:
I call this 12th meeting of the Standing Committee on Public Accounts to order. I would ask our friends in the media, with the cameras, to conclude their filming.
I have given permission for a couple of still cameras to remain for a minute or two because of the kind of shot wanted. Apparently that's not unusual. They assure me they will be just a moment or two.
Before we go to our guests, I will tell you that the steering committee met today, and it's agreed so far, subject to the approval of the committee, that at 5:15 we will conclude this hearing. If everything goes the way it should, we should have come very close to exhausting the speakers list. But it's accepted and recommended by the steering committee unanimously that, regardless of where we are in the rotation, at 5:15 we will conclude and move to an order of the day, which will be to deal with Mr. Saxton's notice of motion.
There's a further commitment—I want to put all the cards on the table—that we will conclude a vote on the matter of Mr. Saxton's motion before we rise.
That's our goal between now and....
I'm looking for a nodding of heads from the steering committee that this is what we agreed to.
Now I ask the general committee, do you support the recommendation of the steering committee?
Some hon. members: Agreed.
The Chair: Hearing no opposition, that is carried and so ordered.
So at 5:15 we have an order of the day to move to Mr. Saxton's motion.
With that, I'll go to the main business of the day.
First of all, welcome, Minister Baird and Minister Clement. Welcome to our committee. We are pleased to have you here.
We will be proceeding in our usual fashion, which is, first, to offer both of you an opportunity for opening remarks. Following that, we will move into rotation in our usual fashion, and people will have their five minutes.
You have the floor now, if you wish to make an opening remark.
Minister Clement, do you wish to go first?
:
Let me thank you, of course, and through you thank the members of this committee.
It is indeed a pleasure to be here today, and in particular to address the events and decisions surrounding the 2010 G-8 summit and my role therein.
With the indulgence of the members, I'd like to rewind the clock a little bit and take us all back to just over three years ago, to June 2008. At that time the Government of Canada proudly announced that a world-class leadership event would be held in Canada in the Muskoka region.
[Translation]
An enormous amount of work went into preparing for that event. Many departments took part and the planning was done jointly by the federal, provincial and municipal governments. International authorities were also involved.
[English]
Ultimately, preparations for the 2010 G-8 summit involved a two-year process. The outcome was an event that has been praised internationally as a model for how future summits can engage with local communities. It was a summit that produced, amongst other things, the internationally acclaimed Muskoka initiative on maternal and newborn health, as well as an opportunity to showcase to the world our country's economic strength and unparalleled natural beauty.
There was, of course, a strong interest on the part of local mayors, municipal officials, businesses, artists, students, and other citizens to find a way to play a coordinated role in this important event. This led to the founding of what was then known as the local area leadership group, which held its first meeting on September 12, 2008.
Now, this group was set up primarily as a way of providing community leaders and others an opportunity to be briefed by government officials on developments that would affect the community throughout the G-8 planning process.
[Translation]
This leadership group also enabled the community leaders to dialogue and exchange ideas about the best ways to meet their community's needs during this incredibly important event.
[English]
I want to stress this, though: this was not, however, a decision-making body, and never behaved in that capacity.
Every municipality in the region was represented at the table, and every one of those meetings was followed by a press conference with local media as a way of engaging the public on progress being made on summit planning.
Now, several months after the first local meeting, on February 6, 2009, I announced on behalf of the Minister of Transport and Infrastructure the creation of the G-8 infrastructure fund, which had been funded in the January 27 budget of that year.
Local mayors and officials were of course keen to take part in the G-8 infrastructure program. They began drafting proposals for a wide variety of projects. In all, municipalities in the region came up with 242 different ideas for G-8 projects.
Now, since there were far too many project ideas for available funds, and since some of the ideas clearly fell outside federal jurisdiction, I then proposed to the mayors a simple, straightforward process through which they could focus on the project proposals that really mattered to them and the region. I suggested that they, amongst themselves and with their councils, identify their top priorities and, based on their own judgment, weed out those proposals they considered to be of low need or outside federal jurisdiction.
Since other mayors didn't want to submit proposals via the Huntsville mayor, I offered my constituency office in Huntsville as a depository where proposals could be dropped off and from there forwarded to federal officials.
These suggestions received a positive reception by the mayors and community leaders, and they worked cooperatively to identify their top priorities. Essentially, each mayor reviewed the proposals for his or her area and brought forward only those they considered a priority.
Most of these focused on improvements to enhance tourism, something the mayors felt was important given the international attention that, through the G-8 summit, would provide millions upon millions of dollars' worth of free publicity and resulting economic encouragement to the region.
Ultimately 33 projects were sent to Infrastructure Canada for review. Infrastructure Canada officials, operating independently, engaged their due diligence process on the 33 proposals put forward, and advised the Minister of Infrastructure which projects were eligible for funding.
