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Chuck Guite's testmony: Day 1


> Standing Committee on Public Accounts           

> Comité permanent des comptes publics           

> EVIDENCE number 30,  Témoignages du comité numéro 30       


> Thursday April 22, 2004 - Le jeudi 22 avril 2004

> *  (0905) 

> [English]

>     The Chair (Mr. John Williams (St. Albert, CPC)): Good morning, everybody.

>     The orders of the day are pursuant to Standing Order 108(3)(g), chapter 3, the sponsorship program, chapter 4, advertising activities and chapter 5, management of public opinion research of the November 2003 report of the Auditor General of Canada referred to the committee on February 10, 2004.

>     This morning, as an individual, we have Mr. Charles Guité, who will be with us all day.

>     There are two things. We'll be having a break about 11 o'clock for 15 minutes and then we go to 1 and then reconvene until 3:30 until 5:30 for the rest of the day. I think there is agreement among all parties that all rounds today, all interventions, will be eight minutes duration.

>     Is that agreed?

>     Some hon. members: Agreed.

>     The Chair: Yes, if you want to split, you may split, but give the Chair notice ahead of time. If you don't then, if you use only a couple of minutes, that will deem to be your intervention.

>     The first thing we'll do is we will swear in the witness. Mr. Guité, do you want to take the oath, please.

>     Mr. Charles Guité: Yes, the evidence I shall give on this examination shall be the truth, the whole truth and nothing but the truth, so help me God.

>     The Chair: Thank you very much.

>     One other question or some questions, Mr. Guité, the last time you testified before the committee you were constrained by your oath of office as a public servant. Do you feel constrained by that since cabinet ministers and so on, that oath of office has been lifted? Do you agree you are no longer subject of the oath of office of the public service as you speak to the Parliament?

>     Mr. Charles Guité: I agree, sir. But how far back have you got this....Does it go back to 1990, 1995, 1997?

>     The Chair: The oath of office was lifted for cabinet ministers back to, I believe, 1996. We are awaiting, it may come through momentarily, a decision by the Privy Council as to whether that's going to be made retroactive even further. I'm of the position that as a public servant you are not subject to the cabinet oath which has been lifted back to a certain date. It has been lifted for you for your period as a public servant of Canada.

>     Mr. Charles Guité: All right.

>     The Chair: All right.

>     Now some other notes and I read this for everybody. The refusal to answer questions or failure to reply truthfully may give rise to a charge of contempt of the House whether the witness has been sworn in or not. In addition, witnesses who lie under oath may be charged with perjury. That comes from the House of Commons Procedure and Practice, Marleau and Montpetit, page 862.

>     Also, Mr. Guité, you are appearing before us as an individual this morning. Did you discuss or have meetings with any employees of the Government of Canada, any members of this committee on both sides in preparation of your report before coming to this meeting or were you counselled or given any coaching by any one in the Government of Canada, the Parliament of Canada before coming here?

>     Mr. Charles Guité: No, I have not, sir, but--

>     The Chair: And any assistance as well?

>     Mr. Charles Guité: No, I have not, but I have spoken to people who worked for me in the past. When, I don't know? I spoke to people since I left the government. Obviously, some of these people are personal friends. But nobody has given me advice or prepared me for my presentation today.>

>     The Chair: Has legal advice been provided or paid for by the authorization of any official in the Treasury Board Secretariat or the Department of Public Works and Government Services or in any other government department or agency? In essence, is the government paying for your legal services?

>     Mr. Charles Guité:

>     Yes, I have confirmation from the last time I appeared here. I assume that agreement is still valid. So the department will pick up my legal expense up to a certain amount.

>     The Chair: We did actually table a report in the House, was it yesterday, that we, this committee recommended that public servants appearing before this committee, because of their position as a public servant of Canada, have their legal counsel paid for by the government.

>     I think these are primarily the questions, to everyone, to all members of the committee, including you, Mr. Guité, just to advise that I will be ensuring that both the questions by members and answers by the witness remain relevant to the orders of the day, that being chapters 3, 4 and 5 of the November 2003 report of the Auditor General of Canada. Where the information given in questions and answers seem to stray from that, I shall intervene to ensure that the discussion remains on track. I would ask in that respect, questions and answers remain succinct and to the point. That's both for the questions and the answers.

>     I think that is it. Mr. Guité, I understand you have an opening statement. I turn the floor over to you. The floor is yours.

> *  (0910) 

>     Mr. Charles Guité:

>     Thank you very much.

>     Well, good morning, everyone. Firstly, Mr. Chairman, I'd like to make the following comment on statements that you made to the press that are totally wrong and misleading. I quote: > "> Can't have someone arrogantly thumbing their nose at Parliament> "> ; > "> The government has powers to make it awkward for Chuck Guité> "> ; > "> Canadians can't sit quietly back and watch Mr. Guité, who is out of the country, thumbing his nose at them> "> ; > "> Mr. Williams said he has no intention of asking for help in the matter from the U.S. police> "> ; > "> The committee could issue a subpoena to get Mr. Guité to appear, or Canada Customs could even arrest him if and when he returns to Canada> "> . End of quote.

>     Mr. Chairman, I have spent most of my career serving Parliament. As a public servant, serving the public at large throughout my career, I have never thumbed my nose at Parliament, furthermore at Canadians. Your comments that > "> the government has power to make it rather awkward for Chuck Guité> "> , well, you have succeeded, sir. Canadians are thumbing their nose at me and my family.

>     Let me give you an example. Where my wife and I winter in Arizona, there are many Canadians who have full access to the Canadian media. Because of your unacceptable comments to the press, we had Canadians driving by our trailer and yelling obscenities at us. Others were running around the community with articles from the press, etc., etc.

>     I repeat, Mr. Williams, I have never thumbed my nose at Parliament or at Canadians. Furthermore, I have continued to serve this institution long after I retired in 1999.

>     Finally, on this issue, Mr. Chairman, I have attached a copy of the letter my legal counsel has sent to you on this issue, as I'm not sure if it has been circulated to all members of this committee.

>     In regard to the meeting of June 6, 2002, which was supposed to be in camera, five minutes after I left, members of this committee were giving interviews to the media. Having said that, I would like to make two comments on the transcript of June 6, 2002, in reference to Mr. Jean Brault-Chalaisand Attractions Canada. After having read the transcript that was released, my wife reminded me that we did go to Mr. Brault-Chalais, and that Mr. and Mrs. Boulay were present. I do not remember the date, but it may have been during the 1994-95 referendum.>

>     As for the billboards that were bought during the referendum, we did not use Attractions Canada for ads as that program only started in 1997, if I recall. We did, however, use other government ads.

>     Now, let me turn to three areas that I would like to address today. They are the process of AMG, APORS and CCSB, as this committee keeps referring to the early 1990s, my promotions, media articles, etc., etc. Item two, the Auditor General's report, as I will illustrate quite clearly, is lacking information and it is misleading to the public at large. It is also inaccurate in some instances. The third item will be political involvement in AG selection and sponsorship events.

>     Let me turn now to AMG, APORS and CCSB. The AMG was originally set up by the Clark government in 1978. That government was short-lived. When the Trudeau government came to power, it retained the AMG, that structure, it became part of the Canada Unity Information Office, commonly referred to as CUIO in early 1979. At that time, a political appointee, Mr. Peter Zary, who subsequently is deceased, was staff of the AMG. Mr. Zary was an expert in advertising and communication and in fact became a professor in this discipline at York University. I cannot describe the day to day workings of AMG in those years, but I have heard a lot about its operation as it was during the years of the first referendum when Monsieur René Lévesque was premier of Quebec.

>     In the fall of 1994, and my dates from here on are approximations or best of my recollection, the Mulroney government came to power and overnight they abolished CUIO on the basis it was perceived as too political.

> *  (0915) 

>     It was a fairly large organization, CUIO that is, and it promoted Canada with travelling exhibits, participating at most national fairs and many other expositions.

>     From 1994 to 1987 , I was manager of the project management group at the Canadian Government Exposition Centre, which was also privatized during the Mulroney years. The only part of CIO that survived was AMG, and the Mulroney government also at that time created the public opinion research. Both of these groups were political and had political appointees on staff. In fact, these appointees headed the AMG and POR. The names are not important, but it is public information, should you wish to know who they were.

>     In those years, the selection of firms advertising research were controlled by these political appointees, and if you wish, I can go into more details later. These groups reported to cabinet committee on communication that was chaired by Senator Lowell Murray. The two groups, which also had on staff public servants, reported administratively to Supply and Services Canada, more specifically the communication professional services branch. I became interim director of that branch in late 1987.

>     When Canada Communication Group, CCG, was formed around 1989-90, because the Canada Communication Group was to become a special operating agency, the administrative responsibility of AMG and POR remain under the direction of Supply and Services. I became the director of both groups, which became known as the advertising and public opinion research sector.

>     Over the next several years, I reported to a DG and two different ADMs. As stated previously, both areas had political appointees on staff. During those years, APORS basically worked with PCO, PMO and, as previously stated, for all intents and purposes, it reported to the cabinet committee on communication, headed by Senator Lowell Murray. I must say, Senator Murray is an extremely professional person. It was a pleasure to work with him.

>     During those years, we had numerous crises--the Meech Lake issue, the Charlottetown accord, the Oka crisis and the ongoing day-to-day activities. PCO, PMO, APORS worked closely together and due to the urgent circumstances contracted for firms using criteria responsive to the particular crisis of that time. We can discuss this further if you wish.>

>     The public servants, during those years, were backed by the government, as there were many critical issues affecting all Canadians that had to be dealt with on an urgent basis.

>     In the fall of 1993, when the Liberals came to power, I was still DG of APORS, and during the first three to four months, the management of my office had little or no input from anyone in government, except the new minister of the day, which was Mr. Dingwall. Mr. Dingwall requested an evaluation of APORS to be carried out, and it was done by a private consulting firm.

>     I received a call from Minister Dingwall's office around February 1994, requesting that I meet with the minister the next day. At that meeting, the first direction I received was to fire the two or three political appointees that had been appointed by the Mulroney Conservative government, but were still on APORS staff. At that point, I informed the minister that it would be less costly to the Crown if we just let their contracts expire--March 31, 1994--which was basically two months. Minister Dingwall's reply was that we would honour their contracts, but send them home anyway.

>     The next 20 minutes were spent with the new minister and his assistant asking me all sorts of questions re the Mulroney years and how the system worked. I refused to disclose such information. Imagine the next move I anticipated was that they would reorganize the APORS group, bring in their own political appointees and I would be forced to find another job somewhere in the department, which I'm sure I would have no difficulty in doing.

>     Well, there are moments where events in your life as individuals you never forget--and I don't have this in my text--things like the day Mr. Kennedy got shot, the day Elvis died, things like that. Well, that was one of them for me.

> *  (0920) 

>     I recall as clearly as yesterday, after this 20-minute discussion, Minister Dingwall, who I was meeting for the first time, got up from his chair, walked around his desk towards me, extended his hand and said, > "> Welcome aboard, you won't rat on them, you won't rat on us> "> , end of quote. I responded that there was nothing to rat on. It was a matter of ministerial confidentiality and I was not about to discuss operation of a previous government, even if it meant losing my position.

>     The other comment he made was that there would be no political appointees on my staff, which I welcome, and I would be asked later to give him more details on APORS. The rest is history. APORS became CCSB in the fall of 1997. I was the executive director of the branch until I retired in August 1999.

>     Let me now turn to the Auditor General's report. I will not spend too much time on the report, as I'm sure we will discuss at length over the next two days. What I would like to do is to initially make the following observations that contain conclusions in the report that are misleading and, in certain cases, wrong.

>     The four following quotes are from page 1 of the Auditor General's report, > "> Government-wide Audit, Sponsorship, Advertising and Public Opinion Research> "> , and I quote:

> We found that the federal government ran the Sponsorship Program in a way that showed little regard for Parliament, the Financial Administration Act, contracting rules and regulations, transparency and value for money. These arrangement, involving multiple transactions with multiple companies, artificial invoices and contracts or no written contracts at all, appeared to have been designed to pay commissions to communication agencies, while hiding the source of funding and the true substance of the transaction.      

>     This statement is partially misleading. For example, it is impossible to make payment pursuant to a contract without an invoice for the goods and services provided and pay an invoice if there's no formal contract or financial commitment. At no time did CCSB intentionally try to hide source of funding while I was executive director up to August 1999. If invoices were artificial, I cannot comment, > except to say that I had no such knowledge or information at that relevant time.

>     Quote two, and I quote:

> We found widespread non-compliance with contracting rules in the management of the federal government Sponsorship Program. At every stage of the process rules for the selection of communication agencies, managing and measuring and reporting results were broken or ignored. These violations were neither detected, prevented or reported for over four years because of the almost total collapse of oversight mechanisms and essential controls. During that period, the program consumed $250 million of taxpayers' money, over $100 million of it going to communication agencies as fees and commissions.  

>     This, again, is not entirely accurate and I will illustrate in two examples later in this presentation.

>     Quote three, and I quote:

> Public servants also broke the rules in selecting communication agencies for the government advertising activities. Most agencies were selected in a manner that did not meet the requirement of the government contracting policy. In some cases, we found no evidence that the selection process was conducted at all.  

>     During my tenure, I can state this assertion: CCSB never selected an agency without following the process, as defined in the contracting policy and guidelines. We always followed the process as per TB guidelines. The one exception was during the referendum of 1995, where we used exception, as provided in the procurement policy.

>     Quote four, and I quote:

> While these chapters contain the name of various contractors, it must be noted that our conclusion about management practice and action refer only to those of public servants. The rules and regulations we refer to are those that apply to public servants, they do not apply to contractors. We did not audit the records of private sector contractors, consequently, our conclusions cannot and do not pertain to any practices contractors followed. 

> *  (0925) 

>     In this regard, it is my opinion that the Auditor General's report is mistaken, and its conclusion is potentially misleading because it has given the perception to the public that $100 million has disappeared in thin air. For example, moneys expended on sponsorship programs were needed, and were proper expenditures. Nonetheless, it has been suggested this is not the case. Not having access to relevant records for many years, the dollar figures in these example are, of necessity, approximations. Bluenose, which is one of the sponsorship programs, someone from the Bluenose trust fund has apparently said that there was approximately $2.5 million sponsorship given to the Bluenose fund, but only $300,000 ended up in the trust fund. However, they have failed to mention the approximately $2.2 million which was spent on the following: $600,000 for the purchase, and design of a travelling exhibit that followed the Bluenose from Halifax to Thunder Bay, and back, with some thirty to forty stops in ports and cities. This consisted of a tractor trailer, expandable, the trailer would access the handicapped people in a very sophisticated exhibit, a ground crew of some ten to twelve people to set up the exhibit, and a store that sold souvenirs, the proceeds of which went to the Bluenose trust fund. The staff worked 12- to 15-hour days, in some cases 24-hour days travelling during the night in order to revive at the next port of call, and set up the travelling exhibit before the Bluenose arrived. If my memory serves me right, the tour lasted two and a half months. Who paid for the mooring fees? The operation of the Bluenose? The daily sail tours in some ports, weather permitting? Special events at city halls of communities or cities that the Bluenose visited? Travel expenses for 12 people, vehicles, hotels, etc? The sponsorship program paid for these expenditures.>

>     Based on the Auditor General's approach, not having reviewed the disbursements made by these agencies managing the Bluenose tour, the AG's conclusion would be $2.5 million sponsorship program with only $300,000 to the Bluenose trust fund, and $2.2 million in fees and commissions. Therefore, $2.2 million unaccounted for. This is demonstratively incorrect, because the sponsorship fund covered all expenses related to the tour, including agency fees and commissions properly earned for managed this enormous project.

>     Example number two, Canada games. The other example is the Canada games that were held in Winnipeg. I don't have access to specific dollar amounts, but the same applies. There was a major Canada pavilion designed and built, travel expenses long before, during and after the game, the staffing of the Canada pavilion, the ongoing operation and maintenance during the game, the subsequent take down, etc. It has been suggested that funds from the sponsorship program have disappeared. This is not accurate. An agency had the responsibility to fund all aspects of the design, construction, and operation of this pavilion. Significant funds were expended for this purpose. Agency commission and fees were charged as permitted.

>     Finally, political involvement. I think it's appropriate here to quote a member of this committee, Mr. Greg Thompson, of June 6, 2002, and I think I may have done it in 2002, but I'll do it again.

> Would it be fair to say that the sponsorship program was set up for the greatest political reasons, in all sense and fairness. In the beginning it was obviously set up for political reasons for the greater good of the country.   

>     I could not have said it better.

>     While I was executive director, I want to make it very clear, I repeat very clear, is that the PMO, and Minister Gagliano, Minister Dingwall never suggested the name or got involved in the agency selection process. Did the PMO, and ministers provide input and decisions with respect to specific events that were sponsored, and the allocation to specific firms, absolutely.

> *  (0930) 

>     The Chair: Thank you, Mr. Guité, and now we'll go to questions.

>     Mr. Kenney for eight minutes, please.

>     Mr. Jason Kenney (Calgary Southeast, CPC): Thank you, and good morning, Mr. Guité. Thanks for appearing before us today.

>     As you know, Mr. Guité, you're in the eye of the storm, speaking proverbially. The Prime Minister has said that this is the largest scandal in decades in Canada. Canadians are very concerned about what this says about the administration of government, and the stewardship of their tax dollars, and a number of people have pointed to you, and you alone as the culprit in this whole mess. My friend Mr. Murphy opposite, near the beginnings of these hearings said, and I quote > "> the real culprit in the whole mess if Mr. Guité> "> . Prime Minister Martin initially blamed this whole matter on > "> a rogue group of bureaucrats> ">  presumably led by yourself. This week the Public Works Minister said it was all Chuck Guité who did this.

>     How do you respond to this effort to make you the sole scapegoat for what went wrong in the sponsorship program, Mr. Guité?

>     Mr. Charles Guité: I think you've had witnesses who have appeared here. Obviously, when I appeared here in 2002, I was using the clause of confidentiality.

>     There is no question that Chuck Guité, or for that matter, Joe Blow, can control a program of that nature by his or herself. If I go back as far as pre-referendum years, I worked very closely in those days with FPRO, PCO, PMO.

>     After the referendum, I met regularly with the minister in question, which was on two occasions. We have to be careful here because the official start date of the sponsorship program was 1997, if I recall correctly, but there was a lot of sponsorship going on before that, which was funding, I think, that came from the unity file. >

>     Every time we prepared the plan of attack for the upcoming year, ministers were involved, discussions were held with the minister's office, they had input into the process. The PMO had input into the process. At the end of the day, my organization delivered the product.

>     Mr. Jason Kenney: Mr. Guité, Canadians really have two preoccupations in this whole mess. First of all, they want to know who is responsible, and second, they want to know where their money went, so I'd like to start questioning you really on this question of responsibility, going through each of the ministers that you reported to in Public Works.

>     You testified that you had a very memorable meeting with Mr. Dingwall, where he said, > "> If you don't rat on us, we won't rat on you> "> . But Mr. Dingwall testified to our committee that he doesn't even remember meeting you. He said, when asked, > "> To the best of your recollection, have you ever met one-on-one with Mr. Guité?> "> , he said, > "> No, I don't believe I have, I don't believe I have, I don't recall that, to the best of my knowledge I don't recall that> "> . Did you meet with Mr. Dingwall as your minister, and how frequently?

>     Mr. Charles Guité: Absolutely, I met with Minister Dingwall. It was not that frequent, but on several occasions I met with the minister in his office with his assistant.

>     Mr. Jason Kenney: What would you discuss with the minister?

>     Mr. Charles Guité: Obviously, in my opening comments, I told you there what we discussed. Subsequent to that, I think we discussed some of the promotion items we would do, and some of the events that would take place.

>     Mr. Jason Kenney: Could you characterize how often you may have met with Mr. Dingwall while he was minister?

>     Mr. Charles Guité: Oh, not very regular. The program was just starting. But I would meet with the minister, basically on their request. I never initiated the meeting.

>     Mr. Jason Kenney: You never initiated the meeting. Is that true of your meetings with Jean Pelletier, because he testified that you met with him on average every other month? This is Jean Pelletier, chief of staff to Prime Minister Chretien. He said that in every instance you initiated the contact with Mr. Pelletier, you initiated the meeting.

>     Mr. Charles Guité: That's correct. Mr. Pelletier's office never called and asked for me to meet him. It was the opposite.

>     Mr. Jason Kenney: So the minister initiated contact with you, but you initiated contact with the chief of staff to the Prime Minister?

>     Mr. Charles Guité: That's correct.

>     Mr. Jason Kenney: Mr. Guité, as a mid-level EX-2, EX-3 at this point, a mid-level public service manager, how could you get such fairly easy access to the most powerful man in the Government of Canada?

>     Mr. Charles Guité: Because the advertising management group, or whatever it was called in APORS, I don't know if it was CCSB then, always reported to the minister's office and had access to PMO.

>     Mr. Jason Kenney: Always reported directly to the minister, bypassing the deputy minister.

> *  (0935) 

>     Mr. Charles Guité: Always did.

>     Mr. Jason Kenney: And who set up that structure?

>     Mr. Charles Guité: The Clark government and the Mulroney government.

>     Mr. Jason Kenney: You would report, regardless of the rules of the public service?

>     Mr. Charles Guité: We always had ... the head of my group, when I headed it, if I go back to the Trudeau years, even though I wasn't in that area, I always had access to the PMO and the minister's office. That's the way it was set up.

>     Mr. Jason Kenney: Sir, Diane Marleau testified that you showed up at her office when she became Minister of Public Works and said, > "> I report to you> "> , and she said, > "> No, you don't, I don't hear directly from line managers, you report to the deputy> "> . Is that accurate?>

>     Mr. Charles Guité: As you noticed in my opening comments, I did not mention Mme. Marleau. If you remember the testimony of Mr. Pelletier, he said that, > "> Chuck started to contact my office around 1996> "> . I think that was about the same time that Mme. Marleau became Minister of Public Works. I met Mme. Marleau, during the whole time she was there, probably twice.

>     Mr. Jason Kenney: My question was, did the exchange that she related to us transpire, where she said, > "> You do not report to me and don't come back to my office> "> ?

>     Mr. Charles Guité: No, I can't remember her telling me that.

>     Mr. Jason Kenney: But you approached her and said, > "> I report directly to you> "> , and she said, > "> No, you don't, you're not a deputy minister> "> .

>     Mr. Charles Guité:

>     No, I don't remember saying that to Mme Marleau.

>     Mr. Jason Kenney: Now, sir, how often did you meet with Mr. Gagliano when he was your minister?

>     Mr. Charles Guité: Regularly, regularly being some months it would be once a month. Some months it might be twice a month. Some weeks it might be three times a week. On the average, I would meet Mr. Gagliano probably every month.

>     Mr. Jason Kenney: Your former assistant, Huguette Tremblay, testified that you would meet with him, on average, once a week. Would that be an accurate characterization?

>     Mr. Charles Guité: No, I wouldn't say once a week because the minister was out of town regularly, and so forth, so--

>     Mr. Jason Kenney: But Mr. Gagliano testified that he may have met with you > "> two or three times a year> "> . Is that accurate?

>     Mr. Charles Guité: No.

>     Mr. Jason Kenney: That's not accurate.

>     Mr. Charles Guité: No.

>     Mr. Jason Kenney: Why do you think he would have told us that?

>     Mr. Charles Guité: Just a minute, now. Just let me backtrack here. When you say, > "> meet Minister Gagliano> "> , I may have met the minister's office--

>     Mr. Jason Kenney: Right.

>     Mr. Charles Guité: --once a week, and I wouldn't say it was once a week, but it was regular.

>     Mr. Jason Kenney: So you were at Gagliano's office, on average, once a week.

>     Mr. Charles Guité: Yes, on the average.

>     Mr. Jason Kenney: Meeting with Jean-Marc Bard and Pierre Tremblay?

>     Mr. Charles Guité: No. With Pierre Tremblay, when Pierre was there, when I left the government I think M. Bard became chief of staff about three months before I left the government, so--

>     Mr. Jason Kenney: And sir, I want to know--

>     Mr. Charles Guité: Well, let me finish.

>     So my meetings with M. Bard I'd think I could probably count on less than one hand because when--let me finish--when M. Tremblay joined my organization, I think in February, 1999, about March or April I basically gave him the reins of the organization and I stood basically in the background, observing things that Pierre was doing, but I haven't met M. Bard...

>     In the case of M. Tremblay, when he was chief of staff, he was normally with the minister when I met with the minister.

>     Mr. Jason Kenney: I only have time for one more question, Mr. Guité, which is this, a two-part question.

>     First of all, did you meet with and discuss the sponsorship program with Jean Carle of the Prime Minister's office? If so, how frequently?

>     And the larger question is this. You testified to us that you did receive political direction but all of your former political masters basically deny ever having known you. They disavow their involvement in this. They claim there was absolutely no political interference. We've heard minister after minister say this, and spokespeople from the PMO. Would you tell us the truth?

>     Mr. Charles Guité: Yes, I know, I--

>     Mr. Jason Kenney: To what extent was there ongoing political direction in this program?

>     Mr. Charles Guité: > Let me answer your question because I think it's important. There is quite a bit of difference about political interference and political input. To me, that is two>  completely different things and to say that they interfered--i.e., selection of agencies--never. I would not let them do that because ministers are not to interfere with the selection process.

>     Did they have input into the program of who got the sponsorship, which sponsorship we're going to do? Obviously. I met with them and we went through the programs together. I think you must have got from some other witness a list of how we used to present the programs to the minister's office where we had, you know, the event, the commissions paid, the agency that got it and so forth. I sat with ministers--not with ministers because in the days of Mr. Dingwall, that did not exist--but with Mr. Gagliano I sat with him and we went through that list and he had input.

>     Now, what input did he have? He didn't say, > "> Well, we don't like that. We like that one> "> . We talked about the impact and at the end of the day we agreed that the split of the projects would be done in this way. So they had input.

>     But let me add another comment, which is important, briefly, of Mme Marleau, and when Mme Marleau came on staff or became minister, the message I got was, deal with PMO.

> *  (0940) 

>     The Chair: All right, thank you very much, Mr. Kenney.

>     Monsieur Gauthier, s'il vous plaît, huit minutes.

> [Français]

>     M. Michel Gauthier (Roberval, BQ): Merci, monsieur le président.

>     Monsieur Guité, vous êtes un fonctionnaire de longue expérience, le rapport de la vérificatrice générale, vous avez donné quelques exemples qui ne vous apparaissaient pas appropriés et j'aimerais savoir si vous considérez que la vérificatrice générale était plutôt légitimée d'exprimer ce qu'elle a exprimé dans son rapport, compte tenu du manque de preuves, du manque de documentation et du manque de capacités à suivre le dossier? Comme vous êtes un fonctionnaire d'expérience, vous savez que dans l'administration publique, toujours j'imagine, on essaie de suivre nos dossiers pour que la vérificatrice générale, qui éventuellement est appelée à faire son travail un peu partout dans les ministère, puisse retracer l'utilisation de l'argent. Est-ce qu'il ne vous semble pas que dans le Programme des commandites, l'absence de documentation, l'absence de dossiers étoffés pouvait vous amener un rapport comme celui-là un jour ou l'autre?

> [English]

>     Mr. Charles Guité: What you've got to realize here is that if you're doing a sponsorship, and I don't want to be sarcastic here, but I can not take a copy of the word mark that's on a building and put it on a file. I can not take the word mark that's on the ice in the forum, or any other hockey club. Sponsorship in its definition, what you're doing is you're getting visibility, that's what we were doing with these files. On the files, when I was there, there was a contract, an invoice and there was an affidavit or a document that said the product has been delivered. What more can I put on file?

> [Français]

>     M. Michel Gauthier: Mme Tremblay, une de vos adjointes, s'est présentée ici au comité pour dire qu'elle s'était inquiétée--c'est une personne qui avait quand même de l'expérience, elle avait l'habitude de fonctionner dans votre service--qu'elle s'était inquiétée à un certain moment donné de manque de pièces justificatives dans un dossier et à telle enseigne qu'elle avait communiqué avec une agence pour dire: « écoutez, il manque des données ». Or, Mme Tremblay avait des habitudes de travail, j'imagine, elle n'en était pas à sa première semaine de travail quand c'est arrivé pour, après ça, se faire dire « écoute, ne pose pas de questions, effectue le paiement, tout est correct ». Comment vous expliquez cette inquiétude de Mme Tremblay qui devait avoir des habitudes administratives correctes, j'imagine?

>     M. Charles Guité: Oui. Je pense que Mme Tremblay, le commentaire que je lui ai fait c'est que, premi> èrement, une commandite est différente d'un programme ordinaire, disons une campagne publicitaire. Alors le rôle de Mme Tremblay dans mon organisation était de s'assurer qu'il y avait un contrat en place, que quand la facture arrivait chez nous le contrat était en bonne et due forme et qu'il restait des fonds dans le contrat. Ce n'était pas à Mme Tremblay de me dire: « est-ce que l'événement a eu lieu »? Ce n'était pas son rôle de faire ça. Ce n'est pas qu'elle a refusé, elle m'a questionné sur une telle facture, j'ai dit: « non, madame Tremblay, je suis certain que l'événement a eu lieu, j'ai l'information qu'il a eu lieu, payez la facture ».

>     M. Michel Gauthier: Finalement, dans le processus que vous nous indiquez là il y a une seule personne en réalité qui pouvait témoigner du fait que le travail avait été fait.

> [English]

>     The Chair: Mr. Gauthier, can I just interrupt and say all cell telephones absolutely off in this room please.

>     Sorry, my apologies.

>     Mr. Gauthier, my apologies.

> [Français]

>     M. Michel Gauthier: Je reviens à ma question, monsieur le président, vous m'avez troublé.

>     Je vous demandais: vous étiez la seule personne qui, finalement, constituait la bibliothèque vivante, c'est-à-dire que c'est vous qui saviez que l'événement avait été fait, c'est vous qui saviez que le travail avait été livré comme prévu et personne d'autre ne pouvait témoigner de cela et il n'y avait aucun dossier pour en témoigner?

>     M. Charles Guité: Non, pas nécessairement, il y avait d'autres personnes dans mon équipe, on avait, je pense, si je me rappelle bien, quatre ou cinq personnes impliquées dans le processus des commandites, et même souvent des personnes de mon équipe assistaient à des événements qu'on commanditait. Alors c'est sûr que j'avais des discussions avec Mme Tremblay, qui a assisté à plusieurs événements, M. Parent, qui a assisté à plusieurs événements. Qui d'autre était là dans ce temps-là? Je ne me rappelle pas des noms, ça fait longtemps que je suis parti du fédéral, mais en tout cas. La seule autorité de délégation pour la signature de factures était à mon bureau. Si je n'étais pas là, je déléguais mon autorité à quelqu'un d'autre, que ce soit M. Tremblay ou M. Parent. Alors, oui, c'est sûr que moi j'étais au courant de presque tous les événements qui se déroulaient.

> *  (0945) 

>     M. Michel Gauthier: Mais est-ce que vous ne pensez pas que vous avez eu quand même des budgets d'une quarantaine de millions de dollars, parfois plus, annuellement? Est-ce que vous considérez que lorsqu'on est un serviteur de l'État, qu'on travaille au plus haut niveau, je dirais, de l'administration publique, que 45 millions de dollars dépensés, cela doit laisser un certain nombre de traces, au moins pour qu'une personne comme la vérificatrice générale puisse retrouver des éléments importants? On ne peut pas. Je ne crois pas que ce que vous dites c'est: « moi, en autant que je savais que c'était fait, c'était suffisant », parce qu'une personne disparaît, une personne décède, quitte, et là l'appareil gouvernemental s'en trouvait, à toutes fins utiles, paralysé. Si c'est sur la bonne foi d'une seule personne qu'on dépense 45 millions de dollars, cela n'a pas de sens.

>     M. Charles Guité: Non, non. C'est comme j'ai dit dans mon allocution quand j'ai commencé à parler ce matin, chaque événement avait un contrat, avait une facture et une certification que le produit était livré. Les commentaires de la vérificatrice générale c'est qu'elle dit: « même, j'ai trouvé des dossiers sans contrat ». Impossible, absolument impossible.

>     Et l'autre commentaire que je voudrais faire à ce point-ci, c'est que quand j'étais là, moi, jusqu'en août 1999, les dossiers étaient là. Et je sais aujourd'hui qu'on entend parler à travers les branches que les dossiers ne sont plus l> à. Ils sont partis où les dossiers? Il y a eu une vérification faite en 1996 quand j'étais là et la vérification, comme toute vérification, on fait des commentaires sur telle chose, bien, les dossiers étaient là puis aujourd'hui ils ne sont plus là. Ils sont partis où?

>     M. Michel Gauthier: Je comptais sur vous pour nous le dire.

>     M. Charles Guité: Je ne le sais pas, monsieur, je ne le sais pas. Comme je vous le disais tantôt, c'est impossible, dans le système fédéral, quand la vérificatrice générale fait un commentaire comme :

> [English]


>     > "> fictitious contracts, fictitious invoices> "> . Well it must have been a fictitious payment because you cannot make a payment without a contract and an invoice. It's like you writing a cheque with no money in the bank and then go to go.

>     And I'm not trying to knock down the Auditor General, she has a job to do, her office has a job to do, but those files were there when I was there. How come they're not there?

> [Français]

>     M. Michel Gauthier: Si vous me le permettez, comme le temps s'achève pour ma période, j'aimerais juste que vous nous disiez, lorsque vous dites que les dossiers étaient là, que : « moi j'avais des dossiers à ma satisfaction », qu'est-ce qu'on retrouvait normalement dans un dossier pour qu'il soit à votre satisfaction?

>     M. Charles Guité: Un contrat, une facture, une vérification dans le dossier, à savoir que le produit a été livré. Cela pouvait être un post mortem, cela pouvait être un affidavit ou quoique ce soit. Il y avait un contrat, une facture et une vérification que le produit a été livré. Comme je le disais tantôt, la vérificatrice générale ne les trouve plus. Chère madame, chère vérificatrice, allez regarder où les dossiers sont partis, parce qu'ils étaient là lorsque j'étais là.

>     Le président: Merci beaucoup, monsieur Gauthier.

> [English]

>     Mr. Murphy, please, eight minutes.

>     Hon. Shawn Murphy (Hillsborough, Lib.): Thank you very much, Mr. Chairman.

>     Mr. Guité, I just want to follow up on the same line of question of Mr. Gauthier and that appears to me to be the nub of this whole issue, this whole issue of documentation in the files in the whole sponsorship program or the lack of documentation. And to put it in context I'm going to go back and talk a little bit about the evidence we heard yesterday from Commissioner Zaccardelli.

>     It seemed to be pretty clear and you're probably familiar with it, the 125th Anniversary of the RCMP, there was large sponsorship.

>     Mr. Charles Guité: I'm very much aware of it, sir.

> *  (0950) 

>     Hon. Shawn Murphy: And $1,081,000 for production costs. And the two agencies involved, which were Gosselin and Lafleur Communications, received a commission of $244,380. Commissioner Zaccardelli explained that they were very pleased with the 700 events, they were very pleased with the way it went, but again, when the event was audited the Auditor General, reflects a lack of documentation. And again it rises because of the lack of documentation. She makes the statement:

> These agencies retained a total of $244,380 in commission fees for transferring funds from CCSB to the RCMP.     



> And I take it that you don't agree with that statement?

>     Mr. Charles Guité: I don't agree at all, no. And while I don't agree at all, I'd have to see the file and the invoices and so forth.

