[Recorded by Electronic Apparatus]
Tuesday, May 14, 1996
.1544 
[Translation]
The Chairman: Good afternoon all.
We will try to finalize and pass a report on chapter 12 of the October 1995 report of the Auditor General of Canada entitled Systems in Development: Managing the risks.
.1545
Now, witnesses were heard and there was also a change in the chairmanship which means that I'm not really cognizant of every last detail of each provision of this draft report. On the other hand, I have read it.
So, at the outset, I'd like to know if any of our colleagues would have comments on the two introductory paragraphs, paragraphs 2 and 3. Do you, colleagues, have any changes to propose?
No news is good news! Fine.
Now let's go to the background. Do you, colleagues, have any comments on paragraphs 4, 5 and 6? No news is good news!
And now to the section titled "Observations and recommendations", paragraphs 7, 8, 9 and 10.
[English]
Mr. Williams.
Mr. Williams (St. Albert): Unfortunately I have to admit that I haven't focused as much attention on this particular report as perhaps I should have.
I'm looking at paragraph 10, about the fourth line. It says:
- First, they stressed the importance of ``sponsorship'' to the success of the project. Senior
management must be truly committed to a project when they are spending taxpayers' dollars on
its development.
Thank you.
[Translation]
The Chairman: We'll let paragraph 10 stand. Do you have a formal amendment to move?
[English]
Mr. Williams: Mr. Chairman, I just wanted to draw people's attention to that in paragraph 10. When we get down to the recommendation after chapter 14 I'll be coming back to that.
[Translation]
The Chairman: Agreed. We're now on paragraph 11. Mr. Brien.
Mr. Brien (Témiscamingue): My colleague, René Laurin, who worked for the Bloc on that chapter, is suggesting a recommendation. There would be something to add to paragraph 11 describing Mr. Little's testimony, among others, and indicating that following that testimony additional resources would be needed for monitoring.
The recommendation would read as follows:
- That the government consider allocating more staff to the group responsible for monitoring
projects in the area of information technology, given the savings that could result from a tighter
control of costs and deadlines for each project.
The Chairman: Right. So this recommendation is to be added after the last sentence in paragraph 11. After the words "camouflage one's inability to complete a project successfully", this next paragraph would be added...
Mr. Brien: Yes.
The Chairman: ...as well as the following recommendation. Agreed.
Paragraphs 12 and 13. Any comments on paragraphs 12 and 13? No comment?
We now go to paragraph 14 and the resolution following:
- Consequently, the committee recommends:
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Do our colleagues have any comments? Mr. Williams.
[English]
Mr. Williams: On paragraph 10, which we have just talked about, it was pointed out quite clearly during the hearing we had that failure is an orphan and success has many parents. In order for us to ensure that these projects, which are of significantly high risk, have parents and are successful rather than orphans abandoned and that at the beginning of the project there is a serious buy-in by any particular department that is going to be affected by the development of this program...
I think, for example, of the development of the payroll program that was supposed to be a government-wide program sponsored by Public Works. We spent $60 million before we realized that we had taken on far too big a project. Since it wasn't really going to do what each individual department thought it was going to do, they abandoned it and wouldn't touch it with a barge pole. Therefore they were able to walk away from their original commitment with impunity. As a result, we spent $60 million and accomplished nothing.
Therefore we must ensure that the Treasury Board, prior to approval of these major projects, has a complete commitment and buy-in by the senior managers of the departments affected in order that they will know that there is to be accountability.
We talk in chapter 11 about accountability, and in chapter 12 we talk about breaking it into chewable chunks. These are fairly obvious and simple management techniques, but we want to ensure that no particular department feels that it can run away, spend millions and millions of dollars, find out that the project is a failure, and then say, ``Don't blame me''.
If we spend $60 million with absolutely zero results for it, I want to be able to blame somebody. Therefore I want to see in the recommendations that Treasury Board will ensure, prior to the funding of any project, that there is a complete and total commitment by the senior managers of the departments affected and that they are collectively held responsible for the success or failure of the project.
The Chairman: Okay. Is it all right for the wording? You don't have a written amendment?
Mr. Williams: Unfortunately, I don't. As I said, I haven't given as much commitment and attention to this particular report as perhaps I could have.
The Chairman: Okay. We will come back.
[Translation]
Any other comments? Mr. Telegdi.
[English]
Mr. Telegdi (Waterloo): On this particular point, I thought what we were going to do was have a lead person responsible for the project so we could track him.
Mr. Williams: I'm talking here about programs that are multi-departmental in their application, and I have no problem with there being a lead department. But what we found out with the payroll program was that everybody said, ``That's not a bad idea; go ahead and do it'', but when it didn't meet the specifications, failure is an orphan and they wanted nothing to do with it.
If they say, ``Yes, develop this program on behalf of my department'', they're not going to be given the opportunity of turning their backs and walking away and saying, ``Don't blame me''.
Mr. Telegdi: So we might be talking about sponsorship and ownership.
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Mr. Williams: Sponsorship and ownership, buy-in, commitment, accountability - whatever name we want to use, I want to be able to point the finger later on if it doesn't work out.
Mr. Telegdi: As we add that to the recommendations, we should also have a lead person on it so we don't... One of the problems you have is to say these folks buy in. Everybody says, I didn't buy in, but he did or she did or whatever. That's what we're talking about, that we couldn't find a project leader; we couldn't find anybody to take ownership. That really comes down to one person. I know they have other people to work with, but somebody has to be tagged so that at least we have somebody who's going to explain, be accountable as to what happened. Right now it's in there and nobody owns it. I agree.
