PACC Committee Meeting
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37th PARLIAMENT, 3rd SESSION
Standing Committee on Public Accounts
EVIDENCE
CONTENTS
Thursday, April 22, 2004
| ¿ | 0905 |
 |
The Chair (Mr. John Williams (St. Albert, CPC)) |
|
Mr. Charles Guité (As Individual) |
|
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 |
| ¿ | 0910 |
|
Mr. Charles Guité |
| ¿ | 0915 |
| ¿ | 0920 |
| ¿ | 0925 |
| ¿ | 0930 |
|
The Chair |
|
Mr. Jason Kenney (Calgary Southeast, CPC) |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
| ¿ | 0935 |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
| ¿ | 0940 |
|
The Chair |
|
Mr. Michel Gauthier (Roberval, BQ) |
|
Mr. Charles Guité |
|
Mr. Michel Gauthier |
|
Mr. Charles Guité |
|
Mr. Michel Gauthier |
|
The Chair |
|
Mr. Michel Gauthier |
|
Mr. Charles Guité |
| ¿ | 0945 |
|
Mr. Michel Gauthier |
|
Mr. Charles Guité |
|
Mr. Michel Gauthier |
|
Mr. Charles Guité |
|
Mr. Michel Gauthier |
|
Mr. Charles Guité |
|
The Chair |
|
Hon. Shawn Murphy (Hillsborough, Lib.) |
|
Mr. Charles Guité |
| ¿ | 0950 |
|
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 |
|
Hon. Shawn Murphy |
|
Mr. Charles Guité |
| ¿ | 0955 |
|
Hon. Shawn Murphy |
|
Mr. Charles Guité |
|
Hon. Shawn Murphy |
|
Mr. Charles Guité |
|
Hon. Shawn Murphy |
|
Mr. Charles Guité |
|
Hon. Shawn Murphy |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP) |
| À | 1000 |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
| À | 1005 |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
Ms. Judy Wasylycia-Leis |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
| À | 1010 |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC) |
|
Mr. Charles Guité |
|
Mrs. Diane Ablonczy |
|
Mr. Charles Guité |
|
Mrs. Diane Ablonczy |
|
Mr. Charles Guité |
|
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 |
| À | 1015 |
|
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 |
|
Hon. Robert Thibault (West Nova, Lib.) |
| À | 1020 |
|
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 |
|
Mr. Charles Guité |
|
Hon. Robert Thibault |
|
Mr. Charles Guité |
| À | 1025 |
|
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 |
|
The Chair |
|
Mr. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ) |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
| À | 1030 |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
M. Charles Guité |
|
Mr. Michel Guimond |
|
M. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
| À | 1035 |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
Mr. Michel Guimond |
|
Mr. Charles Guité |
|
The Chair |
|
Hon. Joe Jordan (Leeds—Grenville, Lib.) |
|
Mr. Charles Guité |
|
The Chair |
|
Hon. Joe Jordan |
|
Mr. Charles Guité |
|
Hon. Joe Jordan |
|
Mr. Charles Guité |
|
Hon. Joe Jordan |
|
Mr. Charles Guité |
|
Hon. Joe Jordan |
| À | 1040 |
|
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 |
|
Hon. Joe Jordan |
|
Mr. Charles Guité |
|
Hon. Joe Jordan |
|
Mr. Charles Guité |
|
Hon. Joe Jordan |
|
Mr. Charles Guité |
|
Hon. Joe Jordan |
| À | 1045 |
|
Mr. Charles Guité |
|
Hon. Joe Jordan |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Vic Toews (Provencher, CPC) |
|
The Chair |
| À | 1050 |
|
Mr. Charles Guité |
|
Mr. Vic Toews |
|
Mr. Charles Guité |
|
Mr. Vic Toews |
|
Mr. Charles Guité |
|
Mr. Vic Toews |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
Mr. Vic Toews |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
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 |
| À | 1055 |
|
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 |
|
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 |
| Á | 1100 |
|
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. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
The Chair |
|
Mr. Alan Tonks (York South—Weston, Lib.) |
| Á | 1125 |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
| Á | 1130 |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
|
Mr. Charles Guité |
|
Mr. Alan Tonks |
| Á | 1135 |
|
Mr. Charles Guité |
|
The Chair |
|
Hon. Walt Lastewka (St. Catharines, Lib.) |
|
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. Marcel Proulx (Hull—Aylmer, Lib.) |
|
Mr. Charles Guité |
|
Mr. Marcel Proulx |
|
Mr. Charles Guité |
|
Mr. Marcel Proulx |
| Á | 1140 |
|
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 |
|
Mr. Charles Guité |
|
Mr. Marcel Proulx |
|
Mr. Charles Guité |
|
Mr. Marcel Proulx |
|
Mr. Charles Guité |
| Á | 1145 |
|
The Chair |
|
Mr. Marcel Proulx |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Marcel Proulx |
|
The Chair |
|
Mr. Charles Guité |
|
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 |
| Á | 1150 |
|
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 |
|
The Chair |
|
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 |
| Á | 1155 |
|
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 |
|
The Chair |
|
Mr. Charles Guité |
|
Mr. Peter MacKay |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Hon. Walt Lastewka |
|
The Chair |
|
Mrs. Diane Ablonczy |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
The Chair |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
| Â | 1200 |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
|
Hon. Walt Lastewka |
|
Mr. Charles Guité |
| Â | 1205 |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Dennis Mills (Toronto—Danforth, Lib.) |
| Â | 1210 |
|
Mr. Charles Guité |
|
Mr. Dennis Mills |
|
Mr. Charles Guité |
|
Mr. Dennis Mills |
|
Mr. Charles Guité |
|
Mr. Dennis Mills |
|
The Chair |
|
Mr. Dennis Mills |
|
Mr. Charles Guité |
|
Mr. Dennis Mills |
|
Mr. Charles Guité |
| Â | 1215 |
|
Mr. Dennis Mills |
|
Mr. Charles Guité |
|
Mr. Dennis Mills |
|
Mr. Charles Guité |
|
Mr. Dennis Mills |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Charles Guité |
|
The Chair |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
| Â | 1220 |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
|
Mr. Charles Guité |
|
Mr. Jason Kenney |
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Mr. Charles Guité |
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CANADA
Standing Committee on Public Accounts |
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EVIDENCE
Thursday, April 22, 2004
[Recorded by Electronic Apparatus]
¿ 
(0905)
[English]
The Chair (Mr. John Williams (St. Albert, CPC)): Good morning, everybody.
The orders of the day are pursuant to Standing Order 108(3)(g), chapter 3, “The Sponsorship Program”; chapter 4, “Advertising Activities”; and chapter 5, “Management of Public Opinion Research”, of the November 2003 report of the Auditor General of Canada, referred to the committee on February 10, 2004.
This morning, as an individual, we have Mr. Charles Guité, who will be with us all day.
We'll be having a break at about 11 o'clock for 15 minutes, and then we go to 1 o'clock, and then we reconvene at 3:30 until 5:30, for the rest of the day. I think there is agreement among all parties that all interventions today will be eight minutes in duration.
Is that agreed?
Some hon. members: Agreed.
The Chair: If you want to split your interventions, you may do so, but give the chair notice ahead of time. If you don't and you use only a couple of minutes, that will be deemed to be your intervention.
The first thing we'll do is swear in the witness.
Mr. Guité, do you want to take the oath, please.
Mr. Charles Guité (As Individual): Yes.
The evidence I shall give in this examination shall be the truth, the whole truth, and nothing but the truth, so help me God.
The Chair: Thank you very much.
I have some questions first, Mr. Guité. The last time you testified before the committee you were constrained by your oath of office as a public servant. Do you feel constrained by that? For cabinet ministers and so on, that oath of office has been lifted. Do you agree that you are no longer subject to the oath of office of the public service as you speak to Parliament?
Mr. Charles Guité: I agree, sir. But how far back does this go? Does it go back to 1990, 1995, 1997?
The Chair: The oath of office was lifted for cabinet ministers back to, I believe, 1996. It may come through momentarily, but we are awaiting a decision by the Privy Council Office as to whether that's going to be made retroactive even further.
I'm of the position that as a public servant, you are not subject to the cabinet oath, which has been lifted back to a certain date; it has been lifted for you for your period as a public servant of Canada.
Mr. Charles Guité: Okay.
The Chair: I have some other notes, which I read to everybody:
| ...the refusal to answer questions or failure to reply truthfully may give rise to a charge of contempt of the House, whether the witness has been sworn in or not. In addition, witnesses who lie under oath may be charged with perjury. |
That comes from House of Commons Procedure and Practice, Marleau and Montpetit, page 862.
Also, Mr. Guité, you are appearing before us as an individual this morning. Did you discuss or have meetings with any employees of the Government of Canada or any members of this committee on both sides, in preparation of your report, before coming to this meeting? Or were you counselled or given any coaching by anyone in the Government of Canada or Parliament of Canada before coming here?
Mr. Charles Guité: No, I have not, sir.
The Chair: And any assistance as well?
Mr. Charles Guité: No, I have not. But I have spoken to people who worked for me in the past. When, I don't know. I've spoken to people since I left the government. Obviously some of those people are personal friends. But nobody has given me advice or prepared me for my presentation today.
The Chair: Okay.
Has legal advice been provided or paid for by the authorization of any official in the Treasury Board Secretariat or the Department of Public Works and Government Services, or in any other government department or agency? In essence, is the government paying for your legal services?
Mr. Charles Guité: Yes, I have confirmation from the last time I appeared here. I assume that agreement is still valid, so the department will pick up my legal expenses up to a certain amount.
The Chair: We did actually table a report in the House--was it yesterday?--where we, this committee, recommended that public servants appearing before this committee, because of their position as public servants of Canada, have their legal counsel paid for by the government.
I think these are primarily the questions for everyone, for all members of the committee and including you, Mr. Guité. This is just an advice that I will be ensuring that both the questions by members and the answers by the witness remain relevant to the orders of the day, those being chapters 3, 4, and 5 of the November 2003 report of the Auditor General of Canada. Where the information given in questions and answers seems to stray from that, I shall intervene to ensure the discussion remains on track. I would ask in that respect that questions and answers remain succinct and to the point; that's both for the questions and the answers.
And I think that is it.
Mr. Guité, I understand you have an opening statement. I turn the floor over to you; the floor is yours.
¿ (0910)
Mr. Charles Guité: Thank you very much.
Good morning, everyone.
Firstly, Mr. Chairman, I'd like to make the following comment on statements that you made to the press that are totally wrong and misleading. And I quote:
| can't have someone arrogantly thumbing their nose at Parliament--the government has powers to make it awkward for Chuck Guité--Canadians can't sit quietly back and watch Mr. Guité who is out of the country thumbing his nose at them. Mr. Williams said he has no intention of asking for help in the matter from U.S. police. |
| The Committee could issue a subpoena to get Mr. Guité to appear or Canada Customs could even arrest him if and when he returns to Canada. |
Mr. Chairman, I have spent most of my career serving Parliament, and as a public servant, serving the public at large throughout my career, I have never thumbed my nose at Parliament or, furthermore, at Canadians.
On your comments that the government has the power to “make it rather awkward” for Chuck Guité, well, you have succeeded, sir. Canadians are thumbing their nose sat me and my family.
Let me give you an example. Where my wife and I winter in Arizona, there are many Canadians who have full access to the Canadian media. Because of your unacceptable comments to the press, we had Canadians driving by our trailer and yelling obscenities at us. Others were running around the community with articles from the press, etc.
I repeat, Mr. Williams, I have never thumbed my nose at Parliament or at Canadians. Furthermore, I have continued to serve this institution long after I retired in 1999.
Finally on this issue, Mr. Chairman, I have attached a copy of the letter my legal counsel sent to you on this issue, as I'm not sure if it has been circulated to all members of this committee.
In regard to the meeting of June 6, 2002, which was supposed to be in camera, five minutes after I left, members of this committee were giving interviews to the media. Having said that, I would like to make two comments on the transcript of June 6, 2002, in reference to Monsieur Jean Brault's chalet and Attractions Canada.
First, after having read the transcript that was released, my wife reminded me that we did go to Mr. Brault's chalet, and that Mr. and Mrs. Boulay were present. I do not remember the date, but it may have been during the 1994-95 referendum.
Secondly, as for the billboards that were bought during the referendum, we did not use Attractions Canada for ads as that program only started in 1997, if I recall. We did, however, use other government ads.
Now let me turn to three areas that I would like to address today.
The first item is the process of AMG, APORS, and CCSB, as this committee keeps referring to the early 1990s, my promotions, media articles, etc. Item two, the Auditor General's report, as I will illustrate quite clearly, is lacking information and it is misleading to the public at large. It is also inaccurate in some instances. The third item will be political involvement in agency selection and sponsorship events.
Let me turn now to AMG, APORS, and CCSB.
The AMG was originally set up by the Clark government in 1978. That government was short-lived. When the Trudeau government came to power, it retained the AMG. That structure became part of the Canadian Unity Information Office, commonly referred to as CUIO, in early 1979. At that time, a political appointee, Mr. Peter Zarry, who subsequently is deceased, was on the staff of the AMG. Mr. Zarry was an expert in advertising and communications and, in fact, became a professor in this discipline at York University.
I cannot describe the day-to-day workings of AMG in those years, but I have heard a lot about its operation, as it was during the years of the first referendum when Monsieur René Lévesque was Premier of Quebec.
In the fall of 1994--and my dates from here on are approximations or to the best of my recollection--the Mulroney government came to power, and overnight they abolished CUIO on the basis that it was perceived as too political. It was a fairly large organization--CUIO, that is--and it promoted Canada with travelling exhibits, participating at most national fairs and many other expositions.
¿ (0915)
From 1984 to 1987, I was manager of the project management group at the Canadian Government Exposition Centre, which was also privatized during the Mulroney years. The only part of CUIO that survived was AMG, and the Mulroney government also at that time created the Public Opinion Research. Both of these groups were political and had political appointees on staff. In fact, these appointees headed the AMG and POR. The names are not important, but it is public information, should you wish to know who they were.
In those years, the selection of firms advertising research were controlled by these political appointees, and if you wish, I can go into more details later. These groups reported to the cabinet committee on communication, which was chaired by Senator Lowell Murray. The two groups, which also had on staff public servants, reported administratively to Supply and Services Canada, more specifically the communications professional services branch. I became interim director of that branch in late 1987.
When Canada Communication Group, CCG, was formed around 1989-90, because the Canada Communication Group was to become a special operating agency, the administrative responsibility of AMG and POR remained under the direction of Supply and Services. I became the director of both groups, which became known as the Advertising and Public Opinion Research Sector.
Over the next several years, I reported to a DG and two different ADMs. As stated previously, both areas had political appointees on staff. During those years, APORS basically worked with PCO, PMO, and as previously stated, for all intents and purposes it reported to the cabinet committee on communications, headed by Senator Lowell Murray. I must say, Senator Murray is an extremely professional person. It was a pleasure to work with him.
During those years, we had numerous crises--the Meech Lake issue, the Charlottetown accord, the Oka crisis, and the ongoing day-to-day activities. PCO, PMO, and APORS worked closely together and, due to the urgent circumstances, contracted for firms using criteria responsive to the particular crisis of that time. We can discuss this further if you wish.
The public servants during those years were backed by the government, as there were many critical issues affecting all Canadians that had to be dealt with on an urgent basis.
In the fall of 1993, when the Liberals came to power, I was still DG of APORS, and during the first three to four months, the management of my office had little or no input from anyone in government, except the new minister of the day, who was Mr. Dingwall. Mr. Dingwall requested an evaluation of APORS to be carried out, and it was done by a private consulting firm.
I received a call from Minister Dingwall's office around February 1994, requesting that I meet with the minister the next day. At that meeting, the first direction I received was to fire the two or three political appointees who had been appointed by the Mulroney Conservative government but were still on APORS staff. At that point, I informed the minister that it would be less costly to the Crown if we just let their contracts expire--March 31, 1994--which was basically two months. Minister Dingwall's reply was that we would honour their contracts but send them home anyway.
The next 20 minutes were spent with the new minister and his assistant asking me all sorts of questions re the Mulroney years and how the system worked. I refused to disclose such information. Imagine that the next move I anticipated was that they would reorganize the APORS group, bring in their own political appointees, and I would be forced to find another job somewhere in the department, which I'm sure I would have no difficulty in doing.
Well, there are moments or events in our lives that as individuals we never forget--and I don't have this in my text--things like the day Mr. Kennedy got shot, the day Elvis died, things like that. Well, that was one of them for me.I recall as clearly as yesterday, after this 20-minute discussion, that Minister Dingwall, who I was meeting for the first time, got up from his chair, walked around his desk toward me, extended his hands, and said, “Welcome aboard. You won't rat on them, you won't rat on us.” End of quote. I responded that there was nothing to rat on. It was a matter of ministerial confidentiality, and I was not about to discuss the operations of a previous government, even if it meant losing my position.
¿ (0920)
The other comment he made was that there would be no political appointees on my staff, which I welcomed, and I would be asked later to give him more details on APORS. The rest is history. APORS became CCSB in the fall of 1997. I was the executive director of the branch until I retired in August 1999.
Let me now turn to the Auditor General's report. I will not spend too much time on the report, as I'm sure we will discuss it at length over the next two days. What I would like to do initially is make the following observations that contain conclusions in the report that are misleading and, in certain cases, wrong.
The four following quotes are from page 1 of the Auditor General's report, “Government-Wide Audit of Sponsorship, Advertising, and Public Opinion Research”, and I quote:
| We found that the federal government ran the Sponsorship Program in a way that showed little regard for Parliament, the Financial Administration Act, contracting rules and regulations, transparency, and value for money. These arrangements--involving multiple transactions with multiple companies, artificial invoices and contracts, or no written contracts at all--appear to have been designed to pay commissions to communication agencies while hiding the source of funding and the true substance of the transactions. |
This statement is partially misleading. For example, it is impossible to make payment pursuant to a contract without an invoice for the goods and services provided and pay an invoice if there's no formal contract or financial commitment. At no time did CCSB intentionally try to hide the source of funding while I was executive director, up to August 1999. If invoices were artificial I cannot comment, except to say that I had no such knowledge or information at that relevant time.
Quote two is:
| We found widespread non-compliance with contracting rules in the management of the federal government's Sponsorship Program, at every stage of the process. Rules for selecting communications agencies, managing contracts, and measuring and reporting results were broken or ignored. These violations were neither detected, prevented, nor reported for over four years because of the almost total collapse of oversight mechanisms and essential controls. During that period, the program consumed $250 million of taxpayers' money, over $100 million of it going to communications agencies as fees and commissions. |
This again is not entirely accurate, and I will illustrate that in two examples later in this presentation.
Quote three is:
| Public servants also broke the rules in selecting communications agencies for the government's advertising activities. Most agencies were selected in a manner that did not meet the requirements of the government's contracting policy. In some cases, we could find no evidence that a selection process was conducted at all. |
During my tenure, I can state this assertion: CCSB never selected an agency without following the process as defined in the contracting policy and guidelines. 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.
Quote four is:
| While these chapters contain the names of various contractors, it must be noted that our conclusions about management practices and actions refer only to those of public servants. The rules and regulations we refer to are those that apply to public servants; they do not apply to contractors. We did not audit the records of the private sector contractors. Consequently, our conclusions cannot and do not pertain to any practices that contractors followed. |
¿ (0925)
In this regard, it is my opinion that the Auditor General's report is mistaken and its conclusion is potentially misleading because it has given the perception to the public that $100 million has disappeared into thin air. For example, moneys expended on sponsorship programs were needed and were proper expenditures. Nonetheless, it has been suggested that this is not the case. Since I have not had access to relevant records for many years, the dollar figures in these examples are, of necessity, approximations.
The Bluenose is one of the sponsorship programs. Someone from the Bluenose trust fund has said that “apparently” there was approximately $2.5 million in sponsorship given to the Bluenose fund, but only $300,000 ended up in the trust fund. However, they have failed to mention the approximately $2.2 million that was spent on the following.
There was $600,000 for the purchase and design of a travelling exhibit that followed the Bluenose from Halifax to Thunder Bay and back, with some thirty to forty stops in ports and cities. This consisted of an expandable tractor trailer. The trailer would give access to handicapped people in a very sophisticated exhibit. There was a ground crew of some 10 to 12 people to set up the exhibit, and a store that sold souvenirs, the proceeds of which went to the Bluenose trust fund. The staff worked 12- to 15-hour days, in some cases 24-hour days, travelling during the night in order to arrive at the next port of call and set up the travelling exhibit before the Bluenose arrived. If my memory serves me right, the tour lasted two and a half months.
Who paid for the mooring fees; the operation of the Bluenose; the daily sail tours in some ports, weather permitting; special events at city halls of communities or cities that the Bluenose visited; and travel expenses for 12 people, vehicles, hotels, etc? The sponsorship program paid for these expenditures.
Based on the Auditor General's approach...since she had not reviewed the disbursements made by these agencies managing the Bluenose tour, the AG's conclusion would be a $2.5-million sponsorship program, with only $300,000 to the Bluenose trust fund and $2.2 million in fees and commissions, and therefore $2.2 million unaccounted for. This is demonstratively incorrect, because the sponsorship fund covered all expenses related to the tour, including agency fees and commissions properly earned for managing this enormous project.
