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Gagliano's testimony

(PoliticsWatch posted March 18, 2004) 
Standing Committee on Public Accounts
Comité permanent des comptes publics
EVIDENCE NUMBER 10, TÉMOIGNAGES DU COMITÉ NUMÉRO 10
UNEDITED COPY - COPIE NON ÉDITÉE
TRANSCRIPTION FROM 10:35 a.m. TO 1:00 p.m.
2004-03-18

 

 

 

À (1035) 
Hon. Alfonso Gagliano: Yes, I learned of all those things that happened prior to my arrival only by listening to this committee here.

Mrs. Marlene Jennings: Yes. Thank you.

Given what you've now learned about Mr. Chuck Guité and his management of APORS from 1994, the period that the internal audit and then the Ernst and Young audit covered, 1994 to part of 1996, and the conclusions of those audits, backdating, duplication of invoices, false invoices, requisitions missing, basically complete flagrant regard to the most basic policy guidelines and rules concerning contracting, etc., would you not as minister have questioned, why is this man in charge of communications and sponsorship?

Hon. Alfonso Gagliano: Definitely I would have questioned him on that.

Mrs. Marlene Jennings: Do you not now ask yourself how is it that the deputy minister, Mr. Ran Quail, who came in to Public Works as a deputy minister in 1993 and who was there and present during Mr. Cutler's complaint, the internal audit, the Ernst and Young audit, that Mr. Ran Quail, I assume, is the one who suggested or proposed, recommended to you that a position of assistant deputy minister for communications be created and that Mr. Guité would be a good guy to fill that position?

Hon. Alfonso Gagliano: Again, the creation of the position of the assistant deputy minister of communications I think that's a separate matter. But I have to say that I, for the first time, met Mr. Chuck Guité when I arrived at the department the summer of 1997.

Mrs. Marlene Jennings: So you didn't know Mr. Guité previous to that?

Hon. Alfonso Gagliano: And until the internal audit of 2000 I had no complaints or anything. He was a nice gentleman, always good manners. Nobody ever spoke to me and said there was something wrong and so on. Therefore I had no knowledge of what was going on prior to that.

Mrs. Marlene Jennings: Mr. Ran Quail--the former deputy minister, Ran Quail--when he testified before us, informed us that Mr. Guité had a direct line to the minister's office. That Mr. Guité went directly to the minister--and that would include the ministers who preceded you--and that this was very unusual. Under normal government hierarchy and authority, assistant deputy ministers or executive directors would go through the hierarchy and through the deputy minister and that basically he was paralyzed before this.

Did Mr. Ran Quail ever inform you that you should not be having, or your officials should not be having, direct contact with people who were in positions below Mr. Ran Quail, that this was not in accordance with regular rules and procedures regarding authorities?

Hon. Alfonso Gagliano: No, I don't recall that he made that specific statement. What I want to say is that I had good relations with the then deputy minister, Ran Quail. I used to meet with him regularly. He knew that once awhile Mr. Chuck Guité would come to meet me to give me some information on the sponsorship program. Every time I would meet Chuck Guité I would kind of debrief him. After the next meeting I would meet him and say "yes I met". And we would discuss for example, we have to go before Treasury Board for a new budget so he will be coming to see you with the information and so on.
À (1040) 

Mrs. Marlene Jennings: Okay. The three contracts that the Auditor General was initially asked to audit. The first one was signed in December 1996, therefore you were not at Public Works. The second one was signed in April 1997, if I'm not mistaken, we were in an election at that time and you were not the minister.

Hon. Alfonso Gagliano: I wasn't there. I became minister on June 11, 1997.

Mrs. Marlene Jennings: Yes. When you ordered the internal audit of the communications and sponsorship program, was there in any way possible uneasiness on your part as to how the people that were running the program--Mr. Guité and his subordinates were running the program--did that play in any part with your decision that it seems like something's not right with this, let's see if it's just my feeling or if it's.... 

Hon. Alfonso Gagliano: Definitely. I'm going to be very brief. Two things happened. Mr. Guité left the department, I believe around the end of 1999 and we had also the problem in Human Resources. Naturally when you leave a department, once he was gone, rumours started also in the air and we had the problem. So that was what really made my decision to call for an internal audit and find out what was there.

The Chair: Thank you, Madam Jennings.

Madame Picard, s'il vous plaît, huit minutes. I apologize, I should have gone to you before I went to the Liberal's round. So it will be yourself, followed by Mr. Tonks who will be next.
[Français]
Mme Pauline Picard (Drummond): Merci, monsieur le président. Monsieur Fournier, monsieur Gagliano, bonjour.

Monsieur Gagliano, lors de votre entrevue à RDI le 7 mars 2004, vous dites: "J'ai appris qu'il y avait des problèmes administratifs sérieux seulement au printemps 2000."

Qu'avez-vous appris, monsieur Gagliano? Quelle était la nature de ces problèmes?
L'hon. Alfonso Gagliano: La nature, c'était un rapport intérimaire que j'avais reçu du vérificateur interne et en présence du sous-ministre et d'autres personnes, c'était un rapport verbal, donc je n'avais pas le rapport comme tel, ils m'avaient dit qu'il y avait des documents qui manquaient dans les dossiers, les dossiers n'étaient pas bien gardés, ce n'était pas clair de la façon dont les contrats étaient donnés. Alors tous ces problèmes-là ont été signalés et c'est à ce moment-là que j'ai demandé au vérificateur interne: " est-ce que je dois appeler la police "? Et il m'a dit: " non, il n'y a pas de matière criminelle, c'est seulement des problèmes administratifs " et là j'ai exigé un plan d'action pour le corriger immédiatement. Ils m'ont soumis après un plan d'action de 37 points. J'ai mis un gel sur le Programme des commandites à ce moment-là et on a fait une nouvelle compétition des agences de communications, le tout, je crois, à la fin de 2000-2001 était rétabli à la même place et je demandais une vérification interne des suivis pour m'assurer que toutes les corrections qu'on avait accepté de faire aient été mises en place et en même temps j'avais demandé la négociation pour transférer le Service de coordination des communications à Travaux publics, au bureau d'Information Canada et gardant sûrement l'octroi des contrats à Travaux publics afin de séparer les deux fonctions et donc éviter qu'il y ait des problèmes. Donc, toutes ces choses-là ont été faites et reconnues, d'ailleurs Communications Canada a été créé à ce moment-là et par ordre en conseil.

Mme Pauline Picard: Dans cette discussion que vous avez eue avant que vous demandiez le rapport de vérification était-il question de favoritisme, de fabrication de fausses factures, d'argent qui ne se rendait pas aux événements?

L'hon. Alfonso Gagliano: Non, il n'y en avait pas. Comme je vous le dis, s'il y avait eu des choses mentionnées, je vous le dis, le premier rapport que j'ai reçu c'était un rapport verbal du vérificateur, il ne m'a pas mentionné qu'il y avait de l'argent qui manquait ou d'argent qui est allé à autre chose, parce que s'il y en avait eu...

Mme Pauline Picard: Peut-on savoir quels sont les problèmes pour que vous puissiez demander une vérification interne?

L'hon. Alfonso Gagliano: Bien, quand vous demandez un rapport de vérification interne, le vérificateur interne vient vous dire qu'il y a des problèmes sérieux administratifs, définitivement vous posez la question qui vous vient à l'esprit: " est-ce qu'on s'est fait voler de l'argent, est-ce qu'on appelle la police "? Il dit: " non, il n'y a pas de matière criminelle, il y a des problèmes administratifs " et il m'a donné quelques exemples de factures qui n'étaient pas combinées comme il faut, qui n'avaient pas le contrat, la copie du contrat n'était pas inscrite au dossier, ce sont des choses administratives. Alors je pose la question au vérificateur interne qui fait la vérification et qui dit que je ne dois pas appeler la police, alors mettons un plan d'action et réglons les problèmes, si ce sont des problèmes administratifs prenons des actions administratives, et c'est cela qu'on a fait.
À (1045) 

Mme Pauline Picard: C'était suffisamment grave pour que vous puissiez penser d'appeler la police. Il y avait quoi? Des fausses factures et on vous a soumis des faits que l'argent ?

L'hon. Alfonso Gagliano: C'est la première chose que le ministre fait quand on a un fonctionnaire qui nous rapporte qu'il y a des choses qui ne sont pas correctes, la première chose qu'il fait--ce n'était pas la première fois qu'il arrivait que j'avais un rapport qu'il y avait des problèmes--et la première chose qu'on fait c'est de poser la question: " y a-t-il matière de fraude, doit-on appeler la police "? Je l'ai fait. Les personnes en charge m'ont répondu que, non, ce n'était pas le cas. Donc, on a procédé avec des corrections administratives.

Mme Pauline Picard: Alors, monsieur Gagliano, le premier ministre actuel affirme qu'il a compris qu'il y avait un problème seulement en prenant connaissance du Rapport de la vérificatrice générale en novembre 2002. Est-ce crédible, à votre avis, alors qu'il était membre du Conseil du Trésor?

L'hon. Alfonso Gagliano: Écoutez, ce que je sais c'est que moi, comme ministre responsable du programme, j'ai été mis au courant qu'il y avait des problèmes sérieux administratifs en, je crois, avril 2002. Le rapport de vérification interne a été mis sur l'Internet, donc tout le monde était au courant, je crois, au mois d'août 2000. Alors ce rapport-là a été envoyé au Conseil du Trésor et aussi au Conseil privé, donc j'imagine que l'interne du fonctionnement du gouvernement, le ministère des Finances aurait pu être mis au courant en même temps que le Conseil du Trésor, donc au printemps 2000. Alors si moi je n'étais pas au courant avant, comment pourrait-il être au courant avant le printemps 2000.
Mme Pauline Picard: Vous étiez ministre des Travaux publics.

L'hon. Alfonso Gagliano: Oui.

Mme Pauline Picard: Vous étiez membre du Conseil du Trésor.

L'hon. Alfonso Gagliano: Oui, mais j'ai été mis au courant lors du rapport de la vérification interne que j'avais moi-même commandée. Je crois que le ministre des Finances avait été mis au courant de ce problème à ce moment-là.

Mme Pauline Picard: Après le rapport?

L'hon. Alfonso Gagliano: Oui, après le rapport de vérification de l'an 2000. Tout le gouvernement était au courant, via le Conseil du Trésor et le Conseil privé. Tous les ministères sont informés de ce qui arrive de cette nature-là.

Mme Pauline Picard: D'après vous, qui était au courant?

L'hon. Alfonso Gagliano: Au courant de quoi?

Mme Pauline Picard: Du rapport de la vérification interne.

L'hon. Alfonso Gagliano: Je crois que le sous-ministre a dit à ce comité que le Conseil du Trésor et le Conseil privé faisaient une vérification interne.

Mme Pauline Picard: Le ministre des Finances était-il au courant?
L'hon. Alfonso Gagliano: Je ne sais pas s'il était au courant, mais ici on parle toujours du printemps 2000, là où la vérification a été faite.

Mme Pauline Picard: Il était toujours le ministre des Finances.

L'hon. Alfonso Gagliano: Bien sûr.

Mme Pauline Picard: Suite à la demande d'une vérification interne, il y avait de sérieux problèmes. Qu'avez-vous choisi de faire avec ce rapport?

L'hon. Alfonso Gagliano: On l'a rendu public. On a mis en place 37 points pour corriger la situation. On a gelé les programmes jusqu'à ce que le plan d'action soit mis en place. On a ouvert un processus compétitif pour choisir les agences de communications. Pour la première fois, il y avait un grand nombre d'agences qui avaient été choisies. Je crois que le plan d'action et les nouvelles agences ont été mis en place à la fin de 2000 et au début de 2001. En même temps, j'ai demandé à mon sous-ministre d'entrer en négociation avec le Bureau d'information du Canada pour transférer tous les programmes de communications à Information Canada et garder l'octroi des contrats à Travaux publics pour séparer les deux fonctions. Le tout est entré en vigueur le 1er septembre 2001. J'ai quitté le 15 janvier 2002. Une semaine avant mon départ, le directeur de l'exécutif de Communications Canada m'a informé que la vérification interne de suivi avait été complétée et que tout avait été mis en place tel que le plan d'action l'exigeait.
À (1050) 
[English]
The Chair: Merci beaucoup, Madam Picard.
Just one clarification on your testimony, Mr. Gagliano. You mentioned that when you took over you were concerned about these contracts, and you put them out for retender, for new bids. Am I correct in saying that?

