PACC Committee Meeting
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37th PARLIAMENT, 3rd SESSION
Standing Committee on Public Accounts
EVIDENCE
CONTENTS
Friday, March 19, 2004
| ¿ | 0910 |
 |
The Chair (Mr. John Williams (St. Albert, CPC)) |
|
Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons) |
|
The Chair |
|
Mr. Rob Walsh |
|
The Chair |
|
Mr. Dennis Mills (Toronto—Danforth, Lib.) |
| ¿ | 0915 |
|
The Chair |
|
Mr. Rob Walsh |
|
The Chair |
|
Mr. Michel Gauthier (Roberval, BQ) |
|
The Chair |
|
Mr. Vic Toews (Provencher, CPC) |
| ¿ | 0920 |
|
The Chair |
|
Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.) |
|
The Chair |
|
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP) |
|
The Chair |
|
Mr. Alan Tonks (York South—Weston, Lib.) |
|
The Chair |
|
Mr. Odina Desrochers (Lotbinière—L'Érable, BQ) |
| ¿ | 0925 |
|
The Chair |
|
Mr. Odina Desrochers |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mr. Michel Gauthier |
|
The Chair |
|
Mr. Odina Desrochers |
|
Mr. Michel Gauthier |
|
Mrs. Marlene Jennings |
|
Mr. Michel Gauthier |
|
The Chair |
|
Mr. Michel Gauthier |
|
The Chair |
|
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, CPC) |
|
Hon. Alfonso Gagliano (As Individual) |
| ¿ | 0930 |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
| ¿ | 0935 |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
Mr. Peter MacKay |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
| ¿ | 0940 |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
The Chair |
|
Mr. Michel Gauthier |
| ¿ | 0945 |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.) |
| ¿ | 0950 |
|
Hon. Alfonso Gagliano |
| ¿ | 0955 |
|
Mr. John O'Reilly |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. John O'Reilly |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
| À | 1000 |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
| À | 1005 |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
| À | 1010 |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
|
Mr. Alan Tonks |
|
The Chair |
| À | 1015 |
|
Mr. Rob Walsh |
|
The Chair |
|
Mr. Jason Kenney (Calgary Southeast, CPC) |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
| À | 1020 |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
| À | 1025 |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Rob Walsh |
|
The Chair |
|
Mr. Rob Walsh |
|
The Chair |
| À | 1030 |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Dennis Mills |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mr. Dennis Mills |
|
The Chair |
|
Mr. Dennis Mills |
|
The Chair |
|
Mrs. Judi Longfield (Whitby—Ajax) |
|
The Chair |
|
Mr. Michel Gauthier |
| À | 1035 |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
| À | 1040 |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mrs. Judi Longfield |
|
Mr. Vic Toews |
|
The Chair |
|
Mrs. Judi Longfield |
|
Mr. Vic Toews |
|
The Chair |
|
Mrs. Judi Longfield |
| À | 1045 |
|
The Chair |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
| À | 1050 |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
Mrs. Judi Longfield |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mrs. Marlene Jennings |
| À | 1055 |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Shawn Murphy (Hillsborough, Lib.) |
|
The Chair |
| Á | 1100 |
|
Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC) |
|
The Chair |
|
Mr. Alan Tonks |
|
The Chair |
|
Mr. Alan Tonks |
|
The Chair |
|
Ms. Beth Phinney (Hamilton Mountain, Lib.) |
|
The Chair |
|
Ms. Beth Phinney |
|
The Chair |
|
Ms. Beth Phinney |
|
Ms. Judy Wasylycia-Leis |
|
The Chair |
| Á | 1105 |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Vic Toews |
|
The Chair |
|
Mrs. Diane Ablonczy |
|
The Chair |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
| Á | 1110 |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
|
Mrs. Diane Ablonczy |
|
Hon. Alfonso Gagliano |
| Á | 1115 |
|
The Chair |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
| Á | 1120 |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Vic Toews |
|
The Chair |
| Á | 1125 |
|
Mr. Vic Toews |
|
The Chair |
|
Mr. Vic Toews |
|
Hon. Alfonso Gagliano |
|
Mr. Vic Toews |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
The Chair |
|
Mrs. Marlene Jennings |
| Á | 1130 |
|
Hon. Alfonso Gagliano |
|
Mrs. Marlene Jennings |
|
Hon. Alfonso Gagliano |
|
The Chair |
| Á | 1135 |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
| Á | 1140 |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
|
The Chair |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
Hon. Shawn Murphy |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
| Á | 1145 |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
| Á | 1150 |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Jason Kenney |
|
The Chair |
|
Mr. Jason Kenney |
|
Hon. Alfonso Gagliano |
| Á | 1155 |
|
The Chair |
|
The Chair |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
| Â | 1205 |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. John O'Reilly |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
| Â | 1210 |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
| Â | 1215 |
|
Ms. Beth Phinney |
|
Hon. Alfonso Gagliano |
|
Ms. Beth Phinney |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
| Â | 1220 |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
| Â | 1225 |
|
Mr. Michel Gauthier |
|
Hon. Alfonso Gagliano |
|
Mr. Michel Gauthier |
|
The Chair |
|
Mr. Michel Gauthier |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Hon. Alfonso Gagliano |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Dennis Mills |
|
The Chair |
|
Mr. Dennis Mills |
| Â | 1230 |
|
Ms. Judy Wasylycia-Leis |
|
Mr. Dennis Mills |
|
The Chair |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
|
Hon. Alfonso Gagliano |
|
Ms. Judy Wasylycia-Leis |
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Hon. Alfonso Gagliano |
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CANADA
Standing Committee on Public Accounts |
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EVIDENCE
Friday, March 19, 2004
[Recorded by Electronic Apparatus]
¿ 
(0910)
[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.
Our witness today, as an individual, is the Honourable Alfonso Gagliano, and the orders of the day are of course that we go from now until 11 o'clock. We'll break for half an hour, go from 11:30 to 1 o'clock, and that will be the end of the day.
I see some people indicating, but before we get into that, I just want to say that many members yesterday were frustrated, I think, with the answers we were getting. The media have reported the same, that this committee is having difficulty in pushing through to the meat of the issue. I therefore discussed the issue with Mr. Walsh, the law clerk of the House of Commons. I've asked him to say a few words about the responsibilities of this committee and the responsibility of witnesses and so on before a parliamentary committee.
Mr. Walsh.
Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons): Thank you, Mr. Chairman.
My remarks are not meant to be a reflection on this particular witness this committee is hearing. In my view, while my remarks may apply in respect of this witness, they might well also apply in respect of earlier witnesses the committee has heard.
I am concerned by the public comments and some members' comments about the difficulties, as you say, Mr. Chairman, in eliciting from witnesses testimony of a kind it would seem the committee wants to obtain to enable it to draw conclusions about the details relating to the administrative matters pertaining to this sponsorship matter. I would like to remind the committee...and I mean this with the greatest respect, because you do have a function as a parliamentary committee that is very important to the life of this country.
But you are not a court of law and you are not a judicial inquiry; you are a parliamentary committee. You are charged with inquiring and are fully entitled to inquire into all matters of public interest with respect to public policy or public administration. You are not required to draw and find evidence of a kind that enables you, on the legal standard of beyond a reasonable doubt or on the balance of probabilities, to draw conclusions of fact. You are not triers of fact, you are triers of matters of public policy.
It is something like the Sherlock Holmesian expression of the dog that didn't bark and that being a piece of evidence or a clue to the outcome of the investigation. What you don't hear is as much evidence here today as what you do hear. In my view, when witnesses come before this committee, they are obliged to give a full and complete accounting to this committee before the first question is asked. It is not the case that the onus is on the committee to think of the right question to elicit the right information. In my view, the onus is on the witness, every witness and particularly deputy ministers and ministers, including former deputy ministers and former ministers, to provide a full and complete accounting to this committee on matters relevant to the subject matter of the inquiry.
Again, I don't mean to suggest in my comments that this witness is in any way more responsible for not being frank with this committee than any previous witness. But it is the case that there is some sense of difficulty on the part of the committee members about whether you are getting a full and complete accounting of matters relevant to the sponsorship dossier. If you don't get what you are looking for, that is evidence itself, if in your judgment the witnesses you're talking to are in a position to tell you more.
I'm concerned that the media seem to be picking up on this idea that you're not getting the testimony you should get. The media seem to be painting this committee into an evidentiary corner as if you're a court of law or a judicial inquiry and can't come to any conclusions unless you find smoking guns, or whatever the analogy might be. That's not true. You are here on behalf of the people of Canada, making an inquiry on a matter of public interest in respect of public policy or public administration. You are fully entitled to get a full and complete accounting from every witness who comes before you, and if you don't or if you feel you don't, that itself is evidence that can be taken into account in making your report to the House.
Mr. Chairman, I thank you for the moment I took to make those comments. I thought they might be of assistance to the committee.
The Chair: Thank you very much, Mr. Walsh.
I do appreciate these comments because, as you know, we want to get to understand ministerial accountability and the government's responsibility to Parliament, and of course we have a responsibility to Canadians to explain and to find and determine in public how this fell apart to the degree it did and we had this total lack of controls that allowed problems to be created.
Mr. Walsh.
Mr. Rob Walsh: I failed to make the point that I wished to include in my oversight that this committee could, at the end of the day, address the question of ministerial responsibility and deputy ministerial responsibility, and articulate standards of ministerial responsibility and deputy ministerial responsibility based on the evidence they have heard or have not heard, and the accounting they have received or have not received, which they thought they should have received. That could be the subject of a report by this committee--unlike a judicial inquiry, which can't make a report of the same kind. You could include in your report remedial suggestions to the House for consideration by the government on ministerial accountability and responsibility, and deputy ministerial responsibility and accountability.
The Chair: Okay. This ministerial accountability is fundamental to our system of responsible and democratic government. If this committee, as a committee of Parliament, feels that the whole truth is not willingly being laid before us, then the democratic process of a responsible government is being threatened and is under attack.
Ministers and deputy ministers, members of the public service, have the obligation to Parliament to be fulsome and forthright in their answers, without reservation. They have privilege. The testimony given before this committee cannot be entered in a court of law and cannot be used against them. We all know that. The witnesses know that.
I know I am getting frustrated and other members of this committee are frustrated by the lack of fulsome answers.
We will have a few short questions on this point I've raised.
Mr. Mills is next, followed by Mr. Gauthier.
Mr. Dennis Mills (Toronto—Danforth, Lib.): Thank you very much, Mr. Chairman.
I'd like to address my question to Mr. Walsh, if I may be permitted.
You talk about full and complete accounting. I agree with you on that specific point. As the chairman said, if we don't have full and complete accounting, then the democratic system is under attack.
Do you have concerns, Mr. Walsh, that we do not have the information in front of us on the $85 million of production costs for those 2,000 events that happened over five years across Canada?
I've spent the better part of my life in this type of business, and I find it very strange that the media and others would suggest there wouldn't be production costs related to each and every one of those events. I don't see how we can even get to the bottom of asking proper questions until we have an analysis of what those production costs were and what they represented.
¿ (0915)
The Chair: Thank you, Mr. Mills.
Mr. Walsh, do you have a response?
Mr. Rob Walsh: My comments weren't meant to address the particular issue that concerns this member relating to production costs. My concern was to bring to the committee's attention that its mandate doesn't depend on getting that particular piece of information, or any other particular piece of information. Although it may be relevant and of legitimate interest to the committee to obtain that, it has a function notwithstanding the unavailability of certain evidence that it might have thought it should have.
I'm just saying your mandate is not one of a court of law or a trier of fact that must have certain evidence before it can draw a conclusion. You are a parliamentary committee, and you're entitled to listen to the accounts given to you, including what is not given to you, and make your conclusions accordingly.
The Chair: Mr. Gauthier.
[Translation]
Mr. Michel Gauthier (Roberval, BQ): Mr. Chairman, I observed the manner in which you conducted the proceedings yesterday and I feel the problem stems from the fact that members have a very limited amount of time to ask questions. Therefore, in order to shed as much light as possible on this matter and to ensure that these proceedings are conducted as smoothly as possible, I would like to move a motion. I'm confident that I will have the support of colleagues from the other parties, including government members, since the Prime Minister, as we all know, is banking considerably on this committee's investigation to shed light on this whole affair.
Therefore, I would like to move the following motion: that each party be allowed 15 minutes to ask questions, given the fact that Mr. Gagliano has shown himself to be quite available and could be invited to testify again before the committee at a later date. In my opinion, 15 minutes would give us time to question Mr. Gagliano more thoroughly and in turn, allow him time to provide more thorough answers. In the process, everyone would be satisfied and real light would be shed on this matter. I so move, Mr. Chairman.
[English]
The Chair: Okay. Thank you very much, Mr. Gauthier.
Before we deal with that issue, I'm going to wrap up any particular questions to Mr. Walsh.
Mr. Toews, did you have a question for Mr. Walsh?
Mr. Vic Toews (Provencher, CPC): I only want to make a comment.
I want to thank Mr. Walsh for clarifying the role of this committee. I think that in the media there have been some conflicting views as to exactly what the role of this committee is. It's clear that we're not a criminal inquiry; we're not a civil judicial inquiry.
At the same time, I too am frustrated. It feels a lot, Mr. Chair, like trying to play pin the tail on the donkey while being blindfolded. You're spun around here, and unless you actually hit the tail right in the proper place, you don't get a response.
The comment Mr. Walsh made, that the witnesses are under a positive obligation to come forward with evidence, is absolutely crucial. This committee, Mr. Chair, is entitled to make adverse inferences against witnesses who fail to disclose what in fact occurred while they were engaged in the public business.
I want to express my appreciation to Mr. Walsh for clarifying that comment. For example, yesterday the entire Conservative side, four members, had a total of 32 minutes. In this kind of trial in a civil matter, you would have hours and hours and hours.
It's a very difficult process. If the witnesses aren't forthcoming, the work of this committee is lost.
Thank you.
¿ (0920)
The Chair: Thank you very much, Mr. Toews.
Madam Jennings.
Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): I'd only like to say that I do appreciate the comments that Maître Walsh has provided this committee. I think it's very important that all members of the committee do in fact have foremost in their minds that, as Mr. Walsh said, we are not triers of fact. We are here--and our mandate is very clear. Our mandate is to Parliament in order to report on ministerial responsibility, as it is now defined and has been for decades, and whether or not that definition has served Parliament and has served the Canadian people well.
The witnesses who come before us, whether they be current ministers, former ministers, current deputy ministers, former deputy ministers, and so on, as Mr. Walsh said, have a positive obligation to provide us with all information. They also have an obligation, may I say, that when any member asks a question, any ordinary, reasonable, thinking Canadian knows what the object of that question is if it is framed in clear, plain language. Therefore, if it's missing one word or one date, it is incumbent on the witness to answer fully. That witness is as intelligent as the average Canadian and knows where the member who is asking the question is going.
Therefore, to use the expression of Mr. Toews, don't force us to be blindfolded with a pin in our hands trying to hit the pinata, or a bat in our hands trying to hit the pinata. Everybody knows that the pinata is there; everybody knows that the bat is there. The object of the bat is to hit the pinata.
You know that. Give us the answers, please. If you don't know, say straightforwardl, “I do not know” or say, “It may be, but honestly I do not recall.”
My last point, Mr. Chair, is on the issue of ministerial responsibility. As I said, we already know, and I think it has been pretty clearly established, what it is traditionally. I think that with the testimony that we have heard to date, and quite possibly the testimony that we will be hearing shortly in the coming days, we will be in a position to already identify if there are weaknesses, if there are holes in that tradition, and to begin thinking about, collectively, what kind of recommendations we can make to change that.
The Chair: Thank you very much, Madam Jennings.
On a point of order, Ms. Wasylycia-Leis.
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): I have a point of order. I appreciate the discussion, and I'm glad Mr. Walsh brought this forward, but we are losing valuable time with an important witness. Could we please proceed, Mr. Chair?
The Chair: We will get to the witnesses when we can. We can call them back if we want.
I think this is an important discussion. I will ask our clerk to put together a synopsis of Mr. Walsh's statement, which will be delivered to all witnesses before they come to this committee so that they know exactly what our thinking is. We expect them, paraphrasing Mr. Walsh, to make a fulsome disclosure before the first question is asked.
Mr. Tonks.
Mr. Alan Tonks (York South—Weston, Lib.): Mr. Chairman, I'm not sure whether we need a bigger tail or a bigger target.
I do think that Mr. Walsh's overview is helpful against what the Auditor General had said. What I was trying to do yesterday was remind the committee in terms of what she had said was the ultimate goal of the committee. I think it helps to remind the committee, along with what Mr. Walsh has said, in terms of guiding our questioning. She had said that it's not just a question of a few rules being broken, that the system would appear to have been designed in such a way as to put commissions in the hands of communications agencies and so on around the processes. I think she is reminding us to attempt to find out whether that was a deliberate action and how the various fail-safe provisions from Treasury Board and so on broke down. I think that's the intent of the questioning, Mr. Chair, and I think Mr. Walsh is reminding us of that.
The Chair: Do we need to belabour this any more, Mr. Desrochers?
[Translation]
Mr. Odina Desrochers (Lotbinière—L'Érable, BQ): No. I would prefer that we consider Mr. Gauthier's motion because I'm anxious to get down to business.
¿ (0925)
[English]
The Chair: So we're finished with Mr. Walsh.
[Translation]
Mr. Odina Desrochers: This is another fine example of wasting time by...
[English]
The Chair: Just let the chair do his job.
Mr. Gauthier asked that there be 15-minute rounds, rather than the eight-minute rounds that we agreed to yesterday, in order to be able to fully ask the questions. A number of people didn't get a chance to speak at all yesterday. Mr. O'Reilly didn't get a chance to speak. That was with an eight-minute round. So keep that in mind when you're talking about Mr. Gauthier's proposal.
We'll have two or three interventions, and then I'm going to see what the consensus of the committee is.
Ms. Jennings.
Mrs. Marlene Jennings: It's an interesting suggestion. Mr. Toews says that at the end of the day the Conservative Party had 32 minutes, the Bloc had 32 minutes, and the NDP had 32 minutes or close to that. However, when one adds up the amount of time the Liberals had, it does not equal the total amount that the opposition had. I would be in favour if the opposition were in agreement that the rota would be Conservative, Liberal, Bloc, Liberal, NDP, Liberal, Conservative, and Liberal. At the end of the day, the total amount of opposition would equal the total amount of Liberal members. Members would be able to share their 15 minutes if they so wished, to ensure that the members on their side got a chance to ask questions. I don't see why the opposition would not be in agreement.
The Chair: This is a debate I would rather have in the steering committee.
Because the public accounts committee is a committee of accountability--
Mr. Michel Gauthier: No, no, no.
The Chair: Mr. Gauthier, would you let the chair speak. I'm getting frustrated.
I said I would rather have this debate in the steering committee.
This is a committee of accountability. It's not a policy committee, like the other committees. The other committees normally have one government member, one opposition, back and forth, and back and forth. This is the accountability committee, and the opposition parties therefore have been given over many years an extra opportunity to ask questions. That is why when you add up the minutes for the government side and the opposition side, it isn't always equal.
Before we get into any heated discussion, I'm just going to say that we'll continue on the way we were, eight minutes, and that is it.
[Translation]
Mr. Odina Desrochers: Notice of motion has been given.
Mr. Michel Gauthier: On a point of order, Mr. Chairman.
Mrs. Marlene Jennings: They're using up time. They accuse us of wasting their time, when now, they're the ones who are wasting time.
Mr. Michel Gauthier: Mr. Chairman, do I have the floor on a point of order?
[English]
The Chair: Mr. Gauthier--
[Translation]
Mr. Michel Gauthier: Mr. Chairman, it's unfortunate...
[English]
The Chair: --before you speak, I will speak.
I said this is a committee of accountability, not a committee of partisan politics. There are more issues for us collectively to investigate rather than one party's position versus another party's position. I'm not interested in allowing this to become a partisan committee that's divided between opposition and government. I will not have that.
If this country is to be served by this committee, it is because we are after the facts, nothing else, and I will not take this kind of intervention so that we divide down partisan lines. So I'm just going to move on.
Mr. MacKay, you have the floor for eight minutes.
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, CPC): Thank you, Mr. Chair.
Mr. Gagliano and Mr. Fournier, welcome back.
Mr. Gagliano, yesterday you spoke of irregular contact with Charles Guité. You indicated that you met with him a couple of times annually.
Did you speak to him on the phone? Did you communicate with him through other individuals? Did you meet with him on a much more regular basis, as was suggested by others, as much as weekly, through any form of communication?
Hon. Alfonso Gagliano (As Individual): Mr. Chairman, what I said yesterday is according to my recollection. I want to state the fact that I didn't consult my agenda at the time, because I don't have that document in my possession. Therefore, I went from recollection and said it was an average of three or four times a year.
I also said yesterday that Mr. Guité would call for an appointment to see me. I don't recall asking Mr. Guité to see me. That's my recollection--and here again, I'm going by recollection. I don't have my agenda for support, where I can count the times I met--
¿ (0930)
Mr. Peter MacKay: Mr. Gagliano, with respect, that's not my question.
My question is, did you meet or take phone calls from Mr. Guité on a much more regular basis than these face-to-face meetings?
Hon. Alfonso Gagliano: No. During my time, I could have maybe received one or two calls from him, but I wasn't taking regular calls from Mr. Guité.
Mr. Peter MacKay: Did he meet with your staff on a regular basis?
Hon. Alfonso Gagliano: I, as a minister, and my staff would receive representation from members of Parliament, mayors, event organizers--
Mr. Peter MacKay: I'm talking about Mr. Guité.
