Proceedings of the Special Senate Committee on the
Pearson Airport Agreements
Evidence
Ottawa, Monday, September 25, 1995
[English]
The Special Senate Committee on the Pearson Airport Agreements met this day, at 9:00 a.m., to examine and report upon all matters concerning the policies and negotiations leading up to, and including, the agreements respecting the redevelopment and operation of Terminals 1 and 2 at Lester B. Pearson International Airport and the circumstances relating to the cancellation thereof.
Senator Finlay MacDonald (Chairman) in the Chair.
The Chairman: Come to order please. We have a very distinguished panel with us this morning - I think we can call them distinguished academics - who will be testifying before us as a panel. Each one will have an opening statement, as I understand it, following which today we will also hear from the former Clerk of the Privy Council, Mr. Glen Shortliffe, who, in our schedule, is expected to come before us at 1 p.m. However, we're awaiting word; he may be able to make that 2 p.m., so we will have a little more time for lunch, and that will end the day.
This week, of course, we have Mr. Robert Nixon, the author of the Nixon report, who will be here tomorrow with his counsel. They will be with us Tuesday, Wednesday and possibly Thursday, if necessary.
That probably winds up the public hearings of this committee. I say "probably" because nothing is certain before this committee. There may be extra information we may require, which may cause us to call further witnesses. I just don't know. I don't think so. That's why I say "probably". I think this will be the final week.
If Mr. Nelligan will introduce our panel, we'll get under way.
Mr. Nelligan: Senators, we have three political scientists with us today. On the right is Professor Mallory, Professor Emeritus of the University of McGill. Next to him is Mr. John Wilson, who is a professor at the University of Waterloo. On the far left is Professor Andrew Heard of Simon Fraser University.
The Chairman: Gentlemen, you're aware that we're taking testimony under oath.
(J.R. Mallory, affirmed:)
(Andrew Heard, sworn:)
(John Wilson, sworn:)
The Chairman: Gentlemen, we haven't tossed coins as to how we will start, but you all have opening statements. Perhaps Professor Mallory might begin, please.
Professor J.R. Mallory, Professor Emeritus, University of McGill: Thank you Mr. Chairman and senators. I have prepared a brief statement - the older you get, the briefer you get - which is mostly a historical disquisition, and I'll leave it to my younger friends to carry on a much more detailed argument.
The question as to whether there is a convention of the Constitution which inhibits governments from making other than routine decisions in the period between the dissolution of Parliament and the date of a general election was raised by a Conservative candidate in the general election of 1953. He was Arthur Beauchesne, who had recently retired from his post as clerk of the House of Commons. In his new guise as a parliamentary candidate he wrote to the Ottawa Journal on July 1:
It is rumored that the Government intends to make some important appointments and to pass orders-in-council dealing with new policies prior to August 10. Let us hope we will be spared such disregard for constitutional government.
It has always been the practice in British democracies that the cabinet, in the period between dissolution and general elections, only acts in matters that are absolutely necessary for the ordinary conduct of affairs.
Our ministers are not now members of parliament for the good reason that there is no parliament. They are private citizens and some of them may never sit again in the House of Commons. In the United Kingdom the administration which happens to be in office during that period is call the "caretaker government" and its actions are limited to mere departmental routine.
A new government coming into power after the elections would be justified in cancelling appointments made during this period of parliamentary dissolution, to the Senate or the upper classes of the civil service; and it could also with perfect justification repeal any measure passed by order-in-council for which no mandate had been given by the late Parliament.
The doctrine is well-known and has been respected by John A. Macdonald, Laurier, Borden, Mr. Meighen and Mackenzie King. Surely Mr. St. Laurent is not going to trifle with it.
That's the end of Beauchesne's letter, which may have comforted such of the Conservative faithful as were in the habit of reading the Journal in those days. I was, and am still unaware of any evidence to support this well known doctrine. So I wrote to the Journal myself on July 3.
The constitutional doctrine stated by Dr. Beauchesne in his letter in your column on July 1, has the charm of novelty, though it lacks the virtue of accuracy...
I am unaware of any examples of this practice which, in any event, could only be destructive to effective constitutional government. It appears to be Dr. Beauchesne's view that ministers of the Crown are, after the dissolution of Parliament, only private citizens and that they thus have no right to carry out their responsibilities of office, save for "mere departmental routine". They are the Crown's Ministers, responsible to the Crown for the conduct of government. For them to lay down their responsibilities as the Crown's confidential advisers for the period of two months which must elapse between the dissolution of Parliament and General Election, would be for them flagrantly to dishonour their oaths as Privy Councillors and Ministers of the Crown. It was never contemplated that we have in effect no government at all for a period of over two months just because of the calling of a General Election. These are not times when any country could afford to be without effective government for such a period. In fact, the whole point of our system of government is that it ensures that there shall always be a body of persons responsible for the conduct of affairs.
It is possible that Dr. Beauchesne has confused two quite different situations. No one has ever suggested that a Government should in effect refrain from governing during the intervals between the dissolution of one Parliament and the election of another. There is, however, a sound body of constitutional precedent that a government which has been defeated at the polls should refrain from consequential policy decisions and major appointments... But this, surely, is a quite different state of affairs from that described by Dr. Beauchesne.
That is the end of my letter.
Governments do sometimes have to make large and difficult decisions in the middle of an election campaign. One example of many which will be recalled by some of you here, I think, who are almost as old as I am, was the decision of the Diefenbaker government to the devalue the dollar during the election campaign of 1962, an unhappy and embarrassing event for them.
The fact of the matter is that not many decisions in fact are made in the middle of an election campaign. It is rare for there to be more than one minister at a time in Ottawa. Mostly they are elsewhere, on the campaign trail. But crises do occur, whether in the money markets of the world or the corridors of the United Nations, and ministers will have to do their duty, forgoing for the time the demands of the election campaign.
But until the people have spoken in the polling booths, there is nothing in the law and convention of the Constitution which absolves them from the duty of making what decisions seem to them to be necessary. Whether those decisions are good or bad becomes a matter for the electorate to decide and a successor government can usually change them.
On the issue between Dr. Beauchesne and myself in 1953, I'm certain that I am right.
The Chairman: Professor Wilson, would you like to proceed.
Professor John Wilson, Professor, University of Waterloo: I'd be glad to. I am sorry to have to tell you that my brief is a little longer than Professor Mallory's. Being younger than he is, I'm allowed that freedom, I think.
There are a number of different issues associated with the authorizing and the signing of the Pearson airport agreements that you folks have been looking at over the past number of months, but I don't think there's any one, myself, that's more important than the one we're addressing today.
There are all kinds of issues about the merits of the agreements, about who was involved and that sort of thing, but I personally think that doesn't matter, if I may be allowed to say that. I think what really matters is what we're looking at now, which is the process of government itself. When it comes to the Constitution and the conventions which are associated with the Constitution, we get beyond the, if you like, nitty-gritty of political fighting and infighting. We're dealing instead with the way in which we manage our affairs and the rules and conventions which we are supposed to be following.
My purpose in making this presentation is to address the character of the constitutional conventions which appear to me to apply in this matter and I should say right at the start that I differ - profoundly is too strong a word, but I certainly differ with Professor Mallory on this question. It will be for you folks to decide whether that matters or not.
What I want to talk about, in short, is what is regarded as appropriate behaviour by Canadian governments in the period following the dissolution of Parliament and leading up to the ensuing general election.
At the very beginning, I think I ought to take a moment to say something that I'm sure is obvious to all senators, and indeed others here. What I'm talking about is not a matter of law, but a matter of custom, convention, usual practice, whatever you want to call it. I'm not going to refer to anything which is written anywhere in our various constitutional documents, but only to certain customs and conventions which we have observed, it seems to me, over the years, and which come to us as a consequence of our having inherited from Great Britain a parliamentary system of government. It is not too much to say that, in my view, the fact that we have a parliamentary system of government is the reason why this particular convention exists.
You all know, I'm sure, that if one were to believe what's written in the Constitution Act we would have to say the Governor General had absolute power. We know that's not true. But there is no mention of the Prime Minister; there is no mention of the cabinet, in the Constitution. Perhaps the most important, most fundamental, rule of all which underlies the operation of our system, the idea that a government which has lost the confidence of the House of Commons must resign, is not written down anywhere and yet, without it, we couldn't function properly as that kind of system.
The rules, if I can give them that title, which are involved in a decision by the Governor General to grant or not to grant a dissolution of Parliament remain unclear, in my view, to this day, although some scholars may argue that they were settled in 1926. Many of the most important rules of parliamentary procedure which are involved in our governance as well are in place only by custom. The list is quite endless. And yet, all of these matters are essential elements of a parliamentary system of government. The usage in each case is only customary and conventional, but it's part of our constitutional practice because we cannot make any sense of how we are governed without knowing about these rules, if I can call them that.
Debates about these kinds of questions can't be settled by reference to the law. Indeed, it all involves an understanding of practice over time. Professor Heard knows a good deal more about this sort of thing than I do, but I'll say a word about it.
The principal distinction between the law on the one hand and convention on the other, I suppose, is that there is an agency which determines what the law is or says - namely the courts - but there is no agency at all which deals with what custom and convention is.
Sir Ivor Jennings has set out, amongst many others - he's perhaps one of the best, in my view - set out more clearly than most commentators what is involved in these matters and I'd like to quote a passage from his cabinet government which I think has a number of points in it that I would like you to consider.
The fact that there is no authoritative tribunal for the determination of convention does, however, create difficulties. They grow out of practice and their existence is determined by precedents. Such precedents are not authoritative, like the precedents of a court of law. There are precedents which have created no conventions, and there are conventions based on precedents which have fallen into desuetude... Every act is a precedent, but not every precedent creates a rule... Precedents create a rule because they have been recognized as creating a rule. It is sometimes enough to show that a rule has received general acceptance. Persons of authority for nearly a century have asserted the right of the Prime Minister to choose his colleagues...
He didn't say, but that's not written down anywhere.
Persons of authority have never, so far as is known, asserted the duty of the monarch to grant a dissolution on request.
Now, it's important for what follows, I think, to recognize Jennings' assertion that it is sometimes enough to show that a rule has received general acceptance. In other words, conventions are not founded only on a series of prior events which may be regarded as precedents. They may also stem from the absence of particular forms of behaviour. To make the point in a different way, it might be said that the fact that a request for dissolution has not been refused by a Governor General in Canada since 1926 should simply be taken as evidence of the understanding of successive Canadian Prime Ministers that inappropriate requests ought not to be made rather than proof that the Governor General no longer has the power to refuse a dissolution.
Simply because nothing has happened or because nobody has said or done anything, there is no reason to assume that there are no rules in place about what is acceptable. The rule in question may say, in effect, that nothing should happen unless something ultimately to be regarded as unacceptable has taken place.
Thus, the fact that there appear to be no examples in practice in Canada to illustrate the play of the conventions governing the period following a dissolution of Parliament may therefore be quite irrelevant. If the principal convention exists in the form in which I will state it, we ought not to expect any examples.
What is known in some quarters as the "caretaker convention" - that's perhaps not the best word but it's the one that's commonly used - is easily described though it's generally not written down. It goes something like this: It's a well-established principle of parliamentary government that once Parliament has been dissolved and an election campaign is under way, the government's freedom of decision making is firmly restricted and should be confined to dealing with only routine matters of administration, apart, of course, from any emergency situation which may arise.
More specifically, it is said that three areas of decision making in particular should be avoided in this period: Matters involving considerable controversy; matters which are not urgent, that is to say, matters which can wait for a later decision without causing irreparable harm or damage; and matters where a decision would unreasonably bind the freedom of decision making of a future government. And some people will add a fourth case, although I don't know that I would myself, matters where there is going to be a very, very large expenditure of public funds involved in the decision that is made.
Now, there are two reasons for this restraining view of the period, both of which would appear to be obvious. The first is that if Parliament is not in session, and may not be for a somewhat extended period of time, the ordinary mechanisms for scrutinizing the government's behaviour - question time, debate on the adjournment, motions for supply, debate generally - are not available.
Everyone knows that in the parliamentary system the power of the executive is potentially enormous. That's an old saw that goes back to Political Science 101, if you like. It is the existence of these mechanisms of constructive obstruction, as Eugene Forsey used to call them, that takes the edge off that power of the executive and ensures the people that the government is being kept responsible. But if those mechanisms cannot be used because Parliament is not in session, there must be a compensating reduction in the usual extent of the power of the government, and the caretaker convention addresses that concern.
The second reason is, of course, that an election campaign always entails the possibility of the government's defeat and, therefore, the possibility that the government will not be able to take responsibility for the consequences of the decisions which it makes, and it follows that only the most routine administrative decisions, therefore, ought to be made in this period; decisions, that is to say, which any government might make, with the exception, again, of an emergency.
Some people object to this argument on the ground that during an election campaign the government is surely very much in the public view and hardly able to do as it pleases. I think when he was testifying on Bill C-22, Professor Heard made remarks roughly along that line on the usefulness of an election campaign as a place where a government is held to account.
One may wonder, however, and I'd be inclined to wonder, whether the daily media conference or the mindless scrum that occurs at each bus stop on the leader's tour is any substitute for the cut and thrust of the House of Commons led by knowledgeable and skilled practitioners of the art of opposition - such as John Diefenbaker - as a means of reigning in the excess of the government.
The point is made, if I may take a moment to tell you one of my favourite stories, by an exchange which occurred many years ago, in the fifties, over a meeting which had occurred in Bermuda between then President Eisenhower of the United States and Prime Minister Macmillan of Great Britain. They had been talking about mutual affairs. After the meeting was over, Mr. Macmillan gave a press conference and talked about what he said and thought and so on. When the press conference was nearly over, a young American reporter rose in his place in front of the stage and said: "Mr. Prime Minister, what do you think of this great American invention, the Prime Ministerial press conference?" And Macmillan, ever the gentleman, said: "I think it's absolutely wonderful; very clever of you to have invented it. You're very much to be congratulated." The young man, not recognizing the British politeness, stood up again and said, "Well, sir, if that's your view, do you intend to introduce the practice when you return to the United Kingdom?" Macmillan said: "There's no need to do that. We've had it for centuries. We call it Question Time in Parliament."
That makes the point that at question time in Parliament you get information, get results, if it's done properly, that you can't get from a media scrum.
There really is nothing to match, in my view, the effectiveness of the House of Commons itself as an agency for monitoring and limiting the purpose of the executive. The purpose, after all, of constructive obstruction, is to get the government to back off, or even perhaps to change its mind, and media scrums and the electorate have never had much success in accomplishing that end.
The British practice, I want to say a quick word about it, a quick word about the Australian practice, and then come finally to Canada.
The United Kingdom doesn't appear to have any evidence at all of the caretaker convention and practice. Jennings makes it quite clear that there have been occasions of what are called caretaker governments in a very limited sense, governments whose purpose is literally to do next to nothing in a very limited space of time, not to do anything at all radical, and that it's understood that they won't do that. An analogous case is the government of Malcolm Fraser in Australia after the Governor General removed Gough Whitlam from office. Fraser's job was literally to get the budget passed and then to have an election and get out. That's a caretaker government of a very limited kind. That's not what we're talking about, at least not what I'm talking about when I talk about the caretaker convention.
But in Britain, as you may know, at the end of the Second World War, Mr. Churchill was faced with the dilemma of fighting a general election when he had colleagues in his administration from both the Labour Party and Liberal Party. He thought that was awkward, so he decided the way out was to resign as Prime Minster of a coalition government, which he indeed did without consulting his Labour and Liberal colleagues, and then the king, in his wisdom, appointed him again immediately as Prime Minister of his own government with nothing but Conservatives in it and then they had an election and you know what happened. I don't know that there's any connection, but that was a caretaker government, and that's all there is in the U.K. case. Jennings says nothing at all about the case we're talking about, about what should or should not happen during the period between dissolution and an election.
But it's conceivable, or indeed highly likely, I would think, that the ancient principle of parliamentary sovereignty which, of course, exists in England - the rule that says no Parliament may bind a future Parliament - may very well be brought to apply in this case in the absence of anything to the contrary being said by a fellow like Jennings.
You know, it's often said that the British constitution is unwritten. I don't know the man's name - I wish I could remember it from my years in England many years ago - but a wag said that's not true. The British constitution is written; it has two sentences. They are: There shall be a Parliament. It can do anything it pleases.
That's the principle of parliamentary sovereignty. Parliament always is going to be able to have its way. Therefore, binding a future Parliament simply isn't possible. You can try it. It isn't allowed; it isn't acceptable, and there are lots of examples of other stories of that which I won't burden you with now, but they're examples of it in practice.
From that very general principle, I'm satisfied that we can easily see the deduction of a caretaker convention. If Parliament cannot be bound by a prior Parliament, it surely cannot be bound by an executive which was acting without the consent of Parliament, to put it very simply and crudely.
The Australian practice, of course, is explicit and clear. The Australians have, and have written it down, a convention called the "caretaker convention" expressed in almost exactly the terms that I expressed it a little bit ago; there not being a responsible chamber for the cabinet to answer to, the danger or the possibility of the defeat of the government in the general election and the consequences that that might have.
I won't burden you with reading it, but it's spelled out in many places. The place I found it is in the report for 1986-87 of the department of the Prime Minister and the cabinet in Australia, where they say that that is what they do and it's quite clear that it happens there. It has been going on since at least the 1950s with the government of Sir Robert Menzies, when it apparently was explicitly recognized, and it's done by understanding and cooperation in all the parties, whichever one is involved in office or in opposition.
The Canadian practice appears to fall somewhere in between. I'm glad that Professor Mallory quoted the exchange of letters between himself and Dr. Beauchesne in the Journal because I was going to quote them now I don't have to.
You were a little unfair to Arthur Beauchesne. He didn't say there ought to be no government at all. He said it should be a very limited government. He shouldn't have talked about ministers being citizens, of course. He was just trying to let on, I think, that Parliament wasn't in session.
But I think it's very important to recognize that those kinds of distinctions are there. I don't know if I want to jim hammer you with the peculiarity of the argument that it seems to me to have, but to say that you were then, and I think you still are, unaware of any example of this doctrine of caretaking in operation, is surely to concede the point. Why would you expect there to be an example? Even if there should be an example, does that mean that you expect that governments have in Canada, routinely, since who knows when, made radical and outlandish decisions in the period between dissolution and election without anybody saying anything? That would be an example of there not being a convention. That nothing has happened at all is, at the very minimum, a possible proof that in fact there is a convention, that it hasn't happened because people, with the exception you named, know better than to engage in that kind of behaviour. But you didn't make that kind of claim so maybe I can't hang you with it.
I was going to quote from The Structure of Canadian Government as a more contemporary example of what is the case, and maybe I should, because I do very much respect you as one of the authorities on the subject. What you said there, you'll remember, is:
When a government has been defeated at the polls or in the House of Commons, it becomes an obligation of all party leaders to assist in the formation of a new government. Until a new government can be formed, it is the duty of the old one to remain in office. While in office it still has the duty and the authority to govern, though a government which has lost the confidence of the people or of the House of Commons can only make routine decisions until a government which has the support of the House can be formed.
That doctrine would appear to support the proposition that a government which has not been defeated in the house, hasn't lost the confidence of the house, has simply said it's time for an election, like the government which existed in 1993 prior to the election, that kind of government can make any decision it wants on the basis of the proposition that it's still the government.
But surely that's not a completely consistent point of view. On one hand it is said that governments must always be able to govern - and you concede that - but on the other hand that they can do so effectively only if they have not lost their moral authority by having been defeated in the House of Commons or in the general election itself.
It seems to me that you're not talking, in fact, as you say elsewhere you want to, about the need for the Crown to be advised. You're talking about the proper moral authority of a government. You're talking about whether a government is entitled to govern. And what you're really doing, I think, is talking about democracy, to put it very simply: Do the people approve of this. And in those circumstances in which there's been a dissolution, for whatever reason, there's no way of knowing whether that's the case or not.
In fact, however, there does now seem to be - and all members of the committee will be, I think, familiar with what I now want to refer to - some indication that the caretaker convention is at work in Canada. The evidence given to this committee last week or the week before by the present Clerk of the Privy Council, Madam Jocelyne Bourgon, was abundantly clear on the question in several different places.
I would like to, if I may have the committee's indulgence, repeat - even though you've heard it before - these three or four passages because I think they're absolutely fundamental to understanding what we're talking about today.
She had this to say about the process of decision making in the case of the Pearson Airport agreements from her perspective as Deputy Minister of Transport at the time the end of the negotiating period was approaching.
But there was a need in my judgment at that point in time to satisfy ourselves that it was indeed the wish of the government to proceed. And that is not unusual by the way. I don't want to leave the impression there is anything unusual about that. There is a general rule of conduct to act with caution as soon as Parliament is dissolved. The purpose of seeking guidance is to make sure that those who have the power of making these decisions are the ones making those decisions as opposed to those who do not have the authority. So there was a need to ascertain that it was the wish of the minister to proceed, and that was clarified, and his will was very clear. And later on the same thing was sought from the Prime Minister.
And again, describing the different phases of the decision making process as the summer of 1993 wound down to its end, the fall:
From the end of August till dissolution of Parliament, September 8, we were still at the stage of converting this general agreement into all the component pieces and agreements required to give effect.
After Parliament was dissolved, what happens in terms of conduct for officials is that there is this general rule. It's not a law. There is a general rule that from that point on, you must act with caution. So the question comes, who is going to make the judgment as to whether or not you're cautious. Well, that's not a judgment to be made for officials. You go to your minister or the first minister, the Prime Minister, depending on the circumstances.
Now, in these observations, Madam Bourgon, you may say, seems only to be describing the appropriate caution which should be exercised by public servants in a period when partisan feeling is likely to be more in the air generally in Ottawa. But with her final remarks on this point she comes closer, I think, to the concerns I've been addressing. She describes two events which caused her to pause.
There was a statement by the Leader of the Opposition requesting publicly the Prime Minister to put everything - I think he used the expression - in the freezer. The day after...I believe there was also a statement by the Leader of the Opposition to the effect that he would wish, should he form the government, to review the approach.
These two events raised in my mind the need to receive guidance on the appropriateness of proceeding further, which is closure on the 7th, but this time from the Prime Minister. Because the Prime Minister is responsible for the behaviour of government during a period of election. And the call having been made at the level of the Leader of the Opposition, in my mind, it was not sufficient to simply ask guidance from the minister at that point in time....
Now, it's not for the Deputy Minister of Transport to get on the phone and call the Prime Minister and say, "I would wish to get guidance." You refer the matter to the clerk, whose job it is to make sure that we respect tradition and values and due process and so on. And when I raised my view with the clerk, the clerk was also of the view that it was appropriate to seek guidance from the Prime Minister. He did and gave me my instructions.
The fact that the then Leader of the Opposition had made remarks which indicated to Madam Bourgon that the agreements were a matter of controversy is what caused her to pause, but there's more to it than that and with this observation which I finally want to quote, Madam Bourgon effectively stated the existence, I think, of the caretaker convention in Canada. It was in response to a later series of questions from the committee during that particular hearing day.
I think controversy is not the only factor, if I may, senator. I think the general rule of conduct to act with caution during an election means that you would consider factors such as: Is it a transaction that is going to bind future governments? What is the - are there alternatives? Are there urgencies in the matter? Is there an obligation to act? Is there controversy? Controversy is certainly a factor, but I would simply want to say that it is not the only one you would consider, in which cases you would seek guidance. There would be more than one factor which would be considered.
I've deliberated quoted at length from her testimony because, in my view, what has happened with that testimony is almost a new chapter has been written in our understanding of the practices of Canadian government. We now have, from what I would regard as quite an authoritative source, a statement about the understanding that officials at least have of what goes on in this period which I don't think we've ever seen before. And it will certainly, I would think, come very much to be part of the literature as far as students of our system is concerned.
Just before I come to the end, I won't go into it but I do have a quotation which you've already seen, so I don't have to read it to you, from Mr. Nixon's report. You'll notice at the bottom of page 8 in the report he prepared for the Prime Minister he says almost exactly the same thing about the appropriateness of this decision and for the same reasons as I have been saying. And I guess I only want to observe that there are what professors and academics think and there are what public servants think. There are also things that long-time practitioners of the political system think, and Mr. Nixon, irrespective of anything else one might want to say about him, has been in the public life in Ontario for a very long time in the legislature, and of course his father before him. The Nixon family is a family of long public experience in public affairs and I dare say they have some knowledge, if not necessarily definitive knowledge, about what it's all about.
Let me summarize finally with these observations. It may be impossible to be absolutely certain on the points I want to mention now, but I'm unaware of any examples, and indeed I should be unaware of any examples in the years since the end of the First World War of governments in Canada in the caretaker period behaving with such reckless disregard for propriety as, in my view, Prime Minister Campbell showed when she authorized the final signing of the Pearson airport agreements on October 7, 1993.
The issue was very clearly one of considerable controversy. The then Leader of the Opposition had vowed to cancel the agreement if his party won the election, which ought to have been enough, in my view, on the basis of the examples I've described, to stop the process. An enormous amount of public money was involved, and the agreement locked the Government of Canada into a very long-term leasing arrangement which equally should have made it an inappropriate candidate for decision making in the caretaker period, and it wasn't urgent, as we now know, I understand.
But most importantly - and in my particular view of the way in which the system operates I guess I'm bound to say this - most importantly, I think, the decision was clearly made at a time when the Prime Minister and those around her must have known that her government was likely to be defeated. The Gallup poll published on September 22 showed the Liberals at 37 per cent and the Conservatives at 30 per cent, down from 36 in August. The Gallup poll published a month later, on October 21, put the Conservatives at 16 per cent.
Now, I don't have to see internal party polls to know that around October 7th, midway between those two dates, the government was very likely at 20 per cent, or not very far away from it. Whatever was being said for publication, I don't believe for one minute that the Prime Minister was not aware of that catastrophic political situation. The hard facts of the case must therefore be that she chose to authorize the signing of the Pearson airport agreements at a time when she knew that she would not be able to take responsibility for the consequences of that decision. And that looks very close to me like the work of a government which has already lost the moral authority to govern. To say that her decision was a constitutionally inappropriate exercise of power is, in my view, to put it mildly, but in the context of our customs and those of other parliamentary systems it, in my view, is also enough to justify whatever steps have to be taken to terminate the agreement.
Thank you.
The Chairman: Thank you Professor Wilson.
Now, Professor Heard, can you get in between these two gentlemen?
Professor Andrew Heard, Assistant Professor, Simon Fraser University: Well, we wouldn't be good academics if we didn't disagree amongst ourselves I suppose,
Senator Kirby: Chairman, I thought at least you would have congratulated Professor Heard on the fact that this is, I think, the first Nova Scotian witness - even though he's now living on the other coast - in the course of these hearings.
Mr. Heard: The debate over the contracts relating to the Pearson Airport agreements raise several questions about the behaviour of political actors, how they should be governed and what sort of limits are placed on our political leaders.