Hon. Alfonso Gagliano: I said, once I learned the management problem that we had in the 2000 internal audit, at that time there was a 37-action plan to correct all the problems, but also there was a new competitive bid to choose communications agencies. That was after the other 2000.... It was not when I arrived at the department. When I arrived at the department, I didn't know anything.

The Chair: Were you the one who asked for these competitive bids? Who asked for them?

Hon. Alfonso Gagliano: I did.

The Chair: Okay.

Mr. Tonks, please, eight minutes. 
This will be the last intervention before a scheduled break at 11 o'clock, and then we will return. 

Mr. Alan Tonks (York South-Weston, Lib.): Thank you, Mr. Chairman, and thank you, Mr. Gagliano, for being here this morning.

I think that one thing that we can agree on is your characterization of the sponsorship program and its administration--now in retrospect--and that it really was a "fiasco". That's your word, and I think that all of us certainly can agree with that.

My question is, you have spent a considerable amount of time, and I can appreciate it as can the members of the committee, on how you feel particularly let down by the system, and that it didn't respond appropriately. You had put in recommendations that you thought would make changes. For example, being able to, as a minister, designate the deputy minister, which is an interesting proposal. 

But, Mr. Gagliano, you haven't spent any time characterizing how you think that the taxpayers of Canada, the citizens of Canada, feel with the kind of information that has come out with respect to that fiasco. You've demonstrated yourself how you feel, but would you like to take just a moment to reflect on how you think the taxpayers feel in terms of how the system protected their interests. 

Hon. Alfonso Gagliano: Well, I can tell you one thing by personal experience on this matter, the taxpayer, Canadians, in general, feel very angry. And because everybody has portrayed me as the great inventor or the great director of all this fiasco, well, definitely, I can tell you that sometimes it's even dangerous for myself walking in a shopping centre.

Yes, Canadians are angry. But I think what is important is this committee, and the other inquiry and the police investigation will prove, I'm very well convinced, at the end of all this--it might take some years, it might take two, three years before we know the real truth--what I did, that I acted at discharging my ministerial responsibility with integrity and honesty and at the end of this process we will prove it.

But, yes, Canadians are angry and they are entitled, and very rightly so.

Mr. Alan Tonks: They are entitled to be angry, okay.

Notwithstanding the fact that Mr. Marshall provided us with a chart that shows that most of the activity that was occurring that Canadians are angry about occurred, so to speak, under your watch, Mr. Gagliano. Your contention is that you didn't know anything about the fiasco that was going on. That's your contention.

L'hon. Alfonso Gagliano: Yes. I've been giving even the details and the documents, referring to documents, how the process was put in place. First of all, there were new communication guidelines issued concerning advertising and opinion poll research in 1994. I was not even in Cabinet. Whoever authorized this special box, I think they call it in your chart there, they had authority to do not only deliver the communication service, but also do the contracting.

That was a Treasury Board guideline issued in 1994. I was not in Cabinet. Then, everybody says the program was created in 1997 by me. The sponsorship program was created in 1996. You just have to read the Treasury Board cabinet committee. The word "sponsorship" is there. Everything is there, even a list of events, the same events that the Auditor General is talking about in her report.

Yes, I arrived in 1997. I was told the way the program functioned. I was told the program was functioning well. I had no indication that there were problems until early spring or late winter of 2000. That's when I ordered an internal audit.
À (1055) 

Mr. Alan Tonks: All right. Mr. Harder, the secretary of Treasury Board, has stated that internal audits normally would not go before Treasury Board.

Hon. Alfonso Gagliano: That was a policy before 2000. I was sitting in Treasury Board when that policy was changed.

Mr. Alan Tonks: And you were there when it was changed.

Hon. Alfonso Gagliano: Yes.

Mr. Alan Tonks: Mr. Marshall has stated that, under the CCSB, through that period of the CCSB that you said that you put in place, there was a complete short-circuiting with respect to the stages calling for procurement strategies to be mapped out for the solicitation of bids, the companies that were going to be provided with the opportunity to bid, of the evaluation. There was no evaluation given, there was no contract approval. Those stages were completely circumvented and that's the chart that he placed.

Were you aware that was happening, since you did put in place the CCSB?

Hon. Alfonso Gagliano: Let's put it this way, the CCSB was put in place during my tenure, as a minister. The CCSB, what we did was take a poll, which was existing before my arrival--I believe since 1994--it was already in that structure because of the Treasury Board guidelines in 1994. We had four more programs because of the communication group propitiation that were laying out there and we were asked to put together. So we put the four programs, plus the advertising service with the sponsorship, plus the opinion research and we created the CCSB. In other words, we created a new name, a new box, but with the same existing rules that were already in place and where nobody told me there were problems. 

Therefore, what I only did as a minister was approve the CCSB, everything, everything that was in a poll, and adding those four new programs.

Mr. Alan Tonks: 

Mr. Chairman, perhaps I could put it this way, Mr. Cutler, in 1994, brought the same issue that you had identified in 2000...the process of audit. Mr. Cutler was aware of the deficiencies in taking the contract review, the authorization of cheques, and the cross-referencing of work to be done with payment and so on. Mr. Cutler has indicated that he was taken out of that loop, if you will, intentionally. An internal audit in 1996 and an external audit found that his concerns were founded.

Were you not informed, on taking over in 1997, that the audit had been done? If you were aware in 2000 of how important that was.... Mr. Cutler, when he was asked, Mr. Chairman, "what could you have suggested in 1996 that would have obviated and stopped this kind of thing", said, "by putting the kind of system in that you did in 2000".

Are you suggesting here, then, that this came as a, how do I put it, bolt out of the blue that the audit told you that you should do this, that you weren't aware that, perhaps, you should have done that?

The Chair: Your time is up.

Mr. Alan Tonks: Can I have an answer? Could the committee have an answer?

Hon. Alfonso Gagliano: I think I said it very clear from the beginning. I got there in 1997 but the program wasn't in place, the structure that you're talking about for the communication service was in place. Nobody told me that there was a problem, there was an internal audit in 1996, or it was a...Ernst & Young. So I'm not aware of that.

There is a program...things working well. We have here four new programs that we have to put somewhere. Government said, Public Works, you take care of those programs; policies...we want all communication services in one box. We took a poll of those four programs, and created CCSB with the same structure prior to my arrival. Therefore I had no indication.... 

When I saw in 2002 those problems, then I said, no, we'll have to separate. Besides the planned action, I went to my deputy and said, I want that we transfer.

Á (1100) 
The Chair: A brief response, Mr. Gagliano.

I have a couple of questions before we break on a slightly different topic, Mr. Gagliano. Canada Communication Group was sold to a company called St. Joseph Corporation. I have a letter here from the executive chairman and chief executive of St. Joseph Corporation, a one Mr. Tony Gagliano. Is Mr. Gagliano in any way, shape, or form related to you?

Hon. Alfonso Gagliano: No, sir.

The Chair: No relation to you.

Hon. Alfonso Gagliano: I can give you an example.

The Chair: No, that's fine.

Hon. Alfonso Gagliano: My consul is sworn in. I believe the clerk of the privy council is sworn in. There's no relation.

The Chair: That's fine.

Hon. Alfonso Gagliano: I know, Mr. Chairman, that question has been asked all the time that I was in. 

The Chair: It's on the record. Thank you very much, Mr. Gagliano.

The other question has to deal with the sale of the Canada Communication Group to the St. Joseph Corporation. They were given a special deal that broke the contracting rules of the Government of Canada. In fact they were given a Privileged AdministrativeAgreement that guaranteed them all printing jobs from larger than a certain amount, that's blanked out, and less than $100,000, and more specifically for printing and duplicating services, reproductive photo services such a photocopying, photocopy of fleet management warehouse distribution, integrated foreign management distribution, etc.

Mrs. Marlene Jennings: Did you get the year?

The Chair: I believe the document that I have doesn't have a date. It just says,
a directive must be given to all departments for mandatory use of the PAA (Privileged AdministrativeAgreement) for all printing jobs greater than a certain amount and less that $100,000. The PAA guarantees that CCGI, presumably Canada Communication Group Inc., is automatically compliant for all services covered in the agreement.

Mrs. Marlene Jennings: But we don't know when that was contracted?

The Chair: I don't have.... It goes on to talk about a meeting with the Honourable Marcel Masse held on March 2, 1998, "we'd request the response by March 23 of 1998". So it's March 2 or March 23, year of 1998.

Mrs. Marlene Jennings: Thank you.

The Chair: Canada Communication Group Inc. was given a special deal by the Government of Canada. When they bought Canada Communication Group that broke the contracting rules. It may even have broken the NAFTA rules. Why were they given this, because that was under your watch?

Hon. Alfonso Gagliano: No, sir. That contract was completed by March 31, 1997 and I became minister June 11, 1997.

The Chair: Did you take any action to bring it within the guidelines?

Hon. Alfonso Gagliano: I was briefed. I was informed of this contract as to why such a special privilege, a special arrangement, was created. The fact the company that won the competition would keep their employment, the over 500 employees that were in the plan and so on.

This was the period where the government was commercializing their own services. This was the briefing that I received, but I was not directly involved in the contracting procedures.

The Chair: Do you know why Mr. Guité was involved? 

I'm looking again at a memo dated May 22, 1998 where it says "there does not seem to be copies of the documents at the Treasury Board. I am advised that the government copies are with PWGSC. By copy of this message I would suggest that Mr. Guité make available these documents so the government side will have a starting point to resolve this situation".

Was Mr. Guité involved in the sale of Canada Communications group?

Hon. Alfonso Gagliano: Frankly, I wasn't , but if you can tell me the date of the letter--

The Chair: May 22, 1998.

Hon. Alfonso Gagliano: Well, what happened after the incorporation--after the creation of CCSB--we included all those services, and even though the communication group was privatized we still had official Queen's Printer and I know that among their duties, Mr. Guité was the Queen's Printer of the government and I believe that he was probably answering all queries.
Yes, he was the acting Queen's Printer and you can find the record.

Á (1105) 

The Chair: That's news to me.
The meeting is suspended until 11:30 a.m.

We will reconvene at 11:30. Thank you.
Á 


Á (1135) 
The Chair: Just a minute. Are we ready? Okay, we're back in session.

Mr. Mills, you have a point?

Mr. Dennis Mills (Toronto-Danforth): Thank you very much. We keep going back to this problem that I have with the perception that $100 million went out the back door. Last week, we received from the deputy minister of Public Works this spreadsheet on the estimated expenditures and events sponsored. Now we see here in this document that there was about $19 million in ...

The Chair: Are you suggesting a motion?

Mr. Dennis Mills: I'm suggesting a motion, Mr. Chair, that the production costs which represents the biggest number here of $83 million for the 1986 events that we get the backup to that $83 million because we do not know what amount has been misappropriated until we have the actual backup of that $83 million.

The Chair: Okay so you're making a motion. We can't adopt motions today so we'll take that as a Notice of Motion, Mr. Mills, that the committee obtain the background documents pertaining to ... How much money?

Mr. Dennis Mills: It's the production costs of $83 million for the 1986 events over the five years.

The Chair: Okay, thank you very much. We'll have that motion at the committee next week. 

Okay, before we move on, I have received from the Privy Council of Canada relevant to the proceedings of the committee and the commission. I presume the commission is the judicial inquiry and I'm not going to read all of it because it ... the whole document will be public. I'll just talk about the appropriate parts here.

