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37th PARLIAMENT, 3rd SESSION

Standing Committee on Public Accounts

EVIDENCE

CONTENTS

Tuesday, April 6, 2004

0905

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

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

The Chair

0910

0915

The Chair

Mr. Jean Pelletier (As Individual)

The Chair

Mr. Jean Pelletier

The Chair

Mr. Vic Toews (Provencher, CPC)

The Chair

Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons)

The Chair

Mr. Jason Kenney (Calgary Southeast, CPC)

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

0920

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

0925

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

The Chair

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ)

Mr. Jean Pelletier

0930

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

0935

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Hon. Robert Thibault (West Nova)

Mr. Rob Walsh

The Chair

Hon. Robert Thibault

The Chair

Mr. Paul Crête

The Chair

Mr. Vic Toews

Mr. Marcel Proulx (Hull—Aylmer, Lib.)

The Chair

Mr. Vic Toews

The Chair

Mrs. Marlene Jennings

0940

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Paul Crête

The Chair

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

0945

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

0950

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

The Chair

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

The Chair

Hon. Robert Thibault

The Chair

Hon. Robert Thibault

The Chair

Mr. Rob Walsh

The Chair

Ms. Judy Wasylycia-Leis

0955

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

1000

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

1005

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

The Chair

Hon. Robert Thibault

The Chair

1010

The Chair

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

The Chair

Mr. Vic Toews

Hon. Robert Thibault

The Chair

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

1015

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

The Chair

Mr. Rob Walsh

1020

The Chair

Hon. Robert Thibault

Mr. Rob Walsh

The Chair

Mr. Paul Crête

The Chair

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

Mr. Jean Pelletier

1025

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

1030

Mr. Jean Pelletier

Le président

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

1035

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

1040

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

The Chair

Mr. Dominic LeBlanc

Mr. Jean Pelletier

1045

Mr. Dominic LeBlanc

Mr. Jean Pelletier

Mr. Dominic LeBlanc

The Chair

Mr. Peter MacKay (Pictou—Antigonish—Guysborough, CPC)

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

1050

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

The Chair

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

The Chair

Mr. Dennis Mills

1055

Mr. Jean Pelletier

Mr. Dennis Mills

The Chair

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

Mr. Jean Pelletier

Hon. Joe Jordan

Mr. Jean Pelletier

Hon. Joe Jordan

Mr. Jean Pelletier

1100

The Chair

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

1105

The Chair

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

The Chair

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

The Chair

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

1110

Mr. Jean Pelletier

Mr. Alan Tonks

Mr. Jean Pelletier

Mr. Alan Tonks

Mr. Jean Pelletier

Mr. Alan Tonks

Mr. Jean Pelletier

Mr. Alan Tonks

The Chair

Mr. Peter MacKay

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

The Chair

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

1130

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

The Chair

Mr. Peter MacKay

The Chair

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

The Chair

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

1135

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

1140

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

The Chair

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

1145

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

1150

The Chair

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

1155

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mrs. Marlene Jennings

The Chair

Ms. Judy Wasylycia-Leis

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

1200

Mrs. Marlene Jennings

The Chair

Mr. Brian O'Neal (Committee Researcher)

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

1205

The Chair

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

The Chair

Mr. Rob Walsh

Mr. Jean Pelletier

Mr. Rob Walsh

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

Mr. Vic Toews

1210

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Alan Tonks

The Chair

Mr. Alan Tonks

The Chair

Mr. Alan Tonks

The Chair

Mr. Vic Toews

Hon. Robert Thibault

The Chair

Hon. Robert Thibault

The Chair

Mr. Vic Toews

1215

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

Mr. Vic Toews

Mr. Jean Pelletier

The Chair

Mrs. Marlene Jennings

1220

Mr. Peter MacKay

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Vic Toews

Hon. Walt Lastewka

Mr. Vic Toews

The Chair

Mrs. Marlene Jennings

The Chair

1225

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

1230

Mr. Jean Pelletier

Mrs. Marlene Jennings

The Chair

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

1235

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

1240

Mr. Paul Crête

Mr. Jean Pelletier

The Chair

Mr. Dennis Mills

The Chair

Mr. Vic Toews

Mr. Dennis Mills

Mr. Vic Toews

The Chair

Mr. Dennis Mills

1245

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Rodger Cuzner (Bras d'Or—Cape Breton, Lib.)

The Chair

Mr. Rodger Cuzner

Mr. Jean Pelletier

1250

Mr. Rodger Cuzner

Mr. Jean Pelletier

Mr. Rodger Cuzner

Mr. Jean Pelletier

Mr. Rodger Cuzner

The Chair

Mr. Jason Kenney

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Hon. Walt Lastewka

The Chair

Hon. Walt Lastewka

The Chair

Mr. Rob Walsh

The Chair

Mr. Rob Walsh

Hon. Walt Lastewka

The Chair

Hon. Walt Lastewka

1255

The Chair

Mr. Rob Walsh

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. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

1300

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

The Chair

Mr. Dennis Mills

The Chair

Mrs. Marlene Jennings

1305

The Chair

Mr. Dennis Mills

Mr. Jason Kenney

The Chair

Mr. Dennis Mills

The Chair

Mr. Alan Tonks

1410

The Chair

Mr. Alan Tonks

Mr. Jean Pelletier

Mr. Alan Tonks

Mr. Jean Pelletier

Mr. Alan Tonks

The Chair

Mr. Alan Tonks

Mr. Jean Pelletier

Mr. Alan Tonks

The Chair

Hon. Joe Jordan

1415

Mr. Jean Pelletier

Hon. Joe Jordan

The Chair

Mr. Jean Pelletier

The Chair

Hon. Joe Jordan

Mr. Jean Pelletier

Hon. Joe Jordan

Mr. Jean Pelletier

Hon. Joe Jordan

Mr. Jean Pelletier

The Chair

Mr. Peter MacKay

1420

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

The Chair

Mr. Jean Pelletier

The Chair

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

The Chair

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

1425

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

The Chair

Mrs. Marlene Jennings

Mr. Jean Pelletier

1430

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

Mr. Jean Pelletier

Mrs. Marlene Jennings

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

1435

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

1440

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

1445

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

1450

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

The Chair

Mr. Jason Kenney

The Chair

Mr. Jason Kenney

Mr. Jean Pelletier

1455

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

Mr. Jason Kenney

Mr. Jean Pelletier

The Chair

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

1500

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

Mr. Paul Crête

Mr. Jean Pelletier

1505

Mr. Paul Crête

Mr. Jean Pelletier

The Chair

Mr. Dennis Mills

Mr. Jean Pelletier

1510

Mr. Dennis Mills

Mr. Jean Pelletier

Mr. Dennis Mills

The Chair

Hon. Walt Lastewka

Mr. Jean Pelletier

Hon. Walt Lastewka

Mr. Jean Pelletier

Hon. Walt Lastewka

Mr. Jean Pelletier

Hon. Walt Lastewka

Mr. Jean Pelletier

Hon. Walt Lastewka

Mr. Jean Pelletier

Hon. Walt Lastewka

The Chair

Hon. Walt Lastewka

Mr. Jean Pelletier

Hon. Walt Lastewka

Mr. Jean Pelletier

Hon. Walt Lastewka

Mr. Jean Pelletier

Hon. Walt Lastewka

Mr. Jean Pelletier

The Chair

Ms. Judy Wasylycia-Leis

1515

Mr. Dennis Mills

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

The Chair

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

1520

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Hon. Walt Lastewka

Ms. Judy Wasylycia-Leis

The Chair

Mr. Jean Pelletier

1525

The Chair

Hon. Joe Jordan

The Chair

Hon. Joe Jordan

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

The Clerk of the Committee

Mr. Dennis Mills

The Clerk

Mr. Dennis Mills

The Clerk

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mr. Jean Pelletier

The Chair

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

Ms. Judy Wasylycia-Leis

Mr. Jean Pelletier

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Mr. Peter MacKay

1530

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

Mr. Peter MacKay

Mr. Jean Pelletier

1535

Mr. Peter MacKay

The Chair

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

1540

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

Mr. Jean Pelletier

Mr. Marcel Proulx

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

1545

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

The Chair

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

Hon. Robert Thibault

Mr. Jean Pelletier

The Chair

1550

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

Mr. Jean Pelletier

The Chair

CANADA

Standing Committee on Public Accounts

NUMBER 021

3rd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, April 6, 2004

[Recorded by Electronic Apparatus]

¿ (0905)

[English]

The Chair (Mr. John Williams (St. Albert, CPC)): The 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 this morning is, as an individual, Mr. Jean Pelletier. Mr. Pelletier, welcome to the committee. We look forward to your participation today.

We also welcome Mr. Guy Pratte, counsel for Mr. Pelletier. I have no doubt you're aware of the rule, Mr. Pratte, that the questions are addressed to Mr. Pelletier. You're not allowed to speak, but Mr. Pelletier may consult you or you may advise him before he answers the questions.

Before we get into that, we have a little housekeeping. The steering committee met yesterday. We have a report that will require a couple of changes, so it will be circulated a little later this morning. We met Monday, April 5, and agreed to the following:

That pursuant to Committee agreement on scheduling witnesses...by category of importance, and in relation to study of Chapters 3, 4 and 5 of the November 2003 Report of the Auditor General regarding the Sponsorship Matter, the Standing Committee on Public Accounts call and schedule the following persons to appear before the Committee in the following order; if desired witnesses cannot be scheduled in order of importance, a further category of expert witnesses be used to draw on to replace those witnesses:

I'm going to read into the record a large number of names, and the clerks and our forensic auditor and others will try to bring them in more or less the same order as we have here.

You don't want me to read them in?

Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): It will be public as soon as it's distributed to members.

The Chair: So we have a large number of names. We are going to be calling them forward in more or less the order they are here, as far as scheduling is concerned, including Mr. Guité, Mr. Tremblay, Public Works, and so on.

Pursuant to the committee's considerations of the chapters, we will be issuing invitations to the witnesses to appear. However, they will be given two business days' notice to accept the invitations. In the event they do not accept the invitation, the clerk will be authorized to issue an immediate summons.

It agreed further:

That the Committee instruct the House of Commons and the Library of Parliament to provide all support necessary to assist the Clerks and Researchers in meeting the increased work demands associated with the Committee's study of Chapters 3, 4 and 5 of the November 2003 Report of the Auditor General into the Sponsorship Matter.

I think we should go on record recognizing the great contribution not only of the clerks, the Library of Parliament, the law clerk, and our forensic auditor, but also of all the people who do not show up here who have made their work so efficient. So we want to thank everybody and to show our appreciation to them, many of whom are nameless.

Beginning on April 19, 2004, we have adopted the following schedule of meetings. We're basically running on alternate weeks, with a Monday and without a Monday. So on alternate Mondays, we will meet from 11 a.m. to 1 p.m., and 3:30 p.m. to 5:30 p.m., with the first Monday sitting to be held on April 19. Therefore, on April 26, there will be no Monday meeting scheduled, and the following week there will be a Monday meeting scheduled, and so on. On Tuesdays, we will meet from 9 a.m. to 1 p.m. and 3:30 to 5:30 p.m.; on Wednesdays, from 3:30 to 6:30; and on Thursdays, 9 a.m. to 1 p.m. and 3:30 p.m. to 5:30 p.m. There will be no Friday meetings, except on April 23, when Mr. Guité is scheduled to appear from 9 to 1.

We discussed the order of interventions by the individual parties. In the first round, a Conservative, Bloc, Liberal, and NDP member will have eight minutes each. In the second round, we will have a Conservative, a Liberal, a Bloc, and a Liberal member for eight minutes each. In the third and fourth rounds, we will have one Conservative and two Liberals, for four minutes each.

The committee agreed further:

That the Law Clerk and Parliamentary Counsel reply to the letter of March 25, 2004 from the Secretary of the Treasury Board

—the letter that I tabled yesterday—

to inform him that the Committee notes the policy set out therein but maintains reservations with regard to the policy's application.

To refresh your memory, basically the letter said that the government reserves the right, or the policy is, to provide legal counsel to people appearing on behalf of the government. This particular investigation is a little different from the norm, and we had some concerns that a lawyer from the government, not necessarily paid by the government but a lawyer from the justice department, could perhaps have a conflict of interest because he would have to defend the government and the witness at the same time. A lawyer from the outside, I think, is not a problem.

Is that correct, Mr. Walsh?

Mr. Pratte is not a government lawyer. You are not with the Department of Justice, but you're a private sector lawyer, so that's okay.

¿ (0910)

Then we have the following:

That in relation to the study of Chapters 3, 4, and 5 of the November 2003 Report of the Auditor General regarding the Sponsorship Matter, the Standing Committee on Public Accounts request from PWGSC

—that's Public Works and Government Services—

both the First and Second Administrative Review Reports of Sponsorship Files, which were conducted by Kroll Lindquist Avery for PWGSC, in their entirety.

I believe that was your motion, Mr. Toews.

The final point is that in addition, there will be a status report to the committee prepared by our researchers and brought forward for discussion next Wednesday. That is not a report to the House of Commons; that is a report to the committee to bring together all that we heard up to April 2. It will not include witnesses heard thereafter. We will make it public because of the interest in this particular part, but it will not be tabled in the House of Commons.

That is the fifth report of the steering committee. Do you want to adopt it now?

(Motion agreed to)

¿ (0915)

The Chair: It will be distributed during the mid-morning break.

We'll turn now to our witnesses.

I read this out, Mr. Pelletier, to everybody:

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

That's from page 862 of House of Commons Procedure and Practice by Marleau and Montpetit. I read that out before every witness makes their intervention.

I also ask if you have been counseled by anyone in government or anybody associated with this particular file so as to suggest that you would answer questions in a particular direction. Have you been coached in any way?

Mr. Jean Pelletier (As Individual): No.

The Chair: Thank you very much.

Do you have an opening statement, Mr. Pelletier?

Mr. Jean Pelletier: No. Mr. Chairman, I was asked by your committee to be available to answer questions, and here I am.

[Translation]

I'm here to answer any questions the committee members may wish to ask me.

[English]

The Chair: Mr. Toews.

Mr. Vic Toews (Provencher, CPC): I know you've reminded the witness of what the obligation is. Part of the obligation of every witness coming here is also to disclose frankly and fully everything they know about the issue. So it's not simply, sir, to answer questions, but to report fully. I think that's perhaps lost on some of the witnesses. I'm wondering if the law clerk could remind the witnesses of their obligation when they come before the committee.

The Chair: Mr. Walsh.

Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons): Mr. Chairman, the member is quite correct. There is an obligation and indeed an expectation that witnesses will provide full and complete responses to the committee and make known to the committee all information that's relevant to the inquiry by the committee, and will not simply wait for the right question to bring forward the right information but will answer fully. Having said that, I don't think it's correct that that must necessarily include an opening statement by a witness. But it is the case that the witness will not simply wait for the right question before giving information that he knows to be pertinent to this inquiry.

The Chair: Thank you, Mr. Walsh.

With no opening statement, we're into questions. Mr. Kenney, you're first, for eight minutes.

Mr. Jason Kenney (Calgary Southeast, CPC): Thank you for coming to the committee, Mr. Pelletier.

I imagine that you're familiar with the in camera testimony of Mr. Charles Guité from two years ago that was recently released. Are you familiar with that testimony as it relates to this matter?

Mr. Jean Pelletier: In general terms, yes.

Mr. Jason Kenney: In that testimony Mr. Guité said:

During the referendum of 1995 my office was requested by the Federal-Provincial Relations Office to hold a competition—I have to be careful here the term I use—and to follow a bit of the guidelines that exist in the rules, but I may have to, for a better term, bend them a little bit...

The Federal-Provincial Relations Office was an organ of PCO. Is that correct?

Mr. Jean Pelletier: Right.

Mr. Jason Kenney: Were you aware of this directive given by FPRO to Mr. Guité to bend the rules a little bit with regard to the administration of sponsorship during the referendum?

Mr. Jean Pelletier: No, and I think it's a good time to ask the committee to make a distinction between the PCO and the PMO, which are two different bodies.

Mr. Jason Kenney: I appreciate that.

Mr. Jean Pelletier: Sometimes I read the press, Mr. Member, and I don't feel that this is clearly understood by the press.

Mr. Jason Kenney: Nevertheless, would you not agree, sir, that PMO and PCO work very closely together in the coordination of government policies.

Mr. Jean Pelletier: They work closely together but separately.

Mr. Jason Kenney: Mr. Pelletier, have you ever spoken with Charles Guité?

Mr. Jean Pelletier: Oh, yes.

Mr. Jason Kenney: How frequently did you speak with Mr. Guité during his period in the public service?

Mr. Jean Pelletier: Maybe once every two months.

Mr. Jason Kenney: You spoke about once every two months. And what would be the nature of those conversations?

Mr. Jean Pelletier: The program was established by the government

[Translation]

in the wake of the referendum, in order to increase the visibility of Canada and the Government of Canada, especially in Quebec. This did not happen only in Quebec but it happened especially in Quebec. There are obviously some who will criticize the program, but it was perfectly legitimate and it was perfectly normal that members of Parliament, members of the Cabinet and their offices be in touch with those who were running the program.

¿ (0920)

[English]

Mr. Jason Kenney: My question was simply how often you spoke with him and what you spoke about.

[Translation]

Mr. Jean Pelletier: I answered that question. As I said, approximately once every two months.

[English]

Mr. Jason Kenney: And what would be the subject of those conversations?

[Translation]

Mr. Jean Pelletier: I wanted to know if the program was working, if the events that had been referred by various ministers' offices, members of Parliament and by the Prime Minister's Office had received grants.

[English]

Mr. Jason Kenney: Would your conversations with Mr. Guité have occurred both during his administration of the APORS program and then later of the CCSB?

[Translation]

Mr. Jean Pelletier: I do not understand all those acronyms. Can you please explain them to me?

[English]

Mr. Jason Kenney: There were changes in the nature of the program. The status of the program that we are examining was as the sponsorship program following 1996. Did you speak to Mr. Guité after 1996?

[Translation]

Mr. Jean Pelletier: I certainly spoke to Mr. Guité after 1996.

[English]

Mr. Jason Kenney: Did you speak with him about particular sponsorship files? Did you propose to him that he ought to authorize funding for particular projects, specific projects?

[Translation]

Mr. Jean Pelletier: There is absolutely no doubt we made recommendations, as would any member of Parliament or any minister who supports their constituents' projects that fall under a program and that involve a decision.

[English]

Mr. Jason Kenney: So that's a yes?

[Translation]

Mr. Jean Pelletier: With your permission, I would like to point out that we never made a final decision involving a grant or a sponsorship, in any case whatsoever. We made our representations, it was our duty to answer those who wrote to us, but we never made the final decision and never, to my knowledge, did the Prime Minister's Office become involved in the internal administration of the program. I want to state that as a fact and I want it to be very clear.

[English]

Mr. Jason Kenney: I'm a little confused. When you say “nous”, to whom does that refer?

Mr. Jean Pelletier: The PMO.

Mr. Jason Kenney: It refers to the PMO, all right. So you never made a final decision, but you did ask Mr. Guité to fund certain projects.

Mr. Jean Pelletier: Sure. We were asked by.... You remember that at the time--

Mr. Jason Kenney: Mr. Pelletier, I have to explain. I only have eight minutes. I have to ask you, if you could, to answer the questions directly; I would appreciate it.

Mr. Jean Pelletier: Yes, but I've also been asked by the counsel to give full explanations about what happened. If you limit me on one side, I cannot respond on the other side.

Mr. Jason Kenney: That's what the opening statement is supposed to be for.

The Chair: For the record, Mr. Pelletier, that is correct. One does expect that a person coming forward here would make an opening statement and put the facts on the table--or put their perceptions on the table.

Mrs. Marlene Jennings: I have a point of order, Mr. Chair.

Maître Walsh made it very clear that this committee cannot either expect or demand an opening statement from any witness, and you're saying that we fully expect one and it's reasonable for us to expect it. So you're not following the instructions we had from our counsel.

What the counsel did say is that any witness who comes before us for questioning is expected to give--and this committee has a right to expect--fulsome answers.

So when Mr. Kenney poses questions, he has a right to expect fulsome answers; therefore, he should not be cutting off a witness who is attempting to give a fulsome answer.

The Chair: I'm sure the path lies somewhere in the middle, Ms. Jennings and Mr. Kenney. As you know, members are restricted to their eight minutes. Opening statements have been very helpful in the past, and this is about the first time we've never had one.

Mrs. Marlene Jennings: But we cannot reproach a witness for not making an opening--

The Chair: But the point we have is that--

Mrs. Marlene Jennings: The point of order I'm making, Mr. Chair--

The Chair: I understand your point of order, Madam Jennings.

Mrs. Marlene Jennings: Would you allow me to finish?

The point of order I'm making is that, given the instructions Maître Walsh has given us, based on Marleau and Montpetit, it is incumbent on the chair and this committee not to reproach a witness who does not make an opening statement. That witness is expected to give fulsome answers to any question that is asked of them. This particular witness was attempting to do that and then becomes reproached by the member asking the question because they're attempting to follow the instructions of our legal counsel.

The Chair: Well, as I said, there has to be somewhere in the middle where there's harmony.

Continue, Mr. Kenney, please.

¿ (0925)

Mr. Jason Kenney: Mr. Pelletier, you testified that you contacted Mr. Guité directly to request that he file particular projects. Did you ever direct Mr. Guité or suggest to Mr. Guité that he use particular advertising agencies in the administration of sponsorship projects?

Mr. Jean Pelletier: May I first correct your question, sir? I never contacted Mr. Guité. Mr. Guité came willingly to my office at his request. Second, I never pointed to any advertising agency.

May I say, Mr. Chair, that I was not asked before coming here to have an opening statement.

Mr. Jason Kenney: Madam Huguette Tremblay testified to this committee that on several instances your office called Mr. Guité's office, yet you're testifying that the contact was always initiated by Mr. Guité and never by your office.

Mr. Jean Pelletier: You asked me, sir, if I had ever contacted him. I never contacted him directly.

Mr. Jason Kenney: I meant you or your office.

Mr. Jean Pelletier: My office may have in its normal activities.

[Translation]

During the normal course of its activities, my office probably wanted to do a follow-up on some of the files that had been sent to us by sponsorship applicants and that we had referred, and probably one of my assistants called the office to find out what the status of that file was.

[English]

Mr. Jason Kenney: Do you find it at all peculiar that Mr. Guité, who was supposedly administering a small program in one department and who was supposed to report to the deputy minister, would have a direct and ongoing relationship with you, as chief of staff to the Prime Minister and therefore the most powerful person in the government next to the Prime Minister himself?

[Translation]

Mr. Jean Pelletier: No, I do not think it was peculiar. In the wake of the referendum and in the wake of everything the government had decided to do to raise Canada's profile and the federal government's profile in Quebec, I think it is perfectly normal that his office would have wanted to pay particular attention to that issue.

[English]

Mr. Jason Kenney: Mr. Pelletier, the current Prime Minister--

[Translation]

Mr. Jean Pelletier: And I insist on...

[English]

Mr. Jason Kenney: The current Prime Minister has said, “I do know that clearly there...had to be political direction” in the administration of this program. Do you agree with this Prime Minister, and if so, where did such political direction come from?

[Translation]

Mr. Jean Pelletier: I am not aware of any political direction in the administration of this program. If by "political direction", you mean raising Canada's profile and its government's profile in Quebec in particular, then there was political direction, but that was the essence of the program.

In terms of the administration of the program itself, I admit that I was somewhat surprised by that statement. And I do not know what led the person who made that statement to do so.

[English]

Mr. Jason Kenney: You're shocked to hear that there might have been political direction, but Mr. Pelletier, you just admitted that you provided such direction.

[Translation]

Mr. Jean Pelletier: No, I did not...

[English]

Mr. Jason Kenney: You just made a distinction between PMO and PCO, and the responsibility of PMO is to implement the Prime Minister's political direction. When you had ongoing contact with Mr. Guité, wasn't that precisely the kind of political direction the current Prime Minister has spoken of?

[Translation]

Mr. Jean Pelletier: I think, sir, that what is at issue here is not the program itself, not the fact that there were applications for grants. What has been raised as an issue by the Auditor General is the internal administration, the management of the program. And I am telling you that in terms of the management of the program, which is the subject of your committee's deliberations, there was no political direction to my knowledge.

[English]

The Chair: Thank you, Mr. Kenney.

[Translation]

Mr. Crête, you have eight minutes.

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Thank you, Mr. Chairman.

Mr. Pelletier, you stated earlier that you were in touch approximately once every two months with Mr. Guité. However, Ms. Huguette Tremblay, who worked closely with Mr. Guité, stated before this committee that your office called on a regular basis. You in fact admitted earlier, that people from your office could have called.

I would like you to tell me more about why those phone calls would have been made, and how frequently.

Mr. Jean Pelletier: Just after the referendum, there were not many government MPs from eastern Quebec, in particular, so many taxpayers used the Prime Minister's office to handle their requests. It was in that context that the people in my office, I imagine, were in contact with the office of Mr. Guité, who was running the sponsorship program, to find out where an application was in the process, if it had been accepted, when it would be accepted, what level of sponsorship would be approved, etc. Ministers and MPs generally asked their riding office staff to handle files in this way.

¿ (0930)

Mr. Paul Crête: You do not really seem to be aware of what kind of exchanges took place, but that is your hypothesis.

Mr. Jean Pelletier: As the Prime Minister's chief of staff, you do not see all the files, because there are too many. These are normal contacts between members of the Prime Minister's office staff and the administrative staff in an office. People wanted to know, for example, where things were at with the application from Saint-Hyacinthe, which we had been asked to support by the member of Parliament, Mr. Loubier. They asked if it would be approved and funded, and what level of funding would be given. People from Saint-Hyacinthe asked us questions, so we wanted to have the information to be able to answer.

Mr. Paul Crête: Do you remember cases where people had the impression that their request would be refused and where your office intervened to get...

Mr. Jean Pelletier: I remember the request from the member for Saint-Hyacinthe—Bagot, a Bloc Québécois MP, who phoned me personally to ask me if I could help him improve the celebrations for Saint-Hyacinthe's anniversary. I did not see why people in that city should not be happy to celebrate their event, so I intervened on behalf of the opposition member, a Bloc Québécois MP. I was pleased to do that. Since I was successful, I have the impression that Mr. Loubier was very happy, as were the people of Saint-Hyacinthe. And I certainly do not have any remorse regarding that file.

Mr. Paul Crête: Mr. Pelletier, do you have other examples of representations that you made?

Mr. Jean Pelletier: I do not remember any other cases in particular. I remember that one because Mr. Loubier himself brought it to public attention again a few weeks ago.

Mr. Paul Crête: So you do not remember any other cases. On March 13, 2004, the Toronto Star indicated that you made a phone call just about every month to Pierre Tremblay, who was Mr. Guité's successor as manager of the sponsorship program. Robert Cribb's article is based on testimony from an anonymous public servant who worked at Public Works.

I would like to know whether you deny the following statement, which was attributed to that whistle blower by the Toronto Star, and I quote: “Pelletier called [Pierre Tremblay] on a regular basis to discuss sponsorships.” Do you deny that?

Mr. Jean Pelletier: I would say at the outset that my personal relationship with Mr. Tremblay was much closer than with Mr. Guité, since Mr. Tremblay had worked in a minister's office before becoming a public servant. I knew him personally much better than I knew Mr. Guité.

I often saw Mr. Tremblay, who used to have breakfast at the Press Club and I used to eat there as well from time to time. So I may have called Mr. Tremblay. I do not remember precisely, but I may have called him.

Mr. Paul Crête: I will repeat the quote: “Pelletier called [Pierre Tremblay] on a regular basis to discuss sponsorships.”

Did you call him on a regular basis to discuss sponsorships?

Mr. Jean Pelletier: Sir, if I remembered, I would tell you. Was it regular or occasional? Honestly, I do not know. However, I do not deny that I had phone conversations from time to time with Pierre Tremblay.

Mr. Paul Crête: We are talking about phone conservations that you had yourself. You told us a little earlier that you were never the one who called Mr. Guité.

Mr. Jean Pelletier: I never called Mr. Guité.

Mr. Paul Crête: But you did call Mr. Tremblay.

Mr. Jean Pelletier: At least, I do not remember ever calling Mr. Guité. I called Mr. Tremblay from time to time.

Mr. Paul Crête: Did you ever call Mr. Gagliano to discuss sponsorships?

Mr. Jean Pelletier: I had regular contact with all Cabinet ministers, particularly political ministers responsible for various regions. Mr. Gagliano was the Minister responsible for Quebec and so I had regular contact with him. Did sponsorships ever come up during a phone conversation or a meeting? No doubt. However, it was always to find out whether the program was working, if the goal of the program was being achieved. It was not so that I could have a say in the selection of intermediaries, in the financial terms of contracts, in the awarding of contracts, etc. We never got involved in that. That is very clear.

Mr. Paul Crête: Did you have any exchanges with Mr. Gagliano to try to have a request approved or rejected?

Mr. Jean Pelletier: I certainly must have said to Mr. Gagliano, for example, about the Grand Prix de Montréal, for which people were seeking funding, that this was an extremely important event for Montreal's economy and that he should look sympathetically at that file. I surely said that.

Mr. Paul Crête: Did you ever...

Mr. Jean Pelletier: And the people consulted us. There were nearly 2,000 files that were funded, I was told. The people administering the program were not aware of the relative importance of the various events in all the communities where they took place. So they would ask what a given activity was, how many people would be reached, how important it was, whether it was simply a project involving two or three people. The people administering the program had a duty to find out these things in order to understand the applications and their relative importance. So they asked us and they asked other people, I am sure.

¿ (0935)

Mr. Paul Crête: Monsieur Pelletier, you said earlier that you were in contact with a number of political ministers. Did you have that kind of contact with Mr. Martin concerning the sponsorships or with someone from his office?

Mr. Jean Pelletier: Not that I am aware, sir.

Mr. Paul Crête: Or with anyone from his office?

Mr. Jean Pelletier: I have no memory of having had contact with the former Minister of Finance or with the people in his office concerning this program.

Mr. Paul Crête: The Sponsorship Program.

Mr. Jean Pelletier: That program.

Mr. Paul Crête: Did you ever have contact with Mr. Martin's office regarding the Canadian unity fund?

Mr. Jean Pelletier: Is the Canadian unity fund part of the mandate, part of the audit?

[English]

The Chair: Are you asking me?

Mr. Jean Pelletier: There is a question on the unity fund, Mr. Chairman, and I'm asking if it's within the mandate of this committee.