I've been asked to talk specifically today about the circumstances surrounding the signing of the contracts, and especially the timing of the signing. My remarks will focus on just one specific controversy, and that is, did the signing of the contracts almost three weeks before election day contravene a constitutional convention.
In my view, there are two identical answers to this question, even though these two answers are arrived at by using two different approaches to identifying the existence of a constitutional convention.
Using a traditional method that relies on historic precedent, which we've heard about, I come to a firm conclusion that there was and is no convention to prohibit the signing of contracts prior to election day.
Another approach, which is one that I have developed, bases convention upon constitutional principles, but also leads to a negative conclusion, but there may perhaps be a certain air of ambiguity left.
I'll work through the methodology and analysis of these approaches and, in doing so, hope to provide some insight into the nature of conventions as well as the kinds of constraints that face a government in its last days.
The first approach to identifying conventions is a traditional one based on precedent, and this was most explicitly formulated by the British constitutional authority, Sir Ivor Jennings, when he wrote that in order to identify a convention we should ask three questions:
First, what are the precedents; secondly, did the actors in the precedents believe they were bound by a rule; thirdly, is there a reason for the rule?
That comes from The Law & the Constitution, (5th.ed.), 1959, page 136.
Historical precedents are central to this approach, and this approach was endorsed by the Supreme Court of Canada in the Patriation reference. Key to this is the existence of some historical precedents, an incident related to relevant practice or application of rules. The late Senator Forsey underlined the role of precedent when he wrote:
A constitutional convention without a single precedent to support it is a house without any foundation... indisputably at least one precedent is essential. If there is no precedent, there is no convention.
That comes from The Courts & the Conventions of the Constitution, 1984, volume 33, UNB Law Journal, page 341.
Using this approach, one has to look for a relevant precedent. And for the task at hand we need to look for precedents relating to the signing of contracts or some equivalent during an election campaign.
This is where we run into a difficulty. Because in searching Canadian and British authorities I found no explicit debate over these sorts of issues outside of the incident Professor Mallory was discussing. But I don't think there's been any explicit extended discussion of the issue of the conduct of a government during an election campaign period. There are no normative observations in the constitutional authorities or in leading memoirs about this constraint on a government during a campaign period. This is a difficulty for us in this instance because we're faced with no direct precedents and the question emerges; does the lack of precedent indicate the observance of a rule by abstaining from an action, or does it indicate there is no rule in the first place.
I would argue that the evidence suggests there was no rule. There has been no discussion, even by third parties, in constitutional literature in Britain and Canada on the conduct of governments during an election campaign period. The precedents that have been discussed by authorities relate to limitations on the governments after the election when the results make it clear that the governing party has been defeated and another will be called upon to form the government. The key to these precedents and these sorts of discussions are that the government has been defeated in the election, and that's quite a different situation from the general campaign period.
I should add that another example of that would be a period after a government had been defeated on a clear vote of confidence in the House of Commons, which again does not apply in this situation.
But looking at the instances of defeated cabinets, or cabinets that have been defeated after an election, modern authorities look with approval upon instances when either the Governor General or the Lieutenant Governor refused to sanction appointments either to the bench or to the Senate when these appointments had been advised by a cabinet defeated in a general election.
The notable federal precedent was set by Lord Aberdeen, as Governor General, who refused to act on Sir Charles Tupper's advice to appoint some judges and senators after his defeat in the 1896 elections. And there are several provincial examples as well where Lieutenant Governors refused to make certain appointments advised by cabinets who had been defeated in a general election. And the examples I came across were Nova Scotia in 1878 as well as 1882, New Brunswick in 1908 and Quebec in 1986. In all these occasions the Governors believed the cabinet should not try to make these appointments. There's one contrary incident in 1905 when the Ontario cabinet succeeded in having some appointments made, but there was a great hue and cry at the time which I take as an indication that the general consensus was this was a contravention of the rule.
So these precedents all reinforce the general principle of responsible government - the reason for the rule - that cabinet has the right to have its advice acted upon so long as it has not been defeated at polls or in a clear vote of confidence. If a cabinet loses the confidence of the house or the electorate, it must limit itself to conducting routine business, but that is a different situation from the one we're facing here. The government had not been defeated either in the House of Commons on a vote of confidence or, as yet, at the polls.
So using the traditional approach to conventions based on precedents, I'd have to conclude that the government defeated at the polls has to limit itself to routine affairs, but until such time as a cabinet is defeated, however, it has complete freedom, in convention, to act as it pleases. And I hasten to add that to say that there is no conventional limit upon the government does not mean there are no limits or constraints upon a government, but those are limits based on prudence, good politics and common sense, and we must distinguish that from an obligation based on constitutional convention.
So that's the first approach based on historic precedent. We have a lack of incidents, a lack of commentary and where there are commentary and incidents they go to the situation of a government that had been already defeated, not one that remains as yet undefeated.
Now I have a certain disquietude with the traditional approach to conventions and I argue that we shouldn't be bound by historical precedent. The problem we have with constitutional convention based on the traditional approach is that if there's a precedent it seems we must follow it, and I'm not so certain that we should be automatically bound by a convention say dating from the nineteenth century simply because it is the one clear precedent that occurs. Constitutional views change considerably over time.
The particular problem we have in this instance is situations where there are no precedents, no explicit action on the part of actors that are relevant to the situation. Does this mean the political actors are free to do as they wish and declare, "Well, there's no precedent, so there's no convention, therefore I can do as I wish"? In my view, precedents are useful but they shouldn't be determinative. They provide a helpful window on the debate over our constitutional principles but I would argue that they are not essential for a conventional rule. I argue that there are principles in our constitution that bind political actors even in the absence of a direct explicit historical precedent.
An example would be no Prime Minister is going to advise the Queen to appoint him or herself as Governor General. That hasn't happened; it won't happen. What prevents that? Fundamental constitutional principle.
For me, the distinguishing feature of conventions that separates them from mere habits and usages is that conventions support important principles of the Constitution. I argue that in the absence of precedence we can, and in practice we do, turn to basic principles for rules that bind our political actors.
So in looking at the signing of contracts by a cabinet during an election campaign I'd want to examine what constitutional principles were involved. And here we find the most important one relating to responsible government. The legal authority of the Governor General is exercised in practice on the binding advice of a cabinet who can command a majority of seats in the House of Commons. That's the most fundamental rule of parliamentary democracy. If a cabinet loses the confidence of the house, it must either resign or advise that an election be held. And until it wins the confidence of the electorate, the cabinet can only carry out limited decisions. This limitation arises because it has lost the confidence of the house. If a cabinet clearly loses a general election, it must offer its resignation and limit itself until a successor is appointed.
Now, turning to the case at hand, in the instance of the signing of the Pearson agreements, there was a cabinet formed by a new Prime Minister who had not met the house after her appointment. She had not been defeated in a vote in the House of Commons; she had not as yet been defeated in a vote in the electorate. She led a party with a majority in the house and there is no doubt that had she met the house she would have won any vote of confidence. I've seen at no time suggestions that a new Prime Minister or premier need to limit themselves until they have met the legislature and won a vote of confidence. Prime Ministers and premiers are frequently replaced by internal leadership selections and once they win the leadership race and are appointed Prime Minister, they simply carry on.
The only instance where a related concern was raised came with the spate of appointments that accompanied John Turner's accession to office in 1984. Here the argument was that a government in its dying days should constrain itself, that John Turner should not have made those appointments because he was about to face the electorate. Such an argument I believe is unfounded since the Parliament at that time had about a year to go before an election had to be called. I believe it's nonsense to suggest that John Turner could not make any appointments for a full year. Many people did not like the large grouping of appointments at that time, but it's a question of public policy, not a matter of constitutional convention.
So my conclusion based on principle is that a cabinet is free to do as it wishes until it is defeated either on a vote of clear confidence in the House of Commons or in a vote in the general election. Until that time, there's no conventional restraint upon it.
At this point I'd like to go one step further and say, let's just assume that I might be mistaken in that conclusion and what sort of limitation might there be upon a government.
I think there it's useful to turn to the discussions we've referred to about the behaviour of defeated governments. So the limitation on a government during an election campaign wouldn't be any worse than or stronger than the limitation of a defeated government, and what sort of limitations are there on a defeated government?
The clue here lies in comments that Peter Hogg made in reviewing the incident between Sir Charles Tupper and Lord Aberdeen in 1896. Hogg wrote:
...the Governor General had a discretion to refuse to concur in an important and irrevocable decision which could await the early and inevitable formation of a new government.
That's from Constitutional Law of Canada, (3rd.ed,) 1993, page 253.
The key phrase in that quotation is important and irrevocable. What Peter Hogg was saying is that the defeated government cannot make important and irrevocable decisions, and I believe that's a very sensible distinction.
There's no major problem so long as the new government can undo the decisions made by the outgoing government. Defeated governments cannot and should not make irrevocable decisions.
So if one concedes, for the sake of argument, that a cabinet must avoid implementing certain decisions during an election campaign period, then the sorts of decisions that are prohibited are important and irrevocable. And as we see with Bill C-22, the Pearson contracts are not irrevocable. One can debate the means chosen to revoke the contracts, but a successor government and Parliament clearly have the power to revoke these contracts.
In conclusion, I would argue that the signing of the Pearson Airport agreements did not contravene any constitutional conventions, whether those conventions are founded upon precedent or upon constitutional principle.
Senator MacDonald: Thank you very much, Dr. Heard. We have two questioners, Senator Jessiman and Senator Stewart.
Could I ask this one question before they do? I remember your testimony before the Legal and Constitutional Committee which I found very, very interesting. It is not assumed, it is a fact that in the BNA Act that the Senate has the legal and constitutional rights to defeat a bill of the elected house, but convention over the years, has taken away that constitutional right and left the Senate only with a legal right. Is that not an accurate statement?
Mr. Heard: Yes, I would argue on that occasion that the Senate has the legal right to veto any bill coming from the House of Commons. But in my view, convention has limited that right, so the net constitutional power is one of suspensive veto.
The Chairman: Right. And that in the event that the Senate does defeat, veto or kill a bill of the elected house, there is no sanction upon that action except a political sanction?
Mr. Heard: That is correct. And it is the absence of that sanction which provides the rule that there is no accountability to the public for the action taken by the Senate.
The Chairman: Thank you. Senator Jessiman?
Senator Jessiman: I address this to all three of you just so you might explain to us. Let's assume there was a convention. We can assume the government was defeated in the house and they went ahead and did what they did in this particular case. They were defeated in the House and they had to call an election, and during the election they did what they did, they signed a contract that had been going on for a number of months. What is the position legally?
Mr. Mallory: Well, everyone is looking at me. I do not know that it makes any difference legally.
Senator Jessiman: Does convention at some point not lead to where we have laws that kind of confirm that that is what you have to do?
Mr. Mallory: A convention is in effect a moral sanction except in the very rare cases - and I can think of two or three - where a convention has in effect been adopted by a court so it becomes part of the constitutional law of the country. Normally a court will not enforce or recognize a convention, and that I think is something that the court should remember and refrain from doing if they can help it. But you put a situation of the government that had been defeated in the House, in other words this means in most cases we have had a minority government and in the course of the election campaign it does something, signs a contract, does something which perhaps you and I would regard as unseemly.
That incurs no legal sanction against the government as such, but we would I think regard it as a breach of the convention. The quotation from me that John Wilson threw at me more or less says that, that a government that had been defeated in the House and was therefore forced to dissolve is more inhibited by convention than one that, after all, with perfectly serene position in the House and plenty of seats in the majority, is still the government in every sense of the word until polling day.
Senator Jessiman: Are there any instances where a court has recognized the conventions of - you signed this contract, you were defeated in the House and you are now - they may have been defeated in the polls as well and you have signed this contract, before you hand it over the raids of government, are there any precedents at all where the courts themselves have said under those circumstances that is not a valid contract?
Mr. Mallory: I can't think of a case where that happened. There was a case that I do not remember very well because I was basically still being educated at a university at that time, but when the Liberals won in Ontario - Mitchell Hepburn - there was a great brouhaha about cancelling highway contracts and, as I recall, hydro contracts which caused a good deal of fuss and litigation. I do not remember how it came out. However, I think it would have been noticed if the courts had said something there that in any way inhibited the right of the successor government to do what it pleased.
Senator Jessiman: Thank you. Do you want to say something?
Mr. Wilson: The problem in Ontario that Professor Mallory refers to, of course the Hepburn legislation contained within it a stipulation that there could be no court action taken by the people who were grieved by the cancellation. Of course that is another question.
You question the defeat of a government. In 1979 when the Clark government was defeated in the House, there was pending a decision with respect to the acquisition of a fairly large number of jet fighter bombers that was going to cost a pocket full of money. Cabinet had agreed, the relevant committees had agreed, et cetera, and then came the defeat in the House.
The reporters, the press, whatever, asked Clark the next day, what are you going to do about that? He said - I am doing this from memory - I do not believe that government which has lost the confidence of the House of Commons has the authority to make that decision. If that had been the case in the fall of 1993, if the Campbell government had lost the confidence of the House, arguably she should have said the same thing. But of course that is not what happened.
Now, had that happened and she went ahead anyway, the only recourse was the Governor General, not the courts. The courts don't generally touch conventions. You remember how fussy they were about touching the convention of how many provinces are needed to agree on repatriation of the Constitution in 1981 or '82. They just don't want to do that sort of thing because they are hard to handle. And if the Governor General was not prepared to intervene and say, I am sorry you can't do that, I will not let you, then it gets done.
Senator Jessiman: I would like to direct this next question to you, Professor Wilson. This was a policy of this government going back to 1985 and then actually in 1990, three years prior, they had announced that they were actually going to call request for proposals to privatize T1 and T2. Three years have passed and from January right through to July, or the end of June, they had been negotiating this contract and they had actually signed the document which set out all the principles, said it was not a legal and binding document but it was an agreement that set out the various principles and said it was subject to various things including getting an Order in Council.
Now, the cabinet looked at this in August. They got the Privy Council to approve of it on August the 30th and the resolution was actually passed, Order in Council passed, authorizing the minister to sign. The evidence before us, certainly a great deal of it, would indicate that certainly the parts, both the government and certainly the parties on the other side felt once they had gotten to that stage where the Order in Council had passed and the documents still had to be prepared to actually be signed at some later date chosen long before the election was called and were matters that did not go to the substance of the contract, because if anything was to be changed that was of any importance, it would have to be referred back to the Privy Council which the evidence says was not the case.
Now, Mr. Nixon said there were 20 agreements. We had testimony that said there were 65 agreements, and we had testimony that there were 110 different documents, but the terms were all agreed to in August before they actually had a call of an election.
Now, surely when you get to the point where all they need now - and at the time that Mr. Chrétien on October the 6th gave notice, although I did not know certainly at the time nor actually until a few weeks ago sitting here, that the actual documents had already been signed before October the 6th. They were signed by both parties, either on October the 4th or October the 5th. The Prime Minister was not asked to give approval to signing. That had already been done. What she was asked to do was to have the necessary documents signed that released the documents from escrow.
So, my question to you sir is, they are not a caretaker government at the time all this is being worked on for three years. Everything has been approved in principle and got cabinet and Privy Council authority. Surely, you cannot say by the actual execution some time during the election that that is a caretaker convention that you say - and you are the first one that suggested this in any of the reading I have read and I have read quite a bit - that in this particular case the government should have said, well, we will not release the documents from escrow. The evidence before us is that the government would have been sued in any event.
Senator Kirby: Before you reply, I do not want to get into a long argument about the facts here, but the reality is that the documents that were signed on the 7th of October consisted of not just release from escrow, but in fact the signing of a number of agreements, including in particular the Allders agreement. That is the first point.
The second point in any event, there is the question, it seems to me, whether or not the minister should have signed on October 4th which was only 21 days before the election day. So if you are going to address the question, I think it would be helpful to the committee if you addressed it in the context of not merely the signings on October the 7th, which included some contracts and the release from escrow, but far more importantly the signing of the papers that the minister himself signed on the 4th of October, 21 days before the election when according to your own document it was very clear the government was going down to defeat.
The Chairman: Let's assume then, in deference to Senator Kirby's point, let's assume that Senator Jessiman is asking you a hypothetical question, that a clear document existed, a clear contract existed which I gather the question was will it not been carried out at that time had it been rebuked?
Mr. Wilson: I am not a lawyer. I am going to respond as a political scientist. The first thing that appears to me is what was necessary was the Prime Minister had to give authorization. If her authorization was necessary to conclude the deal, it was necessary to conclude the deal and that is the end of the story. Had it not been given, it would not have been concluded, whatever states it might have said to be in. I presume that that is the case, otherwise I do not know what she is involved in it at all for.
I want to put it in a more political - with a small "P" not a partisan a more political - context rather than a decision-making context or a legal context which I do not see it in. I do not want to put it in a conventional context. I think Professor Heard and I probably agree I am maybe misusing or overusing the word "convention".
What Madam Bourgon tells us is that once dissolution occurs, it is the custom - I do not know how else you can describe it - to show restraint. She tries to define what that means. I am going to hang around this afternoon, I hope you folks ask Mr. Shortliffe what he thinks about it if he will say because we need to know. We don't know what the customs are. But the apparent evidence is that within the public service, that dissolution means something.
All I will say to the political actors in the case is that if you were going on with this game, those people, not you people, for three, four, whatever number of years it was, and I know that that is true. The discussion began in 1990 if not earlier.
Senator Jessiman: 1985 but then 1990 for these particulars.
Mr. Wilson: If that is so, and particularly in 1993. You mean you can't count? You know that in the fall of 1993 there has to be an election constitutionally because there was one in 1988. You don't know that that inhibition is on the horizon? If you know it why don't you hurry up the negotiations? Why don't you get through them?
Then I am concerned of course that whatever was agreed over the summer period had not been revealed to Parliament. This is where I become very excited about it. It is not that cabinet can't do what it wants. It is in the caretaker period because Parliament is not sitting. There is no agency in the name of the public, if you like, to review what the government is doing.
With respect to Professor Heard who took a slightly different stand over Bill C-22, I don't think the election itself is that kind of agency. I have never thought that the daily press or the weekly press is fit - I say this with respect to the members of the Fifth Estate who are present - is fit to do the business of questioning of the government on a daily basis. They never get anywhere. You only need look at what happens in the United States at presidential press conferences to see how ineffective that tool is as compared to the question time in the House of Commons when it is used properly. That is what worries me is that that had not taken place. Because that is not possible when Parliament dissolves, so the Australians say, we need to show restraint. That is their whole reason. Compensation for the fact that Parliament is not there to do the digging.
A government that felt confident of re-election could have happily waited another three weeks until the end of the election to then settle the matter. A government that knew it was not going to get re-elected, in my view, ought to have said we shouldn't do this for the same reason Joe Clark said he shouldn't; not because we were defeated in the House of Commons, not because we lost the election, but because we are about to. It is not a legal view at all.
Senator Jessiman: The idea about getting permission or getting first the documents signed by the minister himself and later then the release from escrow by the Prime Minister was really, as I understand it, was in the mind first of Mr. Rowat who discussed it with Mme. Bourgon and then who discussed it with the Clerk of the Privy Council, but the fact -
Mr. Wilson: She discussed it with the Clerk of the Privy Council.
Senator Jessiman: And then I assume the clerk spoke to the Prime Minister because the necessary documents were forthcoming. But the fact that those three individuals in this particular case, because of all the publicity in the press, because all this was really before the Leader of the Opposition made that announcement on the 6th, and surely that does not make it a convention?
Mr. Wilson: It may not make it a convention if one wants to be rigid about the term. That is not what Madam Bourgon said. She said explicitly, I got worried because I heard the Leader of the Opposition making it a controversy.
Senator Jessiman: On the 6th?
Mr. Wilson: Never mind the dates. That is what she said in her testimony before this committee. That is what alerted me to the problem of a controversy. And at that point, I needed the Prime Minister, not just the minister, is what she said.
Senator Jessiman: That is what she thought, but there is nothing to say that a different person, let's say look, we are going to be bound by this. We are going to be sued if we don't sign. Just go ahead and we signed.
Mr. Wilson: I am not sure what that means. What Madam Bourgon was saying was that we have this "rule", that is the word she used, that there must be caution after dissolution. And if I were able to talk to her and you folks do the same I would say, well, tell us about this. Do you have a convention, a custom? Is this the way you always behave? Has this gone on for how many years? What documentary evidence is there in the paper's of the Privy Council Office to support it? I bet there is some. If it exists at all, you expect to find it there in some sense. If it is there then I think maybe we have a practice certainly, whether one wants to call a convention, I will bow to Professor Heard on that one.
Senator Jessiman: But the actual signing, there is no doubt that the actual signing made it a legal binding document?
Mr. Wilson: Of course it did. If you say, can the Prime Minister do this? The answer is sure, legally she can do anything she wants. She's Prime Minister. That is why she is not mentioned in the Constitution. She goes to the Governor General and says, you sign it. He says you take responsibility politically and that will be that, don't have to worry about it. But if she can do anything she wants, so can her successor Prime Minister.
Senator Jessiman: Have you a paper on this previously?
Mr. Wilson: No, sir.
Senator Jessiman: In view of that, I wonder if either of the other two gentlemen would like to make remarks? If they have heard it for the first time, I should like to hear their remarks. I know what they were with Beauchesne, so I hope they are similar.
Mr. Mallory: Well, say what I think. My old friend Professor Wilson seems largely activated by the sense that the particular Pearson airport thing was unseemly, and therefore it must be unconventional. I don't think he really can bring convention in in support of his argument. His argument may well be plausible and perhaps enthusiastically received by many in a political sense, but I don't know that he effectively addresses the problem of whether there is a convention of the Constitution here or not because it seems to me that he strays too far away from what conventions are.
The point where he deals with Madam Bourgon, here we are again operating in a slightly different realm because there may well be - there has been some evidence that this is so for the last 40 years anyway - that there is within the public service a set of norms of behaviour which exists at a sort of sublevel. After all, governments under our Constitution are inordinately powerful, that Parliament - in fact I say this and not wishing to cause dismay to any of you here who have been in the House or are now senators - Parliament is relatively ineffective at really controlling the government. That is putting it mildly. It has become in a sense part of the dignified part of the Constitution as Walter Bagehot called it.
The only real debates that take place in the House of Commons are in party caucuses and sometimes in parliamentary committees. But on the floor of the House, there is not much effective, real discussion of policy issues. I mean, there is a lot of fireworks at question time, but it is very much a show and not in a sense that it accomplishes very much except perhaps politically.
Years ago, I seem to recall that Professor Hodgetts, who is also of our generation, set up a notion that the only effective control against governments behaving in a totally unfettered and sometimes unseemly way is the professionalism and property of the public service. There is evidence to suggest that the public service, from the days of Arnold Heeney in the 1940's down to Madam Bourgon, have their own sort of rules that impose caution on ministers who are motivated essentially by short-run considerations, day-to-day. But the public service has to take the long view. That means that sometimes departments like the Privy Council Office or other agencies in government may have rules of prudence and caution which in terms of the bureaucracy are almost the form of conventional behaviour, but they operate at a different level from the politicians, and of course, they do not have the legal power as ministers do to make the final decision. They can drag their feet as much as they like. In extremis, they can resign, but they cannot stop ministers, the cabinet, the Prime Minister, whatever, doing what they have the right to do.
You have to remember that while the public service can on certain prudential issues drag their feet to make sure the politicians know what they are doing and see what the consequences are, they don't have the legal right to stop them or the conventional right really. When the orders come down, they have to say yes, sir and salute. That is it. We must remember that we are talking about a couple of different levels of behaviour.
Conventions of the Constitution are norms of behaviour that govern politicians. There are prudential and professional rules that govern the public service, and it would be interesting to the extent that this committee can uncover this and see whether it is still as valid as it was in the days of tough-minded and highly respected public servants like Arnold Heeney or Bob Rice.
Senator Jessiman: Thank you, professor. Professor Heard, would you like to add anything to that?
Mr. Heard: I think anything I would like to say has been covered.
Senator Jessiman: Have any of you gentlemen - did any of you speak to Mr. Nixon before he made his report or after he made his report? None of you have spoken with him?
Mr. Mallory: Not I.
The Chairman: That was 27 minutes, Senator Jessiman. Can we try to keep it to 30 in the first round, Senator Stewart?
Senator Stewart: I will do what I can, Chairman. I can't speak for the witnesses. First, I want to thank Professor Mallory for his statement. I think we have to put that statement in its context. It starts with reference to what was said by a Conservative candidate in the 1953 election, and that candidate said that ministers and now I quote "are private citizens and some of them might never sit again in the House of Commons".
It is my impression that Professor Mallory is saying, you know, this is palpably wrong, and of course I agree with Professor Mallory on that. But, the fact that Beauchesne went wrong at this point, as he did on so many other matters, should not mislead the committee.
Then Professor Mallory goes on to say, "Governments do sometimes have to make very large and difficult decisions in the middle of an election campaign," and of course no one would disagree with that. He speaks of having to make the decisions that seem to them to be necessary. Again, I think nobody would disagree with that. But could we come to the situation concerning which the committee is concerned?
We are not dealing with a period when a government has been defeated. Much has been said this morning about the standards that should prevail after a government has been defeated, either in the House of Commons or at the polls.
The word "convention" has been used in relation to the practice that should be followed during an election campaign. Now, Professor Heard quotes from the late Senator Forsey a paper which I believe was delivered at the University of New Brunswick in which Forsey commented very critically, if I recall correctly, on the decision of the Supreme Court of Canada on the repatriation question.
He said, the Supreme Court has no business, if I recall what Forsey said on that occasion, it has no business answering the kind of question that was put to it.
Here is the question I will now address to Professor Heard. Is there a very considerable ambiguity as to the meaning of convention in the context concerning which we are now speaking as evidenced by what Dr. Forsey said on that occasion?
Mr. Heard: There is a couple of levels of ambiguity about convention. One of them is in the methodology one uses for identifying them, and I covered a bit of that, whether one uses precedent. If so, are you looking for incidents, whose comments are you looking? Whose agreement on the principle is relevant?
The other level of controversy which you have eluded to is the relationship between convention and law. That is not as clear as the Supreme Court has asserted. They follow the Dicey approach that courts enforce law and conventions are for the realm of the politicians, and I think that is what Senator Forsey was arguing, that having made that point, the Supreme Court had no business to go ahead and discuss the conventions relating to the patriation of the Constitution.
In the context of these agreements, the ambiguity would be, does convention have anything to do with these contracts? From a legal sense, what relationship would a purported convention have to the validity of those contracts? If there were a convention that constrained the government from signing such agreements, does that affect the validity of the contract? I think the courts would say conventions have no bearing on the law relating to contract.
Whatever the propriety of the signing of the contracts, the issue would be the validity. And in terms of law, the constitutional element of political practice is not relevant to that contract law.