>     And it's funny, because I was listening last night to the Commissioner of the RCMP at this committee yesterday--I think he was here, if I recall right--and I got quite a kick when he had to ask me--I guess it wasn't him, but his predecessor--if he could buy horses. I thought it was quite funny. Mind you, I could probably help him because I'm quite a good rider and I know a lot about horses, but I'm off track here.

>     Let me now answer your question. The RCMP 125> th--and again, the figures that are here I'm sure that she got them from somewhere so I won't disagree with those figures--celebration that happened in La Belle Province in Montreal, where there was a big ball and there were a couple of events, I think, in Quebec City, the Commission yesterday was quite accurate. There were horses that were purchased with the money that was given to the RCMP for that event. The set up of the whole celebration or the ball, for a better term, that was held in Montreal cost a lot of money. Now, when the Auditor General says $243, in what? In fees and commissions? Is it both? Definitely there would be fees. Who paid to set up the place? I'm sure the agencies involved spent some time in setting up the ball, spent some time in getting the hall organized, probably did some promotional items for the RCMP.

>     And in that regard I recall, it seems to me that during the 125th there were some parkas or jackets made with the RCMP logo on the back and saying 125. There were some other promotional items like--I can't remember exactly--maybe cufflinks or things like that. But, I mean, this was all part of the sponsorship.

>     Hon. Shawn Murphy: Is it your testimony that the sponsorship program got value for the money, for the $244,000?

>     Mr. Charles Guité: Absolutely. Absolutely, and, you know, I'm sure that we're going to talk about several projects over the next day and a half, and I will always come back to the same conclusion, or the same statement: The Government of Canada, in all of those projects, got value for money, and as we commonly say or often say, > "> The proof is in the pudding> "> .

>     I think there was one committee member who made a comment, > "> Well, why do that when you knew there was going to be no more referendums?> ">  The reason there's going to be no more referendums, or in the coming year, is because the popularity of the separatist movement in Quebec is way down. Why is it way down? The sponsorship program.

>     Hon. Shawn Murphy: I'd like to stick to the report if I could here.

>     Mr. Charles Guité: But what I'm trying to tell you, sir, is that, as I said earlier, if you do a sponsorship, you do get value for money. We sure did, we got value for money.

>     Hon. Shawn Murphy: There have been allegations made--and I'm sure, sir, you have heard them--that there's $100 million missing. Your evidence is, that's not correct.

>     Mr. Charles Guité: Absolutely wrong.

>     Hon. Shawn Murphy: Is there any money missing?

>     Mr. Charles Guité: No, and let me tell you why. If you went back, not you but if any auditor went to CCSB--whatever it is now because I think CCSB is history--and went through every invoice, because you cannot pay an invoice or issue a government cheque without an invoice, it's going to add up to $250 million and 24¢, if that was the money that was allocated, because it's impossible to issue a cheque without that.

>     Hon. Shawn Murphy: But in fairness to the auditor--and I've been on this committee now back 2002 when you appeared before--the level of documentation and supporting evidence doesn't seem to be there that you see in other government departments.

>     Mr. Charles Guité: I agree, sir, and I addressed that earlier, but again, I will make a statement like the two examples I used. What am I going to put in a file? I can't put the Bluenose in a file. The schedule was there. There's a schedule of where the Bluenose went.

>     The Canada Games in Winnipeg, they happened. How many people visited the pavilion? The pavilion was a huge, huge undertaking. How was it managed? Who staffed it? Who kept it operational? When the games were over, and the feedback I got from the agency that was involved, and I forget who did the Canada Games, they said, > "> Chuck, a fantastic success> "> . What else do I put on file? I have a contract, I have an invoice, and I would have a post-mortem, obviously, of the games, which should be on the file. What else do I put on file?>

> *  (0955) 

>     Hon. Shawn Murphy: But the auditor has made the statement, on many occasions, that these contracts...the provisions of the Financial Administration Act and the policy guidelines issued by Treasury Board were generally not followed.

>     Mr. Charles Guité: That's the Auditor General's comment. I don't agree with it.

>     Hon. Shawn Murphy: You don't agree with it?

>     Mr. Charles Guité: No.

>     Hon. Shawn Murphy: Did anyone ever tell you the way to document the files in the sponsorship program?

>     Mr. Charles Guité: No, but I think at a discussion around the table probably during the referendum year, 1994-95, when I worked very closely with FPRO and Privy Council, which is basically the Prime Minister's department--and when I say > "> we> "> , I could probably give you a few names but I'd have to go back and talk to a few people to get who the players were--we sat around the table as a committee and made the decision: The less we have on file, the better. The reason for that, if somebody has an access to information...and I think as I said back in 2002, a good general doesn't give his plans of attack to the opposition.

>     Hon. Shawn Murphy: Could it be, sir, that you were keeping your level of documentation down because of the access to information legislation?

>     Mr. Charles Guité: Yes. The reason we kept minimum information on the file was in case we have an access to information. Now, since that time, I'm well aware--and I think I got that, Mr. Williams, at the last committee--the rules have changed on access to information, but they didn't apply at the time when I was there.

>     The Chair: Thank you, Mr. Murphy.

>     On this access to information, that seems a rather strange comment, Mr. Guité. The sponsorship program was to sell Canada, get the name out there, to get information out there at the best possible value for money by what you're telling us, and yet you seem to say, > "> We don't want anything to file to tell us how we're promoting Canada> "> . It seems to be a dichotomy that you would keep the file very small, and yet you would be spreading the word Canada everywhere.

>     Mr. Charles Guité:

>     No. During the referendum and after the referendum also. But again, the information that we didn't want to get out, obviously, was what participation we were going to have.

>     Let me give you an example. I'm sure that'll come up over the next day and a half or whatever. I was provided with a lot of good advice from Groupaction on the strategy of the Quebec government. I'm sure we'll talk about that later on. I wasn't going to put that information on file.

>     I knew, for example, that if I went to a certain event that the Quebec government was going to be present with quasi-government organizations like the casino and Société des alcools du Québec, and so forth.

>     In certain cases, somebody in Groupaction--I had several people I was dealing with there--came back to me and said, > "> Chuck, you can't go to that event because the organizers of that event told me that if there's any federal money, Quebec will withdraw their participation> "> . In several cases, I said to the agency, > "> go back and tell them we'll cover it> "> . So where they were getting $50,000, let's say, from the Quebec government, we wanted to be equivalent or more, to be visible at that event. The organizer would call back and say, > "> if we take money from you, we're going to lose the one from Quebec> "> . A good strategy is to say that we'll double it.

>     The Chair: Ms. Wasylycia-Leis, please. Eight minutes.

>     Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you, Mr. Chairperson.

>     Thank you, Mr. Guité, for your appearance here today. We appreciate your testimony because, in fact, I think that you can help us, as a committee, and all Canadians to understand what went wrong in this very egregious chapter in Canadian history.>

>     I know that you've spent some time downplaying the significance of the Auditor General's report, but I'm not convinced. In fact, I think that the Auditor General was clear when she said that every rule in the book was broken with respect to normal process of government.

>     If you don't accept the Auditor General, we also know that there were internal Public Works documents in 2002 talking about the extreme nature of the over-billing, talking about systematic and egregious overcharging, and talking about involvement with sponsorship funds or ad firms dealing with the gun registry. I could go on with that list.

>     We also have Allan Cutler who said in 1994 that you began interfering in the contracting process. We also have some of your previous staff who said that they smelled something wrong and they felt something wrong. They've raised it.

>     How can you now downplay this chapter in our history, and suggest that all was above board? Is somebody else lying? Was the Auditor General lying? Is Allan Cutler lying? Is your former staff lying? Are the Public Works officials who did the internal review lying?  

> *  (1000) 

>     Mr. Charles Guité: What's the question? You've asked me 12 questions.

>     Ms. Judy Wasylycia-Leis: The question is, if you don't accept the findings of the Auditor General, do you accept them of some of the other witnesses we have had, Allan Cutler, some of the previous staff, and the internal reviews in your own old department?

>     Mr. Charles Guité: Do you want me to address Mr. Cutler's comments?

>     Ms. Judy Wasylycia-Leis: How can you say that there's really nothing egregious and nothing wrong in this little chapter?

>     Mr. Charles Guité: I cannot comment on what other people or other witnesses have said here unless you give me the exact quote, and I'll reply to it.

>     If you want to, I'll address which seems to be--and it's been bounced around this committee several times.... I must say that I didn't know what was going on in this committee--because apparently I was hiding in Arizona. Everybody else knew where I was--until I got back. I listened, for about 20 minutes, to three or four sessions that went on here that were broadcast on national TV.

>     Now, if you want me to address the comments made by Mr. Cutler, I will.

>     Ms. Judy Wasylycia-Leis: Let me give you three short questions then.

>     Mr. Charles Guité: Not three, one question at a time.

>     Ms. Judy Wasylycia-Leis: The Auditor General says every rule in the book was broken. Do you disagree or agree with that?

>     Mr. Charles Guité: I disagree.

>     Ms. Judy Wasylycia-Leis: Some of your previous staff have said... Huguette Tremblay has said that rules weren't broken because there were no rules.

>     Mr. Charles Guité: That's what she said.

>     Ms. Judy Wasylycia-Leis: Mr. Allan Cutler has said that you began interfering in the contract due process in 1994, and in fact you started, and I'll quote here, > "> by authorizing agencies to carry out work without a pre-existing contract> "> . I could go on. Do you agree or disagree?

>     Mr. Charles Guité:

>     I disagree.

>     Ms. Judy Wasylycia-Leis: We have reports from the Public Works internal review, 2002.

>     Mr. Charles Guité: I wasn't there.

>     Ms. Judy Wasylycia-Leis: No, this was a review of previous, of the history of the sponsorship program. They commented on some of the over-billing. Do you disagree that there was over-billing?

>     Mr. Charles Guité: Disagree.

>     Ms. Judy Wasylycia-Leis: Do you disagree with the findings that were not refuted by Mr. Boulay when he was here from Everest that there was in fact money for nothing contracts?

>     Mr. Charles Guité: Possible.

>     Ms. Judy Wasylycia-Leis: How do we explain, how do you explain money going from your department to several agencies to go on to other projects, with agencies taking a huge cut and work not being provided or services not being provided in terms of direct benefit or communication of that particular program?>

>     Mr. Charles Guité: What date are you talking about?

>     Ms. Judy Wasylycia-Leis: I'm talking about the Maurice Richard series.

>     Mr. Charles Guité: Okay, the Maurice Richard series started, I think, 1998.

>     Ms. Judy Wasylycia-Leis: So you're saying that was--

>     Mr. Charles Guité: No, no, let me finish. Let me answer the question.

>     What happened after August 1999 I can't comment on. Let me make a point here that I think on three occasions people have tried to explain. An agency, an advertising agency or an agency of record, and there's quite a bit of difference here between an AOR and an advertising agency.

>     Ms. Judy Wasylycia-Leis: I don't want to talk about agency of record right now. Just a straight, separate--

>     Mr. Charles Guité: No, but you made a comment about Claude Boulay and said that he received or you said that he received--

>     Ms. Judy Wasylycia-Leis: Everest, not Media IDA as the agency of record, but Everest in terms of direct funds for supposedly managing a contract for which he could not give a single bit of evidence about what that translates into.

>     Mr. Charles Guité: When I was executive director of the branch from 1997, it became it branch, till I left, the policy that existed and the way we did sponsorship, the government, was through an ad agency. In the Treasury Board or contracting policy, I guess, for guideline, it is very clear that an agency gets 12%, an AOR gets different, 11.75% and 3.25%. I forget the exact amount.

>     Now, it is no different than the private sector. What happens in a system like that is that you will have a project where you will lose your shirt. You will have another project where you'll make the money, as any business.

>     No, no, let me explain it because I think one of the biggest things, hearing some of the comments from this committee, and again I don't want to make a general comment, but you've got to understand how the industry works. When I was there, that was the rule. You paid 12%.

>     I'll give you an example.

> *  (1005) 

>     Ms. Judy Wasylycia-Leis: There were three Groupaction contracts done. Each one, in terms of our perception, a fake, not providing real studies of any sort. I'm not talking about normal business. I'm talking about those examples that are not normal.

>     Mr. Charles Guité: What contracts are you talking about?

>     Ms. Judy Wasylycia-Leis: Well, we can go back to when you appeared before the committee in 2002.

>     Mr. Charles Guité: Well, no, you're saying these contracts. I have to know which contracts you're talking about.

>     Ms. Judy Wasylycia-Leis: The Groupaction contracts that you testified--

>     Mr. Charles Guité: Yes, those contracts were given. The crown got value for money.

>     Ms. Judy Wasylycia-Leis: Well, see, that--

>     Mr. Charles Guité: No, that's your point of view, Madame.

>     Ms. Judy Wasylycia-Leis: Okay, that's my point of view. Okay, but let me ask one more question.

>     The Chair: Okay. Let's be careful. We'll not have a violent disagreement back and forth. We'll allow the person to ask the question. We'll allow the person to answer. We'll have a civilized discussion, here.

>     Ms. Judy Wasylycia-Leis: Sorry.

>     Fair enough. I appreciate that, Mr. Chairperson.

>     You said earlier that the government, politicians, cabinet ministers did not interfere at all in the selection of ad agencies.

>     Mr. Charles Guité: Correct.

>     Ms. Judy Wasylycia-Leis: Yet, you said back in 2002, and I'm quoting: The Federal-Provincial Relations Office in the Privy Council Office was requested to hire four or five agencies without going through the normal competition process.

>     So it would have seemed, based on your earlier testimony, that in fact some direction was coming from somewhere. In this case, you mentioned the FPRO, PCO in terms of ad agencies. >

>     Mr. Charles Guité: That's not a ministry, those are public servants.

>     Ms. Judy Wasylycia-Leis: So are you saying that there was no interference at all from the...? You said yourself that there was...you made the decisions about selections of ad agencies. When we talk about PCO or PMO, we're talking about another level of direction. That's what we're trying to do as a committee. Where did you get your direction?

>     Mr. Charles Guité:

>     I got the direction--

>     Ms. Judy Wasylycia-Leis: Did you do it on your own?

>     The Chair: Thank you. We're going to stop it right there.

>     Mr. Charles Guité: Can I answer that question, because I think it's very important. During the pre-referendum, and obviously during and after, Chuck Guité didn't decide he's going to do this on his own. There was a committee, for example, leading up to the referendum, and we sat around the committee room and we said, okay, da-da-da, the strategy, and we decided to hire agencies to help us, and I won't use the war, but to help us fight the issue, and we decided we're going to do that using a system that is well defined in the contracting policy, and if you have it, Michael, the one that lists the reasons we can go off target...

>     We sat around, as a committee, and agreed that we're going to have a competition and we're going to invite ten firms, and the rules we have used, notwithstanding section five, > "> a contracting authority may enter into a contract without soliciting bids where the need is one of pressing emergency.> ">  I think losing our country is pretty pressing. There's another one here that we use. > "> The nature of the work is such that it would not be to the public interest to solicit bids.> ">

>     Ms. Judy Wasylycia-Leis: What was pressing in 1994?

>     The Chair: Ms. Wasylycia-Leis, we're stopping right there.

>     Mr. Charles Guité: In 1994 there was a referendum coming up. I'm not going to start promoting--

>     The Chair: Okay, we're going to pretty well finish that, I think. Mr. Guité, you've been quoting from some documents, can you ensure that the clerk gets copies of these before the end of the day.

> *  (1010) 

>     Mr. Charles Guité: Mr. Chairman, this is a government contract regulation, which is available.

>     The Chair: Just ensure that the clerk has them so we know what you're quoting from.

>     Mr. Charles Guité: By all means.

>     The Chair: I will again re-iterate that if anybody has a cell phone, would they please turn it off. Ms. Ablonczy, please. Eight minutes.

>     Mrs. Diane Ablonczy (Calgary-Nose Hill, CPC): Mr. Guité, let me continue where Ms. Wasylycia-Leis left off. Who sat on this competition committee from your office?

>     Mr. Charles Guité: Any agency competition we had consisted of...are you talking about the specific competition or competitions?

>     Mrs. Diane Ablonczy: The competition committee to choose the agencies that would assist the government to win the referendum in Quebec.

>     Mr. Charles Guité: I definitely sat on it. I would definitely say that Andree Larose sat on it because she was one of my employees who I had seconded to FPRO during the referendum. The other members would be probably two or three members from FPRO/PCO. To go for their names, I'd have to go back to the file. What I can ascertain for sure is that myself and Andree Larose, who was one of my staff members, seconded to FRRO sat on that committee.

>     Mrs. Diane Ablonczy: Would you please, Mr. Guité, go back to your records and provide the committee with the names of the individuals who sat on the competition committee.

>     The Chair: Ms. Ablonczy, since he's now retired, I think it's more appropriate that we make that a request of the chair and we will get them from the government. You don't have these records, Mr. Guité?

>     Mr. Charles Guité: No, I don't, and I have no access at all to the government or to my previous employer. I'm a persona non grata.>

>     The Chair: Do you want the clerk to try and get that information, Ms. Ablonczy?

>     Mrs. Diane Ablonczy: Yes, please.

>     Mrs. Diane Ablonczy: This, of course, was a very critical committee, as you've already indicated to Ms. Wasylycia-Leis. Were there any political appointees on this committee?

>     Mr. Charles Guité: No.

>     Mrs. Diane Ablonczy: When these agencies were selected, did they submit a proposal or make a verbal presentation?

>     Mr. Charles Guité: What we did is we selected ten agencies; now, that number could vary; it could be ten, or twelve, or nine, but it was in the nine, ten, eleven area. What we did is we prepared a scope of work of the day, and there's a good example that I would not put it on file in case we had an access to information. That scope of work was sent to about ten or twelve agencies, and we said, based on the scope of work, how would you meet this program? That scope of work came back to the committee and we sat around the table and reviewed them all and based on that input, we selected five agencies to come in and give us a one hour presentation of a more detailed...after having evaluated their initial input, we went back to those firms and said, okay, expand that and come back to us and make a presentation to the committee that will last one hour. Based on that...in fact, there was more than that; I think there was seven or eight that we called on the second go-around, but only retained five at the end of the day.

>     Mrs. Diane Ablonczy: Was there any political influence brought to bear on the selection of the agencies that were used?

>     Mr. Charles Guité: No.

>     Mrs. Diane Ablonczy: Mr. Guité, it's clear that whatever system was used--

>     Mr. Charles Guité: Not whatever system. It was a system--

> *  (1015) 

>     Mrs. Diane Ablonczy: The system that you described, Mr. Guité, was clearly open to abuse because of course we already have one criminal charge laid against one of the agencies, Coffin Communications, and so I'm wondering how you would respond to the fact that the system allowed for the fraud to the degree that criminal charges have now been laid and more are expected.

>     Mr. Charles Guité: The only comment I can make here, first of all, there are about three questions there, but I'll answer the fraud charge. I cannot comment on what the RCMP has done or found, or whatever. All I can comment on is the invoice I got from an agency, I was satisfied with that invoice. If the agency has forged that invoice, or whatever, I have no way of knowing that.

>     Your other question--the one before the fraud question?

>     Mrs. Diane Ablonczy: I don't want to pursue that at this time because of my time limitations. I would simply point out that someone should have had a way of knowing if fraud was occurring. That's what checks and balances are for, wouldn't you agree?

>     Mr. Charles Guité: Let me give you a very simply answer or example to your question.

>     I buy a house and I tell the contractor to build me a house and I say I want 2"x6"s in the wall, not 2"x4"s. Three months later I move into my nice new house. It meets all my requirements. A year later there's a flood and I have to replace a wall. I take the wall apart and I find there are 2"x2"s, not 2"x6"s. Is that fraud on behalf of the contractor? Yes. Did I know it? No.

>     Whatever the RCMP have found out and have charged an agency, that's up to them to do it and at the end of the day, we'll see what happens. I can't comment.

>     Mrs. Diane Ablonczy: Mr. Guité, I would suggest that's what building inspectors are for and the owner would prudently work with that. So I'm not sure if that analogy is very helpful.

>     Let me move to testimony the committee has heard. The committee was told--has heard testimony--that in 1994 you began > "> interfering in the contracting process by authorizing agencies to carry out work without a pre-existing contract> "> . Is that true, Mr. Guité?

>     Mr. Charles Guité: Yes. Let me explain, though. It is not uncommon, depending on the situation, to say to a company or a firm, not only in advertising or communications, to start work without a contract. It's commonly known as a verbal direction and then issuing a contract, two, three weeks, three months, six months down the road and I think the one that Mr. Cutler referred to--I think it was the Department of Finance, if I recall rightly, on a Canada Savings Bonds--I'm not sure. I would have to see the file to comment on the specific contract.

>     Mrs. Diane Ablonczy: So this only happened once?

>     Mr. Charles Guité: That I can remember. I don't know how many times it happened. I couldn't say. I'm sure it happened more than once, but has it happened once, twice or twenty times? I don't know. I would have to check the file. It is not common practice to get agencies to do work without a contract.

>     Mrs. Diane Ablonczy: Mr. Guité, also according to testimony, you held a meeting on November 17, 1994 with the personnel responsible for negotiating sponsorship contracts. You are alleged to have said that normal advertising rules and regulations would no longer apply and that you would discuss this with the responsible minister in order to change the normal rules and regulations. Do you remember that conversation?

>     Mr. Charles Guité: Not at all and a minister would not have them put it into government policy and procedures, policy but not procedures.

>     Mrs. Diane Ablonczy: Mr. Guité, the auditor general's report, as you known, noted weaknesses in the control and oversight mechanisms of the sponsorship program--that's putting it kindly--and the lack of transparency in its decision-making process. I guess my question is, as executive director of the communications branch, what was the nature of the relationship between you and the minister and his office, because oversight clearly had to be exercised by someone? Was it you or was it the minister?

>     Mr. Charles Guité: I don't understand your question. No, I really don't, what are you asking me?

>     Mrs. Diane Ablonczy: I'm asking you who was responsible for the weaknesses in the oversight and control mechanisms that the Auditor General identified in the sponsorship program? Was it you or was it the minister?

>     Mr. Charles Guité: The minister had nothing to do with it. But again, I disagree with the Auditor General. There was a contract, there was work done, there was an invoice, and it was paid. What's the oversight? And in the first part of your question, the examples I've used.

>     The Chair: Thank you, Ms. Ablonczy.

>     Monsieur Thibault, s'il vous plaît, huit minutes.

> [Français]

>     L'hon. Robert Thibault (Ouest Nova): Merci beaucoup, monsieur le président.

>     Monsieur Guité, il me fait plaisir de vous rencontrer et je vous remercie d'avoir accepté de comparaître aujourd'hui. Je regrette grandement qu'il y ait eu des attaques personnelles pour vous et votre famille à ce sujet. Lorsque vous avez comparu en 2002, malheureusement, votre témoignage à huis clos a été donné aux médias. Ce témoignage n'aurait jamais dû être divulgué, mais il l'a été partiellement et c'est regrettable. Vous avez accepté de comparaître aujourd'hui et vous avez été d'accord à ce qu'on libère entièrement votre témoignage de 2002.

>     Premièrement, j'aimerais vous indiquer que j'admire grandement votre carrière. J'admire les objectifs que vous voulez mettre de l'avant, mais j'ai des difficultés, comme parlementaire et comme Canadien, de penser qu'il y aurait eu un système en place où on aurait pu faire le transfert de fonds du Trésor public à des agences du gouvernement ou à d'autres organisations et que des agences de publicité aient touché des commissions pour uniquement faire le transfert.

>     Je reconnais que dans la grande majorité des cas ou dans la grande majorité des sommes d'argent que vous avez utilisées, nous avons atteint des objectifs et que, probablement, ces transferts étaient légaux, mais on y reviendra plus tard. Pour moi c'est une question d'éthique. Quel était le système en place qui a nécessité cela? Je voudrais qu'on touche à cela un peu plus tard, mais avant j'ai quelques questions pour vous.

>     Vous parlez de rencontres avec les ministres et on a eu beaucoup de discussions ici sur la fréquence de ces rencontres que je vous inviterais à clarifier. Vous avez dit qu'avec M. Gagliano, vous vous rencontriez souvent de façon mensuelle, des fois à quelques reprises par semaine, des fois de façon hebdomadaire. En réponse à une question plus tard, vous avez dit que ces rencontres n'étaient pas nécessairement avec le ministre mais avec le Bureau du ministre. Souvent on va interchanger les termes, le Bureau du ministre, les représentants politiques du ministre et le ministre même. Est-ce que vous pourriez clarifier la fréquence de vos rencontres avec M. Gagliano?

> *  (1020) 

>     M. Charles Guité: En moyenne deux, trois peut-être par mois, le ministre lui-même. Le ministre lui-même deux fois par mois. Souvent, souvent, souvent le matin, mon bureau était situé juste en bas de la Colline ici, le matin je passais souvent au bureau du ministre qui était dans l'édifice ici, pour aller chercher des documents qu'il avait reçu pour des demandes de commandite etc., mais je ne voyais pas le ministre Gagliano. À l'époque, c'était Isabelle Roy qui était là comme adjointe et qui faisait la coordination avec mon bureau et le bureau du ministre. Mais il n'y avait pas de rencontres spécifiques avec M. Gagliano à toutes les semaines. C'est sûr que ce n'était pas à toutes les semaines.

>     Hon. Robert Thibault: Mais c'était au moins une fois par mois, des fois plus.

>     M. Charles Guité: C'est sûr, monsieur Thibault, que je rencontrais le ministre au moins une fois par mois, sans faute, mais il faut faire attention parce qu'il y avait des mois où le ministre n'était pas disponible.

>     L'hon. Robert Thibault: En ce qui a trait à M. Dingwall, vous avez témoigné que vous le rencontriez rarement.

>     M. Charles Guité: Très rarement.

>     L'hon. Robert Thibault: Mais vous rencontriez le bureau du ministre.

>     M. Charles Guité: Oui.

>     L'hon. Robert Thibault: Qui était l'assistant principal que vous avez rencontré?

>     M. Charles Guité: Monsieur Kinsella.

>     Hon. Robert Thibault: Et la fréquence de ces rencontres?

>     M. Charles Guité: À ce temps-là, ce n'était pas fréquent. Je dirais même qu'il pouvait se passer deux mois sans que j'aie de rencontres au bureau de M. Dingwall. J'ai rencontré M. Dingwall très peu, comme individu.

>     L'hon. Robert Thibault: Avant 1993, avant l'arrivée de M. Dingwall et du gouvernement Chrétien, pendant votre séjour à la Fonction publique, à l'époque du gouvernement Mulroney--je ne vous demande pas de briser...

>     M. Charles Guité: Non, je ne briserai pas de confidentialité, je l'ai dit dans mon rapport. Je me rapportais directement. Le groupe était très, très politique, on avait des nominations politiques vraiment qui géraient le groupe et on se rapportait. Moi je me rapportais fonctionnellement dans ce temps-là au Conseil privé, je faisais beaucoup affaire avec le Conseil privé et le groupe se rapportait au sénateur Murray, Lowell Murray, qui était le président du Comité en communications.

>     L'hon. Robert Thibault: Et vous rencontriez M. Murray vous-même personnellement ?

>     M. Charles Guité: Jamais tout seul.

> *  (1025) 

>     L'hon. Robert Thibault: Jamais tout seul?

>     M. Charles Guité: Non, on avait une réunion, si je me rappelle bien, le jeudi matin dans ce temps-là parce qu'il y avait des choses comme Meech Lake>  et The Oka Crisis puis Charlottetown Accord. Il y avait un comité en place et moi je rencontrais toujours les mêmes. Je n'allais pas toutes les semaines. Souvent, c'était la personne politique de mon bureau qui y allait, mais souvent, souvent je suis allé à ce comité-là et je me rappelle très, très bien, il y avait Dave Gagné, qui était au Conseil privé, il y avait moi, il y avait Peggy Binns. En tout cas, on rencontrait le sénateur comme président du comité régulièrement. Si je me rappelle bien c'était tous les jeudi matins.

>     L'hon. Robert Thibault: Vous avez indiqué que pendant l'arrivée de Mme Marleau à ce temps-là vous avez eu l'instruction de faire affaire avec le bureau du premier ministre. Ces instructions étaient du bureau du premier ministre ou du bureau de Mme Marleau?

>     M. Charles Guité: Du bureau du premier ministre.

>     L'hon. Robert Thibault: Du bureau du premier ministre. Vous faites référence à des exceptions que vous avez avec le rapport de la vérificatrice générale, la vérificatrice générale, dépendamment de comment on lit ce rapport-là. M. Toews a indiqué au comité que 100 millions de dollars auraient disparu. Les médias , dépendamment de comment on lit le rapport. Pour moi, je vois ça comme 100 millions de dollars qu'elle questionne s'il y a eu la valeur pour l'argent.

>     M. Charles Guité: Je ne sais pas si c'est la question directe que vous voulez me poser, monsieur Thibault, mais, regardez, comme je l'ai fait tantôt, j'ai pris deux exemples tantôt et je pourrais en prendre, il y avait, quoi, 1 200, 1 400 projets dans les quatre années où cela s'est passé. Quand j'étais là, je ne me rappelle pas du nombre de projets, mais je pourrais regarder ces dossiers-là. Et la vérificatrice générale a fait une évaluation de combien de dossiers? Je ne me rappelle pas si c'était 49, puis sur ça elle en a trouvé, je ne sais pas, 29 ou 30 ou la moitié, 50 p. 100, puis ces 49 dossiers-là avaient des erreurs. Bon, cela veut dire que si tu prends

> [English]

>     In English an extrapolation of that you end up that 98.9% of the time we were right, there was no problem. So to me it's very simple, you cannot generalize, which is very, very misleading and in this case, realistically, $100 million cannot disappear into thin air.

>     I'm not an auditor, but if I had access to those files, I would not find $100 million that we could not vouch for.

>     Hon. Robert Thibault: Thank you, Mr. Guité.

>     I have one last quick question. On that's point, I think that's a very valid point, unfortunately, we don't have time to develop it too much, but I think it's, as I say, how you read the report.

>     The last question I would have for you is you mentioned before and today you doubted your word, but the word of the war, that we were in a war and you talked about a general and I know you're a former military person before joining the civil service--

>     Mr. Charles Guité: Yes, this morning apparently I was a paymaster.

>     Hon. Robert Thibault: The question I'd ask you, when you embarked in this battle, in this war as the general, as the principal man handling that organization, what were the rules of engagement and who gave the rules of engagement? Was it the minister, was it the Prime Minister, was it the Prime Minister's Office, was it a committee?

>     Mr. Charles Guité: Mr. Thibault, let me start by saying I was one of the generals. Again, obviously, everybody says > "> Chuck Guité, Chuck Guité> "> . As I said earlier, it's impossible for me to run a program like that without input.

>     There was a lot of people around the table during the Mulroney years, during the Chrétien years, who planned the strategy and so forth. My role was to execute, to issue the contract, send it to an agency and get the work done. But I didn't decide personally this is what we're going to do. It was decided in discussions with PCO, PMO, the minister's office, depending on what time frame we talk about and in the case....>

>     Again, here, I don't want to, I guess, take a cheap shot, but in the case of Madame Marleau, she didn't have the feel for what we were doing, so I basically got a comment from PMO, > "> Well, look, over for the next little while, deal with us> "> , which I did. And I've met Monsieur Pelletier at my request where I felt that some of the stuff we were doing may have a political impact in la belle province and what better person to go and talk to than the Prime Minister's Chief of Staff; and I had that access.

>     Now Monsieur Pelletier would not....I didn't go there to talk about the weather. He had better things to do than that.

>     :

>     So there was input from a lot of people and very important here, it's input, not interference.

>     The Chair: Thank you very much.

>     Monsieur Guimond, s'il vous plaît, huit minutes.

> [Français]

>     M. Michel Guimond (Beauport-Montmorency-Côte-de-Beaupré-Île-d'Orléans): Merci, monsieur le président. Monsieur Guité, à quelle date avez-vous quitté la fonction publique?

>     M. Charles Guité: Combien est-ce qu'il y a de jours au mois d'août? Trente ou trente-et-un? Le 31 août 1999.

>     M. Michel Guimond: D'accord. Vous avez, à mon collègue, Michel Gauthier, répondu tout à l'heure, et je voudrais juste reprendre rapidement la séquence, mais je voudrais juste m'assurer que je l'ai bien comprise, la séquence. D'une part, il y a un événement. Il y a attribution d'un contrat à une firme, incluant un plan de visibilité, production d'une facture et un produit de visibilité livré. C'est exact?

> *  (1030) 

>     M. Charles Guité: Oui.

>     M. Michel Guimond: Est-ce que cette séquence a été appliquée pendant tout le temps où vous avez assumé la direction générale?

>     M. Charles Guité: Si je me rappelle bien, oui.

>     M. Michel Guimond: Ça veut dire tout le temps. Ça veut dire donc de quelle date à quelle date, je pourrais dire? De quelle date à quelle date avez-vous assumé?

>     M. Charles Guité: Le programme a commencé en 1997, qui voudrait dire le premier avril 1997, jusqu'au 31 août 1999.

>     M. Michel Guimond: D'accord.

>     Je vous réfère maintenant au rapport de vérification interne.

>     M. Charles Guité: Quelle date?

>     M. Michel Guimond: Le rapport de vérification interne qui a été fait du 11 mars au 11 mai 2000, mais qui...

>     M. Charles Guité: Je n'étais pas là, moi.

>     M. Michel Guimond: ...vérifiait, c'est écrit là-dedans, « ils ont procédé à une analyse détaillée de 276 dossiers de commandites choisis parmi les 580 » et la période de référence est de novembre 1997 au 31 mars 2000. Donc, de novembre 1997 au 31 mars.

>     M. Charles Guité: J'étais là, oui.

>     M. Michel Guimond: Donc, de novembre 1997 au 31 mars. Lorsque ce rapport de vérification interne stipule, et là j'en cite des conclusions, « il y avait peu d'évidence documentaire afin d'étayer les décisions prises en 1997 et 1998 », qu'est-ce que cela veut dire?

>     M. Charles Guité: C'est comme j'ai dit tantôt. Sur le dossier, il y avait un contrat, il y avait une facture et il y avait une assermentation ou un post mortem, qu'on appelle, sur le dossier.

>     M. Michel Guimond: Mais quand on parle d'évidence documentaire, quand on parle d'avoir des documents qui justifient un contrat, qui justifient une dépense d'argent payée par les payeurs de taxes...

>     M. Charles Guité: Comment avez-vous justifié, monsieur Guimond, de mettre le mot symbole « Canada » sur la glace au forum à Montréal ou au Centre... Cela s'appelle quoi aujourd'hui? Centre Molson? Non, c'est Centre Bell. Et, dans le centre, il y avait, je pense, si je me rappelle bien, le mot symbole « Canada » autour des bandes en haut. Tu sais, ça s'allume. Alors, quoi d'autre est-ce que je peux mettre sur le dossier?

>     M. Michel Guimond: Je comprends que vous ne pouvez pas...

>     M. Charles Guité> : Et tous les événements qu'on faisait, les événements, c'est d'avoir une présence fédérale, le drapeau du Canada, très visible. Je vais vous dire que j'étais très, très fier quand on a fait le Grand Prix à Montréal d'avoir autant de drapeaux du Québec que du Canada. C'est beau de voir le Québec à côté du Canada.

>     M. Michel Guimond: Lorsque le rapport de vérification interne nous dit, « bien que l'approbation de la commandite doit être fondée sur une évaluation positive de la demande, seulement 25 p. 100 des dossiers vérifiés contenaient une demande et peu d'entre eux portaient la preuve d'une évaluation par la direction générale. » Seulement 25 p. 100?