Perhaps in number 10 we could just add ``sponsorship'' and ``ownership''. Then I concur with the recommendation.
Mr. Williams: Sponsorship, ownership, accountability and, if possible, break it down into chewable chunks, as we explain in number 12, so that we don't take on a massive project and find out it's too big to handle.
The Chairman: We'll change the wording of paragraph 10.
Mr. Williams: We add another point, Mr. Chairman. I have no problem with points 1, 2, 3 and 4, but we need a fifth point: that prior to the Treasury Board approving a project it ensures there is sponsorship of the program; that there is buy-in to the program if it's multi-departmental; that there is accountability of who is responsible for the program; that if possible the program is broken down into chewable chunks prior to the approval of the Treasury Board.
Mr. Telegdi: Ownership.
Mr. Williams: I said sponsorship, ownership - either word. I'm easy on -
Mr. Telegdi: No, we need both.
Mr. Williams: Fine - sponsorship, ownership, and accountability.
The Chairman: Are there any other comments on the recommendation?
[Translation]
Before adopting the report, are there any comments on the conclusion?
So we shall now come back to the amendment to paragraph 11. All those in favour of the amendment moved by Mr. Brien, or Mr. Laurin, please raise your hand.
Amendment carried unanimously
The Chairman: I'll ask Ms Salvail to read the amendment by Messrs. Williams and Telegdi. We're adding a point 5.
Mrs. Michelle Salvail (researcher for the committee): I have the text in English.
The Chairman: Go ahead.
[English]
Ms Salvail: It would be something like:
- Prior to the funding, that the Treasury Board Secretariat ensure complete sponsorship,
ownership, buy-in of ideas, accountability and, if possible, that the project would be divided
into chewable chunks.
Mr. Williams: I was going to say, Mr. Chairman, that in the past, where there has been unanimity on a variable change such as this, we have allowed the chairman to exercise his authority to put it in appropriate writing and table it afterwards, since we have an agreement. We don't have to have the exact wording right now. I'm prepared to delegate that to you prior to the tabling of the report.
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The Chairman: It will be item 2B), ``that the chair be authorized to make such grammatical and editorial...''. It will be our motion 2B) in thirty seconds.
[Translation]
Any further comments?
We will now vote on the three motions.
Will the draft report as amended be concurred in?
Draft report, as amended, concurred in
The Chairman: Is the Chairman authorized to make whatever grammatical or stylistic changes are required without changing the substance of the report?
Motion carried
The Chairman: Will the report, as amended, be presented by the committee chairman to the House of Commons?
Motion carried
[English]
The Chairman: Thank you.
[Translation]
Before screening the Market Place program, we will report on the steering committee meeting we had before this meeting for the benefit of our colleagues.
Tomorrow, we will be meeting our research staff and the staff from the Auditor General's office to get a briefing on the family trusts mentioned in the report tabled last week by the Auditor General.
Thursday morning, from 9:00 a.m. until noon, we will be meeting with Messrs. Gravelle, Dodge and Lefebvre as well as the Auditor General on chapter 1 of that report.
Your colleagues from the steering committee unanimously decided to recommend that the Public Accounts Committee pursue its examination of the two 1991 family trust cases mentioned in the Auditor General's Report.
There is nothing to hide. Some may think that it should be examined by the Finance Committee. However, the members of the steering committee had a good discussion about this earlier and they are of the opinion that it's the responsibility of the Public Accounts Committee to examine chapter 1 of the Auditor General's Report tabled on May 7th.
To this end, during the week following our return, at our May 28 and 29 meetings, depending on the information we have then, depending on whether we're done with the matter Thursday this week, we'll decide during another steering committee meeting which will be held immediately after this week's Thursday meeting whether we should pursue our examination of the family trust matter or if we should undertake the examination of chapter 11 of the Auditor General's Report concerning tax evasion at Revenue Canada.
That should keep us busy during our meetings of May 28 and 29.
We'll immediately screen the video on moving services. We have to make a decision. If we can make it as early as this afternoon, all the better. We will have to decide together whether there's enough information in this program to justify reopening the investigation, hearing the witnesses again or hearing others.
I'd like to remind our colleagues that we previously decided to take a month to proceed with the adoption of this report when it was stood the last time. If we decide we don't want to hear any other witnesses but that we should work at the wording again, then we'd appreciate our colleagues sending their amendments to the clerk as soon as possible so we can finish the whole thing within the month we had set.
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We didn't manage to plan beyond June 5, but depending on our examination of family trusts and tax evasion, you can understand that we'll be examining reports until summer recess.
Is that in agreement with what our colleagues... Yes, Mr. Williams.
[English]
Mr. Williams: Mr. Chairman, we have a motion in front of the entire committee that Wednesday, May 15 be a hearing on chapter 1 and Thursday, May 16 be a normal hearing. I would ask that we get this approved as a motion before we move on to the video and so on.
The Chairman: What do you move?
Mr. Williams: I move that on Wednesday, May 15 we have an in camera briefing on chapter 1 and on Thursday, May 16 we have a hearing on chapter 1 of the Auditor General's report tabled in May 1996.
Motion agreed to
The Chairman: Thank you, Mr. Williams.
Mrs. Barnes.
Mrs. Barnes (London West): This is from your report just now. Then after we get back from the break you're proposing to have another -
Mr. Telegdi: No, we'll decide after.