Senator Stewart: So there is ambiguity as to the meaning of the expression "convention".
Mr. Heard: I have sometimes said that what we are talking about - it is a situation like the rules of what youngsters call street games. You cannot go and say these are the rules, here is the book. However, roughly every kid on the block knows how the game is played.
The Chairman: I have to say that my grandson changes the rules whenever it suits him. Sorry to interrupt.
Senator Stewart: Yes, but you make an important point. The rules may well change to suit convenience, but I doubt that any one kid can get away with changing them because the others will have conveniences too. It is the collective convenience which will produce the rules. I see you nodding, Chairman, sagely.
The Chairman: Particularly, if you own the bat and ball.
Senator Stewart: Yes. All right.
Now let's come if we can to the game. In order to save time Chairman, I know you are concerned about that, I am going to make propositions and ask for agreement or disagreement or corrections.
We talk about our system as a system which has one of its great principles, that of responsible government. We sometimes read in the literature that a government, that is the ministers, are responsible to Parliament and that Parliament, in turn, is responsible to the electorate.
Now, I doubt the validity of the second of those propositions because it may well be that the majority in Parliament decides not to run again. Therefore, they evade responsibility in that way. Unless I am terribly wrong, let's focus on the first proposition, that is that the ministers, the government in that sense, are responsible to Parliament. I think here we mean for most practical purposes the House of Commons.
Surely responsibility - the ability of that responsibility to function practically varies from time to time. For example, when Parliament is not in session, the practical level of responsibility is down, whereas when Parliament is in session, practically speaking there has to be more responsibility.
Now, would it be correct to say - and I will put it to you Professor Heard - that assuming that my preamble is correct, that the responsibility to the House of Commons is at a very low ebb - it does not exist after a dissolution?
Mr. Heard: No, that is correct. After dissolution, there is no Parliament.
Senator Stewart: So there is no responsible government at that point in the narrow sense to which I have defined the term?
Mr. Heard: Right.
Senator Stewart: Then I guess I will ask you Professor Heard, given the fact that responsible government is ordinarily one of the great tenants in our system, would it not behoove a government, knowing that that great tenant was not practically operative, to act with great caution if it was making a decision of long-term consequences?
Mr. Heard: There is two aspects to your question. To answer the second one first, I think in any circumstance the government needs to move cautiously and in agreement.
Senator Stewart: We will take that for granted.
Mr. Heard: The first element being, I can't answer your question the way you framed it in the sense that you gave one definition of responsible government, meaning cabinet is responsible to the House of Commons which in turn is responsible to the electorate.
Senator Stewart: I have set aside the electorate aspect.
Mr. Heard: This is the issue here. You are saying in the absence of Parliament, there is no responsible government. While Parliament is dissolved during an election period, there is no Parliament so there is no responsible government, so the Cabinet of the day should be cautious. A point I made before the Legal and Constitutional Affairs Committee is responsible government includes not just the responsibility of cabinet to the House of Commons but directly to the electorate. That is the point of the general election.
So, at the time of dissolution, the cabinet or the government of the day in general is being held accountable in the most ultimate sense to the electorate. So it is not without responsibility or accountability during the periods the writs are issued. They are being held accountable to the electorate.
Senator Stewart: I think you are not appreciating how horrendous my statement was. What I am suggesting to you is that this notion that Parliament is responsible to the electors is profoundly misleading. Let us take for example the situation that prevailed in the last weeks of Mr. Trudeau's government. He did not intend to run again. Most of his ministers did not intend to run again. We can say that there is the theory of responsible government that they are responsible to the electorate. He had no intention of running again. Practically speaking, responsible government, as far as Mr. Trudeau was concerned at that point, was a thing in the textbooks. Is that not correct?
Mr. Heard: No, there certainly are periods at which there are great deficiencies in the way the principle operates. You could have a situation where the Prime Minister and cabinet, most of them announce they will be resigning, but that is a normal course of politics.
We have in a sense political party accountability, so the way it works in practice is the party banner is the vehicle through which it -
Senator Stewart: What stands under the party banner may change radically from one month to another, if we follow the ongoing NDP exercise as an example, and then it would apply to the Liberal party and I suppose to the Conservatives too. So merely to say that consistency, integrity and therefore responsibility to the electorate is guaranteed by the fact that they call themselves New Democrats or Liberals or Progressive Conservatives means virtually nothing. Is that not correct?
Mr. Heard: I think it is an overstatement, but you have certainly touched on a real weakness, yes.
Senator Stewart: All right. I guess what we have said is that there is a real weakness here and that our system is not foolproof.
But then let's go back to where we were before. Again I will address my questions to Professor Heard. If we have recognized that after a dissolution the means of enforcing this great principle of responsibility has been set aside, and if we say that responsibility to the electorate is weak - I would have used a stronger term - then does it not behoove the government, the Ministry in that period if indeed it has a choice - and Senator Jessiman and I might disagree as to how much choice was available to the Campbell government - does it not behoove the government to refrain from making commitments which are long term, which involve important policy questions and which involve large sums of money?
Mr. Heard: I think I need to come back to sort of the closing points of my presentation. You are touching on what are those limitations. I think the difficulty we have in just saying they should not undertake long-range, expensive projects -
Senator Stewart: I didn't say that.
Mr. Heard: No, but this is the essence of it. There should be some constraint - hesitation shall we say - before entering into those sorts of situations. I think prudence would suggest that, good common sense would suggest that, but that is different from saying there is a constitutional obligation upon the government to have that constraint. I think the reason being is based on the notion of what can an old government do that a new government can undue? What can an old government do that a new government cannot undue? I think that is the distinction that really is the firmest one we can use for founding a rule, that the government in a period that you describe should as a constitutional obligation avoid entering obligations that are irrevocable. That is quite different from saying that they have a constitutional obligation not to undertake long-term or expensive obligations which can be renegged.
Senator Stewart: Senator Kirby wants to ask a question, but before I yield the floor, how are you using the word "irrevocable" here?
Mr. Heard: The examples from past precedence were appointments to the bench, appointments to the Senate. Once someone is appointed to the bench or the Senate, you cannot unappoint them, and that was why the Lieutenant Governors and the Governor General refused to make those appointments, because once those appointments are made, the new government cannot come in and say, we are going to have a different bunch of judges or different senators. That is irrevocable.
The Chairman: You have no idea how comforting that is.
Mr. Heard: That is quite different from a situation of a contract which there may be expense involved and may be a tremendous amount of expense involved, but they can be revoked.
Senator Kirby: In fact that is exactly the point I was going to put you on. You are taking irrevocable to mean independent - any act is legitimate, provided that it can be undone regardless of the costs that you are undoing it. The only acts you are regarding as irrevocable are those for which there is no means of undoing them, is that correct, that is your definition of irrevocable?
Mr. Heard: It leaves me with a certain discomfort, but yes because I understand -
Senator Kirby: Let's explore your discomfort because I am sure mine is probably greater than yours. Take a case for example where the cost to a government was going to be $100 billion. You would argue that that act was still legitimate?
Mr. Heard: No, I wouldn't.
Senator Kirby: We are only arguing about price. So suddenly you have abandoned principle here, just so we are clear. Why don't you explain to me - clearly your discomfort has a dollar value attached to it. I must say I have difficulty with political scientists arguing principle when I suddenly discover the principles have a price to them. What is your discomfort when I raised the issue? Tell me what the value - or at what point does the cost become sufficiently minimal in your mind that you will stand on principles? In other words, we know you will abandon the principle at some point.
Mr. Heard: All I know is I think a former professor of public administration is enjoying seeing a political scientist squirm.
Senator Kirby: That has been a lifetime enjoyment of mine and it is usually pretty easy to do.
Mr. Heard: I think I can hide behind what may be left of my tattered shreds of principle and say the practicality of revocation is an issue. If you give the example of $100 billion costs, that simply is impractical, okay? No government could pay that cost, so it verges on the impractical. So I guess where I would draw the line is something which can be managed within practical limits. That is a grey area. There will be controversy over where that line is drawn, but I think it still provides a principle basis that does not just get into saying, well, this is you know -
Senator Kirby: The minute you say that you have moved to an area of total subjectivity.
Mr. Heard: Not at all.
Senator Kirby: The issue of what is financeable and not financeable is subjective.
Mr. Heard: There is a subjective element, but that is not to say that the whole thing is consumed by subjectivity.
We can agree that five cents is assumeable and we can agree that $100 billion is not assumable. There will be a grey area where we disagree, but many will fall within an area where there will be close to a consensus.
Senator Kirby: I think the key thing I wanted to establish is that what you had espoused as a principle is not really a principle because it can in fact be removed by an argument?
Mr. Heard: I disagree profoundly there. To say there is a principle does not mean to say that there is no grey area, no confusion, no controversy. No constitutional principle is without its controversies and I think it is a clear misrepresentation to say that this position is not a matter of principle. I am suggesting that the principle has to operate within practical realities. There will be a boundary where there is a disagreement over the practical operation of the terms of that principle.
Senator Kirby: It is not my definition of a principle, but back to Senator Stewart. I took part of my colleagues time. I am sure you will give it back to him.
The Chairman: If you take the position - I think Professor Wilson did - that you know you cannot bind a future government, the only examples we have seen so far of those which are irrevocable are just those matters of appointments, judges, senators, et cetera.
Senator Kirby: There are not even et cetera, Mr. Chairman, because to the best of my knowledge, deputy ministers' appointments, all of those can usually be revoked.
Mr. Heard: There may be other examples. For instance, the United States bought Alaska. You could give away territory. There is a number of instances we can think of where physical property perhaps is destroyed. There are a number of things which are irrevocable.
Senator Stewart: Thank you very much, Chairman. Again, I will stay with Professor Heard largely because I started with him.
In his submission, Professor Wilson referred us to a description of the Australian conventions with regard to the caretaker period, and he quoted from a document. That is on page 8 of his paper. I will quote it:
The basic caretaker conventions require a Government to avoid implementing major policy initiatives, making appointments of significance or entering major contracts or undertakings during the caretaker period and to avoid involving departmental officers in election activities.
Given the fact that their system of government comes from the same stem as ours does, and in fact in many important features is the same as ours, how do you suppose they came to this conclusion concerning the avoidance of entering major contracts or undertakings during the period after a dissolution or is that just an Australian eccentricity?
Mr. Heard: I think it reflects a particular history in Australia, and the formulation of this convention followed an effort by a body called the Australian convention to try to write down a number of the informal rules of the Constitution following the 1975 constitutional crisis.
At that time, Australians were particularly concerned with limiting discretion of political actors and politics in a particular context. This was one of them. So I think it must be made clear in the first instance that the Australian political situation followed in a climate where there was a deliberate effort to try to restrict discretion.
Senator Stewart: So, this arose from Australian experience?
Mr. Heard: Yes.
Senator Stewart: It was a legitimate consequence of Australian experience?
Mr. Heard: Yes.
Senator Stewart: Do you then envision that the possibility - that as a result of what I sometimes have called the airgate experience,political science in Canada will start advocating a comparable Canadian statement with regard to entering major contracts or undertakings? What I am saying here is clearly the law of the Constitution, to some extent the conventions of the Constitution, regardless of how you use the word, is the consequence of empirical experience and will evolve as the experience evolves.
Australia had a certain experience. It laid down this as a good rule to avoid comparable experiences again. We now have this Pearson airport situation. Is it reasonable to suppose that some people will say that Canada ought to have an explicit statement with regard to entering major contracts or undertakings during the caretaker period? I am not saying that political scientists would agree on this. Heaven forbid, would reduce the excitement of annual meetings. Is it not reasonable to expect that some people will -
Mr. Heard: The whole point of conventions is they allow an informal evolution of the Constitution. To say that there was no precedent relating to this matter previously is quite different from saying five years from now, people can say the same thing. We are living through a precedent now.
Senator Stewart: Yes.
Mr. Heard: And the resolution of this issue will be referred to in the future. And yes, this is an opportunity to gage what the consensus of the community is.
In terms of my reflection, all I can tell you is what people have said and thought in the past, what I might think presently. It is largely part of your responsibility to try and gage the reaction of the public to this current incident.
Senator Stewart: This is very important because as was said earlier, for the long hall, testimony such as that which we are receiving today may be more important than the details of what happened on December 7th or so on. So, your work Professor Heard has been in a sense retrospective. You have looked back, but it has not been prospective.
Mr. Heard: Yes.
The Chairman: Surely conventions are not developed over a considerable period of time?
Senator Stewart: Lets's hear that again please?
The Chairman: I said surely conventions are determined over a considerable period of time. You used the word five years.
Senator Stewart: Oh no, but there can be specific incidents and I think I could site some, and they are not Canadian, where because of special dramatic instances, the result was that the ship was turned. The direction in which the whole process of the unwritten Constitution changed.
The Chairman: I would like an example. You are not talking about something which is done by statute or by legislation.
Senator Stewart: Well, let me give you an example. I will go back a long way. What is it? It is 1756. It is January and the King, who was George the II, is not very happy with the fact that some months previously, the majority of his cabinet had forced him to let Grandville, the Secretary of State, go. And over the intervening months, he had persisted in taking advice behind the curtain from Grandville and ignoring the ministers of the day. What did the ministers of the day do?
Well at what they thought was an opportune point, they waited on the King and one after another, they tendered their resignations. Well, King George the II was reasonably complacent and he turned to Grandville and said go out and form a new government.
They made a fierce effort. It was joked at the time that it was dangerous to walk on the sidewalk in London because one might be shanghaied into being a minister in the forthcoming new government. They could not do it. They just could not form the government. It turned - it changed the Constitution.
Mr. Wilson: Even another example from our home province of Nova Scotia, responsible government in British North America started after 1848 following the resignation of the executive council after a motion of no confidence in the legislative chamber.
Senator Stewart: It is not necessarily a creeping incremental process. You can get dramatic incidents which change the Constitution, the working Constitution, as distinct from the documents.
Mr. Wilson: Mr. Chairman, I would make a quick observation to Senator Stewart about Australia since the question was asked?
The Chairman: Certainly.
Mr. Wilson: I am not sure what happened in Australia with respect to this convention - grew out of something sudden or exciting or whatever. In 1951, just after having dissolved the House and called an election for that year, Sir Robert Menzies wrote to his ministers and said, "I should also be glad if you would note that while continuing to take whatever action you deem necessary in connection with the ordinary administration of your departments, you should not make decisions on matters of policy or those of a contentious nature without first referring the matter to myself."
Now there is no reason given in this document why he did that, but it does not look like there was a crisis. I am not aware of one, certainly not the 1975 crisis with Fraser and all of that.
It was substantially ahead of that and it's been going on ever since. So that it's become now, after that event in Australia, a convention.
I'm not sure that your origin question to Professor Heard that, you know, it happens in that parliamentary system: How come about us? isn't a reasonable question. That's all, sir.
Senator Stewart: I found that reassuring and I would like you to repeat it.
Professor Wilson: It was reassuring I think.
Senator Stewart: Will you repeat it?
Professor Wilson: Menzies started it in 1951...
Senator Stewart: Yes, I know.
Professor Wilson: ...by saying ministers don't do drastic things during an election campaign. It's not clear why he did that but there's no hint that there was some sudden crisis or event or whatever that caused his to do it. It rather appears that Sir Robert Menzies felt that this was the right thing to do as the person in charge of the administration of Australia. And it's evolved since then, and long before the very serious constitutional crisis of 1975 between the Governor General and with whom and whatever. That's not the cause of it.
And so Australia is a parliamentary system, as you said just like us in a federation. It's either the Australians are peculiar, do things differently, or it else it's something that can and maybe should, for all we know, occur within a parliament system, in which case our question becomes: How come not Canada? if it is, as is said by some already, not Canada?
The Chairman: Senator Stewart.
Senator Stewart: Yes. I'll ask one, if I may, and then I'll cease.
The Chairman: I was going to say, you can have a little bit more time than that; your half-hour is up. I was going to give you a little bit more time than one question.
Senator Stewart: Oh, thank you. Just one more question.
The Chairman: Okay.
Senator Stewart: In your statement you commented on the relevance of precedence as evidence of a convention; and if I heard you correctly, what you said was or - I want to go back - as evidence of a convention, a rule or indeed a practice, a custom, whatever.
Am I correct in my recollection that what you said was that the mere fact - the fact - that incidents cannot be cited does not mean that there is not a rule, a practice, a custom, a convention because everybody follows - every kid on the block follows the rules of the game and consequently there are not fist fights incidents where someone says, "You're breaking the rules." The mere fact there are no fist fights over the rules doesn't mean that there are no rules.
Professor Wilson: Well, I didn't refer to fist fights.
Senator Stewart: No, no. But I mean -
Professor Wilson: That would be my view. And I specifically gave - it's an easier one to handle than convention or custom or whatever we decided we want to call it instead - the business of the Governor General's power of dissolution. And there is quite - great difference, I guess, within the profession as you know, about whether or not that was settled in 1926 or wasn't.
Senator Stewart: Yes.
Professor Wilson: Eugene Forsey was one and I'm another, and I dare say we're not alone, who said, "No, it wasn't settled in 1926. There still is the power of dissolution." Just because it hasn't been used since 1926 - refusal of the power of dissolution -
Senator Stewart: Yes.
Professor Wilson: - hasn't been used since - doesn't mean that it's not there. But Professor Dawson's view of the question was that, "Oh no, it was settled in 1926 and the Governor General's not had that power." Zap.
Senator Stewart: Very good. Thank you very much, Chairman.
Senator Jessiman: I just have one question. May I go now?
The Chairman: Yes.
Senator Jessiman: Thank you. Can you explain the difference to us between a "tradition" and a "convention"?
Professor Heard: The essential difference between a "tradition" and a "convention" is that there is - in a convention there is a tangible constitutional convention - constitutional principle which is being either protected or realized.
A "tradition" would be a habitual manner of doing things. An example of a tradition would be the gentleman usher, the Black Rod, proceeding to the House of Commons, the door being closed; him knocking three times before it is opened and he summoning the Commons to join you in the Upper House. That's a tradition. There may have been a reason in the past for that but it is simply a manner of practice.
And that is distinct from a convention such as both houses need to agree on the passage of a bill before it may be assented to, and there there's a real principle at stake.
Senator Jessiman: Thanks very much.
The Chairman: Now I want to just get an idea who would like to -
Senator Kirby: I do, but I'm very short. I don't mean in height, Mr. Chairman. I mean in length of -
The Chairman: Yes. Mr. Nelligan would like to ask a few questions.
Senator Kirby: After me?
The Chairman: Yes. Go ahead.
Senator Kirby: Thank you. I just want to ask two or three things because there's a couple of points I'm confused on. I think the first is to Professor Heard. And it really gets at understanding what you mean by "precedent" and let me tell you, this may be a problem with my mathematical mind treating it as a logical problem.
If, in fact, all three of you said in various different ways that there are no precedents; you can't find cases I think was Professor Heard's words, where in court important contracts were signed during the campaign. So let's take it as I think agreement from all three of you that there are no precedents that deal with a case identical to this.
My concern - I guess what really what I want to know is: does the lack of that precedent - I mean it seems to me that can lead you in one of two directions: it can lead you in the direction of saying: the fact that it hasn't happened before means there's no - and I want to stay away from technical, political science words like "convention" - The fact that no such contract has been signed before during the campaign can either lead to the conclusion that therefore there is no rule; or it can lead to the conclusion that there is obviously a rule which is precisely why they haven't been signed before.
Now, you get around that very cleverly by using the word "precedent". Can you tell me, given the situation that I described, which conclusion do you draw and why?
Professor Heard: I take that evidence of non-action as an example of no rule. And the reason being, accompanying that non-action there has been no commentary as well. So this is different from the non-action involved in the Governor General vetoing a bill. We don't have an example of a Governor General simply vetoing a bill. But we do have an instance of comments both by politicians and by academics saying the Governor General should not veto a bill.
And from the Jennings' point of view you need three elements: you need the precedent in terms of an incident, and it can be an incident of omission as well as commission.
Senator Kirby: Can I just stop you?
Professor Heard: Sure.
Senator Kirby: How do you know? I mean, incidence of omission; how do you know that they - it's the old is there noise in the forest when there's no one there to hear it? I mean how do you know?
Professor Heard: This is the problem. And this is where you couple the other elements of Jennings' test and that is what were the comments of the actors? And we do have instances of the actors and of observers and commenting on non-action. And in the traditional approach that non-action, coupled with commenting and a reason, those three elements, create the convention. And so I'm saying in the traditional approach we have non-action but no commenting, and using the traditional approach that does not create a convention.
Senator Kirby: But surely you could make the - I'm deliberately trying to stay away from the word "convention". And you're really saying that in a situation - logically where your analysis leads you to is the following which I find kind of absurd but let me just tell you what it is: it leads to the conclusion that any one off situation, i.e. any situation that is totally unique can never ever be subject to an convention because by your test it's never happened before so it doesn't meet the precedent test; there's been no comment on it because it hasn't arisen before; and therefore, by definition, it is acceptable convention. I mean, that's the logic that your analysis leads you to, and I find that kind of absurd because you can think all kinds of situations.
Professor Heard: I agree with you whole-heartedly and that's why I wrote my book. I was arguing against that traditional approach that relies on precedent because we do have this problem, this non-action -
Senator Kirby: Right. So then you get to your irrevocable thing which is an issue of principle with a price, right?
Professor Heard: It's an issue of principle that operates in a practical context.
Senator Kirby: "Practical" surely is a word in quotes, right, in the sense that what's practical to one person is not practical to another. I just have two other questions, Mr. Chairman.
Professor Wilson, I want to make sure I understood a couple of the points you made. First all, there's never been an occasion where a British government made anything other than routine decisions following the dissolution of parliament?
Professor Wilson: I'm doing that from memory but I'm pretty certain.
Senator Kirby: Okay, point one. Point two, in Australia where the caretaker convention is written down, it explicitly prohibits entering in a major contract? I'm just quoting from your -
Professor Wilson: I don't think we should say it's written down in the sense that I believe you mean that. We should say only that the document I'm quoting from is an information document produced by the relevant, you know, information officer in the department of the Prime Minister and the cabinet.
It's much the same, in essence, as Jocelyne Bourgon's testimony here. It's a public official saying, "That's the way we do things."
Senator Kirby: Included in the list of "thou-shalt-nots" was entering in a major contract?
Professor Wilson: Yes.
Senator Kirby: And third, this situation you can find no example where this situation has occurred in Canada before?
Professor Wilson: I can't think of a single case.
Senator Kirby: And neither could Professor Heard and I think Professor Mallory. Then could I just ask all three of you one last question: In light of that, and staying away from - since legality is not the issue, none of us have challenged legality; and I want to stay away from the political science words of "convention"; let me just talk about "practice" I guess - would you describe the signing of this contract - and let's forget about the October 7th one, let's take the October 4th one which is the date the Minister signed it - Would you describe the signing of this contract during an election campaign 21 days before the election as consistent with let me call it normal and honourable democratic practice?
Professor Wilson: Where do you get those words from?
Senator Kirby: I just want to know what your reaction to that is?
Professor Wilson: I wouldn't use those words. I would rather you - Can I you rephrase the question: Is it consistent with the Australian convention? Will that work? No?
Senator Kirby: No. The words "normal and honourable in a democratic practice" in fact come from the Nixon report.
Professor Wilson: That's what I thought.
Senator Kirby: What I want to know is whether or not you would describe this decision as -
Professor Wilson: I wouldn't use the word "honourable", I don't think that's what's involved.
Senator Kirby: Okay. "Normal"?
Professor Wilson: No, it's not. I think this was an action taken, a decision taken, whatever, that goes beyond the ordinary routine administration of government for any one of a number of reasons you can name: whether it is as Madam Bourgon said, controversy between the party leaders; you mentioned I think size of money, somebody else has mentioned the 57-year lease, and what's irrevocable and what's not. If you can't get out of it except for a huge price then it's problem. There are all sorts of things where it might have been legit [sic].
It would have been desirable I think for whoever was the major actor, in this case I think the Prime Minister not just the Minister, to say, "No, I think we'd better let this go. We better hold back on it."
See, what happens in Australia and what I presume, and I wish we could find this out, happens in Canada, is that the Public Service, Professor Mallory mentions that they - some people have said they're watchdogs on the government because he says Parliament can't be. I'm not sure I buy that. But leave that aside. What the Public Service does, what the Clerk does, perhaps, is say to the Prime Minister - just like the British television series - "Prime Minister, this shouldn't be done at this stage in the campaign." They are the teachers, if you like, of untutored politicians, about what the conventions of the system are. They have been at it a lot longer than most of the politicians have.
Ms Campbell, I don't say this with any disrespect to her competence at all, but she was a person with apparently limited experience of public life and certainly limited experience at the top, just as her predecessor was. Mr. Chrêtien is a horse of a different colour, if you want to compare them. But ordinarily in this country, perhaps because of the demands of political life, we don't get political figures and leaders who stay around for a long time except for Mackenzie Kings of this world and perhaps Mr. Trudeau. And therefore, at the beginning at any rate, there's a good bet that they don't know what the practices are, rather than use the word "convention". They're not sure what to do or say.
And let me just add to that, if I may, apropos what Professor Heard said about what Jennings has said. I felt very strongly about the sentence Jennings used in his source I got from him which is not the same source as Professor Heard. What is it? "It is sometimes enough to show that a rule has received general acceptance." Now that implies at the very minimum that nothing's happened.
Senator Kirby: Right. That was the point of -
Professor Wilson: But that we've always behaved in the same way, i.e. not taken major decisions in the so-called caretaker period.
Senator Kirby: Right.
Senator Jessiman: There's a question fact as to when they actually entered those major contracts. And you're assuming that -
Professor Wilson: I'm not concerned that the discussion began. We could change the subject altogether and talk, just for the hell of it to make it simple-minded for my sake, about dog licences, you know, that they've talking about imposing rules on since day one of Parliament, and didn't get around to it for whatever reason until into the campaign. And then all of a sudden laid on a system of legislation or an agreement that involved, you know, injurious, horrendous or whatever it might be penalties and so on. And people said, "Wait a minute." It's not a sufficient answer to say, "Look, we've been talking about this since 1990 so we can do it whenever we you like." You've got to do it when Parliament is there to say, "What have you done? You shouldn't have done it. You're going to suffer for it." You've got to have all of that stuff.
Senator Kirby: Professor Heard, just to complete going across the three of you. What is your reaction - I want to go to Professor Heard - what is your reaction to my - let me ask as a question:
Do you think - again staying away from the word "convention" - that the signing of this contract in the middle of the campaign constituted normal practice or I think your phrase in your paper as I recall was, or do you think - using your terms - do you have think it violated the limits of good politics and prudence?
Professor Heard: It's not in keeping with past political practice and it's I think an issue that certainly raises the question of whether it was prudent or not.
Senator Kirby: Professor Mallory, would you comment on the same question?