Hon. Alfonso Gagliano: Let me explain what the relationship was between Mr. Guité and my office.
We were receiving representations in terms of events, to advance their cause. Our role was, as a minister...as a member of Parliament receives representation from their constituency, brings it to the minister, and the minister would transfer those representations to the bureaucrats. Mr. Guité being the director executive of the program, my office would communicate with Mr. Guité.
Mr. Peter MacKay: So it's possible that Mr. Guité met on a more regular basis with your staff than he did with you. Would you agree with that?
Hon. Alfonso Gagliano: Yes, it's possible.
Mr. Peter MacKay: Mr. Gagliano, did you meet with a Claude Boulay, owner of Groupe Everest?
Hon. Alfonso Gagliano: I met with Mr. Boulay and Mr. Guité once in my office at the Centre Block.
Mr. Peter MacKay: One time only?
Hon. Alfonso Gagliano: Yes, Mr. Guité and my executive assistant were present.
Mr. Boulay was responsible for the Attractions Canada project. That project was up for renewal a few months after, and he came to present to me the work of the project. Specifically, he presented to me that summer the campaign he had with Tim Hortons, I remember, where the Tim Hortons places would have table mats with questions about the history of Canada, and so on.
Mr. Peter MacKay: Who was the executive assistant present for that meeting?
Hon. Alfonso Gagliano: I had only two executive assistants, as the Minister of Public Works; therefore, it would be--I don't remember the exact date, which year--either Mr. Pierre Tremblay or Mr. Jean-Marc Bard, one of the two.
Mr. Peter MacKay: At that meeting with Mr. Boulay, the one time that you met at your office, did you have any discussions over sponsorship funding?
Hon. Alfonso Gagliano: No. He was just coming to brief me and to present this project. Definitely, like I said, this project would be coming up for renewal two months from that meeting, so he was making the pitch that the project was very good and was serving the objective of the program, where people would go for coffee and doughnuts at Tim Hortons, a very popular coffee shop, and would read about Canada's history, and so on.
Mr. Peter MacKay: Did you ever meet with a Jean Lafleur of Lafleur Communication?
Hon. Alfonso Gagliano: On sponsorship issues?
Mr. Peter MacKay: Yes, on sponsorship issues.
Hon. Alfonso Gagliano: No, and the chairman has asked me this question. Mr. Jean Lafleur was part of an official trip that I did in Italy, I believe in 1999, and I met him then.
Mr. Peter MacKay: That's the only time you ever had any contact with Mr. Jean Lafleur? The only time was that trip to Italy.
Hon. Alfonso Gagliano: Yes.
Mr. Peter MacKay: Did you ever meet with a Jean Brault, owner of Groupaction?
Hon. Alfonso Gagliano: Yes, twice. Again, with Mr. Chuck Guité, and I believe--and I'm not sure if it was in both meetings or in one meeting--with the presence of Madame Myriam Bédard.
The first time he came with Chuck Guité to present me the ads video for the Nagano Olympic Games, and the second time he came--and at that meeting I'm sure that Madame Bédard was present with Mr. Brault--they came to present me and Chuck Guité a project where they would have video cassettes for elementary or high school students talking about the importance of sports so they could stay away from drugs, so--
¿ (0935)
Mr. Peter MacKay: So Mr. Gagliano, just so I'm clear, to recap your evidence, you admit to meeting with Claude Boulay on one occasion, Jean Brault twice, and Jean Lafleur on one occasion--
Hon. Alfonso Gagliano: Yes.
Mr. Peter MacKay: --and at no time did you discuss sponsorship programs with any of those individuals, or their officials?
Hon. Alfonso Gagliano: Except those projects they went to see me about.
Mr. Peter MacKay: And these meetings were at your office?
Hon. Alfonso Gagliano: Yes.
Mr. Peter MacKay: And you never met with any of those three individuals elsewhere at any other time?
Hon. Alfonso Gagliano: I must have met them at official events, social events or, for example, in the riding where there were fundraising activities. I would be the speaker, so I would say hello, shake hands, but we never discussed sponsorship--
Mr. Peter MacKay: But you never discussed sponsorship at any time.
Mr. Gagliano, you said yesterday in your testimony, your presentation, “A minister does not run his department. He has neither the time nor the freedom to do so.”
I want to refer you, sir, to a response that you gave in the House of Commons on May 14 in reference to these sponsorship programs. You said at that time:
| Mr. Speaker, I repeat that all those contracts and the contract that the hon. member makes reference to are given in a competitive process. If the hon. member is ready, my officials are ready to give him a briefing on how we do procurement for communications contracts, which might be a little bit different from the others, but that is the system that everybody uses. |
What did you mean by that?
And I want to refer to one other response to a question that you gave in the House of Commons on the procurement contracts for the helicopters, and you were public works minister at that time and that fell under your purview. Again, it was a question about awarding of contracts. You said, in reference to this, “Mr. Speaker, I always give directions to my deputy. I have been doing it since I have been a minister and I will continue to do so.”
Those statements that you gave in the House of Commons seem contradictory to the evidence that you gave yesterday. You said that you didn't give direction to your deputy ministers or those under you, that you didn't have the ability to control your department.
You also made reference to a very specific issue of how contracts were awarded, and I wanted to give you the opportunity to explain those contradictions to the committee.
Hon. Alfonso Gagliano: On the last answer, I assume you're quoting from Hansard, and--
Mr. Peter MacKay: Yes, I am.
Hon. Alfonso Gagliano: --I don't know what the question was. But let me say that when you say this contradicts my testimony, definitely yesterday in my testimony I said that once I learned about it, I first of all asked for the internal audit in 2000, and therefore I directed my deputy minister....
Secondly, when I found in that audit that there were serious administrative problems, I directed them to give me a plan of action. I directed them to have a new competition for the communication agency. I directed my deputy minister and directed the executive director of the Canada Information Office to meet and start negotiations so that it could be transferred--all the CCSB, all the branch of the coordination and communication service--to another department, so that would be--
Mr. Peter MacKay: So you're telling us today you were a very active minister.
Hon. Alfonso Gagliano: When I was informed that there were problems--and this is what I said yesterday if you go back to my statement--I took action. But when I didn't know there was a problem I was powerless, because--
The Chair: Thank you, Mr. Gagliano.
Before we move on--
Hon. Alfonso Gagliano: Mr. Chair, there was another question. Sorry, I'm in your hands.
The Chair: Before we move on, I omitted to say that the blues from all day yesterday are now available and the clerk is now distributing them.
Also, yesterday, remember we made mention to guidelines for ministers. The 2003 edition is available in both official languages and we have made a request for the previous editions, and when they are available they will be distributed and tabled.
[Translation]
You have eight minutes, Mr. Gauthier.
Mr. Michel Gauthier: Thank you, Mr. Chairman.
Good morning, Mr. Gagliano. I listened to your testimony yesterday. At one point, you stated that you had met with officials from the Everest Group as well as from Groupaction prior to the 1997 campaign and that you had invited them to join a consortium of advertising agencies. Is that correct?
Hon. Alfonso Gagliano: Yes.
Mr. Michel Gauthier: Can you tell me, Mr. Gagliano, whether these agencies did in fact get involved in planning the campaign?
¿ (0940)
Hon. Alfonso Gagliano: Yes, they did.
Mr. Michel Gauthier: Was it at this time, Mr. Gagliano, that you were seen, according to some reports, in the presence of Groupaction officials?
Hon. Alfonso Gagliano: Yes, I entered their offices by the back door.
Mr. Michel Gauthier: I see. Did your visit coincide with the time campaign preparations were being made?
Hon. Alfonso Gagliano: Yes, I recall stopping by the offices of Groupaction and Groupe Everest. You're familiar with Sherbrooke Street.
Mr. Michel Gauthier: Indeed I am.
Hon. Alfonso Gagliano: When you arrive by car, you use the rear entrance of the building.
Mr. Michel Gauthier: I know all about that. Thank you.
Mr. Gagliano, regarding the famous Groupaction report that was commissioned once, completed, commissioned a second time and then a third time, without ever being submitted, were you in fact aware that such a report had been commissioned from Groupaction?
Hon. Alfonso Gagliano: No, I was not aware that this report had been commissioned. I first learned about this...In fact I was questioned in the House about one of these reports. I was unaware that two more reports had been commissioned. Of course, after I left office, I read about them in the newspapers.
Mr. Michel Gauthier: I see. So then...
Hon. Alfonso Gagliano: I never ordered these reports.
I'd like to take a minute to explain the delegation of powers by a minister. When I arrived at the department, there was some discussion of this process. My deputy minister gave me a delegation of powers form whereby I assigned all signing authority to the deputy minister. My reaction was to ask them what role I played in all of this. I said that if they signed off on everything, they didn't need a minister.
Finally, after several weeks of negotiation between my office and the deputy minister's office, it was agreed that I would have signing authority in the case of all contracts valued at between $10 and $20 million. However, contracts valued at $20 million and over would still need to be approved by Treasury Board. I would be responsible for reviewing them and signing off on them. In the case of contracts of under $10 million, authority would be delegated to the deputy minister who in turn, could delegate authority to the ADM.
I think it's very important, when discussing ministerial responsibility, to take into consideration how authority is delegated.
Mr. Michel Gauthier: Mr. Gagliano, the famous reports in question were likely ordered by Mr. Guité and authorized by your deputy minister. Is that correct?
Hon. Alfonso Gagliano: If my deputy minister was unaware of what was happening, then I was unaware as well. Pursuant to the delegation of authority arrangement, Mr. Guité had sufficient authority to order these reports himself.
Mr. Michel Gauthier: To order these reports.
Hon. Alfonso Gagliano: In so far as the $500,000 report is concerned, the Executive Director definitely...
Mr. Michel Gauthier: He is not...
[English]
The Chair: If I can interrupt, and I do apologize for interrupting, but I would like to read to Mr. Gagliano, our witness, again for the edification of the entire committee, from the Department of Public Works and Government Services Act, the powers, duties, and functions of the minister. It is number 6:
| The powers, duties and functions of the Minister extend to and include all matters over which Parliament has jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada, relating to |
--among other things--
| çççççç | the acquisition and provision of services for departments; |
I will continue by reading subsection 7(1), under exercise of powers. It says:
| ççççç | In exercising the powers or performing the duties or functions assigned to the Minister under this or any other Act of Parliament, the Minister shall |
--among other things--
| çççççç | acquire materiel and services in accordance with any applicable regulations relating to government contracts; |
You may have delegated your authority, Mr. Gagliano, but you're not absolved of the responsibility is the point we are saying. Under the legislation you do have the responsibility even if you delegated it.
Mr. Gauthier, you may continue.
[Translation]
Mr. Michel Gauthier: Mr. Chairman, I intended to broach the subject of ministerial responsibility myself, but I will do so later on. For now, I'll continue with my questions.
Mr. Gagliano, did you not find the following sequence of events rather unusual? Two communication agencies involved in the Liberal Party election campaign in 1997 prepared a report in 1996-1997. This report was commissioned and presented and its authors were paid for the work done. We could discuss the price tag, but that's not the point I'm trying to make. Do you not find it rather odd that Mr. Guité came up with the idea, the year after these agencies worked on your election campaign, to commission another $525,000 report, a report that was never tabled -- it was so unnecessary that it was never tabled or no one noticed -- and to commission yet another report the following year, still from the same agency, a report that once again was so unnecessary that it was never delivered and no one even noticed?
Do you not find it normal, to say the least, for parliamentarians and members of the public to be concerned about the fact that one of the two agencies with ties to the Liberal Party, an agency involved in the election campaign, was paid $500,000 twice to prepare a report that was never tabled? Do you not find it rather odd that Mr. Guité would make such a decision?
¿ (0945)
Hon. Alfonso Gagliano: The curious thing about the whole sponsorship system, and I do hope we'll get to the bottom of things one day...If you look at the date of the reports that were commissioned, you'll see that two of them were, I believe, commissioned before I took over as Minister. As I said, I wasn't aware that these reports had been commissioned. I had no knowledge of that fact. It came to my attention later. If you look at Hansard, you'll see that I was asked questions about this matter in the fall of 2001, when I was still the Minister. By then, I had learned that... Often, ministers are briefed when someone reads something in the newspapers. Ministers are briefed because they must answer questions in the House. That was the case in that particular instance.
Mr. Michel Gauthier: Mr. Gagliano, a great deal seems to have rested on Mr. Guité's shoulders. Fortunately for everyone, he retired in 1999 and was replaced on an interim basis by your chief of staff, the person closest to you. Would you say that during the time Pierre Tremblay was in charge of the program, you were in contact with him more often than you had been with Mr. Guité, since he was one of your closest advisors and had taken part in political discussions and administrative decisions?
Hon. Alfonso Gagliano: I would have to say that I spoke with Mr. Tremblay less often than I had with Mr. Guité, precisely because he was a former member of my staff. Let me explain to you how Mr. Tremblay came to be hired as a public servant. I think it's important for Canadians to know the facts.
Mr. Michel Gauthier: He was hired through the normal process. I'm not questioning that process, Mr. Gagliano.
Hon. Alfonso Gagliano: I just wanted to be clear on that point. If you have any doubts, I can explain the sequence of events to you.
Mr. Michel Gauthier: No, I'm not calling into question how he came to be hired.
Hon. Alfonso Gagliano: Fine then.
Mr. Michel Gauthier: What worries me in particular, Mr. Gagliano, is the list of transactions associated with the infamous sponsorship scandal. After Mr. Tremblay assumed responsibility for the program, the scandals continued. If I had 15 minutes, I could run through the list.
How do you explain the fact that your Chief of Staff, a person who was supposed to protect you politically -- that's the usual job of a chief of staff, I have one myself and that's what he does -- a person who knew how concerned you were about having a program that worked well in accordance with the rules, continued to operate the program in this manner, after leaving your office to take on this job? He was indeed a worthy successor to Mr. Guité. Could he have forgotten your political concerns about ensuring that the program was run properly, particularly since you no longer spoke to him? I'm having some difficulty understanding that all of a sudden, he lost sight of how you wanted the department to operate, that is with a eye to fairness and equity. Once he became a public servant, he immersed himself and apparently, allowed himself to be influenced by Mr. Guité, a person with whom he had no close ties, or so I would imagine.
Hon. Alfonso Gagliano: There's no way for me to know what kind of relationship Mr. Guité and Mr. Tremblay had.
The Chair: You have time for one last brief question.
Hon. Alfonso Gagliano: When Mr. Tremblay applied for a position, it wasn't for the position of Executive Director. However, that position was vacant. He subsequently applied for the job and was hired.
Mr. Michel Gauthier: That wasn't the gist of my question, Mr. Gagliano.
Since he continued to run the program as Mr. Guité had, I have to wonder if he lost sight of your principles and your concern for sound management when he became Executive Director of the program.
Hon. Alfonso Gagliano: It's not for me to say. I think you should put the question to Mr. Tremblay. However, in his 2000 internal audit report, the auditor indicated to me that since taking over the reins of the program, Mr. Tremblay had begun to make some improvements. These changes took time.
The Chair: Thank you very much, Mr. Gauthier.
[English]
Mr. O'Reilly, please, for eight minutes.
Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.): Thank you very much, Mr. Chairman.
This reminds me of the 1997 Auditor General's report and some of the work that went on with public accounts since you became chair. I remember being vice-chair of the committee at that time, and I think it was Mr. Nunziata who tried to take it over. He thought he should be chair. So I congratulate you on your longevity, Mr. Chairman.
I thank Mr. Walsh for his intervention.
I didn't get a chance to ask questions yesterday of the witness, but having read his report and reflected on what went on yesterday, I certainly have some questions--six points, actually.
Of course, accountability is the main issue, and I think it's the main issue of conversation. It's like the weather, you know; when the weather is good we take responsibility for it, and when it's bad we blame the Reform Party. It's the same with employment figures; when employment figures are good the government takes credit, and when they're bad we blame it on somebody else, the economy.
So there's a belief factor here that seems to be missing, and my first question is, how can a minister of the Crown not be responsible for the department? Over and over again we are told that ministers of the Crown are responsible. When things go well they take credit, and when things go bad they blame it on someone else, or it's always someone else.
So that would be my first question, but before you answer it I'm going to go through my six points, and then you can deal with them at your time.
Regarding the word “scandal”, you've used it in your report three or four times. I didn't see the word “scandal” in the Auditor General's report, so I wonder. If you use it in your report, you must believe there is a scandal. So I'd want to know, is this a media word, an opposition word, or something that you've picked up on? I would like to know why you use the word.
My third point is the direction. I want to know, did you give direction on policy? Did you intervene personally in the awarding of contracts?
Fourth, did you talk directly to the ad agency firms, particularly Groupaction--which you've indicated you have? I want to know how you directed them.
Fifth, on page nine, it's interesting that you indicated that there was criminal activity going on and you wanted to call the police, but you were told it was administrative. So I want to know who gave you that advice, and I want to know why you took it and why you didn't take action, why you didn't call the police.
And then I also want your reaction on your satisfaction or disappointment in the fact that there were many things said in the House of Commons, where members are privileged and can say almost anything they want in question period--I didn't go over them, but I did brief on some of them. In their derogatory statements in question period, they've accused you of almost everything but being human, and I think that's what has fed the media frenzy. This has become a media frenzy, driven by the opposition and driven by, obviously, the media, who are enjoying it very much, as you witness by their presence here.
So those are my six points, Mr. Gagliano, and I would ask you to respond to them.
¿ (0950)
Hon. Alfonso Gagliano: I'm going to try. I took them down as fast as I could.
¿ (0955)
Mr. John O'Reilly: I'll remind you.
Hon. Alfonso Gagliano: I'm going to do my best to answer them.
On the responsibility, what I said in my statement yesterday was that as a minister responsible--and I never denied my responsibility as the Minister of Public Works and Government Services--I was trying to explain how far the responsibility went. I think there is a lot of documentation, and I alluded to the Auditor General's report, chapter 2, I think, where she speaks a lot about it. I'm sure this committee and the government will have to have a very interesting debate to redefine how far ministerial responsibility goes.
On the point I tried to make yesterday, when I knew there was a problem I acted immediately. I took action, and the problem was corrected. That was recognized by the Auditor General. I could not take action to fix something that I didn't know was broken. That's what I'm trying to explain to the committee and all Canadians.
In terms of the word “scandal”, frankly, I used that word because that's what everybody is saying. So I used the word you can practically read on the lips of all the members of the media, and on the lips of most or all of the opposition parties. So that's my answer.
In terms of directions I gave, I think I was clear yesterday--yes, directions on policy. The policy was that we had to have timely visibility. We were talking about sports events, festivals--activities that happen in a timely fashion. We were also living in a very competitive environment, because the Government of Quebec of the time didn't want us as the federal government to be anywhere in Quebec. But I only gave policy direction. Yes, we discussed events, but I never got involved in the contracting or management of the agencies--that was the bureaucrats.
On giving directions to agencies, as I said this morning in answering a question, I met the agencies specifically when they came to present or pitch their cases--specific events. I listened and said, “Thank you very much. I'll be definitely talking”. In one case, I even said I didn't think the sponsorship program was for that; there were other programs in Health Canada or Justice that could do that project, and that's it.
On why I didn't call the police, when I heard the interim verbal reports of the internal auditor my first reaction was, “Should I call the police?” The internal auditor said no, there was no evidence of any criminal wrongdoing; it was just a management problem. Therefore I directed him to give me a management plan to correct the problem.
I agree with you I've been called the mastermind of this sponsorship file. I would like to remind everybody that the sponsorship file was created before I was the Minister of Public Works, and the new Treasury Board guidelines to have the procurement and communications services together were put in place in July 1994, when I wasn't even in cabinet.
The Chair: A very brief question, Mr. O'Reilly.
Mr. John O'Reilly: When Minister Boudria inherited that file, I think the only official act he did was open a building on Sparks Street--the Darcy McGee building. Then he was found to have stayed at somebody's cottage and was immediately dismissed.
If it's true that his only sin was to stay over a weekend, I have to ask if you have ever stayed at any of the Irving-cottage types of places, or places that are owned by the people who are involved in the sponsorship program.
Hon. Alfonso Gagliano: No.
As a matter of fact, I have to say that I was invited to Mr. Boulay's 50th birthday, and I declined the invitation because I was the Minister of Public Works and knew that he was doing business with the government. I felt that as a minister, it was not proper to be there.
The Chair: Thank you very much, Mr. O'Reilly.
Mr. Gagliano, you asked how you could have take action when you didn't know. But you were a minister of the Crown, and under responsible government, ministers take responsibility for all actions of all civil servants in their department. I would have thought that when you came here, the first thing you would have done would be to have accepted that responsibility, even though you didn't know what was going on, or you say you didn't know. As a minister of the Crown reporting to Parliament, you had the responsibility to accept that responsibility, which you have not done.
You keep saying, how could I accept responsibility when I didn't know? But under responsible government theory, you had an obligation to come to this committee and accept that responsibility.
Ms. Wasylycia-Leis.
Hon. Alfonso Gagliano: May I answer that, Mr. Chair?
À (1000)
The Chair: Yes.
Hon. Alfonso Gagliano: First of all, with due respect, let me disagree with you.
That responsibility...you speak about it, you release it. It's the Prime Minister who deals with doing that, and usually in a case like this, the Prime Minister might ask the minister to resign as a minister. When this came out in 2002, I was no longer a minister.
Secondly, when I came to this committee, I thought that the committee wanted to know what my role was and what happened to this file, and that's what I've been doing.
The Chair: That's absolutely correct, Mr. Gagliano, and part of that is to come to this committee and accept the responsibility for what happened in your department on your watch as a minister of the Crown, and you had that obligation to say that to this committee.