The Chairman: After the meeting.
Mrs. Barnes: What you are telling me is this is to explain the two chapters, right? Will there be another briefing for the next chapter? Is this what you want? Then there will be another hearing on that chapter. This is what you said for the 28th and 29th. Is that what I understood?
The Chairman: After the meeting of next Thursday -
Mrs. Barnes: You mean this Thursday.
The Chairman: - this Thursday - we will decide if the family trust case is finished for us and we are able to work on the report. We can decide to have other witnesses or the same witnesses at a meeting on Tuesday, May 28. If it's finished, we will have a briefing on chapter 11 on the 28th and witnesses on the 29th. If we continue with family trust on the 28th, we will have a briefing on chapter 11 on the 29th.
Mrs. Barnes: Just for my own clarification, when are we supposed to finish this issue on the moving, or is that what today is about, too?
The Chairman: It may be the beginning of June. Okay?
Mrs. Barnes: Fine.
The Chairman: Thank you.
[Translation]
The clerk tells me that to view the video, we have to adjourn our meeting temporarily. After that, we'll resume to decide what we want to do.
Meeting adjourned
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[Video Presentation]
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The Chairman: Do you, colleagues, have any comments? I have a question. How many witnesses did you hear before drafting the report?
[English]
Mr. Telegdi, you have some witnesses on this matter before we try to have a report?
Mr. Telegdi: This is a whole different segment from what we were dealing with previously.
I guess what I find really disturbing is that the move by the government has been operated by... Four van lines were found guilty of price-fixing back in the early 1980s. Allegations that there were just no systematic ways of checking weights - they call it weight-bumping in the industry and it was rampant - is something I have been aware of now going on two years.
The one that ties in directly to us from the clips you saw is what happened with the RCMP. But I am not aware of anything within the government such that it had a way of checking the weights of what was being moved. It was all coming from the van lines, which contract with movers. They jointly work for a van line, which coordinates their activities. Obviously, the more weight you carry, the more money you make. My understanding is that this has been done systematically, in terms of the weight-bumping.
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Interestingly enough, that aired one night and we had our meeting the next night. The person who was there was Chuck Martin. I managed not to make the connection, which is quite amazing.
So no, we didn't deal with that in terms of the report. We didn't deal with it in terms of whether the government is paying for what they should be paying for, what steps the government has taken to make sure that kind of fraud no longer takes place and to what extent they can show us what kind of checks they had on those moves outside of manufactured weight scales.
With this thing, we really haven't dealt with that. In terms of the witnesses, it was not something we dealt with within the report, but it strikes at the very heart of what happens in move management, which is done by the IDC committee.
One of the feelings of the committee was that we should get IDC right out of the management of household moves. I think that's one thing we concurred on. Some of the things put before the committee were weight-bumping, gift-giving, and having employees from the IDC who work for the government one day quit and end up working for the van lines. This is the first one where we actually saw a hard case of weight-bumping. Somehow we have to make sure that's not happening.
What's troublesome about the video is that you see people who had a complaint but had nowhere to take it to. The police are too busy. Our government and the military are too busy, in terms of managing it. Where do you get some kind of redress?
Make no mistake; given the size of the government moves, it really affects everybody. It affects private people, private customers who are moving, because so many of the moves are done by the government. We really set the standard. That's what goes on there. Even if it's not a military move, chances are it's coloured by the kind of practices that go on.
The Chairman: Mr. Williams.
Mr. Williams: Thank you, Mr. Chairman.
I don't have my file on the household goods removal services with me, but it seems to me that I made a recommendation to tighten up weight-bumping by the mover and also by the person who is being moved. There was an indication from the witnesses that the people whose goods were being moved were compensated on a basis related directly to the weight of the move for such items as propane tanks that couldn't be removed because they were hazardous material, drapes that don't fit the windows of the new location, and so on.
I made a specific recommendation that the policies be changed so that there is no incentive to bump the weight by the person who's being moved. I talked about washing machines that have no motors and various other things - heavy equipment that is discarded at the new location.
These recommendations, Mr. Chairman, were defeated by the committee, but I'll have to bring them back to the committee as we finish up our report.
I would certainly suggest that we include in our report that the RCMP be asked to investigate the allegations contained in this particular report. I'm quite prepared to support that. It is not the role of this committee to get into a criminal investigation. We have all kinds of people in this country who have the expertise and the responsibility to do that. I'm quite prepared to attach to the report a recommendation that the RCMP be asked to do it - not us but them.
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The other thing I would say - and I think I said this in committee the last time, when we got into the furore regarding the report - is it's not our job to micro-manage the bureaucracy or to do the administration on behalf of the bureaucracy, but I think it's our responsibility to hold them accountable for what they do and for how they spend the taxpayers' money. If the government accounts for 35% or 40% of the total moves in the country and if they don't insist upon a random check at the other end, as the lady in Vancouver did, then I would think they are significantly remiss in their management of taxpayers' money.
As I say, I don't like micro-management, but I certainly want to put the onus on the IDC or whomever is in charge of organizing the moves for government. They are accountable. If they allow government funds to be paid out on a fraudulent basis to someone who is scamming the government, then they are accountable every bit as much as someone who feels they can defraud the government and has criminal charges laid against them.
Based on that particular video, I wouldn't want to reopen and call more witnesses, Mr. Chairman, but I would certainly suggest that we add a couple of recommendations to our report.