Professor Mallory: Well, I think "imprudent" is the best way of describing it. I don't myself find very convincing all this argument about caretaker governments existing between dissolution and the election. I think this is a sort of a false trail to follow, really.
And it was imprudent mainly because it took so long to get the thing sorted out that it was only possible to push it through at the very last minute. That itself should have suggested to all concerned that it was imprudent to push it because it was provocative to push it at that time, whatever the merits of the thing, which I don't - as far as I understand it, the whole thing seems crazy to me. But this process has been going on, as Senator Jessiman said, for years. And then suddenly to try to push it on a threshold of an election, when they were distracted by rushing back and forth on campaign planes and things, seems bizarre and imprudent.
But I wouldn't go so far as to suggest that it's unseemly because it's a complicated issue and you can't describe it in simple terms of what's involved and whether it was a good public policy or bad. But it had been discussed after all for five years at least, whatever the upshot. But it certainly was imprudent at that time to have done anything of the sort.
The Chairman: Since you've brought up the matter, could I just ask you -
Senator Kirby: Mr. Chairman, that finishes what I wanted to ask.
The Chairman: Okay. Well then, I might ask to you Professor Wilson: Did I get the impression - because I can't go back and reread your opening statements, but you use the word rather loosely in my opinion about "caretaker government". Do you apply that equally to a government that's been defeated or to a government that's about to be defeated? I mean your that's your clear -
Professor Wilson: The word "caretaker" I'm only using because that's the only one that's in the literature. I'm quite willing to grant straight off it would be nice to find another word that would not be offensive in the same way. Because there is a distinction between literal caretaker governments, ones that aren't supposed to do anything like Malcolm Fraser's government in Australia after Whitlam was dismissed, or Churchill in 1945, and governments which are merely managing the affairs of state in the election period and who are expected to - so we're told by some people - not to do radical and extraordinary things, and therefore be sort of caretakers. But they are not, for example, lame ducks like the President of the United States is - lost a presidential election is because he's still in office until January or whatever. I don't see any distinction between a government that has been defeated in the House and clearly has lost the confidence of the House, and I think government's lost election is another question altogether. The post-election period is, I think there's no argument amongst any of us about that.
The argument is about a government that's lost an election - been defeated in the House - and a government in which, on available evidence, is about to be defeated. Now, people can say "Well, the evidence wasn't there." Well, I mean it was; I don't think there's any question about that. You could have won a lot of money with somebody who wanted to say there wasn't any evidence for the government was going to be defeated on October 7th. I was crystal clear. And I think Allan Gregg would be happy to come before and testify to that effect, if necessary.
So then the question is -
The Chairman: But it would have been a little bit different if the polls were 50-50? You would have changed your general views if the polls showed a 50-50 split?
Professor Wilson: Oh, if you thought there was a chance of winning, then I think you'd be perfectly entitled to carry on, but not again to do anything radical. The argument about -
The Chairman: Well, now, I mean, carry on by - What's the degree?
Professor Wilson: In the somewhat limited area, deal with an emergency, yes, be it the civil service? Yes. Not make major decisions that are controversial. Not spend colossal sums of public money. Not engage in decisions which irrevocably bind the future government - we're not sure what "irrevocable" means.
The Chairman: Yes. But that's -
Professor Wilson: You don't accept those -
The Chairman: Well, no. I accept the fact that even a government which is at 5 per cent, about to be annihilated...
Professor Wilson: Yes.
The Chairman: ...can make decisions in an emergency.
Professor Wilson: Oh yes, of course.
The Chairman: For sure. I'm talking about -
Professor Wilson: Let me suggest to you, Senator MacDonald, how they might be made. Such a Prime Minister, who was in that spot, would presumably to go the Leader of the Opposition party and say, "Let's you and I talk about this and sort out what should be done in this emergency." Just as the British government does routinely about security questions; the Prime Minister doesn't handle it all by himself. He calls the Leader of the Opposition into his office and he gets access, the Leader of the Opposition, to all the secrets of state entail, so that in the House of Commons it's clear to the British people that the government has been responsible because the Leader of the Opposition knows what's going on. That's really responsible government. And that's what you do in this - or analogous things like that - in this caretaker period. You try to run things in a way that takes partisanship out of the business of government while you're fighting for the people's will.
The Chairman: That's interesting. Now, Professor Heard, do you agree that there was no convention restraining the Campbell government from reaching the contracts relating to the Pearson airport; that there was no convention restraining them, whether founded upon precedent or arising from constitutional principles?
Professor Heard: That's my conclusion, yes.
The Chairman: Professor Mallory?
Professor Mallory: With that I agree, yes.
The Chairman: And, Professor Wilson, you do not?
Professor Wilson: Well, people don't want to call it a convention, but there's sure a practice.
The Chairman: Well, would you agree with the question I just asked you?
Professor Wilson: I'm not going to agree with it because the word "convention" is not meaning everything to the same - So I'm going to say okay with the convention, sure, she shouldn't have done it.
The Chairman: But Professor Mallory and Professor Heard disagree with you?
Professor Wilson: They clearly do. Perhaps I can take two minutes to tell you what "convention" means to me? I tell this to my students every year because they have a lot of trouble with the problem. I say to them, you know, "What happens to you in the United States when you misbehave, when you step out of line, what do people say?" And after a while they say, "I'm going to throw the book at you." That's the book that's got all the rules in it, you know, "And you violated 2(b)."
What do we say here? "We don't do that sort of thing around here." That's convention to me.
The Chairman: Now, is this a final question?
Mr. Nelligan: I think Senator Stewart -
Senator Stewart: Mr. Chairman, I think Professor Mallory opened up a very interesting line of argument and I think we ought to give him an opportunity to elaborate just a little. He argued that we ought to focus upon the role of the Public Service as a restraint upon Ministers, especially Ministers of limited experience. I think this really gets to the working constitution. And I would like to hear him tell us what some of the implications of his thoughts on that topic are.
For example, assuming that - am I correct in assuming that he means primarily the people in Canada in the Privy Council Office, are they the ones? Does he include also Deputy Ministers? What is the role of the Clerk of the Privy Council as a custodian of at least propriety? What are the implications of that role for the career of a Clerk of the Privy Council? Should the Clerk of the Privy Council be a person who is steeped in the ethos and the rules of the central agency of the government? Or do you bring in, let's say, a Deputy Minister of Public Works or someone like that? If this is such an important role, what does it say about the career experience of the person who occupies it? I must say I think what Professor Mallory has said is very important and we ought to give him a chance to -
The Chairman: Well, I think it is, too. But you know why all these gentleman are here and what we're trying to find out, which we have just found out, and that is the answer to those two questions I just put to Professor Heard and Professor Mallory.
Senator Stewart: Well, Chairman, I'm prepared to abide by your ruling if indeed that is a ruling.
The Chairman: But I don't want to silence Professor Mallory who probably has some very interesting views, and I would like to hear them. But I repeat, they were not the answers to the questions that you both said Yes to.
Professor Mallory: I agree, Mr. Chairman, and this is a topic that I would like at some time to discuss at greater length and continue my long acquaintance with Senator Stewart. And I am not sure that I need to say more than perhaps a couple of sentences if that will be sufficient?
The Chairman: Yes.
Professor Mallory: It seems to me this notion of the top mandarin, the impartial head of the civil service, it's notion in this country that only grew up, partly as an outgrowth of the aura of Arnold Heeney from the '40s on, and it had trouble taking root because it didn't exist before. But it was necessary that it happened when it did because up to that time we didn't have a very large Public Service, a very large range of state activity.
And the head of the Public Service, the Clerk of the Privy Council, is of a different order from your run-of-the-mill Deputy Minister. If a Deputy Minister can't get along with his Minister and he remonstrates that, "Minister, you're doing something terrible," there is nothing much he can do except either resign, or if he's lucky, get shuffled off to another department.
But the Clerk of the Privy Council has a greater responsibility. Most of the time he has to do what the Prime Minister wants and make sure that it's done, but also to impose a sense of propriety both on his fellow Deputy Ministers, which is a hard enough thing to do, and also to be willing to risk everything if the Prime Minister asks, or a Minister asks, something that he thinks is unconscionable and contrary to the rules which public servants have sort of built into their consciousness. Then he has no choice but perhaps to resign and go public. But that he has a duty to always say that, "I must take that risk at some time."
Now, this is something that Professor Stewart and I could spend - my ex-Professor Stewart and ex-professor me could discuss for a whole afternoon, but it is, I agree, only marginally germane to the central part of this inquiry. But I agree with him that the constitutional role of the Public Service has, to a degree, emerged here and it probably needs to be taken account of when the Committee reaches its conclusions.
Senator Kirby: Mr. Chairman, just one comment given you defined in your own words what you said we were here for today. I think we just ought to be clear that we would not necessarily agree with your narrow definition of why we're here. It seems to me we were here to understand whether or not there were any precedents in this regard, and the evidence has shown that there weren't any in Canada, the U. K. or Australia.
And secondly, whether or not the actions taken with respect to signing the contract in the middle of an election campaign were appropriate, prudent, consistent with normal practice. And you used the very narrow defin- you used the word "convention" and I just want to point out that since it's clear from these - I'm not a political scientist, neither are you - "convention" in a political science context is a word on which reasonable people can differ as to its definition, as we've seen since we've got three reasonable people here today and there's some disagreement among them as to what it means.
And so I just thought we ought to be clear that yes, we were here to understand whether or not this kind of activity had occurred in the past, and to understand whether it was consistent with normal practice. You used the word "convention" and I think we were actually here to look at something broader than that.
The Chairman: Senator Kirby, for the last three years every newspaper article that I have read ends with the phrase "in the dying days". It seems to be a trait of the media to feed on each other; they love that expression, "in the dying days of a Campbell administration" or a...
Senator Kirby: Whatever.
The Chairman: "...unacceptable et cetera, et cetera, ...dying days."
Senator Kirby: Sure.
The Chairman: The questions that I put to Professor Heard and Professor Mallory were straight forward. There was no convention restraining the Campbell government from reaching the contracts related to the Pearson airport.
Senator Kirby: Mr. Chairman, I didn't disagree with your questions.
The Chairman: There was no convention restraining them whether founded upon precedent or arising from constitution principles.
Senator Kirby: Mr. Chairman, sorry, you misunderstood me. I didn't question with your questions. I disagreed with your editorial comment that these are the only two questions we were here to answer. That's all. I didn't disagree with your questions or their answers. I was just saying the terms of reference, they were here for a broader purpose, that's all.
The Chairman: All right. Now, Mr. Nelligan.
Mr. Nelligan: I'm concerned, not as political scientist, but as a lawyer, as to the position of the government in good-faith bargaining with members of the public, and trying to apply that to the strictures and limitations which you have suggested which apply during an election campaign. Because it would appear here that there was an incremental decision-making process. And that in the words of Ms Bourgon there were degrees of legal obligations that arose from time to time during the course of that incremental decision-making.
And since, Professor Wilson, you seem to be more concerned with it; if I can just go through the steps. I take it that we're in agreement that there was nothing exceptional in the original announcement requesting proposals by the government; that was totally within their discretion and their constitutional powers?
Professor Wilson: That's long before dissolution. I'm only concerned with the beginning of dissolution.
Mr. Nelligan: All right. Well then, following that, of course, there was a decision for the best overall and they began to negotiate.
There was an agreement which is stated to be non-binding in June prior to the resignation of Mr. Mulroney which the government agreed to use its best efforts to reach agreement on the identified points which were not yet in agreement. Was that within their powers?
Professor Wilson: Absolutely.
Mr. Nelligan: All right. And then subsequently the government announced that it considered itself bound by that agreement to bargain in good faith. Was that within their powers?
Professor Wilson: Depends when they said it.
Mr. Nelligan: They said it in July.
Professor Wilson: All right.
Mr. Nelligan: All right. There was then an approval by the Treasury Board, and at that time the Minister made a public announcement that the parties had agreed to the leasing of the Pearson Airport with some details to be worked out; this is some weeks before the announcement of the election. Was that within his powers?
Professor Wilson: Yes.
Mr. Nelligan: All right. At that point the negotiations were turned over to various senior negotiators to conclude the detail of some of the outstanding matters. Was it within the power of the government to delegate those powers at that stage to their senior negotiators?
Professor Wilson: Depends when it was done.
Mr. Nelligan: This was done at the end of August.
Professor Wilson: Yes.
Mr. Nelligan: Yes, all right. At that time a closing date was fixed of October 7th. Now, an election call intervened. And what concerns me at this point is that what is the obligation of the public servant to watch the day-to-day polls to determine the respective popularity of the two leading parties; do they have to watch that?
Professor Wilson: No, I certainly didn't suggest that, Mr. Nelligan. I hope I haven't mislead you. I think it's the politician's job to that to do.
Mr. Nelligan: All right.
Professor Wilson: Once dissolution has occurred it becomes - this is not a legal question. You're making it, I think, a legal question. I'm just not concerned with legality. The government can do what it likes any time, legally, any time it likes. There was nothing illegal about what Prime Minister Campbell did on October 7th. That's why I think the question of constitutional convention is a little tight and misleading and why I won't answer it. There is a moral obligation, or if you like a political obligation, on a government after dissolution to not go any further, whatever steps have been taken up to that point with this process. Because -
The Chairman: Well, see, this is what bothers me, sir, is that - and you're not going to decide this point. But let us assume for a moment, as we've heard witnesses say here today, that as of the end of August some of the parties involved felt they had a binding agreement which merely had to be reduced to formal writing.
Senator Kirby: I don't think -
Mr. Nelligan: We haven't made the decision, but Mr. Baker testified -
Senator Kirby: Not today?
Mr. Nelligan: Eh?
Senator Kirby: - said a witness made that statement -
Mr. Nelligan: Not today. I'm sorry. Here. All right. All I'm trying to is, assuming for a moment there was a consideration as to whether or not there was a binding agreement, does that make a decision - a difference in your view as to what the government of the day should do when the time came to formerly execute the agreement?
Professor Wilson: No, it most certainly doesn't. I'll quote Madam Bourgon, I think, and she said, "It's not over till it's over"; somebody else said that before she did I expect. What she means by that is you can think what you like about what you've agreed to. Until it's signed, sealed and delivered, it's not done.
Take the break-up a marriage. Mine broke up some years ago and I thought it was signed, sealed and delivered long before it was. Until it's on paper, notarized, and all the other things lawyers - you will know - have to be done to it to make it a final act, it isn't finished.
And it wasn't finished until the Prime Minister authorized whatever it was she authorized on October 7th. If that's not so, I have to say why was she asked to act. Now, beyond that, when you ask about the concerns that existed in the Public Service, I want so say, why is it that the Deputy Minister of Transport said, "I think I need guidance." Why is it when she went to the Clerk, because she figured it was a question for the Prime Minister, the Clerk agreed that guidance was needed. Now, what does that mean? Now, I think it's a code word for something else. And in fact it's code word for what she said earlier in her testimony. The question arose whether or not it is right at this stage to proceed with this through to closure, i.e. October 7th.
Now, it doesn't matter to me whether that's a perception on the part of Public Service that's been there for donkey's years, as I think it probably has, and I don't care terribly whether it goes back to Heeney or earlier or later, I think that doesn't matter. That it's become custom at least amongst public servants to think that way, and I think it has from the evidence we've been given. Then it won't surprise me to learn, if I could learn it, and I don't think at the moment know how to or desperately want to after this very interesting experience this morning, to learn from other Clerks perhaps in the past what they thought.
I want to know whether or not it hasn't been for many years the role of the Public Service to do just as Senator Stewart suggested, and I will use the word he didn't use, "teach Prime Ministers and cabinet Ministers what their responsibilities are in this difficult period." And where it's a toughy, like post-dissolution, say, "Hey, we shouldn't go any further." I wonder if that's what "guidance" means. Whether it doesn't mean, "Prime Minister, tell me in writing on paper that you wish me to go ahead with this and conclude it irrespective of the timing and all the other things that are going on." If that's what it means, we've got a morally and politically - not legally - very different kettle of fish, post-dissolution.
Mr. Nelligan: But what I'm concerned about, does this mean that a person who has bargained in good faith with the government, and who has expended - I think the evidence is - in the tens of millions of dollars and has set the contract up, if the election is called before the formal documents are signed, they may then expect that no contract will be signed until after the new government is elected?
Professor Wilson: I think that could very easily happen. That's got nothing to do with good faith. I mean, bargaining in good faith runs you into any number of roadblocks down the line. Things can happen, never mind election calls, there are other things that can happen that could make it - I'm sure you'd agree with this - all that good-faith bargaining worth nothing because of the change in the circumstances. I don't see - the notion of it having been done in good faith isn't at issue. I don't dispute that. I don't dispute the good faith of the people on the public side who were seeking an agreement. I don't dispute the good faith of the public servants or the Ministers, or the Prime Minister or whichever one it was who were talking for some many months and years about the plan. All that was done in good faith.
I may have an opinion about the political wisdom of that particular policy or any way of dealing with it, but that's not an issue. Everybody has differences in that. We're all, as I said in the paper, partisan in our ways.
What we're talking about is the way you go about making decisions. And it does not matter whether you're Conservative, a Liberal a Socred, a fascist, a communist, New Democrat, you know, whatever's left - well I guess facists and communists don't do it that way, but the others tend to follow a certain set pattern. And the question is whether or not that set - or the appropriate pattern was followed in this case.
I don't think it's a question so much of constitutional convention, though I know I've used those terms, so much as it's question of appropriate practice.
Mr. Nelligan: So that it would be a matter of considering the circumstances at the time and deciding what was prudent?
Professor Wilson: On the part of the Prime Minister?
Mr. Nelligan: Yes.
Professor Wilson: Yes.
Mr. Nelligan: Yes. And that then it's a matter of a decision for her to make whether or not it is prudent?
Professor Wilson: Yes. Which I believe she did.
Mr. Nelligan: All right. Have either of you gentlemen got anything to comment on that?
Professor Heard: No, I think you've summed it up.
Professor Mallory: No, I think - nothing I could add in terms of the flow of your questions, no.
Senator Tkachuk: I've got just a couple of just sort of follow up to what counsel had mentioned.
If the decision she had made had caused her to win the election?
Professor Wilson: Winning and losing doesn't make any difference. If she had won the election she'd still be prime minister; the agreement would have been made and you folks wouldn't be sitting here being concerned about a cancelled agreement, it would have gone ahead. And we would bicker, maybe, as political scientists, about whether she won because of here ability to make a tough decision in difficult circumstances or whatever. But that isn't what happened. It's not that she lost the election that has any bearing at all on what I'm saying about it. I'm saying at the time she did it, she knew - I know I can't prove this, and you can only get it by talking to her - but she knew she was going to lose the election. She must have. Any half-wit political scientist can count and knows that at 20 per cent you don't win elections. You may win more seats than two but you sure don't win, particularly when you drop all the way from 36 in three weeks - there's a problem.
She knew she wasn't going to win and therefore she knew that she couldn't take responsibility because she wasn't going to be Prime Minister some weeks hence for that decision, for the consequences of it.
Now in those circumstances, I think, just my judgment, that she ought to have said, "If I'm prudent I shouldn't take on a task this big." And then the question becomes: Was this particular proposal urgent, controversial, you know, all the things, adjectives that have been bandied about that define a really major contractual decision as distinct from a bunch of dog licences.
Mr. Nelligan: Should she consider whether or not the government would be exposed to severe claims for damage if she failed to sign?
Professor Wilson: No, I don't think so. I think the - let's do some what-ifs, which I'm not very good at because I'm not a lawyer. But let's suppose there were major damages advanced against the government - a later government - not hers. You mean if she won the election?
Mr. Nelligan: No. If she refused to sign, and as a result of that there was a claim against the government for breach of contract; should she take that into account?
Professor Wilson: Not at all. Because that wouldn't have got anywhere near resolution in the courts, as I'm sure you'd agree, for ages, you know, before we had a new government, and it would be their problem not hers.
Mr. Nelligan: Well, that's passing responsibility onto the new government which they didn't seek.
Professor Wilson: Chrétien asked her to -
Senator Kirby: Every time a government changes there's a potential degree of liability...
Mr. Nelligan: That's right.
Senator Kirby: ...on the next government on a zillion things.
Professor Wilson: I mean, it's easy to say this, more difficult to imagine it in practice: they really shouldn't have been in this decision-making mode in this thing at all because of those kinds of implications. I mean, they ought to have known, I'd argue, in the middle of August, or earlier, that there was going to be an election before signing date settled for October 7th because they knew when the five-year rule ran out on a Parliament elected in 1988 there had to be an election in the fall of '93. So they were bound to run - if they did their numbers - into this problem. And you know, maybe they ought to have reined things in back in the summer.
Senator Tkachuk: So it's not the magnitude of the decision, it's whether it's a popular decision?
Professor Wilson: No, no. It is the magnitude. A minor decision, one - even a minor/major decision might not have been -
Senator Tkachuk: Well, I asked you that question: what would have happened if this decision had caused her to win the election?
Professor Wilson: I'm having a real difficulty with that question. I can't conceive how -
Senator Tkachuk: No, no. But hypothetically a decision can be made by government that's a major decision but that doesn't cause them -
Professor Wilson: It doesn't have to be minor or major.
Senator Tkachuk: - that causes them to win the election. Does that mean - You see, I have a great difficulty with the logic of the time period of when the Parliament is dissolved and the time of the election. Because you used polling and - you used polling and then you used Jocelyn Bourgon's question. But on what precedents did she base her particular letter of asking for advice? Did she have a precedent or is it just what she -
Professor Wilson: No, no. As I understand what she said, she said there is - I'm putting words in her mouth a little bit but I don't think too many - there is a practice and understanding, a way of doing things in the Public Service that once dissolution has occurred there is this rule - remember she said that - it's not a law but there is this rule; there is this form of behaviour, and so on. That says to me that she's repeating something that's practice that goes back some time in the Public Service.
The Chairman: Would it be too irreverent to ask you, Professor Wilson, because of your views about the great job that the senior Public Service does in educating our Ministers of the Crown, is there a thin line that divides political sensitivity and protecting your own derriere?
Professor Wilson: Well, I suppose you can't ever escape that. But there is a more serious problem I would have thought and that is - I know it and Professor Mallory knows it and so does Professor Heard, so does Professor Stewart - ex-Professor Stewart: as a teacher you can lead the horse to water but you can't make him drink.
Maybe that teaching that goes on falls on deaf ears. And at the risk of - I don't want to give offence to any particular individual. I think it's fair to say Prime Minister Campbell had had very little experience of public office of Parliament: she had only been a Minister in two cases; only been in Parliament since '88. She had been on the Vancouver school board before that.
You look, apart from her and her predecessor, the experience that Prime Ministers have had is far greater than that, and therefore they're more likely maybe to listen, understand or to sense the wisdom of what they're getting from the Public Service.
I suspect that she decided, you know, as has been suggested, we've been at this a long time, it's a legit thing, it's all sorted out, everybody's on board. Let's go ahead with it and that's that. And I suspect also that Mr. Shortliffe, although I don't suppose he'll ever tell you, said to her, "Prime Minister, there's a case for caution." Just as Madam Bourgon said she said to Mr. Corbeil. And that she said, "Well, I'm not concerned about that," or whatever and went ahead. There are lots of other examples that have nothing to with that decision that suggests this is probably what would have occurred.
But it's got nothing to do with the questions being asked by Senator Tkachuk. Because I think what he's asking is whether or not, if she'd won the election, hypothetical, that decision would have - let me change it around - would have mattered very much? No. We wouldn't be asking the question.
But we're not asking the question because she lost the election. We're asking the question because she shouldn't make that kind of decision. If she had won the election and continued to be Prime Minister, who would have raised the question about her having done it? You would have been able to sweep it under the carpet. It would have become one of those precedents that you were looking for (to Professor Mallory) of something having been done that maybe shouldn't have been done about which nobody said anything. And that's where we would be.
But none of that affects to my mind the iniquity - if I can use that awful word - of what was done.
Senator Tkachuk: So governments can, during that time period, can make decisions?
Professor Wilson: Sure, yes.
Senator Tkachuk: And they can make decisions of this kind so it will be the people who will decide in the end whether they like the decision or not and future Parliaments can deal with that decision?
Professor Wilson: If she'd made that decision in the middle of August, if it had been done then, nobody would have a leg to stand on in this argument as far as I'm concerned. It becomes an issue only because it was concluded after dissolution. Why does that matter? Well, I don't want to repeat myself.
Senator Tkachuk: Well, because it was political...
Professor Wilson: No.
Senator Tkachuk: ...Highly politically charged?
Professor Wilson: No, no. You folks may think that's important. I don't think that matters a damn.
Senator Tkachuk: Well, there's something wrong with me here because -
The Chairman: - does matter a damn because you brought up the matter of the polls.
Senator Tkachuk: - it's just a matter of the polls and whether it's -
Professor Wilson: Oh, that's what you mean. I thought you meant something else.
Senator Tkachuk: No. Like it seems to me that if you have a rule, or a rule in your own mind about how a government should act and what decisions it can make by decisions of magnitude that you're talking about during this time period - But really what you're saying is, it isn't a decision of magnitude that's the cause of not making a decision or making a decision...
Professor Wilson: No, it is.
Senator Tkachuk: ...but rather a decision of the election?
Professor Wilson: No, no. No, I don't think I'm saying that. I being misunderstood. Let me try very quickly, Mr. Chairman - do you wish me to shut up?
The Chairman: No, no. Please, go ahead.
Professor Wilson: Repeat what I said? What I said generally was, Look, there are two reasons for the so-called caretaker convention. One was, after dissolution the mechanisms for scrutinizing the government's behaviour are gone: question time, et cetera, to which there's an answer, well, there's an election campaign, there is the press whatever. I don't accept that, but that's a matter of opinion I'll grant you.
The second reason was in an election - and this is the one the Australians give in their document - an election always entails the possibility of the defeat of the government which means that that government that might make this big decision, whatever it may be, won't be able to take responsibility for its consequences because it won't be the government after the election. Now that's thought to be a problem.
Now I'm saying in Ms Campbell's case, when she made the decision she knew she wasn't going to win the election. Now, you may say that wasn't that clear. All right, we can have that argument too, if you want. But she knew she wasn't going to win the election, therefore she ought not to have made the decision because it was too big. What's "too big"? I don't know, that's a matter of definition. It's hard to lay out.
Senator Tkachuk: So if she would have been ahead in the polls and then something happened two weeks later that caused her to lose the election, that would excuse her from that particular act?
Professor Wilson: If she had been ahead in the polls, I wouldn't have been able to write the last two pages of this paper.
Senator Tkachuk: But isn't that the point?
Professor Wilson: It wouldn't excuse her. It would leave all the other stuff there, that you shouldn't do it in a period after dissolution because who's scrutinizing it? How are you going to be responsible to Parliament? Who's asking the questions? Who's making the Prime Minister face the music in the House of Commons? I mean, none of this stuff is going in an election campaign at all.