The Chair: I believe it is, because we're dealing with the sponsorship program, Mr. Pelletier, and there is no question that the policies of the Government of Canada with regard to trying to prevent the separation of Quebec--if I can use that terminology--seem to be very much a part of it. So I would think the unity fund would be part of this debate.

[Translation]

Mr. Jean Pelletier: Would you repeat the question?

[English]

The Chair: We have a point of order.

Hon. Robert Thibault (West Nova): Could we ask the law clerk whether it is in reference to chapters 3, 4, and 5?

Mr. Rob Walsh: Mr. Chairman, I have two comments. One is that I'd like to take that comment under advisement, if I may, and defer this question until I've had a chance to study the question more closely and respond. But let me just add a second comment.

Whether it is within or without the terms of reference of this committee is a fancy way of asking whether the question is relevant, and relevancy is a hard thing to define in the context of this inquiry. I'll look at the AG's report and I'll see to what extent there's evidence in there of a connection with this, but I'm not so sure that's the answer to your question.

The Chair: Okay, at this point in time, Mr. Pelletier, you may defer answering questions on the unity fund until we....

Mr. Thibault.

Hon. Robert Thibault: The instructions that you as chair have given to witnesses who appeared before were that they were relieved from their confidentiality on cabinet matters relative to chapters 3, 4, and 5 of the Auditor General's report, so questioning a witness who is bound by confidentiality on other points might be relevant.

The Chair: Well, Mr. Pelletier has not been in the cabinet of the Government of Canada, so I'm not sure that actually applies. The law clerk has reserved a decision. Until we hear from the clerk, I say you may, if you so desire, Mr. Pelletier, defer from answering the question at this point in time.

Mr. Crête and Mr. Toews.

[Translation]

Mr. Paul Crête: Mr. Chair, my point was simply that the money in the Canadian unity fund came from the same Sponsorship Program. So, it is reasonable that such questions could be answered: it was the same source of funding, when it comes down to it. So I think that the argument is relevant. If you would prefer to wait and come back to it, let me know.

[English]

The Chair: I agreed and I suggested that it would, but the law clerk deferred an opinion; therefore, we have to withhold. We will get the answer to your question once we've had a response from the clerk in a positive vein.

Mr. Toews.

Mr. Vic Toews: I'd just like to add the comment that no one knew about the unity fund when the Auditor General was doing her report, so--

Mr. Marcel Proulx (Hull—Aylmer, Lib.): Is this a point of order, Mr. Toews?

The Chair: It's all part of this point of order raised on the unity fund.

Mr. Vic Toews: No one knew about the unity fund when the audit was going on by the Auditor General. Now I think it's incumbent upon us to explore the relationship between the sponsorship program and the secret honey pot, as the Prime Minister's Office called it.

The Chair: Madam Jennings, you have a point on this issue.

[Translation]

Mrs. Marlene Jennings: Given that witnesses have stated before this committee that from the time it started the Sponsorship Program was funded from a discretionary fund of the former Prime Minister and that, moreover, that situation lasted for the first year, if not the first two fiscal years of the program, I find it difficult to understand that questions concerning the management of that program would not be considered relevant.

¿ (0940)

[English]

The Chair: Would that be relevant?

Mrs. Marlene Jennings: I have a difficulty understanding how questions regarding the management of that discretionary fund as it relates to the moneys that were given over to sponsorship would not be pertinent; i.e., they are pertinent, in my view.

The Chair: In my view, they are as well, but the law clerk has reserved a decision at this point in time and he will give it later on this morning.

Mr. Crête, your time has expired, but once we've had the ruling, we will ask that particular question to Mr. Pelletier if the law clerk feels that it is in order.

[Translation]

Mr. Paul Crête: Mr. Chairman, how much time did I have left in my eight minutes before that debate started?

[English]

The Chair: The clerk stopped the clock exactly on eight minutes.

[Translation]

Mr. Proulx, you have the floor.

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

Good morning, Mr. Pelletier, hello, Mr. Pratte. Thank you, Mr. Pelletier, for making yourself available to answer the committee's questions.

To begin with, I would like to know from which year to which year you worked for Prime Minister Chrétien as his chief of staff? Was chief of staff actually your title?

Mr. Jean Pelletier: I started working for Mr. Chrétien, who was then the Leader of the Opposition, on July 1, 1991. I became the Prime Minister's chief of staff on November 4, 1993, and I left that position on May 4, 2001.

Mr. Marcel Proulx: Thank you.

Mr. Jean Pelletier: I left the Prime Minister's Office for good on June 30, 2001.

Mr. Marcel Proulx: Thank you. I understand that before working for Mr. Chrétien, who was then Leader of the Opposition, you were active in political life—another political life—as a journalist in Quebec City. So politics and the workings of government were not completely new to you. Is that true?

Mr. Jean Pelletier: Yes. Although the municipal, provincial and federal levels organize public governance differently, there are great similarities as well.

Mr. Marcel Proulx: Mr. Pelletier, when you came to the Prime Minister's Office in 1993, you had been working in the federal area since 1991. Can I take it or assume that you were aware—and I am not saying this in a pejorative sense—of the work that Mr. Chuck Guité had done under the previous government, that is, the Conservative government?

Mr. Jean Pelletier: I was not aware of the details, but I had been told that this man was continuing in his position and that he had carried out these duties for a certain number of years. I apparently took it for granted that his superiors were satisfied with his work, since he was still in his position. Of course, it was not up to me to decide whether transfers or changes should take place within Public Works.

I should give you an idea here of the philosophy that we had in the Prime Minister's Office. The day after he was sworn in as Prime Minister, Mr. Chrétien met will all the deputy ministers and agency heads. He was very clear: he told the deputy ministers and the agency heads that they were responsible for the administrative and legislative aspects of government, that this was their territory, their responsibility and that they had full authority to act in those areas. He added that the political offices, like the PMO and the ministers' offices, were responsible for political aspects and he clearly indicated that he wanted people to stay within their own sectors, that deputy ministers should give legislative and administrative advice to their ministers, that their political offices should give political advice, and that ministers would then make the decisions.

From then on, ministers' offices, in particular the Prime Minister's Office, stuck to the political aspects of things and left it up to deputy ministers to look after the administrative and legislative aspects.

¿ (0945)

Mr. Marcel Proulx: Mr. Pelletier, I'm sorry but in 1993—and this has been tabled before the committee—there had already been articles in the media to the effect that Mr. Guité could quite easily change the rules of the game as he wished; that was well known.

Do you not think that at that point someone could have stepped in? Maybe someone did, but without necessarily saying that Mr. Guité could not remain, do you not think that someone could have stepped in to issue a warning, to put up a red flag, to point out that this person already had a certain reputation?

Mr. Jean Pelletier: Sir, you say you are referring to newspaper articles. I have not seen them at all.

Mr. Marcel Proulx: Fine.

Mr. Pelletier, from 1993 until the end of his career, Mr. Guité rose within the ranks and received promotions at quite a rate: he started as an EX-1 and ended up as an EX-4. Were those promotions, in one way or another, directly or indirectly, approved by your office or, to your knowledge, by the office of the Minister of Public Works?

Mr. Jean Pelletier: We had nothing to do with the management of Mr. Guité's file as a government employee. You're telling me he went from being an EX-1 to an EX-4; I was not aware of that. The Prime Minister's office was in no way responsible for the promotion of public servants and we were not involved in this in any way.

Was the Privy Council involved in this? Was the minister's office involved in that? I do not know, you would have to ask them.

Mr. Marcel Proulx: Thank you.

Mr. Pelletier, to your knowledge, while Mr. Guité held his position, did he have relations with, or did he work closely with, Crown corporations? Are you aware that Mr. Guité might have dealt with Crown corporations in order to increase the funds that he was managing or to manage programs jointly between his sector within Public Works and Crown corporations?

Mr. Jean Pelletier: I was informed that there were what I would call multiple partners for the Maurice Richard sponsorship project, but this is the only example I heard of involving a pool of associated sponsors within the program.

Mr. Marcel Proulx: Had you heard of or did you participate in this group of sponsorships?

Mr. Jean Pelletier: Not in any way.

Mr. Marcel Proulx: Mr. Pelletier, did you ever have the opportunity to speak, directly or indirectly, with individuals managing communication agencies, for example, Mr. Gosselin, Mr. Boulay, Mr. Lafleur, or Mr. Brault? Did you ever have any discussions, conversations or meetings with these people?

Mr. Jean Pelletier: I never had any formal meetings with these people. I know Mr. Lafleur personally. I don't know who Mr. Brault is. I do not know the other people, for instance Mr. Gosselin. Who were the others?

¿ (0950)

Mr. Marcel Proulx: There were Mr. Gosselin, Mr. Boulay from the Everest Group and there was Mr. Brault.

Mr. Jean Pelletier: I met Mr. Boulay once at a reception, but I never had any professional contact with these agencies.

[English]

Mr. Marcel Proulx: Merci, Monsieur Pelletier.

Thank you, Mr. Chair.

The Chair: Merci beaucoup, Mr. Proulx.

Ms. Wasylycia-Leis, eight minutes.

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Mr. Chairperson, could I just have a point of order at the beginning of my remarks? Pursuant to the question about the lack of an opening statement, I've just noticed in the media that Mr. Pelletier said on March 15 of this year that he has been offering to testify for two years and didn't know why he hadn't been contacted. It seems to me that he should have been ready for this committee, should have been watching the proceedings, and would know that there would be a requirement for an opening statement. My point of order is that we ask the clerk to inform all witnesses that it is a requirement of our committee.

The Chair: She is entitled to raise a point of order, like everybody else, so she's entitled to be heard as well.

While you quote these articles, Ms. Wasylycia-Leis, I understand, because of time constraints, the conversations with Mr. Pelletier were actually verbal, not written. I'm not sure whether he was actually advised that he could have made, should have made, might want to make, or whatever the terminology may be, an opening statement. It is not here. You've heard the law clerk say it's not mandatory. Informal statements in the media do not constitute communication from the committee that he has to make a statement.

Mr. Thibault.

Hon. Robert Thibault: It is my understanding from the clarifications made by the clerk earlier that the witness has a right to make an opening statement. Generally, we limit them in time. I've appeared a number of times, and I was always advised that I would be limited in my time, but I was never told I must have an opening statement. I understood earlier, when the same point was brought, that the witness is not required to have an opening statement.

The Chair: Thank you, Mr. Thibault. You, of course, have the experience of being a minister.

The public accounts committee has not always limited statements. We now normally limit opening statements to five minutes. The reason is that a number years ago ministers and others would come in here and take up 20 minutes, 40 minutes, the better part of an hour on an opening statement, leaving virtually no time for questions. So we said, because the public accounts committee is a committee of accountability, and we have the facts normally from the Auditor General's report before us, we don't need a very long opening statement: so have five minutes, present your case, and we go from there.

Mr. Walsh has pointed out in previous interventions in this committee that witnesses have an obligation to lay the facts before the committee before any questions are asked.

Hon. Robert Thibault: Can we get clarification?

The Chair: Is that correct, Mr. Walsh?

Mr. Rob Walsh: That may be correct as to the language I used, but it did not mean to say it gave rise to an obligation to provide an opening statement. What I meant was that you can't simply wait and sit on your hands for the right question to come along before you tell what it is you have to say. There's an obligation overriding all answers that everything you have to say about the matter that is the subject of the inquiry will at some point be said, maybe in a closing statement, if the right question hasn't been asked, or maybe in an opening statement, but everything should be put on the table by the witness and nothing withheld for lack of the right question.

The Chair: So that's the issue, Mr. Thibault. Mr. Pelletier may wish to avail himself of a closing statement or not, the point being that this is not a court of law. We are here to get on the public record, on behalf of Canadians, the facts--all the facts.

We will continue on, but these points of order just take away from the opportunity to ask questions of the witness.

So Ms. Wasylycia-Leis, you have eight minutes.

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

I can express my surprise, though, at the absence of an opening statement, Mr. Pelletier, because this has been such a major issue for Parliament. It has been a very important part of history in terms of the Auditor General's report and our work as the public accounts committee to get to the bottom of it.

Of course, you will know, Mr. Pelletier, that the present Prime Minister has said this is a scandal that must be addressed, and the former Prime Minister, your boss, has disagreed somewhat with those statements. So I think it would have been useful to have that statement.

That said, let me ask you, since you said there were meetings with Chuck Guité at his request and you indicated as well that you met occasionally with Mr. Pierre Tremblay, is it a regular occurrence for the chief of staff to the Prime Minister to accept to receive a meeting with a public servant at the level of Mr. Guité or Mr. Tremblay?

¿ (0955)

Mr. Jean Pelletier: Just before answering your question, Madame, I will say that I'm very sad to deceive you, but nobody told me about any opening statement requirements at all or the possibility, so I feel completely happy with myself without it.

Secondly, I think there was no more important file for the then Prime Minister of Canada than the unity of the country. I think he has made a few decisions that are well known about that subject after the years of referendum, so it was not at all inconvenient that his office would follow this file in all its sectors with a particular eye.

Ms. Judy Wasylycia-Leis: You didn't answer my question. Is it a regular occurrence for the chief of staff to meet with bureaucrats at this level?

Mr. Jean Pelletier: I think, madame, the necessity of the file makes the necessity.

Ms. Judy Wasylycia-Leis: Okay.

Mr. Jean Pelletier: I would have seen the janitor if it would have helped the cause of Canadian unity.

Ms. Judy Wasylycia-Leis: Would it not be the usual course of business to have approved such a meeting through the bureaucracy of the Department of Public Works?

Mr. Jean Pelletier: Everybody knew this was happening. At the minister's level, they knew; at PCO, they knew. So why should I have taken out an ad in the paper to say that I was meeting Mr. Guité? It was the normal course of a very important file that the Prime Minister had a special eye on.

Ms. Judy Wasylycia-Leis: Well, the questions are a result of the fact that, in my understanding, it's very unusual for the chief of staff of the Prime Minister to actually meet with the public servants at that level without some vetting of that decision through--

Mr. Jean Pelletier: Madame, you're entitled to your opinion.

Ms. Judy Wasylycia-Leis: All right.

Did you or your office inform the Minister of Public Works, perhaps his executive assistant or chief of staff, the Prime Minister, or the Deputy Minister of Public Works that you in fact would be having these meetings with Mr. Guité, Mr. Tremblay, or anyone else pertaining to the sponsorship program?

Mr. Jean Pelletier: I just mentioned a minute ago that it was at the knowledge of the minister and his office that Mr. Guité, once every two months, would have a conversation with me. So that answers your question.

Ms. Judy Wasylycia-Leis: So the Minister of Public Works was fully aware of your meetings with his mid-level staff?

Mr. Jean Pelletier: I'm sure he was.

Ms. Judy Wasylycia-Leis: You mentioned the referendum, the national unity issue. In the lead-up to the referendum in Quebec, did you ever, in tone, direct or ask any public servant, political operative, or politician to bend or circumvent any standard Treasury Board operating procedures?

Mr. Jean Pelletier: No. In any circumstances, it was no. It never happened.

Ms. Judy Wasylycia-Leis: Thank you.

What is your connection in terms of the ad firms in question, as listed by the Auditor General in her report? I assume you've read the report in question. Did you ever meet with any of the management or staff from any of the firms in question?

Mr. Jean Pelletier: I think I already answered that question when Mr.--

Ms. Judy Wasylycia-Leis: I'm asking it again.

Mr. Jean Pelletier: I never have met these guys professionally.

Ms. Judy Wasylycia-Leis: Were you ever present at any fundraising events where the principals or staff members from any of the firms in question were in attendance?

Mr. Jean Pelletier: I don't know. I attended the normal fundraising dinners of the Prime Minister in Toronto and in Montreal. There were over 1,000 people. Were they in the room? I don't know, maybe...but not more than that. I don't know.

À (1000)

Ms. Judy Wasylycia-Leis: It is our understanding that there were regular meetings between you and Chuck Guité and Roger Collet. In fact, it's been suggested that you had weekly meetings on Tuesdays to discuss the sponsorship file. What was the nature of those discussions pertaining to the sponsorship file?

Mr. Jean Pelletier: Not weekly meetings, madame, I'm sorry. I could probably, with my agendas, if ever the committee is interested, give you the dates, but they were not every two weeks. That's not true.

Ms. Judy Wasylycia-Leis: Could you tell us if you met regularly at places outside of your office, perhaps at Mamma Teresa's?

And, Mr. Chair, you will note that this is based on testimony provided by Huguette Tremblay, who was the assistant to Chuck Guité, who has confirmed for us that there were regular meetings between Chuck Guité and you, and in fact, that those meetings often occurred outside this Parliament or outside offices of the public service and happened in restaurants like Mamma Teresa's.

Mr. Jean Pelletier: I don't recall any lunch or dinner with me and Mr. Guité--not one. I had lunch with the Minister of Public Works, or dinner, many times at Mamma Teresa's or at other restaurants. I'm happy to know that you're interested in my social life, but I don't think I ever had a meal with Mr. Guité.

Ms. Judy Wasylycia-Leis: Thank you.

It's been suggested in the--

Mr. Jean Pelletier: I should have invited Mrs. Tremblay.

Ms. Judy Wasylycia-Leis: Well, in fact, I was just going to ask you about Mrs. Tremblay. It has been suggested that your comments to Mrs. Tremblay, which were clearly sexist in nature, were out of character, and that in fact may have reflected the pressure and difficulties you're experiencing at the present time, given the sponsorship scandal. So my question--

Mr. Jean Pelletier: I think you're mixed up with the two ladies, madame.

Ms. Judy Wasylycia-Leis: Let me ask about Madame Bédard, sorry. We'll get the women right here, won't we? Let me ask you about your remarks to Madame Bédard.

It has been suggested that those remarks to Madame Bédard were out of character. Were they out of character, or did they reflect the fact that you were feeling somewhat under pressure, given that you were under the microscope with respect to the sponsorship file?

Mr. Jean Pelletier: Madame, as there are two legal procedures concerning the Government of Canada and me at the present moment, I don't think it's proper for me to comment on this matter.

The Chair: Ms. Wasylycia-Leis, we will leave it there.

Ms. Judy Wasylycia-Leis: All right, Mr. Chairman.

The Chair: Mr. Toews, please, eight minutes.

Mr. Vic Toews: Thank you very much.

The Auditor General has referred to what has happened in the sponsorship affair as commissions to communications agencies, while hiding the source of funding and the true substance of the transactions.

I understand, of course, that you came to VIA Rail long after the matter related to the investigation by the Auditor General. But as a result of the Auditor General's findings, did you direct staff in VIA Rail to look specifically at the involvement of VIA in terms of transactions hiding the source of funding?

Mr. Jean Pelletier: As I was not at VIA when all these files took place, I was not in the position, really, to make any personal judgment. The audit committee of VIA looked into the matter and the board has looked into the matter. But I know that I heard in the press this morning that Mr. LeFrançois is coming to see you tomorrow. He's the chief executive of VIA. He's more in line with these files than I have ever been, and really I don't have anything to say on the VIA files because I don't know them.

Mr. Vic Toews: So you were aware that VIA might have been involved in that, but you didn't give any specific directions to the staff to look into that particular issue.

We heard from Mr. Guité that the 1995 referendum in Quebec and the events surrounding that referendum were a war, if I can use that expression. The unity file certainly, whether we classify it as a war or not, must have been one of the most important files on the desk of the Prime Minister. In fact, as you indicated, the Prime Minister had a special eye on this file. How did that special eye work? To what corners did that special eye extend? There must have been polling, there must have been strategy, there must have been direction on the file. Where do we find information about how that special eye of the Prime Minister worked in respect of this file?

À (1005)

Mr. Jean Pelletier: Personally, I was more involved in the relationship between the Canadian government and the “no” committee, headed by Mr. Johnson in Quebec. I was involved in the relationship between the feds and the provincial Liberals on the “no” committee.

Mr. Vic Toews: Right.

Mr. Jean Pelletier: There was also a kind of office in PCO or in federal-provincial relations, I can't remember which, headed by Howard Balloch.

Mr. Vic Toews: That wasn't the communications coordination working group, was it, with Mario Laguë and Françoise Ducros?

Mr. Jean Pelletier: No. Ms. Ducros was at the time with the federal-provincial relations minister's department.

Mr. Vic Toews: All right.

Let's talk then about this special eye of the Prime Minister. How did that work? Can you focus your comments on this special eye of the Prime Minister in following this unity file?

Mr. Jean Pelletier: During or after the referendum period?

Mr. Vic Toews: You indicated that the Prime Minister had a special eye on the file.

Mr. Jean Pelletier: I think any Canadian Prime Minister should have a special eye on the file of the unity of the country, regardless of party.

Mr. Vic Toews: I agree with you. All I'm asking is--

Mr. Jean Pelletier: And I think Mr. Chrétien held that file close to his heart, and knowing that, we were trying to help in all ways possible.

Mr. Vic Toews: Okay, that's the point, Mr. Pelletier—helping in all ways possible. You must have been involved in strategy, you must have been involved in polling, you must have been involved in directing the file. Certainly, the communication agencies were an important part of this file. Mr. Chrétien has this in his heart, he's got it in his eye, he must also have it on his fingertips. What did he do?

Mr. Jean Pelletier: I'm not too sure, Mr. Chairman, that this question is relevant to your mandate. We're not here by the side door to open the whole management of the referendum file—

The Chair: Monsieur Pelletier, if you're asking for my opinion on this particular question, Mr. Toews is trying to get a feeling, as I understand it--Mr. Toews can correct me if I'm wrong--for the dynamics of the office at the PMO, with the Prime Minister and you, and the relationship to this issue regarding sponsorships, chapters 3, 4, and 5 of the Auditor General's report, where she tells us about all the things that have gone wrong. We're trying, as a committee, to find out who was involved in managing these files, who was involved in making these decisions, and Mr. Toews has suggested--and I think he quoted you--that there was no more important file than the unity file for the Prime Minister, and no doubt that applied to you as well, as his chief of staff.

The sponsorship program is integrally involved in this unity file, and Mr. Guité is on record as saying this was war; he made the comments before this committee that are now public testimony. To understand the dynamics, who were the players, who were making the decisions, I think the question is quite relevant.

You have a point of order, Mr. Thibault?

Hon. Robert Thibault: I understand your point, Mr. Chair, on the relevance, and I think it points to the relevance. But you also have to recognize, and I'm sure you do, that our witness was exempt staff during that period and is bound by the confidentiality of cabinet material, and the veil is lifted, as we've been instructed, in accordance to specific criteria--chapters 3, 4, and 5, and the file's relevance. I think the witness should have the right to answer only to those questions that are relevant and not to the full administration of government at that time.

The Chair: This is true, Mr. Thibault, but the point of Mr. Toews, if I understand it correctly, was, to what extent was Mr. Pelletier, and therefore, by implication, the Prime Minister, directly involved in the sponsorship program, because according to Mr. Pelletier, there was no more important file than the sponsorship program for the Prime Minister. Therefore—

An hon. member: For all of us.

À (1010)

The Chair: Yes, all Canadians. I would have thought that all Canadians would want to know who was running this issue. Did the Prime Minister have a hands-off affair when it came to the sponsorship program? Did Mr. Pelletier, his chief of staff, have a hands-off attitude when it came to managing the sponsorship program?

A voice: You know, Mr. Chairman—

The Chair: Let me finish. You asked my opinion. Mr. Dingwall, yesterday, would suggest that he was focusing on rules and he said that he wasn't intimately involved in this file, so I think Mr. Toews' question to find out who was managing the issue of the sponsorship programs, which is the heart of the matter, is a relevant question.

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.): On a point of order, Mr. Chairman, I believe you inadvertently, perhaps, said that Mr. Pelletier said that there was no more important file for the Prime Minister than sponsorship. We can check the blues, but I remember Mr. Pelletier saying that it was the unity of the country, and not the sponsorship file particularly.

The Chair: You're correct, he did say the unity of the country, but the sponsorship program, according to Mr. Guité, was an integral part, if not a major part, of managing the unity file, because he said it was war and that he felt that rules had to be broken if that was the way things were. That was Mr. Guité who said that.

Therefore, Mr. Toews, your question is relevant.

Mr. Vic Toews: Thank you.

I want to make a point on the same point of order. We're all talking about the objective and how important the objective is, but nobody wants to talk about the administration, whether it's Mr. Dingwall, whether it's Mr. Gagliano, whether it's Mr. Pelletier. What I'm asking Mr. Pelletier is, how did this actually work in its mechanism? That's what we're here to figure out, because we want to know how this system broke down. Nobody doubts the good intentions of the Prime Minister for the time being. What we are looking at is, how did this system break down? Who had their fingers in this pie from the Prime Minister's Office to the actual awarding of the contracts? And that's where I was starting.

We are not dealing here, Mr. Chair, with an unsophisticated witness. I can presume about this type of witness that he is knowledgeable about these affairs.

Hon. Robert Thibault: One element of what you said, Mr. Chair, that has me concerned is that you took the evidence that was presented before the committee by one witness--a witness who has not yet appeared, yet whose testimony is there--as gospel. I don't think we can say that any of the testimony is false or correct, according to one as opposed to the other.

The Chair: I can quote testimony on the record, paraphrase it to the best of my ability, because all testimony is deemed to be the facts. I made the opening statement that they are required to reply truthfully to all questions, and that applied to Mr. Guité two years ago just the same as it applies to Mr. Pelletier today, and therefore, if that was his testimony, that was his testimony. Therefore, I'm getting back to Mr. Toews.

Please continue.

Mr. Vic Toews: Thank you. You have some indication of the relevance, Mr. Pelletier. Could you let us know how the administration of that worked, coming out of the Prime Minister's Office?

Mr. Jean Pelletier: I would say that before and during the referendum, in terms of the publicity that was handled by the public works department, the PMO had nothing to do with that.

Mr. Vic Toews: So PMO gave no direction to the--

Mr. Jean Pelletier: Absolutely no direction to that.

Mr. Vic Toews: On the most important file on the Prime Minister's desk, there was--

Mr. Jean Pelletier: For publicity, no, sir, it was handled by Public Works. We didn't manage that. The sponsorship program--

À (1015)

Mr. Vic Toews: So they determined--

Mr. Jean Pelletier: Would you let me finish?

The sponsorship program came after the referendum and was dealt with in the way that I explained already to this committee here this morning. We would, I should say, transmit the requests that we had. We would give our opinions on what should be accepted or not. We would not make the decisions. We would then ask what decision was made, at what level, so that we were able to go back to the people asking for assistance through the program. But the administration of the program was never in the PMO.

Mr. Vic Toews: No, and I didn't suggest that, but whether there was direction from the PMO is what I was asking about.

But what you're saying, sir--

Mr. Jean Pelletier: The direction, sir, was the program--

Mr. Vic Toews: Let me finish my question.

What you are telling us now is that, sometime after the referendum, the focus changed and the sponsorship program was an issue entirely different from the unity file. This sponsorship file had nothing to do with the unity file; that is your testimony to us now.

Mr. Jean Pelletier: No, I didn't say that, sir.

Mr. Vic Toews: What did you say?

Mr. Jean Pelletier: I said that the publicity during the referendum was one thing, and we didn't interfere at all after that. But after the result of the referendum, it was felt by the government that we should make the profile of Canada and the Government of Canada higher, especially in the province of Quebec. We insisted then that the program be more focused to deliver more highlights--

Mr. Vic Toews: So that was a decision of cabinet at that time?

Mr. Jean Pelletier: Sure.

Mr. Vic Toews: Okay. Thank you.

The Chair: Thank you, Mr. Toews.

Mr. Walsh has something to say.

Mr. Rob Walsh: Mr. Chairman, in response to the earlier point of order about the acceptability of the question—posed by Monsieur Crête, I believe—regarding the national unity fund, I have looked at the Auditor General's report, and I think I can answer your question without going much beyond chapter 3 or into chapters 4 and 5.

Chapter 3 talks about the sponsorship program and notes that the program was designed to increase the federal presence and visibility in communities across Canada. It also talks about the manner by which this was done. Paragraph 3.44 says it “appeared designed to provide commissions to communications agencies, while hiding the source of funds and the true nature of the transactions” and that the “parliamentary appropriation process was not respected”. Some of these same suggestions, it seems to me, have come up in the public discourse with regard to the national unity fund.

But in any event, it seems to me the national unity fund—and I don't know in any intimate detail what its purpose was beyond what its name implies—was a fund available to the government and government officials for purposes of national unity, one assumes. It would appear that the sponsorship fund used its resources in that direction, from what I've heard in testimony before this committee, and indeed advertising may have done so as well. Insofar as all three areas appear to be related to national unity, I would think a question pertaining to the national unity fund is relevant to the inquiry of this committee.

However, let me point out that the issue arising here—and if my memory serves, the point arose from a comment by the witness regarding the acceptability of the question—on the one side is a question of whether the subject matter is pertinent to the inquiry of this committee. In my view, a committee has broad latitude about what subject matters or lines of inquiry it allows to enter into its inquiries. The other side of the coin here, however, and the one that perhaps concerns the witness, is the question to what extent he may not be able to answer some questions by virtue of some oath to which he is subject—or, were he governed by the order in council, to which it applies. That's something else, and we can look at it.

The order in council, which applies to ministers and former ministers, and I wouldn't think it applied to this witness, appears to be limited to matters relating to certain activities of the sponsorship program—I'm reading from the order in council in paragraph (a)(i) of section 2—“certain activities of the sponsorship program, advertising activities and the management of public opinion research of the Government of Canada referred to in Chapters 3, 4 and 5 of the Report of the Auditor General of Canada...”.

Perhaps the witness is concerned by reason of some other oath he took as a federal government official—I'm not sure—but that is a different question. It's been my view, and I think the committee has shared this view, that notwithstanding any oath that may be out there, witnesses, including federal civil servants, are obliged to speak fully and truthfully to the committee on all matters raised. Their entitlement to not answer any question does not turn on whether in their view the question is relevant. That's a matter for the committee to determine in its own wisdom, as it sees fit. The only issue for the witnesses is whether there's some oath that constrains them, and it's our view—my view certainly, subject to the committee's agreement—that any oath that may be out there does not apply as against the parliamentary committee.

I expressed the view earlier that in my view this may apply also to oaths upon cabinet ministers, but the question became unnecessary when this order in council was made releasing ministers and former ministers from their obligation to be confidential about cabinet confidences.

In short, in my view, the question is appropriate to the subject matter of this inquiry, and unless the witness has something to share with the committee in this regard, I would think the witness is obliged to answer the questions pertaining to the national unity fund. But it's up to the committee to make that determination.

À (1020)

The Chair: Mr. Thibault, do you have a question for Mr. Walsh?

Hon. Robert Thibault: It's just a brief question. Yesterday we discovered there was a problem with the order in council in doing our work, and we unanimously agreed there would be changes. Does this take into consideration those problems?

