post mortem report left your company but never made it to the government or else it made it to the government but someone organized its disappearance.

Mr. Claude Boulay: I am not going to make an assertion, Madam, but it did make its way to the government. Indeed, if it had not made its way to the government, then no one would have been paid. If the report does not get delivered to the government, then the Ottawa Senators do not get their money, the Canadian Tulip Festival does not get its money, the Saint-Tite Western Festival does not get its money, the Vancouver Canucks do not get their money. In essence, if no post mortem is delivered and accepted by the Department of Public Works, then there is no payment. This is why I am affirming that in the case of the files that we managed, all of the payments were made in accordance with the contracts in place.

You will have to ask the people from the Department of Public Works, because they went into the agencies. As I have told you, our contractual obligation is to provide a post mortem. It was like the conclusion of our commitment vis-à-vis the department. They therefore saw the documents when they came to see us. They saw them, we put them at their disposal and they left with copies of these documents.

» (1705)

Mrs. Marlene Jennings: Thank you.

Do I still have some time?

[English]

The Chair: No, unfortunately not.

[Translation]

Mrs. Marlene Jennings: Thank you very much.

[English]

The Chair: Merci.

Can you tell me, Mr. Boulay, what a final report would look like? Is it a one-page document, a one-sentence document, a ten-page document, a full analysis? What does a final report look like—just in case the Auditor General missed it in the file?

[Translation]

Mr. Claude Boulay: I do not believe that is the case, Mr. Chairman. If the document had been there, she would have found it.

[English]

The Chair: So what does it look like?

[Translation]

Mr. Claude Boulay: There probably were cassettes, visual support material, documents relating to the advertising coverage in various places, I presume. I am not aware of the detail of the document, but there is most certainly a detailed file, sir.

[English]

The Chair: So are we talking about 10 pages, 20 pages, 100 pages?

[Translation]

Mr. Claude Boulay: There are perhaps post mortems that are 10 pages long and there are others that have been as lengthy as 100 or 150 pages. I do not know exactly how many pages there were in that particular one, but it would have been quite substantial, sir...

[English]

The Chair: So they're substantial documents.

Mr. Dennis Mills: I have a point of clarification.

On this very point you've touched on, Mr. Chair, when they put in their information to the Canada audit branch, on things like commercials that were manufactured or designs of exhibits that were made.... I mean, they only refer to flags and wordmarks here. There had to be other substantive things that were part of this experience.

The Chair: Well, that is my point, Mr. Mills.

I'm not going to get into what each sponsorship program was about. I just want to know if a final report was a substantive document. He, Mr. Boulay, is telling us, yes, they were substantive documents that detailed the entire program and its accomplishments, be it advertising, flags, or whatever it may be. So he says it's all there.

I was a little concerned about his statement when he said that of course nobody would get paid unless the paperwork was there. We know that Mr. Guité could phone up the president of VIA Rail and have a cheque issued for $1 million without a single piece of paper moving, or whatever. I'm quite concerned that Mr. Boulay couldn't get Mr. Guité to do a thing without the documentation being there.

So you're saying in every case--in every case--documentation was properly submitted.

[Translation]

Mr. Claude Boulay: Could you repeat the end of your question? What am I maintaining, sir?

[English]

The Chair: I asked, in every case was the documentation submitted in accordance with the requirements? Well, I can't say “with the requirements”, as there's no contract. But you're saying that in order to get paid every sponsorship program had a complete final report, which was a substantive document. Everyone had a substantive final report.

[Translation]

Mr. Claude Boulay: Definitely, absolutely.

[English]

The Chair: Okay.

Madam Wasylycia-Leis, please, for eight minutes.

[Translation]

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you, Mr. Chairman.

I will come back to the question of the hour, the same question I asked you this morning in English. My question is the following: how can you explain the large commissions identified by the Auditor General? What did you do that warranted these large commissions, as in the case of the series on Maurice Richard?