Senator Tkachuk: It's not going on - Anyway, I've asked the questions. Your arguments are, and I'll just go back to that because, you know, I've never read anything that Professor Ward has said. I've never heard this idea in Canada of "caretaker government". It may be that in Australia but they've got a lot of things in Australia we don't have here. But I have never heard that sort of concept after an election is called. And you base it on political arguments and that's fair enough and you base it on -
Senator Kirby: - science literature is full of discussions of the "caretaker government" issue in the Canadian context. I mean, I know it's not your field. I'm just saying that as a statement of fact.
Senator Tkachuk: Let me ask that question again: You say that she should have made - the decision itself should have been made should have been made - shouldn't have been made because she knew that she was going to lose the election. My point was, what if she knew or what if she believed at the time -
Professor Wilson: I understand.
Senator Tkachuk: - and then something happened as in the case of the Liberal government or the Liberal Party in Ontario was 50 per cent in the polls at the beginning and then slid down and lost the election.
Professor Wilson: I heard that question. And the answer, I repeat, is that I would not have been able to make the point I made in the last two pages because she would not have been have been losing the election at the time she made the decision. That doesn't take away from the other stuff that I was - at least I don't think it does - that I was arguing in the paper about Parliament having been dissolved and there being no responsible chamber, and about the potentiality for government defeat. That was an afterthought, almost, that last one. You're beginning to make me feel I shouldn't have put it there because it's created all kinds of trouble.
May I just say, Mr. Chairman, for the Senator's interest, I've decided, in fairness to put my mind at rest, I would talk to as many of the senior political scientists in Canada I could chase down by telephone between Wednesday and the weekend. And I have yet to find one who disagrees, that this custom exists, except for Professor Heard, and I'm not sure it's a major disagreement, and Professor Mallory. You're all alone, did you know that.?
Professor Mallory: You didn't consult me.
Professor Wilson: I know I didn't because I knew what you thought. I'd already read your -
Senator Kirby: He knew he was going to see you today.
The Chairman: Shall I thank the witness, colleagues? Thank you very much, gentlemen. That was a very good course in - what will we call that - Political Science, more than 101. Thank you, Professor Mallory, Professor Wilson, Professor Heard.
Mr. Nelligan: Are we at two or at one?
The Chairman: We're meeting at two o'clock.
Senator Kirby: Mr. Chairman, I'd have no problem with meeting at two o'clock although we were scheduled to go earlier. Just so we're clear, though, I would anticipate we would be finished with Mr. Shortliffe at five, but if we're not that we break from five seven and reconvene at seven because we have to finish with Mr. Shortliffe tonight, is that correct?
The Chairman: Yes.
Senator Kirby: That's fine. Two o'clock is no problem.
The committe recessed.
Ottawa, Monday, September 25, 1995
The Special Senate Committee on the Pearson Airport Agreements met this day, at 1:30 p.m., to examine and report upon all matters concerning the policies and negotiations leading up to, and including, the agreements respecting the redevelopment and operation of Terminals 1 and 2 at Lester B. Pearson International Airport and the circumstances relating to the cancellation thereof.
Senator Finlay MacDonald (Chairman) in the Chair.
The Chairman: Order, please.
Welcome back, Mr. Shortliffe.
Mr. Glen Shortliffe (Former Clerk of the Privy Council): Thank you very much, senator. I won't say it is a pleasure to be back, but it is always interesting to be back.
The Chairman: We missed you. It has been lonely around here without you.
Apparently, you have no opening statement to make.
Mr. Shortliffe: That is correct, senator. I have no opening statement except, perhaps, to inform the committee that when this meeting is over today I am going to invite Ray Hession to lunch.
The Chairman: Okay. Then we will start with the questions. Senator Lynch-Staunton and Senator Kirby.
Senator Lynch-Staunton: Mr. Shortliffe, before we get into the meat of the questioning, I would like you to explain to us, or to me certainly, as succinctly as possible, what is the role of the Clerk of the Privy Council? What are particularly his or her responsibilities towards the Prime Minister?
Mr. Shortliffe: Well, senator, there are essentially three roles to the Clerk of the Privy Council. First, and, in many ways, foremost, the Clerk is the Deputy Minister to the Prime Minister. As such, he is the - he or she is the public service head of the Prime Minister's department, which is the Privy Council Office; and he is, or she is, the senior public servant - service advisor to the Prime Minister of Canada.
The second role of the Clerk is Secretary to the cabinet. As such, the Clerk has responsibilities delegated from the Prime Minister to operate the cabinet decision-making system; to serve the various cabinet committees and cabinet itself in terms of public service support; and to provide advice to ministers in their collectivity in their collective responsibilities for decision making.
Certainly, when I was Clerk and cabinet was at a strength of 40, I had one overall boss, first and foremost the Prime Minister, and then 39 other ministers that I had to support.
Thirdly, now by statute, the Clerk of the Privy Council is head of the public service of Canada and, as such, has a broad managerial responsibility for the health of the institution of the public service and for its management.
Those are the essential roles of the Clerk.
Senator Lynch-Staunton: Regarding your - or the Clerk's - well, better relate it to your terms because each Clerk may have a different way of approaching things as well as the Prime Minister of the day. You have served three Prime Ministers so we can benefit from the experience of three different individuals whom you establish, obviously, a very close confidential relationship. It is essential to the proper functioning of your office to make sure that each one has the confidence of the other.
Mr. Shortliffe: Yes, I would certainly agree with that, senator. In fact, the relationship that has to exist between Clerk and the Prime Minister is, I would say, probably unique in our system of government.
One of the three Prime Ministers that I had the honour to serve said to me once, "I can tell you things that I can't tell anyone else knowing that I can tell you and it stops there." That is very much at the heart of the relationship that exists between Clerk and Prime Minister.
Yes, senator, I did have the distinct honour to serve three Prime Ministers and each one was in his or her own way a unique relationship.
Senator Lynch-Staunton: In turn, do you act as a buffer against all those who want access to the Prime Minister, particularly senior government officials who feel they have to - or feel it is necessary to get in touch with him? How does the Prime Minister avoid getting 40 pieces of advice from 40 departments on a constant basis, except from ministers, I am talking the deputy ministers and seniors?
Mr. Shortliffe: The normal process, senator, is, of course, as you have just quite correctly said, ministers provide advice directly to the Prime Minister all the time, either in the context of cabinet meetings or by written correspondence or by one-on-one meetings or small groups of meetings.
But with respect to the public service, public service advice to the Prime Minister is channelled from all parts of the government through the PCO and through the Clerk. So the Clerk is the channel of public service advice to the Prime Minister.
Senator Lynch-Staunton: What I am getting to, as obviously you suspect, is a number of memos which have been supplied to this committee all with the heading, "Clerk of the Privy Council and Secretary to the cabinet," most of them memorandum for the Prime Minister and all marked "Secret". I guess - well, why are they all marked secret if they eventually become public documents?
Mr. Shortliffe: Well, it certainly - they are not produced at the time with the thought that they are all going to become public documents, first and foremost.
Secondly, in my time and in the time of my predecessors, and I am quite confident that in the time of my successor today, it was standard practice that all memoranda to the Prime Minister from the PCO were marked secret mostly because, at various times, as you will have seen in the memoranda that have been released, memoranda are very often discussing things that fall within the ambit of cabinet confidence, or within the ambit of advice to the Prime Minister, and they are all marked secret. It was a routine process on all memoranda on all subjects.
Senator Lynch-Staunton: How many - once - I see that, for instance, on most of these memorandums you sign but there is always somebody else's name to the left of your signature, which means that these are not all written by you; they are prepared by senior officials of the appropriate department and then sent to you for approval; is that how it works? Is that how it did work?
Mr. Shortliffe: The names that you are reading on the left-hand side are names of officials within the Privy Council Office who have prepared, drafted, the memoranda and have sent it forward for my approval and signature.
This would - in a normal day, senator, I might sign as many - anywhere from 5 to 20 memoranda to the Prime Minister in the course of a normal day. On a weekend, on a Friday afternoon, partly on the theory that Prime Ministers should not rest on the weekends, we would have a very heavy flow of memoranda, normally, to the Prime Minister.
These are not documents prepared in other departments. They are documents prepared in the Privy Council Office.
When you say that I didn't write myself, I don't think I wrote a typed memorandum to the Prime Minister all the time I was Clerk. I signed memoranda that were prepared by other people.
When I sign them, it means that I have agreed with its contents and approved it.
Senator Lynch-Staunton: So how many - how would you select the topics that would go to the Prime Minister? Did he direct you to keep himself informed on certain issues; or was it at your discretion to keep him informed on whatever issue you thought should be brought to his attention?
Mr. Shortliffe: It is a mixture of the two, senator. It would not be infrequent that the Prime Minister would ask to be briefed or informed on a subject or a set of subjects; but I would also use my own judgment in bringing to bear my judgment that the Prime Minister ought to be informed about this, that or the other thing relating to the national - the concerns of the national government.
So it was a mixture of the two. He would sometimes ask me for things, and ask me to keep him informed; and on other occasions I was using my own judgment to keep him informed.
Senator Lynch-Staunton: So can it be said that on a weekend in particular when he had a bigger flow of memos it covered a broad area of subjects, not one in particular?
Mr. Shortliffe: Oh yes.
Senator Lynch-Staunton: What I am trying to establish is that while we only have these memos on one topic they are part of a collection of memos on a variety of topics which you and/or the Prime Minister considered to be of national interest both to the government and to the party and to the people of Canada, not necessarily in that order?
Mr. Shortliffe: Yes, quite correct; and not just on the weekends, senator, every day.
Senator Lynch-Staunton: We will get to the handwritten notations in a moment, but was it normal for you to make handwritten notations on memos? I mean you would read them carefully before signing them and then put in our your own personal thought.
Mr. Shortliffe: I read every memorandum I signed very carefully before I signed it because, indeed, as I said a moment ago, my signature indicated that I agreed with the contents of what had been put in front of me.
In my own personal style, senator, I guess my best answer is: It was not unusual for me to put a handwritten note on a memorandum, but it didn't mean that I put one on every one that came forward. It was when I wanted to add something or embellish on something that was in the typescript.
Senator Lynch-Staunton: Would any of the memos come back with the Prime Minister's notes on it?
Mr. Shortliffe: Very frequently.
Senator Lynch-Staunton: There would be discussions verbally on them on occasion, too. They just didn't remain in the brief case and were dead lettered. He felt or she felt that because they were put to their attention that they were worthy and required reading in other words.
Mr. Shortliffe: Yes. Very frequently, the Prime Minister would make a written notation on a memorandum of mine. When I say "Prime Minister", I mean all three.
Senator Lynch-Staunton: Yes.
Mr. Shortliffe: Not just one.
Would put a handwritten comment on a memorandum of mine, particularly if that memorandum was seeking a decision of some sort or guidance of some sort.
Also very frequently, because I met with all three of the Prime Ministers on a routine basis, the Prime Minister would wait until our regular meeting and then raise a memorandum with me and we would discuss its contents. I don't think I ever went to a meeting with any one of the three Prime Ministers that I served without having a little handwritten list of mine that would have 10 subject-matters to be covered in the course of our discussion that day.
Senator Lynch-Staunton: I hope - that certainly clears it up for me, and I hope for others, too, as to the role the Clerk plays. It is a crucial one, an essential one.
Senator Stewart: Senator Lynch-Staunton, could I ask at this point just to follow on a question or two? Thank you.
Senator Lynch-Staunton: Certainly.
Senator Stewart: This has been a most interesting and enlightening description of the role of the Clerk.
You would be signing memoranda on certain issues which the PCO thought ought to be brought to the attention of the Prime Minister and then, in certain cases, the memoranda would deal with issues on which the Prime Minister had already expressed an interest.
Mr. Shortliffe: Correct.
Senator Stewart: So you have had your discussion with the Prime Minister, and I am not talking about any particular one. What then? Obviously, this is more than bedtime reading for a Prime Minister. What happens then? The Prime Minister indicates his or her will and then what?
Mr. Shortliffe: The Prime Minister, and again I am not being specific as to Prime Minister, the Prime Minister very frequently would give me direction as to followup action that he or she would like to see taken on the subject matter under consideration. That could range, senator, from me dealing with Deputy Ministers around town to convey to them the Prime Minister's will or opinion or decision; or very frequently the Prime Minister would ask me to speak to one of his ministerial colleagues and to pursue a particular subject area with one of his ministerial colleagues.
In some cases with respect to the flow of memoranda that went to Prime Ministers, there was no followup because all we were doing was advising the Prime Minister of a state of play. In other cases, we were looking for direction or a decision by the Prime Minister and, when the Prime Minister took that decision, part of my job was to follow up on it.
Senator Stewart: I think this is important, otherwise I wouldn't be taking your time with it. Tell me if I go wrong. The memorandum has gone to the Prime Minister, she or he has read it, the discussion takes place, it is one of those on which the Prime Minister has - where the Prime Minister's decision entails action within the government.
One possibility would be that you as Clerk of the Privy Council would one way or another get in touch with a Deputy Minister, perhaps an Associate Deputy Minister.
Mr. Shortliffe: Normally with a deputy.
Senator Stewart: Normally with the deputy.
Can you give us any reading as to how often you would act as the Prime Minister's agent dealing with his ministerial colleagues as over against the cases where you would act as agent dealing with Deputy Ministers? It would vary, I am sure, from time to time.
Mr. Shortliffe: It varied very widely, senator.
Senator Stewart: Fifty per cent one way or another, roughly?
Mr. Shortliffe: I am reluctant to, in the sense that I am not sure that I would be particularly accurate. I would deal with deputies daily. I would very often - I would deal with ministers less frequently but fairly regularly, and ministers would deal with me.
When I was answering Senator Lynch-Staunton a few moments ago, I was saying one of the roles of the Clerk is Secretary to the cabinet; and, as Secretary to the cabinet, the Clerk has a responsibility for supporting ministers in their collectivity.
It would be not unusual for a minister, for example, to phone me and say, "I am thinking of raising subject such and such. Do you think, Glen, that the Prime Minister would like to see this raised at this particular time?" I might say to that minister, "Well, I will find out". And I would ask the PM and the PM would tell me and then I would go back and tell the minister. I was a communications conduit in that sense.
Senator Stewart: Chairman, perhaps I ought to tell you what lies behind my questioning and my interest in the answers given to Senator Lynch-Staunton's questions.
I am trying to discover, and I think it is relevant to the problem before us, just the relationship - the role of a Prime Minister. I have recently heard a Prime Minister say, and it wasn't in another language, "I will ask one of my ministers to do this." And I said, "Well, where is the Queen?" That is language that one normally expects from the head of state. "One of my ministers."
That is a kind of American model of government. It certainly isn't the old British model. I can't speak for the contemporary British model.
But I am trying to ascertain if, in effect, the Prime Minister of Canada is now really the minister and then there are lieutenants. You see, when you say that - when you say that the Prime Minister makes a decision, the Clerk of the Privy Council as his - enjoying a unique relationship with the Prime Minister then communicates with the deputy ministers, I get almost a Washington model which I find certainly incompatible with most of the stuff we read in the textbooks. Will you help us on that?
Mr. Shortliffe: I will try, senator. First of all, the textbooks that I have read I have never thought were particularly accurate with respect to the reality of how a government functions.
Secondly, I have served every Prime Minister from Mr. Diefenbaker to Mr. Chrétien, and I am prepared to bet with you, although I can't guarantee, that every one of those Prime Ministers would have said, "And I will refer this to my ministers." There is a possessiveness in that sense that has characterized certainly every Prime Minister for whom I worked directly.
The Prime Minister is the head of the government, there is no question. He is not the head of state, but he is the head of the government.
The uniqueness of our system, as you know, sir, is that he only remains head as long as his colleagues consent to that. So there is a very real check on him, but the power of a Prime Minister is pretty unlimited in our system. In fact, I would contend because of the nature of the Westminster system that in reality the power of a Prime Minister is greater than that - than the President of the United States because a Prime Minister in our country exists both in terms of the executive powers of the government and in terms of the legislative powers of the government or else he can't survive. So there are vulnerabilities to our system but there are great strengths to our system.
Senator Stewart: Thank you, chairman. Thank you, Senator Lynch-Staunton.
Senator Lynch-Staunton: Thank you. I share Senator Stewart's - I don't want to get into the discussion, but I do feel there is an extraordinary concentration of power taking place in our national government which has developed over the years which can be a bit frightening. But that is for another debate.
I would like to get on to three memorandums which were released to this committee, all marked secret and all with notations by you on them. I was intending to discuss the issue of confidentiality, but it seems to me when we go to the memos I want your opinion as to whether confidentiality was not breached here.
The first memo I want to refer to is the one numbered 002188, which is familiar to everyone around this table, dated November 16, 1992, to the Prime Minister: "Update on Pearson Airport - Terminals 1 & 2 Redevelopment". It is stated - it tells the Prime Minister that Paxport has the best proposal, although the news will only be made public three weeks later. It identifies a number of problems which have developed since the RFP came out; the recession is carrying on longer than expected; Air Canada is concerned about possible increased costs; an LAA may be formed. It is all written there and we are familiar with it, but at the end there is under your signature a handwritten note, which I gather is yours, saying:
Prime Minister: As the material indicates, there are few incentives for the bidders to get together. As discussed last Thursday, I'm looking at bid compensation.
Now, (a), since this is a public document we can't pretend it doesn't exist, I feel that this is a violation to release this note, I interpret that as advice to the Prime Minister, and I feel that having released it is a violation of what has been explained to us can be considered a confidential document. I don't know what your reaction was to find this come out. I am sure it cannot please - if my interpretation is right - Clerks, or people in that position, to be in that position to know that advice of this sort can be made public.
Mr. Shortliffe: Senator, I thank you for putting the point in the way in which you have put it. Yes, I regret that at least the first sentence of my handwritten note to the Prime Minister was released. If the intention of the government was to keep, in the various whiteouts that have appeared in all of these documents, references to cabinet confidences and to advice, to not release that, then I do not think that that particular - that is advice. That line is advice to the Prime Minister from me. So I don't think it should have been released.
I am not - I am sure there is a judgment call. It is always subjective and I know that officials have been working very hard in processing all these hundreds of thousands of documents. But I regret that it was released.
I am sure - I said a few moments ago part of my style as a senior official was very often to put handwritten notes on material going forward to ministers or Prime Ministers, and I suspect my successors will not engage in that practice very easily; and, if I had it all to do over again, I don't think I would either.
Senator Lynch-Staunton: Quite understandable also.
Well, now that it is out and it has been given a lot of interpretations both here and elsewhere, you are the only one who can tell us exactly the significance of this notation. Could you tell us exactly what we are reading and what its significance is?
Mr. Shortliffe: Yes, I can. Since it is out, yes, I can.
It is not infrequent for Prime Ministers to ask questions of the Clerk. This is an instance where I was responding to a question that I had been asked by Prime Minister Mulroney. It came about basically in the following fashion: Before this memorandum was prepared, the Prime Minister knew from me orally that the best overall proposal emerging from the evaluation process was indeed Paxport. He knew that because I told him that orally.
It so happened that a couple of days before this memorandum was prepared the Prime Minister was at a social function and at that social function he encountered Charles Bronfman. Mr. Bronfman - of course, at that time no announcement had been made as to who had won the best overall proposal; and Mr. Bronfman, as I understand it, in the course of their social discourse, made, frankly, a pitch at the Prime Minister about the importance to Claridge of winning the bid for Pearson redevelopment.
As a result of that discussion, the next morning when I met with the Prime Minister, the Prime Minister asked me whether or not there was any possibility that once the announcement was out that the two could be - would - could come together so that everybody could get a piece of the action.
Quite frankly, that was the Prime Minister being nice in response to a social discussion that he had had the night before.
I said to the Prime Minister at that time, "Look, I have got to go away and look at the current state of the whole file." I went away. I had this memorandum prepared. I wrote the note at the bottom which was my advice and judgment to the Prime Minister.
The second sentence also simply reflects that at that particular time a final decision to go ahead with an announcement that the project would proceed had not yet been made and that one of the matters that I had discussed with the PM was if the government decided not to go ahead, was there some method by which the proponents to the bidding process could be compensated for the costs that they had incurred in going through the RFP process et cetera; and that is what the second sentence means.
So it was a comment, as I say, in response to a question from the Prime Minister, and those kinds of questions were not unusual at all.
Senator Lynch-Staunton: Did the Prime Minister ever follow up on his reporting the discussion of Mr. Bronfman? Did he persist with the suggestion -
Mr. Shortliffe: No, this memorandum was that and that was the end of it. We were onto other things.
Senator Lynch-Staunton: This was enough to discourage anyone from pursuing.
So, that is very important, Mr. Shortliffe, because you are the only one who, of two, who were at that conversation, and what we are told is that the Prime Minister, after a discussion with Charles Bronfman, who quite rightly having T3 was hoping to get T1 and T2, it is quite normal, and who wanted to win the process said, "Well, in case I lose, or in case something happens, maybe we could do something together because I am already on the ground."
Mr. Shortliffe: No, I don't want to put those -
Senator Lynch-Staunton: No? I want to be very clear. I don't want to misinterpret what -
Mr. Shortliffe: Exactly, senator. If I may, I don't want to put any words into - ascribed to Mr. Bronfman of which I have no knowledge.
Senator Lynch-Staunton: No.
Mr. Shortliffe: What I am saying is that I was told by the Prime Minister that he had had a social conversation. The Prime Minister, of course, in that conversation, because the announcement had not yet been made, neither did not tell Mr. Bronfman what the Prime Minister already knew, which was that Paxport was being judged as the best overall performance; and then the Prime Minister came to me and said, "Well, is there any way they could, in effect, be involved in the final implementation of the project?" And my advice to the Prime Minister is the handwritten comment at the end.
Senator Lynch-Staunton: And that was the end of -
Mr. Shortliffe: Yes.
Senator Lynch-Staunton: - the topic as far as the two getting together one way or another with the Prime Minister. Okay.
The reason that had to be cleared up is - I want to pick up again on a suggestion made here by Senator Bryden when he was discussing Paxport with Mr. Hession. He said, "Now, my question is -" this is Senator Bryden - "was that a secret agreement between Claridge and Paxport or Paxport's principals and Claridge's principals right from the beginning," suggesting that right from the beginning there was an agreement somewhere that Claridge and Paxport would eventually get together and the whole process was a sham.
Mr. Shortliffe: Senator, to my knowledge, the competition between Paxport and Claridge throughout the whole process was very intense. Perhaps one amusing - not amusing - one illustration of that is another document that is in the pile before you, which I call "Harry Near's nearer my God to thee" fax to me on the day that the announcement was made.
Harry Near was doing his job for his client. The ship, the Titanic, having hit the iceberg and sinking, there was Near on the tail of the ship sending off faxes which, in effect, said, "Nearer my God to thee." That was a sign of competition.
Senator Lynch-Staunton: So we can dismiss a suggestion of collusion, and we can dismiss a suggestion of a sham process from what we have heard so far, anyway, we will see what we hear in the next few days.
I only have two memoranda to go, and I will do this as quickly as possible because then I have another topic to get on, but I promise not to take more time than needed.
The second memorandum is dated December 4, 1992. It is number 002184. It also has been distributed. Again to the Prime Minister and again on T1T2 and again an update with a notation highlighting the airline industries' problems, that was one of the problems which had ensued since the RFP had been distributed; and you write at that point:
The government would have to consider putting the whole project on hold until a later date -
Because of the current circumstances in the airline industry. And then there is another handwritten note:
Prime Minister: However, the government could consider other alternatives.
Do you recall what you meant by writing that little note? This goes back some years.
Mr. Shortliffe: I have thought about it, senator, and I - first of all, let me say I am not absolutely sure what I meant at the time, but I could have meant things like doing it as a government project, looking at Crown corporations, et cetera. There were always alternatives if one wanted to get on with something.
Senator Lynch-Staunton: You didn't have anything specific in mind?
Mr. Shortliffe: No.
Senator Lynch-Staunton: You weren't - were you thinking of a merger between the two at that time, do you think?
Mr. Shortliffe: Not in particular I don't think, senator. To the best of my recollection, the reason I wrote that note, and here again I come back to the process that I was discussing earlier, at the end of my day, normally, I would be faced with my signing file and there would be a number of memoranda to the Prime Minister, letters to other deputies, conceivably letters to ministers, in that file; and there is a good deal of material to get through. I would normally read very carefully each document to which I was going to affix my signature and, to the best of my recollection, as I was reading this in the late afternoon of whatever the date was, and I came to that line, "Putting the whole project on hold to a later date," and knowing that the government and the Prime Minister would not be enthusiastic about putting it on hold to a later date, I wrote what I wrote.
Senator Lynch-Staunton: Fair enough. The third memo, and the last one I want to bring up, is dated March 5, 1993, 002191, also been distributed, and it points out Paxport's problems in meeting the financibility criteria of Transport.
Mr. Shortliffe: Senator, may I ask you to tell me the number again? Mine are not in a book so I have to -
Senator Lynch-Staunton: I am sorry, yes, 002191, dated March 5, 1993.
Mr. Shortliffe: I have it.
Senator Lynch-Staunton: The problem here is that the airlines are resisting additional charges because of the problems they were going through at the time. And, again, a handwritten note to the Prime Minister:
I have been having some conversations on this file on which I will report to you orally.
That seems like quite an innocuous comment but, because there is a note there, was there anything special that you had to report to him orally which would be of value to this committee? Or, is that again - I just bring it up because -
Mr. Shortliffe: I am just refreshing my memory, senator, on the content of the memorandum itself.
As I recall, I believe that handwritten note related to various discussions that were going on at the time with respect to the prospects for Mergeco.
Senator Lynch-Staunton: Okay. Did you find that Prime Minister Mulroney was taking an unusual interest in this file as opposed to other files you would bring to his attention?
Mr. Shortliffe: No, not in this timeframe, senator, because the - within this timeframe, that is, we are now talking about the period - certainly the period in 1993 between January and June, the government had made it quite clear that this was one of the priorities that it wanted to see completed before it left office. There were others but this was one of the priority items for the government.
It would not be unusual for me as Clerk to keep the Prime Minister closely apprised of developments with respect to those things that clearly had been identified as priorities for the government.
There were a number of factors that were going into that; but part of it was the reality, certainly after February, that this government knew that it was going to leave office and it wanted to complete this process which, as you will recall, when I came and testified as Deputy Minister of Transport, began when I was Deputy Minister of Transport, some four years before.
Senator Lynch-Staunton: Just to get back to that conversation regarding the Prime Minister's passing on the request for some participation in the T1T2 process by Claridge. That doesn't seem to indicate to me that the Government of Canada via the Prime Minister was actually favouring one party over the other; he didn't say at the same time, did he, "Well, keep them out because my friends are Paxport and they are the ones I want in there right until the end"?