>     M. Charles Guité: C'est le même commentaire que je viens de faire. Comment est-ce que je peux mettre autre chose sur le dossier sur un événement?

>     M. Michel Guimond: Non, mais il y a des façons. Il y a des photos, il y a des...

>     M. Charles Guité: Dans plusieurs cas, il y avait des photos. Il y a plusieurs dossiers qui n'en avaient pas.

>     M. Michel Guimond: Quand la vérification interne parle qu'il y a seulement 25 p. 100 des dossiers vérifiés qui comprenaient une demande de commandites?

>     M. Charles Guité: Est-ce que c'est les 25 p. 100 quand j'étais là ou les 25 p. 100 après? C'est ça le problème, n'est-ce pas?

>     M. Michel Guimond: C'est une très bonne question. Mais je veux dire que de novembre 1997, ils vont vérifié 276 dossiers sur 580. Il ne faudrait pas être chanceux statistiquement qu'ils sont tous arrivés après votre départ.

>     M. Charles Guité: Non, c'est sûr.

>     M. Michel Guimond: La loi de la statistique... Puis, d'après moi, les vérificateurs internes, eux, ils font des...

>     M. Charles Guité: Cela veut dire que j'étais seulement responsable pour la moitié.

>     M. Michel Guimond: Vous avez une façon très simpliste...

> [English]

>     Mr. Charles Guité: What can I say?

> [Français]

>     M. Michel Guimond: Bien que la direction générale doit faire parvenir un autre exemple de commentaires, bien que la direction générale doit faire parvenir une lettre aux bénéficiaires de la commandite pour l'aviser du montant approuvé, cela veut dire que là on ne parle pas du logo au Canada, sur la glace. Une lettre aux bénéficiaires pour l'aviser du montant approuvé et de la firme de communications qui gérera la commandite dans seulement 25 p.100 des dossiers vérifiés, il y en avait une. Qu'est-ce que vous avez à répondre à cela?

>     M. Charles Guité: Je ne comprends pas votre question mais je pense que je sais ce que vous voulez savoir.

>     Si on avait une demande de commandite, que ce soit le Centre Bell, je pense, que M. m'a indiqué, que ce soit le Grand Prix de Montréal, le Festival des canards à Montmagny, ou whatever, on avait une demande. Cette demande pouvait venir de trois manières: du bureau du ministre, de l'organisation elle-même ou parfois de l'agence. Quelqu'un approchait l'agence et disait: «Regarde, on a entendu parlé à travers les branches, parce qu'on a commencé à être pas mal visible, que le fédéral donne des commandites pour telle chose.» Une fois que cela était fait, il y avait un choix à faire: oui, on y va ou non, on n'y va pas. Il y avait une agence qui était choisie qui allait faire l'événement et, l'agence en discussion avec moi ou avec quelqu'un de mon bureau, on disait: «Bon, pour ce montant, on veut telle visibilité». À la fin de l'événement la visibilité avait été donnée. L'agence certifiée et les organisateurs de l'événement ont donné la visibilité qu'on avait demandé. On a payé la facture.

> *  (1035) 

>     M. Michel Guimond: Une autre chose que le rapport interne de vérification nous donne c'est ceci: «Bien que les firmes de communication doivent fournir un plan de visibilité», vous me l'avez dit tantôt, «qui décrit les occasions pour le gouvernement d'être visible et de faire passer des messages, > à peine 25 p. 100 des dossiers vérifiés en contenaient un plan de visibilité».

>     M. Charles Guité: Oui. Ici, je vais faire un commentaire.

>     Je sais que,quand je suis parti et même avant, j'étais là pour ce programme de 1997-1998, 1998-1999, qui était une partie de l'année parce que je suis parti en 1999, quand le système a commencé--cela ne serait pas honnête de dire le contraire--il y avait très peu, comme dirais-je, de procédures en place. On n'avait pas défini de système d'évaluation, on n'avait pas défini comment on donne à cet événement versus cela. L'information que je recevais de Groupaction et d'autres agences, «dans tel endroit, vous devriez être là», c'est sûr que la première année--je suis totalement d'accord avec cela--il y avait très peu de documents sur le système. La deuxième année que j'étais là, je pense que c'est moi qui, avant de partir et peut-être huit ou neuf mois avant de quitter la fonction publique, j'ai institué un système de post mortem et de photos des événements.

>     M. Michel Guimond: À travers tout ce que les rapports internes de vérification ont démontré et ce que la vérificatrice générale a trouvé, ne pensez-vous pas, monsieur Guité, que la vérificatrice générale avait entièrement raison de dire qu'il y avait des éléments manquants dans chacun des dossiers, et que c'est là-dessus qu'elle juge qu'il était impossible de savoir où est allé tout cet argent?

>     M. Charles Guité: Non, c'est impossible, monsieur Guimond, que la vérificatrice générale n'est pas capable de trouver les factures pour les événements. Son commentaire à l'effet qu'il y a de l'argent qu'elle ne peut pas..., ce n'est pas qu'elle ne peut pas le justifier, elle ne peut pas trouver cela. C'est impossible.

> [English]

>     The Chair:

>     Mr. Guimond, I'm sorry, your time has expired.

>     Mr. Jordan, please, eight minutes.

>     Hon. Joe Jordan (Leeds-Grenville, Lib.): Thank you, Mr. Chair.

>     Mr. Guité, I may pick up a little bit on my colleagues. We had the executive director from VIA Rail here. I asked him specific questions about Maurice Richard. So I'm wondering, did you have the AG's report there? Can you...?

>     Mr. Charles Guité: Hang on for a sec. I was interrupted by legal counsel. Could you start your question again, please?

>     The Chair: Please start your question again. Let Mr. Jordan ask his question. Mr. Jordan has a question.

>     Hon. Joe Jordan: We had Mr. Lefrançios from VIA Rail. I asked him specific questions about Maurice Richard. I want to ask you specific questions about the Maurice Richard series. I'm wondering if you could get that sheet.

>     Mr. Charles Guité: Yes, I have it.

>     Hon. Joe Jordan: Maybe what I'd like to do is describe what I take from the AG's report and then give you an opportunity to perhaps explain what appears to be rather regular transactions here. Fair enough?

>     Mr. Charles Guité: Go ahead.

>     Hon. Joe Jordan: My read of this, first of all the thing that strikes me is that we've talked about documentation, lack of documentation. The Auditor General says here, she's referring to a business case, she's saying that from her analysis she can find no up-front business case that would have been used to justify this decision being a good or bad decision in terms of policy.

>     Essentially, you had about $4.7 million given to this production company, L'Information Essentielle, to make this series on Maurice Richard.

>     Mr. Charles Guité: I was responsible for $750,000 on that.

>     Hon. Joe Jordan: Fair enough, but what we had--then we'll get to that because according to this diagram...you're saying $750,000 because it transcends your time at CCSB. You left in August 1999.

> *  (1040) 

>     Mr. Charles Guité: Yes.

>     Hon. Joe Jordan: But what we've got here is a chart, and actually Mr. Boulay pointed out that this chart sort of gives the impression this was happening simultaneously. It wasn't, but Canada Post transferred about > $1.6 million to this project.

>     Mr. Charles Guité: Is that the Maurice Richard project?

>     Hon. Joe Jordan: Yes, according to the chart. CCSB, over a number of years, transferred $3.4 million, and you're saying you were there for $750,000 of that.

>     Mr. Charles Guité: It's very easy. Look at the dates here. In March 2000 I wasn't there. In February--

>     Hon. Joe Jordan: No, I'm not denying that.

>     Mr. Charles Guité: Which one do you want me to answer?

>     Hon. Joe Jordan: Let's start with was there no business analysis done before this project was undertaken?

>     Mr. Charles Guité: I forget when I specifically got involved in that Maurice Richard project, but a figure in there with which I disagree, and I don't know where it comes from, where somebody from L'information essentielle says > "> The executive director agreed to verbally commit--.> ">  Well, you can't verbally commit funds. It's a government note to funding that includes $7.5 million for a series on Richard, $1.2 to the millénaire, which I don't know what they're talking about, and funding for a series called Innovation. I don't know what that is either, but if I recall the specific issue or sponsorship you're talking about, the Maurice Richard, I remember very clearly Robert Scully, who is the president of L'Information Essentielle coming to my office and discussing the Maurice Richard series. I said to him, > "> Yes, this is a very good series and I think we'll get a lot of visibility certainly dans la belle province because we're talking about Maurice, the Rocket, number 9, Richard.> ">  By the way, I used to know the individual very well. I said to Robert Scully, > "> Robert, I can't see the word mark being put on an event like that.> ">  He said, > "> VIA Rail wants to go but they've got no money, or they don't have enough funding to do it.> ">  I forget if it was during the current fiscal year or the fiscal year after. I'm trying to recall here from memory the subsequent discussion I had with Robert Scully, but subsequently I called Marc LeFrançois who is the...and was chairman of the...I said, > "> Marc, Scully came to see me. I know he talked to you. They want to do this series on the Rocket. What do you think?> ">  He said, > "> Chuck, I think we're going to get a lot of visibility. We're going to get a lot of events around it.> ">  I said, > "> Well, look if you want to go and get in on it, go for it and I will make sure next year that one of the events we sponsor will be the Maurice Richard series.

>     Hon. Joe Jordan: Would you not define that as a verbal contract?

>     Mr. Charles Guité: No. I will tell you what could have happened there. What I had said to Marc LeFrançois, and I can get into the details of wanting to use the VIA Rail logo because it has the word mark in it and VIA Rail is very prominent--

>     Hon. Joe Jordan: Mr. Guité, can you just stop there, please. There are two issues in my mind here. One is the decisions around the policy and what was done and why it was done. That's certainly a legitimate debate, but there's also how it was done. I want to talk about how it was done because, at the end of the day, I guess my question is what, in your view, what did Lafleur, Groupe Everest, Gosselin do for their 12% because it seems like they just passed the money on to the production company?

>     Mr. Charles Guité: Which question do you want me to answer now?

>     Hon. Joe Jordan: What did these advertising companies on this chart do for their money?

>     Mr. Charles Guité: As I said earlier in my presentation, the ad agencies or the communications agencies that were doing the sponsorship program--in those days well defined in a Treasury Board policy--I had a staff of four people, not like Communications Canada who had several hundred and make the comment today, > "> You don't need agencies.> ">  The only way to manage those projects was to do it through an agency. In the case of VIA and Post Canada, you cannot--how would I use the words here--I cannot transfer funds from CCSB to Post Canada. To>  do that I have to go through Treasury Board because that's taking funds from one portfolio, and even worse, to a crown corporation. So there's quite a system to go in. By using an agency, which I've done to every sponsorship we did, I used the agency to get that money into VIA Rail, but that money didn't go into VIA for their operation, it went in for a sponsor....

>     Hon. Joe Jordan: Okay.

>     But if the advertising agency is augmenting your staff and providing some coordinating function to the project, why wouldn't you have stayed with one agency? Why would you have broken it up between agencies?

> *  (1045) 

>     Mr. Charles Guité: Well, if you look at the timeframe, some of them were different years, and when we reviewed the process at the start of the year, we looked at who got what last year, who is getting what this year. You have to remember, too, that the agencies in a program like that--and I won't deny it--it's a fairly good commission. But I could use again, and take up this committee's time for an afternoon, about some of the work the agencies have done and lost their shirt. Like any ad agency out there, there are some winners and some losers, but at the end of the day, any business, your overall success is at the end of the year. Some projects you make more money, others you don't. I mean to say, > "> What did they do?> ">  They probably made sure that it happened. They probably made sure that we had the visibility at the events that were done leading up to the Maurice Richard launching of the film, and I think there--

>     Hon. Joe Jordan: Are those amounts industry standards? Or are there industry standards on what the commissions are in the advertising industry?

>     Mr. Charles Guité: Very much so.

>     I think, Mr. Chairman, if I could take two minutes--

>     The Chair: No, one minute.

>     Mr. Charles Guité: Well, one minute.

>     The best thing that this committee could do is ask the chairman of the ICA, the Institute of Communications Agencies to come and make a presentation to this committee on industry standards.

>     The Chair: Okay. Thank you very much.

>     Mr. Toews, please, eight minutes.

>     Mr. Vic Toews (Provencher, CPC): Well, Mr. Guité, if there were winners and losers on contracts, certainly from what we've seen there were never any losers when it came to the Government of Canada and taxpayers' dollars. These agencies won every single time. There's no mistake about that. Maybe you were a good negotiator as far as the agencies were concerned.

>     I want to deal very specifically with chapter 3, page 20, along the same lines of questioning as my colleague asked earlier. We have here dealing with the 125th anniversary of the RCMP, we have CCSB dealing with a number of agencies, we have CCSB sending money to Lafleur in a separate contract with a 12% commission, we have Media/I.D.A. with a 3% commission, then another contract to Lafleur, then another one to Gosselin and Media/I.D.A., and then another one to Gosselin, so we have at least six different contracts and then it's split up to the RCMP, Quebec division, and RCMP headquarters, and then it eventually gets to the RCMP 125th anniversary.

>     What the Auditor General has been saying is it appears that these transactions are designed to hide the source of the money. The Auditor General asks--and I think it's a very good question--why wasn't the money just paid directly to the RCMP and save $250,000.00 in commissions? Indeed, why wasn't there one agency, one contract from CCSB to one agency to the 125th anniversary? Why this circuitous route ? I mean this looks to me like money laundering. That's essentially what this looks like to me. This is very suspicious. There is no legitimate business reason to split up these contracts in this way.

>     To paraphrase your former employee, Huguette Tremblay said that you couldn't break any rules because there were no rules, Mr. Guit> é.

>     Now you're coming to us and saying, you know, the documentation was all there, everything was there, everything was fine. I don't know where the documents went.

>     Mr. Guité, when Minister Dingwall saw you and said, > "> You won't rat on them. You won't rat on us> ">  I think he's right. You're not > "> ratting> ">  on them. That's for sure. You're not > "> ratting> ">  on anybody. Do you take us for fools to sit here and listen to your nonsense? Why don't you answer these questions about why this circuitous route with what should be a very straightforward transaction, but which funnelled off $250,000.00 in commissions through various contracts. Why don't you tell us about that?

>     The Chair: Mr. Guité.

> *  (1050) 

>     Mr. Charles Guité: What is the question?

>     Mr. Vic Toews: Why don't you tell us about why you chose to secure this route in getting $250,000 in commissions through six or seven or eight different contracts? Why didn't the money go from CCSB to the RCMP with no agents, or at least only one agent? Why?

>     Mr. Charles Guité: Again, you've asked me about four questions, but I'll answer a couple of them.

>     The same comment applies to the RCMP as VIA Rail, that we were talking about. I cannot transfer money directly to the RCMP on the sponsorship program.

>     Mr. Vic Toews: Why not?

>     Mr. Charles Guité: Because that's the rules. Let me finish.

>     Mr. Vic Toews: That was the rule. So you're--

>     The Chair: No, no, Mr. Toews, Mr. Toews, let him finish.

>     Mr. Charles Guité: Let me finish. Yes, he's right.

>     So if you transfer money from one department to the other or the government gives money--in this case it would be the government to the RCMP--it either has to be through their funding or through a grant. The Sponsorship Program was not a grant.

>     Now, as far as using different agencies, there were several events that went on during the RCMP 125th celebration. Again, I'd have to refer to the files, but in the case of Lafleur Communications, I think Lafleur Communications looked after the ball that was organized in Montreal and some events in the Quebec area.

>     In the case of Gosselin--and, again, Mr. Chair, I could be mistaken here, so I'd have to see the file--there was a lot of promotion and a lot of promotional items bought during the RCMP 125th celebration. In the case of Gosselin, I don't know if anybody in the committee here remembers--and I'm sure you'll see it in some of the projects--we had a promotion program going with the hot air balloons. There was the maple leaf, there was the drapeau du Canada, and during the 125th anniversary there was the famous RCMP montgolfières or hot air balloon that we also supported.

>     Mr. Vic Toews: I don't doubt that there were all kinds of programs. I'm wondering why you chose--

>     Mr. Charles Guité: No, no, let me finish.

>     The Chair: Mr. Toews, just...Mr. Guité, you can't go on and on. The question was why you tried to...basically, the answer is, you're saying, each one had a different role to play.

>     Mr. Charles Guité: Exactly. That's it.

>     The Chair: Okay.

>     Mr. Toews.

>     Mr. Vic Toews: Then, you disagree with what the Auditor General said. And what she said:

> What is particularly disturbing about these sponsorship payments, is that each involved a number of transactions with a number of companies, sometimes using false invoices and contracts or no written contracts at all. These arrangements appear designed to provide commissions to communications agencies, while hiding the source of funds and the true nature of the transactions.   

>     What she's basically saying is that what this is designed to do is simply to pay commissions to agencies, it's not there to pay for legitimate programs. This is what this is all about, isn't it, Mr. Guité?

>     Mr. Charles Guité: No, it's not. The Auditor General's comment is wrong-->

>     Mr. Vic Toews: She's wrong?

>     Mr. Charles Guité: --and I illustrated it very clearly in my opening comments.

>     Mr. Vic Toews: Well...so you have five or six different agencies that you contract with and you're trying to coordinate the RCMP activities, but you do it through five or six different contracts.

>     Mr. Charles Guité: They were doing different activities.

>     Mr. Vic Toews: Different activities. Why couldn't you use one agency?

>     Mr. Charles Guité: Because, as I said, again, earlier, when we looked at the different allocations to the firms, we didn't want it to go all to one firm.

>     Mr. Vic Toews: And why didn't you want to do it with one firm?

>     Mr. Charles Guité: So that they wouldn't get the majority of the business. There was a guideline that says a company can only get 25% of a program.

>     Mr. Vic Toews: There's a guideline that says they only get 25% of the program.

>     Mr. Charles Guité: It's very clear in the communication policy or the contracting regulation--I can't quote which one--that any company doing business with the Government of Canada cannot have more than 25% of the business volume.

> *  (1055) 

>     Mr. Vic Toews: So you split it up into Lafleur, Lafleur, Gosselin and Gosselin.

>     Mr. Charles Guité: In this case, they were totally different activities.

>     Mr. Vic Toews: But that doesn't get back to the point. You said that a company can't have more than 25%. Now, you've split it up into at least four different contracts, two of them involving Lafleur, two of them involving Gosselin. You're explanation makes no sense at all.

>     Mr. Charles Guité: No, no, it does make sense. The overall, the total business volume cannot exceed...if the program was $40 million a year, one company cannot get more than 25% of that program.

>     Mr. Vic Toews: Right, but we're talking about $1.7 million, we're not talking about $40 million. Couldn't you give Lafleur $1.7 million so that it's handled in an appropriate, transparent fashion, and then go to Gosselin for another contract? What you're doing, you're splitting up all these contracts, you're, in fact, hiding the source of the money.

>     Mr. Charles Guité: No, I'm not.

>     Mr. Vic Toews: We know that the RCMP wasn't entitled to receive this. The RCMP commissioner says the RCMP phoned you up, asked to buy the horses. You say that's not correct.

>     Mr. Charles Guité: That is not correct.

>     The Chair: You're saying that is not correct?

>     Mr. Charles Guité: It's not correct.

>     The Chair: All right. We're going to leave it right there. My watch is about 6 minutes to 11. I'm going to ask a couple of questions myself, Mr. Guité, then we're going to break. We may break a couple of minutes early.

>     The concern I have, Mr. Guité, when listening to the last hour and a half or so, is that you tell us that this was a bureaucratic process, that there was no political involvement or interference. We also know from Mr. Pelletier that this was the most important file on the Prime Minister's desk and the Prime Minister said to the nation that this was the most important file on his desk and I think the nation agreed with him that this was the most important file on his desk.

>     But you tell us that Mr. Pelletier never called you, you just went to him, that you didn't discuss the details with the Minister of Public Works who would have been the minister responsible for implementing the program, the sponsorship program; and there was very high political stakes on the sponsorship program going back to your own words, as you know, in the previous testimony. It doesn't seem that....I can't get the concepts clear in my mind that the most important file on the Prime Minister's desk, the most important file on the desk of the Chief of Staff of the Prime Minister, the most important file for the cabinet of the Government of Canada would not have any participation, direction, knowledge, of what you were doing and why is that so? >

>     Mr. Charles Guité: Well, Mr. Chair, again, I want to make very clear here, input versus interference. The cabinet--

>     The Chair: So tell us about the input.

>     Mr. Charles Guité: Yes. There's no question that the Prime Minister's Office, the minister's office, PMO, were involved in the decision-making of the sponsorship program. There's no question. I've never said...and I think in earlier comments--

>     The Chair: So what kind of decision-making was involved then?

>     Mr. Charles Guité: I had input. I'll give you an example, I would meet, for example, with Jean Carle, at PMO, because Jean Carle in those days was the Director of Operations, I think, for the Prime Minister. So if we had certain events going on, I wanted to know, for example, is the PM going to be in that area? Because if we have two or three events, we can make sure that when there's one happening the PM's going to be there, he can be there.

>     The other thing we coordinated very much with the minister's office and we had input from the minister was that at all events that we sponsored, can we have...would they want to have somebody > "> political> ">  at those events, which we could organize obviously, again, for more visibility and so forth. So the minister's office, the Prime Minister's Office, i.e. Jean Pelletier and Jean Carle had input into the process. There's no question--

>     The Chair: But you never talked to them? They never called you and said....Now this is the most important file in the Government of Canada. They never said > "> Mr. Guité, come and see me and tell me what progress are we making? Are we winning? Are we losing? Are we going sideways? Are we off-track? Should we redefine--

>     Mr. Charles Guité: We would discuss this on a regular basis.

>     The Chair: Who's we?

>     Mr. Charles Guité: Well, with the minister's office or the Prime Minister's Office--  

> *  (1100) 

>     The Chair: No political people?

>     Mr. Charles Guité: Pardon?

>     The Chair: No political people?

>     Mr. Charles Guité: What do you mean by > "> no political people> "> ?

>     The Chair: Nobody elected and no members of cabinet?

>     Mr. Charles Guité: Well, the minister's elected I think.

>     The Chair: Well, you say > "> minister's office> "> . I said the minister--

>     Mr. Charles Guité: I would meet, let's say, with the minister's office and the minister, i.e. let's say once a month--

>     The Chair: How about Mr. Chrétien? Did you meet with Mr. Chrétien?

>     Mr. Charles Guité: No, I never met with the Prime Minister, always with either Jean Pelletier or Jean Carle. And I would brief them on how the events were coming along. We obviously, not from my organization, but another organization, either the political or whatever, we were seeing the results of our impact in Quebec because we saw the separatist movement going down. We saw the results. These things were discussed with ministers that I worked with and PMO on a regular basis.

>     The Chair: So there was a serious act of participation by the PMO or PCO, the Minister of Public Works and--

>     Mr. Chuck Guité: PCO--

>     The Chair: No, let me finish.

>     There was an active engagement in the file that they were all managing it, because this was the most important file on the Prime Minister's desk. So that there was an ongoing engagement, assessment, reporting, giving directions, managing by the committee. Am I right in saying that?

>     Mr. Charles Guité: No, no.

>     The Chair: I'm not. What--

>     Mr. Charles Guité: I managed the files my organization had. What I did is I briefed the minister's office and PMO on the results we were getting.

>     Now, I'm sure on several occasions the minister said > "> Well, there might be this event over here, that maybe we should consider that one or this one> ">  and so forth, so they had input. But for them to direct me how to manage the program, no. They had input into the events. They had input into the agency allocations. >

>     The Chair:

>     Was there feedback, saying > "> This is was we got. We're getting value for money here and value for money there> "> ?

>     Mr. Charles Guité: Sure.

>     The Chair: You said > "> This is value for money> "> .

>     Mr. Charles Guité: Sure. The results, the proof is in the pudding.

>     The Chair: Okay.

>     Well, just one final question on this note. When you had these discussions about this is what we've achieved, did they give you any direction to say > "> We think we're off-track, value for money> "> ? Did they ever tell you to change direction?

>     Mr. Charles Guité: No, as I said earlier, they may have indicated that there are certain events coming up that we should consider.

>     The Chair: Okay.

>     We're going to recess for 15 minutes.

> *   



> *  (1120) 

>     The Chair: Resuming our hearing.

>     Mr. Tonks, you are next for eight minutes, please.

>     Mr. Alan Tonks (York South-Weston, Lib.): Thank you, Mr. Chairman.

>     Mr. Chairman, through you, if I may.

>     Mr. Guité, I would like to preface my questions with a bit of an overview. I think that what the Auditor General wanted to understand further was the extent to which the rather elaborate procedural architecture was put in place that allowed you to carry out what you perceived to be your mandate, and that was to win the Separatist battle, if you will, one that I would suggest is still going on by the presence of our colleagues in the Bloc.

>     Mr. Cutler, and you are familiar with Mr. Cutler, who worked under your direction, had indicated that there was a separation of the issuance of contracts, the adjudication of contracts, the tendering, all of that part, and there was a separation of that process to the evaluation and the subsequent issuance of a contract. He indicated that you took some exception to that, it wasn't perhaps going to your satisfaction, and as of March, when concerns were raised out of a meeting that was held, this was March of 1995, and I quote Mr. Cutler now:

> Mr. Guité had acquired the authority to authorize advertising, advertising related expenditures on behalf of Public Works. The earliest example is the Group Everest contract. It clearly indicated that Mr. Guité now had the authority to authorize the expenditure. This development meant that Mr. Guité was in a position to authorize the expenditures, select the agency, approve the terms of the contract, and confirm that the work was performed, and authorized payment.  

>     Would you agree that this was the authority that you had?

> *  (1125) 

>     Mr. Charles Guité: No.

>     Mr. Alan Tonks: Alright. I could go through other illustrations that indicated that you did, to Mr. Cutler's satisfaction, exercise that kind of control, if you will.

>     The audit that was done, in fact, found that the concerns raised by Mr. Cutler-

>     Mr. Charles Guité: Which audit?

>     Mr. Alan Tonks: Both audits, the internal, and the external audit.

>     Mr. Charles Guité: The internal, there was one in 2000, and there was one-

>     Mr. Alan Tonks: I'm talking about 1996.

>     Mr. Charles Guité: In 1996, okay.

>     Mr. Alan Tonks: The internal audit, and the external audit.

>     My question to you is, there appears to be concerns that were raised at that time, the interpretation of the financial process was being somewhat, in your words, bent. Where did you get the authority to do those things? Did you take that to Mr. Quail, and was the subject of the audit discussed with Mr. Quail? Was there any action that was taken subsequent to that that started to tighten up on those processes again?

>     Mr. Charles Guité: Which question do you want me to answer?

>     Mr. Alan Tonks: You can answer it any way you want.

>     Mr. Charles Guité: Mr. Chair, I think it's extremely important that I make a comment regarding Mr. Cutler because it's important. I may add that there's a couple of other witnesses that you've had here that are fairly questionable.>

>     Mr. Cutler, and I read his testimony that he gave here, clearly if I remember right-and I'm not going to quote him because I don't have his testimony in front of me-said that I wanted to fire him. Totally wrong. What I said to Mr. Cutler was that he would be red circled, which meant that he would stay in his position, but he could not go any further because I didn't need that level of individual in my organization.

>     Mr. Cutler's statement that he's never been promoted and so forth, well I met him in 1986 I guess as a PG-5, we're now just about 20 years later, and he's still a PG-5. So it had nothing to do with me.

>     What's important here is that when I told Mr. Cutler of the situation he went to the union. The union came back, sat in my office with a witness sitting there and I explained to the union what the process was in a red circling. Subsequent to that Mr. Cutler fiddled with the files and I have proof of that. I have a witness that will testify here to that.

>     I called in the audit after Mr. Cutler's accusation and one of my employees spent three months with the auditors going through Mr. Cutler's accusations and they were wrong.

>     The Chair: I'm going to stop there, Mr. Guité. You've made an accusation against Mr. Cutler. Do you have any documentation that you could submit to this committee to support the allegation that you've just made against Mr. Cutler?

>     Mr. Charles Guité: Could you start your question again.

>     The Chair: I said, you've just made a serious accusation about Mr. Cutler fiddling. I'm asking if you have any documentation that would support your allegations.

>     Mr. Charles Guité: No I don't have documentation, but I have a person who used to be on my staff who spent months with the auditors and would justify that files have been amended after this incident.

>     Now what's very important here, Mr. Chairman, also, I had to have the locks on our offices changed because Mr. Cutler was coming in at night. We found files on his desk that he had nothing to do with, files that should not be on his desk at that time were on his desk. So I was the person that said to my deputy at the time, these are pretty serious allegations that Mr. Cutler has made so let's have an audit. I think that my staff that spent three, three-and-a-half months with the auditors could justify what I have just said.

>     The Chair: You're saying you called in the auditors?

>     Mr. Charles Guité: I discussed it with the deputy and said we have to have an audit. Obviously an audit is always the decision of the deputy.

> *  (1130) 

>     The Chair: I'm just going to talk here, my apology, we'll stop the clock here for you, Mr. Tonks.

>     We're dealing here with a serious allegation against Mr. Cutler. I'm reviewing here a letter from Mr. Steinberg who was a senior auditor. It was addressed to Mrs. Stobbe, the Assistant Deputy Minister, dated June 19, 1996. It says,

> The issue here is one of policy and procedures which may in themselves be faulty. However, individuals have tried to overcome these by taking shortcuts or inventing methods which have led to wilful alterations of documents which, if examined by an audit or outside regulatory agency, would raise questions of probity in the manner in which the department is fulfilling its duties and obligations with respect to contracting.    

>     Now that is from Mr. Steinberg. So you're saying that was because you instituted this audit, not because the union did it on behalf of Mr. Cutler?

>     Mr. Charles Guité: No. I think, Mr. Chair, you have to be careful here. I, as an individual, can't request an audit. There's no question. I'm quite sure that the final decision to audit any part of a department rests with the Deputy Minister. At the time of these allegations I was involved in discussions with the Deputy or Assistant Deputy Minister I reported to at that time and was well aware that the audit would take place, but it wasn't me personally who called the audit. I can't do that.>

>     The Chair: You did not call the audit?

>     Mr. Charles Guité: No I can't.

>     The Chair: We'll leave that matter.

>     Mr. Tonks, I'm going to return to you. You've got about two-and-a-half minutes.

>     Mr. Alan Tonks: Thanks, Mr. Chairman.

>     The reason for my questioning is that I think the committee wants to understand better just the accountability in the systems. Under the Financial Administration Act and Treasury Board guidelines, it's the accountability that protects against funds not being spent on what they're supposed to be spent on. So I want to understand that as a result of that audit, were you aware of what the audit findings were at the time?

>     Mr. Charles Guité: Definitely, because what I would have to do as executive director or director--whatever title I held at the time, director general, it doesn't matter--as the person in charge of that organization, I would have to respond to that audit. In other words, I think the way it worked way back then, and I don't have all the details, but there was an internal audit and then they called in an external auditor, who was...I forget, but it was a private company.

>     Mr. Alan Tonks: In 1996.

>     Mr. Charles Guité: Yes. They came in and did an audit.

>     Mr. Alan Tonks: Last question?

>     Mr. Charles Guité: Now, what I have to do as head of that branch or that sector at the time is respond to that audit, with all the observations and a plan to make corrections.

>     Mr. Alan Tonks: If I may just interrupt--

>     Mr. Charles Guité: Let me finish. Once I had done that, there was no major problems in the division.

>     Mr. Alan Tonks: That's my point. That's my lead-in.

>     When the letter was sent up to Mr. Stobbe, and in fact Mr. Marshall indicated that the same thing was happening when the CCSB...there was no separation out--

>     Mr. Charles Guité: Who's Mr. Marshall?

>     The Chair: deputy minister of Public Works.

>     Mr. Alan Tonks: He gave us a chart that showed us how the usual administration of contracts should go, and how it went under the regime that had been established.

>     My question to you is, that you had weekly meetings with Mr. Quail--

>     Mr. Charles Guité: Not weekly, no.

>     Mr. Alan Tonks: That's not what you said in your testimony. You said, > "> There was a committee chaired by Mr. Quail that you met with weekly> "> .

>     Mr. Charles Guité: When was that? When did I say that?

>     Mr. Alan Tonks: You said that in your testimony of 2002.

>     Mr. Charles Guité: That meeting was not the meeting about this. What I attended was the executive committee meeting of the department, not a meeting to deal with my--

>     Mr. Alan Tonks: Would it not have seemed appropriate that something out of an internal audit and external audit that said there were problems that were founded, that Mr. Cutler had raised...? Would it not have seemed reasonable that there would have been part of that meeting to discuss how the changes were going to be made?

>     Mr. Charles Guité: Not at that meeting, no. The executive committee would not address that. The deputy would address that directly with me.

>     Mr. Alan Tonks: Did he?

>     Mr. Charles Guité: He sure did. I had to give him an action plan of how to address those observations that were made.

>     Mr. Alan Tonks: But no changes were made, according to--

> *  (1135) 

>     The Chair: but I'm still concerned about the allegation you made about Mr. Cutler, Mr. Guité, and especially I thought you said that you initiated the audit. Again, I go back to the letter that I was just quoting from....

>     Yes, Mr. Lastewka.

>     Hon. Walt Lastewka (St. Catharines, Lib.): I've been trying to hear the words very clearly. Did he initiate the audit, or did he talk to the deputy minister about initiating the audit?

>     The Chair: I think he said he initiated the audit.>

>     Mr. Charles Guité: Let me make it very clear, I did not, and I could not, initiate an audit, because the only person who can decide to do that is normally the deputy.

>     The Chair: Yes. Now, you've said Mr. Cutler did not initiate the audit.

>     Mr. Charles Guité: No.

>     The Chair: It was because of Mr. Cutler's complaint that the audit was initiated.

>     Mr. Charles Guité: Exactly.

>     The Chair: That's a pretty fine division in the air.

>     Mr. Charles Guité: No, no, it's not a fine line, Mr. Chairman. Mr. Cutler accused myself and my organization of wrong-doings, and I was well aware that there was no wrong-doing. There is nothing wrong with back-dating a contract when you have to, and the contracts were there, and Mr. Cutler, who was > "> a problem employee> "> , took off and started to build a file.

>     When I look at his testimony--that he said to this committee, I don't know when--I question it.

>     The Chair: Now, you did mention that when you sat down with Mr. Cutler, there was somebody else with you.

>     Mr. Charles Guité: Yes.

>     The Chair: Who was that?

>     Mr. Charles Guité: It would have been my secretary, who I think...1994, I'm not sure, because I've had three from 1993 or before that. From about 1990 until I left in 1999, I had three executive assistants.

>     The Chair: So when you were having a very serious discussion with one of your senior employees regarding a serious difference of opinion, by the sound of it, it's normal that your administrative assistant would sit in on these meetings?

>     Mr. Charles Guité: Definitely, I would never meet the union with Mr. Cutler and not have a witness. I can find out, Mr. Chairman, who that was. It was either Mme. Tremblay or Denise Paquette.

>     The Chair: All right, we can check that out.

>     Monsieur Proulx, s'il vous plaît, huit minutes.

>     Mr. Marcel Proulx (Hull-Aylmer, Lib.): Thank you, Mr. Chairman.

> [Français]

>     Bonjour, monsieur Guité. Me Edelson, bienvenue au comité. Merci d'être ici ce matin.