"Therefore the committee of the Privy Council on the recommendation of the Prime Minister with the consent of the former Prime Minister, the Right Honourable Jean Chrétien and with the concurrence of the clerk of the Privy Council and Secretary to the Cabinet advised that (a) the confidences of the Queen's Privy Council for Canada as defined in Section 39 of the Canada Evidence Act in existence since July 1996 until the date of the making of this Order of Council shall be made available in response to requests made by (1) the committee for the purposes of inquiring into certain activities of the sponsorship program, advertising activities and the management of public opinion research of the Government of Canada referred to in Chapter three, four and five of the report of the Auditor General of Canada to the House of Commons in November 2003 and the commission for the fulfillment of its mandate. 

And (b) any individual required to testify in respect of the confidences of the Queen's Privy Council for Canada referred to in paragraph (a) for the purposes of the proceedings of the committee and the commission may do so."

Therefore, Mr. Gagliano, that is a statement from the Privy Council of Canada releasing you from your oath of secrecy so that if there are questions from the commission or this committee, you are free to answer them. The full document is tabled with the clerk and now a public document.

Okay, Miss Phinney, I believe you're next on the list, eight minutes. 

Ms. Beth Phinney (Hamilton Mountain, Lib.) (Hamilton Mountain, Lib.): Thank you very much, thank you very much, Mr. Chairman. 

I have some questions about ... 

Do you want Mr. Mills to go first?

The Chair: My apologies for interrupting.

Do you agree that you're released from your oath by that statement from the 

Privy Council, Mr. Gagliano?

Hon. Alfonso Gagliano: Could I have a copy please.

The Chair: Yes, okay, take that down to ... we'll just maybe wait if you may until 
Mr. Gagliano agrees that we have a transcript from the Privy Council. 

Hon. Alfonso Gagliano: Mr. Chairman, I think we can continue with the proceeding. 

If I have a problem with a question, my lawyer will be looking. In expediency to save time, let's proceed. 

The Chair: Very good, okay.

Ms. Beth Phinney: Thank you very much. Welcome to our committee and thank you for agreeing to come.

While you were the minister, the deputy minister was Ran Quail. Does he have to take an oath?

Hon. Alfonso Gagliano: I don't know. I know that they are security cleared but I don't know about an oath.

Ms. Beth Phinney: Could we ask our ... 

Hon. Alfonso Gagliano: Maybe the legal counsel ... 

The Chair: know the answer? Do deputy ministers have to take an oath?

Mr. Rob Walsh: I think they take oaths as federal public servants. I don't know there's an oath particularly deputy ministers. But they take oaths as public servants to the federal government. 

The Chair: Thank you.

Ms. Beth Phinney: If you're looking at the hierarchy in the department when you were the minister here, would you say that Ran Quail was responsible to you, accountable to you? 
Á (1140) 

Hon. Alfonso Gagliano: Definitely as a minister yes. He was my deputy minister. He was running the department and I have to say that I had good relations. We used to meet two, three times a week.

Ms. Beth Phinney: The next person I'm going to ask you about is Mr. Guité. 
Looking at the hierarchy on the sheets we have, Mr. Guité normally would be responsible to the deputy minister, who would be Mr. Quail.

Hon. Alfonso Gagliano: Yes. Once the CCSB was created, Mr. Guité reported directly to Mr. Quail.

Ms. Beth Phinney: All right. Now, before that, do you know who he was reporting to?

Hon. Alfonso Gagliano: I think the organization was called APOR. I believe he was reporting to an assistant deputy minister.

Ms. Beth Phinney: Now, Mr. Quail said when he was here that there was a special relationship between yourself and Mr. Guité, and you have said this morning that you met regularly with Mr. Guité. I'm presuming that if you've been watching our meetings, you know that we have talked about the department and this little box on the side. Mr. Guité was in that little box on the side. When you took this over, when you moved into the department, that little box was still on the side, with Mr. Guité running it.

Hon. Alfonso Gagliano: That little box continued exactly the same way. There was created, I believe, with those powers in 1994 by Treasury Board, new guidelines.

Ms. Beth Phinney: Wouldn't it have been normal for Mr. Guité to do any briefing he had to do, to do it directly with his direct boss, who would have been Ran Quail?

Hon. Alfonso Gagliano: I believe that they were regular meetings or discussions, definitely, with Mr. Quail.

Ms. Beth Phinney: But there were also meetings between you and Mr. Guité.

Hon. Alfonso Gagliano: Yes. I never called Mr. Guité to come to see me. Mr. Guité would call my office to see me, to discuss sponsorship file. Most of the time it was to prepare a presentation of Treasury Board, because the initial allocate budget was not enough. So we would discuss those files with me in terms of approving a list that would go to Treasury Board. 

Ms. Beth Phinney: Okay. All right. That's--

Hon. Alfonso Gagliano: I believe Mr. Quail explained that since I had to sign, I had to be informed. Then he would go back to the deputy and discuss it. I would inform my deputy that I met with Mr. Guité to discuss those sponsorship files.

Ms. Beth Phinney: So Mr. Quail was privy to everything that you discussed with Mr. Guité.

Hon. Alfonso Gagliano: Yes, always briefed after. I always told Mr. Quail that I met. It was not only in this case, Mr. Guité, but in other parts of the department, other assistant deputy ministers, director general, may have come to see me for an opinion.

Ms. Beth Phinney: Yes. Okay.

Mr. Guité, then, the only briefing he was doing was to you. He was not accounting for everything that's going on in the whole sponsorship program to Mr. Quail, who said that his relationship was more with you, a direct relationship between the two of you, rather than with Mr. Quail.

Hon. Alfonso Gagliano: My relationship with Mr. Guité was strictly with budget approval. 

For example, in a couple of instances, he came to brief me on a major project. If you recall, for example, we had the Nagano Olympic Games. Mr. Guité called my office to have some times on my agenda so he could come and present me the ads that we were going....so those are the things. But the management of the program, I always assumed that Mr. Guité was reporting to Mr. Quail, and so therefore in terms of the management of the program, the files, that was normal procedure, according not only that program, all the other programs in the department.

Ms. Beth Phinney: So you just assumed that, because Mr. Quail sort of suggested that it wasn't that way, that it was between the two of you. So are you saying that Mr. Guité at no time spoke to you about any money, other than the fact that you were going to Treasury Board to ask for permission to have more money, I presume, not less--

Hon. Alfonso Gagliano: Yes, yes, and the list.

Ms. Beth Phinney: So he at no time discussed with you--except maybe that very large one that you mentioned--the fact that this group wants money, and this group wants money, and this group wants money. You never discussed that kind of thing?

Hon. Alfonso Gagliano: He would come to me and say, "Look, this is what we have". He would say, "We have lots of demands, but that's the money we have, and I think we could go and ask for another $17 million, supplementary estimates, and here are the projects which I think we should do with the level of funding".
I would look at them, and say, "Okay, makes sense". Some, I would ask questions, and then he would proceed, go back to the deputy ministers and prepare a Treasury Board submission.
Á (1145) 

Ms. Beth Phinney: So it would be between you and Mr. Guité to decide okay we'll want this project and this project and this project?

Hon. Alfonso Gagliano: Yes he would come with some recommendations and I would...

Ms. Beth Phinney: Did he ever mention to you, and I'll read a quote from the beginning of the Auditor General's report that from 1997 until 31 March 2003 the government--this is on page three--the Government of Canada spent about $250 million to sponsor so many projects, 1,1987 projects. Over $100 million of that 40% of the total expenditures was paid for communication agencies etc. 

Did he ever discuss with you the fact that this money went from him, he seemed to have total control of this money, I guess it went from Treasury Board to him, I guess?

Hon. Alfonso Gagliano: Treasury Board to the yes.

Ms. Beth Phinney: And then the money went to an advertising company and that they were taking a certain percentage off of it and handing it to a crown corporation and he did that. Discussion never came up with the percentage of money that was being...

Hon. Alfonso Gagliano: We never discussed commissions, we never discussed, you know, I'm going to give the file to this agency, the other file the agency. That was his...

Ms. Beth Phinney: His total domain.

Hon. Alfonso Gagliano: His decision, his branch a decision and he was supposed to operate according to public administration and act in according to Treasury Board guidelines.

Ms. Beth Phinney: So you didn't at any time while you were there think it was strange that this one man with 14 people under him had total control on how much money he spent, what projects they went to, what advertisement company got the money, how much percentage they could take off the top, that didn't seem strange that Mr. Guité had the total control?

Hon. Alfonso Gagliano: Well he was not alone in that branch. He had 14 people. I assumed that those responsibility were divided according to Treasury Board guidelines. 

I only found it in the audit of 2000 and that's where I made it, not only corrected but I mean I took the service out completely the department and put it in somewhere else and just keep the procurement, so there was a division of power.

Ms. Beth Phinney: So you trust Mr. Guité to be accountable to the deputy minister for all of his actions and you just discussed some of the details when it went...going to Treasury Board, okay, thank you.

The Chair: Thank you very much Miss Phinney.

Mr. Toews please, eight minutes.

Mr. Vic Toews: Thank you very much.

Mr. Gagliano you've indicated in your testimony here today that you, as Minister of Public Works had very erroneous responsibilities, you mentioned all of your responsibilities quite extensive in your testimony, pointed out that you had 90,000 employees reporting to you and a budget of about $4 billion, is that correct?

Hon. Alfonso Gagliano: Yes.

Mr. Vic Toews: So it's quite a number of responsibilities, department, crown corporations and yet you had what we've heard a very direct relationship with a middle-manager in a department that in 97-98 had an appropriate of $17 million, with respect to the Sponsorship Program.

Any specific reason why you would choose a middle-manager out of a department to have this direct relationship with?

Mrs. Marlene Jennings: Point of order Mr. Speaker. I believe that Mr. Toews perhaps inadvertently is mischaracterizing. Mr. Guité I understand was an EX...

Mr. Vic Toews:Just a minute.

Unknown: Don't interfere.

Mrs. Marlene Jennings:...3, which is a senior manager.

Mr. Vic Toews: Yes that's exactly what she's doing, she's interfering my question 
Mr. Chair.

The Chair: The clock has been stopped but Miss Jennings is saying that you mischaracterized, I presume you're taking about Mr. Guité, as a middle-manager, you're talking about someone other than...EX1, 2, 3, and 4...

Mr. Vic Toews: The senior member is of course the deputy minister, this is not the senior member, he's a middle-management member.

The Chair: Yes, I do not find a middle-manager a derogatory term but...Miss Jennings.
Á (1150) 
Mrs. Marlene Jennings: Mr. Speaker, Mr. Speaker, the clock is stopped I'm not trying to interfere with Mr. Toews time.

In the interest of clarity...in the interest of clarity it has always been my understanding and the information that we received from the former deputy ministers and the actual deputy minister's is that senior managers are EX's, assistant, who include an assistant deputy ministers and deputy ministers. If I am in error...

The Chair: 
I'm hearing one point of order; I'll hear the next point of order.

Mrs. Marlene Jennings: If I am in error, then I would appreciate being corrected, but if I am not in error, then I think it's incumbent on all members to make sure that when we're making statements, we try to make them as correctly as possible.

The Chair: According to the Government of Canada chart of November 1, 1998, the assistant deputy minister, Government of Canada communication coordination services was, acting, a Mr. Guité, as an EX-4, and that was November 1, 1998.

Mr. Kenney, your point of order.

Mr. Jason Kenney (Calgary Southeast): This is an actual point of order, Mr. Chairman, which is that we have now had, during opposition members' questioning, five specious points of order from government members, all of which have been points of debate, each of which has interrupted a line of questioning from opposition members, and none of which has been reciprocated. No opposition member of the committee has interrupted a government member's line of questioning with such a specious point of debate disguised as a point of order. I would ask, Mr. Chairman, that you use some discretion more quickly, not to accept these specious points of order.

The Chair: Unfortunately, one has to hear the point of order before he determines whether it's specious enough. Mr. Toews.

Mr. Vic Toews: Let me proceed then, Mr. Chairman. I will recharacterize; I don't want to waste any further time.