Mr. Shortliffe: Heaven's no, senator. The Prime Minister and the government - and I say "and the government", the government being the collectivity of ministers - was well aware that there had been a process; an RFP had been issued; there had been a bidding process; there had been a very carefully done evaluation process. The kind of comment that you have just made never came into the picture in any way, shape or form.
Senator Lynch-Staunton: I hope that clarifies a lot of things.
Now, I promised to be as quick as possible. I get onto the third and last item on my list, and that is something I have been on over and over again, and that is the significance of the dates as the contract moves along and gets ready for the final signatures.
I would like to know your assessment and evaluation of the importance of two or three dates. First, there is one in June when Mrs. Labelle - I forget the exact date, the middle of June, I believe - sends a letter, a non-binding letter of agreement to the principals. Once you have reached that stage how far ahead are you in the process of negotiation, once you get a letter saying, "This is the broad outline. It is not binding, mind you, but this is where we feel we are at today," is that an encouragement, a discouragement?
Mr. Shortliffe: It is an encouragement, obviously; and it was - it represents an important step in the negotiating process that is leading, hopefully, to an agreement. But it is exactly what you describe it as. It is non-binding but it is a positive step down the road.
Senator Lynch-Staunton: Can it be called a turning point?
Mr. Shortliffe: It was a significant milestone.
Senator Lynch-Staunton: Significant milestone.
Then, at the end of August, we have Treasury Board, cabinet, we have an Order in Council, and then the minister's announcement a few days later that an agreement has been reached. It hadn't been signed but has been reached between the parties. Now, how firm is that agreement? How binding is it? How far had the parties come now once they can say that we have an agreement?
Mr. Shortliffe: Well, I am going to put this in layman's terms, obviously, because that is what I am. That announcement meant the deal had been struck. What now had to happen was that that deal had to be translated into legal documentation to give it effect. But a deal had been made.
Senator Lynch-Staunton: Yes, a deal had been made although the final papers had yet to be signed. There had been a shaking of hands and a commitment on both sides.
Mr. Shortliffe: Yes.
Senator Lynch-Staunton: We can't turn back, unless you want to take the risk of turning back.
Mr. Shortliffe: Casey Stengel said, "It's never over until it's over". A deal had been made.
Senator Lynch-Staunton: And then on the 3rd and the 4th both parties signed separately, as I recall - the 3rd and 4th of October - and on October 7, and perhaps you could - since, again, you were a principal actor in the event, a few days before - well, perhaps you could relate to us what led to Prime Minister Campbell being consulted regarding what was to take place on the 7th of October?
Mr. Shortliffe: Well, I think you have had quite a lot of testimony on this, senator, and I can basically only affirm what I think you have previously heard, and that is to say that the, as I recall it, Minister Corbeil had affixed his signatures to the various documents which he had to sign. The final signing was set for the 7th. Somewhere between the date that Minister Corbeil signed and the 7th the present Prime Minister, the then Leader of the Opposition, made his statement about the Pearson file; and that in turn led the Associate Deputy Minister of Transport and the Deputy Minister of Transport to consult with me as to whether or not we should consult with the Prime Minister for a final political go signal with respect to final execution of the documents.
I was consulted by Madam Bourgon and I agreed that we should consult with the Prime Minister. I arranged for that consultation to take place; and the rest is in the evidence before you.
That was - in other words, let me try to put this slightly broader. As we approached that final signature, of course Pearson had become an issue in the election campaign. It was politically contentious and we knew that and therefore we wanted to be sure that we had a final political approval to go ahead and execute the documents, and that is what we got.
Senator Lynch-Staunton: Now, I won't ask you because I know you won't reveal your discussions with the Prime Minister on any issue, including this one; but, as you were approached by Mr. Rowat and Madam Bourgon, surely amongst yourselves you must have been concerned with the legal liability that the government, if any - I believe Madam Bourgon said the liability was increasing as the process continued - the legal liability the government had incurred, as the other parties had, at the end of August when, as you say, the deal had been struck and the purpose of the October 7 signatures was to release the documents, the signing of the closing documents and release of documents in escrow, the contracts having already been signed.
So, yes, were you aware that if the government did not release the documents that there was a great chance that it would be subjected to some legal action to say the least? In other words, did the government have any choice?
Mr. Shortliffe: The government always has a choice, senator. It always has a choice. The government could have decided not to proceed on the 7th. Was I aware or did I believe that there would be an issue of legal liability involved? Yes.
Senator Lynch-Staunton: Yes. I don't want to put words in your mouth - you won't tell us anyway, and you are quite right, whether the Prime Minister was alerted to this. That is between you and her and that is the way it should remain. But you, as her senior advisor, were certainly conscious of the fact that there was a legal liability involved here, all through the piece, no matter what the government's decision was on the 7th of October?
Mr. Shortliffe: Correct.
Senator Lynch-Staunton: I think I will stop there for now, Mr. Chairman. Thank you.
The Chairman: Did you feel an obligation to - does a Clerk of the Privy Council under those circumstances usually provide options for the Prime Minister?
Mr. Shortliffe: You are asking me generically?
The Chairman: Yes.
Mr. Shortliffe: Yes.
The Chairman: Did you?
Mr. Shortliffe: Senator, you and I have known each other a long time. You are a mischievous man, sir.
The Chairman: No, no, I am not.
Senator Kirby: Mr. Chairman, I don't think you needed to ask that last question, since the Clerk has a long standing record as a superb public servant. So I think we know the answer to that second question.
I wonder if I might, before I get into the documents I want to use, I wonder if I might just finish off on the point we are on rather than come back to it later on.
Did you - let's go back to the 4th rather than the 7th, the day before the minister signed rather than the day before Mr. Rowat signed. Did you have an assessment of the consequences of - I am not asking what you gave the Prime Minister; I am not asking what you gave the minister. I am just curious whether you understood - to pick up on Senator Lynch-Staunton's point - what the consequences of not proceeding initially on the 4th would have been, if the minister hadn't signed on the 4th?
Mr. Shortliffe: Do you mean in detail, senator?
Senator Kirby: Yes.
Mr. Shortliffe: No.
Senator Kirby: You knew there would be some liability, I understand, but did you have any assessment as to what that was?
Mr. Shortliffe: To my recollection, I had had in that period some discussions with colleagues, I think in the PCO, although I am not sure. In general terms, yes. I mean - I mean: Did I think there would be a 10-buck liability? No. Did I think there would be a very high liability? Yes.
Senator Kirby: But did you have legal - I am not going to ask you for the legal opinion because I know you can't give it to us, but did you -
Mr. Shortliffe: Did I have a written legal opinion?
Senator Kirby: Yes.
Mr. Shortliffe: Not to my recollection.
Senator Kirby: Did you have a discussion with the Deputy Minister of Justice or somebody? I understand that you are not a lawyer, neither am I. So am I correct on that? So did we have -
Mr. Shortliffe: To the best of my recollection, I had such a discussion with my legal counsel.
Senator Kirby: In the PCO?
Mr. Shortliffe: Yes.
Senator Kirby: But it wasn't quantified in any normal legal opinion sense?
Mr. Shortliffe: No.
Senator Kirby: Okay. I wonder if I could just ask you about a letter which was sent to the chairman today from Bill Rowat. It is really just clarifying a couple of points. It just came in a couple of minutes ago. The Clerk just handed it to me. There is one paragraph, and I will read you the paragraph in the letter. So this is Bill Rowat writing as of today.
It was my view at that time, and it is still my view now, that the Pearson Contract was not concluded unless and until all the documents were signed by the parties, including those signed on October 7, 1993...
Was it your view - would you care to comment on that? Do you agree with Bill on that, Mr. Rowat on that, or not?
Senator Lynch-Staunton: What letter is that?
Senator Kirby: This is a letter the Clerk handed me literally five minutes ago.
Senator Lynch-Staunton: Could you share it?
Senator Kirby: It is a letter to the Chairman with a copy to Mr. Nelligan, the Clerk and myself.
Senator LeBreton: Here we go again.
Senator Kirby: I mean literally - I have been sitting at the table.
All right, Mr. Chairman, I will tell you what I will do. I will come back on this while the Clerk duplicates it and then I will talk about it after, if that makes it easier for everybody.
I think, in fact, that the letter went to the Chairman. It didn't come to me.
The Chairman: It was copied to you, Senator Kirby.
Senator Kirby: I wonder if I can go back to one of the documents - let me make things easy. I want to touch on a whole series of documents. And I actually put letter tags next to them, so I am going to ask my assistant to give it to you just to make it easier for you to find them.
Mr. Shortliffe: Thank you, senator.
Senator Kirby: I will have to read the number into the record, but in fact I am going to refer to the letter and I am not necessarily going to use all of these but you have got lettered tags.
The first one is the one that Senator Lynch-Staunton - it is my tab A. It is the one Senator Lynch-Staunton asked you about, and I won't then get onto your handwritten note because he has asked what I wanted to ask on that. But there is a separate issue here that has been sort of troubling me from the beginning. You will notice in the first dash under the second bullet point it says:
- the recession is continuing longer than expected and traffic may decline due to the current airline industry situation so the need for expanded terminal space has slipped 2 to 3 years. There is no need to start construction until 1996;
Given that, and that theme appears in a bunch of other documents that we have seen, why was the government pressing to - initially, the target date for finishing was May 31, 1993 - given what seemed to be happening, given the Air Canada - given the fact that Air Canada's lack of desire to pay extra, et cetera, what was the significance of the May 31 deadline and why the push?
Mr. Shortliffe: First of all, if I may, before the indented bullet, the round circle bullet -
Senator Kirby: I am sorry, I wasn't -
Mr. Shortliffe: It says:
Transport has identified a number of issues to be considered...
Senator Kirby: I am sorry, I wasn't trying to -
Mr. Shortliffe: What we are doing here is reporting a view held essentially by some officials in Transport.
Senator Kirby: Right, MOT.
Mr. Shortliffe: Secondly, as I testified to with Senator Lynch-Staunton a few minutes ago, and as in fact I think my handwritten comment underscores, at this point the government had not taken a final decision to go ahead. You will notice that the comments section has been excised and I am sure, Senator Kirby, from your experience you know what that was discussing -
Senator Kirby: Yes.
Mr. Shortliffe: - quite obviously.
The government subsequently took the decision to go ahead with the project; and that decision was announced on the 4th of December. As I indicated to you a few moments ago, from the period, really, from January through June of 1993, the government clearly identified to those of us in the bureaucracy that this was a priority project that they wanted to see completed before they left office.
Senator Kirby: So do I infer from that that the original - that the push for the original target date of May 31st was driven by a consideration of when an election might be held?
Mr. Shortliffe: No, not an election, when a government was going to leave office.
Senator Kirby: When?
Mr. Shortliffe: A government was going to leave office, senator.
Senator Kirby: I see. When the Prime Minister was going to leave office? Well, when the government - okay, you are correct. I am sorry -
Mr. Shortliffe: When the government was going to leave office, senator, because that is a very important point.
Senator Kirby: I accept that.
Mr. Shortliffe: It wasn't just the Prime Minister. The cabinet was gone when Mr. Mulroney left.
Senator Kirby: Fine, okay, that is fine. I was using "Prime Minister" for the short and absolutely I agree with you the government was going. So, in fact, it was the change of government, change of Conservative government from one Conservative government to another which was originally driving the March 31 -
Mr. Shortliffe: May 31st.
Senator Kirby: Excuse me, thank you very much, the May 31st deadline.
Okay. I wonder if I could turn to - sorry, just one last comment on the handwritten note on the bottom of that page. I understood your response to Senator Lynch-Staunton on the first sentence. The second sentence says:
As discussed last Thursday, I'm looking at bid compensation.
What does "bid compensation" mean?
Mr. Shortliffe: The question that had been raised was: If the government decided not to proceed, was there some -
Senator Kirby: You mean essentially that cancels the project.
Mr. Shortliffe: To cancel the process, was there some way that the proponents, the bidders, could be compensated for the money that they had spent going through the process to this point. That is what the -
Senator Kirby: So "bid compensation" was to compensate the two firms for the cost of actually having responded to an RFP that the government then pulled.
Mr. Shortliffe: That is correct.
Senator Kirby: Can I get back then to the question of the creation of Mergeco - or the - let me not call it the creation of Mergeco, the putting of the two firms together. When did you first hear that this might happen?
Mr. Shortliffe: It is interesting, if I may, senator, the difference between recollection and testimony that you previously had because I was thinking about this before I left on my most recent business trip. My own mind said January, but somebody testified that I said something near the end of December, so that is probably when I heard it.
Senator Kirby: In fact, Madam Labelle in - I never figured out how to read - I will just read you the excerpt because I have got it here.
I asked her whether anyone - I said: "To the best of your knowledge, did anyone in the government do anything to encourage the formulation of Mergeco? That is, anybody being other people in the PCO or in the minister's office or anywhere else for that matter?" Madam Labelle said in replying to me: "I was certainly not told that either, that the minister, for example, was involved in the creation of Mergeco -" and the minister testified he didn't know anything about it until the third week of January. Madam Labelle then goes on to say: "I had a call from the Clerk of the Privy Council around Christmas time indicating that it was likely that these two companies may come together, but that is the extent of my knowledge." So she heard from you. My question is: Who did you hear from?
Mr. Shortliffe: To the best of my recollection, I heard from somebody in the private sector and I can't tell you who it was because I can't remember.
Senator Kirby: You are, I think, probably aware of the fact that Mr. Hession testified that some public servant called him, I think he said, three or four days following the December 7th announcement, suggesting that the two companies should look at synergies between them and ways that those synergies might be exploited - I am paraphrasing because I don't have the exact transcript here, but that is the essence of what he said. Do you have any idea who that civil servant was?
Mr. Shortliffe: No, sir.
Senator Kirby: Does it surprise you that a senior civil - because it was described actually to us as a senior civil servant - does it surprise you that a senior civil servant would do that without being instructed to do so by some superior?
Mr. Shortliffe: It surprises me that a senior civil servant did that.
Senator Kirby: You regard that as highly unusual as I do?
Mr. Shortliffe: Yes.
Senator Kirby: To the best of your knowledge you - you didn't instruct anybody to do that - ask anybody to do it - suggest to anybody that they do it?
Mr. Shortliffe: No, senator.
Senator Kirby: Okay. I wonder, then, if I can turn to the one that is my letter numbered "C" which is also one that - it is the third one in in my pile - okay? Which is the same one that Senator Lynch-Staunton referred to a few minutes ago.
This is a December 4th memo, again three weeks prior to - excuse me, three days prior to the announcement. You will notice in the fourth bullet point, the one below the whited out statement, there is a sentence that says:
There are concerns that Paxport may not be able to confirm the financing of the project as it effectively requires the consent of Air Canada,...
And it goes on to say:
- within a matter of weeks Paxport could very well be back to us indicating that their proposal is not workable under current circumstances in the airline industry.
So three days before, in fact, the initial announcement was made on December 7th there was clearly some concern within - well, in this case, within the PCO because this is not a MOT memo, but within the PCO about the ability of Paxport to actually carry out the deal. Given that -
Mr. Shortliffe: Well, senator, if I may?
Senator Kirby: Sure.
Mr. Shortliffe: In a sense, the answer to your question is yes; but the answer is contained up above in the second bullet:
The press release contains wording requiring that the successful developer, Paxport, confirm the financibility of the project with the stakeholders before negotiations with the government commence.
That was a deliberate decision being taken by the government at the time in the context of this announcement. So, yes.
Senator Kirby: Nevertheless, the decision was made to proceed -
Mr. Shortliffe: With that proviso, yes.
Senator Stewart: And with the concerns.
Senator Kirby: Yes, and with the concerns about whether or not Paxport could eventually meet the financibility requirement.
Okay. I wonder if I can - by the way, just as an aside, was the concern about Paxport being able to meet the financibility requirement debated seriously or was there an assumption that somehow down the road this problem would get solved?
Mr. Shortliffe: Senator, you are now taking me into an area that I can't discuss.
Senator Kirby: Okay. All right. Clearly, there must have been an assumption that somehow the problem could get solved or you wouldn't have proceeded I presume, okay.
Let me turn to the next memo, which is my letter E, which is also the one that Senator Lynch-Staunton - one of the ones that Senator Lynch-Staunton used. This is a memo - and we are now into March.
And you will notice that again this is a memorandum where you briefed the Prime Minister on the results of the Deloitte Touche study that said unless the financing issues are resolved, they can't provide assurance to the Crown that the project can be financed. Then over on the last page, there is a handwritten note from you saying that you have been having some conversations on this file. Again recognizing that you can't give us information as to advice to the Prime Minister, can you explain to me a little bit about what you mean by some conversations?
Mr. Shortliffe: As I recall, as I think I said a little while ago, I had been talking to various people inside and outside the government with respect to the creation of Mergeco.
Senator Kirby: You were having - why was someone in your job, knowing how busy you are - and that is not being facetious. As you know, I know what that job is like having watched it in action for quite sometime - why would you have been spending time either worrying about getting the two parties together or finding out if they were going to get together? It seems to me a disproportionate percentage of your time seemed to be devoted to this issue?
Mr. Shortliffe: I am glad you brought that up because it allows me to make a few comments. No, a disproportionate amount of my time was not going on this file. Yes, the clerk's job is a very busy job. Quite frankly at this stage in 1993, my main pre-occupation was on preparing for transition from the Mulroney government to whatever was going to succeed it.
Why was I involved in having discussions? Because as I said a few moments ago, this was clearly one of the priorities that the government of Prime Minister Mulroney had identified that it wanted to have completed before it left office, and part of my job, in supporting the Prime Minister and the government, was to do what I could from my position to help achieve that objective. So that is why I was involved.
Senator Kirby: Did your involvement include doing whatever you could to get the two parties together, to essentially deal with a Deloitte Touche problem by helping to get the two firms together?
Mr. Shortliffe: Personally?
Senator Kirby: Yeah, you or the PCO, it could mean either.
Mr. Shortliffe: No, the initiative for the two to come together was an initiative of the two, as I believe you have heard. There was a point around this time, and I cannot be more precise Senator Kirby than that, where quite clearly it looked to us inside the government that if the project was going to be achieved, it would probably only be achieved in a Mergeco, Pearson Development Corporation mode, and we were encouraging of that. I think that answers your question.
The Chairman: Senator Kirby, could I ask a supplementary?
Senator Kirby: Sure.
The Chairman: Mr. Shortliffe, this memorandum referring here - maybe I am going back, the one here, dated December the 4th. You are writing to the Prime Minister and you are referring to a revised press release on the announcement of T1 and T2. You are showing him a draft press release that has not yet been released.
Mr. Shortliffe: That is correct, sir.
The Chairman: And you are also referring to wording that the successful developer, Paxport, confirmed the financeability of the project before negotiations with the government commenced.
Mr. Shortliffe: That is correct.
The Chairman: And you are making reference to a letter which has been drafted but not yet sent by Mr. Barbeau to the - so that all that is -
Mr. Shortliffe: Still to come.
The Chairman: - prepatory to what is going to happen three days later?
Mr. Shortliffe: That is correct, sir.
The Chairman: That is for the Prime Minister's approval apparently or is it just for information?
Mr. Shortliffe: What tab number was that?
Senator LeBreton: It was your C.
The Chairman: 2184.
Mr. Shortliffe: 2184?
The Chairman: Yes.
Mr. Shortliffe: It is an update for the Prime Minister, but there are portions of this whited out and for a reason.
The Chairman: We have seen Mr. Barbeau's letter. Apparently it was drafted at that time.
Mr. Shortliffe: This memorandum, senator - perhaps this will help. You have identified it correctly. This is telling the Prime Minister what is about to happen and some of the policy content of what is about to happen, and it has not yet happened and then three days later it happens.
Senator Kirby: This is my letter C, right?
Mr. Shortliffe: This is your letter C, Senator Kirby.
The Chairman: But the letter of Mr. Barbeau which is to follow three days later or four days later in which he says congratulations to Paxport and so on, but we now want you to assuage our concerns in the following manner. I am paraphrasing. But that letter that Mr. Barbeau sent makes no reference at all to the consent of Air Canada, the principle T2 tenant.
Mr. Shortliffe: No, that is correct, senator. The bullet that says "the press release contains wording requiring that the successful developer, Paxport, confirm the financeability of the project," that is us reporting to the PM that the press release is going to say this. That is as a result of a decision by the government that the press release is going to say this.
What is down below, the whited out section, is a further report to the Prime Minister on concerns, or thoughts about concerns of what may follow. But, it is only that upper paragraph that had to find itself into Mr. Barbeau's letter later.
Senator Kirby: Thank you, Mr. Chairman. Can I get back to an answer Mr. Shortliffe that you gave me a couple minutes ago? When I said to you why was the PCO and or you involved in trying to get the two firms together, your response was because this appeared to be the only way in which the project could succeed.
Mr. Shortliffe: At a certain point. I cannot be precise as to the dates, but March, April, of 1993.
Senator Kirby: Before that in fact presumably you could have switched from the Paxport proposal to the Claridge proposal, is that right?
Mr. Shortliffe: Could have switched to the Claridge proposal anytime up until the withdrawal of the Claridge proposal.
Senator Kirby: My question goes back to your answer. Your answer suggested that - you said that the only way to proceed was somehow to get the two together. My question is, why was the option of simply proceeding to negotiate with Claridge on the grounds that Paxport could not meet the conditions set out in Mr. Barbeau's letter, why was that strategy not followed?
Mr. Shortliffe: Because the Claridge proposal was much less attractive to the Crown than the Paxport proposal.
Senator Kirby: Although the proposal that ended up was also less attractive to the Crown.
Mr. Shortliffe: Sure, but senator you have been around a long time. In any negotiation there is give and take.
Senator Kirby: Your assessment would be that on balance, the government got a reasonably good deal?
Mr. Shortliffe: Yes.
Senator Kirby: To that extent, you would make the argument - I do not want to go back into revisiting all the gives and takes. We did that with MOT officials. Your rationale for not switching to Claridge was essentially based on that argument, on the argument that switching to Claridge would have left the government worse off? Why couldn't you start it with Claridge and worked your way up to the other one?
Mr. Shortliffe: It is easy to start far out and work back than start far down and work up.
Senator Kirby: It depends on the nature of the negotiations. You had a long series of meetings - regular weekly meetings - I do not mean long in terms of individual meetings, but regular weekly meetings with Mr. Rowat and there was a team of you that met regularly. Mr. Rowat gave that evidence after he went over to be chief negotiator. In terms of keeping central agencies, was his term up-to-date with PCO?
Mr. Shortliffe: Not with me, senator. As I recall, he chaired a committee which included on it representatives from central agencies. But these were not regular meetings with me.
Senator Kirby: In fairness he said the PCO. I used the word central agencies. The purpose of this was to - presumably from Mr. Rowat's point of view - the purpose was to prevent him from getting sandbagged by central agencies after he got down the road. Time honoured tradition of lined departments. I am not knocking that.
Mr. Shortliffe: One of the strengths of having Mr. Rowat as chief negotiator and as Associate Deputy Minister in Transport at that particular time, he was freshly out of the central agencies and he knew how to manage them.
Senator Kirby: It takes one to -
Mr. Shortliffe: It takes one to -
Senator Kirby: That is - that would lead to an entirely different direction.
Mr. Shortliffe: It would indeed.
Senator Kirby: I wonder if I can turn you to my letter V. Were you involved in the decision to put Mr. Rowat in as senior - I guess, sorry - associate deputy and chief negotiator?
Mr. Shortliffe: Senator, the Clerk of the Privy Council is the senior advisor to the Prime Minister on matters relating to senior personnel. You know that.
Senator Kirby: So you would have been obviously consulted on that issue before it happened?
Mr. Shortliffe: Senator, the Clerk of the Privy Council is the senior advisor -
Senator Kirby: I made that as a statement. Did you find my letter V?
Mr. Shortliffe: No. Okay.
Senator Kirby: This is a teleconference between a series of MOT officials. By the way, if it helps anyone I guess Mr. Chairman I have to read the document number. It is 00189.
You will notice that on the second page of that, there were some comments made. The date of this is a telephone conference call on March 4th, 1993.
You will notice that it says "the ADM's view is that Shortliffe is trying to orchestrate something but not sure what."
Can you explain to us what that -
Mr. Shortliffe: Can't at all. Nope.
Senator Kirby: Don't understand?
Mr. Shortliffe: Senator, I am not going to comment on somebody's comment. No, I cannot explain it to you.
Senator Kirby: Let me ask the question slightly differently. Can you think of something related to this issue that you were trying to orchestrate on the 4th of March?
Mr. Shortliffe: No. And again if you look at the next document in my file which is 52398 -
Mr. Shortliffe: What tab number?
Senator Kirby: W.
Senator LeBreton: 00007.
Senator Kirby: At the top I have 520398.
Senator LeBreton: 97. It is all scratched out.
Senator Kirby: I am sorry. Okay. You will notice on - this is the minutes of a meeting held in the DM's boardroom, and you will notice at the bottom, this was a presentation, Mr. Broadbent testified this was a meeting that he was at and briefing people. You will notice at the bottom of the first page under meeting notes and it says "a clear indication that the joint venture" i.e. the joint venture, the Mergeco creation, "is the product of the Government (PCO and politicians)" Can you -
Mr. Shortliffe: No, senator. I am not going to comment on notes that were done in another department by people who were not related to the PCO.
Senator Kirby: There were a few names I do not recognize. Were any of them PCO?
Mr. Shortliffe: I recognize all those names and not one of them is PCO.
Senator Kirby: I was not clear on that.
Mr. Shortliffe: They are all Transport Canada people, senator.
Senator Kirby: Mr. Chairman, I am going to stop at that point but I want to come back briefly on the second round.
Senator Lynch-Staunton: Could I have a point of clarification? Senator Kirby asked the question why didn't you switch to the Claridge proposal as if it would have been so easy to do so. The answer is found in memo 002194 for Glen Shortliffe prepared by William Rowat. Proceeding only with Claridge. This is dated May 25.
We met this morning with Mel Cappe to discuss the implications and proceeded only on the basis of the Claridge bid. You will recall that Claridge withdrew its bid on May 5 at Transport's request. Mel confirmed that proceeding only with Claridge would open us to a lawsuit with Paxport, likely resulting in substantial liability for the Crown. The only way to avoid this would be to cancel the process and initiate a new RFP.
Even if the Claridge bid were still on the table, it would be impossible to sign an agreement with Claridge as there has been no discussion of it. The Claridge bid has its problems. Total revenues to the government would only be about half of the Paxport proposal. Moreover, Claridge's original proposal involved an annual revenue reduction of $19 million per year, lasting for six years, greater than the $11 million reduction Mergeco is proposing. While Claridge would change its bid, these problems illustrate why we could not immediately sign a deal on the basis of the existing Claridge proposal.
That pretty well summarizes the inability to go from one to the other just like that, if at all. Thank you, Mr. Chairman.