Mr. Claude Boulay: Very well. There are two elements to your question. First of all, what did we do to obtain the contracts? First, Madam, you must be aware that as far as being chosen goes, there was an invitation to tender process for the selection of a certain number of agencies whose services would be retained to work on the sponsorship files. That was the first stage. The first stage was therefore to go through a prescribed process.

Ms. Judy Wasylycia-Leis: Excuse me, Mr. Chairman, but that was not my question. I do not wish to be given information on the contract, but on the commissions. How do you explain these sizeable commissions? What did you do to earn a commission of some $68,000?

» (1710)

Mr. Claude Boulay: The government established a business model aimed at remunerating the agencies under two formulas, either 15% or 12% and 3%. We are dwelling on one particular case here. It is as if you were telling me that as a real estate agent, for example, you sold one house and received a commission on the $100,000 sale and the next day you sold another for $500,000. We are dwelling on this one case, but what is important to note here, Madam, is that the government negotiated contracts with agencies for the management of a whole set of files, and not just one file. So for all of the files we managed or administered, it was the same fee schedule, whether the file was worth $500,000, $25,000 or $10,000. The basis for remuneration was always the same, namely 12%.

Ms. Judy Wasylycia-Leis: Excuse me, Mr. Chairman.

My question does not relate to the agency of record

[English]

agency of record.

[Translation]

or to the commission percentage, but to the $68,000 commission paid out to Groupe Everest.

What did you do? Did you talk on the telephone? Did you write letters?

[English]

The Chair: Let me interject here, Mr. Boulay. Let us get quite specific here. This is the third time Madam Wasylycia-Leis has asked this question. This same question has been asked by a number of others. You have been vague and obtuse. You talk about the general concept of commissions and you use the real estate equivalent. She had a clear question on this issue: what did you do to earn the money? And we don't want, “We managed the contract”. We want to know, what did you do? As I said, do you have a pang of conscience for getting the money and doing nothing, or did you do something? What did you do?

Ms. Judy Wasylycia-Leis: Could I add, Mr. Chair, on this particular issue—

The Chair: Let's just take it one step at a time. Let's get the answer to this and then we'll take your extra piece.

Ms. Judy Wasylycia-Leis: Just on your issue, Mr. Chair, I want to point out again that we're not talking about an event that you were arranging the sponsorship of. We're talking about the funding of a film series where money that flowed through--

The Chair: Okay, Madam Wasylycia-Leis, I asked a question—what did Groupe Everest do?

We're on Madam Wasylycia-Leis's time.

Ms. Judy Wasylycia-Leis: No, we'll add a couple of minutes.

The Chair: We want to get the answer to the question.

[Translation]

Mr. Claude Boulay: I am confused. You are talking to me about Groupe Everest and you are talking to me about Media/IDA Vision...

Ms. Judy Wasylycia-Leis: For the time being, we are talking about Groupe Everest.

Mr. Claude Boulay: I said this earlier: what we did at Groupe Everest is work with the people from L'Information essentielle to ensure that the visibility that was expected...

[English]

The Chair: Okay, order, please.

Mr. Boulay, s'il vous plaît.

[Translation]

Mr. Claude Boulay: ... to ensure that the government be given the required visibility within the various communication products that L'Information essentielle was producing. This is the only answer I can give you. Media/IDA Vision, for its part, acted in the same way in the L'Information essentielle file. For us, L'Information essentielle was an event, a festival, an organization, a sports club, it was a player, an organization that interacted with the government; it was a file for which we were being asked to act as a manager, as a contract manager, to take care of the transactions, to forward invoices to the departments, to ensure that the amounts were in agreement with the contracts and to cut checks to the various organizations and associations. It was always the same work, all of the time. You could repeat this 150 times...

[English]

Ms. Judy Wasylycia-Leis: What we're talking about is the Maurice Richard series, so it wasn't an event. Money flowed through you to get to them in order for them to put on the series, and all that happened in terms of visibility was a wordmark in the opening and closing credits, so it doesn't add up yet to $67,000.