The other example is the Canada Games that were held in Winnipeg. I don't have access to specific dollar amounts, but the same applies. There was a major Canada pavilion designed and built; travel expenses long before, during, and after the game; the staffing of the Canada pavilion; the ongoing operation and maintenance during the game; and the subsequent take-down, etc.
It has been suggested that funds from the sponsorship program have disappeared. This is not accurate. An agency had the responsibility to fund all aspects of the design, construction, and operation of this pavilion. Significant funds were expended for this purpose. Agency commission and fees were charged, as permitted.
Finally, on political involvement, I think it's appropriate here to quote a member of this committee, Mr. Greg Thompson, on June 6, 2002. I think I may have done it in 2002, but I'll do it again:
| Would it be fair to say that the Sponsorship Program was set up for the greatest political reasons, in all sense of fairness? In the very beginning it was obviously set up for political reasons, for the greater good of the country. |
I could not have said it better.
While I was executive director, I want to make it very clear—I repeat, very clear—that the PMO, Minister Gagliano, and Minister Dingwall never suggested a name or were involved in the agency selection process.
Did the PMO and ministers provide input and decisions with respect to specific events that were sponsored and in the allocation to specific firms? Absolutely.
Thank you.
¿ (0930)
The Chair: Thank you, Mr. Guité.
Now we'll go to questions.
Mr. Kenney for eight minutes, please.
Mr. Jason Kenney (Calgary Southeast, CPC): Thank you.
Good morning, Mr. Guité. Thanks for appearing before us today.
As you know, Mr. Guité, you're in the eye of the storm, proverbially speaking. The Prime Minister has said that this is the largest scandal in decades in Canada. Canadians are very concerned about what this says about the administration of government and the stewardship of their tax dollars.
A number of people have pointed to you, and you alone, as the culprit in this whole mess. My friend Mr. Murphy, near the beginning of these hearings, said “the real culprit in the whole mess is Mr. Guité”. Prime Minister Martin initially blamed this whole matter on “a rogue group of bureaucrats”, presumably led by you. This week the public works minister said that it was Chuck Guité who did all this.
How do you respond to this effort to make you the sole scapegoat for what went wrong in the sponsorship program, Mr. Guité?
Mr. Charles Guité: Well, I think you had witnesses who appeared here. Obviously, when I appeared here in 2002, I was using the clause of confidentiality.
There is no question that Chuck Guité, or for that matter, Joe Blow, can control a program of that nature by himself or herself. If I go back as far as pre-referendum years, I worked very closely with, in those days, FPRO, the PCO, the PMO. After the referendum, I met regularly with the minister in question, which was on two occasions. We have to be careful here, because the official start date of the sponsorship program was 1997, if I recall correctly, but there was a lot of sponsorship going on before that, which was funding, I think, that came from the unity file.
Every time we prepared the plan of attack for that upcoming year, ministers were involved, discussions were held with the minister's office, they had input into the process, the PMO had input into the process, and at the end of the day, my organization delivered the product.
Mr. Jason Kenney: Mr. Guité, Canadians really have two preoccupations in this whole mess. First of all, they want to know who is responsible, and secondly, they want to know where their money went. So I'd like to start questioning you really on this question of responsibility, going through each of the ministers that you reported to in Public Works.
You testified that you had a very memorable meeting with Mr. Dingwall, where he said, if you don't rat on us, we won't rat on you. But Mr. Dingwall testified to our committee that he doesn't even remember meeting you. When asked, “Did you, to the best of your recollection, ever meet one-on-one with Mr. Guité?”, he said, “No, I don't believe I did. I don't recall that, to the best of my knowledge.”
Did you meet with Mr. Dingwall as your minister, and how frequently?
Mr. Charles Guité: Absolutely I met with Minister Dingwall. Not that frequently, but on several occasions I met with the minister in his office with his assistant.
Mr. Jason Kenney: What would you discuss with the minister?
Mr. Charles Guité: Obviously in my opening comments I told you what we discussed. Subsequent to that, I think we discussed some of the promotion items we would do and some of the events that would take place.
Mr. Jason Kenney: Could you characterize how often you may have met with Mr. Dingwall while he was minister?
Mr. Charles Guité: Oh, not very regularly. The program was just starting. But I would meet with the ministers basically on their request. I never initiated the meetings.
Mr. Jason Kenney: You never initiated the meetings. Is that true of your meetings with Jean Pelletier? He testified that you met with him, on average, every other month. This is Jean Pelletier, chief of staff to Prime Minister Chrétien. He said that in every instance you initiated the contact with Mr. Pelletier; you initiated the meeting.
Mr. Charles Guité: That's correct. Mr. Pelletier's office never called and asked for me to meet. It was the opposite.
Mr. Jason Kenney: So the ministers initiated contact with you, but you initiated contact with the chief of staff to the Prime Minister?
Mr. Charles Guité: That's correct.
Mr. Jason Kenney: Mr. Guité, as a mid-level EX-2 or EX-3 at this point, a mid-level public service manager, how could you get such fairly easy access to the most powerful man in the Government of Canada?
Mr. Charles Guité: It was because the advertising management group, or whatever it was called then--APORS, I guess; I don't know if it was CCSB then--always reported to the minister's office and had access to PMO.
Mr. Jason Kenney: It always reported directly to the minister, bypassing the deputy minister.
¿ (0935)
Mr. Charles Guité: It always did.
Mr. Jason Kenney: And who set up that structure?
Mr. Charles Guité: The Clark government and the Mulroney government.
Mr. Jason Kenney: You would report, regardless of the rules of the public service?
Mr. Charles Guité: The head of my group, when I headed it--and if I go back to the Trudeau years, even though I wasn't in that area--always had access to the PMO and the minister's office. That's the way it was set up.
Mr. Jason Kenney: But, sir, Diane Marleau testified that you showed up at her office when she became Minister of Public Works and said you reported to her, and she said, no, you don't; I don't hear directly from line managers; you report to the deputy. Is that accurate?
Mr. Charles Guité: As you'll notice, in my opening comments I did not mention Madame Marleau. If you remember the testimony of Mr. Pelletier, he said I started to contact his office around 1996. I think that was about the same time that Madame Marleau became Minister of Public Works. I met Madame Marleau, during the whole time she was there, probably twice.
Mr. Jason Kenney: But my question was, did the exchange that she related to us transpire, where she said, you do not report to me, and don't come back to my office?
Mr. Charles Guité: No, I can't remember her telling me that.
Mr. Jason Kenney: But you approached her and said, I report directly to you; and she said, no, you don't, you're not a deputy minister.
Mr. Charles Guité: No, I don't remember saying that to Madame Marleau.
Mr. Jason Kenney: Now, sir, how often did you meet with Mr. Gagliano when he was your minister?
Mr. Charles Guité: Regularly, meaning that in some months it would be once a month, in some months it might be twice a month, and in some weeks it might be three times a week. On the average, I would meet Mr. Gagliano probably every month.
Mr. Jason Kenney: Your former assistant, Huguette Tremblay, testified that you would meet with him, on average, once a week. Would that be an accurate characterization?
Mr. Charles Guité: No, I wouldn't say once a week, because the minister was out of town regularly, and so forth.
Mr. Jason Kenney: Mr. Gagliano testified that he may have met with you “two or three times a year”. Is that accurate?
Mr. Charles Guité: No.
Mr. Jason Kenney: That's not accurate.
Mr. Charles Guité: No.
Mr. Jason Kenney: Why do you think he would have told us that?
Mr. Charles Guité: Just a minute, now. Let me backtrack. When you say, meet Minister Gagliano, I may have met the minister's office—
Mr. Jason Kenney: Right.
Mr. Charles Guité: —once a week. I wouldn't say it was once a week, but it was regular.
Mr. Jason Kenney: So you were at Gagliano's office, on average, once a week.
Mr. Charles Guité: On the average.
Mr. Jason Kenney: Meeting with Jean-Marc Bard and Pierre Tremblay?
Mr. Charles Guité: No, with Pierre Tremblay, when Pierre was there. I think Monsieur Bard became chief of staff about three months before I left the government. So—
Mr. Jason Kenney: And sir, I want to know—
Mr. Charles Guité: Let me finish.
So my meetings with Monsieur Bard, I think, I could probably count on less than one hand, because when Mr. Tremblay joined my organization—I think in February 1999—I basically gave him the reins of the organization in about March or April, and I basically stood in the background observing things that Pierre was doing. But I haven't met Monsieur Bard....
In the case of Monsieur Tremblay, when he was chief of staff, he was normally with the minister when I met with the minister.
Mr. Jason Kenney: I only have time for one more question, Mr. Guité, a two-part question. First of all, did you meet with and discuss the sponsorship program with Jean Carle of the Prime Minister's office; and if so, how frequently?
And the larger question is this. You testified to us that you did receive political direction, but all of your former political masters basically deny ever having known you. They disavow their involvement in this. They claim there was absolutely no political interference. We've heard minister after minister say this, and spokespeople from the PMO. Would you tell us the truth?
Mr. Charles Guité: Yes, I know—
Mr. Jason Kenney: To what extent was there ongoing political direction in this program?
Mr. Charles Guité: Let me answer your question, because I think it's important. There is quite a bit of difference between political interference and political input. To me, they are two completely different things. And to say that they interfered--i.e., with the selection of agencies—never. I would not let them do that, because ministers are not to interfere with the selection process.
Did they have input into the program over who got the sponsorship and which sponsorships we were going to do? Obviously. I met with them and we went through the programs together. I think you must have got, from some other witness, a list of how we used to present the program to the minister's office, where we had the event, the commissions paid, the agency that got it, and so forth. I sat with ministers...not with ministers, because in the days of Mr. Dingwall that did not exist. But with Mr. Gagliano, I sat with him and we went through that list, and he had input.
Now, what input did he have? He didn't say, well, we don't like that, but we like that one. We talked about the impact, and at the end of the day, we agreed that the split of the projects would be done in this way. So they had input.
But let me add another brief comment, which is important, on Madame Marleau. When Madame Marleau became minister, the message I got was, deal with PMO.
¿ (0940)
The Chair: Thank you very much, Mr. Kenney.
Monsieur Gauthier, s'il vous plaît, huit minutes.
[Translation]
Mr. Michel Gauthier (Roberval, BQ): Thank you, Mr. Chairman.
Mr. Guité, you are a public servant with years of experience. With respect to the Auditor General's report, you gave a few examples that you found inappropriate. I would like to know this: don't you think that it was actually legitimate for the Auditor General to express what she did in her report, given the lack of evidence, the lack of documentation and the inability to follow any paper trail? Since you are an experienced public servant, you know that in public administration, one always tries, I imagine, to establish a paper trail, so that the Auditor General, who may be called in to do her job in various departments, can track how money is used. Don't you think that under the sponsorship program, the lack of documentation and the lack of supporting documentation in the files might have been expected to lead to a report like this eventually?
[English]
Mr. Charles Guité: What you have to realize here is that in doing a sponsorship--and I don't want to be sarcastic here--I cannot take a copy of the word mark that's on a building and put it in a file. I cannot take the word mark that's on the ice in the forum or any other hockey club. With sponsorship, by definition, you're getting visibility, and that's what we were doing with these files. In the files, when I was there, there was a contract, an invoice, and a document that said the product has been delivered. What more can I put on file?
[Translation]
Mr. Michel Gauthier: Ms. Tremblay, one of your assistants, a person with some experience, after all, who was used to working in your section, appeared before the committee and said that she was concerned at one point about the lack of supporting documents in a file, so much so that she contacted an agency to say that some information was missing. Now, Ms. Tremblay had certain work habits. I imagine that this didn't happen during her first week of work. But after that, she was told not to ask questions and to make the payment, that everything was fine.
How do you explain Ms. Tremblay's concern, given that her administrative practices must have been acceptable, I suppose?
Mr. Charles Guité: I think that what I said to Ms. Tremblay was that first of all, a sponsorship is not like an ordinary program, such as an advertising campaign. So Ms. Tremblay's role in my organization was to make sure that there was a contract in place and that when we got the invoice, the contract was in due form and there was still some money left under the contract. It wasn't for Ms. Tremblay to ask me whether the event had taken place. That wasn't her role. It wasn't that she refused; she asked me about an invoice, and I answered that I was sure that the event had taken place, that I had information confirming that it had taken place, and I told her to pay the invoice.
Mr. Michel Gauthier: Ultimately, according to the process that you have indicated, there was in fact only one person who could testify to the fact that the work had been done.
[English]
The Chair: Mr. Gauthier, can I just interrupt and say all cell telephones should be off in this room?
Mr. Gauthier, my apologies.
[Translation]
Mr. Michel Gauthier: I'll repeat my question. Mr. Chairman, you distracted me.
I was asking you whether you were the sole person who ultimately constituted the living archive, meaning that you were the one who knew whether the event had taken place, you were the one who knew whether the work had been done as expected, and nobody else could vouch for that as there was no file to confirm it.
Mr. Charles Guité: No, not necessarily. There were other people on my team. If I recall correctly, there were four or five people involved in the sponsorship process, and frequently, people from my team even attended the events that we were sponsoring. So I definitely had discussions with Ms. Tremblay, who attended several events, and with Mr. Parent, who attended several events. Who else was there back then? I don't remember their names, I left the federal government a long time ago, but at any rate, the only delegating authority to sign invoices was with my office. If I wasn't there, I would delegate my authority to someone else, either Mr. Tremblay or Mr. Parent or... So yes, clearly, I was aware of virtually all of the events that were going on.
¿ (0945)
Mr. Michel Gauthier: You did have annual budgets of around $40 million, if not more. Do you think that when you're a public servant working at the highest level, I would say, of the public administration, expenditures of $45 million should leave some kind of trail, at least so that someone like the Auditor General could track down the bulk of it? I don't believe that what you're saying—that as long as you knew that things had been done, that was sufficient—is good enough, because a person may disappear, a person may die or leave, and the machinery of government would wind up paralyzed, for all intents and purposes. If we're relying on one person to spend $45 million in good faith, that doesn't make sense.
Mr. Charles Guité: No. As I said in my presentation this morning, there was a contract for each event, an invoice and confirmation that the goods were delivered. The Auditor General commented that she even found some files without contracts. That's impossible, absolutely impossible.
The other comment that I'd like to make at this point is that when I was there, until August 1999, the files were there. And I know today through the grapevine that the files are no longer there. Where did the files go? An audit was done in 1996, when I was there, and that audit, like any audit, made comments on that point. Well, the files were there. Today, they no longer are. Where did they go?
Mr. Michel Gauthier: I was counting on you to tell us.
Mr. Charles Guité: I don't know, sir, I don't know. As I was saying a few minutes ago, it's impossible for that to happen in the federal system. When the Auditor General said the following:
[English]
“fictitious contracts, fictitious invoices”, it must have been a fictitious payment, because you cannot make a payment without a contract and an invoice. It's like you writing a cheque with no money in the bank. I'm not trying to knock down the Auditor General; her office has a job to do. But those files were there when I was there. How come they're not there?
[Translation]
Mr. Michel Gauthier: I don't have very much time left. You say that the files were there and that in your opinion, they were satisfactory. I'd like you to tell us what one would normally find in a file in order for it to meet with your satisfaction.
Mr. Charles Guité: The file should contain a contract, an invoice and a document confirming that the goods were delivered. That could be a post-mortem, and affidavit or something else. There was a contract, an invoice and proof that the goods had been delivered. As I said before, the Auditor General can't find them anymore. The Auditor General should search the files, because they were there when I was there.
The Chair: Thank you very much, Mr. Gauthier.
[English]
Mr. Murphy, eight minutes.
Hon. Shawn Murphy (Hillsborough, Lib.): Thank you very much, Mr. Chairman.
Mr. Guité, I want to follow the same line of questioning as Mr. Gauthier. That appears to me to be the nub of this whole issue, documentation or lack of documentation in the files in the sponsorship program. To put it in context, I'm going to go back and talk a little about the evidence we heard yesterday from Commissioner Zaccardelli.
It seems to be pretty clear--and you're probably familiar with it--that the 125th anniversary of the RCMP had large sponsorship.
Mr. Charles Guité: I'm very much aware of it, sir.
¿ (0950)
Hon. Shawn Murphy: And he gave the figures from the Auditor General's report: $1,704,000 was transferred to the RCMP for sponsorship events; $1,081,910 was used for production costs--posters, brochures, you name it. The two agencies involved, which were Gosselin and Lafleur, received a commission of $244,380. Commissioner Zaccardelli explained that they were very pleased with the way the 700 events went, but again, when the event was audited, the Auditor General found a lack of documentation. She makes a statement that arises because of the lack of documentation: “These agencies retained a total of $244,380 in commission fees for transferring funds from CCSB to the RCMP.” I take it you don't agree with that statement.
Mr. Charles Guité: I don't agree at all, but I'd have to see the file and the invoices and so forth.
I was listening last night to the Commissioner of the RCMP at this committee yesterday, and I got quite a kick when his predecessor had to ask me if he could buy horses. I thought it was quite funny. Mind you, I could probably help him, because I'm quite a good rider and I know a lot about horses. But I'm going off the track here.
Let me now answer your question. Again, the figures that are here I'm sure she got from somewhere, so I won't disagree with them. The RCMP's 125th celebration involved a big ball in Montreal, and there were a couple of events, I think, in Quebec City. The commissioner yesterday was quite accurate. Horses were purchased with the money given to the RCMP for that event. The set-up of the ball that was held in Montreal cost a lot of money. The Auditor General says $244,000 in fees and commissions. Is it both? Definitely, there would be fees. Who paid to set up the place? I'm sure the agencies involved spent some time setting up the ball, spent some time in getting the hall organized, probably did some promotional items for the RCMP. It seems to me that during the 125th there were some parkas or jackets made with the RCMP logo on the back and saying “125”. There were some other promotional items like--I can't remember exactly--maybe cufflinks or things like that. This was all part of the sponsorship.
Hon. Shawn Murphy: Is it your testimony that the sponsorship program got value for the $244,000?
Mr. Charles Guité: Absolutely. I'm sure we're going to talk about several projects over the next day and a half, and I will always come back to the same statement. The Government of Canada in all of those projects got value for money, and as we often say, the proof is in the pudding. I think one committee member said, why did you do that when you knew there were going to be no more referendums? The reason there will be no more referendums, at least in the coming year, is that the popularity of the separatist movement in Quebec is way down. Why is it way down? The sponsorship program.
Hon. Shawn Murphy: I'd like to stick to the report, if I could.
Mr. Charles Guité: What I'm trying to tell you, sir, is, as I said earlier, that if you undertake a sponsorship, you should get value for money. We sure did get value for money.
Hon. Shawn Murphy: There have been allegations made--and I'm sure, sir, you have heard them--that there's $100 million missing. Your evidence is that this is not correct.
Mr. Charles Guité: It's absolutely wrong.
Hon. Shawn Murphy: Is there any money missing?
Mr. Charles Guité: No, and let me tell you why. If any auditor went to CCSB--or whatever it is now, because I think CCSB is history--and went through every invoice, it's going to add up to $250 million and 24¢, if that was the money that was allocated, because you cannot issue a government cheque without an invoice.
Hon. Shawn Murphy: But in fairness to the Auditor General--and I've been on this committee now since 2002, when you appeared before it--there doesn't seem to be the level of documentation and supporting evidence you see in other government departments.
Mr. Charles Guité: I agree, sir, and I addressed that earlier, but again consider the two examples I used. What am I going to put in a file? I can't put the Bluenose in a file. The schedule was there. There's a schedule of where the Bluenose went. The Canada Games in Winnipeg happened. How many people visited the pavilion? The pavilion was a huge undertaking. How was it managed? Who staffed it? Who kept it operational? When the games were over, the feedback I got from the agency that was involved--and I forget who did the Canada Games--was that they were a fantastic success. What else do I put on file? I have a contract, I have an invoice, and I would have a post-mortem, obviously, of the games, which should be on the file. What else do I put on file?
¿ (0955)
Hon. Shawn Murphy: But the Auditor General has made the statement on many occasions that with these contracts, the provisions of the Financial Administration Act and the policy guidelines issued by Treasury Board were generally not followed.
Mr. Charles Guité: That's the Auditor General's comment. I don't agree with it.
Hon. Shawn Murphy: You don't agree with it?
Mr. Charles Guité: No.
Hon. Shawn Murphy: Did anyone ever tell you the way to document the files in the sponsorship program?
Mr. Charles Guité: No, but I think there was a discussion around the table during the referendum year, 1994-95, when I worked very closely with the FPRO and the Privy Council, which is basically the Prime Minister's department. When I say “we”, I could probably give you a few names, but I'd have to go back and talk to a few people to get who the players were. We sat around the table as a committee and made the decision that the less we have on file, the better. The reason for that was in case somebody made an access to information request. I think, as I said back in 2002, a good general doesn't give his plans of attack to the opposition.
Hon. Shawn Murphy: Could it be, sir, that you were keeping your level of documentation down because of the access to information legislation?
Mr. Charles Guité: Yes. The reason we kept minimum information on the file was in case of an access to information request. Since that time, as I'm well aware--and I think I got that, Mr. Williams, from the last committee--the rules have changed on access to information, but they didn't apply at the time I was there.
The Chair: Thank you, Mr. Murphy.
