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37th PARLIAMENT, 3rd SESSION

Standing Committee on Public Accounts

EVIDENCE

CONTENTS

Thursday, April 22, 2004

1535

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

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

Mr. Charles Guité (As Individual)

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

1540

The Chair

Mr. Charles Guité

The Chair

Mr. Vic Toews (Provencher, CPC)

The Chair

Mr. Charles Guité

The Chair

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

Mr. Charles Guité

Mrs. Diane Ablonczy

The Chair

Mr. Marcel Proulx (Hull—Aylmer, Lib.)

Mr. Charles Guité

Mr. Marcel Proulx

1545

Mr. Charles Guité

Mr. Marcel Proulx

Mr. Charles Guité

Mr. Marcel Proulx

Mr. Charles Guité

Mr. Marcel Proulx

Mr. Charles Guité

Mr. Marcel Proulx

Mr. Charles Guité

Mr. Marcel Proulx

Mr. Charles Guité

Mr. Marcel Proulx

Mr. Charles Guité

Mr. Marcel Proulx

1550

Mr. Charles Guité

Mr. Marcel Proulx

Mr. Charles Guité

Mr. Marcel Proulx

Mr. Charles Guité

Mr. Marcel Proulx

Mr. Charles Guité

Mr. Marcel Proulx

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Hon. Robert Thibault (West Nova, Lib.)

The Chair

Hon. Robert Thibault

The Chair

Hon. Robert Thibault

The Chair

Hon. Robert Thibault

The Chair

Hon. Robert Thibault

The Chair

1555

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

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

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

1600

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

The Chair

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

1605

Mr. Odina Desrochers

Mr. Charles Guité

Mr. Odina Desrochers

Mr. Charles Guité

The Chair

Hon. Shawn Murphy (Hillsborough, Lib.)

Mr. Charles Guité

Hon. Shawn Murphy

Mr. Charles Guité

Hon. Shawn Murphy

Mr. Charles Guité

Hon. Shawn Murphy

Mr. Charles Guité

Hon. Shawn Murphy

Mr. Charles Guité

Hon. Shawn Murphy

Mr. Charles Guité

1610

Hon. Shawn Murphy

Mr. Charles Guité

Hon. Shawn Murphy

Mr. Charles Guité

Hon. Shawn Murphy

Mr. Charles Guité

The Chair

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

The Chair

Mr. Charles Guité

1615

Hon. Shawn Murphy

Mr. Charles Guité

Hon. Shawn Murphy

Mr. Charles Guité

The Chair

Mr. Vic Toews

Mr. Charles Guité

The Chair

Hon. Shawn Murphy

The Chair

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

The Chair

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

The Chair

Mr. Charles Guité

The Chair

1620

Mr. Vic Toews

The Chair

Mr. Vic Toews

Mr. Charles Guité

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

The Chair

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

1625

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

Mr. Vic Toews

Mr. Charles Guité

The Chair

Hon. Robert Thibault

Mr. Charles Guité

Hon. Robert Thibault

Mr. Charles Guité

Hon. Robert Thibault

Mr. Charles Guité

1630

Hon. Robert Thibault

Mr. Charles Guité

Hon. Robert Thibault

Mr. Charles Guité

Hon. Robert Thibault

Mr. Charles Guité

Hon. Robert Thibault

Mr. Charles Guité

Hon. Robert Thibault

Mr. Charles Guité

Hon. Robert Thibault

Mr. Charles Guité

Hon. Robert Thibault

The Chair

Mr. Dominic LeBlanc

The Chair

Mr. Dominic LeBlanc

The Chair

1635

Mr. Odina Desrochers

The Chair

Mr. Michel Gauthier (Roberval, BQ)

The Chair

Mr. Michel Gauthier

The Chair

Mr. Michel Gauthier

The Chair

Mr. Dennis Mills

Mr. Charles Guité

Mr. Dennis Mills

Mr. Charles Guité

The Chair

Mr. Charles Guité

1640

Mr. Dennis Mills

The Chair

Mr. Dominic LeBlanc

The Chair

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

Mr. Charles Guité

1645

Hon. Walt Lastewka

Mr. Charles Guité

Hon. Walt Lastewka

Mr. Charles Guité

Hon. Walt Lastewka

The Chair

Mr. Dominic LeBlanc

Mr. Charles Guité

Mr. Dominic LeBlanc

Mr. Charles Guité

Mr. Dominic LeBlanc

Mr. Charles Guité

Mr. Dominic LeBlanc

Mr. Charles Guité

Mr. Dominic LeBlanc

Mr. Charles Guité

1650

Mr. Dominic LeBlanc

The Chair

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

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

1655

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

The Chair

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

The Chair

Mr. Peter MacKay

The Chair

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

Mr. Charles Guité

Mr. Peter MacKay

The Chair

Mr. Peter MacKay

The Chair

Mr. Charles Guité

1700

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Peter MacKay

The Chair

Hon. Walt Lastewka

The Chair

Mr. Dennis Mills

The Chair

Hon. Walt Lastewka

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

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

Mr. Peter MacKay

The Chair

Mrs. Marlene Jennings

1705

The Chair

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

1710

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

Mr. Charles Guité

Mrs. Marlene Jennings

The Chair

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

Mr. Charles Guité

1715

Hon. Joe Jordan

Mr. Charles Guité

Hon. Joe Jordan

Mr. Charles Guité

Hon. Joe Jordan

Mr. Charles Guité

Hon. Joe Jordan

Mr. Charles Guité

Hon. Joe Jordan

Mr. Charles Guité

1720

Hon. Joe Jordan

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Charles Guité

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

1725

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

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Hon. Joe Jordan

The Chair

Mrs. Diane Ablonczy

The Chair

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

The Chair

Mr. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ)

1730

The Chair

Ms. Judy Wasylycia-Leis

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

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Vic Toews

Mrs. Marlene Jennings

Mr. Vic Toews

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Vic Toews

1735

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

CANADA

Standing Committee on Public Accounts

NUMBER 031

3rd SESSION

37th PARLIAMENT

EVIDENCE

Thursday, April 22, 2004

[Recorded by Electronic Apparatus]

¹ (1535)

[English]

The Chair (Mr. John Williams (St. Albert, CPC)): Good afternoon, ladies and gentlemen. We are resuming the meeting from this morning. The orders of the day are as I read earlier on.

As I mentioned just before we broke for lunch, once I had it translated I would distribute the letter from Edelson & Associates regarding Mr. Guité. I believe that has been translated and has been delivered. I also understand that one or two copies of the blues of this morning are available, and they have been electronically distributed to all members' offices.

On that basis, we are going to start with the next round. Madame Ablonczy, we're back to you, for eight minutes, please.

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

Mr. Guité, who had the authority to approve payment of invoices for sponsorship contracts?

Mr. Charles Guité (As Individual): I did.

Mrs. Diane Ablonczy: I assume, then, that you're familiar with section 34 of the Financial Administration Act, which talks about what needs to be present before payment is made.

Mr. Charles Guité: Yes.

Mrs. Diane Ablonczy: In each case where you made payment on a contract, were the provisions of section 34 of the Financial Administration Act complied with?

Mr. Charles Guité: Yes.

Mrs. Diane Ablonczy: So there was always an indication that work had been performed, that the payment had been made according to contract, and that the work had actually been done?

Mr. Charles Guité: That's correct.

Mrs. Diane Ablonczy: Mr. Guité, the Auditor General says this on page 28, paragraph 3.87:

In our view, the public servants involved in administering the Sponsorship Program did not discharge their responsibilities with due care and diligence. There was little evidence that anyone had verified the reliability of the data on the invoices submitted by the communications agencies. Furthermore, the files often lacked evidence showing what work the communications agencies had done and therefore had little support for invoices paid.

What's your response to the finding of the Auditor General in that paragraph, Mr. Guité?

Mr. Charles Guité: Very simple: When I was there, up until I left in 1999, the files were there. There were documents on file. After I left, she did the audit in what, 2003, which is four years later. What happened to the files? I can't comment, but the files were there when I was there.

Mrs. Diane Ablonczy: You did actually comment. Someone asked you what happened to the files and who basically destroyed documents, and I believe you did mention names. Did I hear incorrectly?

Mr. Charles Guité: I didn't mention anybody's name as regards destroying files.

Mrs. Diane Ablonczy: Mr. Guité, you're essentially saying, then, that everything was up to snuff under your watch. Is that correct?

Mr. Charles Guité: It depends how you define “snuff”.

Mrs. Diane Ablonczy: Well, that you complied with the--

Mr. Charles Guité: What I said this morning, and I'll say it again this afternoon, and I'll say it tomorrow morning--

Mrs. Diane Ablonczy: I'm sure you will.

Mr. Charles Guité: --is that there was a contract; there was an invoice. There was a proper contract and invoice, and I certified that the product had been delivered as negotiated, and the invoices were paid.

Mrs. Diane Ablonczy: Mr. Guité, Mr. Cutler said he raised the following concerns about how things were managed under your watch. He said that authorizing agencies were allowed to carry out work without a pre-existing contract, contracts were regularly being backdated, commissions were paid for services apparently not performed, there were improper advance payments, authorizations were not sought, contracts were being issued without prior financial authorization, and there was no longer a negotiation of prices or insistence on the use of the established government contracting prices. He brought these concerns forward. As a result, an internal audit was done in 1996, which concluded that his allegations were well founded.

Subsequent to that, an external audit was done by Ernst & Young, which found the same thing. Mr. Gagliano said that because of that, he ordered an audit in 2000, which essentially said the same thing.

Mr. Guité, in light of the three audits--two in 1996 and one in 2000--and, I might add, the audit in 2002 by the Auditor General of three Groupaction contracts, which found that “every rule in the book had been broken”, how can you tell this committee that everything was kosher under your watch?

Mr. Charles Guité: I'll make the comment again. Mr. Chair, you may want to get a copy of the audit that was done in 1996. One of my staff members sat with the auditors for three months reviewing the files. It was evident that somebody had tinkered with the files.

I won't deny that we backdated some contracts. Those things happen, not regularly, but they do happen. As far as I'm concerned, I maintain my point of view that there was a contract and an invoice, the product had been delivered, and the supplier of that work was paid in accordance with the contract.

The Chair: I'm going to interject here, if I may. You mentioned the 1996 audit, but there were two audits. Are you talking about the Ernst & Young audit?

Mr. Charles Guité: Both of them, the internal audit and the Ernst & Young audit.

The Chair: You said that the documents had been tampered with. Was that identified at that time?

Mr. Charles Guité: That was identified during the audit that was done by the outside firm.

The Chair: And there's no reference to that in the audit?

Mr. Charles Guité: I don't know. I have no idea. But I can tell you that one of my employees, who was a senior procurement person at that time, sat with the auditors for three months going through those files. I don't know how much detail I got in this morning with regard to Mr. Cutler, but as you probably know, he was removed from my office and sent back to the department. I in fact changed the lock on the door because Mr. Cutler was coming in during the evening.

¹ (1540)

The Chair: I find it rather strange that it became apparent that the files had been tampered with, but no mention of that was made in the audit.

Mr. Charles Guité: Talk to the auditors and to my former employee.

The Chair: Yes, we'll have to talk to the auditors.

I can't get into a debate, Mr. Toews.

Mr. Vic Toews (Provencher, CPC): I was wondering if we could have the name of the senior employee who sat with the auditors so that we can have that person subpoenaed.

The Chair: Who was that person?

Mr. Charles Guité: His name is Mr. Mario Parent.

The Chair: My apologies, Ms. Ablonczy. You may continue.

Mrs. Diane Ablonczy: That's fine, Mr. Chairman.

Mr. Guité, the Auditor General, on page 33, paragraph 3.122, concluded as follows:

It remains of great concern, however, that the Sponsorship Program was ever allowed to operate in the way it did. Considerable amounts of public funds were spent, with little evidence that obtaining value for money was a concern. The pattern we saw of non-compliance with the rules was not the result of isolated errors. It was consistent and pervasive. This was how the government ran the program. Canadians have a right to expect greater diligence in the use of public funds.