What you're saying is that on a day dealing with this sponsorship file...you would do what? You'd wake up, have a coffee, cash your commission, write a cheque, put a stamp on an envelope, and mail it to this organization to pay for a television series. Is that what you're saying?

[Translation]

Mr. Claude Boulay: I say and I repeat that the choice of events, the choice of selections, the choice of production houses, the choice of whatever it might be, these choices were not made by the agencies. The Publics Works Department assigned mandates to a communications agency, entrusted Media/IDA Vision with the responsibility of negotiating a transaction on behalf of the government, and that is what we did.

You may think that we did not do much. I cannot prevent you from believing that, Madam. You can believe what you wish. We, as required under our contracts, managed the government's money in accordance with the agreements.

» (1715)

[English]

Ms. Judy Wasylycia-Leis: You can't stop me from believing that and you can't stop Canadians from believing that, because you haven't given us any evidence of any work being done. In fact, all you've done is reinforce the impression that this is a money-for-nothing contract. You were used by the government to flow money through you for the money to go to some purpose for which we're trying to find the reason.

Let me ask you this. In the same case we can look at the Auditor General's report around the production of stamps at Canada Post. It very clearly states in the report from the Auditor General that you received, again, $15,000 and some for simply transferring the money. What can you say? What can you provide us with? Do you have some bills? Do you have a breakdown in the case of the Maurice Richard series' $67,000 in terms of what you did and in the case of these other projects? Do you have a detailed breakdown of every penny you spent then?

That's the only way we will be able to understand this because you have been so vague and so unwilling to answer these questions that we are no further ahead in terms of understanding your motives or the government's motives for using this very spurious approach and this very convoluted arrangement. What is the reason you were involved in such a ridiculous scheme?

[Translation]

Mr. Claude Boulay: I will once again repeat the same thing to you. What do you want me to say? We were given a mandate, there was a proper contract with Canada Post for an event, which was a stamp series, in the same way that the Canadian Tulip Festival is an event. We were charged with carrying out that mandate. We, in the case of that file, did exactly what was expected.

I would like to say, Madam, that there is unfortunately a false impression at the moment. It is easy to bandy about large numbers, as I was saying earlier, but the ultimate question we should perhaps be asking ourselves is whether or not the government would have been able to manage a program such as that for less money. I would say, Madam, that the answer is probably no, because there were some 600, 700, 800 or 1,000 activities taking place. These activities were held in the months of June, July and August, on Thursdays, Fridays, Saturdays and Sundays. At the time, therefore, we needed several teams, people close to the activities who could be present.

I remember having talked to a deputy minister and having asked him how much it cost the government to deliver a program. He told me that it cost the government 12% to deliver a program. But in the case of the Sponsorship Program, I can assure you of one thing: that it would have cost much more than 12% because it truly involved an awful lot of people. This is why nine or ten agencies were called upon, because there were multiple events being held simultaneously.

You can believe what you want. However, in my mind, it is important to recognize that there are perhaps exceptional cases that may raise a few eyebrows, but I believe that the government, in this file, was overall very well served.

[English]

Ms. Judy Wasylycia-Leis: Can you verify it?

The Chair: Thank you very much, Ms. Wasylycia-Leis.

We're now at a quarter after five. As the law clerk says, if the witness feels some questions haven't been asked, ones he wants to get on the table, he should have a closing statement as well.

I'm reluctant to start another round unless we just have one or two individual questions from the floor, because there's only 15 minutes. As you know, we've had a great deal of difficulty in eliciting real information...but I see some hands for individual questions. We'll take two from this side and two from this side--or four from this side; we'll balance it out.

So quickly, Mr. Kenney, a question.

Mr. Jason Kenney: I'll try to condense four minutes of questions into 30 seconds.

Mr. Boulay, do you recall having received a $492,000 contract for promotional items from Public Works that you then subcontracted to a company called Communication Art Tellier Inc. in 1998? I really need a follow-up on this.

[Translation]

Mr. Claude Boulay: Vaguely, sir.

