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Ouellet disagrees with AG findings 

(PoliticsWatch posted April 13, 2004) OTTAWA - The suspended president of Canada Post today took exception with the findings of the Auditor General's report that flagged two sponsorship deals that involved the Crown corporation. 

Andre Ouellet told the Commons Public Accounts committee Canada Post received "valuable publicity and advertising in return" for the money it spent on two projects mentioned in  Auditor General Sheila Fraser's report on the sponsorship program. 

Ouellet, who has been a senior executive at Canada Post since January 1996, also criticized the Auditor General for wounding the 60,000 employees of the corporation and for wounding him. 

"The past month has been a living hell for me and my family," Ouellet said in his opening statement. 

On Feb. 24, Prime Minister Paul Martin suspended Ouellet and two other Crown corporations executives whose corporations were mentioned in the Auditor General's report. He said he was informed of his suspension by letter and has not been able to talk to employees at Canada Post since his suspension. 

"The only thing they allowed me was to go to the post office to buy stamps," said Ouellet, who is the only one of the three who were suspended not to be fired. 

The Auditor General's report took exception with two sponsorships that involved Canada Post. 

Canada Post, along with Via Rail, provided $1.6 million in funding to a company producing a series on hockey legend Maurice "Rocket" Richard. Unlike Via, Canada Post did not involve advertising agencies in its transfer of money to the production company, L'information essentielle. Fraser took exception with Canada Post entering into the agreement with "no signed contract" or "no signed proposal or written business case." 

But more interesting was how Canada Post received funding for its participation in an international stamp competition. 

Canada Post hired Lafleur Communications to manage the project and to find funding partners for it. Lafleur only found one funding partner, the Communications Coordination Services Branch, which operated the sponsorship program. 

In total, the CSSB spent $715,000 on the project. Lafleur received over $115,000 directly for production work. The other $600,000 was given to Canada Post, but Lafleur and another ad firm, Media/I.D.A. vision, took commissions totalling nearly $80,000 for, as the Auditor General described it, "simply transferring money," leaving Canada Post with $521,000. Canada Post then used that money to pay Lafleur $516,000 for production costs another fees. This work was done without a contract tendering process. The remaining $5,000 went to another ad firm. 

"We question the value of this sponsorship, since Canada Post was already required to display the Canada wordmark on all its corporate identity applications, under the Treasury Board's Policy on Federal Identity Program," the Auditor General wrote. 

Canada Post defended the decision to the Auditor General, saying that the presence of ministers at various functions provided visibility in addition to the wordmark. 

Liberal MP Shawn Murphy questioned Ouellet on the stamp sponsorship and said that it appeared to him that Lafleur received a double commission and the sponsorship itself was questionable. 

"We felt that we were entitled like any other organization to receive money from the government," Ouellet said in defence of Canada Post receiving money from the sponsorship program. "Yes, Lafleur got a commission, but we didn't pay the commission. The commission was paid for by the government."

However, Murphy was not satisfied with that response. 

"Don't you agree in hindsight that it did not look good?"

To which Ouellet replied, "I accept that it does not look good and especially the way the Auditor General presented it did not look good." 
Check out these related links:

arrow-trans.gif (111 bytes) Public Accounts Sponsorship Hearings 

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