The question then is, here's a minister with $4 billion of budget; 90,000 employees, and he has a very direct relationship with an individual who supervises approximately 14 people. Can you account for that, Mr. Minister?

Hon. Alfonso Gagliano: Yes. First of all we'll have to clarify exactly what a direct relationship is that I had with Mr. Guité. Like I said publicly, I met him maybe three or four times a year. He used to come to inform me of the budget and discuss supplementary budgets, special programs. Let's not forget

Mr. Vic Toews: All right. Now, we have the characterization--

Hon. Alfonso Gagliano: May I finish?

The Chair: Mr. Gagliano has to finish his point, briefly.

Hon. Alfonso Gagliano: Mr. Guité's responsibility was not just the sponsorship program. We had the 1-800 Canada; we had the website; and three or four other programs.

The Chair: All right.

Mr. Vic Toews: So, your testimony is that you only saw Mr. Guité three to four times a year, and indeed, earlier in your testimony you said that you saw him once in a while. Was that correct? Is that a fair summarization?

Hon. Alfonso Gagliano: Definitely. We're talking here a few years back. I cannot remember exactly...

Mr. Vic Toews: Yes, but three to four times a year and once in a while. So, a characterization that you would have seen Mr. Guité approximately once a week or once every two weeks would not be correct. Is that right?

Hon. Alfonso Gagliano: No, I don't think I was seeing him once a week or once every two weeks.

Mr. Vic Toews: No, so three or four times a year; once in a while you would see this individual.

Now we have Mr. Quail stating that you have a very direct relationship with Mr. Guité and you've indicated that that direct relationship isn't perhaps as extensive as perhaps some of the other testimony has indicated. Now, you've indicated that Mr. Guité came to see you three to four times a year now, and you stated earlier in your testimony, he came with ads, came to speak to you about ads. Now, seeing Mr. Guité three to four times a year, he's coming to you with ads. Why would he come and see you with respect to ads, when you're only seeing him three or four times a year?

Hon. Alfonso Gagliano: I'll give you an example. I was explaining before that we had the Nagano games, and Mr. Guité, on his own authority, created the ads for those games by the Government of Canada and came to see me to present those ads and asked me if-- 
Á (1155) 
Mr. Vic Toews: All right. So, he's coming to see you, then...he's created some ads on his own authority and a man who comes to see you, maybe three or four times a year, shows up with these ads in your office and says, I've got these real nice ideas for ads, and you say, sure, I'd love to talk to you about ads?

Hon. Alfonso Gagliano: It's the winter Olympic games ads that we're talking about and definitely he told me at that time that he was hoping that Heritage Canada would sponsor those ads, pay for those ads 

Mr. Vic Toews: 
Yes, all right--

Hon. Alfonso Gagliano: Let me finish, let me finish--

Mr. Vic Toews: --so that's what he was hoping to do. I only have eight minutes here. 

Hon. Alfonso Gagliano: Mr. Chairman, can I finish mine, then?

Mr. Vic Toews: Well, I want to clarify--

The Chair: Just very briefly, Mr. Gagliano. Provide us a direct response to Mr. Toews' question, and--

Hon. Alfonso Gagliano: Yes, I'm trying. 
He came to see me with those ads and then asked if we could sponsor those ads through the budget. And if you see at Treasury Board--

Mr. Vic Toews: All right. 

Hon. Alfonso Gagliano: If you see the Treasury Board submission--

Mr. Vic Toews: All right, so that's fine. That's fine--

Hon. Alfonso Gagliano: --in the list, there are those Olympic Game ads. 

Mr. Vic Toews: So he came to you. 

The Chair: Fine. 

Mr. Toews. 

Mr. Vic Toews: He came to you to see if you could sponsor those ads through the budget. Now, I've been a minister of the Crown and I find this quite remarkable that a person dealing with an area with 14 employees, of 90,000 employees, comes and says, "Mr. Minister, can you approve this budget for specific ads?". 
Wouldn't the normal practice be to go through the deputy minister and have the deputy minister come and talk to you about that?

Hon. Alfonso Gagliano: Well, he came to me and after went to the deputy minister and then we prepared a submission through the Treasury Board,--

Mr. Vic Toews: Yes, I know. 

Hon. Alfonso Gagliano: --the submission to Treasury Board which you have in your hands. 

Mr. Vic Toews: I know he came to see you but what I find astounding is that this man who runs a program, a specific program--I'm speaking about $17 million out of your $4 billion-budget, out of 90,000 employees--phones up your office and says, "I want to see you". It isn't coming through the deputy minister's office. 

There is, in fact, what Mr. Quail indicated in earlier testimony, a very direct relationship and you're asking us to believe that all we're doing here is talking about ads. He had some real neat ideas about skiing or whatever it is in the Olympics, and this man--you've plucked him out of this 90,000-employee department, a $4 billion budget--and you have got to see these ads. Is that what you're trying to tell us?

The Chair: One minute. 

Hon. Alfonso Gagliano: What I've been trying to tell you since this morning, if you're listening, is that I was not asking Mr. Guité to come and see me. Mr. Guité was calling me to see me and as a minister, if any employee of the department would come and ask to see me, definitely yes, I would see it because I think it's important. But I always made a commitment to my deputy minister that whatever, when anybody from this department would come to see me, I would inform him and Mr. Quail was always briefing me on a regular basis. 

Mr. Vic Toews: All right, but why wouldn't you follow the standard, usual practice that a minister follows by following the chain of command to ensure that the deputy understands what's going on and that this particular idea is vetted through the department? For some reason, this man had a special relationship with you--as you said--could phone up your office, out of 90,000 employees, ask for an appointment about some advertisements and you put everything aside and, Mr. Chair, had a meeting with this individual. How does that work?

The Chair: Mr. Gagliano?

Hon. Alfonso Gagliano: Yes, as I've been explaining how those work. He would call me and say, "I have an important project. I would like to have your brains, or what you think" and my secretary would give an appointment and he would make the presentation and I give him my opinion and that's it. 

The Chair: Well, thank you very much. 
I would like to set the record straight, Mr. Toews. It's 19,000, not 90,000, for the record. 

Mr. Vic Toews: All right. 
So then, just on a point of order, 19,000 and this individual on the sponsorship program, supervised 14 employees. 

The Chair: Yes, we have the point there, Mr. Toews, but it was not 90,000. 
Ms. Longfield, please, eight minutes. 

 (1200) 
Mrs. Judi Longfield (Whitby-Ajax): Thank you, Mr. Chair. 
Thank you, Mr. Gagliano, for agreeing to come. At this time of the day, a number of the questions I had originally wanted to ask have been asked, but I'm going to pick up on something Mr. MacKay said when he pointed out in your statement you've said that a minister doesn't run the department and that this is alarming. I would certainly agree and it begs the question, if the minister doesn't run the department, who does run the department, and to whom does he or she ultimately answer. 

And then you had also indicated that in your experience, "No matter how hard I tried, I never had control or power over the department that would give me the ability to answer for all that went on within it". I would like to know, if you had a problem, to whom did you go; what were the results of making that intervention; and who should have the power?

Hon. Alfonso Gagliano: What I was saying in my statement was that the way it is structured-the present structure of the government-the minister is at the level of policy. The minister goes to cabinet. He goes to cabinet committees. That's where policies are discussed and then, through PCO and Treasury Board, all the mechanism comes down to get to the minister and to get to the different divisions so that those programs can be implemented.


I was making the case that as a minister I don't hire my deputy minister. Neither can I fire him, nor anybody else, as a matter of fact, down through the chain, so if we have to establish, since this committee's main purpose-what I read and saw on TV-is to establish ministerial responsibility, if we have to give ministerial responsibility, we'll have to give also ministerial power. The minister doesn't have power, effective powers. I can go to the deputy minister and say, "I think that person is not doing a proper job," but I cannot ask him to fire that person or hire that person. This is his responsibility. The minister approves. You have the Treasury Board for the assistant deputy minister of communication, the position, but it doesn't fill the position, so I was making that case as a suggestion if we want to go to the road to have personal responsibility for ministers.

Mrs. Judi Longfield: Okay. I agree that responsibility and authority should go hand in hand. You can't give one without the other.
Do you believe that a minister should have that authority and that responsibility?

Hon. Alfonso Gagliano: If the minister should have the authority, I also make the case in my presentation, then the minister should be taken away of all the responsibility to attend all the cabinet committees. I was practically a member of most of the cabinet committees so I was always in meetings, and when you are in meetings attending policy discussions and other things...I was relying that the deputy minister was watching. The department really is run by the deputy minister.

If I can give you a very simple comparison, a minister is like a chairman of the board and the deputy minister is the CEO.

Mrs. Judi Longfield: Okay, you also indicated that you supervised a budget in excess of $4 billion. I want to know what the nature of that supervisory role would be.

Hon. Alfonso Gagliano: Definitely I had my own budget of the Department of Public Works and Government Services. It was over...I'm talking functioning budgets because if you're talking budgets for what we used to buy for the Government of Canada, then we're going to a much higher figure, but in the functioning, I think the department in my time was over $2 billion, just the Department of Public Works and Government Services. There was the Canadian information office.There was CMHC, Canada Post. This was a kind of overall general figure of functioning budgets, but actually when you're talking crown corporations, you have a board of directors and so on which is different from a department.

Mrs. Judi Longfield: Okay, on page 9 of your submission to us you indicated that you merely approved the recommendation of the selection committee to comply with the signing authority requirements. Those, I take it, are the submissions that were going to go to Treasury Board.

Hon. Alfonso Gagliano: On page...sorry.
 (1205) 
Mrs. Judi Longfield: That is on page 9, and it's the third bullet.

Hon. Alfonso Gagliano: I believe that was on the report from the Ethics Councillor concerning some contracts in the department. He was explaining how the system was functioning, I believe, if we're quoting from the same page.

Mrs. Judi Longfield: Okay, then let me be more specific. When Mr. Guité came to you and indicated that he had events that he thought were worthy of sponsorship and that where it exceeded what was in the budget and you were going to ask for additional funds, did you personally sign off on the submission to Treasury Board?

Hon. Alfonso Gagliano: Yes.

Mrs. Judi Longfield: Okay, if you personally signed off on the submission--I know that members of Parliament have a very small budget and we are required to sign when we do it. Part of it is, before I would or any other member would sign a submission, we would ask for some backup documentation. I guess I would like to know what kind of supporting documentation would there be, just a broad sort of general outline, or would there be some specifics: how much was it going to cost and how was it broken down, was there an application process, were there invoices attached, what was the nature of it, what were going to be the cost overruns and were we getting value for the dollar. I guess before you sign off...I would like to know what constitutes, in your mind, appropriate documentation to support the request?

Hon. Alfonso Gagliano: 
I didn't see the appropriate documentation, where the appropriate documentation existed. I was briefed through a list and the discussions were simply this is the list, this is the sort of the individual events, with the amount recommended and so on, 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. And I had no indication that those documents, those procedures were not in the files because if you see the treasury board submission that you have there, it's written, black and white, very clearly, that that division, that branch had to operate within the Public Administration Act and the Treasury Board guidelines. So, therefore I assumed that all of those procedures that you mentioned should have been done, but I didn't see it, and when he came to see me he didn't bring them along and they are not attached with treasury board.

The other thing I want you to note is that once you make a submission to treasury board, treasury board officials also go through, with the departmental officials, about all those documents and review all those. And treasury board approved, I assume, that all that was needed to be done was done.

Mrs. Judi Longfield: So then who, in you mind, should have had all of that documentation? Who should have it, a file on each sponsorship event with all of the supporting documentation? Was that Mr. Guité?

Hon. Alfonso Gagliano: Mr. Guité should have had that file where all the documentation and treasury board, I assume, would have asked for that file before they would recommend the minister to approve that. 

Mrs. Judi Longfield: And should the deputy minister have been able to review that submission before it came to you or before it went to treasury board?

Hon. Alfonso Gagliano: In principle, yes, because I wouldn't have signed any submission to the treasury board without the recommendation of my deputy minister.