Now, Mr. Guité, your evidence is that you were in charge. The Auditor General's audit covered the period beginning in 1997, when you were completely and utterly in charge, and yet this is her finding. How do you explain that, Mr. Guité?

Mr. Charles Guité: I don't agree with the Auditor General's comments.

Mrs. Diane Ablonczy: Well, now, isn't that interesting, Mr. Chairman.

Mr. Charles Guité: It's very interesting.

Mrs. Diane Ablonczy: Here we have a civil servant who, by his own admission, is not an auditor. We have the Auditor General of Canada, who has been evaluated by a peer review of an international panel as completely and utterly up to scratch as an auditor, and he has the gall to sit here and tell us that she's wrong and doesn't know her business.

Mr. Charles Guité: She hasn't looked—

Mrs. Diane Ablonczy: How do you explain that kind of a comment?

Mr. Charles Guité: —at all the files, as I explained this morning in my first presentation. A hundred million dollars has disappeared into thin air--come on, let's get with it.

Mrs. Diane Ablonczy: That's not what she said, by the way, Mr. Guité. She did not say that.

The Chair: We will let the record stand as to what has been said.

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

[Translation]

Mr. Marcel Proulx (Hull—Aylmer, Lib.): Merci, monsieur le président.

Hello again, Mr. Guité.

Mr. Guité, it has been put forward that some agencies were engaged in what might be termed “double billing“, in the recruiting of groups, associations or municipalities and promoted events by charging a percentage. Then, when your group gave out a sponsorship, the agencies got a second commission because of the work they were doing for the Government of Canada. Were you aware of that? Did you have any suspicion, because agencies were submitting applications on behalf of groups? There must been cases where applications were presented by agencies.

Mr. Charles Guité: We had applications either from event organizers, agencies, the minister's office, or the Prime Minister's Office. I do not know wether any agency had an agreement with an organization to receive payment for getting a sponsorship.

Mr. Marcel Proulx: You were not aware of that?

¹ (1545)

Mr. Charles Guité: Not at all.

Mr. Marcel Proulx: When agencies represented organizations in order to get a sponsorship, it never occurred to you that they could have asked for a percentage or a commission?

Mr. Charles Guité: No.

Mr. Marcel Proulx: So you were in no way aware of this practice.

On page 9 of your presentation this morning, you say:

[English]

We always followed the processes as per T.B. guidelines. The one exception was during the Referendum of 1995, where we used exceptions as provided by the Procurement Policy.

[Translation]

I presume you are referring to Treasury Board's Procurement Policy.

Mr. Charles Guité: Yes, I do believe I referred you to that—

Mr. Marcel Proulx: You referred us to that this morning. Could you please give me some further explanations on this? I want this to be clear, and I'm asking for your help in understanding exactly what you were referring to this morning. I believe you were talking about emergency or special situations.

Mr. Charles Guité: I will even give you the policy number.

Mr. Proulx, the policy, which was revised in May 2002—but I am sure the same conditions applied when I was there—is called

[English]

“government contracts regulations”, and is found in the section on bids in the Financial Administration Act: “Before any contract is entered into, the contracting authority shall solicit bids therefor in the manner prescribed by section 7”—whatever section 7 says, which is probably a whole set of rules.

Then it continues: “Notwithstanding section 5, a contracting authority may enter into a contract without soliciting bids where(a) the need is one of pressing emergency in which delay would be injurious to the public interest...”. Then it goes on to describe some other things. And then the other clause I spoke of this morning is (c), “the nature of the work is such that it would not be in the public interest to solicit bids”.

I think it was to the public interest, and I would say it was a pressing emergency.

Mr. Marcel Proulx: That would not be to solicit bids, right?

Mr. Charles Guité: That's right.

In fact, what we could have done was to have gone out and said “We'll take this firm, that firm, and that firm”, end of discussion. But in order not to do that, to make it.... I think that in my first testimony to this committee back in 2002, I can remember quite clearly—though I won't look it up—that we invited about ten firms and we retained five. But really, I could have gone out and said “I'll take this one, that one, and that one”, based on the policy.

Obviously, we wanted to make sure that we had the best, so we invited ten. And through a selection process, through a scope of work and a second presentation, we retained five agencies.

[Translation]

Mr. Marcel Proulx: Was it when you hired the five agencies that you implemented the principle or one of the two principles that allowed you not to bid, or was this rather something you did every time you gave them contracts?

Mr. Charles Guité: We did that only once. It was during the referendum. In 1996, if I remember correctly, we held another competition to qualify agencies. This appeared on the MERX system,with which you are all familiar, and 35 or 40 agencies applied. After this competition, if I recall correctly, we kept 10 or 12 agencies which became the permanent agencies. That is what is known as a standing offer.

Mr. Marcel Proulx: That is where you found the agencies to carry out your contracts.

Mr. Charles Guité: Yes.

Mr. Marcel Proulx: In her report, the Auditor General talks about missing supporting documentation. This morning, you insisted—and I believe you were correct, Mr. Guité—that no government cheque can be issued without an invoice. No one issues cheques on the basis of a phone call. However, it is easy to have an invoice which states: “For services rendered, $55,000“. I believe the Auditor General was saying she could not find any supporting documents. I maybe interpreting here, but not that much, because there are some places in the report where this is very clear.

This morning you spoke to us about a post-mortem or affidavit. What was in these post-mortem reports? I think some witnesses have referred to them as “final reports“. What was contained in those reports, Mr. Guité?

¹ (1550)

Mr. Charles Guité: In some cases, there were photos of the event showing the visibility that was provided. In other cases, there was a written report certifying that the visibility negotiated at the beginning of the event had been provided, that the event had taken place and that the visibility was there.

Mr. Marcel Proulx: You are telling me, Mr. Guité, that these reports existed...

Mr. Charles Guité: Yes.

Mr. Marcel Proulx: In all the files?

Mr. Charles Guité: No, not necessarily in all the files. I will give you another example, Montreal's famous hockey club. I did not need a report in the file to certify that the word “Canada“ was on all the signs inside the Forum during the entire hockey season.

Mr. Marcel Proulx: Now that you know what the Auditor General said, I am sure you are now of the view that a photo would be required.

To your knowledge, Mr. Guité, did anyone benefit financially from the contracts with agencies, the advertising contracts or the sponsorships? Did any of the following people benefit: you, your staff, any of your employees or the deputy ministers with whom you worked or for whom you worked, or one or more ministers of the Crown?

Mr. Charles Guité: No.

[English]

Mr. Marcel Proulx: Merci.

Thank you, Mr. Chair.

The Chair: Thank you very much, Monsieur Proulx.

Before we move on, Mr. Guité, you mentioned in your opening statement, and I will quote:

We always followed the process as per TB guidelines. The one exception was during the referendum of 1995, where we used an exception, as provided in the procurement policy.

And you invoked that exception by saying it was one of pressing emergency. Is that correct?

Mr. Charles Guité: That's correct.

The Chair: Okay, now I'm looking at the rules. It does say an exception is...“the need is one of pressing emergency in which delay would be injurious to the public interest”. Then it goes on to say that in exception (a), which I just quoted,

a pressing emergency is a situation where delay in taking action would be injurious to the public interest. Emergencies are normally unavoidable and require immediate action which would preclude the solicitation of formal bids. An emergency may be an actual or imminent life-threatening situation, a disaster which endangers the quality of life or has resulted in the loss of life, or one that may result in significant loss or damage to Crown property.

In light of that definition, a government definition of your pressing emergency, how do you qualify, since you said you always followed TB guidelines? Square that circle for me.

Mr. Charles Guité: No, except in the case of selecting agencies for the referendum, we followed the guidelines. Again, I don't know what document you were reading from, but--

The Chair: I was reading from page 59 of the contracting policy, which is 227 pages long, from the Treasury Board of Canada.

Mr. Thibault.

Hon. Robert Thibault (West Nova, Lib.): On a point of order, Mr. Chair, I believe that document is the one we referred to earlier this morning, on which it was requested that copies be gotten for members. Is that the one the committee was to receive copies of, which we were talking about earlier this morning?

The Chair: I'm not sure.

Hon. Robert Thibault: Is that the same document the witness was quoting from this morning?

The Chair: This was supplied to me by the research branch of the Library of Parliament.

Hon. Robert Thibault: But is it the same document that...?

The Chair: I'm not sure. I can't remember.

The clerk believes it's the same document.

Hon. Robert Thibault: I think we did ask that it be furnished to the committee. I find it strange that the chair would have it and members wouldn't.

The Chair: As you can see, my researchers here have stacks and stacks of documents, and they seem able to pull out the page that we need.

An hon. member: They're our researchers too.

Hon. Robert Thibault: They're the committee's researchers.

The Chair: Well, this is true, and they will supply these to you as well.

Anyway, according to the Treasury Board document,

An emergency may be an actual or imminent life-threatening situation, a disaster which endangers the quality of life or has resulted in the loss of life, or one that may result in significant loss or damage to Crown property.

How does your waiver of the rules because it was a pressing emergency fit with that, Mr. Guité, when this emergency lasted for about two or three years?

¹ (1555)

Mr. Charles Guité: At least.

Again, what you have to understand here is that when I sat around the table with FPRO, PCO people, and my staff, the nature of the upcoming referendum was of an emergency. Without reading between the lines here, the one that you failed to mention is that “the nature of the work is such that it would not be in the public interest to solicit bids”.

The Chair: That's correct. The other one was--

Mr. Charles Guité: I'm not going to sit here, Mr. Chair, and read every comma of the policy.

The Chair: No, I'm just asking you to tell me--

Mr. Charles Guité: No, no, let me finish. You asked a question, and I want to answer it.

I sat around at a committee table with some very knowledgeable people from FPRO, PCO, and my organization, and we decided to carry this competition, the way I have described, to the Auditor General, to this committee in 2002. And again today, I stand by how we did the competition.

The Chair: Okay. But you still didn't answer my question. Since there was no loss of life and stuff like that at stake, why did you feel you could bend the rules, avoid the rules, or whatever?

Mr. Charles Guité: There are 16 reasons in here, which you just read, about buildings falling down, losing lives, and so forth. All I'm saying to you is there are also reasons in here to have a competition without a bid when it's in the public interest. I think winning the referendum was in the public interest.

The Chair: You said there were a dozen ad agencies out there that were federalist; that you didn't work with the NDP...if they're Conservative or Liberal, as long as they're federalist versus separatist. You identified these. It only takes two or three weeks to do a complete bidding process. This went on for two or three years.

Mr. Charles Guité: No. It took about a week.

The Chair: Okay. A proper process might take two or three weeks. I was being generous. I still question how you couldn't do a bidding process, because there wasn't actually an emergency until a week before the referendum.

Mr. Charles Guité: No, I disagree with you. I think it was an emergency, and at the end of the day the interests of the public.... The cost to this country would have been enormous if we had split up the country.

The Chair: It goes on to say that if you do use any of the exemptions, it “should be fully justified on the contract file”. So I presume it was fully justified on the file.

Mr. Charles Guité: I assume in the competition file there would be notes.

The Chair: Did you prepare the notes on the justification for avoiding the contracting policy?

Mr. Charles Guité: We're talking about 1994, Mr. Chairman. I don't know. I'd have to see the file.

The Chair: Do you remember?

Mr. Charles Guité: I do not.

The Chair: You do not remember.

Mr. Charles Guité: No. I probably would have put notes on the file, there's no question, because for every competition we had, as long as I was executive director of that branch, we had a complete competition file. So the record would show not only my comments, but the comments of all the committee members.

The Chair: Okay.

[Translation]

Mr. Desrochers, please, for eight minutes.

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

Good afternoon, Mr. Guité. Since the tabling of the Auditor General's report on February 10, Paul Martin has said many times that he did not know how the Sponsorship Program worked. Is that correct?

Mr. Charles Guité: I cannot comment for Mr. Martin. If that is what he said, that is what he said. I do not know. I cannot—

Mr. Odina Desrochers: The names of a number of ministers who intervene, either by making a recommendation or exerting influence, have been named. To your knowledge, did Paul Martin intervene to exert any influence whatsoever in the awarding of a contract or a file?