>     Monsieur Guité, j'aimerais que vous m'aidiez à essayer de comprendre le genre de délégation de pouvoirs que vous aviez, ou les pouvoirs que vous aviez dans votre poste. Ce que je comprends de votre carrière c'est que, quand vous étiez en charge des commandites vous étiez directeur général. Je suis surpris qu'un directeur général ait eu la latitude pour faire des transactions de millions de dollars, soit avec des corporations de la Couronne soit avec des agences extérieures. Alors pouvez-vous essayer de m'aider à comprendre le cheminement. Vous aviez quelle délégation de pouvoirs, d'où cela provenait-il? Est-ce que c'est vous qui preniez les décisions ou est-ce que c'était un sous-ministre associé, un sous-ministre adjoint, le sous-ministre? Aidez-moi, s'il vous plaît.

> [English]

>     Mr. Charles Guité: Thank you, Mr. Proulx.

>     Delegation authority in a department, the ultimate delegation, obviously, is with the minister. The minister delegates to his deputy, his deputy delegates to his ADMs, his ADMs delegate to the DGs, and the DGs delegate down the line. Obviously, the delegation that I had in those days, obviously, I had the delegation to spend those funds or to allocate those funds because when I signed an invoice and I sent it to finance for payment, I don't make the payment. The Department of Finance--not Finance Canada, but the Department of Finance within the department--makes the payment. The first thing they will check, if I have signed an invoice for $20 or $20 million, is has he got the delegation authority. On file is a delegation card that says, > "> J.C. Guité ... has this amount of delegation> "> . So if they paid the invoice, obviously I had the delegation. That delegation would come from the minister to the DM to me. It would come down the line.

>     Mr. Marcel Proulx: When you get a delegation of that sort, >

> [Français]

>     Est-ce que le sous-ministre, le sous-ministre associé ou le sous-ministre adjoint garde toujours un droit de regard, une autorité? Ce que j'essaie de savoir de votre part, monsieur Guité, c'est qu'on a eu M. Ran Quail qui est venu témoigner avec Mme la sous-ministre qui a suivi M. Quail. Ils sont venus nous dire qu'ils n'avait aucune idée de ce qui se passait dans votre groupe de travail, dans votre division, si vous voulez, et je les ai questionné sur ce point en leur demandant: «Comment un groupe...?». Vous étiez combien dans votre groupe de travail? Dix, douze, quatorze?

> *  (1140) 

>     M. Charles Guité: Non. Dans ce temps-là l'organisation comprenait à peu près 12 personnes. Il y en avait cinq ou six dans la publicité et les commandites, après cela j'en avais quatre, je pense, du côté de la recherche. Cela en fait à peu près huit ou neuf. Et on avait, c'est sûr, mon assistante et peut-être deux commis. Alors on était une douzaine de personnes.

>     M. Marcel Proulx: Vous n'étiez pas dans un édifice isolé, vous n'étiez pas un ministère isolé.

>     M. Charles Guité: On n'était pas dans le même édifice que le ministère.

>     M. Marcel Proulx: Je comprends mais vous étiez tout de même, vous faisiez partie du ministère.

>     M. Charles Guité: Oui.

>     M. Marcel Proulx: Est-ce qu'ils ont raison quand ils me disent, ou quand ils ont dit au comité qu'ils n'avaient pas de regard sur ce que vous faisiez, ils ne savaient pas ce qui se passait, vous aviez l'autorité, vous faisiez ce que vous vouliez?

>     M. Charles Guité: Non. Premièrement je vais faire le commentaire suitant. La plupart du temps où j'étais dans ce poste-là, j'ai eu M. Quail comme sous-ministre qui a donné beaucoup de support à notre orgfanisation. Mais de dire qu'il n'était pas au courant qu'un de ses directeurs généraux qui, à travers l'un des sous-ministres dépensait quatante millions par année, et qu'il n'était pas au courant? Je ne pense pas. Et même, j'envoyais régulièrement des listes de projets, etc. au bureau du sous-ministre.

>     M. Marcel Proulx: Avez-vous souvenir, monsieur Guité de vous être assis, soit seul ou dans un groupe de travail ou M. Quail était pour faire un rapport de ce qui se passait. Vous pouvez avoir envoyé des rapports mais cela ne veut pas dire nécessairement qu'il a eu vos rapports sous les yeux. Mais avez-vous souvenance personnellement d'avoir fait un rapport verbal ou d'avoir expliqué verbalement à M. Quail ce qui se passait?

>     M. Charles Guité: Oui, mais comme comité non. Jamais je n'ai eu un comité où M. Quail était présent. Souvent, lorsque je rencontrais M. Quail, comme on dit toujours one on one, c'est sûr que j'expliquais un peu le programme.

>     M. Marcel Proulx: De façon générale, vous vous rapportiez à votre supérieur, qui était un sous-ministre adjoint.

>     M. Charles Guité: Administrativement oui, mais fonctionnellement non.

>     M. Marcel Proulx: Vous vous rapportiez à qui?

>     M. Charles Guité: Au ministre. Est-ce qu'ils vous ont montré l'organisation lorsque j'étais directeur exécutif?

> [English]


>     little box that you kept referring to. That was a little box, so administratively, there's no question. I got very good support from the deputy, obviously my salaries and my operating funds came out of the A base of the budget of the department, but the deputy minister was not involved in the day to day doings or ongoings of my organization. I basically trucked along and briefed the minister and his staff on where we were going; PMO when it was necessary.

> [Français]

>     M. Marcel Proulx: Vous vous rapportiez au ministre par choix du ministre ou par choix du sous-ministre?

> [English]

>     Mr. Charles Guité: Neither of the above.

> [Français]

>     C'est sûr que je me rapportais au ministre parce que c'était la façon de faire depuis toujours, rapporter dans le sens op> érationnel et non administratif.

>     M. Marcel Proulx: Dans vos notes, au début, et vous y avez fait référence tout à l'heure, vous avez parlé de

> [English]

>     the allocation to specific firms.

> [Français]

>     en disant que cela provenait du cabinet du premier ministre et des ministres. Qu'est-ce que c'est pour vous

> [English]

>     allocation to specific firms?

> [Français]

>     M. Charles Guité: Il faut faire attention que cela provenait...ça ne provenait pas.

>     Lorsque je rencontrais soit M. Pelletier, dans les années 1996-1997, alors que Mme Marleau était ministre, et suivant cela c'était avec M. Gagliano, qui était le ministre. Donc, lorsqu'on regardait la liste, moi j'arrivais là avec la liste des projets qui donnait les évènements, le montant recommandé, que j'avais discuté soit avec des personnes de mon organisation, parce qu'à la fin de la journée, il fallait arriver à un tel montant. Ensuite, il y avait les commissions qu'on payait, les dates de l'évènement etc.

>     M. Marcel Proulx: C'était dans la liste que vous étudiiez.

>     M. Charles Guité: Oui. Cette liste-là est disponible. Alors, si monsieur le président veut en avoir une copie, il n'a qu'à demander la question au ministère, ces listes-là étaient faites à tous les ans.

>     Alors, lorsqu'on révisait cette liste de projets, par exemple, le 15 mars, parce que l'année fiscale finissait et la nouvelle année commençait. Je m'asseyais au bureau du ministre, et d'habitude son chef de cabinet, pour regarder la liste. C'est sûr qu'on ne prenait pas l'allocation du 40 millions de dollars. On se gardait toujours une marge de manoeuvre entre 10 et 12 millions de dollars pour des changements durant l'année. C'est sûr qu' il y avait là l'input du ministre. On considérait combien pour telle agence, est-ce que ce sont des bons projets, est-ce qu'on devrait faire des changements etc.

>     Durant l'année, à chaque fois qu'on faisait une autre allocation, c'est à ce moment-là que je rencontrais le bureau du ministre, soit le ministre lui-même ou son chef de cabinet. Son chef de cabinet, c'était surtout Pierre Tremblay. M. Bard, je l'ai rencontré deux ou trois fois parce que j'avais presque quitté le ministère à ce temps-là. Alors, il n'y avait pas de changement qui se faisait sans aviser le bureau du ministre, car pour eux, au niveau politique, disons qu'il y avait un évènement à Montmagny et que, par hasard, l'évènement était annulé, le bureau du ministre aurait pu dire: « il va y avoir quelque chose à Montmagny, alors on devrait s'assurer qu'il y ait un représentant politique ».

> *  (1145) 

> [English]

>     The Chair: I'm afraid...very, very briefly.

> [Français]

>     M. Marcel Proulx: Est-ce que les listes mensuelles contenaient les mêmes informations que la liste annuelle? Vous nous avez dit, et M. Pelletier nous a dit que vous vous rencontriez avec M. Tremblay pour regarder les projets parce que vous questionniez la pertinence. Est-ce que ces listes-là contenaient les mêmes informations concernant la description des évènements, les montants et les commissions?

>     M. Charles Guité: Je ne le sais pas.

> [English]

>     The Chair: I'm going to cut you off, Mr. Proulx. The answer was...

>     Mr. Charles Guité: I can't remember if those lists were the same.

>     The Chair: Mr. Proulx, would you like us to obtain these from the department?

>     M. Marcel Proulx: Sure, thank you.

>     The Chair: Okay. We will try...Mr. MacKay, eight minutes, please.

>     Mr. Peter MacKay (Pictou-Antigonish-Guysborough, CPC): Thank you, Mr. Chair.

>     Thank you, Mr. Guité, for being here, along with your counsel.

>     Much of what you've told us today, sir, has cast a lot of serious aspersions on previous witnesses, including your most recent comments about Allan Cutler. Mr. Cutler was here. He brought extensive evidence with him. In fact, we have four bound binders of documents and testimony that Mr. Cutler presented to this committee. Yet when it comes to much of what you're telling us today, you're just saying > "> take me at my word> "> .

>     There wasn't documentation in many of the files according to the Auditor General. In fact, she went on to say > "> The absence of documentation prevents us from determining the extent or the appropriateness of discussions. The files did not indicate their results> "> . This was in her report. She said, later on in an interview, > "> These methods were apparently designed to pay commissions to communications agencies while hiding the source of the funds> "> .

>     Now, essentially, you've told us that the Auditor General doesn't have any credibility when she makes these claims and you illustrated in a couple of examples, namely, the Blue Nose, that you couldn't put the Blue Nose in the file. Well, nobody's suggesting that, sir, but you could put invoices in there. You could put requisition orders. You could put employment forms for people who worked on the file. You could put in a bill of lading. There are all sorts of documentation that could have and, I suggest, should have wound up in some of those files.

>     I would like to know from you why those rules were deliberately flaunted by yourself and those involved in the delivery of the sponsorship program?

>     Mr. Charles Guité: I said earlier there was a contract, there was an invoice. You just said there was no invoice. You cannot...how do you issue a cheque without an invoice? And there was an affidavit or a post mortem report on the file. The Auditor General's comment and I'm not trying, Mr. MacKay, to discredit the Auditor General, all I said in the examples at the start, it is inaccurate. If I could have access to those files and sit down with auditors I would show where every penny went. It's impossible in the Government of Canada to pay an invoice without...to issue a cheque without an invoice and a contract.

>     Mr. Peter MacKay: Well, Mr. Guité, you're given an opportunity now to do just that. You're telling us you'd be willing to sit down with the Auditor General and help locate where that money went and account for it. I think you said earlier and correct me if I'm wrong, sir, you told us that every penny of that $100 million could have and could be accounted for.

>     Mr. Charles Guité: Definitely.

>     Mr. Peter MacKay: Do you believe that?

>     Mr. Charles Guité: Yes, I do.

>     Mr. Peter MacKay: And when the Auditor General tells us that there were invoices not in files and in many cases the files were incomplete, the data wasn't there, she's wrong?

>     Mr. Charles Guité: She is wrong and I'll tell you why. How could we have paid...how could the Government of Canada have issued a cheque without an invoice? Ask that question to the Auditor General.

>     Mr. Peter MacKay: Well, we'll have that opportunity, Mr. Guité.

>     I want to ask you a specific question that came from Madame Tremblay who I believe was an employee of yours. She worked directly with you?

>     The Chair: Just a moment, please.

>     All right, Mr. MacKay.

>     Mr. Peter MacKay: You're familiar with Huguette Tremblay?

> *  (1150) 

>     Mr. Charles Guité: Very much.

>     Mr. Peter MacKay: In what capacity did she work for you?

>     Mr. Charles Guité: From 1986 roughly to 1992-93--

>     Mr. Peter MacKay: So she worked closely with you, she was in your office.

>     Mr. Charles Guité: She was my--

>     Mr. Peter MacKay: She was interactive with you regularly.

>     Mr. Charles Guité: Well, let me answer your question.

>     She was my secretary, for a better term, but as we call them executive assistants in these days, from about 1986, 1987 to about 1991 or 1992. Then she became the administration officer of my organization and when we merged advertising and public opinion research sector with another branch which became CCSB, she became in the job that she was when I left which was in charge of the contract--

>     Mr. Peter MacKay: > She worked regularly with you, Mr. Guité, that's my point.

>     Mr. Charles Guité: Yes.

>     Mr. Peter MacKay: And she would have had knowledge of what was going on in the office, the day to day operations of what was taking place, correct?

>     Mr. Charles Guité: Yes.

>     Mr. Peter MacKay: Now, Mr. Guité, aside from the fact and I guess we'll agree to disagree on the premise of whether those contract files were complete and whether invoices were actually there--

>     Mr. Charles Guité: They were when I was there.

>     Mr. Peter MacKay: They were there. Well, Mr. Guité, did you ever shred documents? Were you ever involved in the shredding of documents?

>     Mr. Charles Guité: I definitely have shredded some documents and I can give you an example. They were not documents pertaining to any files or project file.

>     One invoice I can remember putting in a shredder was an invoice that was received from one of the sponsorship events we were doing and that invoice was addressed to Mr. Pelletier. The reason it was addressed to Mr. Pelletier is that sponsorship had gone PMO, back to me, back over to the event and obviously the event organizer or the person--

>     The Chair: (Inaud) only one document that you shredded?

>     Mr. Peter MacKay: Is that the only document, the only time it happened?

>     Mr. Charles Guité: I may have personal notes or things like today, I would get back to the office and I'd--

>     Mr. Peter MacKay: You're telling us today you shredded an invoice.

>     Mr. Charles Guité: Yes.

>     Mr. Peter MacKay: Don't you feel that this should have been in a ...? Was it a duplicate?

>     Mr. Charles Guité: No, no, it was an original invoice. What I did is I had either Mme. Tremblay or somebody else call the organizer and say, > "> Look, don't send an invoice to Jean Pelletier, send it to CCSB> "> .

>     Mr. Peter MacKay: I see. So you didn't want that invoice to go anywhere else but to CCSB?

>     Mr. Charles Guité: That's right, but they cannot send an invoice to PMO. The PMO has no authority to pay invoices.

>     Mr. Peter MacKay: Why wouldn't you just put it in the file? Back to this issue of why there wasn't complete documentation in the file. You say there was, but the Auditor General completely disagrees.

>     Mr. Charles Guité: I put the next invoice on file, which was addressed to my organization.

>     Mr. Peter MacKay: Why would you shred it?

>     Mr. Charles Guité: Why would I not?

>     Mr. Peter MacKay: Well, Mr. Guité, it seems to me that you felt it was just okay to chuck the rules--

>     Mr. Charles Guité: No.

>     Mr. Peter MacKay: --just to say we're not going to comply with the regular operating standards that seem to exist for everybody else.

>     Mr. Charles Guité: I don't agree.

>     Mr. Peter MacKay: You seem to tell us today that you just ran your own show.

>     Mr. Charles Guité: No.

>     Mr. Peter MacKay: You said in your final paragraph in your submission here,

> Did the PMO and ministers provide input on decisions with respect to specific events that were sponsored and the allocation of specific firms? Absolutely.          

>     Absolutely. And you make a very fine line in determining what was political input and what was political influence.

>     Mr. Charles Guité: Yes. Quite a bit of difference.

>     Mr. Peter MacKay: I'm suggesting to you, Mr. Guité, when you met with someone like Jean Pelletier or your minister and they gave you input, that was political influence, because you didn't want to wind up with a red circle around your name, did you?

>     Mr. Charles Guité: I don't agree with you.

>     Mr. Peter MacKay: You don't agree with that statement.

>     Mr. Charles Guité: No.

>     Mr. Peter MacKay: So you were able to determine just on the word of whatever minister you were speaking to, or whatever senior bureaucrat, and in the case of Mr. Pelletier, the most senior bureaucrat in the government, when they gave you input as to what sponsorship program should be approved, what firms should be used to deliver those services, you just took that as, > "> Well, they're just giving me their opinion, and I'll just still make up my own mind, independent of what these political masters are telling me> "> .

>     Mr. Charles Guité: No.

> *  (1155) 

>     Mr. Peter MacKay: That didn't happen?

>     Mr. Charles Guité: No.

>     Mr. Peter MacKay: You were able to make that judgment call on your own. You didn't have to follow any other guidelines. You didn't have to follow the normal procedures that were put in place, the checks and balances. Those were chucked out the window?

>     Mr. Charles Guité: No, no, we had a contract in place, we had an invoice, we sent it to finance to pay it, they paid it.

>     Mr. Peter MacKay: But, Mr. Guité, the Auditor General has said those contracts weren't fulfilled and in many cases the government and the people of Canada were billed for work that wasn't done. You haven't been able to cast any light on how that happened under your watch.

>     Mr. Charles Guité: The Auditor General has not looked at the files and at the agency process. As I said earlier, Mr. MacKay, when I was there, those files were there. In 1996, when there was an audit done, the files were there. There were comments made that documents were missing, and as I said earlier to the chairman, there are individuals on my staff who will verify that somebody screwed around with those files.

>     Mr. Peter MacKay: Who did that, Mr. Guité? You're telling us that you're a former military man yourself. You're former military and you used the term, > "> We were at war> "> , and there were other generals. What we want to know is, who gave the orders, because you weren't' the general?

>     The Chair: All right, Mr. MacKay.

>     Who gave the orders, Mr. Guité?

>     Mr. Charles Guité: Orders for what?

>     The Chair: You were saying somebody screwed around with the files. Who screwed around with the files?

>     Mr. Charles Guité: Mr. Cutler.

>     Some hon. members: Oh, oh.

>     The Chair: Order, order.

>     Mr. Charles Guité: Mr. MacKay, I'll have a witness if you want them to come here and testify--

>     The Chair: No, no, we're not going to get into that. No, no.

>     Order, please, Mr. MacKay.

>     Mr. Guité, you do say that the government will not pay a bill without an invoice, and the Auditor General confirmed that, and I think probably (inaud) confirm that. But the Auditor General said these invoices were fraudulent invoices. What do you say about that?

>     Mr. Charles Guité: Not that I was aware of. Did the Auditor General say that? Quote, show me where.

>     The Chair: Sorry, > "> fictitious> ">  was the word.

>     Mr. Charles Guité: No.

>     The Chair: So, okay, it's on the record.

>     Mr. Lastewka.

>     Hon. Walt Lastewka: Thank you very much.

>     Mr. Guité, I want to do a little bit of a synopsis--

>     The Chair: Ms. Ablonczy did tell me ... what's that quote you've got there?

>     Mrs. Diane Ablonczy: The witness may be directed to page 21, paragraph 3.44, in which the Auditor General says:

> The sponsorship payments involving sometimes using false invoices and contracts...       

>     Mr. Toews read the same line to the witness earlier.

>     The Chair: All right, the Auditor General says > "> false invoices> "> .

>     Mr. Charles Guité:

>     How can you have a false contract?

>     The Chair: Well, you can have a contract that's quite false, Mr. Guité. I could write up a contract and say that it has nothing to do with a business relationship and say we're going to supply forces to the RCMP, for example, but that's not the way it works, so you just say, that's the contract. You already did admit that the contracts were back-dated. You have said that already.

>     Mr. Charles Guité: In 1994, I did say that, and absolutely, but when I issued a contract to an agency, the contract specified the amount of the sponsorship and the event, and when that event was over, we paid the invoice. So what's fraudulent about that? >

>     The Chair: The auditor general says the whole thing was a front and the work didn't appear to have been done. That's the issue of the false

>     Mr. Charles Guité: The work had been done.

>     The Chair: Anyway, we don't seem to be getting there, so Mr. Lastewka, please, eight minutes.

>     Hon. Walt Lastewka: Could you tell me how much time I've got left? Mr. Guité, I want to just summarize a few items that you've mentioned in your report. You talked about the AMG--advertising management group--starting in 1979?

>     Mr. Charles Guité: In 1978, the Clark government.

>     Hon. Walt Lastewka: Then you talked about that the group continued in the 1980's under Senator Murray with political appointees?

>     Mr. Charles Guité: There were the Trudeau years between the Clark government and the Mulroney government.

>     Hon. Walt Lastewka: Right, so this AMG group, I guess we call it, continued on?

>     Mr. Charles Guité: In the Trudeau years. In the Mulroney years it continued on but added the POR--public opinion research.

>     Hon. Walt Lastewka: When was that added? I'm not clear on that.

>     Mr. Charles Guité: That was put in place by the Mulroney government.

>     Hon. Walt Lastewka: So that's the polling and research added to that?

>     Mr. Charles Guité: Yes, which became APOR--advertising public opinion research.

>     Hon. Walt Lastewka: Okay. The group starting in 1993-94, who were the members of that group at that time, and were you a part of it?

>     Mr. Charles Guité: I was there in 19--when did the Mulroney government come in place. I became the director of AMG/POR, I think, in 1989. It's in my opening document. I think it was 1989 because they created the Canada Communication Group and they could not take on APOR and AMG because they were becoming a special operating agency, so that's when they created, in fact APOR...it's in my introductory document.

>     The Chair: Mr. Lastewka.

>     Hon. Walt Lastewka: Okay, I'm following it. You were part of the group in the early 1990's--1993-94? Was Mr. Quail involved with that?

>     Mr. Charles Guité: I don't think he was deputy then, no. In fact, in those days, it was Supply and Services Canada, not Public Works.

> *  (1200) 

>     Hon. Walt Lastewka: Okay. When the program of the sponsorship program was first initiated, were you part of the design of the program?

>     Mr. Charles Guité: Yes.

>     Hon. Walt Lastewka: Was Mr. Quail?

>     Mr. Charles Guité: Hmm. You see, the program, just so you understand how the process works, the actual sponsorship activity started pre, during, and after the referendum, before officially it became, in 1997. If I recall correctly, the funding in those days was anywhere between...it started off around $15 million and I think it went up to $20 million or $21 million, but I'm not sure here. I think that money came under the Unity Fund.

>     Hon. Walt Lastewka: When you were involved with the sponsorship program, what was your relationship with Mr. Quail?

>     Mr. Charles Guité: Like any other assistant deputy minister, I attended his executive committee; I met with him on one-to-one at my request or his request. I had a very good relationship with Mr. Quail.

>     Hon. Walt Lastewka: Was he brought up-to-date and involved in the progress of project approvals?

>     Mr. Charles Guité: Repeat your question?

>     Hon. Walt Lastewka: Was he involved in the process of project approvals under the sponsorship program?

>     Mr. Charles Guité: Very little, if, in fact, I would more intend to say, no.

>     Hon. Walt Lastewka: Was he involved in the project review?

>     Mr. Charles Guité: No.

>     Hon. Walt Lastewka: Was he involved in the summary of final evaluations?

>     Mr. Charles Guité: No.

>     Hon. Walt Lastewka: You're leaving me the impression that he wasn't involved at all.

>     Mr. Charles Guit> é: No. What Mr. Quail used to get from my organization was the list of events and obviously, I may have met with him when he got the list, to discuss it and so forth. The day-to-day operation of agency allocation, event selection, post mortem and that, the deputy was not involved in that.

>     Hon. Walt Lastewka: When you gave him your reports-I think you mentioned it was on a monthly basis-did he ever come back to you--

>     Mr. Charles Guité: No, I didn't mention that I gave him monthly reports.

>     Hon. Walt Lastewka: How often would he get your reports then?

>     Mr. Charles Guité: I think I would send him the list once a year at the start of the year and then probably an update halfway through as it changed.

>     Hon. Walt Lastewka: I guess it goes back to my earlier question. It seems that he was absent a lot in the involvement--

>     Mr. Charles Guité: He was not involved very much in the day-to-day operation of my organization.

>     Hon. Walt Lastewka: Basically then, it's my understanding, he gave you full authority to run the sponsorship program and from that point on maybe once a year or once a year he got a report. He never questioned things, as the deputy minister of the department.

>     Mr. Charles Guité: No.

>     Hon. Walt Lastewka: I find it strange that a deputy minister would not be more involved in a program that was one of the top programs for the government under his department. Do you find that strange?

>     Mr. Charles Guité: Not necessarily, sir, because, as I said earlier, the advertising management group, APORS, or at the end, CCSB, as far back as I can remember-I wasn't involved in the Trudeau years but I was involved definitely in the Mulroney government and, obviously, this government-the AMG always reported either through a cabinet committee, the minister's office. It always worked that way.

>     Let me add that the other thing that is very important here. During the Conservative years it was very political. I had political appointees, named by the Prime Minister's Office, to manage those two groups, and these were very political people. The Chrétien government changed that. It got rid of the political people. That's my famous comment where I say > "> You're not going to rat on us; you won't rat on them.> ">  There were no political appointees. It sure made my life a lot easier.

>     Hon. Walt Lastewka: Is it as a result of that you were given free wheel to operate and Mr. Quail just seemed absent?

>     Mr. Charles Guité: No. In the operation during the Conservative years I reported to Senator Murray through PCO and so forth, so it was no different then except the major difference between the Conservatives was the Conservatives had political appointees on my staff and they, in fact, controlled the process.

>     Hon. Walt Lastewka: You mentioned earlier that the committee should hear the association, I take it, for the advertising companies. Why did you say that?

>     Mr. Charles Guité: Yes. When I left the government in August 1999 I was approached by the ICA. In those days it was called the institute of Canadian advertising. Subsequently, when I was there for a year and a bit-and I'll tell you why I'm not there anymore in a minute-they asked me to go and work for them because they were having a bit of problem with the access to the government and they were questioning the way competitions were done and all that nice stuff, so I said to the president of the day, who was Mr. Rupert Brendon, who is still president, I think, > "> Rupert, I cannot represent you in Ottawa or work for the association for at least a year after I leave the government because I have a clause of conflict of interest that I cannot work for any association that I dealt with.> ">  Obviously, I've dealt with the industry for a good part of my career, so I joined the ICA and Mr. Rupert and myself-and I have a letter that I think I have with me so I can leave you a copy-time and time again, we wrote to the government because then I was obviously not a public servant anymore, and I wanted to se> e the system become more transparent, open and so forth on agency competition. Mr. Rupert Brendon wrote to the President of the Treasury Board. He wrote to Mr. Goodale. He never got an answer. He never got a reply, and I found out why. It was because of Chuck Guité. I think it is very important here that I explain why, Mr. Chairman.

> *  (1205) 

>     The Chair: Your time is up, but if you feel it's important, you can finish that.

>     Mr. Charles Guité:

>     Mr. Boudria, who was the minister of the day at that time, and the Canada Information Office obviously reported to him at that time. Some people in Canada Information Office said > "> Anything that Chuck Guité touched is poison, don't touch it, and in fact, Mr. Minister, don't meet with him> "> .

>     Mr. Boudria, outside the House of Commons, made a statement. I forget what, I would say I resigned from ICA, I think in September 2000-01. Mr. Boudria came out of the House of Commons and said > "> Chuck Guité, I may have met him once. Who is he and why did he give $1,000 to my campaign? I don't know. I don't know this guy> "> .

>     Well, I think I know why Mr. Boudria didn't last very long as a minister. He's got no memory. He doesn't remember the dinner I had with him with a fairly profile hockey legend during the Canada game. He doesn't remember that. He doesn't remember that I organized a hot-air balloon ride in his riding as part of the sponsorship program for his Highland Games. He doesn't remember that. He doesn't remember a football game in Montreal where he was going to do the first kick on the ball. He doesn't remember his trip to Trois-Rivières to the Grand Prix Trois-Rivières that was organized through the sponsorship as a politicl guy to be there.

>     He doesn't recognize, there were a couple more I had but I forget them. So Mr. Boudria doesn't know me. He doesn't know who Chuck Guité is. He's got an awful memory.

>     The Chair: Thank you very much.

>     Mr. Charles Guité: Based on that, Mr. Chairman, I resigned from ICA because you can imagine I was vice-president of government relations, representing the industry, and the minister responsible for communications doesn't know me and won't talk to me.

>     The Chair: Thank you very much, Mr. Guité.

>     Mr. Mills, please, eight minutes. Eight minutes, Mr. Mills.

>     Mr. Dennis Mills (Toronto-Danforth, Lib.): Thank you very much, Mr. Chairman.

>     I'd like to begin by clearing up a misconception around the Auditor General. The Auditor General never said $100 million was stolen or $100 million was missing. ON page 3 of chapter 3, she said > "> Over $100 million of the $250 million for the sponsorship program was paid to communications agencies as production fees and commissions> "> . She later added to that, when I asked her, management fees, as well.

>     My obsession, Mr. Guité, over the last nine weeks on this journey has been the whole value for money. It's very difficult for Canadians to understand, if you sponsor an event, how do you decide whether you put $5,000 into an event, or $100,000 or $1 million, whatever it is?

>     My question to you is around that area of value for money. Did you ever, in your execution of these 1,987 events over a number of years, or your portion of them, did you ever ask those agencies or those sponsored events to ship post-evaluation analysis to sort of ratify that the taxpayers were getting value for their money?

> *  (1210) 

>     Mr. Charles Guité: Initially, on the latter part of your question, did we do a proper evaluation? Probably not, initially. There's no question that when we decided when we were going to do....

>     For example, let me use two ends of the stick, here. We're going to do the Grand Prix in Montreal. We're going to have an audience, a great audience. I'm sure that I could not go into the Grand Prix in Montreal and ask for the type of visibility I wanted for $25,000. Those events, like the hockey arena, were in the $500,000, $700,000 sponsorship events. >

>     So obviously I knew that there was value there. I know that people watching a hockey game are going to see that wordmark, left and right, every time the puck goes over it when the camera's on the ice.

>     Now, if I had a request for sponsorship of--let me think of a good one, here, and again, I'm not trying to make a joke, here--but > "> La descend de canots dans la rivière de la Mauricie> "> . I'm not going to put $50,000 in that event. It was a good event. They applied for it. They were going to have a launching of this river. Descend la rivière, as we say en français, and they wanted, I don't know, $5,000 or $10,000.

>     Well, it's value for money. They were promoting Canada on that event. They had wordmarks at the start and the finish, and so forth. So obviously there was value for money.

>     Mr. Dennis Mills: So perhaps I can ask my next question then.

>     When the Auditor General's team came in here...and we understand now that the audit of the 1.987 events, there were 56 that were chosen from that envelope where she extrapolated her analysis. Did you ever get a chance when the auditors would come in and say, here is the way we find the management of this file, and we don't feel that it's appropriate, or we feel that the contracts haven't been > "> papered> ">  properly, did you ever have a chance--or value for money--did you ever have a chance to say to those auditors that were doing this evaluation, your position on this file?

>     Mr. Charles Guité: No, and the reason for that, Mr. Mills, is I wasn't there when the audit was done. The only interview I had with the Auditor General was when the issue came out around the Groupaxion reports. I agreed at the time to meet with the Auditor General. They wanted to know certain discussions on those files. At that time, not having access to the contract or the files, I clearly indicated to the Auditor General that the crown got value for money. But again the Auditor General today is saying the files are not there. They were there when I was there. Where did they go?

>     Mr. Dennis Mills: Wouldn't the ad agencies have had to have kept sort of backup documents on all these events?

>     Mr. Charles Guité: Again, now you're asking me questions that I have to check the contract regulations, but I think an agency doing work on behalf of the government has to keep documents and track of what they've done definitely in their files. I can't verify that. I'd have to get that checked out, but I think that's part of a contract, what I call the fine...the details at the back of a contract.

>     Mr. Dennis Mills: How much more time do I have, Mr. Chair?

>     The Chair: You've got almost three minutes.

>     Mr. Dennis Mills: Yesterday we had the RCMP here and they told us about the 700 events that they did over a period of time across Canada. Would it not have been a normal practice for your officials to ask the local village, town, city to send a post-evaluation sort of report about the impact on tourism, or whatever, the RCMP Musical Ride would have had in those communities?

>     Mr. Charles Guité: No.

>     Mr. Bob Mills: People who come from that industry or who have had the event happen in their town, they know the impact, but in terms of an audit on value for money, they need to see that, they need to know that the local newspaper was involved, the local radio station, the local television station, that hotels and motels were being filled. How is that we never got all of that information backing up the 700 events of the Royal Canadian Mounted Police?

>     Mr. Charles Guité: Because that's the Royal Canadian Mounted Police duty.

>     I sponsored the Royal Canadian Mounted Police--I forget the amount that the government put in there, or the sponsorship program--mainly for the event that happened in Montreal, le bal that happened in Montreal, and I think there was definitely something in Quebec City, and then there were some promotional items that were acquired, including some horses. Again, you know, that's the only involvement.>

>     Now, the other 699 projects or events that the RCMP have done, I have no knowledge of what they even did, so I can't have input or have anything on file for that.

> *  (1215) 

>     Mr. Dennis Mills: Thank you.

>     Mr. Charles Guité: But what's important here, too, Mr. Chair, is--I forget if I read it or heard it on TV this morning in the early news--where the commissioner said, > "> Well, we phoned Chuck to see if we could buy horses.> ">  If I gave a sponsorship to the RCMP, the Montreal Canadiens, the football club, I'm giving them money to make sure I have the visibility that I negotiated. What they do with the money is their problem.

>     Mr. Dennis Mills: A short question.

>     The Auditor General made a statement that Mr. Guité broke every rule in the book. What is your response to that?

>     Mr. Charles Guité: I haven't broke any rule in the book.

>     Mr. Dennis Mills: Thank you, sir.

>     Thank you, Mr. Chair.

>     The Chair: Thank you very much.

>     He's got 20 seconds left. If you want to share your time, if anybody wants to share...do so at the beginning.

>     You did say there, Mr. Guité, that whatever they did with the money was their problem, but you say you always got value for money. That's a bit of a contradiction.

>     Mr. Charles Guité: No, it's not, Mr. Chairman.

>     I'll give you five examples if you want.

>     The Chair: No, just give me one.

>     Mr. Charles Guité: Okay, I'll give you one.

>     I paid the Montreal Canadiens $500,000 to have the Canada wordmark at both ends of the ice for a season and the wordmark around the arena I think on what they call their mobile board that goes around, and I think it also included a couple of ads in their regular magazine. We negotiated with the Canadiens de Montreal to have that delivered to the crown, and it was delivered. Now, if the Montreal Canadiens took that $500,000 and bought hockey pucks, that's their problem. What I paid for is I paid to get visibility and I got it.

>     The Chair:

>     Okay.

>     Mr. Charles Guité: Is it different than Pepsi or Coke?

>     Not at all.

>     The Chair: I did mention the other day that I was an accountant in a prior life and that wouldn't fly with me, I can assure you.

>     Mr. Kenney, eight minutes.

>     Order please, order please.

>     We have now finished the first round of four rounds. We're now back to the second one, where of course it will be the Conservatives, the Bloc, Liberals, NDP and so on.

>     Mr. Kenney, eight minutes, please.

>     Mr. Jason Kenney: First of all, Mr. Guité, you've given us three different stories about who gave you leave to report directly to Jean Pelletier in the PMO. First, under questioning to me, when I expressed surprise that a mid-level bureaucrat would be reporting to the most powerful man in the government, you said: > "> Well that was the established process that had been that way since the Joe Clark government.> ">  Later you said that the PMO called you to have a direct contact with them when Madam Marleau was the minister because she wasn't getting it, she wasn't playing the political game. And you also said that you contacted Jean Pelletier on your own accord. So I want to know which of these three stories is accurate?