Mr. Rob Walsh: Mr. Chair, the point to which the member refers concerned the date—the mention of July 1996. The committee passed a motion yesterday requesting that this order in council be amended so as to begin from December 1, 1993.

The answer to the member's question, Mr. Chairman, is that with regard to that previous period and until such time as the order in council is amended, a former minister or a minister might decline to answer a question relating to cabinet confidences. But as I said at the opening session of this committee, that would entitle the committee to draw the adverse inference that the disclosure was not made because it would not be helpful to the government's position. But that's something for the committee to do.

Ostensibly the minister or former minister would be entitled to stay within his oath, with regard to confidences preceding July 1996, until such time as this order in council is amended to include the earlier period, as the committee requested by motion yesterday.

The Chair: Thank you, Mr. Walsh.

I'll say this before we go to Madam Jennings. Now that we have had the clarification that questions regarding the unity file are in order, I will ask Mr. Crête to put his final question once more to Mr. Pelletier and get the answer.

You had a question regarding national unity that Mr. Pelletier deferred. Now that we find it's within the parameters of this committee to investigate, I will ask you to ask your question regarding the unity file.

[Translation]

Mr. Paul Crête: Mr. Chairman, I prefer to come back on to my eight-minute turn because I have a list of questions on this. So I would like to start with that.

[English]

The Chair: Very good.

Madam Jennings, please.

[Translation]

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

Thank you, Mr. Pelletier. You stated that you met with Mr. Chuck Guité, the director of sponsorships, who subsequently was promoted a number of times, approximately once every two months. You said that on each meeting, it was at Mr. Guité's request. Your office was made up of other people besides yourself. In view of the fact that we have heard evidence to the effect that there was either telephone or personal contact between Mr. Guité or people from his office, from his branch and the Prime Minister's Office, my question to you is whether, to your knowledge, other people, such as Jean Carle, who at the time was working for the Prime Minister's Office, might have had much more regular contact with the branch managed by Mr. Chuck Guité at the time you were chief of staff.

I'm certainly not questioning the fact that you yourself met with him approximately once every two months, I'm just trying to reconcile this with evidence that partially contradicts what you're saying. So I'm wondering whether it wasn't other people from the Prime Minister's staff who might have had much more regular contact.

Mr. Jean Pelletier: Well, madam, I can't say how regular any contact may have been between Mr. Carle and Mr. Guité.

Mrs. Marlene Jennings: Or someone else.

Mr. Jean Pelletier: I know that there was contact and it's quite easy to explain. Mr. Carle was responsible for all of the prime minister's activities outside the National Capital, so he needed to know, when he was preparing program suggestions for the prime minister, what the activities in question were. It was perfectly normal for him to know, then, whether certain activities had applied for a grant under the program or had received a grant or were supposed to. I find it perfectly normal for him, in the course of his daily duties, to find out about that and thus to have had contact with Mr. Guité or members of his office. I wouldn't be surprised by that at all.

Now, another witness said that there were people from my office who were communicating by telephone. I explained earlier that there were people in my office who were following up on files that had been referred to us by all kinds of people—citizens, organizations, members of parliament, ministers, and so on—and who were obviously keeping a abreast of the progress of these files through the administrative machinery of the program by telephone. But that—

À (1025)

Mrs. Marlene Jennings: Fine. As I recall—

Mr. Jean Pelletier: I think that the very fact that it was not employees in authority in my office but administrative employees who were doing this indicates the extent to which, to us, this was simply routine follow-up on files, as in any minister's office.

Mrs. Marlene Jennings: Fine. As I recall, you yourself spoke—and I think it's a perfectly reasonable figure—of approximately 2,000 events that received grants.

Mr. Jean Pelletier: I read that in your minutes.

Mrs. Marlene Jennings: Mr. Pelletier, please let me finish my question, and you'll see what I'm getting at.

Of the total number of events that were approved for a federal sponsorship under the sponsorship program, do you have any idea what percentage of those events went through the Prime Minister's Office, whether it was a back bencher who communicated with your office to say that there was an event in his or her riding and who wanted to know how to apply or if the application had already been made, what stage in the selection and approval process the application had reached, and so on, or in the case of applications made directly to the Prime Minister's Office? Do you have any idea how many proposed sponsorship files may have gone through the Prime Minister's Office when you were chief of staff?

Mr. Jean Pelletier: It's very hard for me to answer your question, because there's a very limited number of files that I had personal knowledge of. I didn't do everything in the Prime Minister's Office. In my own office, there were six people dealing with files. How many did they handle? It's hard for me to say. I don't know.

Mrs. Marlene Jennings: First, who were the six people handling those files? Second, can you tell me, as far as you recall, how many files you dealt with personally?

Mr. Jean Pelletier: I certainly didn't, in all those years, personally handle more than 25 files, perhaps. As for the rest of my office, I don't know.

Mrs. Marlene Jennings: What are the names of the six people you just referred to?

Mr. Jean Pelletier: I would have to do some research.

Mrs. Marlene Jennings: You can provide the committee with those names in writing later.

Members of the opposition have asked a lot of questions, be it in question period or through the media, in an attempt to incriminate Quebec ministers at the time of the sponsorship program. I'd like to know whether you yourself were aware of any detailed discussion of the administration of the sponsorship program at meetings of Quebec ministers.

Mr. Jean Pelletier: I don't recall any detailed discussion at any meeting of Quebec ministers whatsoever, of those that I attended.

Mrs. Marlene Jennings: Are you aware of a discussion that Quebec ministers may have had about the internal audit of 2000?

À (1030)

Mr. Jean Pelletier: No, I have no information that there were any conversations about that audit. But I can tell you, since you want me to tell all and I'm willing to do so, that at one point, I heard some rumours. As you know, there are a lot of rumours circulating in Ottawa. If you took every rumour seriously, you'd be in a constant state of panic. At one point, I heard all kinds of rumours, both in Ottawa and Montreal, about the administration of the program. I let the Prime Minister know about what I had been hearing. Mr. Chrétien then asked me to speak to the minister responsible, Mr. Gagliano. So I met with Mr. Gagliano and shared with him what I had heard. Mr. Gagliano told me that he had heard the same rumours and that he had requested an internal audit. I informed the Prime Minister that the internal audit process was underway. The Prime Minister then asked me to keep him up to date, of course, on what would follow.

When the audit was finished—it was in the spring of 2001, I think, or the spring of 2000—Mr. Gagliano met with me to tell me that he had received the findings, that here were no criminal issues raised, that there were management issues, administrative misdeeds, and that a whole range of recommendations had been made to put things back in order in terms of management. He told me that he had asked his deputy minister to proceed with corrective action and that in the meantime, the program would likely be suspended.

I relayed to the Prime Minister what the minister had told me, and the Prime Minister said that that was just fine, that the minister had done what he had to do. In my opinion, that was the Prime Minister's only involvement in the administration of the program. As for the rest, he never heard anything about anything.

Le président: Thank you very much.

Mr. Crête, you have eight minutes.

Mr. Paul Crête: Thank you, Mr. Chairman.

Mr. Pelletier, lets come back to the question of the Canadian Unity Fund. You know that Mr. Eddie Goldenberg, who was special advisor to the Prime Minister, confirmed last week that the Minister of Finance was aware of the existence of this reserve for quite some time. Mr. Goldenberg said something along the lines of, “We've spoken several times a week for nine years. I don't know whether we spoke specifically about the reserve in question, but the Minister of Finance was certainly aware of the issue.”

Did you ever discuss the Canadian Unity fund with Mr. Martin?

Mr. Jean Pelletier: No, personally, I never discussed the Canadian Unity Fund with Mr. Martin. But the Department of Finance was obviously aware of this reserve.

Mr. Paul Crête: In what sense was it aware?

Mr. Jean Pelletier: For it to be incorporated into the fiscal framework, the department had to be aware.

Mr. Paul Crête: That means that the Minister of Finance had to know about this fund that was renewed year after year, since its conception. It had been accepted as part of a budget.

Mr. Jean Pelletier: That's your conclusion.

Mr. Paul Crête: Well it's your conclusion that I'm interested in.

Mr. Jean Pelletier: Sir, I cannot speak for the former Minister of Finance. I don't know whether he was aware of a particular figure in a particular column. You'll have to ask him.

Mr. Paul Crête: Does it seem normal to you for the Minister of Finance to know that his budget contains a $40 million fund for Canadian unity?

Mr. Jean Pelletier: These days, sir, I can hardly tell what's normal and what isn't.

Mr. Paul Crête: Well, we'll all have to reflect on that!

On another point, I'd like to know whether the Option Canada group was funded from the Canadian Unity Fund reserve.

Mr. Jean Pelletier: I don't know.

Mr. Paul Crête: You don't know whether Option Canada was—

Mr. Jean Pelletier: The Canadian Unity Fund was not managed by the Prime Minister's Office, it was managed by the Privy Council.

À (1035)

Mr. Paul Crête: But you know that Option Canada—

Mr. Jean Pelletier: I don't know where all of the government funds and programs come from. Besides, it wasn't my role to know these things. I had enough work to do without taking on other people's work.

Mr. Paul Crête: But, Mr. Pelletier, you told us what a great concern Canadian unity was to the Prime Minister, and thus to his chief of staff, and that Option Canada was set up in a hurry to meet short-term advertising needs.

Are you telling us that you weren't aware of the existence of Option Canada?

Mr. Jean Pelletier: That's not what I said. I said that I didn't know whether Option Canada was funded out of the Canadian unity reserve. That's very different from the words you're trying to put in my mouth.

Mr. Paul Crête: I'm not trying to put any words in your mouth, Mr. Pelletier. I'm asking you questions to elicit more information, with a view to finding out what exactly went on.

Can you tell me what Option Canada's $4.8 million was used for, to your knowledge?

Mr. Jean Pelletier: No. I didn't administer Option Canada. It's not for me to answer that question, and I'm not in a position to answer it.

Mr. Paul Crête: You didn't have that information?

Mr. Jean Pelletier: No.

Mr. Paul Crête: I will now move on to the issue of Crown corporations, another area in which you worked following the sponsorship scandal.

I will quote the Auditor General:

In a small number of troubling cases, sponsorship funds were transferred to Crown corporations by way of “highly debatable methods”—

On this issue, Mr. Martin, the current prime minister, said and I quote:

It is impossible to believe that there was no political direction.

He said that there was someone who was deciding on how all of that was controlled. In his statement, the Prime Minister seems to point the finger directly at the former Prime Minister. Minister Gagliano could not get the Crown corporations to play a role, only the Prime Minister's Office could do so.

Did you ask any Crown corporations to get involved in funding communications or sponsorship projects?

Mr. Jean Pelletier: No, sir, not in any way.

Mr. Paul Crête: Did staff members of you office, including the Prime Minister, ask Crown corporations to get involved in funding communications projects?

Mr. Jean Pelletier: I think I can say, without any hesitation, that the answer is no.

Mr. Paul Crête: So there is no link with the sponsorship program, which was apparently used to transfer funds between government organizations.

Mr. Jean Pelletier: I answered earlier that the only file that I had heard about, without being in any way involved in any decision on it, was the co-sponsorship of the Maurice Richard project. I then learned that several entities had met to discuss this. This is all I had heard about, and we had nothing to do with any decision on this file.

Mr. Paul Crête: On another topic, I want to go back to Mrs. Jennings' question, during which you talked about in internal audit and the intervention of the deputy minister, Mr. Quail.

In this context, a meeting was held on September 28, 2000, a few weeks before the election was called on November 27, 2000.

Were you aware of this meeting?

Mr. Jean Pelletier: I was away from Ottawa for surgery in July, August and September 2000. According to what I read in Mr. Steinberg's testimony, I believe, the meeting was held during the last days of September. I did not take part in it, I did not hear about it and I was not back in Ottawa when it occurred.

Mr. Paul Crête: Were you made aware, in the weeks following your return, that the Privy Council Office had called a meeting to deal with an internal audit report that raised some administrative problems, whereas you told us that—

Mr. Jean Pelletier: No, sir. I was not aware of the meeting held at the end of September nor was I aware of any follow-up to it.

Mr. Paul Crête: Mr. Pelletier, you said that you heard some rumours circulating in Ottawa, in Montreal. You spoke to Mr. Gagliano so that you could inform the Prime Minister, and he told you that there was an internal audit taking place, and you passed this information on to the Prime Minister. Following that, you no longer took an interest in this file.

Mr. Jean Pelletier: That's not what I said. I said that after hearing Mr. Gagliano's explanations following the internal audit, I told the Prime Minister that Mr. Gagliano had shared the results with me and had told me that changes were to be made and that there was a plan—I'm not sure, but I think there were 37 points in that plan—to correct what had to be corrected. He also said he would ask his deputy minister to make sure that those changes were made. That was in the spring of 2000. Then came the month of July. As I said, I was on leave in July, August and September as a result of an operation. I only came back at the very end of September, about the time Mr. Trudeau died, which was at the end of September or at the very beginning of October. I did not attend the meeting Mr. Gagliano had with the PMO staff at the end of September about the results of the internal audit. I wasn't there and I didn't hear about any follow-up after that.

À (1040)

Mr. Paul Crête: You heard nothing more about this audit after September 2000.

Mr. Jean Pelletier: I'm not sure, this would have to be checked, but I think that the deputy minister of Public Works appeared before the committee to talk about that internal audit and the follow-up administrative action at Public Works. From then on, I assumed the problem would be solved by administrative means.

Mr. Paul Crête: On what date did the Prime Minister hear about this problem for the first time?

The Chair: Thank you, Mr. Crête.

[English]

Your time has expired. We've gone to 8 minutes and 35 seconds.

Monsieur LeBlanc, s'il vous plaît, pour huit minutes.

Mr. Dominic LeBlanc: Thank you, Mr. Chairman.

[Translation]

Good morning, Mr. Pelletier. Thank you for being here today.

First, I'd like to salute your long and distinguished career serving Canadians. I had the privilege of working with you for three years and I noticed your integrity, your judgment and your service. It's important for people to understand your career, which brought you to the position of the Prime Minister's chief of staff.

[English]

Monsieur Pelletier, a lot of people in the public and at this committee table have alleged all kinds of political involvement, for example, in the birth of the sponsorship program and the conditions that gave rise to the decision of the government to establish this program. I think it would be useful, because of the functions you occupied before the referendum, during the referendum period, and after the referendum, if you were to give us a sense of the context in which the federal government was operating following the referendum of 1995, the political context that would have given rise to a decision of the government to establish this program.

[Translation]

Mr. Jean Pelletier: We all remember that the results of the 1995 Quebec referendum were rather close, to say the least. The rest of Canada—I'm excluding Quebec—did not mince words about the federal government and did express very clearly and with some anger that the government had almost lost the country. Two or three days after the results of the referendum, the Prime Minister made a speech in Toronto—I remember that supposedly partisan room, where the reception was particularly cold—and the Prime Minister ended his speech with:

[English]

“Take my word; I won't let Canada down.”

[Translation]

From that time on, those of us who were close to the Prime Minister understood that certain things would be done. Of course, people forget. People have forgotten that at that time they were afraid of losing their country and they would not have allowed their government to just sit back and wait for the third referendum. That's why, after that, all sorts of things were done by Mr. Chrétien's government to give Canada and the Canadian government a higher profile in Quebec and to make belonging to Canada more appealing to Quebeckers. The culmination of all that, to my mind, was the Clarity Act, but all kinds of other things were also done.

Imagine what the reaction of Canadians would have been if we had done nothing and the country had been split in two during a third referendum; everyone would have blamed us. So I think that the Prime Minister was perfectly right in taking all kinds of initiatives, one of which was the sponsorship program. Now, what is being questioned in the Auditor General's report, sir, is not the legitimacy of the program, I don't think, nor do I think it is the contact between the political actors and the program managers. What the auditor is questioning—and she is right in doing so—is the management of the program. Are there people who used this program to do illegal or fraudulent things? That is what the public is condemning right now and on that point we absolutely agree.

The fact that some may have acted wrongly does not mean that everyone acted wrongly. We have to avoid guilt by association. Meeting someone somewhere who is accused of something three years later does not mean that you're automatically guilty yourself. Both the political world and the world of the media can get a bit carried away about such things.

I'm here to say exactly what went on. I have nothing to hide and I did not come here to protect anyone in any way. I am here to say what happened and who did it. I consider that I am testifying here this morning, Mr. Chairman, the same way as I would if I were testifying under oath.

À (1045)

Mr. Dominic LeBlanc: Thank you, Mr. Pelletier.

When you talked about getting carried away, I think you were absolutely right. People have been carried away on this at many levels and in many ways. One example of things we often hear about is the idea that the Prime Minister's Office or yourself or someone who was working for you is supposed to have been involved, for example, in the choice or decision to use one agency rather than another or in the management of the contracts or in the choice of a particular company for a particular contract.

Could you clarify for us what role your office played concerning the administrative details of the Sponsorship Program, and advertising matters and what kind of relationship there was between yourself or the people working for the Prime Minister's Office and either the bureaucrats or the agencies concerning program delivery details.

Mr. Jean Pelletier: I think I've answered that question already but for clarity's sake, I'll repeat what I said. The Prime Minister's Office had no role, neither direct nor indirect, in choosing the agencies or firms that became intermediaries between the government and the organizers of subsidized events. We had nothing to do with the choice of intermediaries. We had nothing to do with awarding contracts to whomever. The Prime Minister's Office never had anything to do with setting the fees or the production fees or simple fees of any nature whatsoever.

We, at the Prime Minister's Office, were in no way involved in the administrative management of the program. I want that to be very clearly understood.

[English]

Mr. Dominic LeBlanc: Thank you, Mr. Chairman.

The Chair: Thank you, Mr. LeBlanc.

We're now into the third round, so we're now down to four minutes per intervention.

Mr. MacKay, please.

Mr. Peter MacKay (Pictou—Antigonish—Guysborough, CPC): Thank you, Mr. Chair.

Mr. Pelletier, you were a key player with Mr. Chrétien going back to 1991, and his chief of staff, you told us, from 1997 on to 2000. Surely your presence here today indicates that you had a real--

Mr. Jean Pelletier: From 1993 to 2001.

Mr. Peter MacKay: Right. And you would be here today clearly to want to help us to get to the bottom of what was going on during a period in which you were a major player in the Chrétien administration. You've told us about efforts that were made to raise the profile of Canada in Quebec specifically, which was initially part of the so-called unity fund, which gave rise to the sponsorship program. In questioning from my colleague, Mr. Toews, you said that after 1997, in particular, cabinet and ministers would have known about the efforts that were being made through the sponsorship program to raise the profile of Canada in Quebec. Is that correct? Cabinet would have known about this plan?

Mr. Jean Pelletier: I don't think I said that, sir.

Mr. Peter MacKay: I'm asking you to clarify that, if you would.

À (1050)

Mr. Jean Pelletier: I don't think I said that.

Mr. Peter MacKay: I'm asking you to clarify, sir.

Mr. Jean Pelletier: I think the polls that were from time to time made public indicated that the sovereignist movement was losing ground and that the federalist perspective was gaining ground.

Mr. Peter MacKay: So spending more money in Quebec you thought would continue that trend, sir?

Mr. Jean Pelletier: Sir, it was not only one program that caused the results. I think it is the combination of many things--

Mr. Peter MacKay: I see.

Mr. Jean Pelletier: --including the clarity bill at the end.

Mr. Peter MacKay: I'm asking you about the sponsorship program specifically, sir.

Mr. Jean Pelletier: You don't live in Quebec. But if you had lived in Quebec, you would have seen the Quebec separatist government using Quebec Hydro, for instance, using Loto-Québec, for instance, to back their political option.

Mr. Peter MacKay: So sponsorship was an effort to counteract what the Quebec government was doing.

Mr. Jean Pelletier: It was an effort to counteract and to balance, I should say, in the minds of Quebeckers, both the federalist Canadian approach and the sovereignist approach.

Mr. Peter MacKay: But my question is about the sponsorship program. My question was, did cabinet know specifically what was going on in this program? And I want to ask you about an ad hoc committee of cabinet on government communications of which there were such infamous members as Mr. Gagliano; we have other cabinet members like Mr. Goodale, Ms. Copps, Ms. McLellan. You were aware of this ad hoc cabinet committee on communications, sir. As chief of staff, you would have to know about that.

Mr. Jean Pelletier: I was aware of the existence of the committee, but I never attended any of its meetings.

Mr. Peter MacKay: And what was the purpose then, the mandate, of that committee, to your knowledge?

Mr. Jean Pelletier: To overhaul the communication strategy of the government.

Mr. Peter MacKay: So would that committee then have anything to do with passing on instructions to Public Works?

Mr. Jean Pelletier: Sir, ask the ones who were sitting at the committee.

Mr. Peter MacKay: I see. You wouldn't know that. As chief of staff to the Prime Minister, you wouldn't know that.

Mr. Jean Pelletier: I'm sorry, I don't know that at all.

Mr. Peter MacKay: Of course.

You mention polling. Polling was one of the areas that the Auditor General pointed out. There was in fact real concern over polls that were being done and paid for by the taxpayers, partisan polls done by the Liberal government. Are you aware of any polling that was ever done and paid for by taxpayers?

Mr. Jean Pelletier: No. There was some polling, I think, directed by the federal-provincial department to know what was the status of federalism against separatism.

Mr. Peter MacKay: Did you read the Auditor General's report, Mr. Pelletier, before coming here?

Mr. Jean Pelletier: Yes, in general terms, I read that.

Mr. Peter MacKay: Chapter 5 of that report, this most recent report, specifically talks about polling being done and that the Prime Minister's Office may have called upon the services of Public Works to do that polling. Are you familiar with that? Do you know anything about that?

Mr. Jean Pelletier: Honestly, sir, I don't recall.

Mr. Peter MacKay: You honestly don't recall anything to do with polling.

Mr. Jean Pelletier: I know that we were investing in polling, but there was a lot of polling done by the media as well, which was helpful.

Mr. Peter MacKay: I'm not concerned about the media; I'm concerned about polling directed by the PMO.

The Chair: I'm going to have to bring this to a close. Thank you very much.

Mr. Mills, please, four minutes.

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

I want to begin my remarks by quoting you, Mr. Chair. You stated earlier today that we are a “committee of accountability”.

The Chair: That's correct.

Mr. Dennis Mills: I split that accountability into two facets. Number one is the value for taxpayers' money, the value for the money they billed us as a government. I'm happy that we now have identified the nine agencies that received the $100 million, which Mr. Toews refers to on a constant basis. Their CFOs will be forthwith presented to us. The second policy objective of accountability has to do with passing the test of how we saved this country and the legitimacy of that program in passing that test.

Mr. Pelletier cannot comment, because it's a machinery-of-government exercise, on how the money was processed. But I would like you to discuss, Mr. Pelletier, building on Mr. LeBlanc's question--because I'm from Toronto, English Canada--how you measured the results of this program in saving Canada.

À (1055)

Mr. Jean Pelletier: I think the 2000 election results in Quebec were a way to know if the federalist option was stronger than before. I remember being a candidate in 1993. We were washed out by the Bloc in 1993, if you remember. It started to slip in 1997, and it slipped again in 2000. So we thought that we had done something right if that result was possible. This is one of the moments where we measured the overall result of our program on unity.

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

I don't have any more questions.

The Chair: Mr. Jordan, for four minutes.

Hon. Joe Jordan (Leeds—Grenville, Lib.): Thank you, Mr. Chair.

Mr. Pelletier, I'm struck by the focus that some of the members have on your lack of an opening statement. I hearken back to the reference that it should be on the subject of the inquiry. I'm sympathetic because, if I had to make an opening statement on the subject of this inquiry, I might have trouble doing it, because we seem to have a very broad brush here.

I'd like to turn to the specific concerns in the Auditor General's report. You've touched on some of this, but I want to get this on the record. Prior to the Auditor General's statements concerning the management of this file, the communications activities of the government, were you ever personally aware or were you made aware of any ad agencies that may have been billing for work they didn't do?

Mr. Jean Pelletier: No.

Hon. Joe Jordan: At any time prior to the Auditor General's analysis of the operation of this department, were you personally aware or were you made aware of any activities by the communications function within the federal government or processes they followed that would have been inconsistent with the implementation of the Financial Administration Act?

Mr. Jean Pelletier: Not directly. The only information I got was the result of the internal audit of 1999-2000.

Hon. Joe Jordan: I want to pick up on the point Mr. Mills made and that you tried to expand on. I'm also an MP who isn't from Quebec. One of the things that people I talk to are struggling with is, what could we possibly hope to have accomplished by spending a lot of money to put the Canadian mark on a ball field fence?

I was struck by the story in the Globe and Mail last week that said Parizeau seemed to have had a fund of about $17 billion. He was going to do some kind of government bond strategy. What were you trying to counter in Quebec? You were there and you lived it, but I have no idea. You talk about Hydro-Québec and Loto-Québec. Exactly what were they doing, and how was this particular government policy going to counter that?

Mr. Jean Pelletier: You see, I think the biggest movement, with some success, used the pride of being Québécois. We're Québécois and we're proud to be. But the counterpart, that we're Canadians and we're proud to be Canadians, was never said. So we thought we had to, I should say, nourish the feelings about Canada a bit more with a higher presence of Canada, one you could see.

It's like the battle of Coke and Pepsi. If suddenly Coke decides not to put its name everywhere and Pepsi is everywhere, everybody will go to Pepsi. It's as simple as that with mass media information. It was not only that, because it would have been a little smaller, but we thought the profile of Canada had to be more visible.

The Péquiste government was using as much as it could--and I'm not blaming it for having done so--Hydro-Québec to sponsor this and that, and it was always the Quebec flag here and the Québécois there, etc., and we weren't there. So people said, what's Canada doing for us? Are they there? They're absent.

I don't think that was healthy for Canadian unity.

Á (1100)

The Chair: Thank you, Mr. Jordan.

Mr. Kenney, please, for four minutes.

Mr. Jason Kenney: Mr. Pelletier, I would like to go back to my original question, because I don't think I have actually received an answer to it. It was, were you aware of a directive from the Federal-Provincial Relations Office at PCO to Chuck Guité in 1995 to “bend” the rules in order to execute the sponsorship program at that time?

Mr. Jean Pelletier: No.

Mr. Jason Kenney: Mr. Pelletier, you also testified that while you may have intervened in several instances with Mr. Guité to propose the authorization and funding of certain sponsorship projects, that

[Translation]

“We made no decisions.”

[English]

You didn't make the decision; it was up to Mr. Guité to make the decision. Is that what you've said?

Mr. Jean Pelletier: Clearly.

Mr. Jason Kenney: Well, Mr. Pelletier, don't you think that's just a little difficult for us to buy? You were known as the most powerful man in the government. Many people said you were the most powerful chief of staff ever in one of the most centralized prime minister's offices. Your word was virtually writ in this town with government officials.

When a relatively junior manager, a civil servant, had a discussion with the chief of staff to the prime minister who indicated his will in a particular way that a particular program be funded, do you expect us to believe that this really allowed the bureaucrat to say, oh no, Mr. Pelletier, I think in fact I'll turn you down on this one?

[Translation]

Mr. Jean Pelletier: I'll answer you in French, if you don't mind, in order to properly choose my words properly.

In my job as chief of staff, I was always very careful about respecting the officials within the limits of their responsibilities. At the outset, I indicated that the Prime Minister did say that all administrative and legislative aspects of the program were the responsibility of the public service and that the political aspects were our responsibility, that is the responsibility of ministers' offices including the Prime Minister's Office. I was always very careful to make the final decisions in my own sector and to let the officials make the decisions that were theirs to make. Ask any deputy minister at all, during the seven and a half years I was chief of staff, whether I ever gave any instructions to deputy ministers. Never, simply because of my respect for this position.

We are not responsible for the influence our position gives us. We are not responsible for that. If some officials are more influenced by what one person says as opposed to another, then so be it.

[English]

Mr. Jason Kenney: Then you will admit, sir, that when you, the chief of staff, communicated with a civil servant, this would have carried pretty significant weight. Would you not say so? Were you aware of a single instance where Mr. Guité came back to you and said No, Mr. Pelletier, I've decided not to finance the project you are lobbying for?

[Translation]

Mr. Jean Pelletier: I think that I was doing my job with respect for theirs and I think that they respected my position as I respected theirs. Now, who was more influenced by various comments, sir? Ask the deputy minister yourself.

[English]

Mr. Jason Kenney: But sir, how was it your function to intervene with a relatively junior bureaucrat? Madam Diane Marleau testified that when she became minister, Chuck Guité arrived at her office and said, I report to you directly. She said, no, you don't; get back to your office and report to the deputy minister. Mr. Gagliano testified that he only met with Mr. Guité two or three times a year.

Now you're telling us you met more frequently with Mr. Guité than his deputy minister or his minister and that you, as the most powerful man in the government next to the Prime Minister, had a direct working relationship with him. Do you expect us to believe this was just business as usual and that there was no political interference when you talked to him on behalf of the Prime Minister?

[Translation]

Mr. Jean Pelletier: Sir, I did indicate that we made the representations we thought useful and we thought it our duty to make concerning the files we relayed to the administrative side of the program. I indicated that the final decision to subsidize or sponsor one event rather than another was made by those who ran the program. We did not make that final decision and I indicated that making the decision was entirely up to the officials, not the Prime Minister's Office.

I think I was very clear about that. I've repeated it several times since the beginning of this meeting. Whether you like the story or not, I came here to tell you my side of the truth, which is perhaps not the one you want to hear. I'm awfully sorry, but I'm telling you the exact truth.

Á (1105)

[English]

The Chair: Thank you, Mr. Kenney.

Monsieur Thibault, s'il vous plaît, quatre minutes.

[Translation]

Hon. Robert Thibault: Thank you very much, Mr. Pelletier. Thank you for coming here to make this presentation and answer our questions.

[English]

It's important for us to find out, I think, at this committee, for all Canadians and for their government in the future, how this system failed and how we can prevent it in the future. If there were abuses, at what level were the abuses, how many were there, and how do we make sure that it never happens?

One of the important elements there is the question of ministerial responsibility. We've examined this with various witnesses, and you certainly were in a position to understand this very well. It's a question where, in a country with a modern democracy like Canada, we depend very much on ministerial responsibility and a professional civil service, a professional bureaucracy. As you mentioned earlier, the Prime Minister had been clear that the administrative and legislative aspects and the political side are to be done by ministers.

I would like you to give me your understanding on this. I think it's too early for us to say that there was or was not political interference or political responsibility, or that there was no administrative responsibility. We need to know all the facts.

In your words, could you please define for us what you see as the ministerial responsibility, and what you see as the role of the administrative side of the bureaucracy in a question such as these sponsorship questions?