Mr. Charles Guité: Mr. Martin himself, no. His office did, several times.

Mr. Odina Desrochers: On what files? Do you have some specific examples?

Mr. Charles Guité: I have no specific examples I can recall, but I think there were a number of contracts with a local company, Earnscliffe. There was some involvement by the office of the Minister of Finance of the day, who was Mr. Martin.

Mr. Martin personally did not get involved; his office did.

Mr. Odina Desrochers: What type of comments were made to you, Mr. Guité?

Mr. Charles Guité: They tried to influence a decision.

I know that if someone today asked for access to information for all the contracts awarded to this company, you would have some surprises. I think there was another minister who tried to intervene for the same company and that was Mr. Goodale. I remember that very well because it became a hot issue between the two ministers. I have the documents. Either my lawyer has some here today, or I have them at home.

Yes, I have some documents I could give you.

º (1600)

Mr. Odina Desrochers: On this?

Mr. Charles Guité: Yes.

Mr. Odina Desrochers: Thank you very much.

Mr. Charles Guité: Just a moment. We have to be careful here. I am not sure that the documents are specifically about that company, but I can show you some documents that were sent from Paul Martin's office asking that companies be added, and so on.

My comment here is that the minister or his office could turn around and say that they simply wanted the process to be more competitive. The important point here is that no one in a minister's office or on his team should establish contacts with the individuals who issue the contracts, the public servants.

Mr. Odina Desrochers: When you received phone calls from Mr. Martin's office, did the person tell you that Mr. Martin was asking for this or for that, or did she simply say that her mandate was to ask for it? What transpired in the conversations between Mr. Martin's office and you, Mr. Guité?

Mr. Charles Guité: I'll tell you about a discussion which either took place on the phone, or in the chief of staff's office...

Mr. Odina Desrochers: Can you tell us who the chief of staff was at the time?

Mr. Charles Guité: Yes, I think it was Terrie O'Leary, and she said quite openly...

[English]

The Chair: Are your questions in relation to the sponsorship chapters 3, 4, and 5, or are you wandering off in a different direction?

[Translation]

Mr. Odina Desrochers: I'm waiting for an answer from Mr. Guité. Aren't I entitled to one, Mr. Chairman?

Mr. Guité, I'm waiting for your answer.

Mr. Charles Guité: Where was I? I remember once speaking to this woman face-to-face or over the phone. She made the following comment,

[English]

and I quote, “Well, Paul would prefer”. So, who's Paul?

[Translation]

Mr. Odina Desrochers: Mr. Guité, you say you have documents in your possession. Would you be able to table them?

Mr. Charles Guité: Yes.

Mr. Odina Desrochers: This would serve to demonstrate Mr. Martin used influence and interfered in the awarding of the contract to this firm.

Mr. Charles Guité: Be careful: this is Mr. Martin's office.

Mr. Odina Desrochers: Indeed. Thank you very much.

Mr. Guité, I want to come back to your initial statement regarding the context in which the referendum campaign took place. From what you said, you were one of the generals. Who were the others?

Mr. Charles Guité: Interprovincial relations officers. I don't recall the name in French, but in English, it's the FPRO, the Federal-Provincial Relations Office. Who was involved in this file at the time? Marc Lafrenière I think, and of course, someone from my team had been seconded. I think Howard Balloch was there as well. There's also a lady whose name I can't recall. I know her very well, but I can't remember her name.

Mr. Odina Desrochers: Was Mario Lague there?

Mr. Charles Guité: I don't know if Mario was... Who is now the minister responsible for federal-provincial relations?

Mr. Odina Desrochers: Mr. Pettigrew.

Mr. Charles Guité: I don't know if Mario was with Mr. Pettigrew or even if the department existed. If I recall, at that time, Mario was involved in the inner workings of it.

Mr. Odina Desrochers: Mr. Guité, you say it took you a week to identify ten or so agencies. Who submitted the names of these agencies to you? Was research carried out?

Mr. Charles Guité: It was done within the committee, with myself, Ms. LaRose and FPRO officials. As you know, I know the industry rather well.

Mr. Odina Desrochers: You made sure that the agencies would do a good job. You were sure of that when you called on their services?

Mr. Charles Guité: Yes. And as they say in English: “You don't get the devil to work for you”. Obviously we didn't want an agency which had a tendency to support the separatist party of Quebec. That's normal. I know many agencies in Quebec... You have to be careful here: it isn't always the agencies, sometimes the agency directors or the staff are renowned for supporting the separatist cause. Clearly, we wouldn't have hired an agency working for the other side, a separatist agency, to defend a united Canada. That's normal.

º (1605)

Mr. Odina Desrochers: You say that when you started up the Sponsorship Program, you also called upon agencies.

Mr. Charles Guité: Yes, after the referendum.

Mr. Odina Desrochers: In the course of the selection process, did you favour Quebec agencies which did good work?

Mr. Charles Guité: No, but within the framework of a competition, under Treasury Board guidelines—I repeat, I don't remember very well—five or six criteria were taking into account. One of the criteria was experience in the areas of communications, including advertising, sponsorships and so on.

Included in the five agencies we retained during the referendum—again, I don't recall the exact details—I believe that two or three made it to the second round. I can name them. There was Groupaction, which did excellent work during the referendum. As for Everest, I believe the agency worked on the referendum, but I'm not sure. I will have to look at the files. I'm also not sure about BCP and Publicité Martin.

[English]

The Chair: Mr. Murphy, please; you have eight minutes.

Hon. Shawn Murphy (Hillsborough, Lib.): There are a couple of issues, Mr. Guité, that I want to pursue a little further. I'm intrigued by the way your small department operated as what I would classify as outside normal government operations. You'd expect to see a much more direct reporting relationship from your department to the deputy minister and on to the minister. Did the deputy minister ever try to rein your department in or try to get more control over it?

Mr. Charles Guité: No, I wouldn't use the words “rein in”; I don't think so. I think the deputy of the day—and now I'm talking about, let's say, the period of Mr. Quail.... No, I think Mr. Quail was aware of what was going on. He was aware that I was meeting with the minister's office on a regular basis.

Was he aware that I was meeting with the PMO? Maybe not; I'm not sure.

When I briefed the deputy on the actual activities of my shop, my briefing was basically “the sponsorship program is going well; we're achieving the objectives that were set out”. To say that he reined me in would be wrong.

Hon. Shawn Murphy: When Mister Quail appeared before this committee, he—and I'm summarizing his evidence—basically said he didn't realize the provisions of the Financial Administration Act and Treasury Board guidelines were not being complied with. He basically said he was more or less outside the loop.

Mr. Charles Guité: I can't hear you.

Hon. Shawn Murphy: He basically said he was outside the loop.

Mr. Charles Guité: Maybe he was.

Hon. Shawn Murphy: Did he never try to get in the loop, as far as your department was concerned?

Mr. Charles Guité: No, I don't think so--not any more than that.

At the end of the day, my invoices were sent to the Department of Finance—the ADM was Mr. Stobbe at the time—and they were paid. If it was such a red flag, how come it wasn't flagged there?

Hon. Shawn Murphy: I was curious about your answer this morning, that when you wanted an increase in your departmental budget you approached Mr. Pelletier.

Mr. Charles Guité: Yes.

Hon. Shawn Murphy: That would certainly be extremely unusual for normal government operating procedures. That must have driven your deputy back a bit, did it not?

Mr. Charles Guité: Not necessarily, because he was probably not aware. But let met qualify that. If I prepared a submission to the Treasury Board for $40 million, and that submission had the Prime Minister's name basically recommending that it be approved, obviously the process of getting it done involved myself. No Treasury Board submission will go to the minister's office without going through the proper channels of the department, no matter who prepares it. From there it came back to my desk. I took it to the PMO to have the Prime Minister sign it.

If, because demands and sponsorships were going to increase, I had to request an amendment for additional funding through a supplementary estimate, obviously that Treasury Board submission was approved by the Prime Minister of Canada. I would go there if I wanted more funding.

I must say very clearly here that when I approached Mr. Pelletier—and I think it was on one or two occasions—for additional funding, he said, “Chuck, we don't have any money in the system to do it.” I think that's the year—and again I can't recall whether it's 1997-98 or 1998-99—that Mr. Quail, through the allocations of the department, gave me the extra money to cover those projects.

º (1610)

Hon. Shawn Murphy: Will you agree with me that you would probably be the only person within the Government of Canada at your level, whether it was an EX-4 or associate deputy minister, going right to the office of the Prime Minister to seek budgetary increases for your particular department?

Mr. Charles Guité: I would say that's fairly accurate.

Hon. Shawn Murphy: The second issue with Mr. Quail, Mr. Guité, goes back to these so-called industry standards. You've spent your lifetime in this industry. Is it your evidence that this commission that you see in the sponsorship program was consistent right across Canada; that the other larger firms, such as the Vickers firm, would deal with these situations with the same commission rate and on the same basis?

Mr. Charles Guité: In the industry?

Hon. Shawn Murphy: Yes.

Mr. Charles Guité: Yes, by all means.

Now, you have to remember that you're talking about let's say the 1990s, and let's carry it to when I left. When I left the government, the industry standard was starting to change a bit. What happens in the private sector now...and I speak now, because having worked with the ICA for a year and a half, until Mr. Boudria helped my career come to an end, we were looking at the government, because in the private sector, to this day I think I would say 35% or 40% of the industry still works on a 15%, 17.65% basis--that is, 15% on the media and 17.65% on production.

But there's a tendency now to go to fees, and I'm trying to think of the term that Mr. Rupert Brendon, who is the president of ICA, and I discussed quite a bit. It's results oriented. For example, they will charge fees, and then based on the result of that ad campaign, promotion, or sponsorship, there's some bonus payable. So there are three kinds of system right now: there are commissions; there are fees and commissions, because some agencies and clients will work on both--they'll pay fees on certain things, commission on others; and then there's the results type of orientation.

I'll give you an example. If company ABC promotes Tim Hortons coffee--

The Chair: Let me just say all cellphones off in this room, please. I heard that a former chair said if a cellphone rings, whoever has it is out of this room and is not coming back. So maybe we'll have to start implementing--

Mr. Dennis Mills (Toronto—Danforth, Lib.): Maybe I'll turn mine on.

The Chair: Please do, please do.

Mr. Charles Guité: To finish your answer, Mr. Murphy, I shouldn't say I know for sure, but from discussions I've had as a vice-president with ICA, there are some advertisers that will pay some agencies on commission, some on fees, and some based on the results.

An example would be Tim Hortons. If agency ABC is doing a Tim Hortons promotion for, I don't know, eastern Canada--because I think it's broken down into sectors--they may say if that campaign generates that much volume of business for the Tim Hortons donut stores, well then there's a little bit in there for commission.

Those things would not be enormous, but they would be an incentive for the agency doing the campaign obviously to track it, do it right, use the right media, and so forth.

But the standard...and I repeat again to this committee that it would be very important to have a person like the chair of ICA to address the committee. I don't want to make a general statement here, but it's not an easy business, and it's not pie in the sky. There are some real benefits of promotion, of sponsorship, of advertising.

º (1615)

Hon. Shawn Murphy: Mr. Guité, we have the situation where there were two audits in 1996, an internal audit in 2000, followed by the Auditor General's audit. Despite what you say, I sense there is a certain element of documentation missing, files that you would expect to see in government operations.

Now, in your particular circumstance, were you ever officially reprimanded or disciplined as a result of any of the findings in these audits?

Mr. Charles Guité: No, never. In fact, I got a performance bonus every year based on the management of my shop. You have to remember that I did more than just sponsorship.

Hon. Shawn Murphy: And who would approve that performance bonus?

Mr. Charles Guité: Normally, the deputy minister. But you have to remember that in the last two years I had a staff of 250, 300 people.

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

Mr. Toews, please, eight minutes.

Mr. Vic Toews: Mr. Guité, when Ms. O'Leary called you from Mr. Martin's office, what exactly did she say to you in respect to the contract?