On this access to information, that seems a rather strange comment, Mr. Guité. The sponsorship program was to sell Canada, to get the name out there, to get information out there with the best possible value for money, to go by what you're telling us, and yet you seem to say, we don't want anything in the file to tell how we're promoting Canada. It seems odd that you would keep the file very small and yet would be spreading the word “Canada” everywhere.
Mr. Charles Guité: No, during the referendum, and after the referendum also.... But again, the information that we didn't want to get out, obviously, was what participation we were going to have. Let me give you an example that I'm sure will come up over the next day and a half or whatever.
I was provided with a lot of good advice from Groupaction on the strategy of the Quebec government. I'm sure we'll talk about that later on. I wasn't going to put that information on file. I knew, for example, that if I went to a certain event, the Quebec government was going to be present with quasi-government organizations, such as the casino, the Société des alcools du Québec, and so forth.
In certain cases, Groupaction--or somebody in Groupaction, because I was dealing with several people there--came back to me and said, Chuck, you can't go to that event, because the organizers of that event have told me that if there's any federal money, Quebec will withdraw their participation. In several cases I said to the agency, go back and tell them we'll cover it.
So let's say they were getting $50,000 from the Quebec government. We wanted to be equivalent or more in order to be visible at that event. If the organizer called back and said, if we take money from you, we're going to lose the one from Quebec, then a good strategy was to say, well, okay, we'll double it.
The Chair: Ms. Wasylycia-Leis, please, eight minutes.
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you, Mr. Chairperson.
Thank you, Mr. Guité, for your appearance here today. We appreciate your testimony, because I think in fact you can help us as a committee, and all Canadians, understand what went wrong in this very egregious chapter in Canadian history.
I know you've spent some time downplaying the significance of the Auditor General's report, but I'm not convinced. In fact, I think the Auditor General was clear when she said that every rule in the book was broken with respect to the normal process of government.
If you don't accept the Auditor General, we also know that there were internal Public Works documents in 2002 talking about the extreme nature of the overbilling, talking about systematic and egregious overcharging, talking about involvement with sponsorship funds or ad firms dealing with the gun registry. And I could go on with that list.
We also have Allan Cutler, who said that in 1994 you began interfering in the contracting process. We also have some of your previous staff, who said they smelled something wrong, they felt something wrong, and they've raised it.
How can you now downplay this chapter in our history and suggest that all was above board? Is somebody else lying? Is the Auditor General lying? Is Allan Cutler lying? Is your former staff lying? Are the Public Works officials who did the internal review lying?
À (1000)
Mr. Charles Guité: What's the question? You've asked me twelve questions there.
Ms. Judy Wasylycia-Leis: My question is that if you don't accept the findings of the Auditor General, do you accept those of some of the other witnesses we've had--Allan Cutler and some of the previous staff--and the internal reviews in your own old department?
Mr. Charles Guité: Do you want me to address Mr. Cutler's comments?
Ms. Judy Wasylycia-Leis: I want to know how you can say that there's really nothing egregious and nothing wrong in this little chapter.
Mr. Charles Guité: I cannot comment on what other people or other witnesses have said here unless you give me the exact quote. That I'll reply to.
If you want, I can address something that seems to have been bounced around this committee several times.
And I must say, I didn't know what was going on in this committee--apparently I was hiding in Arizona, although everybody else knew where I was--until I got back. I listened to three or four sessions that went on here, that were broadcast on national TV, for about 20 minutes.
Now, if you want me to address the comments made by Mr. Cutler, I will.
Ms. Judy Wasylycia-Leis: Let me give you three short questions, then.
Mr. Charles Guité: Not three; one question at a time.
Ms. Judy Wasylycia-Leis: The Auditor General says that every rule in the book was broken. Do you disagree or agree with that?
Mr. Charles Guité: I disagree.
Ms. Judy Wasylycia-Leis: Some of your previous staff have said.... For instance, Huguette Tremblay said that rules weren't broken because there were no rules.
Mr. Charles Guité: That's what she said.
Ms. Judy Wasylycia-Leis: Mr. Allan Cutler said that you, and I'll quote, “began interfering in the contracting process by authorizing agencies to carry out work without a pre-existing contract”. And I could go on.
Do you agree or disagree?
Mr. Charles Guité: I disagree.
Ms. Judy Wasylycia-Leis: We have reports from the Public Works internal review in 2002.
Mr. Charles Guité: I wasn't there.
Ms. Judy Wasylycia-Leis: This was a review of the history of the sponsorship program. They commented on the overbilling. Do you disagree that there was overbilling?
Mr. Charles Guité: I disagree.
Ms. Judy Wasylycia-Leis: Do you disagree with the findings, which were not refuted by Mr. Boulay from Groupe Everest when he was here, that there were money-for-nothing contracts?
Mr. Charles Guité: It's possible.
Ms. Judy Wasylycia-Leis: How do you explain money going from your department to several agencies to go on to other projects, with agencies taking a huge cut, and work or services not being provided in terms of direct benefit or communication of that particular program?
Mr. Charles Guité: What date are you talking about?
Ms. Judy Wasylycia-Leis: I'm talking about the Maurice Richard series.
Mr. Charles Guité: The Maurice Richard series started, I think, in 1998.
Ms. Judy Wasylycia-Leis: So you're saying that was--
Mr. Charles Guité: Let me finish. Let me answer the question.
I can't comment on what happened after August 1999, but let me make a point here that I think people have tried to explain on three occasions.
There's quite a bit of difference between an agency of record and an advertising agency.
Ms. Judy Wasylycia-Leis: I don't want to talk about agency of record right now, just a straight--
Mr. Charles Guité: No, but you made a comment about Claude Boulay, and you said that he received--
Ms. Judy Wasylycia-Leis: Groupe Everest--not Media/IDA as the agency of record, but rather Groupe Everest in terms of direct funds for supposedly managing a contract, and he could not give a single bit of evidence about what that translated into.
Mr. Charles Guité: When I was executive director of the branch, from 1997 till I left, the way the government handled sponsorship was through an ad agency. In the Treasury Board contracting policy or guideline, it is very clear that an agency gets 12% and the AOR gets the difference, or 11.75% and 3.25%. I forget the exact amount.
Now, it is no different from the private sector, and what happens in a system like that is that you will have a project where you will lose your shirt, and you'll have another project where you'll make the money, as in any business.
Let me explain it, because after hearing some of the comments from this committee-- and again, I don't want to make a general comment--I think you have to understand how the industry works.
When I was there, that was the rule. You paid 12%. I'll give you an example.
À (1005)
Ms. Judy Wasylycia-Leis: Let me give you another example. There were three Groupaction contracts. Each one, in terms of our perception, was a fake and did not provide real studies of any sort. I'm not talking about normal business. I'm talking about those examples that are not normal, and I'm asking you, how could it have happened, and were you responsible? And if you weren't, who was?
Mr. Charles Guité: What contracts are you talking about?
Ms. Judy Wasylycia-Leis: We can go back to when you appeared before the committee in 2002.
Mr. Charles Guité: No, you say “these contracts”. I have to know which contracts you're talking about.
Ms. Judy Wasylycia-Leis: The Groupaction contracts that you testified about in 2002.
Mr. Charles Guité: Yes, those contracts were given out. The Crown got value for money.
Ms. Judy Wasylycia-Leis: Well, that's--
Mr. Charles Guité: That's your point of view, madame.
Ms. Judy Wasylycia-Leis: Okay, that's my point of view.
Let me ask one more question--
The Chair: Okay, let's be careful. We'll not have a violent disagreement going back and forth. We'll allow the person to ask the question, and we'll allow the person to answer. We'll have a civilized discussion.
Ms. Judy Wasylycia-Leis: Fair enough. I appreciate that, Mr. Chairperson.
You said earlier that governments, politicians, and cabinet ministers did not interfere at all in the selection of ad agencies.
Mr. Charles Guité: Correct.
Ms. Judy Wasylycia-Leis: Yet you said back in 2002 that the Federal-Provincial Relations Office in the Privy Council Office was requested to hire four or five agencies without going through the normal competition process. So it would seem, based on your earlier testimony, that some direction was coming from somewhere. In this case, you mentioned the FPRO and PCO in terms of ad agencies.
Mr. Charles Guité: That's not a ministry. Those are public servants.
Ms. Judy Wasylycia-Leis: Are you saying there was no interference at all from the...? You said that you made the decisions about the selection of ad agencies. When we talk about PCO or PMO, we're talking about another level of direction. That's what we're trying to do as a committee. From where did you get your direction?
Mr. Charles Guité: I got the direction--
Ms. Judy Wasylycia-Leis: Did you do it on your own or--
Mr. Charles Guité: No, no--
The Chair: Thank you.
We're going to stop it right there.
Mr. Charles Guité: Can I answer that question? I think it's very important.
The Chair: You can answer that question.
Mr. Charles Guité: During the pre-referendum--obviously during and after--Chuck Guité didn't decide he was going to do this on his own. There was a committee, for example, leading up to the referendum, and we sat around in a committee room and said okay, da-dun-da-dun, this is the strategy. We decided to hire agencies to help us fight the issue--I won't use the word “war”--and we decided we were going to do that using a system that was well defined in the contracting policy.
If you have it, Michael, it's the one that lists the reasons we can go off target in the policy.
We sat around as a committee and agreed that we were going to have a competition and we were going to invite 10 firms, and the rule we used was “Notwithstanding section 5, a contracting authority may enter into a contract without soliciting bids wherethe need is one of pressing emergency....” I think losing our country is pretty pressing. I think there's another one here we used: “the nature of the work is such that it would not be in the public interest to solicit bids”.
Ms. Judy Wasylycia-Leis: What was pressing in 1994?
The Chair: Ms. Wasylycia-Leis, we're stopping right there.
Mr. Charles Guité: In 1994 there was a referendum coming up. I'm not going to start promoting--
The Chair: We're going to pretty well finish that, I think.
Mr. Guité, you've been quoting from some documents. Can you ensure that the clerk gets copies of these before the end of the day?
À (1010)
Mr. Charles Guité: Yes, Mr. Chairman. This is a government contract regulation, which is available.
The Chair: It's just to ensure the clerk has them so we know what you're quoting from.
Mr. Charles Guité: By all means, yes.
The Chair: I will reiterate that if anybody has a cell phone, would they please turn it off.
Ms. Ablonczy, please, for eight minutes.
Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC): Mr. Guité, let me continue where Ms. Wasylycia-Leis left off. Who from your office sat on this competition committee?
Mr. Charles Guité: Are you talking about a specific competition or about competitions?
Mrs. Diane Ablonczy: I mean the competition committee to choose the agencies that would assist the government in winning the referendum in Quebec.
Mr. Charles Guité: I definitely sat on it, and I would say that Andrée LaRose definitely sat on it because she was one of my employees I had seconded to FPRO during the referendum. The other members would probably have been two or three people from FPRO/PCO. To get their names I'd have to go back to the file, but what I can attest to for sure is that I and Andrée LaRose, one of my staff members who was seconded to FPRO, sat on that committee.
Mrs. Diane Ablonczy: Would you please, Mr. Guité, go back to your records and provide the committee with the names of the individuals who sat on the competition committee?
Mr. Charles Guité: I don't have access to the records.
The Chair: Ms. Ablonczy, since he's now retired, I think it's more appropriate that you make that request of the chair, and we will get them from the government.
You don't have these records, Mr. Guité?
Mr. Charles Guité: No, I don't, and I have no access at all to the government, my previous employer. I'm persona non grata.
The Chair: Do you want the clerk to try to get that information for you, Ms. Ablonczy?
Mrs. Diane Ablonczy: Yes, please.
This, of course, was a very critical committee, as you've already indicated to Ms. Wasylycia-Leis. Were there any political appointees on this committee?
Mr. Charles Guité: No.
Mrs. Diane Ablonczy: When these agencies were selected, did they submit a proposal or make a verbal presentation?
Mr. Charles Guité: No. What we did was we selected 10 agencies. Now, that number could vary; it could be 10, it could be 12, or it could be 9, but it was in the 9, 10, 11 area. What we did was we prepared the scope of the work of the day--and here's a good example where I would not put it on file in case we had an access to information request. That scope of work was sent to about ten or twelve agencies, and we said, based on the scope of the work, how would you meet this program? The responses to the scope of work outline came back to the committee, and we sat around the table and reviewed them all.
Based on that input, we selected five agencies to come in and give us a one-hour presentation of a more detailed.... After having evaluated their initial input, we went back to those firms and said okay, expand on that and come back to us and make a presentation to the committee that will last one hour.
In fact, there were more than that; I think there were seven or eight we called for the second go-round, but we only retained five at the end of the day.
Mrs. Diane Ablonczy: Was any political influence brought to bear on the selection of the agencies that were used?
Mr. Charles Guité: No.
Mrs. Diane Ablonczy: Mr. Guité, it's clear that whatever system was used--
Mr. Charles Guité: Not whatever system; it was a system outlined in the policy.
À (1015)
Mrs. Diane Ablonczy: The system you've described was clearly open to abuse--
Mr. Charles Guité: No.
Mrs. Diane Ablonczy: --because of course we already have one criminal charge laid against one of the agencies, Coffin Communications. So I'm wondering how you would respond to the fact that the system allowed for fraud to the degree that criminal charges have now been laid and more are expected.
Mr. Charles Guité: The only comment I can make here.... First of all, there are about three questions there, but I'll answer the fraud charge. I cannot comment on what the RCMP has done or found, or whatever. All I can comment on is that the invoice I got from an agency...I was satisfied with that invoice. If the agency forged that invoice, or whatever, I have no way of knowing that.
Now, your other question was...? There was a question before the fraud question.
Mrs. Diane Ablonczy: I don't want to pursue that at this time because of my time limitations. I will simply point out that someone should have had a way of knowing if fraud was occurring. That's what checks and balances are for, wouldn't you agree?
Mr. Charles Guité: Let me give you a very simple answer, or example, to your question.
I buy a house and I tell the contractor to build me a house. I say I want 2x6s in the walls, not 2x4s. Three months later I move into my nice new house. It meets all my requirements. A year later there's a flood and I have to replace a wall. I take the wall apart and find out there are 2x2s and not 2x6s. Was that fraud on behalf of the contractor? Yes. Did I know it? No.
Whatever the RCMP have found out and have charged an agency for, that's up to them to do. At the end of the day, we'll see what happens. I can't comment.
Mrs. Diane Ablonczy: Mr. Guité, I would suggest that's what building inspectors are for, and the owner would prudently work with that. So I'm not sure if that analogy is very helpful.
Let me move to testimony the committee has heard. The committee has heard testimony that in 1994 you began “interfering in the contracting process by authorizing agencies to carry out work without a pre-existing contract”. Is that true, Mr. Guité?
Mr. Charles Guité: Yes. Let me explain, though. It is not uncommon, depending on the situation, to say to a company or a firm--not only in advertising or communications--to start work without a contract. It's commonly known as a verbal direction. Then a contract is issued two weeks, three weeks, three months, or six months down the road. I think the one Mr. Cutler referred to was for the Department of Finance, if I recall rightly, on the Canada Savings Bonds. I'm not sure. I would have to see the file to comment on the specific contract.
Mrs. Diane Ablonczy: So this only happened once?
Mr. Charles Guité: That I can remember. I don't know how many times it happened. I couldn't say. I'm sure it happened more than once. But did it happen once, twice, or twenty times? I don't know. I'd have to check the file. It is not common practice to get agencies to do work without a contract.
Mrs. Diane Ablonczy: Also according to testimony, you held a meeting on November 17, 1994, with the personnel responsible for negotiating sponsorship contracts. You are alleged to have said that normal advertising rules and regulations would no longer apply, and that you would discuss this with the responsible minister in order to change the normal rules and regulations. Do you remember that conversation?
Mr. Charles Guité: Not at all. And a minister would not have input into government policy and procedures--policy; they were not procedures.
Mrs. Diane Ablonczy: The Auditor General's report, as you know, noted weaknesses in the control and oversight mechanisms of the sponsorship program--that's putting it kindly--and the lack of transparency in its decision-making process. My question is this. As executive director of the communications branch, what was the nature of the relationship between you and the minister and his office? Oversight clearly had to be exercised by someone. Was it you or was it the minister?
Mr. Charles Guité: I don't understand your question, I really don't. What are you asking me?
Mrs. Diane Ablonczy: I'm asking you who was responsible for the weaknesses in the oversight and control mechanisms the Auditor General identified in the sponsorship program. Was it you or the minister?
Mr. Charles Guité: The minister had nothing to do with it. But again, I disagree with the Auditor General. There was a contract, there was work done, there was an invoice, and it was paid. What's the oversight? And for the first part of your question, there are the examples I've used.
The Chair: Thank you, Mrs. Ablonczy.
Monsieur Thibault.
[Translation]
Hon. Robert Thibault (West Nova, Lib.): Thank you, Mr. Chairman.
Mr. Guité, it's a pleasure to meet you and I thank you for agreeing to appear today. I greatly regret that the information you provided us has given rise to personal attacks on you and your family. To my knowledge, when you were asked to appear in 2002, you did so. Unfortunately, the media were given access to your in camera evidence. That evidence should never have been made public, but it was in part, and that's regrettable. You have agreed to appear today and consented to the release of your evidence from 2002 in its entirety.
I'd first like to say that I greatly admire your career. I admire the goals that you sought to further, but I have a hard time, as a parliamentarian and as a Canadian, fathoming that there was a system for transferring funds from the public purse to government agencies or other organizations, and that advertising agencies were paid commissions just for making the transfer.
I recognize that in the vast majority of cases, the amounts that you used enabled us to meet certain goals and that the transfers were probably legal. We'll come back to that later. To my mind, it's an ethical issue. What was the system that made that necessary? I'd like us to deal with that a bit later, but first I have a few questions for you.
You referred to meetings with ministers, and there has been a lot of discussion here about the frequency of those meetings. So I would invite you to clear up some of those details.
You said that you often used to meet with Mr. Gagliano monthly, sometimes a few times a week, and occasionally weekly. Later, in response to a question, you said that on these occasions, you didn't necessarily meet with the minister; sometimes you met with people from the minister's office. People often refer to the minister's office, the minister's political representatives and the minister himself indiscriminately.
Could you state clearly how often you met with Mr. Gagliano?
À (1020)
Mr. Charles Guité: I met with the minister himself on average two or three times a month. My office was located just below Parliament Hill, and quite often I would stop by the minister's office in the morning—his office was in this building—to pick up documents that he had received regarding sponsorship requests and things like that. However, I wouldn't see Minister Gagliano. When Isabelle Roy was the assistant, I believe that she was responsible for coordination between my office and the minister's. But meetings specifically with Mr. Gagliano didn't occur every week, that's for sure.
Hon. Robert Thibault: But they occurred at least once a month, sometimes more.
Mr. Charles Guité: Mr. Thibault, I definitely met with the minister at least once a month without fail. However, I should point out that some months, the minister was unavailable, either because he wasn't there or because the House wasn't sitting, for example.
Hon. Robert Thibault: Part of your evidence was that you very rarely met with Mr. Dingwall.
Mr. Charles Guité: That's right.
Hon. Robert Thibault: But you would meet with representatives of the minister's office.
Mr. Charles Guité: Yes.
Hon. Robert Thibault: Who was the main assistant that you would meet with?
Mr. Charles Guité: Mr. Kinsella.
Hon. Robert Thibault: How frequent were those meetings?
Mr. Charles Guité: Back then, they weren't frequent. I'd even say that in some cases, two months could go by without my having a meeting at Mr. Dingwall's office. I very rarely met with Mr. Dingwall himself.
Hon. Robert Thibault: Before 1993, before Mr. Dingwall and the Chrétien government took office, while you were in the public service under the Mulroney government—and here, I won't ask you to violate confidentiality—...
Mr. Charles Guité: No, I won't disclose anything confidential, as I said in my report. I reported directly to political staff. The group was very, very political. There were political appointees, and they ran the group. From an operational point of view, I reported to Privy Council back then. I had a lot of dealings with Privy Council, and the group reported to Senator Lowell Murray, who was the chairman of the Cabinet Communications Committee.
Hon. Robert Thibault: Did you meet with Mr. Murray yourself, in person?
Mr. Charles Guité: Never alone.
À (1025)
Hon. Robert Thibault: Never alone?
Mr. Charles Guité: No. At that time, if I recall correctly, we used to meet on Thursday mornings, because things were happening like the Meech Lake Accord, the Oka crisis and the Charlottetown Accord. There was a committee in place, and I would always meet with the same people. I didn't attend every week. Often, it was a member of the political staff of my office who would attend, but I also took part in that committee and I clearly remember seeing someone there by the name of Gagné, from Privy Council, and Peggy Binns, among others. Anyway, we would regularly meet with the senator as chairman of the committee. If I recall correctly, that was every Thursday morning.
Hon. Robert Thibault: You indicated that while Ms. Marleau was minister, you were instructed to deal with the Prime Minister's Office. Where did those instructions come from, from the Prime Minister's Office or Ms. Marleau's office?
Mr. Charles Guité: From the Prime Minister's Office.
Hon. Robert Thibault: From the Prime Minister's Office. You say that you disagree with some of the statements in the Auditor General's report. The report can be interpreted in a number of ways. Mr. Toews has told the committee that $100 million has vanished. The media make similar claims at times. In my opinion, the Auditor General was questioning whether the services that were provided were actually worth what was paid, in other words, whether we paid $100 million more than the work was worth.