In the end, a total of 32 G-8 legacy projects were approved. A public announcement for each funded project was held with media and the general public present.
[Translation]
As the members of this committee know, in order to maximize accountability to taxpayers, our government consulted the Auditor General at the time and proactively asked her to look not only at the expenses of the G8 summit, but also at those of the G20 summit.
[English]
The Auditor General fully investigated the G-8 fund and confirmed that every penny spent is accounted for, and has also clearly stated that there is no reason for any further audit of the fund.
In fact, just recently, the interim Auditor General, while testifying before this parliamentary committee, reaffirmed this position.
In her report however, the then Auditor General did make recommendations to improve the administrative processes. This includes the process I outlined just a couple of minutes ago, in which I asked local municipal officials to prioritize their own project submissions.
I can assure you that I have taken the Auditor General's recommendations with regard to the administration of the intake process very seriously, and I certainly accept her conclusions.
In hindsight, it may have been better for infrastructure officials to review all 242 initial proposals and not simply encourage the local mayors to collaborate and focus their requests in the interests of efficiency and time. It is worth reiterating, however, that every penny of the G-8 infrastructure fund was accounted for. The Auditor General's report is clear on this.
I have spoken at length about these issues in public already, including at the House of Commons government operations committee on June 20. In fact, members, since January 1, 2010, a total of 53 witnesses have appeared before two House of Commons standing committees on the G-8 legacy fund and the G-20 leaders summits. In all, House committees have spent 39 hours hearing testimony and discussing this topic. Today's meeting will bring this total to 41 hours.
Today I am hopeful that with me, with of course my colleague the Minister of Foreign Affairs, and with the gathered federal officials here at the table we can finally put an end to the assertions contending that the review process undertaken was in any way unethical, and members can then move on to their reviews of other government operations pertaining to the rest of a large $280-billion federal budget.
I thank you.
:
He said he wouldn't miss it, for the record.
He wishes Deepak was here; don't we all. Deepak is representing the Government of Canada at a very important meeting abroad.
The G-8 legacy fund helped an already beautiful part of Canada put its best face forward to the world. There were going to be literally 4,000 members of the media beaming pictures of this summit and the Muskoka region to every corner of the globe in blanket coverage. There were also thousands of delegates, thousands of diplomats, who would share their own impressions by word of mouth. Some stayed up to 100 kilometres away from the summit site. This was a huge opportunity. This was a huge undertaking.
Large international summits like this generally require significant infrastructure investments. Our government in February 2009 announced this fund to Canadians. Up to $50 million was available.
Ultimately, my office and departmental officials presented me with a list of public infrastructure projects that I approved. These 32 projects met the criteria of the program. These included the effective and secure hosting of the G-8, beautification of the region, and a lasting legacy for local communities.
As minister, I presented estimates to Parliament, and I am accountable for those estimates. When I arrived at the department, I was hearing concern from all sides that federal infrastructure approvals were taking far too long. They were mired in red tape. My mission was to get things moving, and, with this fund, time was of the essence.
The Building Canada fund was a seven-year program. Stimulus programs ran for two. With G-8 projects, though, we had approximately 15 months from start to finish.
Officials recommended, and I as minister accepted that advice, that we use an existing fund rather than create an entirely new one so that we could move quickly. The border infrastructure fund was topped up.
I am pleased to say that the 32 projects were delivered on time and millions under budget.
I would like to underline one point. I said the border infrastructure fund was an existing fund that was topped up. In other words, money that was designed for border infrastructure was not diverted from improvements to border security or mobility. It was merely a delivery mechanism.
The projects came in under budget, every penny was accounted for, and each of the projects continues to serve the public as it was intended. I'm told that this has been done in terms of parliamentary appropriations for more than 100 years.
I would also reiterate, Mr. Chair, the buck stops with me. The projects presented to me met all of the eligibility criteria for the program. I made the decisions, I am responsible, and I am accountable.
Let me also say that public servants at Infrastructure Canada did an absolutely outstanding job when the Canadian economy needed the federal government the most. They applied professional oversight and expertise to the thousands of project applications to help create jobs, hope, and opportunity at a time of global recession.
If our government had not acted to create more than 23,000 stimulus projects across the country, the great global recession may well have had great depression effects.
The Auditor General in her report made a number of observations about ways to be more open and more accountable to Canadians. I fully accept those comments, and the government agrees.
In hindsight, the estimates could have included a line regarding the top-up of this fund. I stand by my decisions, which were informed by the best possible advice. I was and remain accountable.
I'm open to providing responses to questions over the areas with which I was responsible.
Thank you.
Mr. Baird and Mr. Clement, thank you for joining us today.