Ms. Wasylycia-Leis, for eight minutes, please.
Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
Let me ask some questions pertaining to developments that fell directly in the period when you were Minister of Public Works.
Let me ask some questions to set the stage. You were the Minister of Public Works between June 1997 and January 2002. Correct?
Hon. Alfonso Gagliano: Yes.
Ms. Judy Wasylycia-Leis: Under your direction during that time, you were responsible for the Communications Coordination Services Branch.
Hon. Alfonso Gagliano: Yes, part of the time.
Ms. Judy Wasylycia-Leis: During most of this time you had the Canada Information Office as part of that branch. Correct?
Hon. Alfonso Gagliano: The communication information office is a totally separate department.
Ms. Judy Wasylycia-Leis: But the Canada Information Office became a part of your department, the Department of Public Works, in June 1998. Correct?
Hon. Alfonso Gagliano: As part of my portfolio, not my department.
Ms. Judy Wasylycia-Leis: Yes, your portfolio. Thank you.
You were the chair of the communications committee of cabinet, and you were assigned as chief political minister for the province of Quebec in your government. Okay.
Let me start by asking you the following. In March 1998, Media IDA Vision, an affiliate of Groupe Everest, owned at the time by Mr. Claude Boulay, the former communications director for the Prime Minister's 1990 leadership bid, was appointed the agency of record for the federal government. That was, I think, the process that culminated in March 1998, with the contract being signed on April 1, 1998. Over the next five years, $435 million in government advertising was placed through that agency, making it one of the, if not the, most lucrative advertising contracts in Canada. You will know from your reading of the Auditor General's report that she has found numerous irregularities in the awarding of that contract.
So I want to ask you, given that this is the most important advertising contract that your department and you, as a minister, would issue during your tenure, can you tell me what criteria were used by your department in selecting Media IDA Vision?
Hon. Alfonso Gagliano: First of all, let me say that I learned that the Media IDA Vision agency was chosen as, what is called in the language used here in Ottawa, the “agency of record” by the media. I was definitely surprised that on such an important contract, I was not briefed as minister.
I asked questions, and I was told then by Mr. Guité that it was a competitive bid; that there was a selection committee; that members of the committee came from the industry and other departments; that he had chaired that selection committee himself; and that the selection was regular and normal.
So I got answers to my questions, and then, like I said, this was before the spring of 2000. I had no reason for doubting his word or briefing.
Ms. Judy Wasylycia-Leis: The selection committee for this contract included members of your department. Was there no communication between you and members of your department over whom you have responsibility?
Hon. Alfonso Gagliano: No. I was told that this competition was handled by CCSB. According to the Treasury Board guidelines, they had that authority. The competition rules were applied, and it was put on the--
Ms. Judy Wasylycia-Leis: This was a process under you as minister. It involved employees of your department, and your department oversaw the selection process. You knew nothing, and you found out about it through the media.
Hon. Alfonso Gagliano: Yes. Right after that I asked questions, and I got the report, as I just told you, that this was done competitively, and the selection--
À (1005)
Ms. Judy Wasylycia-Leis: You asked questions. Then in 2000 there was the audit, which verified that the irregularities were occurring. It's a strongly worded report saying that the process did not meet the requirements of Treasury Board policies and government contracts. That's in the year 2000.
Hon. Alfonso Gagliano: That's after.
Ms. Judy Wasylycia-Leis: Right. You did nothing to change the process. The contract continued. You would have begun the extension of the contract for Groupe Everest, or Media IDA Vision, during your tenure as minister even though you knew of these concerns. You say that you wanted this audit done. The audit points out the irregularities, and you still did nothing. It went on. To this day, Groupe Everest, or Media IDA Vision, still has this contract, which is the most lucrative contract in the Government of Canada.
Hon. Alfonso Gagliano: Let me answer that question. I did something, because, definitely, my intention was, like the other agencies, to have that contract put out for competition again. I was told that even though the internal audit was critical of the way the selection was done, legally it was not necessarily enough to cancel that contract and go to competition and risk a lawsuit that would cost more money. Again, I acted under those recommendations that I received from officials.
Ms. Judy Wasylycia-Leis: You're the minister. You're the chair of the cabinet committee dealing with communications, where this whole contract and the irregularities would have been discussed. But your hands were tied. You could do nothing. You can't explain how so many irregularities would have happened while you were minister because it was out of your hands. You can't explain that.
Hon. Alfonso Gagliano: I explained. There was an internal audit report. When it came to the question of another competition, I got the information that legally we could have been damaged, and therefore the recommendation was that we continue. As you said, the present government has continued it because there is a question of a legally binding contract even though, as the auditor said, the policy was not implemented to the letter.
Ms. Judy Wasylycia-Leis: During your tenure as minister, what percentage of overall government advertising money was given to Groupaction, Groupe Everest, Gosselin, Lafleur, and other Quebec-based agencies mentioned by the attorney general? As minister and chair of the cabinet committee on communications, were you not aware that a disproportionate amount of federal government advertising was going to Quebec-based agencies, particularly those mentioned in the AG report?
Of those agencies, how many played a part in the advertising consortium that handled the Liberal Party advertising during the 1997 and 2000 elections? Could you tell us whether or not any of these agencies or associates of these agencies contributed funds or services of any kind to your own election campaigns in 1997 and 2000?
Hon. Alfonso Gagliano: There are two things, Mr. Chairman. I'm going to try to answer them in order. First of all, I was briefed that in the 1994 Treasury Board guidelines there was a provision that no communication agency should receive more than 25% of the advertising business from the Government of Canada. I only learned in the internal audit that one or two of those agencies had surpassed that 25% ceiling.
Others were invited to the consortium, but only two agencies accepted: Groupaction and Groupe Everest.
Did they contribute directly to my own campaign? I couldn't find a copy of my 1997 election return for my riding. I have a copy of the 2000 electoral report, and I didn't see any contributions from any communications agency to my re-election campaign in 2000. I couldn't put my hands on the report for 1997.
À (1010)
The Chair: So that is not a specific statement that there was no contribution to your campaign?
Hon. Alfonso Gagliano: I checked in 2000--
The Chair: But for 1997?
Hon. Alfonso Gagliano: I don't know. I still have to put my hands on the election records.
The Chair: I want to get back to this ministerial responsibility, and I'm still frustrated, Mr. Gagliano. Yesterday you said in your opening statement that “A minister does not run his department. He has neither the time nor the freedom to do so.”
I just quoted from the Department of Public Works and Government Services Act. Are you familiar with your responsibilities as a minister under the Department of Public Works and Government Services Act?
Hon. Alfonso Gagliano: Yes.
The Chair: Now, I understand that when a minister is appointed, he or she receives a letter from the Prime Minister that is sometimes, I believe, called an “instrument of advice”. Did you receive such a letter from the Prime Minister?
Hon. Alfonso Gagliano: Yes, and I mentioned yesterday in my opening statement that in that letter it stated my deputy minister was the principal adviser of me as a minister and I should work diligently and very closely with him. That's what I meant yesterday in my statement.
The Chair: You will note, of course, he's an adviser; he doesn't take responsibility. Is it possible for us to get a copy of that letter?
Hon. Alfonso Gagliano: It could be in the department. There is a ministerial correspondence section in the Department of Public Works; all my files remain there. But this letter was, I believe, drafted by PCO, so PCO must have a copy.
The Chair: We'll pass a motion next week asking for a copy of that letter.
Mr. Kenney, please, for eight minutes.
Ms. Judy Wasylycia-Leis: On a point of order, I didn't get answers to a couple of these questions. If I could, through you, I would request that we get answers from the witness pertaining to which of these agencies I referred to played a part in the advertising consortium that handled the Liberal Party advertising in 1997--
Hon. Alfonso Gagliano: I answered: Everest and Groupaction. I answered that.
The Chair: He says he gave us his answer, and if it was not a fulsome answer.... We've been talking about a lack of fulsome answers, but the answer will stand at this point in time until we find--
Hon. Alfonso Gagliano: Mr. Chairman, I gave the answer and I'm willing to repeat it. They were Everest and Groupaction; those were the two agencies.
The Chair: As I say, that's his answer.
Mr. Toews.
Mr. Vic Toews: On the same point of order, for all of those questions, I found the answer remarkably short. I'm wondering whether this witness should be given the opportunity to consider everything that was put to him and to see whether or not he has additional information he can share with this committee, bringing it forward in writing to this committee, Mr. Chair.
Second, I would also like to see the returns on the election contributions for both 1997 and 2000. These issues have been directly brought up in the testimony here today, and I think that we should be able to examine those.
The Chair: In response to the first point Mr. Toews and Ms. Wasylycia-Leis raised, I'll point out that the witness--every witness and this particular witness--always has the opportunity to review the blues and to provide further information to this committee if they feel that is warranted.
As to your point on the donations to the 1997 and 2000 election campaigns, it is a matter of public record. The clerks will get it and deliver it to the committee.
Mr. Tonks.
Mr. Alan Tonks: Could we use this as an illustration, just getting back to what Mr. Walsh said in relation to this committee's role? May I ask, Mr. Walsh, is what Mr. Toews asked for relevant with respect to the overview you gave us? I think we should, in terms of ministerial responsibility...the point being, whether it's on the website or not, whether it's relevant for that information that was required with respect to contributions.
The Chair: Mr. Walsh is free to answer, but I do know and it is a matter of public knowledge that the RCMP is investigating the Liberal Party in the province of Quebec as part of this investigation. But if you're talking to Mr. Walsh about Mr. Toews' concept that we're not getting the fulsome answers....
Don't feel you're obligated to respond, Mr. Walsh, but if you have something to say, feel free.
À (1015)
Mr. Rob Walsh: I feel I should point out to the member, Mr. Chair, that the question of relevancy, often a vexing one, is not one for legal counsel to determine but one for this committee in its own good judgment to determine.
The Chair: So we're not going to belabour that point.
We're going to move to Mr. Kenney for eight minutes.
Mr. Jason Kenney (Calgary Southeast, CPC): Thank you, Mr.Chairman.
Yesterday, Mr. Gagliano, you testified to the following, that once Mr. Guité was gone from the department, “rumours started and we had a problem. So that really made me decide to call for an internal audit and find out what was there.”
What was the nature of these rumours? From whom did you hear such rumours?
Hon. Alfonso Gagliano: From memory, and again subject to verification--I think there were even questions in the House of Commons--this was part of my decision. But as I explained yesterday, there was also the fact that we were having some problems of control of files in human resources. After discussing with my deputy minister that even though sponsorship was a communications service and not a grant, a contribution, we went ahead with an internal audit.
Mr. Jason Kenney: Apparently the witness didn't hear my question, so let me repeat it.
What rumours did he hear, and from whom did he hear such rumours?
Hon. Alfonso Gagliano: I said I believe--and you can verify better than me through the records--there were--
Mr. Jason Kenney: I can't verify what rumours the witness heard, Mr. Chairman.
Hon. Alfonso Gagliano: I cannot exactly recall what happened five or six years ago.
Mr. Jason Kenney: Yesterday you spoke about rumours. What rumours--
Hon. Alfonso Gagliano: I believe there were questions in the House. If you ask questions, that means you have a.... So for me it was a concern.
Mr. Jason Kenney: I see. So the rumours were questions being asked by the opposition.
Hon. Alfonso Gagliano: I believe it can be verified.
Mr. Jason Kenney: So the minister first heard about the problems in his department from the opposition, apparently.
Hon. Alfonso Gagliano: Doesn't the opposition have a very important role in our parliamentary system?
Mr. Jason Kenney: This is just unbelievable.
Hon. Alfonso Gagliano: Speaking of unbelievable....
Mr. Jason Kenney: In what I just quoted, the witness said he called for an internal audit. But his former deputy minister, Mr. Quail, told us, “I initiated the internal audit”. Indeed, the 2000 audit says it was conducted at the request of the deputy minister.
So who's telling the truth, the minister or his former deputy? Did the minister request the audit, or did his former deputy initiate it?
Hon. Alfonso Gagliano: Both.
Mr. Jason Kenney: I see.
Hon. Alfonso Gagliano: Yes. The deputy minister went to the internal audit committee in the department and said, “Well, even though it's not in the plan, we want to have a audit of the sponsorship program, but I have to discuss it with the minister”.
Mr. Jason Kenney: Yesterday I quoted to the witness the following statement made to us by his former deputy minister, Mr. Quail. He said there was “a very direct relationship between the minister and the Canada Communication CCSB group, and in particular the executive director”. That would be Mr. Guité. I'm having a hard time understanding why a 43-year career public servant, who served as Deputy Minister of Public Works for nine years, would characterize a relationship as being very direct between the minister and Mr. Guité when it only consisted of only three or four meetings a year.
Yesterday, the minister agreed on the record with Mr. Quail's characterization of a very direct relationship. So what am I missing here? Why don't I think two or three meetings a year constitutes a very direct relationship?
Hon. Alfonso Gagliano: As I said again this morning, I recall that on average I would have three to four meetings a year with Mr. Guité. I had regular meetings with my deputy minister at least twice a week, on average, but not with Mr. Guité.
As I said this morning--and I want to make it clear--before coming here I didn't check my 1997, 1998, or 1999 agendas so I could count the number.... I'm going from what I can recall, and to the best of my recollection I believe I met with Mr. Guité, on his request and not mine, about three to four times a year, on average.
Mr. Jason Kenney: We have that on the record.
Again, would the witness agree with his former deputy's characterization of that as being a very direct relationship?
À (1020)
Hon. Alfonso Gagliano: Well, if the deputy minister felt it was a direct relationship--
Mr. Jason Kenney: Yes or no.
Hon. Alfonso Gagliano: Yes, I met with Mr. Guité and had a discussion. If you read the deputy minister's testimony, he said he had the responsibility of meeting with him. He signed the Treasury Board document, so he had to have the information before signing. That's what Mr. Quail said.
Mr. Jason Kenney: One of the key issues here is the difference between merely administrative problems that the minister has referred to and potentially fraudulent activities that have been revealed by the Auditor General.
I'd like to ask the witness the following question. The audit revealed:
| For those invoices which did provide some details on the breakdown of amounts being billed, we concluded the amounts being charged were for products/services more appropriately considered management of the sponsorship (and therefore to be included in the 12% commission fee paid), and not for product/services appropriate to the use of the production budget . |
According to one media summary this meant that:
| advertising firms involved in the sponsorship program sometimes got paid twice for the same services, and topped up their invoices with high levels of labour costs. |
Does the witness think that billing twice through essentially fake invoices constituted a mere administrative problem, or would that not flag for him a potentially fraudulent activity?
Hon. Alfonso Gagliano: Definitely, it is not an administrative problem. If I would have that information, the exact information... I don't know which report you're quoting or whether it's the Auditor General. If it's the Auditor General, she showed me that when she came to see me in Copenhagen.
In the audit of 2000, in my briefing, I was never told that there was double invoicing. What I was told was that there was documentation missing and files were not properly kept.
Mr. Jason Kenney: So the minister would regard that as a very serious revelation.
Hon. Alfonso Gagliano: Definitely.
Mr. Jason Kenney: Mr. Chairman, what I quoted was the 2000 audit. I'd like to know if the minister actually read that audit.
Hon. Alfonso Gagliano: No. As I've been saying, I was given a verbal interim report.
Mr. Jason Kenney: Did the minister read that audit, the 2000 audit?
Hon. Alfonso Gagliano: No, I didn't read that audit. Once I was told that there were problems, my first objective was, when I was told there were no--
Mr. Jason Kenney: Mr. Chairman, the witness has testified that there were merely administrative problems revealed by that audit; therefore, a police investigation was not required. The audit revealed the process of double billing, of false invoices being submitted. Why didn't the minister act on that, Mr. Chairman?
Hon. Alfonso Gagliano: Mr. Chairman, I beg to differ with the member. I acted. I didn't read the full audit. I didn't receive the summary. I had a verbal briefing with the deputy minister, with the internal auditor, saying that there was no criminal matter, it was administrative--
Mr. Jason Kenney: Mr. Chairman, the minister was wrong.
My last question--
Hon. Alfonso Gagliano: --and I required a plan of action. That was my interest. When I'm told there is no fraud, why should I not believe my officials?
The Chair: I think, Mr. Gagliano, that you have answered the question.
Mr. Kenney.
Mr. Jason Kenney: My last question is this, Mr. Chairman. Pierre Tremblay and Jean-Marc Bard were the executive assistants to the minister during his tenure. I believe there was also a Pierre Brodeur, who was his special assistant for Quebec.
I would like to know whether the minister ever gave instructions, implicit or explicit, to any of these senior staff members or other senior members of his ministerial staff to communicate directly with Mr. Guité regarding the administration of the program. Is he aware of regular meetings that occurred between Mr. Guité and either Jean-Marc Bard, Pierre Brodeur, or Pierre Tremblay?
Hon. Alfonso Gagliano: The only instruction that I gave to my officials, my staff--whether it would be the three gentlemen that you mention or anybody else--would be when I had representation. I'll give you an example that I think everybody can understand because you're members of the House. Usually right after question period, a member comes and sees you, or gives you a note, or verbally explains that he has received representation from a project. I would take the note, give it to my legislative assistant, and say, “Bring it to the executive assistant to follow up.”
That was my only instruction, really, to make sure that the representation that I received, as a minister on a specific file, was forwarded to the officials in the department.
À (1025)
The Chair: Okay. Before we move to Mr. Gauthier, Mr. Gagliano, again Mr. Kenney asked you specifically about an audit that you say you were given a verbal briefing on, but didn't read, even though you were advised presumably that there was criminal activity of false invoices, and so on, going on. Will you not accept that you, as the minister of the time, have a responsibility to accept the responsibility for what happened in your department and, if you didn't take the time to read serious accusations and an audit, that you were culpable?
Hon. Alfonso Gagliano: At that time, when I received the briefing, this was an interim report.
The Chair: But you were told what was in there.
Hon. Alfonso Gagliano: Right away, in the middle of the audit, as soon as they realized there were problems, they asked to meet me, with the deputy minister and other officials from my office of the department, and gave me a briefing. At that time, when I asked the question about whether I should call the police, they said no, there was no criminal involvement; they believed that it was administrative. I said we should have a plan of action to immediately correct all of the administration.
I've been telling you since yesterday the actions that I took.
The Chair: I know the actions well. I know what you've said about the actions. But my question is, don't you feel that, as a minister of the Crown, you have to accept the responsibility?
Hon. Alfonso Gagliano: I did by taking action.
The Chair: To this committee.
Hon. Alfonso Gagliano: If you would let me finish, I also instructed the internal audit to continue the audit and to audit all the files of the sponsorship program. Later on, I was told that the same problem—meaning an administrative problem—was in the rest of the file.
Therefore, what I'm telling the committee here is that I was told there was no criminal activity. So my concern was to correct the problem. And I gave all of my time and attention so that the plan of action was in place and a follow-up audit, and I transferred the whole service, CCSB, from Public Works to the Canada Information Office, which became Communication Canada, keeping Public Works just for procurement, to separate the two.
I think I take a responsibility for that. I did my duty and my job as a minister.
You as a chair, and the committee, decide where the full responsibility lies. I'm telling you what my involvement was. You'll make the final decision.
The Chair: Well, I think you're just failing absolutely and completely, Mr. Gagliano, because you're not running a proprietorship. This wasn't your own business; this was the public good that you were administering and, as a minister of the crown, you're responsible to Parliament. You're sitting before a parliamentary committee, and you have said to the various members what you did, but you have an obligation, sir, to accept responsibility before this committee and before Parliament for everything that happened in your department. Are you going to do that?
Hon. Alfonso Gagliano: Mr. Chair, you're definitely raising a very legal issue here.
The Chair: It's not a legal issue; it's a parliamentary issue.
Hon. Alfonso Gagliano: Well, it's a parliamentary issue, but I mean, if you're asking me to incriminate myself, I won't do that. Like I said, I'm here before the committee and I am telling the committee.... I'm answering all the questions, and you might not like the answers, but those are my answers. Those are the facts that I know on my involvement, and as a committee you'll make that judgment.
The Chair: Okay.
Mr. Walsh, would you please advise us and the witness about the privilege and his responsibilities before this committee?
Mr. Rob Walsh: Mr. Chairman, the witness used the word “incriminate”. I don't think there's anything in the exchange, either on this occasion or any other occasion, that could be taken as giving rise to a possible incrimination of this or any other witness, insofar as the proceedings of this committee and the testimony provided to it are not available for use in any other proceedings, or in any investigation, whether of a criminal nature or any other nature.
I just wanted to make that clear, if that is of assistance to the committee.
The Chair: Okay.
And do you have any direction to the witness other than what you've just said?
Mr. Rob Walsh: It wouldn't be my place to give any direction to the witness, Mr. Chair.
The Chair: Okay.
Let me ask you again, Mr. Gagliano.
As a minister of the crown responsible to Parliament, you as a minister are responsible for everything that went on in your department whether you knew about it or not. Will you accept responsibility before this committee, before Parliament, for the problems that occurred in your department?
À (1030)
Hon. Alfonso Gagliano: Mr. Chair, I accept the responsibility for my action, and the action is that when I knew what was wrong, I took action. That's my responsibility.
The Chair: As I said this morning, democracy is threatened in this country.
Mr. Toews, you had a point of order.
Mr. Vic Toews: It just related to your questioning. What I didn't quite understand was the issue of responsibility. As I understood it, perhaps it arose out of Mr. Kenney's question dealing with the 2000 audit report.
The Chair: Is this a point of order?
Mr. Vic Toews: Yes.
I'm just seeking this, because I think it is a very important issue. Mr. Kenney has raised the issue of the 2000 audit, a report that the minister indicated he initiated. It's an 18-page report; he didn't read it.