Mr. Charles Guité: I don't know if this is your question, Mr. Thibault, but I used two examples earlier and I could use others. Over the four years, there were around 1,900 projects. I don't remember the exact number of projects, but I could consult the files. How many files did the Auditor General look at? I think it was around 49, and there were 29 or 30, or half of them, that contained errors. That means that if you take...
[English]
In English, an extrapolation of this is that it ends up that 98.9% of the time we were right, there was no problem. So to me it's very simple. You cannot generalize, which is very misleading, and in this case...I mean, realistically, $100 million cannot disappear into thin air. I'm not an auditor, but if I had access to those files, I would not find $100 million that we could not account for.
Hon. Robert Thibault: Thank you, Mr. Guité.
I have one last quick question. I think that's a very valid point you make, and unfortunately we don't have time to develop it too much. But I think it's, as I say, how you read the report.
The last question I would have for you is this. Previously--although today you declined to use this word--you used the word “war”, that we were in a war, and you talked about a general. I know you're a former military person before joining the civil service--
Mr. Charles Guité: Yes, this morning apparently I was a paymaster.
Hon. Robert Thibault: The question I'd ask you is, when you embarked in this battle, in this war, as the general, as the principal man handling that organization, what were the rules of engagement and who gave the rules of engagement? Was it the minister, was it the Prime Minister, was it the Prime Minister's Office, was it a committee?
Mr. Charles Guité: Mr. Thibault, let me start by saying I was one of the generals. Again, obviously, everybody says Chuck Guité, Chuck Guité. As I said earlier, it's impossible for me to run a program like that without input. There were a lot of people around the table during the Mulroney years, during the Chrétien years, who planned the strategy and so forth. My role was to execute, to issue the contract, send it to an agency, and get the work done. But I didn't decide personally this is what we were going to do. It was decided in discussions with PCO, PMO, the minister's office, depending on what timeframe we talk about.
Again, I don't want to take a cheap shot here, but in the case of Madame Marleau, she didn't have the feeling for what we were doing, so I basically got a comment from PMO, look, for the next little while, deal with us--which I did. And I met Monsieur Pelletier, at my request, where I felt that some of the stuff we were doing may have had a political impact in la belle province , and what better person to go and talk to than the Prime Minister's chief of staff? And I had that access.
Monsieur Pelletier would not...I didn't go there to talk about the weather. He had better things to do than that.
So there was input from a lot of people. And what's very important here is that it was input, not interference.
The Chair: Thank you very much.
Monsieur Guimond, s'il vous plaît, huit minutes.
[Translation]
Mr. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ): Thank you, Mr. Chairman.
Mr. Guité, when did you leave the public service?
Mr. Charles Guité: How many days are there in August, 30 or 31? On August 31, 1999.
Mr. Michel Guimond: Okay. Earlier, you told my colleague, Michel Gauthier... I just wanted to go over the order of things to make sure that I understood correctly. First, there was an event, and then a contract was awarded to a firm, including a visibility plan, production of an invoice, and a visibility product was delivered. Is that right?
À (1030)
Mr. Charles Guité: Yes.
Mr. Michel Guimond: Is that the order in which things were done at all times when you were head of the branch?
Mr. Charles Guité: Yes, if I recall correctly.
Mr. Michel Guimond: At all times, so that means from when to when? From when to when were you...?
Mr. Charles Guité: The program began in 1997, so from April 1, 1997, until August 31, 1999.
Mr. Michel Guimond: Okay.
I would now refer you to the internal audit report.
Mr. Charles Guité: What date?
Mr. Michel Guimond: The internal audit report that was done from March 11 to May 11, 2000...
Mr. Charles Guité: I wasn't there.
Mr. Michel Guimond: ... but that audited, it says, in detail, 276 sponsorship files chosen from among 580 sponsorships, the reference period being from November 1997 to March 31, 2000.
Mr. Charles Guité: Yes, I was there.
Mr. Michel Guimond: So from November 1997 to March 31, 2000. The internal audit report states in the conclusion that there was little documentary evidence to support the decisions made in 1997-98. What does that mean?
Mr. Charles Guité: It is like I said earlier. In the file, there was a contract, an invoice and certification or what we call a post-mortem.
Mr. Michel Guimond: But when it comes to documentary evidence and having documents to justify a contract and the expenditure of taxpayers' money—
Mr. Charles Guité: Mr. Guimond, how does one justify the fact that the “Canada” word mark was put on the ice at the Montreal forum or the Bell Centre? The centre also had, if I remember rightly, the “Canada” word mark in lights up high around the arena. So what else can I put in the file?
Mr. Michel Guimond: I understand that you could not—
Mr. Charles Guité: And all these events involved having a federal presence in order to make the flag of Canada very, very visible. I can tell you that I was extremely proud, when we did the Canada Grand Prix in Montreal, to see both the Quebec and Canadian flags. It is wonderful to see Quebec alongside Canada.
Mr. Michel Guimond: The internal audit report states:
| Although sponsorship approval is to be based on a positive assessment of a sponsorship proposal, proposals were only evident for approximately 25% of the files reviewed, and of these, few contained evidence CCSB had assessed the proposal. |
Only 25%.
Mr. Charles Guité: That is the same comment I just made. How could I put anything else in the file on an event?
Mr. Michel Guimond: But there are ways: there are photos, there are—
Mr. Charles Guité: In many cases, there were photos. There are a number of files that did not have any.
Mr. Michel Guimond: The internal audit says that only 25% of the files reviewed contained a sponsorship proposal—
Mr. Charles Guité: Was it 25% when I was there or 25% afterwards? That is the problem, isn't it?
Mr. Michel Guimond: That is a very good question, but they audited 276 files out of 580 from the period before November 1997. There is not much chance statistically, that they all occurred after your departure.
M. Charles Guité: No, that is true.
Mr. Michel Guimond: The Statistics Act... In my opinion, the internal auditors do—
M. Charles Guité: That means that I was only responsible for half of them.
Mr. Michel Guimond: You have a very simplistic way—
[English]
Mr. Charles Guité: What can I say?
[Translation]
Mr. Michel Guimond Here is another comment:
| Although CCSB is to send a letter to notify sponsorship recipients of the amount approved— |
They are not talking here about putting the Canada logo on the ice.
| —and the CA which will manage the sponsorship for the GoC, these decision letters were only evident for approximately 25% of the files reviewed. |
How do you respond to that?
Mr. Charles Guité: I do not understand your question, but I think that I know what you want to know.
If we received a sponsorship request, whether for the Bell Centre—I believe that this was what was being indicated—for the Montreal Grand Prix or for the Festival de l'Oie Blanche in Montmagny or some other event, it would come to us in one of three ways: from the minister's office, from the organization itself or sometimes from the agency. People would approach the agency and say that they had heard through the grapevine, since we started to be quite visible, that the federal government was giving sponsorships for certain things. Once the request was made, a decision whether or not to approve it had to be made. The agency chosen to do the event would enter into discussions with me or someone from my office, and we would say that, for this amount, we wanted this visibility. At the end of the event, the visibility had been provided. The certified agency and the event organizers had given the visibility that we had requested and we paid the invoice.
À (1035)
Mr. Michel Guimond: Something else that the internal audit report tells us is that:
| Although CAs are to provide a visibility plan— |
—as you mentioned earlier—
| to outline the visibility and messaging opportunities for the GoC at sponsored events, these Visibility Plans were only evident on fewer than 25% of the files reviewed. |
Mr. Charles Guité: Yes. I will make a comment here. I know that when I left, and even before, since I was there for the program in 1997-98 and 1998-99, but only for part of 1999, since I left during that year, when the system began, there were very few procedures in place. It would not be honest to state otherwise. No evaluation system had been set up, and no process for choosing to give to one event rather than another had been identified. The information that I received from Groupaction and other agencies was that we should be present at a given event.
During the first year, of course, there was very little documentation on the system. I agree totally on that. The second year that I was there, I believe that I was the one who set up, perhaps eight or nine months before leaving the public service, a system of post-mortem reports and even photos.
Mr. Michel Guimond: On the basis of everything that the internal audit reports showed and that the Auditor General has found, do you not believe, Mr. Guité, that the Auditor General was entirely correct in saying that there was documentation missing in all the files and that is why she finds it impossible to know where all this money went?
Mr. Charles Guité: No, there is no way, Mr. Guimond, that the Auditor General would not be able to find the invoices for the events. Her comment is that there is money that she cannot track down. It is impossible.
[English]
The Chair: Mr. Guimond, I'm sorry, your time has expired.
Mr. Jordan is next, please, for eight minutes.
Hon. Joe Jordan (Leeds—Grenville, Lib.): Thank you, Mr. Chair.
Mr. Guité, I may pick up a little bit on what my colleagues have said. We had the executive director from VIA Rail here. I asked him specific questions about Maurice Richard. So I'm wondering, do you have the AG's report here?
Mr. Charles Guité: Hang on for a second. I was interrupted by legal counsel. Could you start your question again, please?
The Chair: Please start your question again. Let Mr. Jordan ask his question.
Hon. Joe Jordan: We had Mr. LeFrançois from VIA Rail here. I asked him specific questions about Maurice Richard. I want to ask you specific questions about the Maurice Richard series. I'm wondering if you could get that sheet.
Mr. Charles Guité: I have it.
Hon. Joe Jordan: I'd like to describe what I take from the AG's report and then give you an opportunity to perhaps explain what appears to be rather irregular transactions here. Fair enough?
Mr. Charles Guité: Go ahead.
Hon. Joe Jordan: On my reading of this, first of all it strikes me.... We've talked about documentation and lack of documentation. The Auditor General refers here to a business case and says that from her analysis she can find no upfront business case that would have been used to justify this decision being a good or bad decision, in terms of policy.
Essentially, you had about $4.7 million given to this production company, L'Information essentielle, to make this series on Maurice Richard.
Mr. Charles Guité: I was responsible for $750,000 on that.
Hon. Joe Jordan: Fair enough. Then we'll get to that. According to this diagram....
You're saying $750,000 because it transcends your time at CCSB? You left in August of 1999?
À (1040)
Mr. Charles Guité: Yes.
Hon. Joe Jordan: Okay.
What we have here is a chart, and as Mr. Boulay pointed out, this chart sort of gives the impression that this was happening simultaneously. It wasn't. But according to the chart, Canada Post transferred about $1.6 million to this project.
Mr. Charles Guité: The Maurice Richard project?
Hon. Joe Jordan: Yes. Over a number of years, CCSB transferred $3.4 million. You're saying that you were there for $750,000 of it.
Mr. Charles Guité: Well, it's very easy when you look at the dates here. In March 2000 I wasn't there, and in February--
Hon. Joe Jordan: No, no, I'm not denying that, but what you have is the ad agencies transferring moneys in February 1999, January 1998, June 1998. So there were moneys being transferred from these ad agencies, of which they took a percentage. I want to know from you--there's no media buy here, essentially—what Canadians were getting for the 12% these ad agencies were taking. Why, over that time, did they not stay with one agency if it was providing a coordinating function?
At the end of the day, was there a rationale for why CCSB didn't just do what Canada Post did, and that is transfer the money directly to the production house?
Mr. Charles Guité: Which one do you want me to answer?
Hon. Joe Jordan: Let's start with this one: was there no business analysis done before this project was undertaken?
Mr. Charles Guité: I forget when I specifically got involved in that Maurice Richard project. However, there is a figure in there with which I disagree, and I don't know where it comes from. Somebody from L'information essentielle says that:
| The Executive Director agreed, and verbally committed the government to funding |
--well, you can't verbally commit funds--
| that included $7.5 million for a series on Maurice Richard, $1.2 million for Le Canada du Millénaire, |
--I don't know what they're talking about--
| and funding for a series called “Innovation.” |
I don't know what that is, either.
If I recall the specific sponsorship you're talking about, the Maurice Richard series, I remember very clearly Robert Scully, the president of L'Information essentielle, coming to my office and discussing the Maurice Richard series. I told him I thought it would be a good series, where we'd get a lot of visibility, certainly in la belle province. We were talking about Maurice, the Rocket, number 9, Richard. And by the way, I used to know the individual very well.
I said to Robert Scully, “Robert, I can't see the word mark being put on an event like that.” He said that VIA Rail wanted to go, but they had no money, or they didn't have enough funding to do it. I forget if it was during that current fiscal year or the fiscal year after. I'm trying to recall here from memory the subsequent discussion I had with Robert Scully.
Subsequently, I called Marc LeFrançois, who in those days was chairman of VIA. I said, “Marc, Scully came to see me. I know he talked to you. They want to do this series on the Rocket. What do you think?” He said, “Chuck, I think we're going to get a lot of visibility. We're going to get a lot of events around it.” I said, “Look, if you want to go and get in on it, go for it, and I will make sure next year that one of the events we sponsor will be the Maurice Richard series.”
Hon. Joe Jordan: Would you not define that as a verbal contract?
Mr. Charles Guité: No, because I'll tell you what could have happened there. What I said to Marc LeFrançois...and I can get into the details of wanting to use the VIA Rail logo because it has the word mark in it, and VIA Rail is very prominent--
Hon. Joe Jordan: Mr. Guité, can I just stop you there? There are two issues in my mind here. One involves the decisions around the policy, what was done and why it was done. That's certainly a legitimate debate. But there's also how it was done, and that's what I want to talk about.
I guess my question, at the end of the day, is this: what, in your view, did these companies--Lafleur, Groupe Everest, Gosselin--do for their 12%? Because it seems like they just passed the money on to the production company.
Mr. Charles Guité: Which question do you want me to answer?
Hon. Joe Jordan: What did the advertising companies on this chart do for their money?
Mr. Charles Guité: As I said earlier in my presentation, the ad agencies or communication agencies that were doing the sponsorship program, in those days well-defined in a Treasury Board policy....
I had a staff of four people, not like Communication Canada, which had several hundred...and make the comment today that you don't need agencies. The only way to manage those projects was to do it through an agency. 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'd have had to go through Treasury Board, because that would be taking funds from one portfolio, and even worse, to a crown corporation. So there's quite a system to go through. By using an agency, which I've done for every sponsorship we did...I used the agency to get that money into VIA Rail. But that money didn't go into VIA for their operations; it went in for a sponsorship.
Hon. Joe Jordan: Okay. But if the advertising agency is augmenting your staff and providing some coordinating function to the project, why wouldn't you have stayed with one agency? Why would you have broken it up between agencies?
À (1045)
Mr. Charles Guité: Well, if you look at the timeframe, some of them were for different years. When we reviewed the process at the start of the year, we looked at who got what last year and who was getting what this year.
You have to remember, too, that the agencies in a program like that—I won't deny it—get a fairly good commission. But I could take up this committee's time for an afternoon with examples of some of the work the agencies have done and lost their shirt on. As with any ad agency out there, there are some winners and some losers, but at the end of the day in any business, your overall success is at the end of the year. On some projects you make more money; on others you don't.
What did they do? They probably made sure it happened. They probably made sure we had the visibility at the events that were done leading up to the launching of the Maurice Richard film, and I think there was—
Hon. Joe Jordan: Are those amounts industry standards? Are there industry standards on what the commissions are in the advertising industry?
Mr. Charles Guité: Very much so. I think, Mr. Chairman, if I could take two minutes—
The Chair: No, one minute.
Mr. Charles Guité: Well, one minute.
The best thing this committee could do is ask the chairman of the ICA, the Institute of Communications and Advertising, to come to make a presentation to this committee on industry standards.
The Chair: Okay. Thank you very much.
Mr. Toews, please, eight minutes.
Mr. Vic Toews (Provencher, CPC): Well, Mr. Guité, if there were winners and losers on contracts, certainly from what we've seen there were never any losers when it came to the Government of Canada and taxpayers' dollars. These agencies won every single time. There's no mistake about that. Maybe you were a good negotiator as far as the agencies were concerned.
I want to deal very specifically with chapter 3, page 20, along the same line of questioning as my colleague asked earlier. Dealing with the 125th anniversary of the RCMP, we have CCSB dealing with a number of agencies: we have CCSB sending money to Lafleur in a separate contract with a 12% commission, we have Media/IDA with a 3% commission, then another contract to Lafleur, then another one to Gosselin, and Media/IDA, and then another one to Gosselin. So we have at least six different contracts, and then it's split up to the RCMP Quebec division and RCMP headquarters, and then it eventually gets to the RCMP 125th anniversary.
What the Auditor General has been saying is that it appears these transactions are designed to hide the source of the money. The Auditor General asks—and I think it's a very good question—why wasn't the money just paid directly to the RCMP to save a quarter of a million dollars in commissions? Indeed, why wasn't there one contract from CCSB to one agency for the 125th anniversary? Why this circuitous route?
This looks to me like money laundering. That's essentially what this looks like to me. This is very suspicious. There is no legitimate business reason to split up these contracts in this way.
To paraphrase your former employee, Huguette Tremblay said you couldn't break any rules because there were no rules, Mr. Guité. Now you're coming to us and saying, the documentation was all there, everything was there, everything was fine, I don't know where the documents went.
Mr. Guité, when Minister Dingwall saw you and said, “You won't rat on them, you won't rat on us”, I think he was right. You're not ratting on them, that's for sure. You're not ratting on anybody. Do you take us for fools to sit here and listen to your nonsense? Why don't you answer these questions about why this circuitous route with what should be a very straightforward transaction, but which funnelled off a quarter of a million dollars in commissions through various contracts? Why don't you tell us about that?
The Chair: Mr. Guité.
À (1050)
Mr. Charles Guité: What is the question?
Mr. Vic Toews: Why don't you tell us about why you chose this circuitous route in getting $250,000 in commissions through six or seven or eight different contracts? Why didn't the money go from CCSB to the RCMP with no agents, or at least only one agent? Why?
Mr. Charles Guité: Well, again, you've asked me about four questions, but I'll answer a couple of them.
The same comment applies to the RCMP as to VIA Rail, which we were talking about. I cannot transfer money directly to the RCMP from the sponsorship program.
Mr. Vic Toews: Why not?
Mr. Charles Guité: Because those are the rules.
Mr. Vic Toews: That was the rule. So you're—
Mr. Charles Guité: Let me finish, let me finish—
The Chair: Mr. Toews, let him finish.
Mr. Charles Guité: Yes, he's right, let me finish.
So if you transfer money from one department to the other, or if the government gives money—in this case, it would be the government to the RCMP—it either has to be through their funding or through a grant. The sponsorship program was not a grant.
Now, as far as using different agencies is concerned, there were several events that went on during the RCMP 125th celebration. Again, I'd have to refer to the files, but in the case of Lafleur Communications, I think it looked after the ball that was organized in Montreal and some events in the Quebec area.
Again, Mr. Chair, I could be mistaken here, so I'd have to see the file, but in the case of Gosselin, there was a lot of promotion and a lot of promotional items were bought during the RCMP 125th celebration. In the case of Gosselin, I don't know if anybody in the committee here remembers, and I'm sure you'll see it in some of the other projects, but we had a promotional program with hot air balloons. There was the maple leaf; there was the drapeau du Canada; and during the 125th anniversary, there was the famous RCMP montgolfière or hot air balloon, which we also supported.
Mr. Vic Toews: I don't doubt that there were all kinds of programs. I'm wondering why you chose—
Mr. Charles Guité: No, no, let me finish.
The Chair: Mr. Toews.
Mr. Guité, you can't go on and on. The question was why you.... Basically, the answer you're giving is that each one had a different role to play.
Mr. Charles Guité: Exactly, that's it.
The Chair: Mr. Toews.
Mr. Vic Toews:
Then, you disagree with what the Auditor General said:
| What is particularly disturbing about these sponsorship payments is that each involved a number of transactions with a number of companies, sometimes using false invoices and contracts or no written contracts at all. These arrangements appear designed to provide commissions to communications agencies, while hiding the source of funds and the true nature of the transactions. |
What she's basically saying is that this was designed simply to pay commissions to agencies and not to pay for legitimate programs. That is what this is all about, isn't it, Mr. Guité?
Mr. Charles Guité: No, it's not. The Auditor General's comment is wrong.
Mr. Vic Toews: She's wrong?
Mr. Charles Guité: And I illustrated this very clearly in my opening comments.
Mr. Vic Toews: Well.... So you have five or six different agencies that you contract with, and you're trying to coordinate the RCMP activities, but you do it through five or six different contracts.
Mr. Charles Guité: They were doing different activities.
Mr. Vic Toews: Different activities. Why couldn't you use one agency?
Mr. Charles Guité: Because, as I said earlier, when we looked at the different allocations to the firms, we didn't want them all to go to one firm.
Mr. Vic Toews: And why didn't you want to do it with one firm?
Mr. Charles Guité: So that they wouldn't get the majority of the business. There was a guideline saying that a company can only get 25% of a program.
Mr. Vic Toews: There's a guideline that says they only get 25% of the program.
Mr. Charles Guité: It's very clear in the communication policy or the contracting regulation—but I can't quote which one—that any company doing business with the Government of Canada cannot have more than 25% of the business volume.
À (1055)
Mr. Vic Toews: So you split it up into Lafleur, Lafleur, Gosselin, and Gosselin.
Mr. Charles Guité: In this case, they were totally different activities.