The Chair: Okay, thank you very much.
I've got an indication of a number of points of order. There's Mr. Toews, Mr. O'Reilly and Mr. Jobin.

Mr. Toews.

Mr. Vic Toews: Just, first of all, I hate to belabour a point, but I think it's an important point of order. In the testimony that was provided by Mr. Gagliano, he indicated that he supervised 90,000 employees, 90,000 employees, and supervised a budget in excess of $4 billion. So my comments, in terms of 90,000, was based on the testimony I heard. Now somebody else has indicated it's 19,000--

The Chair: That was me, that was the chair.

Mr. Vic Toews: That was the chair?
Well, I'm just wondering if the chair has any comment on that?

The Chair: Okay, thank you, Mr. Toews.
90,000 and 19,000,000 in mathematics is a significant difference, but I think 19,000 is much closer to the real number of those who worked at public works than 90,000. But again, we can get the research department to figure that one out if we so desire. 
Mr. O'Reilly's point of order.

Mr. John O'Reilly (Haliburton-Victoria-Brock): It was the same.
The Chair: The same point of order?
 (1210) 
Mr. John O'Reilly: Yes, the same point of order as Mr. Toews.

The Chair: Okay, so it wasn't specious because two people were raising the same point of order.

Mr. Jobin, on a point of order. 

Did you have a point of order?
[Français]
M. Christian Jobin (Lévis-et-Chutes-de-la-Chaudière): Une question.
C'est à mon tour?
[English]
The Chair: No, it's not your turn. We're going to move to Mr. LeBlanc, followed by Mr. Kenney and I may come back to you after that, but the order is Mr. LeBlanc, Mr. Kenney and I'll figure out from that point forward.
Monsieur LeBlanc, s'il vous plaît, huit minutes.
[Français]
M. Dominic LeBlanc (Beauséjour-Petitcodiac, Lib.): Merci, monsieur le président.
Merci, monsieur Gagliano d'avoir accepté si vite après la demande du Comité de venir ici volontairement.

Monsieur Gagliano, il y a une discussion qu'on entend souvent ici, à ce comité, qui touche à la question du Comité du cabinet des communications. Si j'ai bien compris, vous avez, pendant une certaine période, présidé ce comité. Je pense qu'il serait utile pour nous de comprendre le rôle du Comité du cabinet des communications, par exemple, quels ministres participaient régulièrement à ce comité-là. Vous avez témoigné, si j'ai bien compris, et j'aimerais que vous confirmiez, que le ministre des Finances n'allait jamais au Comité des communications lorsque vous y étiez et qu'il y avait peut-être quelqu'un de son personnel qui y était pour discuter de la préparation d'un budget pour les communications. 

Plus en général, pouvez-vous nous parler du rôle du Comité du cabinet sur les communications et comment vous, en tant que président ou membre de ce comité-là, vous avez été impliqué, par exemple, dans des décisions de communications du gouvernement fédéral?

L'hon. Alfonso Gagliano: Monsieur le président, le Comité des communications du gouvernement a été créé pour conseiller le gouvernement de sa stratégie des communications en général. Donc, le comité qui se réunissait une fois par semaine quand la Chambre siégeait, le lundi tard dans l'après-midi, bien sûr il y avait moi-même comme président du comité, il y avait des ministres régionaux, donc toutes les régions étaient représentées dans le comité afin qu'ils puissent exprimer leurs opinions et leurs conseils selon leur région, comment ils voyaient la communication, la publicité du gouvernement. Donc, comme tout comité de cabinet, il y a un secrétariat qui est appuyé par le Conseil privé et il y avait le bureau d'Information Canada qui assistait aussi à nos réunions et moi, comme président, tous les lundis après-midi avant la réunion je réservais à mon bureau le secrétaire du Cabinet des communications qui me briefait sur l'ordre du jour du comité et donc si on avait des invités ou des témoins, et donc je suivais, comme président, l'ordre du jour, on avait des discussions comme on fait dans tout comité.

L'actuel premier ministre n'était membre du Comité des communications et bien sûr les gens de son bureau ont pu, lors de la préparation du plan des communications de la présentation du budget à chaque année, ont pu venir vous présenter la stratégie et demander des commentaires du ministre, membre du comité. Mais je ne me souviens pas du tout que le ministre des Finances assistait à nos réunions.

M. Dominic LeBlanc: Merci, monsieur Gagliano. Et ce comité-là n'était pas impliqué, par exemple, dans des décisions ou n'offrait pas une opinion quant au choix, par exemple, des agences de publicité, participait à la discussion des commandites en termes d'événements en particulier, ce n'était pas ce genre de discussion que ce comité avait?

L'hon. Alfonso Gagliano: Non. Le comité discutait, par exemple, si un tel ministère, mettons le ministère de la Santé a décidé de faire une campagne publicitaire contre le tabac, à ce moment-là le comité, via le Conseil privé, via le secrétariat, demandait au ministre et au ministère de la Santé de nous faire une présentation de leur plan de campagne publicitaire contre le tabac et le comité exprimait son opinion sur le contenu, sur la stratégie, et encore ce n'est pas, disons, le Comité des communications ne prenait pas de décision, c'était vraiment un comité conseil. C'est toujours le ministère qui est responsable de dépenser et d'approuver des programmes, c'est la loi de l'administration publique. Bien sûr que si le comité n'était pas d'accord avec le ministère de la façon dont cette campagne de publicité en termes de stratégie, en termes de produits de publicité, de vidéocassettes ou d'articles de journaux, donc je parle seulement du contenu et non pas de la gestion de la campagne comme telle, il peut bien sûr décider de faire un rapport au Conseil des ministres et à ce moment-là, bien, tous les ministres avec le premier ministre pourra prendre la décision, mais autrement c'était seulement en termes de conseils. Et souvent on proposait des changements, le ministère l'acceptait. Revenir une autre fois avec le produit .
 (1215) 
M. Dominic LeBlanc: Monsieur Gagliano, la question de la gestion des sociétés de la Couronne, comme vous avez dit dans vos commentaires au début, vous avez été responsable de plusieurs sociétés de la Couronne. Votre expérience comme ministre, étiez-vous impliqué avec des décisions de ces sociétés-là, par exemple, quant au choix des agences de publicité, quant au choix des décisions administratives que faisaient ces sociétés. Décrivez-nous un peu vos relations en tant que ministre avec des sociétés de la couronne dont vous avez été responsable devant le Parlement pour gérer.

L'hon. Alfonso Gagliano: La responsabilité principale d'un ministre à l'égard d'une société de la Couronne c'est premièrement de s'assurer, disons, de la recommandation des nominations des membres du conseil d'administration dont le président du conseil,-ce sont des recommandations que l'on fait au gouverneur en conseil pour faire ces nominations-et, bien sûr, de l'approbation de leur plan d'affaires et de leur plan d'action, qu'ensuite le ministre responsable signe et envoie au Conseil du Trésor. Une fois approuvé par le Conseil du Trésor, celui-ci signe ces documents avant qu'ils soient déposés à la Chambre des communes. Cela, c'est la responsabilité traditionnelle. Selon les objectifs et la matière que la société de la Couronne touche, sans doute il peut y avoir qu'on ait des relations plus étroites justement à cause du sujet. 

Prenez par exemple la Société canadienne des Postes. Je crois que j'ai reçu des centaines et des centaines de lettres, surtout de bureaux de poste en milieu rural, ou disons de bureaux de poste en franchise, comme disons des boîtes postales. La Société canadienne d'hypothèque et de logement était une autre société où on recevait beaucoup de plaintes de gens qui écrivaient au ministre. Alors il y avait donc certaines relations parce qu'il faut répondre aux lettres. 

Il faut aussi bien sûr intervenir à la période des questions. Quand il y a une question, ce n'est pas le président de Postes Canada, c'est le ministre qui répond à la Chambre. C'est un peu ce qu'on faisait avec la Société mais ce sont eux qui géraient. Il y a un comité exécutif, un conseil d'administration. Ils sont responsables de leur propre gestion.

M. Dominic LeBlanc: Une dernière question très brève, monsieur Gagliano, concernant vos relations avec M. Guité quand il était fonctionnaire dans votre ministère. Il y a des gens qui ont prétendu que M. Guité avait un accès hebdomadaire ou très fréquent à vous comme ministre pour des décisions précises. Pourriez-vous nous décrire brièvement en français les relations de travail que vous, comme ministre, avez eu avec M. Guité?

L'hon. Alfonso Gagliano: C'était des rencontres très ponctuelles que M. Guité lui-même demandait, pour discuter de budget, de stratégie mais non pas pour discuter de la gestion du programme comme tel. C'était sa responsabilité en regard de la Loi sur l'administration publique et les lignes directrices du Conseil du Trésor. Oui, je l'ai peut-être rencontré trois ou quatre fois par années et appelé pour des rendez-vous. Et comme mon agenda était quand même assez chargé, il attendait son tour. Disons que j'ai toujours fait rapport de nos rencontres au sous-ministre.
[English]
The Chair: Merci beaucoup, monsieur LeBlanc.
Mr. Kenney, please, eight minutes.

Mr. Jason Kenney: Thank you, Mr. Chairman.

Mr. Gagliano, you testified today the sponsorship program was created in response to the political environment created by the 1995 referendum in Quebec. Is that accurate?
 (1220) 
Hon. Alfonso Gagliano: Oui, yes.

Mr. Jason Kenney: And that it was designed, I think you said, to promote national unity?

Hon. Alfonso Gagliano: National unity, yes.

Mr. Jason Kenney: Where was that program objective ever described? I cite from page 5 of the Auditor General's report when she said that:

When it created the Sponsorship Program, the federal government did not inform Parliament of the program's real objectives and in the absence of any written direction from the deputy minister or the executive committee of Public Works, and any written decision by the cabinet or the Treasury Board, it is not clear to us how the decision to create the program was made and by whom.

How do you respond to her finding in that regard?

Hon. Alfonso Gagliano: Mr. Chairman, I arrived in the department in June 1997, exactly June 11, I believe, and the program was already existing. There was a Treasury Board submission of sponsorship events in November 1996, and I was told that this was a national unity program and envelope, and, as a matter of fact, every Treasury Board submission is signed by the Prime Minister because that national-unity envelope was indeed PCO budget, that is, the budget of the Prime Minister. 

Mr. Jason Kenney: So, you were just told this verbally, even though, according to the Auditor General--

Hon. Alfonso Gagliano: Yes, I have no written document and I always trusted my officials. I had no reason to believe my officials were not telling me--

Mr. Jason Kenney: You just trusted your officials in this regard? 

Hon. Alfonso Gagliano: Yes.

Mr. Jason Kenney: Did the Prime Minister ever discuss the objective of this program with you?

Hon. Alfonso Gagliano: I never discussed the sponsorship file with the Prime Minister.

Mr. Jason Kenney: He never discussed this program with you in any way, shape or form?

Hon. Alfonso Gagliano: No, no.

Mr. Jason Kenney: In his testimony before this committee your former deputy minister, Mr. Quail, said the following and I quote: "

The fact of the matter is that at the government political level they wanted to move forward with this program. That's why it, the government, gave rather sparing dollars in a very tight budget environment to undertake those sponsorships. The Minister was charged with that--he's referring to you--and obviously, in order to move that forward quickly, you needed to have capability within the bureaucracy and the decision was taken that we would use CCSB, hence the relation for the very direct relationship between the minister and CCSB group and, in particular, the executive director.

Do you agree with Mr. Quail's characterization that you had a very direct relationship with the executive director?

Hon. Alfonso Gagliano: I think if we understand the direct relationship with Mr. Guité is the way I've been describing it before, yes.

Mr. Jason Kenney: A very direct relationship?

Hon. Alfonso Gagliano: Well, I say a direct relationship. I've been saying that I would meet him three or four times a year and--

Mr. Jason Kenney: So you agree with Mr. Quail's characterization?