Are you asking him, Mr. Chair, whether he's responsible as a result of this 18-page report that he initiated but didn't read?
The Chair: That's not a point of order, Mr. Toews.
An hon. member: I have a point of order, Mr. Chair.
The Chair: Just a second for me to respond.
Mr. Gagliano, ministers are responsible not just for their own actions but for all actions of their department, and for their omission to do things, as well. I think that Mr. Walsh said earlier this morning that the dog that didn't bark was as much evidence as the one that did, or something to the effect.
You, as a minister, are responsible for your actions and your omissions. Do you accept that responsibility?
Hon. Alfonso Gagliano: Mr. Chairman, I believe in my statement yesterday I talked about ministerial responsibility when they appoint a minister. You answer to the Prime Minister who appoints you, and you answer collectively to Parliament. I believe that when I was minister I exercised my responsibility.
I'm called here as an individual, as a former minister, to come before this committee and tell the committee about the kind of action that I took while I was minister on this file, and I am doing it. I've been doing it since yesterday. Really, I don't understand why you insist on that.
The Chair: Well, perhaps you didn't understand your responsibilities as a minister of the crown.
Mr. Mills, on a point of order.
Mr. Dennis Mills: Mr. Chair, I'm seeking clarification. This is the second time now this morning where you, as chair, have said that democracy is threatened. Could you take a couple of minutes and help me out as to what you mean when you say “democracy is threatened”?
Some hon. members: Oh, oh.
Mr. Dennis Mills: This is quite serious.
The Chair: Mr. Mills has asked a question, and it's a serious question.
Mrs. Marlene Jennings: Yes, but it's not a point of order.
The Chair: Well, it may not be a point of order. He can bring it up as a point of debate, but he has raised the issue.
Let me tell you that I see Parliament's role, Mr. Mills, quite simply. We act on behalf of the Canadian public to hold government accountable. We, Parliament, approve legislation. We debate it in public. The public knows what we're doing and we approve, amend, or decline to give that approval.
We approve the budget and the taxation policies to raise the funds that the government needs to administer the public good. We approve the estimates, the department line-by-line spending, and we debate that in public on behalf of Canadians. We approve and give Parliament, the government, the authority.
Mr. Dennis Mills: I understand that.
The Chair: The government reports to Parliament. Therefore, that is why democracy is threatened, when we're finding the government is not giving us fulsome answers and is giving evasive answers and is avoiding the responsibility to Parliament. That is why I feel democracy is threatened.
That's my opinion.
Mr. Dennis Mills: That's what I thought you were going to say.
The Chair: We will now go to Ms. Longfield for eight minutes.
Mrs. Judi Longfield (Whitby—Ajax): Thank you, Mr. Chairman.
The Chair: Oh, sorry. Monsieur Gauthier, my apologies.
Monsieur Gauthier for eight minutes, then Mrs. Longfield.
[Translation]
Mr. Michel Gauthier: Thank you, Mr. Chairman.
I'd also like to thank my colleague for giving me his allotted time.
I'd like to come back to one point in particular, Mr. Gagliano. When he testified before the committee, former Deputy Minister Quail provided the following explanation of how power was transferred from Mr. Guité to Mr. Tremblay, your former Chief of Staff. He stated that Mr. Guité met with Mr. Tremblay and handed over the files and the reins to him. Mr. Tremblay then took it from there.
How then do you explain the fact that your former Chief of Staff, surely a Liberal Party supporter and a close adviser whose main role was to protect and support you, a person who knew that you had delegated considerable powers and who knew the workings of this branch, did not react initially to the nonsense going on and move to warn the minister of the irregularities that were occurring? How do you explain the fact that instead of doing just that, he continued on with business as usual and approved a large number of sponsorships following the same rules and practices as Mr. Guité?
À (1035)
Hon. Alfonso Gagliano: As I said earlier, Mr. Gauthier, I can't answer that question. Perhaps Mr. Tremblay can. As Minister, I did not concern myself with the transition of power, that is when one official left or retired and another took over. These matters were handled by departmental managers and employees.
I didn't concern myself with the transition as such. All I know, and this I learned from the internal auditor, was that on taking office -- I think mention is made of this somewhere -- Mr. Tremblay proceeded to make some changes to the system for the better.
Mr. Michel Gauthier: Mr. Gagliano, I believe you when you say he made some improvements to the system, but my sense is that he made the system more efficient, in terms of the way he wanted it to work.
Hon. Alfonso Gagliano: I'm not the one who...
Mr. Michel Gauthier: Take, for example, the Groupaction report mentioned earlier. The report was produced and paid for, then commissioned a second time, but never delivered, then paid for again, and so forth. The 1998-1999 report was paid for, but never tabled. Payment was authorized by Mr. Pierre Tremblay who had been on the job since June 1999. I imagine the 1998-1999 report should have been tabled in late 1999.
How do you explain the fact that your Chief of Staff, a Liberal Party member whose job was to protect you, failed to report problems in his branch to you, in this instance, the fact that a report that had been commissioned had not been tabled, that he felt compelled to pay for the report and that what's more, the agency in question had worked on your last election campaign? Doesn't this explanation strain our credulity too much?
Hon. Alfonso Gagliano: As I said, Mr. Gauthier, I was unaware initially that these reports had been commissioned. I was unaware of their existence. I learned about them just as everyone else did.
Mr. Michel Gauthier: That's not what I'm asking, Mr. Gagliano. I'm asking if you're...
Hon. Alfonso Gagliano: You're asking me to pass judgment on Mr. Tremblay. I think he should be the one to answer these questions. I can answer for my actions, but not for the actions of others.
Mr. Michel Gauthier: Mr. Gagliano, when you learned from a report that some glaring irregularities were occurring within CCSB, did it not cross your mind to call your friend, your former adviser and Liberal Party member, someone who protected you for years as your Chief of Staff, and ask him why he had not informed you of these irregularities? Did it not occur to you to ask him why he had paid for a report that had not been delivered and why he went so far as to commission another report, knowing full well that the agency involved had worked on your election campaign? Did it not occur to you to speak to Mr. Tremblay? He worked in your department.
You yourself said that you delegated powers extensively. I would imagine that when someone does that, from time to time, they look at what's happening, particularly when warning bells are sounded.
Hon. Alfonso Gagliano: First of all, Mr. Gauthier, no mention was made in the internal audit report of the Groupaction reports. I've stated repeatedly that I learned from the internal audit that after Mr. Tremblay took over as acting Executive Director, he made improvements in a number of areas. Therefore, I had no reason to ask Mr. Tremblay why he had failed to bring these matters to my attention.
We mustn't lose sight of the fact that Mr. Tremblay was a public servant at the time. Before he took over the job, I ordered him to take three months of leave without pay in order to sever his ties with my office before taking up his duties in the department.
Mr. Michel Gauthier: Your intentions were very noble, Mr. Gagliano, but as Minister, you cannot argue on the one hand that you delegated powers more extensively than anyone else in Canada when you were appointed Minister, that you delegated and closed your eyes, and on the other hand, maintain that you no longer spoke to government officials, even those who were once your political advisers.
Mr. Tremblay, your Chief of Staff, acquitted himself very admirably. He learned the ropes so fast during his brief meeting with Chuck Guité that he commissioned another $575,000 report that was paid for, but never tabled. Mr. Tremblay surely was a quick study if he learned how things worked or could work from his meeting with Chuck Guité.
Let me give you my take on things, Mr. Gagliano. Is it possible that Pierre Tremblay wasn't in the least bit surprised when he took over the reins at CCSB because he knew that was the way things worked and that it was business as usual? There was no need for him to inform his minister because the minister already knew how things worked.
Correct me if I'm wrong, Mr. Gagliano, but that's how I think it went down.
À (1040)
Hon. Alfonso Gagliano: I disagree with you. The Minister was not aware of these things. I learned from the internal audit report, after Mr. Tremblay had been on the job for several months, that he began to take corrective action. Therefore, I had no reason to doubt Mr. Tremblay.
Besides, the entire 37-point action plan was developed by Treasury Board and by Mr. Tremblay. All of the measures were put in place. I transferred departmental services to the Canada Information Office, later Communication Canada. As Minister, as soon as I found out there was a problem, I assumed my responsibilities.
Mr. Michel Gauthier: Quite frankly, Mr. Gagliano, that still doesn't make any sense. Your former Chief of Staff realizes, in the course of a meeting with Chuck Guité, that what's happening is entirely different from what the Minister and his staff believe and that all kinds of irregularities are occurring. He doesn't say a word about this to you, he continues with business as usual, commissions a report and awards $575,000 to an agency that had been involved in the Liberal Party's campaign. Everything is goings swimmingly and he begins to make some improvements when the findings of an internal audit lead to condemnations in the House of Commons and in the press.
Two scenarios are possible, Mr. Gagliano. Either your Chief of Staff pulled a fast one on you the day he left your office, or else you're not telling us the truth. I'm sorry, but there are not that many possible scenarios. No one here is willing to believe that your Chief of Staff tried to pull one over on you. I'm inclined to believe that he continued to run things as he had been accustomed to doing in your office. I think that's what really happened.
Hon. Alfonso Gagliano: Mr. Chairman, I believe I've answered that question repeatedly.
As I said, I found out from the internal audit report that Mr. Tremblay made some changes to the program. He held this position for only a few months, but he was responsible for implementing, along with Treasury Board officials, the action plan appended to the internal audit report.
[English]
The Chair: Merci, Monsieur Gauthier.
Ms. Longfield, please, for eight minutes.
Mrs. Judi Longfield: Thank you, Mr. Chair.
Mr. Gagliano, yesterday, in response to--
Mr. Vic Toews: Mr. Chair, with regard to the matters that were mentioned in respect of the minister's instruments of advice, I would like to read a formal motion to proceed--
The Chair: It's not a point of order to read that at this point in time, Mr. Toews. I'll give you extra time after you have finished your eight minutes. You can read it then.
Mrs. Judi Longfield: And I won't interrupt your eight minutes.
Mr. Vic Toews: That's why I wanted to go before you, so that I didn't interrupt your eight minutes, Ms. Longfield.
The Chair: I don't think we need to have it on the record. We'll just have it distributed in both official languages. That will be sufficient.
Ms. Longfield, please, eight minutes.
Mrs. Judi Longfield: It's starting now. Is that correct?
À (1045)
The Chair: Yes.
Mrs. Judi Longfield: Thank you, Mr. Chair.
Mr. Gagliano, yesterday, in response to my question relating to what supporting documentation you reviewed before you signed off on the Treasury Board submission for additional funds related to the sponsorship program, you replied, “I didn't see the appropriate documentation...”. You went on to say, “...and I assumed that all the paperwork and the documentation that you thought was in the file, but I didn't see it and I didn't ask him for it”. Yet later, in response to Mr. Kenny's question of how did you express your desire to be directly involved in the administration of the sponsorship program, you said, “Well, I would sign for the budget. I would sign the submission for the Treasury Board. I think I would have expected to have some information before signing that Treasury Board submission.” Sir, what information do you think would have been appropriate before signing that Treasury Board submission?
Hon. Alfonso Gagliano: You have to realize that we spent about $40 million a year, and we had demands for at least three times that much. My implication was at the budgetary level, and naturally we had to have a list of events with the total amount of money we were asking for, and that's the discussion I had. In the Treasury Board submission that I signed, which you have a copy of, so you can see this, there is a paragraph that says clearly that all this should be according to the Financial Administration Act and the Treasury Board guideline.
Mrs. Judi Longfield: But normally that would have been conveyed to you through the deputy minister, not through the executive director. This was in response to why you met with Mr. Guité.
Hon. Alfonso Gagliano: In a prior meeting with Mr. Guité, we would agree, after a discussion, on a list of events that would be presented to the Treasury Board. Then I would inform my deputy minister that I had a discussion with Mr. Guité. Mr. Guité would go and see the deputy minister. The deputy minister would prepare, with Mr. Guité or someone else in the department, a submission for Treasury Board, and then that submission would come to me for signature. Yesterday I said very clearly that I never signed a Treasury Board submission without the recommendation of my deputy minister.
Mrs. Judi Longfield: In testimony yesterday, the Auditor General stated that there was a lot of authority vested in the executive director, Mr. Guité. Today, in response to a question from Mr. Gauthier, you offered confirmation that you delegated your signing authority for contracts between $500,000 and $10 million to the deputy minister and then further to the executive director, Mr. Guité. In light of this and after the results of the internal audit of 2000, what attempts did you make to speak directly to Mr. Guité, who had been responsible for running the program--I know he wasn't there any more, but you talked to him on a regular basis--and to Mr. Quail, given that there was evidence of gross irregularities, gross mismanagement, and a total disregard for Treasury Board guidelines occurring under your watch by people to whom you had designated signing authority? Did you not phone some of these people and say, “What in the hell were you guys up to? You hung me out to dry here. You made these submissions. I trusted you, and I assumed that you'd have this documentation there.” Did you get on the phone and say, “What were you doing? How could you have done this?”
Hon. Alfonso Gagliano: Let me first clarify on the delegation of power or authority, because it seems that this was exceptional. That type of delegation of power is if you go through the departments, because if the minister has to sign all the documents, then the contract naturally would slow down so much, and already Canadians complain about the bureaucracy. So that was regular in the sense that I was signing contracts of up to $10 million--
Mrs. Judi Longfield: I'm not suggesting that it was irregular to delegate authority. I'm just saying that when they obviously misuse that authority--
Hon. Alfonso Gagliano: Once Mr. Guité left the department, I never saw him. I never had contact with him.
Mrs. Judi Longfield: Okay.
Mr. Gagliano, do you understand that most Canadians believe that in your capacity as a minister of the crown, if you affix your signature to a budget submission to Treasury Board, then by virtue of that signature you are ultimately responsible for the authenticity and the completeness of that submission, and that all specific projects flowing from that submission are compliant with Treasury Board guidelines and operate within the Financial Administration Act? Doesn't the buck stop somewhere?
Is the minister of the crown operating on the principle of “Hear no evil, see no evil, speak no evil”, or “Don't ask, don't tell”? Is that what Canadians expect?
Hon. Alfonso Gagliano: When a minister is told something and finds out that something is wrong in his department, his responsibility is to fix it. If he doesn't fix it, then it is clear that he is not acting properly, is not taking his responsibility. In this case, I took my responsibility and I fixed the thing.
À (1050)
Mrs. Judi Longfield: Given that you say that once you knew about it you proceeded to try to fix it, what advice would you give to ministers of the crown now in terms of exercising their authority or their supervisory role over their department? Is there something the matter with the letters of mandate?
Given what you're going through now, what you see happening, would you not say to someone, “You're the minister, and you'd damn well better know what's going on, because this is what's going to happen if you don't”?
Hon. Alfonso Gagliano: Well, if I had a position of giving advice, looking back on my experience, the first thing I would recommend is that there be mandatory annual audits and that the audits be from the Treasury Board office, not the department office.
Secondly, I would ask that there be a mandatory rotation system. The bureaucrats stay 10 or 15 years in the same position, and that's not healthy in terms of management control. If you look at another example, the diplomatic corps, every four years, no matter what their level in the foreign service, they have to move on. So that creates a certain transparency and follow-up, added with internal annual audits.
The Chair: Ms. Longfield, your next question.
Mrs. Judi Longfield: Part of the reason that bureaucrats stay for as long as they do is to give some sort of corporate memory. So do you attach any importance to a body of people having that kind of memory? Is it supposed to be that every year everybody relearns the job?
Hon. Alfonso Gagliano: I don't say every year. We're talking here four years, or a maximum of five years, in terms of a corporate memory. They should be, with the annual audits, applying the procedure. There will be details of record.
Mrs. Judi Longfield: Should it change, then, with every new minister? So when a new minister comes in, with that new minister comes a new set of--
Hon. Alfonso Gagliano: No, I'm not saying that, because then we would link it to a political system. For example, the foreign affairs service is not linked to the government or the minister that changes. You get a posting for four years. You are entitled to ask for an extra year, which most of the time is not granted, and you move on to another post. That's the permanence of the system. So the person who is leaving knows that when he's leaving, he'd better leave his papers in order, because somebody else will--
The Chair: Okay, thank you very much, Mr. Gagliano.
Thank you very much, Ms. Longfield.
[Translation]
You have the floor for eight minutes, Ms. Jennings.
Mrs. Marlene Jennings: Thank you, Mr. Chairman.
Thank you very much for testifying here today and for shedding light on certain matters.
Questions have been put to you concerning the verbal interim report on the internal audit of the Sponsorship Program that you either ordered or approved on the advice of your deputy minister. You claim that when you received this verbal interim report, your initial reaction was to ask if you should apprise the RCMP of the fact so that it could launch a criminal investigation, but that your deputy minister and other officials -- and possibly members of your staff -- who were in attendance advised you that such action wasn't necessary because the problems were of an administrative, not criminal, nature.
The following is noted on page 45, paragraph A.4 of Governing Responsibly: A Guide for Ministers and Ministers of State under the heading “Ministers and the Law”:
| All government activity must take place in accordance with the law. Ministers having any doubts on the legality of a particular action should ask their deputy minister |
which you did
| and obtain the view of the Department of Justice. |
If I understand correctly, despite the advice of your deputy minister, at no time did you seek the view of the Justice Department. Your deputy minister never said to you that while it was generally felt that these were merely administrative problems, it might be wise to turn the file over to the police who, given their expertise, would be able to determine if any criminal acts had been committed. Is that correct?
À (1055)
Hon. Alfonso Gagliano: I obtained the view of the internal auditor, which was supported by the deputy minister, whereby no criminal action was involved. I can't recall and I don't know which document you're quoting. I imagine it's the one signed in December 2003 by the new government. Moreover, I don't recall that provisions were in place whereby I should have sought the view of the Justice Minister. I did not obtain the minister's view. I received advice from the auditor.
Mrs. Marlene Jennings: We've already asked the Privy Council for all of the guides for ministers published since 1993, so as to put the right question to the right person. On page 33 of this guide, in paragraph VI.1 under the heading “Ministers' Offices and Exempt Staff”,the following is noted in the second paragraph, third sentence:
| The exempt staff do not have the authority to give direction to public servants, but they can ask for information or transmit the Minister's instructions, normally through the deputy minister. |
Prior to hearing your testimony here today, we heard from at least one witness that meetings took place daily or weekly between the Sponsorship Program staff -- in particular Mr. Guité, but possibly other members of his immediate entourage -- and the Minister or the Minister's staff.
You say that that wasn't usually the case. Therefore, there are some discrepancies between the two testimonies. We heard from one witness that meetings took place on a regular basis.
Hon. Alfonso Gagliano: I never denied meeting occasionally or even on a regular basis with my staff, for the simple reason that each time I or my staff needed to make arrangements in connection with a request received from members of other parties, representatives of other organizations, provincial members of Parliament or mayors, I would pass along the information to my staff who in turn, would contact either the Executive Director himself, or the persons to whom he had delegated authority.
[English]
The Chair: Merci, Mr. Gagliano.
I'm going to interrupt your testimony, Madam Jennings. Some people have some commitments and we are going to break at 11 o'clock. However, before I do that, we have a couple of points of order, one from Mr. Murphy and one from Mrs. Ablonczy.
Mr. Murphy, please.
Hon. Shawn Murphy (Hillsborough, Lib.): Thank you, Mr. Chairman.
Mr. Chairman, I just have a point regarding the direction of the committee. An article appeared in this morning's Ottawa Citizen; it quotes you, Mr. Chairman, and I'll read it here. I don't know if the quote is accurate or not; you can comment.
| The chairman of the parliamentary inquiry into the sponsorship scandal said yesterday the probe has to “play the media out” and schedule star witnesses on different days so the impact of their testimony receives more attention. |
And you were subsequently quoted again, Mr. Chairman, about playing the media out.
You're doing a good job, Mr. Chairman. You have a difficult job and a challenging job and I applaud you, but this brings the committee into disrepute. We're not here to play the media out or to feed the media or to be puppets to the media. This is a parliamentary committee; it's not a circus. If it is correct, I urge you to withdraw your remarks.
The Chair: You're absolutely correct, Mr. Murphy: this is not a circus. This is a very serious investigation. It's important that we communicate with Canadians as to what we do, that we do all our business in public, and that the committee be observed by Canadians as doing what we do in a democratic process to the best of our ability.
The guidance of the committee was, I think, overheard by someone yesterday.
We can't have all the witnesses on one particular day and so on, so I can raise that and have discussions on it with the steering committee next week.
Ms. Ablonczy.
Á (1100)
Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC): Mr. Chairman, we have an unusual circumstance today. We have, as you know, a leadership convention for the Conservative Party.
An hon. member: Hear, hear.
Mrs. Diane Ablonczy: Generally speaking, Parliament does not sit on weekends or on Fridays when party conventions are taking place. We have of course made an exception in this case because Canadians wanted very much to hear from Mr. Gagliano, and we as members of the official opposition wanted to make sure we facilitated that. However, many of us have convention commitments beginning this afternoon.
I know we have a lot more we want to get from the former Minister of Public Works, so I would make it a motion that because we'll have to adjourn early--or at least some of us will have to adjourn early today because of this other commitment--we have Mr. Gagliano back next week at the earliest opportunity so we can continue this examination. I think everyone feels--certainly I feel and certainly the country feels--that we have not gotten to the bottom of what this witness can tell us, so I would like to make that a motion, Mr. Chairman.
The Chair: Thank you very much, Ms. Ablonczy.