Mr. Vic Toews: But that doesn't get back to the point. You said that a company can't have more than 25%. Now you've split it up into at least four different contracts, two of them involving Lafleur and two of them involving Gosselin. Your explanation makes no sense at all.
Mr. Charles Guité: No, no, it does make sense. The overall or total business volume cannot exceed.... If the program was $40 million a year, one company cannot get more than 25% of that program.
Mr. Vic Toews: Right, but we're talking about $1.7 million; we're not talking about $40 million. Couldn't you give Lafleur $1.7 million, so that it's handled in an appropriate, transparent fashion, and then go to Gosselin for another contract?
What you're doing is splitting up all these contracts; you're in fact hiding the source of the money.
Mr. Charles Guité: No, I'm not.
Mr. Vic Toews: We know that the RCMP wasn't entitled to receive this. The RCMP commissioner says that the RCMP phoned you up and asked to buy the horses. You say that's not correct.
Mr. Charles Guité: It is not correct.
The Chair: You're saying that is not correct.
Mr. Charles Guité: It's not correct.
The Chair: Okay. We're going to leave it right there. My watch shows it is about 6 minutes to 11. I'm going to ask a couple of questions myself, Mr. Guité, then we're going to break. We may break a couple of minutes early.
The concern that I have, Mr. Guité, in listening during the last hour and a half or so, is that you tell us this was a bureaucratic process and there was no political involvement or interference. We also know from Mr. Pelletier that this was the most important file on the Prime Minister's desk, and the Prime Minister said to the nation that this was the most important file on his desk. I think the nation agreed with him that this was the most important file on his desk.
But you tell us that Mr. Pelletier never called you, that you just went to him; you didn't discuss the details with the Minister of Public Works, who would have been the minister responsible for implementing the sponsorship program, and there were very high political stakes on the sponsorship program, going back to your own words, as you know, in the previous testimony.
I can't get the concept clear in my mind that, on the most important file on the Prime Minister's desk, the most important file on the desk of the chief of staff of the Prime Minister, the most important file for the cabinet or the Government of Canada, they would not have any participation, direction, or knowledge of what you were doing. Why is that so?
Mr. Charles Guité: Mr. Chair, again, I want to be very clear here on input versus interference. The cabinet--
The Chair: Tell us about the input.
Mr. Charles Guité: Yes. There's no question that the Prime Minister's Office, the minister's office and the PMO, were involved in the decision-making of the sponsorship program. There's no question. I've never said that, I think, in earlier comments. I had input.
The Chair: What kind of decision-making was involved, then?
Mr. Charles Guité: I had input. I'll give you an example.
I would meet, for example, with Jean Carle at the PMO, because Jean Carle in those days was the director of operations, I think, for the Prime Minister. So if we had certain events going on, I wanted to know, for example, if the PM was going to be in that area. If we had two or three events, we could make sure that when there was one happening, the PM could be there.
The other thing that we coordinated very much with the minister's office--and we had input from the minister--was whether, at all events that we sponsored, they would want to have somebody “political” at those events, which we could organize, obviously, again for more visibility and so forth. The minister's office and the Prime Minister's Office--i.e., Jean Pelletier and Jean Carle--had input into the process. There's no question.
The Chair: But you never talked to them. They never called you.... Now, this was the most important file in the Government of Canada. They never said, Mr. Guité, come and see me and tell me what progress we are making. Are we winning? Are we losing? Are we going sideways? Are we off track? Should we redefine it?
Mr. Charles Guité: We would discuss this on a regular basis.
The Chair: Who's we?
Mr. Charles Guité: Well, the minister's office or the Prime Minister's Office.
Á (1100)
The Chair: No political people?
Mr. Charles Guité: Pardon?
The Chair: No political people?
Mr. Charles Guité: What do you mean by “no political people”?
The Chair: Nobody elected and no members of cabinet.
Mr. Charles Guité: Well, the minister is elected, I think.
The Chair: Well, you said the minister's office. I said the minister.
Mr. Charles Guité: I would meet with the minister's office and the minister, let's say, once a month.
The Chair: How about Mr. Chrétien? Did you meet with Mr. Chrétien?
Mr. Charles Guité: No, I never met with the Prime Minister; it was always with either Jean Pelletier or Jean Carle. I would brief them on how the events were coming along. Obviously--not from my organization but another organization, either political or whatever--we were seeing the results of our impact on Quebec because we saw the separatist movement going down. We saw the results. These things were discussed with ministers I worked with and with the PMO on a regular basis.
The Chair: There was a serious act of participation by the PMO or the PCO, the Minister of Public Works--
Mr. Charles Guité: The PCO--
The Chair: No, let me finish.
There was an active engagement in the file, they were all managing it because this was the most important file on the Prime Minister's desk. There was ongoing engagement, assessment, reporting, giving of directions, and managing by the committee. Am I right in saying that?
Mr. Charles Guité: No, no.
The Chair: I'm not.
Mr. Charles Guité: I managed the files, or my organization did. I briefed the minister's office and PMO on the results that we were getting.
Now, I'm sure that on several occasions the minister said, well, there might be this event over here, so maybe we should consider that one or this one, and so forth. So they had input. But, no, they did not direct me on how to manage the program. They had input into the events. They had input into the agency allocations.
The Chair: Was there feedback saying this is what we got; we're getting value for money here, and value for money there?
Mr. Charles Guité: Sure.
The Chair: And you said this was value for money?
Mr. Charles Guité: Sure, sure. The proof is in the pudding.
The Chair: Okay.
Well, I just have one final question on this note. When you had these discussions about “this is what we've achieved”, did they give you any direction to say, okay, we think we're off-track on value for money? Did they ever tell you to change direction?
Mr. Charles Guité: No. As I said earlier, they may have indicated that there were certain events coming up that we should consider.
The Chair: Okay.
We're going to recess for 15 minutes.
Á (1102)
Á (1122)
The Chair: We will resume our hearing.
Mr. Tonks, you are next for eight minutes, please.
Mr. Alan Tonks (York South—Weston, Lib.): Thank you, Mr. Chairman.
Mr. Guité, I'd like to preface my questions with a bit of an overview. I think the Auditor General wanted to understand further the extent to which the rather elaborate procedural architecture was put in place that allowed you to carry out what you perceived to be your mandate to win the separatist battle, if you will--one that I suggest is still going on, by the presence of our colleagues in the Bloc.
Mr. Cutler--and you are familiar with Mr. Cutler, who worked under your direction--indicated that there was a separation between the adjudication of contracts, the tendering, all of that part, and the evaluation and subsequent issuance of contracts. He indicated that you took some exception to that--it wasn't perhaps going to your satisfaction--and concerns were raised out of a meeting that was held in March 1995. I quote Mr. Cutler now:
| Mr. Guité had acquired the authority to authorize advertising-related expenditures on behalf of PWGSC. The earliest example...contract with Groupe Everest. It clearly indicates that Mr. Guité himself now had the authority to authorize expenditures. This development meant that Mr. Guité was now in a position to authorize the expenditure, select the agency, approve the terms of the contract, confirm that the work was performed, and authorize payment. |
Would you agree that was the authority you had?
Á (1125)
Mr. Charles Guité: No.
Mr. Alan Tonks: All right. I could go through other illustrations that indicate that you did, to Mr. Cutler's satisfaction, exercise that kind of control, if you will.
Now, the audit that was done found that the concerns raised by Mr. Cutler were founded.
Mr. Charles Guité: Which audit?
Mr. Alan Tonks: Both the internal and the external audits.
Mr. Charles Guité: There was an internal one in 2000, and there was one—
Mr. Alan Tonks: I'm talking about 1996.
Mr. Charles Guité: Okay.
Mr. Alan Tonks: There was the internal audit and the external audit.
So my question to you is this. It appears there were concerns raised at that time that the interpretation of the financial process was being somewhat--in your words--bent. Where did you get the authority to do those things? Did you take that to Mr. Quail, and was the subject of the audit discussed with Mr. Quail? Was any action taken subsequent to that to start to tighten up those processes again?
Mr. Charles Guité: Which question do you want me to answer?
Mr. Alan Tonks: You can answer it any way you want.
Mr. Charles Guité: Mr. Chair, I think it's extremely important that I make a comment regarding Mr. Cutler. I may add that there are a couple of other witnesses you've had here who are fairly questionable.
I read Mr. Cutler's testimony that he gave here. Clearly, if I remember rightly--and I'm not going to quote him because I don't have his testimony in front of me--he said that I wanted to fire him. Totally wrong. What I said to Mr. Cutler was that he would be red-circled, which meant that he would stay in his position but he could not go any further, because I didn't need that level of individual in my organization.
On Mr. Cutler's statement that he's never been promoted and so forth, well, I met him in 1986, I guess, as a PG-5. We're now just about 20 years later, and he's still a PG-5. So it had nothing to do with me.
But what's important here is that when I told Mr. Cutler of the situation he went to the union. The union came back, sat in my office with a witness, and I explained to the union what the process was in a red-circling. Subsequent to that, Mr. Cutler fiddled with the files, and I have the proof of that. I have a witness who will testify here to that. I called in the auditors after Mr. Cutler's accusation, and one of my employees spent three months with the auditors going through Mr. Cutler's accusations, and they were wrong.
The Chair: I'm going to stop there, Mr. Guité. You've made an accusation against Mr. Cutler. Do you have any documentation that you can submit to this committee to support the allegation that you've just made against Mr. Cutler?
Mr. Charles Guité: Could you start your question again?
The Chair: I said you've just made a serious accusation about Mr. Cutler fiddling. I'm asking if you have any documentation that would support your allegation.
Mr. Charles Guité: No, I don't have documentation, but I have a person who used to be on my staff who spent months with the auditors and who would justify that files had been amended after this incident.
Now, what's also very important here, Mr. Chairman, is that I had to have the locks on our offices changed because Mr. Cutler was coming in at night. We found files that he had nothing to do with on his desk. Files that should not have been on his desk at that time were on his desk. So I was the person who said to my deputy at the time, these are pretty serious allegations that Mr. Cutler has made, so let's have an audit. I think that my staff, who spent three or three and a half months with the auditors, could justify what I have just said.
The Chair: Are you saying you called in the auditors?
Mr. Charles Guité: I discussed it with the deputy and said we had to have an audit. Obviously an audit is always the decision of the deputy.
Á (1130)
The Chair: Okay. I'm just going to talk here.
My apologies. We'll stop the clock here for you, Mr. Tonks.
We're dealing here with a serious allegation against Mr. Cutler. I'm reviewing here a memo from Mr. Steinberg, who was a senior auditor. It was addressed to Mr. Stobbe, the assistant deputy minister, and dated June 19, 1996. It says:
| The issue here is one of policy and procedures, which may in themselves be faulty. However, individuals have tried to overcome these by taking shortcuts or inventing methods which have led to wilful alteration of documents, which, if examined by an audit or outside regulatory agency, would raise questions of probity in the manner in which the department is fulfilling its duties and obligations with respect to contracting. |
Now, that is from Mr. Steinberg. So are you saying that was because you instituted this audit, not because the union did it on behalf of Mr. Cutler?
Mr. Charles Guité: No, Mr. Chair, I think you have to be careful here. I as an individual can request an audit. There's no question. I'm quite sure that the final decision to audit any part of a department rests with the deputy minister. At the time of these allegations I was involved in discussions with the deputy minister, or an assistant deputy minister I think I reported to at that time, and was well aware that the audit would take place. But it wasn't me personally who called the audit. I can't do that.
The Chair: You did not call the audit.
Mr. Charles Guité: No, I can't.
The Chair: Okay. Well, we'll leave that matter.
Mr. Tonks, I'm going to return to you. You have about two and a half minutes.
Mr. Alan Tonks: Thanks, Mr. Chairman.
The reason for my questioning is that I think the committee wants to understand better just the accountability in the systems. Under the Financial Administration Act and Treasury Board guidelines, it's the accountability that protects against funds not being spent on what they're supposed to be spent on.
So what I want to understand is, as a result of that audit, were you aware of what the audit findings were at the time?
Mr. Charles Guité: Definitely, because what I would have to do as executive director, director, or director general, or whatever title I held at the time—it doesn't matter—or as the person in charge of that organization, is respond to that audit.
In other words, I think the way it worked way back then—and I don't have all the details—was that there was an internal audit, and then they called in an external auditor, who was.... I forget, but it was a private company.
Mr. Alan Tonks: It was in 1996.
Mr. Charles Guité: Yes. They came in and did an audit.
Mr. Alan Tonks: Last question?
Mr. Charles Guité: Now, what I had to do as head of that branch or sector at the time was to respond to that audit, with all of the observations and a plan to make corrections.
Mr. Alan Tonks: If I may just interrupt...?
Mr. Charles Guité: Let me finish.
Once I had done that, there were no major problems in the division.
Mr. Alan Tonks: That's my point. That's my lead-in.
When the letter was sent up to Mr. Stobbe.... And in fact, Mr. Marshall indicated that the same thing was happening when the CCSB.... There was no separation out—
Mr. Charles Guité: Who is Mr. Marshall?
The Chair: The former Deputy Minister of Public Works.
Mr. Alan Tonks: He gave us a chart showing us how the usual administration of contracts should go, and how it went under the regime that had been established.
My question to you is about your weekly meetings with Mr. Quail.
Mr. Charles Guité: I wouldn't say weekly, no.
Mr. Alan Tonks: Well, that's not what you said in your testimony. You said there was a committee chaired by Mr. Quail that you met with weekly.
Mr. Charles Guité: When was that? When did I say that?
Mr. Alan Tonks: You said that in your testimony of 2002.
Mr. Charles Guité: That meeting was not the meeting about this. What I attended was the executive committee meeting of the department, not a meeting to deal with my specific--
Mr. Alan Tonks: Would it not have seemed appropriate that something out of an internal audit and an external audit that said there were problems that were founded, which Mr. Cutler had raised...? Would it not have seemed reasonable that part of that meeting would have been to discuss how the changes were going to be made?
Mr. Charles Guité: Not at that meeting, no. The executive committee would not address that. The deputy would address that directly with me.
Mr. Alan Tonks: Did he?
Mr. Charles Guité: He sure did. I had to give him an action plan of how to address those observations that were made.
Mr. Alan Tonks: But no changes were made, according to—
Á (1135)
Mr. Charles Guité: I don't think you are right.
The Chair: Mr. Guité, I'm still concerned about the allegation you made about Mr. Cutler, especially as I thought you said that you had initiated the audit. Again, I go back to the letter that I was just quoting from.
Yes, Mr. Lastewka.
Hon. Walt Lastewka (St. Catharines, Lib.): I've been trying to hear the words very clearly. Did he initiate the audit, or did he talk to the deputy minister about initiating the audit?
The Chair: I think he said that he initiated the audit.
Mr. Charles Guité: Let me make it very clear: I did not and could not initiate an audit, because the only person who can decide to do that is normally the deputy.
The Chair: Yes. Now, you said Mr. Cutler did not initiate the audit.
Mr. Charles Guité: No.
The Chair: But it was because of Mr. Cutler's complaint that the audit was initiated.
Mr. Charles Guité: Exactly.
The Chair: That's a pretty fine division of the--
Mr. Charles Guité: No, no, it's not a fine line, Mr. Chairman.
Mr. Cutler accused me and my organization of wrongdoings, and I was well aware that there was no wrongdoing. There is nothing wrong with backdating a contract when you have to; and the contracts were there. And Mr. Cutler, who was “a problem employee”, took off and started to build a file. When I look at his testimony to this committee—I don't know when—I question it.
The Chair: Now, you did mention that when you sat down with Mr. Cutler, there was somebody else with you.
Mr. Charles Guité: Yes.
The Chair: Who was that?
Mr. Charles Guité: It would have been my secretary. I'm not sure who it was in 1994, because I had three executive assistants from about 1990 until I left in 1999.
The Chair: So when you were having a very serious discussion with one of your senior employees regarding a serious difference of opinion, by the sounds of it, it was normal that your administrative assistant would sit in on these meetings?
Mr. Charles Guité: Definitely. I would never meet the union with Mr. Cutler and not have a witness. I can find out, Mr. Chairman, who that was. It was either Madame Tremblay or Denise Paquette.
The Chair: All right, we can check that out.
Monsieur Proulx, s'il vous plaît, huit minutes.
Mr. Marcel Proulx (Hull—Aylmer, Lib.): Thank you, Mr. Chairman.
[Translation]
Good morning, Mr. Guité and Mr. Edelson. Welcome to the committee. Thank you for being here this morning.
Mr. Guité, I would like you to help me understand the kind of authority that you had in your position. From what I understand of your career, when you were in charge of the sponsorships, you were director general. Now I am surprised that a director general had the latitude to handle transactions worth millions of dollars, either with crown corporations or outside agencies.
Can you try to help me understand how things worked? What delegated authority were you given? Where did it come from? Were you the one making the decisions, or was it an associate deputy minister, an assistant deputy minister or the deputy minister? Please help me with this.
[English]
Mr. Charles Guité: Thank you, Mr. Proulx.
In regard to delegation of authority in a department, the ultimate delegation obviously is with the minister. The minister delegates to his deputy. His deputy delegates to his ADMs. His ADMs delegate to the DGs, and the DGs delegate down the line.
Obviously, in those days I had been delegated authority to spend those funds or to allocate those funds. When I signed an invoice, I sent it to finance for payment. I don't make the payment; the finance department within the department makes the payment. The first thing they will check, if I have signed an invoice for $20 or $20 million, is whether I have the delegation authority. On file is a delegation card that says J.C. Guité has this amount of delegation. So if they paid the invoice, obviously I had the delegation. That delegation would come from the minister to the DM to me. It would come down the line.
Mr. Marcel Proulx: When you get a delegation of that sort,
[Translation]
Does the deputy minister or the assistant deputy minister always have some oversight, some form of authority?
Mr. Charles Guité: Not necessarily.
Mr. Marcel Proulx: Mr. Guité, Mr. Ran Quail and the deputy minister that succeeded him appeared before us. They indicated that they had no idea what was going on in your unit or in your division.
How many were there in your unit: 10, 12, 14?
Á (1140)
Mr. Charles Guité: At that time, the unit had around 12 people: five or six involved in advertising and sponsorships and four, I believe, on the research side. That makes a total of eight or nine. Then there was my assistant, of course, and about two clerks. So there were about a dozen people.
Mr. Marcel Proulx: You were not located in a separate building or a different department.
Mr. Charles Guité: We were not in the same building as the department.
Mr. Marcel Proulx: I understand that, but you were still part of the department.
Mr. Charles Guité: Yes.
Mr. Marcel Proulx: They told the committee that they had no oversight with respect to what you were doing, that they did not know what was going on, that you were the one who had the authority and that you did what you wanted. Is what they said correct?
Mr. Charles Guité: I first want to make the following comment. For most of the time that I held that position, Mr. Quail was my deputy minister. He gave a lot of support to our organization. In my opinion, it is not plausible that he was not aware that one of his director generals, through a deputy minister, was spending $40 million a year without his knowledge, especially since I regularly sent lists of projects, among other things, to the deputy minister's office.
Mr. Marcel Proulx: Do you remember, Mr. Guité, sitting down, either alone or with a group, and giving a report on what was happening in the presence of Mr. Quail? You may have sent reports, but that does not necessarily mean that he read them. Do you remember giving an oral report yourself or giving an oral explanation to Mr. Quail about what was going on?
Mr. Charles Guité: I did that, but not in a committee setting. I never took part in a committee where Mr. Quail was present. When I met with Mr. Quail, it was often one on one and of course I would explain a bit about how the program worked.
Mr. Marcel Proulx: Generally speaking, you would report to your supervisor, who was an assistant deputy minister.
Mr. Charles Guité: You are right from an administrative standpoint, but not from an operational standpoint.
Mr. Marcel Proulx: Who did you report to?
Mr. Charles Guité: I reported to the minister. Have you been shown the organization chart, when I was executive director? The famous
[English]
little box that you kept referring to--that was the little box.
So administratively, there's no question I got very good support from the deputy. Obviously my salaries and my operating funds came out of the A base of the department's budget. But the deputy minister was not involved in the day-to-day doings or goings-on of my organization. I basically trucked along and briefed the minister and his staff on where we were going, and the PMO when it was necessary.
[Translation]
Mr. Marcel Proulx: Was it the minister or the deputy minister who decided that you would report to the minister?
[English]
Mr. Charles Guité: Neither of the above.
[Translation]
I reported to the minister because things had always been done that way, for operational purposes but not administrative ones.
Mr. Marcel Proulx: In the beginning of your notes—and you referred to this a little earlier— you talk about “allocation to specific firms,” and specify that this came from the Prime Minister's Office and ministers' offices. What do you mean by “allocation to specific firms”?
Mr. Charles Guité: We had to be careful that it did not come from... During 1996-97, when Ms. Marleau was minister, I met with Mr. Pelletier. Later on, I met with Mr. Gagliano, when he was minister. I would come with my list of projects, which listed events, the recommended amount that I had discussed with people in my organization, since we had to propose an amount, commissions, event dates, etc.
Mr. Marcel Proulx: All that was in the list that you looked at.
Mr. Charles Guité: Yes. That list is available. If the chair would like a copy, he just has to ask the department. Those lists were prepared every year.