[Translation]

Mr. Jean Pelletier: Sir, I think that the ministers and Cabinet decide on programs and their focus. I think that the ministers give general directions concerning program focus and after that it's up to the officials to manage the program. It's that simple.

Hon. Robert Thibault: So, ministers were not part of or should not be part to the operational decisions about what the accepted value would be for a contract or the issuing of contracts or that sort of thing.

Mr. Jean Pelletier: I'm not a specialist on government machinery, but I think that in Ottawa I found a public service which is extremely powerful, which is extremely jealous of its power and wants to continue to keep full control over the administration of the government's expenditure programs.

Hon. Robert Thibault: We often use the names of the administrators you mention, such as Mr. Guité and Mr. Quail. These were professional managers. First, when did you meet those people?

Mr. Jean Pelletier: I didn't meet Mr. Quail very often because I didn't normally deal with the deputy ministers. I met Mr. Quail maybe a few times.

I met Mr. Guité perhaps in 1996. I have to get look it up in my desk calendars. But I don't remember having met Mr. Guité very often before the end of the Quebec referendum.

Hon. Robert Thibault: You mentioned Mr. Tremblay before. So you were in touch with him from time to time. Did those meetings happen before or after the year 2000? Did they happen before this new 37-point plan was put forward?

Mr. Jean Pelletier: Listen, I had two periods when I had dealings with Mr. Tremblay. First, I had dealings with him when he was the executive assistant of a minister. After that, I think he was totally out of the picture for a period of three months because he was going to become a civil servant and so on. I had my first dealings with him in that capacity when Mr. Guité retired and Mr. Tremblay took over his job. So when was it? It was probably in the summer of 1999, if memory serves, when Mr. Guité retired.

Hon. Robert Thibault: Thank you, Mr. Pelletier.

[English]

The Chair: Merci beaucoup.

Mr. Lastewka and Mr. Tonks have indicated that they will have two minutes each, rather than a four-minute intervention by one, and that would then complete round one. We will then have a health break for a few minutes, and then we will come back and start over again for another round.

Mr. Lastewka, you have something to say?

Hon. Walt Lastewka (St. Catharines, Lib.): The four minutes will be with Mr. Tonks.

The Chair: Okay, Mr. Tonks, and then we'll have a five-minute recess.

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

Thank you also for the long service that you've given. I can say that after having 30 years in the municipal area, and I've known the deputant during those times. You've served Canada well.

Á (1110)

Mr. Jean Pelletier: Thank you.

Mr. Alan Tonks: Have you read the transcript of Mr. Guité?

Mr. Jean Pelletier: Yes, because I couldn't get it on Friday, I went through it rapidly yesterday afternoon.

Mr. Alan Tonks: I'd like to ask some questions with respect to your opinion as to the context and the validity of the points that are put forward by Mr. Guité. For example, he was asked a question by Mr. Mayfield, and the question was:

Could you describe the nature of that advice, please? The Auditor General has said that she can find no record of that advice...

and so on and so forth.

Mr. Guité said:

I have to be careful here the term I use--and to follow a bit of the guidelines that exist in the rules, but I may have to, for a better term, bend them a little, because, as you all can understand, we were basically at war trying to save the country. We, and FPRO, invited approximately 10 firms, which is documented, there's a scope of work, to present to us and, as a committee, what they could do to help us win the referendum in Quebec--which they did. Based on that, we retained five firms.

The Federal-Provincial Relations Office was a construct that you were aware of? You knew of the existence of the Federal-Provincial Relations Office?

Mr. Jean Pelletier: Yes, but it was not in the PMO. I knew the existence of it, but it was in the PCO, not the PMO.

Mr. Alan Tonks: Right, okay.

Mr. Mayfield goes on to ask a question:

I'm wondering who was the liaison between you and the minister's office and the Prime Minister's Office to keep track of this whole program as it was going on. Can you tell us, please, sir?

He further asks:

...who is involved with you in making the decisions about perhaps slightly bending the rules, about coordinating it, which to accept and which to reject?

Mr. Guité said, “That was my decision.”

In other words, he was meeting with the Federal-Provincial Relations Office, which was a construct dealing with federal-provincial.... He had discussed this whole issue with respect to strategic decisions. He said they even met as a committee, and he is taking responsibility with respect to the kinds of decisions, based on his background, in the firms that could carry the message.

Do you accept Mr. Guité at face value, that he made those kinds of decisions as administrative and management decisions?

Mr. Jean Pelletier: Sir, it's for him to speak for himself, but there are two things that I can tell you. First, I personally was not aware of his dealings with the FPRO. Secondly, the PMO, the Prime Minister's Office, was never involved in any suggestions that any rules should be bent in any way. I remember all the funds that were taken out of the unity file to go to a place... and it always stipulated that it should be in accordance with the Financial Administration Act and the rules of Treasury Board. Every time it was mentioned.

Mr. Alan Tonks: Thank you.

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

We're going to have a five-minute recess, and when we return we'll start the rotation all over again, with the interventions being eight minutes long.

We are suspended for five minutes or so.

Á (1114)

Á (1125)

The Chair: We have now resumed. We're now on to round two. It'll be a repeat of what we did before, with the parties having eight minutes each in the first two rounds.

You are first, Mr. MacKay, for eight minutes, please.

Mr. Peter MacKay: Mr. Pelletier, in earlier testimony--in response to one of the Liberal questioners, I believe--you said that you knew some of the individuals who were the heads of various communication firms, individuals like Claude Boulay, Jean Brault, and Jean Lafleur. I want to ask you specifically about your relationship with Mr. Lafleur.

Mr. Jean Pelletier: [Technical difficulty—Editor]

The Chair: We have a problem with the interpretation, the microphones. We'll try to get it fixed over lunch.

Now to Mr. Pelletier, please.

Mr. Jean Pelletier: I don't know Mr. Brault.

Mr. Peter MacKay: Okay. What about Mr. Lafleur? I want to ask you specifically about Mr. Lafleur.

Mr. Jean Pelletier: I have met Mr. Boulay once socially, but not more than that. Mr. Lafleur I know.

Mr. Peter MacKay: Mr. Lafleur you know well. In fact, Mr. Lafleur and his company, which was later sold to Groupaction, actually received virtually every communications contract during the time you were at the PMO, and then that continued after you went to VIA Rail. Is that correct?

Mr. Jean Pelletier: I don't know.

Mr. Peter MacKay: You don't know?

Mr. Jean Pelletier: I'm sorry, I don't know.

Mr. Peter MacKay: You have no idea what communication spending was going on at VIA Rail.

Mr. Jean Pelletier: When I arrived at VIA Rail, he had the contract as the ad agency. The contract had been approved previously by the board before I was there, so....

Mr. Peter MacKay: So you had no input. You never discussed communications with Mr. Lafleur while at the PMO or VIA Rail--at no time.

Mr. Jean Pelletier: No. I knew Mr. Lafleur socially. He has a son whom I know well, and he was very concerned about his son at a certain time, and we discussed that.

Mr. Peter MacKay: So when you said that you didn't know him professionally--

Mr. Jean Pelletier: But I didn't discuss any contract with Mr. Lafleur.

Mr. Peter MacKay: You never discussed it. When you said you knew him, you didn't mean professionally; you knew him unprofessionally. Is that what you meant?

Mr. Jean Pelletier: Unprofessionally.

Mr. Peter MacKay: Unprofessionally, okay. You said at one point in your previous testimony that you would talk to the janitor if it would help the country. Would you talk to the janitor if you thought he was bilking the government of $100 million? Would you talk to him then? Probably, right?

Mr. Jean Pelletier: When I said I would see the janitor, I said it, sir, to make a point about the Prime Minister's chief of staff not being forbidden from seeing anybody who could have had a positive role in the unity file.

Mr. Peter MacKay: So these communications firms--

Mr. Jean Pelletier: Let me finish.

I gave that answer when I was asked if it was not particular for me to be in contact with a low-ranking official, a middle official. First, I don't think it was too middle, but I would have seen anybody who had an important role in the unity file, including a janitor.

Mr. Peter MacKay: But you wouldn't involve yourself with anybody who had hands-on decision-making power over where these contracts for communications were going. You had no communications with those individuals?

Mr. Jean Pelletier: Sir, I explained very clearly that--

Mr. Peter MacKay: Maybe you could walk us through it again, because we're not all as sharp as you, Mr. Pelletier.

The Chair: Mr. Pelletier, please.

Mr. Jean Pelletier: What was your question again?

Mr. Peter MacKay: My question is, you had no contact with individuals who had hands-on decision-making power over the awarding of sponsorship contracts? You had no contact with those people?

Mr. Jean Pelletier: Sir, I said that the PMO was doing its job. We had to see that the program was delivered the way the cabinet had approved it. We would serve Canadians and their needs when they asked us to file demands for the program, the financial assistance of the program. We did that. But we didn't get into the administration,

[Translation]

nor concerning the internal management of the program, the choice of intermediaries, the conditions of or the payment of the contracts as well as the people they were awarded to. We did not intervene in that in any way.

[English]

Mr. Peter MacKay: What about the political direction--which are the words we're continually reminded of--that came from the current Prime Minister, Mr. Martin? Was there any political direction you ever witnessed or had a part of in your capacity as the Prime Minister's chief of staff?

Á (1130)

[Translation]

Mr. Jean Pelletier: We never gave political instructions to favour a given firm or award a contract to one firm rather than another.

[English]

Mr. Peter MacKay: All right. What about hiring practices, Mr. Pelletier? Did you ever have any input into hiring practices?

Mr. Jean Pelletier: No.

Mr. Peter MacKay: There's a suggestion made by François Beaudoin. You're familiar with Mr. Beaudoin. He was the head of the BDC, and he suffered a fate similar to yours when he was fired by the government, correct?

Mr. Jean Pelletier: Mr. Beaudoin was not fired by the government, sir.

Mr. Peter MacKay: He was not fired by the government?

Mr. Jean Pelletier: No.

Mr. Peter MacKay: No? He took a voluntary leave?

Mr. Jean Pelletier: I think what happened is that he decided to leave the bank, and it was a negotiation of an outgoing contract that he had.

Mr. Peter MacKay: I see. Well, there's a suggestion, in any event. We can disagree on the circumstances that led to his departure, and we will.

Mr. Jean Pelletier: On that fact, which is not pertinent to the committee, I am sure we will disagree.

Mr. Peter MacKay: None whatsoever. But my question to you, sir, was, did you ever have anything to do with the hiring practices? And this goes, I would suggest, to credibility. There's a suggestion that you met with Mr. Beaudoin and a number of others, including Jean Lafleur, with whom you had an unprofessional personal relationship, according to you.

The Chair: Mr. MacKay, I wouldn't call it unprofessional.

Is it unprofessional? Were those his words?

Mr. Peter MacKay: That's what he said. Those were his words.

The Chair: Okay.

Mr. Peter MacKay: Thank you, Mr. Chair.

There was a discussion at a box in Montreal, at the Molson Centre; this was the VIA Rail box, as I understand it. Do you recall that meeting? There was a box at a hockey game.

Mr. Jean Pelletier: Sir, I know that Mr. Beaudoin said that he had gone to hockey with me and that at that hockey game I gave him the name of a search firm so that he could facilitate the entry of Jean Carle into the bank staff.

Mr. Peter MacKay: Correct.

Mr. Jean Pelletier: I deny that I ever went--

Mr. Peter MacKay: You deny that.

Mr. Jean Pelletier: I may have been in the same box of hockey or in the Bell Centre in Montreal where Mr. Beaudoin was, but we never went to hockey together. I deny that I gave him any name of any search firm, and I deny that the PMO was ever involved in the hiring of Mr. Carle at the bank. I say very strictly that Mr. Beaudoin hired Mr. Carle by himself, independently of anybody, and that the PMO and Mr. Chrétien himself were never involved in that.

Mr. Peter MacKay: Were there any discussions at that time, Mr. Pelletier--

Mr. Jean Pelletier: You gave me the occasion to say so, and I'm very happy. I thank you.

Mr. Peter MacKay: I'm glad you wanted to clear that up.

Now, did you have any discussions with Jean Lafleur at that time, at the box in the Molson Centre, at the hockey game, when Mr. Beaudoin was present, about activities at VIA Rail vis-à-vis the work being done by Lafleur Communications? Did you have any discussions at that time?

Mr. Jean Pelletier: On VIA Rail, never.

Mr. Peter MacKay: None whatsoever.

Mr. Jean Pelletier: No.

Mr. Peter MacKay: And you had no discussions whatsoever about the hiring of Mr. Carle?

Mr. Jean Pelletier: None at all.

Mr. Peter MacKay: And no discussions about the BDC entering into an arrangement to also contribute financially to the cost of the box?

Mr. Jean Pelletier: None at all.

Mr. Peter MacKay: You had no discussions along those lines?

Mr. Jean Pelletier: None at all.

Mr. Peter MacKay: Okay. Thank you, sir.

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

Monsieur Crête, s'il vous plaît, huit minutes.

[Translation]

Mr. Paul Crête: Thank you, Mr. Chairman.

Mr. Pelletier, during the first part of your testimony, you told us that you had dealt with some 25 files. Which ones were they besides the Grand Prix and the Saint-Hyacinthe project? Could you tell us which ones they were or send us a list of them?

Mr. Jean Pelletier: No, I'm not going to send you a list because I don't have any notes on that, sir. I said 25, but I could have said 23 or 30.

Mr. Paul Crête: You also said that you met Mr. Guité when he came to your office, I believe. Was Mr. Gagliano present on that occasion or on others?

Mr. Jean Pelletier: I think Mr. Gagliano was present once or twice when the transition was being made between Guité and Tremblay, but certainly not the other times.

Mr. Paul Crête: As for the other occasions, could you tell us how many times you met Mr. Guité alone or at least without Mr. Gagliano?

Á (1135)

Mr. Jean Pelletier: Off the top of my head, I said that I met him approximately every two months.

Mr. Paul Crête: Every two months?

Mr. Jean Pelletier: I wasn't counting.

Mr. Paul Crête: Every two months over a period of several years?

Mr. Jean Pelletier: Probably 1996, 1997, 1998. After that, he retired.

Mr. Paul Crête: Did you have the same kind of meetings with Mr. Tremblay afterwards? I don't remember whether you mentioned that.

Mr. Jean Pelletier: I don't remember exactly. With Mr. Tremblay, it was mostly over the telephone. We were discussing the progress made on a file, on an issue. Those were normal exchanges, but always within the bounds of our role as I explained it to you.

Mr. Paul Crête: You have been speaking about some rumours, back in 2000, regarding the sponsorship program that led you to ask some questions. What were you concerned about in those rumours?

Mr. Jean Pelletier: When someone gets a favour, somebody else who wanted the same is envious. When all the contracts are going to the same small group, the others aren't happy and get upset. There were all kinds of rumours: there were not enough intermediaries; all the contracts were given to the same people; maybe some arrangements were not proper. You know, once a rumour starts, there is no stopping it. After a while, everybody was talking about it.

I decided to get to the bottom of things and see what was happening. At that point, as I was telling you, I reported to Mr. Chrétien who told me to go and see the minister. The minister told me an audit was under way and that we had to wait for the results. We got them. And I told you what he did with those results.

Mr. Paul Crête: When you say that some people were complaining that all the contracts were going to the same group, who was in this small group, and who were these people complaining about it?

Mr. Jean Pelletier: There was a rumour going around. When you keep hearing the same rumour and everyone is talking about it, you start wondering at some point if there's some truth to it. Then, you have to find out what is going on.

Mr. Paul Crête: You took it upon yourself to mention it to the Prime Minister who told you to see the minister to find out what it was all about. The minister told you that he had ordered an internal audit. Once the results of that internal audit were known, you did not take it upon yourself in that case to find out what they were, because you told me that during the fall, when you came back after your illness—

Mr. Jean Pelletier: No sir. What I told you—and you forgot a bit—was that when the internal audit was completed, the minister told me that he had received the results and there was nothing criminal, that there were administrative and management problems and that there was a corrective action plan—with 36, 37 or 38 items, I think—and that he had told his deputy minister to implement those suggestions and that until they were implemented all the activities of the program were to be suspended. This took place towards the end of May or in June 2000, I believe. I left after that, in early July. So, when he gave me the results of the audit, I reported to the Prime Minister. He told me that the minister had done what he was supposed to do: he had had an audit done, he had obtained the results and he had told his deputy minister to implement the recommendations.

Mr. Paul Crête: Okay. Later, in October or November, you never revisited the issue to find out the results of the audit.

Mr. Jean Pelletier: When I came back in early October, I was recovering from major surgery that had quite drained me physically. There was Mr. Trudeau's funeral and then there was some sort of election in November 2000. I think I focused on that issue instead.

Mr. Paul Crête: Between early October and November 30, specifically, I was wondering if you were concerned with revisiting the issue, before the election.

Mr. Jean Pelletier: No, I'm sorry. It was not my responsibility to deal with management or administrative remedial action. This was the role of the public service.

Á (1140)

Mr. Paul Crête: Basically you're saying that any prime minister should keep an eye on national unity. Is this a way for you to find fault with Mr. Martin for doing away with the national unity contingency fund?

Mr. Jean Pelletier: Not necessarily. There can be other vehicles. I don't know, but what I'm saying is that any prime minister must have this concern in mind. This is the case not only at the federal level but also at the provincial level, as far as I know.

Mr. Paul Crête: What are you talking about?

Mr. Jean Pelletier: Your friends in Quebec city.

Mr. Paul Crête: There is no doubt that the decision of a people to become a nation, in the final analysis, will not be made on the basis of fiscal or marketing issues. People are much smarter and more aware of their destiny than that.

Mr. Jean Pelletier: I'm very grateful for your insight.

Mr. Paul Crête: I would like to ask you a question on another topic. Are you familiar with one Jacques Corriveau?

Mr. Jean Pelletier: Yes, I know Mr. Corriveau.

Mr. Paul Crête: Have you had frequent meetings with this person?

Mr. Jean Pelletier: No.

Mr. Paul Crête: Neither you nor your office were in touch with Mr. Guité's division about projects managed by Polygone, like the Salon national du grand air, the Almanach du peuple, radio spots, for instance. You never had any contact in this area?

Mr. Jean Pelletier: I have nothing to do with this.

Mr. Paul Crête: Okay. Because it's a known fact that Mr. Corriveau lobbied for Polygone, that he is a friend of the Prime Minister's and that he received $1 out of every $6 of the Sponsorship Program. So, Mr. Corriveau was not in touch with your office for sponsorship or visibility projects in any way shape or form.

Mr. Jean Pelletier: In no way.

Mr. Paul Crête: Very well. Thank you.

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

Mr. Proulx, please, you have eight minutes.

Mr. Marcel Proulx: Merci, monsieur le président.

Good morning again to you, Mr. Pelletier.

Mr. Jean Pelletier: Good morning again to you, Mr. Proulx.

Mr. Marcel Proulx: Mr. Pelletier, before going any further, a word was used earlier during an exchange between Mr. MacKay and yourself, and I would like to know what meaning you give to that word. When you said “unprofessional relationship”, did you use the word “unprofessional” in the sense of a friendly relationship?

Mr. Jean Pelletier: Professional as opposed to social.

Mr. Marcel Proulx: Very well. By “unprofessional” you meant not on a professional basis. Thank you.

It was discussed briefly during my first eight minutes, and I would like to go back to the selection of go-betweens, the much-discussed communication companies in the Sponsorship Program. You say—and I am not questioning your answer—that you were not involved in how these go-betweens were selected, but I would like to know who, as far as you know, was involved in choosing go-betweens, Mr. Pelletier.

Mr. Jean Pelletier: I don't know. That was handled by Public Works, not us.

Á (1145)

Mr. Marcel Proulx: You have told us about the meetings you had every two months at Mr. Guité's request and about meetings or discussions with Mr. Tremblay. I believe you said earlier—and I would like you to confirm this—that in those meetings, you would discuss files that were important for the PMO, where representations had been made to you or to the Prime Minister's Office. Did I understand you correctly? Firstly, Mr. Guité would come and see you in your office, I presume, or would talk to you on the phone. Was anyone else present with you and Mr. Guité, Mr. Pelletier?

Mr. Jean Pelletier: Jean Carle might have been present now and then.

Mr. Marcel Proulx: Was there anybody...

Mr. Jean Pelletier: At those meetings, we would discuss files that we had submitted, that had come through our office, to get an update.

These discussions were also a sounding board for Mr. Guité and, I imagine, his team; they would come with questions, they wanted to know, for example, if we knew anything about such and such an event in the Pontiac or Matapédia regions, if these were important events, etc.

I imagine that those who had to make up the list of events to be sponsored did not have personal and in-depth knowledge of each file and were not in a position to tell which event would be priority 1, priority 3 or priority 4. They needed information. Therefore Mr. Guité and his staff would ask us for information and consult us both on files that might not have come through the Prime Minister's Office but for which a sponsorship request had been made and on files that we had handled.

Mr. Marcel Proulx: Am I to understand, Mr. Pelletier, that you had the opportunity to systematically look at the list of projects that were considered for sponsorship by Mr. Guité and his staff?

Mr. Jean Pelletier: I did see lists. Did I see all the lists? Only God knows.

Mr. Marcel Proulx: I think we should ask Mr. Guité.

Mr. Pelletier, during those meetings when you saw the lists, when Mr. Guité consulted you on files from the Prime Minister's Office or, for example, Mr. Loubier's request, for Saint-Hyacinthe, which you mentioned earlier, you were trying to get information.

We started on that topic earlier but we sort of digressed, but who would regularly attend these meetings that you would have with Mr. Guité? Was there someone from the office of the Minister of Public Works?

Mr. Jean Pelletier: Not that I remember. There was Mr. Guité from Public Works.

Mr. Marcel Proulx: Yes, but was there anybody from the political staff of Mr. Gagliano or Ms. Marleau, as far as you know?

Mr. Jean Pelletier: From Ms. Marleau's office, no. Did Jean-Marc Bard from Mr. Gagliano's office attend these meetings? Perhaps once or twice.

Mr. Marcel Proulx: During that period, at the beginning, if I'm not mistaken, Mr. Gagliano's chief of staff was Mr. Tremblay. Mr. Tremblay might have been present with you and Mr. Guité. Afterward, when Mr. Tremblay became executive director, Mr. Jean-Marc Bard became Mr. Gagliano's chief of staff, if you recall.

Was Mr. Bard present at those meetings with you and Mr. Tremblay?

Mr. Jean Pelletier: Perhaps once or twice, but I would have to look at my day planner to give you a more precise answer.

Mr. Marcel Proulx: Okay.

Earlier, Mr. Pelletier, we started to talk about what I should probably not call your friends, but rather your acquaintances in advertising agencies. You said that you did not know this or that person, that you did not have business discussions as such about the sponsorship program.

Did you have discussions with employees of those agencies? I'm not thinking not necessarily of the main agencies but of people like Mr. Alain Renaud, for example--

Mr. Jean Pelletier: Certainly not.

Mr. Marcel Proulx: Fine. I wanted that to be clear.

As you know, since you said that you read Mr. Guité's testimony, Mr. Guité talks about being at war. At that time, he had authorization or at least signs that he could bypass the public service rules.

According to you, who would have been in a position to give him this authorization? I should remind you that yesterday we heard Mr. Dingwall who was minister of Public Works at the time and who categorically denied Mr. Guité's statement that Mr. Dingwall wanted or was able to change the rules of the game.

Do you have any idea who could have instructed Mr. Guité to bend the rules? Do you have any idea who could have instructed Mr. Guité to do so?

Mr. Jean Pelletier: I don't have the slightest idea, Mr. Proulx.

Mr. Marcel Proulx: You talked earlier with Mr. MacKay, I believe, of the communication contracts that might have been given out by the Prime Minister's Office. According to the org chart, Mr. Pelletier, who would have been responsible for such contracts in the Prime Minister's Office?

Mr. Jean Pelletier: It would have been either my executive assistant or Mr. Carle.

Mr. Marcel Proulx: All right.

I have one last quick question. Bearing in mind our committee's objective that you yourself have described so well earlier, could you tell us of any irregularity that you were aware of in this program?

Mr. Jean Pelletier: No, I'm sorry. I have learned a lot of things by reading the papers. I read in the paper about the infamous three reports by Groupaction which started the whole thing. I was already gone by then. I believe this was in February 2002 and I had left Ottawa in June 2001.

Á (1150)

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

[English]

Ms. Wasylycia-Leis please, for eight minutes.

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

May I begin by asking a rhetorical question? How long have you been rehearsing, Mr. Pelletier, to be so evasive in your answers to our committee?

Mr. Jean Pelletier: Madame, I didn't rehearse to be evasive. I rehearsed to remember the facts and remember what happened. I told this committee that I had the firm belief that my testimony was as if I was under oath, Madame. I'm sorry if my answers don't please you, but I am here to say my truth, not the truth you'd like me to say.

Ms. Judy Wasylycia-Leis: You can imagine, though, our dismay at having here the former chief of staff from the Prime Minister's Office from throughout the period of time that this sponsorship scandal was unfolding, the most significant scandal in the history of this country, yet the chief of staff from the Prime Minister's Office doesn't seem to know much of anything. It's really hard to believe.

Equally, it's hard to believe that as chief of staff for the Prime Minister's Office you, and I quote from your earlier comments, “weren't that aware of the machinery of government”. Equally surprising is your statement—and you've said this a few times—that your idea of ministerial responsibility is that ministers should be in sort of rough...in tune with their departments, but that they would ensure that the nitty-gritty was carried out by public servants. Now that's an interesting definition of ministerial responsibility.

I have to say one thing: it's been consistent. Between you and Mr. Gagliano and Mr. Dingwall we're getting a whole new political science definition of “ministerial responsibility”. But is that really the case?

I was a minister in a provincial government, and as a minister I was expected to know what was going on in my department. If something went wrong, I was held responsible. If something went wrong in one of the departments when you were chief of staff in the Prime Minister's Office, was the minister never held accountable and responsible?

Mr. Jean Pelletier: I'm not a university professor able to discuss what the system is, but you know, here in our system—and it might be changed—deputy ministers and civil servants are not accountable.

Ms. Judy Wasylycia-Leis: Ministers are.

Mr. Jean Pelletier: And frankly, I think that a minister who is accountable for everything cannot know and have his hands on everything. During the years I was in Ottawa I saw some ministers tracked in question period about facts they didn't know about, things which in the end, with the Auditor General's report, were far more minor than when they were exploited.

So as chief of staff to the Prime Minister I could not know what was going on everywhere. I tried to manage my shop, and I think I managed my shop with a sense of responsibility. But I didn't try to manage other shops or other ministers' offices or bureaucratic offices.

I'm sorry if this displeases you.

Ms. Judy Wasylycia-Leis: Fair enough, but I would have thought that as the chief of staff in the Prime Minister's Office it would have been your job to meet with all incoming ministers and advise them of their responsibilities.

Mr. Jean Pelletier: No, Madam, it was not up to the chief of staff for the Prime Minister to do that. It was up to the Clerk of the Privy Council and his staff.

Ms. Judy Wasylycia-Leis: The Prime Minister's Office and the chief of staff in that office also play a pivotal role in terms of the machinery of government, and--

Mr. Jean Pelletier: No, Madam, I'm sorry--

Á (1155)

Ms. Judy Wasylycia-Leis: --it's hard to actually understand your complete lack of involvement in--

Mr. Jean Pelletier: I'm sorry, Madam, I clearly said that the office of the Prime Minister was for political aspects. Administrative and legislative aspects were for the deputy ministers and the bureaucracy.

I'm ready to give answers on what was my responsibility, but unfortunately I can't answer for the responsibility of others.

The Chair: No, Mr. Pelletier. I think you're required to answer what you know, not what you believe are your responsibilities.

Thank you.

Mr. Jean Pelletier: But Mr. Chairman, I must say what the limit of my responsibility was to explain the answers I give.

The Chair: You are required to answer on what you know, not within what you consider to be the terms of reference of the job that you had as chief of staff for the Prime Minister.

Mr. Jean Pelletier: But am I to accept the blame of the member because of her interpretation of my duties?

The Chair: No. You can answer a question and say “I have knowledge and this is what I know”, or you can say “I have no knowledge. I do not know.” You may explain the difference between the PMO and the PCO and your responsibilities as the chief of staff, primarily, I presume, within the PMO--we had a Clerk of the Privy Council for the PCO. But you can't say “That was not my responsibility; therefore, I will not answer.” You have to answer what you know.

Mrs. Marlene Jennings: I have a point of order, Mr. Chair. The witness did not say “I will not answer.” The witness was doing exactly what you just explained, which was to give an explanation of his responsibilities as chief of staff in the Prime Minister's Office, to attempt to explain the responsibilities of PCO as they pertained to the administration, the bureaucracy, the public service, etc., and then to continue to explain what he knew. I think the witness was doing exactly what you just explained, so I would suggest that perhaps you not reproach the witness for following your instructions.

The Chair: The question was asked by Ms. Wasylycia-Leis. The response was “It was not within my responsibilities”. I say the answers are not to be confined to his responsibilities; the answers are to be on what Mr. Pelletier knows.

Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: Mr. Chairperson, I think the witness is being evasive, because in fact it is not impossible to understand the links between something going wrong in a department that is part of the minister's responsibilities and the political ramifications. For the witness to suggest he was not involved and was out of touch with all of these aspects we're talking about is just not credible.

I would think, Mr. Chairperson, that if back in 1994 Allan Cutler came forward to his departmental officials in Public Works about wrongdoing, that message would have gone directly from the minister or the minister's political staff to you as the chief of staff with a red alert saying there's something going on. Is that not the case?

Mrs. Marlene Jennings: I have a point of order, Mr. Chair. I believe that as chair you've made it perfectly clear to all members of this committee particularly--and I assume those who have attended either all or the majority of the meetings are aware of your direction--that it's very important when asking a question not to give out information that is inaccurate. I think it would be important for any member who is using testimony that was brought before this committee to do so accurately.

Mr. Cutler testified that he became aware of irregularities in 1994, when his section was merged with that of Mr. Guité, but in fact did not signal those irregularities to Mr. Guité's superior until May or June of 1996. His formal complaint was, as he testified, the first time he had brought it to the attention of Mr. Guité's superiors--I'm not talking about bringing it to Mr. Guité's attention, but to the attention of Mr. Guité's superior. His formal complaint was laid in the spring of 1996 and resulted in an internal audit, which then resulted—

The Chair: Thank you, Ms. Jennings. I'm going to say--

Mrs. Marlene Jennings: —in the 1996 Ernst & Young audit.

I think it's important that the member, when asking a witness questions based on that testimony—

The Chair: Madam Jennings, please. I hear you, Madam Jennings.