[Translation]
The Chairman: Mr. Paradis.
Mr. Paradis (Brome - Missisquoi): We are talking about $100 million to move household goods. The second figure is even more of a concern. The federal government alone accounts for 40% of all household moving costs in this country.
Four big companies are involved in these moves. We know that IDC does that planning for us.
We've just watched a Market Place program broadcast last December about the abuse in household moving costs. What I get out of it mainly is that there's overbilling.
The second point is to know whether all those removals were necessary. When the federal government accounts for 40% of all household moves in the country, that's a lot.
I'd like us first to see if all those moves were necessary and then how it might be possible to tighten monitoring standards and finally ensure that the public servants who manage this program answer to our committee for the public monies spent.
Our committee must see to it that someone, at some point, is made answerable. I'd like us to reopen this investigation and hear once again constable Karen Mang from the RCMP in Regina who, after her household move, had to pay some rather stiff bills and who also says that criminal charges should have been brought against the van line.
If the RCMP is getting diddled with household moves, I'd like to know what's going on. We know the two main "movers" in federal government ranks: the RCMP and National Defence. I'd like us to hear the person in charge of household moves from the RCMP for RCMP officers and his counterpart at National Defence in charge of doing that same kind of work for that department.
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I'd like us to reopen the investigation; it's awful to hear that it's $100 million a year and that it accounts for 40% of all household moves in Canada. It's public money and I suggest we reopen the investigation.
The Chairman: Mr. Brien.
Mr. Brien: We're talking about investigation the company in question, criminal charges and so forth. Going any further in this affair is not necessarily within our terms of reference; on the other hand, I don't know if individuals or even the RCMP itself have done anything about any of these happenings.
I'm not opposed to requesting the public servants to come before us and tell us what they have done because the federal government has certainly paid way too much for some moves. Examples were given.
What action did then government take, because one of the clients was injured? Is it questioning its whole policy in the area of household moves payments?
If we do it, we'll have to hear from the RCMP and National Defence at the same meeting and compare their testimony. The two policies should be similar.
We can do it for the federal government, but I'm not quite sure I fully understand what you mean about criminal charges, Mr. Paradis.
Mr. Paradis: It's not a matter of bringing criminal charges. I'm just looking at the civil aspect of the matter. I'd like the RCMP officer to bring her bills and explain how she was mislead by the van line.
I want to see the procedure behind all that. If it can happen to an RCMP officer transferred to Regina, it can happen elsewhere; but everything isn't very clear, the amount of the bill and so on. That would give us an example of how some do business.
Mr. Brien: Did anyone take any procedure against the company after the news report?
Mr. Paradis: Not to my knowledge.
Mr. Brien: And the RCMP itself figured it wasn't worth an investigation? As a client, the RCMP was had.
The Chairman: Mr. Brien's question is relevant. Mr. Paradis, you're a former president of the Quebec Bar and you have a Quebec wide reputation. You know the definition of "anyone" in the Criminal Code: anyone can lay a complaint. After what was said, even the police officer said that there should have been criminal charges brought against the company. That's a police officer saying that. Why didn't she put in a complaint under the "anyone" provision?
Mr. Paradis: We could put that question, Mr. Chairman.
The Chairman: Mr. Brien.
Mr. Brien: I'd like it to be checked out. There may be some who did but it wasn't drawn to our attention. Our work is actually to see what steps the RCMP and National Defence took and whether they overpaid some bills. Are they looking at taking action? What are they going to do to correct this or prevent it in the future?
We could do that during one single meeting as we had scheduled, in June, when everybody could be here at the same time.
[English]
The Chairman: Mr. Hubbard.
Mr. Hubbard (Miramichi): Mr. Chairman, I rather suspect we're looking at a bad policy, a bad procedure. It's something we can never correct and probably none of the departments can correct, but we do know that over the last year or more there have been a lot of concerns with it.
I've heard of companies that backed up to DND personnel houses to move, looked at a three-cord woodpile out behind and said ``We'll take that with us''. They load it on.
Basically we have to look at one of two things. The person being moved could be given a flat rate for a move. In other words, a certain amount of money is allowed and that's the maximum, regardless of whether you have two children or a family of ten. Or the government could deal with the person on a percentage basis. In other words, the person being moved will have to pay a percentage of the cost of the move, which ensures he's the guy who watches out to see that the contract is not fraudulent.
To try to give an open-door policy that anyone can move a farm at the government's expense doesn't seem a very realistic procedure. Some maximums, some guidelines, have to be put on. Probably the person who's moving, whether he's single or married, gets a flat amount of money for his move and the government forgets about all these side issues we're talking about here in this committee.
The Chairman: Mr. Telegdi.
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Mr. Telegdi: I recall that we spent a fair amount of time talking about freight subsidies in the Atlantic. Mr. Williams came up with many good suggestions as to how we should try to recover funds from a program that has essentially been terminated, and if there's a possibility of recapturing some funds.
I supported that, because I think that any time the government gets ripped off, the standard in the country slips. There's no question that all sorts of Canadians saw that piece done on Market Place. It seems to me that every one of them was bothered by everything they saw in terms of people being ripped off.
When those things go by without any answer to them, the whole integrity of our law and order system is brought into disrepute.
Following up, just to see what happened there, perhaps having the RCMP officer before this committee would be useful.
The other thing is that we have had numerous studies done by government on the moving industry within the framework of the federal government, one of them being Consulting and Audit Canada. Some might have seen some of the reports they came out with. They have been recommending for years that the whole system should be changed.