[English]

Mr. Jason Kenney: Well, let me jog your memory and see if you recall. You sublet this contract to a company owned by Benoît Renaud, and your company received a $68,000 commission in the process. So Benoît Renaud received a $390,000 subcontract from you for promotional items, and three months before that, Benoît Renaud's brother, who managed a numbered company in the same location, had donated $64,000 to the Liberal Party of Canada. That was more than four of the major chartered banks had donated.

Why would you have subcontracted this $400,000 piece of work, receiving a $70,000 commission, to the brother of somebody who had contributed $64,000 to the Liberal Party? This looks like money laundering. What's your explanation?

» (1720)

[Translation]

Mr. Claude Boulay: I am not aware of the political contributions made by each company and each individual. You talk to me about Communication Art Tellier and you refer to two events. I am not even aware if these two events are the same. Therefore, I do not know...

[English]

The Chair: The question, Mr. Boulay, was not about how much was contributed to the Liberal Party. He pointed out exactly what they contributed to the Liberal Party. Mr. Kenney has called it money laundering; he was asking what you called it.

[Translation]

Mr. Claude Boulay: That is absolutely not the case, because products were delivered. As a matter of fact, these products...

[English]

The Chair: Mr. Murphy.

Hon. Shawn Murphy (Hillsborough, Lib.): I just want to make a quick suggestion to the witness, Mr. Chairman. I too have some difficulty following some of the money trails in the administration of this program. I invite the witness, on reflection after this hearing, if he has anything to clarify as to the whole management and administration of this program, to put it in writing to us.

What were the roles and the duties of the agencies vis-à-vis the sponsorship program? What were you expected to complete, what did you complete, and did it meet with the government's objectives? If you want to take us up on that invitation, fine; if you don't, that's fine also.

The Chair: We'll leave that with you, Monsieur Boulay. If you wish to respond to Mr. Murphy's question, the clerk will send it to you in the mail once it has been transcribed.

Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: Thank you.

I just want to ask a question I didn't have a chance to deal with, and that's the whole question of advertising in chapter 4 of the Auditor General's report, where she clearly documents the irregularities in the arrangements around the letting of the agency of record contract to Media/IDA Vision. When we met with Mr. Gagliano, he expressed concern about not being briefed on this file, and he actually said he learned there were serious irregularities and tried to break the contract but was told he would face legal action if he did. Is it true you were prepared to sue the government if they tried to get out of this five-year contract involving Media/IDA Vision as agency of record for the Government of Canada?

[Translation]

Mr. Claude Boulay: I have absolutely no idea whatsoever of what the Auditor General is referring to in that regard.

[English]

Ms. Judy Wasylycia-Leis: Well, it wasn't only the Auditor General--

The Chair: What paragraph were you quoting there, Ms. Wasylycia-Leis?

Ms. Judy Wasylycia-Leis: It's chapter 4, basically paragraphs 4.24, 4.25, and going on and on.

In her conclusion she basically said she found all kinds of irregularities in the way this contract was let.

The Chair: There's nothing in here. I don't see anything in here about a lawsuit, Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: Oh, sorry. No, the lawsuit pertains to my questioning of Alfonso Gagliano when he was here before this committee, where I asked him about this and I said, what did he do? He said, well, the internal audit found irregularities in the way the contract was awarded, but he was advised the government could face legal action if it cancelled the agreement on the basis of the audit.

The Chair: Okay, and Mr. Boulay said he didn't know, and that's the answer.

Ms. Phinney, please.

Ms. Beth Phinney (Hamilton Mountain, Lib.): I just have a very short question.

You've been asked this indirectly about six or seven times. Could you please tell us, what's the difference between management costs and production fees?

[Translation]

Mr. Claude Boulay: I am pleased that you have asked me the question, Madam, because the Auditor General's report has some serious flaws, namely in the area of definitions. Indeed, on page 3, she refers to 100 million dollars in commissions and in production. But on page 31 of the same document, she talks of 100 million dollars in fees and commissions. That is the information that everyone has been circulating since the tabling of this document. However, in the highlights, it is stated that 100 million dollars were paid out in production costs and commissions.