Â (1200)

Mrs. Marlene Jennings: --portray the testimony accurately.

The Chair: Madam Jennings, you don't have the testimony of Mr. Cutler in front of you. Neither does Madam Wasylycia-Leis, and I don't have the testimony in front of me. Mr. Cutler made the formal complaint in 1996 through his union because he couldn't get it on the record before that.

Do you have anything to say, Mr. O'Neal?

Mr. Brian O'Neal (Committee Researcher): Mr. Chairman, I just wanted to point out that the letter to Mr. Stobbe, the assistant deputy minister at the department, signalling Mr. Cutler had a problem was dated May 13, 1996, and is from the Professional Institute of the Public Service of Canada.

The Chair: And that was when he got the union involved because he couldn't get it done through normal channels. He had to--

Mrs. Marlene Jennings: Mr. Chair, I have a point of order. That is a mischaracterization of Mr. Cutler's testimony. Mr. Cutler at no time in his testimony stated he had attempted to bring to the attention of Mr. Guité's superiors the irregularities before he filed that specific complaint.

The Chair: Well, I disagree with you, Madam Jennings, but we're not here about Mr. Guité.

Mrs. Marlene Jennings: Then I would ask the chair to pull out the exact testimony showing that my characterization is incorrect.

The Chair: No, no, I'm going to go back to Ms. Wasylycia-Leis. Please continue.

And if your dates are not correct, you can make approximations, and so on. If you're not quoting somebody's testimony, you shouldn't refer to somebody's testimony unless you can say you're paraphrasing it, or you believe....

Nonetheless, no misleading comments on the record, please.

Ms. Judy Wasylycia-Leis: Mr. Chairperson, I was not trying to mislead the witness or this committee.

The Chair: I know you're not.

Ms. Judy Wasylycia-Leis: I have the testimony, or at least the synopsis of evidence, from Allan Cutler in front of me. I don't have the actual verbatim transcript.

This is still a point of order, Mr. Chairperson, on the issue of Mr. Allan Cutler.

I was not suggesting anything other than what he had told us, which was that he had tried very hard to get this information out and to have authorities act on it before he had to go the route of going through his union. In fact, he said to us in his testimony—

The Chair: We're not going to go off on a tangent here, Madam Wasylycia-Leis. Just continue on, please.

Ms. Judy Wasylycia-Leis: All right.

Whenever Allan Cutler passed on this information through the channels at Public Works, eventually it did get to the Deputy Minister of Public Works.

One would think, based on your own analysis, that the information would have gone to you, because of the political consequences. Were you made aware of Allan Cutler's concerns, at least by 1996, and what did you do about Allan Cutler's testimony?

Mr. Jean Pelletier: I'm sorry to say that the member doesn't seem to know well how the government functions.

If Mr. Cutler—who I don't know, and I had never heard about before he testified before you—had anything to say, it would have gone to his deputy minister. Then if that were to go further up, his deputy minister would take it to the Clerk of the Privy Council. It didn't at all involve the responsibility of the PMO; it was a PCO matter.

It's quite normal, with the division of responsibilities, which I was very clear about, that we had absolutely nothing to do with that kind of problem.

Ms. Judy Wasylycia-Leis: All right, I'm not going to get any further with you on that issue.

Mr. Jean Pelletier: And I was not informed and not involved.

Ms. Judy Wasylycia-Leis: Let me then talk about your role in terms of the politics of the day.

The Chair: You have 30 seconds.

Ms. Judy Wasylycia-Leis: Did you subtract all of my time for these points of order?

The Chair: Yes, the clock was stopped.

Ms. Judy Wasylycia-Leis: Your job, clearly, was to work hand in glove with the ministers who were appointed political ministers for their provinces or regions. So you would have worked directly with Mr. Gagliano; you would have worked directly with Mr. Dingwall. And you would have talked about the sponsorship file and about ensuring the best bang for the buck in terms of the political requirements of the day, however you want to define them.

So could you tell us a bit about those meetings and what you discussed in terms of the sponsorship file?

Mr. Jean Pelletier: Madam, I should say that the rumour that everything is centralized at the PMO is a false rumour. Although I've heard that so many times, I'm sorry to say that it's false.

Mr. Chrétien's instruction was not to give instructions to the ministers except if he asked us specifically to; but in the normal course of action, it was to coordinate the global action of the government and the delivery of the policies, and not to take decisions at the PMO for the ministers.

The ministers took their decisions by themselves, or at the level of the cabinet committee. That was how it functioned.

So if you're asking me if I had regular meetings with Mr. Dingwall or Mrs. Marleau or Mr. Gagliano about the delivery of any program, the answer is no.

Â (1205)

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

Mr. Toews, please, for eight minutes.

Mr. Vic Toews: Thank you.

We heard earlier testimony that back in November of 1994, shortly after Mr. Dingwall became the Minister of Public Works, the oversight function in terms of the contracting was collapsed. Essentially, procurement and oversight were put together in one body, with Mr. Cutler then reporting to Mr. Guité. It is certainly of some concern to the committee that those separate functions were collapsed.

Mr. Cutler indicated that prior to 1994, from 1990 to 1994, there were no problems in that respect. However, with the advent of Mr. Dingwall—or certainly, concurrently with it—problems began. Now we heard testimony from Madame Marleau that essentially she went in to clean up the department; in her words, she “cleaned it up big time”.

What specific instructions did Madame Marleau receive from the Prime Minister when she became the Minister of Public Works?

Mr. Jean Pelletier: Sir, the mandate letters given by the Prime Minister to a minister is the PCO's responsibility, not the PMO's, and machinery of government is the responsibility of the Privy Council Office and not the Prime Minister's Office. So we have nothing to do with the machinery of government.

No, we had nothing to do with instruction letters from the Prime Minister to his minister.

Mr. Vic Toews: If I could just--

The Chair: I'm going to interrupt here.

Mr. Jean Pelletier: It might have been different in other governments--

The Chair: Again, Mr. Pelletier, you're indicating that because it was PCO's responsibility rather than PMO's responsibility, the PMO had nothing to do with it--I think I'm quoting your words. But the point I put to you is, do you have knowledge on this issue?

Mr. Jean Pelletier: No, sir.

The Chair: Okay, if you have no knowledge, fine.

Mr. Jean Pelletier: No. It was not our stake, and I have no knowledge on these things. Sorry.

Mr. Vic Toews: So as the Prime Minister's chief of staff, you had no knowledge in the appointment of Madame Marleau as the minister? You were not consulted on that issue at all?

Mr. Jean Pelletier: I may have been consulted by the Prime Minister when he formed his cabinet, but after, the instructions he gave to a minister went through the Clerk of the Privy Council, not the chief of staff of the Prime Minister.

Mr. Vic Toews: All right.

Mr. Jean Pelletier: It might have been different under other governments, but under Mr. Chrétien's term of office it was very clear that they were administrative and legislative; we were policies.

Mr. Vic Toews: All right. So when Madame Marleau then was transferred out after being there for a short period of time, she had indicated that she had “cleaned it up big time”. Did you have any conversations with Mr. Chrétien, the Prime Minister, as to Madame Marleau's success in cleaning up the department at that time?

Mr. Jean Pelletier: I don't remember having had any conversation with the Prime Minister on this subject. But now that I have given my answer, I'm a bit reluctant to talk about the private conversation I had as chief of staff with the Prime Minister. I'm very reluctant in speaking to that.

The Chair: Mr. Walsh, can you give us some direction on this, please?

Mr. Rob Walsh: Mr. Chairman, in my view, notwithstanding the witness's reluctance, the question seemed to me appropriate and the witness ought to provide that.

Mr. Jean Pelletier: I have given the answer already.

Mr. Rob Walsh: The witness ought to be able to answer with regard to that conversation and not withhold the information, I would have thought.

The Chair: Okay. Could you please answer the question, Mr. Pelletier?

Mr. Jean Pelletier: I already did, sir.

The Chair: Would you answer it again, please?

Mr. Jean Pelletier: I had no conversation with the Prime Minister on that subject.

Mr. Vic Toews: So you've indicated that ministers, of course, knew about the sponsorship program in 1997. I don't know what the extent of ministers' knowledge was about the program prior to that time--the advertising contracts, the unity file--but you've indicated that this was the most important file or one of the most important files in the Prime Minister's Office. You had no discussions with the Prime Minister in respect of the minister who was in charge of that particular file?

Â (1210)

Mr. Jean Pelletier: I indicated that when there were rumours, I told him about the rumours, and he told me to see the minister, which I did. I saw the minister, and there was this internal audit going on, and so on.

Mr. Vic Toews: That's what I find curious. You said you had no involvement in dealing with ministers. Now you are sent directly by the Prime Minister to speak to a minister.

Mr. Jean Pelletier: But I said that the Prime Minister in his instruction had said that we should not give orders to individual ministers except in a case where he would request us specifically to do that.

In that case, he asked me to see the minister, so I saw the minister. I inquired about it and I got answers, which I relayed to the Prime Minister, and after all.... You know about the rest.

Mr. Vic Toews: I find this very curious. You don't know anything about the appointment of the minister, you don't know anything about the mandate of the minister, yet when there is a problem with the minister in that department, you're asked by the Prime Minister to go and talk to the minister about that particular problem.

Mr. Alan Tonks: On a point of order, Mr. Chairman, if I may, we are advised that you should give the complete context in which a question is asked.

The context of the question to which Mr. Toews is making reference was that there were some newspaper articles that had implied or had developed scenarios with respect to the sponsorship program. That was the complete context, and Mr. Pelletier did answer that particular question.

Now we're segmenting that context. That may be good in the--

The Chair: We're not going to have a debate across the floor.

Mr. Alan Tonks: —the jury room, but I don't think it's appropriate in this room.

The Chair: I have a little concern myself, Mr. Tonks. The Prime Minister is the Prime Minister, and he appoints all ministers to perform the functions of government. He carries an awful lot of weight.

Mr. Pelletier has been talking about the Prime Minister's Office coordinating. I always thought the Prime Minister did more than coordinate. It was his vision, his ideas, and in this particular case, keeping the country together was his most important file.

Here we have a disconnect, in my perception, between the Prime Minister having the hands-on management of government, and this coordination role. His chief of staff may or may not have had some discussions with the ministers. They all get together once a week at cabinet—

Mr. Alan Tonks: He also reads the newspaper, Mr. Chairman.

The Chair: No, no, I listened to you, and you will listen to my response.

Therefore I have this problem in trying to understand. There seems to be no dialogue in the cabinet between the Prime Minister's Office and the ministers and so on. The picture doesn't sit well with me, so I think Mr. Toews' trying to find out the relationship between the Prime Minister and the Prime Minister's staff—the PMO and the chief of staff—with ministers and regarding this particular file is a legitimate line of inquiry.

Mr. Toews, please.

Mr. Vic Toews: That's my point. My point is that whenever we've raised issues with this witness about the sponsorship program, he says “It's the PCO.”

He was given specific instruction by the Prime Minister, as the head of the PMO—

A voice:— [Inaudible—Editor]—

Mr. Vic Toews: Let me finish.

Hon. Robert Thibault: Is this on his time, or as a point of order?

The Chair: The point is, the clock stops during points of order. So please—

Hon. Robert Thibault: But is this a point of order?

The Chair: No, it's not a point of order.

Continue, Mr. Toews.

Mr. Vic Toews: All right.

I understand the Liberals are a little sensitive about this issue, but my concern here is that every time we ask about an issue related to ministers, “It's the PCO.”

Now he's being sent by the Prime Minister, Mr. Chair, to talk to a minister. I want to know what the Prime Minister asked this individual to say to the minister, and what the minister said back to him to carry to the Prime Minister.

Â (1215)

Mr. Jean Pelletier: Sir, if you allow me to speak about how it was organized and functioning, this government—

Mr. Vic Toews: Let's deal with the specific issue. Then you can say whatever you want in respect to whatever else you want.

Mr. Jean Pelletier: Would you repeat your question, sir, please?

Mr. Vic Toews: Now you are specifically in this case asked by the Prime Minister, going outside the regular protocol, to go to a minister and ask about an administrative detail inside the department—something the PCO usually does. You now say you didn't say, “Well, the PCO should maybe do that.” No, you went to the minister.

What were your instructions from the Prime Minister to the minister? What did you say to the minister? What did the minister say to you to take back to the Prime Minister?

Mr. Jean Pelletier: When I saw in the paper and then on the street that rumours were growing about possible problems in the delivery of the sponsorship program, I thought it my duty to report that to the Prime Minister, because one of the duties of his chief of staff is to protect the Prime Minister and the political credibility of his Prime Minister.

I thought that all these rumours and these articles in the paper could affect the credibility of the government, so I reported the fact to the Prime Minister. The Prime Minister said “All right. Would you ask the minister what it's about?”

So I went to see the minister. The minister said he himself had read the same papers, had recorded the same grumbling about the delivery of the program, and that there was an internal audit going on—or decided. Had it started, or was it decided? I can't remember. But anyway, it had been decided.

So I said to the minister: “I will let the Prime Minister know about that. But when the internal audit is finished and you get the results of the audit, would you please let me know about the results and what you will do after that?” He said yes.

Mr. Vic Toews: Why were you getting involved with the machinery of government at this particular time, when you said it was not your function to get involved in the machinery of government?

Mr. Jean Pelletier: It's not a question of the machinery of government.

I reported to the Prime Minister that I had seen the minister and that an internal audit was going on. The Prime Minister said “Keep me informed about the results”.

When the minister got the results of the internal audit, he came to see me and said “Look out. We have the results. There's nothing criminal, I'm told, but there are, as I said to you earlier, des problèmes de gestion, and there's a list of recommendations to put things back into place. I asked my deputy minister to put these recommendations in place, and until they're in place, the delivery of the program would be suspended.”

I got back to the Prime Minister and reported on what the minister had told me about the conclusion of the internal audit and the decision he had taken regarding the results. That's it. Then the Prime Minister said to me, “Okay, the minister has done his job.”

The Chair: Thank you, Mr. Toews.

Madam Jennings.

[Translation]

Mrs. Marlene Jennings: Thank you, Mr. Chair. Thank you again, Mr. Pelletier, for your testimony.

Mr. Pelletier, I'd like to come back to a question that my colleague Mr. Proulx raised to get some clarification. Mr. MacKay, who is a Conservative-Alliance member, questioned you on the relationships that you might have had in private with employees of certain agencies. You answered him in English. He used the term “unprofessional” and you said yes.

As a Quebecker, I think that it's outrageous that a member of the official opposition would try to ridicule a witness whose mother tongue is French and who tries to accommodate the member by speaking English when this member is more or less a unilingual anglophone.

Â (1220)

[English]

Mr. Peter MacKay: I have a point of order, Mr. Chair. This Liberal member is totally mischaracterizing questions I put to this witness and attributing some kind of motive for doing so that is completely inappropriate. I know there are sensitivities over there about the questioning that's going on here, but these were the words of this witness, not something I attributed to him or tried to mock him over. These were his words. The vice-chair is a little bit outside the bounds here.

The Chair: Thank you, Mr. MacKay.

Ms. Jennings, the time is your time. It's not to repeat somebody else's time. Therefore, focus on your intervention, please.

[Translation]

Mrs. Marlene Jennings: Yes, I will focus on my interventions and if I want to clarify a point which in my mind was not clear, I will use my time to do it. Thank you, Mr. Chairman.

I find it outrageous that opposition members, the Conservative-Alliance members—especially Mr. MacKay who is now deputy leader or something or other—would try to ridicule a French speaking witness by creating confusion about the terms used. Now, my question...

[English]

The Chair: Ms. Jennings, I don't think we need to have references about language in this place. We have two official languages here. Both are totally appropriate. To make comments about one or the other is off the mark. So please refrain from those kinds of statements.

Mr. Vic Toews: I have a point of order. Mr. Chair, I was sitting next to Mr. MacKay. I saw absolutely no ridicule on his part.

Hon. Walt Lastewka: What is the point of order?

Mr. Vic Toews: The point of order is this. Every time we don't use exactly the same words that the witness does, this is the member who objects on a point of order. Mr. MacKay used a particular word that the witness himself used. Perhaps it wasn't the best choice of words. I understand that it may well be the second language. But I can assure everyone that there was not one gram of ridicule in that. The point is that we have tried to be fair to every witness, and we have tried to respect Ms. Jennings' comment that whenever we summarize a witness's evidence, we should do it accurately. Now she is criticizing us for using the exact same words.

The Chair: Madame Jennings, again I would ask you to use the time for your testimony rather than rephrasing and characterizing other testimony.

Mrs. Marlene Jennings: Mr. Chair, if in my view there has been confusion created in the mind of a witness by a particular term that is used, and that confusion may have been caused by the witness's mother tongue being the other official language, then I feel it incumbent on me as a member of this committee to clarify that confusion. In my view, the clarification that was attempted earlier was not sufficient.

I think I have a right to make that clarification. The witness may tell me, “No, I understood perfectly and I'm satisfied with the clarification I made in response to a question from Mr. Proulx”, but the witness may wish to bring further clarity to the particular issue. Therefore I think I am perfectly justified in using my eight minutes to make a clarification if I wish, to solicit new testimony if I wish.

The Chair: Madam Jennings, you may feel that way, but if you wish the committee to be clarified, you can raise it on a point of order, not on your intervention. I give all people a great deal of latitude to follow a line of questioning as they so desire.

Â (1225)

[Translation]

Mrs. Marlene Jennings: I have a point of order.

[English]

The Chair: It's not for me to determine what is relevant in your mind and what is not, but if you're trying to clarify other people's testimony, you would do it on a point of order and not on your intervention.

Please continue.

[Translation]

Mrs. Marlene Jennings: I have a point of order, Mr. Chair.

Mr. Pelletier, when the Conservative-Alliance member Mr. MacKay questioned you earlier...

[English]

The Chair: Madam Jennings, if you have a point of order, you address it to the chair.

[Translation]

Mrs. Marlene Jennings: Mr. Chair, the Alliance-Conservative member, Mr. MacKay asked a question earlier to Mr. Pelletier, former chief of staff to the former prime minister, the Right Honourable Jean Chrétien. The question was about the nature of the relationship that he had in private with individuals who had positions in advertising firms or who owned them.

Mr. Pelletier used the English equivalent of the expression “non professionnelle” to describe these relationships. This term is quite correct in French. Obviously English is not Mr. Pelletier's mother tongue and he translated the French term literally. Mr. MacKay who knows French quite well—he claims to be bilingual—used this misunderstanding, I believe...

I'm not finished, Mr. Chair, because in English, the term “non professional” has a very negative connotation.

[English]

The Chair: Madam Jennings, I know what you're trying to say. Mr. Pelletier clarified for the record afterwards when the word “unprofessional” was raised—and I was a little concerned about “unprofessional”, as non-professional and unprofessional have two entirely different meanings in English—that it wasn't a meeting on a professional basis. It was on a social basis that he met, which is in a non-professional relationship, an amicable, friendly relationship that did not pertain to his job. Mr. Pelletier clarified that quite well and was quite aware of the situation. So your point is ruled out of order.

You have an intervention. Please continue.

Mrs. Marlene Jennings: How much time do I have, Mr. Chair?

The Chair: You have used up only one minute and 52 seconds.

[Translation]

Mrs. Marlene Jennings: Mr. Pelletier, I have a few questions for you now that...

[English]

The Chair: Mr. Jordan, can you please refrain from comments across the floor? We want to hear the intervention.

[Translation]

Mrs. Marlene Jennings: Mr. Pelletier...

[English]

The Chair: Mr. Jordan, please.

[Translation]

Mrs. Marlene Jennings: Mr. Pelletier, I have a few questions to ask you now that the meaning of the term that you used earlier has been made clear for all of us here today. I thank the committee chair for this clarification.

You said that staff in the Prime Minister's Office could have had and probably had regular contacts with Mr. Guité and his staff, either because requests for federal sponsorship came directly to the Prime Minister's Office or because members from all political parties would make sponsorship requests directly to the Prime Minister's Office or because Mr. Guité would contact the Prime Minister's Office directly to indicate that requests had been received, that he did not know much about the events and that he needed more information.

I asked you the names of these employees and you mentioned six in the Prime Minister's Office.

Since I first asked you that question, have you been able to identify these six people who worked in the Prime Minister's Office or at least a few of them?

Mr. Jean Pelletier: I don't know where you get the number six.

Mrs. Marlene Jennings: You mentioned it.

Mr. Jean Pelletier: It might be four or five. I have not yet really thought about it, madam.

Mrs. Marlene Jennings: But you will and you will give the list of names to the chair through the clerk?

Mr. Jean Pelletier: Of course.

Mrs. Marlene Jennings: Perfect.

You also said that the issue of Canadian unity was a priority for the former prime minister, Mr. Chrétien, and that the policy on sponsorship, better communication, etc. was part and parcel of this priority to heighten the Canadian federal government's visibility and communications, particularly in Quebec, but also in the rest of Canada. You say that this is what the policy arose out of, or this sponsorship program, and that never once did you or any staff member of your office who dealt with political issues interfere in the administration and management of this program.

We have received testimony from the current Deputy Minister of Public Works, Mr. David Marshall. He told us that, in his experience, when the government decides to make something its number one priority and wants to get results as soon as possible, the zealousness of certain officials may cause them to take it upon themselves to breach or bypass Treasury Board rules and policies.

Did it ever worry you, when you talk about sponsorships and visibility being the number one priority, that despite the Treasury Board's policies on procurements, selection, etc. bureaucrats might decide on their own prerogative to set aside the rules in order to get results as quickly as possible because this was the number one priority of the Prime Minister?

It is a long question, but I think you understand what I mean.

Â (1230)

Mr. Jean Pelletier: Madam, it is clear that the unity file, in all its aspects, was a priority for the Prime Minister, and the message was clear throughout the entire government structure. It was a file that drew everyone's attention as a priority.

Now, neither the Prime Minister nor the Prime Minister's Office ever asked for the rules stipulated in the Financial Administration Act and Treasury Board rules not to be complied with, even if it was a priority issue.

I was not an administrative bureaucrat in the government. If the current Deputy Minister of Public Works told you what he told you, I presume that he has reasons for doing so, but those are his statements. They do not concern the actions taken by the Prime Minister's office on this issue in any way.

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

[English]

The Chair: Merci, Madam Jennings.

Monsieur Crête, for eight minutes.

[Translation]

Mr. Paul Crête: Thank you, Mr. Chairman.

Mr. Pelletier, I want to go back to the meetings that you had with Mr. Guité. Who was present? What was on the agenda? Were there minutes for the meetings? What resulted from these meetings?

Mr. Jean Pelletier: Firstly, there wasn't an agenda. Next, there were no minutes for the meeting: it was an open and unstructured discussion between him and me. According to what I'm told, Mr. Carle and Mr. Gagliano may have been present.

We talked about whether or not the program was working and going well. He always asked for a little more money, which is normal. Following that, we checked on the status of a given application or file. He asked us if we were aware of a certain event that was the subject of a grant application, and so on. Put simply, it was an exchange of information.

Mr. Paul Crête: Did you go over applications of concern?

Mr. Jean Pelletier: I was asked earlier if I had seen all of the lists of applications. I saw some of them, but did I see all the lists? I have no idea.

Mr. Paul Crête: But during these meetings, you dealt with one request after another in order to determine which ones should be accepted, and which ones, for any given reason, should not be.

Mr. Jean Pelletier: I did exactly what I am doing here: I answered questions.

Mr. Paul Crête: Questions asked by Mr. Guité?

Mr. Jean Pelletier: But of course: Mr. Guité asked me questions on certain files; so I answered them.

Mr. Paul Crête: Ms. Huguette Tremblay told us that she received regular calls from your office. In these cases, it certainly wasn't your office that was asking questions.

Mr. Jean Pelletier: Sir, you asked me a question on meetings I had with Mr. Guité: I then answered you on that matter. Now, you are talking about another issue.

Mr. Paul Crête: No, Mr. Pelletier. It is the same issue, given the fact that there is certainly a link between the fact that you had these meetings...

Mr. Jean Pelletier: Yes, but between telephone calls...

Â (1235)

Mr. Paul Crête: I'd like to finish my question. You had regular meetings with Mr. Guité, and between these meetings, telephone calls were made between your office and that of Mr. Guité.

You say that he had a list of activities that were evaluated, he asked you if you had any information, and you answered his questions.

I want to know if the telephone calls made following these meetings were related to these meetings.

Mr. Jean Pelletier: I presume so. I refer to the issue that I cited as an example earlier, the Saint-Hyacinthe event. At a certain point in time, I would have said to Mr. Guité that we should really push this file, because it was a community celebration, and that we shouldn't take advantage of it to play party politics. In addition, I would have also told him that the people of Saint-Hyacinthe were celebrating an important event in their community and that if he was able to help them, in my opinion, everyone—the mayor, the priest, the bishop and the member for Saint-Hyacinthe—would be happy.

Following that, it may well be that I asked a person in my office to enquire about the status of the file and that this person would have called someone in Mr. Guité's office. I'm convinced that this person did not speak directly to Mr. Guité, but rather to someone from his office. The person would have certainly asked about where the Saint-Hyacinthe file stood, if a timely decision had been made, and if the people concerned knew whether or not their funding request was approved.

Mr. Paul Crête: Mr. Pelletier, did you know, at that point, that for a $125,000 application, a $96,000 commission would be paid out?

Mr. Jean Pelletier: Not at all.

Mr. Paul Crête: You were not aware of that?

Mr. Jean Pelletier: Not at all. I repeat that we never dealt with program management, whether it be the choice of middlemen, contracts and their terms and conditions, the sponsorship conditions, commissions or anything relating to this.

Mr. Paul Crête: You are directly contradicting yourself, Mr. Pelletier. You told me that during your meetings, you studied the list of sponsorships. Yet you are now saying that you never dealt with the management of the program. Where does the truth lie?

Mr. Jean Pelletier: I'm saying that once the decision was made, Mr. Crête, and once we were ready to allocate a certain amount to party X, the way it was delivered no longer concerned us. We didn't get into that.

Mr. Paul Crête: How can you tell us that you were not responsible for the influence you held because of the role you played, when you were holding meetings with the person who was managing the administration of this program? You have repeatedly told us that you had absolutely no responsibility and no link on the administrative front.

Mr. Jean Pelletier: I find it amusing that you talk to me about being responsible for my influence. Is one ever responsible for one's influence? Honestly, sir, one is not responsible for one's influence: one either has influence or one does not.

Mr. Paul Crête: Mr. Pelletier, did you not feel responsible, given your task, for the effects this type of meeting would have on the choice of sponsorships? Is this what you're trying to tell me?

Mr. Jean Pelletier: Of course not, sir. All the better if my representations were able to advance certain files, including that of your colleague. I have nothing against that and I think I was doing my job. I think that an MP submitting a grant application tries to use as much influence as he or she can on the person he or she is addressing, to get a positive response. It is exactly the same thing.

Mr. Paul Crête: But what you're telling us is--

Mr. Jean Pelletier: In that situation, you do your job well, and did mine well.

Mr. Paul Crête: You are telling us that you were not aware of the influence you held at that time. You are telling us that there was no political leadership, that the political role was to establish the rules, but in this case, there were two internal reports: the report of 2000 and the Ernst & Young report of 1996. Despite the corrective measures that were contained in those reports, one thing is certain: there was overbilling, cronyism and non-compliance with the rules.

Who was responsible for that, Mr. Pelletier?

Mr. Jean Pelletier: I don't know, sir. It's up to your committee to find out. I am telling you the story that I know, that of the Prime Minister's Office, on this issue. I am being as clear as possible. As for the rest, I am not aware. You will be hearing from other witnesses, and you will ask them.

Mr. Paul Crête: That means that you were chief of staff in the Prime Minister's Office, you asked Mr. Gagliano if there were audits, he told you that there was an internal audit and that following that, you did not check to see if there was someone who was ultimately responsible for that issue.

Mr. Jean Pelletier: Sir, I want--

Mr. Paul Crête: Is that what it means?

Mr. Jean Pelletier: Sir, I clearly said that when the internal audit was completed, the minister gave me the results of the audit and apparently there was absolutely nothing criminal. Secondly, he told me that there were some administrative and management problems and that there were suggestions put forth—I believe there were 37, if I recall correctly—in order to straighten out the management and administration of the program and put things right. At that point, the minister told me that he had asked his deputy minister to put these recommendations into effect, so that things would go back to being the way they should be. In the meantime, the program, the program administration was suspended.

So, I took what he told me and I shared it with the Prime Minister because I thought that the Prime Minister would have liked to know, since he had asked me, the results of all that. From that point on, it was no longer my responsibility, as chief of staff in the Prime Minister's Office, to follow up on the administration of all expenditure programs across all departments. I am sorry, but we are not equipped for that, it's not our job.

Â (1240)

Mr. Paul Crête: Mr. Pelletier, do you realize that you are using the same line of defence as those ministers who told us they had no ministerial responsibility? In your case, as chief of staff, you had influence—you said so yourself—but you're saying you're not responsible for the outcome of this influence.

Let me repeat the question. In that case, who is responsible for the huge amount of money that was wasted in this program, where money was diverted on a large scale and in a systematic way? You were at the top of this structure, this pyramid. Who is responsible for this?

Mr. Jean Pelletier: Sir, let me first say that I'm not here to protect anyone. I did not work on my testimony this morning with anyone, except my lawyer. I am here for no reason but to tell the truth as I know it. I have no one to protect. I am telling exactly what happened. I'm sorry if politically it does not suit you. I am very sorry, but I cannot say anything more than the truth as I know it, without restriction. I've tried to be as accurate and detailed as I could, but who is responsible for the mess, if there is one? I do not know.

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

Mr. Mills, I understand that you're going to be sharing your time with Mr. Cuzner for the next eight minutes.

[English]

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

Mr. Chair, I think we should all remember that we were talking about 1,986 projects over a five-year period. Canadians forget that.

Mr. Crête referred to this project in Saint-Hyacinthe. I think he was trying to let Canadians think this was only commissions that were paid. Again, I come back to my whole focus on production costs. There were obviously production costs in there. We have to make sure, before we make judgments, that we have all the X-rays.

One of the concerns I have, colleagues, about the focus and the direction we've been taking this morning is that Canadians must think that the sponsorship project to save Canada and to promote the Government of Canada presence in Quebec only happened there. I only want to remind members and remind Canadians about a few of the other projects that this project benefited. I'd like to read a few of them into the record, projects that happened outside Quebec.

The Chair: A point of order, Mr. Toews?