I am cognizant of the need to move forward as quickly as we can, and I am cognizant of what is needed to try to organize the committee and make sure we have a steady line of witnesses. We cannot accept motions, but I was going to have an informal discussion with some members of all parties later on today. This will be followed on Monday by a public hearing at 9 o'clock, where we will consider all the motions that have come out of this week. This will be followed by a meeting of the subcommittee on witnesses so we can talk to more witnesses, and by a meeting of our steering committee as well next Tuesday so we can really set the stage. That of course will include the recall of Mr. Gagliano at that point in time if the committee so desires. So your point is taken.
Mr. Gagliano, you may expect the committee may want to call you back.
Mr. Tonks.
Mr. Alan Tonks: Mr. Chairman, I think we would all like to facilitate a request to meet the member's concern. May I ask you, Mr. Chairman, how many speakers you have, just on this first round, who are on your list and haven't had an opportunity to ask a question? The reason I ask that, Mr. Chairman, is that if there's any question of adjournment, would it be possible, if it isn't asking too much, at least for it to be after the round has been completed? That's all.
The Chair: We were not talking about an adjournment; we're going to one o'clock. We have a full list of names. The point is that some members may not be able to stay and would like to ask questions, so they're asking Mr. Gagliano to come back.
Mr. Alan Tonks: I see, and my request would be that if there are only one or two who have not had a chance on the first round--and that's just something like 16 minutes--we could then adjourn even earlier than one o'clock in order that--
The Chair: I think we have enough. We have Mr. Mills, Ms. Phinney, Mr. Murphy, Mr. Toews, Mr. Tonks, Mr. Gauthier, Mr. Desrochers, Mr. Kenney, and of course the chair can always ask a couple of questions as well. So I expect we'll go on until about one o'clock.
But Ms. Ablonczy's point is well taken that parliamentary business is important as well, especially conventions and the choosing of leaders. And as she pointed out, Parliament does not normally sit during a convention, so parliamentarians can continue to do that part of their work.
Ms. Phinney.
Ms. Beth Phinney (Hamilton Mountain, Lib.): I was wondering, Mr. Chair, how many from that particular party from the opposition have already asked their question. How many are there left to go?
The Chair: We've heard from Mr. MacKay. We've heard from Mr. Kenney. We haven't heard from Mr. Toews. We haven't heard from Ms. Ablonczy either.
Ms. Beth Phinney: Could I suggest, Mr. Chair, that those two be given the courtesy of being able to ask their questions as soon as possible? I'm willing to give up my space if it moves one of them forward, not give it up permanently but--
The Chair: Unfortunately, when we reconvene at 11:30, they will be on their way to the airport.
Ms. Beth Phinney: They are going to leave now. I see.
Ms. Judy Wasylycia-Leis: Can we continue on until 11:30?
The Chair: If it's the agreement of the committee that we continue on, then I'm quite prepared to continue on and either postpone the break or continue through the break.
Mr. Toews.
Á (1105)
Ms. Judy Wasylycia-Leis: Cancel the break.
Mr. Vic Toews: I think Mr. Kenney is going to be here right until one, so the Conservative Party is going to be represented here.
The Chair: No, Mr. Toews.
Let me ask, is it the guidance or the wish of the committee that we continue on and waive the break?
Some hon. members: Agreed.
The Chair: It is. And it's also agreed that those who have to leave will ask questions first. Is that agreed?
Some hon. members: Agreed.
The Chair: Ms. Ablonczy, are you ready?
Mrs. Diane Ablonczy: I'm always ready with questions, Mr. Chairman.
The Chair: Eight minutes, Madam Ablonczy.
Mr. Toews, I believe you may be next.
Mrs. Diane Ablonczy: Mr. Gagliano, as you know, your testimony in front of this committee was looked forward to with a great deal of anticipation by Canadians. We were finally going to hear from the man at the top. We were going to get the real story about what had happened.
To everyone's dismay, disappointment, and anger, the only thing we've heard from you so far is that you know nothing. You weren't really in charge. You were just there, I guess. I don't know why you were drawing a salary. You didn't know what was going on. You didn't talk with anybody about what was going on. You didn't bother to read the documents about what was going on.
In anticipation of giving the committee and giving Canadians some real answers, Mr. Gagliano, before you appeared yesterday and today, did you talk with your former deputy minister, Mr. Quail?
Hon. Alfonso Gagliano: Could you repeat the question, please?
Mrs. Diane Ablonczy: Before you appeared in front of the committee yesterday and today, in anticipation of giving this committee some facts, did you speak with your deputy minister, former deputy minister Mr. Ranald Quail?
Hon. Alfonso Gagliano: No.
Mrs. Diane Ablonczy: Did you speak with Mr. Guité?
Hon. Alfonso Gagliano: No.
Mrs. Diane Ablonczy: Did you speak with Mr. Pierre Tremblay, your former executive assistant?
Hon. Alfonso Gagliano: No.
Mrs. Diane Ablonczy: Did you speak with Mr. Bard, your other former executive assistant?
Hon. Alfonso Gagliano: Yes.
Mrs. Diane Ablonczy: What was the nature of that conversation, sir?
Hon. Alfonso Gagliano: I was trying to prepare myself for coming here.
Mrs. Diane Ablonczy: What did he tell you? What facts came out in that conversation, Mr. Gagliano, that may be helpful to this committee?
Hon. Alfonso Gagliano: I was trying to recall the events. Since he was my chief of staff for the period in which this program was run, I was....
For example, I've been saying that we were receiving representation and it was transferred to my executive assistant and the staff to follow, to the director executive office and so on, so I wanted to check if that was okay.
For example, I recall that I asked whether I should call the police when I got the verbal interim auditor report. I said, “Did I dream of it?” I think I asked that question. He said, “Yes, I was there, and you asked that question.”
I was trying to confirm, as best I could, my memory.
Mrs. Diane Ablonczy: Mr. Gagliano, excuse me. Please, I only have eight minutes, and we have to use it usefully.
Is there anything, Mr. Gagliano, that came out in your discussion with Mr. Bard that has not yet been brought before the committee in your testimony yesterday or today?
Hon. Alfonso Gagliano: No.
Mrs. Diane Ablonczy: Then let's not waste our time.
Did you speak with Mr. Boulay, formerly of Groupe Everest?
Hon. Alfonso Gagliano: No.
Mrs. Diane Ablonczy: Did you speak with Mr. Lafleur?
Hon. Alfonso Gagliano: No.
Mrs. Diane Ablonczy: Did you speak with Mr. Pelletier, the former chief of staff to the former Prime Minister?
Hon. Alfonso Gagliano: Yes. After I gave the interview to the media, he called me in support and understanding of what I was going through.
Mrs. Diane Ablonczy: Did anything come out in that conversation that should be laid before this committee?
Hon. Alfonso Gagliano: No.
Mrs. Diane Ablonczy: Did you speak with anybody at all so you could give Canadians and this committee some real facts about what happened to millions and millions of dollars that the Auditor General said were improperly spent by your department? Did you talk to anybody so you could inform yourself, in anticipation of appearing here today?
Hon. Alfonso Gagliano: I spoke to my former chief of staff, who refreshed my memory. I checked with him if what I recalled was what happened. So I had those conversations.
Mrs. Diane Ablonczy: But basically nothing came out of that conversation of any assistance to this committee.
Hon. Alfonso Gagliano: I've been answering all those questions since yesterday.
Mrs. Diane Ablonczy: You testified that you were the minister for Quebec.
Á (1110)
Hon. Alfonso Gagliano: Yes.
Mrs. Diane Ablonczy: In that capacity, would you not have taken an interest in appointments made in the province of Quebec?
Hon. Alfonso Gagliano: In that capacity, let me explain how the appointments were made. The appointments were made by the minister--
Mrs. Diane Ablonczy: I don't want to hear how they were made. Would you have taken an interest in the appointments that were made?
Hon. Alfonso Gagliano: Yes, I would have, as minister for Quebec, collectively with the other ministers for Quebec.
Mrs. Diane Ablonczy: Would you have taken an interest in how program money was spent in Quebec?
Hon. Alfonso Gagliano: Each department manages its own programs, so my--
Mrs. Diane Ablonczy: That's not my question.
Hon. Alfonso Gagliano: I'm giving you the answer I know. My responsibility as minister for Quebec was to make sure Quebec got its fair share of the programs.
Mrs. Diane Ablonczy: So you would have taken some interest in how program money was spent in the province of Quebec.
Hon. Alfonso Gagliano: Sure.
Mrs. Diane Ablonczy: On the sponsorship program, you testified it was to save Quebec from the clutches of the separatists. Would you have taken an interest in how that money was spent in Quebec?
Hon. Alfonso Gagliano: Yes, but in terms of visibility we're talking here about how the rules were broken.
Mrs. Diane Ablonczy: I'm just asking what you would have taken an interest in. But in spite of the interest you would have taken in appointments, program spending, and particularly sponsorship spending in Quebec, your evidence before this committee is you really didn't know who got the money, why they got the money, or about the good will that might have been bought with the money. You're telling us you're really very dim about all of those things. Is that what you're telling us?
Hon. Alfonso Gagliano: I disagree with you in that regard. I have said there were discussions with Mr. Guité concerning a list of events, and every time we had to go over the budget--
Mrs. Diane Ablonczy: But you said that only happened--
Hon. Alfonso Gagliano: Mr. Chair, I mean--
Mrs. Diane Ablonczy: I only have eight minutes. Please let me direct the questioning.
Hon. Alfonso Gagliano: I cannot give you the right answer if you don't give me the time.
Mrs. Diane Ablonczy: You're saying that you met with Mr. Guité only two or three times a year. Is that correct?
Hon. Alfonso Gagliano: From my recollection it was three or four times a year. I don't have my agenda, so I cannot confirm the exact number of times.
Mrs. Diane Ablonczy: You've also testified that you didn't really run your department. I assume only faceless bureaucrats run the affairs of Canada, not the people we elect, and not the people we appoint as ministers of the crown. Is that your evidence?
Hon. Alfonso Gagliano: I said that as a minister I was involved in creating policy. I had cabinet meetings practically every day, with hours of debate on different programs. For example, I spent a lot of time debating and creating the program of affordable housing. I was definitely a very busy person.
Mrs. Diane Ablonczy: I understand that, sir, but if you don't know how the policies are carried out, what's the point? It's just a debating shop.
Hon. Alfonso Gagliano: I knew what the policy was. I was not aware of the micro-management of the day-to-day things. I did not appoint the agencies. I didn't decide which agencies should get contracts. I didn't decide on the events. We had discussions on the budget, and then the civil servants continued to do their jobs.
Mrs. Diane Ablonczy: I suggest to you, sir, that you have played members of this committee for fools. You have come to this committee and said, “I didn't run anything. I didn't know what was going on. I was just at the mercy of what somebody told me.”
You said that in spite of the fact that you were the minister for Quebec, you didn't know who got the contracts, why moneys were misspent, and why moneys went missing. You knew nothing.
Mr. Gagliano, I hate to say this, but I'll tell you something. I don't believe you, and Canadians don't believe you.
Who are you protecting? Why aren't you telling us what you really know, what you really talked about, and what really happened in your department? Who are you protecting, Mr. Gagliano?
Hon. Alfonso Gagliano: Mr. Chairman, I'm going to stay calm, because I think the accusations are very serious.
First of all, let me say that I'm not protecting anybody. I'm telling you what I know, the way the facts are. The committee might judge that I didn't exercise my responsibility or that I'm incompetent; that's your judgment. I'll leave it with my judgment.
But definitely, Mr. Chairman, that goes for everybody, including the media.
I'm not expecting anybody to believe my story, because for the past two years all of you have condemned me publicly, that I was the mastermind of the program. I don't expect that I will spend a day and a half before this committee, and you're going to believe my story. But in due time, through this committee and the public inquiry, when you have more witnesses, I'm sure the truth will come out, Mr. Chairman.
So that's all I have to say.
Á (1115)
The Chair: Well, we'd have hoped, Mr. Gagliano, that the whole truth would come out at this committee, as we hear all the witnesses that we have heard from and will be calling forward. It's for this committee to get to the facts, believe we have got to the facts, believe we have got to the truth, to be able to table a report in the House of Commons saying that this is what transpired, and these our recommendations, whatever they may be.
We are dealing, as I said, with responsible government where ministers are responsible to Parliament and Parliament is responsible to the people. This is why we have a serious obligation to continue to press for what we consider is more information, factual information, on the table.
Mr. Toews, please, for eight minutes.
Mr. Vic Toews: Thank you.
Mr. Gagliano, in respect of your concern about your being perceived as incompetent, let me assure you that I don't consider you incompetent at all.
Mr. Gagliano, you came to this hearing and you indicated that you had read the Auditor General's report three times. You appear to be well briefed on the contents of it. You spoke with my colleague, Mr. Kenney, about the 2000 audit, which was certainly a very important audit for the running of the government. In fact, you felt it was so important that you took the opportunity to call for that audit. Isn't that correct?
Hon. Alfonso Gagliano: Yes.
Mr. Vic Toews: Very important.
Indeed, not only did you think it was important, but your deputy minister also thought it was important, and he called for the audit as well. So we have here not just a matter of the civil or public service asking for the audit, but you yourself, as a minister, Mr. Gagliano, had asked for that.
Now, you got a briefing on this particular audit, and you had a verbal summary of this audit, and you were assured—and you're nodding in agreement with me—on the basis of the briefing that you received that there was no criminal wrongdoing. Is that correct?
Hon. Alfonso Gagliano: Yes.
Mr. Vic Toews: That's correct.
Earlier on, Mr. Kenney read directly from that audit—page 15 of that 2000 audit. He didn't tell you where the text was from, but you said that had that come to your attention, you would have taken a very different approach to the action you took, because it clearly indicated criminal activity.
Then when Mr. Kenney disclosed to you that came right out of the 2000 audit, you indicated to this committee that you had never read the 2000 audit, the audit that you thought was so important, that your deputy minister thought was so important. It was an issue of grave concern in your department, and you didn't even read the report.
And remember, Mr. Gagliano, this is an 18-page report. This isn't even as big as the Auditor General's report, and you read the Auditor General's report three times. Why didn't you read the 2000 audit at least once?
Hon. Alfonso Gagliano: Mr. Chairman, I have in front of me the page that was referred to, but I would like Mr. Toews, on behalf of Mr. Kenney, to tell me which paragraph he is referring to.
Mr. Vic Toews: He quoted it to you. It says “for those invoices which...”.
Hon. Alfonso Gagliano: Which paragraph? Sorry. The paragraphs are numbered.
Mr. Vic Toews: It's paragraph 2.3.2, the second full paragraph. Now that has already been put to you. You indicated that you didn't read the report.
Mr. Gagliano, this was so important to you that you called for it and you didn't even read the report, yet you read the Auditor General's report three times. Why didn't you read this report, Mr. Gagliano?
Á (1120)
Hon. Alfonso Gagliano: Mr. Chairman, I'm reading this page, and this paragraph.
Mr. Vic Toews: No, no. Mr. Gagliano, you indicated at the time that you never read this report. Why not? Why not?
Hon. Alfonso Gagliano: Yes. But what Mr. Kenney read to me, I cannot find in the page that is referred to. Was I misled?
The Chair: I think the question by Mr. Toews is fairly simple, Mr. Gagliano. You've said on numerous occasions before this committee that you hadn't read the report. The question of Mr. Toews is why didn't you read the report? It's a fairly simple question.
Hon. Alfonso Gagliano: It's because I trusted that the internal audit and my deputy minister were telling me the truth. I concentrated on their report.
What I want to know is was Mr. Kenney reading from the internal report or the Auditor General's report? What I'm trying to find out is whether I was misled by the committee.
Mr. Vic Toews: As I indicated earlier, this individual isn't incompetent. He knows that I have eight minutes.
I've said that it's page 15 of the internal audit report.
Mrs. Marlene Jennings: A point of order, Mr. Chair.
We'll will stop his time. He'll still have his time.
The Chair: A point of order.
Mrs. Marlene Jennings: On a point of order, the witness was asked a question and quotations were read from a document. The witness is unable to find where that quotation is located. I think it's incumbent on the member who is asking the question to clarify that.
Is it from the Auditor General's report? Is it from the internal audit report that he's also raising? Which document is it from?
The Chair: Mr. Toews, can you name the document?
Mr. Vic Toews: It's very clear, Mr. Chair, that it was the audit report, page 15. I've stated it a number of times.
The Chair: Just a second. I believe, Mr. Toews, that you're talking about the directed audit of the management of sponsorship--
Mr. Vic Toews: That's correct.
The Chair: --at the Communications Coordination Services Branch, CCSB, the final report.
Mr. Vic Toews: That's correct. The Public Works and Government Services Canada audit and review branch, 2000-08-31, page 15--the one that this witness indicated he hadn't read.
The Chair: Okay. We have the reference. That's fine, because normally we put on the record the document that has been quoted.
Mr. Vic Toews: All right. Let me rephrase my question, and I'll put the question to the witness. Why didn't you read the report that you specifically called for when you learned of difficulties in your department?
Hon. Alfonso Gagliano: Mr. Chairman, I said I received a verbal briefing. I believe and I trust and still today I have no reason not to believe the internal audit or my deputy minister. All my energies and all my time were to make sure that the things the internal audit was saying were corrected immediately, and I worked on the action plan.
Now I want to say something else, Mr. Chairman. I will read the blues, and I will determine that what Mr. Kenney said exactly reflects the internal report. I only want to be on the record that I didn't find the exact wording.
The Chair: If you want to correct yourself, you can write to the clerk.
Hon. Alfonso Gagliano: I hope Mr. Kenney does the same thing.
Mr. Vic Toews: You knew that something wrong was going on inside your department. You had people inside your department to do the report. Instead of reading the report, you relied on verbal information from people in your department. Is that correct?
Hon. Alfonso Gagliano: Yes, and I--
Mr. Vic Toews: Are you saying--
Hon. Alfonso Gagliano: --was very professional. I had a very professional--
Mr. Vic Toews: I understand, and you stated that. I understand that.
You're saying that despite the fact that the staff was very professional, your deputy minister misled you in terms of summarizing the impact of this report, if this report in fact indicates that there's some criminal wrongdoing. He misled you.
Hon. Alfonso Gagliano: No. I don't believe that my deputy minister misled me. I think the deputy minister had the same information that we have.
Mr. Vic Toews: You said that he told you that it was only administrative problems. Yet the paragraph that Mr. Kenney quoted to you clearly indicates, and you agreed, that there was criminal wrongdoing.
Hon. Alfonso Gagliano: I reserve my right now to read in the minutes that paragraph to see if it corresponds to what is in the document.
The Chair: Mr. Toews, are you talking about the second paragraph under 2.3.2?
Mr. Vic Toews: That's correct.
The Chair: Let me read the paragraph to you, Mr. Gagliano:
| Because CCSB does not analyse or document a detailed breakdown of the production budgets, it is impossible to verify if CCSB received, in full, the services for which the CA was retained. The invoices charged against the production budgets for most of the files audited did not contain a sufficiently detailed breakdown of the amounts charged or the services provided. For those invoices which did provide some details in the breakdown of amounts being billed, we concluded the amounts being charged were for products/services more appropriately considered management of the sponsorship (and therefore to be included in the 12% commission fee paid), and not for products/services appropriate to the use of the production budget. |
Is that the paragraph you're talking about, Mr. Toews?
Á (1125)
Mr. Vic Toews: That's correct.
The Chair: So that is the paragraph, and you have it in front of you.
Mr. Toews, you have one minute left.
Mr. Vic Toews: What I'm puzzled about, Mr. Gagliano, is that you called for the audit, you thought it was so important, and your deputy thought it was important. It's not a weighty document in the sense of length--it's 18 pages--and you chose, for some reason, not to read it. The fact is, you took a personal interest in calling for the audit. You didn't read it.
In respect to the Auditor General's report, you read it three times. Why was that worthy of reading three times, and the very report you called for wasn't even worthy of reading once?
Hon. Alfonso Gagliano: Mr. Chairman, I've been saying from the beginning, I got a briefing, an interim internal report verbal briefing. When I got that briefing, the report was not written. I got that internal briefing after the internal auditor audited about a hundred and some files and decided the problem was serious. He came to see me, with the deputy minister--and I believe there was another official--and the executive director of the program and my executive assistant were present, and he informed me that there were serious management problems.
I couldn't have read the report at that time; the report was not written. He told me there was a serious management problem. I said “Should I call the police?” He said “There is no criminal evidence.” So I said “Give me a plan of action to correct all those things.” They did. We created the new agency, I froze the program at that time, and I said “Go and audit the rest of the files.” After a while I was informed that the same problem existed in the rest of the files.
I concentrated on applying that plan of action and making the necessary change, transferring the program from Public Works to Communication Canada. That's where I concentrated myself. I couldn't have read the report.
Mr. Vic Toews: You never read the report, even when it was completed. Even when it was completed, you never read it.
The Chair: Mr. Toews--
Hon. Alfonso Gagliano: The plan of action was in place. Everything was done.
The Chair: Mr. Gagliano, if I understood you correctly, you were saying you got a verbal report from the auditor who was going to write the report. You got it before you--
Hon. Alfonso Gagliano: Yes. Mr. Steinberg.
The Chair: Okay, that's fine. So now the very person who had collected all the information, before he wrote his report, he gave you a full briefing of what he was going to put in his report, including the fact that there were serious problems.
You didn't ask for the final report after it was written to see that it was in line with your verbal--
Hon. Alfonso Gagliano: I don't think so. I don't recall.
The Chair: So there is a chance you did read the report?
Hon. Alfonso Gagliano: I don't recall reading the full report.
The Chair: Okay.
Hon. Alfonso Gagliano: I have to say what I remember and what I know.
The Chair: Now you're saying there's some doubt. Okay.