Hon. Alfonso Gagliano: Yes, this was a government policy. I mean--

Mr. Jason Kenney: The former deputy minister went on to say that this created some difficulties for him. He said:

Obviously this is a very difficult situation for a deputy in terms of the fact that you're working with the minister. On the one hand you can say, well, minister, you can't talk to that particular group. I did not do that. The minister wanted to have these discussions. He wanted to be involved. He had a responsibility. He had signed the submissions. He had direct approval to proceed and get this done".

Do you agree with that characterization of Mr. Quail's?

Hon. Alfonso Gagliano: Yes. Oh, yes, I mean this was government policy. We almost lost the country by 50,000 votes and the policy was yes, we are quite sure Quebeckers understand the--

Mr. Jason Kenney: So you had direct approval to get this done? What was "this"? To get what done?

Hon. Alfonso Gagliano: Well, to make sure that we had the visibility of the government. So the sponsorship program was one of the priorities and as Mr. Quail said, in a time where if you look at the Public Works and Government Services' budget, this was the only item that the budget was increased when all the other budgets were decreased. Definitely it was here that this was a priority--

Mr. Jason Kenney: Do you agree that you wanted to have--

The Chair: Mr. Kenney, let Mr. Gagliano finish.

Hon. Alfonso Gagliano: If you see in all the documents and every time we made very clear that this was a priority, that this program had to be delivered within the Public Administration Act and within the Treasury Board guidelines.

Mr. Jason Kenney: Mr. Chair, the witness has testified that he only met Mr. Guité two or three times, three or four times a year. But Mr. Quail says that the minister wanted to have these discussions, part of his very direct relationship with the executive director. He's talking about discussions only three or four times a year, sir?

Hon. Alfonso Gagliano: He's talking about discussions presented because I had to sign Treasury Board submissions to...if you read more. And we only presented two times a year, I believe, or once a year a Treasury Board submission.

Mr. Jason Kenney: Mr. Quail said you wanted to be involved in it. You wanted to. How did you express your desire to be directly involved in the administration of the sponsorship program, sir? 
 (1225) 
Hon. Alfonso Gagliano: 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.

Mr. Jason Kenney: You just testified that this whole thing was designed to save the country because of the 50,000 vote gap in the referendum and I think you're implying that if that meant breaking some eggs to make the omelette, so be it.

Your former boss, Mr. Chrétien, said on May 30, 2002 that:

Perhaps there were a few million dollars that might have been stolen in the process, but how many millions of dollars have we saved because we re-established the stability of Canada by keeping it a united country.

Do you agree with Mr. Chrétien's characterization of this program, that the money was stolen, but that it was justified?

Hon. Alfonso Gagliano: I believe Mr. Chrétien said that if there were moneys stolen, let the police look after them. But the program was important. We had to create the unity of the country and I think anybody who was in public office at the federal level, I think this was a major responsibility. The future of the country was at stake here.

Mr. Jason Kenney: Mr. Gagliano, on February 12 of this year the current Prime Minister said the following: 

I do know that clearly there had to be political direction--he's referring to the management of the sponsorship program--there had to be political direction. It's a small group of people and the auditor talked about the 12 or so people who worked for public works, but there certainly has been other people in crown corporations who were accomplices and it is impossible to believe there was no political direction.

Who provided the political direction to which the Prime Minister is referring, sir?
Hon. Alfonso Gagliano: I'm not aware of any political direction on this sponsorship file.

Mr. Jason Kenney: So you reject the comment of the current Prime Minister that there was clearly political direction. Is that correct?

Hon. Alfonso Gagliano: I'm only saying, as far as I'm concerned, as far as I'm aware, I'm not aware of any political interference--

Mr. Jason Kenney: If there was political direction, would it not have come from you, as the minister responsible?

Hon. Alfonso Gagliano: I assume. And I didn't give any political directions, so, therefore, I say that I'm not aware of any political direction.
Mr. Jason Kenney: So you're saying that the current Prime Minister is wrong when he says clearly there was political direction, it is impossible to believe that there was no political direction. Are you saying the Prime Minister is wrong in that comment?

Hon. Alfonso Gagliano: You will have to ask him.

Mr. Jason Kenney: Well, sir, I'm asking you.
Hon. Alfonso Gagliano: I'm answering you that I didn't have any...I am not aware. I didn't need any political direction, so I'm--

Mr. Jason Kenney: Mr. Gagliano, you say that you were not responsible. Your former deputy minister says that he was not responsible. Who exactly was responsible? You claim that you've been wronged. You may have a tort here against somebody who misbehaved, who committed fraudulent activity under your watch, as minister. Who do you think might have been responsible for this?

Hon. Alfonso Gagliano: I think that's what this committee is trying to find out. That's why--

Mr. Jason Kenney: And what's your opinion, sir?

Hon. Alfonso Gagliano: --that's what is a public inquiry, that's the RCMP's investigation.

Mr. Jason Kenney: That's why you're here, sir, to give us your opinion.

The Chair: Okay, okay, okay, okay.

Hon. Alfonso Gagliano: I'm here to tell you exactly what I did and what I know, as a minister. I'm not here to accuse anybody. I think due process, it is important that we do it. So let's find who is responsible. If somebody did something wrong, well, let them pay the price.

The Chair: Okay, thank you very much, Mr. Kenney.
We'll now move on. Monsieur Desrochers, s'il vous plaît, huit minutes.
[Français]
M. Odina Desrochers: Merci, monsieur le président.
Dans la grande tournée médiatique que vous avez faites, monsieur Gagliano, le 6 ou le 7 mars 2004--ce n'est pas votre sous-ministre qui l'a dit, mais c'est vous--vous avez dit: " L'argent des commandites venait de l'enveloppe qui s'appelait Unité nationale, qui était dans le budget du premier ministre.
Pouvez-vous nous dire depuis quand existe cette enveloppe-là, monsieur Gagliano?

L'hon. Alfonso Gagliano: Moi j'ai été mis au courant que l'enveloppe sur l'Unité nationale existait dès que j'ai assigné la première soumission au Conseil du Trésor pour obtenir un budget supplémentaire des commandites.

M. Odina Desrochers: Alors, quand?

L'hon. Alfonso Gagliano: Je crois que c'était à l'automne 1997.

M. Odina Desrochers: Est-ce que c'est à ce moment-là, monsieur Gagliano, que vous avez signé, avec M. Chrétien, pour obtenir des crédits supplémentaires de 18 millions de dollars et que sur ce même avis, il était écrit qu'il y avait uniquement Chuck Guité qui devait être au courant de quelle façon le 18 millions de dollars allait être dépensé?

L'hon. Alfonso Gagliano: Je crois qu'il y a une liste des évènements qui est attachée à cette soumission au Conseil du Trésor et si vous lisez cette même soumission du Conseil du Trésor, qui a été préparée, je crois, par M. Chuck Guité et approuvée par le sous-ministre, Ran Quail, on dit clairement que le tout devait être fait selon les lignes directrices du Conseil du Trésor.

M. Odina Desrochers: Monsieur Gagliano, est-ce qu'il y avait d'autres fonctionnaires qui avaient autant de privilèges dans votre ministère? M. Guité semblait pouvoir faire tout ce qu'il voulait.

L'hon. Alfonso Gagliano: Je ne crois pas que M. Guité avait des privilèges. Il appelait et donnait des rendez-vous pour venir me voir et me présenter ces projets-là, mais je peux vous dire qu'il y avait d'autres fonctionnaires. Nous avions un grand projet sur la Colline parlementaire...

 (1230) 
M. Odina Desrochers: Monsieur Gagliano, est-ce qu'il y avait un autre fonctionnaire qui pouvait choisir, placer des médias, s'occuper de la facture ou si c'était uniquement M. Guité qui avait ce privilège-là?

L'hon. Alfonso Gagliano: Je n'étais pas au courant qu'il avait ce privilège-là. Les règles étaient claires. Je vous invite à lire les lignes directrices...

M. Odina Desrochers: Ce ne sont pas les lignes directrices qui m'intéressent.

L'hon. Alfonso Gagliano: ...les lignes directrices de juillet 1994, en ce qui concerne le Service des communications, que les règles des contrats soient données au Service des communications.

M. Odina Desrochers: Les directives et les règles n'ont pas été respectées.

L'hon. Alfonso Gagliano: Le tout selon les lignes directrices du Conseil du Trésor.

M. Odina Desrochers: Mais monsieur Gagliano, il manque 100 millions de dollars. 

L'hon. Alfonso Gagliano: Monsieur le député, on a appris qu'il y avait des problèmes, en 2000, et on a corrigé la situation.

M. Odina Desrochers: Mais il manque 100 millions de dollars sur 250 millions de dollars.

L'hon. Alfonso Gagliano: Monsieur le président, j'aimerais qu'on clarifie une fois pour toute cette question du 100 millions de dollars. Je pense qu'on ne rend pas un bon service au Canadiens.

M. Odina Desrochers: Ah mon doux! Vous pensez que vous avez rendu de bons services au gouvernement canadien?

L'hon. Alfonso Gagliano: Laissez-moi finir. Oui, j'ai aidé beaucoup.
Il ne manque pas 100 millions de dollars. La vérificatrice a dit qu'on ne savait pas si on avait reçu la valeur de l'argent qu'on avait dépensé. Alors, disons aux Canadiens les faits. Vous avez devant vous la liste où on dit combien...
[English]
The Chair: Monsieur Gagliano.
[Français]
L'hon. Alfonso Gagliano: Elle vous dit combien coûtent les commissions, combien coûtent les frais de production. Alors, allons au fond des faits au lieu de dire et de toujours répéter qu'il manque 100 millions.

M. Odina Desrochers: Monsieur Gagliano...
[English]

The Chair: We're going to get, based on Mr. Mills' motion, the documents of background to the $83 million, and the Auditor General can re-affirm what she has said earlier, when she appears at 2:30 this afternoon.
Monsieur Desrochers, s'il vous plaît.
[Français]
M. Odina Desrochers: Monsieur Gagliano, "le programme"-et c'est la vérificatrice qui le cite-"a coûté aux contribuables 250 millions de dollars, dont plus de 100 millions de dollars en honoraires et commissions versés à des agences de communications."

Elle dit auparavant: "Nous avons constaté un non-respect généralisé des règles de passation des contrats dans la gestion du programme des commandites du gouvernement fédéral, et ce, à toutes les étapes du processus."
Est-ce que vous croyez qu'en tolérant une telle situation, vous vous êtes rendu serviable à l'endroit de la population canadienne, comme vous avez essayé de nous le dire tout à l'heure?
Trouvez-vous cela normal, un tel fouillis, monsieur? Est-ce que vous pensez que c'est honorable? Les autres pays, que pensent-ils de cela? 
C'est le gouvernement libéral qui a fait éclater le scandale des commandites. Vous ne pouvez quand même pas dire le contraire. On n'est pas capables de savoir qui, mais cela s'est fait pendant que vous étiez là, pendant que Jean Chrétien était là, pendant que Jean Pelletier était là, et pendant que tout le monde qui est mentionné depuis quelques semaines était là.
Franchement, monsieur Gagliano, est-ce que c'est cela, servir le gouvernement canadien?

L'hon. Alfonso Gagliano: Monsieur le président, je suis fier d'avoir servi le gouvernement canadien et tous les Canadiens. Définitivement, je me suis battu et j'ai travaillé fort pour garder le pays uni.
Tandis que ce monsieur-là...

M. Odina Desrochers: Vous avez volé le référendum.

L'hon. Alfonso Gagliano: ... monsieur le président, il a fait tout son possible pour séparer le pays. Mettons les points sur les i tout d'abord.

M. Odina Desrochers: Monsieur le président, le programme des commandites, c'était fait pour voler notre pays!
[English]
The Chair: Mr. Desrochers, I will have Mr. Gagliano answer his questions.
[Français]
L'hon. Alfonso Gagliano: Deuxièmement, monsieur le président, là, il dit que le programme des commandites, ç'a été fait pour voler le pays, mais regardons les faits.
Le programme des commandites était un bon programme.