Senator Kirby: I postponed a question on this to the witness on this letter until it has been circulated. I understand now everyone has a copy of Mr. Rowat's letter. Can I ask a question on this? This is a letter addressed to you.
The Chairman: Let me apologize and explain to the committee that I got the letter just a few minutes ago. It was the first time anyone sent me a letter as chairman. There was a copy to Kirby and a copy to Nelligan, and I assumed that of course the thing had been circulated by the clerk, but the clerk says it is your letter why should I do it without instructions? I never thought about it. I didn't notice it was addressed to me to be frank with you.
Senator Kirby: Since I have been sitting here, the clerk handed me a copy and I assumed he distributed it to everyone at the same time.
Senator Tkachuk: I have two documents here. One a letter September 22nd to Finlay MacDonald, and then I have a letter from Mr. Rory Edge; attached is a letter from Bill Rowat with copies to Kirby, Nelligan and O'Brien. On Mr. Rowat's letter, he does not copy anyone. He sends this to you, Chairman. But then Mr. Edge copies Kirby, Nelligan and O'Brien. Did he send it to Mr. Edge first and then Mr. Edge sent it to everybody? How did this all work?
Mr. O'Brien: We very quickly made a photocopy of Mr. Rowat's letter to Senator MacDonald, and there are no attachments to it. The full letter is repeated in this document that was sent to the Chairman from Justice, so really it is the same letter twice through the same source.
Senator Tkachuk: So Mr. Rowat sent this to Mr. Edge for approval and then it was sent here?
Mr. O'Brien: Yes, it came through Justice.
Senator Tkachuk: Why would he do that?
Senator Lynch-Staunton: Everything goes through Justice. Probably went through the gumshoes too.
Senator Stewart: Why did it go to the PCO?
Senator Lynch-Staunton: Nothing goes to PCO anymore.
Senator Kirby: I do not know what they are talking about. Mr. Shortliffe, do you have a copy in front of you?
Mr. Shortliffe: Yes.
Senator Kirby: The second to last paragraph on page 2 which is the paragraph I read a few minutes ago, essentially Mr. Rowat, who was the chief negotiator at the time, is saying that in his view the Pearson contract was not concluded. It was not a fait accompli unless and until all the documents were signed on October 7th. Do you agree with that?
Mr. Shortliffe: I essentially agree with it. If I were back in the public service and exercising my editing of drafts, I would have written it was not legally concluded, but essentially I agree with the point.
Senator Kirby: Thank you. I would like to come back on the second round.
Senator Lynch-Staunton: Let's be clear that Mr. Rowat said was concluded, and I agree and we all agree that had the documents not been released from escrow, the deal could not have been concluded because if the agreements stay in escrow, the contract can't be executed. So Mr. Rowat is not telling us anything new. Something had to take place on October 7th, something took place on October 7th which allowed the already signed contracts to be executed. The conclusion is that the deal was concluded on the 7th of October. They were not signed on the 7th of October.
Senator Bryden: Mr. Chairman, and I do not want to get into an argument over this, but there is a disputed opinion as to whether there were substantive documents to be executed on the 7th of October.
Senator Lynch-Staunton: Yes.
Senator Bryden: Not just the release from escrow, but substantive documents that were condition precedent. I interject that, not to replow old ground, but just to make sure that we remember that Senator Lynch-Staunton's opinion is one and mine is another, and without a judge to decide it, neither one of us will move off our positions.
The Chairman: Did not Mr. Shortliffe make it clear in earlier testimony that when he spoke to the Prime Minister he did give options. He didn't tell us what they were, but he did say that he was concerned, after speaking to his associates, about a potential liability, so you would have to have concluded that everything had been concluded.
Senator Stewart: No, we were told of the increasing steps of liability.
Senator Bryden: I make one further comment, and I will not say anymore. It is a liability if they were liable to repay the cost of the bidders that they had incurred up to that point. That is a liability. There are other liabilities.
The Chairman: Will you direct the question -
Senator Bryden: Sorry. No, I do not want to. We have gone over this so many times that there is no way that we are going to come to a consensus at this table as to when the agreement was actually, finally a legally binding agreement that would have been enforceable in a court. That is all.
Senator Tkachuk: This has been confusing for some of us, but counsel, I am going to give you an example from my own personal experience and maybe you can sort of help me through it because maybe that will help us a little bit because we have had a lot of discussion on this.
In the process of, for example, getting a public company on the stock exchange, you go through a whole process with an application to the securities commission. You fulfil a whole bunch of requirements that they demand of you. You organize all of your documentation and you do all the work that they require of you and they have pages and pages of things that they require that has to be done.
In the end, what happens is they sign a certificate that you are going to be listed on the stock exchange, for example. At least that is what they did with our particular company which I was involved with. When that certificate came to us, we had a deal unless some huge things changed after that. In other words, there was something different that we were going to do than what was in the prospectus that we had applied. And then, we just picked a day and we said, well let's just organize all these contracts around the table. You go to the law office and my partner went to the law office in Calgary and there was a boardroom and there was piles of documents, everything from insurance to this and this and this.
We are already done. As far as we are concerned, it is a done deal. All anyone did was walk around the table and sign the documents.
When the bank tells me that my mortgage is okay'd, I don't wait to sign the mortgage document. I get a letter. I know the money is in the bank but then I go and sign a mortgage document. Meanwhile, the money is gone. We are getting a little -
The Chairman: Are you asking a direct question of counsel?
Senator Tkachuk: I am asking counsel to help us through this. I am giving examples from my experience that seem to relate a little bit, although that is a little deal there and this is like a big deal, but it seems the process - I mean, I can understand the process because it seems to me that is the way you do it. There was a deal made in August. There was an agreement. The minister got up, said we have an agreement. Now we have documents to sign.
Well in this particular case they may take a little longer than a house agreement or a small company on the Calgary stock exchange, and there may be a little more time allowed, but I tell you, on the day it is done, it is done.
Senator Stewart: If I were to go over this again, I think I know why Senator Lynch-Staunton made a statement. Senator Bryden is uneasy about that. Now Senator Tkachuk undertakes to help us with his own personal experience. I wonder if we need really to go over this again. We have been over it what, 8, 10 times? Is this the time?
Senator Tkachuk: I am just having a discussion, Senator Stewart. He said we don't have to till the soil. He kind of got me going.
Senator Stewart: I am not saying that this is not an important point. I just wonder if we ought to ask counsel at this juncture, with a witness before us, to go off on this particular branch.
Mr. Nelligan: If I may suggest with respect, the legal issue remains to be determined on the basis of all of the facts as to what was the legal situation at any given time. I think you as a committee may be interested to know what the state of mind of various witnesses were at various times which does not mean they are right or wrong, but we can determine the hard legal issue on the basis of all the evidence, but these witnesses can only tell you what their mindset was at any given moment.
Senator Lynch-Staunton: I believe it is important that we determine the significance or lack of the October 7th signature because, "so-called", because that was what started off all sorts of events which eventually led to our sitting around this table. Had it been August the 7th, we wouldn't be here. A great deal of importance is given to October 7th. Its significance was exaggerated to say the least.
Senator Kirby: We don't know that.
Senator Lynch-Staunton: Well, the Prime Minister signed the contract, which I read in one newspaper. That was slightly exaggerated. I do not see her attending the closing. That is what I am saying. I would suggest that we don't wait for a judge to tell us the significance. We speak to the people who were there.
I see that Blake Cassels were the ones at whose offices this was held. Perhaps someone from that office could come and tell us exactly what they were doing and sharing and what the significance of October 7th was. A neutral participant.
Senator Stewart: Mr. Rowat has written a letter and it has been quoted, it was my view at that time and it is still my view now that the Pearson contract was not concluded unless and until and so on.
Senator Lynch-Staunton: We don't disagree with that.
Senator Stewart: The witness has said if he were editing a draft of this letter, he would have inserted the word "legally" before the word "concluded".
Senator Lynch-Staunton: I do not disagree with that either.
Senator Stewart: All right. Why are we wasting time?
Senator Lynch-Staunton: We are not wasting time.
Senator Stewart: We have a document. We have the present witness's comment on that. Why are we wasting time with this witness here?
Senator Lynch-Staunton: We are wasting time because - we didn't distribute the letter. Senator Kirby opened the topic on this letter. It has nothing to do with the witness. We could have waited till we were through, but since he has opened it, he can't shut it off because he does not want to discuss it anymore. The purpose of clarifying October 7 is clear. What would have happened had nothing happened on the 7th of October? That is what we want to find out.
Senator Stewart: I guess the question for you, Chairman, is are you satisfied that this witness has more to tell us with regard to the significance of what happened on October 7th or has he already answered our questions?
The Chairman: I feel compelled to tell the committee that we have attempted with Justice to get the legal representatives, the lawyers who represented the government and the private lawyers who represented the government, to testify before this committee with respect to the matters brought up here. They have to date refused to give us these lawyers. They tell us that Mr. Rowat will be happy to reappear and explain. Mr. Rowat has sent this letter. It is not that which gives us the precise answer. We are waiting. That is why I said this morning that probably this will be the last we are going to be hearing, maybe not. We don't know. That is one of those things that is in the air.
I suggest at the close, after we are finished questioning Mr. Shortliffe, that possibly there may be other questions Mr. Nelligan may want to ask Mr. Shortliffe. Were you continuing the question, Senator Kirby?
Senator Kirby: Mr. Chairman, I think I used my half an hour. I should like to come back on the second round, but I am happy to yield.
Senator Tkachuk: Just a few questions, sir. We have had - and they are basically clarifying questions because of different testimony that has occurred here. One of the issues that has been brought to our table is the questions on the local airport authority and - the Toronto Airport Authority. There was a number of names that they had.
What was the situation during this time, and why did the government not conclude a deal with them, or maybe you can't answer that? I find it difficult to ask you questions because there is certain things you can tell me and certain things you can't. I know there was a lot of controversy about this later on. Maybe you can put some perspective on what was happening with them.
Mr. Shortliffe: There was not - I suppose senator that for the vast bulk of the time frame that we are dealing with here today, that is late '92 and through into the middle of 1993, there was not really a "them" to deal with.
There were efforts underway in Toronto to form a local airport authority, but I do not - to the best of my recollection, there was not an authority with whom the government could enter into discussion and/or negotiation. And, of course I am seeking to be careful about what I say in the realm of cabinet confidences and so on, but it is quite clear, and I have previously said this, the government decided on the 7th of December that it was going ahead to negotiate for private sector development of T1T2 on the basis of the best overall proposal. And as I have said earlier this afternoon, this was a priority objective of the government to complete before it left office in June of 1993.
And in that period senator, there was no local airport authority. To put the bluntest point on it that I possibly can, had the government decided that it wanted a deal with a local airport authority, it would have had to shut down an attempt to develop T1 and T2 in that time frame.
Senator Tkachuk: We have had some testimony here about the - well maybe we have not had it here, maybe it is a result of the Nixon report, but the movement of civil servants and there was one that Madam Labelle - did anyone direct you to give her the position or to have her moved or anything like that?
Mr. Shortliffe: No, absolutely not. Perhaps I can put a slight context on this. Senator Kirby asked me earlier whether I was putting a disproportionate amount of my time on the Pearson file, and I answered him by saying no because what was preoccupying me as clerk for a good deal of the period of the spring of 1993 was transition, and in that context, the largest reorganization of the Government of Canada since 1867.
On the 25th of June, 1993 when Prime Minister Campbell was sworn in, she implemented a massive reorganization of the federal government which in essence entailed major downsizing of the structures and cabinet decision-making system. A key part of that was a very large shuffle of deputy ministers, I believe it was in excess of 21 on the 25th of June, 1993, and Madam Labelle and indeed Madam Bourgon were part of that shuffle. That was preoccupying me through the spring of 1993.
Senator Tkachuk: Mr. Nixon, did he request to meet with you?
Mr. Shortliffe: Yes, he did. I saw Mr. Nixon - I cannot give you the exact date, but on the day that the Prime Minister designate asked him to take on his responsibilities, I saw Mr. Nixon immediately after he left the Prime Minister designate's office.
Senator Tkachuk: How much time did you spend with him?
Mr. Shortliffe: I would say somewhere between 30 and 40 minutes, senator.
Senator Tkachuk: Do you mind telling us what you talked about?
Mr. Shortliffe: We talked about two or three things. First of all, the mandate that he had been given by the Prime Minister designate. I indicated to him that I would mobilize the public service to co-operate with him just as fully as we could within certain limitations that obviously would be imposed upon us. We discussed a contract, because at the end of the day - in fact I think I signed the contract with Mr. Nixon as Deputy Minister of the PCO, and so we discussed the contract, the nature of the contract. And we discussed the substance of the file in the sense that I was giving to Mr. Nixon some of my views as to how this file had evolved over the years and what was involved in it.
Senator Tkachuk: The contract that he would have signed with you, I think there has been testimony or I read it somewhere that there was a standard form contract. Did it have like what he was supposed to do or was it a consulting contract?
Mr. Shortliffe: It was a standard consulting contract from what I remember, which usually has an annex of what the basic thrust of what this contract is for.
Senator Tkachuk: That came from him or the Prime Minister as to what the contract was for?
Mr. Shortliffe: His mandate - in fact I think there was a press release if I recall at the same time - which described what Mr. Nixon's mandate was. When I met with Mr. Nixon, he in effect told me what his mandate was from the Prime Minister designate and to the best of my recollection it is the same thing from the press release and probably found its way into the contractual document.
The Chairman: The contract signed with Mr. Nixon was not until November 22nd. Mr. Nixon's appointment was October 28th, so it was not signed at that time, the time you had the first meeting with Mr. -
Mr. Shortliffe: Oh, no. It was indeed signed later. What I was saying to Mr. Nixon in that meeting was yeah, we would work out the details of the contract and we would execute the documents, and this was one of these cases which again, Senator MacDonald, it is not something I recommend now that I am in the consulting business, but where you undertake the work before you have the John Henry on the line and that is what happened in this case.
The Chairman: There is no doubt that the "Air Canada sandwich" as it is called, caused a delay of three months let's say in the negotiations leading to the contract. Can you give us the background of the "Air Canada sandwich" starting with the guiding principles?
Mr. Shortliffe: Well, to the extent where my knowledge begins and ends senator, as Deputy Minister of Transport, I participated in the discussions leading up to and approved the signature of this letter in 1989 I believe it was, which comes to be called the guiding principles.
In essence, what that was all about was giving some comfort to Air Canada who felt at a competitively disadvantageous position as Terminal 3 was about to come on stream, and it wanted to undertake some capital investment in Terminal 2. Terminal 2 was a terminal owned by Transport Canada. In the normal course of events, when you have to upgrade something you own, you invest in it and you upgrade it. But Transport Canada, in that year as today, didn't have the money to invest in an upgrade of erminal 2. So, Air Canada undertook to make that investment, and the guiding principles became a document which, in my interpretation of them, in essence gave comfort to Air Canada that depending upon future development, they would get the investment back if required. Their investment would not be for not, if I can put it that way.
Now what happened to that document in terms of the RFP and all the rest that you have heard about and the document room, I can't attest to because I know nothing about it other than it surfaced again in the winter/spring of 1993 with the reality that the proponents had not been aware of the details of that document until the spring of 1993.
The Chairman: That was the -
Mr. Shortliffe: Could I add senator that when it was done in 1989, this was done long before the T1T2 file started to run. The T1T2 file started to run some time later. This was a specific investment by Air Canada at that time seeking to achieve a degree of competitive parity with Terminal 3 which was about to come on board.
The Chairman: Did not the guiding principles give a little more than comfort to Air Canada? Did it not indicate that they would receive so many years of -
Mr. Shortliffe: In my interpretation, and I am not a lawyer and I do not want to get into legal interpretations and I will not get into legal interpretations. In my interpretation of it, certainly Transport at that time was saying we are prepared to consider a 40 year lease for you, but was it a legally binding obligation to do so? That you have to ask legal opinions on. In my interpretation, no. But I am not a lawyer.
The Chairman: But it was lost, it disappeared.
Mr. Shortliffe: I do not know what happened to it.
The Chairman: It was not in the data room.
Mr. Shortliffe: From listening to the testimony here - well, sorry. That is not fair. It was not in the data room. I was told that much later, yes.
The Chairman: But the Deputy Minister, Mme Labelle, became aware of this before the request for proposals was put out, and all that there was in the request for proposals was that Air Canada should receive some kind of consideration for the money that they had spent on T2 and that the lease with Air Canada expired in 1997. That was all the proponents knew, and they went ahead with their proposals. When of course they discovered these things, there was an enormous screw up which had to be resolved.
Mr. Shortliffe: There was certainly a problem in the spring of 1993 with respect to what has come to be called the "Air Canada sandwich", yes.
The Chairman: Which delayed the matters for three months.
Mr. Shortliffe: At least senator, yes.
Senator LeBreton: Actually Senator Tkachuk asked a couple questions I was going to ask. Going back to Mr. Nixon, Mr. Shortliffe, the contracts, as we now know with him, were signed on the 22nd of November. As far as you know, was there a confidentiality agreement signed at the same time or how does one go about signing a confidentiality agreement?
Mr. Shortliffe: Well, was there one signed? Frankly senator, I can't remember. I remember executing the contractual document. I don't think I executed any other document. That does not mean that one was not done, and probably there was one done because it is fairly standard procedure when you are bringing in non-civil service people to assist you with a file that you would seek a confidentiality agreement.
My only concern at the same time quite frankly, on this particular issue, and this came up in my initial conversation with Mr. Nixon, was I assured him that the civil service would co-operate fully and make available to him all appropriate documentation, and then I said to him quite specifically, and that means of course you cannot have access to cabinet confidentiality of the previous government. I remember saying to him, as a former cabinet minister yourself, you will understand that, and he was very gracious and polite and said yes, I understand that fully. At the time that was my only concern.
Senator LeBreton: Perhaps counsel we can determine if in fact Mr. Nixon did sign a confidentiality agreement. That is not for Mr. Shortliffe. He says he can't remember. There was also a contract signed between PCO and Crosbie and Company.
Mr. Shortliffe: Yes.
Senator LeBreton: Because we were told Mr. Nixon hired Mr. Goudge directly as a result of his contract. Do you remember any details about that?
Mr. Shortliffe: No, not really, senator. Was I aware that he had hired? Yes, I was because I believe I had a couple of telephone conversations with Mr. Nixon where he told me what he was planning to go do, and quite frankly, I would make a note of this and turn to my assistant deputy minister management and say make sure you get all this incorporated in the contractual documents. It was a routine piece of business.
Senator LeBreton: I understand that and I totally agree with you. With regard to Mr. Nixon, you had that initial meeting with him where you discussed his contract and you said you discussed the airport deal with him. Did he ever meet you again specifically to discuss the Pearson airport agreement?
Mr. Shortliffe: No, he did not.
Senator LeBreton: Did he make any phone calls to you?
Mr. Shortliffe: On the substance?
Senator LeBreton: Yes.
Mr. Shortliffe: No, he did not.
The Chairman: Senator Bryden?
Senator Bryden: Mr. Shortliffe, you have indicated that the Prime Minister did not direct you to intervene in the lease negotiations on Pearson. I believe that you made that indication?
Mr. Shortliffe: I am sorry, senator?
Senator Bryden: I think you have indicated that the Prime Minister did not direct you to intervene in the negotiations for Pearson?
Mr. Shortliffe: I don't think I indicated that at all.
Senator Bryden: Then let me ask you the question. Did he ask you to intervene, promote these negotiations?
Mr. Shortliffe: The question - yes, in a way, thank you. You don't need to ask. I mean it was a priority of the government and I was doing my job as I saw it in order to assist the government to achieve its priority.
Senator Bryden: I draw your attention to the judgment of Mr. Justice Lederman in the Bitove case where at an earlier time and at an earlier lease in relation to Pearson, at least according to Judge Lederman's findings, the Prime Minister did ask you to intervene to expedite the lease, is that not correct?
Mr. Shortliffe: When I was Deputy Minister of Transport?
Senator Bryden: Yes.
Mr. Shortliffe: What does Judge Lederman say? Because I have -
Senator Bryden: It is a matter of public record and I have the whole judgment here. I have copies.
The Chairman: Could you assist me? Where is this questioning going Senator Bryden?
Senator Bryden: Where is it going? Okay. It is not really intended to go on for a long time. The question that I am raising -
Mr. Shortliffe: Let me answer the question senator because I should like to put this one to bed once and for all. In 1988 I did receive a phone call from Prime Minister Mulroney who said the following things to me, did I know John Bitove? I said nope, never heard of him. Did I know that John Bitove had a problem with Transport? I said nope, never seen the file. The Prime Minister said to me, I do not know whether Bitove is right or Bitove is wrong, but would you mind looking into the file? Period, full stop. And that is all the Prime Minister ever said to me on the Bitove file.
What I read here in this judgment, I can only disagree with the substance of the interpretation that is put on it.
Senator Bryden: That is all the questions I have, Mr. Chairman.
The Chairman: Senator Stewart and Senator Kirby.
Senator LeBreton: Ask Mrs. Milgaard and ask those mothers at Gloucester Arena who came up to talk to the Prime Minister about being stalked by their husbands and ask the clerk what the Prime Minister instructed him to do on those occasions.
The Chairman: Senator Stewart?
Senator Stewart: Thank you, Chairman. Probably you were too busy this morning to come and hear our discussion in this committee. We had three distinguished professors from Canadian universities talking about the propriety of going ahead with this deal during the period after the dissolution of Parliament and before the election of a new House of Commons. I wanted to ask you - well perhaps I ought to tell you just in case you didn't hear it.
Mr. Shortliffe: I did not, senator. I was occupied on other things this morning.
Senator Stewart: Fair enough. Professor Mallory said some disillusioning things about the relationship between the government and the House of Commons. He said what goes on in the House of Commons - this is my gloss on what he said - really ought not to be taken very seriously. If in fact there is much in the way of holding government responsible, it happens in caucuses. This means that in our modern Constitution, a very heavy burden of obligation falls upon the public service.
Senator Tkachuk: Did he say that, Senator Stewart?
Senator Stewart: Yes, I think so.
Senator Kirby: Let him finish.
Senator Tkachuk: Well if you are quoting someone, you should quote someone. Why don't you ask him from your point of view and forget Mr. Mallory unless you can quote him?
Senator Stewart: All right. If this is a sensitive matter chairman as it seems to be -
Senator Tkachuk: No, it is not. It is just not nice to people if you misinterpret them. That is not my interpretation of what he said, so I wouldn't want you to do that to me and I am sure I wouldn't do it to you, Senator Stewart.
Senator Stewart: In any case, let me put it this way. The argument can be made that because of what has happened in our political parties, the power of a government majority backbenchers to restrain a Prime Minister and his ministerial colleagues is severely limited. For example, in Canada, unlike the United Kingdom, leaders of parties are selected by conventions. This is not a decision that is made by members of Parliament.
Then it can be argued that in view of this development, there now is a very heavy onus upon senior members of the public service to assure that all the proprieties - I use that general expression to include rules, conventions, traditions et cetera - are observed.
Now, assuming that that is correct, could you tell us if you have ever examined the limits, the parameters, of what a government ought to do after Parliament has been dissolved and before a new government? Well, I will say before election day, not necessarily before the new government takes over. There are really two phases in there. But between dissolution on the one hand and election polling day on the other hand, have you ever examined that and, you know, put together a study of the precedence and so on?
Mr. Shortliffe: In part senator. May I back up, sir? I do not know whether you were quoting the professor or not, but part of the premise to your question, from my experience in government, I must disagree with. There are powers in the caucus. There are powers in the backbench.
Senator Stewart: Yes.
Mr. Shortliffe: And I have seen them exercised and I have seen governments restrained or diverted or amend initiatives that they, meaning the executive or the cabinet, would like to take. So to kind of write off the caucus system in our parliamentary system or indeed the power of parliamentary committees in the House and in the Senate to affect government policy, I just don't agree with that premise.
Now, to the second part of your question, there are obvious, very clear limitations by convention on what a government can do or cannot do between election day and swearing in when it has lost office. Up until election day, the powers of the government, from the look that I have had at it, are unfettered in the sense of its ability to govern and to take decisions. However, once an election is called, quite clearly the decision-making process in government goes into by and large hiatus. The reason it goes into hiatus is the self-evident reason, everyone goes out and tries to get elected. Therefore, the period between an election call and an election day is not a period of time by convention when governments set out to take a whole bunch of new initiatives of a policy or administrative nature. But, its capacity to govern up until election day, in my judgment, is completely unfettered. On election day it is fettered.
Senator Stewart: Going back to what you call the first part, you are saying that the old truths which we all read in our Government of Canada books are still to a large extent true and that is that a government is, in a practical way - in a significant and practical way - held responsible by the House of Commons and the caucuses so that is still -
Mr. Shortliffe: Yes.
Senator Stewart: All right. But the implication of that is that once the dissolution has taken place, those restraints upon a government are gone, and consequently, presumably, there is a commensurate reduction in what the government ought to do; it no longer stands upon the foundation, the pedestal of a majority in the House of Commons; it no longer stands upon the confidence on extant House of Commons?
Mr. Shortliffe: Yes, Senator, I agree with that in the way in which you're phrasing it now. But I assume that this is going some place and that where you're going is to the Pearson deal.
And if I may say so, on the Pearson deal, as I have testified earlier, by and large in my judgment the deal was done, although not legally concluded, before the election was called.
The Chairman: In other words, Mr. Shortliffe, there were no new initiatives taken after the writ was issued on September 8th?
Senator Kirby: He didn't say that.
Mr. Shortliffe: I didn't say that. I said that in my view the deal was essentially done before the election was called.
The Chairman: Well, in answer to Senator Stewart - yes, Senator Kirby, just - Mr. Shortliffe answered that - he talked about the period of the campaign in which everything is in hiatus, they're all out there trying to get elected. And he said under those circumstances he thought that no new initiatives under those circumstances should be taken by the government.
Mr. Shortliffe: Or would be taken.
The Chairman: Or would be taken. And I asked the question: Were there any new initiatives taken after the writ was issued on September 8?
Mr. Shortliffe: Related to this file?
The Chairman: Related to this?
Mr. Shortliffe: Not to my knowledge.
The Chairman: Okay.
Mr. Shortliffe: Not to my knowledge. But you see, if I can come back, Senator Stewart, to the in a sense the theory that we're both feeling our way in at this point, clearly in a - let's say that some sort of national emergency occurred.
Senator Stewart: Sure.
Mr. Shortliffe: Clearly the government has to be able to govern; it has to be able to take decisions.
Senator Stewart: No question.
Mr. Shortliffe: And I'm saying that certainly until election day there is not a fettering of the government in that sense.
Senator Stewart: And we had evidence, if I may, Senator Tkachuck, that at least in some regimes what would be done, if there was a major decision brought - the need for which was brought on by an emergency, there would be conversations between the leader of the government and the leader of opposition. I think that's a fair statement...