I must mention the fact that, since last June, we would have liked you to have risen from your seats in the House to answer our questions. There was some contempt or disdain toward Parliament and with respect to the right of the elected members to obtain answers from the government.
We have here what is probably the biggest scandal since the sponsorship scandal. All the elements of a shady process are here. The Auditor General told us that she had never seen anything like it and that all the rules had been broken. You managed to implement an opaque, parallel process to distribute $50 million in your constituency. The Auditor General first told us that there were no documents or minutes, that we didn't know what happened and that no senior public servants were present. Access to information requests made by the NDP showed us that the story was a little different, in the end: senior public servants were present, but they were subsequently concealed. Through these access to information requests, we also learned plenty of interesting things about certain emails. I'll come back to that.
Mr. Clement, your spokesperson in the House just stated that he was the only one responsible for approving projects. I have in my hands a document dated October 21, 2009 that bears Mr. Baird's signature.
[English]
It's an agreement for G-8 summit projects,
[Translation]
and bears the signature of the mayor of Huntsville, as well as yours. Does that not contradict the version of the facts presented by Mr. Baird? You also signed the document.
:
Twenty-five. Thank you, Minister.
I'm sure you appreciate what's at stake here. In addition to the process issues, which we're trying to get at to ensure that taxpayers' dollars were protected and there was a process in place, you are also the minister of the Treasury Board, now responsible for a very serious initiative within the government to cut down government spending. You're also the chief executive in the spending of over $250 billion.
This is a larger issue in addition to the G-8 legacy fund, so let's get to the brass tacks of this. You're suggesting—if I'm reading it correctly—that instead of 242 applications, you asked for mayors and communities to self-evaluate all the applications within and amongst themselves, and to arrive at, with surgical precision, 32 projects that would meet the criteria and also meet the budget envelope of $50 million.
Is that what you're suggesting--that with surgical precision, 25 organizations and communities, without any disputes or objections being raised amongst themselves, actually arrived at that number themselves?
The alternative, Minister, if there was no adjudication within and amongst themselves, was that the department, the Government of Canada, had a role to play, and there was some oversight or some assessment granted by government officials of those 242 applications.
It's either one or the other. Was it a self-evaluation process or was there some guidance given by the Government of Canada?
:
The framework we apply to any funding program is to ensure that we follow the law, we make sure that government pays the bills that are appropriate, and we make sure that results are achieved. These are the general objectives of any program.
In this particular case, for the 32 projects we did the legal contribution agreements; we assessed and examined the submissions from the proponents, which in many cases were the municipalities, except one case, which was the Province of Ontario; and we made sure the files were robust, because in every project file you have to have the information around the processes, everything that has been submitted.
We made sure that...it's something called “control framework”, to make sure that, in any process, at what points do you put extra controls to make sure that you don't make any mistakes? Especially when you're dealing with as many files and projects as we deal with, we have, as a system, control points injected.
For example, before the final payments were made, we did further due diligence, and then we released the documentation. Then we closed the program.
So it's basic program management, and that, I think, is what the Auditor General referred to.
:
Thank you very much, Mr. Chair.
Mr. Clement and Mr. Baird, I'd like to thank you for being here.
I would like to summarize the current situation. The 32 projects have been mentioned a lot. The Auditor General had the opportunity to review the 32 projects.
One thing concerns us: $50 million, which was approved by Parliament for a Border Infrastructure Fund, was transferred for the G8 Legacy Infrastructure Fund without Parliament's approval or even it's knowledge. At the end of the day, a group called the Local Area Leadership Group was created and was consisted of Mr. Clement, the mayor of Huntsville and the general manager of the hotel. This group in question decided, alone, how to allocate this $50 million. That's the root of the problem. We're talking about 242 projects. That's what I'm concerned about now.
I'd like to talk to you about a conclusion the Auditor General made that I'm particularly concerned about. She said that she had asked the Summit Management Office to provide all documentation indicating how the office had been involved in the review or selection of the projects. The Auditor General told us that the office had not been involved in the review or selection of the 242 projects, but that it had held information sessions for the local communities on the G8 summit.
When we look at the minutes we obtained, we can see, among other things, that Mr. Gérald Cossette was present. He was the head of the Summit Management Office. He was also assistant deputy minister for Foreign Affairs. I assume the Auditor General spoke to him. I assume that she also spoke to other officials. But there was no response from these people who were involved in the process. I say this because our emails indicate that he was involved.
Did the Department of Foreign Affairs or the Summit Management Office mislead the Auditor General?
:
Thank you, Mr. Chairman.
As mentioned, in February 2009 new money came into the department and the administration of this fund came under Infrastructure Canada authorities.
At that time, some of these projects had to start within weeks, if not days, because most of them had to be completed for the time of the summit.