M. Odina Desrochers: Pour récompenser les agences.

L'hon. Alfonso Gagliano: On s'est battus, monsieur le président, pendant quatre, cinq ans. J'aimerais maintenant remercier le député, parce qu'il va me donner l'occasion de répéter ce que ses acolytes séparatistes nous faisaient pour...

M. Odina Desrochers: Vous avez violé les lois référendaires.

L'hon. Alfonso Gagliano: ... pour empêcher la présence fédérale au Québec et le drapeau canadien d'apparaître au Québec.

M. Odina Desrochers: C'est pour cela que vous avez autorisé des commandites...

L'hon. Alfonso Gagliano: S'il veut en parler, on va en parler à savoir qu'ils gaspillent l'argent.

M. Odina Desrochers: Monsieur le président, c'est pour cela...
[English]
The Chair: Okay, one moment, Mr. Desrochers, s'il vous plaît. 
Monsieur Desrochers, this is not a political fight. We're not in here to debate the policies of our particular parties; that can be done in the House of Commons.
We're here to investigate what happened in the sponsorship program and, perhaps, if we focus on that issue rather than a partisan debate, we can actually make some progress.

Monsieur Desrochers, s'il vous plaît.
[Français]
M. Odina Desrochers: Monsieur le président, excusez-moi de m'emporter, mais lorsqu'on apprend que le programme des commandites a été créé pour remercier des gens qui ont fait une publicité à l'échelle du pays pour renverser un choix objectif, un choix de peuple, j'ai de la difficulté à comprendre cela.
Et M. Chrétien lui-même ne s'est pas gêné pour dire que le programme des commandites avait sa raison d'être dans le cadre de l'unité nationale.
Je lui ai posé la question à savoir s'il était au courant d'où venait l'enveloppe de l'unité nationale dans le budget du premier ministre. Il a avoué qu'il était au courant de cette enveloppe.
Combien d'argent venait de l'enveloppe? Combien d'argent était transféré dans votre ministère, monsieur Gagliano, puisque vous avez dit qu'elle existait, cette enveloppe?
 (1235) 
L'hon. Alfonso Gagliano: Monsieur le président, le député continue à insinuer des choses. Le montant de la somme d'argent que j'ai eue de l'enveloppe de l'unité nationale, vous l'avez. Est-ce que le député a lu?
Vous avez demandé au gouvernement, au nom des payeurs de taxes, d'avoir un grand nombre de documents. Bien c'est clair. L'argent que j'ai eu de l'enveloppe, c'est dans les soumissions du Conseil du Trésor, signées par moi, signées par mon prédécesseur et signées par le premier ministre.
On n'a rien caché, monsieur le président. C'est clair que c'est là. Et je comprends que le programme des commandites, cela ne fait pas l'affaire du député. On reparlera de cela peut-être dans un autre lieu.
Toutefois, la réalité, c'est que c'est un bon programme. Quant aux objectifs de ce programme, je l'ai dit ce matin, c'était un bon programme d'unité nationale. Cependant, bien sûr...

M. Odina Desrochers: Une dernière question.Oui, bien sûr, j'ai une petite question.

L'hon. Alfonso Gagliano: Il y a eu des problèmes administratifs et il y a eu une mauvaise gestion. Et le comité et l'enquête publique, c'est ce qu'ils sont en train de faire, soit de découvrir cela. La vérificatrice générale l'a indiqué. Le rapport de la vérification interne de 2000 l'a indiqué.

M. Odina Desrochers: Vingt secondes, monsieur le président. 
Monsieur Gagliano, compte tenu que vous parlez de l'issue du programme de l'unité nationale, Paul Martin était-il au courant que des tractations se faisaient aux comptes publics, que des tractations se faisaient au bureau du premier ministre pour s'assurer que le drapeau du Canada soit vu peinturé partout au Canada pour assurer que l'unité nationale et que le Canada étaient bons? Est-ce que cela a été discuté? Est-ce que Paul Martin était informé de cela?
Vous semblez avoir eu un rôle primordial. Vous vous êtes vanté d'avoir sauvé le Canada. Alors, j'aimerais en savoir davantage sur le rôle de Paul Martin à cet égard.

L'hon. Alfonso Gagliano: Monsieur le président, bien sûr que le programme des commandites a été approuvé par le Conseil du Trésor et par le premier ministre. Donc, c'est une politique du gouvernement.
Maintenant, si la question est une politique du gouvernement, j'assume que tous les ministres ont été solidaires à ce programme. Maintenant, est-ce qu'il y a eu des discussions entre l'ancien ministre des Finances et l'ancien premier ministre sur ce programme, je ne le sais pas et je ne crois pas qu'il y en ait eu. Définitivement, moi, je n'en ai pas eu ni avec l'ancien premier ministre ni avec l'ancien ministre des Finances. Est-ce que c'est clair?
[English]
The Chair: Before our one o'clock break we'll hear from Ms. Wasylycia-Leis and one more member on this side and then we'll have our one o'clock break.

Ms. Judy Wasylycia-Leis: It certainly feels like, with all due respect, Mr. Gagliano, that you're playing with us and you are full of contradictions.
On the one hand you suggest that you accept the thrust of the Auditor General, that we should get to the bottom of it yet every time we go down that path you start to question the very assumptions that are part of the Auditor General's report.

You also seemed to indicate specific knowledge on certain projects but claim no general knowledge of the program, even though, as you said, this was part of national unity objectives.

If it was so important in terms of saving Canada, how is it that you know so little about this program and why did you let it run on its own?

Hon. Alfonso Gagliano: Well, ministers don't run on a daily basis or manage programs. Ministers establish policies and turn those policies, once it becomes government policy, turn those policies and programs over to bureaucrats to run it.

Ms. Judy Wasylycia-Leis: Perhaps--

Hon. Alfonso Gagliano: Do you expect me to be on the streets at festivals or sports events to check whether we had a flag or other things? No, that's not the role of a minister.

Ms. Judy Wasylycia-Leis: No, but you were clearly involved in some minutiae, in some details around this program at some times and at other times you were not. Your involvement in terms of the ad contract for the Winter Olympics is certainly indicative of that.

My question to you is, what did you know about the sponsorship arrangements with the Pan Am Games in Winnipeg?

Hon. Alfonso Gagliano: Let me clarify one thing to make sure that it right--

Ms. Judy Wasylycia-Leis: Could you answer that last question?

Hon. Alfonso Gagliano: Yes, I'll be answering that, too. On the Nagano games you said that I was involved in the ad contract. I was not involved, I want to make clear, in the ad contract.

Ms. Judy Wasylycia-Leis: But you said, involved in the nitty-gritty of a specific project.

Hon. Alfonso Gagliano: Well, again, if you want to go that way, you accuse me of being contradictory. Let's say the things the way they are. I said Mr. Guité came to see me to show me a tape that he had a communications firm prepare, advertising that we should air during the Winter Olympics.

He showed it to me, definitely. I am sure you remember. Some of you saw them. They were really nice. He had the objective of making Canadians feel good about the country and so on. It was an important event.

I said they were good but then the question was, well, "I have no money."
We had to go to Treasury Board, and if you see the Treasury Board submission, you see there is the $4 million something to pay for those ads on Nagano. So, that was my level of involvement.
 (1240) 
Ms. Judy Wasylycia-Leis: Okay. Did you have any involvement at all with the Pan Am Games in Winnipeg, in terms of the sponsorship program?

Hon. Alfonso Gagliano: I believe in the Pan Am Games it was the same thing. It was in the list of projects and I said, yes, "It's an important thing." But again, I didn't manage the contract and I didn't know exactly what happened. Now I hear, I think it was last week, that there were some problems and we should find out what happened.

Ms. Judy Wasylycia-Leis: Well, it's a bit like the Blue Nose campaign. 

Hon. Alfonso Gagliano: Exactly the same time.

Ms. Judy Wasylycia-Leis: On the Blue Nose issue you seemed to know. You indicated in the Hill Times, you knew a fair bit about it but yet you don't know so many other things.

Hon. Alfonso Gagliano: I knew for example on the Blue Nose, the first submission to Treasury Board was in '96 and there was another two parts later on but, how was that managed?

I am making the case here that I was not micromanaging the projects.

Ms. Judy Wasylycia-Leis: But in that article you suggested we should go to the ad agencies and ask them for explanations.

Hon. Alfonso Gagliano: Exactly. Yes.

Ms. Judy Wasylycia-Leis: Let me ask you. You were aware then that advertising firms were sometimes reaping six figure commissions just to transfer funds between public works and crown corporations.

Hon. Alfonso Gagliano: No.

Ms. Judy Wasylycia-Leis: You weren't. Okay.

Hon. Alfonso Gagliano: The first time I learned that money was transferred to crown corporations from the sponsorship fund was when the Auditor General came to see me on September 8, 2003, in Copenhagen.

Ms. Judy Wasylycia-Leis: I accept that. You assert also that you never directed contracts. Why did you personally meet with officials from advertising firms on a regular basis and listen to their pitches for specific campaigns?

Hon. Alfonso Gagliano: I didn't meet with officials of ad agencies. The only officials of ad agencies regarding Nagano, Mr. Guité came with the President of the Communications Branch.

Ms. Judy Wasylycia-Leis: You never met with any advertising firm officials on a regular basis?

Hon. Alfonso Gagliano: Not since I've been Minister of Public Works and Government Services. I have already said it publicly that I met two agencies before the election campaign of 1997. I was the organizer of the campaign, then I was Minister of Labour and I asked those agencies if they would be part of a communications consortium for the next elections.Some said yes, some said no. They made a presentation and they were part of that consortium but I never--

Ms. Judy Wasylycia-Leis: Okay, fair enough. Did you ever solicit political donations from any of these ad agencies in question?

Hon. Alfonso Gagliano: Not at all.

Ms. Judy Wasylycia-Leis: Okay, I accept that.

Hon. Alfonso Gagliano: I said since I was appointed minister in September, 1994, I made it very clear that I withdrew myself for any political fund-raising activity.

Ms. Judy Wasylycia-Leis: Isn't it interesting then that every ad agency in question, whether we're taking about GroupAction, Lefleur, Gosselin, Group Everest, Vickers and Benson, every one of them gave major contributions to the Liberal party?
There were no contracts going to Bloc ad firms. There were no contracts going to conservative ad firms. There were contracts going strictly to a select number of firms and donations coming back.

Hon. Alfonso Gagliano: Like I said before and I repeat again, I was not participating in fund-raising 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.

Ms. Judy Wasylycia-Leis: Okay. Isn't it true though that whenever a contract was awarded that didn't go through this process of where commissions were handed out to these ad firms that you would have a tantrum? I refer specifically to an episode to scattering the seeds, and a film that was produced by a company that did not go through this, what we would consider a skimming process or money-laundering scheme .

Hon. Alfonso Gagliano: Really, I don't know what film or what company. This is the first time I hear of that.

Ms. Judy Wasylycia-Leis: Okay. We respect to your office, could you tell us who in your office, who was the special assistant or the special policy advisor who dealt with this sponsorship file?
 (1245) 
Hon. Alfonso Gagliano: I believe--and it depends on the period--we had two or three, but as a minister I would receive representation from members of Parliament from all sides, mayors, provincial MNAs--

Ms. Judy Wasylycia-Leis: I'm asking who on your staff?

Hon. Alfonso Gagliano: We can provide the names. I would have to ask my Executive assistant to see which period because--

Ms. Judy Wasylycia-Leis: If you would provide us with the names of all your special assistants--

The Chair: Ms. Wasylycia-Leis, are you talking of a specific--

Ms. Judy Wasylycia-Leis: Okay, let me ask you, Mr. Chair, if we could ask for the names of all special assistants--

Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.
It would seem to me that you're playing with us, Mr. Gagliano. You're making us play a game of clue and asking questions like, was it Mr. Guité in the laundry room or Mr. Pelletier in the PMO. 

If you're so determined for us to get to the bottom of this, then will you tell us who you think we should talk to so we can talk to so we can actually find out where the money went and what game was being played?