Certainly that's in Consulting and Audit Canada, and I believe there are two principals there. One was Michel LeSieur, who was involved in the investigation of the whole issue, andJean Petitclerc was involved in it as well. I think they could add some very good input to the committee on how the system could be restructured so this won't happen.
The other one that has studied it a great deal is the Competition Bureau. They studied it for well over a year. It's important to remember that George Addy, who's the head of that bureau, basically said that the practices of the IDC, the interdepartmental committee on household moves, was virtually inducing the van lines to break the terms of their prohibition order, which was put against them in 1983.
It staggers my comprehension to see that we have a department in the government - and it went through numerous leaderships at the political level, Conservative, Liberal - continuing in this fashion. It's almost as if they're a little law unto themselves.
I think it would be useful to have the principal researcher who did the work for the Competition Bureau before this committee - not with a lot of superiors and what have you, but specifically him. We could put to him the question of what he found when he did those investigations.
Probably what you'll find is what you have seen. Then the question will become what this committee can do to get this changed and get an accountable system, such as Mr. Williams tried to establish for the freight subsidies in the Atlantic, even though that's been said and done.
How can we do that for something that is ongoing? That's very important. We have the chance to deal with the concerns that were raised on that tape. If we don't deal with them as a committee of Parliament, then who's going to deal with them?
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The Chairman: Mr. Williams.
Mr. Williams: Thank you, Mr. Chairman.
I don't agree with Mr. Telegdi's underlying assumption that the only honest people are the clerks who did the work and that the managers aren't therefore accountable as well and aren't as honest and as law-abiding as the junior clerks. I don't agree with his premise that we should invite these particular aggrieved individuals to this committee in order to listen to their stories.
The reason I don't want to spend my time listening to the RCMP constable is that from her we're either going to get ``everything is fine'' or ``everything is not fine''. If everything is not fine, what are we going to do? We're going to say, ``RCMP, would you please investigate this issue?'' Therefore, why don't we just say ``Please investigate the issue'' to the RCMP now?
As far as the accountability of the IDC, I think I've been more critical of the management of that organization than anybody else in this committee.
A voice: No.
Mr. Williams: I have brought forward numerous recommendations that I thought, from a policy perspective, were going to coerce them into making some significant changes by holding them accountable. I still stand by the fact that we must hold them accountable.
But I don't want to take up this committee's time, Mr. Chairman, to call more witnesses and to have more verifications and allegations of this type of situation when, in the final analysis, what are we going to do? We're going to refer it to someone who can investigate it - certainly not this committee - someone like the RCMP, who has the authority to lay criminal charges. If there has been fraud, presumably we would follow that up with civil suits to get reimbursement for the excess moneys paid out.
I think we can do it by making sure our report advises the government of our serious concerns. Of course, our reports always request a government response. If we find the government's response is that they're not prepared to do anything, the committee can take it up a second time.
If we recommend to the federal government that the RCMP be requested to investigate this particular matter, I certainly hope their response will be, ``Yes, the RCMP will investigate this matter''.
I leave it in their very capable hands. I feel that the RCMP are deserving of their reputation: they do their work properly. I'm prepared to abide by their investigations.
Therefore, Mr. Chairman, I move that we revisit the household goods removal services report to include further recommendations based on the Market Place report that we have seen.
The Chairman: Mr. Grose.
Mr. Grose (Oshawa): Let's not get sidetracked here. I think we are getting sidetracked. I'm talking about the RCMP. From my sentence in the military, I seem to recall that the RCMP cannot even enter Department of National Defence property.
Furthermore, the RCMP are not particularly concerned with what happens with their individual moves. They call up the military, who have 137 people who shuffle papers, not one of whom has ever lifted an end table, and they shuffle paper in and out. No one who shuffles this paper and authorizes payment of the bills ever actually sees the load, and this is where the breakdown is.
There is another thing that has to be considered. I have some experience with trucks and overweight and underweight. Trucks are weighed between here and Vancouver probably fifteen times, but they're weighed by the provinces, not by the federal government. In provinces that use the Mounties, there's a separate Department of Transport. It's not done by the police, so you have divided authority there. It would be easy for them to check the waybill and find that your waybill says 100,000 pounds and you're only carrying 80,000 pounds, but no one cares. It's a divided responsibility. If you're underweight, the province doesn't care.
I believe we have to - and I thought we came to this conclusion once before - get back to the source of the problem, which was that the Department of National Defence didn't seem to be terribly interested in this job anyway. They have a little empire that they built there, but I think they'd be glad to get rid of it.
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We've got to find a better system. Picking at it by having this guy look at this while a civil servant over here checks the load when he gets where he's going... He doesn't care.
Let's go back to the source of the problem. I think instead of wasting our time going up these blind alleys, go back to DND and see if we can get that fixed.
Mr. Williams: But, Mr. Chairman, I'm just suggesting in my motion that we revisit our report and include specific recommendations in there. If Mr. Grose feels that the responsibility should be moved away from the military, I have no problem with that whatsoever. I want accountability by the civil service for the taxpayers' money they are spending.
As I said, for example, if they're spending 30% or 40%, with all the moves in Canada, I would have hoped by now that they would have instituted a system of random checks to ensure honesty by their supplier. If that hasn't been done, Mr. Chairman, then I would be very concerned about the capability of the management of IDC.