These are very different things, given that in the majority of cases, production fees are paid to third parties. Therefore, this is not money that the agencies pocketed or that flowed through the agencies to the Liberal Party: this is money that was used to pay a variety of media.

» (1725)

[English]

The Chair: Mr. Boulay, she's asked you about the difference between management fees and production fees.

[Translation]

Mr. Claude Boulay: That is what I am trying to explain. I am also saying, Mr. Chairman, that on the first page of the highlights in the English version of the Auditor's report, she talks of fees and production fees. I wish to underscore once again that that is a very different concept. Production entails fees paid outside, to third parties that have been engaged: printers and media outlets, for example. Generally, these are third parties.

This is therefore completely different from fees or commissions an agency receives. Fees and commissions are one thing, but production fees, in the majority of cases, are amounts paid to third parties. Earlier on, I gave the following example: if I must do production work because there is a requirement for a banner alongside the rink, there is a cost tied to that and in this case these would be called production costs. If we administer a program such as Attractions Canada and in this context we place a one or a one and a half million dollar order with CTV or TVA or purchase a page in all of the dailies in the country, these are production costs. In the end, these are costs covering the payment for products and services.

[English]

The Chair: Mr. Desrochers, and on this side, Mr. Thibault.

[Translation]

Mr. Odina Desrochers: Mr. Boulay, in the context of the Sponsorship Program, what was the nature of your relationship with Denis Coderre?

Mr. Claude Boulay: I had none.

Mr. Odina Desrochers: No relationship? Mr. Coderre never talked to you about the Sponsorship Program?

Mr. Claude Boulay: Never.

Mr. Odina Desrochers: In no way whatsoever? Even when Mr. Coderre participated in the communications committee? Despite the fact that you were involved in the 3% of planning, you are affirming that Mr. Coderre never, in any way, talked to you about the Sponsorship Program.

Mr. Claude Boulay: The people with whom we worked, our contact people, were officials. It is at that level that decisions were made and it was those people who in fact managed the overall program. It was not Mr. Coderre, as MP or as Secretary of State.

Mr. Odina Desrochers: I asked a question and I am disappointed, Mr. Chairman, because I did not get an answer.

Mr. Claude Boulay: But I gave you one.

[English]

The Chair: Because of the translation delay, and so on, I thought the question was answered.

You're on to your next question, Mr. Desrochers.

Mr. Thibault, please.

Hon. Robert Thibault: Mr. Boulay, when I look at the Auditor General's report, as it refers to L'Information essentielle, and the amount that had been contracted by your company, I certainly hope, as a Canadian.... What I see is that there was a contract, there was an arrangement, and there was a standard amount paid to the communications company, and most likely we'll hopefully see in the documentation to come that the great majority of that money was well used and went to good purposes.

But when I look at L'Information essentielle, I see a few things. I see all of the communications companies wanting to get a share of the money. I see Public Works acceding to that wish. I don't know yet whether it was on the sole initiative of a bureaucrat or if there was some political manoeuvring to assist in that way. But what I would ask of you, as a communications expert, is if you were my consultant and I had a $3.4 million program and I wanted to do a $4.7 million film, would I change communications companies, starting with one in January of 1998 to represent me, change in June 1999, change again in May, change again in March 1999, change again in January of 2000, and change again in March of 2000? All of them received 12%. The agent of record received an additional 3% on most of these turns, and it was 12% when Groupe Everest came around.

Would I, as a sponsor, be well served by changing representatives all the time? As I have mentioned, the important thing we have to find out, as you well know, if you can help us, is how do we make sure this never happens again? What were the conditions that created this?

» (1730)

[Translation]

Mr. Claude Boulay: Would I change? I do not know. Is having three or four players a good way of going about things? I do not know that either, in the sense that, as I have told you, we are not the ones who made that decision.

As for the last part of your question, if the government wants to change its business model, if it wants to establish a different way of doing things, then it is up to it to evaluate the costs of that, the costs of having permanent core staff, the cost of the people who will be in place, etc. That is a business choice that the government will eventually have to make.