Mr. Charles Guité: She asked me to come and meet with her, which I did, and then we discussed the competition, how it was being held. She asked for certain changes, and I said I couldn't do that. You can't be three-quarters of the way through a process and change the rules. In one instance, I did receive a memorandum, which I think my legal counsel has a copy of, from somebody from the staff--I don't think it was Ms. O'Leary--asking to add these other firms to an agency selection process, if I remember right.

Now, having said all that--

The Chair: There is a point of order here.

Hon. Shawn Murphy: Mr. Chairman, I don't object to this line of questioning at all, but I just want to point out to the chair why we're here. We're here to investigate chapters 3, 4, and 5 of the Auditor General's report, and if we're going to go down this line, I think we have to do a couple of things.

First of all, we have to report that these Earnscliffe contracts have all been investigated by the Auditor General before. They have been looked at, examined. I think we have to get into that.

Second, we'd have to basically admit that there is nothing further on these chapters 3, 4, and 5 that we should....

The third issue, Mr. Chairman, is once you go down this road, once the worms are out of the can, sometimes it's hard to get them back. Where are you going to close the door here?

I don't have any problem with it; I'm just throwing some caveats. It started with the Mulroney government. Do you call Mulroney to testify in the committee? Do you call some of the cabinet ministers? Where does it end, Mr. Chairman? We'll leave it up to you. Again, I'm not objecting to the—

The Chair: Your points are very valid, and I was going to ask Mr. Toews, since we are doing chapters 3, 4, and 5, where is the relevance?

Mr. Vic Toews: All right. I understand this is either a sponsorship, advertising, or public opinion research contract--is that not correct?

Mr. Charles Guité: That's correct.

Mr. Vic Toews: Well, that's the relevance. These chapters 3, 4, and 5—

The Chair: Just a second.

Mr. LeBlanc, s'il vous plaît.

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.): Mr. Chairman, it's on the same point of order. Mr. Guité referred to some documents he had and that he offered to table relating to this issue. I'm wondering if you wouldn't ask him if it's possible that they be tabled right away so that they can be distributed to all members of the committee and we'd have the benefit of seeing those documents.

The Chair: I will do that. I asked him to table documents this morning, which the clerk has distributed, I believe, or copies are currently being made of some pieces. I was going to make reference to that this afternoon and thought I would do it at the end. But if you want it done now, I'll ask him to do it now.

Mr. Guité, you've been making reference to some documents. If you would like to give them to the clerk, we'll try to get copies made as quickly as possible. Are they in two languages or in only one language?

Mr. Charles Guité: I think they're only in one language.

The Chair: Well, I won't be able to distribute them today if they're only in one language. I was able to deal with Mr. Guité's letter from his lawyer this morning because I was able to have it translated. I was able to deal with the rules regarding contracting because we got that document off the web in both official languages. But we have an issue that we deal with two languages in this room; therefore, unless I can have them in two languages, I don't feel I should be distributing them. So that deals with documents.

Mr. Toews.

º (1620)

Mr. Vic Toews: Mr. Chair, maybe then I can defer that line of questioning and move on to another one. If Mr. Guité is going to bring that forward in the next week or so, we'll have it then and can recall him later on.

The Chair: Mr. Guité, if you leave the documents with us, we can get them translated and circulated for when, if we want to, we can call you back at a subsequent time.

Mr. Vic Toews: I think that would be a good idea. I'll defer that line of questioning.

Mr. Guité—

Mr. Charles Guité: On that issue, Mr. Chairman, I will leave you a copy, because we only have the one copy, and I want mine.

The Chair: The clerk will make a photocopy and we'll give your copy back; then we will have it translated and we'll have it circulated. Is that okay?

Mr. Toews.

Mr. Vic Toews: Will the clock start now?

The Chair: You have one minute.

Mr. Vic Toews: Well, Mr. Chairman, my line of questioning....

I want to refresh your memory, Mr. Guité—

The Chair: Order, please.

Mr. Toews, you have the floor.

Mr. Vic Toews: Thank you.

The day you met Minister Dingwall, the day you kept your job because he said you wouldn't rat out the new government, the day that stands out in your memory in the same way the assassination of JFK stood out in your memory was a memorable day for you, in your own words. The meeting you held took place in Minister Dingwall's office, and when he came around the desk and extended his hand to you, were you and he the only people in the office at that time?

Mr. Charles Guité: No, his executive assistant was there, Mr. Kinsella.

Mr. Vic Toews: Mr. Kinsella.

Now, the minister's office would have been in the same building as your office.

Mr. Charles Guité: No. That meeting took place at Place du Portage Phase III, I think, where the Minister of Public Works normally has his office. My office used to be on Sparks Street.

Mr. Vic Toews: All right. But when you came into the minister's office, there would have been a receptionist; there would have been a number of offices, including Warren Kinsella's office. You would have walked by Warren Kinsella's office when you came to see the minister?

Mr. Charles Guité: That's correct. But let me tell you how the minister's office worked.

Mr. Vic Toews: No, let me just.... I'll get into that.

The Chair: He confirmed Mr. Toews' question, but then he wanted to elaborate. But he confirmed the question. Mr. Toews, finish the question.

Mr. Vic Toews: You walked by a number of offices. Various people would have gotten to know you over the years, would they not?

Mr. Charles Guité: No, because it was the first time I was meeting the minister.

Mr. Vic Toews: Subsequent to that, did you go to the same office to meet with the minister?

Mr. Charles Guité: In most cases, yes.

Mr. Vic Toews: In most cases.

Mr. Charles Guité: On a couple of occasions I think I met him on Parliament Hill. I think his office was in the West Block.

Mr. Vic Toews: So there would have been numerous other people who would have seen you come and go, including the receptionist, for example, who would have seen you come there, would have seen you appear a number of times. And those receptionists, and even Mr. Kinsella, could basically verify the number of times you came to see Mr. Dingwall. Is that correct?

Mr. Charles Guité: Do you mean that Mr. Kinsella could?

Mr. Vic Toews: Yes.

Mr. Charles Guité: I would think so, because I've never met with the minister without his assistant there.

But what I want to make clear here is that when you arrived at the minister's office at Place du Portage, there was a waiting area. As with most meetings with ministers, you were booked to see him at two o'clock but you might see him at four, and you waited outside, obviously.

Mr. Vic Toews: Yes, so your presence was known.

Mr. Charles Guité: That's right. When I walked in, let's say, from the reception area to the minister's office, I definitely went by several other offices within the complex, or within the context of the minister's office.

Mr. Vic Toews: Now, think very carefully about this. Could there have been weeks when you would have been coming at least three or four times a week to see the minister on sponsorship or advertising contracts?

Mr. Charles Guité: Not in the case of Mr. Dingwall, no, because the program didn't exist then. The program started—

Mr. Vic Toews: Why were you seeing Mr. Dingwall?

Mr. Charles Guité: We were doing sponsorship with the unity money, which was allotted—

º (1625)

Mr. Vic Toews: So you're not there on the sponsorship, you're there on the unity fund. But in going to see Mr. Dingwall on the spending of the unity fund, you'd see him maybe three or four times a week sometimes?

Mr. Charles Guité: No.

Mr. Vic Toews: Never?

Mr. Charles Guité: I don't think so, no.

Mr. Vic Toews: Never. Would it ever have been maybe once or twice a week for a period of time?

Mr. Charles Guité: No. Definitely not, no.

Mr. Vic Toews: So you're saying the most you would have seen him at any one time...?

Mr. Charles Guité: In the years of Mr. Dingwall, depending on the issue of the day—i.e., where we were with the file—some weeks I might have seen his office twice, but not very often, and I did not meet with Minister Dingwall or his chiefs of staff on a regular basis.

Mr. Vic Toews: All right. But some weeks you would have seen him up to twice a week.

Mr. Charles Guité: Yes, that could happen.

Mr. Vic Toews: The other point I wanted to go back to is you told this committee in answer to my question that the reason you had to split up the contract—and that was on chapter 3, page 20—is that you had to keep the agency's piece of the action under 25%.

I have a lot of problem with that answer. Let's say a company has 30% of the action of the contracts. If you divide up that 30% into five different contracts and you give it to the same agency, it still works out to 30%, doesn't it?

Mr. Charles Guité: I don't know what your question is.

Mr. Vic Toews: You said to me, when I brought this issue up to you—

Mr. Charles Guité: Just a second, please.

I think what you're probably confusing here—

Mr. Vic Toews: Let me just clarify so that we both know what we're talking about. In respect of the diagram on page 20, when I said Lafleur-Media, Lafleur-Gosselin, Media-Gosselin, you told us you broke up those contracts so that it would be under 25%. How does breaking up a big number—let's say 25%, 30%, 35%—into different contracts and giving it to the same agency reduce it in any way?

Mr. Charles Guité: The Treasury Board policy of the day was very clear, and I'm sure it's still on record. Not strictly taking into account sponsorship, a company like Gosselin or Lafleur could not do more than 25% of the total business volume. It could be National Defence, it could be sponsorship, it could be Health Canada. We had to in those days report every three months to Treasury Board the name of the company and how much business they had. If, for example, company A was very close to the 25% volume of all the government communication, I maybe had to say, “Well, we can't send that sponsorship there because that's going to take them over the scale”. So I might have sent it over to another firm.

Mr. Vic Toews: Is that what you did here?

Mr. Charles Guité: That's correct.

Mr. Vic Toews: So basically you were avoiding the rules. You were bending the rules.

Mr. Charles Guité: Why was I bending them?

The Chair: Okay. Time, time.

Now we're going to Mr. Thibault for eight minutes, please.

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

[Translation]

Hello again, Mr. Guité. I have a couple of questions for you.

When Mr. Boulay appeared before the committee, he indicated that, in fact, supporting documentation for each file was kept by the advertising agencies, that it was part of their contract,and that every report and supporting document was not necessarily sent to your section or to the Department of Public Works. To the best of your knowledge, is this accurate? If not, can you set the record straight?

Mr. Charles Guité: If I understood the question, I know that whenever the government awards a contract to a company, such as Groupe Everest, there is a clause which stipulates that the company must keep supporting documentation in its files.

Hon. Robert Thibault: The company does not necessarily have to send a copy to the Department of Public Works.

Mr. Charles Guité: No, not necessarily.

Hon. Robert Thibault: So, if the Auditor General reviewed the files at the Department of Public Works, she may not necessarily have found the supporting documentation, which was kept in the agencies files.

Mr. Charles Guité: No. I read in the transcript, or heard during the broadcast of one of the committee's previous meetings, that—

º (1630)

Hon. Robert Thibault: Are you referring to Mr. Boulay's testimony or that of the Auditor General?

Mr. Charles Guité: I think it was Mr. Boulay's testimony. At a certain point, he indicated that auditors had been to the offices of Groupe Everest to examine the files and that they had found all the documents and supporting paperwork.

Hon. Robert Thibault: Yes.

Mr. Charles Guité: So, it seems that every company did the same thing.

Hon. Robert Thibault: So there is documentation, I believe, not necessarily for every file, but at least for some files, including those of Groupe Everest.

I have another question. According to the Auditor General's report and to some of the testimony we heard, the amounts involved in contracts signed with advertising agencies were substantially increased by yourself. I imagine this happened in your negotiations with them. The Canada Mortgage and Housing Corporation was mentioned. The contract amount was increase by $800,000, I believe. Can you tell us how this could have happened?

Mr. Charles Guité: No, Mr. Thibault. I will have to look at the file. I may be mistaken, but in the case of the Canada Mortgage and Housing Corporation, the money involved did not come from the sponsorship budget.

If memory serves me well, when Mr. Collet, who was with the Canada Information Office, began working for the Canada Mortgage and Housing Corporation, there was no advertising agency in place. Of course, he knew me very well. We worked together a lot during the referendum, for instance. If I recall properly, Mr. Collet transferred money from the Canada Mortgage and Housing Corporation to us and I in turn transferred it to... We hired Groupe Everest, if I recall correctly. But it seems to me that other companies were involved in that particular file.