We can put that in our report, but I don't want to take more witnesses and more time. We've seen the evidence. We know what we want. Let's put it in a report and carry on.
[Translation]
The Chairman: I just want to make sure that my colleagues have read the minutes and proceedings of this committee, issue 73, 31 October 1995, when our witnesses were Mr. George Addy, a director from the Competition Policy Bureau, Lieutenant-General Fischer, Senior Assistant-Deputy Minister in charge of equipment, Lieutenant-Colonel Legue and Lieutenant-Colonel Stewart, Chairman of the Inter-Department Committee. There are several answers there.
[English]
Mr. Telegdi and then Mr. Crawford.
Mr. Telegdi: I'm not looking have everybody from the TV program here tomorrow. I think the RCMP officer would be interesting because we could follow up on the government's particular situation.
You just asked: has this been ongoing? I'm saying to you that the system over there has been corrupt. I have been saying that for two years.
I'm saying there are two sources by which the committee can get a feel for how that was.
One is from Consulting and Audit Canada, which means those two people I named. They did a major review on the moves and what the problems were. They could come before the committee to deal with that.
The other one is the principal investigator for the Bureau of Competition Policy. He was here with Mr. Addy, but you'll notice that Mr. Addy did all the talking. I'm saying to get the principal investigator before the committee and let him tell us in committee what he found. This is without having it answered by Mr. Addy, which is when it gets a little coloured.
Then you'll get a feel for how long this might have been going on. My suggestion is that it has been going on for a long time.
IDC thought that any change the previous government tried to impose upon them... I think you raised the question, or was it your colleague in the committee at the time who raised the question?
The Chairman: Abbott.
Mr. Telegdi: It was about why the IDC was not abolished, as was directed to be done by three cabinet ministers of the previous government: the Solicitor General, the Minister of National Defence, and the Minister of Supply and Services. These were three ministers of the previous government who basically said to abolish that department.
That decision got turned over by a letter written by the head of the IDC, Colonel Stewart, or whomever, and signed by - I think you folks asked the questions on it - an assistant to the Minister of National Defence on behalf of the minister. It said it was not within the competence of the three ministers of the previous government to disband the IDC.
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Imagine a colonel writing a letter signed by a political assistant to the minister saying the previous three ministers did not have the competence to abolish a little department like the IDC. This is what is really staggering.
They have been fighting it tooth and nail. All I'm saying is the people I mentioned will give the committee an idea, and we will have a chance to look at this. They're government employees. They're not anybody outside the government. They're government employees who can talk to us directly on this.
The Chairman: Mr. Crawford.
Mr. Crawford (Kent): Mr. Chairman, I was only agreeing with Mr. Williams on this resolution. I believe it was a resolution. I think just doing spot checks is the simplest way to do things.
Mr. Williams: It is proper management.
Mr. Crawford: Well, number one, yes. You do it with proper management and then with spot checks. I believe you used 100,000. No, it was our friend Ivan. But let's say you're only carrying 80,000. You know you might be spot checked. You're going to watch; you're going to be a little leery of doing this.
The Chairman: We will go to Mr. Williams. Then I think we will vote.
Mr. Williams: One final point, Mr. Chairman. I just want to be sure we don't confuse several issues here. The IDC has over the years created a bureaucratic system that allowed, coerced - I'm not sure of the proper word - collusion and price-fixing within the industry. This was dealt with by the Competition Bureau of Mr. Addy's department. This is an entirely different issue from the fraudulent activities we saw on Market Place. It is an entirely separate issue altogether.
We have focused so far, in our report and in the discussions we have had with the witnesses, on the issue of the Competition Bureau, the price-fixing and the incestuous relationship between IDC and the moving businesses, and so on. I've spoken out clearly on this issue.
This issue on Market Place is a new one that has been brought to this committee. It concerns fraudulent practices. This is why we keep them separate. It is why I'm recommending we reopen or continue our report. But I don't think we need to call any more witnesses because when we hear these people, what are we going to do? We're going to refer it to the RCMP for investigation. Therefore, let's just do that now. Afterward I could ask you a pile of questions, Mr. Chairman.
The Chairman: Okay. I think we have a motion from Mr. Williams that the committee reconsider the draft report on moving services to consider other recommendations to take into account the Market Place video just viewed.
[Translation]
Mr. Paradis: Mr. Chairman, I have a bit of a technical type problem. You may remember that we had temporarily adjourned the meeting to view the video and call the meeting to order after that. That video is not technically part of this meeting. We're getting ready to make a recommendation based on a video that's not part of our proceedings.
The Chairman: In any case, that doesn't prevent us from making a recommendation. The video exists; the program exists. It was viewed. Do you want us to change
[English]
the Market Place video as presented last fall on CBC television?
[Translation]
Do you want us to mention the date it was broadcast?
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[English]
Mr. Telegdi: When was our meeting when we had the movers here?
The Clerk of the Committee: November 29.
Mr. Telegdi: So this would have been the November 28 video.
The Chairman: We will indicate the date when the video was presented.
[Translation]
Motion carried
[English]
The Chairman: Mr. Telegdi.
Mr. Telegdi: I think I would like to move that we hear from Consulting and Audit Canada. Previous motions certainly don't preclude this. They are the people who did the report on household moves, in particular Mr. Michel LeSieur and Jean Petitclerc.
The Chairman: Do you have comments, Mr. Williams?
Mr. Williams: Can Mr. Telegdi tell us who they are? How senior are they? Do they speak as individuals? Do they speak on behalf of their department? Is a departmental manager or a senior officer going to be present?