Madame Jennings, we're going to return to you, and because we cut you off in the middle, I'm going to give you an extra minute or so.
Mrs. Marlene Jennings: Thank you, Mr. Chair.
Mr. Gagliano, you've just brought forward a name that this committee has not heard of but has seen in documents--that is, the auditor at Public Works, the assistant deputy minister, I believe, government services audit, and so on, whatever the title is, Mr. Stein....
Hon. Alfonso Gagliano: I believe his name is something like that.
Mrs. Marlene Jennings: Is it Mr. Steinberg?
The Chair: It's Mr. Steinberg.
Mrs. Marlene Jennings: If I were to tell you that Mr. Steinberg is the one who signed the report of the internal audit in 1996 of the advertising, polling, opinion research sector headed by Mr. Guité, who was at that time, I believe, an EX-1, and said internal audit was conducted because a complaint was filed by Mr. Allan Cutler, and that said internal audit found that all of the allegations of Mr. Cutler were founded and as a result of that an external audit by Ernst & Young in 1996 was conducted, and that external audit found there was no expertise for procurement within that branch of APORS that became sponsorship headed by Mr. Guité, would you not have wished to have that information as being material to your responsibility as a minister? Because according to the definition of ministerial responsibility, Mr. Gagliano, you are responsible for what happened at Public Works in the sponsorship branch while you were there.
Would you not consider it better, given that fact and that it was your responsibility, and you are responsible whether you knew of it personally or not, to have known that there was an internal audit of the successor of sponsorship in 1996, and that this internal audit, which was conducted under the auspices of Mr. Steinberg, found that there were contracts that were not properly given, that there was backdating of invoices, that there were requisitions that were falsified in order to cover up the fact that contracts had already been given, work had already been done, and payments had already been made?
Do you not think it would have been material for you to have received that information during the briefings you received after you were appointed?
Á (1130)
Hon. Alfonso Gagliano: Definitely I would have liked it, and I think a minister should be receiving all internal audit reports. That's the only management tool through which really the minister can know what happens down there in his own department. That's what I've been telling this committee since yesterday. But I was not informed that there was an internal audit in 1996, neither that it was an external audit in 1996. I arrived at the department in 1997, and I was not briefed on that.
Therefore, and here it goes to the heart of talking about responsibility, how can a minister be responsible when he doesn't know, when he's not informed? This is the debate this committee in Parliament definitely has to have if we want to talk about ministerial responsibility.
Also, the information that is given to that minister--
Mrs. Marlene Jennings: May I interrupt for one moment, Mr. Gagliano?
When you were appointed Minister of Public Works, or when you were appointed minister of your portfolio preceding Public Works, and you received briefings, did you ask, has this department ever been audited by the Auditor General and are there any systemic problems that have been identified by the Auditor General?
Hon. Alfonso Gagliano: I don't recall exactly if I asked that question in those terms, but definitely on the Auditor General every time. I had two departments--Labour and Public Works--and yes, I always wanted to be informed of what the Auditor General would have said in the past to see if I could detect previous problems. But in the case of Public Works I don't think there was an Auditor General's report on the communications or sponsorship file.
The Chair: Thank you, Ms. Jennings.
Mr. Gagliano, you mentioned just a few minutes ago that you had a direct personal briefing by Mr. Steinberg, who was writing this report, the final report that Mr. Toews was talking about, and Madam Jennings pointed out that he was the same auditor who did the 1996 audit when Mr. Guité was pointed out as having broken an awful lot of rules back then, too.
Did Mr. Steinberg say to you in the personal briefing, “By the way, this is the same department and the same people that I wrote about four years before”? Did he not mention that to you?
Á (1135)
Hon. Alfonso Gagliano: No.
The Chair: I find it rather strange that the internal auditor would not go back in his own memory and say it's the same people, same department, same problems--nothing changed. No?
Hon. Alfonso Gagliano: Well, I believe that if he had recalled that, then he would have answered my question about calling the police differently.
The Chair: Thank you very much.
Mr. Murphy, please, for eight minutes.
Hon. Shawn Murphy: Thank you, Mr. Chairman.
Mr. Gagliano, I don't have a lot of confidence in my ability to elicit a lot of additional information from you after a day and a half of testimony. I'm going to try a little different angle here.
There's a concept known as “similar fact evidence”, and your evidence is that you as minister didn't know anything or you didn't do anything on this sponsorship issue. But there was another issue in the public domain a couple of years ago that you were very much involved in, and that was the Canada Lands Company. There were a lot of questions in the House of Commons regarding that issue. In that case it would appear that you did do something and that you were very much involved politically in lobbying Mr. Grant to hire friends of yours for the company, Canada Lands, and also in lobbying Mr. Grant and other officials with Canada Lands for you to be involved in contracts involving Canada Lands. So you were very much involved politically in Canada Lands.
My question to you is, given your activities in Canada Lands, how did you manage to resist the temptation to be involved in the sponsorship program?
Hon. Alfonso Gagliano: I'm glad you've brought up the Canada Lands file and the Jon Grant saga, because I think there again, when that happened in the media, I went and explained exactly, never denying.... Yes, there were problems; Canada Lands had some problems. As a matter of fact, I was the minister who called in the RCMP on the operation of the military base at St. Hubert and Canada Lands' management. After being briefed by Mr. Grant and Mr. Buchholz, the chairman and the president of Canada Lands, I learned there were some serious problems. After they informed me that they had performed a forensic audit and I discussed it with my deputy, we informed the commissioner of the RCMP, and we continued discussions. There were problems managing those properties, and I suggested, look, if there are problems here, I know a person who has 35 years' experience in managing property, managing schools; maybe you can use that person. That was the only thing.
What I want to say about Mr. Jon Grant, because he has been coming out lately in the media again on this, is that Mr. Jon Grant complained to the rank and file of the Liberal Party, complained to the Auditor General, complained to the ethics commissioner, and complained to everybody except me, who was the minister, about what was going on in my office. Every time he saw me, and he had a lot of occasions, he was always very complimentary on what good relations he had with me and my office. There is even some correspondence to that effect.
So, please, I think--
Hon. Shawn Murphy: So your evidence is that you weren't involved in the political hanky-panky with Canada Lands. Is that your--
Hon. Alfonso Gagliano: The only involvement a minister has--and I've been trying to make this case for a day and a half, and I've been making it in the media too--is that a minister, like a member of Parliament, receives representations--
Hon. Shawn Murphy: I think you've answered my question, Mr. Gagliano.
The second point I want to make, Mr. Gagliano, and I invite you to comment on this, concerns the inverse relationship this committee sees with respect to your innocence on the political hanky-panky on the sponsorship program and your competence. It's because you can't have it both ways here, and I'll explain: the more innocent you are, as is coming out in the testimony, the more incompetent you appear.
It's not a complicated case. We have the minister, the deputy, and the sponsorship program. Your evidence is--and it's very clear that you were responsible for managing this department--I didn't do anything and I didn't know anything, so I'm not responsible. But the bottom line is, you are responsible. You mandated these people, you set up the department, you hired Tremblay, you supervised Guité, and you supervised Quail.
Your evidence would be a lot easier to accept if you said, I didn't really know anything; I wasn't capable of being a minister. There was supposed to be somebody there to be responsible for the checks and the oversight, which weren't there. What you're setting up, sir, is that you're inviting this committee--in fact, you're compelling the committee--to find that you were extremely incompetent. It would be different if there had been a sinister plot to keep the facts hidden or if you had purposely been kept in the dark.
Do you have any evidence out there on this issue of competence?
Á (1140)
Hon. Alfonso Gagliano: Again, it seems that the committee goes around.... Mr. Chairman, I'm willing to come back next week, if that's what the committee decides, but I think we're going around the same question.
As a minister, I asked for the internal audit. Do you call that incompetence, or do you call it responsibility? I asked for the internal audit. The internal audit was brought to me immediately. I didn't wait six months to have the damn report written. He came to me within a few weeks and said “Minister, there is a problem.” I said “Should I call the police?” He answered “No, there is no criminal evidence.”
I asked for a 37-point action plan to fix the thing. I froze the program. I asked the deputy minister to start negotiations with another department to transfer and have a distance between the procurement and the thing.
That's responsibility. That's what a minister has to do. The minister doesn't have to go down on every corner and say you do this and that, because then you would accuse me--
Hon. Shawn Murphy: Mr. Gagliano.
Hon. Alfonso Gagliano: --of political interference.
You cannot have the cake and eat it too. You have to make the decision. The minister should stay at the policy level and let the bureaucrats do their job. When he finds something out that is wrong, he takes action.
I can prove.... The Auditor General, as a matter of fact, says that very clearly. But is that really what we want? Do we want to really know what happened? I've been telling you what happened, and still you don't believe me. So I wonder where we're going.
Hon. Shawn Murphy: But Mr. Gagliano, you want your cake and to eat it too.
Hon. Alfonso Gagliano: No, I don't.
Hon. Shawn Murphy: Everything happened here under your charge. You're the one who hired Tremblay. You're the one who put him in his position.
Hon. Alfonso Gagliano: I didn't hire Tremblay. Tremblay applied for the job through the system. It was through the system. Go and check.
Hon. Shawn Murphy: Your job was to supervise him.
Hon. Alfonso Gagliano: I was not a direct supervisor--
The Chair: Mr. Murphy, please.
Hon. Alfonso Gagliano: --of the executive director.
Hon. Shawn Murphy: Your job was to supervise Quail.
The Chair: Mr. Gagliano, Mr. Murphy has the floor.
One minute.
Hon. Shawn Murphy: You'll agree with me, Mr. Gagliano, that all these problems occurred on your watch. You were the minister responsible.
Hon. Alfonso Gagliano: Yes. And when I was aware of them, I fixed them. That's what leadership and responsibility are.
If you are looking for a scapegoat--and I think that's what you're trying to do--you're doing a good job.
Hon. Shawn Murphy: You don't accept--
Hon. Alfonso Gagliano: No.
Hon. Shawn Murphy: --any responsibility for anything here today?
Hon. Alfonso Gagliano: I said what I did, and that's what my responsibility is.
Hon. Shawn Murphy: Your statement is that you thought you were a competent minister, at the same time?
Hon. Alfonso Gagliano: Yes, I am a competent minister because I acted when I was informed that there was a problem. I fixed it, and the Auditor General recognized it.
The Chair: Thank you very much, Mr. Murphy.
We'll have Mr. Kenney, Ms. Phinney, Mr. Gauthier, and perhaps Ms. Wasylycia-Leis. Oh, and Mr. Tonks. We will not forget Mr. Tonks either.
Mr. Kenney.
Mr. Jason Kenney: Mr. Gagliano, this morning, if I recall correctly, you testified that you attended constituency fund-raising events throughout Quebec that you spoke at, and what not. Is that correct?
Hon. Alfonso Gagliano: Yes.
Mr. Jason Kenney: How often would you say that you attended Quebec Liberal Party fund-raising events in Quebec, give or take?
Hon. Alfonso Gagliano: There are 75 ridings in Quebec. I don't pretend to do the 75 ridings, other ministers would have done that, but maybe I would attend at least 15 or 20 of them. We had three or four regional cocktails, plus a Prime Minister dinner in Montreal. I would say maybe 20 or 25, I don't know.
Mr. Jason Kenney: In a year, on average, you would say 20 or 25.
Hon. Alfonso Gagliano: Yes.
Mr. Jason Kenney: You, as the minister responsible for Quebec and head of the political organization for the federal Liberal Party in Quebec, were an important figure at these events?
Hon. Alfonso Gagliano: If I was, I was there, for example, as the speaker.
Mr. Jason Kenney: Right.
Hon. Alfonso Gagliano: I would make a speech, shake everybody's hands, and leave.
Mr. Jason Kenney: Sure. As a part of that function, you would shake hands, you would meet people who would be there.
Á (1145)
Hon. Alfonso Gagliano: Yes.
Mr. Jason Kenney: Okay.
Well, Mr. Gagliano, yesterday you testified to the following, and I quote: “I said, since I was appointed minister in September 1994, I made it very clear that I withdrew myself from any political fund-raising activity”. Let me re-quote that for you, sir: “I withdrew myself from any political fund-raising activity”. That's what you testified to yesterday. Today, you say that you attended up to 25 fund-raising events a year in Quebec, at which you were the main speaker, sir.
Why are you contradicting yourself? Why can't you get your stories straight?
Hon. Alfonso Gagliano: I'm not contradicting myself. I've been public on this a few weeks now. What I said was I didn't raise money.
Mr. Jason Kenney: No, sir. You said you withdrew yourself--
The Chair: Mr. Kenney.
Hon. Alfonso Gagliano: Can I finish? Yesterday I believe I said, and we can check the blues, that when I was first appointed to the cabinet as a minister in September 1994, I even consulted the ethics commissioner--and the member was laughing. I said, “Now as a minister, what is my position in this?” The ethics counsellor advised, “You shouldn't be involved in any fundraising activity in terms of raising money, in terms of asking people to buy tickets. But as a minister, because you also are an elected member of Parliament, you are entitled to attend political activities and make speeches.” But I definitely didn't ask anybody to contribute to--
Mr. Jason Kenney: The problem is this was not in the witness's testimony yesterday. To quote verbatim from the official transcript, the blues, the former minister said, “I made it very clear that I withdrew myself from any political fund-raising activity”.
The problem is this witness's credibility. He comes to us and tells us that he withdrew from any political fundraising activity, and then he changes his story.
The witness's testimony so far is that he didn't run his own department; he became aware of what was happening in the sponsorship program because of the opposition raising questions; and he requested an internal audit that he never read.
His testimony yesterday was that there was no political interference involved in this. That contradicts the current Prime Minister, who said, “I do know that clearly there...had to be political direction...it is impossible to believe there was no political direction.”.
Now the former minister is contradicting himself about his fundraising activities. How can this witness expect this committee to believe anything he has to say when he's constantly contradicting himself like this?
Hon. Alfonso Gagliano: I repeat that I don't expect this committee to believe me. It's public knowledge that a certain number of members of this committee have been making statements, not only in the House but outside the House, accusing me of everything, like being the mastermind. So I don't expect the gentleman to believe me.
Mr. Jason Kenney: Did you have any regular meetings with Paul Coffin, of Coffin Communications?
Hon. Alfonso Gagliano: No. I don't know Mr. Coffin.
Mr. Jason Kenney: You've never met Mr. Coffin.
Could you just repeat for us who were your chiefs of staff or executive...? Who ran your ministerial offices during your tenure as Public Works minister?
Hon. Alfonso Gagliano: I believe I already answered that question. It was Mr. Tremblay at the beginning and then Mr. Jean-Marc Bard.
Mr. Jason Kenney: And who were your special assistants responsible for Quebec during this period?
Hon. Alfonso Gagliano: I believe there were two or three--Mr. Pierre Brodeur, Mr. Pierre Lesieur.... Again, I have to go back to see which year exactly, but people were rotated and changed in that position.
Mr. Jason Kenney: Earlier today you testified it was possible that Mr. Guité met with these individuals in your office more often than they met with you. You tried to couch this in the ambiguous statement that your office received a lot representations from constituents and interest groups. I wasn't aware that Mr. Guité was a constituent or that he constituted an interest group.
Do you have any idea how often your senior ministerial political staff met with Mr. Guité or had direct contact with him?
Á (1150)
Hon. Alfonso Gagliano: No.
Mr. Jason Kenney: Did you trust your senior political staff--your chiefs of staff and your Quebec ministerial assistants? Did you entrust them? Did you have a good working relationship?
Hon. Alfonso Gagliano: Yes.
Mr. Jason Kenney: Would they have carried out your wishes? Do you believe they followed your direction?
Hon. Alfonso Gagliano: I believe they did, within the scope of the law and the rules.
Mr. Jason Kenney: Would you be surprised if they had engaged in activity repeatedly on an important file that you were unaware of? Would they have brought you up to date on important communications they had within your purview as a minister?
Hon. Alfonso Gagliano: I had regular meetings with my chief of staff, and he would inform me of major files.
Mr. Jason Kenney: Would you be surprised if you learned that Mr. Guité met with senior members of your ministerial office staff on, say, a weekly basis? Would that be surprising to you?
Hon. Alfonso Gagliano: As I said yesterday and today, my office received many representations for sponsorship funds.
The Chair: That wasn't the question, Mr. Gagliano.
Hon. Alfonso Gagliano: Well, he's asking.... The only reason my staff would have meetings or contacts with Mr. Guité was concerning the sponsorship files. I'm saying if we received representation, we would have had to transmit it to Mr. Guité, and that's where they would have those communications. How many they had, whether in person, whether by telephone, I don't know.
Mr. Jason Kenney: Would you characterize them as frequent or irregular meetings? You said your staff briefed you on their activities.
Hon. Alfonso Gagliano: On major activities.
Mr. Chairman, Mr. Kenney--
Mr. Jason Kenney: I'm asking--
Hon. Alfonso Gagliano: Can I have a point of order?
The Chair: Mr. Kenney, hold it.
Mr. Gagliano, you may have a point of order.
Hon. Alfonso Gagliano: I know Mr. Kenney. I was in the House when he was first elected, and I respect him and I know he's a very good member of Parliament and questioner. But since this morning he has been trying to kind of misquote me very often, and here is one, about the political activities, which he quoted just before, Mr. Chairman.
I would like to quote from the minutes. It says here:
| Hon. Alfonso Gagliano: Like I said before and I repeat again, I was not participating in fundraising activities except to go and make a speech. The party, they had a financial committee who were organizing the event and I made it clear, not only during the regular period but also during the election campaign that I didn't want to get myself involved in financial matters--who was giving money, because I didn't want to know. When I was sitting at the cabinet table I wanted to make my decision on the merit of the file and not who was giving money to the party. |
That is in the minutes of this committee--and I'll be coming back with a letter once we see the minutes of this morning on the other matter, because I don't think it's fair to me.
The Chair: As I mentioned to you, Mr. Gagliano, you have every right to communicate to this committee if you feel the answers are not appropriately stated or need further clarification.
We will have one very brief question from Mr. Kenney to wrap up this session.
Mr. Jason Kenney: I thank you, but before I get to my question I would invite the witness to read his previous answer, where he said, “I withdrew myself from any political fundraising activity.” That is a verbatim quote, Mr. Chairman.
The Chair: There was nothing beyond that? Was that the end of that quote?
Mr. Jason Kenney: That is the end of the quote. He can read it. It's two paragraphs above the one he just quoted.
Mr. Chairman, this is my last question. The minister claims he had no knowledge or responsibility of what was going on. The current Prime Minister doesn't believe him. He says there had to be political responsibility. Obviously this minister would have been the one involved in that political responsibility.
Did the minister not create at least an implicit understanding with his senior political staff, including Mr. Tremblay, Mr. Jean-Marc Bard, Mr. Brodeur, and Mr. Lesieur, that they were to get this done, and if it meant bending the rules and working directly with Mr. Guité, they were to do it but to leave a wall of plausible deniability between them and the minister?
Mr. Chairman, won't the witness admit that he had his political staff do the dirty work so that he could come to a committee like this and exercise plausible deniability about his knowledge?
Hon. Alfonso Gagliano: Mr. Chairman, again, Mr. Kenney is not looking to find the truth. He's just looking for a scapegoat.
Yesterday I explained that in my office we had a special assistant. You asked for the name, and we said yes, we were going to try to find out who, at the different stages we were at. We had a special assistant who would communicate with my executive assistant, with the executive director, on the representation of the sponsorship file. That's all from the minutes.
This morning he asked me who were my political assistants, my assistants for Quebec, and I gave the names. I want to put on the record that those gentlemen had nothing to do with the sponsorship file. Therefore, let's not....
But again, I don't think he's interested in the truth. He's just interested in making allegations and accusations. I think that is very clear, and the minutes will prove it.
Á (1155)
The Chair: Okay.
We are going to have a health break, so the committee is recessed for five minutes.
Á (1155)
 (1203)
The Chair: We'll go to Ms. Phinney, Mr. Gauthier, Ms. Wasylycia-Leis, if she is here, and so on.
Before we go to Ms. Phinney, Mr. Gagliano, I couldn't quite get what appeared to be a very fine line between your speaking at fundraisers and your not being involved in fundraising. And what did the ethics counsellor actually tell you? Is it that speaking at a fundraising event is not fundraising? Did he tell you that?
Ms. Beth Phinney: Yes, those are the rules.
Hon. Alfonso Gagliano: He told me--I can't recall exactly, I think back in 1994--that, yes, as a member of Parliament, as an elected politician, it was part of my job to be present and make speeches, to shake hands at political fundraisers, but it was not proper to raise money. In other words, to ask people, could you contribute $100, or sell a ticket for that activity, was not proper. Since then, I have completely withdrawn myself from those activities, except, as I said, participating as a minister, as a member of Parliament, at riding activities or other regional functions.
 (1205)
The Chair: So was this a general guideline that the ethics counsellor gave to you?
Hon. Alfonso Gagliano: I got that information verbally--
The Chair: Verbally.
Hon. Alfonso Gagliano: Yes, I called him and I asked. I don't remember if he followed up in writing, but it was advice. I had just been appointed Secretary of State for Parliamentary Affairs and I felt I needed to have some guidance on that.
The Chair: So the ethics counsellor didn't say, “I have a general rule and guideline for ministers of the crown regarding fundraising and here is a general guideline”? He just--
Hon. Alfonso Gagliano: I don't think he pointed me to a general guideline or general rules that were in the guidelines that ministers and secretaries of state were receiving at that time.
The Chair: If I understand you, the ethics counsellor said it's perfectly okay for you to speak at a fundraiser--
Hon. Alfonso Gagliano: Yes.