Hon. Robert Thibault: You sent a letter to the committee through your lawyer. The letters are usually read out loud for the record. However, this particular letter was not read, for one reason or another, and we just received it today. In the letter, you say that you felt you were being treated like a fugitive. Did the holidays you spent in the United States take place during your normal holiday period, and did you come back when you originally wanted to?

Mr. Charles Guité: I don't understand your question, Mr. Thibault.

Hon. Robert Thibault: In your letter, or rather, the letter your lawyer wrote, you indicate that you felt you were being treated like a fugitive.

Mr. Charles Guité: Yes.

Hon. Robert Thibault: Were these holidays planned? Was this your normal holiday time? Did you change your plans?

Mr. Charles Guité: No. Ever since Mr. Boudria made his remarks, and ever since this committee began its work, there have not been many companies or people who want to deal with me anymore. Consequently, last year, I believe we spent three months down south. Last winter, we spent almost the entire time in Texas, and some time in Florida. Last year, we had been thinking about buying in Arizona, and we have since purchased a property down there, because we always spend our winters in Arizona. But since my retirement, the time spent down there is not holiday time. I prefer 20 degrees over minus 20 degrees.

Hon. Robert Thibault: Thank you.

[English]

The Chair: Now we're going to Mr. Mills, but before we move there the clerk has had copies made of the relevant portion of the Treasury Board Secretariat's contracting policy, which will be circulated in both official languages, and a link to the full policy, which is over a hundred pages in length, will be sent to the members' offices. We're now in a position to distribute that, which will be “Contracting Policy--Part 3 of 31”, dealing with exceptions and so on. We're able to distribute that now.

Okay, that will be done.

Mr. LeBlanc, you have a point of order.

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

I see the clerk got the document Mr. Guité referred to, but it was only in one language. In the past at this committee, sometimes you've asked for unanimous consent, Mr. Chairman, to table the document, although it's in one language, and it could be translated thereafter. I'm wondering if you'd do the same in this case.

The Chair: The contracting policy I'm going to distribute is in both languages—

Mr. Dominic LeBlanc: I was referring to the document Mr. Guité referred to that was only in one language.

The Chair: Yes, okay, but that portion is being distributed because it is in both languages.

I was in the past asking for unanimous consent. I was doing that from the chair. There have been some objections by some members, but since one member is now asking that it be distributed in one language and one language only, I will again ask, is there unanimous consent that we distribute in one language? If the answer is no, then we will not.

Is there a point of order? It's just yes or no.

º (1635)

[Translation]

Mr. Odina Desrochers: I would like to clarify a point, Mr. Chairman.

There's been talk of a lot of documents. We have one here in French, which is entitled “Politique sur les marchés - 10.2 Exceptions”. Is this the document my colleague Mr. LeBlanc referred to?

Mr. LeBlanc, my question is for you through the chairman.

The Chair: No.

[English]

Document 10.2, starting with “Exceptions to the contracting policy...” I believe is in both official languages and is being circulated.

What we're talking about are the documents Mr. Guité has given to the clerk, which I said I cannot distribute until such time as they are translated. I have now had a request by a member that they be distributed even though they are in one language only. Therefore I'm seeking unanimous consent. If someone says no, that will be the end of it.

Is there unanimous consent?

[Translation]

Mr. Michel Gauthier (Roberval, BQ): Mr. Chairman, there's some confusion with regard to this document. Mr. Guité tabled a government policy document, did he not? We would like to know what document you are referring to. We'd like to be of help, but we don't know...

[English]

The Chair: No. Let me go through this again.

The contracting policy exceptions, document 10.2, has been distributed in both official languages. The issue is documents brought by Mr. Guité, which I have in front of me. One is a memorandum to a Bruce Young concerning “Facts regarding Earnscliffe Research and Communications and the Government of Canada”, and there are others. These documents are only in one language.

I said I would not distribute them because they are in only one language. There has been a request by one member that I circulate them. I have therefore asked, is there unanimous consent that they be circulated in only one language—yes or no?

[Translation]

Mr. Michel Gauthier: Yes, Mr. Chairman, since you asked for a translation. I suppose it will be provided quickly.

[English]

The Chair: No. There's quite a stack of documents. It will be Monday at the earliest, I expect, or maybe tomorrow. It's doubtful for tomorrow, but Monday.

[Translation]

Mr. Michel Gauthier: Table the documents, Mr. Chairman, we need them to do our job. You can table them.

[English]

The Chair: Okay, then there is unanimous consent. I'll have the clerk make copies and have them distributed within about half an hour or so.

Mr. Mills, you'll have four minutes.

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

Mr. Guité, I'd like to have your explanation around this issue of backdating invoices. I'd like you to try to explain your view of how you would justify or reflect the oral commitments you gave to people over the phone or work done already. Just explain to me this whole issue of backdating of invoices.

Mr. Charles Guité: First of all, you can't backdate an invoice. You can backdate a contract.

Mr. Dennis Mills: Fair enough. That's what I meant to say.

Mr. Charles Guité: That's fine; I thought that's what you meant to say.

Let me explain how the system works. It's not only in communications or advertising or sponsorship. In this case, in sponsorship, I don't think it ever happened. I think they refer to one instance.

If a government employee or contracting officer—it could be me; it could be one of my contracting officers.... The case I want to use here as an example was, I think, the Canada bonds series in the fall of 1993. In those days, we only advertised Canada savings bonds, I think, from October until the end of November. It was a very short period.

With the Chrétien government being elected in November, if I recall correctly—

The Chair: October 25.

Mr. Charles Guité: —October 25, they wanted obviously to do a campaign on the Canada savings bonds. They needed an agency to do it.

They called me, and I said “Yes, we have agencies that are on a standing offer. We could use our current agencies.” Because of the urgency, the paying of that campaign was not done by Chuck Guité in sponsorship; it was done by the Department of Finance. I myself, or one of my contracting officers, or Mr. Parent could have said to the agency, “Go ahead and start the work, and we'll get a contract in place.”

They might have worked two or three months on this contract, and in this case it could have gone five or six months. By the time the campaign is over, an invoice arrives at the Department of Finance to pay for the campaign. The Department of Finance says, as I've been saying all the way along, “I can't pay it; there's no contract.”

There are only two ways you can now pay that invoice. You can do what you just said: you can backdate a contract, and as to what would be identified on the contract, normally it would read “as per verbal direction of October 10, 1994, we've given direction to this company to go ahead with this work; therefore you can pay it.” The other way you can do it is by what is called in the system a “confirming order”. A confirming order is a little more complex because it has to go through a whole bunch of legal steps.

We could have said to Finance: “No, we're not going to issue a backdated contract. We think it's your responsibility. Go through the confirming order process.” That's a very long process. It needs all sorts of legal input and so forth. Obviously, once an agency in good faith has delivered the Canada savings bonds, the Department of Finance didn't want them to wait another three, four, or five months to get paid.

We therefore backdated the contract, which is quite legal, and done not on an ongoing basis, but more than once and fairly regularly—in many, many instances, not only in communications.

º (1640)

Mr. Dennis Mills: Thank you very much.

Thank you, Mr. Chair.

The Chair: Now I'll go to Mr. Lastewka and Mr. LeBlanc.

Are you splitting your time?

Mr. Dominic LeBlanc: Yes.

The Chair: Okay. Mr. Lastewka, it's for four minutes.

Hon. Walt Lastewka (St. Catharines, Lib.): Yes, with Mr. LeBlanc.

I have a question I wanted to get at concerning the arrangements you had with your advertising firms. You were the kingpin of the sponsorship program and you had a number of advertising agencies.

On your relationships with the advertising agencies, you mentioned earlier that you had visited the agencies, and I would expect that from time to time you were involved with the sponsorship events to go to events. What kinds of gifts or favours or freebies might you have gotten over that time when you were with the sponsorship?

Mr. Charles Guité: Not very many. I may have gotten a bottle of wine at Christmas or another gift—it could have been an agenda, or things like that—but I never accepted gifts from agencies. And maybe this is the area about which I've heard, I think through the media, that I got a trip around the world. Then it was a trip to California, and then I think they might have gotten Japan in there somewhere.

When I retired, there was no question there was a fairly nice farewell party put on for my departure from the government. There were a lot of public servants there I had worked with for some 34 years. There were a lot of people from the industry—not necessarily all advertising: there were some from public opinion research; there were some from public relations firms. And there were gifts given to me when I retired. They varied from a cowboy hat signed by a lot of people I don't even know—even though I got the cowboy hat because everybody knows I'm a bit of a western guy; I love horses and riding and so forth.

I was given a trip to Las Vegas from an agency, and I think either the same night or the night after I said to the deputy of the day, who was Mr. Quail, “Ran, don't worry; I'm not going to take this trip”, because I thought it was not acceptable, and to this day I have not taken that trip.

I'll be very, very honest here. The president of the agency called me two years ago, and I'll never forget the letter. I tried to find it yesterday, but I couldn't find it. At the bottom it had—the gift was for four days to Vegas, hotel included and airfare—“P.S. No gambling money”. The agency called me perhaps a year ago and said, “Chuck, when are you going to take your trip?” I said to the president of the agency, “Never”.

So the gifts I have received involved, as I say, a bottle of wine here or a bottle of wine there, but nothing that would contradict the conflict of interest guidelines.

º (1645)

Hon. Walt Lastewka: But is the atmosphere not, in the advertising business, that gifts be offered many times? Did you refuse gifts during the time of the sponsorship program?

Mr. Charles Guité: No, because I think the agencies I dealt with wouldn't offer me a gift that would not be acceptable.

Hon. Walt Lastewka: Why do you say that?

Mr. Charles Guité: Bbecause I know most of those agencies very well. You have to remember that I have not worked with those agencies for five or six years. Some of those agencies go back to 1984, so some of these people I know very well. Over the years I can't remember an agency offering me something that was out of line so that I would have to say “No, I can't take it.”

Hon. Walt Lastewka: Thank you, Mr. Chair.

The Chair: Mr. LeBlanc, s'il vous plaît, vous avez quatre minutes.

Mr. Dominic LeBlanc: Thank you, Mr. Chairman, and thank you, Mr. Guité, for your answers to so many questions.

I wanted to touch, if I could, Mr. Guité, on two particular issues. One may be just a clarification. Earlier you mentioned Mario Lague in the context of a question from a colleague. I don't know if there may be some confusion as to Mario Parent, who I believe worked with you.

Mario Lague, my information is, joined the government only in June 1997 at FPRO—or as it then was, Intergovernmental Affairs—when Mr. Dion was the minister. I didn't want there to be some confusion.

Mr. Charles Guité: No, I think the question was not.... When we talked about Mario Lague, that's who I meant. As I said, I'm not sure whether Mario Lague was in PCO or FPRO or Monsieur Dion's section, and in retrospect, Monsieur LeBlanc, I think you may be right that Mario Lague joined the government when Minister—

Mr. Dominic LeBlanc: —Dion—

Mr. Charles Guité: —Dion became involved or became a minister. But I know Mario very well, because I worked closely with him when he was at PCO.

Mr. Dominic LeBlanc: Anyway, thank you, Mr. Chairman. I just didn't want there to be some confusion about that.

Mr. Guité, I was hoping you could explain to us and correct a popular misconception about the various agencies the Government of Canada used, be it for advertising or for the sponsorship program, either when it was done from the unity fund or subsequent to the actual creation of the program. There seems to be considerable confusion in many people's minds that these agencies were selected other than by an open, public process.

You referred to the MERX system. Now leave aside the exception, which my colleagues went on, about the pre-referendum context. Could you go back to the advertising and management group, when you first became involved in this file in government, and tell us, for example, when Senator Murray was involved, were agencies chosen by public open competition? How, typically, were agencies of record selected, either in advertising or in sponsorship?

Mr. Charles Guité: How far back would you like me to go? I can go back to when I started the job, which was about 1989, I think.

Mr. Dominic LeBlanc: Please.