>     Mr. Charles Guité: Well I don't know what the question is.

>     Mr. Jason Kenney: The question is who gave you leave to report directly to Jean Pelletier? Did you assume that responsibility unto yourself? Or were you told to do so by the PMO, as you earlier testified?

>     Mr. Charles Guité: No, let me--

>     Mr. Jason Kenney: Or was that the longstanding precedent?

>     Mr. Charles Guité: Well hang on. I'm going to answer the first question.

>     Mr. Jason Kenney: Which of your many versions of events is accurate?

>     Mr. Charles Guité: I'm going to answer the first question.

>     When I met Madam Marleau for the first time it was very obvious to me that Madam Marleau was not interested in that file. When I came back to my office, not Jean Pelletier or not Jean Carle, Chuck Guit> é called PMO. And I said to, probably, one of the assistants in Mr. Pelletier's office that I would like to meet with Mr. Pelletier regarding the appointment of the new minister. And when I met with Jean Pelletier we discussed the issue and he said > "> Look, Chuck, for the next little while report to our office.> ">

>     Mr. Jason Kenney: So now you're reporting not to the minister, but actually to the Chief of Staff of the Prime Minister.

>     Mr. Charles Guité: Well, exactly, yes. No, you're right, yes.

>     Mr. Jason Kenney: But you initiated this? You didn't mention this to your deputy minister or your minister, that you were now going to report to their boss' boss?

>     Mr. Charles Guité: No, no. The minister of the day, as she said in this committee, said > "> I don't want to deal with Chuck Guité.> ">

>     Mr. Jason Kenney: Now she didn't want to deal with you, sir, because you weren't her deputy minister. She wanted you respecting the normal reporting lines, isn't that accurate?

>     Mr. Charles Guité: And that's fine. That's what she wanted and she was right in that decision.

> *  (1220) 

>     Mr. Jason Kenney: So what you're really saying, I take it, is that Madam Marleau wasn't willing to play the same political game and see the rules being bent in the same fashion that Mr. Dingwall, Mr. Gagliano, Mr. Pelletier and Mr. Carle were willing to?

>     Mr. Charles Guité: Well she couldn't go to Mr. Gagliano. The only thing she could compare it to was Mr. Dingwall because the ones came after .

>     Mr. Jason Kenney: And she wasn't as willing to bend the rules in terms of reporting lines and so forth as Mr. Dingwall was, that's what you're testifying?

>     Mr. Charles Guité: That's exactly.

>     Mr. Jason Kenney: When you say that Mr. Dingwall told you that > "> you don't rat on us and we won't rat on you> "> , what do you think he meant by that?

>     Mr. Charles Guité: He just meant exactly that, that I wasn't going to give him information on the previous administration and if the reporting structure of my group stayed the same I would respect ministerial confidentiality.

>     Mr. Jason Kenney: In other words, if the rules were bent, if you were given political direction about how to mismanage this program, that he wouldn't tell on you and you wouldn't tell on him?

>     Mr. Charles Guité: No, he wouldn't give me political direction. There's quite a bit of difference between--

>     Mr. Jason Kenney: He wouldn't give you political direction. Well, you've testified that you have faith in Madam Huguette Tremblay, who was your assistant for several years. You've promoted her. Obviously you had confidence in her. She said, under questioning from me, when she appeared before us, that very often when you would come back from the minister's office > "> we were given directives as to which sponsorship had been approved, so I mean, put one and one together.> ">

>     Mr. Charles Guité: Which minister?

>     Mr. Jason Kenney: This was Gagliano.

>     Mr. Charles Guité: Yes, that's true.

>     Mr. Jason Kenney: She went on.

>     Mr. Charles Guité: But then you're talking--

>     Mr. Jason Kenney: I said > "> Do you think that it would be fair and accurate to say that there was political direction in the management of the program and the approval of the contracts?> ">  She replied > "> It is my belief, yes.> ">

>     Is that accurate? Was there political direction?

>     Mr. Charles Guité: No, that's her point of view.

>     Mr. Jason Kenney: I'm asking you if you share her point of view?

>     Mr. Charles Guité: No.

>     Mr. Jason Kenney: Is she right or wrong?

>     Mr. Charles Guité: She's wrong.

>     Mr. Jason Kenney: She's wrong about that?

>     Mr. Charles Guité: Yes.

>     Mr. Jason Kenney: Well she tells us that sometimes you would refuse to approve a contract the minister's office wanted and that you would overturn that decision. That it was overturned by the minister's office, rather.>

>     Mr. Charles Guité: No, no. She may have said that, but not concerning Chuck Guité, probably Mr. Tremblay.

>     Mr. Jason Kenney: Would you have us believe that when you were meeting with the Chief of Staff to the Prime Minister that he was merely providing general political advice and coordination and suggestions? Isn't it true that when you were meeting with--

>     Mr. Charles Guité: Political advice, never.

>     Mr. Jason Kenney: Yes, you said exactly that. You wanted to know where the Prime Minister was going to be, whether or not--

>     Mr. Charles Guité: That's not political advice, that's trying to find out what the Prime Minister's schedule is.

>     Mr. Jason Kenney: Oh I see, so coordinating the programs that you were financing with the Prime Minister's schedule was not political. That was just normal bureaucratic routine was it?

>     Mr. Charles Guité: No, no. All of those events that we did, one of the things that we had input from the Minister's office and the PMO's office is to let us know when these events happen, and if we can, we'll have a political rep or person at that event.

>     Mr. Jason Kenney: We'll have a political person at that event, but that wouldn't be political.

>     Mr. Charles Guité: That is definitely political.

>     Mr. Jason Kenney: So it is political.

>     Well, Mr. Guité, can you get it straight here for us. Did you ever say no when Mr. Pelletier offered political input?

>     Mr. Charles Guité: Definitely.

>     Mr. Jason Kenney: You did say no.

>     Mr. Charles Guité: Definitely.

>     Mr. Jason Kenney: Oh you turned him down did you?

>     Mr. Charles Guité: Definitely.

>     Mr. Jason Kenney: Like on what?

>     Mr. Charles Guité: On certain events that he wanted to do, or that came through his office. I can verify that. You know where somebody would approach his office and say, look, we'd like you to put the pressure on so we can get some money. Not a lot of times, but several times I cut back to his office, maybe not him personally, but after I got it from him and got back to his office and said, look, here are the reasons why we don't want to go to that one.

>     Mr. Jason Kenney: Well Mr. Pelletier testified, even he was straight enough to understand, that you would never say no to him. He said that you never declined to finance a project that he proposed unless your budget had run out of money in which case you would lobby him to get the budget for CCSB increased. Is that not accurate?

>     Mr. Charles Guité: I have approached him to get more money on the budget, definitely.

>     Mr. Jason Kenney: So you're telling us that you told the Chief of Staff to the Prime Minister basically on certain files to go and fly a kite.

>     Mr. Charles Guité: No I didn't tell him to go and fly a kite. I evaluated the requests that came through his office and said to his office, and maybe I sent a reply back to his office saying we should not get involved for these reasons.

>     Mr. Jason Kenney: Well, Mr. Guité, I'd like to move to this question of how this money was...In your opening statement you said that you had never received input from the PMO, Gagliano, or Dingwall on the names, never suggested the names or got involved in the agency's selection process. I think you later amended your version of those events.

>     Mr. Charles Guité: No, never amended that and never will.

>     Mr. Jason Kenney: I see.

>     Mr. Charles Guité: They have never got involved in the agency selection process. There's quite a difference between selecting an agency and allocating the sponsorship program.

>     Mr. Jason Kenney: So the fact that these agencies were all major donors to the Liberal Party, some of them, for instance, Group Everest, contributing over $100,000 over the course of five years of this program, is just a mere coincidence?

>     Mr. Charles Guit> é: What agencies do with political parties is the agency's problem, not Chuck Guité.

>     Mr. Jason Kenney: It's their problem.

>     Sir, why is it that in all of these sponsorship arrangements you used these agencies as filters for this money rather than sending the cheques directly through? As one example, the Maurice Richard series, why is it you spent around half a million dollars in commissions to Liberal friendly ad agencies for simply, according to the Auditor General, passing a cheque on with no value added? Why didn't you just send a cheque on directly through to L'information essentielle?

> *  (1225) 

>     Mr. Charles Guité: Can't do it.

>     Mr. Jason Kenney: You couldn't do it. It was impossible.

>     Mr. Charles Guité: I think I explained that earlier.

>     Mr. Jason Kenney: Because you were so scrupulous about not breaking rules.

>     The Chair: Okay, Mr. Kenney.

>     Mr. Charles Guité: I think it's important, Mr. Chairman, that I answer that question.

>     The Chair: Yes, you can answer this question.

>     Mr. Charles Guité: There is quite a difference between a sponsorship initiative and a grant. If I sent the money directly to L'information essentielle, or directly to the Montréal Canadiens, or directly to anybody else with its sponsorship, it becomes a grant. I can not transfer funds from a government portfolio to a private organization. It has to be a grant.

>     The Sponsorship Program was set up in my organization to promote the visibility of Canada so it became a program called the Sponsorship Program. The only way I could facilitate that process in order to have access to all these sponsorships was to go through an ad agency. I also had three people on staff.

>     The Chair: The definition of a grant, Mr. Guité, is for the Government of Canada, pays and gets no value in return and does not expect value for return. For example, it's a grant that we pay out to many Canadians...the old age security that we pay out every month is a grant because we pay the money, there's no value comes back to the taxpayers of Canada, the Government of Canada. That is a definition of a grant.

>     Now the notion that you couldn't send the money to them directly because that would be a grant isn't correct because you were, according to the Auditor General...at least there might have been a 48¢ stamp or whatever, but the concept was that you were saying there was value for money received back to the Government of Canada either through the advertising agencies, or by just plain award and so on.

>     This was not a grant under any circumstances even if you paid the money directly to the organization because a grant says no value return to the Government of Canada. There are many situations where the Government of Canada pays out grants on that basis. Sponsorship program, any way you slice it, wasn't one of them.

>     Mr. Gauthier, s'il vous plaît. Huit minutes.

> [Français]

>     M. Michel Gauthier: Monsieur Guité, dans votre déposition de ce matin, l'avant-dernier paragraphe où vous dites que, pendant que vous étiez directeur exécutif, «je veux être très clair, je répète, très clair. Le bureau du premier ministre, le ministres Gagliano et Dingwall n'ont jamais suggéré de noms d'agence», c'est votre déclaration.

>     Je voudrais simplement que vous m'expliquiez le contexte de la lettre du 22 février 1995 qui a été rendue publique et qui porte votre signature, destinée à M. Kinsella, qui était du cabinet de M. Dingwall, et dans laquelle vous lui dites, je me permets une traduction libre: «Je vous fais suivre le rapport du comité pour for your review, pour que vous le regardiez, and after...

>     Le président: Monsieur Gauthier.

>     M. Michel Gauthier: est-ce que c'est acceptation?

>     M. Charles Guité: Arrêtez, monsieur Gauthier. Je suis au courant de la lettre.

>     M. Michel Gauthier: > Vous êtes au courant. Alors à ce moment-là, si vous êtes bien au courant de la lettre que vous soumettez au ministre, au cabinet du ministre, et que vous dites que cela doit être ratifié au plus vite, alors demain sauf avis», comment vous conciliez les deux affirmations à l'effet qu'ils n'ont jamais mis le nez dans la sélection d'agences mais que, par contre vous prenez la peine de le faire avec leur cabinet? Et quelle est la distinction entre les deux?

>     M. Charles Guité: J'ai un document ici qui s'appelle

> [English]

>     Appendix Q. I think the chair has a copy of this. If I can refer to page 6 of that policy. And if you don't have it...

> [Français]

>     Si vous n'en avez pas une copie, je peux vous en faire parvenir une. Cela va prendre juste une minute à expliquer le processus.

>     Quand on faisait une sélection d'agences, il y avait un comité de deux personnes de mon équipe, deux personnes du ministère et deux personnes su secteur privé. Il y avait des entrevues, des présentations d'agences qu'on appelle. À la fin de la journée, il y avait six agences qu'on gardait, ce qu'on appelait le short list. La compagnie no 1, la compagnie no 2, 3 4 ou 5, basé sur le pointage qu'elles ont reçu durant la présentation. Dans la politique ou le règlement du Conseil du Trésor, un ministre avait le droit de changer entre la première ou la deuxième agence, si la différence était moins que 10 p. 100.

>     Cela veut dire que, disons que je me présente comme agence et que j'ai 90 points. Vous vous présentez comme agence et vous avez 88 points. Je suis premier. Le ministre avait le droit, s'il le voulait, lui ou elle, de dire: «J'aime mieux le numéro deux parce..», et je vais être un peu comique ici, «parce que ce sont nos chums, on va prendre le numéro deux». Je vous affirme que cela n'est jamais arrivé qu'un ministre ait changé la décision du comité. Et dans la politique, c'est écrit ici. Je ne l'ai pas en français mais si vous avez des problèmes, je vais vous le donner en anglais:

> *  (1230) 

> [English]

> The selection review committee will forward its recommendation and a summary of its deliberations to the minister of the department or agency for approval.        

> [Français]

>     Cela veut dire que quand j'envoyais ces lettres-là, comme dans ce cas-ci à M. Kinsella, c'était pour le ministère de M. Dingwall. La même lettre a été envoyée à tous les ministres, dans tous les ministères, chaque fois qu'il y avait une compétition.

>     M. Michel Gauthier: OK.

>     M. Charles Guité: Mais la chose importante c'est que je veux vous assurer qu'il y a un ou une ministre qui voulait changer de numéro un à numéro deux. Et quand son chef de cabinet m'a appelé, j'ai dit: «Est-ce que vous aimeriez cela demain matin être dans le Globe and Mailou dans les journaux du Québec: «Minister reverses this». Elle a dit: «Non, on est mieux de laisser cela tranquille». Il n'aime pas le Globe and Mail.

>     M. Michel Gauthier: J'aimerais que vous nous disiez, monsieur Guité, la chose suivante. Tout à l'heure vous avez dit: «On garde dix ou douze millions dans le budget chaque année. Je donne de l'input au ministre», entre autres, et vous avez dit combien telle agence a eu. C'est la phrase que vous avez eue. Pourriez-vous élaborer un petit peu plus, toujours en concurrence de ce qu'on vient de dire?

>     M. Charles Guité: Une allocation à quelle agence?

>     M. Michel Gauthier: Oui.

>     M. Charles Guité: Comme je l'ai dit tantôt ou plutôt ce matin, quand je rencontrais le ministre ou le bureau du premier ministre durant les années de Mme Marleau, on préparait une liste, mon organisation, pas moi personnellement, mais les personnes de mon organisation. On avait 300 ou 400 demandes par année. On préparait une liste basée sur celle-là, avec une discussion avec mon équipe que «cela ça paraît pas pire», et on faisait une allocation entre 28 et 30 millions, disons qui auraient > été approuvés, autorisés ou discutés avec le ministre, et plutôt discutés avec le ministre au commencement de l'année fiscale.

>     Alors quand je rencontrais, soit M. Pelletier, soit M. Gagliano--dans le temps de M. Dingwall ce n'était pas le même processus--on regardait la liste ensemble avec son chef de cabinet, moi-même ,et je ne me rappelle pas si j'avais quelqu'un d'autre avec moi. Sur cette liste-là, on regardait «voici les énervements qu'on va faire», et la liste indiquait l'événement, le montant, le pourcentage de commission, s'il y avait de la production, et l'agence. C'est sûr que dans ces discussions-là si ministre ou M. Pelletier avait dit: «Regarde, cela paraît pas mal pesant de ce côté-là». Excepté que d'habitude j'avais assez de jugement entre les deux oreilles pour essayer de diviser cela également.

>     M. Michel Gauthier: Parce que les agences...

>     M. Charles Guité: Dans certains cas, il y avait des petites agences qu'on avait gardées et ce n'était pas vraiment égal, parce que c'était des agences qui n'avaient pas le personnel dans leurs équipes pour être capables de livrer un projet comme le Grand Prix de Montréal.

>     M. Michel Gauthier: Dans le fond, vous référez au pool. Il y avait six ou sept ou dix agences et, vous, vous vous organisiez pour équilibrer pour que tout le monde en ait. C'est ce que je comprends.

>     M. Charles Guité: Exactement.

>     M. Michel Gauthier: Pour éviter que le chef de cabinet du premier ministre intervienne.

>     M. Charles Guité: C'est évident. L'autre chose, c'est sûr, comme je viens de dire, il y avait une ou deux agences qui étaient des petites agences. Alors, c'est sûr que je n'aurais pas donné, par exemple, le projet Bluenose à une agence qui a un personnel de cinq ou six personnes.

>     M. Michel Gauthier: D'accord. Il y avait des dossiers plus simples comme d'aller porter le chèque à VIA Rail. Ce serait plus facile. Ça ne prend pas une grosse agence. Mettons que c'était des dossiers plus...

>     Vous avez dit quand même, monsieur Guité, vous avez dit que vous faisiez un équilibre. Ça, on peut comprendre, ce n'est pas un mauvais souci. Le chef du cabinet du premier ministre avait peu souvent l'occasion d'intervenir, mais il est intervenu déjà.

>     M. Charles Guité: Ça dépend ce que vous voulez dire par intervenir. Moi, si je me rappelle bien...

>     M. Michel Gauthier: Pour équilibrer.

>     M. Charles Guité: Peut-être, oui. Mais, moi, si je me rappelle bien, le seul temps que j'ai vraiment eu des discussions avec l'allocation des projets pour l'année fiscale, ça a été durant l'année et quelques mois que Mme Marleau était ministre et cela veut dire que sur ce processus-là, j'ai rencontré Jean Pelletier une fois, pour ce processus-là. Dire que je l'ai rencontré à toutes les années--bien, toutes les années, ça aurait été deux fois, parce que j'ai été là deux ans--, ce ne serait pas juste, parce que ce n'est pas vrai, ce n'est pas cela que j'ai fait. Je l'ai rencontré, par exemple, sur d'autres choses, comme l'impact qu'on pourrait avoir dans tels événements. Je l'ai rencontré une fois pour avoir plus d'argent dans mon budget, parce qu'on manquait d'argent. Si je me rappelle bien, je pense que j'ai une note sur mon dossier indiquant à M. Pelletier qu'on avait besoin d'un autre, je ne sais pas, 5 ou 6 millions de dollars avant la fin de l'année. C'est là que je peux dire que souvent, M. Quail, il n'aimait pas cela, mais je l'appelais parfois et je lui disais « Monsieur Quail, on a besoin d'un autre 5 ou 6 millions de dollars dans les commandites.  » C'était quand le budget était dans l'envergure d'à peu près 30 millions de dollars. Parce que quand cela a commencé, le budget a commencé à 15 millions de dollars, durant les années du fonds, du programme Unité Canada, ensuite il est tombé à 29 ou 30 millions de dollars et, ensuite, il est tomb> é à 40 millions de dollars.

>     L'autre chose très importante, c'est que ce programme-là avait ce qu'on appelle en anglais un sunset clause. C'était de l'argent que, moi, il fallait que j'envoie à toutes les années une soumission au Conseil du Trésor et la soumission qui arrivait au Conseil du Trésor était signée par le premier ministre du Canada. Alors, vous voyez l'importance. Je me rappelle...

> *  (1235) 

>     Le président: Merci beaucoup, monsieur Gauthier.

> [English]

>     Mr. Charles Guité: Just one second, if I could just finish.

>     The Treasury Board every year got this thing prepared by my group, signed by the Prime Minister of Canada. So obviously the Treasury Board Minister at one of the events said I don't know if we want to approve this, and one minister said well look at the bottom--it's approved.

>     It's pretty obvious.

>     The Chair: There you have it, approved.

>     Mr. Tonks, eight minutes, please.

>     Mr. Alan Tonks: Thank you, Mr. Chairman. If I get any further around here, you'll have to have me sworn in.

>     Mr. Charles Guité: No, no. Let me make this clear because it's important. The Department of Public Works had several of what I would call--not > "> would> "> , they were--executive committees. There was the executive committee of ADMs, which I was part of. So you'd have the ADM of personnel, of operations, of procurement, and so forth. Then there was another executive committee on personnel and so forth. I only sat on one which was the Departmental Executive Committee--DEC, I think it was called, yes, Departmental Executive Committee--and at that committee, what the minister would do is brief his ADM on his discussions with the minister and so forth, here are the priorities of the department, and so forth. Then there would be a round table of, you know, okay, Mr. Scobey, who was the assistant deputy minister of finance, and he would give a briefing on the overall budget of the department and so forth. The ADM of personnel would give an overview on personnel matters and any big issues coming up, or brief the rest of the committee members if there had been changes in personnel out of Treasury Board and so forth.

>     When it came to Chuck Guité, I briefed that executive committee on, you know, we've got five agency competitions coming up with these departments, the sponsorship program is going as planned, we discussed staffing, funding, the ongoing operation of my group. I did not give a briefing at that meeting, while there's that many activities going on in sponsorship and so forth. So, it was the executive committee.

>     Mr. Alan Tonks: Okay, thank you. I just wanted to clarify Mr. Quail never raised the issue.

>     I'm looking at a document from the Internal Affairs Directorate of June 17, 1996, which says:

> Allegations made in relation to the contracting practices of the advertising and public opinion research sector are founded. The documents reviewed note that a number of files ...           

>     Sorry, the rest of it is that it delineates instances where requisitions for goods and services had been received and backdated and that kind of thing.

> *  (1240) 

>     Mr. Charles Guité: As I said earlier, there's no question that in certain instances we backdated contracts.

>     Do you have a copy of that audit, Mr. Chairman, the 1996 audit?

>     The Chair: Not in front of me, but it's been circulated widely for the last month or more.

>     Mr. Charles Guité: Yes, but I think you should ... if you have it, I mean, that audit was done while I was there. There was an action plan to correct whatever observations were made, and unless I left my memory in Arizona, there wasn't that much .... There were some definite observations that were serious observations in that audit and we took corrective action to correct those observations.

>     The Chair: Was there a follow-up analysis or anything to suggest or confirm that this was done?>

>     Mr. Charles Guité: It has to be, Mr. Chair, because Mr. Steinberg, who I know very well, when he did an audit internally, we--I, being responsible for that organization--had to give him back an action plan. That was brought up to the audit review committee which was chaired by the deputy. When Mr. Steinberg did that quick internal audit, after Mr. Cutler's accusation, then they called in another firm, and I can't recall their name--

>     The Chair: Ernst & Young.

>     Mr. Charles Guité: Ernst & Young, they came in and that's the firm that spent three months in my organization, plus, and that's where it became very evident to me and to my employee who was involved with the auditors to review those files, that somebody had been tinkering with the files. My comment that Mr. Cutler tinkered with the files, I stand to that today.

>     The Chair: My researcher here is saying that the central recommendation of the Ernst & Young audit was that, and I quote:

> It may be more beneficial to all parties to incorporate the procurement of advertising and public opinion research within the normal procurement stream of PWGSC services. 

>     That was the central recommendation. That was never implemented, I take it?

>     Mr. Charles Guité: I don't think so, and that would have been the decision of the deputy minister.

>     The Chair: There was no reporting back to Mr. Steinberg and the audit department that notwithstanding the recommendations we're not going to implement these?

>     Mr. Charles Guité: That would have been done in the action plan because we have to respond to every observation. A decision would have been made to leave it the way it was, not by Chuck Guité, but by the deputy minister.

>     The Chair: We certainly don't recall Mr. Steinberg saying there was an action plan that said that the central core recommendation was to be ignored. Does anybody else remember that?

>     Mr. Charles Guité:

>     No, Mr. Chair, I could be totally wrong, here. All I'm saying is that when I was a public servant, when I worked in Supply and Services Canada, if I was responsible in organizing that and there was an audit, there had to be an action plan sent to the auditor.

>     The Chair: Yes, I believe there was an action plan, but I don't think anybody followed up to find out if the action plan was actioned on. That, I think, is the issue.

>     Mr. Charles Guité: Could be.

>     The Chair: You have 3 minutes and 59 seconds, Mr. Tonks.

>     Mr. Alan Tonks: Thank you, Mr. Chairman.

>     Mr. Guité, you had given an overview just a few minutes ago with respect to the agencies and how they were selected. Up to this point we've had the impression that you just pulled them, you selected the agencies arbitrarily. Can you elaborate?

>     I was interested, and I'm sure the committee would be interested, there is an organization or an entity called the Federal-Provincial Relations Office--

>     Mr. Charles Guité: Which I think now is a department.

>     Mr. Alan Tonks: All right. You know more about it than I do. Could you illustrate for the committee what the role was of that entity, and what direction they gave you and how your department or your group interfaced with this organization? The reason I ask that is that there's the impression that there was no strategic direction other than very political, in a hierarchical way, whereas there was this entity that seems to come up every so often, at least it did in your original testimony.

>     Mr. Charles Guité: Yes, the Federal-Provincial Relations Office, I used to know, maybe it's not that, anymore, but let me give you my memory of that organization. The Federal-Provincial Relations Office I think was part of PCO initially. FPRO, I remember FPRO like yesterday, were really federal-provincial relations. It would do things like, if there was a major issue in agriculture, for example, out west, FPRO would get involved in communication exercises and so forth, how to deal with that.>

>     During the referendum, obviously, who's going to get involved in the communications is FPRO. They called me up and they said > "> Chuck, we know what we've got to do, you know what we've got to do. We have some staff, but we're short of an expert in advertising, and communications and promotion. Would you lend us an employee?> ">  After about a week of discussion, I had four people on staff in that organization.

>     I agreed to send Madame André-Larose who was my right arm, left arm and two feet. She was really the next person in line from me. André-Larose went over to FPRO. Then we started obviously to plan on the strategy to fight the referendum.

>     When, it must have been sometime in 1994-- La date du referendum, c'était quand?

>     A voice: Novembre 1995.

>     Mr. Charles Guité: So, November 1995 was the referendum. So sometime in late 1994, 1995, Madame Larose came back to our office, which was next door, by the way. FPRO was at 30 Sparks, and I was at the old Birk's building on Sparks Street, which is next door, just about. She came over one morning, and she said > "> Chuck, they> "> , they being FPRO, > "> want to get agencies on board to get a strategy around la bataille> "> .

> *  (1245) 

>     The Chair: Mr. Guité, is this all relevant to answering Mr. Tonks' question?

>     Mr. Charles Guité: Yes, it is, because he's asking me how the process worked. So we had a competition, as I described earlier, how we invited firms and so forth.

>     In the advertising world, once an agency is in place, we used to put in place what we call > "> standing offers> "> . So it means that standing offer can run one year, two years, three years, five years. It can run forever if you don't change it. Normally, after five years you would review a standing offer, which we did in advertising.

>     So those firms, during the referendum, worked on that file. Obviously, we had some good results, but very close.

>     Mr. Alan Tonks: They were chosen through this process at FPRO. Thank you.

>     Mr. Charles Guité: Through this process, but your question, though, I know where you're going. About 1996, before the sponsorship program officially started, we re-competed, this time using a completely open process, i.e. not using the claws that I could use during the referendum.

>     We had a competition. I think we invited, the record will show, again, there were 10 or 12 firms that presented. Oh no, more than that because we retained 10, I think. They became the standing orders for the sponsorship program.

>     Obviously, the record shows that of the $40 million, $39.5 million, or not quite that much, was spent in la belle province. That was the intent of the sponsorship. So we used agencies on the list that were in Quebec.

>     Mr. Alan Tonks: Thank you, Mr. Chairman.

>     The Chair: Thank you, Mr. Tonks.

>     Ms. Wasylycia-Leis, please, eight minutes.

>     Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.

>     I think I'm beginning to see why we're at this impasse and the kind of problems we're having. It seems to me, Mr. Guite, the things that you would consider normal and appropriate and proper are the very things that many of us have difficulty with in terms of fitting into that definition. I think there's that same gap between what you believe and what the Auditor General believes and what accountants believe, what business out there wouldn't believe. You've said you think it's acceptable to backdate contracts when appropriate in certain circumstances.

>     You have said that it's okay for sponsorship dollars, once you've approved it, to go to anything basically. It could be horses. Whether there's a new musical ride or not in the case of the RCMP. It could be pucks. Whether it has anything to do with advertising the actual event. It could be in the case of the city of Elmira Maple Syrup Festival. It could be buying pancake batter. So that's where we have a problem. >

>     The third is that you don't see the need to put in writing the scope of work. So this is exactly what the Auditor General is saying is the problem. You have not identified the criteria by which you judged the granting of funds for the sponsorship program. Then you have no way to evaluate it and then in order for any reasonable thinking person in Parliament or across Canada, you don't have the answers to whether we got value for money.

>     So my question to you is, why do you have such a different set of standards when it comes to administration? Is it because you actually do think it's normal or is it because as you've said in other times, that we had exceptional circumstances that required exceptional administrative actions like bending the rules? Or is it the fact that this was just the way government was doing business when you were in the Mulroney administration and then when you took over under the Chrétien administration.

> *  (1250) 

>     The Chair: There's a number of questions there.

>     Mr. Charles Guité: Well, Mr. Chairman, exactly. I mean where do I start here?

>     The Chair: Well you start with the first one and move through.

>     Mr. Charles Guité: What's the question?

>     Ms. Judy Wasylycia-Leis: Did you consider these abnormal ways of operating normal? Did you see them as exceptional because of exceptional circumstances around national unity?

>     The Chair: One question at a time, Ms. Wasylycia-Leis.

>     Ms. Judy Wasylycia-Leis: No, it's one question, three parts or is this the way he saw that this is the way government did business. I mean there is a huge gap between what you're saying and what many self-respecting auditor is going to say in terms of this process.

>     The Chair: Again, Mr. Guite.

>     Mr. Charles Guité: What's the question?

>     Ms. Judy Wasylycia-Leis: You heard the question and I think you're just trying to be difficult here.

>     Mr. Charles Guité: No, no. I'm being serious.

>     Ms. Judy Wasylycia-Leis: Do you think your way of doing business was normal or did you actually bend the rules?

>     Mr. Charles Guité: Under the circumstances we were working under, they were normal and there was as I said earlier and let me use your example of batter at a sugarbush for pancakes. If an event came to the Government of Canada, not to Chuck Guite, to the Government of Canada and asked for a sponsorship. Why did they want a sponsorship? In order to carry out that event. They need money to carry out that event. No?

>     Ms. Judy Wasylycia-Leis: You said yourself, the sponsorship program ...

>     Mr. Charles Guité: Hang on, hang on. You're not letting me answer the question.

>     Ms. Judy Wasylycia-Leis: To give visibility to pursue.

>     The Chair: One at a time.

>     Mr. Charles Guité: You're not letting me answer the question.

>     So that organization, the little sugarbush in wanted, let's use $25,000 for us to sponsor, for the government to be a sponsor of that event. Obviously that organization wants the money in order to carry out the event. What I want as the Government of Canada is the visibility worth $25,000 for that event. If they use that money that they've received and it's to go back to the Chairman's comment a while back, what they're going to do with that money obviously is carry out that event. But I'm going to make sure that the government has its visibility and that we did, madam, and the results our proof is in the pudding.

>     Ms. Judy Wasylycia-Leis: And that's we have the biggest area of concern ...

>     Mr. Charles Guité: Well there's not much I can say there.

>     Ms. Judy Wasylycia-Leis: All right then. You can tell us what did Groupe Everest do for $67,826 when you flowed a cheque through then to L'Information Essentielle for Maurice Richard? What did you ask them to do? What did they do? What value did we get for flowing that cheque, besides the cost of the stamp?>

>     Mr. Charles Guité: They probably used a courier.

>     Ms. Judy Wasylycia-Leis: Okay, besides the cost of the courier then.

>     Mr. Charles Guité:

>     Again, what I said, I think, earlier this morning, an advertising agency, or AOR, have loss leaders and leaders, and if I look at the amount of work, or the amount of product or value that the government received from the agencies involved in this program, I can assure you, Madam, that the government got value for money. I'll use a small example here.

>     We do a $15,000 event in Quebec City and Groupe Everest gets that sponsorship; and if you look at the list of events that Everest did, you'll see a lot of them, there was very little money, but they may have to send two or three people to the event; no money. At the end of the day, what I'm saying to this committee--and that's where I think it's very important that a person like the president of ICA address this committee--is agencies will make money on some, lose on others, but at the end of the day, the Government of Canada got value for money.

>     It's easy to say to use one example and say, well, they got $64,000 to put a stamp...if I was Everest, I would turn around and I'd show you how much money I lost on six events prior to that.

>     Ms. Judy Wasylycia-Leis: Well...

>     The Chair: Ms. Wasylycia-Leis.

>     Mr. Charles Guité: I can't add any more to that, that's the

>     The Chair: Ms. Wasylycia-Leis.

>     Ms. Judy Wasylycia-Leis: With your approach, there wouldn't be any need for auditors, would there? Anything goes. And it just sort of balances out in the long term; we don't need to know what the money was designated for; we don't know whether it was spent on that; we don't need to know if we got value for money; that's basically what you're saying, and that's what the auditor general is saying.

>     I guess the other rhetorical question to this is, since you had such close contact with politicians and Liberal cabinet ministers, why they went along with it. Why they went along with this most bizarre, inappropriate way of managing the books and practising in such, what I would consider, unethical terms.

> *  (1255) 

>     Mr. Charles Guité: I totally disagree.

>     Ms. Judy Wasylycia-Leis: You disagree, okay. Let me ask then, about advertising. Since part of this whole study is chapter four as well as chapter three, could you tell me what percentage of advertising contracts were eventually rewarded to agencies who contributed to the Liberal party?

>     Mr. Charles Guité: I have no idea.

>     Ms. Judy Wasylycia-Leis: You don't know. We're only talking about five agencies--Lafleur, Gosselin, Groupe Everest, GroupAction--primarily, and you can't say how this worked out? They were the only ad companies getting any contracts in this whole period of time...there's a few others, but...

>     Mr. Charles Guité: No, no. You're talking about advertising. Advertising companies that got work from the Government of Canada work for departments. I don't know how much they got from agriculture or national defence or finance.

>     Ms. Judy Wasylycia-Leis: Let's just talk about it in terms of the sponsorship program, then.

>     Mr. Charles Guité: The sponsorship program...well...

>     Ms. Judy Wasylycia-Leis: Could you give us a figure in terms of how you divided it up?

>     Mr. Charles Guité: Get a copy of the list, it's on the list. I can't remember if this firm got $2 million, or $5 million, or $8 million, or $20 million. If you get a copy of the list, very clearly on the list you'll get the program, the amount, the agency, and so forth. But I can't sit here and give you those figures, I don't know. I've been gone for five years.

>     Ms. Judy Wasylycia-Leis: Last question already?

>     The Chair: Last short question.

>     Ms. Judy Wasylycia-Leis: Was there an agency selection process, in terms of CIO? I'd like to get a sense of the relationship. You worked very-->

>     Mr. Charles Guité: Canada Information Office, yes, okay. I can't remember.

>     The Chair: Okay, we will stop there and we're just about ready to break for lunch. Mr. Guité, I have a question for you. Twice this morning you mentioned the Unity Fund. How did the Unity Fund differ from the sponsorship program?

>     Mr. Charles Guité: In a technical term, Mr. Chairman, it would be obviously two different Treasury Board submissions. The Unity Fund, I can't comment on that because I don't know how the Treasury Board submission was...that was done probably by PCO/FPRO, and the Unity Fund, obviously when we, being the Government of Canada, did promotion or events pre, during, and right after the referendum, up to when they established the actual sponsorship fund, that, I assume. The year of the referendum there is no assumption; it probably came out of the Unity Fund. After that, it came out of some fund out of, I would assume, Privy Council or FPRO, because I did not have it in my budget. The first Treasury Board submission I submitted was to create the program for 1997-98, which was, I think, at $40 million, and then 1998-99 I prepared that submission also because I was still the executive director.