Mr. Vic Toews: Well, I'm only wondering--

Mr. Dennis Mills: This is my time

Mr. Vic Toews: Is Mr. Mills now giving testimony that we can examine him on with respect to whether these are the same sponsorship programs? It's something I wouldn't mind examining Mr. Mills on, at a later date, but is it really the right time to be bringing evidence before us? We have witnesses who can actually bring evidence before us, rather than having political speeches from Mr. Mills.

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

I think it was with Madam Wasylycia-Leis yesterday when I said that members have the right to use their time as they see fit. If Mr. Mills wants to talk about the Bluenose or other programs that were sponsored, it's within the confines of our examination, so I'm sure he will.

Mr. Mills.

Mr. Dennis Mills: In response to Mr. Toews, I'd be happy to be a witness at a later point--

Â (1245)

The Chair: But you haven't been asked, Mr. Mills.

Mr. Dennis Mills: —if he asks me to, on the projects I've been involved in as a result of the sponsorship program, from World Youth Day, which I'd be happy to be a witness on, to the family farm tribute, to others I've been on. I'd be happy to be a witness, sit in this chair, and show that not only did we provide value for money, but in fact we did impact studies and showed that those projects had an economic benefit to Canada.

At any rate, that offer is open to Mr. Toews any time he wants to put me in as a witness.

The Canadian Association of Journalists convention, the Canadian Human Rights conference, and the Canada Winter Games are all projects outside Quebec. I think it's important that Canadians understand. The Naganoads, all of the CFL teams, all of the NHL teams, the Pan Am Games in Winnipeg, Corner Brook Canada Games, the Young Presidents Organization, the Youth and Learning community newspaper are all outside Quebec.

Other projects were research services for the Public Policy Forum; Skate for Hope in British Columbia; Tennis Canada and their tour of young tennis players all across Canada; the Molson Indy in Toronto and in Vancouver; the Lobster Festival 50th anniversary; the National Orchestra of Canada; the New Brunswick Games; the Nova Scotia International Air Show; Opportunities Rural Ontario; Lacrosse Game of the Week; Laurentian University 25th anniversary; Halifax 250th birthday; East Coast Music Awards; the Edmonton 2001 World Track and Field; the Edmonton Drillers Soccer Club; the Canada Games in Brandon, Manitoba; the Arctic Games; the Police and Fire Games; the China and Team Canada TV series; the Italian Veterans Association of Niagara Falls; the Aboriginal Peoples Television Network; the Acadian Food and Culture Festival; and the Blue Jays amateur hit-run-throw.

Colleagues, I think that it's fair ball to ask the toughest questions of any of our witnesses. I've been driving hard here for eight weeks to get the people in front of us who received the money. We've been driving hard to ask them, “What did you do with the taxpayers' money?”

I think we should ask the agencies. I know the Bloc Québécois supports that the chief financial officers—

The Chair: Your time is up, Mr. Mills.

Mr. Dennis Mills: Is my time up?

The Chair: Your four minutes is up. You're eating into Mr. Cuzner's time now, if you continue.

Mr. Dennis Mills: I only want to wrap it up.

Colleagues, we should never forget that this was a national program. For those 1,987 beneficiaries of this program, if we asked them if there was a benefit, I'm sure most of them would respond that it was most beneficial to their survival or their going forward.

Thank you.

The Chair: Thank you, Mr. Mills.

Mr. Cuzner, you have about three minutes.

Mr. Rodger Cuzner (Bras d'Or—Cape Breton, Lib.): I have to recognize the restraint from the entire committee. I'm sure that they all felt, like myself, as if they wanted to stand up and sing “O Canada”, because this is a program that has had a great reach right across the country, Mr. Chairman.

The Chair: Okay, no conversations across the table, please.

Mr. Rodger Cuzner: As is the practice in most ministerial offices, Mr. Pelletier, most ministers do have regional desks, and I recognize that the Prime Minister's Office as well has a regional desk.

From your testimony you've met with Mr. Guité every second month or so. Would there be a person on your staff, junior to you, who would have met with him on a more regular basis? More specifically, would there have been a Quebec desk that would have been responsible for the sponsorship files?

Mr. Jean Pelletier: I don't think anybody met more than I did with Mr. Guité, except maybe Mr. Carle, in his responsibilities as director of operations for the Prime Minister. Apart from that, I don't see.... And, you know, at that time the Quebec desk was almost mine.

I'll try to give you the list, as I told Ms. Jennings, of people from my office who might have been in contact with the office of Mr. Guité, but....

Â (1250)

Mr. Rodger Cuzner: But nothing comes to mind just now of somebody who would have been working on the Quebec files along with you?

Mr. Jean Pelletier: No.

Mr. Rodger Cuzner: Recognizing the significance of this program with the members from Quebec and the ministers from Quebec, are you aware of the discussions among the Quebec ministers that would relate to the sponsorship program?

Mr. Jean Pelletier: I don't recall any discussions about this with the Quebec ministers relating to this program. I think the program had been decided by the Prime Minister in cabinet, so the program was administered by one of their colleagues. And if they had some activities that they wanted to be sponsored by the program, I'm sure their respective offices had links with the group administering the program. I don't recall a big discussion by the Quebec ministers on the program. I don't recall that at all.

Mr. Rodger Cuzner: That's it.

The Chair: Thank you, Mr. Cuzner.

Mr. Kenney, we're now on to the third round, so this is four minutes.

Mr. Jason Kenney: Mr. Pelletier, on May 30, 2002, then Prime Minister Chrétien, speaking about the sponsorship program, said “Perhaps there were a few million dollars that might have been stolen...”. Do you agree with your former boss Mr. Chrétien, that perhaps a few million dollars might have been stolen from the sponsorship program?

Mr. Jean Pelletier: My opinion on that I think is not relevant, sir, and I had left the office of the Prime Minister a year before that.

The Chair: Mr. Pelletier, it's not for you to determine whether it's relevant. The question has been asked.

Mr. Jean Pelletier: I'm sorry, but I have no opinion on that subject.

The Chair: No, the question wasn't whether you had an opinion....

What was your question?

Mr. Jason Kenney: My question was, do you agree with your former boss that a few million dollars were stolen in this program?

You're here to testify about this program. We're trying to identify, among other things, whether there is criminal wrongdoing.

Your former boss offered an opinion on this that a few million dollars were stolen. I would like to know whether you agree or disagree with him.

Mr. Jean Pelletier: Sir, you're asking me to give a judgment.

Mr. Jason Kenney: Yes.

Mr. Jean Pelletier: I'm not here to judge, I'm here to testify, and I won't express any judgment on anybody who has made a judgment before knowing the facts.

Mr. Jason Kenney: Well, did Mr. Chrétien make that judgment before knowing the facts?

Mr. Jean Pelletier: I don't know, sir.

Mr. Jason Kenney: Are you accusing him of just being fast and loose with the facts when--

Mr. Jean Pelletier: I have nothing to say on that record.

Mr. Jason Kenney: So you have no opinion on whether money was stolen here or not?

Mr. Jean Pelletier: I don't know.

Mr. Jason Kenney: I have another question. Based on the information that you have, can you--

The Chair: Hang on, Mr. Kenney, let him answer.

Mr. Pelletier, please.

Mr. Jean Pelletier: I really believe that fast conclusions have been given without all the facts being known. I hope that all the facts will be known and then a judgment will be put on the facts. But as one of the members just said, you have not yet been asking questions of the agencies. You don't know. So I'm sorry, I cannot judge.

The Chair: Mr. Pelletier--

Mr. Jean Pelletier: I'm here as a witness, not as a judge.

The Chair: Mr. Pelletier, this is not a criminal investigation. It's not for us to judge. It's for us to get the facts on the table for Canadians to know what is going on. This is not a criminal court. This is an inquiry by Parliament, because government reports to Parliament and Parliament is trying to find out what the government was doing in this particular file, because according to the Auditor General a large amount of money cannot be explained.

This is where you can't say that you can't answer these questions. All questions before a parliamentary committee have to be answered if we insist, so--

Hon. Walt Lastewka: A point of order, Mr. Chair.

The Chair: Mr. Lastewka.

Hon. Walt Lastewka: I would ask that our legal counsel again repeat the purpose of this committee.

The Chair: All right, let's get that.

Mr. Walsh.

Mr. Rob Walsh: I don't think I heard what the member was saying.

The Chair: He asked what is the purpose of this committee.

Mr. Rob Walsh: My understanding of the purpose of this committee of inquiry is to look into the so-called sponsorship program scandal with regard to ministerial and possibly deputy ministerial accountability.

Hon. Walt Lastewka: Mr. Chair--

The Chair: All right. And that of course includes other people closely associated with these people.

Hon. Walt Lastewka: Mr. Chairman, I think it's prudent that we stick to the purpose of this committee. We tend to go off it in trying to lead witnesses, which I think the previous speaker has been trying to do, rather than posing the questions along the line towards the purpose of this committee.

I object when it's being slanted, Mr. Chair.

Â (1255)

The Chair: Mr. Pelletier decided that he would refrain from answering a question because he would suggest.... I can't remember his exact words.

You maybe could repeat what you were saying, Mr. Pelletier. The point we're trying to make here is this is a public inquiry. We're trying to find out and understand how the parameters within the problem happened, and for you to say that you can't answer the question is not appropriate.

Is that correct, Mr. Walsh?

Mr. Rob Walsh: If I may suggest, Mr. Chairman, I think a distinction has to be made between asking the witness to exercise a judgment today and to express that judgment, and asking the witness whether at the time he heard the remarks of the Prime Minister to which the member referred in his question he had any judgment at the time about that.

The latter question is a question of fact, whether he or did not have a judgment at that time or form one at some point and what that judgment was. But to ask a witness today what his judgment is on something, it might be understandable that it is a matter on which a witness may be reluctant to testify or may not have a judgment on which to express himself at this point.

The Chair: Do you understand that, Mr. Kenney?

Mr. Dennis Mills: I have a point of order, Mr. Chair. You said something a few minutes ago about how this is not a court of law, and I agree with that.

The Chair: That's right, I did. Thank you.

Mr. Dennis Mills: But you allowed Mr. Toews to state on the record last week that $100 million was stolen. He repeated that several times in his testimony, and he stated that before we have all the facts in front of us--

The Chair: Mr. Mills, we can't have every word proven before every word is said. The Auditor General has...her terminology was--does anybody remember?--$100 million, little or no value, I believe.

Mr. Dennis Mills: That's not accurate.

The Chair: She also went on to point out clearly and explicitly how huge commissions were paid for little or no value.

Mr. Dennis Mills: That's not what she said, sir.

The Chair: And Mr. Minto, from the Auditor General's office, when I asked him before this committee, do you mean little or no value for a very large commission in the tens of thousands of dollars, said maybe they had a 48¢ stamp.

Mr. Dennis Mills: That's not accurate, Mr. Chair.

The Chair: That is accurate, Mr. Mills.

Mr. Dennis Mills: That isn't accurate.

The Chair: That is accurate, Mr. Mills, because I asked--

Mr. Dennis Mills: I asked her the question, and she said.... I asked her specifically, and you were here. I said there's a perception out there that $100 million went out the back door, and we all know that's a lie, and she said she was unable to get all the records.

The Chair: She had serious concerns about value for $100 million.

Mr. Dennis Mills: That's not accurate.

The Chair: That's why we're here.

Mr. Dennis Mills: I'm going to take it up with her.

The Chair: Now we're going to get back to Mr. Kenney

Mr. Kenney, you heard what Mr. Walsh said. You cannot ask Mr. Pelletier a question today on the basis of do you believe that the Prime Minister's statement of May 30, 2002, was appropriate, but you can ask him if he discussed the matter with Mr. Chrétien at that time, and so on and so forth.

Mr. Jason Kenney: Well, as I continue with my time, I want to make the point that the purpose of this committee is to answer the question for Canadians how much of their money was stolen and where it ended up. The former Prime Minister expressed an opinion about money being stolen. For the record, his former right-hand man has no opinion on that question.

Mr. Pelletier, you earlier testified that you heard “street rumours” about this program that caused you to approach the Prime Minister to discuss it. When did you hear these rumours, and what was the nature of these rumours?

Mr. Jean Pelletier: Oh, it was at the end of 1999, probably, or the very beginning of 2000. It was before the internal audit was launched. We were reading in the Montreal press that there were only a few firms that had been involved in the delivery, and that there were suspicions of all sorts.

I thought this might be negative for the image of the government and that we should simply look into the matter to see whether things were all right or not.

Mr. Jason Kenney: All right, thank you.

You said there were “street rumours”. Did you hear rumours other than what you read in the Montreal press?

Mr. Jean Pelletier: Oh, yes. I was going to the Press Club, and people would.... You know what Ottawa is.

· (1300)

Mr. Jason Kenney: What was the nature—

Mr. Jean Pelletier: There are a lot of rumours in Ottawa.

Mr. Jason Kenney: Could you specify what some of those rumours might have been? You said earlier there was suspicion “of all sorts”. What kinds of suspicion were they—suspicion of what kind of activity?

Mr. Jean Pelletier: They were suspicions that there were higher commissions than should have been paid, and that they were directed to some particular firms, and that others were not admitted to get contracts, etc.

Mr. Jason Kenney: Would you agree that the nature of these rumours... Did you ever hear rumours about the practice known as “dry cleaning”, which the Sun newspaper chain reported, quoting a senior government official as referring to ad agencies buying bottles and cases of Pétrus wine at $4,500 a bottle that were in part served to the Prime Minister on a trip in Hong Kong, and that this was one way of dry cleaning the overcharges by the ad agencies? Did you ever hear rumours of this nature, of dry cleaning?

Mr. Jean Pelletier: Never.

The Chair: Your time is up.

We're going to break for lunch. But before we do that, in response to Mr. Mills I'm quoting from the Auditor General's November 2003 report, from the “Overall Main Points” at the beginning of chapter 3, on page one. This is her testimony:

We found that the federal government ran the Sponsorship Program in a way that showed little regard for Parliament, the Financial Administration Act, contracting rules and regulations, transparency, and value for money. These arrangements—involving multiple transactions with multiple companies, artificial invoices and contracts, or no written contracts at all—appear to have been designed to pay commissions to communications agencies while hiding the source of funding and the true substance of the transactions.

She goes on:

During that period, the program consumed $250 million of taxpayers' money, over $100 million of it going to communications agencies as fees and commissions.

That is a direct quote from the Auditor General's report.

Mr. Dennis Mills: Mr. Chair, on a point of order, I will read her response to me when I asked her a question specifically about that. I'll read that this afternoon, from the blues.

The Chair: And of course....

Madam Jennings, do you have a point of order?

Mrs. Marlene Jennings: Yes, I do.

It comes back to the questioning of the witness based on Mr. Allan Cutler's testimony and the documentary evidence that he tabled before this committee. The questioning was alluding to complaints that Mr. Cutler would have made up the ladder, and that the witness should presumably have been aware of that. I have gone through both the documentary evidence that Mr. Cutler provided and his testimony, and the only reference that I have found where Mr. Cutler made a superior aware of Mr. Guité was during his opening statement on page 46, where he said:

In April 1996, matters came to a head when I once again refused to sign an approval authority and contract. Mr. Parent indicated that there would be a price to be paid for my refusal. Following this, I sought the assistance of my union, the Professional Institute of the Public Service. On my behalf, the institute wrote to Jim Stobbe, the assistant deputy minister for the government operations services branch. In 1995, Mr. Stobbe replaced Rick Neville as Mr. Guité's immediate superior.

And then it says:

The union's letter to Mr. Stobbe, dated February 13....

Then there's a second section, where he again refers to informing a superior. It was in response to questioning by Mr. Odina Desrochers, and it's on page 54. The question was:

Mr. Cutler, you of course mentioned the report. When you noticed that there were irregularities, did you forward any complaints to the deputy minister or the minister to tell them that improprieties were being committed in one of the services of his department?

Mr. Cutler's answer was:

No. There is an established protocol of how to proceed. You have to also realize that now, in a new organization with a new chain of command, I do not know my ADM. I do not know the chain of command above Mr. Guité. I don't know the individuals and I haven't had any dealing with them.

In order to rectify a situation, you also have to build a case and have very solid evidence before you can do anything. There is an established protocol, and one of the protocols is that you get the backing of your union, which is the way I elected to go.

· (1305)

The Chair: Okay, thank you, Ms. Jennings.

We'll now break for lunch. We'll reconvene at two o'clock.

· (1306)

¸ (1407)

The Chair: We're back.

We'll deal with two things before we go back to the testimony. I have here for distribution the report from the subcommittee on agenda and procedure of the standing committee, which I read into the record this morning. With regard to the times when the committee will meet, the subcommittee on witnesses and the steering committee will also meet within that same timeframe. A lot of hours are being devoted to meetings. If per chance there is no public meeting, it may be because the subcommittee on witnesses or the steering committee is meeting.

Mr. Mills caught my attention and would like to say something.

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

This is just a point of clarification. You were quoting from the Auditor General before we adjourned. I'd like to put on the record my point to the Auditor General and her response when she appeared in front of us.

Ms. Fraser, in your report in chapter 3, page 3, you identified that the sponsorship program covered 1,987 events across Canada.

I asked her about the $100 million, and she said:

This is an estimate we did. Based on my understanding, the Public Works systems do not give that kind of breakdown. I think you would have to ask Public Works for more information....

Then I interrupted her, and I said:

I hear you, Madam Fraser, and I realize I have a very short amount of time. But you can understand that there's a perception in the media and in the community out there that $100 million went out the back door here, when in fact there were real production costs related to signage in all of these events. I mean, we realize and we admit that there were flaws and mistakes, but I really think we have to separate the good work that was done from work that was flawed and stained.

Ms. Fraser responds, “We have certainly said that there were services rendered for some”—

Mr. Jason Kenney: I have a point of order. Mr. Chairman, is Mr. Mills intervening under the cover of a point of order? We've probably wasted upwards of an hour of the committee's time and opportunity to question witnesses with points of debate disguised as points of order. I would ask that on a point of order, the chairman promptly rule out of order what are points of debate for myself or anyone else so that we can focus on questioning the witness.

The Chair: Unfortunately, it appears that many people want to put back on the record what's already on the record.

Perhaps you can just finish up there, Mr. Mills, and then we'll move on.

Mr. Dennis Mills: Mr. Chair, you will acknowledge that I sought your permission, and you suggested that it be a point of clarification.

I have one sentence to read, and I'm quoting Ms. Fraser:

We have certainly said there were services rendered for some part of that $100 million, be it production fees or the management of those activities.

And I said, “Thank you”.

The Chair: Thank you, Mr. Mills.

Mr. Tonks, you are on for four minutes.

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

Mr. Chairman, we've had a great deal of discussion with regard to the manner in which the government of the day regrouped itself in terms of facing one of the most serious political issues of our time, which was the referendum and the implications with regard to the destruction of the country.

¸ (1410)

The Chair: Do I hear cellphones again in this room?

Sorry to interrupt, Mr. Tonks. Please proceed.

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

People would understand that any government would attempt to regroup. In regrouping, were instructions given through the system to do things such as bend the rules out of shape? The committee is trying to get a handle on that element of it and the extent to which that happened.

I hadn't really appreciated this until I fully read Mr. Guité's testimony. Mr. Guité indicated in his testimony that the Federal-Provincial Relations Office provided his organization with strategic direction, and the Privy Council Office was part of that group. I'd like to ask Mr. Pelletier once again, just for clarification, did the PMO give instructions or directions to this strategic group?

Mr. Jean Pelletier: No.

Mr. Alan Tonks: It also was indicated that the Privy Council Office was part of that strategic group. So my question to Mr. Pelletier is, to the best of your recollection, did the PMO give instructions or directions to the Privy Council Office? It would be a backdoor way to start managing the contracts and so on.

Mr. Jean Pelletier: To my knowledge, no.

Mr. Alan Tonks: Okay. Then I have only one question, Mr. Chairman.

Mr. Pelletier also indicated that, to the best of his knowledge, the Financial Administration Act had in fact been adhered to.

In Mr. Guité's testimony, in answer to a question from Mr. Proulx, he indicated that when invoices were presented, for the most part there was a separation. Contrary to what we had been told, there was a separation with respect to the administration of the contracts, the final approval that was given, and his role in that. I'll read it:

The department could not pay an invoice without a contract. So if the invoice came in and there was no contract, you can't pay the invoice. Therefore, when I issued a contract, it went through the contract branch of our department. When I signed an invoice, it went through the financial branch and they matched the two. There's a contract, there's an invoice, it's authorized for payment, therefore we issued a cheque.

The Chair: You are reading from Mr. Guité's testimony?

Mr. Alan Tonks: I'm reading from Mr. Guité's testimony. There's no page number.

My question to Mr. Pelletier is this. Is that his understanding with respect to how an administrative group or unit would operate under the Financial Administration Act?

Mr. Jean Pelletier: Sir, as we, the PMO, were not at all involved in the administration of the program, I'm not in a position to say that this process was the right one or not. I presume that the financial director of the department was doing his job, but I'm not the one to tell you it happened that way. We were not at all involved in the process of administering the program.

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

The Chair: Thank you, Mr. Tonks.

Mr. Jordan, please, four minutes.

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

Mr. Pelletier, one of the things that strikes me as we're looking at this issue of what happened and why it happened—we've yet to determine the extent of the damage—is it becomes clear to me that one of the things that went wrong systemically was that in the communications activities under Mr. Guité a decision was made, at some point, that this office would exist outside the normal reporting structures, in the sense that he, as an executive director, would report right to the minister.

The implications are that by not reporting through his deputy, the PCO oversight and the responsibilities that a deputy minister would bring in terms of evaluation mechanisms to his sphere of influence were either deliberately or unintentionally bypassed. It's one of the reasons, in my view, in this particular practice of not documenting properly and not adhering to the Financial Administration Act, why it was allowed to go on so long before it was actually detected and corrected.

Do you have any personal knowledge as to exactly why, or perhaps who might have made the decision, in terms of the organizational structure and the reporting structure of this particular entity?

¸ (1415)

Mr. Jean Pelletier: Mr. Member, as the PMO is not at all linked to the machinery-of-government issues, I don't have any answer to give you on that. I don't know. It's a question you should ask the authorities of the departments and the PCO, not the PMO.

Hon. Joe Jordan: Were you aware?

The Chair: I would say, Mr. Pelletier, if you do know the answer, if you are aware....

Mr. Jean Pelletier: I'm not aware, sir.

The Chair: You're not aware. Okay.

Hon. Joe Jordan: Were you aware at the time, though, that there was a different reporting structure that was really outside the norm, in terms of this particular office?

Mr. Jean Pelletier: No. But the fact that things were happening I took for granted was at the knowledge of the minister and of the deputy minister. I didn't question that. It's not my role to see who's doing what.

Hon. Joe Jordan: My final question, then, has to do with this notion of the level of politics involved in this file. I think we're getting a clearer picture of what was going on at the time. It's always risky to look back and Monday morning quarterback it, but distinctions have been made and phrases have been thrown around.

In your long history in public service, do you, in your own mind, make a distinction or have a definition of what would constitute legitimate political direction and what would constitute political interference?

Mr. Jean Pelletier: I don't have a dogma in my head. I think it's a question of good judgment in the files.

Hon. Joe Jordan: I guess I have one more question then.

In terms of a larger policy of increasing the federal presence and assorted complementary messaging in Quebec, Mr. Guité, when he testified, talked about the polls. I was assuming he was talking about the level of support for the various sides. Were there any other evaluation mechanisms in terms of the macro strategy of increasing visibility? How did you determine whether or not this was working?

Mr. Jean Pelletier: We get the polls in the press every month about where the parties are.

For us, it was easy. The Liberals were federalist, the NDP was federalist, and the Conservatives were federalist. The only party that was not federalist in the province was the Bloc, and the PQ at the provincial level. So when we compared the level of support for the Bloc or the PQ versus all the others combined, we had quite a clear sense of where things were going. It doesn't take a magician to know that.

The Chair: Thank you, Mr. Jordan.

Mr. MacKay, please.

Mr. Peter MacKay: Well, there is a lot of magic being weaved around this entire affair, Mr. Pelletier.

I have a question for you about your previous testimony wherein I believe--and correct me if I'm wrong--you indicated to me, in response to my question about your presence at a box at the Molson Centre, at which Mr. Jean Lafleur was present, and I believe you also said Mr. Jean Carle was there and François Beaudoin, that you had no involvement in pressuring Mr. Beaudoin or members of the BDC at any point to hire Mr. Jean Carle. I believe you said--and correct me if I'm wrong--the only involvement you might have had was to suggest that a certain executive search firm might be used to help fill that position. Is that correct?

¸ (1420)

Mr. Jean Pelletier: I didn't say that at all, sir. I said that Mr. Chrétien and the PMO and I were never in any way involved in the hiring of Mr. Jean Carle by the Business Development Bank, nor--

Mr. Peter MacKay: So you never made any representations on behalf of a certain executive search firm?

Mr. Jean Pelletier: Not at all. I wasn't involved in anything like that, and if it is the pretension of Mr. Beaudoin that it happened otherwise, it's not true.

Mr. Peter MacKay: Okay. Well, Mr. Pelletier, I'm quoting from the National Post of February 14, where you're quoted specifically as saying “I never spoke to anyone at the BDC about hiring an executive search firm.” That contradicts the evidence you gave earlier today.

Mr. Jean Pelletier: Not at all. It's exactly the same thing.

Mr. Peter MacKay: You suggested earlier that you had given advice only on the use of an executive search firm--

The Chair: Order.

Mr. Jean Pelletier: No, I'm sorry, sir, I said exactly the contrary of what you've just said.

The Chair: Order.

Mr. MacKay.

Mr. Peter MacKay: We'll check the blues on that.

Mr. Jean Pelletier: All right, check the blues, my friend. I know what I said.

Mr. Peter MacKay: Very good.

You talked at length, at times, about the separation between legislative and administrative roles and political roles, and you suggested that there was never any political influence whatsoever exerted by you, your office, the Prime Minister, or the ministers, to your knowledge; yet we have the current Prime Minister specifically alluding to political direction that was given to rogue bureaucrats. You discount the current Prime Minister completely on that score. You say there was no political direction given whatsoever.

Mr. Jean Pelletier: Sir, I own my answers, and the answers I've given you are my answers.

Mr. Peter MacKay: Correct.

Mr. Jean Pelletier: If someone has said other things, ask them why they've said that, but that is not my story. I'm telling you the story I know and the story based on facts.

Mr. Peter MacKay: So you would agree that this runs completely contrary to what the current Prime Minister has said. You would agree with that.

Mr. Jean Pelletier: I am not aware of exactly what the Prime Minister has said, but I'm saying I'm absolutely reluctant to accept any idea of possible political direction in the administration of the delivery of the sponsorship program coming from PMO.

Mr. Peter MacKay: Thank you.

The Chair: Next we have Monsieur Thibault.

[Translation]

You have four minutes, please.

[English]

Hon. Robert Thibault: Thank you, Mr. Chair.

[Translation]

Mr. Pelletier, could you tell us what difference you see between involvement by the Prime Minister's Office, a minister's office or an MP's office, that is, political involvement in a file, and administrative interference?

Mr. Jean Pelletier: If the Prime Minister's Office had selected the firms responsible for program delivery, if we had determined which file went to which firm together with the terms of payment, we would have been involved in the administration and delivery of the program.

The Prime Minister's Office was in no way involved in any of those aspects. It is likely that we expressed an opinion on whether to fund this or that project, for such and such a reason, but the final decision was not made by the PMO. If the unit managing the file was influenced more by our comments than by those of Tom, Dick and Harry, I can't help it. The decision did not come from the PMO.

Hon. Robert Thibault: Thank you.

Let's go back a little. Before joining the Office of the Leader of Opposition, what was your occupation?

Mr. Jean Pelletier: For a year and a half I chaired a Quebec commission on seniors' policy. Previously, I had been mayor of Quebec City for 12 years.

Hon. Robert Thibault: What did you do before becoming mayor of Quebec City?

Mr. Jean Pelletier: I was in business. I was in finance and communications.

Hon. Robert Thibault: I imagine you were approached to join the office of the opposition leader because you were a great fan of the Liberal Party and this was your reward for your years of service for the Liberal Party.

¸ (1425)

Mr. Jean Pelletier: No, I'm quite sorry, I was not a member of the Liberal Party before coming to Ottawa in 1991. I did not attend the 1990 convention that elected Mr. Chrétien party leader. All through the years I was mayor of Quebec city, I was not involved in partisan politics other than at the municipal level, as leader of my own party.

I think the reason why Mr. Chrétien asked me to give me a hand is that we were old classmates. Next September, we'll have known each other for 50 years. We had a good friendship and good mutual respect. I think he believed in my loyalty and my ability to manage his office and I was confident in return that he would be a good prime minister. I hope he was no more disappointed than I was because I, at least, have not been disappointed.

Hon. Robert Thibault: The outcome has certainly been good for both of you.

During your years in administration, have you had an opportunity to see bureaucrats or other politicians imply that they had a closer relationship with ministers or with the prime minister than they in fact had?

Mr. Jean Pelletier: I think it's human nature to suggest that you have a lot of power and connections and that someone picks up the phone right away when you call. I think it's human nature. Everybody does that, sir. Not only in government, but also in everyday life, in business, everywhere.

Hon. Robert Thibault: Would you find it conceivable that a bureaucrat or a manager in contact with the staff of a minister would say that he or she had meetings or personal contacts with the minister or tell staff back at the office that instructions had come from the minister instead of a subordinate of the minister?

Mr. Jean Pelletier: It's quite possible. It's quite possible and quite likely. I was under the impression, during all the years I was at the Prime Minister's Office, that a lot of people were using my name without my knowing it.

At times, my secretary would come and tell me that a “very close friend” had called and wanted to speak to me when I did not even know the person.

That's human nature for you.

[English]

The Chair: Yes, well, we'll let it pass.

Madam Jennings, please, four minutes.

[Translation]

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

Mr. Pelletier, you have tried to explain to my opposition colleagues that there was a separation between the PMO and the PCO.

I may be wrong, but I was under the impression that before 1993 there was no such wall between them, between the political side and the administration, within government.

Am I wrong?

Mr. Jean Pelletier: No. I think you are right. This is precisely why Mr. Chrétien was so clear with deputy ministers after his swearing in, in November 1993.

He started by telling the deputy ministers that in all ministers' offices he had eliminated the position of chief of staff except for a single one in the entire government, which was in his office.

He added that he had abolished this position precisely to avoid any grey area between the responsibilities of a minister's office and those of a deputy minister and the bureaucracy. He took the opportunity to specify that deputy ministers and civil servants were accountable for the administrative and legislative function of government and that it was their responsibility to give their respective ministers advice in these two areas. Further, he said there would also be political staff in each minister's office who would be responsible for the political dimension of files and who would give advice to the minister at arm's length from the bureaucracy.