Mr. Charles Guité: I think in my opening comments I described in very broad terms how the system worked under the Mulroney government. It was very clear then how it worked. Agencies were prequalified by a questionnaire they would fill in. When it came time to have an agency competition, the chairman of AMG, who was a political appointee, would go down the list and pick five or six or seven firms to come and do a presentation for a competition. Once that was done, obviously, that political appointee was not involved in the process, because of, again, the procurement guidelines of the government. The committee in those days consisted of two people from my staff and three people from the department, and it was chaired by a private contractor. At the end of the day, we held the competition no differently, except that now we're totally open, whereas before you were limited by the list you were given by these political appointees.

Mr. Dominic LeBlanc: You mean before in the previous Conservative government.

Mr. Charles Guité: That's right. The system changed to become what I would call totally open when the Liberal government got into power. They took away the political appointee. Mr. Dingwall in one of the minutes I've read talked about the policy, saying there was no policy before. In fact, there was a lot of policy before they were there. It used to be right in the policy that AMG would have on staff two regional advisers appointed by the political system.

º (1650)

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

The Chair: Merci, Monsieur LeBlanc.

Mr. MacKay, please, eight minutes.

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

Mr. Guité, what you're telling us, then, is that it went from a process that was, to use your word, politicized to one where essentially you made the call after input from various political consultations, whether it be with Mr. Pelletier in the Prime Minister's Office or another minister. They gave you input, then you made the decision. And you consider that to be depoliticizing.

Mr. Charles Guité: Absolutely not. You're mixing the whole process here, Mr. MacKay. The agency selection process under this current government has been the most open since I've been in that job. I'll tell you why. We changed the policy Mr. Dingwall referred to when he was here. From about 1994, when a new policy came in, initially, when the Liberals came in, we had to advertise the agency competition in what we call a trade magazine, a marketing magazine. There's one en français, I think, called le Grenier, and so forth. We would advertise that Health Canada, say, was looking for an ad agency. Any agency could hold up their hand and say they wanted to be considered. Then we would send them a questionnaire, and we'd say, you need to have a creative department on staff, you need a media planning division, and so forth. I'd have to check it in the record, but I would say that lasted about a year.

As we wrote the new policy--“we” being the Government of Canada, and policies on communications and the like would involve me, PCO, Treasury Board, and so forth--I remember trying to argue with Treasury Board that there was no way we could put agency selection on MERX, and Treasury Board said, Mr. Guité, they're going to be on MERX. So today--

Mr. Peter MacKay: All right. That's your assessment of how it worked at the time.

Mr. Charles Guité: No, it's not my assessment. That's how it works.

Mr. Peter MacKay: I see.

Mr. Charles Guité: So now all agencies are on MERX.

Mr. Peter MacKay: I want to move on to another question. You referred earlier in your evidence, in response to Mr. Desrochers' question, to a phone call, or perhaps several phone calls, you received from a Terrie O'Leary. Is that correct?

Mr. Charles Guité: That's correct.

Mr. Peter MacKay: Ms. O'Leary was working at the Department of Finance at the time?

Mr. Charles Guité: She was chief of staff to the minister.

Mr. Peter MacKay: Chief of staff to Paul Martin.

Mr. Charles Guité: If I recall correctly, yes.

Mr. Peter MacKay: And when she called, was she giving you this so-called input on contracts that were under your purview at the time?

Mr. Charles Guité: Yes.

Mr. Peter MacKay: So she was giving you advice on what she felt or what the minister felt should be the awarding of contracts.

Mr. Charles Guité: No. In one case--and I think I've given the documents to the chair--somebody from the minister's office wrote and asked to add these agencies to a competition, which we obviously refused to do, because the process had already started.

Mr. Peter MacKay: So was the letter a follow-up to the phone call? I want to be clear on that.

Mr. Charles Guité: I can't remember.

Mr. Peter MacKay: The memo you provided, on page 3, section 7, says:

We agree that it makes the most sense for the strategy to be developed by Gingko/Groupe Everest in collaboration with the market researchers, rather than another ad agency. In addition, Gingko/Groupe Everest should also serve as project manager/co-coordinator for the public relations firms which are appointed.

That's input from now Prime Minister Paul Martin's chief of staff to you on who should be hired to do the work and who the contract should be awarded to. Correct?

Mr. Charles Guité: Requesting that we do that, yes.

Mr. Peter MacKay: They're requesting that you use Groupe Everest. Was that the only time you recall that the then finance minister's office called to give you input on such a contract decision?

Mr. Charles Guité: On advertising, that's the only one I can recall, but I remember having calls on research.

Mr. Peter MacKay: On research and awarding of contracts for research?

Mr. Charles Guité: No, that we should include, for example, Earnscliffe. I think I said earlier this morning that the minister, Minister Dingwall, received a letter from Mr. Goodale asking to exempt him from the policy, and we said no.

Mr. Peter MacKay: I'd like to stay focused for a moment on this call from Ms. O'Leary. Was the call directly to you?

Mr. Charles Guité: Yes.

Mr. Peter MacKay: Did she indicate at any time that she was calling on behalf of the minister?

Mr. Charles Guité: I think I said earlier that she said “Paul would be happier if...”.

Mr. Peter MacKay: “Paul would be happier if...” a certain firm was used, mainly Everest.

Mr. Charles Guité: No, I'm not talking about the Everest file now, I'm talking about research, the Earnscliffe file.

º (1655)

Mr. Peter MacKay: Okay, you're talking about research. And it was Earnscliffe specifically?

Mr. Charles Guité: Yes.

Mr. Peter MacKay: So Ms. O'Leary from Paul Martin's office called and said “Paul would prefer it if Earnscliffe was used to do this research”?

Mr. Charles Guité: Exactly. The memo that I've given you today--I can't remember who Bruce Young is--I don't think is from Minister Martin's office. There's a memo here from Terrie O'Leary. I think that's the one you're referring to, Mr. MacKay.

Mr. Peter MacKay: That's the memo. So we're on the same page, it's dated May 30, 1994. It starts, “Just wanted to outline some suggestions from myself and the minister regarding the proposal for the 1994 retail debt strategy.” When she says “the minister”, you're saying that was Paul Martin. That was her department, the Department of Finance.

Mr. Charles Guité: Well, who did she work for?

Mr. Peter MacKay: Right. So it was Paul Martin, you would agree?

Mr. Charles Guité: I would agree.

Mr. Peter MacKay: Okay.

Mr. Guité, in reference to the issue of awarding of contracts, there's a letter allegedly written by you in June 1999, in which it is alleged that you instructed Groupaction Marketing that if they had money that was unused or not accounted for in the delivery of a sponsorship program, unused federal funds, they should simply continue to use them for ongoing work and not return the money if it wasn't used for a specific project.

Mr. Charles Guité: I'd have to see the letter, Mr. MacKay, and the file.

Mr. Peter MacKay: All right. I'll give you a little context. There's an amount of $330,000 to Salon du plein air, Quebec City. This was, as I understand it, a fishing and gaming show. The allegation was that the gaming show didn't happen, so the money wasn't used for that purpose. You wrote to them, allegedly, and said don't return the money, just do some other work.

Mr. Charles Guité: No.

Mr. Peter MacKay: You're saying that didn't happen?

The Chair: Just a minute, Mr. MacKay, let him answer.

Mr. Guité, you've got the floor.

Mr. Charles Guité: I did write the letter--obviously, if I signed it, I wrote it.

Mr. Peter MacKay: I haven't seen the letter. I'm just asking if you wrote it.

Mr. Charles Guité: Where's the letter if you haven't seen it?

Mr. Peter MacKay: I'm referring to coverage of this in the Globe and Mail in September 2002.

Mr. Charles Guité: End of discussion. I have no idea what you're talking about.

Mr. Peter MacKay: You have no idea what I'm talking about. You just said you had a letter, Mr. Guité. You said you signed the letter.

The Chair: Mr. MacKay, just a second, slow down a bit.

Mr. MacKay, you made some allegations based on.... Do you want to give a copy of that article to the clerk?

Mr. Peter MacKay: Sure.

The Chair: You are quoting from a newspaper article that suggests that Mr. Guité had written a letter.

Mr. Guité, if you have knowledge of the letter, you will speak about the letter. You can't say that because it's coming from a newspaper article you don't have to speak about it.

Mr. Charles Guité: I definitely will speak about it, Mr. Chairman, because I remember the incident, the occasion, or whatever.

What year was that, Mr. MacKay, 1997?

Mr. Peter MacKay: The letter was allegedly written in June 1999. The article I'm referring to, just for context, is dated September 19, 2002, in the Globe and Mail.

Mr. Charles Guité: Do I remember that specific letter? No. Do I remember the incident? Yes. I'll tell you how it worked.

We were doing that year, if I remember correctly, several outdoor shows. The one you referred to I think was in Quebec City.

Mr. Peter MacKay: Salon du plein air.

Mr. Charles Guité: That would be in Quebec City, I think. That event was cancelled. What I remember discussing--and again, if I had the file, I'd be more specific--with Groupaction was taking that money to give us more visibility in the other events.

Mr. Peter MacKay: You wrote to Groupaction--

The Chair: Mr. MacKay, your time is finished.

Mr. Peter MacKay: Let me finish this line of questioning, Mr. Chair.

The Chair: No, your time is up, but I will finish this thing.

So you're saying a contract is a contract, but don't worry about the contract, take the money, spend it where you think it's better.

Mr. Charles Guité: Not where you think it's best--I had input in where that money was going to go.

I'll give you an example of this. Salon du plein air in Quebec was cancelled. There were, I think, two or three salons du plein air happening in Quebec. There was one in Montreal, there was one in--I was going to say Rivière-du-Loup, but it wasn't Rivière-du-Loup. My direction to the agency of the time was to give us more visibility at those other venues.

» (1700)

The Chair: So the contract was ignored and you wanted to do something else.

Mr. Charles Guité: No, it wasn't ignored.

The Chair: The contract said this is what we're going to do, and that didn't happen. So what happened from that point forward?

Mr. Charles Guité: I asked for more visibility in other events. It could have been more than one event, not necessarily just another event.

The Chair: Okay. So the contract you had was not fulfilled, and rather than cancelling the contract and not paying out the money, you just said we'll spend it in another way.

Mr. Charles Guité: No, not “we'll spend it another way”, but “we'll get more visibility in other events”.

The Chair: Well, that's another way, isn't it?

Mr. Charles Guité: Well, fine.

The Chair: Yes, that's another way. The contract would have said “I engage you to advertise the Government of Canada at this particular location at this particular time”. It didn't happen, so rather than saying that's the end of it, we'll keep the money, the contract was not fulfilled, you said “Notwithstanding that, we'll just spend the money in another way at another location at another time”. Is that right?

Mr. Charles Guité: I'll repeat. If I recall correctly, my direction to the agency at the time was to get more visibility in other events. I can't make any further comment, because I would have to see the file.

The Chair: A very quick closing comment here, Mr. MacKay.

Mr. Peter MacKay: Mr. Chair, in relation to this, I think we've seen another example of how reluctant a witness Mr. Guité is. When he's asked a question, he, immediately upon hearing that it's in a newspaper article, and he previously said yes, he remembers the letter and that if he signed it, he must have written it....

I'm looking on the wall, here, Mr. Chair, and it says “The Spirit of the Printed Word”, sitting right above your head. The problem here is that the spirit of the printed word was completely out the window. Everything was done orally; there were no written documents. There were files that weren't complete. That seems to be the entire problem here today.

The Chair: Thank you, Mr. MacKay. You've got your comments on the record.

Mr. Lastewka, you've got a point of order now.

Hon. Walt Lastewka: It's very simple, Mr. Chairman. I think we're here to question the witness. Instead of attacking the witness, I think the questions should be put and the answers sought. Mr. Chairman, I think you have a responsibility to this committee in that.

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

Mr. Dennis Mills: I have a point of order, Mr. Chair.

The Chair: Before we deal with that point of order, Mr. Lastewka, we are dealing with the Parliament of Canada, where people are entitled to state varied opinions. This isn't an academic process. This is the Parliament of Canada, where many different opinions may be expressed. He just expressed an opinion.

Mr. Mills, you have a point of order.

Hon. Walt Lastewka: We're here to question the witness.

Mr. Dennis Mills: On the spirit of the printed word that Mr. MacKay talks about, I think most members of this committee would realize that the fairness and accuracy of some of the reporting that has gone on with this file over the last two months could be challenged.