>     The Chair: That was to spend money from the Unity Fund?

>     Mr. Charles Guité: No. That was a separate Treasury Board submission, for Treasury Board to allocate $40 million to a sponsorship program.

>     The Chair: By this time, I think, you are about the level of an assistant deputy minister.

>     Mr. Charles Guité: That's correct.

>     The Chair: As senior executive, not the most senior but you're up there in the executive rank, you know the appropriations process, you know the estimates process. I presume by this time, you are aware of the contracting rules of the Government of Canada. You're dealing with two issues: You are spending money on the sponsorship program and you're spending money on the unity fund.

>     Mr. Charles Guité: Not at the same time, no.

>     The Chair: Never at the same time?

>     Mr. Charles Guité: No.

>     The Chair: Now, we know the unity fund only was cancelled this past few months. It was running right up to the end of 2003.

>     Mr. Charles Guité: Mr. Chairman, once I got the Treasury Board submissions for the sponsorship program, in 1997-98, 1998-99, I have never got another penny from wherever it came prior to that, which was probably unity fund.

>     The Chair: So you were spending money on the unity fund in which years?

>     Mr. Charles Guité: I would think 1994-95, 1995-96.

>     The Chair: After that, you didn't spend a dime?

>     Mr. Charles Guité: And maybe 1996-97.

>     The Chair: But after that it ceased?

>     Mr. Charles Guité: After that it was definitely a separate Treasury Board submission.

> *  (1300) 

>     The Chair: Treasury Board submission. That's not the point. I said, did you spend the money allocated under the unity fund and the sponsorship fund?

>     Mr. Charles Guité: No. No, I have not.

>     The Chair: So the only moneys that you spent was the sponsorship program?

>     Mr. Charles Guité: Yes.

>     The Chair: From 1997 onwards approximately, you never spent a dime of the unity fund?

>     Mr. Charles Guité: Not that I'm aware of, but let me add one more caveat to that. I'm not sure of the year--it probably was 1997-98--that we spent more than the $40 million. I can't remember the figure, but it might have been $42 million or $43 million, and I got the additional funding through the regular department allocation.

>     The Chair: Now was that the supplementary estimates?

>     Mr. Charles Guité: I can't remember, Mr. Chair. Probably when they did the supps, which we normally did every year, I would advise the deputy of the day, who was Mr. Quail, that the budget is over-expended.

>     The Chair: Now did you have any discussions about, I will spend this out of the sponsorship program, I will spend this out of the unity fund? How did you differentiate between which-->

>     Mr. Charles Guité: No. I never had both at the same time.

>     The Chair: So when you were spending money out of the unity fund in 1994-95, and so on, you had no sponsorship program.

>     Mr. Charles Guité: I didn't have sponsorship. No.

>     The Chair: So you had one or the other, but never both.

>     Mr. Charles Guité: No. Now having said that, what the unity fund did with up to, I think you said last year, I have no idea. They may have done other promotion things, but never through my organization.

>     The Chair: The work that you were doing was by and large the same thing--you were buying sponsorship programs. That's what you were doing.

>     Mr. Charles Guité: Yes.

>     The Chair: Did anybody ever say to you, > "> Chuck, we're not going to use the sponsorship program, we're going to use the unity fund--

>     Mr. Charles Guité: No.

>     The Chair: --and then from now, we're going to go back to the sponsorship?> ">  Did you ever ask which budget you were spending money out of?

>     Mr. Charles Guité: If I ever asked?

>     The Chair: Yes.

>     Mr. Charles Guité: No. I was spending out of my sponsorship program.

>     The Chair: By this time, you were up to ADM level. Don't you ever ask: Which budget, what's my limit, how much money do I have, what budget am I spending from?

>     Mr. Charles Guité: Oh, I was well aware what budget I was spending and what my limit was. My budget was the sponsorship budget at $40 million. Period.

>     The Chair: Yes, but you flip back and forth between sponsorship and unity.

>     Mr. Charles Guité: No, no. We never flipped back and forth.

>     Let me start again. In 1994-95, 1995-96, 1996-97, the sponsorship money--I shouldn't say sponsorship because it was...I should say more in general terms, the communication money--to promote the unity and the referendum issues, and the post-referendum, more than likely came out of the unity fund. When I made a submission to Treasury Board, 1997-98, 1998-99, it was a separate submission every year to establish the sponsorship fund. Once that started, I never got another penny from the unity--

>     The Chair: Yes, but I think you said earlier on, you spent money either out of the unity fund or you spent it out of the sponsorship--

>     Mr. Charles Guité: If I said that, I was wrong.

>     The Chair: You could spend money out of both funds at the same time?

>     Mr. Charles Guité: No.

>     The Chair: I am confused.

>     Order, please.

>     There were two funds--the sponsorship fund and the unity fund. You agree there were two funds?

>     Mr. Charles Guité: I can't hear.

>     The Chair: There were two funds. The sponsorship fund, and the unity fund.

>     Mr. Charles Guité: I had access to the unity fund until 1996.

>     The Chair: And up until 1996 were you also spending out of the sponsorship fund.

>     Mr. Charles Guité: It didn't exist.

>     The Chair: Oh, it didn't exist. Okay.

>     Mr. Charles Guité: It only became the sponsorship fund in 1997-1998, 1998-1999.

>     The Chair: After 1996, the unity fund continued. It continued on until this fall, the unity fund continued but you were not spending that money.

>     Mr. Charles Guité: No.

>     The Chair: You have no idea where that money was spent?

>     Mr. Charles Guité: No.

>     The Chair: You have no idea what it was all about?

>     Mr. Charles Guité: No.

>     The Chair: You have no idea of the criteria for that fund?

>     Mr. Charles Guité: No.

>     The Chair: Okay.

>     Two things.

>     Mr. Charles Guité: I would assume, Mr. Chair, that was controlled by PCO, by the way.

>     The Chair: Okay. Two things.

>     For tomorrow, the orders of the day are that we sit from 9 to 1 p.m., but I think that it's appropriate that we will suspend from 11.15 a.m. to 12.15 p.m., to allow the members to go to Question Period, because Question Period on a Friday is from 11 to 12. So rather than have a 15-minute break, I think it's appropriate we have a one-hour break. At 11.15, it will allow us to go to Question Period. We will miss members' statements, but 15 minutes afterward will allow us > to come back here.

>     And secondly, Mr. Guité made mention of a letter that was attached to his opening statement. It was delivered in one official language, and when it's available in both languages it will be distributed.

>     We are adjourned until 3.30 this afternoon.

¹  (1535)  


    The Chair (Mr. John Williams (St. Albert, CPC)): Good afternoon, ladies and gentlemen. We are resuming the meeting as of this morning. The orders of the day are as I read earlier on.

    As I mentioned just before we broke for lunch that once I had it translated I would distribute the letter from Edelson & Associates regarding Mr. Guité. That I believe has been translated and has been delivered. I also understand there's one or two copies of the blues of this morning are available, and they have been electronically distributed to all members offices.

    On that basis we are going to start with the next round. Madame Ablonczy, we're back to you, eight minutes please.

    Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC): Thank you, Mr. Chairman.

    Mr. Guité, who had the authority to approve payment of invoices for sponsorship contracts?

    Mr. Charles Guité (As Individual): I did.

    Mrs. Diane Ablonczy: I assume then that you're familiar with section 34 of the Financial Administration Act which talks about what needs to be present before payment is made. In each case where you made payment on a contract, were the provisions of section 34 of the Financial Administration Act complied with?

    Mr. Charles Guité: Yes.

    Mrs. Diane Ablonczy: So there was always an indication that work had been performed, that the payment had been made according to contract, and that the work had actually been done?

    Mr. Charles Guité: That's correct.

    Mrs. Diane Ablonczy: Mr. Guité, the Auditor General says this on page 28, paragraph 3.87,

In our view the public servants involved in administering the sponsorship program did not discharge their responsibilities with due care and diligence. There was little evidence that anyone had verified the reliability of the data on the invoices submitted by the communication agencies. Furthermore, the files often lacked evidence showing what work the communications agencies had done and therefore had little support for the invoices paid.

    What's your response to the finding of the Auditor General in that paragraph, Mr. Guité?

    Mr. Charles Guité: Very simple. When I was there, up until I left in 1999, the files were there, there were documents on file. After I left, she did the audit what, in 2003, which is four years later. What happened to the files? I can't comment. The files were there when I was there.

    Mrs. Diane Ablonczy: You did actually comment. Someone asked you what happened to the files and who basically destroyed documents, and I believe you did mention names. Did I hear incorrectly?

    Mr. Charles Guité: I didn't mention anybody's name destroying files.

    Mrs. Diane Ablonczy: Mr. Guité, you're essentially saying then that everything was up to snuff under your watch. Is that correct?

    Mr. Charles Guité: It depends how you define snuff.

    Mrs. Diane Ablonczy: Well, that you complied with the--

    Mr. Charles Guité: What I said this morning, and I'll say it again this afternoon, and I'll say it tomorrow morning--

    Mrs. Diane Ablonczy: I'm sure you will.

    Mr. Charles Guité: --there was a contract, there was an invoice. There was a proper contract and invoice, and I certified that the product had been delivered as negotiated and the invoices were paid.

    Mrs. Diane Ablonczy:

    Mr. Guité, when we heard from Mr. Cutler, he said that he raised the following concerns about how things were managed under your watch. He said that “authorizing agencies were allowed to carry out work without a pre-existing contract”. He said that contracts were regularly being backdated. He said that commissions were paid for services apparently not performed. He said that there were improper advanced payments. He said that authorizations were not sought. He said that contracts were being issued without prior financial authorization. He said that there was no longer a negotiation of prices, or there was no insistence on the established government contracting prices.

    He brought these concerns forward. As a result, there was an internal audit in 1996. That internal audit concluded that his allegations were well-founded. That's what the audit said in 1996.

    Subsequent to that, there was an external audit by Ernst and Young, who found the same thing. Because of that, Mr. Gagliano said that he ordered an audit in 2000, which essentially said the same thing.

    So, Mr. Guité, in light of three audits, two in 1996, an audit in 2000, and I might add the audit in 2002 by the Auditor General of three Groupaction contracts that “every rule in the book had been broken”, how is it, Mr. Guité, that you can tell this committee that everything was kosher under your watch?

    Mr. Charles Guité: I'll make the comment again, and I think, Mr. Chair, you may want to get a copy of the audit in 1996 that was done. One of my staff members sat with the auditors for three months reviewing the files. It was very evident that somebody had tinkered with the files.

    As far as I'm concerned, I have not denied this morning and won't deny that we did not backdate some contracts. Those are things that happen, not regularly, but they do happen. So as far as I'm concerned, I maintain my point of view that there was a contract, there was an invoice, the product had been delivered, the supplier of that work was paid in accordance with the contract.

    The Chair: I'm going to just interject, here, if I may. You mentioned the 1996 audit, but there were two. Are you talking the Ernst and Young audit?

    Mr. Charles Guité: Both of them. The internal and the Ernst and Young audit.

    The Chair: Okay. Now, you're saying the documents had been tampered with. Was that identified at that time?

    Mr. Charles Guité: That was identified during the audit that was done by the outside firm.

    The Chair: There's no reference to that in the audit.

    Mr. Charles Guité: I don't know. I have no idea. I can tell you that one of my employees who was a senior procurement person on my staff at that time sat with the auditors for three months going through those files. I don't know how much detail I got in with Mr. Cutler this morning, but as you probably know, he was removed from my office and sent over back to the department. I in fact changed the locks on the door because Mr. Cutler was coming in during the evening.

¹  (1540)  

    The Chair: I find it rather strange that if the auditor said, over there at the time the audit was going on and they were auditing the files, and it became apparent that the files had been tampered with, that there would be no mention of that in the audit.

    Mr. Charles Guité: Talk to the auditors. Talk to my previous employees.

    The Chair: Well, I guess we'll have to talk to the auditors.

    I can't get into a debate, Mr. Toews.

    Mr. Vic Toews (Provencher, CPC): No, no, but just on the name, the senior employee who sat with the auditor, so that we can have that name so we can have that person subpoenaed.

    The Chair: Who was the person?

    Mr. Charles Guité: His name is Mr. Mario Parent.

    The Chair: Mario Parent.

    My apologies, Ms. Ablonczy. You may continue.

    Mrs. Diane Ablonczy: That's fine, Mr. Chairman.

    Mr. Guité, the Auditor General, on page 33, paragraph 3.122, concluded as follows:

It remains of great concern that the Sponsorship Program was ever allowed to operate in the way it did. Considerable amounts of public funds were spent, with little evidence that obtaining value for money was a concern. The pattern we saw of non-compliance in the rules was not the result of isolated errors. It was consistent and pervasive. This is how the government ran the program. Canadians have a right to expect greater diligence in the use of public funds.

    Now, Mr. Guité, your evidence is that you were in charge. The Auditor General's audit covered the period beginning in 1997, when you were completely and utterly in charge, and yet this is her finding. How do you explain that, Mr. Guité?

    Mr. Charles Guité: I don't agree with the Auditor General's comments.

    Mrs. Diane Ablonczy: Well, now, isn't that interesting, Mr. Chairman.

    Mr. Charles Guité: It's very interesting.

    Mrs. Diane Ablonczy: Here we have a civil servant who, by his own admission, is not an auditor and we have the Auditor General of Canada, who has been evaluated by a peer review of an international panel as completely and utterly up to scratch as an auditor, and you have the gall to sit here and tell us that she's wrong, that she doesn't know her business.

    Mr. Charles Guité: She hasn't looked--

    Mrs. Diane Ablonczy: Just how do you explain that kind of a comment?

    Mr. Charles Guité: She hasn't looked at all the files, as I explained this morning in my first presentation. A hundred million dollars has disappeared in thin air. Come on, let's get with it.

    Mrs. Diane Ablonczy: That's not what she said, by the way, Mr. Guité. She did not say that.

    The Chair: We will let the record stand as to what has been said.

    Mr. Proulx, s'il vous plaît, huit minutes.


    M. Marcel Proulx (Hull—Aylmer): Thank you, Mr. Chair.

    Rebonjour monsieur Guité. Monsieur Guité, il a été allégué ou établi que certaines agences faisaient ce qu'on pourrait appeler du double billing, dans le sens où elles faisaient du recrutement de groupes, d'associations, de municipalités, elles faisaient de la sollicitation pour des évènements en leur chargeant un pourcentage. Ensuite, quand votre groupe accordait une commandite, les agences se trouvaient à avoir une deuxième commission à travers l'ouvrage qu'elles entreprenaient pour le gouvernement du Canada. Étiez-vous au courant de cela, dans le sens aviez-vous des doutes, puisque c'était des agences qui soumettaient des demandes pour des groupes, parce que cela a dû arriver que les demandes sont arrivées des agences?

    M. Charles Guité: On a eu des demandes soit d'un organisateur d'évènements, soit d'une agence, soit du bureau du ministre, soit du bureau du PMO. Si une agence avait une entente avec une organisation, que l'organisation allait les payer, parce qu'elle allait soulever une commandite, je ne le sais pas.

    M. Marcel Proulx: Vous n'étiez pas au courant de cela?

¹  (1545)  

    M. Charles Guité: Pas du tout.

    M. Marcel Proulx: Quand les agences se faisaient les représentants d'un organisme pour obtenir une commandite, cela n'allumait pas de lumière chez vous, à l'effet qu'ils auraient pu demander un pourcentage ou une commission?

    M. Charles Guité: Non.

    M. Marcel Proulx: Alors, vous étiez d'aucune façon au courant de cette pratique-là.

    Dans votre présentation de ce matin, à la page 9, vous faites référence, vous dites :




    Je présume que vous parlez du Procurement Policy du Conseil du Trésor?

    M. Charles Guité: Oui, je pense que je vous ai référé à...

    M. Marcel Proulx: Vous nous avez référé à cela ce matin, alors pourriez-vous m'expliquer cela un peu plus. Je veux que cela soit clair et je vous demande votre aide pour comprendre exactement de quoi vous nous parliez ce matin. Vous nous avez parlé, je pense, d'urgences ou de situations particulières.

    M. Charles Guité: Je vais même vous donner le numéro de politique. Monsieur Proulx, la politique qui a été revisée en mai 2002--mais je suis certain que les mêmes conditions existaient quand j'étais là--s'appelle


    No, government contracting regulations of the Financial Administrative Act, entitled Sections on Bids.


Before any contract is entered into the contracting authority shall solicit bids therefore in the manner prescribed in paragraph 7--whatever paragraph 7 says which is probably a whole set of rules


notwithstanding section 5 of the contracting authority, the contracting authority may enter into a contract without soliciting bids where the need is one of pressing emergency in which delays would be injurious to the public interests;--then it goes on to describe some of the things, and then the other clause that I spoke of this morning,


the nature of the work is such that it would be to the public's interest to solicit bids.--and I think it was to the public interest, and I would say it was a pressing emergency.

    Mr. Marcel Proulx: That would be not to solicit bids, right?

    Mr. Charles Guité: That's right. In fact what we could have done was gone out and said “We'll take this firm, that firm and that firm, end of discussion”, but in order not to do that, to make it--and I think in my first testimony to this committee back in 2002, if I remember rightly, and I won't look it up but I think I can remember quite clearly, we invited about 10 firms and we retained 5. But really, I could have gone out and said I'll take this one, that one and that one, based on the policy.

    Obviously we wanted to make sure that we had the best, so we invited 10 and through a selection process, through the scope of work and a second presentation, we retained 5 agencies.


    M. Marcel Proulx: Quand vous avez retenu les cinq agences c'est là que vous avez appliqué le principe ou un des deux principes qui vous permettait de ne pas aller en soumission, ou c'est plutôt à chaque fois que vous leur donniez des noms propres?

    M. Charles Guité: On a fait cela seulement une fois. C'était durant le référendum. En 1996, si je me rappelle bien, on a refait une autre compétition pour choisir des agences. C'est sorti sur le système MERCSque vous connaissez, et il y a eu, je ne sais pas, 35 ou 40 agences qui ont fait application. Sur cette demande, cette compétition on a gardé, si je me rappelle bien, 10 ou 12 agences qui sont devenues les agences permanentes qu'on a mises en place. C'est ce qu'on appelle standing offer. Et les agences ont continué à faire des...

    M. Marcel Proulx: C'est là que vous pigiez les agences pour remplir vos contrats.

    Dans le rapport de la vérificatrice générale, la vérificatrice nous parle de documents de justification qui manquent. Ce matin vous insistiez pour dire--je pense que vous avez raison, monsieur Guité--que sans qu'il y ait une facture, il n'y a pas de chèque du gouvernement qui peut être émis. Il n'y a personne qui émet de chèque sur un coup de fil. Cependant c'est facile d'avoir une facture qui dit «pour services rendus, 55 000 $». La vérificatrice générale, je pense, ou j'interprète, d'ailleurs je n'interprète pas tant que cela parce qu'il y a des endroits où c'est très clair, c'est ce qu'elle demande, c'était qu'elle ne trouvait pas de pièces justificatives. Ce matin vous nous avez parlé, soit de post mortemou d'affidavit. Qu'est-ce qu'il y avait dans ces rapports de post mortem? Je pense que des témoins se sont référés à cela en parlant de «rapport final». Il y avait quoi dans ces rapports, M. Guité?

¹  (1550)  

    M. Charles Guité: Dans certains cas, il y avait des photos de l'événement, des photos de la visibilité qu'on avait. Dans d'autres instances, on avait un rapport écrit qui donnait, certifiait que la visibilité négociée au commencement de l'événement, avait eu lieu, que l'événementr avait eu lieu et que la visibilité était présente.

    M. Marcel Proulx: Vous êtes en train de me dire, monsieur Guité, qu'il en existrait de ces rapports-là...

    M. Charles Guité: Oui.

    M. Marcel Proulx: Dans tous les dossiers?

    M. Charles Guité: Non, pas nécessairement tous les dossiers. Il y a certains cas... je vais vous donner encore un exemple. On va prendre le fameux club de hockey à Montréal. Je n'avais pas besoin de rapport dans le dossier pour certifier que le mot, symbole du Canada , et l'événement durant toute la saison de hockey le mot «Canada» était sur les affiches à l'intérieur du forum.

    M. Marcel Proulx: Maintenant que vous savez ce que la vérificatrice générale a dit, je jurerais que vous vous diriez maintenant que ça vous prendrait une photo.

    À votre connaissance, monsieur Guité, est-ce que vous ou quelqu'un de votre personnel, vos employés ou des sous-ministres avec qui vous avez travaillé ou pour qui vous avez travaillé, ou un ministre ou des ministres de la Couronne, est-ce qu'une de ces personnes-là, vous inclus, aurait bénéficié financièrement des contrats d'agences, des contrats de publicité ou des commandites?


    Mr. Charles Guité: No.

    Mr. Marcel Proulx: Merci.

    Thank you, Mr. Chair.

    The Chair: Thank you very much, Mr. Proulx.

    Before we move on, Mr. Guité, you mentioned in your opening statement, I will quote:

We always followed the processes as per Treasury Board guidelines. The one exception was during the referendum of 1995 where we used exceptions as provided by the procurement policy.

    Now you invoked that exception by saying it was one pressing emergency. Is that correct?

    Mr. Charles Guité: That's correct.

    The Chair: Okay, now I'm looking at the rules. It does say an exception is:

The need is one of pressing emergency in which the delay would be injurious to the public interest.

    Then it goes on to say:

In exception (a),

    which I just quoted:

a pressing emergency is a situation where delay in taking action would be injurious to the public interest. Emergencies are normally unavoidable and require immediate action which would preclude the solicitation of formal bids. An emergency may be an actual or imminent life-threatening situation, a disaster which endangers the quality of life or has resulted in the loss of life, or one that may result in significant loss or damage to Crown property.

    In light of that definition, government definition of your “pressing emergency”, how do you qualify, since you said you always followed TB guidelines? Square that circle for me.

    Mr. Charles Guité: No, no, except in the case of selecting agencies for the referendum, we followed the guidelines. Again, I don't know what document you were reading from.

    The Chair: I was reading from page 59 of the Contracting Policy, which is 227 pages long, from the Treasury Board of Canada.

    Hon. Robert Thibault: I believe that document is the one that we referred to earlier this morning that it was requested that copies be obtained for members. Is that the one that the committee receive copies that we were talking about earlier this morning?

    The Chair: I'm not sure.

    Hon. Robert Thibault: Is that the same document that the witness was quoting from this morning?

    The Chair: This was supplied to me by the Research Branch of the Library of Parliament.

    Hon. Robert Thibault: Is it the same document that...?

    The Chair: I'm not sure. I can't remember. Pardon? Yes, the clerk believes it's the same document.

    Hon. Robert Thibault: I think that we did ask that it be furnished to the committee. I find it strange that the chair would have it and that members wouldn't.

    The Chair: As you can see, my researchers here have stacks, and stacks and stacks of documents. They seem able to pull out the page that we need.

    Hon. Robert Thibault: They're the committee's researchers.

    The Chair: Well, this is true. No, they will supply these to you, as well.

    So anyway, Mr. Guité:

An emergency may be an actual or imminent life-threatening situation, a disaster which endangers the quality of life or has resulted in the loss of life, or one that may result in significant loss or damage to Crown property.

    How does your waiver of the rules, because it was a pressing emergency, fit with that when this emergency lasted for about two or three years?

¹  (1555)  

    Mr. Charles Guité: At least.

    Again, what you've got to understand, here, when I sat around the table with FPRO, PCO people and my staff, the nature of the upcoming referendum was of emergency. Without reading between the lines, here, the other one that you failed to mention “the nature of the work is such that it would not be in the public interest to solicit bids”.

    The Chair: That's correct, the other one was....

    Mr. Charles Guité: I'm not going to sit here, Mr. Chair, and read every comma of the policy.

    The Chair: No, I'm just asking you to tell me--

    Mr. Charles Guité: No, no, let me finish. You asked a question, I want to answer it.

    I sat around at a committee table with some very knowledgeable people from FPRO, PCO and my organization. We decided to carry this competition the way that I have described to the Auditor General, to this committee in 2002. Again, today, I stand by how we did the competition.

    The Chair: Okay. But you still didn't answer my question, since there's no loss of life and stuff like that at stake, how you felt you could bend the rules, avoid the rules or whatever?

    Mr. Charles Guité: There are 16 reasons in here, which you just read, about building falling down and losing life and so forth. All I'm saying to you is there's also reasons in here that you have a competition without bid when it's the public interest. I think winning the referendum was in the public's interest.

    The Chair: You said there's a dozen ad agencies out there, I think, that were federalists, that we don't work with NDP, if they're Conservative, or Liberal, as long as they're federalists versus separatists, and you identified these. It only takes a couple to three weeks to do a complete bidding process. This went on for a couple or three years.

    Mr. Charles Guité: No, it took about a week.

    The Chair: It took about a week. Okay, a proper process might a couple or three weeks. I was being generous. I still feel how you couldn't do a bidding process because there wasn't actually an emergency until a week before the referendum.

    Mr. Charles Guité: No, I disagree with you. I think it was an emergency and I think that, at the end of the day, the interests of the public, the costs to this country, would have been enormous if we had split up the country.

    The Chair: And it goes on to say, “If you do use any of the exemptions, it should be fully justified on the contract file”. So I presume it was fully justified on the file?

    Mr. Charles Guité: I would assume that the competition file that's there, there would be notes.

    The Chair: Did you prepare the notes as to the justification for avoiding the contracting policy?

    Mr. Charles Guité: We're talking 1994, Mr. Chairman. I don't know. I'd have to see the file.

    The Chair: Do you remember?

    Mr. Charles Guité: I do not.

    The Chair: You do not remember?

    Mr. Charles Guité: No. And I can't say I put notes...I probably would have put notes on the file, there's no question, because every competition we had, as long as I was executive director of that branch, we have a complete competition file. So the record would show, and not only my comments, but the comments of all the committee members.

    The Chair: Okay.

    Monsieur Desrochers, s'il vous plaît, huit minutes.


    M. Odina Desrochers (Lotbinière—L'Érable, BQ): Merci, monsieur le président.

    Bonjour, monsieur Guité. Depuis le dépôt du rapport de la vérificatrice générale, le 10 février dernier, Paul Martin a affirmé à maintes reprises qu'il n'était pas au courant du fonctionnement du Programme des commandites. C'est exact?

    M. Charles Guité: Je ne peux pas faire de commentaires pour M. Martin, mais si c'est ce qu'il a dit, c'est ce qu'il a dit. Moi je ne le sais pas.

    M. Odina Desrochers: On a nommé plusieurs ministres qui sont intervenus soit par recommandation soit par influence. À votre connaissance, est-ce que Paul Martin est intervenu pour exercer une influence quelconque pour l'attribution d'un contrat ou d'un dossier?

    M. Charles Guité: Monsieur Martin, personnellement, non. Son bureau oui et à plusieurs occasions.

    M. Odina Desrochers: Dans quels dossiers? Est-ce que vous avez des exemples précis?

    M. Charles Guité: Je n'ai pas d'exemples précis dont je puisse me rappeler, mais je pense qu'il y avait plusieurs contrats avec une compagnie locale, la compagnie Earnscliffe. J'ai eu des interférences du bureau du ministre qui était en ce temps-là, le ministre des Finances, M. Martin, mais M. Martin personnellement non, son bureau oui.

    M. Odina Desrochers: Quel genre de remarques vous faisait-on, monsieur Guité?

    M. Charles Guité: D'essayer d'influencer la décision.

    Je pense qu'aujourd'hui, si quelqu'un demandait l'accès à l'information pour tous les contrats qui ont été attribués à cette compagnie-là, vous seriez surpris. Je pense qu'il y avait un autre ministre qui avait essayé de faire une interférence pour la même compagnie, qui était M. Goodale. Je m'en rappelle très bien parce que c'était devenu, comme on dit, a hot issue entre les deux ministres. J'ai les documents, soit avec mon avocat ici aujourd'hui ou je les ai à la maison.

    Oui, j'ai des documents que je pourrais vous fournir.

º  (1600)  

    M. Odina Desrochers: À ce sujet-là?

    M. Charles Guité: Oui.

    Un instant. Il faut faire attention ici. Je ne suis pas certain si les documents sont spécifiquement pour cette compagnie-là, mais je peux vous montrer des documents qui ont été envoyés du bureau de Paul Martin, demandant d'ajouter des compagnies etc.

    Le commentaire que je veux faire ici c'est que le ministre ou son bureau pourrait se retourner et dire: « on voulait seulement que ce soit plus compétitif ». La raison importante ici, c'est que jamais un bureau de ministre ou son équipe devrait faire des contacts avec les fonctionnaires qui émettent les contrats.

    M. Odina Desrochers: Lorsque vous avez reçu des appels téléphoniques du bureau de M. Martin, est-ce qu'on disait: « M. Martin me demande ceci, M. Martin me demande cela? » ou si on disait tout simplement: « j'ai comme mandat de vous demander ceci? ». Comment se passait les échanges entre le bureau de M. Martin et vous, monsieur Guité?

    M. Charles Guité: Je vais vous dire une discussion, soit téléphonique ou dans le bureau du chef du cabinet...

    M. Odina Desrochers: Pouvez-vous nommer le nom du chef du cabinet à l'époque?

    M. Charles Guité: Oui, il me semble que c'était Terry O'Reilly et le commentaire qu'elle a fait assez ouvertement, c'est que...


    The Chair: Are your questions in relation to the sponsorship chapters 3, 4 and 5, or are you kind of meandering off in a different direction here?


    M. Odina Desrochers: J'attends une réponse M. Guité. J'ai le droit, je pense, monsieur le président?

    Monsieur Guité, j'attends votre réponse.

    M. Charles Guité: Je ne sais pas où j'étais rendu, mais je me rappelle qu'une fois, soit au téléphone ou personnellement avec cette dame, son commentaire était :


    and I quote, “Well, Paul would prefer” Alors, who's Paul?


    M. Odina Desrochers: Monsieur Guité, vous dites que vous avez des documents. Est-ce que vous seriez en mesure de les déposer ces documents-là?

    M. Charles Guité: Oui.

    M. Odina Desrochers: Pour démonter que carrément il y avait de l'influence et de l'ingérence de M. Martin dans le contrat de cette firme-là.

    M. Charles Guité: Faites attention, il s'agit du bureau de M. Martin.

    M. Odina Desrochers: Du bureau de M. Martin. Merci beaucoup.

    Monsieur Guité, je reviens avec votre déclaration initiale sur le contexte de la campagne référendaire. Vous disiez que vous étiez l'un de ces généraux. Les autres, c'était qui?

    M. Charles Guité: Les personnes des relations interprovinciales. Je ne me rappelle pas du nom en français, mais c'est le FPRO. Les relations fédérales-provinciales. Les noms qui étaient impliqués dans ce dossier-là, il y avait dans ce temps-là, je pense, Marc Lafrenière, il y avait bien sûr une personne de mon équipe que j'avais prêtée au système, il y avait Howard Balleck , je pense, qui était là. Il y avait aussi une dame, dont je ne me souviens pas du nom, que je connais très bien, mais son nom m'échappe.

    M. Odina Desrochers: Est-ce que Mario Lague était là?

    M. Charles Guité: Dans ce temps là, je ne sais pas si Mario était avec le...Qui est le ministre responsable des relations fédérales maintenant avec les provinces?

    M. Odina Desrochers: M. Pettigrew.

    M. Charles Guité: Je ne sais pas si Mario était avec M. Pettigrew dans ce temps-là ou si le département existait. Si je me rappelle bien, Mario, dans ce temps-là, était impliqué dans la machinerie.

    M. Odina Desrochers: Quand vous nous dites, monsieur Guité, que vous avez pris une semaine pour identifier une dizaine d'agences, qui vous a soumis le nom de ces agences-là? Est-ce que cela s'est fait dans une recherche?

    M. Charles Guité: Cela s'est fait dans le comité, soit avec moi, Mme Larose et les personnes du FPRO. C'est sûr, comme vous le savez, je connais l'industrie assez bien.

    M. Odina Desrochers: Vous vous êtes assuré que ces agences-là fassent bien le travail. Vous étiez sûr en faisant appel à elles?

    M. Charles Guité: Oui et comme on le dit souvent en anglais : « You don't get the devil to work for you. » C'est sûr qu'on ne voulait pas avoir une agence qui avait des tendances à supporter le parti séparatiste au Québec. C'est normal et même beaucoup d'agences que je connais au Québec, et pas nécessairement les agences, il faut faire attention ici, soit des dirigeants d'agences ou des personnes dans les agences sont reconnus comme pour supporter la cause séparatiste. Alors, c'est sûr qu'on n'engageait pas une agence, pour défendre le Canada uni, qui était de l'autre côté de la Chambre, qui était séparatiste. C'est normal.

º  (1605)  

    M. Odina Desrochers: Vous nous dites en même temps, que lorsque vous avez démarré le Programme des commandites, vous avez fait appel également à des agences.

    M. Charles Guité: Après le référendum, oui.

    M. Odina Desrochers: Est-ce que les agences québécoises qui avaient travaillé, qui avait fait leur travail, à ce moment-là, ont été privilégiées dans votre sélection?

    M. Charles Guité: Non, mais c'est sûr que lorsqu'on fait une compétition d'agences, une des choses qu'on prend en considération, si vous regardez dans les directives du Conseil du Trésor--je ne m'en rappelle pas encore--je sais qu'il y a cinq ou six items qu'on évalue. Un des items est l'expérience dans tel secteur des communication, soit publicités, commandites, etc. Sur les cinq firmes qu'on avait retenues durant le référendum, je ne me souviens pas encore exactement, mais je pense qu'il y en a deux ou trois qui ont été requalifiées à la deuxième ronde. Je peux nommer les agences : il y avait Groupaction, qui avait fait un très bel ouvrage durant le référendum. Dans le cas d'Everest, je ne suis pas certain si cette agence était impliquée dans le référendum. Je pense que oui, mais encore il faudrait que je vérifie les dossiers. Je ne suis pas certain pour BCP non plus. Ensuite, les autres, dans ce temps-là...Publicités Martin, je ne suis pas certain.


    The Chair:

    Mr. Murphy, please. Eight minutes.

    Hon. Shawn Murphy (Hillsborough, Lib.): I have a couple of issues, Mr. Guité, that I want to pursue a little further. I'm intrigued with your small department and the way it operates, what I classify as, outside normal government operations. You'd expect to see a much more direct reporting relationship from your department to the deputy minister, the non-minister. Did the deputy minister ever try to reign your department in or try to get more control over your department?

    Mr. Charles Guité: No, I wouldn't say. They used the words “reign in,” I don't think so. I think that the deputy of the day, and how I talked, let's say, the period of Mr. Quail.... No, I think that Mr. Quail was aware of what was going on. He was aware that I was meeting with the minister's office on a regular basis.

    Was he aware that I was meeting with the PMO? Maybe not, I'm not sure.

    When I briefed the deputy on the actual activities of my shop, my briefing was basically “the sponsorship program is going well, we're achieving the objectives that were set out”. To say that he reigned me in, no.

    Hon. Shawn Murphy: When Minister Quail appeared before this committee, he--and I'm summarizing his evidence--basically said that he didn't really realize the provisions of the Financial Administration Act were not being complied with, and that the Treasury Board guidelines were not being complied with. He basically said that he was more or less outside the loop.

    Mr. Charles Guité: I can't hear you.

    Hon. Shawn Murphy: He basically said that he was outside the loop.