I remember—I will use Mr. Chrétien's very words because I remember them clearly—that he said:

[English]

If you do that, everything will go well. Your minister will look good. And if your minister looks good, you will look good also.

¸ (1430)

[Translation]

It's from that time, the very next day, that the relationship between the PMO and the PCO was structured in this way so that, for all files we were working on in common, staff would remain within their own jurisdiction: administrative and statutory, on the one hand and political on the other. If you had the former clerk of the Privy Council, Mrs. Jocelyne Bourgon, to testify, she would fully confirm that this is indeed how things worked.

Mrs. Marlene Jennings: Given what you have just said, what do you think of a deputy minister who believes that there is a political bypass between his minister and the minister's political staff and the civil servants who normally report to him, the deputy minister, according to various reporting structures, and who doesn't blow the whistle to his employer or his supervisor, in this case the clerk of the privy council?

Mr. Jean Pelletier: I don't know if you are referring to something specific. I have not followed all--

Mrs. Marlene Jennings: Mr. Ran Quail--

Mr. Jean Pelletier: I did not follow that, but I feel that if a deputy minister, in a department, feels that things are not being done as they should within the public service, either he puts up with what he doesn't like or he complains to his supervisor, the clerk of the privy council. Is this what he has done? I have no idea.

Mrs. Marlene Jennings: Thank you.

The Chair: Is that all?

[English]

Okay. We're coming to the end of the second round, and I'm going to ask a few questions myself. Some people have indicated that perhaps we should wind down, and if there is unanimous consent we can do that. If others still have some questions they would like to ask, then of course we will continue.

There seems to be some indication.... Ms. Wasylycia-Leis, of course, is always after me for another turn. It seems to me she's indicating the same.

Anyway, I was going to ask a few questions myself.

Mr. Pelletier, you mentioned that Mr. Guité came to your office a couple of times a month, or whatever, but never at your request. Is that correct?

Mr. Jean Pelletier: That's correct.

The Chair: Was this at the request of some of your staff, or at his request?

Mr. Jean Pelletier: I presume it was at his request. There might have been somebody at my office who wanted this meeting to happen. I don't recall, but it was not at my request.

The Chair: So did he just show up, coffee in hand, and say, “Let's have a chat”, or did he come on business?

Mr. Jean Pelletier: No, as I indicated previously, Mr. Chairman, when we had these meetings I was asking questions about certain files that had been through our office directed to him or to his staff. I was asking the state of affairs in these files, and he was also asking me what I thought about such or such an event, and I would give our comments.

The Chair: So if Mr. Guité hadn't been so diligent in following up on your opinions on these files, you would never have had an opportunity to express an opinion on these files.

Mr. Jean Pelletier: I'm sorry, sir, I didn't get this point.

The Chair: If Mr. Guité hadn't been so diligent in coming to your office on a regular basis to get your opinions on these files, you would never have been giving opinions on these files, because you never called Mr. Guité to express an opinion.

Mr. Jean Pelletier: No, because the results I got through what was happening made us happy enough not to complain, or not to have any worries.

The Chair: Okay, but you—

Mr. Jean Pelletier: If there had been any, I would probably have called the minister.

The Chair: So this is the most important file on the Prime Minister's desk—the country had to be saved—and a couple of times a month Mr. Guité would show up and say, “All is well”, you would give him your blessing, “On you go”, and that's it?

Mr. Jean Pelletier: Mr. Chairman, I read the testimony of Mr. Guité, and I think you heard it yourself.

The Chair: I did.

¸ (1435)

Mr. Jean Pelletier: I think it indicates he was apparently strong enough to administer his program without failing too much.

The Chair: You had pan-government responsibilities, being at the central office, the Prime Minister's Office. How many other middle managers in other departments came to you to discuss their files?

Mr. Jean Pelletier: I don't know; not many.

The Chair: Not many, but Mr. Guité came on a regular basis.

Mr. Jean Pelletier: Mr. Guité came because it was one of the aspects of the federal strategy about Canadian unity—

The Chair: Because this file was important to you, was important to the Prime Minister—

Mr. Jean Pelletier: —and I was very much involved in the Quebec desk, in Quebec affairs.

The Chair: Yes, I can understand, and I expect you would have been involved. I expect you would have been very much involved, involved daily. You would have been scrutinizing the media to see what they were saying. You mentioned the polls on a monthly basis. Perhaps you were polling more often than on a monthly basis. You were actively, intimately, and completely engaged in the file, I would presume.

I have a problem saying that once every couple of weeks or so Mr. Guité would come into your office—at his timing, not your timing, according to what you say—and give you an update, and you would give him your blessing, saying, “You're doing a fine job.”

Mr. Jean Pelletier: Mr. Chairman, not once every two weeks; it was once every two months. That's a bit different, if I may say so.

The Chair: That's even less credible than once every two weeks, because this is the most important file you had, remember, and this was the guy who was carrying the can for you. This was the guy who could go out and snap his fingers and buy $8 million worth of billboards—every billboard in the province of Quebec. Did he not come to you and say: “I just bought all these billboards. What do you want to put on them?”

Mr. Jean Pelletier: This I heard through his testimony. I didn't know before about all the billboards and the $8 million. I read that in his testimony yesterday, or in the press when you made the testimony public last week. I may have read it in the Saturday papers.

The Chair: But the Prime Minister said the sponsorship program was central and crucial to your initiative to save Quebec.

Mr. Jean Pelletier: One second, Mr. Chairman. The sponsorship program came after the referendum, not before and not during. The billboards were in the referendum period, if I'm well informed; sponsorship came after. Don't mix the two.

The Chair: But we're investigating from 1993-1994 onwards, all through Mr. Guité's—

Mr. Jean Pelletier: Yes, but what happened in 1995 didn't happen in 1996; what happened in 1996 didn't happen in 1997. You must consider the periods.

The Chair: But because you were so actively involved, because the Prime Minister was so actively involved, and this was the most important file the Prime Minister had on his desk, and the Prime Minister said the sponsorship program was integral to his plan to keep Quebec well within Canada.... Now you're telling me once every two months or so you would get an update as to what was going on with the most important file on your desk?

Mr. Jean Pelletier: Sir, I don't know if you know the daily work of the chief of staff to a prime minister. It runs from 8 a.m. in the morning to 10 o'clock at night. You don't have time to see every file, every day, every week, and you have a team--

The Chair: I know you don't.

Mr. Jean Pelletier: — if I may finish--of 90 persons who are devoted to various sectors. You have the provincial desk, you have the communications, you have the operations, etc.

Every morning at a quarter to nine we had what we call the senior staff meeting, and people would report on all aspects of the policies they had to deal with.

The Chair: Was the Clerk of the Privy Council at these meetings?

Mr. Jean Pelletier: No.

The Chair: Never?

Mr. Jean Pelletier: Never.

The Chair: So the senior staff did not include the Clerk of the Privy Council.

Mr. Jean Pelletier: It was the senior staff of the PMO--

The Chair: All right, the--

Mr. Jean Pelletier: --and at 9:30 the Clerk of the Privy Council and the chief of staff to the Prime Minister jointly would go and see the Prime Minister. It was the operations committee of the government really. The clerk would arrive with his files, I would arrive with mine, and we would give our say to the Prime Minister, who would make decisions and give us instructions.

The Chair: So here you're running the political wing, the PMO, the Prime Minister's staff, you have the feedback from your staff as to what's in the newspapers today, what is happening, you have the latest poll results, and you have the responses of the latest initiatives--more advertising, less advertising, more speeches or whatever the score may be.

Also, at the same time, at 9:30, you have the Clerk of the Privy Council saying the machinery of government is delivering what the Prime Minister wants, be it contracts of advertising, or whatever else the government does. The three of you are there, the PCO, the administration of government, you as the chief of staff, the political wing of the government--reporting to the Prime Minister together. And you say you're not aware of how the administration was working?

¸ (1440)

Mr. Jean Pelletier: The machinery of government is not my--

The Chair: Did the clerk--

Mr. Jean Pelletier: We're talking about the files; we're not talking about the administration of files.

The Chair: Did the Clerk of the Privy Council ever tell the Prime Minister when you were there that there were some serious problems with the contracting on this program, on this file?

Mr. Jean Pelletier: Not that I remember, sir.

The Chair: The Auditor General tells us that a great many files have little or no documentation, no contracts, and I quoted earlier about false contracts, false invoices, and so on from her report. Were you concerned about the lack of value you were getting for the money that was being spent?

Mr. Jean Pelletier: Sir, the files of the program in my office...the files were at Public Works. I didn't know what was in the file, what was missing in the file, and it was not my duty to see if we had good service for good money. That was not my responsibility. I didn't bother about that. It was not my job.

The Chair: When Mr. Guité came to you and said he was recommending that you advertise this way, that way, sponsor this event, that event, and so on, did he give you competitive bids? Did he give you any costs, or did he just give you a list with numbers and names attached?

Mr. Jean Pelletier: No. What we saw were the names of files of those who wanted to be sponsored with the amount they wanted to get, period. I don't recall having seen a list of sponsored events with the number of the sponsorship for each event.

The Chair: The Prime Minister and you as his lieutenant were driving this file, I presume, this Quebec--

Mr. Jean Pelletier: No.

The Chair: You were not driving the file?

Mr. Jean Pelletier: It depends on what file you're talking about.

The Chair: I'm talking about the unity of the country.

Mr. Jean Pelletier: The overall file of unity of the country, yes, but the specific file on the sponsorship program was the responsibility of Public Works.

The Chair: But you and the Prime Minister, or the Prime Minister assisted by you and your staff, were driving the unity-of-the-country file forward. In that--

Mr. Jean Pelletier: No, sir, not only us. I think there was a chap by the name of Stéphane Dion who was also a bit involved in the unity file. I don't want to deprive him of his good work results.

The Chair: No, we will recognize that, but no doubt he was not working contrary to the Prime Minister; he was working in harmony, because he was taking his direction from the Prime Minister too.

The point I'm trying to make is that because the Prime Minister, assisted by you and the PMO staff, aided by the PCO, who put the thing together afterwards, must have given some direction: in order for us to move this unity-of-the-country file forward, we have to enhance the name of Canada and the province of Quebec. That's pretty well, I believe, what the Prime Minister said was a major component of the file. In fact, you've made mention of that yourself today.

Mr. Jean Pelletier: A major one, an important one.

The Chair: Okay, important.

Mr. Jean Pelletier: There were others. And all departments, sir--all departments--were involved in the unity file.

The Chair: That's right, including Mr. Dion's.

Mr. Jean Pelletier: I think the Minister of Agriculture was sensitive to the farmers of Quebec. I think the fisheries minister was also sensitive to that. It was an overall government policy.

The Chair: Driven by the Prime Minister.

So a major, significant, important part of that was the sponsorship program. Did that initiative come out of the PMO, from your office or from the Prime Minister, or did it come from Mr. Guité and his department?

Mr. Jean Pelletier: The sponsorship program?

The Chair: Yes.

Mr. Jean Pelletier: I don't recall, sir. I don't remember.

The Chair: So while the Prime Minister was driving the most important file in the country, the unity of the country--sponsorship being, I believe your word was, an “important” part of that--the notion of this being an important part of the whole unity file possibly didn't come out of the PMO, but may have come out of the sponsorship program, CCSB?

Mr. Jean Pelletier: You know, there was an advertising program far before...I don't know what year, but many, many years before--

¸ (1445)

The Chair: Yes, Mr. Dingwall told us that yesterday.

Mr. Jean Pelletier: This was really going on before the referendum.

The Chair: Yes, it goes all the way back to the Trudeau years, he said.

A voice: Before.

Mr. Jean Pelletier: Guité was in charge of that program.

The Chair: Yes, but Mr. Dingwall told us that this advertising agency record goes all the way back to the Trudeau era as well.

Mr. Jean Pelletier: Very good.

A voice: It was 1979.

The Chair: Okay, 1979.

Mr. Jean Pelletier: Mr. Guité was administering that. Actually, it was

[Translation]

a shift of the government's advertising program through a sponsorship program that was decided on in 1995 or 1996. This is how it was done. A decision was made to emphasize the visibility of Canada, of the Government of Canada, in Quebec after the referendum, in order to make Quebeckers proud of also being Canadians. That was the plan.

Who had this idea? To my mind, that doesn't matter very much. What matters is that the program was set up and gave results.

[English]

The Chair: Okay. If who came up with the idea wasn't important, because no doubt you were canvassing every idea you could find, was it endorsed by the Prime Minister and by your office?

Mr. Jean Pelletier: It was certainly endorsed by the Prime Minister, because no program is given birth without the Prime Minister's pre-approval.

The Chair: So did you give some specific direction that we wanted to accomplish this or that, or something else? Did you say, “This is how we envisage this program working?”

[Translation]

Mr. Jean Pelletier: Mr. Chair, the Prime Minister and the Cabinet decided on a program. They said what kind of program they wanted and for what purpose; they set the goals of the program. From that point on, it's up to the machinery of government to deliver.

[English]

The Chair: You didn't follow up to find out if it was achieving the goals?

[Translation]

Mr. Jean Pelletier: I answered earlier that as the polls showed that federalist parties were becoming more popular among Quebeckers it was clear to us that the range of actions taken within the unity file were having positive results.

[English]

The Chair: So once a month when the poll results came in, you looked at them and said, “We're doing fine. We don't need to fine-tune the program. We don't have to micromanage the program. It's just doing fine.”

[Translation]

Mr. Jean Pelletier: Everybody were doing their own analysis and tried to contribute to even better results the next day. I do not quite understand your question.

[English]

The Chair: So it was being managed on a more frequent basis than monthly?

[Translation]

Mr. Jean Pelletier: I do not quite understand your question.

[English]

The Chair: Okay. Did the Prime Minister ask you on a daily basis or on a frequent basis, “How's the Quebec file coming along? How are we doing?”

Mr. Jean Pelletier: Oh, I think the Prime Minister...as any Prime Minister is very interested in any polls coming out and wants to know about details of the poll, region by region.

The Chair: On a monthly basis.

Mr. Jean Pelletier: I'm not too sure that members of Parliament on an individual basis have less interest.

The Chair: You're right. How very true. How very correct, Mr. Pelletier.

Mr. Dennis Mills: I have a question.

The Chair: Okay, I was going to go to....

Do you have a single question, Mr. Mills?

Mr. Dennis Mills: Well, I believe it was my turn, Mr. Chair.

The Chair: No, it was not your turn.

We're going to start round three, if it is the desire of the committee. As I said earlier, I know Ms. Wasylycia-Leis always likes to get in a round for the last word, so we have to start round three. Therefore, we're going to start with Mr. Kenney, Mr. Crête, Mr. Mills, Ms. Wasylycia-Leis, then Mr. Toews, and Mr. Lastewka.

Mr. Kenney.

Mr. Jason Kenney: Thank you.

Mr. Pelletier, I'd like to pursue what you discussed with Mr. Guité during your bimonthly meetings. You've indicated that he would appear at your office with lists that included the names of sponsors as well as the dollar amount for the sponsorship. Is that accurate?

Mr. Jean Pelletier: As I have indicated, I never saw a list with the amounts that it was finally decided would appear. What I saw were lists of demands with the level of each demand in dollars.

Mr. Jason Kenney: During these meetings, would Mr. Guité invite your response to each individual request or proposal?

Mr. Jean Pelletier: No. I didn't see everything because it would have taken hours.

¸ (1450)

Mr. Jason Kenney: What exactly did he seek your input on? What kind of approval, authorization, or information was he seeking from you?

Mr. Jean Pelletier: I think I already answered that question in saying that neither Mr. Guité nor his staff was able to know about every activity that was asking to be sponsored. They had to dig information from maybe the member's office or the Prime Minister's Office or from people in a particular sport or field.

Mr. Jason Kenney: I don't understand this, Mr. Pelletier. You're telling us, as you've said before, that, for instance, he would ask you, what is going on in the riding of Saint-Hyacinthe, and should we be involved or engaged there? Why would he come to the chief of staff to the Prime Minister rather than, say, to the staffer handling the Quebec desk in the PMO, or for that matter the Quebec desk in Minister Gagliano's office? Why would he come to the chief of staff to seek local political information on what's happening in Quebec?

Mr. Jean Pelletier: Sir, there's no evidence that he didn't do that as well. He may have called--

Mr. Jason Kenney: But why would he be coming to the chief of staff to the Prime Minister? Did he ever explain to you why he was coming to you?

Mr. Jean Pelletier: You should ask him that question when he comes before you.

Mr. Jason Kenney: Didn't you ever ask him?

Mr. Jean Pelletier: No.

Mr. Jason Kenney: You never asked him. This is the thing we find very peculiar. Mr. Pelletier, this is what we find very strange. Mr. Dingwall claimed yesterday that for all intents and purposes, Mr. Guité didn't exist while Mr. Dingwall was Minister of Public Works. Mr. Dingwall didn't hear about him, didn't know about him, didn't see him, and didn't meet him. Ms. Marleau testified that Mr. Guité arrived at her office shortly after she became Minister of Public Works, and she sent him packing, saying, “You don't report to me. Go back and talk to your deputy”. Mr. Gagliano said, vaguely, “I think maybe I met with this guy two, three, four times a year.” You're the chief of staff to the Prime Minister, and you have these regular meetings with Mr. Guité. His own minister won't meet with him. You're having us believe that this is a normal way of doing business. How could it possibly be that it wouldn't raise questions in your mind?

Mr. Jean Pelletier: Sir, I don't think I saw Mr. Guité during 1993-1994. I started to see Mr. Guité on a more regular basis--about once every two months--after the referendum took place and because of that unity file.

Mr. Jason Kenney: Isn't it true, Mr. Pelletier, that in these meetings he was seeking ongoing direction and approval from you on the way he was managing the program and the grants he was approving?

Mr. Jean Pelletier: He was not asking for our blessing on how we would administer the program. He never did. He was not the type to do that.

Mr. Jason Kenney: It was just the time to get your views on what was happening in Saint-Hyacinthe.

Mr. Jean Pelletier: Yes, and to say that he was running out of funds and was seeking more funds. Sometimes he finished by having some more funds, and sometimes he was refused more funds.

Mr. Jason Kenney: Was it normal practice in the public service, with over 400,000 employees and a $160 billion budget, for the chief of staff to the Prime Minister to receive a line manager from one department who was lobbying for additional funds for his program? Was that how you normally conducted your business?

Mr. Jean Pelletier: Sir, I said the unity file was a special file. I would have seen any janitor related to the unity file if the unity file made it necessary for me to meet. I will not excuse myself for having seen Mr. Guité on the unity file.

Mr. Jason Kenney: So he lobbied you directly for additional funding, and you would approve--

Mr. Jean Pelletier: Yes, he did, and his minister did as well. Finally, when there were supplementary estimates, some years there was some added money and some years there wasn't.

Mr. Jason Kenney: Okay, Mr. Pelletier—

The Chair: Mr. Kenney, I'm going to interrupt at this point. We have about an hour left in the meeting. I was thinking that since we've started round three, we'd go eight minutes for the first two rounds, but perhaps in fairness to everybody I'll give you one more question, and we'll go with four minutes for each one. Is that okay, or would you rather proceed differently?

Mr. Jason Kenney: Well, Mr. Chairman, I have several questions I wanted to get through. I have three more minutes. I created my line of questioning anticipating eight minutes.

The Chair: Okay. I'll discuss it after you've finished your eight minutes. I did expect you'd have eight minutes.

Mr. Jason Kenney: Mr. Pelletier, did you meet with any frequency with Pierre Tremblay after he assumed the position Mr. Guité had vacated as head of the sponsorship program?

Mr. Jean Pelletier: I think Mr. Tremblay got into the job in...what?

¸ (1455)

Mr. Jason Kenney: It was in 1999.

Mr. Jean Pelletier: In 1999. Up to my departure in June, a little less than two years later, I certainly had a few contacts with Mr. Tremblay. But as I have mentioned before, I knew Mr. Tremblay personally better than I had known Mr. Guité personally, and I don't think Pierre Tremblay came to my office—or maybe once. The contacts with Pierre Tremblay were more by telephone.

Mr. Jason Kenney: All right. Would you characterize them as regular telephone contacts?

Mr. Jean Pelletier: Certainly they—

Mr. Jason Kenney: To discuss the sponsorship program?

Mr. Jean Pelletier: I don't think the rhythm of my contacts with Mr. Tremblay was different from the contacts I had with Mr. Guité.

Mr. Jason Kenney: I asked you earlier, and we didn't get a chance to get a direct answer: of the programs you proposed Mr. Guité fund through the sponsorship program, did he ever reject any of your requests for funding? Did he ever come back to you and say, “Mr. Pelletier, we're not going to fund that program?”

Mr. Jean Pelletier: I think he did when he had no money.

Mr. Jason Kenney: But otherwise he... All right.

My final question, sir, is this. You said you'd heard suspicions of all sorts—from street rumours, from reading articles—in the year 2000 about the misadministration of the program, including what you characterized as rumours about inflated commissions and essentially about rule-breaking in terms of the way these contracts were let to ad agencies. You brought these to the Prime Minister. Then you went to Mr. Gagliano, and the internal audit came back and they said, “No problem, Mr. Pelletier, these are just administrative problems. There is nothing untoward or illegal involved here.”

My question to you is this. Having heard what you believed to be credible rumours about inflated commissions and rule-breaking, why did you accept this response that these were merely administrative problems? Why didn't you probe further? Or did you simply want to protect your boss by not knowing what was really going on in this department that has since been revealed by the Auditor General?

[Translation]

Mr. Jean Pelletier: I found your last comment a little insulting. If, in order to protect my boss, I had neglected my duty as a public officer, it would not have been right, I think, and it is not really my style.

This being said, when questions were raised about the program's administration and management, I think that in the first instance, it was up to the internal audit to tell us the problems were. If that internal audit had revealed anything wrong, it would have said more than it actually did, I think, and I had no reason not to accept its findings as such. The minister told me that the audit findings included suggested changes to procedures in about 37 cases, 37 items to improve the process, and that he had asked his deputy to see to it that these suggested changes be put in place. Thus, I fail to see any PMO responsibility in this regard. This is much more an administrative responsibility of the deputy minister and the civil servants than a PMO responsibility, with all due respect, Mr. Kenny.

[English]

The Chair: Thank you, Mr. Kenney.

Monsieur Crête, s'il vous plaît, vous aurez huit minutes.

[Translation]

Mr. Paul Crête: However, Mr. Pelletier, from that point on, we still kept asking numerous questions about this in the House of Commons. I suppose that the PMO would have wondered why we were so persistent and whether there might have been additional things to dig out. During the following months, did you not have to deal with that?

Mr. Jean Pelletier: You know, Mr. Crête, during question period, when the opposition has a meaty issue, they always try to chew it to the bone, but we should not lose sight--

Mr. Paul Crête: Mr. Pelletier, I think that in this case, we were darn right.

Mr. Jean Pelletier: But there's no reason to lose one's marbles about it. I've seen the Human Resources Development file which amounted to over a billion dollars. The minister was responsible for it and he was answering questions in the House. What is it you want? Was I to answer on his behalf?

Mr. Paul Crête: That's not what I'm saying. You were the PM's chief of staff, and this file was regularly coming to the fore after you had advised the Prime Minister and after you had learned about the deputy minister's comments. But we kept asking questions. This does not mean that you had to recognize that we were right at that time, but didn't that entice you to ask more questions to see whether, indeed, things were being handled differently? After the audit by Ernst & Young in 1996 and after the internal audit in 2002, nothing changed.

¹ (1500)

Mr. Jean Pelletier: Mr. Crête, first of all let me tell you that I never heard a thing about the 1996 audit. The first audit that I learned about was the audit in the beginning of 2000, and I have told you that we only got the findings in the spring of 2000. I also told you that I was absent in July, August and September. Upon my return, the election had been called and a few months later, I had to deal with the Summit of the Americas. Then, I left. Consequently, I did not concern myself with what had appeared to me, after the internal auditor submitted his report, to be the deputy minister's responsibility.

Mr. Paul Crête: I would like to ask you a question about something else, namely the Maurice Richard stamp series. You told us that you had been appraised...

Mr. Jean Pelletier: I was not aware of the Maurice Richard stamp series as such. I was told that there was a series for which several government outfits would participate in a joint sponsorship.

Mr. Paul Crête: Did you have an idea of how much went to Post Canada, which got $1,625,000, Via Rail and others?

Mr. Jean Pelletier: No, sir.

Mr. Paul Crête: Did you know the total cost of this event?

Mr. Jean Pelletier: No, sir.

Mr. Paul Crête: You didn't know that $7.5 million was to be sunk in this production?

Mr. Jean Pelletier: No, sir.

Mr. Paul Crête: One thing strikes me a lot in your testimony. You have stated, particularly after the break, that the Prime Minister had told the deputy minister that there would be no meddling in his work. After that, you had bi-monthly meetings with Mr. Guité, who was a middle manager. You had meetings with him every two months, whereas normally, you would have had to go through the deputy minister in charge of the department.

How do you explain this contradiction between your actions and the Prime Minister's directive?

Mr. Jean Pelletier: There's no contradiction at all between my actions and what I have been telling you. You have asked me why I had met with Mr. Guité. It was because he was the person whom the department was sending to me, and those meetings were held with the full knowledge of his deputy minister and with the full knowledge of his minister. That being the case, there was no problem with me meeting with him.

I have also told you that we were making representations just like any minister's office or MP's office, in order to address request from Canadian citizens and Canadian organizations that came through the Prime Minister's Office seeking access to the program, which was perfectly normal.

I have told you that we never interfered with internal administration and program management. I have said, I don't know how many times since 9 a.m. that we were never involved in the selection process, in awarding contract or in determining the rates to be paid to those various agencies for professional services or the commissions to be invoiced by them. We did not see any of this and if we had, we would have contravened the Prime Minister's directive of November 5, 1993, since this would have been tantamount to interference by the political side in administrative management. That was not the case. Since we did not do it, you should not say that the meetings I had with Mr. Guité were in contravention of the Prime Minister's instructions dated November 5, 1993, which specified that the administrative and legislative were to be kept separate from the political. These two levels, which are distinct, should each stick with their own areas. They have to remain in contact, but each must stick with its own area and not interfere with the other.

Mr. Paul Crête: When a civil servant comes to see you, the prime minister's chief of staff, and when you give an opinion about sponsorships, about those request which are valid and those which aren't, isn't that kind of interference totally unacceptable and indicative of the general mindset of this whole scandal?

Mr. Jean Pelletier: With respect, Mr. Crête, I would remind you that what is at issue here is not the choice of sponsored events, but rather the way the government spent that money and sponsored these events or not. That's what is at issue. The program itself is not in dispute. The program was not found unlawful. The political influence that might have been exerted in the choice of events is not at issue. The question is whether there was fraud in the management of monies. That is what is at issue. You should keep that in mind and not use this for politicking as many parties like to do these days. I don't blame them but let us not forget what was raised in the Auditor General's report.

¹ (1505)

Mr. Paul Crête: You must understand, Mr. Pelletier, that it is reasonable for us to ask questions, since there are agencies that ended up being generously sponsored by the Liberal Party and there are very clear correlations, almost to within a couple of percentage points, between the agencies that were hired and their contributions to political parties. It is therefore quite normal that we want to get to the bottom of this to know if in fact there was one person in control of the whole program.

Mr. Jean Pelletier: Sir, I have no objection to your doing your work. I encourage you to do so and to do it well. Canadians want to know what happened. But you will not find answers to the questions you have just raised in the Prime Minister's Office. There are no answers to be found there. I can tell you, there are none.

[English]

The Chair: Merci beaucoup.

Mr. Mills, please.

Mr. Dennis Mills: Mr. Chair, I'm going to be sharing my time with Mr. Lastewka, so cut me off at four minutes.

Colleagues, many of us have served in this House for a long time. I've been around here for 16 years, and I've spent my entire political career intervening on behalf of my constituents. I consider political intervention part of my responsibility.

There have been times in the last 16 years when I've gone to ministers for support, and when I didn't get it, I would go to the Prime Minister's Office and lean on them for support. I think that is part of what a member of Parliament is supposed to do, to work as hard and to be as focused as you can for your constituents. So I get confused at the two-faced side of this exercise we've been going through here over the last little while, questioning political intervention as if it's some kind of sin or something that's forbidden. I just do not take that position.

I've never questioned that we should find out if there is stained money here, but I think Canadians should know that parliamentarians have a responsibility to intervene politically day in and day out. I have gone to the Prime Minister on more than one occasion in the last 16 years, even to an earlier Prime Minister, Prime Minister Mulroney, because I felt there were times, when I couldn't get ministers to act, for me to go right to the top.

So because there's some question of this here today, Mr. Pelletier, my question to you is, what do you consider to be appropriate versus inappropriate political intervention?

[Translation]

Mr. Jean Pelletier: You should address that question to others more competent than me. I believe that members of Parliament who are also ministers should intervene through their offices on behalf of their constituents. Of course, there are all kinds of rules on conflicts of interest that prohibit ministers from doing this or that, but there are still ways that they can intervene. For example, if you want to intervene in a justice issue, since you can't talk to the judge, you will talk to the Justice minister who will get in touch with the chief justice of the relevant court if need be. In such a case I believe there are enough checks and balances to avoid abuse.

I believe you have passed or will soon pass legislation on an ethics' commissioner. Perhaps you should direct your questions on this issue to those people, who are much more knowledgeable than I am.

¹ (1510)

[English]

Mr. Dennis Mills: I have one last, short question.

But you would not find it inappropriate if a member of Parliament appealed to you on a certain file on behalf of his or her constituency.

Mr. Jean Pelletier: Not at all, including members of the opposition.

Mr. Dennis Mills: Thank you.

The Chair: Mr. Lastewka, please.

Hon. Walt Lastewka: Thank you, Mr. Chairman.

I want to go back to some of the comments made yesterday and today on the unity fund. It's my understanding, Mr. Chair, that the fund was set up in 1979 under the Conservative government, that it was $21 million, and that it was operated under the advertising management group. I understand that when the next government came in, they also had the fund at $21 million, and then from 1984 to 1993 the unity fund ballooned to somewhere just over $100 million. It was still managed, from what I understand, by the advertising management group.

It's my understanding that in 1994, as a result of things that had happened in previous years, there was a desire to put some guidelines in place. My understanding from yesterday's testimony is that there were no guidelines in place from 1979 to 1993. Is that correct?

Mr. Jean Pelletier: Sir, I am not in a position to answer that. I wasn't there before 1993.

Hon. Walt Lastewka: Were you involved in the setting up of the guidelines in 1994?

Mr. Jean Pelletier: No.