The Chair: How it's being reported is nothing that I have any control over.

Mr. Dennis Mills: Well, you have had a lot of control.

The Chair: I just say that this is the Parliament of Canada, where everybody has an opinion. Therefore, in addition to asking questions, they are entitled to state their opinion as to the quality and the competence of the answers.

Madam Jennings.

Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): I'd like some clarification from the witness and from you, Mr. Chair.

On the whole question that Mr. MacKay asked, if I'm not mistaken--and the blues may correct me--he said that Mr. Guité wrote a letter concerning the Salon du plein air. At one point Mr. Guité said “I don't recall”, and Mr. MacKay said “Well, your signature is on it.”

Mr. Peter MacKay: Not at all. Absolutely not.

The Chair: Order, please.

Mrs. Marlene Jennings: Mr. Guité said “If my signature is on it, then I wrote it”, assuming, as I also assumed, that Mr. MacKay had a copy of the alleged letter in hand. But Mr. MacKay then said that what he had was a newspaper article that makes reference to the letter.

So if I'm correct, the witness assumed...and in fact asked if he could have a copy of the letter Mr. MacKay was referring to. Is that in fact what happened? Because you did not clarify it, to my point of view.

» (1705)

The Chair: I suggest we wait until tomorrow morning, when you can raise that as a point of privilege if what you think is correct. We will have the blues at that point in time.

Okay, Madam Jennings, it's your turn, for eight minutes.

[Translation]

Mrs. Marlene Jennings: Thank you.

Mr. Guité, I was not here this morning because I had to be on another committee. However, I read the transcript of the testimony you gave this morning, and, as you can see, I have been here since the committee resumed its deliberations at 3:30. I do not agree with what Mr. MacKay has just said. On the contrary, I find you have a phenomenal memory, given that you retired from government several years ago, and that, as you said, you did not have access to the files you worked on from the time the Sponsorship Program began in 1997.

I would like to come back to several points you raised in your testimony this morning.

[English]

In talking about the Auditor General's report, you said very clearly that you were not trying to discredit the Auditor General but that in some of the examples you were able to show that the Auditor General's conclusion was not the conclusion you drew. You had access to possibly information and files that the Auditor General did not have access to.

When I say information, I'll give you the example of what you yourself said, that for some of the visibility sponsorships, it would have been difficult to have something in the file--for instance, if there was a wordmark on a skating ice rink or something like that. I believe those were your very words.

So it's clear that if the Auditor General audited that particular file, the Auditor General would not be in a position to see that there was value for money. I'm pleased that you clarified that you're not trying to discredit the Auditor General but you're trying to complete information that you feel she may not have had in her hands.

There was the question of the interest earned by, for instance, Groupe Everest in the corporate account, from the time a cheque was cut from CCSB or from the government and then deposited in their corporate account, when they then cut a cheque to the ad agency, for instance, or to the event organizers. The Auditor General had a problem with the fact that there was interest earned on that money.

Now, Mr. Boulay, who came here from Everest, explained very clearly what that interest was, and that in fact the contracts that were signed never addressed the issue. Therefore, legally that interest could very well belong to Groupe Everest, but they decided not to go the legal route before the courts and simply paid it back, not to make an issue of it. But that was an issue the Auditor General had.

Did you at any time discuss that with the Auditor General when she presented you with at least part of her report?

Mr. Charles Guité: No, absolutely not. In fact, I haven't read Monsieur Boulay's testimony, but I would assume.... If I remember correctly, it seems to me there was a clause in the contract with the AOR--

Mrs. Marlene Jennings: The agency of record, correct.

Mr. Charles Guité: --because it would have been one of the bigger contracts we would issue. They would place millions of dollars on media.

If I recall correctly, and I could be wrong, there was a time delay. When Groupe Everest received the money, they had to pay the media--

Mrs. Marlene Jennings: Within five days.

Mr. Charles Guité: In how many days?

Mrs. Marlene Jennings: Five days, according to Mr. Boulay.

Mr. Charles Guité: Which I think is probably appropriate.

Now, if it never came to my mind.... And now that you mention it, that an agency like the AOR could receive $5 million to $6 million today from the government, keep it for five days, and then pay.... Well, if I had $5 million in the bank for five days, I'd be happy.

Mrs. Marlene Jennings: But it's not just that.

Mr. Charles Guité: No, no, let me finish.

So I definitely wasn't aware that this was the case. But then, in thinking of Chuck Guité now, having left the government, if I have a business and I receive money on a valid contract, and I have a clause that says you're going to pay party three within five days, and my company ends up making a profit by doing that, is that illegal? If it's not in the contract, I don't think so.

» (1710)

Mrs. Marlene Jennings: That's the point I wanted to make, but it goes even further.

Mr. Charles Guité: And Mr. Boulay says he returned the money?

Mrs. Marlene Jennings: They returned the money because they felt that the legal fees to fight the government after the 2000 audit, etc., would have cost them more than the $100,000-and-something interest they earned over the years.

The other thing is that it's not just that the cheque gets cut by Media/IDA or by Everest within the five stipulated days. Once it's received by the event organizer--

Mr. Charles Guité: They may not cash it for another three or five days.

Mrs. Marlene Jennings: Exactly.

Now, I want to go to another issue where you were hammered--unjustifiably, in my view--on the question of Treasury Board rules where no one company could be awarded more than 25% of all government contracts. And that's why....

You say that you kept track. I assume you had a computerized system.

Mr. Charles Guité: We did, and we had to report, if I remember--

Mrs. Marlene Jennings: Every three months.

Mr. Charles Guité: --on a quarterly basis to Treasury Board.

Mrs. Marlene Jennings: That's right; every three months.

Therefore, when you saw that an agency was coming close to the 25% of all government contracts awarded from say January 1 to March 31, if you were awarding a contract on March 30 and you knew that there was $100 million of government contracts out there and one particular agency had received, to that point, $24,999,000.99, you wouldn't award it in order to respect and apply the rule. Is that correct?

Mr. Charles Guité: That's correct, because we had to report to Treasury Board.

Mrs. Marlene Jennings: Exactly.

Now, in the next quarter, if another $100 million of all government contracts went out, then the almost 25% that agency had had of the first quarter would now be reduced to 12.5%, in which case they would then be admissible, under the Treasury Board guidelines, for another contract.

Mr. Charles Guité: Not within the same year.

Mrs. Marlene Jennings: Not within the same year. Even if they were no longer at 25%.

Mr. Charles Guité: If I remember correctly, and again I'd have to check--the policy must still exist on file somewhere--it read that no one firm will get more than 25% of the total government business volume within a one-year period.

So if an agency, let's say from January.... I think I saw this in a document somewhere a couple of days ago. If the government did $150 million in advertising, one agency could not get more than 25% of that.

Mrs. Marlene Jennings: Over the entire year.

Mr. Charles Guité: Over the entire year, including sponsorship, including research. Because some companies do all--sponsorship, research, and advertising.

So at 25% they were basically cut off. An agency in fact can get cut off. If the fiscal year starts April 1, and by the end of July we know that the forecast is going to be x, y, z, and they're up at around 24% or 25%, that's it, folks.

Mrs. Marlene Jennings: Okay. Thank you.

The Chair: Ms. Jennings, thank you very much.

Mr. Jordan, please, eight minutes.

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

Mr. Guité, I just want to go back to the Maurice Richard file. This morning I asked about the rationale behind using the agencies when we're essentially giving money from CCSB to the production company to make the movie. In response to that, you said, and I'm quoting here:

In the case of VIA and Canada Post, you cannot—how would I use the words here...? I could not transfer funds from CCSB to Canada Post. To do that I had to go through Treasury Board, because that would be taking funds from one portfolio, and even worse, to a crown corporation.

What's the problem with going through Treasury Board? Is it a timing issue?

Mr. Charles Guité: No, it's not a timing issue. That would mean, if I did that for L'Information essentielle, why wouldn't I do it for every other sponsorship, go directly and avoid the agency? The answer is very simple. When I was there, we were doing I forget how many events a year, but it was in the high hundreds. I had a staff of four in advertising and sponsorship. On the sponsorship file, I think I had one and a half persons.

So obviously, in those days the decision was made that we would do the sponsorship through the auspices of an agency in order to ensure that the visibility was taking place. Once we installed, I think six or seven months after it started, the post-mortem picture.... I mean, I didn't have the staff to send out to these events.

Now, as I was trying to explain this morning, there are different rules about transferring funds in the government from one department to another or a department to a crown corporation. It's not impossible. It's done, and I'm sure it's done not regularly but often enough. It's not a matter of delay. The problem here was basically lack of staff.

As I think I said this morning, Canada Communication, I think they're called now--or I guess they're not called anything as of April 1--

» (1715)

Hon. Joe Jordan: Yes, I think I'm getting that, but I'm just wondering, could CCSB have transferred the money for the production of the Maurice Richard series directly to the production company, or are you telling me that the advertising agencies did more than just pass that money through?

Mr. Charles Guité: No, because then it would have become.... How would I explain that? The money that was allocated for sponsorship would go through an ad agency, which is normally the way you'd do sponsorship. For me to transfer that money directly to L'Information essentielle would have been a totally different process. Otherwise, as I just said earlier, why would I use an agency at all for any of those sponsorship programs? Why wouldn't I transfer it all?

My argument here has always been, and always will be, that the agencies in doing those events for the Government of Canada made, on some of them, no question, a nice profit. But on some of them they broke even, and on some of them they lost their shirts. Overall, the Government of Canada got value for money, and I will stick with that--if I'm here for six months.

Hon. Joe Jordan: Let's hope that's not the case.

Mr. Charles Guité: No.

Hon. Joe Jordan: In terms of the exceptions, then, you talked about the procurement policy. There are four exceptions, and you cited the third one: “the nature of the work is such that it would not be in the public interest to solicit bids”. And then a further explanation of that: “Exception (c) should normally be reserved for dealing with security considerations or to alleviate some significant socio-economic disparity.”

I'll jump ahead a bit. The thing I'm interested in here is this: “This exception should be invoked only with the approval of senior management as delegated by the contracting authority...”. Was the decision to invoke that made by you, as a senior manager?

Mr. Charles Guité: No, I think it was made by the committee--you know, myself, people from FPRO. Obviously, one of my senior people who was seconded to FPRO was involved in that decision, but it wasn't “Chuck Guité is going to do it this way”. No, I think it was discussed around the table.

Again, if we're going to split hairs on those rules, well.... You know, you can say security, confidentiality, whatever, but I think at the.... I'm trying to avoid using that famous phrase. I think what we were dealing with at the time justified very, very good.... I believe we did the right thing.

Hon. Joe Jordan: Mr. Guité, just on that point, I'm not necessarily disagreeing with you, but it is sometimes problematic to look historically, through a lens, at something that happened in the mid-1990s.

Mr. Charles Guité: Yes, 20/20 hindsight.

Hon. Joe Jordan: I asked this of Mr. Pelletier when he was here, and he touched on it. You also touched on it a little bit this morning. What exactly were we trying to counter with this program? What was going on in Quebec? You don't need to get into the debate, but what was the other side doing that gave rise for the need for us to do something? You mentioned something about using the casino. What were you trying to counter?

Mr. Charles Guité: Again, I think there are about three questions there, but that's fine, because they all relate to one another.

In terms of what we did during the referendum and in the months leading up to it, obviously we were very concerned about what le gouvernement du Québec was doing, advertising the “oui” , versus the “non” for le Fédéral.

So we did all sorts of promotions in Quebec during that time. What was there? There were a lot of government ads running in Quebec. There were the famous billboards that we bought, where we ran government ads.

» (1720)

Hon. Joe Jordan: What was the other side doing? What was their message?

Mr. Charles Guité: The other guy was promoting the yes side of the separatists.

The second part of your question was why did we carry on with that. Well, if you remember the night of the referendum.... I remember it very well, and I'm sure people from the Bloc remember it very well, but on an obviously different side of the coin. I remember that the following morning the Prime Minister of Canada of the day, who was Mr. Chrétien, said we will never let this happen again; we'll do whatever is possible so it never repeats itself.