    Mr. Charles Guité: Maybe he was.

    Hon. Shawn Murphy: But he never tried to get in the loop, as far as your department is concerned?

    Mr. Charles Guité: No, I don't think any more than that.

    At the end of the day, the Department of Finance, the ADM was Mr. Stobbe at the time.... My invoices were sent there. They were paid. If it was such a red flag, how come it wasn't flagged there?

    Hon. Shawn Murphy: I was curious about your answer this morning that when you wanted an increase in your departmental budget, you approached Mr. Pelletier.

    Mr. Charles Guité: Yes.

    Hon. Shawn Murphy: That would certainly be extremely unusual for normal government operating procedures. That must have drove your deputy , did it not?

    Mr. Charles Guité: Not necessarily because he was probably not aware.

    Let met qualify that. If I prepared a submission to the Treasury Board for $40 million, and that submission had the Prime Minister's name, basically recommending that it be approved, obviously the process of getting that done involved myself. No Treasury Board submission will go to the minister's office without going through the proper channels of the department no matter who prepares it. From there it came back to my desk. I took it to the PMO to have the Prime Minister sign it.

    If, because of demands and sponsorships were going to increase, I had to request an amendment for additional funding through a supplementary estimate, obviously that Treasury Board submission was approved by the Prime Minister of Canada, I would go there if I wanted more funding.

    I must say very clearly here that when I approached Mr. Pelletier--and I think it was on one or two occasions--for additional funding, he said, “Chuck, we don't have any money in the system to do it”. I think that's the year, and again I can't recall if it's 1997-98 or 1998-99, that in fact Mr. Quail, through the allocations of the department, gave me the extra money to cover those projects.

º  (1610)  

    Hon. Shawn Murphy: Will you agree with me that you would probably be the only person within the Government of Canada at your level, whether it was an EX-4 or associate deputy minister, going right to the office of the Prime Minister to seek budgetary increases for your particular department?

    Mr. Charles Guité: I would say that's fairly accurate.

    Hon. Shawn Murphy: The second issue with Mr. Quail, Mr. Guité, going back to these so-called industry standards--and you've spent your lifetime in this industry--this commission that you see in the sponsorship program, is it your evidence that was consistent right across Canada, the other larger firms, firm, that they would deal with these situations with the same commission rate and on the same basis?

    Mr. Charles Guité: In the industry?

    Hon. Shawn Murphy: Yes.

    Mr. Charles Guité: Yes, by all means. You've got to remember here that you're talking 1990, well let's say the 1990s and let's carry it to when I left. When I left the government, the industry standard was starting to change a bit. What happens in the private sector now and I speak now because having worked with the ICA for a year and a half until Mr. Boudria helped my career come to an end, we were looking at the government because in the private sector ... and to this day I think I would say 35 or 40% of the industry still works on a 15, 17.65%, that is 15% on the media and 17.65% on production.

    But there's a tendency now to go to fees and I'm trying to think of the term here that Mr. Rupert Brendon and I who is the president of ICA discuss quite a bit, it's results oriented. For example, they will charge fees and then based on the result of that ad campaign or that promotion or that sponsorship, there's some bonus payable depending on the results. So there's a kind of three systems right now. There is the commissions, there is the fees in commission because some agencies and clients will work on both. They'll pay fees on certain things, commission on others and then there's the results type of orientation.

    I'll give you an example. For example if, I don't know, company ABC promotes the Tim Horton coffee.

    The Chair: Let me just say, all cellphones off in this room please. I was heard that a former chair said if a cellphone rings, whoever's got it is out of this room and not coming back. So maybe we'll have to start implementing ...

    Mr. Dennis Mills: Maybe I'll turn mine on.

    The Chair: Please do, please do.

    Mr. Charles Guité: No but anyway to finish your answer, Mr. Murphy. I shouldn't say I know for sure. In discussions I've had as a Vice-President with ICA, there is some advertisers that will pay agencies on commission, some on fees and some based on the results. An example would be, for example I was saying Tim Horton. If agency ABC is doing a Tim Horton promotion for I don't know eastern Canada because I think it's broken down into sectors. They may say look, if that campaign generates that much volume of business to the Tim Horton donut stores, well then there's a little bit in there for commission.

    I mean those things would not be enormous but they would be an incentive for the agency doing that campaign obviously to track it and do it right and use the right mediums and so forth.

    But the standard and I repeat again to this committee would be very important to have a person like the chair of ICA to address this committee. I don't want to make a general statement here but it's not an easy business and it's not a pie in the sky. There is some real benefits of promotion, of sponsorship, of advertising.

º  (1615)  

    Hon. Shawn Murphy: Mr. Guite, we have the situation where there was an audit in, I guess two audits in 1996, an internal audit in 2000 followed by the Auditor General's audit. Despite what you say there is a ... I sense a certain element of documentation missing, there were files that you would expect to see in government operations. Now your particular circumstance, were you ever officially reprimanded or disciplined as a result of any of the findings in these audits?

    Mr. Charles Guité: No, never and in fact, I got performance bonus every year based on my ... the management of my shop. You've got to remember that I did more than just sponsorship.

    Hon. Shawn Murphy: And who would approve that performance bonus?

    Mr. Charles Guité: Normally the deputy minister. But you've got to remember that the last two years I had a staff of 250, 300 people.

    The Chair: Okay, thank you very much, Mr. Murphy.

    Mr. Toews, please, eight minutes.

    Mr. Vic Toews: Mr. Guite, when Ms. O'Leary called you from Mr. Martin's office, what exactly did she say to you in respect of the contract?

    Mr. Charles Guité: She asked me to come and meet with her which I did and then we discussed the competition, how it was being held. She had asked for certain changes and I said I can't do that. You can't be three-quarters of the way through a process and change the rules. In one instance which my legal counsel I think has a copy, I did receive a memorandum from somebody from the staff. I don't think it was Miss O'Leary asking to add these other firms to an agency selection process if I remember right.

    Now having said all that ...

    The Chair: I have a point of order here.

    Hon. Shawn Murphy: Mr. Chairman, I don't object to this line of questioning at all, but I just want to point out to the Chair why we're here. We're here to investigate chapters 3, 4 and 5 of the auditor general's report, and if we're going to go down this line, I think we have to do a couple of things. First of all we have to report that these contracts which I understand they've all been investigated by the auditor general before--they've been looked at, examined and I think we have to get into that.

    Secondly, we have to basically admit that there is nothing further on these chapters 3, 4 and 5 that we should, and the third issue, Mr. Chairman, once you go down this road, once the worms are out of the can, sometimes it's hard to get them back. Where are you going to close the door here?

    Of course--and again, I don't have any problem with it, but I'm just throwing some caveats. It started with the Mulroney government. Do you call Mulroney to testify in the committee? Do you call some of the cabinet ministers? Where does it end, Mr. Chairman? We'll leave it up to you, but again, I'm not objecting to the--

    The Chair: Your points are very valid and I was going to ask Mr. Toews, that we are doing chapters 3, 4 and 5 and where is the relevance?

    Mr. Vic Toews: All right. Now I understand that this is either a sponsorship, advertising or public opinion research contract, is that not correct?

    Mr. Charles Guité: That's correct.

    Mr. Vic Toews: Well, that's the relevance.

    Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.): Mr. Chairman, on the same point of order, Mr. Guité referred to some documents that he had and he offered to table documents relating to this issue. I'm wondering if you wouldn't ask him if it's possible that they be tabled right away that they can be distributed to all members of the committee so that we have the benefit of seeing those documents.

    The Chair: I will do that. I asked him to table document this morning which the clerk has distributed, I believe, or copies are currently being made of some pieces.

    I was going to make reference this afternoon and thought I would do it at the end but if you want it done now, I'll ask him to do it now.

    Mr. Guité, you've been making reference to some documents. If you would like to give them to the clerk we'll try and get copies made as quickly as possible--are they in two languages or in only one language?

    Mr. Charles Guité: I think they're only in one language.

    The Chair: Well I won't be able to distribute them today if they're only in one language. I was able to deal with Mr. Guité's letter from his lawyer this morning because I was able to have it translated. I was able to deal with the rules regarding contracting because we got that off the web in both official languages, but we have an issue that we deal with two languages in this room, and therefore, unless I can have them in two languages I don't feel that I should be distributing them. So that deals with documents.

    Mr. Toews.

º  (1620)  

    Mr. Vic Toews: Mr. Chair, maybe then I can defer that line of questioning and move onto another one. If Mr. Guité is going to bring that forward in the next week or so, we'll have it then and we can recall him later on.

    The Chair: Mr. Guité, if you leave the documents with us we can get them translated and circulated and we can call you back at a subsequent time.

    Mr. Vic Toews: I think that would be a good idea. I'll defer that line of questioning.

    Mr. Guité--

    Mr. Charles Guité: On that issue, Mr. Chairman, I will leave you a copy because we only have the one copy and I want mine.

    The Chair: The clerk will make a photocopy and we'll give your copy back, then we will have it translated and we'll have it circulated. Is that okay?

    Mr. Vic Toews: Will the clock start now?

    The Chair: You have one minute.

    Mr. Vic Toews: Well, Mr. Chairman,my line of questioning--I want to refresh your memory, Mr. Guité--

    The Chair: Order, please.

    Mr. Toews, you have the floor.

    Mr. Vic Toews: Thank you.

    The day that you met Minister Dingwall, the day that you kept your job because he said you wouldn't rat out on the new government, that day that stands out in your memory in the same way that the assassination of JFK stood out in your memory, it was a memorable day for you--in your own words. Now the meeting that you held took place in Minister Dingwall's office, and when he came around the desk and extended his hand to you, you and he were the only people in the office at that time?

    Mr. Charles Guité: No, his executive assistant was there, Mr. Kinsella.

    Mr. Vic Toews: Mr. Kinsella.

    Now, the minister's office would have been in the same building as your office.

    Mr. Charles Guité: No, no. That meeting took place at Place du Portage Phase III, I think, where the Public Works Minister normally has his office. My office used to be on Sparks Street.

    Mr. Vic Toews: All right. When you came into the minister's office, there would have been a receptionist, there would have been a number of offices, including Warren Kinsella's office. You would have walked by Warren Kinsella's office when you came to see the minister?

    Mr. Charles Guité: That's correct. But let me tell you how the minister's office worked.

    Mr. Vic Toews: I'll get into that.

    The Chair: No, he confirmed Mr. Toews' question, then he wanted to elaborate. But he confirmed the question. Mr. Toews, finish the question.

    Mr. Vic Toews: You walked by a number of offices, various people would have gotten to know you over the years, would they not?

    Mr. Charles Guité: No, because this was the first time I was meeting the minister.

    Mr. Vic Toews: Okay, the first time.

    Now, subsequent to that did you go to the same office to meet with the minister?

    Mr. Charles Guité: In most cases, yes.

    Mr. Vic Toews: In most cases.

    Mr. Charles Guité: On a couple of occasions I think I met him on Parliament Hill, I think his office was in the West Block.

    Mr. Vic Toews: So there would have been numerous other people who would have seen you come and go. Including the receptionist for example would have seen you come there, would have seen you appear on the number of times and those receptionists, and even Mr. Kinsella, could basically verify the number of times that you came to see Mr. Dingwall. Is that correct?

    Mr. Charles Guité: If he could? If Mr. Kinsella could?

    Mr. Vic Toews: Yes.

    Mr. Charles Guité: I would think so. Because I've never met with the minister without his assistant there.

    But what I want to make clear here. When you arrived at the minister's office at Place du Portage, there was a waiting area. And as most meetings with ministers you were booked to see him at 2 p.m. but you might see him at 4 p.m., and you waited outside obviously.

    Mr. Vic Toews: Yes, so your presence was known.

    Mr. Charles Guité: That's right. When I walked in let's say from the reception area to the minister's office, I definitely went by several other offices within the complex, or the context of the minister's office.

    Mr. Vic Toews: Now, think very carefully about this. Because, could there have been weeks in fact when you came to see the minister where you would have been at least three or four times a week in coming to see the minister on sponsorship or advertising contracts?

    Mr. Charles Guité: Not in the case of Mr. Dingwall, no. Because the program didn't exist then. The program started--

    Mr. Vic Toews: Why were you seeing Mr. Dingwall?

    Mr. Charles Guité: Because we were doing sponsorship with the unity money, which was .

º  (1625)  

    Mr. Vic Toews: So you're not there on the sponsorship, you're there on the unity fund. But to go to see Mr. Dingwall on the spending of the unity fund you'd see him maybe three or four times a week sometimes?

    Mr. Charles Guité: No.

    Mr. Vic Toews: Never?

    Mr. Charles Guité: Don't think so, no.

    Mr. Vic Toews: Never. Would it ever have been maybe once or twice a week for a period of time?

    Mr. Charles Guité: No. Definitely not, no.

    Mr. Vic Toews: So you're saying the most you would have seen him at any one time?

    Mr. Charles Guité: In the years of Mr. Dingwall, depending of the issue of the day, i.e. where we were with the file, some weeks I may have seen his office twice. But not very often and I did not meet with Minister Dingwall or his chiefs of staff on a regular basis.

    Mr. Vic Toews: All right. But some weeks you would have seen him up to twice a week.

    Mr. Charles Guité: Yes, that could happen.

    Mr. Vic Toews: Now, the other point that I just wanted to back on. That is you told this committee, in answer to my question, that the reason you had to split up the contract, and that was on chapter 3, page 20, is that you had to keep the agencies piece of the action under 25%.

    I've got a lot of problem with that answer. Because it seems to me, let's say a company has 30% of the action of the contracts, you divide up that 30% into five different contracts, you give it to the same agency. It still works out to 30%, doesn't it?

    Mr. Charles Guité: I don't know what your question is.

    Mr. Vic Toews: Well you said to me, when I brought this issue up to you, you said--

    Mr. Charles Guité: Just a second, please. I think what you're probably confusing here--

    Mr. Vic Toews: Let me just clarify, just so that we both know what we're talking about. In respect of the diagram on page 20 when I said Lafleur-Media, Lafleur-Gosselin, Media-Gosselin, you told us that you broke up those contracts so that it would be under 25%. How does breaking up a big number, let's say 25%, 30%, 35%, into different contracts and giving it to the same agency reduce it in any way?

    Mr. Charles Guité: Because the Treasury Board policy of the day was very clear--and I'm sure that it's still on record--a company not strictly taking into account the sponsorship, a company like Gosselin or Lafleur or whoever, could not do more than 25% of the total business volume. It could be National Defence, it could be sponsorship, it could be Health Canada. Because we had to in those days report, I think, every three months to Treasury Board the name of the company, how much business they have, if, for example, company A was very close to the 25% volume of all the government communication, I may have to say, “Well, we can't send that sponsorship there because that's going to take them over the scale”. So I might send it over to another firm.

    Mr. Vic Toews: And is that what you did here?

    Mr. Charles Guité: That's correct.

    Mr. Vic Toews: That's what you did here. So, basically, you were avoiding the rules. You were bending the rules.

    Mr. Charles Guité: Why was I bending them?

    The Chair: Okay. Time, time, time, time, time.

    Now, we're going to Mr. Thibault. Mr. Thibault, eight minutes, please.

    Hon. Robert Thibault: Thank you, Mr. Chair.


    Rebonjour, monsieur Guité. J'ai une couple de questions à vous poser.

    Lorsque M. Boulay a comparu devant le comité, il a indiqué que dans la pratique, certains dossiers ou pièces justificatives pour les dossiers étaient tenus par les agences de publicité, que c'était leur responsabilité contractuelle et qu'il n'y aurait pas nécessairement des pièces justificatives, ou tous les rapports ne seraient pas nécessairement envoyés à votre service ou à Travaux Publics. Est-ce qu'à votre idée, à votre connaissance, elles le font? Sinon est-ce que vous pouvez corriger?

    M. Charles Guité: Si j'ai bien compris la question, je sais que dans tous les contrats que la Couronne émet à une compagnie, comme par exemple Groupe Everest, il y a une clause dans le contrat qui indique que la compagnie devrait garder les pièces justificatives.

    L'hon. Robert Thibault: Et pas nécessairement en faire une copie à Travaux Public.

    M. Charles Guité: Non, pas nécessairement.

    L'hon. Robert Thibault: La vérificatrice générale, si elle est allée vérifier les dossiers à Travaux Publics, n'a pas nécessairement vu les pièces justificatives qui auraient été dans les dossiers des agences.

    M. Charles Guité: Non. Ce que je pense c'est que, soit que je l'ai vu dans une des séances avant aujourd'hui dans ce comité, si je me rappelle bien, soit que je l'ai lu ou que j'ai vu lereplayde la séance...

º  (1630)  

    L'hon. Robert Thibault: De M. Boulay ou de la vérificatrice?

    M. Charles Guité: Je pense que c'était une partie du témoignage de M. Boulay. Dans un certain cas, il a indiqué qu'il y avait des vérificateurs qui s'étaient présenté chez Groupe Everest, qui avaient vérifié des dossiers et qui avaient trouvé tous les documents, les pièces justificatives chez eux.

    Hon. Robert Thibault: Oui.

    M. Charles Guité: Alors il me semble que chaque compagnie a fait la même chose.

    L'hon. Robert Thibault: On a quand même, je pense, de la documentation maintenant. Cela n'est pas nécessairement pour tous les dossiers, mais pour certains dossiers dont le Groupe Everest.

    Une autre question. Dans le rapport de la vérificatrice, dans les témoignages qu'on a eus, il y a la question des contrats avec des agences de publicité qui auraient été majorés par vous en négociation avec eux, j'imagine, à des montants substantiels. Parfois on parle de la question de Canada Morgage and Housing, la Société d'hypothèque et de logement du Canada, d'un montant de 800 000 $, je pense, majoré de 800 000 $. Est-ce que vous pouvez faire un commentaire surla façon dont cela aurait pu arriver?

    M. Charles Guité: Non. Monsieur Thibault, il faudrait que je regarde ce dossier-là. Le dossier de la Société d'hypothèque du Canada, si je me rappelle bien--encore que je peux me tromper--ce n'était pas des fonds du système, du budget des commandites. Dans ce cas-là, si je me rappelle bien quand M. Colet  qui était au Bureau d'information du Canada a rempli ce poste à la Société canadienne d'hypothèque, bien sûr il me connaissait très bien, on travaillait beaucoup ensemble. On a travaillé ensemble sur le référendum, etc. Quand il est arrivé là, il n'y avait pas d'agence de publicité en place. Si je me rappelle bien, M. Coleta transféré l'argent chez nous, de la Société canadienne d'hypothèque à chez nous et je l'ai remis. On a engagé Groupe Everest, si je me rappelle bien. Mais il me semble qu'il y avait d'autres compagnies dans ce dossier-là.

    L'hon. Robert Thibault: Dans la lettre que vous avez fait parvenir par l'entremise de votre avocat au comité et qu'on a justement eu aujourd'hui, habituellement les lettres sont lues dans le compte-rendu. Celle-ci ne l'a pas été pour une raison ou l'autre et on l'a seulement reçue aujourd'hui. Vous y indiquez que vous avez eu le sentiment qu'on vous traitait comme si vous étiez un fugitif. Est-ce que alors que vous étiez aux États-Unis, c'était votre temps normal de vacances et que vous êtes revenu au temps normal?

    M. Charles Guité: Je ne comprends pas votre question, monsieur Thibault.

    L'hon. Robert Thibault: Vous indiquez dans votre lettre, ou la lettre de votre avocat, que vous étiez traité comme si vous étiez un fugitif.

    M. Charles Guité: Oui.

    L'hon. Robert Thibault: Est-ce que cette vacance était prévu à l'avance et est-ce que c'était votre temps normal de vacance? Est-ce que vous avez changé vos plans?

    M. Charles Guité: Non. Depuis que M. Boudria a fait son commentaire, depuis que ce comité-ci a été mis sur pied, c'est sûr qu'il n'y a pas beaucoup de compagnies ou de personnes qui veulent faire affaire avec moi. Alors, l'année précédente, on a passé, je pense, trois mois dans le Sud. L'hiver dernier, on a passé presque tout l'hiver au Texas et en Floride encore un peu. L'année passée, on avait planifié et on a maintenant acheté une propriété en Arizona parce qu'on va passer tous les hivers en Arizona. Alors, ce n'est pas une vacance depuis que j'ai pris ma retraite. J'aime mieux plus 20 que moins 20.

    L'hon. Robert Thibault: Merci.


    The Chair:

    Okay, we're going to Mr. Mills, but before we move there the clerk has had copies made of the relevant portion of the Treasury Board Secretariat's Contracting Policy which will be circulated in a both official languages and a link to the pool policy, which is over 100 pages in length, will be sent to the members' offices. So we're now in a position to distribute that, which will be Contracting Policy - Part 3 of 31, dealing with exceptions and so on and we're able to distribute that now.

    Okay, that will be done.

    Mr. LeBlanc, a point of order.

    Mr. Dominic LeBlanc: Thank you, Mr. Chairman.

    I'm just wondering, I see the clerk got the document that Mr. Guité referred to, but it was only in one language. In the past, at this committee, sometimes you've asked for unanimous consent, Mr. Chairman, if the document could be tabled, although it's now in one language, and it could be translated thereafter. I'm wondering if you'd do the same in this case?

    The Chair: The contracting policy that I'm going to distribute is in both languages.

    Mr. Dominic LeBlanc: I was referring to the document that Mr. Guité had referred to that was only in one language.

    The Chair: Yes, okay, that portion is being distributed because it is in both languages.

    I was, in the past, asking for unanimous consent. I was doing that from the chair. There have been some objections by some members, but since one member is now asking that it be distributed in one language and one language only I will again ask is there unanimous consent that we distribute in one language? And if the answer is not then we will not.

    Okay, a point of order.

    Just a yes or no.

º  (1635)  


    M. Odina Desrochers: Un point de clarification, monsieur le président.

    On a parlé de tellement de documents ici. Nous en avons un en français, 10.2 Exceptions: Politique sur les marchés. Est-ce que c'est de ce document dont mon collègue, M. LeBlanc, fait référence?

    Monsieur LeBlanc, je m'adresse par le biais de la présidence.

    Le président: Non.


    10.2 starting “Exceptions to the contracting policy...” I believe are in both official languages and being circulated.

    What we're talking about are the documents that Mr. Guité has given to the clerk which I said I cannot distribute until such time as they are translated. I have now had a request by a member that they be distributed even though they are in one language only and therefore I'm seeking is there unanimous consent? And if someone says no then that will be the end of it.

    Is there unanimous consent?


    M. Michel Gauthier (Roberval): Monsieur le président, il y a une confusion quant au document. C'est une politique gouvernementale qu'a déposé M. Guité. C'est ça? On ne sait plus de quel document vous parlez. On voudrait bien vous aider, mais on ne sait plus...


    The Chair: No.

    Let me go through this again.

    The Contracting Policy Exceptions 10.2 has been distributed in both official languages. The issue is documents brought by Mr. Guité, which I have in front of me, and one is a memorandum to Bruce Young regarding Earnscliffe Research and Communications and the Government of Canada and others and these documents are only in one language.

    I'd said I would not distribute them because they are in only one language. There has been a request by one member that I circulate them. I have therefore asked is there unanimous consent that they be circulated in only one language? Yes or no?


    M. Michel Gauthier: Oui, monsieur le président, compte tenu que vous ayez demandé la traduction, elle sera fournie rapidement quand même.


    The Chair: No, there's quite a stack of documents. It will be Monday at the earliest I expect or maybe tomorrow. Doubtful tomorrow, but Monday.


    M. Michel Gauthier: Déposez-les, monsieur le président. On en a besoin pour travailler. Alors, vous pouvez les déposer.


    The Chair:

    Okay. Then there is unanimous consent. I'll have the clerk make copies and have them distributed within about half an hour or so.

    Mr. Mills, four minutes.

    Mr. Dennis Mills: Thank you, Mr. Chair.

    Mr. Guité, I'd like to have some explanation, your explanation around this issue of backdating invoices. I'd like you to try to explain the condition or your view of how you would justify or reflect the oral commitments that you gave to people over the phone or worked on already. Just explain to me this whole issue of backdating of invoices.

    Mr. Charles Guité: First of all, you can't backdate an invoice. You can backdate a contract.

    Mr. Dennis Mills: Fair enough. That's what I meant to say.

    Mr. Charles Guité: That's fine. I think that's what you meant to say.

    Let me explain how the system works. It's not only in communications, or advertising or sponsorship. In this case, in sponsorship, I don't think it ever happened. I think they referred to one instance.

    If a government employee or contracting officer, it could be me, it could be one of my contracting officers, and the case that I want to use here as an example, I think it was the Canada Bonds series in the fall of 1993. In those days, we only advertised Canada Savings Bonds, I think from October till the end of November. It was a very short period.

    So obviously, with the Chrétien government being elected in November, if I recall correctly--

    The Chair: October 25.

    Mr. Charles Guité: --October 25, so they wanted obviously to do a campaign on the Canada Savings Bonds. They needed an agency to do that.

    They called me and I said “Yes, we have agencies that are on a standing offer. We could use our current agencies”. Because of the urgency, the paying of that campaign was not done by Chuck Guité in sponsorship, it was done by the Department of Finance. So myself or one of my contracting officers, either Mr. Parent, could have said to the agency “Go ahead and start the work and we'll get a contract in place”.

    They may have worked two months, three months on this contract. In this case it could have gone five or six months. By the time the campaign is over, an invoice arrives at the Department of Finance to pay for the campaign. The Department of Finance says, well, as I've been saying all the way along “I can't pay it, there's no contract”.

    There are only two ways that you can now pay that invoice. You can do what you just said, you can backdate a contract. What would be identified on that contract, normally it would read “As per verbal direction of October 10, 1994, we've given direction to this company to go ahead with this work, therefore you can pay it”.

    The other way you can do it is what is called in a system, a “confirming order”. A confirming order is a little more complex because it has to go through a whole bunch of legal steps. So we could have said to finance “No, we're not going to issue a backdated contract, we think it's your responsibility, go through the confirming order process”. That's a very, very long process. It needs all sorts of legal input and so forth.

    Obviously, once an agency in good faith has delivered the Canada Savings Bonds and the Department of Finance didn't want them to wait another three, four, five months to get paid. So we therefore backdated the contract, which is quite legal and done, not on an ongoing basis, but it's done more than once and fairly regularly in many, many instances, not only in communications.

º  (1640)  

    Mr. Dennis Mills: Thank you very much.

    Thank you, Mr. Chair.

    The Chair: Okay, thank you very much.

    Now I'll go to Mr. Lastewka. Mr. LeBlanc, are you splitting your time?

    Mr. Dominic LeBlanc: Yes.

    The Chair: Okay. Mr. Lastewka, for four minutes.

    Hon. Walt Lastewka (St. Catharines, Lib.): Yes, with Mr. LeBlanc.

    I have a question that I wanted to get at. It's concerning the arrangements that you had with your advertising firms. You were kind of the kingpin of the sponsorship program. You had a number of advertising agencies.

    Your relationships with the advertising agencies, you had mentioned earlier that you had visited the agencies. I would expect that from time to time. You were involved with the sponsorship events to go to events. What kinds of gifts, or favours or freebies might you have gotten over that time when you with the sponsorship?

    Mr. Charles Guité:

    Not very many. I may have gotten a bottle of wine at Christmas or another gift. It could have been an agenda, or things like that but I never accepted gifts from agencies. And maybe this is the area that I've heard, I think either again through the media, that I got a trip around the world. Then it was a trip to California and then I think they might have got Japan in there somewhere.

    When I retired there was no question, there was a fairly nice farewell party put on for my departure from the government. There were a lot of public servants there that I've worked with for some 34 years. There were a lot of people from the industry, not necessarily all advertising. There were some from Public Opinion Research, there were some from public relations firms, and there were gifts given to me when I retired. They varied from a cowboy hat signed by a lot of people who I don't even know, even though I got the cowboy hat because everybody knows I'm a bit of a western guy. I love horses and riding and so forth.

    I was given a trip to Las Vegas from an agency and I think either the same night or the night after, I said to the Deputy of the day, who was Mr. Quail, “Ran, don't worry. I'm not going to take this trip” because I thought that was not acceptable and to this day I have not taken that trip.

    And I'll be very, very honest here. The president of the agency called me two years ago and I'll never forget the letter--and I tried to find it yesterday but I couldn't find it--at the bottom it had, “the gift was four days to Vegas, hotel included and airfare. P.S. No gambling money” and the agency called me, oh, a year ago and said, “Chuck, when are you going to take your trip?” and I said to the president of the agency, “Never”.

    So the gifts that I have received, like I say, a bottle of wine here or a bottle of wine there but nothing that would contradict the conflict of interest guidelines.

º  (1645)  

    Hon. Walt Lastewka: Was the atmosphere not, in the advertising business, that gifts be offered many times? Did your refuse gifts during the time of the sponsorship program?

    Mr. Charles Guité: No, because I think the agencies that I dealt with wouldn't offer me a gift that would not be acceptable.

    Hon. Walt Lastewka: Why do you say that?

    Mr. Charles Guité: Because I know most of those agencies very well. You've got to remember that I have not worked with those agencies for five or six years. Some of those agencies go back to 1984 so some of these people I know very well and over the years I can't remember an agency offering me something that was out of line that I would have to say, “No, I can't take that”.

    Hon. Walt Lastewka: Thank you, Mr. Chair.

    The Chair: Mr. LeBlanc, s'il vous plaît, quatre minutes.

    Mr. Dominic LeBlanc: Thank you, Mr. Chairman, and thank you, Mr. Guité, for your answers to so many questions.

    I wanted to touch, if I could, Mr. Guité, on two particular issues. One may be just a clarification. Earlier you mentioned Mario Lague in the context to a question from a colleague across. I don't know if there may be some confusion as to Mario Parent who I believe worked with you.

    Mario Lague, my information is, joined the government only in June, 1997 at FPRO or as it then was, Intergovernmental Affairs when Mr. Dion was the Minister, so I just didn't want there to be some confusion.

    Mr. Charles Guité: No, no, I think the question was not... When we talked about Mario Lague, that's who I meant and as I said, I'm not sure if Mario Lague was in PCO or FPRO or M. Dion, and in retrospect, M. LeBlanc, I think you may be right that Mario Lague joined the government when Minister--

    Mr. Dominic LeBlanc: Dion was--

    Mr. Charles Guité: --Dion became involved or became a minister and so forth, but I know Mario very, very well because I worked closely with him when he was at PCO.

    Mr. Dominic LeBlanc: Anyway, thank you, Mr. Chairman. I just didn't want there to be some confusion about that.

    Mr. Guité, I was hoping you could explain to us and correct a popular misconception that the various agencies that the Government of Canada used, be it for advertising or for the sponsorship program, either when it was done from the Unity Fund or subsequent to the actual creation of the program, there seems to be considerable confusion in many people's minds that these agencies were selected other than by an open public process. You referred to the MERX system. Now leave aside the exception which my colleagues went on the pre-referendum context.

    Could you go back to the advertising and management group, when you first became involved in this file in government, and tell us, for example, when Senator Murray was involved. Were agencies chosen by public open competition? How, typically, were agencies of record selected, either in advertising or in sponsorship?

    Mr. Charles Guité: How far back would you like me to go? I can go back as far as when I started the job which was about 1989 I think.

    Mr. Dominic LeBlanc: Please, please.

    Mr. Charles Guité: But I think in my opening comments I described in very broad terms how the system worked under the Mulroney government. It was very clear then how it worked. We had ... agencies were prequalified by a list, a questionnaire that would fill in. When it came time to have an agency competition, the chairman of the MG which was a political appointee would go down the list and pick five or six or seven firms to come and do the presentation for a competition. Once that was done, obviously that political appointee was not involved in the process because of again the procurement guidelines of the government.

    The committee in those days consisted of again two people from my staff, two people from the department or three, I forget, three from the department and it was chaired by a private contractor. At the end of the day, we had the competition no different than we did it now except now we don't have ... now we're totally open whereas before you were limited by the list that you were given by these political appointees.

    Mr. Dominic LeBlanc: When you say before, you mean before, in the Conservative government.

    Mr. Charles Guité: That's right. The system changed to what I would call more open or totally open when the Liberal government got into power and what they did, they took away the political appointee and when I think it was Mr. Dingwall in one of his minutes I've read talked about the policy and there was no policy before. No, there was a lot of policy before they were there. What happened when we changed the policy, it used to be right in the policy, that AMG would have on staff two regional advisors appointed by the political system.

º  (1650)  

    Mr. Dominic LeBlanc: Thank you, Mr. Guite.

    The Chair: Merci beaucoup, Monsieur LeBlanc.

    Mr. MacKay, please, eight minutes.

    Mr. Peter MacKay (Pictou—Antigonish—Guysborough, CPC): Thank you, Mr. Chair.

    Mr. Guite, what you're telling us then is that it went from one process of being, to use your word politicized, to a process where essentially you made the call after the input from various political consultations whether it be with Mr. Pelletier in the Prime Minister's Office or another minister. They gave you input. Then you made the decision.

    Mr. Charles Guité: Absolutely ...

    Mr. Peter MacKay: You consider that to be de-politicizing.

    Mr. Charles Guité: Absolutely not. What your mixing the whole process here, Mr. MacKay.

    The agency selection process under this current government has been the most open since I've been in that job. I'll tell you why because when we changed the policy that Mr. Dingwall referred to when he was here, yes the policy was changed. If you read it today, we had I think from about 1994 when a new policy came in, initially when the Liberals came in, we had to advertise the agency competition in what we call trade magazine, a marketing magazine. There's one en francais I think called a ...

    le grenier

    We would advertise that a department let's say Health Canada is looking for an ad agency. Any agency could raise up their hand and say I want to be considered. Then we would send them a questionnaire and we'd say okay, you've got to have a creative department on staff. You've got a media planning division and so forth. That lasted about I would say, I'd have to check it in the record, but I would say about a year.

    But as we wrote the new policy--we being the Government of Canada--and policies obviously of communication like that would involve myself, PCO, Treasury Board and so forth. I remember trying to argue with Treasury Board that there's no way we can put an agency selection on MIRCs and Treasury Board said, Mr. Guite, they're going to be on MIRCs.

    So today ...

    Mr. Peter MacKay: All right. That's your assessment of how ...

    Mr. Charles Guité: No, no it's not my ... that's how it works.

    Mr. Peter MacKay: I see.

    Mr. Charles Guité: So now all agencies are on MIRCs.

    Mr. Peter MacKay: I want to move on to another question.

    You referred earlier in your evidence the response to Mr. Desrocher's question about a phone call or perhaps several phone calls you received from a Terry O'Leary. Is that correct?

    Mr. Charles Guité: That's correct.

    Mr. Peter MacKay: Ms. O'Leary was working at the Department of Finance at the time.

    Mr. Charles Guité: She was chief of staff to the minister.

    Mr. Peter MacKay: Chief of staff to Paul Martin.

    Mr. Charles Guité: If I recall correctly, yes.

    Mr. Peter MacKay: And when she called, was she giving you this so-called input on contracts that were under your purview at the time?

    Mr. Charles Guité: Yes.

    Mr. Peter MacKay: So she was giving you advice as to what she felt or what the minister felt should be the awarding of contracts.

    Mr. Charles Guité: No, no. The advice in one case and I think that I've given the documents to the Chair. In one case somebody from the minister's office wrote and asked to add these agencies to a competition which we obviously refused to do because the process had already started.

    Mr. Peter MacKay: So was the letter a follow-up to the phone call? I want to be clear on that.

    Mr. Charles Guité: You know, I can't remember.