The project list was reviewed around March 15, since the fiscal year was ending and the new year would soon start. I went to the minister's office and I usually saw his chief of staff so that we could look over the list. Of course, we did not decide on how the $40 million would be allocated. We always kept a reserve of between 10 and $12 million for changes during the year. The minister would make comments, of course. We discussed how much a given agency would receive, whether these were good projects, if changes were needed, etc.
During the year, every time we decided on another allocation, I would meet the minister himself or his chief of staff. When I say his chief of staff, I am mainly talking about Pierre Tremblay. I met with Mr. Bard two or three times, since I had practically left the department at that time. No change was made without advising the minister's office, since the political level was important to them. If there was an event in Montmagny, for example and it was cancelled for some reason, the minister's office could decide that since there was going to be something happening in Montmagny, it was important to have a political representative there.
Á (1145)
[English]
The Chair: Very briefly.
[Translation]
Mr. Marcel Proulx: Did the monthly lists contain the same information as the annual list? You told us—and Mr. Pelletier confirmed it—that you met with Mr. Tremblay to look over the projects since you were not sure about their relevance. Did those lists contain the same information regarding the description of the event, the amounts and commissions?
Mr. Charles Guité: I do not know.
[English]
The Chair: I'm going to cut you off, Mr. Proulx. The answer was--
Mr. Charles Guité: I can't remember if those lists were the same.
The Chair: Mr. Proulx, would you like us to obtain these from the department?
Mr. Marcel Proulx: Sure, thank you.
The Chair: Okay. We will try--
Mr. Charles Guité: They would be available, Mr. Chairman.
The Chair: Mr. MacKay, eight minutes, please.
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, CPC): Thank you, Mr. Chair.
Thank you, Mr. Guité, for being here, along with your counsel.
Much of what you've told us today, sir, has cast a lot of serious aspersions on previous witnesses, including your most recent comments about Allan Cutler. Mr. Cutler was here. He brought extensive evidence with him. In fact, we have four bound binders of documents and testimony that Mr. Cutler presented to this committee. Yet when it comes to much of what you're telling us today, you're just saying “take me at my word”.
There wasn't documentation in many of the files, according to the Auditor General. In fact, she went on to say, “The absence of documentation prevents us from determining the extent or the appropriateness of those discussions; the files did not indicate their results.” This was in her report. She said later on in an interview, “These methods were apparently designed to pay commissions to communications agencies while hiding the source of the funds.”
Now, essentially you've told us that the Auditor General doesn't have any credibility when she makes these claims. And you illustrated in a couple of examples, mainly the Bluenose, that you couldn't put the Bluenose in the file.
Well, nobody's suggesting that, sir, but you could put invoices in there. You could put in requisition orders. You could put in employment forms for people who worked on the file. You could put in a bill of lading. There are all sorts of documentation that could have and, I suggest, should have wound up in some of those files.
I would like to know from you why those rules were deliberately flaunted by you and those involved in the delivery of the sponsorship program.
Mr. Charles Guité: I said earlier there was a contract, there was an invoice. You just said there was no invoice. How do you issue a cheque without an invoice? And there was an affidavit or a post-mortem report on the file.
I'm not trying, Mr. MacKay, to discredit the Auditor General. All I am saying in the examples at the start is that it is inaccurate. If I could have access to those files and sit down with auditors, I would show where every penny went. It's impossible in the Government of Canada to issue a cheque without an invoice and a contract.
Mr. Peter MacKay: Well, Mr. Guité, you're given an opportunity now to do just that. You're telling us you'd be willing to sit down with the Auditor General and to help locate where that money went and account for it. I think you told us earlier, and correct me if I'm wrong, sir, that every penny of that $100 million could be accounted for.
Mr. Charles Guité: Definitely.
Mr. Peter MacKay: Do you believe that?
Mr. Charles Guité: Yes, I do.
Mr. Peter MacKay: And when the Auditor General tells us that there were not invoices in files and in many cases the files were incomplete, that the data wasn't there, she's wrong.
Mr. Charles Guité: She is wrong, and I'll tell you why. How could the Government of Canada have issued a cheque without an invoice? Ask that question to the Auditor General.
Mr. Peter MacKay: Well, we'll have that opportunity, Mr. Guité.
I want to ask you a specific question that came from Madame Tremblay, who I believe was an employee of yours. She worked directly with you. You're familiar with Huguette Tremblay?
Á (1150)
Mr. Charles Guité: Very much.
Mr. Peter MacKay: In what capacity did she work for you?
Mr. Charles Guité: From 1986 roughly to 1992-93--
Mr. Peter MacKay: So she worked closely with you, she was in your office.
Mr. Charles Guité: She was my--
Mr. Peter MacKay: She interacted with you regularly.
Mr. Charles Guité: Well, let me answer your question.
She was my secretary, for want of a better term--but we call them executive assistants these days--from about 1986-87 to about 1991 or 1992. Then she became the administration officer of my organization, and when we merged the advertising and public opinion research sector with another branch, which became CCSB, she came into the job she was in when I left. She was in charge of the contract--
Mr. Peter MacKay: She worked regularly with you, Mr. Guité. That's my point.
Mr. Charles Guité: Yes.
Mr. Peter MacKay: And she would have had knowledge of what was going on in the office, of the day-to-day operations of what was taking place, correct?
Mr. Charles Guité: Yes.
Mr. Peter MacKay: Now, Mr. Guité, I guess we'll agree to disagree on the premise of whether those contract files were complete and whether invoices were actually there--
Mr. Charles Guité: They were when I was there.
Mr. Peter MacKay: Well, Mr. Guité, were you ever involved in the shredding of documents?
Mr. Charles Guité: I definitely have shredded some documents, and I can give you an example. They were not documents pertaining to any files or project files.
One invoice I can remember putting in a shredder was an invoice received from one of the sponsorship events we were doing, and that invoice was addressed to Mr. Pelletier. The reason it was addressed to Mr. Pelletier is that this sponsorship had gone to the PMO, back to me, and back over to the event, and obviously the event organizer or the person--
The Chair: But on the shredding, was it only one document that you shredded, Mr. Guité?
Mr. Peter MacKay: Is that the only document, the only time it happened?
Mr. Charles Guité: Oh, I may have personal notes...or things like today, I would get back to the office and I'd--
Mr. Peter MacKay: So you're telling us today that you shredded an invoice.
Mr. Charles Guité: Yes.
Mr. Peter MacKay: You don't feel that should have been in a...?
Was it a duplicate?
Mr. Charles Guité: No, no, it was an original invoice.
What I would do was have either Madame Tremblay or somebody else call the organizer and say, “Look, don't send an invoice to Jean Pelletier, send it to CCSB.”
Mr. Peter MacKay: I see. So you didn't want that invoice to go anywhere else but to CCSB.
Mr. Charles Guité: That's right. But they cannot send an invoice to the PMO. The PMO has no authority to pay invoices.
Mr. Peter MacKay: Well, why wouldn't you just put it in the file?
Let's get back to this issue of why there wasn't complete documentation in the file. You say there was. The Auditor General completely disagrees with that.
Mr. Charles Guité: Because I put the next invoice on file, which was addressed to my organization.
Mr. Peter MacKay: Why would you shred it?
Mr. Charles Guité: Why would I not?
Mr. Peter MacKay: Mr. Guité, it seems to me that you felt it was okay to just chuck the rules, to just say--
Mr. Charles Guité: No.
Mr. Peter MacKay: --we're not going to comply with the regular operating standards that seem to exist for everybody else.
Mr. Charles Guité: I don't agree.
Mr. Peter MacKay: You seem to tell us today that you just ran your own show.
Mr. Charles Guité: No.
Mr. Peter MacKay: Well, in the final paragraph of your submission here, you said, “Did the PMO and Ministers provide input and decisions with respect to specific events that were sponsored and the allocation to specific firms. Absolutely.”
So “absolutely”. And you make a very fine line in determining what was political input and what was political influence.
Mr. Charles Guité: Yes. Quite a bit of difference.
Mr. Peter MacKay: I'm suggesting to you, Mr. Guité, that when you met with someone like Jean Pelletier or your minister, and they gave you input, that was political influence, because you didn't want to wind up with a red circle around your name, did you?
Mr. Charles Guité: I don't agree with you.
Mr. Peter MacKay: You don't agree with that statement.
Mr. Charles Guité: No.
Mr. Peter MacKay: So you were able to determine, just on the word of whatever minister you were speaking to, or whatever senior bureaucrat--and in the case of Mr. Pelletier, the most senior bureaucrat in the government--that when they gave you input as to what sponsorship programs should be approved, what firms should be used to deliver those services.... You just took that as, well, they're just giving me their opinion, and I'll still make up my own mind, independent of what these political masters are telling me.
Mr. Charles Guité: No.
Á (1155)
Mr. Peter MacKay: That didn't happen.
Mr. Charles Guité: No.
Mr. Peter MacKay: You were able to make that judgment call on your own. You didn't have to follow any other guidelines. You didn't have to follow the normal procedures that were put in place, the checks and balances. Those were chucked out the window.
Mr. Charles Guité: No. We had a contract in place. We had an invoice. We sent it to finance to pay it, and they paid it.
Mr. Peter MacKay: Mr. Guité, the Auditor General has said that those contracts weren't fulfilled, and that in many cases the government and the people of Canada were billed for work that wasn't done. You haven't been able to cast any light on how that happened under your watch.
Mr. Charles Guité: The Auditor General hasn't looked at the files and at the agency process, and as I said earlier, Mr. MacKay, when I was there, those files were there. In 1996, when there was an audit done, the files were there.
There were comments made that documents were missing. As I said earlier to the chairman, there are individuals on my staff who will verify that somebody screwed around with those files.
Mr. Peter MacKay: Who did that, Mr. Guité?
You tell us that you're a former military man yourself. You've used the term that you were “at war”, that there were other “generals”. What we want to know is, who gave the orders if you weren't the general?
The Chair: Okay, Mr. MacKay.
Who gave the orders, Mr. Guité?
Mr. Charles Guité: Orders for what?
The Chair: You were saying that somebody screwed around with the files. Who screwed around with the files?
Mr. Charles Guité: Mr. Cutler.
Mr. Peter MacKay: Of course, of course...[Inaudible—Editor].
The Chair: Order!
Mr. Charles Guité: Mr. MacKay, I have a witness, if you want, who can come here and testify.
The Chair: No, no, we're not going to get into that.
Order, please, Mr. MacKay.
Mr. Guité, you do say that the government will not pay a bill without an invoice. The Auditor General confirmed that, and I think Public Works confirmed that. But the Auditor General said that these invoices were fraudulent invoices.
What do you say about that?
Mr. Charles Guité: I don't...not that I was aware of.
And did the Auditor General say that? Quote it, show me where.
The Chair: Sorry, “fictitious” was her word.
Mr. Charles Guité: No.
The Chair: So.... Okay, then, it's on the record.
Mr. Lastewka, please.
Hon. Walt Lastewka: Thank you very much.
Mr. Guité, I want to do a little bit of--
The Chair: Excuse me, but Mrs. Ablonczy has a quote there.
Mrs. Diane Ablonczy: Yes. The witness may be directed to page 21, paragraph 3.44, where the Auditor General says the sponsorship payments involved “sometimes using false invoices and contracts”. Mr. Toews read the same line to the witness earlier.
The Chair: Okay. So the Auditor General says “false” invoices.
Mr. Charles Guité: How can you have a false contract?
The Chair: You can have a contract that's quite false, Mr. Guité. I could write up a contract and say it has nothing to do with a business relationship and say we're going to supply horses to the RCMP, for example, but that's not the way it works, so you just say, “That's the contract.” You already admitted that contracts were back-dated. You have said that already.
Mr. Charles Guité: In 1994. I did say that, absolutely. But when I issued a contract to an agency, the contract specified the amount of the sponsorship and the event, and when that event was over we paid the invoice. What's fraudulent about that?
The Chair: The Auditor General says the whole thing was a front and that the work didn't appear to have been done. That's the issue of the false invoices.
Mr. Charles Guité: No, the work had been done.
The Chair: Anyway, we don't seem to be getting there, so we'll hear Mr. Lastewka, please, for eight minutes.
Hon. Walt Lastewka: Mr. Guité, I want to summarize a few items you've mentioned in your report. You talked about the AMG, the advertising management group, starting in 1979.
Mr. Charles Guité: It was in 1978, during the Clark government.
Hon. Walt Lastewka: Then you talked about the group continuing in the 1980s under Senator Murray, with political appointees.
Mr. Charles Guité: There were the Trudeau years, between the Clark government and the Mulroney government.
Hon. Walt Lastewka: Right. So did this AMG group, I guess we call it, continue?
Mr. Charles Guité: In the Trudeau years, and in the Mulroney years it continued but added POR, public opinion research.
Hon. Walt Lastewka: When was that added? I'm not clear on that.
Mr. Charles Guité: That was put in place by the Mulroney government.
Hon. Walt Lastewka: Is that when the polling and research were added to it?
Mr. Charles Guité: Yes, which became APORS—advertising and public opinion research.
Hon. Walt Lastewka: Okay. Starting in 1993-94, who were the members of that group at that time, and were you a part of it?
Mr. Charles Guité: In 1993-94, definitely; I was there in.... When did the Mulroney government come into place? I became the director of AMG/POR, I think, in 1989. It's in my opening document. I think it was in 1989, because they created the Canada Communications Group, and they could not take on APORS and AMG because they were becoming a special operating agency. That's when they created, in fact, APORS. It's in my introductory document.
The Chair: Mr. Lastewka.
Hon. Walt Lastewka: Okay, I'm following it. You were part of the group in the early 1990s, in 1993 and 1994. Was Mr. Quail involved with that?
Mr. Charles Guité: I don't think he was deputy then, no. In fact, in those days, it was Supply and Services Canada, not Public Works.
 (1200)
Hon. Walt Lastewka: Okay. When the sponsorship program was first initiated, were you part of the design of the program?
Mr. Charles Guité: Yes.
Hon. Walt Lastewka: Was Mr. Quail?
Mr. Charles Guité: You see, just so you understand how the process worked, the actual sponsorship activity started before, during, and after the referendum, before officially it became a program in 1997. If I recall correctly, the funding in those days started off at around $15 million, and I think it went up to $20 million or $21 million, but I'm not sure here. I think that money came under the unity fund.
Hon. Walt Lastewka: When you were involved with the sponsorship program, what was your relationship with Mr. Quail?
Mr. Charles Guité: Like any other assistant deputy minister, I attended his executive committee; I met with him one-on-one at my request or his request. I had a very good relationship with Mr. Quail.
Hon. Walt Lastewka: Was he brought up to date and involved in the progress of project approvals?
Mr. Charles Guité: Would you repeat your question?
Hon. Walt Lastewka: Was he involved in the process of project approvals under the sponsorship program?
Mr. Charles Guité: Very little, if.... in fact, I would tend to say no.
Hon. Walt Lastewka: Was he involved in the project review?
Mr. Charles Guité: No.
Hon. Walt Lastewka: Was he involved in the summary of final evaluations?
Mr. Charles Guité: No.
Hon. Walt Lastewka: You're leaving me the impression that he wasn't involved at all.
Mr. Charles Guité: No, I'm not giving you.... What Mr. Quail used to get from my organization was the list of events. Obviously, I may have met with him when he got the list, to discuss it and so forth. But in the day-to-day operation of agency allocation, event selection, post mortem, and that sort of thing, the deputy was not involved.
Hon. Walt Lastewka: I think you mentioned that it was on a monthly basis, but when you gave him your reports, did he ever come back to you?
Mr. Charles Guité: No, no, I didn't mention giving him monthly reports.
Hon. Walt Lastewka: How often would he get your reports, then?
Mr. Charles Guité: I think I would send him the list once a year, at the start of the year, and then probably an update halfway through, as it changed.
Hon. Walt Lastewka: I guess it goes back to my earlier question. It seems that he was absent a lot from being involved.
Mr. Charles Guité: He was not involved very much in the day-to-day operation of my organization.
Hon. Walt Lastewka: Basically then, it's my understanding that he gave you full authority to run the sponsorship program, and from that point on, maybe once a year, he got a report.
He never questioned things, as the deputy minister of the department?
Mr. Charles Guité: No.
Hon. Walt Lastewka: I find it strange that a deputy minister would not be more involved in one of the top programs of the government in his department. Do you find that strange?
Mr. Charles Guité: Not necessarily, sir.
As I said earlier, the advertising management group, APORS, or CCSB at the end, always reported either through a cabinet committee or the minister's office. It always worked that way, as far back as I can remember, though I wasn't involved in the Trudeau years but was definitely involved in the Mulroney government and, obviously, this government.
Let me add that the other thing that is very important here is that during the Conservative years, it was very, very, very political. I had political appointees, named by the Prime Minister's Office, to manage those two groups. Those were very political people. The Chrétien government changed that; it got rid of the political people. That's my famous comment where I said, you're not going to rat on us; you won't rat on them. There were no political appointees. It sure made my life a lot easier.
Hon. Walt Lastewka: But were you given a free wheel to operate as a result of that, and Mr. Quail just seemed absent?
Mr. Charles Guité: No.
In the operation during the Conservative years, I reported to Senator Murray through PCO, and so forth. So it was no different then, except that the major difference between the Conservatives and the Liberals was that the Conservatives had political appointees on my staff. They in fact controlled the process.
Hon. Walt Lastewka: You mentioned earlier that the committee should hear the association for the advertising companies. Why did you say that?
Mr. Charles Guité: Yes. When I left the government in August 1999, I was approached by the ICA. In those days it was called the Institute of Canadian Advertising. Subsequently, when I was there for a year and a bit.... I'll tell you why I'm not there any more in a minute, but they had asked me to work for them because they were having a bit of problem with access to the government, and they were questioning the way competitions were done, and all of that nice stuff. So I said to the president of the day, Mr. Rupert Brendon, who is still president: “Rupert, I cannot represent you in Ottawa or work for the association for at least a year after I leave the government, because I have a clause on conflict of interest. I cannot work for any association that I dealt with”. Obviously, I've dealt with the industry for a good part of my career.
So I joined the ICA. I have a letter on this, so I can leave you a copy, but Mr. Rupert and I wrote to the government time and time again. I was obviously not a public servant any more. I wanted to see the system become more transparent, open, and so forth, in agency competitions. Mr. Rupert Brendon wrote to the President of the Treasury Board, to Mr. Goodale, but he never got an answer or a reply. I found out why. It was because of Chuck Guité.
I think it is very important here that I explain why, Mr. Chairman.
 (1205)
The Chair: Your time is up, but if you feel it's important, you can finish that.
Mr. Charles Guité: Mr. Boudria was the minister of the day, at that time, and the Canada Information Office obviously reported to him at that time. Some people in the Canada Information Office said, “Anything that Chuck Guité touched is poison; don't touch it, and in fact, Mr. Minister, don't meet with him”.
Mr. Boudria, outside the House of Commons, made a statement. I would say I resigned from ICA, I think, in September 2001. Mr. Boudria came out of the House of Commons and said, “Chuck Guité? I may have met him once. Who is he and why did he give $1,000 to my campaign? I don't know. I don't know this guy”.
Well, I think I know why Mr. Boudria didn't last very long as a minister. He has no memory. He doesn't remember the dinner I had with him, with a fairly high-profile hockey legend, during the Canada Games. He doesn't remember that. He doesn't remember that I organized a hot-air balloon ride in his riding as part of the sponsorship program for his Highland Games. He doesn't remember that. He doesn't remember a football game in Montreal where he was going to do the first kick of the ball. He doesn't remember his trip to Trois-Rivières to the Grand Prix Trois-Rivières, that was organized through the sponsorship, as the political guy there. He doesn't recognize.... There were a couple more that I had, but I forget them.
So Mr. Boudria doesn't know me. He doesn't know who Chuck Guité is. He has an awful memory.
The Chair: Thank you very much.
Mr. Charles Guité: Based on that, Mr. Chairman, I resigned from ICA. You can imagine, I was vice-president of government relations representing the industry, and the minister responsible for communications doesn't know me and won't talk to me.
The Chair: Thank you very much, Mr. Guité.
Mr. Mills, please, eight minutes.
Mr. Dennis Mills (Toronto—Danforth, Lib.): Thank you very much, Mr. Chairman.
I'd like to begin by clearing up a misconception about the Auditor General. The Auditor General never said that $100 million was stolen or $100 million was missing. On page 3 of chapter 3, she said that over $100 million of the $250 million for the sponsorship program was paid to communications agencies as production fees and commissions. She later added management fees to that, when I asked her, as well.
My obsession, Mr. Guité, over the last nine weeks on this journey, has been the whole value for money aspect. It's very difficult for Canadians to understand, if you sponsor an event, how you decide whether you put $5,000, $100,000, $1 million, or whatever it is, into an event.
My question to you is around that area of value for money. In your execution of these 1,987 events over a number of years, or your portion of them, did you ever ask those agencies or those sponsored events to ship post-evaluation analyses to ratify that the taxpayers were getting value for their money?
 (1210)
Mr. Charles Guité: On the latter part of your question on whether we did a proper evaluation, probably not, initially. But there's no question that when we decided that we were going to do, for example—let me use two ends of the stick here—the Grand Prix in Montreal, we knew that we were going to have a great audience. I'm sure I could not go into the Grand Prix in Montreal and ask for the type of visibility I wanted for $25,000. Those events, like in the hockey arena, were $500,000 to $700,000 sponsorship events.