The Chair: --provided you didn't say, “And please give me money”. As long as you didn't use these words or words to that effect, you were not fundraising?
Hon. Alfonso Gagliano: It's not just the words. As long as you don't ask people for money, as long as you don't really get involved in raising the money directly, you can make a speech about the--
The Chair: Yes. I'm trying, you know--
Hon. Alfonso Gagliano: --policy of the party or of the government. You can be present at the event, but you cannot actually be active in selling tickets for the event, or taking the phone, or knocking at doors and saying, “Here, buy a ticket. Give me $100 for the party.” That's what I understood.
The Chair: These nuances draw to mind some quotations by a former President of the United States. We'll leave that one alone, but it seems to be very close to the same concept.
Mr. John O'Reilly: Was it John Kennedy?
The Chair: So it's okay to speak at a fundraiser provided you don't ask for the money and that is not fundraising. Being at the fundraiser, speaking at the fundraiser, or being the principal speaker at the fundraiser is not fundraising. And the ethics counsellor said that was okay?
Hon. Alfonso Gagliano: Yes.
The Chair: All right.
Hon. Alfonso Gagliano: I assume all of you are doing the same thing in your riding.
The Chair: We're not ministers, by the way.
Ms. Phinney, eight minutes.
Ms. Beth Phinney: Thank you very much, Mr. Chairman.
This is not a question, but I would like to give a chance for Mr. Gagliano to set the record straight in something that I have found a little confusing in the last two days.
When I asked you yesterday if Mr. Guité came to your office, you answered that most of the time when he came he was coming to prepare for the Treasury Board. The rest of the time when you were asked that--the other times yesterday, and I don't know if there was one this morning--you said you met with Mr. Guité three or four times.
I wondered if you could, not today, maybe send us a note and reflect on that and see if it wasn't maybe more than three or four times, because you wouldn't have said “most of the time” for three times. If you only did something three times, you don't say “most of those three times I did this”. So it might have been seven or eight times, or 15 times a year, or once a month. Could you clarify that in the record? It doesn't balance.
Hon. Alfonso Gagliano: I can't do it right away. For over a month I have been trying to recall how many times I met Mr. Guité. Unfortunately, I could no longer find my agendas so I couldn't count the times.
My recollection is three or four times a year. We went to Treasury Board not more than twice. Definitely there are other matters, like 1-800-O-CANADA or the government website, other files, special projects, which I talked about this morning. So on average, four or five times a year--maybe one year more, maybe one year less. But again, if I feel in the next few days that I can remember, definitely I'll communicate with the committee clerk any clarification I can provide.
Ms. Beth Phinney: Thank you.
Hon. Alfonso Gagliano: If more come...I will read all the blues.
Ms. Beth Phinney: Thank you very much.
You were asked by Mr. MacKay yesterday whether you had been briefed about this program when you first came to the department, and you said yes, you had been briefed. You said yesterday when you were talking to me, answering my questions, that you had been aware there was a public works department and there was this little block on the side that was running the sponsorship program.
Did you at any time think it was a little strange that there was a little group of 14 people who were totally responsible for it and who didn't have to go through any other sections of the department? They were totally on their own, and the communication was between the director there, you, and Treasury Board, I guess. There was nothing inside the department, and nobody else in the department was aware of what was going on in there or how it worked. Did you find that at all strange?
 (1210)
Hon. Alfonso Gagliano: First of all, let me say--and I think the committee asked for a copy of those briefing books I received at that time--that what I recall clearly in my mind is that I was briefed in July 1994. There were new Treasury Board guidelines about the communications service and the opinion research section, and through those guidelines the contracting responsibility for communications services would stay with what was then called APORS--
Ms. Beth Phinney: We understand that, but did you think it was strange when you saw this outside the box?
Hon. Alfonso Gagliano: No. This was under Treasury Board guidelines. When you have Treasury Board guidelines, in your mind as a minister you always take them very seriously, so--
Ms. Beth Phinney: I can understand that there were guidelines for running this sponsorship program, but I don't even know whether Treasury Board was aware that this box was outside the department, that they were dealing with a group outside--
Hon. Alfonso Gagliano: At that time it wasn't. As a matter of fact, in June 1997 Mr. Guité was reporting to an assistant deputy minister. When it was decided that Mr. Guité would report directly to the deputy minister, it was at the creation of CCSB. It was created because more responsibility was added, because we had those programs from the privatization of the communications group.
There being more responsibility added and because of the importance of the government policy to coordinate all communications activities in one branch, both felt, the deputy and I, that he should report directly. That would give him the opportunity to be present at the executive committee meetings of the department. Therefore, I felt at that time, not knowing.... I mean, if you look today at what we know today and what we knew then, well, probably, I'm sure the same decision wouldn't be taken, but we were dealing with the situation with the knowledge we had then.
Ms. Beth Phinney: So it was not strange that you were meeting with Mr. Guité, that you then approved or disapproved whatever Mr. Guité said, and that he then took it back to the deputy minister, who--
Hon. Alfonso Gagliano: Yes, concerning the Treasury Board submissions.
Ms. Beth Phinney: It just seems like it was backwards. I thought the deputy minister would be the top person, but you okayed it; it didn't have to be run past the deputy minister.
Hon. Alfonso Gagliano: Sure, he had to--
Ms. Beth Phinney: It was just to write out the forms.
Hon. Alfonso Gagliano: Yes, he had to prepare the submission, and if the deputy minister had said he didn't recommend that I put this forward to Treasury Board, I wouldn't have done it.
Ms. Beth Phinney: So he would have done that?
Hon. Alfonso Gagliano: Yes, every Treasury Board submission I signed and sent to Treasury Board was recommended by my deputy.
Ms. Beth Phinney: The documents you have before you now were given to us by Mr. Marshall, who is the present deputy minister of Public Works. The first page shows what the typical procurement process is in Public Works, and if you look at the second page, you'll see how it worked under the sponsorship program. Do you agree that this is how it worked, where the steps of going to the procurement strategy, the solicitation, the evaluation, and the contract approval, were all totally missed and that it just went from Mr. Guité to Mr. Guité, I guess?
Hon. Alfonso Gagliano: Definitely from the Auditor General's report, and even some of it from the internal audit, we know that guidelines were not followed to the letter and the spirit.
Ms. Beth Phinney: Do you agree that this was how it was functioning?
Hon. Alfonso Gagliano: From what we know now, yes, but not then, because if you look at the policy and the instructions they received from the deputy minister, from the Treasury Board guidelines, from the public administration act, even though Treasury Board guidelines said that the procurement operations for communications were to stay with the board, they said you have to respect the rules.
You've had a lot of discussion in past weeks here about schedule Q, I believe. There was a requirement. The Prime Minister then asked to make sure, yes, that you have that, because of the special exemption, if you will, for communications to have procurement in their own shop, unlike the others. But every three months you have to report to Treasury Board an analysis of what you did, what contracts, and how the contracts were competitive. I think I saw at least one report in 1995 or 1996 where Treasury Board accepted that a quarterly report could be waived and that the annual report just be kept. If you look even at those reports, it is clear that Treasury Board agreed that the three-month request should have been redundant. So things were done properly.
 (1215)
Ms. Beth Phinney: So you're saying the instructions from Treasury Board were that the sponsorship program did not have to follow this procedure?
Hon. Alfonso Gagliano: The Treasury Board guidelines in 1994 were that communications procurement remain with the communication services group.
Ms. Beth Phinney: That covered all of the sponsorship program.
The Chair: Thank you very much, Mr. Gagliano.
Hon. Alfonso Gagliano: In 1994—
The Chair: I have a couple of announcements. The blues for the period up to 10:45 this morning are now, I believe, available. Again, I would like to congratulate the staff for their excellent efficiency in being able to do that.
I have been given online from Elections Canada the contributions and expenses for Mr. Alfonso Gagliano for the 1997 and 2000 elections. It's from the contributions and expenses database, which is available in both official languages. Copies will be circulated as soon as possible.
Mr. Gagliano, there is a contribution in there from Groupaction of $3,000. I think it was in the 1997 election that you received $3,000 from Groupaction. Do you remember getting that $3,000?
Hon. Alfonso Gagliano: If it's in the report, yes.
In 1997, I would like to remind you, I was just Minister of Labour.
The Chair: I'm sorry, you were just—
Hon. Alfonso Gagliano: I was Minister of Labour and not Minister of Public Works and Government Services.
The Chair: Okay.
But it's in there as a $3,000 contribution from Groupaction, along with others.
Those documents are now available.
[Translation]
You have eight minutes, Mr. Gauthier.
Mr. Michel Gauthier: Thank you, Mr. Chairman.
Mr. Gauthier, you've stated -- and I was present when you made the comment -- that you wanted to clear your name and put this matter behind you. Earlier, members questioned you about your reports on the election funding you received.
I have a short question for you about these reports before I move on to another subject. As part of the process of clearing your name, would you also be willing to make public the list of donors to corporation number 2812801, also known as Les ami(e)s d'Alfonso Gagliano Inc.? Would you be willing to disclose the donations that were made to the corporation in support of your bid for re-election to clear up any confusion over the participation of individuals or communication firms directly implicated in this scandal?
Hon. Alfonso Gagliano: Certainly I would. I recall very clearly that this corporation was set up by some friends and served on two occasions: first, when I marked my tenth anniversary as an MP and second, when I was nominated as a candidate at the convention.
Mr. Michel Gauthier: I see.
Hon. Alfonso Gagliano: I will check to see what kind of documents exist. If we're talking about a corporation, then it filed a report. I'll be happy to make public any existing documents.
Mr. Michel Gauthier: I'd like to focus in on one area in particular, Mr. Gagliano. To what extent was authority delegated to Chuck Guité? Why level of expenditures was he authorized to approve without having to discuss the matter with anyone else?
 (1220)
Hon. Alfonso Gagliano: I delegated authority to the deputy minister who in turn delegated some powers to his ADMs and executive directors. Therefore, I wouldn't want to give you any incorrect figures. However, the facts are on record and can therefore be verified. PWGSC has files showing the extent of the delegation of powers. If memory serves me well, I believe he could authorize spending up to $5 million, but I can't say for certain.
Mr. Michel Gauthier: I would imagine that is about the right figure, given the existing documentation.
The sponsorship list includes such items as billboards and sweaters bearing the Canada wordmark and posters announcing certain events. We understand how the system works. However, at some point, the program appears to have taken a different direction. In the case of the Maurice Richard Series, the sponsorship program took on prestigious overtones. Having the Canada wordmark appear everywhere was no longer the overriding consideration. Rather, it was the act of helping to produce a series about Maurice Richard, with the involvement of Robert-Guy Scully. All of this happened in 1998 and the federal government sponsored the project to the tune of $7.5 million.
Mr. Gagliano, was Mr. Guité the one who decided to take the program in a new direction and sponsor prestigious ventures, or did the decision in fact come from you?
Hon. Alfonso Gagliano: I was advised that the strategy involved was to produce a series about a great Canadian who was well-known and well-liked, not just by Quebecers but by all Canadians. I was informed that sponsorship funds would be committed to this venture, either through the Fondation Maurice Richard or the Maurice Richard family. I can't recall for certain. I was not apprised of the details.
Mr. Michel Gauthier: So you were in the loop. Therefore, the decision was made by someone else, namely by Mr. Guité.
Hon. Alfonso Gagliano: Correct.
Mr. Michel Gauthier: He committed $7.5 million in federal funds. We need to find out what kind of spending authority he had. I also had the impression that in terms of spending authority, his limit was $5 million. If that's the case...
Hon. Alfonso Gagliano: I learned that $7.5 million in federal funds had been committed when the Auditor General came to Copenhagen in September.
Mr. Michel Gauthier: Rather unusual funding arrangements were made in the case of the Maurice Richard series. The arrangements were so unusual that two heads of Crown corporations were suspended after the details came to light. Can you tell us who proposed these arrangements to fund the Maurice Richard series?
Hon. Alfonso Gagliano: When I learned about these arrangements in September through the Auditor General, I was rather surprised myself. That's a very good and timely question. The first I heard of these funding arrangements was on September 8, 2003.
Mr. Michel Gauthier: As Minister of Public Works, you announced the biggest project under the Sponsorship Program for which you were responsible. This project was very important to you. As you stated yesterday, there is no shame in admitting that the program was politically motivated. You had a goal in mind, you had received a mandate from the Prime Minister, you held the program reins and you made a decision to award the largest sum in connection with this rather unusual sponsorship initiative. We're talking about a different kind of visibility.
I can appreciate that you may not have been familiar with every single detail of the funding arrangement, but I have trouble understanding how, as the minister responsible for the program, you had no knowledge of this major commitment made by a public servant who was overstepping his spending authority and that you only learned about all of this while posted in Denmark.
Hon. Alfonso Gagliano: As I said earlier, I was informed very early on in the process that sponsorship funds were being committed to a series on Maurice Richard, but I had no knowledge of the sums being committed or of how these funds were to be used.
In the Treasury Board submission that was approved -- I believe you have that document --, the amounts listed never corresponded to anything like $7.5 million.
 (1225)
Mr. Michel Gauthier: If memory serves me well, Mr. Gagliano, VIA Rail and Canada Post are two Crown corporations that report to PWGSC.
Hon. Alfonso Gagliano: Not VIA Rail.
Mr. Michel Gauthier: Fine then. VIA Rail reports to the transportation sector.
Mr. Gagliano, do you really believe that Chuck Guité, who is neither a senior public servant nor a deputy minister -- well, he's almost a deputy minister, but his status is rather bizarre -- but rather a middle-level public servant, picked up the telephone, called André Ouellet, the Head of Canada Post and a former minister, and said: “Listen, André, I want you to invest $2 million in the Maurice Richard series”, and that André Ouellet answered: “Sure, Chuck, I'll get on it right away”. Subsequently he was suspended for his actions.
I doubt this is what really happened. I rather doubt Chuck Guité wielded that much authority. What do you think? I doubt very much that the head of a Crown corporation didn't receive a telephone call from his minister telling him: “Listen, André, you have to help us out with the funding.”
The Chair: What's your question, Mr. Gauthier?
Mr. Michel Gauthier: I've asked the question, Mr. Chairman. I'm simply elaborating for Mr. Gagliano's benefit.
[English]
The Chair: Okay. I think Mr. Gagliano has the drift of the question, so we'll have the answer.
[Translation]
Hon. Alfonso Gagliano: Mr. Gauthier, I did not discuss this file with Mr. Ouellet. As I stated yesterday, I did not discuss sponsorship files with the heads of the corporations reporting to my department. I found out about the Maurice Richard venture and about another project when I read the Auditor General's report.
Mr. Guité was well known in advertising circles.
[English]
The Chair: Thank you very much, Mr. Gagliano.
[Translation]
Hon. Alfonso Gagliano: He had a way of getting his foot in the door just about everywhere.
[English]
The Chair: I'm not going to make a comment there.
Ms. Wasylycia-Leis, eight minutes, please.
Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
You will notice, Mr. Gagliano, that committee members are getting a little impatient and frustrated with the lack of answers.
Hon. Alfonso Gagliano: So am I.
Ms. Judy Wasylycia-Leis: Yesterday I said--and I'll repeat it again today, as my other colleagues have done--that you really are playing us for fools, ignoring the fact that many of us have had long-time experience as parliamentarians and some of us have had experience as ministers of the crown, where we certainly have a notion of ministerial responsibility that is quite different from yours.
We need to try to get some answers, as the chair has said, in the interest of democracy. Mr. Mills may not agree with that, but we are in fact talking about people's loss of faith in politicians and in democratic institutions because of a glut of corruption on the scene currently. I really would like to get some answers.
I'm saying that it's getting more serious because in fact we're not only talking about a scandal that is centred in Quebec. We're talking about something that actually was starting to fester and spread across Canada.
I want to reference in fact new information we have received--and it has been released in Winnipeg about an hour ago--pertaining to the Pan Am Games. I asked you about that yesterday. I want to ask you again, because in fact we know that a sponsorship grant was provided for the games to the tune of $2.336 million. We now know, from documents from the Pan Am Games officials, that only $634,000 was forthcoming to the games. That's a shortfall of $1.7 million.
Mr. Mills would like us to believe that's all production costs. Give me a break. I think that even Mr. Gagliano would question the ludicrousness of Mr. Mills' statement.
We know in fact that--
The Chair: We will not have comments across the floor.
Ms. Judy Wasylycia-Leis: All right, I won't.
We also know that this money was--
Mr. Dennis Mills: A point of order, Mr. Chair.
The Chair: On a point of order, Mr. Mills.
Mr. Dennis Mills: Mr. Chair, the Auditor General of Canada sat here yesterday--
 (1230)
Ms. Judy Wasylycia-Leis: Oh, come on. Let me finish.
Mr. Dennis Mills: --and said that she could not ascertain the amount of value in the $84 million that was directly related to production costs on the 2000 events. You should not be casting aspersions until you have the facts.
The Chair: Thank you very much, Mr. Mills.
Ms. Wasylycia-Leis, you have the floor.
Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
Nobody is casting aspersions. We're pointing out the facts. Here we're talking about $1.7 million that has gone missing and can't be accounted for. The sum went to a firm by the name of Compass Communications Inc. of Halifax. That company is owned by Liberal strategist Tony Blom, who is a key Liberal activist in the province of Nova Scotia. Mr. Gagliano, since this happened in your time, could you tell us why it happened?
Hon. Alfonso Gagliano: I really have no idea. I know that your colleague Mr. Martin, the NDP member, raised it through the media or in the House last week. This is the kind of problem I hope the inquiry will address. I said yesterday that we know to whom the money was paid, the agencies, and what we paid them for, but now we find out that the organizations were not receiving the amounts. In the case you presented, we have to know what happened to the $1.7 million.
Ms. Judy Wasylycia-Leis: I'm glad, Mr. Gagliano, that you've at least acknowledged the significance of this gap, and I appreciate that.
Hon. Alfonso Gagliano: Definitely. It seems that there are other cases similar to this--
Ms. Judy Wasylycia-Leis: However, let me say, Mr. Gagliano, that you were the minister responsible for your department. You also had responsibility for Media IDA Vision getting that contract as the agency of record. It turns out that the invoices for the Pan Am Games were sent to Media IDA Vision. Did you know that Compass Communications Inc. is a part of Media IDA Vision? Is this an indication that perhaps there was skimming two and three times over by the way in which these companies were set up?
Hon. Alfonso Gagliano: I don't know the relationship between Media IDA Vision and Compass Communications Inc. What I can say is that the way the system was set up, contracts for sponsorship above $25,000 were given to the agency of record. In other words, we were paying through the agency of record, and the agency of record had the responsibility. That's why you see the 3% and the 12%. They were paying the other agency that was supposed to deliver the sponsorship. That's the only relationship that I understand was between Compass and Media IDA Vision. If there was a corporate relationship, I am not aware of that.
Ms. Judy Wasylycia-Leis: You would agree that it's fishy and we need to get to the bottom of it.
Hon. Alfonso Gagliano: Let's be careful here. There is a system in place that says for contracts above $25,000, I believe--I can be corrected--
Ms. Judy Wasylycia-Leis: Yes, I heard that.
Hon. Alfonso Gagliano: --the CCSB would deal directly with the communications agency. Above that, we would go through this agency of record. So I'm saying that that is the only relationship I see, because the cheque was through Media IDA Vision and not through Compass. But if there are other things, let's find out.
Ms. Judy Wasylycia-Leis: I appreciate that.
We're now talking about examples that are happening across Canada. We can say that the whole country has been contaminated by this sponsorship scandal. In the past you and others have said this was necessary because of the crisis in national unity. Mr. Guité has said it was worth breaking the rules because of the crisis happening in this country. But we're now finding that this was a way of doing business well before the referendum. We know that from Mr. Cutler's testimony. Now we know that this is pervasive across Canada and not limited to the province of Quebec. So is it fair to say that national unity had nothing to do with the sponsorship file or with the fact that rules were broken and liberties were taken?
Hon. Alfonso Gagliano: No, I don't agree with you on that. There are three points I would like to make. First of all, the sponsorship program was a national program. Anything the federal government creates is a national program, except for the regional agencies. There are specifics for that region. The majority, I would say, at least in my time--between 80% and 85% and for some years maybe even 90%, and the records are there to give you that information--was spent in Quebec, because that's where the urgent need was. But other projects were accepted as well, including the Bluenose, the Pan Am Games, and other activities in Toronto and elsewhere. So I would clarify that. This was a national program, but we spent the majority of the money in Quebec because there was a national unity crisis.
 (1235)
The Chair: Ms. Wasylycia-Leis, you can have a very brief follow-up question.
Ms. Judy Wasylycia-Leis: Throughout this you've been playing the innocent, and you don't seem to have much information on the questions we're raising. Is it possible you're worried about saying too much because you might feed this perception within your own Liberal organization of being the scapegoat for this whole fiasco? Would you say that a lot of people, from the Prime Minister on down, would benefit greatly by making you the scapegoat for this fiasco?
Hon. Alfonso Gagliano: I'll try to answer this in a very simple way. I have already said on the record that I'm not protecting anybody here. I came before this committee voluntarily and eagerly. I'm answering all your questions. You might not like my answers, but I'm answering the questions to the best of my ability.
The Chair: Thank you, Mr. Guité.
Some hon. members: Oh, oh!
The Chair: Okay. I do apologize to the witness. That was a Freudian slip.
Hon. Alfonso Gagliano: You need a trip to Arizona.
Mr. Dennis Mills: I want to raise a point. I put forward a motion at the last meeting to deal with these production costs. It is very pertinent, because Ms. Wasylycia-Leis talked about the Pan Am Games. The fact of the matter is that a 10,000-square-foot exhibit celebrating the ingenuity of Canadians was part of the Pan Am Games--
The Chair: Mr. Mills, I thought you wanted to ask a question, or whatever. As far as a motion regarding the production of these documents is concerned, we cannot deal with motions today because we are in a break week.