[English]

The Chair: Ms. Ablonczy.

Mrs. Diane Ablonczy: Thank you, Mr. Chair.

Mr. Boulay, let's give it another shot here. I want to ask about a meeting that you and I both know took place, when Mr. Tremblay took over the directorship of the sponsorship program, but before this meeting in September 2000 when the internal audit was discussed. I just want to know who from your company attended that meeting with Mr. Tremblay after he took over.

[Translation]

Mr. Claude Boulay: At the meeting we are discussing in the case of Public Works' report, it was me, Madam.

[English]

Mrs. Diane Ablonczy: No, the one before that.

[Translation]

Mr. Claude Boulay: I do not know which meeting you are referring to, Madam. You are talking to me about a meeting that would have been held right after Mr. Tremblay took over. I do not remember that meeting, Madam. I remember, as I told you earlier, the meeting that took place in 2000 or 2001—I do not remember the exact date—where, indeed, we were given the summary or the report of the work done. But I do not at all remember that other meeting, Madam. As a matter of fact, I do not know who talked about it.

[English]

Mrs. Diane Ablonczy: Well, I guess I have to accept that. I do find it difficult to--

The Chair: Okay, we'll just have to leave it there, Ms. Ablonczy.

Mrs. Diane Ablonczy: But, Mr. Chairman, here we have a new director, obviously a new guy in charge. This is a big change. Everyone wants to know how he's going to run things. He has a meeting, and yet Mr. Boulay doesn't even remember this event. I just find that so odd and so frustrating, because important things about the program were discussed.

The Chair: Okay, thank you.

Monsieur Proulx, please.

Mr. Marcel Proulx: Thank you, Mr. Chair.

[Translation]

Mr. Boulay, with regard to your statements of a few minutes ago, am I to understand that at each of the events for which your company was the communications agency you had staff in attendance so as to be able to report upon the visibility, upon the event per say, upon what took place?

Mr. Claude Boulay: I would say that that was so in several cases. There were prior meetings. As I said, if an event were to take place, let us say, next week or during the week-end, then there would obviously be prior work to be done: all of the production, the preparation, going to the site to ensure that the visibility is there, that it is in place. Indeed, in several cases, our people were there. I am not saying that if the event lasted seven days, they would have been there for seven days, but they did attend, precisely to collect the necessary information and to do the post mortem, in several cases.

Mr. Marcel Proulx: That is part of the fees.

Mr. Claude Boulay: That, indeed, is part of the fees.

[English]

Mr. Marcel Proulx: Merci.

Thank you, Mr. Chair.

The Chair: One final question from the chair, Monsieur Boulay. A number of people have talked about money laundering here; even in cabinet documents money laundering was mentioned. And the Auditor General has talked about fraud. Can you assure this committee that with respect to all these commissions that were paid to your companies, the money was used for the normal operations of the business, including the profit and bonuses and salaries to the staff and owners? Was any of the money sent elsewhere for some other purpose, other than dealing with the normal expenses of the business and the profits thereof?

[Translation]

Mr. Claude Boulay: Mr. Chairman, with the fees, the costs, the commissions—call that as you wish—that we received from the Government of Canada, we did four things. Firstly, we paid our people; secondly, we paid our company's expenses; thirdly, we paid our taxes; and when there was anything left over, we paid a dividend to our shareholders. That is what we did with the monies received from the government.

» (1735)

[English]

The Chair: Okay. Do you have any closing statement, Mr. Boulay?

[Translation]

Mr. Claude Boulay: Yes. In my introductory comments, I told you that I hoped to clarify a certain number of things and assist you in your work. I hope I have done so. You, on several occasions, Mr. Chairman, indicated to me that I seemed to not want to answer. That is absolutely not the case. I answered as best I could, with the limited advanced notice I got. As you know, I was told Friday afternoon at 2:15 that I was to be here this morning. I did my best to cooperate and I do hope that this will help you in your work.

Thank you.

[English]

The Chair: Thank you very much. The meeting is adjourned.