Secondly, what do we expect them to tell us?
Mr. Telegdi: I think what we would expect them to tell us is that there need to be major changes in terms of the moving. They'll give us reasons why. They are investigators with Consulting and Audit Canada and they are the ones who did the study. I believe you have part of a report. Part of it was edited out, but you have this report available to you. I provided it.
I will tell you what I'm worried about and I guess what I don't want to let go of. I don't see this is any different from the freight in the Atlantic. The fraud has taken place systematically over the years. What can we do to recover some of those funds?
One of the chapters we're dealing with in the present Auditor's report is tax avoidance. Well, if there has been systematic fraud, what can we do about getting some of this money back?
One has to be convinced that it has happened on a large scale. If one is convinced, what measures are taken to try to recover some of this money?
Mr. Williams: You will recall I made additional recommendations to this committee to be included in the report. I thought I was being relatively mild in my recommendations, but they did go beyond what this committee had intended, and I didn't get support for these recommendations.
I'm prepared to reintroduce these and even strengthen them and add to them. I fully supportMr. Telegdi's position that this whole moving business needs a complete overhaul. It needs to be shaken out and turned upside down. They need to be told there will be accountability in this program.
I think we table a report that says this. We ask the government to come back within six months and tell us what they have done and what they have decided. Then we can take up the issue after this if we do not like their response.
But it is not this committee's responsibility to go in and micro-manage and do all the recommendations. My goodness, we have all kinds of civil servants with all kinds of expertise to say the Standing Committee on Public Accounts has spoken and we had better act. We know what they want and we had better provide it.
As far as Mr. Telegdi's other point, I'm fully prepared to say yes and ask the RCMP to investigate. If fraud has been found, the government must take whatever steps they can to recover money that they have paid out under fraudulent circumstances.
I'm prepared to bring these recommendations forward. I would hope everybody around this table would support these recommendations. Let us move forward and let us deal with other issues. I can work with the members of the government side to bring forward recommendations in the report to ensure we give a clear message that things will change on household moving.
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[Translation]
The Chairman: Mr. Telegdi, the point I wanted to make is that nothing prevents you as a member of this committee from meeting whomever you want who can give you information on this subject - you may change your recommendations based on that. I agree with Mr. Williams. Why should the committee meet that person? You probably may have recommendations to make and we can debate them; during the 150 days following the tabling of our report, the government will answer.
I think the approach is...
[English]
Mr. Hubbard.
Mr. Hubbard: I'm rather disturbed at this business. We all seem to assume that there are a lot of fraudulent practices. Do we have evidence to indicate that?
I watched Market Place. I think a lot of us watch that on a weekly basis. It's a very sensational program. In terms of what I know about movement of articles and goods in this country, as Mr. Grose has mentioned, in most cases it's very difficult to get weights. Here was this company out there getting their weights at the city dump. Is that a legal weight?
When you go in to move someone's property, there are 5,000 pounds of furniture. What is the type of furniture? It all depends on how much care has to be taken. In most towns and villages across this country, there is nowhere that could be weighed. Most trucks that move furniture move probably two or three households at once, rather than one. It's not simply one load of furniture.
We're jumping to a lot of conclusions. I think the committee should take and review this at the basic level to see what's happening before we start accusing people in this country of fraud.
Fraud is a very serious thing. Maybe it's mismanagement. That's what I spoke about last time. Maybe we're not managing the file properly. But to go out and say that four van lines and hundreds of family units are out there committing offences of fraud against the government of this country...
We're dealing with a very serious issue, and I think we should be careful before we do too much in that area. Let's look specifically before we make general accusations.
Mr. Telegdi: That is exactly the reason I said we should have somebody here from Consulting and Audit Canada to tell this committee what they found so there is some confidence in the members' minds that these things do exist. I'd be prepared to go with Mr. Williams and support all those things, because from everything I've seen, I think it does cry out for an investigation.
I'm not sure what kind of plan the government would come up with to check it out and measure it, but all sorts of studies have been done. That's the tragedy of this whole moving business. This has been going on for a long time.
I can't underline it more strongly than by telling you that the head of the Competition Bureau tells us the IDC could be inducing the van lines to break the terms of their prohibition order. Here's a government department causing the suppliers to the government to break the prohibition order that was put on them, about not retarding competition, back in the early 1980s. They were fined $250,000 in the early 1980s.
That's why I suggested we hear from Consulting and Audit Canada. Yes, it's a disturbing allegation. That's why I wanted the committee to investigate. I'm giving you the wonderful people of Consulting and Audit Canada.
Mr. Hubbard: Even in Atlantic Canada, do you have proof that fraud was happening? We hear a lot of stories, but stories are stories. When you get an RCMP officer in here - that lady we saw - do you think she'd sit at this table and say she was fraudulently moved in terms of the bills?
Perhaps our clerk could ask the IDC for maybe ten family moves in the past year. Let our committee sit down and look to see what the charges are. Then we'd have a better impression of what's happening. But to try to bring in all these inferences of fraud and mismanagement is very serious.
[Translation]
The Chairman: Mr. Paradis.
Mr. Paradis: I just want to support Mr. Telegdi's proposal.
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We could discuss this a for a while yet, but I think that if we set aside an hour to hearMichel LeSieur and Jean Petitclerc from Consulting and Audit Canada we should then immediately be in a position to do the follow-ups suggested by Mr. Williams which is to go through the report based on what we have heard today with a view to being more rigorous.
