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PACP Committee Report

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“The G8 Legacy Infrastructure Fund”

Overview

1.       The Office of the Auditor General’s (OAG) spring 2011 audit report on the G8 Legacy Fund is one of the most consequential publications to come out of the OAG in recent years. The OAG report detailed the administration of a $50 million slush fund for the 2010 G8 Summit concentrated exclusively in Minister Clement’s Parry Sound—Muskoka riding. Similar Summits received one tenth of the federal funding the Muskoka Summit received.

2.       The Conservative members of the Public Accounts committee have declined to bring a representative from the OAG to Public Accounts committee to discuss this chapter specifically. This is an insult to the accountability and transparency that this committee stands for.

3.       We agree with the Interim Auditor General’s comments on the Legacy Fund’s administration, where he said that “rules were broken”[1]. However, the Conservative members of the Public Accounts Committee have produced a report that contains fundamental flaws and disregards any real accountability. Their duty is to go beyond partisan lines and seek out answers for the Canadian public their serve. Their inaction is jeopardizing the committee’s legitimacy as the overseer of government spending.

Background

4.       The $50 million dollar fund that would become the G8 Legacy Fund was first presented to Parliament in the November 2009 Supplementary Estimates (B). The government used the $83 million budget line “Border Infrastructure Fund” as a “vehicle”[2] to distribute the money quickly. The OAG concluded that this “did not clearly or transparently identify the nature”[3] of the Legacy Fund.

5.       When the government added $10 million in Supplementary Estimates (A) 2010-2011 to the Border Infrastructure Fund they labeled it “Funding for the Border Infrastructure Fund related to projects in support of the 2010 G8 Summit.”  The OAG concluded this was “still not clear because it suggests that these projects were somehow related to border infrastructure, which was not the case.”[4] 

6.       The Conservative government was in a minority parliament. They would have needed the support of at least one party to pass any legislation, and had they been forthright about the nature of the funding, it is obvious an unnecessary vanity project in the middle of an economic downturn would never have passed. This is why we believe their unclear labeling was used multiple times.

The Summit and Project Selection

7.       The dates and location of the G8 Summit were announced on November 1, 2008. The Legacy Fund was announced on February 6, 2009. As early as August 2008, Minister Clement had been soliciting local area mayors to propose projects for federal funding.

8.       Clement’s constituency and political staff were actively involved in these projects. His constituency office was the collection point for proposals; his Ministerial staffers provided advice and wrote rejection letters to the towns. Clement’s use of exempt staff was intended to sidestep Federal Access to Information (ATI) laws. It is only through Municipal Freedom of Information (FOI) requests that the NDP was able to discover their intense involvement in the Fund.

9.       The OAG’s report stated that officials from Infrastructure Canada were unable to provide them with documentation showing how the projects were reviewed and selected; through ATI releases we now know that Infrastructure officials had a list of all 242 projects prior to the report’s publication. A memo from the Chief of Staff of the Deputy Minister of Industry reads: “FedNor officials transferred the catalogue of projects to Infrastructure Canada officials. All 242 project proposals were sent; this included the 32 projects which were recommended by Minister Clement.”[5]

10.   The OAG report also stated that the Summits Management Office (SMO) had no documentation to show their involvement “in the review or selection of the 242 projects.”[6] A senior SMO official was a member of the Clement-chaired Local Area Leadership Group (LALG), whose meetings focused on the review and criteria for Legacy funding.[7]

11.   After soliciting his local area mayors to return to him with project ideas right before the writ dropped on the 2008 Federal election, Tony Clement’s constituency office received a total of 242 project proposals. While Clement claimed on June 20, 2011 that the area mayors “said they agreed that 242 was [sic] too much and they suggested 32 or 33, which they conveyed to me,”[8] there is no documentation that supports this. We know many projects that were considered high priority by the mayors themselves—such the crumbling fire hall in Minett—were still rejected. Letters of rejection were issued for 210 unsuccessful projects by Clement’s exempt ministerial staff.[9]

Conclusions

12.   It is now clear that not all materials pertinent to the project review and selection were given to the Auditor General’s office. In the words of the interim Auditor General: “We did approach the Minister's office to request any documentation that was available in the Minister's office or in the constituency office to explain how the projects were selected. We received a small amount of documentation, which wasn't directly relevant to the question of the project selection and we therefore concluded as we did in the audit.”[10] However, we know that both Industry Canada and Infrastructure Canada were in possession of all 242 project proposals before the audit was conducted.[11]

13.   The importance of a functioning checks and balance on government expenditures cannot be overstated. Neither can the significance of Parliamentary committees being able and willing to enforce these checks and balances. The Conservative members of the Public Accounts Committee, by refusing to pursue solid answers and real recourses regarding the Legacy Fund, have abdicated their responsibilities to the Canadian public to whom they answer.

Recommendations:

14. In light of the concerns outlined above, the NDP recommends that:

  • All documents in Industry Canada and Infrastructure Canada must be given to the OAG.
  • All documents related to the G8 Legacy Fund must be tabled in the House of Commons
  • The Standing Committee on Public Accounts must perform a complete review of the Spring 2011 Auditor General report.
  • The Standing Committee on Public Accounts must allow the Auditor General to testify at committee to this specific chapter of the Auditor General report.

[1] Fekete, J. ‘‘Rules were broken’ over G8/G20 summit spending: Auditor-General’. The National Post. October 6, 2011.

[2]Hon. John Baird. Hansard, Standing Committee on Public Accounts. November 2, 2011. (1620)

[3] The Office of the Auditor General of Canada. Spring 2011 Report. Chapter 2 (2.22).

[4] The Office of the Auditor General of Canada. Spring 2011 Report. Chapter 2 (2.14).

[5] Halucha, Paul. Memorandum to the Deputy Minister. November 2, 2011.Released through Access to Information December 9, 2011.

[6] The Office of the Auditor General of Canada. Spring 2011 Report. Chapter 2 (2.17).

[7] 2010 G8 Summit Local Area Leadership Group meeting minutes. http://bit.ly/GV4LRs

[8] Hon. Tony Clement. Hansard, Standing Committee on Government Operations and Estimates. June 20, 2011. (1645)

[9] Letter from David Pierce to Walter Schmid, July 9, 2009. “G8 Documents”. http://bit.ly/H9eOpt p.9.

[10] Wiersema, John. Hansard, Standing Committee on Public Accounts. October 5, 2011.

[11] Email from Tom Dodds to France Pégeot, January 13, 2010. “Infrastructure Canada request for G8 Project Proposal Information.”