In February 2009, when this fund came in, it was at the same time that the infrastructure stimulus fund and the whole economic action plan programs came into the department. There were a lot of flexibilities that got instituted later on in terms of approvals processes in the federal cabinet decision-making, but in February it was not very clear that we could get, as a department, approvals for a brand new program in time.
Normally, any new program design takes anywhere between four to six months. If it took four to six months, the proponents could not have been able to start the projects.
So at the officials level, they had discussions and they looked at any mechanism that we could use to put the new money in, almost like a subsection of the border infrastructure fund. It had its own terms and conditions, and it had...so that was used as a vehicle. The presence of the legacy fund was made public around similar times by Minister Clement. So it was a delivery mechanism.
That being said, given that we were able to secure all of the approvals for all of our other programs, with 20/20 hindsight it would have been much wiser to have a separate fund instituted, put in place, and then we would not have recommended to our minister something that the Auditor General found to be not transparent.
On the estimates process, Madam d'Auray is going to take the answer.
:
Our goal, obviously, was to meet the three objectives of the fund. In addition, obviously as part of the global economic downturn we responded with the stimulus initiative, and some 23,000 projects, Government of Canada wide, were taken. We did a significant amount of work to ensure that things would move expeditiously, quickly.
In fact, we were dealing with mostly municipal projects here. The Canadian association of municipalities I think has acknowledged and even given an award to the department for the great job they did in moving expeditiously.
There was a lot of debate whether the federal government could respond to the challenge. We did that. I think by and large the infrastructure funds, when you look at the totality, were distributed pretty fairly. If you look at the work we did from coast to coast to coast, it created a lot of jobs. We have a lot of public infrastructure that will benefit communities for many years to come.
We did move quickly. Things were far too slow in the past. I thought they were too slow. Opposition members, provinces, municipalities, government members all thought they were too slow. We did a lot to speed that up.
I think if you look at the record in its totality, it was an unprecedented success. I think one of the things that was so good was that we put aside partisan politics, worked with municipalities of every political stripe, worked with provincial governments of every political stripe.
I think that's exactly...not what people expected during the economic downturn, but they demanded it, and I think they received it.
:
Thank you, Mr. Chairman.
As I outlined a few minutes ago, when the new money came into the department, the department did not have that much time to get the program up and running. The projects had to start within weeks. Therefore, departmental officials tried to find the most expedient way to administer this program.
Getting new funds and programs off the ground, and getting all of the authorities and approvals done from scratch, often takes anywhere between four to six months. So the idea of using the border infrastructure fund came up as a way to administer the program appropriately but in a more expedient approval time process. New money was added into the border infrastructure fund, with separate terms and conditions around this legacy fund.
Again, as we said, that was what was deemed to be a wise way of proceeding at that time. Within months of that, the officials were thinking that we should have done a stand-alone fund, because we could have gotten the approvals probably in the same timeframe; a lot of flexibilities came in with the economic action plan in terms of getting the memoranda to cabinet approved, Treasury Board submissions approved, etc.
At the time, they didn't know. They looked at the past process, and that was the recommendation that was made to the minister.
We have instituted two things within the Treasury Board Secretariat based on the Auditor General's advice. First, for initiatives of a horizontal nature, we have described with greater detail in the estimates. We are also for the first time, as you will see shortly, providing information on horizontal initiatives from previous estimates as well as the current estimates, so that the tracking of funds can now be done. That's a new development.
We have also instituted some very clear guidelines inside our organization, because we're the ones that provide departments with their estimates sheets for them to sign off. Where there are specific subprogram elements that provide different parameters or additional parameters to existing programs, those will now be listed separately.
We have had a tradition of aggregating them, and we recognize that may not be as transparent or as clear. We recognize that. As a result, where there are subprograms with different parameters or additional parameters, those will then be identified distinctly. They will still be under the heading of the main program so that the funds can be tracked under the program authorities all the way through.
The program elements are also reported in departments' performance reports. They are also reported in the public accounts. Members of Parliament can see them all the way through--from the main estimates, to the supplementary estimates, to the departmental performance reports, to the public accounts.
Certainly to our guests gathered here, without doubt and without exception let me congratulate all of the officials who are here today. When we talk about the stimulus plan, the knowledge infrastructure, and the legacy fund--literally it is without parallel in Canadian history for efficiency, effectiveness, and accountability.
I know that most Canadians definitely share that view. They are very thankful that our officials, our civil service, and our ministers, in a time of extreme economic duress, acted in such an accountable manner, let alone expeditiously.
So I am deeply disturbed, quite frankly, when the official opposition have repeatedly stated that officials misled the Auditor General. I think it's disturbing. I'm very proud of the work of our professional civil service and the ministers on this.
I'd like some comment on the statement made by the opposition that the Auditor General has been misled by the officials gathered here today.
Perhaps I could even have a response from each one of you, very quickly.