The Chairman: We'll wind up with a delay. If they appear, we'll have to look at the draft report again in the light of whatever might be said. It would be unrealistic to think that we could be able to do it immediately. We'd need an extra meeting.
[English]
Mr. Williams.
Mr. Williams: Let's just stop and think about what we're doing here. The last thing I am competent to do is pass judgment on anybody's moving waybills or prices or anything. I'm just in no position whatsoever to do it. Therefore, I don't want to see that evidence presented at this committee. I'm in no position to pass judgment one way or the other.
Second, we've already heard from Mr. Addy from the Competition Bureau, who instructed IDC to make certain changes. These changes were being implemented, and I for one, as a member of this committee didn't like what they were trying to implement, because they were going to go from everybody having a piece of the pie to only one person having a piece of the pie or one person having the whole pie.
Because they dominate the market so much, with 30% or 40% of the entire business, I recommended that one or two bidders be automatically left out and the business be spread around between I think four out of six. I did not like the standard methodology IDC had brought up, that 40% go to the first bidder, and 25% and 15% and so on. I thought that was a total lack of competent management on their part. They just came up with a formula and said there it is, I don't have to think about this any more. Management has to be evaluating the procedures each and every day, and that applies to IDC or whoever their successor organization may be.
Therefore, in terms of the two witnesses Mr. Telegdi is talking about, I'm not aware that they can add anything to the discussions we've already heard so far. We hear from departments of government; we do not hear from individual civil servants. People have to speak on behalf of their department. Therefore, if these two people who are being proposed cannot speak on behalf of their department, then we obviously would need someone here who can speak on behalf of that department.
These people do not have the authority to come here and speak as individuals. They're speaking as civil servants who are employed by government and who have been given a specific role to play, maybe an investigative role within their department. It's the department that speaks, not the individual, and we have to get these things straight in our minds.
I'm not in favour of hearing them at all. I think we have heard all the information we want, and we can go forth, write the report, table it, and wait and see what the government does as a response.
The Chairman: Mr. Telegdi, you can correct me if I'm wrong, but I think those two persons, Mr. Petitclerc and Mr. LeSieur, are outside consultants. Is that right?
Mr. Telegdi: No, they are with Consulting and Audit Canada. They prepared the report on the whole moving business.
The Chairman: But Consulting and Audit Canada is a department of the Government of Canada.
Mr. Telegdi: Yes, it's within Supply and Services. They would come in and tell us what they found in their report.
The Chairman: Are we ready to vote? I'll repeat the motion from Mr. Telegdi. It is moved that the committee hold a meeting with two investigators of Consulting and Audit Canada who prepared a report on IDC.
Mr. Williams: I'd like to amend that, Mr. Chairman, to say ``provided they can speak on behalf of their department''.
Mr. Telegdi: I think they'd be speaking on behalf of the report they've prepared. I'm amazed that you'd want to tie their hands.
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Mr. Williams: I don't want to tie their hands, but it's only appropriate to remember that in regard to these people who have been commissioned or employed to write these reports on behalf of their particular department, it is the department that is speaking; it is not them as individuals. If their report is not endorsed by their department - and I don't know whether it is or it isn't - we're going to have a difficult time and they're going to have a difficult time. Therefore, it is the department that speaks. I have no problem with them as long as they can speak on behalf of their department.
I would propose that change, Mr. Chairman.
[Translation]
The Chairman: We'll vote on the amendment. Let's go on to Mr. Williams' sub-amendment to the motion which would read:
[English]
- That the committee hold meetings with two investigators of Consulting and Audit Canada who
prepared a report on IDC, provided that they can speak on behalf of their department.
Mr. Telegdi: This amendment should read:
[English]
``provided that they can speak on behalf of their department''.
[Translation]
That is Mr. Williams' amendment.
The Chairman: Agreed.
Amendment negatived: yeas 2, nays 4
The Chairman: Let's go back to Mr. Telegdi's main motion:
[English]
- That the committee hold meetings with two investigators of Consulting and Audit Canada who
prepared a report on IDC.
Motion negatived: yeas 3, nays 4
The Chairman: Could I suggest that we authorize the clerk to ask Messrs. LeSieur and Petitclerc to submit their comments in writing without delay so we can proceed with the examination and the drafting of our report.
[English]
Is there any problem if we ask the clerk to write to...?
Mr. Williams.
Mr. Williams: Is it appropriate, Mr. Chairman, for us to accept a written submission without hearing the testimony? I ask yourself or the clerk.
The Chairman: It's possible. It will only be advice, an opinion. If they can give some information, why not?
Mr. Williams: My point is, Mr. Chairman, that if we read their submission and we decide to incorporate some of their points in a report, how are we able to include that in the report if it's not part of the record?
[Translation]
The Chairman: My proposal was not to take extracts of their recommendations and introduce them into our own report. I thought they could enlighten us during the drafting of our own recommendations.
They might raise interesting points which could cast a different light on things and help us see things differently.
Mr. Paradis: I so move, Mr. Chairman.
The Chairman: Agreed. Mr. Paradis moves that we ask Messrs. Petitclerc and LeSieur to send us their comments on removal of household goods in writing. The committee can then decide what it wants to do. It might even go so far as to serve as a summary of the report.
Motion carried
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The Chairman: Thank you and have a nice day.
The meeting is adjourned until 3:30 p.m. tomorrow.