We lost the referendum by one percent, give or take. I won't go into the details of my involvement in the few days before the event.

Anyway, to make a long story short, the day after the referendum, based on the Prime Minister's comment, there was a lot of discussion around the table. We have to get a new set of dishes, folks. One of the areas discussed was that the federal government was not present enough in Quebec. There were too many Québécois and Québécoises who didn't know that in every village and every city there was a lot of federal money--i.e., a post office, a department, and so forth.

In discussions with this committee of FPRO, my organization, the PMO, and the minister's office, the idea of carrying on with the sponsorship program that had worked fairly well during the referendum was initiated. Again I'll refer to the comment I made this morning that this was supposed to last until 1999 or 2000, and that program would then be off the table. If you did a survey today on the people in Quebec who would separate from Quebec versus those who would stay with Canada, I think you'd find a different response. It wouldn't be 49%. I think mes amis québécois et québécoises realize it's a good family, it's part of a good family; we are present.

My advice to the Québécois is make sure you're well represented in Ottawa at the next election.

The Chair: Thank you very much, Mr. Jordan and Mr. Guité.

The clerks are passing around some motions we will just wrap up our day with.

Mr. Guité, there's no need for you to remain. You are excused, but we will see you here at nine o'clock tomorrow morning.

Mr. Charles Guité: What's the schedule tomorrow, Mr. Chairman?

The Chair: The schedule is from nine to one, but we will break from 11:15 to 12:15--

Mr. Charles Guité: For question period?

The Chair: Yes.

The witness is excused.

We're going to deal with three motions by Ms. Wasylycia-Leis and.... What have you got there?

Mr. Vic Toews: I have a motion as well.

The Chair: Is that a notice of motion?

Mr. Vic Toews: Yes.

The Chair: Okay, I'll get to it. I already have the notice of motion by Ms. Wasylycia-Leis. We'll deal with that, and then I'll accept your notice of motion. Then we'll wrap up, okay?

Mr. Vic Toews: Okay.

The Chair: Do we have everybody here?

These motions were distributed by Ms. Wasylycia-Leis. There are three of them.

The motion from Ms. Wasylycia-Leis of Tuesday, April 6, is that the committee request Public Works and Government Services Canada to provide a detailed breakdown of the disbursements made under contract EP043-9-0037 with respect to the sponsorship of the Pan Am Games in Winnipeg in 1999. Of particular interest are the details of $1,591,420 in production costs.

Madam Wasylycia-Leis, speak to your motion briefly.

» (1725)

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Very briefly, it's critical that we get some details pertaining to this particular sponsorship file. It's particularly relevant given the comments today by our witness, Mr. Guité, who has suggested in fact that a Canadian pavilion was designed and built for the Pan Am Games. My understanding is that's not the case, that an existing building at The Forks was simply redone in terms of the actual theme of the Pan Am Games.

I'm looking for details, not broad costs. I'd like a breakdown of the production costs.

The Chair: That's very good, Ms. Wasylycia-Leis. We've been asking for all kinds of information, and I think we'll agree to this one too.

(Motion agreed to [See Minutes of Proceedings])

The Chair: Moving on to the next motion, of Tuesday, April 20:

That the Standing Committee on Public Accounts call on the Honourable John Gomery of the Superior Court of Quebec, or someone on his behalf, to appear before it to update the Committee on the progress of his Commission of Inquiry as it relates to the Auditor-General's November 2003 Report.

Speak to your motion, briefly.

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

I would ask for the support of the committee with respect to this motion. I think it's critical that we get an update from either Judge Gomery or someone on his behalf, to inform us about his plans for conducting an independent judicial inquiry into the sponsorship file.

I would hope that committee members would support this, because I think it will enlighten our work and help to ensure that we aren't stepping over each other's toes, and that we have a sense of the fact that this is an inquiry in place that can do the work our committee is not equipped to do.

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

Mr. Jordan.

Hon. Joe Jordan: Mr. Chair, I guess I have a bit of a problem with this. I think we need to maintain the independence between the two processes.

From what I've read in the paper, there is going to be some kind of an update given publicly by the inquiry. There's certainly a lot of attention on this.

Certainly we want to make sure we're not interfering with what each of us is doing, but we managed to accomplish this informally with the RCMP. Unless there's a pressing problem, I think we should pursue that informal process, because I think that calling a superior court justice here is a precedent we should give some thought to.

The Chair: Ms. Ablonczy.

Mrs. Diane Ablonczy: As so often happens, Mr. Chairman, I find myself in complete agreement with the Liberals opposite.

Some hon. members: Oh, oh!

Mrs. Diane Ablonczy: I do question whether it would be wise for us to examine the head of the commission, so to speak.

Mr. Chairman, I would appreciate having some words of wisdom from our legal counsel on that point.

The Chair: Mr. Walsh.

Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons): Mr. Chairman, I believe there were some discussions with the mover of the motion with regard to the very point Ms. Ablonczy is now raising. For that reason, the words “or someone on his behalf” were inserted in anticipation that the commission counsel or co-counsel would attend, much as the RCMP officer did, and just apprise the committee of where things are going with that inquiry—and perhaps enable this committee to be sensitized to where there may be points of impact, one with the other, which it might be helpful to be aware of.

The Chair: In light of that, Mr. Walsh, I think we should perhaps wait until the inquiry is up and running before we actually move down that road.

There is one more intervention, by Monsieur Guimond.

[Translation]

Mr. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ): Thank you, Mr. Chairman.

I entirely agree with what Mr. Jordan said, which is that if this motion cannot be withdrawn by my NDP colleague, it should at the very least be defeated. This should happen for the same reasons that we must maintain the separation between the legal and legislative branches. We are a creature of the legislative branch. This committee is an extension of the House of Commons and we must remain independent from the Gomery commission of inquiry.

» (1730)

[English]

The Chair: I give Ms. Wasylycia-Leis the final short comment.

Ms. Judy Wasylycia-Leis: I realize I don't have much support for this motion, but I want to suggest to the committee that this motion by no stretch of the imagination suggests that we lose any sense of independence. The intent of this motion is to reflect on the fact that we are at day 72 since the Prime Minister struck this independent judicial committee. It has yet to report, it has yet to begin to hear witnesses. We have become the only game in town, and yet we are not designed to be a court of law, nor are we designed to follow the money. I assumed that it would be a constructive addition to the public focus on this whole critical issue to at least have an update, not necessarily from the judge, but from the office, to hear the plans. Or maybe we should be asking the Prime Minister, then, to tell us what the heck he set up this inquiry for if he had no intention of making it a reality.

The Chair: Thank you very much.

I'm not going to hear any more on this. I think you answered your own question. The last thing we'd ever want to do is bring someone in here from the commission of inquiry to chastize them for the lack of progress. That is not our role. Therefore, I'm going to call the question.

(Motion negatived)

The Chair: The third one is that the Standing Committee on Public Accounts call on Ms. Donna Achimov, former employee of Public Works and Government Services Canada, to appear before the committee.

Ms. Jennings.

Mrs. Marlene Jennings: Perhaps Ms. Wasylycia-Leis or the clerk can clarify whether this Donna Achimov already appears on the master witness list.

The Chair: She does not believe so. We did have an agreement that it would be checked.

Mrs. Marlene Jennings: You know what, Mr. Chair? One of the things we requested that KPMG is supposed to be doing is ensuring that any new motion that comes in does not duplicate a motion that has already been adopted by this committee. So I would think that the logical thing is that when a motion comes in with the name of somebody to appear as a witness, one looks at the master list that this committee unanimously adopted, and if the name is already there, we say it is out of order. If the name's not there, it is in order. So I don't think the answer “I don't think so” is adequate.

The Chair: The clarification I have is that the subcommittee on witnesses did actually interview Ms. Achimov--

Mrs. Marlene Jennings: I know; I was there. That's not the point.

The Chair: --and the decision was made that the person would not be called. Therefore, she was not on the list. But that does not preclude someone's bringing the motion forward.

Mrs. Marlene Jennings: I understand that. That was not the question I asked.

The Chair: I know. I said it was not on the list.

Mrs. Marlene Jennings: The question I asked was we have a master list we approved--is this name on the list or not?

The Chair: And I have been advised that it isn't.

Mrs. Marlene Jennings: So the answer is either a categorical yes, in which case this motion is out of order, or it's a categorical no, in which case the motion is in order.

The Chair: And it's not on the list--

Mrs. Marlene Jennings: Thank you.

The Chair: --so the motion is in order.

Mr. Toews.

Mr. Vic Toews: I'm a little surprised here at Ms. Jennings' concern about calling witnesses without approval from KPMG. I thought KPMG was going to be giving us a list of the witnesses, how we are going to be calling them--

Mrs. Marlene Jennings: Do not misstate my words, please.

Mr. Vic Toews: --and then we--

The Chair: Madam Jennings, please.

Mrs. Marlene Jennings: Do not misstate what--

The Chair: No, Madam Jennings, Mr. Toews has the floor.

Mr. Vic Toews: What I'm very concerned about is this. I thought all the witnesses were going to be put on a list by KPMG, and the steering committee would deal with this. Yesterday Ms. Jennings walked in with a list of witnesses to recall on particular dates. I assume now that we have somehow abandoned what we had all agreed at the steering committee. Ms. Jennings comes in, sets her own agenda, and now we have to start scrambling about putting these on.

I'm just wondering, Mr. Chair, if we could in fact have KPMG bring forward a list before we start approving all kinds of witnesses.

» (1735)

The Chair: That is very good, Mr. Toews. Yesterday I received a notice of motion from Ms. Jennings, and of course when we discuss the motion, as we're discussing Ms. Wasylycia-Leis', these points are valid.

The name is not on the list because it was removed from the list. Ms. Wasylycia-Leis would like the name put back on the list, and I was going to call the question.

Mrs. Marlene Jennings: Mr. Chair, you're misstating the facts. The name was not removed from the list. There was a master list that combined Ms. Ablonczy's numerous motions with a list of witnesses and a motion I had with a list of witnesses, and that is the only list of witnesses this committee has approved.

I don't have a problem with Ms. Wasylycia-Leis' motion as long as I'm assured that it's not a duplication. I've just been assured categorically by one of the clerks that this name does not appear on the master list. So when you say it was removed from a list, you're not stating the facts accurately.

The Chair: The decision was made by the steering committee--

Mrs. Marlene Jennings: Not to put the name on the list.

The Chair: Okay.

Mrs. Marlene Jennings: So it was not removed from the list; it was never on the list.

The Chair: I'm going to call the question on the motion as circulated.

(Motion agreed to [See Minutes of Proceedings])

The Chair: There is a final motion that we deal with every year. This has nothing to do with chapters 3, 4, and 5 of the Auditor General's report. The Treasury Board has requested that permission from the public accounts committee to waive the publication of the details related to ex gratia payments for the fiscal year ending March 31, 2004, be granted for the merchant marine veterans, heating fuel rebates, payments made to resolve claims rising from the Indian school system, with the provision that the gross amounts for each and the total number of claims are reported to Parliament in Public Accounts of Canada. So rather than having individual names and individual amounts, we have the gross amount and the number of claims only.

Okay, Mr. Toews? We do this every year.

Mr. Vic Toews: Is it a good idea?

The Chair: It is a good idea.

Mr. Vic Toews: All right.

The Chair: The motion will be moved by Mr. Jordan.

(Motion agreed to)

The Chair: Mr. Toews gave me a notice of motion.

Mr. Vic Toews: I want to give notice of a motion that pursuant to its study of chapters 3, 4, and 5 of the November 2003 report of the Auditor General of Canada, the Standing Committee on Public Accounts call the following witnesses: Monday, May 3, 2004, Mr. Jean Carle; Tuesday, May 4, 2004, the Honourable Don Boudria; Wednesday, May 5, 2004, the Honourable Ralph Goodale; Thursday, May 6, 2004, Mr. Warren Kinsella.

Thank you.

The Chair: It is received as a notice of motion. Give it to the clerk, and it will be translated and distributed.

The meeting is now adjourned.