I think that's a fair question. He said we should get to the bottom of it. To whom should we talk?

Hon. Alfonso Gagliano: Well, I think the committee, from what I saw on TV, has a list of witnesses. You should talk to them.

Ms. Judy Wasylycia-Leis: Who would you recommend?

Hon. Alfonso Gagliano: I have no recommendation. I came on my own here.

The Chair: Okay, thank you, Ms. Wasylycia-Leis.

Hon. Alfonso Gagliano: I believe that Mr. Pelletier offered. There are a lot of people who offered to come before the committee, so invite them.

But I want to make one point about playing games, Mr. Chairman.

I didn't talk about a laundry. If you don't want to play a game, let's use the right words. But when we presume and throw in the air innuendoes and so on, it's very hard for a witness like myself not to react. So it takes two to tango.

The Chair: 
There's a lot of rumours and innuendoes out there, as you have said. I think this is the place to put these facts on the table, on the public record, so that the questions are answered so that we have a definitive statement on the record, and we take that as fact until we find out otherwise. Madam Jennings, please, and I believe you're splitting your time with Ms. Redman, is that correct?

Mrs. Marlene Jennings: Yes, I am.

Mr. Gagliano, I basically have two questions for you. The first one is, the auditor general audited some specific funding contracts for specific projects with Crown corporations. for the giant screen and the Canadian Innovation Program; BDC for the series, etc. In the in her report at page 15, it says, 

As part of its operations, Old Port, of Montreal wanted to purchase a giant screen for its science centre but lacked sufficient funds. We (auditor general) were informed that initially Old Port had approached CCSB to obtain funding for the giant screen. However, CCSB did not provide it with any funds. Following a presentation by Old Port, to the Minister of Public Works and Government Services Canada, CCSB offered verbally to provide $1.5 million in sponsorship funds in return for federal visibility.

I'd like you to explain how that came about and whether you were aware, once that presentation went through an approval, that initially had been denied went through, were you aware of how the monies were then flowed through to Tribar for the purchase of the screen and 

My second question concerns Mr. Cutler. You are aware, since all of the information that has come into the public sphere, that he filed a grievance, that there was a whole investigation etc. and that ultimately, on the 11th of March, 1998, a letter of apology was sent to Mr. Cutler signed by an assistant deputy minister. Were you aware of that letter of apology that went from an assistant deputy minister of human resources to Mr. Cutler?

Hon. Alfonso Gagliano: I was not aware. Again, I repeat the Mr. Cutler file was news to me when I came here before the committee.

On the Société du Vieux-Port de Montréal, yes, I think the auditor general describes what happened. Like I said this morning in my statement, the Old Port of Montreal was under my responsibility. The chairman of the board, Mr. Lamarre, came to see me making this proposal and I said, well, you have to make a presentation to the communications branch; you could qualify. As you know, this probably is the only physical federal presence in Montreal and over eight million tourists a year pass through this so therefore, in terms of visibility, was a good spot.
 (1250) 
Mrs. Marlene Jennings: May I interrupt for one moment. Were you aware, when Mr. Lamarre of Vieux-Port de Montréal came to see you that he had already, or Vieux-Port had already approached sponsorship and had been refused.

Hon. Alfonso Gagliano: I was...

The Chair: Mr. Gagliano, please allow Ms. Jennings to ask the question.

Mrs. Marlene Jennings: Had already approached sponsorship and had been approved. Did he apprise you of that?

Hon. Alfonso Gagliano: Sorry...I didn't...

Mrs. Marlene Jennings: According to the auditor general's report, Vieux-Port went to sponsorship branch, Mr. Guité, and asked for funding for this giant screen. Mr. Guité told them no. Then at some point later, Mr. Lamarre meets you and says, we'd like to get this big screen and it can provide visibility to the federal government and you think, well maybe that can go through sponsorship. Make your presentation application to the sponsorship branch. When you met with Mr. Lamarre, did he inform you that he had already tried to get money for that screen from sponsorship?

Hon. Alfonso Gagliano: I could say no because I really...I agree with the fact that he came. I agree I knew that they made this presentation. At that time I believe it was Pierre Tremblay that was the acting executive director and he accepted to do it. The only thing I told Pierre Tremblay, because of the strategic importance of that giant screen in the Old Montreal, because of the amount of money that Mr. Lamarre was asking, I said make sure this not for one year, I want it for ten, twenty years. 

So that giant screen and Canada visibility is there. I passed in front of it the other day so we saw it there. I assumed that contract...because I didn't follow after. I was informed by the Auditor General that we pay a commission. Really I'm as surprised as you are. Why are we paying a commission to transfer the money? I hope somebody can explain why we have to pay a commission every time we move money.

The Chair: That's a question we'd all want to know, Mr. Gagliano.
Thank you, Ms. Jennings.
Ms. Redman, you've got a couple of minutes.

Mrs. Karen Redman: Thank you, Mr. Chair. I'll try to be very brief, I realize you're being generous with the time.

You've stated that you were aware that there were Treasury Board guidelines, Mr. Gagliano, and that it was your expectation that they were being followed both by your department and the crown corporations. Clearly the Auditor General's report says something different. 

Whose responsibility should it have been to ensure that those guidelines were being followed within the department and the crown corporations? Is the minister? is it the deputy minister? Is it the assistant deputy minister? Within whose responsibility does that fall?

Hon. Alfonso Gagliano: Well definitely the person that was managing the program, the person that had the responsibility, the executive directive was responsible. He would sign under--I don't remember which article--of the Public Administration Act, that the services were rendered according and so on, and authorize payment. So definitely at first the responsibility comes there. That's clear.

Now the question is why the system failed, why the deputy minister was not aware and why the minister was not made aware of what was happening? I think hopefully that this committee and the enquiry can answer those questions at the end.

Mrs. Karen Redman: Thank you.

The Chair: Thank you, Ms. Redman.
A few points myself, Mr. Gagliano. 

First of all you mentioned earlier today that the advertising bids you wanted to go out for a new competition. Therefore I will ask for a motion that these documents be provided at a later date. That motion can come forward next week.

It's been in the media that you talked about "my crowns", the crown corporations that were underneath your responsibility. Did you meet on a regular basis for lunch with the heads of these crowns? Is that a regular feature of your calendar?
 (1255) 
Hon. Alfonso Gagliano: No. This was in the program. Hopefully when you get the briefing books from the department there is a program called portfolio management. After talking with my deputy minister, I said it would be good that we not only just exchange letters between CEO and deputy minister, but I think it would be good, that portfolio management, that we get all the crown corporations under the department so that we have everything. 

We used to have a meeting every two months with the chairman of the board of which crown corporation I was responsible for and the president of the crown corporation. My deputy minister was sitting next to me, as a matter of fact he would prepare the agenda after discussing with me. That was about three or four times a year. A one-day meeting, we would stop for lunch and continue in the afternoon. Once I remember we even had somebody from the Auditor General office talking about governance. 

Let me say, Mr. Chairman, there are minutes of every meeting. If you ask the department, you will see the meeting.

The Chair: Okay. What you're saying is you did not meet on a monthly basis for lunch. Anyway, that's fine.

Hon. Alfonso Gagliano: And no sponsorships were discussed.

The Chair: Okay. 

It has been suggested at times, and this is where we put these matters on the public record, that these crown corporations and perhaps even Public Works were arranging the bids so that they determined before the bids went out who was going to receive the bids. So on paper it looked like it was a legitimate request for proposal and a bidding process and awarding to the best contract, however it had been arranged beforehand both in the crown corporations and Public Works. Are you aware that anything like this was going on?

Hon. Alfonso Gagliano: No I was not aware of that.

The Chair: Not whatsoever?

Hon. Alfonso Gagliano: I learned by reading the Auditor General report.

The Chair: Okay, it has been mentioned or suggested that in 1997 you took a trip to Italy with Mr. Lafleur and Mr. Lafrancois, is that correct?

Hon. Alfonso Gagliano: Yes there was Mr. Dominic Taddeo who is the President of the Montreal Port and I believe it was Mr. Mincarelli who was one of the administrators of IBM Airport in Montreal and a couple other people, this was a trip the fold-up after the trip of the Prime Minister in Italy the year before and there was an official from my department. 

All the trip was organized by the Canadian Embassy in Rome. We had an activity in Rome with financing project, definitely as a department the Prince Edward Island Bridge project finances is a good example. 

We were...I made a speech, the official of the department made a speech, I would do and we had other...two city meetings and everybody paid for their own expenses.

The Chair: Did you receive any gifts during that trip and did you report them in accordance with the public policy regarding gifts?

L'hon. Alfonso Gagliano: Anytime I received gifts above, I believe $200.00 value were reported. But I don't think in that trip I received any gifts of more than $200.00.

The Chair: Okay I'm going to take the different point of view than my colleague Mr. Toews who thought that such a small department really didn't warrant a great deal attention but this was...the Prime Minister said this was to save Canada and I think you've said the same thing as well and this was a very very important program, according to what we've had from the Prime Minister. 

You have said the future of the country was at stake, it was a very important program, we almost the country with 50,000 votes and so on and yet you're only meeting with Mr. Guité two, three, four times a year and you talk about for example, communications strategies and I think you mentioned the health department would come forth to the committee and say to this cabinet committee and communications and get their strategy approved.

Did the Sponsorship Program, which was perhaps the most important communications program in the country, according to the Prime Minister, did it get approval at this committee, was there a strategy proposed?

Hon. Alfonso Gagliano: No I don't believe that a Sponsorship Program ever came before the communication committee, at least when I was there.
· (1300) 
The Chair: Well according to this was to save the country and the cabinet committee in charge of communications didn't even have anything to say on a strategy or lack thereof for this Sponsorship Program that was to save the country, nothing to say at all?

Hon. Alfonso Gagliano: Yes but I mean not only the communication program that existed in the committee came before the committee. Definitely the committee was interested mostly on new programs and not existing ones and I don't recall anybody, I mean as a Chair, like you are the Chair, usually I mean you hoping that your members...

The Chair: So the future of the country was...

Hon. Alfonso Gagliano: I don't recall anybody asking the Chair to bring before the committee the Sponsorship file and was never brought before the communication committee.

The Chair: So the future of the country was delegated to one Mr. Guité and that was it. The cabinet had nothing to say?

Hon. Alfonso Gagliano: Well the program, at least the report we had was working well, I mean I can't say that the visibility, the objective of the program was definitely there. I can say that I went around, I did the region of Quebec and I definitely, I saw a large improvement of visibility of the Government of Canada in Quebec, naturally.

The program is clear since the audit of 2002 and the Auditor General, she practically she the same period, are disturbing and we should find the facts. But again I mean you know we're talking a lot of things to hear still and nobody came out with specific facts, there is police investigations.

Let's wait before we conclude what really happened.

The Chair: Okay, I just find it rather strange and I think I'm quoting your own words by saying this cabinet committee was not a decision-making one but if it did not agree with the recommendations it could report to cabinet. I think I'm quoting you here.

Hon. Alfonso Gagliano:Yes.

The Chair: It seems strange that they would talk about Health Canada, maybe cigarette smoking and they were talking about some other things but they wouldn't talk about this, anyway we'll leave that for perhaps another day.

Hon. Alfonso Gagliano: If you want to know the truth, that's what happened.

The Chair: Okay, two or three announcements. I understand that the blues without translation from the beginning until 11 o'clock will be available this afternoon for anybody that wants them and the blues for today will be available tomorrow. I have a note here that says Mr. Guite's lawyer has sent us a letter saying that his client will not be available to appear on March 25th. They did not offer another date. That's hot off the press. 

Lunch will be served for members and staff in the room behind and also at 2:30 we will have the Auditor General come forward and if you have ... Not that we want to take the rest of the afternoon with her, but if you have any points of clarification from Mr. Gagliano's testimony this morning that you want to have clarified, you may then of course ask her and then she will be excused. Mr. Gagliano will be back and if we deem it necessary, Mr. Gagliano, we will continue on tomorrow.

This meeting is adjourned and suspended until 2:30

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