    Mr. Peter MacKay: The memo that you provided, at one point, page 3, section 7, it says,

We agree it makes the most sense for the strategy to be developed by Ginko/Groupe Everest in collaboration with the market researchers, rather than another ad agency. In addition, Ginko/Groupe Everest should also serve as project manager/co-coordinator for the public relations firms which are appointed.

    That's input from now-Prime-Minister Paul Martin's chief of staff to you on who should be hired to do the work and who the contract should be awarded to. Correct?

    Mr. Charles Guité: Requesting that we do that, yes.

    Mr. Peter MacKay: Yes, they're requesting that you use Groupe Everest. Was that the only time that you recall that the Prime Minister, the then-Finance-Minister's office, called to give you input on such a contract decision?

    Mr. Charles Guité: On advertising, that's the only one I can recall, but I remember having calls on research.

    Mr. Peter MacKay: On research and awarding of contracts for research?

    Mr. Charles Guité: No, that we should include, for example ... what's their name again?

    A Voice: Earnscliffe.

    Mr. Charles Guité: I think I said earlier this morning, the minister, being Minister Dingwall, received a letter from Mr. Goodale asking to exempt him from the policy, and we said no.

    Mr. Peter MacKay: I'd like to just stay focused if we could for a moment on this call from Ms. O'Leary. Did she indicate at any time, was the call directly with you?

    Mr. Charles Guité: Yes.

    Mr. Peter MacKay: Did she indicate at any time that she was calling on behalf of the minister?

    Mr. Charles Guité: I think I said earlier, she referred, “Paul would be happier if...”.

    Mr. Peter MacKay: “Paul would be happier if...” a certain firm was used, mainly Everest.

    Mr. Charles Guité: No, no, “...if you would concern ...”. No, I'm not talking about the Everest file now. I'm talking about research, Earnscliffe.

º  (1655)  

    Mr. Peter MacKay: Okay, you're talking about research.

    Mr. Charles Guité: In the case of the Everest file--

    Mr. Peter MacKay: And it was Earnscliffe specifically?

    Mr. Charles Guité: Yes.

    Mr. Peter MacKay: So, Ms. O'Leary from Paul Martin's office called and said, “Paul would prefer if Earnscliffe was used to do this research”?

    Mr. Charles Guité: Exactly. The memo that I've given you today--I can't remember who Bruce Young is--but I don't think that's from Minister Martin's office. This one. Here we go here.

    There's a memo here from Terry O'Leary that went to ... I think that's the one you were referring to, Mr. MacKay?

    Mr. Peter MacKay: That's the memo. It's dated, so that we're on the same page, May 30, 1994. In the opening line, it starts:

Just wanted to outline some suggestions from myself and the minister regarding the proposal for the 1994 retail debt strategy.

    When she says “the minister”, you're saying that was Paul Martin. (Inaud.) her department, the Department of Finance.

    Mr. Charles Guité: Well, who did she work for?

    Mr. Peter MacKay: Right. So it was Paul Martin, you would agree?

    Mr. Charles Guité: I would agree.

    Mr. Peter MacKay: Okay.

    Mr. Guité, in reference to the issue of awarding of contracts, there was a letter allegedly written by you in September--or, I'm sorry, I want to be very clear on this--a letter written in June 1999, in which it is alleged that you instructed Groupaction Marketing that if they had money that was unused or unaccounted for in the delivery of a program or a sponsorship program, if there was unused federal funds, that they should simply continue to use them for ongoing work, and not return the money if it wasn't used for specific purpose.

    Mr. Charles Guité: I'd have to see the letter, Mr. MacKay, and what file?

    Mr. Peter MacKay: All right. I'll give you a little context.

    The amount of $330,000 to Salon du plein air, Quebec City. This was, as I understand it, a fishing and gaming show. The allegation was that the gaming show didn't happen, therefore, the money wasn't used for that purpose. You wrote to them allegedly and said, “Don't return the money, just do some other work”.

    Mr. Charles Guité: No, no, no.

    Mr. Peter MacKay: You're saying that didn't happen?

    The Chair: Just a minute, Mr. MacKay, let him answer.

    Mr. Guité, you've got the floor.

    Mr. Charles Guité: I did write the letter. Obviously, if I signed it, I wrote it.

    Mr. Peter MacKay: I haven't seen the letter. I'm just asking if you wrote the letter, I haven't seen it.

    Mr. Charles Guité: Where's the letter if you haven't seen it?

    Mr. Peter MacKay: I'm referring to coverage of this in the Globe and Mail in September 2002.

    Mr. Charles Guité: End of discussion. I have no idea of what you're talking about.

    Mr. Peter MacKay: Oh, you have no idea of what I'm talking about. You just said you had a letter, Mr. Guité. You said you signed the letter.

    Some hon. members: Oh, oh.

    The Chair: Mr. MacKay, just a second, just slow down a bit.

    Mr. MacKay, you made some allegations based on .... Do you want to give a copy of that article to the clerk, first of all--

    Mr. Peter MacKay: Sure.

    The Chair: Just let me finish.

    Mr. Peter MacKay: Okay, Mr. Chair.

    The Chair: You are quoting from a newspaper article which suggests that Mr. Guité had written a letter. Just because he is referring to a newspaper article, Mr. Guité, if you have knowledge of the letter, you will speak about the letter. You can't say because it's coming from a newspaper article, you don't have to speak about it.

    Mr. Charles Guité:

    I definitely will speak about it, Mr. Chairman, because I remember the incident, or the occasion or whatever.

    What year was that, Mr. MacKay, 1997?

    Mr. Peter MacKay: The letter was allegedly written in June 1999. The article that I'm referring to, just for context, is September 19, 2002, Globe and Mail.

    Mr. Charles Guité: Now, do I remember that specific letter? No. Do I remember the incident? Yes. I'll tell you how it worked.

    We were doing that year, if I remember right, several outdoor shows, one of them being, the one that I referred to I think was in Quebec City.

    Mr. Peter MacKay: Salon du plein air.

    Mr. Charles Guité: Yes, that would be in Quebec City, I think. That event was cancelled. What I remember discussing, and again if I had the file, I'd be more specific. What I remember discussing either with Groupaction, was to take that money and give us more visibility in the other events.

    Mr. Peter MacKay: You wrote to Groupaction--

    The Chair: Mr. MacKay, your time is finished.

    Mr. Peter MacKay: --let me finish this line of questioning, Mr. Chair.

    The Chair: No, no. Your time is finished, but I will finish this thing. So you're saying automatically a contract was a contract, but don't worry about the contract. Take the money, spend it where you think it's better.

    Mr. Charles Guité: No, no. Not where you think it's best. I had input in where that money was going to go.

    I'll give you an example of this. Salon du plein air in Quebec was cancelled. There were I think two or three Salons du plein air happening in Quebec. There was one in Montreal, there was one in--I was going to say Rivière-du-Loup, but it wasn't Rivière-du-Loup--my direction to the agency of the time was “Give us more visibility in those other venues”.

»  (1700)  

    The Chair: So the contract was ignored and you wanted to do something else.

    Mr. Charles Guité: No, it wasn't ignored.

    The Chair: The contract said “This is what we're going to do”. That didn't happen. So what happened from that point forward?

    Mr. Charles Guité: I asked for more visibility in other events. It could have been more than one event, not necessarily just another event.

    The Chair: Okay. So the contract that you had was not fulfilled. So rather than cancelling the contract, not paying out the money, you just said “Well, we'll spend it in another way”.

    Mr. Charles Guité: No, not “Well, we'll spend another way”, “We'll get more visibility in other events”.

    The Chair: Well, that's another way, isn't it?

    Mr. Charles Guité: Well, fine.

    The Chair: Yes, that's another way. The contract would have said “I engage you to advertise the Government of Canada at this particular location at this particular time”. It didn't happen.

    So rather than saying “That's the end of it, we'll keep the money”, and so on and so forth, the contract was not fulfilled, you said, notwithstanding that, we'll just spend the money in another way, at another location at another time. Is that right?

    Mr. Charles Guité: I'll repeat. If I recall correctly and I'd have to see that file, that my direction to the agency at the time was to get more visibility in other events.

    Now I can't make any further comment because I would have to see the file.

    The Chair: Okay, well a very, very quick closing comment here, Mr. MacKay.

    Mr. Peter MacKay: Well, Mr. Chair, just in relation to this, I think we've seen another example of how reluctant a witness Mr. Guité is. When he is asked a question--

    The Chair: Okay.

    Mr. Peter MacKay: --if I could just finish, Mr. Chair. When he is asked a question, he immediately upon hearing that it's in a newspaper article, and he previously said yes, he remembers the letter, and that if he signed it, he must have written it. I'm looking on the wall, here, Mr. Chair, and it says “The spirit of the printed word”, sitting right above your head.

    The problem here is the spirit of the printed word was completely out the window. Everything was done orally. There were no written documents. There were files that weren't complete. That seems to be the entire problem here today.

    The Chair: Well, thank you, Mr. MacKay. You've got your comments on the record.

    Mr. Lastewka, you've got a point of order now.

    Hon. Walt Lastewka: Well, it's very simple and long, Mr. Chairman. I think we're here to question the witness--

    The Chair: Well, this is true.

    Hon. Walt Lastewka: --instead of attacking the witness. I think these questions should be put and the answers should be sought, not the attacks and everything else that goes with it. Mr. Chairman, I think you have a responsibility to this committee.

    The Chair: Thank you very much, Mr. Lastewka.

    Mr. Dennis Mills: On a point of order, Mr. Chair.

    The Chair: Just before we deal with your point of order, Mr. Lastewka, we are dealing with the Parliament of Canada where varied opinions are entitled to be stated here. This isn't an academic process, here. This is the Parliament of Canada where many different opinions are entitled to be expressed. He just expressed an opinion.

    Mr. Mills, you have an opinion, you have a point of order.

    Hon. Walt Lastewka: We're here to question the witness.

    Mr. Dennis Mills: On this reference to the spirit of the printed word that Mr. MacKay talks about--

    The Chair: Well, that's a concept. Yes.

    Mr. Dennis Mills: --I think that most members of this committee would realize that the fairness and accuracy of some of the reporting that has gone on with this file over the last two months could be challenged.

    The Chair: Well that's kind of away from...how it's being reported here is nothing that I have any control over. I just say that this is the Parliament of Canada where everybody has an opinion. Therefore, in addition to asking questions they are entitled to state their opinion as to the quality and the confidence of the answer.

    Madam Jennings.

    Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): I'd like some clarification both from the witness and from you, Mr. Chair. When the whole question that Mr. MacKay asked, if I'm not mistaken, the blues may correct me, said that you wrote, say to Mr. Guité, you wrote a letter concerning the salon derurure and at one point Mr. Guité said I don't recall. He said, well your signature is on it.

    Mr. Peter MacKay: Absolutely not.

    The Chair: Order please.

    Mrs. Marlene Jennings: Excuse me, Mr. Guité said, if my signature is on it then I wrote it. I also assumed that Mr. MacKay had a copy of the alleged letter in hand when he then said, it's a newspaper article which makes reference to the letter.

    So I think if I'm correct, the witness assumed and in fact asked, may I have a copy of the letter you're referring to? Is in fact that what happened because you did not clarify it to my point of view?

»  (1705)  

    The Chair: What I suggest is we wait until tomorrow morning, you raise that as a point of privilege if what you think is correct. We will have the blues at that point in time.

    Okay, Madam Jennings, it's your turn.


    Mme Marlene Jennings: Merci.

    Monsieur Guité, contrairement aux commentaires que je viens d'entendre de la part de M. MacKay--je n'étais pas présente, ce matin, à cause de mes fonctions à un autre comité--j'ai révisé les transcriptions de votre témoignage, ce matin et comme vous le voyez, je suis présente depuis que le comité a recommencé à 15 h 30. Je trouve que vous avez une mémoire phénoménale, compte tenu que vous soyez retraité du gouvernement depuis plusieurs années. Deuxièmement, selon vous, vous n'avez pas eu accès aux dossiers sur lesquels vous avez travaillé depuis que le Programme des commandites a débuté en 1997.

    J'aimerais revenir sur quelques points de votre témoignage de ce matin.


    In talking about the Auditor General's report, you said very clearly on page 58 that you were not trying to discredit the Auditor General, but that in some of the examples you were able to show that the Auditor General's conclusion was not the conclusion that you drew because you had access to possibly information and files that the Auditor General did not have access to. When I say information, I give you the example, you yourself say that for some of the sponsorships, the visibility, it would have been difficult to have something in the file, if there's a word mark on a skating ice rink or something like that, I believe those were your very words. So it's clear that if the Auditor General audited that particular file, the Auditor General would not be in a position to see that there was value for money. I'm pleased that you clarified that you're not trying to discredit the Auditor General, but that you're trying to complete information that you feel she may not have had at her hands.

    On the question of the interest earned, for instance, Everest Group, in the corporate account from the time a cheque was cut from CCSB, or from the government, was deposited in their corporate account they then cut a cheque to the ad agency, for instance, or to the event organizers. The Auditor General had a problem with the fact that there was interest earned on that money.

    Now Mr. Boulet who came here from Everest explained very clearly what that interest was and in fact the contracts that were signed never addressed the issue. Therefore, legally that interest could very well belong to Everest Group, but they decided not to go the legal route before the courts and simply paid it back not to make an issue of it. But that was an issue of the Auditor General.

    Did you at any time discuss that with the Auditor General when she presented you with at least part of her report?

    Mr. Charles Guité: No, absolutely not. In fact I haven't read Monsieur Boulet's testimony. But I would assume, if I can remember right, it seems to me that there was a clause in the contract with the AOR, because it is one of the bigger contracts that we issued.

    Mrs. Marlene Jennings: Agency of record, correct.

    Mr. Charles Guité: They would place millions of dollars on Media. If I recall correctly, now I could be wrong, there was a time delay that when Groupe Everest received the money they had to pay the Media--

    Mrs. Marlene Jennings: Within five days.

    Mr. Charles Guité: In how many days?

    Mrs. Marlene Jennings: Five days, according to Mr. Boulet.

    Mr. Charles Guité: Which I think is probably appropriate. It never came to my mind, and now that you mention that, that an agency like the AOR could receive $5 million-$6 million today from the government, keep it for five days, and then pay. Well, if I had $5 million in the bank for five days, I'd be happy.

    Mrs. Marlene Jennings: But it's not just that.

    Mr. Charles Guité: No, let me finish. I definitely wasn't aware that was the case. But then in now thinking of Chuck Guité having left the government. If I have a business and I receive money on a valid contract and I have a clause that says you're going to pay party number three within five days and my company ends up making a profit by doing that, is that illegal? It's not in a contract, I don't think so.

»  (1710)  

    Mrs. Marlene Jennings: That's the point I wanted to make.

    Mr. Charles Guité: And Mr. Boulet says he returned the money?

    Mrs. Marlene Jennings: He returned the money because they felt the legal fees to fight the government after the 2000 audit, etc., it would have cost them more than the $100,000 and something of interest that they earned over the years.

    The other thing is that it's not just the cheque gets cut by Media IDA or by Everest within the five stipulated days. Once it's received by say the event organizer--

    Mr. Charles Guité: They may not cash it for another three days, or five days.

    Mrs. Marlene Jennings: Exactly. Now, I want to go to another issue where you were hammered, unjustifiably in my view, on the question of Treasury Board rules where no one company could be awarded more than 25% of all government contracts. And that's why you say that you kept track, I assume you had a computerized system.

    Mr. Charles Guité: No. We did, and we had to report, if I remember--

    Mrs. Marlene Jennings: Every three months.

    Mr. Charles Guité: --on a quarterly basis to Treasury Board.

    Mrs. Marlene Jennings: That's right, every three months.

    Therefore when you saw that an agency was coming close to the 25% of all government contracts awarded say from January 1 to March 31, then say if you were awarding a contract on March 30 and you knew that there was $100 million of government contracts out there and one particular agency had received, to that point, $24,999,000.99, you wouldn't award it in order to respect and apply the rule. Is that correct?

    Mr. Charles Guité: That's correct, because we had to report to Treasury Board.

    Mrs. Marlene Jennings: Exactly. Now, in the next quarter, if another $100 million of all government contracts went out, then that almost 25% that agency had of the first quarter would now be reduced to 12.5%, in which case they would then be admissible under the Treasury Board guidelines for another contract.

    Mr. Charles Guité: Not within the same year.

    Mrs. Marlene Jennings: Not within the same year. Even if they were no longer at 25%.

    Mr. Charles Guité: If I remember correctly, and again I'd have to check--and the policy must still be there, exists on file somewhere--it read that no one firm will get more than 25% of the total government business volume within a one-year period. So, if an agency, let's say from January--and I think in a document somewhere I saw a couple of days ago--if the government did $150 million in advertising, one agency could not get more than 25% of that.

    Mrs. Marlene Jennings: Over the entire year.

    Mr. Charles Guité: Over the entire year, including sponsorship, including research. Because some companies do all, they'll do sponsorship, research and advertising. So at 25% they were basically cut off. So an agency in fact could get cut off. The fiscal year starts April 1, by the end of July we know the forecast is going to by xyz, they're up around 24%-25%, that's it, folks.

    Mrs. Marlene Jennings: Okay. Thank you.

    The Chair: Ms. Jennings, thank you very much.

    Mr. Jordan, please, eight minutes.

    Hon. Joe Jordan (Leeds—Grenville, Lib.): Thank you, Mr. Chair.

    Mr. Guité, I just want to go back to the Maurice Richard file. This morning I asked about the rationale behind using the agencies when we're essentially giving money from CCSB to the production company to make the movie. In response to that you said in the case of VIA and Canada Post you can not and you said, and I'm quoting here, how would I use the words, “I can not transfer funds from CCSB to Canada Post. To do that I would have to go through Treasury Board because that's taking funds from one portfolio, and even worse to a crown corporation”. What would have been the problem with going through Treasury Board? Is it a timing issue?

    Mr. Charles Guité: No, it's not a timing issue. That would mean that if I did that for Information Essentiel, why wouldn't I do that for every other sponsorship? Go directly and avoid the agency. The answer is very simple. We were doing I forget how many events a year when I was there, it was in the high hundreds and I had a staff of four in advertising and sponsorship. On the sponsorship file I think I had one and a half person. So obviously in those days the decision was made that we would do the sponsorship through the auspices of an agency in order to ensure that the visibility was taking place and once we installed--I think six, seven months after we started--the post mortem/picture, I didn't have the staff to send out to these events.

    Again, what I was trying to explain this morning, there are different rules about transferring funds in the government from one department to another or a department to a crown corporation, and it's not impossible. It's done and I'm sure it's done, not regularly, but it's done often enough. It's not a matter of delay. The problem here was basically lack of staff and I think I said it this morning, Communications Canada I think they're called now--I guess they're not called anything as of April 1--

»  (1715)  

    Hon. Joe Jordan: I think I'm getting that but I'm just wondering could CCSB have transferred the money for the production for the Maurice Richard series directly to the production company, or are you telling me that the advertising agencies did more than just pass that money through?

    Mr. Charles Guité: No, because then it would have become--how would I explain that? Te money that was allocated for sponsorship would go through an ad agency normally the way you do sponsorship and for me to transfer that money directly to Information Essentiel would have been a totally different process. Otherwise, as I just said earlier, why would I use an agency at all for any of those sponsorship programs? Why wouldn't I transfer it all?

    My argument here has always been and always will be that the agencies in doing those events for the Government of Canada-no question, on some of them, made a nice profit. On some of them they broke even and on some of them, they lost their shirt. Over all the Government of Canada got value for money and I will stick with that if I'm here for six months.

    Hon. Joe Jordan: Let's hope that's not the case.

    In terms of the exceptions then, you talked about the procurement policy, there are four exceptions, and you cited the third one, the nature of the work is such that it would not be in the public interest to solicit bids. Then a further explanation of that of exception C, “should normally be reserved for dealing with security considerations or to alleviate some significant socio-economic disparity”--I'll jump ahead but the thing I'm interested in here--“this exception should be invoked only with the approval of senior management as delegated by the contracting authority”.

    Was that decision to invoke that made by you as a senior manager?

    Mr. Charles Guité: No, I think it was made by the committee--myself, people from FPRO. Obviously one of my senior people who was seconded to FPRO was involved in that decision but it wasn't Chuck Guité is going to do it this way. No. I think it was discussed around the table. And again, if we're going to split hairs on those rules, you say security, confidentiality, whatever. I think--and I'm trying to avoid using that famous phrase--the issue we were dealing with at the time justified very well and I believe we did the right thing.

    Hon. Joe Jordan: Mr. Guité, just on that point and I'm not necessarily disagreeing with you but it is sometimes problematic to see things historically through a lens of something that happened in the mid-1990s--

    Mr. Charles Guité: Yes, 20/20 hindsight.

    Hon. Joe Jordan: I asked this of Mr. Pelletier when he was here and he touched on it, and you touched on it a little bit this morning. What exactly were we trying to counter with this program? What was going on in Quebec? And you don't need to get into the debate, but what was the other side doing that gave rise for the need for us to do something? You mentioned something about using the casino. What were you trying to counter?

    Mr. Charles Guité: Again, I think there are about three questions there and that's fine, because they all relate to one another.

    Obviously what we did pre-referendum--during the referendum, i.e., the months leading up to it, obviously, we were very concerned with what the gouvernement du Québec was doing, advertising the “Oui” versus the “Non” for the fédéral, and so we did all sorts of promotions in Quebec during that time. Now what were they? There were a lot of government ads running in Quebec. The famous billboards that we bought and ran government ads

»  (1720)  

    Hon. Joe Jordan:

    I guess my question is, what was the other side doing?

    Mr. Charles Guité: Who?

    Hon. Joe Jordan: What was the other side doing? What was their message?

    Mr. Charles Guité: Well, the other guy was promoting the yes side of the separatists.

    Now, the second part of your question is then, why did we carry on with that? Well, if you remember the night of the referendum, I remember it very well and I mean, I'm sure people from the Bloc remember it very well, but on an obviously different side of the coin.

    I remember the following morning the Prime Minister of Canada of the day, who was Mr. Chrétien, said that we will never let this happen again. We'll do whatever is possible that it never repeats itself.

    We lost the referendum by what, 1%, give or take? I mean, I won't go into the details of my involvement in the few days before the event.

    Anyway, to make a long story short, after the event , the day after the referendum, based on the Prime Minister's comment, there was a lot of discussion around the table. “We have to get a new set of dishes, folks” and one of the areas that was discussed was that the federal government is not present enough in Quebec. There are too many Québécois, Québécoise who don't know that in every village and every city there is a lot of federal money, i.e., there's a post office, there's a department and so forth.

    In discussions with this FPRO/my organization/PMO/minister's office, the idea of carrying on with the sponsorship program that had worked fairly well during the referendum was initiated. And I think again I'll refer to the comment I made this morning--this was supposed to last I think up until 1999 or 2000 and that program would then be off the table because if you did a survey today on people in Quebec who would separate from Quebec versus stay with Canada, I think you'd find a different response. It won't be 49% and I think mes amis québécois et québécoises realized that it's a good family, it's part of a good family, we are present.

    My advice to the Québécois would be, make sure you're well represented in Ottawa at the next election.

    The Chair: Thank you very much, Mr. Jordan and Mr. Guité and the clerks are passing around some motions that we will just wrap up our day with.

    Mr. Guité, there's no need for you to remain. You are excused but we will see you here at 9:00 o'clock tomorrow morning.

    Mr. Charles Guité: At 9:00 o'clock tomorrow morning?

    The Chair: At 9:00 o'clock tomorrow morning, yes.

    Mr. Charles Guité: And what's the schedule tomorrow, Mr. Chairman.

    The Chair: The schedule is 9:00 to 1:00 but we will break from 11:15 to 12:15--

    Mr. Charles Guité: For question period?

    The Chair: --for question period.

    The witness is excused and we're going to deal with three motions by Ms. Wasylycia-Leis and...what have you got there?

    Mr. Vic Toews: I have a motion as well.

    The Chair: Is that a notice of motion?

    Mr. Vic Toews: Yes.

    The Chair: Okay, I'll get to it. I already have the notice of motion by Ms. Wasylycia-Leis. We'll deal with that and I'll accept your notice of motion and then we'll wrap up, okay?

    Mr. Vic Toews: Okay.

    The Chair: Do we have everybody here?

    These were motions distributed by Ms. Wasylycia-Leis. There are three of them.

    Just a second. Would these cameras please move. This meeting is not adjourned.

    I'll get to you in a minute, Mr. Toews, if we can just get a little bit of peace and quiet here

    The motion from Ms. Wasylycia-Leis Tuesday, April 6 that the committee request Public Works and Government Services Canada to provide a detailed breakdown of the disbursements made under contract EP043-9-0037 with respect to the sponsorship of the Pan Am Games in Winnipeg in 1999. Of particular interest are the details of $1,591,420 in production costs.

    Madam Wasylycia-Leis, speaking to your motion briefly.

»  (1725)  

    Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP):

    Very briefly, it's critical that we get some details pertaining to this particular sponsorship file. It's particularly relevant given the comments today by our witness, Mr. Guité, who has suggested, in fact, that a pavilion was built, that a Canadian pavilion was designed and built for the Pan Am Games. My understanding is that's not the case, that simply an existing building at The Forks was redone in terms of the actual theme around the Pan Am Games.

    Mr. Speaker, I'm looking for details, not broad costs. I'd like a breakdown of the production costs.

    The Chair: Okay. That's very good, Ms. Wasylycia-Leis. We've been asking for all kinds of information, and I think that we'll agree to this one too.

    (Motion agreed to)

    The Chair: Moving on to the next motion, Tuesday, April 20,

that the Standing Committee on Public Accounts call on the Honourable John Gomery of the Superior Court of Quebec or someone on his behalf to appear before it to update the committee on the progress of his commission of inquiry as it relates to the Auditor General's November 2003 report.

    Speaking to your motion, briefly.

    Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.

    I would ask for the support of the committee with respect to this motion. I think that it's critical we get an update from either Judge Gomery or someone on his behalf to inform us about his plans for conducting an independent judicial inquiry into the sponsorship file.

    I would hope that committee members would support this because I think that it will enlighten our work and help to ensure that we aren't stepping over each other's toes, and that we have a sense of the fact that this is an inquiry in place that can do the work our committee is not equipped to do.

    The Chair: Thank you very much, Ms. Wasylycia-Leis.

    Mr. Jordan.

    Hon. Joe Jordan: Mr. Chair, I guess I have a bit of a problem with this. I think that we need to maintain the independence between the two processes.

    The public inquiry, from what I've read in the paper...there is going to be some kind of an update given publicly. There's certainly a lot of attention on this.

    Certainly we want to make sure we're not interfering with what each other is doing, but we managed to accomplish this informally with the RCMP. I think that, unless there's a pressing problem, we pursue that informal process. Calling a Supreme Court justice here is a precedent that I think we want to give some thought to.

    The Chair: Ms. Ablonczy.

    Mrs. Diane Ablonczy: As so often happens, Mr. Chairman, I find myself in complete agreement with Liberals opposite.

    Some hon. members: Oh, oh!

    Mrs. Diane Ablonczy: I do question whether it would be wise for us to examine the head of the commission, so to speak. Mr. Chairman, I would appreciate having some words of wisdom from our legal counsel on that point.

    The Chair: Mr. Walsh.

    Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons): Mr. Chairman, I believe there were some discussions with the mover of the motion with regard to the very point Ms. Ablonczy is now raising. For that reason, the words “or someone on his behalf” were inserted in anticipation that the commission counsel or co-counsel would attend, much like the RCMP officer did, and just apprise the committee of where things are going with that inquiry, and perhaps enable this committee to be sensitized to where there may be points of impact, one with the other, that it might be helpful to be aware of.

    The Chair: I think that in light of that, Mr. Walsh, we should, perhaps, wait until the inquiry is up and running before we actually move down that road.

    I'm going to call the question. All those in....

    One more intervention. Monsieur Guimond.


    M. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans): Merci, monsieur le président.

    Je suis entièrement d'accord avec le commentaire fait par M. Jordan à l'effet que cette motion, si elle ne peut être retirée par ma collègue du NPD, elle devrait à tout le moins être défaite pour les mêmes raisons que nous devrions préserver l'indépendance entre le judiciaire et le législatif. Nous sommes une « créature » de l'appareil législatif. Nous sommes un prolongement de la Chambre des communes, en tant que comité, et nous devrions garder notre indépendance par rapport à la Commission d'enquête du juge Gomery.

»  (1730)  


    The Chair: I give Ms. Wasylycia-Leis the final short comment.

    Ms. Judy Wasylycia-Leis: I realize I don't have much support for this motion; however, I want to suggest to the committee that this motion, by no stretch of the imagination, suggests that we lose any sense of independence.

    Let me just say, Mr. Chairperson, the intent of this motion is to reflect on the fact that it is today day 72 since the Prime Minister struck this independent judicial committee. It has yet to report, it has yet to begin to hear witnesses. We have become the only game in town and yet we are not designed to be a court of law, nor are we designed to follow the money.

    So I had assumed, Mr. Chairperson, that it would have been a constructive addition to the public focus on this whole critical issue to at least have an update, not from necessarily the judge, but from the office to hear the plans. Or perhaps maybe we should be asking the Prime Minister, then, to tell us what the heck he has set up this inquiry for if he had no intention of making it a reality.

    The Chair: Okay, thank you very much. And I'm not going to hear any more on this. I think you answered your own question. The last thing we'd ever want to do is to bring someone in here to the commission of inquiry to chastize them for the lack of progress. That is not our role. Therefore, I'm going to call the question.

    All those in favour of adopting the motion?

    (Motion negatived)

    The Chair: Moving onto the third one: That the Standing Committee on Public Accounts call on Ms. Donna Achimov, former employee of Public Works and Government Services Canada, to appear before the committee.

    Mrs. Jennings.

    Mrs. Marlene Jennings: Just a point of clarification, and perhaps Ms. Wasylycia-Leis or the clerk can, does this Donna Achimov already appear on the master witness list?

    The Chair: You don't believe so? She does not believe so. And we did have an agreement that it would be checked.

    Mrs. Marlene Jennings: You know what, Mr. Chair, one of the things we requested, that KPMG is supposed to be doing, is ensuring that any new motion that comes in does not duplicate a motion that has already been adopted by this committee. So I would think that the logical thing is a motion comes in with the name of somebody to appear as a witness, one looks at the master list, that this committee unanimous adopted, and, if the name is already there, says, “This is out of order. The person is already there”. If the name's not there, then says, “It's in order because it doesn't appear”. So I don't think the answer, “I don't think so”, is adequate.

    The Chair: The clarification that I have is the subcommittee on witnesses did actually interview Ms. Achimov--

    Mrs. Marlene Jennings: I know, I was there. That's not the point.

    The Chair: --and the decision was made the person would not be called; therefore, she was not on the list. But it does not preclude someone bringing the motion forward.

    Mrs. Marlene Jennings: I understand that. That was not the question that I asked.

    The Chair: I know. I said it was not on the list.

    Mrs. Marlene Jennings: The question I asked was: we have a master list we approved. Is this name on the list, or no?

    The Chair: And I have been advised that it isn't.

    Mrs. Marlene Jennings: So the answer is either a categorical “yes”, in which case this motion is out of order, or it's a categorical “no”, in which case the motion is in order.

    The Chair: And the answer it's not on the list--

    Mrs. Marlene Jennings: Thank you.

    The Chair: --therefore the motion is in order.

    Mr. Toews.

    Mr. Vic Toews: Well, I'm just a little surprised here at Mrs. Jennings' concern about calling witnesses without approval from KPMG. I thought, in fact, KPMG was going to be giving us a list of the witnesses, how we are going to be calling them--

    Mrs. Marlene Jennings: Do not misstate my words, please.

    Mr. Vic Toews: --and then we--

    The Chair: Madam Jennings, please.

    Mrs. Marlene Jennings: Do not misstate what--

    The Chair: No, Madam Jennings, Mr. Toews has the floor.

    Mr. Vic Toews: What I'm very concerned about is I thought all the witnesses were going to be put on a list by KPMG and the steering committee would deal with this.

    A couple of days ago, Mrs. Jennings walked in--

    An hon. member: Yesterday.

    Mr. Vic Toews: Yesterday--with a list of witnesses, to recall witnesses.

    An hon. member: On particular dates.

    Mr. Vic Toews: On particular dates. So I assume now that we have somehow abandoned what we had all agreed at the steering committee. Mrs. Jennings comes in, sets her own agenda, and now we have to start scrambling about putting these on.

    I'm just wondering, Mr. Chair, if we could, in fact, have KPMG bring forward a list before we start approving all kinds of witnesses.

»  (1735)  

    The Chair: That is very good, Mr. Toews. Yesterday, I received a notice of motion from Mrs. Jennings, and, of course, at that point, when we discussed the notice of motion, as we're discussing Ms. Wasylycia-Leis, these points are valid.

    Now, the name is not on the list because it was removed from the list. Ms. Wasylycia-Leis would like the name put back on the list and I was going to call the question.

    Mrs. Marlene Jennings:

    Mr. Chair, your misstating the facts. The name was not removed from the list. There was a list which was a master list, which combined Ms. Ablonczy's numerous motions with a list of witnesses, and a motion that I had with a list of witnesses, and that is the only list of witnesses that this committee has approved.

    I don't have a problem with Ms. Wasylycia-Leis' motion as long as I'm assured that it's not a duplication. I've just been assured categorically by one of the clerks that this name does not appear on the master list.

    So when you say it was removed from a list, you're not stating the facts accurately.

    The Chair: The decision was made by the steering committee that--

    Mrs. Marlene Jennings: Not to put the name on the list.

    The Chair: Okay.

    Mrs. Marlene Jennings: So it was not removed from the list, it was never on the list.

    The Chair: Well, the question, I'm going to call the question on the motion as circulated.

    (Motion agreed to)

    The Chair: Okay. Order, order. We're just going to get out of here with one final.... Can I have your attention, please, for one final...? Order, please, Mr. Toews. Mr. Toews, can I have your attention, please? Madam Jennings, can I have your attention, too, please? Okay, Mr. Jordan, can I have your attention, too, please? Thank you.

    This is a final motion that we deal with every year. This has got nothing to do with chapters 3, 4 and 5 of the Auditor General's report. The Treasury Board has requested permission from the public accounts committee to waive the publication of the details related to ex gratia payments for the fiscal year ending March 31, 2004, be granted for the following: the Merchant Marine veterans, heating fuel rebates, payments made to resolve claims rising from the Indian school system; on the provision that the gross amounts for each and the total number of claims are reported to Parliament in the Public Accounts of Canada.

    So that rather than having individual names, individual amounts, we have the gross amount and the number of claims only.

    Okay, Mr. Toews. We do this every year.

    Mr. Vic Toews: Is it a good idea?

    The Chair: It is a good idea.

    Mr. Vic Toews: All right.

    The Chair: The motion will be moved by Mr. Jordan.

    (Motion agreed to)

    The Chair: The meeting is adjourned.

    Oh, I'm sorry. Hold it. Mr. Toews gave me a notice of motion.

    Mr. Vic Toews: Yes. I just want to give you notice of motion:

That pursuant to its study of chapters 3, 4 and 5 of the November 2003 report of the Auditor General of Canada, the Standing Committee on Public Accounts call the following witnesses: Monday, May 3, 2004, Mr. Jean Carle; Tuesday, May 4, 2004, Honourable Don Boudria; Wednesday, May 5, 2004, Honourable Ralph Goodale; Thursday, May 6, 2004, Mr. Warren Kinsella.

    Thank you.

    The Chair: It is received as a notice of motion. Give it to the clerk. It'll be translated and distributed.

    Okay, the meeting is now adjourned.


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