Senator Kirby: That was said this morning.
Senator Stewart: ...One of things we were told this morning.
Senator Tkachuk: That was one of things we were told this morning.
Senator Stewart: I'm glad that you admit some of the things that were told this morning. I think there is no question that the government is legally in office until such time that it is replaced. What we are talking about is the hiatus.
Now, would it be fair to say, given the unique relationship between a Clerk of the Privy Council and the Prime Minister, that there is a special burden upon the Clerk of the Privy Council during that period in which a government is on the one hand unfettered, but which for other reasons - for reasons which we have just now discussed, there is a kind of hiatus?
Mr. Shortliffe: Yes, there's a certain burden on the Clerk of the Privy Council at all times, and including that time, Senator, yes.
Senator Stewart: I think what I'm asking you is, given the fact that the circumstance is unusual, Parliament has been dissolved, there is no new parliament, Ministers are abroad throughout the land, undertaking very good work no doubt...
Mr. Shortliffe: No, seeking election.
Senator Stewart: Well, all right, that's what I mean. Don't you think that in that period there is a special burden upon the immediate advisers, those who stand in a unique relationship to the Prime Minister?
Mr. Shortliffe: Yes, there is - both in terms of the Clerk, if you will, of the Public Service as a whole to ensure that the necessities of public administration are carried out in an orderly manner, yes.
Senator Stewart: Let me ask you this question. Suppose you as a public servant, let's say as Clerk of the Privy Council, were told by the Prime Minister of the day, to do something which you thought was - should not be done in the public interest. What do you do? Do you say, "Yes, Prime Minister, and go out - yes, Prime Minister. Yes, Minister," and go out and give the instructions to the appropriate parts of the Public Service? Or, do you say, "No, Prime Minister, here is my resignation."?
Mr. Shortliffe: One of my very illustrative predecessors, Senator, Gordon Robertson I believe it was, wrote some years ago that when you're Clerk of the Privy Council - this is not true of the current Clerk - when you're Clerk of the Privy Council you get up every morning, you shave, you look yourself in the mirror and you say, "Is this the day in which I will have to submit my resignation?" And when I became Clerk of the Privy Council, I realized the enormous truth of Mr. Robertson's statement. And I can happily report to you that in serving three Prime Ministers over a considerable period of time, that day never came for me.
Senator Stewart: Would you explain why?
Mr. Shortliffe: Because I was never asked to do anything that would force my resignation.
Senator Stewart: Yes, but it would have been nice to have had a chance to ask my question. Would you explain why the Clerk of the Privy Council has this unique, to use a word you used earlier today - has this unique burden onus - or I assume that you're saying that this is not an onus which falls upon the ordinary public servant. There is really a heavy focus on a Clerk of the Privy Council?
Mr. Shortliffe: Of course.
Senator Stewart: Yes, all right. And would you tell us why?
Mr. Shortliffe: Because the Clerk is the Deputy Minister to the Prime Minister and the Prime Minister is the head of the government. That's why.
And you know, Senator, if I may, since we're only speaking generically...
Senator Stewart: Yes.
Mr. Shortliffe: I mean there are lots of instances where I have said, either to Ministers or Prime Ministers, or their staff - well, their staff quite frequently; but to Prime Ministers and Ministers, "That's dumb, sir, you're not going to do that." At which point the Prime Minister would say, "Well, what do you mean that's dumb? You can't tell me I'm dumb." Speaking generically, of course -
Senator Stewart: Of course.
Mr. Shortliffe: And then one does explain why one is saying that and you go from there. But I mean the image of, "Yes, Minister," is about as accurate as any other television show of fiction.
Senator Stewart: Thank you, Chairman.
The Chairman: Who's - I've lost.
Senator Kirby: I just have a couple of questions on follow up, is that okay?
The Chairman: Yes, Senator Kirby, go ahead now. Is Lynch-Staunton next Senator?
Senator Lynch-Staunton: I may have a couple of questions to clarify.
The Chairman: Just give me an idea. Senator Kirby, Senator Lynch.
Senator Kirby: I just simply want to follow up on a couple of questions that Senator Stewart raised. Mr. Shortliffe, you said between the date of the issuing of the writ of dissolution and election day, you said a couple of times "the powers of government are unfettered." Given that, why did you agree with Madame Bourgon's request to seek direction from the Prime Minister prior to signing the documents on October 7th, and I say that because you said you thought the deal was essentially a done deal.
Mr. Shortliffe: Sure.
Senator Kirby: And secondly, that the powers of the government are clearly unfettered. So, why would you have gone -
Mr. Shortliffe: Because it is always open to a government, Senator, to change political direction up to the 59th minute of the 11th hour. And what the Deputy Minister of Transport and I agreed on was to reconfirm that political direction, given the controversies that were surrounding the file.
Senator Kirby: So it had nothing to do with any sense of constraint, in terms of government - recognizing legally, no one's argued the issue of legally here. The issue that's been argued is the question of whether or not - let me use the word "appropriate" - it's appropriate, normal, whatever you want, a word like that for government to take certain actions during an election campaign?
Mr. Shortliffe: I understand the debate, Senator, that surrounds it and the variety of opinions that surround it, and as I say I understand the debate. And indeed, we consulted the Prime Minister for a political, not a technical or a legal reason, and that reason was the controversy in the middle of the election campaign.
But as I have also said earlier this afternoon, in my view, the deal was done before the election was called.
Senator Kirby: Do you accept Madame Bourgon's view that during an election campaign it's important that the civil service proceed - her words she used two or three times - her testimony was "with caution", that is to say to that extent there is a, let's say, a yellow light vis-a-vis the system?
Mr. Shortliffe: I think in an election campaign and up until the subsequent government comes into office - whatever, regardless who wins and who loses -
Senator Kirby: I want to ignore the period between -
Mr. Shortliffe: - there is a need to examine each issue and each decision with great care.
Senator Kirby: That statement strikes me as having an element of inconsistency with the statement that the powers are unfettered, which I took to be not a legal statement, because we would all agree with it legally. I took the statement to mean a statement, let's say a mode of behaviour statement rather than a legal type statement.
Mr. Shortliffe: Let's be clear, senator, as we both know, as we all know. I mean, civil servants are not taking decisions. Ministers take decisions. And there is a need to consult very closely during this period of time as there is at other periods of time.
But I'm going to stand by the statement, my view is that the powers of government are unfettered.
Senator Kirby: Are you making that a legal statement?
Mr. Shortliffe: No.
Senator Kirby: Okay. And therefore when Madame Bourgon says, as she did in her testimony, for the record it's on page 1410-37. I'll just read you an excerpt from what she said. She said:
I think the general rule of conduct to act with caution during an election means that you would consider factors such as: is it a transaction that is going to bind future governments? What is the - are there alternatives? Are there urgencies in the matter? Is there an obligation to act? Is there controversy?
and then she goes on to elaborate on those points.
I infer from what you said that you would disagree with that, is that correct?
Mr. Shortliffe: No, not necessarily. It would depend on which aspect of that - Look, I'm not going to get into a debate through you with her.
Senator Kirby: No, no. I guess what I'm trying to understand, and I wasn't trying to do that. I was trying to establish that the current Clerk had a view that you ought to proceed with considerable -
Mr. Shortliffe: Senator, why don't ask me the question: did I believe that when the government decided to go ahead on the 7th of October that it had the capacity and right to do so?
Senator Kirby: Okay, because I think you've already answered that.
Mr. Shortliffe: Well, that's fine. Okay, that's my answer.
Senator Kirby: That wasn't the question I was going to ask you. What I was trying to understand was, a different question, which is essentially, particularly in light of the debate we had in the discussion we had with the academics this morning was, whether or not you see any constraints or believe that there ought to be any - or sorry, not ought to be - that there are any non-legal but sort of constraints that are in terms of normal government practice on a government during the election campaign, and you seemed to view that there are not. Is that correct? That's what you seemed to be -
Mr. Shortliffe: No, that's too sweeping, Senator Kirby.
Senator Kirby: Well, that to me is what - you tell me what "the powers are unfettered" means?
Mr. Shortliffe: Yes, the powers are unfettered but the fact is that the normal processes of government don't work during an election campaign in a normal way.
Senator Kirby: So it's okay to do it, it's just that the system doesn't operate properly - doesn't operate the way -
Mr. Shortliffe: No, you're putting words in my mouth, Senator. And I'm just going to stand by the words that I have spoken, not the ones you're speaking. Please don't put words in my mouth.
Senator Kirby: No, I wasn't trying to. I'm trying to understand what you're saying.
Mr. Shortliffe: I've said what I've said. That there is a hiatus; that normal functioning of government does not take place; there are not weekly cabinet meetings; there are not cabinet committee meetings; there are not the normal processes in place. In reality, during a period of an election campaign, new initiatives requiring large decisions are unlikely.
Senator Kirby: Right. But there is nothing - that I understood you to say. But you also seem to be saying that there is nothing wrong with such initiatives in the sense of it - assuming that, you know, there were Ministers in town and you had a cabinet meeting and all the processes foll- there's nothing wrong with such issues?
Mr. Shortliffe: It would depend on what it was. So I mean, do I think that there is an element of constraint? Yes, I do.
Senator Kirby: Now, all I'm trying to understand is, and I'm not trying to put words in your mouth and I'm not trying to ask you questions specifically related to the contract. I'm trying to understand what you perceive - this is important to us in a whole bunch of other contexts other than this issue - what you perceive those constraints to be, that's all I'm trying to understand? Or, how would you define the constraints?
Mr. Shortliffe: Well, I could define them - it's a little bit - I could define it best if I could see it in the sense that if you took an example of something that you think would be inappropriate and asked me whether I would agree with you, I can probably give you an answer. But you're asking me to deal with something that's very abstract.
Senator Kirby: Well, I really - I didn't mean to be. Let me - well let me just take a couple of for-instances, now, I'll take a specific. But for instance, would it be okay to appoint judges during an election campaign, or senators for that matter?
Mr. Shortliffe: It's happened in the past.
Senator Kirby: I guess my question was: Do you think it's okay? I mean is that - I'm trying to understand. You said there are constraints. You asked for a specific example. Now I give you a specific example, I'm trying to understand if it violates your constraint or not?
Mr. Shortliffe: Generically, I would - well, first of all it's happened. So, again, it comes back to my point about the powers of government to govern are unfettered. Is it a wise idea? No.
Senator Kirby: Why?
Mr. Shortliffe: It depends at what point it happens in the period. Sorry, I'm misleading you and I was thinking of something. I've confused you.
Senator Kirby: Yes.
Mr. Shortliffe: Can it happen in the period up to the election? Yes. Could it happen in the period after the election?
Senator Kirby: No.
Mr. Shortliffe: No.
Senator Kirby: Agreed.
Mr. Shortliffe: Okay.
Senator Kirby: But you said it would be unwise, I understood; I'm not putting words in your mouth. I'm trying to understand what you said.
Mr. Shortliffe: Now, I was confusing myself. I was really thinking of that latter period.
Senator Kirby: Okay. Evidence this morning described the Australian convention in terms of what can happen during an election period in the following way. The basic - and I'm quoting from the evidence we heard this morning. Page 8 of Professor Wilson's statement:
The basic caretaker conventions require a government to avoid implementing major policy initiatives, making appointments of significance, or entering major contracts or undertakings during the caretaker period, and to avoid involving departmental officers in election activities.
We all agree on the latter -
Mr. Shortliffe: Certainly.
Senator Kirby: What is your reaction to the first part of that which says:
Caretaker conventions require a government to avoid implementing major policy and issues, making appointments of significance and entering into major contracts or undertakings during an election.
Mr. Shortliffe: Well, on the middle one I would say that -
Senator Kirby: Okay, which is the middle one, because there's four?
Mr. Shortliffe: Making appointments.
Senator Kirby: Okay.
Mr. Shortliffe: That the precedent in the Canadian experience is there; major appointments have been made during those periods of time. Entering into major contracts, which is really what this is all about, you come back to the issue at what stage was a deal done? And in my view a deal was done -
Senator Kirby: You keep taking me back to the case at hand and I'm trying to ask you about the principle.
Mr. Shortliffe: I know that, Senator.
Senator Tkachuk: Can I clarify something, Mr. Kirby? When was the date set, just so it's clear in our minds, because this we have heard testimony on, is the date was set October 6th and 7th previous to the writ being issued.
Senator LeBreton: In early July by proponents and by public servants.
Senator Tkachuk: Okay. So it was set -
Mr. Shortliffe: I think so.
Senator Tkachuk: - it wasn't sort of set at the time?
Mr. Shortliffe: No.
Senator Tkachuk: It was already set - I just wanted to clear that.
Senator LeBreton: Mr. Desmarais and Mr. Coughlin both testified to that.
Mr. Shortliffe: You want to go back to the abstraction?
Senator Kirby: Yes. Because I don't think - One of the issues that this Committee has been looking at, outside of this issue, okay, is the question of the extent to which and whether there ought to be in future, as opposed to retrospectively in the future, constraints such as the kind of caretaker convention - But you have been a Clerk of the Privy Council.
Mr. Shortliffe: Thank you.
Senator Kirby: I mean everybody else keeps trying to force me back on the issue. I'm trying to ask you in the broad context -
Mr. Shortliffe: Right.
Senator Kirby: - if this Committee has to deal with that issue of principle, where should we come down?
Mr. Shortliffe: Well, I'll tell you where I think you should come down. Be careful, senator, about building into the conventions that exist for Canada as distinct from Australia and the U.K.; too much tying of the flexibility of the hands of government, and that's why I've been kind of - been a bit confusing in my earlier responses, and now you've asked me in a way that I can address this in the theoretical. I believe that we have almost gone too far in some senses in tying the hands of government to be able to make decisions. And I don't believe -
Senator Kirby: During the election period?
Mr. Shortliffe: Including during election - Well, if we did what you have just read to me about the convention elsewhere.
Senator Kirby: That's the Australian convention.
Mr. Shortliffe: I would disagree with that.
Senator Kirby: Why?
Mr. Shortliffe: Because I think it is too stringent in tying the hands of a government in circumstances that cannot be foreseen.
The Chairman: In 1935, Mr. Shortliffe, as you well know -
Mr. Shortliffe: As you and I well know, senator.
Senator Kirby: Some of us, for the record, Mr. Chairman, aren't as familiar with 1935 as some of the other people here.
Mr. Shortliffe: I was a gleam in my father's eye. What were you, Senator?
The Chairman: I was in the Boer War. The prerogatives of the Prime Minister are set out in the - and signed by the then Clerk of the Privy Counsel and they are quite clear, and they're the only place where they're described. And I agree with you, this suggestion here - is this an Italian form of government that we're suggesting here? What would require to change the prerogatives of the Prime Minister? Saying the Prime Minister's prerogatives are these. They're all there, 1935 signed by the Clerk of the Privy Council, except that he or she cannot do these things between such and such or so and so, et cetera. You disagree with that? You disagree with codifying?
Mr. Shortliffe: Uh'hmm. Look, we have a system of government here that operates as much by the absence of code and the absence of written law; cabinet appears nowhere in the constitution of Canada. Cabinet does not appear in the way in which you give legal effect to the statutes of Canada; you know that, Senator, as do I. Our government operates in a large way by convention and precedence.
I mean, Senator Kirby, it's a rich field for debate, particularly with academics, I must say. But you're asking me as a practitioner -
Senator Kirby: I'm asking you as a former Clerk.
Mr. Shortliffe: - and a former Clerk.
Senator Kirby: I wasn't asking you about this issue. I was asking -
Mr. Shortliffe: No, no, I understand that. And I'm answering you as a former Clerk. I would be reluctant to recommend to this Committee or to any - to the current or future Prime Minister that the hands be tied in a way that is more suitable to a system of government other than our own.
Senator Kirby: In spite of the fact that in Australia, which is the one I quoted, and to a lesser extent in the U.K., that hand-tying, I think as you said, is done?
Mr. Shortliffe: In spite of the fact that in the U.K. and Australia it is done -
Senator Kirby: Okay.
Mr. Shortliffe: - because there are another significant divergences in the way the system of government works. There's a basic similarity in the Westminster model, obviously. But in the U.K, for example, you don't subject Ministers to Question Period the way we do in Canada.
Senator Kirby: Don't anymore anyway. Thank you. Mr. Chairman, that was -
Mr. Shortliffe: Yes, and senators are elected in Australia.
Senator Kirby: Some of us are in favour that, too. Mr. Chairman, that's all.
Senator Stewart: But neither of those examples - points - is relevant because we're talking about a period when there is no Parliament.
Senator Tkachuk: My point was relevant.
The Chairman: I think we just have one more questioner and that's Senator Lynch-Staunton.
Senator Lynch-Staunton: I would like to ask, Mr. Shortliffe, the same questions that have been asked of many, many previous witnesses, but your answers I believe will take on special importance because based on what you explained is the role of the Clerk, he, and today she, has a practically unlimited access to the Prime Minister -
Mr. Shortliffe: Yes.
Senator Lynch-Staunton: - as compared to members of his caucus and even including his Ministers and senior bureaucrats. The Clerk and the Prime Minister form a team?
Mr. Shortliffe: That's correct.
Senator Lynch-Staunton: An essential two-man, or one-man one-woman, whatever, it's a two-person team?
Mr. Shortliffe: That's correct.
Senator Lynch-Staunton: And so you reflect to the Prime Minister, or the Clerk reflects to the Prime Minister, what is felt to be essential for the Prime Minister as proper governance of the country, and the Prime Minister reflects to the Clerk how he sees certain policies should be carried out. And one then carries out direction.
Now, I say that your answers take on a particular importance because in the Clerk's work you have access to all the Deputy Ministers, who report to the Clerk directly. Is that an accurate description of your jurisdiction, if you like, over the Deputy Minister?
Mr. Shortliffe: A Deputy Minister in our system operates, senator, in a hybrid way. I mean he has direct responsibilities to his Minister but he has also has responsibilities to the Prime Minister, and those responsibilities are usually delegated to the Clerk. So it's a bit complicated.
Senator Lynch-Staunton: So the Clerk has a pretty intimate knowledge of what's going on in government on the assumption that he or she has good relations with the key Deputy Ministers. Fine.
Mr. Shortliffe: Yes.
Senator Lynch-Staunton: The reason I want to establish that as a background is because in his official report Mr. Nixon makes a number of allegations regarding public servants. For instance, he talks about the climate of pressure resulting in several civil servants being reassigned or requesting transfers from the project.
Now, we do know that Mr. Barbeau was relieved of his responsibilities for six weeks or so, plus or minus. Are you aware of any other civil servants being reassigned or requesting transfers from the project?
Mr. Shortliffe: No.
Senator Lynch-Staunton: Nothing came to your attention?
Mr. Shortliffe: No.
Senator Lynch-Staunton: Okay. Mr. Nixon in his official report speaks of a flawed process, that the whole business leading up to October 7, right from the beginning was flawed throughout. Do you agree with that conclusion?
Mr. Shortliffe: No, I do not. I believe is - from the perspective from which I am speaking now, Senator, which is the work that was carried out by the public servants, throughout what was a long and complicated process, I believe was carried out with great professionalism and indeed great skill and produced a result that met the government's objectives and with which those who worked on it could feel comfortable.
Now, I'm not going to try to interpret Mr. Nixon. But that is my answer with respect to those two words as they relate to the Public Service.
Senator Lynch-Staunton: Mr. Nixon, again in his official report, talks of a - well, he doesn't come out categorically but the impression is certainly left - may leave one with the suspicion that patronage had a role in the selection of Paxport Inc.
Are you aware of any patronage that you may have heard of or been part of - ?
Mr. Shortliffe: No.
Senator Lynch-Staunton: - or that would have led to Paxport being selected?
Mr. Shortliffe: No. I believe that Paxport was selected as the best overall proposal through the process that you have had in mind-numbing terms described to you here in the committee over the past summer.
Senator Lynch-Staunton: And finally - not finally, but this is the final conclusion I'll bring up today - Mr. Nixon in his official report speaks of actions and decisions - I'll start from the beginning.
When senior bureaucrats involved in the negotiations with the Government of Canada feel that their actions and decisions are being heavily affected by lobbyists, as occurred here, the role of the latter (meaning the lobbyists) has in my view exceeded permissible norms.
Are you aware of any undue lobbying activities which affected the decisions or affected the negotiations of the government in coming to an arrangement?
Mr. Shortliffe: Absolutely not.
Senator Lynch-Staunton: Were you yourself ever -
Mr. Shortliffe: I testified to this in the other context when I was here the last time. And I simply reiterate my very strong view that a lot of money may have got wasted on a lot of lobbyists.
Senator Lynch-Staunton: And finally, I want to talk about Mr. Mulroney because some people enjoy always bringing up his name in connection with a particular transaction. And you told us that you had one conversation with him as a result of his meeting Charles Bronfman at a social event, who had then indicated an interest in being somewhere in the T1, T2 development?
Mr. Shortliffe: Again, senator, may I be very careful here. I'm not ascribing anything to Mr. Bronfman. I'm saying the Prime Minister asked me, not reporting something that Mr. Bronfman asked; the Prime Minister asked me the question that I answered in that document.
Senator Lynch-Staunton: He asked you the same question that he was asked by Mr. Bronfman?
Mr. Shortliffe: I don't know that, senator. This is why I'm being very -
Senator Lynch-Staunton: Any time his name comes up there's always big issue done around it and most of the reporting I've seen about his name is - to say grossly exaggerated. What we're trying to do -
Mr. Shortliffe: While I would never - Forgive me for interrupting you, Senator. But while I would never in other circumstances, and I do thank Senators this afternoon for having been as careful as you have been all been about the difficulty of getting into discussions with Prime Ministers and with cabinet.
While I would never in any other circumstances get into this, because this comment of mine was released, I have described very carefully what happened, and my words are now in the transcript. I will go one step farther and hope that Mr. Mulroney won't kill me at some future time, and say to you, my interpretation of why he asked me the question was that he wanted to be nice to the loser.
Senator Lynch-Staunton: And are you aware that Mr. Mulroney took more than a Prime Ministerial interest in this file from reports he would get from people involved in the file, or from your own conversations which you can discuss here? I mean, was he taking a sudden - you know, his fingerprints were all over it and he was pushing somebody here, restraining somebody there?
Mr. Shortliffe: No. The Prime Minister took - Did the Prime Minister take a keen interest in the file? Yes, Senator, he did. The Prime Minister, Mulroney, as indeed Prime Minister Campbell, as indeed Prime Minister Chrétien, when they have a keen interest, follow files closely. This wasn't the only one. There were several. But this was one of the ones that he followed closely, yes.
Senator Lynch-Staunton: Thank you, Mr. Chairman.
The Chairman: Mr. Nelligan.
Mr. Nelligan: Mr. Shortliffe, I don't know if you can help us on this but we've had an ongoing problem with this committee in obtaining documents from the Department of Justice and some of them have been censored on the basis that they were cabinet confidences and we've had a long discussion on that. Unfortunately that form of confidence hasn't extended to some persons because there has been a suggestion, particularly in the press today, that there are confidential documents in existence which paint an entirely different picture than the one we've heard here.
And while I'm not asking you to comment on confidential documents, I just ask you if you have any knowledge of any of the problems which are mentioned in this particular newspaper clipping and discuss them; if those are the facts, I would like to hear from you on them?
Senator Stewart: Could we hear about the contents of the newspaper. This is the first -
Mr. Nelligan: Yes.
Senator Stewart: I haven't been diligent in reading them.
Mr. Nelligan: Well, apparently in The Ottawa Citizen this morning they refer to the "Pearson Inquiry Whitewash". And I felt that this witness, being at the centre of operations, might be able to help us to either confirm or deny the allegations that are in that press.
Now, if the senators don't want me to do, I'm quite prepared to stop. But what concerns me is there's been an allegation made that this inquiry is designed to obscure the information and the facts rather than trying to disclose them, and I think that is contrary to the wishes of all of the senators.
And I thought perhaps, while we're at this late stage and we certainly can't get the documents, we've got a witness here who has some knowledge. Now, do you want me to proceed and ask him the question?
Senator Stewart: I have no problem with you proceeding. It's simply that I did not know to what documents you were referring to.
Mr. Nelligan: Yes, that's right. Well, it's my last chance to get a witness that might help us on these matters.
Among the facts suggested by Mr. Weston are, first, that the cabinet - that there were documents which projected that taxpayers would actually forfeit as much as tens of millions of dollars a year in net profits.
Were you aware of any such projection was ever made at any time by the experts working on this file?
Mr. Shortliffe: Mr. Nelligan, may I make a suggestion to you, sir...
Mr. Nelligan: Yes.
Mr. Shortliffe: ...that I hope will be helpful?
Mr. Nelligan: Yes.
Mr. Shortliffe: I read that article this morning. I saw it, I suppose, as - I believe that before - well before October the 7th, '93, there was an alleged leak of some document or other.
Now, when documents leak, unless they are reprinted in their entirety, as Clerk and as a senior official, I never comment on them. Never. Because I don't know what it is, I don't know what's in it. I have no idea what the reporter is speaking to or from.
And I must say, Mr. Nelligan, I think to get into a discussion about a reporter's interpretation of the Pearson file, when you have had three months of testimony of a whole host of people who were directly involved in the negotiation of the deal and the construction of it, and there is now a very clearly public record, is not productive for you, sir, nor for the committee, nor for me, because I can't get into a discussion of what was in cabinet documents at any time.
Mr. Nelligan: Well, let me put another way and in a broader sense, is that being generally aware of the evidence that has come before this committee, do you feel that there is any group of experts or civil servants who are knowledgeable about this file that have not been called before this committee to testify, that we should call before this committee to have a full and fair picture of what actually went on?
Mr. Shortliffe: No, sir. I think you have had key officials from Transport. You've had key officials from the Treasury Board Secretariat. You've had key officials from the Privy Council Office. You've the former chief negotiators who - those who are still inside the Public Service and those of us who are outside the Public Service. No, I do not think there is such a group that you need to call.
Mr. Nelligan: In your view has the way in which the evidence has been presented before this committee that constitute in any way a whitewash of what actually went on?
Mr. Shortliffe: Of course not. Of course not.
Senator Tkachuk: Counsel, isn't this the same reporter who wrote this article in '93, did he not win an award or something for those series of articles?
Mr. Nelligan: I have no idea.
Senator Tkachuk: I think it is. I was just wondering if it might have been his own self-interest to say what he's saying, despite all the facts being given in committee.
The Chairman: Shall I thank the witness? Thank you very much, Mr. Shortliffe, for coming back and being, as usual, very forthcoming and helpful to us.
Mr. Shortliffe: Thank you, Mr. Chairman.
Senator Kirby: Mr. Chairman, can I ask a question. Tomorrow we start at nine. Is it the same as today, nine to twelve and two to five?
Mr. Chairman: Correct.
The committee adjourned.