Mr. Dennis Mills: I hear you.
The Chair: That will be on the agenda for Tuesday when the committee is back and motions can be entertained and adopted or rejected.
Mr. Dennis Mills: But I'm trying to illustrate to you, in a very specific and concrete way, why those production numbers are important. A member of Parliament today was talking about the Pan Am Games, and she did not raise the fact that a 10,000-square-foot exhibit celebrating the ingenuity of Canadians was part of the Pan Am Games.
The Chair: That's very well, Mr. Mills, but Mr. Minto from the Auditor General's office also pointed out, when he was asked if value was given for the $150,000 commission, “Well, they maybe did pay for a 48¢ stamp.”
We have accusations on both sides, so we'll just leave it there and get the facts.
Mr. Dennis Mills: I thought you cared about the facts.
The Chair: I do care about the facts, but arguments back and forth--
Mr. Dennis Mills: You're casting aspersions before you get them.
The Chair: Debate across the table is not going to bring facts forward.
Mr. Tonks has been waiting diligently all morning, so we will recognize Mr. Tonks for eight minutes.
Mr. Alan Tonks: Mr. Gagliano, I think the frustration is on two counts. I don't think the contention is that when you took action those actions were incorrect. I think we would agree that as a result of the audit, the actions you took were correct.
I think the contention is that there may have been opportunities for you to have acted, and it's for this committee to decide whether it was the system that let you down perhaps--that you didn't get the information to carry out your ministerial oversight.
My questions are going to relate to your testimony. I am going to use your document, if I may. On page 7, if you could just clarify, it says you inherited the communications program. You said that by a decision of Treasury Board, the program was reviewed twice between 1994 and 1996. Are you referring to the two audits that were done?
 (1240)
Hon. Alfonso Gagliano: I was referring to the two Treasury Board submissions.
Mr. Alan Tonks: Okay.
You also said that included a list of venues, which pretty well reflects what the Auditor General found deficient in her most recent report. Could you please explain that?
Hon. Alfonso Gagliano: In the Treasury Board submission of 1996, you'll see a list of events that the Treasury Board approved. The Auditor General referred in her report to some of those events.
Mr. Alan Tonks: And did anyone at that time know there was any deficiency?
Hon. Alfonso Gagliano: No.
Mr. Alan Tonks: It was just a list of events.
Hon. Alfonso Gagliano: I was referring to the Auditor General's report.
Mr. Alan Tonks: On the next page you say “upon my arrival...I reviewed and followed the recommendations of the Secretariat of the Treasury Board; these included the redirection of the procurement process....” Now, remember, this is on the heels of an internal and an external audit, the one Ernst & Young did. Could you please explain to the committee what the recommendations were?
Hon. Alfonso Gagliano: The recommendations I'm referring to were the new guidelines Treasury Board adopted, and that's what you will find in the briefing notes I got in June 1997. In July 1994 there were new Treasury Board guidelines concerning communications services and opinion research, and those guidelines confirm--I don't know if it was at that time or even before--that in 1994 the procurement functions for communications services should be with the communications service and the public opinion research branch. So what I'm saying is that I reviewed--
Mr. Alan Tonks: We're aware of that.
Hon. Alfonso Gagliano: I was briefed that those guidelines had been there since 1994, that they were being implemented, and that there were reporting procedures and so on, things for which you have documents and of which you are aware. I'm referring to that.
Mr. Alan Tonks: And you said you reviewed those, so you were aware--
Hon. Alfonso Gagliano: Yes, I was aware, and that's why we created CCSB later in the fall. We created CCSB when we added other functions to APORS. It was there, so we took it as it was and added those functions; we made it bigger and we changed the name.
Mr. Alan Tonks: But I take it, Mr. Gagliano, that what you reviewed was also a culmination of some of the deficiencies that had occurred in the program when it was under APORS and Mr. Guité.
Hon. Alfonso Gagliano: And now I've learned this in the past few weeks through the committee, through Mr. Cutler's testimony, through the Ernst & Young audit, and through the internal audit. But at that time, when I took over the Department of Public Works in June 1997 and in the fall of 1997, I was not aware of those problems.
Mr. Alan Tonks: No, but you said you followed the recommendations of the secretariat of the Treasury Board.
Hon. Alfonso Gagliano: The Treasury Board guidelines--
Mr. Alan Tonks: But those recommendations were based on earlier--
 (1245)
Hon. Alfonso Gagliano: No, because the Treasury Board guidelines I'm talking about were approved in 1994. The internal audit and the Ernst & Young audit report were done in 1996, and I was not aware of them. As far as I'm concerned, I had in front of me Treasury Board guidelines approved in 1994--
Mr. Alan Tonks:
Mr. Harder gave a different interpretation of appendix Q. He said:
| Treasury Board approved the cancellation of appendix Q's reporting requirements to the Treasury Board. As the documents indicate, the secretariat concluded that “because of the high level of competition of public opinion research and advertising contracts, the reporting requirement should be removed...”....“PWGSC, however, would continue to monitor its contracts for these services and ensure that high levels of competition continue....” |
Hon. Alfonso Gagliano: When was that?
Mr. Alan Tonks: That was in September of 1996.
Hon. Alfonso Gagliano: I was Minister of Labour. I was not briefed on that.
Mr. Alan Tonks: But Mr. Gagliano, when you took over Public Works, you reviewed and followed the recommendations of the secretariat, and those were the recommendations.
Hon. Alfonso Gagliano: No. Again I repeat, I reviewed the policy guidelines of the Treasury Board, and I'll do the research myself to see if I can find the briefing notes so we can use the language.
Mr. Alan Tonks: That would be interesting.
Mr. Gagliano, in the next paragraph you say that in August “I signed a submission to TreasuryBoard” to appoint Mr. Guité as the assistant deputy minister--Mr. Guité has gone from APORS, has gone through EX-2 and EX-3, and now he's an EX-4--
Hon. Alfonso Gagliano: I believe--
The Chair: Mr. Gagliano, let Mr. Tonks finish.
Mr. Alan Tonks: --and it was “to assist me in my capacityof Chair of the Cabinet Committee....” Now, what was it you thought Mr. Guité would be so qualified for that you thought he should be elevated to assistant deputy minister?
Hon. Alfonso Gagliano: The first thing is that I didn't sign a Treasury Board submission to appoint Mr. Guité. I think if you look at the Treasury Board submission...I signed the Treasury Board submission creating a position called assistant deputy minister for communication and coordination. That was the position. The filling of the position was not my responsibility.
Secondly, at the same time, right after, the cabinet decided to create the cabinet communication...which I was asked--or right before, I don't remember. I believe it was right before that submission.
Mr. Alan Tonks: I think this is important.
Hon. Alfonso Gagliano: Therefore, on the submission, the deputy minister--I assume it was Mr. Guité who prepared the submission--assumed that it would be useful to assist me as chairman of the committee in the secretariat.
Mr. Alan Tonks: Mr. Gagliano, the record says here, from Mr. Quail, “He talked to me about that”--which is Mr. Guité--“and he also talked to the minister about it. The minister raised it with me and said he would like the matter looked at, at whether or not we could move to have Mr. Guité classified at the EX-4 level.”
Then he said later that he signed--
The Chair: Okay, Mr. Tonks.
Mr. Alan Tonks: --the document appointing him.
I guess my question is, if you didn't have much of a relationship with Mr. Quail, how did you feel that he was so qualified to be an assistant deputy minister?
Hon. Alfonso Gagliano: No, I think you meant Guité. I had good relations with Mr. Quail.
Mr. Alan Tonks: Sorry, Mr. Guité, yes.
Hon. Alfonso Gagliano: Well, as I said yesterday, I had no reason to believe otherwise. He was a good gentleman. He was working very hard. He was delivering the objective of the program. I had no reason at that time. But what I'm saying here is--
The Chair: Okay. Thank you very much, Mr. Gagliano.
We're coming close to the one o'clock adjournment time. I'm going to allow individual single questions for those who have a question.
Ms. Jennings was first, so we'll have Monsieur Desrochers, Mr. O'Reilly, and Mr. Kenney.
Mrs. Marlene Jennings: Very briefly, before I ask my question, when Ms. Wasylycia-Leis was questioning Mr. Gagliano, she stated there was $1.7 million missing from the Pan Am Games. That's a really serious accusation.
I would ask, through you, Mr. Chair, that Ms. Wasylycia-Leis table whatever documents she has that back up this accusation.
The Chair: That's a valid request, Ms. Jennings.
Therefore, Ms. Wasylycia-Leis, you will provide to the clerk the information you have.
Mrs. Marlene Jennings: Now, Mr. Gagliano, you've talked about the 1994 Treasury Board guidelines on contracting, which decided that the contracting function remain in the communication services of Public Works. At that point, that was APORS, which was headed by Mr. Guité.
You are now aware of the 1996 internal audit of APORS, which came about as a result of Mr. Cutler's allegations of wrongdoing. The results of that, or the conclusion of that internal audit, said the allegations were founded and that there should be an external audit, the Ernst & Young external audit, which resulted in and concluded that the procurement function should not remain in APORS.
The assistant deputy minister responsible at the time said “Yes, we will follow that recommendation; we will undertake the administrative mechanisms to ensure that procurement is moved out”.
For you, as an accountant, when you learned that procurement function under Treasury Board guidelines was in the communications branch or services, did that not ring a bell, saying, “Hmm, you know, there should be a complete separation”? Did it not ring a bell, based on your own professional experience before coming into government?
 (1250)
Hon. Alfonso Gagliano: Not at that time. I believe the Treasury Board guidelines were specific that procedures should be followed. The competitive process and all that was in the guidelines.
I would like to remind you that the moment in the audit of 2000 that I found there were problems, that's exactly what I did; I separated the two.
Mrs. Marlene Jennings: Yes, but the point is the fact that--
The Chair: Madame Jennings, we do have to move around.
[Translation]
You may ask a question, Mr. Desrochers.
Mr. Odina Desrochers: Thank you very much, Mr. Chairman.
Mr. Gagliano, in response to a question from my colleague the Member for Roberval, you stated earlier that you were apprised of the facts after the transactions between the Crown corporations had taken place. However, the Auditor General noted the following in her report and I quote:
| The former Minister of Public Works and Government Services told us he was aware that CCSB's Executive Director had entered into transactions with the Crown corporations; the Executive Director had informed him that moving money between entities in this way was appropriate. |
Who is being truthful, Mr. Gagliano? The Auditor General is quoting your own words, sir. What are we to believe? This version of the events, or the account given to my colleague from Roberval?
Hon. Alfonso Gagliano: What I told Mr. Gauthier was...
[English]
The Chair: Mr. Desrochers, before Mr. Gagliano responds, will you give the reference for the page, paragraph, and document you're quoting from?
[Translation]
Mr. Odina Desrochers: For once, Mr. Chairman, we have a specific reference to this affair, namely paragraph 3.44 on page 21 of the Auditor General's report.
If you've read the report three times, Mr. Gagliano, then surely you read this particular paragraph.
Hon. Alfonso Gagliano: Yes.
The Chair: Thank you very much.
Hon. Alfonso Gagliano: Mr. Gauthier asked me if I discussed the sponsorships with the heads of the Crown corporations. I told him that I had not discussed them and I stand by that statement.
According to the Auditor General's report -- and the Auditor General did put this question to me -- Mr. Guité did in fact...As you can see as well from the Treasury Board documents in which funding approval was given, certain Crown corporations were involved in projects. I was aware that Public Works was funding a portion of the sponsorships, while the corporations were picking up part of the tab as well in order to raise their profile. I asked if the rules allowed for this or for sponsorship funds to be transferred to Crown corporations and I was assured by Mr. Guité that this was within the rules.
Mr. Odina Desrochers: Did you also ask if the advertising agencies received a commission each time the Crown corporations sponsored an event?
Hon. Alfonso Gagliano: No.
The Chair: Thank you very much, Mr. Desrochers.
[English]
Mr. O'Reilly, please.
Mr. John O'Reilly: Thank you very much, Mr. Chairman.
I'm worried about those Pan Am Games. I sang O Canada at them and got a hat and a jacket. I hope it wasn't part of the sponsorship program.
In an earlier question, when I talked about Mr. Gagliano's involvement, on page 9—where he felt there was criminal activity and he wanted to call the police, but was told it was administrative—I asked who gave that advice. I was looking for a specific name or names and I didn't get it in his answer to that question.
 (1255)
Hon. Alfonso Gagliano: Excuse me, I was distracted for a moment. Could you repeat your question?
Mr. John O'Reilly: The whole place is distracting, I understand that.
My earlier question was about your evidence on page 9, where you indicated that you thought there was criminal activity and you were going to call the police, and then you took advice that it was strictly administrative.
I had asked first of all why you didn't take that action, but then who gave you the advice? I was looking for a specific answer to who would have given you the advice to change your mind on that.
Hon. Alfonso Gagliano: The internal auditor.
Mr. John O'Reilly: And that was...?
Hon. Alfonso Gagliano: I believe it was, and I think it still is, Mr. Steinberg.
Am I right in pronouncing the name, Mr. Chairman?
The Chair: Yes, Steinberg, the auditor.
Mr. John O'Reilly: Thank you very much, Mr. Chairman, and Mr. Gagliano.
The Chair: Thank you, Mr. O'Reilly.
Mr. Kenney, please.
Mr. Jason Kenney: Mr. Chairman, I'm only going to take 20 seconds, but do you mind if I do it in three very tight questions, which should require very short answers?
The Chair: Yes.
Mr. Jason Kenney: Thank you.
First, Mr. Gagliano, on July 10, 2002, The Globe and Mail quoted you as saying about Chuck Guité that, “He was a good civil servant. He served the country.” My first question is, is that still your view about Mr. Guité?
Secondly, are you aware of any direct contact that Mr. Guité may have had during this period with senior personnel in the Prime Minister's office, including Jean Pelletier?
And, thirdly, who on your staff was responsible for the sponsorship program? Who in your ministerial office was responsible for the program?
Hon. Alfonso Gagliano: In my ministerial office, naturally my chief of staff would be responsible, and he might have delegated some responsibility--
The Chair: Was it Pierre Tremblay?
Hon. Alfonso Gagliano: In the beginning, Pierre Tremblay, and then Jean-Marc Bard. He might have delegated some responsibility to senior staff. We can try to find some records to give you--
The Chair: Your other two questions were, Mr. Kenney?
Mr. Jason Kenney: Are you aware of any contact between Mr. Guité and any senior officials of the PMO, including Jean Pelletier?
My other question was, do you--
The Chair: We'll get an answer to the first one. Are you aware...?
Hon. Alfonso Gagliano: I'm not aware of a meeting between the Prime Minister's Office and Mr. Pelletier or Mr. Guité.
The Chair: Thank you very much.
Mr. Jason Kenney: Do you still hold by your opinion that Mr. Guité was a good civil servant?
Hon. Alfonso Gagliano: I believe at that time--which date did I say that?
Mr. Jason Kenney: July 2002.
Hon. Alfonso Gagliano: I believe at that time there was--
The Chair: The question was, do you still believe it?
Hon. Alfonso Gagliano: There was no reason why.... Again, I believe in due process.
Mr. Jason Kenney: The question is, is that still your view?
Hon. Alfonso Gagliano: Whether it's my view or not, I'm not going to accuse anybody until we know the facts. Sorry, I don't live by those standards.
The Chair: Thank you.
A direct answer is always appreciated.
Mr. Tonks, did you have a question?
Mr. Alan Tonks: I have one last question, Mr. Chairman, and that is to Mr. Gagliano.
Mr. Gagliano, the Treasury Board approved Mr. Guité as an EX-4, but we were told by Mr. Harder that it was not incumbent in the Treasury Board application for there to be a reorganization plan put forward, that this was something the Public Service Commission would deal with. We were also told that it was because of Mr. Guité's increase in responsibilities with respect to the size of the program and so on.
My question is, in retrospect do you believe that at that time, when you were responsible for CCSB, there ever, at any time, should have been a performance review? I would say in retrospect that there should have been a program review, a reorganization plan, and not just an elevation of Mr. Guité.
If you had to play over that again, would you have done that?
Hon. Alfonso Gagliano: Knowing what I know today, yes, I would have asked at least to go through the board. What I knew then is that we had an effective human resources department in the department who were looking into those issues. The Public Service Commission was also involved, and I believe that Treasury Board was at least consulted, but again, I only participated with the deputy minister in creating the position.
I said from the beginning that I don't appoint. I don't even appoint the deputy minister.
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The Chair: Thank you, Mr. Gagliano. I think we have that answer.
Ms. Wasylycia-Leis, please.
Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
I have one quick question for Mr. Gagliano. And I want to say that before we adjourn I have a point of order, or a point of privilege, if you will permit that.
Mr. Gagliano, you said--and I'm going back to the 2000 audit, which you started off your report yesterday by saying was your initiative--you basically only received verbal reports or you got a summary, yet throughout the two days I think it was 13 or 14 times you said, “I asked whether I should call the police”. Is it possible that on the basis of a verbal report you would feel that strongly about calling the police? Are you sure you're clear about those details, that in fact you weren't more knowledgeable than that?
Hon. Alfonso Gagliano: That's what I recall, and as I said this morning, to make sure my memory was not failing, I even checked with my executive assistant who was present at the meeting, and he confirmed it.
The Chair: You said you had a point of order or a point of privilege that you wished to raise?
Ms. Judy Wasylycia-Leis: Yes. I want to clarify the previous exchange we had in terms of the--
The Chair: No, we're not into clarification of previous--
Ms. Judy Wasylycia-Leis: Not a clarification, a point of privilege.
The Chair: A point of privilege?
Ms. Judy Wasylycia-Leis: I had said during that exchange that I was referencing the gap of $1.7 million in terms of the money that was allocated for the Pan Am Games--
The Chair: That's a point of clarification, I think.
Ms. Judy Wasylycia-Leis: --and I repeat--
The Chair: Yes, that's a point of clarification.
Ms. Judy Wasylycia-Leis: My point of privilege is this, Mr. Chairperson. In the heat of the moment I used the word “missing”. I would like to apologize for exaggerating my point and I would like to withdraw the use of the word “missing”. But I will still provide the documents pertaining to the gap in the money designated for the Pan Am Games and the money that was received by the Pan Am Games.
The Chair: Thank you very much.
We're not getting into any points of order. I think we've had enough of these for today. I will just bring this meeting to a close.
Mr. Mills and Ms. Wasylycia-Leis, I said no across-the-floor comments, and I'm going to wrap up this meeting.
Mr. Gagliano wants to say something.
Hon. Alfonso Gagliano: On a point of logistics, I'm not sure yet.... When I was called to come before this committee, the information was Thursday and possibly Friday, and we have been here. Now, through this morning's discussion, I hear the possibility of Monday. I would like to know, because I made plans for the next two weeks. I was going outside the country. So if I have to cancel those plans, I would like to know as soon as possible.
Am I back Monday or not?
The Chair: We will absolutely give you all the notice we can, and I'm sure we respect any travel commitments you have made. You're offering to be here on Monday.
Mrs. Jennings.
Mrs. Marlene Jennings: If the committee decides that we are in fact going to call Mr. Gagliano back for this coming Monday, which is March 22, I think we should inform Mr. Gagliano--
The Chair: Today.
Mrs. Marlene Jennings: --and the decision should be made now. Otherwise, if we say, no, it's not March 22, and then we decide on another date and Mr. Gagliano is not available, I fear that opposition members will attempt to read into Mr. Gagliano's unavailability things that are not there, in the same way they read into some of his responses, put negative connotations on them.
The Chair: Okay. I was going to have an informal discussion after this meeting. Therefore, I think at that point in time....
Do you want to do it on the record? All right.
Before we go to that, there are two points, and we'll therefore make a decision.
Ms. Phinney, do you have a point?
Ms. Beth Phinney: I think it might be more helpful and we might have more of an idea if we want to have him back or not if we wait for maybe....
You're going to be away for two weeks? Two weeks.
We have time after that, so we could have him back, say, on April 5, 6, or 7, or something like that.
We would have heard other people in the meantime and we could verify things, rather than continue. As has already been mentioned today, some of these questions are just being repeated over and over again.
The Chair: It is my opinion that if we are going to invite you back, Mr. Gagliano, it would be after we have heard from other people. That would be when we'd do it, and not just a continuation of the conversations we've had for the last two days.
If I can speak for the committee, I think I may be speaking for the committee to say we will not be calling you on Monday. You may therefore continue with your other, personal commitments. If the committee does call you back, then of course advise us if you have commitments you have made and we will try to respect that if at all possible.
· (1305)
Hon. Alfonso Gagliano: Thank you very much.
The Chair: Before you leave, I just want to say, Mr. Gagliano, that you mentioned earlier on about the debate about ministerial accountability being what this is all about. Yes, it is, but it's about the renewal of ministerial accountability.
I think ministerial accountability has been around at least since Confederation, and that ministerial accountability was, as far as I always took it to mean, that a minister is accountable for the workings of his department. You repeatedly and painstakingly went out of your way in the last two days to ensure that you did not accept that responsibility. I find that very unfortunate, but that is your choice.
We will have to discuss these issues as we table a report to the House of Commons. Therefore, I would like to finish by thanking you for coming forward for the last two days. We appreciate it, and the committee will continue with other witnesses. If we'd like to have you come back, we will communicate with you through the clerk. So I thank you very much.
Hon. Alfonso Gagliano: Thank you.
The Chair: The meeting is adjourned.