Hon. Walt Lastewka: So you had no contact with the minister, and you were not involved in the setting up of the guidelines that eventually came to cabinet.

Mr. Jean Pelletier: I don't recall having been involved at all, no. The unity fund was, I should say, managed by PCO.

Hon. Walt Lastewka: This was under the advertising management group?

Mr. Jean Pelletier: No, this is something....

Hon. Walt Lastewka: What was the group called in 1993 then?

Mr. Jean Pelletier: The unity fund--which I think was mentioned by the Minister of Finance in his last budget speech, if I'm well informed--was, I should say, a bank account administered by PCO. The signature of the Prime Minister was a necessity for anyone to get any money from that source. That's something that may be different from what you're talking about.

Hon. Walt Lastewka: Mr. Dingwall talked about putting a new policy in place for advertising, and it was to be implemented by Public Works and Government Services. He mentioned yesterday, if I remember correctly--and you can correct me, Mr. Chairman--that it was the first time there had been guidelines in Canada, even in provincial governments.

The Chair: I think you're correct in saying that Mr. Dingwall said that it was the first time the rules had been brought in and that he had brought them in.

Hon. Walt Lastewka: What you're saying is, you were not involved with the guidelines and it was done....

Mr. Jean Pelletier: It was done at Public Works or at PCO, but not by us. The Prime Minister's Office was not concerned with the specific file you referred to.

Hon. Walt Lastewka: When you had discussions with Mr. Guité by phone or he visited your office, did you talk about the guidelines that were being used? Was there any discussion on procedures?

Mr. Jean Pelletier: Not that I can recall.

Hon. Walt Lastewka: So there was no discussion between you and Mr. Guité on the implementing of the sponsorship program.

Mr. Jean Pelletier: No.

Hon. Walt Lastewka: It was on the results of the sponsorship program.

Mr. Jean Pelletier: Yes. The program was administered not by us but by Public Works. We were not involved in that, as I mentioned earlier.

The Chair: Thank you, Mr. Lastewka.

Ms. Wasylycia-Leis, it's your turn again; eight minutes.

Ms. Judy Wasylycia-Leis: Thank you.

It's my lucky day: three times.

Mr. Chairperson, I just think we should remember why we're here. I know Mr. Mills would always like to downplay the significance of the events we're dealing with, but the Auditor General--

¹ (1515)

Mr. Dennis Mills: I have a point of order. Did you say downplay the importance of this?

Ms. Judy Wasylycia-Leis: Yes.

The Chair: Mr. Mills, we are entitled to choose our words carefully in this House, and if Ms. Wasylycia-Leis wants to talk about downplaying, she may continue to do so.

Ms. Judy Wasylycia-Leis: Let me just say, Mr. Chairperson, that whenever Mr. Mills talks I have to stop and ask myself, is this real? Are we really dealing with something? I get the feeling it's a figment of my imagination.

The Chair: No, I can assure you it is not, Ms. Wasylycia-Leis. This is a very serious issue.

Ms. Judy Wasylycia-Leis: It is a serious issue. So I would like to ask Mr. Pelletier—since he said he didn't really know of problems back then—if he had known then what he knows now from the Auditor General's report, would he have done anything differently in terms of directions to ministers and reports to the Prime Minister, or would he also have said it should be left to the PCO?

Mr. Jean Pelletier: Madame, when I had any doubts about the program—and it happened when I reported to the Prime Minister that there were rumours—I think we reacted in a responsible way. This indicates that if I had known more, I would have done more. But the only time when there were some rumours about possible problems in the delivery of the program, I reported to the Prime Minister and acted the way he asked me to do. This is the proof of the pudding, I think.

Ms. Judy Wasylycia-Leis: I appreciate that.

You've really emphasized today the line between the PMO and the PCO, as if there is a wall almost between them. Yet if you check the Internet these days—and I don't think this has been changed since the new Prime Minister came into office—it says, and I quote from the PCO's site, that the PMO “...works closely with the Privy Council Office. Together these two organizations provide advice and support from different perspectives on the issues of daily concern to the Prime Minister.”

I guess I could table my BlackBerry, Mr. Chairperson, but I want to make the point that I don't think, in terms of the way this place operates and the way we understand the different rules in the Prime Minister's Office vis-à-vis the PCO, that in fact one can actually separate in the way you've done—it would appear, to your convenience—today.

I come back to that point, because we're trying to understand.... This is where the political does come into play. Dennis Mills asks why we are talking about politics, but in fact the present Prime Minister has said this is a major—and I think he even used the word—scandal. We have to get to the bottom of it; it's horrible, he said. And when he tried to dump it on public servants, nobody believed him. It was as if he were reading a fairy tale. It's just not credible.

No one believes this was single-handedly masterminded by one or two public servants, Mr. Guité and whoever. We know there has to be some political involvement, and you're obviously the person who can shed some light on that.

I want to ask you a few questions.

As chief of staff in the Prime Minister's Office, you would have chaired regular meetings of ministers' political staff. Isn't that right? You said you didn't have chiefs of staff in ministers' offices, but you had executive assistants.

The Chair: You've asked the question, Ms. Wasylycia-Leis. Let Mr. Pelletier answer.

Mr. Jean Pelletier: I chaired some meetings, on a very irregular basis in an irregular calendar, of executive assistants to ministers. I chaired a few to give them the direction the government had taken in some areas. Yes, I did that.

Ms. Judy Wasylycia-Leis: I appreciate that.

Mr. Jean Pelletier: But would you do me a favour, Madame?

Ms. Judy Wasylycia-Leis: Sure.

Mr. Jean Pelletier: Would you read again what it said about PMO?

Ms. Judy Wasylycia-Leis: Sure I will, as soon as I finish my question, so that I don't lose that—

The Chair: You can table the document you're reading.

Ms. Judy Wasylycia-Leis: I could table it. It's on my BlackBerry, so it's a little hard to do, but it's right off the PCO site, and I can get it copied and circulated to the committee. I would be glad to repeat that in one minute or two minutes.

Concerning meetings with political staff, however irregularly you may have met, it would be at these meetings, presumably, that some of the widespread rumours you were hearing about the sponsorship program might have been discussed.

Mr. Jean Pelletier: No, the sponsorship program, Madame, was never discussed at these meetings--never.

Ms. Judy Wasylycia-Leis: It was never discussed. Okay.

Was the sponsorship program ever discussed, period, in terms of political staff? Not the rumours or—

¹ (1520)

Mr. Jean Pelletier: It was discussed inside the PMO with the senior staff, who had to know what was going on with the programs. I had senior staff in the morning. I had somebody from research and policy, from the political desk, the communications department, the operations department, my executive assistant. It was the daily meeting we had so that the cross-information would flow from one to another, so that the end result of our overall team would be of better quality. I'm sure we informed these people about the program and what was happening, etc. If you were the western desk and you got some request, you would have to proceed that way to put it in the hands of... Yes.

Ms. Judy Wasylycia-Leis: Okay. I appreciate that there's always going to be some flow of staff between the political level and the bureaucracy. In the case of the sponsorship file, it seems rather an interesting phenomenon in terms of the political staff, such as Pierre Tremblay and Isabelle Roy moving directly from Mr. Gagliano's office, as political staff, into one of a small group of 14 people in terms of the sponsorship program.

Mr. Jean Pelletier: Inside Public Works?

Ms. Judy Wasylycia-Leis: Inside Public Works, but inside the group, unto its own, that had reporting relations directly to the minister.

Could it be that in fact it was a case of the political overtaking the bureaucratic or the public servant role in terms of the sponsorship program? Did you accomplish your means in that way, without having to be directly controlling, pushing, and pulling, in terms of political buttons?

Mr. Jean Pelletier: It's a bit difficult to understand what you have in mind.

Ms. Judy Wasylycia-Leis: It's a revolving door between the political staff and the....

Mr. Jean Pelletier: As to what is happening inside the Department of Public Works, ask anybody else to answer that question. It was not my responsibility, and I don't know.

Ms. Judy Wasylycia-Leis: But you're in charge of political staff, right?

The Chair: Okay, Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: On a point of order, at least we know that Mr. Pelletier is responsible for political staff. I would hope, Mr. Chairperson, that you would seek an answer vis-à-vis any questions pertaining to that function. That is within his jurisdiction, and he cannot claim to be outside of his mandate as chief of staff in the Prime Minister's Office.

The Chair: Before I get to you, Mr. Lastewka, I pointed it out earlier, and Mr. Pelletier answered that he did not know. I pointed out earlier that because it's not within his domain, it doesn't mean that he can't answer, but he did answer saying that he didn't know.

Mr. Lastewka.

Hon. Walt Lastewka: I want to get clarification on the question and the answer. What I understood Mr. Pelletier to say is that he met with the chiefs of staff of ministers. What Mrs. Wasylycia-Leis said is that Mr. Pelletier was responsible for chiefs of staff of the ministers.

That's what I heard. Could I get that clarified? What was the question, and could we hear the answer?

Ms. Judy Wasylycia-Leis: I was certainly not suggesting that Mr. Pelletier was responsible for all the minister's political staff. But he had an important liaison role with political staff and therefore would have something to do with or say about the movement of political staff from Mr. Gagliano's office into the communications office of the Department of Public Works. That's a fair question.

The Chair: Mr. Pelletier, did you have any say in the movement of political staff from one office to another?

Mr. Jean Pelletier: We usually applied...I say “usually”, but that was the rule. The executive assistant to a minister would be appointed only if the Prime Minister was in agreement and if the minister was in agreement. It was a dual consent. If one or the other was not happy, somebody else would be selected.

As far as the rest of the staff in the ministerial office, their names were communicated through the PMO. There was the normal security check that was done. If there was a problem, I would call, or the minister or the executive assistant would, to discuss a particular case. But if nothing arose, it was accepted. That was the rule.

¹ (1525)

The Chair: Mr. Jordan, you had a point of clarification too.

Hon. Joe Jordan: What Mrs. Wasylycia-Leis is referring to, if I'm getting it right, is an exempt staff or EA to a minister then bumping into to a department. I think that's guided by the collective agreement.

The Chair: I don't think that's what Mrs. Wasylycia-Leis was saying. I think we'll leave that alone, because Mrs. Wasylycia-Leis and Mr. Pelletier have answered that in fairly significant depth. We're not talking about EAs.

Hon. Joe Jordan: She was talking about Pierre Tremblay going into Guité's job, wasn't she?

The Chair: Was that your point, Madam Wasylycia-Leis?

Ms. Judy Wasylycia-Leis: My point was, you had political staff who fell under the rough umbrella of the chief of staff in the PMO who were moving from political jobs, particularly in Mr. Gagliano's office--two of them--and going into the very group that was at the heart of this whole sponsorship scandal. This was at a time, as Mr. Gagliano testified before us, when he was forced to accept certain people in certain staffing positions. It begs the question, who forced him and was this not directed by the PMO chief of staff?

The Chair: Mr. Pelletier, my question is, was it directed by you in the PMO?

Mr. Jean Pelletier: What?

The Chair: The fact that Mr. Tremblay--

Mr. Jean Pelletier: I'm a bit confused.

The Chair: Well, I think we're all a little confused here, but Mr. Tremblay moved from being the EA--executive assistant--of Mr. Gagliano into the public service as the executive director in charge of the sponsorship program, which was a public service position. As you know, senior staff can, without open competition, move into the public service.

Now, Madam Wasylycia-Leis is saying that Mr. Gagliano said, I couldn't stop it; I was ordered to do it. So who transferred Mr. Tremblay to the public service, or did he transfer himself?

Mr. Jean Pelletier: Sir, we may have been consulted as to whether we had objections to this happening, but we were certainly not the ones to decide on somebody entering the public service.

The Chair: Thank you.

Just for everybody's edification, the blues from 9 o'clock this morning until the lunchtime break are now available. I have only three copies, but do you want to just mention what website they are available on?

The Clerk of the Committee: The blues, the unedited transcript, are available on the internal website, Intraparl.

Mr. Dennis Mills: What is the website?

The Clerk: It's Intraparl, Mr. Mills.

Mr. Dennis Mills: Where do you go after that?

The Clerk: To committee proceedings.

Mr. Dennis Mills: Now I'll ask the clerk for a clarification. Is the list of the 1987 projects on the site?

The Chair: No. I just made an information announcement, Mr. Mills.

Mr. Dennis Mills: But that's pretty important information.

The Chair: We're not going to go off on an examination of the website. We have half an hour left, and we're going to go four minutes a round.

Mr. Pelletier.

Mr. Jean Pelletier: Mr. Chairman, I had asked this honourable lady to read what she had said, and she was supposed to do it. Would you please do me the favour?

The Chair: Yes.

Can you read what you have there, Ms. Wasylycia-Leis?

Ms. Judy Wasylycia-Leis: It's a rather lengthy piece, but I'll just read the excerpt I--

Mr. Jean Pelletier: Read the PMO part.

Ms. Judy Wasylycia-Leis: It says: “Italso works closely with the Privy Council Office. Together, these twoorganizations provide advice and support from different perspectives on theissues of daily concern to the Prime Minister.”

Mr. Jean Pelletier: Thank you very much.

Ms. Judy Wasylycia-Leis: You're welcome.

Mr. Jean Pelletier: I think it confirms what I told you already.

The Chair: With the emphasis on “daily”, so—

Ms. Judy Wasylycia-Leis: I think it confirms what I've been--

The Chair: Thank you, Ms. Wasylycia-Leis. You have this capacity to be heard beyond the power of the NDP.

Some hon. members: Oh, oh!

The Chair: Mr. MacKay, four minutes.

Mr. Peter MacKay: Thank you, Mr. Chair.

Mr. Pelletier, I wanted to ask you about Quebec ministers' breakfast meetings. Are you aware of regular meetings that took place at any time with Quebec ministers that were apparently taking place in an informal capacity and where there were discussions--I don't want to assume anything, but I'm assuming there would be discussions--over the political atmosphere in Quebec, including the threat of separatism there? Are you aware of any such meetings, and did you ever attend them?

¹ (1530)

Mr. Jean Pelletier: Oh, yes. I attended all of these meetings on a regular basis.

Mr. Peter MacKay: And would you therefore be aware of discussions on political strategy over how to combat this political scourge in Quebec, separatism?

Mr. Jean Pelletier: There's no doubt there was an exchange of views between ministers about that, yes.

Mr. Peter MacKay: Therefore, I suggest to you that sponsorship would have been very much a subject of debate as to this issue of how to raise the profile of Canada in Quebec with the billboards and the Canada logo, the strategy, as you put it, to raise our profile and to counteract some of the Quebec provincial government's efforts to put Quebec first.

Mr. Jean Pelletier: It might have been mentioned, but I have no recollection of a really serious, in-depth discussion of that program.

Mr. Peter MacKay: So never any detail over cost.

Mr. Jean Pelletier: Actually, when the overall subject was discussed, it was more about organizing the presence of Quebec federal ministers in the province, on regular tours and with a regular presence, etc., systematically.

Mr. Peter MacKay: Those Quebec ministers would include the then finance minister and current Prime Minister. Would he have been present at these breakfast meetings?

Mr. Jean Pelletier: They were all invited. All of them were not always present because of their ministerial duties. They sometimes had to be out of the capital. All Quebec ministers were invited to the Tuesday morning breakfast meetings.

Mr. Peter MacKay: You said you attended regularly.

Mr. Jean Pelletier: Yes, but not the whole meeting. It took place, if I remember correctly, from 8 to 10, and I would skip out at 9:20 to see the Prime Minister at 9:30 before the cabinet meeting began.

Mr. Peter MacKay: Mr. Pelletier, was Mr. Martin present at any of those breakfast meetings?

Mr. Jean Pelletier: He was present sometimes, surely. Was he at all meetings? I don't know.

Mr. Peter MacKay: More often than not?

Mr. Jean Pelletier: I didn't notice.

Mr. Peter MacKay: It was a regular meeting. Was he there regularly or not?

Mr. Jean Pelletier: I think most of the time he was there.

Mr. Peter MacKay: When these discussions would take place, would you relay that information to the then Prime Minister, your boss?

Mr. Jean Pelletier: If there was something special I would. If there was nothing special I would say, “Nothing special occurred this morning, sir, at the Quebec ministers' meeting”.

Mr. Peter MacKay: What do you say, Mr. Pelletier, to the allegation that Quebec advertising firms that had Liberal connections were being given the bulk of the business around this sponsorship program and some of those same firms were making substantial political donations to the Liberal Party? This certainly smacks of political influence, and it certainly gives the very real appearance of those firms being rewarded for their contribution by virtue of receiving this work through the sponsorship program. That is very much the crux of the issue here. It's a matter of public record that those firms that got the work also made considerable donations to the Liberal Party.

Mr. Jean Pelletier: Sir, I didn't know about any of the firms when it happened. We knew about the firms afterwards. When it was said by the internal audit that there was nothing criminal and that it was administrative and management problems, I personally had no reason, even if it was a short time, because after I left for my surgery--

Mr. Peter MacKay: Some of those firms are under investigation now. You would admit that.

Mr. Jean Pelletier: I think the former Prime Minister was very clear. If somebody has not acted properly and in all the public responsibility in that program, let the police find out. Let the prosecutors do their job and let the due process of justice take place to deal with the file. I think that was a very responsible position.

I'm absolutely

¹ (1535)

[Translation]

in agreement with that position. We won't defend people who misused public funds and perhaps broke the law.

[English]

Mr. Peter MacKay: Merci, monsieur Pelletier.

The Chair: Thank you, Mr. MacKay.

Monsieur Proulx, for four minutes.

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

Mr. Pelletier, this is probably my last chance to ask you questions this afternoon. I would like then to tie up a few loose ends. From July 1991 to the election of 1993, you worked in Mr. Chrétien's office; he was then leader of the opposition. This morning I asked you about reports in the media on Mr. Guité's bad management practices and you told me that you did not know anything about that.

At the time was there anybody monitoring the media? Was there anybody at the time, in the leader of the opposition's office, who monitored the media?

[Translation]

Mr. Jean Pelletier: Between 1991 and 1993?

Mr. Marcel Proulx: That's right.

Mr. Jean Pelletier: I don't know. The communications director had a team. At that time, the communications director was Peter Donolo. I never heard anything about Mr. Guité during that period. I can only repeat what I said earlier. I heard nothing about him. Were there other people in my office who heard things? I don't know.

Mr. Marcel Proulx: There were media reports, Mr. Pelletier, which were tabled with the committee but you can't be expected to read them all or be aware of them all.

Let's make a distinction between the Prime Minister's Office and the Privy Council Office. We agree that the Privy Council Office, or PCO in government jargon, is the Prime Minister's department.

Mr. Jean Pelletier: That's right.

Mr. Marcel Proulx: All ministers have a chief of staff and in the case of the Prime Minister, it was you.

Did anybody play the role of executive assistant in the department called the Privy Council Office?

¹ (1540)

Mr. Jean Pelletier: No. Let me describe the relationship between the Prime Minister's Office and the Privy Council Office back then. I had direct contact with the Clerk of the Privy Council. Normally we would meet every morning in the Prime Minister's office at 9:30 and we spoke on the phone as often as necessary. Also our director of policy and research was in touch with the secretaries of cabinet committees handling economic or social issues.

Our communications service was in contact with PCO's communications service. Each office was in contact with its counterpart at the PCO and, every week, there were meetings between the two to coordinate work. As I explained, each office kept to its own area: we were responsible for the political area, they were responsible for the administrative and legislative areas. That's how it worked.

Mr. Marcel Proulx: Mr. Pelletier, if there had been a management crisis or some kind of panic at the management level within PCO, they would not have gone to one of those managers but would have gone directly to the Clerk of the Privy Council.

Mr. Jean Pelletier: The matter would have been referred to more senior staff and, if it had to go to the top, the clerk would have talked directly to the Prime Minister.

Mr. Marcel Proulx: The matter would have been mentioned at the 9:30 meeting that you attended.

Mr. Jean Pelletier: That's right.

Mr. Marcel Proulx: I'd like to clarify something. This will be my last question. In your meetings with Mr. Guité and then with Mr. Tremblay and perhaps also with Mr. Bard, you would look at the lists of the various requests for sponsorship that also showed—as you said earlier in response to one of Mr. MacKay's questions, I believe—the corresponding amounts.

Mr. Jean Pelletier: The amounts that were requested.

Mr. Marcel Proulx: Thank you, I wanted to clarify that. The Auditor General pointed out that in certain cases, the amounts that were at least double the amount requested.

Were you aware of that? Did you discuss that around your table or was it only Mr. Guité's and his team's responsibility?

Mr. Jean Pelletier: I honestly don't remember.

Mr. Marcel Proulx: Thank you.

Thank you, Mr. Chairman.

[English]

The Chair: Madam Jennings, do you have a point of order?

Mrs. Marlene Jennings: Yes, I do. It concerns a ruling you made previously to some objections I had made. Now that I have the transcript in front of me, I think I'm in a position to show that in fact the ruling was incorrect. It regards testimony that was given. It's in the section from 11:25 a.m. to 11:30 a.m., and it regards Mr. MacKay's questioning of the witness. I can read out what it says:

Mr. Jean Pelletier: No. I knew Mr. Lafleur socially like that. He has a son who I know well and he was very concerned about his son at a certain time and we discussed that.

Mr. Peter MacKay: So when you said that you didn't know him professionally--

Mr. Jean Pelletier: I didn't discuss any contract with Mr. Lafleur.

Mr. Peter MacKay: You never discussed it. When you said you knew him, you didn't know him professionally, you knew him unprofessionally. Is that what you meant? Unprofessionally, okay.

When you said, at one point in your testimony previous, that you would talk to the janitor if it would help the country, would you talk to the janitor if you thought he was bilking the government of $100 million? Would you talk to him then? Probably, eh?

Mr. Jean Pelletier: When I said that I would see the janitor....

Mr. Pelletier never agrees that he knew anybody unprofessionally. Then when we get further down and Mr. MacKay is questioning again, he says:

None whatsoever. But my question to you, sir, was did you ever have anything to do with the hiring practices? And this goes, I would suggest, to credibility. There's a suggestion that you met with Mr. Beaudoin and a number of others, including Jean Lafleur--who you had an unprofessional personal relationship with, according to you--

The Chair: Mr. MacKay, I wouldn't call it unprofessional. Is it unprofessional? Were those his words?

Mr. Peter MacKay: That's what he said. Those were his words.

Mr. MacKay led you, the chair, into error. According to the transcript, which confirms my memory of his testimony, Mr. Pelletier never used the term “unprofessional” or even agreed with Mr. MacKay's qualification of his relationship.

The Chair: Thank you very much, Ms. Jennings. You may recall that I pointed out that Mr. Pelletier did clarify later on that the relationship he had was a social relationship; it was not a professional relationship. I pointed out that I did take unction at the word “unprofessional”, and Mr. MacKay did suggest that it was Mr. Pelletier's word. However, I did not agree with allowing the word “unprofessional” in the room. I pointed that out.

Mrs. Marlene Jennings: My point of order--

The Chair: The point, I think, is that--

Mrs. Marlene Jennings: I haven't even made my point of order.

The Chair: What is your point of order, Madam Jennings?

Mrs. Marlene Jennings: My point of order, sir, is that I think it's serious behaviour or conduct on the part of a member who mischaracterizes the testimony of a witness and induces the chair to error by putting words in a witness's mouth. I think that's quite serious. It goes to the very credibility of the work of this committee. I think it behooves members not to mischaracterize testimony, not to misinform on testimony.

The Chair: Yes, yes, we agree, Madam Jennings. I and Mr. Pelletier did clarify that it was a social relationship. It wasn't a professional relationship. It wasn't an unprofessional relationship.

Mrs. Marlene Jennings: It's Mr. MacKay's conduct in mischaracterizing--

The Chair: Madam Jennings, you have raised a ruling of the chair pertaining to Mr. MacKay.

We are now going to move to Mr. Thibault for four minutes.

¹ (1545)

[Translation]

Hon. Robert Thibault: Thank you, Mr. Chair.

[English]

Mr. Pelletier, again, Mr. MacKay raised a point that I think is very important, something that has been created a little bit out there, which is that these firms were Liberal-friendly firms. I don't know. I hear different points of view from different people. Some tell me they were firms that were friendly to the Progressive Conservative Party when they were in power. There were firms that may have had links with other parties. But in all cases they were, I think we heard in testimony, federal-friendly firms.

Do you have any information on those points? Is there any way you could assist us?

Mr. Jean Pelletier: Not at all. I'm sorry, I don't know these firms.

Hon. Robert Thibault: You don't know these firms, and you have never participated in any discussion that would characterize their political leanings?

Mr. Jean Pelletier: No.

Hon. Robert Thibault: Thank you.

[Translation]

You said that the PQ government of Quebec, at that time, used the agencies that were at its disposal—you mentioned Loto-Québec and Hydro-Québec—to promote the symbol of Quebec, its flag, the government of Quebec and the people of Quebec in that province.

Now you would not have us believe that the intent of all that was to shape people's political positions or to encourage them to vote against this great nation that is Canada.

Mr. Jean Pelletier: I don't quite understand your question, sir.

[English]

The Chair: I think it was political, Mr. Pelletier.

Hon. Robert Thibault: No, never.

[Translation]

Mr. Jean Pelletier: For example, there was in Quebec a campaign to encourage people to wear their seat belts. The slogan was “On s'attache au Québec” which was translated as “Everyone buckles up in Quebec” but which literally means “everyone is attached to Quebec”. You see how subtle it was. It is very intelligent advertising but the message went beyond the simple use of seat belts. The Quebec Government was launching all kinds of initiatives by advertising its services or institutions or by using funds from Loto-Québec or Hydro-Québec.

At the time, people recognized that it was clever. I also recognize that it was clever and that it encouraged a feeling of pride and belonging in Quebeckers. Similarly, we wanted to encourage Quebeckers to be proud to be Canadian and increase Canada's profile in Quebec, where its presence was not very visible. That's one of the reasons the program was set up.

Hon. Robert Thibault: Do you think that, in the government and the public service, political and non-political public administrators might have felt that the situation was so urgent that they could ignore the controls that should have been exercised under the Treasury Board directives or the Financial Administration Act?

Mr. Jean Pelletier: I believe that the government or at least the Prime Minister and the Prime Minister's Office never wanted that, on the contrary. If it happened, we were not aware of it.

Hon. Robert Thibault: The guidelines said that one should always...

Mr. Jean Pelletier: If you look at the paperwork—and there was certainly a lot of it—you will see that the appropriation of funds and so on was always carried out in accordance with the Financial Administration Act and the Treasury Board directives.

[English]

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

I myself have a question. I have a letter to read. We don't have time for another round, so I might just take the odd question from the odd individual to try to balance it out, if there are such questions.

Mr. Pelletier, you were the chief of staff to the Prime Minister, and as you say, in charge of the Prime Minister's Office, the political wing, not the PCO, the bureaucratic administrative wing of government. It has been a matter of record for 10 years, during Mr. Chrétien's tenure as Prime Minister, that any time a cabinet minister was under attack by the opposition, he or she would be defended at great length by the Prime Minister, with one exception. That was in January 2002, when the first story appeared in the newspapers about potential contracts and no value having been received for them. Within a couple of days Mr. Gagliano had resigned and was off to Denmark as our ambassador--quite contrary to the normal position of the Prime Minister.

Did you discuss the resignation of Mr. Gagliano with the Prime Minister? Did you give him any political advice? Were you aware of any rationale as to why he should resign and why he should be appointed as our ambassador to Denmark?

Remember, this is totally out of context with everything else that the Prime Minister had done in defending cabinet ministers. What advice did you give the Prime Minister about accepting the resignation or defending Mr. Gagliano?

Remember, the House wasn't even in session at that time. There wasn't even a question from the opposition, because the House wasn't sitting. All of a sudden, Mr. Gagliano was gone.

¹ (1550)

Mr. Jean Pelletier: Mr. Chairman, I regret to inform you that I had left Ottawa six months earlier, so I no longer had any contacts with the Prime Minister. If you look at your calendar, you will see that unfortunately the question has no grounds for being asked.

It's all very good to say that Mr. Gagliano was the only one to be dismissed, as you intended to say--

The Chair: No, I didn't say “dismissed”.

Mr. Jean Pelletier: He was removed. But I remember a former Minister of Defence who had to resign, by the name of Mr. Collenette. I know my former mayor of Toronto also had to resign. So I think Mr. Chrétien defended his people when he thought they should be defended and acted differently when he thought it had to be done differently.

The Chair: So he must have “thought differently” in Mr. Gagliano's case then, because he defended Mr. Collenette for a long, long time.

Mr. Jean Pelletier: I don't know. I am able to comment on facts that took place when I was here. I don't think I should comment on facts about which I have no evidence of anything, because I'd been gone for six months.

The Chair: I'm going to read a letter from the law clerk addressed to Mr. Jim Judd, the Secretary of the Treasury Board. It's his response to the letter we received from the Treasury Board, which I tabled yesterday, regarding Treasury Board policy on indemnification and legal assistance for crown servants:

Thank you for your letter of March 25, 2004 enclosing the above-noted policy.

Please be advised that I have been instructed by the Public Accounts Committee to respond to your letter to indicate that, in the view of the Committee, the policy does not fully address the concerns underlying the statements of March 11, 2004 to which your letter refers.

It must be noted here that the Committee is making an inquiry into government or departmental operations, arising from the Auditor General's Report of November 2003 relating to the sponsorship program that was run out of the Department of Public Works. Briefly described, the Auditor General found numerous shortcomings in the operations of this program.

For this reason, the Government or the Department of Public Works might have an interest in this inquiry that it would want to defend. This would seem to present a conflict of interest under the above-noted policy such that a government lawyer ought not to have private consultations with a public servant who has been, or might yet be, called as a witness before the Committee.

The Committee must be assured that public servants appearing before the Committee are free to testify fully and truthfully to matters within their knowledge without constraint and have not been subject to any interference, whether explicit or implicit.

I do not mean to suggest that there has been any attempt to improperly influence a public servant scheduled to testify before the Committee. There is no evidence of this. However, the incident discussed on March 11th raises the possibility of such interference. The purpose of this letter is to make clear to you, and through you to other government officials, that in the view of the Committee, there must not only be no interference but also, as much as possible, no appearance of any possible interference.

I trust this adequately explains the view of the Committee on application of the above-noted Treasury Board policy.

Yours truly,

R.R. Walsh

--with a copy to me, as the chair of the committee.

So that's tabled and public knowledge.

We're at five to four and I think we'll bring it to an end.

Mr. Pelletier, you didn't have an opening statement. Do you have a closing statement?

Mr. Jean Pelletier: Thank you for receiving me.

The Chair: You're welcome.

The meeting is adjourned to the call of the chair.