Obviously, I knew that there was value there. I know that people watching a hockey game are going to see that word mark, left and right, every time the puck goes over it when the camera is on the ice.
Now, if I had a request for sponsorship of—let me think of a good one here, and again, I'm not trying to make a joke—la descente de canots dans la rivière de la Mauricie, I was not going to put $50,000 into that event. It was a good event. They applied for it. They were going to have a launching of this descente la rivière, as we say en français. They wanted, I don't know, $5,000 or $10,000.
Well, it's value for money. They were promoting Canada at that event, they had word marks at the start and the finish, and so forth, so obviously there was value for money.
Mr. Dennis Mills: Perhaps I can ask my next question, then.
When the Auditor General's team came in here...and we understand now that of the audit of the 1,987 events, there were 56 chosen from that envelope where she extrapolated her analysis. When the auditors would come in and say, here is the way we find the management of this file and we don't feel that it's appropriate, or we feel that the contracts haven't been papered properly or there isn't value for money, did you ever have a chance to tell those auditors who were doing this evaluation your position on this file?
Mr. Charles Guité: No, and the reason for that, Mr. Mills, is that I wasn't there when the audit was done. The only interview I had with the Auditor General was when the issue came out around the Groupaction reports. I agreed at the time to meet with the Auditor General, and they wanted to know certain discussions on those files.
At that time, not having access to the contract or the files, I clearly indicated to the Auditor General that the Crown got value for money. But again, the Auditor General today is saying the files are not there. They were there when I was there. Where did they go?
Mr. Dennis Mills: Wouldn't the ad agencies have had to keep backup documents on all these events, in your opinion?
Mr. Charles Guité: Again, you're asking me questions on which I have to check the contract regulations, but I think an agency doing work on behalf of the government has to keep documents and keep track of what they've done definitely in their files. I can't verify that. I'd have to get that checked out. But I think that's part of a contract, what I call the fine details at the back of a contract.
Mr. Dennis Mills: How much more time do I have, Mr. Chair?
The Chair: You have almost three minutes.
Mr. Dennis Mills: Yesterday we had the RCMP here, and they told us about the 700 events that they did over a period of time across Canada. Would it not have been a normal practice for your officials to ask the local village, town, or city to send a post-evaluation report about the impact on tourism, or whatever, that the RCMP Musical Ride would have had in those communities?
Mr. Charles Guité: No.
Mr. Dennis Mills: People who come from that industry or who have had the event happen in their town know the impact, but in terms of an audit on value for money, they need to see that. They need to know that the local newspaper was involved, the local radio station, the local television station, that hotels and motels were being filled. How is it that we never got all of that information backing up the 700 events of the Royal Canadian Mounted Police Musical Ride?
Mr. Charles Guité: Because that's the duty of the Royal Canadian Mounted Police.
I sponsored the Royal Canadian Mounted Police--I forget the amount that the government put in there, or the sponsorship program--mainly for the event that happened in Montreal, le bal that happened in Montreal, and I think there was definitely something in Quebec City, and then there were some promotional items that were acquired, including some horses. Again, that's the only involvement.
On the other 699 projects or events that the RCMP have done, I have no knowledge of what they even did, so I can't have input or have anything on file for that.
 (1215)
Mr. Dennis Mills: Thank you.
Mr. Charles Guité: But what's important here, too, Mr. Chair, is--I forget if I read it or heard it on TV this morning in the early news--where the commissioner said, well, we phoned Chuck to see if we could buy horses. If I gave a sponsorship to the RCMP, the Montreal Canadiens, or the football club, I'm giving them money to make sure I have the visibility that I negotiated. What they do with the money is their problem.
Mr. Dennis Mills: I have a short question.
The Auditor General made a statement that Mr. Guité broke every rule in the book. What is your response to that?
Mr. Charles Guité: I haven't broken any rule in the book.
Mr. Dennis Mills: Thank you, sir.
Thank you, Mr. Chair.
The Chair: Thank you very much.
He has 20 seconds left. If anybody wants to share their time, they can do so at the beginning.
You did say there, Mr. Guité, that whatever they did with the money was their problem; but you say you always got value for money. That's a bit of a contradiction, isn't it?
Mr. Charles Guité: No, it's not, Mr. Chairman.
I'll give you five examples, if you want.
The Chair: No, just give me one.
Mr. Charles Guité: Okay, I'll give you one.
I paid the Montreal Canadiens $500,000 to have the Canada word mark at both ends of the ice for a season and the word mark around the arena, I think, on what they call their “mobile board” that goes around, and I think it also included a couple of ads in their regular magazine. We negotiated with les Canadiens de Montréal to have that delivered to the Crown, and it was delivered. If the Montreal Canadiens took that $500,000 and bought hockey pucks, that's their problem. What I paid for is to get visibility, and I got it.
Is it different from Pepsi or Coke? Not at all.
The Chair: I did mention the other day that I was an accountant in a prior life, and that wouldn't fly with me, I can assure you.
We have now finished the first round of four rounds. We're now on to the second one, where of course it will be the Conservatives, the Bloc, the Liberals, the NDP, and so on.
Mr. Kenney, eight minutes, please.
Mr. Jason Kenney: Thank you.
First of all, Mr. Guité, you've given us three different stories about who gave you leave to report directly to Jean Pelletier in the PMO. First, under questioning by me, when I expressed surprise that a mid-level bureaucrat would be reporting to the most powerful man in the government, you said, well, that was the established process and it had been that way since the Joe Clark government. Later you said the PMO called you to have direct contact with them when Madam Marleau was the minister because she wasn't getting it, she wasn't playing the political game. You also said you'd contacted Jean Pelletier of your own accord. I want to know which of these three stories is accurate.
Mr. Charles Guité: Well, I don't know what the question is.
Mr. Jason Kenney: The question is, who gave you leave to report directly to Jean Pelletier? Did you assume that responsibility unto yourself, were you told to do so by the PMO as you earlier testified, or was that the long-standing precedent?
Mr. Charles Guité: Well, hang on. I'm going to answer the first question.
Mr. Jason Kenney: Which of your many versions of events is accurate?
Mr. Charles Guité: I'm going to answer the first question.
When I met Madame Marleau for the first time, it was very obvious to me that Madame Marleau was not interested in that file. When I came back to my office, Chuck Guité called PMO; neither Jean Pelletier nor Jean Carle called me. And I said to, probably, one of the assistants in Mr. Pelletier's office that I would like to meet with Mr. Pelletier regarding the appointment of the new minister. When I met with Jean Pelletier, we discussed the issue and he said, look, Chuck, for the next little while, report to our office.
Mr. Jason Kenney: So now you're reporting not to the minister but actually to the chief of staff of the Prime Minister.
Mr. Charles Guité: Well, exactly. You're right, yes.
Mr. Jason Kenney: But you initiated this. You didn't mention to your deputy minister or your minister that you were now going to report to their boss's boss?
Mr. Charles Guité: No, no. As she said in this committee, the minister of the day said, I don't want to deal with Chuck Guité.
Mr. Jason Kenney: She didn't want to deal with you, sir, because you weren't her deputy minister. She wanted you to respect the normal reporting lines; isn't that accurate?
Mr. Charles Guité: And that's fine. That's what she wanted, and she was right in that decision.
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Mr. Jason Kenney: So what you're really saying, I take it, is that Madam Marleau wasn't willing to play the same political game and see the rules being bent in the same fashion as Mr. Dingwall, Mr. Gagliano, Mr. Pelletier, and Mr. Carle were willing to.
Mr. Charles Guité: Well, she couldn't go to Mr. Gagliano. The only thing she could compare it to was when Mr. Dingwall was there, because the others came after.
Mr. Jason Kenney: And she wasn't as willing to bend the rules in terms of reporting lines and so forth as Mr. Dingwall was. That's what you're testifying.
Mr. Charles Guité: That's exactly it.
Mr. Jason Kenney: When you say Mr. Dingwall told you, you don't rat on us and we won't rat on you, what do you think he meant by that?
Mr. Charles Guité: He just meant exactly that, that I wasn't going to give him information on the previous administration, and that if the reporting structure of my group stayed the same, I would respect ministerial confidentiality.
Mr. Jason Kenney: In other words, if the rules were bent, if you were given political direction about how to mismanage this program, he wouldn't tell on you and you wouldn't tell on him.
Mr. Charles Guité: No, he wouldn't give me political direction. There's quite a bit of difference between--
Mr. Jason Kenney: He wouldn't give you political direction? Well, you've testified that you have faith in Madam Huguette Tremblay, who was your assistant for several years. You promoted her, so obviously you had confidence in her. She said, under questioning from me when she appeared before us, that very often when you came back from the minister's office, directives were given as to which sponsorship had been approved. So I mean, put one and one together.
Mr. Charles Guité: Which minister?
Mr. Jason Kenney: This was Gagliano.
Mr. Charles Guité: Yes, that's true. But then you're talking--
Mr. Jason Kenney: She went on. I said, do you think it would be fair and accurate to say that there was political direction in the management of the program and the approval of the contracts? She replied yes, that is my belief. Is that accurate? Was there political direction?
Mr. Charles Guité: No, that's her point of view.
Mr. Jason Kenney: I'm asking you if you share her point of view.
Mr. Charles Guité: No.
Mr. Jason Kenney: Is she right or wrong?
Mr. Charles Guité: She's wrong.
Mr. Jason Kenney: She's wrong about that.
Mr. Charles Guité: Yes.
Mr. Jason Kenney: Well, she tells us that sometimes you would refuse to approve a contract the minister's office wanted and that you would overturn that decision--that it was overturned by the minister's office, rather.
Mr. Charles Guité: No, no. She may have said that, but not concerning Chuck Guité; it was probably Mr. Tremblay.
Mr. Jason Kenney: Would you have us believe that when you were meeting with the chief of staff to the Prime Minister, he was merely providing general political advice, coordination, and suggestions? Isn't it true that when you're meeting with--
Mr. Charles Guité: Political advice? Never.
Mr. Jason Kenney: Yes, you said exactly that. You wanted to know where the Prime Minister was going to be, whether--
Mr. Charles Guité: That's not political advice, that's trying to find out what the Prime Minister's schedule is.
Mr. Jason Kenney: I see. So coordinating the programs that you were financing with the Prime Minister's schedule was not political. That was just normal bureaucratic routine, was it?
Mr. Charles Guité: No. In all of those events we did, one of the things that we had input on from the minister's office and the PMO's office is that we were to let them know when these events would happen, and if they could, they would have a political rep or person at that event.
Mr. Jason Kenney: We'll have a political person at that event, but that wouldn't be political.
Mr. Charles Guité: That is definitely political.
Mr. Jason Kenney: So it is political.
Well, Mr. Guité, can you get it straight here for us? Did you ever say no when Mr. Pelletier offered political input?
Mr. Charles Guité: Definitely.
Mr. Jason Kenney: You did say no.
Mr. Charles Guité: Definitely.
Mr. Jason Kenney: You turned him down, did you?
Mr. Charles Guité: Definitely.
Mr. Jason Kenney: Like on what?
Mr. Charles Guité: On certain events that he wanted to do, or that came through his office. I can verify that. For instance, where somebody would approach his office and say, look, we'd like you to put the pressure on so we can get some money. Not a lot of times, but several times, after I got it from him I got back to his office--maybe not to him personally--and said, look, here are the reasons why we don't want to go to that one.
Mr. Jason Kenney: Mr. Pelletier testified--even he was straight enough to understand this--that you would never say no to him. He said that you never declined to finance a project that he proposed unless your budget had run out of money, in which case you would lobby him to get the budget for CCSB increased. Is that not accurate?
Mr. Charles Guité: I have approached him to get more money on the budget, definitely.
Mr. Jason Kenney: So you're telling us that you told the chief of staff to the Prime Minister basically on certain files to go fly a kite.
Mr. Charles Guité: No, I didn't tell him to go fly a kite. I evaluated the requests that came through his office and said to his office, or maybe sent a reply back to his office saying, that we should not get involved in this for these reasons.
Mr. Jason Kenney: Mr. Guité, I'd like to move to this question of how this money was.... In your opening statement you said that you had never received input from the PMO, Gagliano, or Dingwall, that they never suggested the names or got involved in the agency selection process. I think you later amended your version of those events.
Mr. Charles Guité: No, I never amended that and never will.
Mr. Jason Kenney: I see.
Mr. Charles Guité: They never got involved in the agency selection process. There's quite a difference between selecting an agency and allocating the sponsorship program.
Mr. Jason Kenney: So the fact that these agencies were all major donors to the Liberal Party, some of them, for instance Group Everest, contributing over $100,000 over the course of five years of this program, is just a mere coincidence?
Mr. Charles Guité: What agencies do with political parties is the agencies' problem, not Chuck Guité's.
Mr. Jason Kenney: It's their problem.
Sir, why is it that in all of these sponsorship arrangements you used these agencies as filters for this money rather than sending the cheques directly through? As one example, for the Maurice Richard series, why is it that you spent around half a million dollars in commissions to Liberal-friendly ad agencies for simply, according to the Auditor General, passing a cheque on with no value added? Why didn't you just send a cheque on directly through to l'Information essentielle?
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Mr. Charles Guité: Can't do it.
Mr. Jason Kenney: You couldn't do it. It was impossible.
Mr. Charles Guité: No. I think I explained that earlier.
Mr. Jason Kenney: Because you were so scrupulous about not breaking rules.
The Chair: All right, Mr. Kenney.
Mr. Charles Guité: I think it's important, Mr. Chairman, that I answer that question.
The Chair: Yes, you can answer this question.
Mr. Charles Guité: There is quite a difference between a sponsorship initiative and a grant. If I sent the money directly to l'Information essentielle, or directly to the Montreal Canadiens, or directly to anybody else with its sponsorship, it becomes a grant. I cannot transfer funds from a government portfolio to a private organization. It has to be a grant.
The sponsorship program was set up in my organization to promote the visibility of Canada, so it became a program called the sponsorship program. The only way I could facilitate that process in order to have access to all these sponsorships was to go through an ad agency.
And I also had three people on staff.
The Chair: The definition of a grant, Mr. Guité, is when the Government of Canada pays and gets no value in return and does not expect value for return. For example, the old age security that we pay out every month to many Canadians is a grant because we pay the money and there's no value that comes back to the taxpayers of Canada, the Government of Canada. That is a definition of a grant.
Now, the notion that you couldn't send the money to them directly because that would be a grant isn't correct, because you were, according to the Auditor General...at least there might have been a 48¢ stamp or whatever. But the concept was that you were saying there was value for money received back to the Government of Canada either through the advertising agencies or by just plain word mark and so on.
This was not a grant under any circumstances, even if you paid the money directly to the organization, because a grant pays no value return to the Government of Canada. There are many situations where the Government of Canada pays out grants on that basis. The sponsorship program, any way you slice it, wasn't one of them.
Michel Gauthier, s'il vous plaît, huit minutes.
[Translation]
Mr. Michel Gauthier: Mr. Guité, in the brief that you provided this morning, in the second-to-last paragraph, you state that you wanted to be very clear that while you were executive director, the Prime Minister's Office, Minister Gagliano and Mr. Dingwall never suggested names of agencies. That is your statement.
I simply want you to explain to me the context of the February 22, 1995, letter to Mr. Kinsella, who worked in Mr. Dingwall's office. In that letter, which has been made public and carries your signature, you tell him that you are sending him the report of the committee “for your review, and after...”
Mr. Charles Guité: Stop there, Mr. Gauthier. I am familiar with that letter.
Mr. Michel Gauthier: You are familiar with the letter. In that case, if you are in fact familiar with the letter that you sent to the minister's office, in which you ask for his opinion and state that approval is needed quickly, how do you reconcile the two statements that, on the one hand, they never got involved in selecting agencies, but on the other hand, you took the trouble to have the minister's office review this? What is the distinction between the two?
Mr. Charles Guité: I have a document here called
[English]
appendix Q. I think the chair has a copy of this. I would refer to page 6 of that policy.
[Translation]
If you do not have a copy, I can send you one. It will just take a minute to explain the process.
When we selected agencies, there was a committee composed of two people from my team, two people from the department and two people from the private sector. There were interviews that we called agency presentations. At the end of the day, there were six agencies that were kept on what was called the short list. The companies were ranked according to the points that they had obtained during the presentation. There was company number 1 and company numbers 2, 3, 4, 5 and 6. In accordance with the Treasury Board policy or regulation, a minister could switch the first and second agencies on the list if the difference was less than 10 per cent.
So, for example, if I apply as an agency and I have 90 points, and you apply and you have 88 points, I will be ranked first. The minister, however, has the right, if he or she wishes, to select number 2 because they are friends. I am just saying that for fun.
I can tell you that a minister never intervened to change the committee's decision. It is right in the policy. I do not have it in French, but I will read it to you in English:
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[English]
| The selection (review) committee will forward its recommendation, and a summary of its deliberations, to the Minister of the department or agency for approval. |
[Translation]
That means that I sent those letters, such as the one to Mr. Kinsella for Mr. Dingwall's department. The same letter was sent to all ministers, in all departments, every time there was a competition.
Mr. Michel Gauthier: Very well.
Mr. Charles Guité: But the important thing that I want to tell you is that there was a minister who wanted to switch the first and second agencies on the list. When the chief of staff called me, I asked whether they would like to see a headline in the Globe and Mail or the Quebec newspapers the next day such as “Minister reverses decision.” The response was that no, the idea had better be dropped.
Mr. Michel Gauthier: They do not like the Globe and Mail.
Mr. Guité, you said earlier that you kept aside 10 or $12 million in the budget each year and that you gave input to the minister, among other things, regarding the amounts that various agencies had received. That is what you said.
Can you elaborate a little more, still in the context of what has just been said?
Mr. Charles Guité: In terms of allocations to various agencies?
Mr. Michel Gauthier: Yes.
Mr. Charles Guité: As I said earlier this morning, when I met with the minister or the Prime Minister's Office—during Ms. Marleau's years—a list was drawn up. I did not prepare it personally, but people in my organization did. There were 300 to 400 requests each year. So a list was prepared on the basis of those requests in consultation with my team regarding which one seemed the best, and then there was an allocation of between 28 and $30 million, which had been approved or authorized by the minister or rather discussed with the minister at the beginning of the fiscal year.
So when I met with either Mr. Pelletier or Mr. Gagliano—in Mr. Dingwall's time the process was different—we looked at the list together with his chief of staff. I do not remember whether anyone else was with me. On that list we looked at which events we wanted to do. The list indicated the event, the amount, the commission percentage, whether there was any production, and the agency.
Of course, if the minister or Mr. Pelletier had said during those discussions that it looked a little lopsided... But usually I had enough common sense to try to divide it equally.
Mr. Michel Gauthier: Because the agencies...
Mr. Charles Guité: In some cases, there were small agencies that we had kept and it was not really equal, since these agencies did not have enough staff to be able to deliver a project like the Montreal Grand Prix.
Mr. Michel Gauthier: You are basically talking about a pool. There were six, seven or ten agencies, and you organized it so that things were balanced and everyone got a share. That is what I understand.
Mr. Charles Guité: Exactly.
Mr. Michel Gauthier: That was to keep the Prime Minister's chief of staff from intervening.
Mr. Charles Guité: Obviously.
The other thing, as I have just said, is that there were one or two small agencies. So I naturally would not give, for example, the Bluenose project to an agency with five or six people on staff.
Mr. Michel Gauthier: Fine. There were simpler files, like passing a cheque along to VIA Rail. That was easier and did not require a big agency. Let us say that it was the files that were more...
You said, Mr. Guité, that you balanced things out. That is understandable and a reasonable concern. The Prime Minister's chief of staff therefore did not often have any reason to intervene, but it did happen.
Mr. Charles Guité: It depends on what you mean by “intervene”. If I remember correctly...
Mr. Michel Gauthier: To balance things out.
Mr. Charles Guité: Yes, perhaps, but if I remember correctly, the only time that I had discussions about the allocation of projects for the fiscal year was during the year and a few months that Ms. Marleau was minister, which means that I met with Jean Pelletier once for that process. To say that I met with him every year, that is twice, since I was there for two years, would not be accurate, because it is not true and is not what I did. I met with him, for example, on other matters, such as the impact that various events might have. I met with him once to get more money for my budget, since we were short of money. I think that I even have a note in my file indicating to Mr. Pelletier that we needed another, say, 5 or $6 million before the end of the year.
I can say that I often called Mr. Quail, although he did not like it, to tell him that we needed another 5 or $6 million for sponsorships. That was when the budget was around $30 million. When things started, the budget was $15 million. That was during the years of the Canada unity program. Then the budget increased to 29 or $30 million and then to $40 million.
One very important thing is that this program had what is called a sunset clause. Every year I had to make a submission to Treasury Board, which was then signed by the Prime Minister of Canada. So you see how important it was. I remember...
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The Chair: Thank you very much, Mr. Gauthier.
Mr. Charles Guité: I would like to continue, sir.
[English]
I'll just take one second, if I could finish. Every year the Treasury Board got this thing prepared by my group and signed by the Prime Minister of Canada. Obviously, the Treasury Board minister at one of the events said, well, I don't know if we want to approve this. And one minister said, well, look at the bottom. Oh. It's approved.
A voice: It was automatic.
A voice: It's pretty obvious.
The Chair: There you have it: approved.
Mr. Tonks, eight minutes, please.
Mr. Alan Tonks: Thank you, Mr. Chairman.
Mr. Chairman, through you to Mr. Guité, I want to follow up just a little bit on the question that was asked by my colleague in relation to the number of times you, Mr. Guité, met with Mr. Quail. In your testimony in 2002 you said, “...I sat...as a senior public servant in the department that was chaired by Mr. Quail. During one of those committees we gave an update, a weekly update, of where we were with activities and so forth.”
I was trying to understand the timing with respect to the internal and external audits, because I think it's very important to.... The Auditor General wanted us to trace through, as part of this committee's deliberations, how this system you were following was set up. And I would like to ask you again, if you met weekly with Mr. Quail--and that's what you said--what would you be discussing at those meetings? Would you discuss matters of internal audit?
Mr. Charles Guité: No. Let me make this clear, because it's important.
The Department of Public Works had several of what I would call executive committees. There was the executive committee of ADMs, which I was part of. So you'd have the ADM of personnel, of operations, of procurement, and so forth. Then there was another executive committee on personnel and so forth. I only sat on one, which was the departmental executive committee, or DEC. At that committee, the minister would brief his ADMs on his discussions with the minister and so on--here are the priorities of the department, and so forth. Then there would be a round table. Mr. Stobbe, who was the assistant deputy minister of finance, would give a briefing on the overall budget of the department and so forth. The ADM of personnel would give an overview of personnel matters and any big issues coming up, or brief the rest of the committee members if there had been changes in personnel out of Treasury Board and so forth.
When it came to Chuck Guité, I briefed that executive committee on the fact that we had five agency competitions coming up with these departments, that the sponsorship program was going as planned. We discussed staffing, funding, the ongoing operation of my group. But I did not give a briefing at that meeting to say that there were that many activities going on in sponsorship and so forth.
So it was the executive committee.
Mr. Alan Tonks: Okay, thank you.
I wanted to clarify that Mr. Quail never raised the issue.
I'm looking at a document from the internal affairs directorate of June 17, 1996, which says: “Allegations made in relation to the contracting practises of the Advertising and Public Opinion Research Sector are founded. The documents reviewed...”. I'm sorry, the rest of it delineates instances where requisitions for goods and services had been received and backdated, and that kind of thing.
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Mr. Charles Guité: As I said earlier, there's no question that in certain instances we backdated contracts.
Do you have a copy of that 1996 audit, Mr. Chairman?
The Chair: I don't have it in front of me, but it's been circulated widely for the last month or more.
Mr. Charles Guité: If you have it...that audit was done while I was there. There was an action plan to correct whatever observations were made, and unless I left my memory in Arizona, there wasn't that much.... There were some definite observations that were serious in that audit, and we took action to correct those observations.
The Chair: So was there a follow-up analysis or anything to suggest or confirm that this had been done?
Mr. Charles Guité: It has to be, Mr. Chair, because when Mr. Steinberg, whom I know very well, did an audit internally, I, being responsible for that organization, had to give him back an action plan. That was brought up to the audit review committee, which was chaired by the deputy minister.
When Mr. Steinberg did that quick internal audit after Mr. Cutler's accusation, then they called in another firm, Ernst & Young. They came in, and that's the firm that spent three months in my organization, plus, and that's where it became very evident to me and to my employee who was involved with the auditors to review those files that somebody had been tinkering with the files.
On my comment that Mr. Cutler tinkered with the files, I stand by that today
The Chair: My researcher here is saying that the central recommendation of the Ernst & Young audit was, and I quote: “It may be more beneficial to all parties to incorporate the procurement of advertising and public opinion research within the normal procurement stream of PWGSC services.” That was the central recommendation.
That was never implemented, I take it?
Mr. Charles Guité: I don't think so, and that would have been a decision of the deputy minister.
The Chair: Okay, so there was no reporting back to Mr. Steinberg and the audit department that, notwithstanding the recommendations, you weren't going to implement these?
Mr. Charles Guité: That would have been done in the action plan, because we have to respond to every observation. A decision would have been made to leave it the way it was, not by Chuck Guité, but by the deputy minister.
The Chair: Well, we certainly don't recall Mr. Steinberg saying there was an action plan that said the central core recommendation was to be ignored. Does anybody else seem to remember that?
Mr. Charles Guité: No, Mr. Chair, I could be totally wrong here. All I'm saying is that when I was a public servant, when I worked in Supply and Services Canada, if I was responsible for an organization and there was an audit, there had to be an action plan sent to the auditor.
The Chair: Yes, I believe there was an action plan, but I don't think anybody followed up to find out if the action plan was acted on.
Mr. Charles Guité: It could be.
The Chair: That I think is the issue.
You have three minutes and 59 seconds, Mr. Tonks.
Mr. Alan Tonks: Thank you, Mr. Chairman.
Mr. Guité, you gave an overview a few minutes ago with respect to the agencies and how they were selected. Up to this point, we've had the impression that you selected the agencies arbitrarily. Can you elaborate?
I was interested, and I'm sure the committee would be interested, in an organization or an entity called the Federal-Provincial Relations Office.
Mr. Charles Guité: I think now it is a department.
Mr. Alan Tonks: All right. You know more about it than I do. Could you illustrate for the committee what the role was of that entity and what direction they gave you on how your department or your group interfaced with this organization?
The reason I ask is that there's the impression that there was no strategic direction other than very politically, in a hierarchical way, whereas there was this entity that seems to come up every so often; at least it did in your original testimony.
Mr. Charles Guité: Yes. On the Federal-Provincial Relations Office...I used to know, maybe it's not that anymore, but let me give you my memory of that organization.
The Federal-Provincial Relations Office, I think, was part of PCO initially. I remember the FPRO like yesterday; the FPRO was really federal-provincial relations. If there was a major issue in agriculture, for example, out west, the FPRO would get involved in communication exercises, and so forth, on how to deal with that.
So during the referendum, obviously, the FPRO was going to get involved in communications. They called me up and said, “Chuck, we know what we have to do; you know what we have to do. We have some staff, but we're short of an expert in advertising, communications, and promotion. Would you lend us an employee?”
After about a week of discussion—I had four people on staff in that organization—I agreed to send Madame Andrée LaRose, who was my right arm, left arm, and two feet. She was really the next person in line from me. Andrée LaRose went over to the FPRO, and then we started, obviously, to plan on the strategy to fight the referendum.
As for when, it must have been sometime in 1994. La date du referendum?
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Mr. Michel Guimond: November 1995.
Mr. Charles Guité: Okay, so November 1995 was the referendum. Sometime in late 1994 or in 1995, Madame LaRose came back to our office, which was next door, by the way. FPRO was at 30 Sparks and I was at the old Birk's Building on Sparks Street, which is next door, just about.
She came over one morning and said, “Chuck, they”—they being FPRO—“want to get agencies on board to get a strategy around la bataille”.
The Chair: Mr. Guité, is this at all relevant to answering Mr. Tonks' question?
Mr. Charles Guité: Yes, it is, because he's asking me how the process worked.
We had a competition, as I described earlier, on how we invited firms and so forth. In the advertising world, once an agency is in place.... We used to put in place what we call standing offers. That standing offer could run one year, two years, three years, or five years. It could run forever if you didn't change it. Normally, after five years you would review a standing offer, which we did in advertising.
Those firms, during the referendum, worked on that file, and obviously we had some good results, but very close.
Mr. Alan Tonks: They were chosen through this process at the FPRO.
Thank you.
Mr. Charles Guité: Through this process, yes. On your question, though, I know where you're going.
About 1996, before the sponsorship program officially started, we re-competed, this time using a completely open process, i.e., not using the clause that I could use during the referendum. We had a competition. I think that we invited, the record will show, again ten or twelve firms that presented. Oh no, it's more than that, because we retained ten, I think. They became the standing orders for the sponsorship program.
Obviously, the record shows that of the $40 million, $39.5 million, or not quite that much, was spent in la belle province. That was the intent of the sponsorship. So we used agencies on the list that were in Quebec.
Mr. Alan Tonks: Thank you.
Thank you, Mr. Chairman.
The Chair: Thank you, Mr. Tonks.
Ms. Wasylycia-Leis, please, eight minutes.
Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
I think I'm beginning to see why we're at this impasse and the kinds of problems we're having. It seems to me, Mr. Guité, the things you would consider normal, appropriate, and proper are the very things that many of us have difficulty fitting into that definition. I think there's that same gap between what you believe, what the Auditor General believes, what accountants believe, and what businesses out there would believe.
You've said you think it's acceptable to backdate contracts when appropriate, in certain circumstances. You've said that it's okay for sponsorship dollars, once you've approved them, to go to basically anything. It could be horses, whether there's a new Musical Ride or not, in the case of the RCMP. It could be pucks, whether it has anything to do with advertising the actual event. It could be, in the case of the city of Elmira's maple syrup festival, buying pancake batter. So that's where we have a problem.
The third is that you don't see the need to put in writing the scope of work. This is exactly what the Auditor General is saying is the problem. You have not identified the criteria by which you judge the granting of funds for the sponsorship program. Then you have no way to evaluate it. And then, for any reasonably thinking person in Parliament or across Canada, you don't have the answers to whether we got value for money.
So my question to you is, why do you have such a different set of standards when it comes to administration? Is it because you actually do think it's normal, or is it because, as you've said at other times, we had exceptional circumstances that required exceptional administrative actions like bending the rules? Or is it the fact that this was just the way government was doing business when you were in the Mulroney administration and when you took over under the Chrétien administration?
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The Chair: There are a number of questions there.
Mr. Charles Guité: Well, Mr. Chairman, exactly. I mean, where do I start here?
The Chair: Well, you start with the first one and move through.
Mr. Charles Guité: What's the question?
Ms. Judy Wasylycia-Leis: Did you consider these abnormal ways of operating normal? Did you see them as exceptional because of exceptional circumstances around national unity?
The Chair: One question at a time, Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis: No, it's one question, three parts. Or is this the way he saw government do business?
I mean, there is a huge gap between what you're saying and what any self-respecting auditor is going to say in terms of this process.
The Chair: Mr. Guité.
Mr. Charles Guité: What's the question?
Ms. Judy Wasylycia-Leis: You heard the question, and I think you're just trying to be difficult here.
Mr. Charles Guité: No, no. I'm being serious.
Ms. Judy Wasylycia-Leis: You heard the question. Did you think your way of doing business was normal or did you actually bend the rules?
Mr. Charles Guité: Under the circumstances we were working under, it was normal. As I said earlier--and let me use your example of batter at a sugar bush for pancakes--if an event came to the Government of Canada, not to Chuck Guité but to the Government of Canada, and they asked for a sponsorship, why would they want a sponsorship? In order to carry out that event. They need money to carry out that event, no?
Ms. Judy Wasylycia-Leis: You said yourself the sponsorship program was designed to give visibility to pursue--
Mr. Charles Guité: Hang on, hang on. You're not letting me answer the question.
The Chair: One at a time.
Mr. Charles Guité: You're not letting me answer the question.
So that organization, the little sugar bush in Montmorency, wanted, let's say, $25,000 for the government to be a sponsor of that event. Obviously that organization wants the money in order to carry out the event. What I want, as the Government of Canada, is visibility worth $25,000 for that event. If they use that money they've received...and this goes back to the chairman's comment of awhile back. What they're going to do with that money obviously is carry out that event. But I'm going to make sure the government has its visibility.
And that we did, madame, and the result, our proof, is in the pudding.
Ms. Judy Wasylycia-Leis: And that's where we have the biggest area of concern--
Mr. Charles Guité: Well, there's not much I can say there.
Ms. Judy Wasylycia-Leis: All right, then, you can tell us what Groupe Everest did for $67,826 when you flowed a cheque through them to l'Information essentielle for Maurice Richard? What did you ask them to do? What did they do? What value did we get for flowing that cheque, besides the cost of the stamp?
Mr. Charles Guité: They probably used a courier.
Ms. Judy Wasylycia-Leis: Okay, besides the cost of the courier, then.
Mr. Charles Guité: As I think I said earlier this morning, an advertising agency, or an AOR, will have loss leaders and leaders. If I look at the amount of work or at the amount of product or value the government received from the agencies involved in this program, I can assure you, madam, that the government got value for money. I'll give you a small example.
We do a $15,000 event in Quebec City. Groupe Everest gets that sponsorship. If you look at the list of events that Everest does, you'll see that for a lot of them there is very little money. However, they may have to send two or three people to the event: no money.
So at the end of the day, what I'm saying to this committee--and that's where I think it's very important that someone like the president of ICA addresses this committee--is that agencies will make money on some, lose on others. At the end of the day, the Government of Canada got value for money.
I mean, it's easy to use one example and say they got $64,000 just to put on a stamp. If I were Everest, I would turn around and show you how much money I lost on six events prior to that.
I can't add any more on that. That's the--
The Chair: Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis: With your approach, there wouldn't be any need for auditors, would there? Anything goes. It just sort of balances out in the long term. We don't need to know what the money was designated for. We don't need to know whether it was spent on that. We don't need to know if we got value for money. That's basically what you're saying. And that's what the Auditor General is saying.
I guess the rhetorical question to ask, since you had such close contact with politicians and Liberal cabinet ministers, is why they went along with it, why they went along with this most bizarre, inappropriate way of managing the books and practising in, as I would consider them, such unethical terms.
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Mr. Charles Guité: I totally disagree.
Ms. Judy Wasylycia-Leis: You disagree? Okay.
Let me ask about advertising, since part of this whole study is chapter 4 as well as chapter 3.
Could you tell me what percentage of advertising contracts were eventually awarded to agencies who contributed to the Liberal Party?
Mr. Charles Guité: I have no idea.
Ms. Judy Wasylycia-Leis: You don't know. We're only talking about five agencies, including Lafleur, Gosselin, Groupe Everest, and Groupaction, primarily, and you can't say how this worked out? They were the only ad companies getting any contracts in this whole period of time. There were a few others, but--
Mr. Charles Guité: No, no, you're talking now about advertising. Advertising companies that got work from the Government of Canada worked for departments. I don't know how much they got from the departments of agriculture or national defence or finance.
Ms. Judy Wasylycia-Leis: Then let's just talk about it in terms of the sponsorship program. Could you give us a figure in terms of how you divvied it up?
Mr. Charles Guité: Get a copy of the list. It's on the list. I can't remember if this firm got $2 million, or $5 million, or $8 million, or $20 million. If you get a copy of the list, you'll see very clearly on the list the program, the amount, the agency, and so forth.
I can't sit here and give you those figures. I don't know. I've been gone for five years.
The Chair: Last short question.
Ms. Judy Wasylycia-Leis: Already, Mr. Chair?
Was there an agency selection process in terms of the CIO? I'm just trying to get a sense of the relationship there. You worked very closely--
Mr. Charles Guité: The CIO being the Canada Information Office. Okay.
I can't remember. I would think yes, but I can't remember.
The Chair: We're just about ready to break for lunch, but first, Mr. Guité, I have a question for you. Twice this morning you mentioned the unity fund. How did the unity fund differ from the sponsorship program?
Mr. Charles Guité: In technical terms, Mr. Chairman, it obviously would be two different Treasury Board submissions. With regard to the unity fund, I can't comment on that, because I don't know how the Treasury Board submission was prepared. That was done probably by PCO/FPRO.
In terms of the unity fund, obviously when we, being the Government of Canada, did promotion or events pre, during, and right after the referendum, up to when they established the actual sponsorship fund, that, I assume....
Well, in the year of the referendum, there is no assumption; it probably came out of the unity fund. After that, it came out of some fund out of, I would assume, Privy Council or FPRO, because I did not have it in my budget.
The first Treasury Board submission I submitted was to create the program for 1997-98, which was, I think, at $40 million, and then for 1998-99 I prepared that submission also, because I was still the executive director.
The Chair: That was to spend money from the unity fund?
Mr. Charles Guité: No. That was a separate Treasury Board submission for Treasury Board to allocate $40 million to a sponsorship program.
The Chair: By that time you were at about the level of an assistant deputy minister.
Mr. Charles Guité: That's correct.
The Chair: As a senior executive--not the most senior, but you were up there in the executive ranks--you knew the appropriations process, you knew the estimates process. I presume by this time you were aware of the contracting rules of the Government of Canada. But you were dealing with two issues: you were spending money on the sponsorship program, and you were spending money on the unity fund.
Mr. Charles Guité: Not at the same time.
The Chair: Never at the same time?
Mr. Charles Guité: No.
The Chair: We know the unity fund was cancelled only this past few months. It was running right up to the end of 2003.
Mr. Charles Guité: Once I got the Treasury Board submissions for the sponsorship program in 1997-98, and 1998-99, I never got another penny from wherever it came prior to that--which was probably the unity fund.
The Chair: So you were spending money on the unity fund in which years?
Mr. Charles Guité: I think it was in 1994-95, 1995-96--
The Chair: After that you didn't spend a dime?
Mr. Charles Guité: --and maybe 1996-97.
The Chair: But after that it ceased?
Mr. Charles Guité: After that it was definitely a separate Treasury Board submission.
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The Chair: A Treasury Board submission...but that's not the point of the question. Did you spend the money allocated under the unity fund and the sponsorship fund?
Mr. Charles Guité: No, I did not.
The Chair: So the only money you spent was from the sponsorship program.
Mr. Charles Guité: Yes.
The Chair: From 1997 onwards, approximately, you never spent a dime of the unity fund.
Mr. Charles Guité: Not that I'm aware of, but let me add one more caveat to that. I'm not sure of the year--it was probably 1997-98--that we spent more than the $40 million. I can't remember the figure, but it might have been $42 million or $43 million. I got the additional funding through the regular department allocation.
The Chair: Now, was that the supplementary estimates or...?
Mr. Charles Guité: I can't remember. Probably when we did the supplementary estimates, which we normally did every year, I advised the deputy of the day, who was Mr. Quail, that the budget was over-expended.
The Chair: Now did you have any discussions about: I will spend this out of the sponsorship program; I will spend this out of the unity fund? How did you differentiate between which--
Mr. Charles Guité: No. I never had both at the same time.
The Chair: So when you were spending money out of the unity fund in 1994-95, and so on, you had no sponsorship program.
Mr. Charles Guité: I didn't have sponsorship.
The Chair: So you had one or the other, but never both.
Mr. Charles Guité: No. Now, what the unity fund did up to--I think you said--last year, I have no idea. It may have done other promotional things, but never through my organization.
The Chair: The work you were doing was by and large the same thing--you were buying sponsorship programs. That's what you were doing.
Mr. Charles Guité: Yes.
The Chair: Did anybody ever say to you, Chuck, we're not going to use the sponsorship program, we're going to use the unity fund--
Mr. Charles Guité: No.
The Chair: --and from now on we're going to go back to the sponsorship? Did you ever ask which budget you were spending money out of?
Mr. Charles Guité: Did I ever ask? No. I was spending out of my sponsorship program.
The Chair: By this time you were up to the ADM level. Didn't you ever ask which budget, what's my limit, how much money do I have, what budget am I spending from?
Mr. Charles Guité: Oh, I was well aware what budget I was spending and what my limit was. My budget was the sponsorship budget at $40 million, period.
The Chair: Yes, but you flipped back and forth between sponsorship and unity.
Mr. Charles Guité: No. We never flipped back and forth.
Let me start again. In 1994-95, 1995-96, and 1996-97 the sponsorship money...I shouldn't say sponsorship. I should say in more general terms the communications money to promote the unity and the referendum issues, and the post-referendum, more than likely came out of the unity fund. When I made a submission to Treasury Board in 1997-98, 1998-99, there was a separate submission every year to establish the sponsorship fund. Once that started, I never got another penny from the unity fund.
The Chair: Yes, but I think you said earlier you spent money out of either the unity fund or the sponsorship--
Mr. Charles Guité: If I said that I was wrong.
The Chair: Let's get this straight. You could spend money out of both funds at the same time.
Mr. Charles Guité: No.
The Chair: I am confused.
Order, please.
There were two funds--the sponsorship fund and the unity fund. Do you agree there were two funds?
Mr. Charles Guité: I had access to the unity fund until 1996.
The Chair: Up until 1996, were you also spending from the sponsorship fund?
Mr. Charles Guité: It didn't exist.
The Chair: Oh, it didn't exist. Okay.
Mr. Charles Guité: It only became the sponsorship fund in 1997-98, 1998-99.
The Chair: After 1996, the unity fund continued until this fall. But you were not spending that money.
Mr. Charles Guité: No.
The Chair: You have no idea where that money was spent.
Mr. Charles Guité: No.
The Chair: You have no idea what it was all about.
Mr. Charles Guité: No.
The Chair: You have no idea what the criteria were for that fund.
Mr. Charles Guité: No.
I would assume, Mr. Chair, that was controlled by PCO, by the way.
The Chair: Tomorrow we will sit from 9 to 1, but I think it's appropriate that we suspend from 11:15 a.m. to 12:15 p.m. to allow the members to go to question period. Question period on Friday is from 11 to 12. Rather than have a 15-minute break, I think it's appropriate that we have a one-hour break. We will miss members' statements. The extra 15 minutes will allow us to get back here.
Mr. Guité made mention of a letter that was attached to his opening statement. It was delivered in one official language. When it's available in both languages, it will be distributed.
We are adjourned until 3:30 this afternoon.